1
2
"Connect, to lead" represents the essence of Prysmian Group's mission and strategic vision. We
want to connect the world and together lead the energy transition and digital transformation.
We want to push ourselves further and further. Beyond the boundaries of innovation, developing
sustainable technologies and solutions in tune with the evolving dynamics of the market. To be
the leaders. To be a driving force behind the transformation.
Disclaimer
This document contains forward-looking statements, specifically in the section entitled and "Business outlook", that
relate to future events and the operating, economic and financial results of Prysmian Group. By their nature, forward-
looking statements involve risk and uncertainty because they depend on the occurrence of future events and
circumstances. Actual results may diverge even significantly from those announced in forward-looking statements due
to a variety of factors.
3
Index
INTEGRATED ANNUAL REPORT
CEO LETTER
..................................................................................................................
5
A.
DIRECTORS’ REPORT
1. INTRODUCTION: PRYSMIAN GROUP APPROACH TO THE INTEGRATED REPORT
..................
7
2. HIGHLIGHTS
.............................................................................................................
9
3. PRYSMIAN: CONNECT, TO LEAD
................................................................................
11
4.
PRYSMIAN: SUSTAIN, TO LEAD
...............................................................................
19
5.
PRYSMIAN'S TWO AMBITIONS: CLIMATE CHANGE AND SOCIAL AMBITION
...................
22
6.
THE SUSTAINABILITY SCORECARD
..........................................................................
24
7.
AN INTERNATIONAL NETWORK
...............................................................................
28
8. CORPORATE GOVERNANCE
.......................................................................................
34
9. BUSINESS ENVIRONMENT AND FINANCIAL MARKETS
...................................................
51
10. SIGNIFICANT EVENTS DURING THE YEAR
.................................................................
55
11. GROUP PERFORMANCE AND RESULTS
......................................................................
71
12. RISK FACTORS
......................................................................................................
92
13. OTHER INFORMATION
...........................................................................................
106
14. BUSINESS OUTLOOK
.............................................................................................
107
15. CERTIFICATION PURSUANT TO ART. 2.6.2. OF THE REGULATION OF MARKETS ORGANIZED
AND MANAGED BY BORSA ITALIANA S.P.A
. ...................................................................
109
16. CONSOLIDATED NON-FINANCIAL STATEMENT
..........................................................
111
18. AUDIT REPORT ON NON-FINANCIAL DISCLOSURE
....................................................
344
B. CONSOLIDATED FINANCIAL STATEMENTS
C.
PARENT COMPANY FINANCIAL STATEMENTS
INTEGRATED ANNUAL REPORT
PRYSMIAN GROUP | LETTER FROM THE CEO
5
CEO LETTER
The year 2023 was an extraordinary year for our Company, as we continued with the positive
results achieved during the previous year. Despite a challenging economic environment -
characterized by a still fragile macroeconomic and market scenario - we have confirmed our
position as market leader through a comprehensive and balanced portfolio that is well exposed
to structural trends and great resilience.
Once again Prysmian ended 2023 with excellent
performance, ensuring a creation of value for all our stakeholders
.
By carefully understanding the changing market dynamics, we experienced solid margin
expansion and strong cash generation. The revenue figure proves to be essentially stable at
€15,354M with significant growth in the Projects business (organic growth +15.3%), supported
by solid execution of interconnection and offshore wind farm projects, as well as projects with
better profitability in the backlog.
We closed the year with a record backlog of about €18
billion
.
The results in terms of profitability were significant, with a major increase in Adj EBITDA growing
to €1,628M (+9.4% vs 2022). Margins also improved to 10.6% (9.3% in 2022), in addition to
an increase in net profit to €547M (+7.5% vs. 2022).
Cash generation remains a key factor
in our success
, with Free Cash Flow at €724M (+29.5% vs. 2022). The soundness of the
financial structure enables us to sustain with balance the sizeable investments to support growth,
to make our leadership even more solid and to seize the opportunities offered by the market.
No less important has been our commitment to ESG performance.
Prysmian recognizes that
sustainability is an indispensable element in creating value for all our stakeholders
. As
such, we have revised our climate plans to become more and more ambitious - an aspiration
supported by clear, concrete and measurable data. We continue to drive innovation in the cable
industry by developing products that have a lower environmental impact and that can support
our customers in their decarbonization goals. We also believe that cultivating an inclusive, fair
and attractive work environment is essential to being a successful company.
Significant improvements have also been recorded in the Social Dimension
. The results
of initiatives implemented by Prysmian in recent years have enabled the company to intensify
its efforts to anticipate achieving some of the targets set for 2030 as early as 2027, such as the
KPI on gender equality.
In conclusion, I would like to express my gratitude for having had the honor of leading this
company for almost two decades. I am extremely pleased with the milestones we have achieved
together, supported by a competent and well-established management team and talented
colleagues, without whom Prysmian would not be what it is today: a world leader in the cable
industry. With confidence I place the helm in the hands of Massimo Battaini, who has been part
of the team since the beginning of this great project and has played a key role in the most
important moments for the Group. It is, therefore, a source of pride for me to complete my term,
handing over to my successors a solid company with a clear vision for its future. It is a story
that, starting tomorrow, I will support from a different position, but with the same closeness.
Valerio Battista
Chief Executive Officer, Prysmian
A. DIRECTORS’ REPORT
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
7
1. INTRODUCTION: PRYSMIAN GROUP APPROACH TO THE
INTEGRATED REPORT
The Prysmian Group presents its annual financial report in the "integrated" form as a tool for
integrated reporting of financial and non-financial data, serving as additional proof of the Group's
daily commitment to integrating sustainability within its business strategies and its role as an
enabler of the energy transition and digitalization process. In an integrated manner, the Report
explains the Group's ability to
create
both financial and non-financial
value over time
, in the
context and markets in which it operates.
The Integrated Annual Report, approved by the Board of Directors on 28 February 2024, consists
of the Directors’ Report (integrated with both financial information and the Non-Financial
Declaration, including also the EU Taxonomy disclosures required by Regulation (EU) 2020/852),
the Consolidated Financial Statements and the Parent Company Annual Report of Prysmian
S.p.A.. The decision to integrate financial and non-financial data into a single report is in
accordance with the provisions of Art. 5(3)(a) of Italian Legislative Decree 254/2016. The Group
presents the Consolidated Non-Financial Statement in a specific section of the Directors’ Report.
The Consolidated Non-Financial Statement was approved by the Board of Directors on 28
February 2024. The document is subjected to a limited review by an auditing firm, EY S.p.A., in
accordance with the
International Standard on Assurance Engagements (ISAE 3000 Revised)
.
The Parent Company Financial Statements and the Consolidated Financial Statements have been
prepared in accordance with IAS/IFRS international accounting standards.
The expanded, holistic reporting encompasses strategy, governance, production activities,
financial performance and interactions with the social, environmental and economic context. This
revolution in corporate reporting reflects the adoption of an innovative cultural approach. For
Prysmian, combining the Non-Financial Statement with the Annual Report means explaining, in
a coherent, rigorous and yet engaging manner why sustainability is central to the Group's
business.
This method of reporting makes it possible to explain how Prysmian has become a leader in the
worldwide ecological transition process – a sustainability enabler – by describing our history,
performance, innovations and projects that, at a global level, allow the transportation of clean
energy and deliver connectivity with state-of-the-art solutions.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
8
In addition to the Integrated Annual Report, Prysmian Group has voluntarily decided to publish
separately a Sustainability Report, supplementing the contents of the Non-Financial Statement,
and which has undergone assurance by auditors EY S.p.A.
The documentation published for 2023 on sustainability matters also includes:
- the 2023 TCFD Report, dedicated to information about the management of climate change
risks in accordance with TCFD (Taskforce on Climate-related Financial Disclosures)
recommendations;
- the 2023 GHG Statement, dedicated to calculation of the CO
2
emissions generated by Prysmian
and its entire value chain;
- the 2023 SASB Report, providing information in compliance with Sustainability Accounting
Standards Board (SASB) framework.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
9
2. HIGHLIGHTS
Key financial, operating and ESG performance data
All percentages contained in this report pertaining to financial data have been calculated with
reference to amounts expressed in thousands of Euro.
(Euro/million)
2023
2022
% Change
2021
Sales
15,354
16,067
-4.4%
12,736
Adjusted EBITDA before share of net profit/(loss)
of equity-accounted companies
1,595
1,442
10.6%
958
Adjusted EBITDA
(1)
1,628
1,488
9.4%
976
EBITDA
(2)
1,485
1,387
7.1%
927
Adjusted operating income
(3)
1,270
1,119
13.5%
647
Operating income
860
849
1.3%
572
Profit/(loss) before taxes
764
739
3.4%
476
Net profit/(loss)
547
509
7.5%
310
(Euro/million)
31.12.2023
31.12.2022
Change
31.12.2021
Net invested capital
5,493
5,517
(24)
5,295
Employee benefit obligations
333
329
4
446
Equity
3,972
3,771
201
3,089
of which attributable to non-controlling interests
191
186
5
174
Net financial debt
1,188
1,417
(229)
1,760
(Euro/million)
2023
2022
% Change
2021
Net capital expenditure
(4)
624
452
38.1%
275
Employees (at period-end)
30,088
30,185
-0.3%
29,763
Earnings/(loss) per share
- basic
1.94
1.91
1.17
- diluted
1.84
1.90
1.17
Number of patents
(5)
5,460
5,760
5,539
Number of plants
108
108
108
(1)
Adjusted EBITDA
is defined as EBITDA before income and expense for business reorganisation, non-recurring items
and other non-operating income and expense.
