Consolidated Financial Statements >
Directors’ Report
38
| 2012 annual report prysmian group
The critical success factors for the Prysmian Group can be
represented as follows:
Ability to anticipate/satisfy customer needs.
The technologies and processes used must be capable of
developing products and solutions that anticipate and satisfy
the needs of its customers. This is why the Group constantly
strives to improve its competencies in the areas of Research
and Innovation, Customer Centricity, Employee Development
and Environmental Sustainability.
Balanced and sustainable growth.
The ability to combine short and long-term objectives,
measurable not only by short and medium-term financial
performance to meet shareholders’ expected return on capital,
but also by seeking healthy creation of value through the
adoption of a system of governance and a business model that
allows such results to be sustained in the long run.
“Healthy” management and financial discipline.
The Group aims to implement “healthy” and prudent
principles in its financial management. In particular, its pays
great attention to operating profitability and cash generation,
with a particular focus on working capital management and
the reduction of fixed costs and capital employed in order to
maximise cash flow generation and the return on investment.
The Group also aims to maintain adequate financial leverage
for its strategy of organic and acquisition-led growth.
Transparency, corporate governance and confidence of
markets and investors.
The Group pays particular attention to its relations with
financial markets, shareholders and investors, also because
of its public company status. Its focus in this sense is on
ensuring precise maintenance of commitments and delivery
of target results. Transparency and credibility are also
expressed in a system of corporate governance based on strict
interpretation and application of the regulations and the
adoption of principles and decisions drawn from international
best practices.
Expansion and growth.
The Group’s development strategy moves along the dual track
of growth in size and continuous improvement in profitability.
When deciding in which business sectors and geographical
areas to expand, the Group tends to give priority to the
maintenance of adequate levels of profitability, even at the
expense of an increase in market share, whose preservation is
nonetheless considered as vitally important, especially in high
value-added market segments. The Group therefore pursues
both organic growth of the business, based on a selective
investment policy and the development of commercial and
production synergies, and acquisition-led growth.
The search for growth opportunities, both organically
and through acquisitions, is primarily focused on higher
value-added high-tech businesses, such as High Voltage
Underground and Submarine Cables and Systems, Cables
for the Renewable Energy sector, Cables for the Extraction,
Mining and Petrochemicals sector, Industrial Cables for
infrastructure, as well as Optical Fibres and Optical Cables for
the development of broadband networks. These businesses
are linked to long-term investment programmes and so are
less impacted by economic cycles.
In terms of geographical expansion, the Group mainly invests
in countries and markets capable of ensuring high rates of
growth and profitability.
The role of Prysmian in the fragmented cable industry will
continue to be that of an “aggregator”, capable of serving
as a leader in the current processes of rationalisation and
consolidation.
Rationalisation and efficiency of industrial and commercial
processes.
Prysmian has developed a recognised track record of
being able to optimise its industrial processes, including
by integrating and rationalising acquired companies. The
Group is successfully conducting the process of integration
with Draka started in 2011 and is on track with its targets. It
intends to push ahead with the plan to extract synergies from
rationalising its organisation and industrial footprint, as well
as from procurement activities. The development of synergies
with Draka also covers the commercial sphere, involving the
integration of product ranges and enhancement of customer
service.
