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PRYSMIAN GROUP | DIRECTORS’ REPORT
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The increase in sales can be broken down into the following main factors:
positive organic growth of Euro 214 million (+15.8%); excluding the impact of the Western HVDC
Link project, organic growth would have been a positive Euro 257 million (+18.2%);
increase of Euro 23 million (+1.7%) for exchange rate fluctuations;
sales price reduction of Euro 9 million (-0.7%) for metal price fluctuations;
increase of Euro 4 million (+0.3%) for acquisition of Gulf Coast Downhole Technologies LLC in the
United States.
The organic sales growth in 2015 is attributable to the significant upswing in the Submarine and SURF
businesses, while performance by the High Voltage business was largely in line with the year before.
Although High Voltage performance was positive in the United Kingdom and China, it remained weak in
some of the major European markets (Italy and North European countries) because of lower demand for
energy infrastructure.
The Group increased its exposure to markets in the Middle and Far East, winning some important orders in
Kuwait; however, despite their growing demand for energy infrastructure, these markets are also
characterised by lower profitability. Demand in Russia was still weak due to continued uncertainty, causing
the implementation of previously planned major projects to be delayed.
Sales by the Submarine business were significantly up on 2014 thanks to the sustained level of work on
existing contracts.
The main projects on which work was performed in the period were the interconnector between Greece and
the Cyclades islands, the ExxonMobil contract in the United States, the Borwin3 and Dolwin3 projects in
Germany, the link between Italy and Montenegro, the second interconnector across the Dardanelles Strait
and the Western HVDC Link in the United Kingdom. Cable manufacturing by the Group's industrial facilities
(Pikkala in Finland, Arco Felice in Italy and Drammen in Norway) and installation services accounted for the
bulk of annual sales, contributing in equal measure.
The results of the Submarine business also benefited from Euro 30 million in connection with the Western
Link contract, as the net effect of several 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 manufacture of HVDC submarine cable for the Western Link contract is proceeding as planned, with
installation having started in the third quarter of 2015.
The value of the Group's Submarine order book was in excess of Euro 2.6 billion at the end of 2015,
providing sales visibility for a period of nearly three years.
The order book mainly consists of the following contracts: the link between Montenegro and Italy (Monita);
the interconnector between Norway and Britain (NSN Link); the inter-array and export cables for offshore
wind platforms (Deutsche Bucht and Wikinger); the links between offshore wind farms in the North Sea and
the Baltic Sea and the German mainland (BorWin3, DolWin3, 50Hertz); the interconnection of the Philippine