QUARTERLY OVERVIEW
Signs of improvement
going into the third quarter
Confirming our profitability target for the full year
of
2013 showed sales of
€
5,488 million
and Adjusted EBITDA of
€
444
million.
Valerio Battista, CEO,
pointed out that the recovery
in sales and profitability seen
in the second quarter has
continued into the third quarter
,
while the particularly negative first-
quarter results were reflected in
a decline in nine-month sales and
earnings. The first signs of a slight
recovery can be seen though, as
the Group’s constant action to keep
costs under control and to improve
the efficiency of organisational
and production processes, along
with synergies from the integration
with Draka, have enabled it to
defend margins, with a slightly
higher Adjusted EBITDA to sales
ratio. These actions also limited
the impact on profitability in the
businesses hardest hit by the crisis,
such as building wires and power
distribution.
The Group has forecast weak
demand in 2013 for low and
medium voltage cables for Utilities
and for building wires, while the
business of onshore wind and solar
power cables is seeing a sharp
contraction. In the Telecom sector,
the weakness in demand in North
America and Brazil is expected
to remain for the rest of 2013.
Instead, positive developments in
demand are confirmed for the high
value-added power transmission
and for industrial segments such
as offshore Oil & Gas, elevators,
railway, cranes and marine. Despite
the steady deterioration in the
economic environment, the results
of the first nine months and the
size of the current order book mean
the Group can confirm Adjusted
EBITDA for FY2013 in the range
of €600–€650 million
. In addition,
it is worth noting that earlier in the
year, given the further worsening
in the markets, the Group decided
to step up measures to rationalize
and optimize its organisational and
manufacturing structure. This was
done with the goal of achieving
€
175 million in cumulative synergies
from the Draka integration by 2015,
representing an upward revision
from the previous target of
€
150
million. Commercial initiatives
have also begun, mainly in the
Industrial and Telecom businesses,
to strengthen Group presence in
high value-added segments, with
the goal of achieving significant
additional sales by 2015.
• FY negative currency effect (mainly BRL, USD, AUD) of approx.
€
20mln
• Transmission projects phasing increasing contribution in Q4
• Growing cost synergies
• Higher SURF deliveries in H2
Outlook – FY Target confirmed despite new bottom
in cyclicals and weak Telecom
Underlying business trend in line with initial expectations. Material negative currency effect in H2
FY 2013 Adj.EBITDA Target (€ mln)
600
650
3
Prysmian Group Insight
