Energy & Infrastructure sales amounted to €2,667 million, with 2.7% organic growth. Business in Europe and South America was affected by the standstill in the construction market and reduced energy consumption, which caused utilities to hold back investments, while North America displayed signs of greater stability. Pressure on prices, partially stabilising in the second half of the year, affected profitability, even if mitigated by improved efficiency. Adjusted EBITDA was €108 million, compared with €127 million in 2013.

Trade & Installers reported a slight recovery in volumes and sales, with a return to positive organic growth. The Group continued focusing on improving relationships with key customers while offering a highly differentiated product mix designed to defend market share and limit impacts on profitability.

Power Distribution continued to be affected by the ongoing weakness of demand arising from slowing investment by utilities, particularly in Europe and South America. Full-year profitability was affected by the first-half weakness, despite additional steps to contain costs.

Industrial & Network Components sales amounted to €1,708 million, reporting negative organic growth (-0.3%) amid sharp differences in performance between markets and geographical areas. Oil & Gas was basically in line with 2013 despite the adverse impact of weak oil prices on the Maintenance, Repair & Operations business. The OEM order book was affected by lower demand for cables in the mining industry, while demand improved for renewables, particularly in Northern Europe, North America and China, and for Rolling Stock and Marine. The Group’s Elevator market leadership was consolidated in North America and expanded into European and Asian markets. The Automotive business reported a decline in volumes, while Network Components scored a positive performance after extending its range of products and services. Adjusted EBITDA came in at €126 million, compared with €141 million in 2013.

Sales performance by Submarine Cables and Systems for power transmission was highly buoyant, despite the delay in the Western Link project. The Group confirmed its market and technological leadership by winning several new projects for both energy interconnections (Cyclades in Greece, Dardanelles in Turkey, NGCP in the Philippines and Zakum in the United Arab Emirates) and for offshore wind farms (Borwin3 and 50Hertz). Profitability also improved considerably, excluding WL, which was in line with the figure announced (€94 million) at the time of the half-year results.

High voltage underground cables saw generally stable sales compared to 2013, despite the impact of weak demand for new energy infrastructure in several major European markets. This weak demand was partially offset by the Group’s increased exposure to growing markets, such as Asia and the Middle East, and thanks to the production capacity of its Asian plants. The change in the geographical mix affected the level of profitability. Among major projects secured, of particular note were Phase XI in Qatar and Ausgrid in Australia.
The order book for underground and submarine power transmission cables and systems stands at about €2.8 billion. Technological development programmes have continued with €40 million invested in the plants in Pikkala (Finland) and Arco Felice (Italy), and in the transformation of the ‘Cable Enterprise’ cable-laying ship, now ready to start work.

The SURF business (products and services for offshore oil production) was in line with 2013. Downhole technology (DHT) cables performed well in North America, while Brazilian demand for flexible pipes (post-salt) remained weak. Umbilicals were stable with a growing order book.

When quality meets capacity

The Rybinsk plant, located 380Km north east of Moscow in the Yaroslavl region, now has a production capacity of more than 20,000 tons per year of energy cables. This product range can serve the Construction, the Oil & Gas, and Automotive markets. Moreover, it can supply extra high voltage cable systems that are used in the improvement of the Russian energy distribution and transmission infrastructure, which is a major asset both for the development of Russia and for the improvement of local companies and economy in general. The plant has already obtained a third-party quality certification (ISO9000). In the telecommunications market, Prysmian provides Russian customers with the best technological products, for the 4G market and for OPGW applications, for example. Prysmian Group has recently supplied submarine energy cables for the 330kV connection installed in the St. Petersburg Bay, delivered AFUMEX safety cables for important installations like the Moscow transmission grid, and is currently bidding with the same product line for the projects connected to the 2018 Football World Cup to be held in Russia.

A Memorandum of Understanding (MoU) to analyse the potential for a submarine connection between Romania and Turkey, and two new major industrial investments worth a total of around €30 million, were announced by Prysmian CEO, Valerio Battista, together with the Group’s Central East Europe CEO, Francesco Fanciulli. The moves are part of a development plan that started in 2013 with an initial investment of €20 million.

The MoU was signed with Transelectrica, the Romanian transmission and system operator, and Unicredit Bank.
By capitalising on their areas of expertise, the partners agreed to carry out studies and analysis on the potential development of a submarine cable connection between Romania and Turkey. The memorandum is aimed at supporting the further development of the energy sector in the region, offering Romanian power suppliers the opportunity to export Romania’s surplus to third-party countries such as Turkey.

New optical cable facilities in Slatina to double production capacity during 2017. The new plant will produce a full range of new-generation optical fibre cables. They will support the most advanced applications and usages from public, private, national and international operators, with all the required quality certifications such as ISO 9001, ISO 14001 and IMQ. The first phase of the project is planned to reach completion during 2017. Part of the production volume will be available for export at regime. Prysmian is planning to double the current production capacity by 2017 and reach three times current production capacity by 2020.

New high voltage production facility. The Group has also planned to start the production of high voltage cables for underground power transmission lines up to 150 kV in Slatina. The new facility pioneers the development of high voltage cable and systems technology in Romania and will leverage locally developed resources. The new facility will serve both the domestic and export markets, further qualifying Romania as an ‘excellence hub’ to serve the most advanced international markets.

Creation of the Prysmian Slatina
Engineering Academy.
With the goal of further developing local highly skilled human resources, Prysmian has also announced the launch of an international education programme to support industrial development, with the recruitment of new and qualified local personnel. The programme is a first step towards the launch of a ‘Prysmian Slatina Engineering Academy’ in collaboration with the leading Romanian universities and is closely connected to the Group’s Prysmian Academy and New Graduate programmes.