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| 2012 aNNual rEpOrT prySmiaN grOup
CONSOlidaTEd FiNaNCial STaTEmENTS >
DIRECTORS’ REPORT
Increased profitability and positive cash flow. These are the
main drivers of our Group’s 2012 financial results. In a market
troubled by continuing crises in some of the world’s major
economies, Prysmian has achieved a positive performance in
operating earnings, particularly in its high-tech value-added
businesses. This result, combined with synergies from the
integration with Draka, achieved faster than expected, has
allowed us to fully reach the targets announced to the market.
Market scenario
The world cable market experienced a slowing in growth
in 2012, reflecting the uncertainty of the macroeconomic
environment and the reduction in investments primarily in
Europe. As a whole, the entire industry saw major differences
both between geographical regions and the various market
segments. In geographical terms, a slight increase in demand
was recorded in areas such as the Middle East, Asia and, to
a lesser extent, South America. North America reported a
moderate recovery in demand, while persistent recession
in Europe affected investment, generating a consequent
reduction in cable demand.
Such sharp contrasts were also evident in the Group’s various
market segments. Growth was reported by submarine cables
and systems, thanks to development of offshore wind energy
generation, by high voltage underground cables, by cables for
the Oil & Gas industry driven by the recovery in oil prices, and
by optical telecom cables, particularly in China. Conversely,
there was stable or declining demand for power distribution
cables and building wires, especially in Central and Southern
Europe.
Business performance
Group Sales amounted to Euro 7,848 million compared with
the 2011 pro-forma figure of Euro 7,973 million. Assuming the
same group perimeter and excluding metal price and exchange
rate effects, the organic change was -1.8%. The Group’s
increased geographic diversification and exposure to high-tech
businesses, more resilient to economic cycles, allowed it to
limit the effects of the continued difficulties, particularly in
Europe, of the power distribution and building wires markets.
Sales trend by geography showed a recovery in North America
and a good performance in Northern Europe. On the whole,
the South American market held up well, while Asia Pacific
reported mixed trends in different regions.
LETTER TO STAKEHOLDERS
The Group fully achieved its EBITDA
target, despite the still negative
environment, with the Draka integration
making an important contribution.
