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| 2013 ANNUAL REPORT | PRYSMIAN GROUP
BILANCIO CONSOLIDATO >
RELAZIONE SULLA GESTIONE
INCOME STATEMENT
The Net result for 2013 was a profit of Euro 154 million, compared with a profit of Euro 169
million at 31 December 2012.
The Group’s sales came to Euro 7,273 million at the end of
2013, compared with Euro 7,848 million in the previous year,
posting a negative change of Euro 575 million (-7.3%).
This decrease was due to the following factors:
• negative organic growth of Euro 241 million (-3.1%);
• negative exchange rate effects of Euro 251 million (-3.2%);
• negative change of Euro 142 million (-1.7%) in sales prices
due to fluctuations in metal prices (copper, aluminium and
lead);
• positive change of Euro 15 million (+0.2%) for the
line-by-line consolidation of Telcon Fios e Cabos para
Telecomuniçaoes S.A. (consolidated since 1 April 2012);
• positive change of Euro 64 million (+0.8%) for the
consolidation of Prysmian Powerlink Services Ltd (formerly
Global Marine Systems Energy Ltd) as from November 2012;
• negative change of Euro 20 million (-0.3%) due to non-
consolidation of the results of Ravin Cables Limited
(India) and Power Plus Cable CO LLC (Middle East – 49%
consolidated), deconsolidated since 1 April 2012.
Despite negative organic growth, reflecting tensions on world
markets throughout the year, the strategic validity of the
Draka Group’s acquisition and integration is nonetheless
confirmed. The enlargement of the Group’s perimeter has
made it possible to improve the geographical distribution
of sales, in favour of markets in Northern Europe, North
America and Asia in general, as well as to enlarge the range
of products offered, especially in the Oil&Gas, Elevator, Surf
and Optical Cables/Fibres businesses. However, this has
not been sufficient to offset the steep decline in demand in
Central-South European markets and in lower value-added
businesses, like Trade & Installers, Power Distribution and
Renewables, nor the sharp slowdown in demand for Optical
Fibre cables in the Americas. The Group’s actions to improve
customer service, combined with technological innovation,
quality improvements and greater flexibility of production by
its high value-added businesses (Submarine, High Voltage
underground and Industrial Cables) have allowed it to take
quick advantage of market opportunities, nonetheless still
marked by extremely tough competition.
Adjusted EBITDA amounted to Euro 612 million, down 5.5%
from Euro 647 million in the previous year. The decrease of
Euro 35 million is entirely due to the Telecom segment, while
the Energy segment saw a slight increase in Adjusted EBITDA.
The result for 2013 was also affected by Euro 23 million in
negative exchange rate effects compared with 2012; these
were largely due to steep depreciation of the Brazilian Real,
the Australian Dollar, the US Dollar and the Turkish Lira. This
negative impact was partially offset by a reduction in overhead
costs, achieved thanks to synergies from integrating the Draka
Group.
EBITDA includes Euro 50 million in net non-recurring expenses
(Euro 101 million in 2012), mainly attributable to costs
for reorganisation projects and for improving the Group’s
industrial efficiency.
Group operating income was a positive Euro 360 million at 31
December 2013, compared with a positive Euro 362 million in
2012, posting a negative change of Euro 2 million mainly due
to the reduction in Group EBITDA and to the fair value change
in metal derivatives, as partially offset by a decrease in net
non-recurring expenses.
Net finance costs, inclusive of the share of net profit/(loss) of
associates and dividends from other companies, were Euro 138
million at 31 December 2013, up from Euro 120 million (+15.0%)
at the end of the previous year.
The increase of Euro 18 million includes Euro 5 million for
the accelerated amortisation of bank fees on the Credit
Agreement 2010 following the early repayment of Euro 486
million during February and March 2013. This early repayment
has led to the discontinuance of cash flow hedge accounting,
resulting in the recognition of additional net losses of Euro 15
million on interest rate swaps, previously recognised in equity.
Taxes amounted to Euro 68 million, representing an effective
tax rate of around 30.4%.
The net result for 2013 was a profit of Euro 154 million,
compared with a profit of Euro 169 million in 2012, recording
a negative change of 8.6%.
Adjusted net profit
1
was Euro 268 million, compared with Euro
280 million in the previous year.
(1) Adjusted net profit is defined as net profit/(loss) before non-recurring income and expenses, the fair value change in metal derivatives and in other fair
value items, the effect of currency and interest rate derivatives, exchange rate differences, non-monetary interest on the convertible bond and the related
tax effects.
