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PRYSMIAN GROUP | DIRECTORS’ REPORT
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Over the course of 2015 the Group recorded a considerable growth in profitability and an increase in sales
volumes. In particular, the Energy Projects segment performed extremely well, primarily thanks to good
results by the SURF and Submarine businesses, while the High Voltage business was basically in line with
the previous year. The Energy Products segment reported a slight recovery by the Trade & Installers
business and a good performance by the Power Distribution business, offset by a downturn in some sectors
of the Industrial business. Growth by the Telecom segment was mainly due to continued increase in demand
for optical fibre cables.
The economic effects of the Western HVDC Link project, for which some technical problems in the cable
manufacturing process were encountered in late April 2014, are presented in the current Report with
reference to the situation expected prior to discovering these technical problems. The negative economic
effects on the 2015 results are Euro 105 million on sales and Euro 26 million on Adjusted EBIDTA (versus
negative effects of Euro 61 million on sales and Euro 94 million on Adjusted EBITDA in 2014). The impact on
Adjusted EBTDA for 2015 has been mitigated by the recognition of Euro 30 million in positive effects,
determined by a number of factors such as the increased efficiency of the production process, in turn
permitting faster execution of the project itself, as well as the agreement with the customer of stronger
contractual guarantees and longer project timing.
The Group's sales in 2015 came to Euro 7,361 million, compared with Euro 6,840 million in 2014, posting a
positive change of Euro 521 million (+7.6%). Excluding the negative impact of expected revenue from the
Western HVDC Link project, the Group's sales would have been Euro 7,466 million compared with Euro
6,901 million in 2014, an increase of Euro 565 million (+8.2%).
The growth in sales was attributable to the following factors:
increase of Euro 365 million (+5.3%) from organic growth; excluding the impact of the Western
HVDC Link project, organic growth would have been Euro 408 million (+5.9%);
increase of Euro 235 million (+3.4%) due to positive exchange rate effects;
sales price erosion of Euro 82 million (-1.2%) following fluctuations in metal prices (copper,
aluminium and lead).
increase of Euro 3 million for changes in the scope of consolidation following the acquisition of Gulf
Coast Downhole Technologies (GCDT).
The organic growth in sales of +5.3% is analysed between the three operating segments as follows:
Energy Projects
+15.8% (+18.2% excluding impact of the Western HVDC Link project);
Energy Products
+1.2%;
Telecom
+9.9%.