The Board of Directors of Prysmian S.p.A. has approved today the Group's consolidated results for the first quarter of 2012 (which are not subject to audit).

" The integration with Draka has led to a significant growth in size – comments CEO Valerio Battista -, allowing sales to be better distributed geographically and the range of products and services offered to be enlarged. The increased share of Northern Europe, North America and Asia and strengthening of the Telecom and Industrial businesses have neutralised the reduction in demand in Southern Europe in more cyclical businesses like Trade & Installers and Power Distribution. Despite continued uncertainty in the macroeconomic environment, namely in Europe, the Group expects to see a positive trend in demand for submarine cables in 2012 as well as for renewable energy, oil & gas and optical cables. Based on these expectations, also supported by a robust order book, we expect full-year Adjusted EBITDA to be in the range of €600-650 million, up from €568 million in 2011".


FINANCIAL RESULTS

Group Sales amounted to €1,874 million compared with €1,881 million in the prior period (pro-forma figure that consolidates Draka for the entire period January-March 2011). Assuming the same group perimeter and excluding metal price and exchange rate effects, the organic change was +2.5%.

Group Adjusted EBITDA amounted to €130 million, up 9.1% from the first quarter 2011 pro-forma figure of €119 million (€101 million consolidating Draka for just the month of March 2011). The increase is particularly attributable to the improved results in the Industrial and Telecom business areas.

Group EBITDA amounted to €115 million, up +24.2% from the figure of €92 million (consolidating Draka just for the month of March 2011). Non-recurring expenses amounted to €15 million, and refer to restructuring costs arising from integration of the two groups; they particularly include restructuring costs in connection with the closure of the Livorno Ferraris site in Italy and the Fercable site in Spain, where agreement has already been reached with the trade unions.

Group Adjusted operating income was €91 million, up 8.8% from the first quarter 2011 pro-forma figure of €84 million (€76 million consolidating Draka for just the month of March 2011). Amortisation and depreciation charges increased on the corresponding quarter last year due to the full impact on the first quarter of 2012 of higher amortisation and depreciation charges resulting from the increase in Draka's asset values (following the application of Purchase Price Accounting with effect from 1 March 2011).

Group Operating income was €89 million, significantly higher (+87.9%) than the figure of €47 million (consolidating Draka just for the month of March 2011). This increase is due to the growth in EBITDA and the positive change in the fair value of metal derivatives.

Net finance income and costs, including the share of income/(loss) from associates and dividends from other companies, reported a negative balance of €28 million, unchanged from the prior year figure (consolidating Draka for just the month of March 2011). Although interest expense increased, due to the full impact on the quarter of the growth in debt following the Draka acquisition, there was an improvement in the net result from derivatives and exchange rate differences.

Adjusted net profit increased by 25.0% to €45 million from €36 million in the first quarter of 2011 (reflecting Draka's consolidation for just the month of March 2011). Net profit also improved significantly to €42 million from €13 million in the first quarter of 2011 (reflecting Draka's consolidation for just the month of March 2011).

Net financial position at the end of March 2012 amounted to €1,273 million, compared with €1,064 million at 31 December 2011 (improving from the €1.460 million at March 2011), having been particularly affected by the following factors:
- positive cash flows from current operations of €103 million;
- increase of €243 million in working capital due to the seasonality of sales and to metal prices, particularly reflecting growth in the value of inventories of raw materials, semi-finished products and finished goods;
- payment of €15 million in taxes;
- net operating investments of €25 million;
- purchase of the remaining Draka shares under the squeeze-out procedure for approximately €9 million;
- payment of €17 million in net finance costs;
- Free cash flow (before dividends and the outlay to acquire Draka), although negative because of the typical seasonal nature of the first quarter, reported an improvement of about €45 million, (excluding the outlay to acquire the total control of the Draka joint ventures in Brazil), reflecting the growth in operating profitability, the slight improvement in working capital on the first quarter of last year and lower outlays for finance costs.


ENERGY CABLES AND SYSTEMS PERFORMANCE AND RESULTS

• Submarine cables order book grows thanks to record Westernlink Contract
• Industrial: increase in sales and profits
• High voltage underground cables: stable demand; growing contribution to results expected from sesecond half
• Slight decrease in power distribution volumes
• Revenues basically stable for T&I 

Sales to third parties by the Energy Cables and Systems segment amounted to €1,528 million compared with the first quarter 2011 pro-forma figure of €1,559 million (€1,284 million consolidating Draka for just the month of March 2011), delivering a positive organic change of +1.8%. Adjusted EBITDA amounted to €95 million, reporting an increase of +1.1% on the first quarter 2011 pro-forma figure of €94 million (€84 million consolidating Draka for just the month of March 2011).

Utilities
Sales to third parties by the Utilities business amounted to €489 million, compared with the first quarter 2011 pro-forma figure of €514 million, with a 3.8% negative organic change particularly coming from the power distribution and high voltage sectors and concentrated in European markets. The organic reduction in sales affected the profitability of the Utilities business with Adjusted EBITDA amounting to €46 million compared with a first quarter 2011 pro-forma figure of €57 million. This contraction in profitability is mainly attributable to the impact of the execution of projects acquired in 2009/2010 with lower margins as well as the reduction in power distribution volumes and the phasing of submarine projects.

