PRYSMIAN : FIRST HALF 2016 RESULTS

PRESS RELEASE

PRYSMIAN S.P.A. FIRST-HALF RESULTS 2016

Milan, 28/7/2016. The Board of Directors of Prysmian S.p.A. has approved today the Group's consolidated results for the first half of 2016.

"The Prysmian Group's first-half results are marked by revenue growth and a significant improvement in profitability," explained CEO Valerio Battista. "The biggest drivers of growth have been Energy Projects and Telecom. The important set of technological innovations introduced between end of 2015 and 2016, involving the launch of the 600kV and 700kV cable systems, combined with greater project execution capabilities, involving the commissioning of Ulisse, the Group's third cable vessel, mean the Group is well positioned to continue taking advantage of the opportunities offered by the market. In the Telecom business, growth has been driven by the recovery in optical fibre competitiveness and the new optical cable manufacturing capacity in Eastern Europe. Performance by the higher value-added businesses has contributed to a fresh upturn in profitability, with a significant improvement in margins, also thanks to our actions to reduce fixed costs and rationalise manufacturing footprint. The newly acquired Oman Cables Industry has also made an important contribution in this regard."

SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION

(in millions of Euro)

(in millions of Euro)

Group Sales amounted to €3,785 million, posting organic growth of +1.8% assuming the same group perimeter and excluding metal price and exchange rate effects. The satisfactory execution of the large number of projects currently in the order book has led to a significant jump in revenue for the Energy Projects segment (+22.7%). This result reflects not only positive performance by submarine cables and systems but also excellent high voltage underground sales. Energy & Infrastructure reported a slight drop in sales (-1.1%) partly due to the Group's decision to focus on the profitability of Trade & Installers product mix, in contrast with positive organic growth for Power Distribution. The Industrial cables business (-1.5%) saw a slight slowdown for Specialties & OEM in the second quarter, reflecting weak investment in the capital goods sector. Elevators business recorded a solid organic growth. The Automotive business showed signs of revival in the second quarter. The Telecom business confirmed the uptrend in sales (+5.8%), with an acceleration in the second quarter. The market downturn, as well as a difficult comparison with the same period of 2015, continued to penalise the Oil & Gas segment, which reported a steep decline in sales (-33.9%), even if as expected.

Group Operating Income came to €217 million, a major improvement from €173 million in the first half of 2015 (+25.5%).

€16 million is mainly attributable to lower finance costs associated with improved efficiency of the financial structure and a lower average financial exposure.

The principal factors over the previous 12 months that influenced net financial position at 30 June 2016 were:

• €551 million in cash flow provided by operating activities before changes in net working capital

• €150 million in reductions in working capital

• €84 million in tax payments

• €220 million in overall cash flow for acquisitions (including new consolidated debt)

• €229 million in net cash outflow for investing activities

• €78 million in net payments of finance costs

• €101 million in dividend payouts

• €41 million in other negative effects (mainly currency translation differences)

1 Adjusted EBITDA is defined as EBITDA, as described in the following note, before income and expense for company reorganisation, before non-recurring items, as presented in the consolidated income statement, and before other non-operating income and expense. The definition of this performance measure has been modified following CONSOB's implementation of the new ESMA guidelines (reference ESMA/2015/1415).

2 EBITDA is defined as operating income before the fair value change in metal price derivatives and in other fair value items and before amortisation, depreciation and impairment.

• STRONG UPTREND CONFIRMED FOR SUBMARINE CABLES
• POSITIVE PERFORMANCE BY HIGH VOLTAGE UNDERGROUND
• IMPROVEMENT IN PROFITABILITY

Energy Projects sales to third parties reached €761 million in the first half of 2016, reflecting organic growth of

+22.7%. Profitability also improved, with Adjusted EBITDA at €111 million compared with €100 million in the first half of 2015 (€76 million excluding the Western Link write-up), while the margin on sales was 14.6% versus 15.6% in the first half of 2015 (around 12% excluding the Western Link write-up).