(2)
EBITDA
is defined as earnings/(loss) for the year, before the fair value change in derivatives on commodities and in
other fair value items, amortisation, depreciation and impairment, finance costs and income, dividends from other
companies and taxes.
(3)
Adjusted operating income
is defined as operating income before income and expense for business reorganisation,
non-recurring items and other non-operating income and expense, and before the fair value change in derivatives on
commodities and in other fair value items.
4)
Net capital expenditure
reflects cash flows from disposals of Assets held for sale and from disposals and additions
of Property, plant and equipment and Intangible assets not acquired under specific financing arrangements, meaning
that additions of leased assets are excluded.
(5)
These are the total number of
patents
, comprising patents granted plus patent applications pending worldwide.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
10
Several of the ESG performance objectives achieved by Prysmian in 2023 are particularly
meaningful when discussing the creation of value shared with stakeholders. Some of these
indicators are also included in the short- and long-term incentive schemes. These will be
discussed in detail in the relevant sections of the Consolidated Non-Financial Statement.
A summary is presented below:
2023
2022
% Change
2021
Emissions of tCOâ‚‚ - Scope 1 and Scope 2 Market
Based
(1)
616,059
665,104
-7%
706,969
Percentage of Scope 1 and Scope 2 CO
2
reduction vs 2019 baseline
(2)
-33%
-28%
-5%
-22%
Percentage reduction of Scope 3 emissions vs
2019 baseline
-10.0%
-7.5%
-2.5%
Share of recycled content on PE jackets and
copper
(3)
12.7%
10.0%
2.7%
Percentage of women executives (job grade ≥
20)
(4)
18.8%
15.7%
3.1%
13.5%
Percentage of Desk Workers women hired
(5)
46.0%
44.9%
1.1%
39.0%
Leadership Impact Index (LI)
(6)
57%
55%
2%
54%
Safety Assessment Plan
(7)
3.4
Share of revenue linked to Sustainable Products
(8)
37%
30%
7%
(1)
Scope 1
emissions are defined as the organisation's direct emissions, being those generated by resources under its
direct control. Reported Scope 1 emissions derive from combustion processes (using natural gas, LPG, petrol, diesel,
fuel oil, marine diesel), leaks of refrigerant gases (HFC, PFC) and SF6 gas leakage.
Scope 2
emissions are those indirect
emissions of the organisation that derive from its direct consumption excluding generation activities. These include
purchased electricity, district heating and steam. With regard to Scope 2 emissions,
Market-based
is a method of
quantification based on the COâ‚‚ emissions of the energy suppliers from which the organisation purchases an electricity
bundle under a contract.
(2)
Percentage of
reduction in CO2 emissions (Scope1and 2)
compared to the year 2019, according to SBTi
methodology. Scope 2 is calculated using the Market-based method.
(3)
Percentage
by weight of recycled content of certain purchased materials
. The scope of the indicator includes:
1) copper purchased at Group level, excluding occasional suppliers and semi-finished products; 2) polyethylene used for
sheathing, excluding those applications for which customers do not allow the use of secondary materials.
(4)
Share of women
in executive positions (job grade 20 and above)
as a percentage of total executive employees.
The number of employees is the headcount as at 31 December 2023, including all permanent contract and temporary
ones. The KPI shows the ability of the Group to develop internal figures to take on leadership roles, its capability to hire
them from the market and its ability to retain those talents.
(5)
Share of
women desk workers hired with permanent contract
compared to the total employees hired with
permanent contract. The index includes all desk workers hired abroad (including global recruiting programs and projects)
and all change of contracts from agency/temporary to permanent.
(6)
Index calculated as the
percentage of employees who declared a level of engagement w
ith the company of at
least five out of seven points in the Speak Up survey conducted by the company. The indices and the survey were
developed in collaboration with POLIMl University in order to ensure their quality and anonymity.
(7)
Index relating to the level of maturity in the
safety management of the Group's various plants
, calculated
following an Audit conducted by a specialized third-party company. The index consists of four different categories
(governance, employee engagement, risk assessment and injury frequency rate). At the end of the assessment, an
overall score is given on a scale of 1 (lowest) to 5 (highest).
(8)
Portion of
revenues from sustainable products.
With the aim of making the Group's approach more organic and
due to the progress made in developing sustainable products and solutions in all Regions, the company has decided to
eliminate the division between Europe and the rest of the world in the calculation of this KPI, as already shown during
the Capital Markets Day held in October 2023.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
11
3. PRYSMIAN: CONNECT, TO LEAD
Global leadership
With a direct presence in more than 50 countries around the world, 108 factories, 26 R&D centers
and over 30,000 employees, Prysmian is a global leader in cable systems for energy and
telecommunications. The Group HQ in Milan, Italy, employing around 800 persons, is supported
by regional headquarters in North America, South America, EMEA (Europa, Middle East and
Africa) and APAC.
Prysmian was established in 2005 following acquisition of the Energy Cables and Systems and
Telecom Cables and Systems businesses of Pirelli by the Goldman Sachs group. The Company
was listed on 3 May 2007, with the market placement of 46% of the shares held by the Goldman
Sachs group and joined the main FTSE MIB index in the following September. Prysmian is one
of the few Italian industries with global reach to achieve public company status. It is a company
whose shares are held by international institutional investors, in which the creation of
shareholder value is a key factor when making strategic decisions at all levels.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
12
The DNA of Prysmian: mission, vision and values of the Group
Over the last two years, the world has faced complex and interlinked political, economic and
social crises, such as the wars in Ukraine and the Middle East, the isolation of China, the
slowdown in global growth and high rates of inflation, not to mention extreme climate events.
These circumstances generated challenges associated with energy and food supply, scarcity of
raw materials and the strategic role of cyber security, which have prompted businesses to adopt
increasingly flexible and resilient business models.
In a volatile, uncertain, complex and ambiguous world, it is therefore essential to understand
the direction of changes to turn them into opportunities for growth, while also maintaining the
steadfast pillars of the company’s DNA. Indeed, Prysmian's actions are underpinned by its
mission –
"To offer our customers worldwide cables and solutions for the transport of energy
and telecommunications, using state-of-the-art technological solutions,"
its
vision –
"
We believe
in the efficient, effective and sustainable supply of energy and data as the main driver for
community development",
and its
values
:
•
DRIVE.
Our objective is to guide the evolution of our industry: we develop our human
capital and our business, by following a clear strategy while anticipating customer needs.
•
TRUST.
We aim to create an environment that inspires trust, where diversity and
collaboration are valued, and people are empowered to make decisions with integrity.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
13
•
SIMPLICITY.
Our challenge is to simplify all that we can, focusing on activities that
generate high value and timely decisions that enhance the Group’s results.
This is the foundation on which Prysmian has built its business model and approach to the
market.
Favorable market development: 4 macro-trends
Risks arising from the recent instability in the global socioeconomic and geopolitical landscape
are not the only ones with which the Group will have to deal. Indeed, at industry level, 2023
confirmed the emergence of four global trends that Prysmian will need to take into account in
the near future, to then aim to turn them into major development opportunities:
1.
Growth of renewables (Energy transition): > 70% by 2050
By 2050, electricity generated from renewable sources will account for 70% of total
electricity on a global scale, more than double today's 30%.
2.
Electrification: +30% electricity consumption by 2030
Population growth and the resulting increase in telecommunications infrastructure are some
of the drivers that will increase electricity consumption by 30% by 2030.
3.
Enhancement of energy networks: 3x annual investment in grids by 2050
To support the energy transition, massive capital expenditure will be needed in
strengthening the grid with the goal of making it capable of handling increased energy
demand.
4.
Digital transformation: 2.5x sites and towers connected with fiber by 2030
Concurrent with the growth in energy demand, there will also be an exponential increase in
data consumption. The development of new technologies is fostering innovative new
solutions (2x IoT devices by 2030), which will require increasingly fast and accessible
connectivity at a lower cost. To support this transition, investments in data centers
valued at USD 330 billion are planned between 2022 and 2030.
Each of these trends shows strong convergence and interdependence between energy and
digitalization. Just think of the case of data centers or 5G towers, where suppliers, distribution
channels, customers and value chains all intersect.
Cutting across these four trends, the increasing focus of customers, investors and partners
throughout the value chain on all aspects of
sustainability
is another element of market
renewal, as well as a significant opportunity for Prysmian.
As an enabler of the global green transition and digitalization, the so-called "
twin transition
",
Prysmian supports the achievement of the goals of the European Green Deal by implementing
its sustainable strategy.
This complex transition process requires the modernization, in the industrial realm, of production
processes through the development of new solutions that help society as a whole become more
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
14
sustainable. To this end, technology and the smart use of data play a strategic role, which still
has great untapped potential.
Together, digitalization and the energy transition can have a positive impact by making
technology, data resources and infrastructure greener, while also accelerating sustainability
throughout the organization.
Prysmian’s competitive advantages
In order to face the continual complex changes described, Prysmian can count on a solid business
model based on the following strategic pillars:
•
Diversification
| A broad product portfolio and geographically diversified coverage to
exploit the convergence of Energy and Digitalization and reduce the cyclic nature of
Prysmian’s various businesses.
