PRYSMIAN : S.P.A. NINE-MONTH 2016 RESULTS

PRESS RELEASE

PRYSMIAN S.P.A. NINE-MONTH RESULTS 2016

Milan, 8/11/2016. The Board of Directors of Prysmian S.p.A. has approved today the Group's consolidated results for the first nine months of 2016.

"Our capability to execute the major power transmission projects in our portfolio and confirmation of the solid growth trend by Telecom have driven the Group's 2016 nine-month results," explained CEO Valerio Battista. "Sales revenue has grown in line with the first half of the year, but above all we have seen another leap in profitability, with rising margins in almost all our businesses except for Oil & Gas, still affected by the very poor market conditions. Among the winning factors our insistent focus on reducing costs and our progress in rationalizing the manufacturing footprint. The market trend is confirmed as solid for the strategic businesses of power transmission, interconnections, offshore windfarms and optical cables for broadband telecom networks, while we expect the more cyclical businesses to gradually stabilise and Oil & Gas to experience continued difficulties. Based on these prospects, we are able to confirm the profitability targets for full year 2016, with ADJ EBITDA at the upper end of the range of €670-720 million."

SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION

(in millions of Euro)

(in millions of Euro)

Group Sales amounted to €5,660 million, posting organic growth of +1.8% (in line with the organic growth recorded in the first half of the year), assuming the same group perimeter and excluding metal price and exchange rate effects. The strong growth in sales for Energy Projects is attributable to favourable phasing and improved execution capabilities for submarine projects. High voltage underground also performed well. The Telecom business has confirmed a solid growth trend for optical cables, also thanks to the recovery in fibre manufacturing competitiveness. Energy & Infrastructure report signs of slowing for Trade & Installers, partially offset by Power Distribution, which has posted positive results for the first nine months albeit with a slowdown in the third quarter as expected. Industrial & Network Components present a mixed picture, with weaker sales for Specialties & OEM but positive performance by Elevators and Automotive. Lastly, difficult market conditions continue to afflict the Oil & Gas business, impacted by a sharp drop in volumes and prices especially in the Core Oil&Gas cables segment.

Group Operating Income came to €333 million, improving by +17.2% from €284 million in the first nine months of 2015.

€141 million in the corresponding period of 2015 (+33.3%).

The principal factors over the previous 12 months that have influenced net financial position at 30 September 2016 are:

• €583 million in cash flow provided by operating activities before changes in net working capital

• €99 million in reductions in working capital

• €85 million in tax payments

• €138 million in net cash flow for acquisitions

• €235 million in net cash outflow for investing activities

• €69 million in net payments of finance costs

• €101 million in dividend payouts

• other effects, of which €83 million linked to the first-time consolidation of the net financial position of Oman Cables Industry and €42 million in currency translation differences affecting net financial position.

1 Adjusted EBITDA is defined as EBITDA, as described in the following note, before income and expense for business 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 earnings/(loss) for the period, before the fair value change in metal derivatives and in other fair value items, amortisation, depreciation, and impairment, finance costs and income, dividends from other companies and taxes.

• PROJECT EXECUTION DRIVES GROWTH IN SUBMARINE CABLES
• POSITIVE PERFORMANCE BY HIGH VOLTAGE UNDERGROUND
• OFFSHORE WIND PROJECTS IN EUROPE EXPECTED TO ACCELERATE

Energy Projects sales to third parties jumped to €1,172 million, posting organic growth of +20.9% on the first nine months of 2015. Profitability also improved, with Adjusted EBITDA at €172 million (+12.4%). The Adjusted EBITDA margin on sales was 14.6% versus 15.4% (13% excluding the €24 million write-up related to the Western Link project).

Sales of Submarine Cables and Systems have grown considerably, driven by progress in the execution of the important projects currently in the Group's order book. Margins are 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. The outlook for 2016 is stable for power interconnections while we expect an acceleration in offshore wind projects.

Sales by the High Voltage underground business have performed particularly well, driven by the execution of the France-Italy interconnector and the execution of projects in North America and Asia Pacific. The medium- term outlook is positive for markets in the Middle East, APAC and Central Europe.

The underground and submarine power transmission order book stands at €2,600 million.

(in millions of Euro)

• TRADE & INSTALLERS: WEAKER SALES WITH BETTER MARGINS
• POWER DISTRIBUTION: 9M GROWTH, 3Q SLOWDOWN AS EXPECTED, IMPROVED PROFITABILITY
• INDUSTRIAL: ELEVATORS AND AUTOMOTIVE POSITIVE, SLOWDOWN FOR SPECIALTIES & OEM

Energy Products sales to third parties amounted to €3,398 million, posting negative year-on-year organic growth of -2.1%, with Oceania and certain Asian countries growing, Europe stable and a steep reduction in volumes in Brazil and Argentina. Adjusted EBITDA for the first nine months of 2016 was up +12.6% at €217 million. The Adjusted EBITDA margin improved to 6.4% on sales (5.7% in the corresponding period of 2015).

(in millions of Euro)

Energy & Infrastructure sales to third parties amounted to €2,300 million (of which €403 million contributed by Oman Cables Industry), with year-on-year negative organic growth of -1.9%. Adjusted EBITDA climbed to €123 million (of which €28 million from the additional contribution of fully consolidating Oman Cables Industry), up

+25.3% on €99 million in the corresponding period of 2015 (with the Adjusted EBITDA margin on sales improving to 5.4% from 4.5%).

The results for Trade & Installers show a slight organic decline in sales, partly attributable to the Group's decision to focus on a product and channel mix designed to protect its profitability, which has improved. Positive performances were recorded in Northern Europe, while the important South American market, like APAC and Central-Southern Europe, has continued to turn down.

Power Distribution has confirmed a positive sales trend, even if with weaker third-quarter sales as expected, and a general improvement in profitability. Most of the impetus has come from markets in Northern Europe, the Netherlands and APAC. On the downside, demand has slowed in Germany and exchange rates have had a negative impact in Argentina.

Industrial & Network Components sales to third parties amounted €1,021 million, posting negative organic growth of -2.5%, mainly due to the instability of investment demand in certain industrial sectors. Adjusted EBITDA improved to €95 million from €92 million in the same period of 2015, with the margin on sales rising to 9.3% from 8.1% in the first nine months of 2015.

Specialties & OEM had a negative underlying sales performance, mainly due to slowdown in the mining and nuclear power stations sectors and in renewable energy in China, as partially offset by good performance in the defence and marine sectors. The situation in South America is particularly difficult. The Elevator business has enjoyed a solid performance thanks to the Group's success in increasing its market share in North America with the sale of accessories and after-market services. The Automotive business has reported an underlying increase in sales and a slight improvement in profitability, with positive performances in APAC and Eastern Europe benefiting from the new manufacturing set-up. Sales of Network Components were slightly higher, with solid performance by High Voltage only partially affected by a Medium Voltage slowdown in Europe.