The various segments of Prysmian Group's market had a mixed performance in 2018, featuring expansion by optical fibre cables, general stability in demand for cables for industrial applications and infrastructure and softer demand for cables by utilities in certain regions (North Europe), albeit recovering in the final part of the year.
After a weak start to the year, the submarine cables market reported a recovery in the second half, with a number of projects awarded in the final months of the year. The size of the submarine cables market was about Euro 2.8 billion, slightly above its past average. By contrast, demand continued to grow in Southeast Asia, where the Group has won a number of major interconnection projects. Tendering activities have started for the major Suedlink and Suedostlink underground HVDC cable projects in Germany.
Partly thanks to political stabilisation, Brazil has seen the major telecom carriers resume investments in both copper and optical fibre cables. North America has continued to see a big increase in data consumption by all sectors of society. As a result, the major market players - AT&T and Verizon to name just a few - are investing in fibre network infrastructure. For instance, Verizon has announced that it is upgrading its network architecture around a next-generation fibre platform with the aim of increasing 4G coverage and laying the foundations for the subsequent development of 5G and IoT (Internet of Things) technology. There has also been growing demand for interconnections between data centres.
The industrial applications business saw a mixed trend for the different market niches. While cables for the automotive and railway infrastructure industries were stable year-on-year, the nuclear and infrastructure businesses recorded a minor decline. In the Oil & Gas business, demand for onshore projects remained at the same level as the year before. The Downhole Technology business saw signs of improving demand primarily linked to growth in production of Shale Oil & Shale Gas in North America.
The Trade & Installers business enjoyed a positive trend in demand during 2018 in most of the European countries served as well as in North America. As for Power Distribution, the major European countries have seen a generally stagnant trend in energy consumption in recent years, in turn adversely affecting demand by the main utilities. The latter, operating in a recessionary economic environment, have either maintained extremely cautious positions given the difficulty of forecasting future growth, or else they have concentrated on business restructuring to improve efficiency and reduce supply-side costs.