•
Technological excellence
| Innovative solutions and highly skilled human capital to
support Prysmian's positioning as a market leader and develop products with a lower
environmental impact.
•
Decentralized supply chain
| A decentralized supply chain capable of creating
customized solutions to establish itself as a leader even in years of major geopolitical
change.
•
Aggregation hub
| Ability to successfully conclude acquisitions and integrations, for
significant cost and revenue synergies.
Prepared for the future
Leveraging these robust competitive advantages, on 5 October 2023 – at the company's first
Capital Markets Day – Prysmian announced its new strategic plan to 2027, based on which the
company aims to:
•
Consolidate its leadership
in core sectors (e.g., interconnections, network
enhancement, FTTx) with structural and long-term growth, including through targeted
investments in production capacity and strategic assets.
•
Be a pioneer in technological innovation
both in sectors where Prysmian is already
the recognized leader and in rapidly expanding sectors where there is greater room for
growth, such as Solar, Wind, EV Charging, Data Centers and 5G.
•
Strengthen its intimacy with customers
to identify technological innovation needs
early, including through greater emphasis on offering turnkey services.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
15
•
Leverage the group's unique expertise
developed over decades, and the breadth of
the product portfolio and markets in which Prysmian operates, to offer distinctive
solutions in a timely manner.
•
Selectively expand the portfolio with M&A
aimed at filling niches that are currently
uncovered – whether geographically or in terms of product – especially in high-growth
and innovative sectors.
The pillars of the Group's strategy
Prysmian's strategy is to capitalize on its leadership positions and to conquer new markets
experiencing growth in order to become a global cabling systems supplier capable of driving the
energy transition and the digital transformation.
The cable industry is increasingly strategic due to long-term structural market trends that
demand resilient, high-performance, sustainable and innovative cable systems. In this context,
and based on the results achieved so far, the Group's strategy comprises four pillars:
-
Self-financed capacity expansion
: investments supporting organic growth,
underpinned by strong cash generation. This implies that the Company will continue to
invest in expanding its capacity and enhancing its ability to serve customers and keep up
with growth in demand. The Group's financial strength was recently confirmed with
Standard & Poor's recognition of its public rating of "Investment Grade" (BBB-).
In order to support this growth, CapEx will double from Euro 310 million to Euro 540
million over the next 5 years.
-
Balanced and innovative portfolio
: New approach to innovation, which consists of
improving electrical performance, and focuses on the transition to more sustainable cable
solutions that contribute to the decarbonization of the economy.
-
Empowerment of people
: Prysmian recognizes and appreciates the significance of its
workforce, believing it to be a fundamental pillar of the Company's success. Therefore,
the Group invests heavily in promoting creativity and collaboration among employees and
developing their skills, driving their engagement, facilitating digital inclusion and fostering
diversity and people's sense of inclusion.
-
Business segmentation
: the Group’s structure will evolve from the current three to
four new business segments starting from 2024, accurately reflecting the four market
trends identified (Transmission, Power Grid, Electrification and Digital Solutions). This
new segmentation will improve go-to-market effectiveness, ensuring greater visibility into
how the Group operates in the various areas.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
16
Prysmian’s business model
Every day, all over the world, Prysmian contributes to the development of smarter, more
sustainable electricity and telecommunications networks to transport clean energy and
information faster and farther.
While Prysmian's positioning as a "cable manufacturer" remains at the heart of what it does, the
new strategy announced in October aims to position Prysmian as a "Global provider of cabling
solutions
,
at the helm of the energy transition and the digital transformation; "
Connect, to
lead
." Indeed, the ability to increasingly integrate the various components of engineering,
installation, network monitoring and after-sales services into value-added services guarantees
recurring revenue and long-term partnerships with customers.
Until the end of 2023, Prysmian had three macro-areas of activity: Energy, Telecom and Projects.
These will be subject to a partial reorganization, announced in October during Capital Markets
Day and effective as of the beginning of 2024, based on which the Group's activities will be
divided into four new segments instead of the three existing ones, in order to be better positioned
to take advantage of the opportunities arising from the 4 macro-trends described above:
-
Transmission
, which includes the Submarine Power and Land HVDC business units,
currently belonging to the Projects segment;
-
Power Grid
, which includes the HVAC business unit, also currently in the Projects
segment, and Power Distribution and Overhead Lines, currently part of the Energy
segment;
-
Electrification
, which includes the Industrial & Construction (now called Trade &
Installer) and Specialties (formerly included in Industrial & NWC) business units, currently
belonging to the Energy segment;
-
Digital Solutions
, the current Telecom segment, which includes the following business
units: Fiber and Optical Cables, Connectivity, Multimedia & Inside Plant cables (MMS).
The new reorganization will allow the company to better respond to market demands, in light of
the development in demand described in the chapter "Favorable market development: 4 macro-
trends”.
As far as the current financial year is concerned, the Group's activities are divided into three
business divisions, as follows.
Energy
Division specializing in products and services for power distribution and special cables for
applications in a wide variety of industries, as well as medium- and low-voltage cables and
accessories for the construction and infrastructure sectors:
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
17
▪
Energy & Infrastructure,
which includes the Trade & Installers business, with a
focus on the industrial and infrastructure segments (cables for power distribution to
residential, commercial and industrial facilities and for infrastructure such as
airports, ports, railway stations and data centers), and Power Distribution (medium-
voltage cable systems for overhead and underground installations, and the related
accessories and network components, for connecting industrial and/or residential
buildings to the primary distribution network)
▪
Special Cables for the Industrial & Network Components segments
that
includes a broad range of cables for different industries – from renewables to
marine, automotive to aerospace, flat lift cables to network monitoring solutions –
with a high level of specificity, including turnkey and maintenance services.
Telecom
Prysmian is the world's largest supplier of state-of-the-art cables and accessories for voice, video
and data transmission, and offers a full range of fiber optic, optical and copper cables and
connectivity systems:
▪
Telecom solutions
: fiber optic and copper telecom cabling solutions and the related
connectivity accessories. In both cables and connectivity, the Group is focusing on
designing products that provide higher density in smaller diameters, are easy to use and
optimize fiber management.
▪
MMS Multimedia Specials
: fiber optic and copper solutions for fixed or mobile
multimedia communication, such as audio-visual content transmission, or indoor
connectivity – increasingly important for the development of smart buildings and the
Internet of Things.
▪
Fiber optic
: Prysmian produces single-mode and multimode optical and special fibers,
using an innovative proprietary technique that places the Group at the forefront of today's
technology.
Projects
From underground cable systems supporting the energy transition and powering wind farms, to
undersea systems installed by the Group's cable-laying vessels, Prysmian works on supply-only
and turnkey projects for some of the world's largest operators. The Group uses specific
technologies for undersea power transmission and distribution and is able to offer sophisticated
solutions that satisfy the strictest international standards.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
18
It specializes in the manufacture and installation of data transmission cables. The Offshore
Specialties business includes a wide range of products for the oil industry.
Prysmian has built
a unique set of assets
to meet market needs: with the ability to deploy
connections more than 200 km long, an installation depth of up to 3,000 meters, proven
expertise, a turnkey offering combining technology, installation, monitoring, maintenance and
repair, and innovative and environmentally sustainable materials, Prysmian is the partner of
choice for major global operators.
Today, Prysmian can count on a fleet of five state-of-the-art deep-water
cable-laying vessels
– among them the flagship Leonardo da Vinci, the world's most advanced cable-laying vessel,
for shallow water and areas periodically washed by the tidal excursion – as well as the broadest
range of inland equipment. Prysmian has also announced the purchase for the 2024-2027 period
of two additional cable-laying vessels to further bolster its fleet.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
19
4.
PRYSMIAN: SUSTAIN, TO LEAD
Prysmian's approach to sustainability: a model based on four pillars
Prysmian's sustainability strategy is based on four pillars, each of which contributes to the
creation of value for the benefit of the Group and all of its stakeholders, and allows long-term
sustainability, including financial, to be implemented:
A.
ENVIRONMENT
| Prysmian is a key player in the energy transition. Therefore, not
only does it aim to minimize its negative impact on the environment in the course of
its production and installation activities, but by directly intervening in the design and
configuration of its products and solutions, it helps facilitate decarbonization
throughout its value chain. In addition, Prysmian acts as a leader in its supply chain,
promoting virtuous practices to all of its partners.
B.
INNOVATION
| Innovation is an indispensable ingredient to achieve the
sustainability goals of Prysmian and the entire supply chain. Since its constitution,
Prysmian has been investing in research and development to offer low-impact, high-
efficiency products – for example the world's first insulation for medium-voltage
cables launched by Prysmian in 2006. Prysmian continues to invest in innovative
solutions, flanking the concept of "design for performance" with the mantra of "design
for sustainability".
C.
PEOPLE AND COMMUNITIES
| People are at the heart of Prysmian's activities: this
centrality takes shape not only in the company’s initiatives for its employees –
promoting work-life balance, diversity, inclusion, training and upskilling – but also
through initiatives benefitting the communities in which it operates.
D.
GOVERNANCE
| The centrality of sustainability in Prysmian's strategy is also
expressed in the definition of a specific type of governance, which is responsible for
overseeing all Group initiatives in a structured and rigorous manner and ensuring
their alignment with ESG targets.
