Consolidated Financial Statements >
Directors’ Report
70
| 2012 annual report prysmian group
FINANCIAL PERFORMANCE
Market share defended in Europe, growing demand in North America benefits first half of the
year, increases in South America benefit the second half.
Sales to third parties by the Trade & Installers business
area amounted to Euro 2,159 million at 31 December 2012,
compared with Euro 2,233 million pro-forma at the end of 2011,
posting a negative change of Euro 74 million (-3.3%) due to the
combined effect of the following main factors:
• negative change of Euro 54 million (-2.4%) in sales prices
due to fluctuations in metal prices;
• organic decrease in sales of Euro 57 million (-2.6%), with
the general downturn in Europe’s Mediterranean countries
not entirely offset by the recovery in volumes in North and
South America;
• positive exchange rate effects of Euro 37 million (+1.7%).
During 2012, Prysmian Group generally defended its market
share in the major European markets not only by pursuing
a strategy focused on commercial relationships with top
international customers, but also by engaging in tactical
actions to avoid losing sales opportunities. During the second
half of 2012, Prysmian pursued its commercial strategy even
more selectively so as to avoid those product segments most
susceptible to price pressures, not only by directing its product
mix to products for “safety of people and property” (Fire
resistant/LSOH), but also by accepting a slight reduction of its
share in zero or low-margin markets.
This allowed it to mitigate the decline in profitability, in the
presence of initially descending and then more stable metal
prices.
In North America, Prysmian Group was able to benefit from
the first-half uptrend in demand after completing activities to
rationalise its Canadian production site in Prescott and make
it more efficient.
Despite tough price competition in the industrial and
commercial construction sectors, Prysmian Group increased its
market share in South America in the last two quarters thanks
to its wide product range.
Thanks to the combined factors described above and the
actions to improve industrial efficiency, adjusted EBITDA
increased by Euro 4 million (+5.5%) on the prior year to Euro 77
million, despite the market downturn in Southern Europe.
