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Consolidated Financial Report |
DIRECTORS’ REPORT
2014 Annual Report
Prysmian Group
46
During 2014, the Group's profitability was largely stable while
sales volumes recovered; in particular, the Energy Products
segment reported a slight recovery for the Trade & Installers
business, offset by a downturn for Power Distribution and
some sectors of the Industrial business; the Energy Projects
segment enjoyed a positive trendmainly thanks to the perfor-
mance of the Submarine business (excluding the adjustments
for the Western HVDC Link project), as offset by weakness in
the High Voltage business; growth by the Telecom segment
was mainly due to increased demand for optical fibre cables,
which offset the deteriorating performance of copper cables.
During the last fewdays ofApril 2014, some technical problems
were uncovered in relation to the manufacture of the cables
for the Western HVDC Link project, which have affected the
full-year results. In this Annual Financial Report, the effects
of the Western HVDC Link project have been determined with
respect to the results forecast prior to discovering the above
technical problems; such effects amount to Euro 61 million on
sales and Euro 94 million on operating income.
The Group's sales in 2014 came to Euro 6,840 million,
compared with Euro 6,995 million in the prior year, posting
a negative change of Euro 155 million (-2.2%). Excluding the
negative impact on expected revenue from the Western HVDC
Link project, the Group's sales would have been Euro 6,901
million (-1.3%). The decrease in sales was attributable to the
following factors:
• increase of Euro 127 million (+1.8%) from organic growth;
excluding adjustments for the Western HVDC Link project,
organic growth would have been Euro 188 million (+2.7%);
• reduction of Euro 178 million (-2.5%) due to negative
exchange rate effects;
• reduction of Euro 104million (-1.5%) in sales prices following
fluctuations in metal prices (copper, aluminium and lead).
The organic growth in sales of +1.8%, is analysed between the
three operating segments as follows:
Energy Projects +1.7%; (+6.1% excluding adjustments
for the Western HVDC Link project);
Energy Products +1.4%;
Telecom
+ 4.0%.
Group Adjusted EBITDA (before Euro 13 million in non-recur-
ring expenses) came to Euro 509 million, posting a decrease
of Euro 104 million on the corresponding figure in 2013 of
Euro 613 million (-17.0%). Excluding the negative impact of
the Western HVDC Link project, Adjusted EBITDA would
have been Euro 603 million.
The full-year result for 2014 reflects the negative impact of
Euro 14 million in higher exchange rate effects than in the
prior year, arising from the depreciation of the Brazilian Real,
the US Dollar, Australian Dollar, the Turkish Lira, certain
North European currencies (Swedish Krona and Norwegian
Krone) and the Argentine Peso.
EBITDA includes Euro 13 million in net non-recurring
expenses (Euro 50 million in 2013). Such net non-recurring
expenses in 2014 mainly include Euro 22 million in income
from the purchase price adjustment against the acquisi-
tion of Global Marine Systems Energy Ltd (now renamed
Prysmian PowerLink Services Ltd.), Euro 31 million in income
from the net release from the antitrust provision, Euro 48
million in expenses for reorganisation and improving indus-
trial efficiency, Euro 8 million in income from the dilution