Prysmian’s commitment to sustainable development and the
achievement of the UN SDGs
In 2021, Prysmian joined the
United Nations Global Compact
, a global network of more than
17,000 companies from 160 countries inaugurated in 1999 with the goal of building a sustainable
global economy.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
20
The Global Compact requires participating businesses and organizations, each in their own
sphere of influence, to agree, support and apply a set of fundamental principles covering human
rights, working standards, environmental protection and anti-corruption.
In reporting on its commitment in this area, the Prysmian Group refers to the
17
Sustainable
Development Goals (SDGs) defined by the UN in its 2030 Agenda. The SDGs and their targets
identify global priorities and define an integrated plan of action for people, the planet, prosperity
and peace.
To strengthen its commitment to sustainability, Prysmian adopted a Sustainability Policy that
defines the company's commitment and priorities, governance, strategy and vision linked to
Sustainability.
Prysmian contributes to the achievement of the SDGs through some specific activities consistent
with its business, relating to the material topics identified every year during the materiality
analysis.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
21
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
22
5.
PRYSMIAN'S TWO AMBITIONS: CLIMATE CHANGE AND
SOCIAL AMBITION
The transition from fossil fuels to renewables is one of the biggest and most urgent challenges
facing humanity, and one in which Prysmian can play an active role: indeed, access to cleaner
and greener energy is enabled by more extensive and smarter networks and infrastructure. That
is why sustainability is in the DNA of Prysmian, which strives every day to make it a reality
through the solutions it offers, the processes to achieve them and the people involved in each
local context.
During 2021, Prysmian formalized two strategic ambitions that will guide its actions over the
medium-long term: the
Climate Change Ambition
and
the
Social Ambition
.
Climate Change Ambition
Prysmian’s climate strategy adopts
science-based targets aligned with the Paris Agreement
climate objectives. In particular, the
Science-Based Targets initiative
(SBTi) defines the
requirements for an effective Net-Zero strategy:
-
reduction of Scope 1, 2 and 3 emissions to zero, or at least to a residual level consistent
with achieving the global or sector targets set in line with the Paris Agreement
-
neutralization of any residual and greenhouse gas (GHG) emissions released into the
atmosphere.
Within this initiative, Prysmian has taken the following actions:
1.
definition of an
overall Net-Zero target
;
2.
definition of a short-term
emissions-reduction target;
3.
definition of a long-term
emissions-reduction target.
In
2023
, Prysmian obtained
official validation
by the
Science-Based Targets initiative
(SBTi) of its targets, thus defined as follows:
A.
Overall Net-Zero
Target
The Prysmian Group is committed to achieving net zero GHG emissions throughout its value
chain by 2050.
B.
Short-term targets
The Prysmian Group is committed to reducing its Scope 1 and 2 GHG emissions – in absolute
terms – by 47% by 2030, compared to the emissions recorded in the year 2019; the
Prysmian Group is also committed to reducing its Scope 3 emissions – in absolute terms
– by 28% over the same time horizon.
C.
Long-term targets (net zero): T
he Prysmian Group is committed to reducing its Scope 1 and 2
GHG emissions
–
in absolute terms
–
by 90% by 2035, compared to the emissions recorded in the
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
23
year 2019; the Prysmian Group is also committed to reducing its Scope 3 emissions
–
in absolute
terms
–
by 90% by 2050.
In addition, during the long-term targets approval process, Prysmian
–
at
SBTi's request
–
recalculated some Scope 3 categories using updated emission factors. Therefore,
the Scope 3 value for 2022 has been revised from what was published in the 2022 Report, as will be
explained later in the chapter "Environmental responsibility".
The efforts made by the company to reduce its emissions are already showing promising results.
In 2023, Prysmian announced that it was ahead of its decarbonization targets, anticipating –
on Capital Markets Day – as early as 2027 a -45% reduction in Scope 1 and 2 emissions, and
a -23% reduction in Scope 3 emissions.
Based on this commitment and in line with the SBTi-approved net-zero trajectory, Prysmian
decided in January 2024 to set a goal of
achieving a percentage reduction in Scope 1 and 2
emissions of between -55% and -60% in 2030, as compared to -47% approved by SBTi. This
target represents the Group's further commitment to the process of decarbonizing its operations
by implementing internal solutions and processes that further limit its impact on the
environment.
Social Ambition
Prysmian's aspiration is to build a more equal, inclusive and innovative world, starting with, but
not limited to, its employees. To be able to do this, the Group formalized its Social Ambition,
which mainly concentrates on the commitment to improve Diversity, Equality and Inclusion
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
24
(DE&I),
digital inclusion, the empowerment of communities, employee engagement and
upskilling.
These commitments have been translated into specific Group targets to be achieved by 2030,
aligned with the UN Sustainable Development Goals made explicit earlier.
The results of the initiatives carried out by Prysmian in recent years, and the investments
planned in the coming years to achieve the Social Ambition goals, have enabled Prysmian to
accelerate the achievement of several targets set for 2030, bringing forward to 2027 the goal of
gender equality in the hiring of desk workers, and 25% in senior leadership roles.
6.
THE SUSTAINABILITY SCORECARD
In order to set a credible path to sustainability and give further substance to the long-term
commitments of the Group, Prysmian has equipped itself with specific short-term objectives
whose progress it monitors year after year.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
25
Starting from the end of 2022, Prysmian defined a new three-year scorecard (2023-2025, with
baseline 2022) containing
12 impact KPIs, with the aim of improving the effectiveness of the
processes of measuring, monitoring and reporting on results. These were defined after an
analysis of:
−
Long-term ambitions of the Group (Social Ambition and Climate Change Ambition);
−
UN Sustainable Development Goals (SDGs);
−
Group Materiality Analysis (focusing on the external impacts generated by the business).
To mark Capital Markets Day, Prysmian defined and published targets to 2027 for some specific
scorecard KPIs, in line with the Group’s five-year strategic plan, and with some financial targets
announced during the event for the same time period. The goals to 2027 shown, which are
outlined in the Scorecard below, also include the desire to quantify the group's commitment to
fostering talent in disadvantaged communities. Between 2023 and 2027, more than 1,400
children and 400 women and girls will be supported by social programs, including: Oman, 100
women and 800 children through the "SHE STEM" program and STEM programs; the
Netherlands, 625 children involved in STEM programs and workshops; and Latin America, 315
women and girls involved in social programs.
The Impact Scorecard is shaped on the four pillars of sustainability of the company –
Environment, People-Community, Governance and Innovation.
Scorecard targets are regularly monitored by the Sustainability Steering Committee, chaired by
the Chief Sustainability Officer and shared with the Sustainability Committee.
Thus, 2023 represented the first year of implementation of the new scorecard.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
26
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
27
The results achieved in 2023 in relation to the "Percentage of revenues from solutions with better
sustainability performance out of the Group's total revenues" KPI testify how central
sustainability is to the innovation activities of Prysmian's product and service portfolio. In 2023,
this KPI reached a value of 37%, up by 7 percentage points from the previous year. Prysmian's
role as an enabler of energy transition and digitalization processes is, moreover, confirmed by
the performance of KPIs related to quantifying the positive impacts of the Group's activities on
communities, which more than doubled the 2022 baseline.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
28
7.
AN INTERNATIONAL NETWORK
As a market leader, Prysmian is present in all major ESG indices globally, and plays a leading
role in several trade associations and distinguished organizations.
Prysmian in ESG indices
Indices play a central role in assessing the ESG performance of companies. In fact, they make
it possible to objectively and comparably measure a company's commitment to sustainability, in
addition to providing a clear picture of its standing against international standards and
benchmarks. Moreover, sustainability indices are key metrics for assessing the social,
environmental and economic impact of a company’s activities. Integrating these indicators allows
Prysmian to make informed decisions, promote corporate responsibility and contribute to a
sustainable future by meeting current needs without compromising those of future generations.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
29
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
30
Proactive role in trade associations and organizations
Prysmian's leadership in its industry is also testified by the Group's membership of the most
important trade associations globally. A strategic network to share best practices and remain
up-to-date on regulatory and product news, with the opportunity to express policy opinions.
Institutional Relations, including corporate lobbying, and participation in trade associations
contribute to the creation of corporate value through a complex, stable system of external
relations that are inspired by criteria of:
-
Legitimacy:
compliance with the law, applicable regulations, the Code of Ethics and
company policies
-
Fairness: respect for the prerogatives, responsibilities and decision-making autonomy of
the parties involved, avoiding the exercise of undue influence in the pursuit of corporate
interests
-
Transparency:
carrying out lobbying activities in legal conditions.
In addition, specific general principles must be observed when engaging in these relations:
-
In the process of interacting with Institutional Representatives, the company must
employ transparent, lawful and autonomous accreditation channels. It must adopt forms
of communication that allow the interlocutor to easily and immediately identify both the
business organization and the interest it represents.
-
The corporate interest involved in an ongoing decision-making process must be made
explicit through the submission of proposals, suggestions, studies, research and analysis.
These tools must be suitable for highlighting the relevance of the corporate interest and
the impacts of the decision.
-
Information used during dialogue with the institutional representative should be
transferred only after verifying that it is fully comprehensive and reliable. This verification
is performed by the departments/functions involved in each initiative.
Some of the main issues subject to the Group's lobbying activities in 2023 were:
-
European Green Deal (with a focus on sustainable fibers)
-
Broadband Cost Reduction Directive
-
Recovery and Resilience Facility (RRF)
Also in 2023, consistent with what is defined in its Code of Ethics, the Prysmian Group made no
contributions in any form to political parties or politicians.