Demand for high voltage underground cables was stable, reporting a decrease in sales on European domestic markets, while more positive results were achieved in countries with growing demand for energy infrastructure such as Russia, Brazil, China, India and the Middle East. A recovery in sales and profits, particularly in Europe, is expected from the second half, thanks to the phasing of certain projects and to the positive investment trends in renewable energy and new interconnections; organic growth for the full year is expected to be positive. The order book provides sales visibility for about one year.

Sales by the submarine cables and systems business increased thanks to the execution of large interconnections projects and development of renewable energy. In February 2012, the Group achieved a new historic milestone by winning the Westernlink project worth approximately €800 million for the construction of the Scotland-England submarine link. Also of note is the Butendiek offshore wind farm project to which, thanks to synergies and its larger product and technology range, the Group will supply both the cable link with the mainland and the interarray connections between turbines (manufactured at the Norwegian factory in Drammen acquired with Draka).
The order book has additionally increased providing sales visibility for nearly three years and reflects continued robust growth in demand from the development of renewables (offshore wind farms in particular) and the need for new interconnections.

Demand in the power distribution business line showed signs of a contraction compared to last year. This decline particularly occurred in central and south European markets (except for Scandinavian countries where volumes were positive), while better sales performance was seen in North and South America. The Group is focusing ever more attention on innovation and its ability to anticipate customer demand and over the last few months it has launched a new range of products and services for smart grid applications as well as niche technologies such as the new Pry Pad tool for monitoring the efficiency of electricity grids. 

Trade & Installers
Sales to third parties by the Trade & Installers business amounted to €541 million, posting a small organic increase (+2.5%), compared with the first quarter 2011 pro-forma figure of €567 million. The volume recovery has been particularly concentrated in North and South America, and has also benefited profitability. In Europe, improvements, albeit minor, have been reported in the Nordic countries, Eastern Europe and Great Britain, while the situation has proved tougher in Central and Southern Europe. The Group has nevertheless been able to maintain its share in major European markets focusing on business relationships with the key customers. Even in South America the Group has maintained and in some cases increased its market share in a competitive but growing construction market. Adjusted EBITDA amounted to €18 million, remaining stable compared with the first quarter last year. 

Industrial
Sales to third parties by the Industrial cables business amounted to €464 million, delivering substantial 15.2% organic growth, compared with the first quarter 2011 pro-forma figure of €413 million. On the whole markets were stable or growing, with significant differences between the various geographical regions and industry segments. Growth was particularly driven by the oil sector, with an increasingly important contribution from products and technologies for offshore oil drilling. Sales of flexible pipes made a positive contribution (more than €10 million in the first quarter), with the order book expected to grow in the second half thanks to qualification of 6.0" diameter flexible pipes. Umbilicals are expected to see a short-term decrease in volumes due to installation delays for some of the Petrobras projects, while the drivers of growth are expected to remain unchanged in the medium term; the Umbilicals business also secured its first orders in the interesting East African market. DHT cables posted a growth in volumes in the USA and the North Sea. Positive performances were also reported in renewables, particularly in China, Australia and India, as well as in specialties and OEM which experienced growth in Asia, Australia and North America, in contrast with a certain weakness in demand in Europe. The Group confirmed itself as world leader in Elevator cables after acquiring the important project to supply cables for installations in the new World Trade Center in New York. Lastly, the Automotive cable market has proven stable in Europe and growing in Asia, and North and South America.

Adjusted EBITDA amounted to €31 million, reporting an increase of €13 million on the first quarter 2011 pro-forma figure.  


TELECOM CABLES AND SYSTEMS PERFORMANCE AND RESULTS

• ORGANIC SALES GROWTH CONTINUES
• ROBUST DEMAND FOR OPTICAL CABLES IN PRINCIPAL GEOGRAPHICAL MARKETS
• SIGNIFICANT INCREASE IN PROFITS 

Sales to third parties by the Telecom Cables and Systems segment amounted to €346 million compared with a first quarter 2011 pro-forma figure of €322 million (€206 million consolidating Draka for just the month of March 2011), delivering 6.1% organic growth primarily thanks to higher volumes of optical cables.

The positive trend in demand for optical cables is expected to continue, driven by the increase in data traffic in established markets and the need for new backbone connections in emerging countries. In particular, in Europe the main thrust is coming from Great Britain and Benelux; in North America the benefits of government incentives continue to be felt, while growth has resumed in China after a flat 2011. In Australia, long-term investment plans have been confirmed, although construction of the National Broadband Network is suffering a few delays due to the installation process. In Brazil the acquisition of complete control of the Draka joint ventures has strengthened the Group's presence in a fast-growing market.

The Multimedia Solutions business line reported higher volumes in Europe, while offering the prospect of interesting opportunities in North and South America, also driven by Data centers expansion. The OPGW business line enjoyed significant growth in South Europe, the Middle East and South America.

The Group continues to focus its strategy on constantly improving product mix and reducing costs to improve profitability. Adjusted EBITDA amounted to €35 million, an increase of 40.4% on the first quarter 2011 pro-forma figure of €25 million. 

