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PRYSMIAN GROUP | DIRECTORS’ REPORT
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BUSINESS OUTLOOK
The macro environment in 2015 saw a gradual stabilisation in the Eurozone, supported by the quantitative
easing programme launched by the European Central Bank, while remaining sturdy in the United States. The
European negotiations to refinance Greek debt, a source of financial market volatility, have created turmoil in
the economic environment in Europe and internationally. The persistent geopolitical tensions in the Middle
East and Russia, together with the slowdown by some economies like China and Brazil, continue to raise
doubts over the contribution of these regions to world economic growth, with implications for the related
exchange rates.
In such an economic context, the Group's expectation for FY 2016 is that demand in the cyclical businesses
of medium voltage cables for utilities and building wires will record a slight volume recovery on the previous
year with price stabilisation. In the Energy Projects segment, the Group confirms an improving trend with
growth in the Submarine business, general stability in the High Voltage underground business and a slight
contraction in SURF. With reference to the Submarine cables business, the plan initiated in response to the
problems in performing the Western Link project is proceeding as expected. In the Oil & Gas cables
business, the drop in oil prices and consequent reduction in oil industry investments are likely to continue to
have a negative impact on the Group's activities. The Telecom business is expected to see continued
recovery in demand for optical fibre cables in 2016 albeit at a slower pace than in 2015 and with fluctuations
dependent on actual progress in the execution of projects to upgrade networks to optical fibre.
In addition, exchange rate effects are forecast to have a negative impact on the FY 2016 results, assuming
constancy of the rates at the start of the year, purely as a result of translating profits expressed in other
currencies into the Group's reporting currency.
Lastly, the Prysmian Group will carry on throughout 2016 to rationalise its activities with the objective of
achieving the projected cost efficiencies and greater competitiveness in all areas of the business.