5
PrysmianGroup Insight
QUARTERLYOVERVIEW
Highvalue-addedbusinessperformedwell
Submarine power transmission and certain areas of the industrial cablesmarket
scoredwell in 2013, underground cables were stable, while the power distribution
market continued to experience difficulty. The sharp decline in demand for telecom
and renewable cables affected the overall results for last year.
Energy
Energy sales amounted to
€
6,018million in 2013with
organic growthmarginally
negative (-1.0%). Excellent
performance by submarine
cables and certain industrial
areas helped partially offset
the underperformance of
Power Distribution and
Trade & Installers. Adjusted
EBITDA came in at
€
492
million, slightly higher than
the 2012 figure, with an
improving profitability on
sales.
Utilities
Sales by the Utilities business were
€
2,224million, meaning an organic
variation of -1.4%, with a positive
performance of Submarine cables
and systems and a general stability
of High Voltage underground,
which helped to partially offset
the negative trend by Power
Distribution. The focus on high
value-added businesses helped to
improve profitability, with adjusted
EBITDA at
€
281million from
€
270
million in 2012. Adjusted EBITDA
enjoyed a significant rebound in
the second half to
€
160million
from
€
121million in the first. Sales
and profits were up for Submarine
cables and systems, as the Group
confirmed its leadership in offshore
wind farm connections and power
system interconnections. In Power
Distribution sales and profits
both fell in 2013, due to declining
electricity consumptions and
consequent limited investments by
utilities companies, particularly in
Europe.
Trade& Installer
Sales of Trade & Installers amounted
to
€
1,914million in 2013, posting
negative organic growth of -4.3%
due to persistent weakness of
demand in Central and Southern
Europe and high competition in Asia.
The constructionmarket continued
on a positive trend in North
America, while in South America
the Group strengthened itsmarket
position. In the second half of the
year the organic growthwas back in
positive territory. Adjusted EBITDA
came in at
€
72million, down from
€
77million in 2012, due solely to
the negative effect of exchange
rates.
Industrial
Sales of the Industrial business
grew organically in 2013 by
4.1% to
€
1,765million, as new
commercial initiatives began to
achieve results, especially in South
America, Asia and North America,
while Europewas weak, mainly
in the OGP, Infrastructure and
Renewables areas. Therewas a
significant acceleration in growth in
the second half, with organic sales
growing at +7.8%. Infrastructure
and transport, alongwith elevator
cables, posted good results despite
weak performance in Europe.
Adjusted EBITDAwas
€
134million,
slightly down on previous year due
to the negative effect of of exchange
rates.
Telecom
Optical cable sales in 2013
showed a steep decline in the
Americas, with the ending of
government incentives but
signs of improving demand
emerged over the year
with further consolidation
expected in 2014.
2013 sales in the Telecom segment recorded negative organic variation of
12% to
€
1,255million. But after reaching the trough in the first quarter
they experienced a gradual, albeit still weak, improvement over the rest of
the year, expected to consolidate in 2014. A number of important project
involving optical cables are in progress in Europe, namelywith BT in the UK
and Telefonica in Spain, whilework continued on the Broadband project in
Australia. Adjusted EBITDA came in at
€
120million, down 25.0% on 2012,
but profitability showed signs of slight recovery in the second half.
