Letter to shareholders
Prysmian CEO letter
2021 has been a another year of unprecedented uncertainty and challenges for global businesses and industries, as we continue to see the impacts of global macroeconomic, political and societal change.
This year has also provided considerable challenges and uncertainty for all of our people and communities across the world, and I would like to thank all of our employees for their incredible resilience and commitment during the year.
The world is changing and climate change is one of the core global challenges that human societies are presently facing. Deep decarbonization must be achieved to tackle this challenge and the collective response has been a call for the expansion and integration of renewables. Prysmian constant technological innovation is at the core of the response.
Our smart, efficient and green solutions, coupled with our people’s expertise, commitment and passion positions Prysmian as the leading technological enabler with game changing offerings and solutions for both now and generations to come.
Our strong performance in 2021 across our all of our business has been driven by the strong demand for our solutions across every region of the world. As a result, we remain the driving force in the energy transition, global digitalisation and the electrification of society.
A year of strong growth and record orders
For the first time in our history, the Group sales exceeded €12 billion, a record milestone, with an organic change of 10.9%, driven by strong performances across the resilient Energy segment and a recovery in the Telecom.
Adjusted EBITDA grew sharply by 16.2% to €976 million, exceeding the Group’s upper range of expectations and revised guidance of €920-€970 million.
The Energy segment has once again demonstrated its resilience, with sound organic growth of 10.7% and stable margins within the business division. This included strong performances from both Energy & Infrastructure and Industrial & Network Components.
The Projects segment reported positive organic growth of 10.2%, mainly attributable to the excellent execution of Submarine Power Cables projects in H2. The Group has also reaffirmed its technological and market leadership, acquiring record orders worth approximately €4.8 billion in the year.
Another highlight has been the recovery in the Telecom segment during 2021, which has been driven by the strong demand for our solutions in the US, recording organic growth 12.7%.
The Group continues to generate strong cash flow, with recorded Free Cash Flow of €365m for the year, ± 20% higher than previous guidance.
Given the strength of the results for 2021, the Board of Directors will recommend at dividend of €0.55 per share be distributed, with a total pay-out of approximately €145 million if approved by at the forthcoming AGM.
Accelerating the rollout of global projects
We have been breaking boundaries in delivery of cable projects throughout 2021. Our execution capabilities, production capacity and equipment investments mean we are second to none and we continue to provide state-of-the-art solutions for High Voltage Underground and Submarine cable links in some of the world’s most challenging environments and major offshore wind farms.
The launch of the Leonardo Da Vinci, a state-of-the-art cable-laying vessel represents a unique asset for the development of efficient and sustainable power grids to support the energy transition.
There have been several major developments within the Projects division in 2021 including the Viking Link, the world’s longest submarine interconnection between the UK and Denmark, where the Leonardo da Vinci is starting operations.
We have also accelerated our offering across several significant US projects. This included the mega land power cable SOO Green HVDC Link, the first of its kind in the US and new contract awards with Dominion Energy Group for the largest submarine project ever awarded in the US and the Vineyard offshore wind farm, the first large scale offshore windfarm in the US. The US remains significantly underserved by renewable energy and we expect continued strong growth in investment in US energy infrastructure for a number of years.
Our focus on sustainability and social ambition
2021 has seen Prysmian take accelerated steps in the process of integrating environmental, social and governance factors across its company strategies. This is a critical part of our journey in building out the Group’s sustainability identity for future years.
Throughout the course of the year, we have reinforced our continued commitment to being a credible and transparent ESG-focused company – dedicated to a business model that integrates economic, social and environmental responsibility across our Group activities and scientific-based targets to tackle climate change.
The launch of our new and ambitious sustainability strategy has seen the Group adopt science-based targets aligned with the requirements of the Paris Agreement and also endorse the Climate Change Ambition, and Prysmian also reinforced its commitment to its social purpose through the formal announcement of the Group’s Social Ambition. This includes a set of new 2030 targets, committing to improving diversity, equality and inclusion (DE&I), digital inclusion, community empowerment, employee engagement and upskilling.
Prysmian is proactively developing as an organisation which recognises the need for diversity, inclusion and gender equality at all levels. We are empowering more women to pursue careers within Prysmian in technical and scientific roles – committing to 30% of senior leadership roles to be held by women and more than 500 new female hires with STEM backgrounds by 2030.
As a company, we want to actively promote the transition towards a more equal, diverse, inclusive and enriched working environment and further align the Group with the United Nations Sustainable Development Goals.