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level in 2013. The decisive contribution to this result came
from high value-added businesses, in particular submarine
cables and systems, along with the significant improvement
in profitability posted by the Telecom business. However,
pressure on prices continued to impact the profitability of
the more cyclical businesses (Trade & Installers and Power
Distribution), which nonetheless found a stabilisation point.
Within the Industrial cables business, the various segments
had widely differing performances, with Renewables and
Elevators making a good contribution, while others were less
positive, such as Oil & Gas, affected by the fall in oil prices,
and some slowing sub-segments of Specialties & OEMs.
The Group confirmed its solid financial structure with a
net financial position at the end of December 2014 of Euro
802 million (Euro 805 million in 2013), well ahead of initial
expectations, achieved thanks to the Group's significant
cash-generating capacity. Synergies arising from integration
with Draka amounted to Euro 140 million.
Strategy development
Industrial investments
In this context, the Group has relentlessly pursued its growth
strategy by focusing on investments in its high value-added
businesses, on ongoing actions to reduce costs and improve
the efficiency of its organisational structure and manufactur-
ing footprint.
In particular, we are driving forward the process of concen-
trating high-tech product manufacturing in a smaller number
of plants, with the goal of creating centres of excellence with
high levels of know-how, where economies of scale can be
achieved by improving manufacturing efficiency and reducing
capital employed. In the standard businesses, the focus has
been on pursuing greater manufacturing efficiency, while
nonetheless maintaining a wide geographical presence to
minimise distribution costs.
The Group's overall capital expenditure totalled Euro 163
million in 2014, up from 2013. Investments to increase pro-
duction capacity and improve the mix accounted for around
30% of the total and were particularly focused on the Energy
Projects and Telecom segments. In the submarine cables
business, investments to increase production capacity and
develop additional technological capabilities were made at all
three production sites located in Arco Felice (Italy), Pikkala
(Finland) and Drammen (Norway). Also of note was the
upgrade of the "Cable Enterprise" cable-laying ship which will
additionally boost the Group's submarine project execution
capabilities. There were two main capex projects in the high
voltage underground business: the first in Abbeville (United
States) to build a second production line and the second in
Slatina (Romania). The Telecom segment's main capital ex-
penditure was to upgrade the optical fibre plant in Sorocaba
(Brazil) and to increase production capacity at the plant in
Slatina, confirmed as one of Europe's centres of excellence for
optical cables. The Energy Products segments made tactical
capital investments to support the development of promising
markets.
A significant proportion of overall capital expenditure was
devoted to improving efficiency in order to reduce fixed and
variable costs, with a focus on product design and exper-
imentation with new materials. In the optical fibre field,
the investment programme to recover fibre manufacturing
competitiveness continued to move ahead.
Lastly, the Research & Development department worked on
several projects, particularly in the submarine cables area,
with the aim of further strengthening the Group's undisputed
technological leadership; projects also focused on Extra High
Voltage underground cables and P-Laser cables and on Oil
& Gas cable product development and technology transfer
between Group factories. The Telecom business introduced
innovations to optical fibres to boost their capacity and per-
formance and to optical cables and connectivity to meet the
specific requirements of broadband cabling projects.
Human Capital Development
The quality of human resources is confirmed as a strategic
factor for the Group's competitiveness. Prysmian carried
out several important People Development projects in
2014. The Graduate Program attracted more than 16,000
applicants from all over the world, leading to the selection
of 50 high-potential new graduates to join the 130 already
recruited. Attention was also given to fostering the value
of senior resources under the Experience Counts project.
The Prysmian Group Academy, a school of managerial and
professional education, saw as many as 600 employees pass
through its doors during the year. Equally successful were
other projects concerning Talent & Succession Management
and performance appraisal. Lastly, the Group employee share
purchase plan (YES Plan) reported a strong take-up, with
around 5,000 employees signing up in 2014, year one of the
plan, confirming their great sense of corporate belonging and
their confidence in the Group's future.
Value creation
Among the principles underlying the Prysmian management
approach is the ability to satisfy the expectations of our
stakeholders and shareholders, through a constant focus
on value creation. We are pleased to have achieved the 2014
targets announced to the market and we are able to reward
our shareholders, for their continued confidence in our man-
agement, with a proposed dividend in line with 2014.