BUSINESS OUTLOOK

The macroeconomic environment in the first half of 2011 had confirmed the initial signs of recovery already seen in the second half of 2010, albeit with low growth rates and still at levels well below those before the 2008 financial crisis. However, the second half of 2011 and first quarter of the current year began to be affected by growing concerns about Eurozone and US debt sustainability, leading to a sharp deterioration in business confidence and a gradual slowing of industrial output and demand.
In such an economic context, the Group expects that 2012 will see generally stable demand for medium voltage cables for Utilities, for building wires and for those products in the Industrial sector most exposed to cyclical trends. Instead, positive developments in demand are confirmed for the high value-added businesses of submarine power transmission, renewable energy, offshore Oil&Gas and fibre optic cables for major telecom operators.
Despite amarket with uncertain growing opportunities, based on the results achieved in the first three months, combined with the size of the current order book, Adjusted EBITDA for FY 2012 is expected to improve in the range of €600-650 million (FY 2011: €568 million). This range is related to development of demand on the reference markets in the second half of the year and includes the consolidation of Draka for the full year (in 2011 Draka was consolidated from 1 March) The expected profitability increase is essentially due to business areas with higher added value as well as cost synergies deriving from the integration with Draka. As a matter of fact, during 2012 the Prysmian Group will continue to integrate the activities of Draka in order to optimise and rationalise the new Group's organisational and production structure with the goal of further strengthening its presence in all areas of business and of achieving the projected cost synergies.

OTHER RESOLUTIONS BY THE BOARD OF DIRECTORS

The macroeconomic environment in the first half of 2011 confirmed the initial signs of recovery already seen in 2010, albeit with very low growth rates and still at levels well below those before the 2008 financial crisis. However, the second half of the year began to be affected by growing concerns about Eurozone and US debt sustainability, leading to a sharp deterioration in consumer confidence and a gradual slowing of industrial output and demand.

In such an economic context, the Group expects that 2012 will see generally stable demand for medium voltage cables for Utilities, for building wires and for those products in the Industrial sector most exposed to cyclical trends. Instead, positive developments in demand are confirmed for the high value-added businesses of power transmission, renewable energy, offshore Oil&Gas and fibre optic cables for major telecom operators. Lastly, the Prysmian Group will carry on during 2012 to integrate the activities of Draka in order to optimise and rationalise the new Group's organisational and production structure with the goal of further strengthening its presence in all areas of business and of achieving the projected cost synergies.


OTHER RESOLUTIONS BY THE BOARD OF DIRECTORS

The Board of Directors has approved a number of amendments to the By-laws – to articles 14 and 21 – to ensure a correct gender balance in the composition of the Board of Directors and Board of Statutory Auditors, as provided by Law 120 of 12 July 2011 and by Consob Resolution 18098 of 8 February 2012.
As soon as the amended By-laws have been filed with the Register of Companies, they will be made available in the Corporate Governance section of the Company's website at www.prysmian.com.
Lastly, the Board of Directors has approved two proposed demergers to Prysmian S.p.A. of part of the assets of Prysmian Cavi e Sistemi S.r.l. and Prysmian Cavi e Sistemi Italia S.r.l., both companies subject to the direction and coordination of Prysmian S.p.A., as announced on 7 March 2012.

The Prysmian Group's First-Quarter Report 2012, approved by the Board of Directors today, will be available to the public by 11May 2012 at the Company's registered office in Viale Sarca 222, Milan and at Borsa Italiana S.p.A.. It will also be available on the corporate website at www.prysmian.com.
The present document may contain forward-looking statements relating to future events and operating, economic and financial results of the Prysmian Group. By their nature, forward-looking statements involve risk and uncertainty because they depend on the occurrence of future events and circumstances. Therefore, actual future results may differ materially from what is expressed in forward-looking statements as a result of a variety of factors.
The managers responsible for preparing corporate accounting documents (Carlo Soprano and Jordi Calvo), hereby declare, pursuant to art. 154-bis par. 2 of Italy's Unified Financial Act, that the accounting information contained in this press release corresponds to the underlying documents, accounting books and records.

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €8 billion in 2011, 22,000 employees across 50 countries and 97 plants, the Group is strongly positioned in high-tech markets and provides the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, offering a complete range of optical fibres, optical and copper cables and connectivity systems. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €8 billion in 2011, about 22,000 employees across 50 countries and 97 plants, the Group is strongly positioned in high-tech markets and provides the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, offering a complete range of optical fibres, optical and copper cables and connectivity systems. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €8 billion in 2011, approximately 22,000 employees across 50 countries and 97 plants, the Group is strongly positioned in high-tech markets and offers the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, offering a complete range of optical fibres, optical and copper cables and connectivity systems. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €8 billion in 2011, approximately 22,000 employees across 50 countries and 97 plants, the Group is strongly positioned in high-tech markets and offers the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, offering a complete range of optical fibres, optical and copper cables and connectivity systems. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €8 billion in 2011, approximately 22,000 employees across 50 countries and 97 plants, the Group is strongly positioned in high-tech markets and offers the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, offering a complete range of optical fibres, optical and copper cables and connectivity systems. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €8 billion in 2011, about 22,000 employees across 50 countries and 97 plants, the Group is strongly positioned in high-tech markets and provides the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, offering a complete range of optical fibres, optical and copper cables and connectivity systems. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

The Board of Directors of Prysmian S.p.A. has approved today the Company's consolidated financial statements and separate financial statements for 2011 .

" Technological innovation and production flexibility have enabled the Group to achieve more than satisfactory results even in a market where signs of recovery are still weak – comments CEO Valerio Battista. Financial year 2011 has closed with a marked organic growth in sales. Profitability has also continued to improve, with Adjusted EBITDA coming in at the top end of the target range announced to the market. The strong cash generation and the clear improvement in our key indicators – for example, net debt just above €1 billion which is less than two times Adjusted Ebitda - allowed us to enter the current year with a solid balance sheet. Lastly, the integration with Draka has been conducted quickly and efficiently, letting us realise significant synergies in the year just ended".


