Our Businesses

1. We are a public company and, as such, it is fundamental to align the interests of the Group with those of our stakeholders. We have always maintained open and transparent dialogue with our shareholders, employees, customers and suppliers, the institutions and the communities in which we work. In order to ensure their confidence and support, we strive to maintain high governance standards and practices: for example, 67% of Board members are independent. As a public company, the shareholders’ meetings of the Prysmian Group provide an important opportunity for discussion, involvement and agreement among all shareholders.

2. We strive to align the management objectives of the Group with the sustainability KPIs and, to this end, we have adopted a scorecard that enables us to manage social, economic and environmental matters as a part of our business activities. The Prysmian Group’s scorecard comprises 14 objectives with a business impact. These are clear and measurable objectives identified with reference to 3 parameters: the 17 Sustainable Development Goals for 2030 (SDGs) defined by the United Nations, requests from major International Sustainability Indexes and the needs and expectations of our stakeholders, which are mapped each year via the Group’s stakeholder engagement initiatives.

3. The incentive scheme for all managers within the Prysmian Group is linked to the achievement of objectives for the improvement of our ESG parameters. The 2020 Remuneration Policy adopted by the Group includes a system of variable remuneration based partly on performance on sustainability matters and, in particular, on the positioning of the Group in the three main sustainability indexes - Dow Jones Sustainability Index, CDP Index, EcoVadis Index - and partly on the progress made on implementing the action plans for three matters of importance to the business: the level of gender diversity in management, the reduction of CO2 emissions and occupational health and safety.

Prysmian Group confirms its ambition to be one of the leading technology players in the transition to the use of renewable energy sources and to a decarbonised economy. 48% of the Group’s sales are attributable to business segments and products that contribute to a low-carbon economy . With the goal of supporting the expected acceleration of the development of new submarine and underground power interconnections (chiefly links and interconnections of offshore wind farms), the Group has planned investments in the range of €450 million by 2022 (over 50% of total investments), which are also intended to further improve the sustainability of its organisation and supply chain.

Prysmian Group has also announced a new ambitious climate strategy adopting science-based targets, in line with the requirements of the Paris Agreement, and endorsing the Business Ambition (1.5°C) with the “net zero” target expected to be achieved within 2035 with regard to the emissions generated by its operations (Scope 1 and 2) and by 2050 for emissions generated by the value chain (Scope 3). Among the most important initiatives in this area is the Group’s Pikkala plant, chiefly dedicated to the production of cables for offshore wind farms, which will become the first net zero plant, where 100% of the energy used will be obtained from certified renewable sources.

Prysmian Group’s strategy is founded on the sustainability principles on which the Group’s ESG identity is based. These principles are applied at each phase of Prysmian’s value chain and are managed through the ESG governance model. Within the Group, value creation is boosted by the significant inputs generated by Prysmian’s approach in reference to three pillars of the corporate identity: People, Culture & Organisation, Sustainable Innovation & Lean Manufacturing and Extended Value Chain. These inputs feed the Group’s value chain and allow Prysmian to create outputs that have the potential to generate an impact outside the organisation, helping to achieve specific Sustainable Development Goals. The Group’s value creation cannot overlook the external drivers that impact on Prysmian’s business and outputs, such as energy transition, digitalisation, scarcity of resources and social issues.

Today, not only do we provide our customers with superior cable solutions based on state-of-the-art technology: we also offer excellence in execution, a legacy built on performance and innovation, and a commitment to delivering sustainable growth and profit. And everything we do is centred around a shared purpose. At Prysmian Group, our purpose unites every individual within our business, ensuring we move towards a shared vision: a future where we solve the challenges posed by the energy transition, ubiquitous digitalisation, and global electrification. Our purpose gives Prysmian Group’s shareholders, stakeholders and customers alike an understanding of our company’s mission. It allows them to share in the impact we have on the world around us, and demonstrates the value this creates for them, and for everyone, as we meet the world’s challenges and contribute to a better future for everyone.

The first seven months of 2021 saw a strong recovery in the global economy, after a 2020 heavily penalised by the Covid-19 pandemic with unprecedented negative effects on the global macroeconomic framework. This recovery was also sustained by national plans supporting the development of infrastructure and digitalisation projects. According to the most recent estimates by the International Monetary Fund, the global economy is expected to grow by 6.0% in 2021 after contracting by 3.2% in 2020. At the geographical level, the United States — with estimated growth of 7.0% — are expected to return to the levels of activity seen at the end of 2019 as early as this year, whereas in the Eurozone and the United Kingdom this recovery is expected to occur in the following year. The Chinese economy — the only major economy to close 2020 on a positive note (+2.3%) — is expected to pick up pace, with estimated growth of 8.1% in 2021. In 2020, the extraordinary impacts of the Covid-19 pandemic also affected Prysmian Group’s results, above all in businesses relating to the construction sector (Trade & Installers) and characterised by significant installation activities. The gradual recovery of business, accompanied by timely cost management, an extremely flexible supply chain and a highly-focused level of customer service, enabled management to protect the Group’s performance and limit the impact of the pandemic on the Group’s margins. These positive trends were consolidated in H1 2021, with the Energy business reaching pre-pandemic levels and recording improved margins (excluding the effect arising from the price increase of metals), and with Telecom volumes up considerably at the global level, although there remains a high level of uncertainty, heightened by the effects of the pandemic on the availability and prices of raw materials. In light of the H1 2021 results, and considering the current business context, Prysmian Group expects demand in the construction and industrial cable businesses to sharply recover in 2021, compared to the previous year. In the Submarine Cables and Systems business, the Group, as demonstrated by its strong order intake in H1, is committed to confirming its leadership in a market expected to grow, thanks to the development of the offshore wind farms and interconnections necessary to the development of renewable energy in support of the energy transition. For this segment, the Group expects results to grow compared to last year, with the second half of the year clearly improving compared to H1, thanks both to greater use of capacity in the submarine cable business and the start of the execution phase of the German Corridors projects. In the Telecom segment, the Group expects volumes to increase in the optical business and price pressure to continue, particularly in Europe. Prysmian Group continues to pursue long-term growth drivers mainly relating to the energy transition to renewable sources, the upgrade of telecommunications networks (digitalisation) and the electrification process. The Group may also rely on broad diversification by business and geographical area, a solid financial structure, an efficient, flexible supply chain and a lean organisation — all factors enabling the Group to face the emergency with confidence. In light of the above considerations and in addition to the Group’s solid performance in the first half of the year, the Group revised its guidance for the FY upwards compared to that announced in March. Adjusted EBITDA for FY 2021 is expected in the range of €920-970 million, up from the €870-940 million range previously announced. The cash generation target has remained unchanged, as according to which the Group expects to generate cash flows of approximately €300 million ± 20% (FCF before acquisitions and disposals) in 2021. These projections are based on the absence of significant changes in the evolution of the health emergency and of possible further discontinuities and slowdowns in the global economic activities. In addition, these forecasts are based on the Company’s current business scope and do not include antitrust-related impacts on cash flow. In 2021 as well, the translation effect resulting from the conversion of the subsidiaries’ results into the reporting currency used in the consolidated accounts is expected to generate a negative impact on the Group’s operating income for approximately €20-25 million. The (expected) cumulative amount of the negative impact of exchange rates in the two-year period 2020-2021 is estimated at around €55 million.