Consolidated Financial Statements >
Directors’ Report
100
| 2012 annual report prysmian group
INTERNAL RISKS
STRATEGIC RISKS
Strategy implementation risks
The Prysmian Group’s ability to improve its profitability
depends, among other things, on its success in implementing
its business strategy. The Prysmian Group’s strategy is
based, among other things: on increasing the proportion of
sales from high value-added business lines, on developing
its industrial structure to support its strategy and on
continuously improving the structure of variable costs, on
improving logistics and customer service and on constantly
researching and developing new products and processes.
The Group intends to achieve its strategy through both
internal and acquisition-led growth; however, it is not
possible to guarantee that this strategy will be fully or partly
achieved in the timescale and manner planned.
Risks relating to the Draka Group’s integration process
The public offer for all the shares in Draka Holding N.V. was
completed on 22 February 2011 with acceptances received
from more than 99% of the shares. After the integration
process’s initial preparatory phase, the new organisational
structure was officially launched with effect from July 2011
and will guide the new Group with the goal of promoting both
the Prysmian and Draka commercial brands and of realising
the expected synergies.
Over the course of the integration process Prysmian expects
to incur a total of some Euro 200 million in restructuring
costs (net of any divestments) and to generate growing cost
synergies starting from year one of the integration with the
goal of achieving total annual synergies of Euro 150 million
by 2015, mainly by reducing fixed costs, by optimising
the industrial footprint and procurement, by making
organisational savings and improving operating efficiency and
optical fibre sourcing, and by exploiting complementarities
in the product portfolios. However, the Group cannot rule
out potential difficulties or delays in implementing the new
organisational structure and the new operating processes,
with a possible consequent adverse impact both on the
timing and amount of expected synergies and restructuring
costs.
