The tenth anniversary of the founding of the Prysmian Group was celebrated in 2015, representing an ideal occasion to remember the great success achieved over the years. These celebrations, with various initiatives involving Prysmian's people and stakeholders, also offered a chance to think about and analyse the results delivered during the past decade. Multiple marketing and communications activities were organised throughout 2015 to mark this 10-year milestone: all communications carried a golden logo created especially in honour of the tenth anniversary, while the history of Prysmian over the decade was gathered and recounted in a book, produced for the occasion, that was dedicated and distributed to every employee.
The Group has signed an agreement to increase its stake in Oman Cables Industry to approximately 51%, thus gaining majority stake. According to the terms of the agreement, Prysmian Group, which already own a 34.78% stake in the company, will purchase an additional approximately 16%, for a total consideration of around €100 million. “We consider our investment in Oman Cables Industry of strategic importance to our presence in the Middle East region” declared Prysmian’s Group CEO, Valerio Battista. “We believe that the company has already demonstrated to be able to succeed in the market and it is now well positioned to seize new growth opportunities. As the main shareholders, we will be delighted to keep supporting the company, also by leveraging on our capabilities as worldwide leader in the cable industry”. With a turnover of RO 303.1 million ($793 million) in 2014, more than 800 employees in two plants, Oman Cables Industry is a top cable manufacturer in the Gulf Cooperation Council region and is listed in the Muscat Securities Market.
Milan EXPO 2015 was a great success. The event was attended by 21 million visitors in 184 days and involved the participation of 144 countries, representing 94% of the world’s population.Prysmian Group contributed to this great event, supplying the cables used to wire the Exhibition Piastra — i.e., the site’s exhibition ground and its most important infrastructure— on which the facilities, pavilions, clusters and amenities of the Milan Universal Exposition were built. In particular, for this project the company supplied low environmental impact MV P-Laser cables for power distribution and LV Afumex cables with special performance in the event of a fire. Within the site, Prysmian supplied LV Afumex cables to be installed in the pavilions of China, Azerbaijan, the Principality of Monaco and Japan, the latter of which was judged to be among the best of the 2015 edition by BIE - Bureau International des Expositions, the international intergovernmental organisation that has the important task of setting the goals for expositions and regulating their selection, schedule and organisation.
Cable Enterprise, the second cable vessel of the Group, has been upgraded from a moored cable laying barge into a DP2 cable laying barge able to manoeuvre with her own propulsion system at the site of work. Following major conversion works, the vessel can now operate autonomously without the need of tugs during cable installation activities. With almost 8 MW of power, Cable Enterprise is capable of maintaining her position in DP mode, even in harsher weather conditions. Her powerful propulsion system enables the vessel to undertake lay and burial operations with any type of plough, including HD3 ploughs. She is now amongst the most powerful submarine cable laying barges in the market and has unmatched green credentials. "Our objective is to further boost the Group’s submarine project execution capabilities with a powerful and flexible asset that can install the entire range of submarine cables, from interconnectors and export cables to inter-array cables between turbines or offshore oil platform grid connections", explains Raul Gil, COO of Prysmian Powerlink.
“2015 was a year of important achievements for us and our stakeholders. We managed to secure growth and profitability in a still uncertain global economic environment, mainly thanks to our continuously improved execution capability and to our disciplined financial attitude. We are now looking at the future with a degree of optimism, as a strong order backlog gives us some visibility.”
"The year has closed with better-than-expected results as our ability to defend the more strategic, high value-added businesses 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. In the Telecom business, the recovery of optical fibre competitiveness and our ability to develop innovative technological solutions for broadband, are allowing us to take full advantage of the opportunities in what is proving a solid market. All this, combined with careful financial management, has helped to ensure strong cash flows and a considerably better net financial position than expected.”
“As the global leader of the cable industry, Prysmian helps to provide the economies of the world with power and communication, it lights cities up, it helps people to move and communicate, and it makes a contribution to lasting and sustainable industrial development. Our world is our clients, that means the main power and telecommunication operators of the globe, and the entire global society that benefits from their services. We shoulder a great responsibility. That’s why we believe in sustainability and make it happen, by constantly searching for innovative technological solutions.”
