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Prysmian Group Insight
QUARTERLY OVERVIEW
Signs of improvement spread over several businesses
Positive organic growth in Submarine (excluding Western Link), High Voltage, Network
Components, T&I and Telecom. Mixed picture in Industrial, with Renewables and Elevator
still positive, OEMs and OGP & SURF weak but expected to improve in the last quarter.
Energy
Sales amounted to
€
4,269
million, compared with
€
4,534
million one year earlier.
Organic variation was slightly
negative (-0.1%) but without
Western Link would have been
+1.7%. Adjusted EBITDA
came to
€
280 million, however
excluding the Western Link
project, they would have come
to
€
363 million, in line with
€
361 million in the first nine
months of 2013.
Utilities
Sales amounted to
€
1,535 million,
with an organic decrease of -3.1%
due to Western Link, without which
it would have been an increase of
+1.8%. The reduction in adjusted
EBITDA to
€
135 million from
€
195
million in the first nine months of
2013 was entirely due to Western
Link; without this it would have
risen by 11.8% to
€
218 million.
Sales of High Voltage Underground
Cables were basically stable with
strong results in Spain, UK and the
Netherlands offset by weakness in
Italy and France. The positive trend
continued in North America.
Sales in the Submarine business,
affected in the third quarter by
the phasing of certain projects,
are expected to recover in the
fourth quarter and report double-
digit organic growth for FY 2014,
excluding Western Link. The outlook
for underground and submarine
power transmission cables and
systems remains positive, with an
order book of close to
€
3 billion.
Programmes for technological
development are continuing with
the
€
40 million due to be invested
in the plants in Pikkala, Finland,
and Arco Felice, Italy and with
the transformation of the Cable
Enterprise cable-laying vessel. The
Distribution business has continued
to be affected by the ongoing
shortage of demand, although
volumes and prices showed signs
of stabilising in the third quarter of
2014.
Trade & Installer
Volumes confirmed the increase
seen in the first half, despite some
softening, with sales of
€
1,434
million and organic growth of +5.3%
on the prior year. In Europe, the
Nordic and East European countries
drove the recovery, making up for
persistent weakness in Central and
Southern Europe. The slowdown
in the construction industry was
behind the drop in volumes in
South America, while North America
and Asia reported a still positive
trend. Adjusted EBITDA came in
at
€
52 million, compared with
€
65
million in the first nine months of
2013, penalised by the effects of
high pricing pressure and negative
exchange rates.
Industrial
Sales amounted to
€
1,228 million,
with an organic decrease of -1.9%,
mainly due to the slowing demand
in the entire capital goods sector in
Europe (impacting OEMs business)
and to the phasing of certain Oil &
Gas and SURF projects. The Oil &
Gas business stabilised in the third
quarter after a weak first half, with a
further improvement forecast for the
fourth quarter, as the Group is well
positioned to benefit from growing
demand for cables for offshore oil
production in Northern Europe. In
the SURF business (products and
services for offshore oil production),
the fulfillment of existing orders
for Umbilicals and DHT will support
fourth-quarter growth. Elevators
continued to enjoy excellent
performance, as did Renewables,
while the Automotive business
experienced slower sales and fiercer
competition in Europe and North
America. Adjusted EBITDA was
€
86
million, compared with
€
97 million
in the first nine months of 2013, also
impacted by negative exchange rates.
Telecom
Growth in demand for optical
cables globally, accompanied
by strong upsurge in sales
volumes. Growth in profitability
in MMS, Multimedia solution
business
Sales amounted to
€
745 million, recording organic growth of +1.9% in
confirmation of the positive volume trend in progress since the start of the
year. Optical cables enjoyed a strong recovery in demand in all the major
markets, while the price pressure seemed to have stabilised. In Europe,
the Group acquired works on major projects from leading operators, such
as British Telecom in the UK, Telefonica and Jazztel in Spain, and Orange in
France. The current trend is expected to be confirmed in the fourth quarter.
In North America, the recovery in demand is expected to continue in the
fourth quarter. Adjusted EBITDA amounted to
€
75 million, compared with
€
81 million in the first nine months of 2013.