Sales of Submarine Cables and Systems grew considerably, driven by progress in the execution of the important projects currently in the Group's order book. Margins were also much improved thanks to the focus on project management and to the enhancement of cable installation assets, making it possible to insource more of the installation operations. Ulisse has entered service as the third vessel in the Group's cable-laying fleet, which already numbers the Giulio Verne, the world's largest cable ship particularly suited to deep water installations, and the Cable Enterprise used for average depth installations. Ulisse is suited to shallow water operations and is a very important asset for offshore wind farm projects.

Sales of High Voltage underground cables performed particularly well in the wake of work on the France-Italy interconnector and the execution of projects in North America and Asia Pacific.

The underground and submarine power transmission order book stands at €2.95 billion. The market scenario for submarine cables and systems remains solid, with good opportunities expected in the offshore wind sector in France, the Netherlands and Great Britain in the second half of 2016 and in 2017. High voltage underground tendering activities are also continuing at an intense pace in the Middle East.

(in millions of Euro)

• GRADUAL IMPROVEMENT IN MARGINS FOR TRADE & INSTALLERS
• POWER DISTRIBUTION GROWTH IN LINE WITH FORECAST
• INDUSTRIAL: ELEVATORS AND AUTOMOTIVE POSITIVE, SLOWDOWN FOR SPECIALTIES & OEM

Energy Products sales to third parties amounted to €2,298 million (of which €289 million from the line-by-line consolidation of Oman Cables Industry since 1 January 2016), recording negative organic growth of -1.3%, with Oceania and certain Asian countries growing, Europe and North America stable and a steep reduction in underlying sales in Brazil and Argentina. Adjusted EBITDA for the first half of 2016 came to €151 million, posting a strong increase of €25 million (+20.0%) on the corresponding period of 2015, almost all of which due to the first-time consolidation of Oman Cables Industry. The Adjusted EBITDA margin improved to 6.6% on sales (5.5% in the corresponding period of 2015).

(in millions of Euro)

Energy & Infrastructure sales to third parties amounted to €1,567 million (of which €289 million contributed by Oman Cables Industry), versus €1,468 million in the first half of 2015 (organic change of -1.1%). Profitability improved, with Adjusted EBITDA climbing to €87 million (of which €24 million contributed by Oman Cables Industry) from €63 million in the corresponding period of 2015, and the margin on sales improving to 5.5% from 4.3%. This result confirms the gradual recovery in profitability seen since the beginning of 2015.

The 2016 first-half results for Trade & Installers show a slight organic decline in sales, attributable to the Group's decision to focus on a product and channel mix designed to improve its profitability. Positive performances were recorded in Eastern and Northern Europe and in Oceania, while the South American market continued to suffer from macroeconomic downturn.

Power Distribution confirmed a positive sales trend, particularly driven by the markets in North America, the Netherlands, Northern Europe and Asia Pacific. On the downside, second-quarter activity slowed as expected in Germany, while demand declined in Argentina.

Industrial & Network Components sales to third parties amounted to €682 million, posting negative underlying growth of -1.5%, mainly due to the weakness of investment demand in certain sectors of Specialties & OEM, with a rationale of differentiation by geography and application. Adjusted EBITDA improved to €64 million from

€61 million in the first half of 2015, with the margin on sales rising to 9.4% from 8.2%. Specialties & OEM remained generally stable in the first six months of the year, with a slight slowdown in the second quarter. Defence, Crane and Marine cables all enjoyed positive sales, while Nuclear, Railways, Mining and Renewables recorded weak results. The Elevator business enjoyed a solid performance thanks to the Group's success in increasing its market share in North America and APAC with the sale of accessories and after-market services. The Automotive business reported a good underlying increase in second-quarter sales, with strong performance in China and Eastern Europe benefiting from the new manufacturing set-up. The Network Components business managed to improve its profitability thanks to optimisation of manufacturing footprint and improved high voltage product mix.