55
Lastly, the market for medium and low voltage accessories
recorded opposing trends in different geographical areas:
weak in Europe, mainly due to the lack of grid investment
projects; still positive on the American continent, where
routine maintenance of secondary distribution networks
supported investments by the main energy suppliers; down in
China, where the market was affected by strong competitive
price pressures.
FINANCIAL PERFORMANCE
Thanks to excellent performance by Submarine Cables and good project mix for the High
Voltage underground business line, Adjusted EBITDA reached Euro 281 million, up from Euro
270 million at 31 December 2012.
Sales to third parties by the Utilities business area amounted
to Euro 2,224 million at the end of 2013, compared with Euro
2,287 million in 2012, posting a negative change of Euro 63
million (-2.8%) due to the combined effect of the following
main factors:
• negative organic growth of Euro 33 million (-1.4%);
• negative exchange rate effects of Euro 53 million (-2.4%);
• negative change of Euro 25 million (-1.1%) in sales prices due
to fluctuations in metal prices;
• negative change of Euro 16 million (-0.7%) due to non-
consolidation of the results of Ravin Cables Limited
(India) and Power Plus Cable CO LLC (Middle East – 49%
consolidated), both of which deconsolidated since 1 April
2012;
• positive change of Euro 64 million (+2.8%) due to
consolidation of Prysmian Powerlink Services Ltd (formerly
Global Marine Systems Energy Ltd) as from November 2012.
The negative organic growth in 2013 reflects a number of
opposing factors, such as the positive trend in the Submarine
Cables business line that nonetheless failed to fully offset
the growing weakness in other businesses, especially Power
Distribution.
Reflecting the contraction in demand on European markets,
the High Voltage business line’s sales posted a slight
decline. This was the combined result of projects awarded
to Prysmian in markets with growing energy infrastructure
requirements, such as the Middle and Far East, along with
a number of projects for European utilities on domestic
markets (in particular TenneT, Terna, EDF), and of the delay in
implementing projects planned in Russia due to local political
uncertainty. The order book at 31 December 2013 assures sales
visibility for almost all of 2014.
Sales by the Network Components business line were down
on the previous year, with a decline in volumes of Medium
and Low Voltage accessories on the major European domestic
markets but stable volumes for High Voltage products. In
contrast, sales on the Chinese market reported a steep decline
due to lower demand accompanied by growing price pressure
in the face of stiff local competition.
Sales by the Submarine business line increased significantly
on the previous year, in line with the completion of work on
the major projects acquired. The main projects on which work
was performed during the period were Messina II (Italy), the
Helwin 2, Sylwin 1 and Borwin 2 offshore wind farm projects in
Germany, Phu Quoc in Vietnam, as well as continuation of the
Western HVDC Link project in the United Kingdom, work on
which had started during the third quarter of 2012.
The value of the Group’s Submarine order book at the end
of 2013 (Euro 2,000 million) was in line with the level at the
end of September, providing sales visibility for a period of
about three years. The high level of the order book is thanks
to contracts for interconnectors in the English Channel
(Normandie3), in the Balearic Islands (Mallorca-Ibiza), over
the Dardanelles Strait, between the island of Capri and Torre
Annunziata and between Montenegro and Italy (Monita), and
to contracts for offshore wind platform connections (DolWin3,
Deutsche Bucht) and for the supply and installation of
submarine cables for the offshore operations of ExxonMobil
Corporation in the United States.
In order to satisfy these contracts, investments have been
made to expand production capacity at the Pikkala plant in
Finland, already operational at the end of 2011, and at the
Arco Felice plant in Italy.
Thanks to the excellent performance of the Submarine
Cables business and the good project mix of the High Voltage
underground business, and despite the continued weakness
of Power Distribution, Adjusted EBITDA for the Utilities
business area increased to Euro 281 million, from Euro 270
million in 2012.