It was a record year for the submarine cables business, thanks to interconnection contracts awarded by leading network operators, particularly in the North Sea, where the Prysmian Group won new orders worth in excess of Euro 1 billion. There were also encouraging developments in the Original Equipment Manufacturing (OEM) sector, with considerable progress in the areas of nuclear energy, rail transport and port cranes, while the mining and shipbuilding industries recorded a slowdown. Oil & Gas applications were affected by the oil price slide, especially those products serving the Maintenance, Repair and Operations (MRO) business. In the telecom business, Prysmian benefi ted from the global growth in demand for optical cables, especially in North America, Europe and Australia. Multimedia (MMS) applications also displayed strong growth thanks to the development of new data centres in Europe.
Energy Projects posted excellent performance in 2015 for submarine cables, with order intake of approximately Euro 1 billion. A year of stability for High Voltage underground while SURF revenue grew thanks to Umbilicals. Total segment sales reached Euro 1,587 million, with organic growth of 15.8% and a major rebound in profi tability. Adjusted EBITDA came to Euro 246 million, soaring 59.7% from Euro 154 million in 2014.
Sales performance by Submarine Cables and Systems for power transmission was very buoyant, particularly thanks to the capability to execute the numerous projects currently in the order book. The Group worked on completing major contracts such as the Italy-Montenegro, Dardanelles Strait and Greece-Cyclades interconnectors, connections for offshore wind farms such as Borwin3 and Dolwin3 in Germany, and the Exxon Mobil project in the United States. The adverse effects related to execution of the Western Link project were also reduced by Euro 30 million. The submarine projects order book stood at Euro 2,600 million at the end of December 2015, with order intake exceeding Euro 1 billion in 2015 alone.
The year 2015 was one of stabilisation for Energy Products, with a slight recovery by Trade & Installers, excellent performance by Power Distribution and an organic decrease for Industrial, mainly triggered by the downturn in Oil&Gas and Automotive investment expenditure.
Sales by the Energy Products operating segment amounted to Euro 4,665 million, refl ecting positive organic growth of 1.2% due to volume recovery in Europe, North America, Oceania and Argentina. Adjusted EBITDA came to Euro 243 million versus Euro 239 million in 2014 (+2.1%). Energy & Infrastructure achieved an Adjusted EBITDA of Euro 128 million, having improved from Euro 108 million in 2014. Static organic growth and stable prices characterised the performance of Trade & Installers. The performance of Industrial & Network Components, with Adjusted EBITDA at Euro 113 million, down from Euro 126 million in 2014, was affected by the instability of demand in some sectors. In Oil & Gas, the reduction in investments caused by falling oil prices had a particular impact on the more capital intensive sectors, such as offshore and the Maintenance, Repair & Operations business. Elevators performed extremely well in nearly all their geographic markets, particularly APAC and EMEA.
With aggregate revenues of around Euro 400 million , the new Oil & Gas Business Area can boast a well-established market presence in North America, Brazil, Europe and in the Asia-Pacifi c region. The main production facilities are located in several countries: Norway, Italy, Turkey, China, Spain, Malaysia, Brazil and US. The new Oil & Gas Business Area has been entrusted to Cristiano Tortelli, who joins the Group as Senior Vice President. The Area will include the Oil & Gas Business Unit – previously part of Energy Products - and the SURF Business Unit - originally included in Energy Projects. The goal of this new organisational structure is to position Prysmian Group as one of the key global suppliers in the Oil & Gas market, from Subsea (Umbilical & Flexible Pipes) and Down-hole technology, to the Core Cables products portfolio.
The year 2015 was one of improved profi tability for the Telecom operating segment with a recovery in margins, thanks to growing demand for optical cables globally and higher sales volumes, accompanied by positive trends for Multimedia Solutions.
Sales amounted to Euro 1,109 million, refl ecting strong organic growth of 9.9% on 2014. Adjusted EBITDA reported a major improvement to Euro 134 million, +14.9% on 2014, with higher margins achieved thanks to measures to rationalise manufacturing footprint and regain fi bre cost competitiveness. Optical cables enjoyed increased demand in nearly all the major markets, particularly North America, Europe and Australia. In Europe, the Group won contracts for work on major projects to realise backhaul links and FTTH connections for leading operators, in particular Orange and Free in France and Telecom Italia in Italy. In North America the development of ultra-broadband and FTTx networks, providing 1 Gbps internet connections, also stimulated a continuous uptrend in demand. The high value-added Connectivity business also enjoyed a positive trend, thanks to the development of new FTTx networks in Europe and North America, as did Multimedia Solutions in Europe.