Below are the main trade associations Prysmian is a member of, which are active in combatting
climate change, supporting energy transition and digitalization processes and promoting
sustainable practices in favor of local communities.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
31
Regarding
environmental issues, with a specific focus on climate change
, the Group is a
member of the following associations:
o
Wind Europe
Over 450 members, counting manufacturers, suppliers and academics, have joined forces to
promote wind energy throughout the world via research and outreach, seminars and policy
guidance.
o
Global Alliance for Sustainable Energy
In 2022, Prysmian joined the "Global Alliance for Sustainable Energy", an independent global
alliance to promote and integrate sustainability and social responsibility in the renewable energy
sector. The alliance, which is open to all interested stakeholders, aims to ensure that the
renewables sector is fully sustainable and respects human rights throughout the entire value
chain.
o
Wash Pledge
By signing the Wash Pledge, Prysmian commits to ensuring access to safe drinking water,
sanitation and hygiene in the workplace at an appropriate level for all employees across all of its
premises. The company is also committed to taking WASH actions throughout its value chain,
including both suppliers and the communities surrounding the workplaces in which it operates.
In the energy area
, the Group is a member of:
o
Europacable
Europacable represents the world's largest cable manufacturers, as well as highly specialized
small- and medium-sized companies, at European institutions, monitoring policy and regulatory
debates. Prysmian participates actively in various working parties, and even plays a leadership
role in those with a specific focus on sustainability.
o
Friends of Sustainable Grids (FOSG)
A non-profit association promoting a pan-European renewable, efficient and large-scale
electricity grid that provides secure and affordable energy. The association mainly focuses on
such topics as efficient governance, a harmonized regulatory approach and energy education.
In the digital area,
Prysmian participates in:
o
Fibre to the Home (FTTH) Council
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
32
Founded in 2004, this group with 150 members seeks to accelerate the deployment of fiber optic
connectivity. Its vision is of a sustainable future made possible by economic growth generated
by new services using high-speed FTTH technology.
o
European Telecommunications Network Operators' Association
ETNO has been the voice of European telecommunications network operators since 1992. Its 38
members and observers innovate and invest in the continent's digital backbone. ETNO's mission
is to develop a positive policy and regulatory environment that enables the deployment of state-
of-the-art telecommunications networks and the provision of advanced digital services for
European citizens and businesses.
In the area of
corporate social responsibility and sustainability,
Prysmian is a member of:
o
UN Global Compact
Prysmian Group is a participant of the Global Compact, whose principles and spirit are reflected
in the Group’s culture, values and practices. Consistent with the Global Compact’s principles,
Prysmian Group adopts policies and tools that safeguard the environment and human and
workers’ rights while supporting local communities and the most vulnerable.
o
Responsible Mica Initiative
In 2021, Prysmian Group joined – as the first company in the cable industry – the Responsible
Mica Initiative (RMI), a non-profit organization committed to eliminating child labor and poor
working conditions in the mica supply chain. Participation in the Responsible Mica Initiative is
consistent with the social ambition objectives of Prysmian and the Group’s commitment to
improving the lives of people, communities and territories in which it operates.
o
Valore D
Italy's first business association promoting gender balance and an inclusive culture for the
growth of companies and the country.
In addition, Prysmian participates in association activity and supports
institutional
communication
through the identification of its representatives at the various working groups
activated by associations with regulators. In particular, in Italy, the Group is present in
Confindustria (the main organization representing manufacturing and service companies in
Italy), ANIE (the association of Electrotechnical and Electronic Companies, brings together
strategic players that make cutting-edge technologies available for the Building, Energy,
Industries and Infrastructure markets) and Assonime (the association for Italian listed
companies, which researches and addresses problems affecting the interests and development
of the Italian economy).
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
33
In order to ensure that all stakeholders are aware of important aspects of the corporate
lobbying process and activities, Prysmian publishes information in its financial statements
(detailed table below) and on the corporate website
(
) on the main
initiatives concluded or in place with institutional stakeholders and the general Group interests
pursued through the activities carried out. In 2023, these contributions amounted to Euro 4,4
million.
(in thousand of Euro)
2023
Lobbying, interest representation or similar activities
1,223
Trade associations or tax-exempt groups (e.g., think tanks)
1,621
Other types of activities
1,576
Total contributions and other expenses
4,421
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
34
8. CORPORATE GOVERNANCE
Directors and auditors
Governance and corporate structure
Effective and efficient, in order to create long-term sustainable value and produce a
virtuous circle with business integrity at its core.
Prysmian knows the importance of a good system of corporate governance in achieving strategic
objectives and creating long-term sustainable value, by assuring governance that is effective in
complying with the legal and regulatory framework, efficient in terms of cost-effectiveness, and
fair towards all the Group's stakeholders.
Accordingly, Prysmian Group keeps its corporate governance system constantly aligned with
latest recommendations and regulations, adhering to national and international best practices.
In addition, the Group has adopted principles, rules and procedures that govern and guide the
conduct of activities by all its organisational and operating units, as well as ensuring that all
business transactions are carried out in an effective and transparent manner.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
35
Once again, during 2023 Prysmian continued to comply with Italy's Corporate Governance for
listed companies, approved by the Corporate Governance Committee.
Further information about:
• compliance with the principles and recommendations of the Corporate Governance Code and
the reasons for any non-compliance with one or more requirements;
• any corporate governance practices actually applied by the Company that go beyond the
related legal or regulatory obligations;
please refer to the "Report on Corporate Governance and Ownership Structure", approved by
the Board of Directors and available in the Company/Governance section of the corporate
website
1
.
Structure of Corporate Governance
The model of governance and control adopted by Prysmian is the traditional one, involving the
presence of a Shareholders' Meeting, a Board of Directors and a Board of Statutory Auditors.
Prysmian's structure of corporate governance is based on the central importance of the Board
of Directors (as the most senior body responsible for managing the Company in the interests of
shareholders) in providing strategic guidance, in ensuring the transparency of the decision-
making process and in establishing an effective system of internal control and risk management,
including decision-making processes for both internal and external matters. Completing the
Prysmian corporate governance structure is a Control and Risks Committee, a Remuneration and
Nominations Committee, a Sustainability Committee and a Monitoring Board instituted under
Legislative Decree 231/2001.
Further information regarding (i) the corporate governance system of Prysmian S.p.A. and (ii)
its ownership structure, as required by art.123-bis of Italy's Consolidated Law on Finance, can
be found in the "Report on Corporate Governance and Ownership Structure", prepared in
accordance with art. 123-bis of the Consolidated Law on Finance and available in the
Company/Governance
1
section of the corporate website.
An overview of the Company's corporate governance structure as at 31 December 2023 now
follows.
1
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
36
Board of Directors
In compliance with the provisions of art. 14 of its By-laws, the Company is managed by a Board
of Directors currently consisting of twelve members - who will remain in office until the date of
the shareholders' meeting called to approve the financial statements for the year ended 31
December 2023. The Board of Directors is composed of three executive directors and nine non-
executive directors. Eight of the non-executive directors are independent within the meaning of
art. 148, para. 3 of Italian Legislative Decree 58 dated 24 February 1998 (known as the
Consolidated Law on Finance) and of art. 2 recommendation no. 7 of Italy's Corporate
Governance Code, while one non-executive director is independent within the meaning of art.
148, para. 3 of the Consolidated Law on Finance. The non-executive directors are sufficiently
numerous and have enough authority to ensure that their judgement carries significant weight
in Board decision-making.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
37
At 31 December 2023, seven of the directors are men and five are women, in compliance with
rules on the gender balance of corporate boards; in addition, seven members are in the 50-60
age bracket, while five are over 60.
Two directors were elected to the Board from the slate of candidates presented by a group of
institutional investors and management funds coordinated by Assogestioni and voted by a
minority of those entitled to attend the Shareholders' Meeting (12.3%), while the other ten
directors were elected from the slate of candidates presented by the outgoing Board of Directors
and voted by the majority of those entitled to attend the Shareholders' Meeting (85.5%).
The Board of Directors exercises the widest powers of ordinary and extraordinary administration,
except for those that by law are reserved solely for the Shareholders' Meeting. The Board of
Directors has identified a Chief Executive Officer from among its members and granted him all
the authority and powers of ordinary management of the company necessary or useful for
conducting its business. Management of the business is the responsibility of the directors, who
carry out those activities necessary to implement the corporate purpose. The Board of Directors
is also responsible for the Group's internal control and risk management system and is therefore
required to verify its adequacy and to adopt specific guidelines for this system, with the support
of the other parties involved in managing internal controls and risks, namely the Control and
Risks Committee, the Director in charge of the internal control and risk management system,
the Head of Audit, the Board of Statutory Auditors and the Managers responsible for preparing
company financial reports.
For further information on the composition, appointment and operation of the Board of Directors,
please refer to the Corporate Bodies section of the corporate website and to the "Report on
Corporate Governance and Ownership Structure"
2
.
2
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
38
Following best practices in the Anglo-Saxon world, and subject to compliance with any
regulations in force from time to time, the Board of Directors has decided to adopt a Board Skills
Matrix through which it identifies the skills existing in the Board itself as well as any gaps, thus
providing guidance on useful skills when drawing up slates of candidates for appointment as
directors
3
.
