9
QUARTERLY OVERVIEW
Potential for growth
in the Submarine.
Recovery to continue
in Opticals
Positive ratings and targets raised after FY 2014
Gradual strengthening of the US economy
but continued weakness in Europe, growing
geopolitical tensions in the Middle East and
Russia, slowdown in some economies such
as China and Brazil.
Against this backdrop, the Group expects
demand for medium voltage power
distribution cables in 2015 to remain weak,
while building wires should continue to
stabilise. The Group confrms a generally
stable trend for its high value-added power
transmission businesses, with potential
growth areas in the Submarine business,
although partly oFset by weak demand in
the high voltage underground market. In
the Submarine business, the impact o± the
Western HVDC Link project posted in 2014
(€94 million on Adjusted EBITDA) will be
signifcantly lower in 2015. In the Telecom
business, demand ±or optical cables is
expected to carry on recovering in the
coming quarters, especially in Europe and
the US, albeit at a slower pace.
In 2015 Prysmian Group will continue to
integrate and rationalise activities. It is
conceivable that exchange rate eFects,
which had an adverse impact o± about €14
million on Adjusted EBITDA in 2014, will be
positive
in 2015.
A large majority of brokers expressed a
positive view on Prysmian stock after the
release o± the results ±or the ±ull year 2014.
Among them, Mediobanca Securities kept
its ‘Outper±orm’ rating with target price
at €18.50 and mentioned the Telecom
business as the best per±ormer, along with
Submarine’s record-level backlog. Barclays
a²rmed its ‘Overweight’ recommendation
and upped the target to €19.50 on the basis
of strong submarine and telecom businesses
as well as high cash generation. Also Morgan
Stanley reiterated its ‘Overweight’ and called
Prysmian a ‘Buy opportunity’ with target
at €21.00. Equita Sim rea²rmed its ‘Buy’
but raised the target to €20.50 underlying
more cost savings ahead. Goldman Sachs
assigned a ‘Buy’ rating with a target price set
at €19.05 as it said it sees Prysmian shares
IR Director Bifulco sees the
Group set for a robust 2015
“Last year Prysmian Group has shown
resilient performance despite the
challenges of the global macro-
economic environment, creating
the conditions for a more robust
performance in 2015.”
This is the
upbeat assessment of Cristina
Bi±ulco, Director o± Investor Relations
at Prysmian, as the stock o± the
company started the year strongly
and many brokers agreeing
on a positive outlook ±or 2015,
especially in light of the current
European investment plans which
might positively influence the
company in the near future. In a
recent overview, Italian ±inancial
magazine Milano ³inanza included
Prysmian among the stocks
expected to per±orm best in 2015.
Cristina notes,
“The financial
market expects Prysmian to
continue to create value and to
be perfectly positioned to benefit
from the positive impact of
quantitative easing in Europe.
The company is perceived as
one of the best-managed in the
capital goods sector and best-
in-class among its peers”.
She cites the strong net
financial position as a gauge of
the Group’s ability to generate
significant cash flows. “The
current year will confirm and
strengthen this view,”
she
concludes.
INTERVIEW
at a 15% discount to the sector. JP Morgan
Cazenove reiterated its ‘Neutral’ rating to
re´ect the lack o± near-term growth pick-up
given Prysmian’s large exposure to Europe,
but raised the target price ±rom €16.0 to
€18.0 to re´ect strong balance sheet and
cash generation as well as incremental
savings ±rom restructuring. No brokers had
a negative rating on the stock.
Cristina Bifulco,
Director of Investor
Relations at Prysmian
Brokers’ Recommendation*
Neutral
Positive
29%
*As of March 6, 2015
71%