FINANCIAL RESULTS

Sales amounted to €7,583 million compared with €4,571 million in 2010. Assuming the same group perimeter (excluding the Draka contribution of €2,220 million for the period March-December 2011, net of €59 million in intragroup transactions) and excluding metal price and exchange rate effects, the organic change was +11.2%. Draka's sales for full year 2011 came to €2,669 million, reporting organic growth of +4.2%. Full year organic growth for the new Prysmian Group (including Draka for the entire period) would have been 8.8%.

Adjusted EBITDA amounted to €568 million, up 46.8% from €387 million in 2010, coming in at the top end of the target range announced to the market in May 2011. This increase is attributable to €32 million from organic sales growth by all businesses within the Prysmian perimeter and €149 million from the consolidation of Draka since March 2011.

EBITDA amounted to €269 million. The decrease from €365 million in 2010 is fully attributable to net non-recurring charges of €299 million, of which €205 million in provisions for risks arising from ongoing antitrust investigations and €56 million in restructuring costs mostly related to the start of integration with Draka.

Adjusted operating income was €426 million, up 37.8% from €309 million in 2010. This increase is attributable to €33 million in higher profits generated by organic growth in the Prysmian perimeter and €84 million from the consolidation of Draka since March 2011 (net of consolidation adjustments).

Operating income, including the effects of non-recurring items, fair value changes in metal derivatives and in other fair value items and asset impairment, was a positive €19 million (positive €307 million in 2010). The decrease is entirely attributable to the negative impact of non-recurring charges and negative fair value changes in metal derivatives.

Net finance income and costs reported a negative balance of €129 million (negative €96 million in 2010). The negative change of €33 million is primarily due to the growth in net debt following the Draka acquisition (€501 million cash outlay plus €357 million for the consolidation of Draka's net financial position at 28 February 2011), but also reflects changes in the composition of financial structure, which has been strengthened after entering a Forward Start Credit Agreement for €1,070 million in January 2010, issuing a bond for €400 million in April 2010 and finalising a credit agreement for €800 million in March 2011. These new agreements have significantly extended average debt maturity to now about 3 years.

Adjusted net profit was 33.5% higher at €231 million (€173 million in 2010); the increase reflects the growth in adjusted operating income and the first-time consolidation of Draka.

The Net result was a loss of Euro 145 million, compared with a profit of Euro 150 million the previous year, reflecting the negative impact of Euro 376 million in non-recurring and extraordinary charges (of which Euro 205 million to provide against risks related to ongoing antitrust investigations).

Net financial position at the end of December 2011 was €1,064 million. The increase from €459 million at 31 December 2010 is attributable to the following factors:
- cash outlay of €501 million for the acquisition of Draka;
- consolidation of the Draka net financial position of €357 million as at 28 February 2011;
- net positive cash flows from operations of €481 million, before changes in net working capital;
- reduction of €183 million in net working capital due to actions taken in the period to improve efficiency;
- net operating investments of €145 million;
- payment of €37 million in dividends;
- net negative cash flows of €229 million primarily due to taxes and finance costs.


INTEGRATION WITH DRAKA AND STRATEGY DEVELOPMENT

• Deployment of new organisation completed, target synergies confirmed on basis of satisfactory results achieved in 2011. Technology and product integration improve offering competitiveness.

The synergy realisation plan has been completed and the initial results in terms of cost reduction have been achieved, particularly in the areas of procurement and workforce rationalisation. The new organisational and management structure launched in July 2011 has already led to the identification of significant efficiencies and to the appointment of approximately 300 new key positions.

The speed and effectiveness with which the integration process has been defined and implemented has allowed slightly higher-than-expected synergies to be realised in 2011 (€13 million versus €10 million originally planned), further boosting confidence in achieving the total annual run-rate target of €150 million (by 2015).

Deployment of all the operating structures has also been completed and integration is proceeding according to plan also on the technological, manufacturing, commercial and logistical fronts.
- In the business of submarine cables for offshore wind farms, the Group is now able to offer the widest range of technologies and products, from inter-array connections between turbines to cable systems for connection to mainland grids.
- In the SURF - Oil&Gas business, the Group's range of technologies and products (which already included umbilicals and flexible pipes) has been enlarged with the addition of Draka's DHT (Downhole Technology) cables.
- In the telecom cables business, the Group can now leverage on a particularly extensive and competitive product range. The availability of worldwide fibre production capacity also reduces production and logistics costs, resulting in better margins.
- In the renewable energy cables business, the enlarged offer is helping improve geographical reach, with a focus on high-growth markets.
- In the T&I business, current integration of the product ranges is improving the offer mix with a focus on high-end products and key global customers.


• Investments of some €145 million: high voltage and submarine cables, flexible pipes, optical cables

In line with its strategy, the Group made €145 million in net operating investments during 2011, mainly to develop high-tech businesses. The principal projects included completion of the new plant in Brazil for flexible offshore oil drilling pipes, and expansion of production capacity for high voltage cables in China and France, for submarine cables in Italy and Finland, and for optical cables in Brazil.