In anticipation of the renewal of the Board of Directors due in 2024, the Board of Directors has
updated the Board Skills Matrix that will be applied when selecting the next Board member
candidates and, subsequently, for those who will actually be appointed. The updated Board Skills
Matrix is as follows:
•
MANAGEMENT, STRATEGY, MERGERS & ACQUISITIONS
3
Further information about the Board Skills Matrix 2023 can be found in the "Report on Corporate Governance and
Ownership
Structure"
available
in
the
Governance
section
of
the
corporate
website
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
39
Experience in senior roles as CEO/Chairman/Senior Executive in large and complex listed
companies, directing strategy, development/transformation of a business or strategic function,
preferably with specific experience in M&A and post-merger integration.
•
SIMILAR INDUSTRIAL SECTORS
Skill and experience in the sectors in which the Group operates or in related/complementary
sectors in terms of product portfolio, focusing on complex projects in the most strategic areas
for the business, including Energy, Telecom & Transmission Networks, Industrial Solutions.
•
GEOGRAPHY & INTERNATIONAL EXPERIENCE
Skill and experience in the key countries where the Group operates.
•
TECHNOLOGY, R&D, ENGINEERING & ICT, DIGITALISATION, CYBERSECURITY
Skill and experience in technology, R&D particularly in material sciences and smart grid
development; skill and experience in innovation, digitalisation, information & communication
technology with particular reference to cybersecurity.
•
FINANCE & RISK MANAGEMENT
Experience in senior control functions (e.g. CFO, Risk Officer, Internal Audit), preferably in
international industrial companies; alternatively, at least 5 years of experience on a Control and
Risks Committee or on an Audit Committee.
•
GOVERNANCE
Knowledge of regulations, legislation, codes of conduct and best governance practices in listed
companies; experience preferably as Chairman of Governance or Nominations Committees.
•
SUSTAINABILITY, ESG, HUMAN CAPITAL DEVELOPMENT
Skill and experience in integrating sustainability/ESG issues into the business vision and in
managing human capital.
Board of Statutory Auditors
The Board of Statutory Auditors is required to monitor observance of the law and the by-laws,
as well as compliance with the principles of good business practices in running the Company,
and to review the adequacy of its organisational structure, internal control system and
administrative-accounting system.
In compliance with the provisions of art. 21 of the Company's by-laws, the Board of Statutory
Auditors is composed of three standing members, including a Chairman, and two alternate
members, who will remain in office until the date of the shareholders' meeting called to approve
the financial statements for the year ending 31 December 2024. All members of the Board of
Statutory Auditors must meet the independence requirements established by art. 148, para. 3
of Italian Legislative Decree 58 dated 24 February 1998 (known as the Consolidated Law on
Finance), and by art. 2, recommendation no. 7 of Italy's Corporate Governance Code.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
40
As at 31 December 2023, two standing members and two alternate members of the Board of
Statutory Auditors are men and one standing member is a woman, in compliance with rules on
the gender balance of corporate boards.
One standing auditor, appointed as Chairman, and one alternate auditor were elected to the
Board of Statutory Auditors from the slate of candidates presented by a group of institutional
investors and management funds coordinated by Assogestioni and voted by a minority of those
entitled to attend the Shareholders' Meeting (15.2%), while the other two standing auditors and
one other alternate auditor were elected from the slate of candidates presented jointly by the
shareholders Clubtre S.r.l., Albas S.r.l. and Angelini Partecipazioni Finanziarie S.r.l. and voted
by the majority of those entitled to attend the Shareholders' Meeting (80.8%).
For further information on the composition, appointment and operation of the Board of Statutory
Auditors, please refer to the Corporate Bodies section of the corporate website and to the "Report
on Corporate Governance and Ownership Structure
4
.
Board committees
The Board of Directors has established three internal committees with investigative, proactive
and advisory functions, and appointed their members, including the chairman.
4
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
41
The composition, duties and operation of the Committees are governed by the Corporate
Governance Regulation adopted by the Board of Directors
5
.
The Committees are composed of three non-executive directors, the majority of whom are
independent pursuant to Italy's Corporate Governance Code and Consolidated Law on Finance,
with the exception of the Remuneration and Nominations Committee, on which one member
qualifies as independent only under the Consolidated Law on Finance. The term in office of each
member corresponds to their term in office as a director.
For further information on the composition, appointment and operation of the Board committees,
please refer to the Committees section of the corporate website and to the "Report on Corporate
Governance and Ownership Structure"
6
.
Governance of sustainability
With the aim of constantly improving the sustainability of its business activities and related
communication to stakeholders, in 2022 Prysmian Group defined a new governance model that
clarifies the roles and responsibilities of all players:
1.
The
Chief Sustainability Officer
is responsible for:
• leading the creation of the ESG Strategy, defining targets and setting priorities by developing
the Group's Materiality Matrix;
• supporting the Regions and Business Units in the implementation of actions and initiatives
aimed at achieving the Group's sustainability goals;
• managing sustainability Indicators;
• guaranteeing the execution of Stakeholder Engagement activities;
• leading the internal Sustainability Committee and the Local Sustainability Ambassadors
Network;
• acting as Secretary of the Board Sustainability Committee;
• supporting the Administration, Finance and Control Department in preparing the Integrated
Annual Report;
• supervising definition of the contents of the Sustainability Report.
2.
The
Group Planning and Control and Group Administration functions
, which report to
the managers responsible for preparing company financial reports, are responsible for:
5
03)_Final.pdf
6
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
42
• monitoring the performance of ESG KPIs;
• coordinating the collection of non-financial data;
• drawing up the Integrated Annual Report;
• verifying the accuracy and quality of data.
3.
The
Communication and Public Affairs Division
, is responsible for:
• developing communication campaigns;
• working with the Chief Sustainability Officer on the organisation of Stakeholder Engagement
events.
4. The
Sustainability Committee
7
,
set up by the Board of Directors, consists of three non-
executive independent directors. In general, the Sustainability Committee has been tasked with
overseeing sustainability issues related to the business's operations and related interplay with
all stakeholders.
5. The internal
Sustainability Steering Committee
, headed by the Chief Sustainability Officer
and composed of representatives from the various corporate functions, is responsible for:
• developing objectives and targets and submitting them to the Group Leadership Team;
• supporting the Chief Sustainability Officer in creating the Materiality Matrix;
• proposing actions to be implemented at Region, Business Unit and function level;
• monitoring and following up sustainability-related KPIs and outcomes.
6.
Regional and Business Unit Leadership Teams
play a key role in the Group's sustainability
commitments.
7. The
Local Sustainability Ambassadors Network
, set up to promote sustainability culture,
local and global ESG initiatives and actions at regional level.
Digital governance of ESG factors
The activities of controlling and certifying Prysmian Group's Non-Financial Statement for 2023
have been conducted using the Group's unified digital data management platform. This platform
is audited and certified according to the main relevant standards.
The process of digitising sustainability KPIs, initiated by Prysmian Group in 2020, allows the
Group to centralise reporting and link these variables to financial ones in a truly integrated vision.
7
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
43
The tool used has functions that allow reporting to be managed in a collaborative, structured
manner with the aid of a workflow process whose steps include editing, uploading, validation
and approval, thus guaranteeing accurate and traceable data.
The digital governance of ESG factors will be progressively extended to other indicators as well,
in order to allow the Group to build, over time, an increasingly broad database that shows ESG
impacts by activities, geographical areas, projects, organisational units and management lines.
The virtuous path of analysing and actively managing these variables adopted by Prysmian
Group combines their digital governance with a robust structure of calculation and data collection
processes, through procedures that clearly and unambiguously define roles, metrics, processes
and responsibilities. In order to manage the complexity of data collection at a global level,
intermediate local and regional controls are in place, with a system for approving KPIs prior to
their consolidation at group level.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
44
Organizational chart of the
Group
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
45
As of 1 January 2024, following the reorganization of the Prysmian Group, the organizational
structure is as follows:
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
46
Ownership structure
Composition of the ownership structure
More than 80% of the ownership structure (82.6%) consists of institutional investors
One-third of institutional investors are from the United States (30%). UK (28%) and French
(12%) funds have a significant presence.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
47
Growth and values as drivers of investment
More than two-thirds (71%) of capital is held by investment funds with Value, Growth or GARP
(Growth at Reasonable Price) strategies. They anticipate the creation of value by Prysmian over
the medium-long term and consider the current share price to be undervalued given the
prospects offered by the fundamentals of the Company.
The total number of ESG investors – that is, those who place environmental, social and
governance issues at the center of their investment strategies – in Prysmian's ownership
structure is 49% (data as at 31 December 2023). In terms of type, the majority (about 80%)
are core ESG investors, whose investment decisions are guided exclusively by ESG performance
factors. These investors usually have a long-term investment horizon and strive actively to
maintain constant, constructive dialogue on sustainability matters.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
48
Furthermore, out of a total of 30,000 employees, one-third is company’s stable shareholders.
Together with management, these employees own more than 3% of the share capital, investing
directly in the Company and demonstrating their confidence in us.
Value creation for all Stakeholders is also represented by the summary indicator of "economic
value generated and distributed". This indicator, based on the re-aggregation of data from the
audited financial statements, measures the overall economic wealth created by the Group.
In 2023, the economic value generated and distributed amounted to Euro 15,938 million (Euro
16,719 million in 2022). Much of this value, a total of Euro 15,391 million (Euro 16,211 million
in 2022), was redistributed in the form of:
REDISTRIBUTION OF ECONOMIC VALUE GENERATED
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
49
Shareholders' meeting
74% of share capital participated in the last annual general meeting, with 2,708 shareholders
present by proxy.
