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PRYSMIAN GROUP | DIRECTORS’ REPORT
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Seng index lost 7.2% during 2015, while the Shanghai Shenzhen index gained 60%, despite falling 25%
from its peak in June after the onshore market's speculative bubble burst.
The Prysmian stock appreciated 33.7% over the course of the year, climbing from Euro 15.15 at 30
December 2014 to Euro 20.26 at the end of 2015. On 10 August 2015, the stock price reached Euro 22.23,
its highest since listing, while the average price over the twelve months was Euro 19.10, also the highest
annual average since listing. The stock's performance, including dividend pay-outs (total shareholder return),
was +36.5% over the course of 2015 and +54.3% since listing. Excluding the contribution of dividends, the
stock's appreciation was +33.7% in 2015 and +35.1% since listing.
The Prysmian stock was the cable industry's best performer, thanks to the solidity of the Group's results
(both in terms of organic growth and profitability) and consistent ability to generate cash and pay dividends.
The Prysmian stock outperformed even the principal benchmark indexes both in 2015 and in the period
since its listing. In fact, the Euro Stoxx Industrial index reported a gain of 10.6% over the year and a loss of
1.5% since the Prysmian listing date, while the FTSE MIB reported a gain of 12.7% during 2015 and a loss
of 51% since the IPO.
Looking at the stock's performance over the year, its appreciation was mainly concentrated in the first and
fourth quarters, while the second quarter reported general stability and the third a slight decline. In particular,
during the first quarter, the share price climbed 26.7%, slightly more than the FTSE MIB index (+21.8%) and
significantly outperforming the Euro Stoxx Industrial (+16.7% ). This improvement was mainly the result of
the ECB's decision in January 2015 to implement a more extensive quantitative easing programme than
expected, leading to a sharp reduction in interest rates and a significant depreciation of the euro against the
dollar. The momentum generated by the ECB's move lasted until mid-April, when growing political and
financial tensions in Greece seemed about to trigger a Eurozone monetary crisis. During the second quarter,
investors were generally cautious whilst awaiting developments in the Eurozone political and economic
situation, with the main benchmark indexes in slight retreat. During this period, the Prysmian stock edged up
slightly thanks to a good set of first-quarter results and publication of guidance for 2015 in line with market
expectations. The plunge in Chinese and Asian stock markets in June 2015 and ensuing weakness over the
summer dragged down markets around the world, with growing signs of slower economic growth in those
regions fuelling pessimism about the strength of global growth. The Prysmian stock was also affected, albeit
mildly, by the market downtrend, falling from Euro 19.38 at 30 June to Euro 18.45 at 30 September and
nonetheless reaching a historic high over the summer of Euro 22.23. Confirmation of the FY 2015 guidance
(excluding Western Link), in addition to good quarterly results, allowed the stock to regain value and exceed
the Euro 20 threshold, despite strong concerns about a weakening global economy. The robustness of its
results and growth expectations have allowed Prysmian to maintain a strong market appeal, confirmed by
financial analyst recommendations at year end, of which 47% were "buy" and the remainder "hold". The
Prysmian stock therefore closed 2015 at a price of Euro 20.26, up 33.7% from Euro 15.15 at 30 December
2014, and 35% higher than its original IPO price.