• Investments in high-growth-potential countries on target

At the end of 2011, emerging and high-growth countries accounted for approximately 30% of the Group's total sales, particularly thanks to the strategy of selective investments in high-tech value-added businesses. In particular, in Asia Pacific the main drivers of growth were the high voltage business, optical cables and certain industrial applications like Renewables and Oil&Gas; Eastern Europe reported positive results not only from high voltage and optical cables but also from the different industrial applications; lastly, in South America, growth was driven both by high voltage and optical cables, as well as by umbilicals for the offshore oil industry.


ENERGY CABLES AND SYSTEMS PERFORMANCE AND RESULTS

• POWER TRANSMISSION ORDER BOOK CLIMBS TO €2.3 BILLION
• POSITIVE DEMAND FOR HIGH VOLTAGE UNDERGROUND CABLES THANKS TO RENEWABLES
• GROWTH IN POWER DISTRIBUTION VOLUMES
• T&I VOLUMES STABLE
• INDUSTRIAL: HIGHER SALES AND PROFITS. EXCELLENT PERFORMANCE IN OFFSHORE OGP

Sales to third parties by the Energy Cables and Systems segment amounted to €6,268 million (including the Draka contribution of €1,439 million for the period March-December 2011, net of €45 million in intragroup transactions). Net of metal price and exchange rate effects and changes in the group perimeter, organic growth was +10.5%, with a particularly positive performance by the Utilities business. Adjusted EBITDA amounted to €447 million, up 27.4% from €351 million in 2010. The increase reflects the contribution of €74 million by Draka (consolidated since March 2011) and an improvement of €22 million by the pre-acquisition perimeter.

Draka's Energy business reported €1,758 million in sales to third parties for the entire period (January-December 2011), with organic growth of 1.9%. The Energy segment's overall twelve-month organic growth (consolidating the Draka perimeter for the entire period) would have been +8.1%.

The market trends and results of the Energy segment's different business areas are presented below but only with reference to the pre-acquisition perimeter (accompanied by a few brief comments about the Draka perimeter).

Utilities
Sales to third parties by the pre-acquisition Utilities business amounted to €2,160 million, delivering organic growth of +17.0% thanks to volume recovery by nearly all business lines even if with differences in timing and between geographical areas. Organic sales growth was positively reflected in profitability, with Adjusted EBITDA increasing by 2.5% to €250 million, despite the rising cost of raw materials and the competitive pressure particularly in emerging markets.

The Draka Utilities business reported €116 million in sales in 2011 (of which €101 million consolidated by Prysmian as from March 2011). The overall twelve-month organic growth of the Utilities business (consolidating the Draka perimeter for the entire period) would have been +17.8%.

Sales by the submarine business line increased thanks not only to progress on the major power interconnection projects acquired by the Group (particularly, Romulo in the Iberian Peninsula/Balearic Islands, Messina II in Italy, Doha Bay in Qatar and Hudson in the USA) but also to the contribution of smaller jobs carried out in Europe particularly in the fourth quarter. A significant number of contracts for offshore wind farm connections were won during the year. This is a market presenting significant opportunities for additional growth and in which the Group has further strengthened its product and technology offering thanks to integration with Draka, which specialises in interarray connections between wind farm turbines. Including the Western Link project for a submarine connection between England and Scotland acquired at the start of 2012, the order book provides sales visibility for over three years. With the objective of continuing to benefit from steady projected growth in this sector, the Group has carried on investing in new manufacturing capacity by starting up submarine cable production at the Pikkala plant in Finland and by planning about a 25% increase in capacity at the Arco Felice plant in Italy.

Sales performance by high voltage underground cables benefited from the recovery in demand, particularly coming from renewable energy projects and/or energy saving projects involving existing European grids (Italy, Great Britain and France) and from projects to develop new infrastructure in emerging markets like Russia, Turkey, the Middle East, Brazil and India. With the goal of boosting market share in Asia Pacific and the Middle East, the Group has invested in new manufacturing capacity for extra-high voltage cables in China. The order book provides sales visibility for about one year.

The Power Distribution business enjoyed strong growth throughout the year, particularly in Asia Pacific and South America. Demand in Europe was primarily driven by Nordic countries, Eastern Europe and Italy, while remaining stable in the rest of Southern Europe. Of particular note is the market success of the new P-Laser technology introduced in Holland after Italy. Brazil and Australia led the recovery outside Europe, while despite weak demand, the USA showed signs of improving profitability. On the whole, margins remained low despite the upswing in volumes. 

Trade & Installers
Sales to third parties by the pre-acquisition Trade & Installers business amounted to €1,621 million, posting a small organic increase (+1.2%). Adjusted EBITDA amounted to €40 million (+10.0% on 2010).

The upturn in volumes occurred particularly in North America, while demand in Europe continued to be weak, especially in Italy and Spain, although the Nordic countries gave off a few positive signals. Outside Europe, the Group has leveraged its large product portfolio to maintain its historic leadership of the South American market, while it has sought to increase its presence in Asia Pacific with the objective of improving the geographical mix of sales.

In 2011, Draka's twelve-month sales to third parties amounted to €816 million (of which €685 million consolidated by Prysmian for the period March-December 2011), with a downturn in volumes in the last quarter of the year. The Group's overall organic growth (consolidating Draka for the entire period) would have been +0.1%. 

Industrial
Sales to third parties by the pre-acquisition Industrial cables business amounted to €919 million, reflecting organic growth of +14.8% most of which achieved thanks to the positive trend in the Oil&Gas sector. Adjusted EBITDA amounted to €72 million, reporting an increase of €11 million partly thanks to a reasonable recovery in demand in various parts of the world.

