ANNUAL REPORT 2015

PRYSMIAN GROUP | DIRECTORS’ REPORT

The various segments of the market had a mixed performance in 2015, with a strong expansion by higher

value-added ones like high voltage and extra high voltage submarine cables and optical fibre cables. In

particular, the latter segment benefited from growing demand for data transmission capacity that made it

essential to upgrade existing network infrastructure, especially in European countries like Italy, France,

Spain and the United Kingdom where the existing network is still predominantly copper. Global demand for

optical fibre cables also benefited from growing investments in network infrastructure by China, which is the

world's largest market by volume, and from the sustained growth of the US market, in which new players

(content providers) are appearing with projects for very high transmission capacity dedicated networks.

The Prysmian Group, the world's top producer of optical cables, benefited from this trend during 2015,

consolidating its leadership in the European market. It was a record year for the submarine cables business,

thanks to interconnection contracts awarded by leading network operators, particularly in the North Sea,

where the Prysmian Group once again proved to be a prime player by winning new orders worth in excess of

Euro 1 billion. There were interesting developments in the OEM (Original Equipment Manufacturing) sector,

with important advances in the areas of nuclear energy, rail transport and port cranes, while the mining and

shipbuilding industries recorded a slowdown linked to commodity price trends. Oil & Gas applications were

affected by oil prices, especially those products serving the MRO business (Maintenance, Repair and

Operations). Lastly, the building wires market was largely stable, except in India, Spain and the Nordic

countries, where growth in wire consumption outpaced that in 2014, while Brazil and Russia both posted a

steep deterioration. In the telecom segment, the Prysmian Group benefited from the global growth in

demand for optical cables, especially in North America, Europe and Australia, confirming its position as

market leader in optical cable production. Even the segment of multimedia (MMS) applications displayed

strong growth, benefiting from the development of data centres in Europe.