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PRYSMIAN GROUP | DIRECTORS’ REPORT
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access leading major operators to opt to renew their networks using optical fibre, rather than perform
maintenance or upgrade work on existing networks.
The MMS cable market posted a slight global growth, with Asia and South America making a larger
contribution than Europe in both the copper and optical cable segments. Growth in demand is being driven
by requests for ever greater bandwidth capacity in professional and office environments and data centres.
Interestingly, this trend applies to both new buildings and projects to renovate existing ones. An important
contribution to this growth is coming from industrial applications that require new highly specialised products.
Another important channel is represented by HDTV cables used for the broadcast of digital content such as
sports events or other events of media interest.
FINANCIAL PERFORMANCE
Sales to third parties by the Telecom operating segment amounted to Euro 1,109 million in 2015, compared
with Euro 994 million in 2014, posting a positive change of Euro 115 million (+11.6%).
This change is attributable to the following factors:
organic sales growth of Euro 98 million (+9.9%), thanks to volume recovery for optical fibre cables;
increase of Euro 19 million (+1.9%) for exchange rate fluctuations;
negative change of Euro 2 million (-0.2%) in sales prices due to fluctuations in metal prices.
The organic growth in 2015 sales was mainly driven by the recovery in demand for optical fibre cables and
OPGW cables, as a result of taking forward leading investment projects in the EMEA region, which more
than offset lower demand for copper cables.
Optical cables enjoyed a strong increase in demand in all the major markets, while the general price
pressure seen in 2014 seems to have stabilised, also thanks to US dollar appreciation. In Europe, in
particular, the Group won contracts for work on major projects to realise backhaul links and FTTH
connections for leading operators, such as Orange and Free in France and Telecom Italia in Italy. In North
America, the development of new ultra-broadband networks and new FTTx networks, which provide 1Gbps
services to residential users, produced a steady increase in domestic demand. In Brazil, the slowdown in
investments by major telecom operators caused a fall in volumes with the previous year. In Australia, work
on the NBN project picked up; in addition, a positive trend in demand was recorded for the Southeast Asia
region.
The Multimedia Solutions business posted a recovery in earnings thanks to the strategy of focusing on
higher value-added products, such as data centres in Europe, and of rationalising its presence in lower
margin businesses.
The high value-added connectivity business enjoyed a positive trend, thanks to the development of new
FTTx networks (for last mile broadband access) in Europe and North America.
Lastly, copper cables continued their ongoing decline due to the retirement of traditional networks in favour
of next-generation ones.