On the whole, the market scenario was stable or slightly better, particularly in the second half of the year, with signs of recovery in demand by the oil, mining and infrastructure sectors especially in high-growth regions like APAC, the Middle East and South America.

Demand for oil industry cables was particularly driven by the offshore sector which contributed to a significant swelling of order books in nearly all the geographical regions concerned. The Group's growth in the offshore business will be driven not only from the new flexible pipes production line in Brazil but also from the integration and development of cross-selling opportunities with Draka, which is present in North America with its DHT (Downhole Technology) cables.
In the renewables segment, positive growth was achieved in the Wind business, where the Group is stepping up its presence in high-growth markets (South America, China, India and Australia), also thanks to integration with Draka. Automotive industry demand was stable in Europe but more sustained in Asia and South America. Demand for elevator cables was stable in North America but higher in Europe and China. Lastly, in the Specialties & OEM segment, growth in the order book in Asia made up for weakness in North America and Europe.

In 2011, Draka's twelve-month sales to third parties amounted to €826 million (of which €698 million consolidated by Prysmian for the period March-December 2011). The Industrial business would have had overall organic growth (consolidating Draka for the entire period) of +8.5%. Draka's presence in the Industrial business is particularly important in geographical markets (such as North America) and product segments (infrastructure and elevator cables and renewable energy solutions) that complement those of Prysmian.

TELECOM CABLES AND SYSTEMS PERFORMANCE AND RESULTS

• STRONG ORGANIC SALES GROWTH, ALSO CONFIRMED IN Q4
• ROBUST DEMAND FOR OPTICAL CABLES, PARTICULARLY IN NORTH AMERICA, SOUTH AMERICA AND AUSTRALIA
• GRADUAL IMPROVEMENT IN PROFITABILITY

Sales to third parties by the Telecom Cables and Systems segment amounted to €1,315 million (including €781 million for the consolidation of Draka from 1 March 2011, net of €14 million in intragroup transactions), delivering strong organic growth (+17.4%).

Adjusted EBITDA amounted to €121 million with an increase of €85 million on the equivalent period in 2010 (following its consolidation from 1 March 2011, Draka's contribution to this result was €75 million).

This growth was particularly driven by a significant increase in fibre optic cable volumes in nearly every geographical area, which was also accompanied by a gradual improvement in margins. In North America demand also benefited from government incentives for the industry, while in Europe growth was held back by the low level of investment by incumbent operators (except for Great Britain and Holland). In contrast, more dynamic investment policies were implemented by operators in South America and Australia (where the Group started work on the National Broadband Network project during the third quarter). The opportunities for the new Group to capitalise on new global fibre production capacity will help reduce production and logistics costs, thus promoting further margin recovery.

Volumes also recovered for MMS (Multimedia & Specials), particularly in Germany and France, and for OPGW (Optical Ground Wire) in South America and Spain, while demand weakened for copper cables where the Group is focusing on reducing production costs.

The integration with Draka represents a turning point for the Telecom business, by creating a world leader in terms of both size and the technology, products and services offered, particularly in the optical fibre and optical cables market. In 2011, Draka's twelve-month Telecom sales to third parties amounted to €826 million. The Telecom segment's overall twelve-month organic growth (consolidating Draka for the entire period) would have been +11.7%.

BUSINESS OUTLOOK

The macroeconomic environment in the first half of 2011 confirmed the initial signs of recovery already seen in 2010, albeit with very low growth rates and still at levels well below those before the 2008 financial crisis. However, the second half of the year began to be affected by growing concerns about Eurozone and US debt sustainability, leading to a sharp deterioration in consumer confidence and a gradual slowing of industrial output and demand.

In such an economic context, the Group expects that 2012 will see generally stable demand for medium voltage cables for Utilities, for building wires and for those products in the Industrial sector most exposed to cyclical trends. Instead, positive developments in demand are confirmed for the high value-added businesses of power transmission, renewable energy, offshore Oil&Gas and fibre optic cables for major telecom operators. Lastly, the Prysmian Group will carry on during 2012 to integrate the activities of Draka in order to optimise and rationalise the new Group's organisational and production structure with the goal of further strengthening its presence in all areas of business and of achieving the projected cost synergies.


OTHER RESOLUTIONS BY THE BOARD OF DIRECTORS

Presentation of a candidate slate by the Board of Directors for board renewal
In view of the expiry of its three-year term in office and as permitted in the By-laws, the Board of Directors has voted to present its own slate of candidates for the office of director to be submitted to the Shareholders' Meeting being called to vote, among other things, on the appointment of the new Board of Directors.
This slate will be made publicly available to the public, together with any slates submitted by eligible shareholders, at the locations and within the deadlines required by applicable regulations.

Demerger of part of the assets of two directly and/or indirectly wholly-owned companies
The Board of Directors has approved two proposals of demerger in favour of Prysmian S.p.A. part of the assets of Prysmian Cavi e Sistemi S.r.l. and Prysmian Cavi e Sistemi Italia S.r.l., both companies subject to the direction and coordination of Prysmian S.p.A..
As a result of the two proposed demergers, Prysmian S.p.A. will become the direct holder of the investments in the share capital of the Prysmian Group's Italian companies, currently held by the two companies undergoing hive-up. This transaction is part of a broader project to reorganise, rationalise and simplify the investments held directly or indirectly by Prysmian S.p.A. also as a result of its acquiring control of the Dutch company Draka Holding N.V. and the latter's investments, following the successful conclusion of the voluntary public mixed exchange and cash offer for the ordinary shares of Draka Holding N.V..
Notice is hereby given that, under the Company's By-laws, decisions concerning demergers shall be taken by the Board of Directors of Prysmian S.p.A. and that no new shares will be issued by Prysmian S.p.A. as a result of the proposed transactions, nor will its share capital undergo any change.
The demerger is exempt from the application of Consob Regulation 17221/2010 (as amended) provided for in the Company's procedures for related party transactions in respect of transactions with its subsidiaries, pursuant to art. 12 par. 3 of the above Regulation.
The legally required documentation relating to these two transactions will be made available to shareholders and the public at the locations and within the deadlines required by applicable regulations.

