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MARKET OVERVIEW
Markets in Europe with severe credit restrictions suffered, while the downward trend
continued in North America. Markets in South America confirmed an upturn in volumes,
driven by industrial and residential construction.
The reference markets have distinct geographical
characteristics (despite international product standards) both
in terms of customer and supplier fragmentation and the
range of items produced and sold.
Construction industry demand, already under pressure since
the second half of 2012, declined during 2013, particularly in
Central and Southern Europe, while remaining more stable in
Eastern Europe and the Nordic region.
Like in the second half of 2012, persistent uncertainty about
the construction industry’s future prospects prevailed over
the positive effects of lower metal and commodity prices; as
a result, the largest industry players continued to maintain
minimum stocks and constant pressure on sales prices.
Like in the past, countries in Europe, such as Spain and Italy,
were particularly hard hit due to the negative consequences
for the property market of severe restrictions on bank credit.
Even Germany and The Netherlands were affected by a
stationary trend in demand for new build; this led to growing
price pressures, also due to ever increasing competition
by small foreign operators from Southern Europe and North
Africa seeking outlets for their surplus capacity in the richer
markets of Central and Northern Europe.
The year 2013 also confirmed the downturn in North American
markets – already affected by flat demand for products
serving infrastructure construction – due to delays in
confirming tax incentives for energy-efficient buildings.
By contrast, markets in South America confirmed an upturn
in volumes on the previous year, driven by both the industrial
and residential construction sectors.
Lastly, the Australian construction market saw a decline
in demand, and was characterised by strong competitive
pressures from Asian operators, despite the Australian
dollar’s depreciation during the year.
FINANCIAL PERFORMANCE
Continued strategy of focusing on top international customers and developing tactical
actions to avoid losing opportunities, by differentiating the offer in the various markets.
Sales to third parties by the Trade & Installers business area
amounted to Euro 1,914 million in 2013, compared with Euro
2,159 million in 2012, posting a negative change of Euro 245
million (-11.3%) due to the combined effect of the following
main factors:
• negative change of Euro 71 million (-3.3%) in sales prices due
to fluctuations in metal prices;
• organic decrease of Euro 93 million (-4.3%), due to the
general downturn in Central Mediterranean countries and
North America that was only partially offset by the growth
in sales volumes in South America;
• negative exchange rate effects of Euro 81 million (-3.7%).
During 2013, Prysmian Group continued its strategy of
focusing on commercial relationships with top international
customers and its development of tactical actions to avoid
losing sales opportunities, by differentiating its offer in the
various markets.
This led to a very selective commercial strategy, focused
on improving the sales mix in favour of products for the
“safety of people and property” (Fire resistant/LSOH), but
also on accepting, if necessary, a reduction of market share
in low-margin markets; this strategy allowed the Group to
mitigate the decline in business profitability.
In Asia, Prysmian Group proved unable to grow in line with
the increasing demand by the construction industry, resulting
in a slight loss of market share.
In North America, despite the downturn in demand, Prysmian
Group enjoyed an increase in profitability due to improved
sales mix and the achievement of manufacturing efficiencies
at its Canadian production site in Prescott.
