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LETTER TO STAKEHOLDERS
Revenue growth, improved profitability and solidity of the financial structure have all characterised 2015,
which has closed with better-than-expected results for our company. In a scenario showing signs of recovery
but nonetheless dominated by uncertainty and strong competitive pressure, our ability to defend the more
strategic, high value-added businesses has continued to be decisive.
The market for submarine cables and systems has rewarded our project execution capability, which has
been further enhanced by investments in technological innovation, production capacity and in installation
with the new cable-laying vessel "Cable Enterprise". In the Telecom business, our recovery of optical fibre
competitiveness and ability to develop innovative technological solutions for broadband, have allowed us to
grasp the opportunities in what has proved a solid market.
Our commitment to containing costs and reorganising manufacturing footprint has carried on like in previous
years, taking the number of plants closed to 12 since initiating the integration process with Draka. Thanks to
these actions, and careful financial management, the business has been able to rely on strong cash flows
and achieve a considerably better net financial position than expected.
Business performance
Group sales amounted to Euro 7,361 million, posting organic growth of +5.3% assuming the same group
structure and excluding metal price and exchange rate effects. Sales growth reflected our capability to
execute the many important submarine cable projects in the order book. High voltage underground sales
were stable, while SURF (Subsea Umbilicals Risers Flowlines) posted a positive performance, especially
thanks to umbilical sales. Sales by the Energy Products segment benefited from a slight recovery by Trade &
Installers and good performance by Power Distribution, while the Industrial cables business was penalised
by the downturn in O&G and Automotive. Lastly, in the Telecom segment the Group benefited from the
continued growth in demand for optical cables and improved competitiveness of its products.
Adjusted EBITDA (before net non-recurring expenses of Euro 1 million) reported a jump of +22.6% to Euro
623 million from Euro 509 million in 2014. Excluding the adverse impact of the Western Link project,
Adjusted EBITDA would have been Euro 649 million, versus Euro 603 million in 2014. The improvement in
profitability, particularly in the Energy Projects and Telecom segments, took place at a steady rate
throughout the year.
Net financial position amounted to Euro 750 million at the end of December 2015 (compared with Euro 802
million at the end of 2014), marking a considerable improvement even on the initial forecasts, and would
have been Euro 529 million excluding the impact of acquisitions. Cash generation from operating activities
and a decrease in net working capital were among the main contributors to this result.
Industrial investments
Like in the previous year, the Group has continued to develop its growth strategy by focusing on investments
in its high value-added businesses. Particular energy has been devoted not only to the process of
concentrating high-tech product manufacturing in a small number of plants, with the goal of creating centres