The annual general meeting of the shareholders of Prysmian S.p.A. was held on 19 April 2023
in single call to adopt resolutions on a number of items, including: approval of the 2022 financial
statements, allocation of the profit for the year and distribution of dividends, authorisation to
buy and use treasury shares, approval of the remuneration policy report, consultation on the
report on compensation paid, approval of a new incentive plan for Prysmian Group employees
with related authorisation to increase share capital by issuing new shares. The meeting
participants, including 2,708 shareholders represented by proxy, accounted for 74% of share
capital and approved every item on the agenda by a wide majority.
The annual general meeting also approved the declaration of a dividend of Euro 0.60 per share.
The dividend was paid on 26 April 2023, involving a total pay-out of approximately Euro 158
million.
SHAREHOLDERS' MEETING: CAPITAL REPRESENTED
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
50
SHAREHOLDERS' MEETING: NUMBER OF PARTICIPANTS IN THEIR OWN RIGHT OR BY PROXY
PRYSMIAN GROUP | A. DIRECTORS' REPORT
51
9. BUSINESS ENVIRONMENT AND FINANCIAL MARKETS
Macroeconomic environment
The global macroeconomic environment gradually improved over the course of 2023, mainly
thanks to stronger-than-expected resilience of the US economy and various emerging markets.
Inflation continued to decline as a result of the more restrictive monetary policy stance adopted
by the major central banks and the decline in energy commodity prices from the previous year's
peaks. The post-Covid global economic recovery has proved surprisingly resilient to the ongoing
wars in Ukraine and Israel and the effects of high inflation. The International Monetary Fund's
latest estimates published in January 2024 put global economic growth in 2023 at 3.1%, slightly
down from 3.5% in 2022. This forecast was revised up by 0.2% from the October 2023 estimate,
reflecting not only the stronger-than-expected resilience demonstrated by the US economy and
some large emerging markets, but also fiscal measures enacted in China. This level of growth
nonetheless remains below the historical average (2000-19) of 3.8%, reflecting restrictive
monetary policies and the withdrawal of fiscal support, as well as low underlying productivity
growth.
Geographically, US growth has been revised upwards, reflecting expectations of a softer landing
and a more orderly disinflation process. The US economy is expected to have grown by 2.5% in
2023, up from 1.9% in the previous year, thanks in part to sturdy domestic demand and a
buoyant labour market that have produced a robust expansion despite considerably tighter
monetary policy.
The situation in Europe is the opposite, posting a significant deceleration from the previous year.
After expanding 3.4% in 2022, eurozone growth in 2023 is estimated at 0.5%, penalised by the
effects of high inflation and the monetary tightening required to contain it, as well as weak global
demand. Almost all European countries have experienced this deceleration, and some of them
could end up in recession, such as Germany, whose 2023 GDP is expected to be 0.3% below
that of 1.8% in 2022. Among the countries with the highest growth are Spain and France with
estimated growth of 2.4% and 0.8% respectively, but still significantly down from 2022 when
they grew by 5.8% and 2.5%.
With regard to emerging economies, the IMF forecasts show substantial stability, with growth
unchanged in 2023 at 4.1%. Within this mixed group of economies, China is forecast to report
a significant recovery in 2023, with growth estimated at 5.2%, up from 3.0% in the previous
year. The lifting of pandemic-related containment measures and a broader recovery in
consumption have offset weakness in the residential construction sector. With 5.2% growth, the
Chinese economy remains the world's second fastest growing economy after India, which is
expected to have grown by +6.7% in 2023, down from +7.2% in the previous year.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
52
Although expectations for the future are positive, there are still a number of uncertainties that
could weigh on short-term growth prospects, including the escalation of geopolitical tensions in
Ukraine and the Middle East and a possible slowdown in the downward path of inflation with
consequent continuation of restrictive monetary policies, involving less favourable financial
conditions.
* Source: IMF, World Economic Outlook Update - January 2024
Financial market performance
Prysmian S.p.A. was floated on the Italian Stock Exchange on 3 May 2007 and since September
2007 has been included in the FTSE MIB index, comprising the top 40 Italian companies by
capitalisation and stock liquidity. The Prysmian stock has since entered the principal world and
sector indexes, including the Stoxx Europe 600 Industrial Goods & Services, made up of the
largest European industrial companies by capitalisation, the Dow Jones Sustainability World
index and MIB ESG, both composed of a selected basket of listed companies that demonstrate
excellent Environmental, Social and Governance (ESG) practice.
The major global equity indexes turned in a positive performance in 2023, recovering most of
the losses incurred in the previous year mainly caused by high inflation and the start of the war
in Ukraine. Performance was particularly positive in the last months of the year, also supported
by prospects that the main central banks might bring forward the cycle of interest rate cuts
following more reassuring data on the normalisation of inflation. Europe's best performer was
Italy's main index (FTSE MIB), which gained +28.0% and surpassed the 30,000 mark for the
first time since 2008, thanks in part to the strong presence in the index of banking stocks, which
benefited from the rate hike. The UK index (FTSE 100) saw the smallest gains at +3.8%, while
PRYSMIAN GROUP | A. DIRECTORS' REPORT
53
the German index (DAX) and the Spanish index (IBEX 35) had fairly similar performances of
+20.3% and +22.8% respectively. Overall, the Stoxx Europe 600 gained 12.7%, with retail,
technology and construction among the best performers. On the flip side, the worst performers
included Basic Resources and Food & Beverage, which were also the only sectors to end the year
in negative territory.
US equity markets also performed well in 2023, with all three major indexes reporting substantial
gains: S&P 500 +24.2%; Dow Jones Industrial +13.7% and in particular Nasdaq 100 with
+53.8% thanks to the strong presence of technology stocks, which benefited from the boost
provided by artificial intelligence. Chinese equity markets on the other hand posted a negative
performance for the second consecutive year, burdened by the prolonged real estate crisis and
a lacklustre post-covid economic recovery. The Shanghai Composite index closed 3.7% down,
while DJ Shenzen lost 9.2%. Hong Kong's Hang Seng index recorded one of the worst
performances among the major world stock indexes, at -13.8%.
The Prysmian stock gained 18.8% in 2023, closing the year at Euro 41.17 per share versus Euro
34.66 at the end of 2022. The excellent performance of Prysmian's stock continued the positive
trend seen in recent years, in which it had climbed by 27.4% in 2019, 35.3% in 2020, 13.9% in
2021 and 4.7% in 2022, bringing its overall gain in the last five years to 144.0%. Its performance
was well above both the FTSE MIB index, which climbed by +65.5%, and the STOXX Europe
600/Ind Goods & Services index, which grew by +70.0% over the same five-year period.
The average share price during 2023 was Euro 36.69, up from Euro 30.69 in 2022. Including
dividend pay-outs, the Total Shareholder Return (TSR) offered by the Prysmian stock was
+20.7% in 2023 and +280.9% since its original listing on 3 May 2007. Excluding the contribution
of dividends and so just considering price changes, the performance was +18.8% in 2023 and
+168.0% since the listing date.
The Group's solidity and expectations of growth in its key markets, also thanks to Energy
Transition, Electrification and Digitalisation megatrends, have enabled the Prysmian stock to
retain its strong market appeal, as confirmed by financial analyst recommendations, of which at
the close of the year, 76% were "Buy" and 18% "Hold".
PRYSMIAN GROUP | A. DIRECTORS' REPORT
54
During 2023, the stock's liquidity recorded average daily trading volumes of approximately 0.8
million shares, with an average daily turnover of Euro 28 million.
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Prezzo al 31 dicembre
41.17 €
34.66 €
33.11 €
29.08 €
21.49 €
16.87 €
27.19 €
24.40 €
20.26 €
15.15 €
Variazione annuale
18.8%
4.7%
13.9%
35.3%
27.4%
-38.0%
11.4%
20.4%
33.7%
-19.0%
Prezzo medio
36.69 €
30.69 €
29.87 €
21.81 €
18.55 €
22.17 €
26.31 €
20.93 €
19.10 €
16.38 €
Prezzo massimo
41.24 €
35.60 €
35.05 €
29.08 €
22.06 €
28.54 €
30.00 €
24.42 €
22.23 €
19.54 €
Prezzo minimo
33.78 €
25.59 €
25.34 €
13.96 €
14.93 €
14.97 €
23.34 €
16.45 €
14.43 €
12.78 €
Capitalizzazione a fine periodo
11,385 Mil €
9,294 Mil €
8,878 Mil €
7,798 Mil €
5,762 Mil €
4,523 Mil €
5,913 Mil €
5,288 Mil €
4,319 Mil €
3,283 Mil €
Capitalizzazione media annuale
9,864 Mil €
8,229 Mil €
8,009 Mil €
5,849 Mil €
4,975 Mil €
5,361 Mil €
5,701 Mil €
4,536 Mil €
4,140 Mil €
3,521 Mil €
N° medio azioni scambiate
0,8 Mil
0,7 Mil
0,9 Mil
1,3 Mil
1,7 Mil
1,3 Mil
1,0 Mil
1,0 Mil
1,4 Mil
1,4 Mil
Controvalore medio scambiato
28 Mil €
22 Mil €
25 Mil €
27 Mil €
31 Mil €
28 Mil €
26 Mil €
20 Mil €
27 Mil €
23 Mil €
Numero azioni al 31 dicembre
276,534,448
268,144,246
268,144,246
268,144,246
268,144,246
268,144,246
217,482,754
216,720,922
216,720,922
216,712,397
PRYSMIAN GROUP | A. DIRECTORS' REPORT
55
10. SIGNIFICANT EVENTS DURING THE YEAR
Finance activities
CDP lends Euro 120 million for innovation and digitalisation
On 6 March 2023, Prysmian Group announced that it had obtained a new loan of Euro 120 million
from Cassa Depositi e Prestiti (CDP) to support R&D focused on deploying innovative
technologies and to help consolidate the business's digitalisation processes, while cutting
emissions to facilitate the energy transition.