The year 2015 closed with a better-than-expected improvement in the key performance indicators, starting with profitability. Value creation capability confirmed, market leadership strengthened.
The Group's 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, as further enhanced by investments in technological innovation, production capacity and in installation with the new cable-laying vessel "Cable Enterprise". In the Telecom business, the recovery of optical fibre competitiveness and our ability to develop innovative technological solutions for broadband, are allowing us to take full advantage of the opportunities in what is proving a solid market.
This endeavour, combined with careful financial management, has helped to ensure strong cash flows and a considerably better net financial position than expected.
The Prysmian stock appreciated 33.7% over the course of the year, climbing from Euro 15.15 at 30 December 2014 to Euro 20.26 at the end of 2015. On 10 August 2015, the stock price reached Euro 22.23, its highest since listing, while the average price over the twelve months was Euro 19.10, also the highest annual average since listing. The stock's performance, including dividend pay-outs (total shareholder return), was +36.5% over the course of 2015 and +54.3% since listing. Excluding the contribution of dividends, the stock's appreciation was +33.7% in 2015 and +35.1% since listing.
The Prysmian stock was the cable industry's best performer, thanks to the solidity of the Group's results (both in terms of organic growth and profitability) and consistent ability to generate cash and pay dividends.
The Prysmian Group is a true Public Company, with a 100% free float and almost 80% of its capital held by institutional investors.
As at 31 December 2015, major shareholdings (in excess of 2%) accounted for approximately 22% of share capital, meaning that there was no majority or main shareholder. Prysmian is one of the few Italian industrial companies with a global presence to have achieved true public company status in recent years.
The Group confirmed its commitment to sustainability during 2015. Worthy of notice among the main results of 2015 was the growth of economic value generated which rose 9.9% to €1,580 million compared to € 1,438 million for 2014. This figure includes the remuneration of human resources, shareholders, minority interests and the Public Administration, contributions to the communities and the value retained by the Company.
The development of innovative, sustainable products continued across all business segments. During the year, the Group expanded its Afumex Green line of cables. Progress was also made in sustainable management of the supply chain, through the implementation of the Code of Business Conduct aimed at spreading responsible business practices and enhancing screening initiatives by including sustainability principles in the process of selecting and approving new suppliers. A focus on human capital was ensured by the constant involvement in training activity at the Prysmian Group Academy, the training school that in 2015 was attended by over 700 employees.
Amongst the noteworthy results achieved through the improvement of sustainability performances, Prysmian Group was included in the prestigious FTSE4Good Global Index, consisting of companies that stand out for the ethical, transparent and sustainable management of their activities.
At Prysmian, people are everything — and nothing less.
Talented individuals capable of inventing solutions that pave the way to new horizons in technology and business, but also the thousands of factory workers who in all corners of the planet work with passion and professionalism for the world leader in the energy and telecom cable systems industry.
For each of its employees, Prysmian has a policy of attention and engagement.
Watch the videos to learn more about our employee training and development programmes:
Prysmian generates innovation, quality and know-how to develop innovative products with lower environmental impacts and high value added for customers. Prysmian's
spending on Research, Development and Innovation total led approximately Euro 73 million in 2015, confirming its steadfast commitment to and focus on sustainable long-term growth. Activities to optimise costs via the Design To Cost (DTC) program have also continued. Design To Cost is a methodology used in order to lower production costs, both when developing a new product and when re-engineering an existing one. Thanks to DTC, Prysmian has reduced its costs by almost Euro 14 million.
The Group's continuous drive for innovation is supported by 17 Centres of Excellence, with Headquarters in Milan, employing more than 550 experienced professionals.
In continually seeking to satisfy customer needs, Prysmian remains true to its corporate Mission and develops sustainable, quality products, by investing in technological solutions able to enhance the value of its product portfolio. Consistent with these principles, in 2015 the Group once again proved its innovative spirit by expanding the Afumex Green line of cables, whose latest member, Afumex Green 1kV, is now the most sustainable and safe cable on the market. Traditional petroleum-derived polyethylene, used for insulation, has been replaced in this product with biopolyethylene (or green polyethylene), a material derived from sugar cane, which is 100% renewable, internationally certified, and reduces CO2 emissions (for every tonne of green polyethylene, more than two tonnes of carbon dioxide are captured from the atmosphere).
Also, at the end of 2015, 91% and 63% of the sites were certified in accordance with ISO 14001 and OHSAS 18001 respectively.