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Financial Performance
Sales to third parties by the Telecom operating segment
amounted to Euro 994 million in 2014, compared with Euro
986 million in 2013, posting a positive change of Euro 8
million (+0.8%).
This change is attributable to the following factors:
• organic sales growth of Euro 40 million (+4.0%), thanks
to volume recovery for optical fibre cables;
• reduction of Euro 26 million (-2.6%) for exchange rate
fluctuations;
• sales price reduction of Euro 6 million (-0.6%) for metal
price fluctuations.
The organic growth in sales in 2014 was mainly driven by
the recovery in demand for optical fibre cable, which offset
lower demand for copper cables and OPGW products, in turn
due to the postponement of investment projects in areas
affected by geopolitical turmoil, such as Iraq and Libya.
Optical cables enjoyed a strong upsurge in demand in all
the major markets, while the general price pressure seen
in the first part of the year seemed to have stabilised, also
thanks to US dollar appreciation. In Europe, in particular, the
Group won contracts for work on major projects to realise
backbones and FTTH connections for leading operators,
such as British Telecom in the United Kingdom, Telefonica
and Jazztel in Spain, Orange in France and Telecom Italia in
Italy. Even North America displayed a recovery in domestic
demand during the year mainly involving development of 4G
LTE infrastructure and new FTTx networks. In South America
government tax measures in support of investment did not
bring any significant improvements in 2014. Lastly, the
Asia Pacific region saw work resume on the NBN project in
Australia and demand follow a positive trend in Singapore.
The Multimedia Solutions business posted a recovery in
profitability thanks to the strategy of focusing on higher
value-added products, such as data centres in Europe, and
of rationalising its presence in lower margin businesses.
The high value-added connectivity business enjoyed a
positive trend, thanks to the development of new FTTx
networks (for last mile broadband access) in Europe and
North America.
Lastly, copper cables continued their steady decline due
to the retirement of traditional networks in favour of
next-generation ones.
Adjusted EBITDA for 2014 came to Euro 116 million, reporting
an increase of Euro 10 million (+10.1%) from Euro 106 million
in 2013, also thanks to the contribution of Yangtze Optical
Fibre and Cable Joint Stock Limited Company in China.