14 Connect, TO LEAD Finally, there is the Digital Transformation. The data boom is fueling big investments in telecom networks and digital infrastructure, and this in turn will create additional demand for electricity. Optical and data cables demand is set to increase as premises move to fiber, data centers expand and 5G is deployed. An additional element to add on these trends is the energy and telecoms convergence. Cables have to be smarter to deal with the complexity of the new grid. They need something they did not have before: digitalized solutions. This is relevant to us because we have a strong position in both of these sectors. Why did you decide to present your strategy now? From the start, we had a clear vision. We wanted to grow this company, expand our footprint and become the market leader. We knew that one day we would capitalize on our strengths. That day has now arrived. Our strategy marks the end of the first part of our journey, but also the start towards new pathways to greater growth. How is Prysmian going to address the new market dynamics? “Connect, to lead” is based on four pillars: self-funded capacity expansion, a balanced and innovative product portfolio, the empowerment of people, and a new business segmentation. What are the plans for capacity expansion and what precautions are being taken to guarantee solid returns? We plan to almost double our capital expenditure, from €312 million in the past 5 years to €540 million in the next five years, and to selffund it with our own generated cash flow, without resorting to the debt or equity capital markets. In terms of precautions, firstly we will prioritize and select our capacity expansion projects on the basis of a solid business case, related to specific market attractiveness and customer commitments such as down payments. Secondly, we will execute these capital expenditures with the classic Prysmian discipline and rigor, to avoid cost overruns and guarantee the appropriate time to market. How does the portfolio reflect Prysmian’s focus on innovation? Our portfolio reflects our obsession with innovation. This is not just traditional innovation, aimed at improving electricity performance. It is a new innovation approach, working on electrical performance enhancement while moving towards more sustainable cabling solutions. We want to help our customers decarbonize the grids and achieve their sustainable goals, and we want to lead sustainability throughout the whole value chain of this industry, embedding it in our innovative products such as E3X robot systems, Pry-Cam monitoring products and our Sirocco Microduct cables. What role do people play? We consider people central to our strategy. We continue to invest in our people, with new programs to make them feel engaged and included in the company. Our special focus on safety at work is a tangible example of how much we care for people. Turning to the redesign of the organization, what does the new segmentation consist of? Our structure will evolve from the current three segments to four new segments which exactly mirror the market trends: Renewable Transmission, Power Grid, Electrification, and Digital Solutions. This new segmentation encourages greater focus on the market trends, enhances the effectiveness of our go-to-market, and provides more visibility of how we operate in the different spaces. Are there any synergies in Prysmian’s product portfolio? We presented the four segments as separate entities, but we recognize sizeable synergies across the four segments. The most obvious one is the One Stop Shop: customers like buying the whole range of products they need from one supplier. In North America, we serve large distributors with the full spectrum of telecoms, industrial & construction and specialty cables, while in Europe we serve utilities and transmission system operators with both high voltage transmission lines and power grid solutions. We are also benefiting from the solution provider opportunity, so combined energy and telecoms solutions, and from operational efficiencies which help us to enhance the profitability of individual segments. And we have a market hedging opportunity. The four business units, coupled with a differentiated geographical base, give us a great set-up to help temper the cyclicality of the individual segments. Let’s take a look at each segment, starting with Renewable Transmission.
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