2014 ANNUAL REPORT

Consolidated Financial Report |

DIRECTORS’ REPORT

2014 Annual Report

Prysmian Group

REVIEW OF ENERGY PROJECTS

OPERATING SEGMENT

Energy Projects is one of the two Operating

Segments into which the Energy business has

been divided: what is its perimeter?

It covers high-tech and high value-added businesses focused

on projects and their execution, as well as on product cus-

tomisation, in other words, the High Voltage underground

business, Submarine systems and SURF (comprising

umbilical cables, flexible pipes and special Downhole Tech-

nology cables for the oil industry). These are businesses with

high technology content and high value-added: we engineer,

manufacture and install high and extra high voltage cables

for underground and submarine power transmission directly

from power stations to the primary distribution networks.

Through Prysmian PowerLink Services S.r.l., we develop

the most advanced turnkey submarine systems, including

for installation at depths of up to 2,000 metres with the

assistance of our cable-laying ship, the "Giulio Verne".

What does it mean for a global leader like

Prysmian to offer turnkey solutions?

It means being able to act as a strategic partner for coun-

try-systems, and in so doing, to strengthen its leadership

and dictate new standards for the entire industry. Take

the case of Germany, Europe's largest and strongest

economy. Germany has a very ambitious goal where energy

is concerned: to shift from fossil fuels to renewables.

Prysmian is a genuine strategic partner to Germany in this

strategic project: its ultra high-tech solutions are allowing

the grid to be fed with increasing amounts of energy

generated by offshore wind farms, while its turnkey cables

and systems solutions are able to respond to ever more

technically difficult and complex challenges. A glance at the

connections maps for the North Sea gives an immediate

idea of the scale of our activities and the importance of our

contribution.

INTERVIEWWITH MASSIMO BATTAINI,

Senior Vice President Energy Projects

The frontier of innovation and technology

is moving ever further ahead ...

Yes, we saw this in 2014, a year in which we

consolidated our leadership but also faced new

challenges, like the Western HVDC Link project,

with its unprecedented levels of work and com-

plexity, in which we encountered some technical

difficulties that were later fully overcome thanks

to our trademark technological excellence. In such

a complex business we managed to achieve organic

growth once again in 2014, which would have

been higher but for the Western Link problems,

subsequently resolved in full. This growth reflects a

combination of equivocal factors: on the one hand,

we had a positive trend for submarine systems and

the SURF business, while on the other, we had to cope

with weakness in the High Voltage business over the

past year.

What are the prospects for the Energy Projects

Operating Segment in the future?

Submarine sales grew in 2014 compared with 2013, with

work still in progress on major projects, like Helwin 2,

Sylwin 1 and Borwin 2 and 3 for offshore wind farms in

Germany. While it's true that High Voltage performance

has been generally negative in Europe, demand is still

showing a positive trend in the Middle and Far East and

in some North European markets. Prysmian is perfectly

equipped to cope with increased demand, especially in the

high value-added market segment, also thanks to recent

investments in our European plants.