5
Prysmian Group Insight
QUARTERLY OVERVIEW
Volume growth continued in most businesses
Good performance of the power transmission business (excl. Western Link), whose order
book reached a record
€
3 billion. Ongoing recovery in sales in the T&I market.
Sales for the Industrial business were penalised by a still sluggish demand in Europe
while the Telecom business, which already reported the first signs of trend reversal in Q1,
posted positive volumes.
Energy
Sales to third parties by the
Energy Cables and Systems
amounted to
€
2,799 million,
with organic growth of 1.4%
on the H1 2013. Excluding
Western Link impact, sales
would have been
€
2,870
million, with organic growth of
3.8%. Adjusted EBITDA came
in at
€
161 million, excluding
the impact of Western Link
Adjusted EBITDA would have
been
€
235 million, slightly up
from
€
232 million in H1 2013.
Utilities
Sales amounted to
€
992 million,
-2.2% organically due to the impact
of Western Link, without which
would have posted an organic
growth of 4.5%. The reduction in
Adjusted EBITDA to
€
64 million
from
€
124 million in H1 2013
was entirely due to Western Link,
excluding which it would have
risen 11.3% to
€
138 million. Sales
of High Voltage Underground
Cables were positive, benefiting in
particular from good performance
on strategic markets like Asia Pacific
and the Middle East. The results of
the Submarine Cables and Systems
business were impacted by Western
Link with an overall negative
effect of
€
71 million on sales and
€
74 million on Adj. EBITDA. The
procedures duly deployed by the
Group for testing and optimising
materials and processes have
allowed it to limit on the overall
impact on the project, estimated
to total
€
94 million in FY2014 and
€
167 million for the entire duration
(2014-2016). The outlook for
underground and submarine power
transmission cables and systems
remains positive with the order book
reaching the record figure of
€
3
billion for the first time. The Power
Distribution continued to be affected
by the low levels of investment by
the utilities.
Trade & Installer
Sales confirmed the signs of an
upturn in volumes seen since the
start of the year, with an organic
growth of 7.4% to
€
944 million.
Signs of dynamism were confirmed
in Eastern Europe, the Nordics,
the UK and Turkey, while also in
North America the positive trend
is expected to continue in coming
quarters. In Asia Pacific the Group
is implementing a selective growth
strategy focused on higher margin
markets. Despite the organic growth
in sales, profitability continued
to suffer from price pressure and
negative exchange rate. Adjusted
EBITDA was
€
34 million (
€
41
million in H1 2013).
Industrial
Sales were
€
817 million with a
slightly negative organic variation
of 0.3%. The business continued
to show large differences between
market segments and geographical
regions. In the Oil & Gas, growth in
demand in North Europe was offset
by the decline in the Middle East.
In the SURF business the execution
of Umbilical projects currently
in the order book will mainly fall
in the second half of the year.
The Specialties & OEM business
had a weaker half mainly due to
the slowdown in infrastructure
investments in North America and
weakness in Europe. Elevators
continued to enjoy excellent sales
performance both in the established
U.S. market and in more recently
entered European and Asian
markets. The Automotive business
posted a good performance in North
America and Asia.
Telecom
Growth for optical cables in
Europe and first positive signs
in the Americas. Cost-cuttings
to limit the impact of price
pressure and exchange rate
effects.
Sales amounted to
€
488 million, recording a slight organic increase
(+0.8%), compared with
€
514 million in H1 2013. Opticals enjoyed a
strong recovery in demand in almost all major world markets even if
price pressures, being countered by cost-cuttings, limited the effects on
revenues. In Europe, the Group started working on major projects for
leading operators, such as BT in the United Kingdom, Telefonica and Jazztel
in Spain, and Orange in France. In North America, demand started to
recover while in South America, the renewal of stimulus should lead to a
more visible market recovery in H2. Multimedia Solutions posted a recovery
in profitability while the high value-added connectivity business grew
marginally, thanks to the development of new FTTx networks.