Directors' independence
Based on statements made by the directors, the Board of Directors reports that it has carried out the review of their independence requirements, provided for by art. 148, par. 3 of Legislative Decree 58/1998 and by the Self-Regulatory Code for listed companies published by Borsa Italiana S.p.A., and confirms that the directors Wesley Clark, Claudio De Conto, Giulio Del Ninno, Friedrich Fröhlich and Massimo Tononi continue to satisfy such requirements.

Share buy-back programme
The Board of Directors has decided to request the next Ordinary Shareholders' Meeting, scheduled in single call for 18 April, for authorisation to start a programme for the buy-back and disposal of treasury shares. The programme will provide the opportunity to purchase, on one or more occasions, a number of shares whose total cannot exceed 10% of share capital. Purchases may not exceed the amount of available reserves reported in the most recently approved annual financial statements. The programme will last for a maximum of 18 months commencing from the date of approval by the Shareholders' Meeting.
Possible objectives of the programme are:

• to provide the Company with a portfolio of treasury shares, including those already held by the Company, that can be used in any extraordinary transactions;
• to use the treasury shares purchased to service the exercise of rights arising from convertible debt instruments or instruments exchangeable with financial instruments issued by the Company, its subsidiaries or by third parties;
• to dispose of treasury shares to satisfy stock option plans reserved for the Group's directors and employees;
• to allow efficient management of the Company's capital, by creating an investment opportunity even for its available liquidity.

Treasury shares will be bought back and sold in accordance with applicable laws and regulations:

(i) at a minimum price no more than 10% below the stock's official price reported in the trading session on the day before carrying out each individual transaction;
(ii) at a maximum price no more than 10% above the stock's official price reported in the trading session on the day before carrying out each individual transaction.

As at the present date, the Company directly and indirectly holds 3,039,169 treasury shares.
The legally required documentation will be made available to shareholders and the public at the locations and within the deadlines required by applicable regulations.


Notice of Shareholders' Meeting
The Board of Directors has given the Chairman of the Board of Directors and the Chief Executive Officer several authority to perform all the formalities to call the Shareholders' Meeting for Wednesday, 18 April 2012, in single call.
Based on the results for 2011, the Board of Directors will recommend to the forthcoming Shareholders' Meeting that a dividend of €0.21 per share be declared, involving a total pay-out of approximately €44 million.
If approved, the dividend will be paid out from 26 April 2012 to those shares outstanding on the ex-div date of 23 April 2012.

Prysmian's Annual Report at 31 December 2011, approved by the Board of Directors today, will be available to the public within March 28, 2012 at the Company's registered office in Viale Sarca 222, Milan and at Borsa Italiana S.p.A.. It will also be available on the corporate website at www.prysmiangroup.com.
The present document may contain forward-looking statements relating to future events and operating, economic and financial results of the Prysmian Group. By their nature, forward-looking statements involve risk and uncertainty because they depend on the occurrence of future events and circumstances. Therefore, actual future results may differ materially from what is expressed in forward-looking statements as a result of a variety of factors.
The managers responsible for preparing corporate accounting documents (Carlo Soprano and Jordi Calvo), hereby declare, pursuant to art. 154-bis par. 2 of Italy's Unified Financial Act, that the accounting information contained in this press release corresponds to the underlying documents, accounting books and records.

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €8 billion in 2011, 22,000 employees across 50 countries and 97 plants, the Group is strongly positioned in high-tech markets and provides the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, offering a complete range of optical fibres, optical and copper cables and connectivity systems. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €7 billion (pro-forma 2010 Prysmian/Draka) and 22,000 employees across 50 countries and 98 plants, the Group is strongly positioned in high-tech markets and provides the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, producing optical fibres, optical cables and connectivity. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

Prysmian Group, world leader in the energy and telecom cables and systems industry, has been awarded a record contract worth approximately 800 million Euro, the highest value ever awarded in the cable business, for the development of Western HVDC Link, a new submarine High Voltage Direct Current (HVDC) interconnector between Scotland and England. The whole turnkey project will be executed by a consortium of Prysmian and Siemens who will be responsible for the HVDC converter stations. Total value of the contract awarded to the Consortium by NGET/SPT Upgrades Ltd, a JV set up by the system operator National Grid Electricity Transmission and its Scottish counterpart Scottish Power Transmission, is around 1.1 billion Euro. Commissioning is scheduled by late 2015.

