Prysmian studies dual listing in the US

Prysmian consolidated its growth, achieving an adjusted EBITDA of EUR 1.409 billion in the first nine months of the year, with an 11.9 per cent margin on sales (the highest level ever achieved in the group's history). The result (adjusted Ebitda in the third quarter was EUR 540 million) also benefited from the integration of the US company Encore Wire, whose acquisition was finalised last April. And it is precisely in the US market that Prysmian is preparing for a further step forward, exploring the possibility of a dual listing. "This evaluation is underway," said Prysmian CEO Massimo Battaini. "By the end of the year or by January at the latest we will be able to reach a conclusion, deciding whether or not to proceed. The decision will be based on the real potential liquidity benefit we could obtain from a dual listing in the US'.

In the first nine months of the year, the cable manufacturer reported revenues down 1.4% to EUR 12.362bn, slightly below consensus (EUR 12.393bn). In the third quarter, organic growth was 1.8%. Adjusted Ebitda was 1.4 billion with margins increasing from 10.9% in the first nine months of 2023 to 11.4%. Ebitda was 1.3 billion (1.19 billion in 2023), including net charges for corporate reorganisations, non-recurring charges and other non-operating charges of 100 million. Net profit increased by 7.7% to EUR 634m. Free cash flow increased to EUR 979 million from EUR 729 million in September 2023 and EUR 724 million for the full year 2023. Net debt increased to EUR 5.042bn from EUR 2.073bn, mainly due to the impact of the Encore Wire acquisition. In light of the results Prysmian confirms the outlook revised upward with the publication of first-half 2024 results. The guidance for the full year sees Ebitda in the range of 1.9 to 1.95 billion and free cash flow in the range of 840 to 920 million. "Prysmian has continued to improve margins and cash generation," explained Battaini. "The results show that Prysmian is well positioned to pursue organic growth and margin improvement. We have laid the foundations to achieve a robust Ebitda margin next year as well'.

In detail, revenue improvements in Transmission (+12.3% organic growth) and Power Grid (+1.8% organic growth) were offset by declines in Electrification (-3% organic growth) and Digital Solutions (-17.3% organic growth). In the third quarter, there was overall positive organic growth of 1.8%, led by Transmission (+17.5% organic growth) and Power Grid, which again offset declines in Electrification and Digital Solutions. "The solid performance of Transmission and Power Grid, which grew both in terms of revenue and profitability, was complemented by the improvement of our margin in Industrial & Construction in the third quarter, which for the first time, includes Encore Wire in our scope. These results confirm the strong cultural affinity between the companies and the positive impact of the acquisition on our performance.

The next step could, as mentioned, be the dual listing. 'The conditions are all there and we are thinking seriously about it,' explained Battaini. 'We are assessing the implications regarding the organisational and financial changes required. Listing in the US would bring benefits for those who do not invest in the Milan market'. A decision, the CEO concluded, will in any case be made by the next Capital Markets Day, which the group will organise in March, in New York.

Another decision that could be taken in the coming months is that regarding a possible acquisition of Nexans (the French company, according to rumours, rejected an offer from the CD&R fund in these days). "We are looking at the dossier," said Battaini, "but we do not yet know whether it would make sense, also because there is a significant overlap" between the two businesses as far as the Industry & Solutions business is concerned; the integration, however, "would give us an additional perimeter advantage, an additional share in the market, although it would probably lead to significant restructuring in terms of factory overlap. We will work on the case, study it, and make a decision in the coming months'.