The Western HVDC Link interconnection is strategic for the upgrade of the entire British transmission grid, as the UK is heading towards a low carbon economy with a massive utilization of power from renewable sources. The project represents a milestone not only for its value but also in terms of technological features, setting new industry records. The interconnection, designed as a low loss High Voltage Direct Current (HVDC) transmission system, will operate at the record voltage level of 600 kV, the highest ever reached by an insulated cable (to date the record is 500 kV) with a rating of 2200 MW - both currently unmatched for long-haul systems. The main purpose of the cable link is to connect renewable generation sources in Scotland to the consumption centers in England, although it also allows bi-directional flow of power. The choice of a submarine cable link versus a land interconnection offers remarkable benefits in terms of project approval and execution time.

“This milestone reconfirms our undisputed prominent role in the submarine cables sector – states Fabio Romeo Executive Vice President Energy Business - both in terms of market share and track record and in terms of know-how and innovation capabilities. In addition, I would also like to highlight our ever-increasing commitment to the renewable energies sector, with a wide range of high-end products and technologies available to support the development of greener and smarter power grids”.

The project requires full turnkey provision of an HVDC link (design, manufacture, installation, testing and commissioning) and considers a bi-pole of cables using PPL (Paper Polypropylene Laminate) insulation, with enhanced electrical and thermal performance. Prysmian has been a forerunner in bringing on the market Mass Impregnated PPL cables an innovative material technology that allows reaching higher voltage classes, reduced cables dimensions for equivalent transmission capacity and optimized power losses. The undisputed expertise in the field of MI PPL cables represented a key success factor for Prysmian in winning the award.

With a route length in excess of 400 km the link includes a short land section in Scotland and a significant land portion in England-Wales; the submarine part will be installed in the Irish Sea. Offshore installation will be performed by Prysmian's own cable ship Giulio Verne.

Prysmian has been taking part in the development of some of the most strategic submarine power interconnections worldwide, supporting the global upgrade of power grids for a better use of available resources with its state-of-the-art cable technology. In particular, the Group is currently involved, in the USA, in the execution of the Hudson Transmission Project which will bring clean power to about 600,000 new homes in Manhattan, New York, and has commissioned the Transbay Cable Project in San Francisco. In Europe, Prysmian is playing a key role in the development of power connections for offshore wind farms, with projects either completed or ongoing in Denmark, Holland, UK and in Germany. In particular, Prysmian can boast its valuable contribution within the most important programme for the development of renewable energies in Europe launched by the German government, with multiple contracts for offshore HVDC grid connection awarded over the last 18 months, namely BorWin2, HelWin1, Helwin2 and SylWin1.

The Group is also strongly committed to the promotion of largest scale initiatives like “ Friends of the Supergrid”, for the development of a new concept of Pan-European power grid, and Medgrid for the future submarine grid to bring renewable energy from Northern Africa to Europe.
 

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €7 billion (pro-forma 2010 Prysmian/Draka) and 22,000 employees across 50 countries and 98 plants, the Group is strongly positioned in high-tech markets and provides the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, producing optical fibres, optical cables and connectivity. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.

Prysmian Group, world leader in the energy and telecom cables and systems industry, will showcase its upgraded xsNet – access network - portfolio at next week’s FTTH Council Europe Conference which takes place in Munich on 15th & 16th of February.

Prysmian Group – formed by the combination of Prysmian and Draka – has maintained the former Draka xsNet brand and has rebranded and improved the system by including a selection of best of the best products from both of the former companies.

xsNet addresses the passive access network and provides tailor made solutions for all parts of the network – Indoor/customer premises, outside plant and POP/exchange applications. The building blocks of xsNet which make this possible include a number of familiar products which have already proven themselves to be highly reliable solutions with established track records. These include SiroccoXS (Blown fibre), VertiCasaXS (MDU cabling system) and the recently launched VerTVXS (optical satellite solution) – all former Prysmian developments. From the Draka side have come the blown cable families including JetNetXS and EaseNetXS, with the whole system portfolio underpinned by a suite of leading in-house fibre technologies led by BendBrightXS, the bend insensitive fibre developed specifically for last mile applications in compliance with G657.A2/B2 requirements.

Several other products complete the overall system which can be further supported by network design services provided also by Prysmian Group. The result is an optimized system which puts Prysmian Group at the forefront of passive optical technology in Europe and indeed the rest of the world.

Phil Edwards, Executive VP of Telecoms at Prysmian Group, who will be present at the event says:
“The advantages of the new xsNet portfolio are significant in terms of providing real added value to our customers and end users. We can provide a complete end to end passive solution to suit almost every situation you are likely to encounter. We have been in a unique position in being able to draw on the strengths of our two former companies in this manner and as a result xsNet now contains a number of highly innovative elements which have been designed with ease of installation, cost effectiveness and system reliability as key criteria.”

Prysmian Group is a Gold Sponsor of the FTTH Council Europe Conference. More than 3,000 visitors attended the event in Milan in 2011 and more are expected in Germany in 2012. The industry association’s objective is to promote the benefits of fibre access across the continent and accelerate the availability of fibre-based, ultra-high-speed access networks to both consumers and businesses.

For more information about the event or for details of the programme visit www.ftthcouncil.eu.
 

Prysmian Group
Prysmian Group is world leader in the energy and telecom cables and systems industry. With sales of some €7 billion (pro-forma 2010 Prysmian/Draka) and 22,000 employees across 50 countries and 98 plants, the Group is strongly positioned in high-tech markets and provides the widest range of products, services, technologies and know-how. In the Energy sector, Prysmian Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in many different industrial sectors and medium and low voltage cables for the construction and infrastructure industry. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission industry, producing optical fibres, optical cables and connectivity. Prysmian is listed on the Milan Stock Exchange in the Blue Chip index.