Prysmian's R&D programs are also in step with the Paris Agreements, the European Green Deal
and Horizon Europe directives for the promotion of clean, renewable energy by developing cable
systems that ensure the interconnection of integrated renewable energy systems.
S&P Global Ratings awards Prysmian S.p.A. an investment grade rating
On 6 June 2023, the Group announced that it had been awarded an investment grade rating by
S&P Global Ratings. Prysmian S.p.A. has received a BBB- long-term issuer credit rating with a
stable outlook.
Revolving Credit Facility 2023
On 20 June 2023, Prysmian Group renewed a Euro 1,000 million long-term sustainability-linked
revolving credit facility with a syndicate of leading Italian and international banks.
This important five-year credit facility, with a 6- and 7-year extension option, will help further
improve the Group's financial structure by lengthening the average maturity of its debt, while
retaining the flexibility offered by such an instrument. The credit facility carries optimum terms,
also in light of the investment-grade credit rating recently awarded to Prysmian by Standard &
Poor's.
In addition, with the aim of deepening the embedding of ESG factors into the Group's strategy,
Prysmian Group has chosen to include important environmental and social KPIs among the
parameters determining the terms of credit. The renewed revolving credit facility is in fact
Sustainability-Linked, being tied to the decarbonisation targets already set by the Group (annual
GHG emissions from 2023 to 2030), to the ratio of female white-collar and executive hires to
total Group hires, and to the number of sustainability audits performed within the supply chain.
56
New contracts and other contract-related information
Prysmian successfully completes laying of the Ibiza-Formentera submarine cable
interconnection
On 31 January 2023, the Group announced that it had successfully completed laying and burial
of the cables for the submarine power interconnection between Ibiza and Formentera.
Prysmian
partners with National Grid to upgrade UK electricity grid
On 6 February 2023, the Group announced that National Grid Electricity Distribution had awarded
the Group's UK subsidiary a minimum three-year framework agreement for the supply of
medium voltage cables.
Prysmian launches Prysolar, its most innovative cable solution for solar power
generation
On 20 February 2023, the Group announced that it would showcase its full range of technologies
at Genera 2023, the International Energy and Environment Fair held in Madrid from 21-23
February 2023. With the release of Prysmian Prysolar, the Group now has the most
comprehensive and geographically wide product capability to serve every customer in every
continent.
TenneT awards Prysmian offshore wind farm connection projects in the Netherlands
worth Euro 1.8 billion
On 3 March 2023, the Group was awarded two contracts worth a total of approximately Euro 1.8
billion by Dutch transmission system operator TenneT for two power grid connection projects
(Ijmuiden Ver Alpha and Nederwiek 1), which will connect two future offshore wind farms located
in the Dutch North Sea to the province of Zeeland, in the south west of the Netherlands.
The first connection is scheduled to be delivered in 2029 and the second in 2030. Each cable
system consists of two single-core 525 kV HVDC cables (with XLPE insulation for the submarine
section and P-Laser insulation for the onshore section), a single-core metallic return cable and
a single-core optical cable. The submarine cables will be manufactured at Prysmian Group's
centres of excellence in Pikkala (Finland) and Arco Felice (Italy), while the onshore cables will
be produced in Gron (France).
Inelfe awards Prysmian a contract worth more than Euro 800 million for a new power
interconnection between France and Spain
On 5 May 2023, the Group was awarded a contract worth more than Euro 800 million for a new
power transmission interconnection between France and Spain. The connection will be built for
INELFE, a 50:50 joint venture between Spanish grid operator Red Eléctrica and French grid
57
operator Réseau de Transport d'Électricité (RTE). The project is one of the European
Commission's Projects of Common Interest as it boosts the reliability of power supply, enables
renewable energy to be an ever-growing integral part of electricity grids and helps create a more
efficient system. The EPCI contract for Cable Link 2 of the Biscay Gulf Project involves a total of
about 400 km of submarine and land cables with an overall capacity of 1 GW. The submarine
section will link the Basque coast (Spain) to the Médoc coast (France).
HVDC cable connections in UK: Eastern Green Link 2 (EGL2) and Eastern Green Link 1
(EGL1)
On 23 May 2023, the Group received notification from SSEN Transmission and National Grid
Electricity Transmission plc that it had been selected as the sole preferred bidder for the Eastern
Green Link 2 (EGL2) cable connection.
Eastern Green Link 2 is an HVDC submarine and land cable link of approximately 500 km,
planned to run from Peterhead in Scotland to Drax in the north of England. With 2 GW power
transmission capacity, this link will be one of the first cable systems in the UK to use 525 kV
technology with extruded XLPE insulation. On 29 June 2023, the Group announced that it had
reached another important milestone with Eastern Green Link 2 Limited, under which an
agreement was made to pay Euro 180 million to reserve Prysmian Group's capacity for the
construction of EGL2 during the remaining period of negotiations aimed at finalising the contract
in a timely manner.
On 25 May 2023, the Group received notification from SSEN Transmission and National Grid
Electricity Transmission plc that it had been selected as the sole preferred bidder for the Eastern
Green Link 1 (EGL1) cable connection. Eastern Green Link 1 is an HVDC submarine and land
cable link of approximately 200 km (requiring about 400 km of cable), planned to run from
Torness in Scotland to Hawthorn Pit in the north of England. With 2GW power transmission
capacity, this link will be the first cable system in the UK to use 525 kV technology with extruded
XLPE insulation. In addition, a 5 km long 400 kV HVAC cable system (requiring approximately
30 km of cable) will connect the converter station and grid substation at the end of the Scottish
section. On 5 July 2023, the Group announced that it had reached another important milestone
with SP Transmission plc and National Grid Electricity Transmission plc, two of the British
electricity grid's owners, under which an agreement was made to make an initial payment of
Euro 85 million.
On 30 November 2023, the Group was awarded the contract worth some Euro 850 million by
Eastern Green Link 1 Limited, a joint venture between UK transmission grid owners SP
Transmission plc and National Grid Electricity Transmission plc.
The award of EGL1, which now joins the Group's order backlog, follows Prysmian's selection
earlier this year as the exclusive preferred bidder and the Group's subsequent commitment to
reserve its production capacity.
58
The cables will be manufactured at Prysmian's centres of excellence in Pikkala (Finland) in the
case of the submarine cables and in Gron and Montereau (both in France) in the case of the
onshore cables. A Prysmian cable-laying vessel of the same class as the Leonardo da Vinci will
be used for offshore installation activities. The project is scheduled to be commissioned in 2028.
EGL2 and EGL1 are part of a series of system upgrades needed to increase the capacity of the
UK's existing transmission grid and support the growth of renewable energy flows generated in
the north of the country to centres that require it in the south. These links will therefore support
the goal of having 50 GW of offshore wind power by 2030 and achieving a Net Zero economy by
2050.
Prysmian to develop a new submarine power cable link for the Hornsea 3 offshore
wind farm in the UK
On 3 July 2023, Prysmian Group was awarded a new contract by Ørsted Wind Power A/S to
supply inter-array submarine cables for the Hornsea 3 offshore wind farm, located 160 km off
the Yorkshire coast in the UK. Once completed, the wind farm will be able to supply clean,
renewable electricity to over 3 million homes.
Cable delivery is scheduled in 2026.
Major Service Level Agreement signed with TenneT for the maintenance of submarine
cables to help ensure stable supply of clean energy to German and Dutch households
On 12 July 2023, the Group signed a Service Level Agreement (SLA) with German-Dutch
transmission system operator TenneT. The agreement provides for the provision of nearshore
and offshore inspection, maintenance and repair services for TenneT's HVAC and HVDC
submarine power cables in the North Sea. The services under the agreement will be provided in
partnership with N-Sea, a Dutch integrated subsea solutions provider specialised in survey, IMR
& construction, subsea cable repair & installation, and UXO identification & disposal.
This new agreement, which will apply to all cable links already in operation, will last for three
years and has the option of being extended. It will cover approximately 4,000 km of TenneT's
submarine cable systems located in the German and Dutch North Sea.
Prysmian selected as preferred bidder for the BalWin1, BalWin2 and DC34 projects in
Germany
On 22 August 2023, the Group announced that it had been selected by Amprion, one of Europe's
leading transmission system operators, as preferred bidder for the two offshore grid connection
systems BalWin1 and BalWin2 and the underground cable project DC34. Prysmian has
committed to reserve the required production and installation capacity until that date. The
contracts are valued in aggregate at around Euro 4.5 billion. These three projects are part of
Germany's overall plan to install 70 GW of offshore wind power by 2045 and will allow energy
59
generated in the North Sea to be transmitted to consumers in the country's western and southern
regions.
Prysmian successfully completes Viking Link, the record-breaking interconnector
between the UK and Denmark
On 4 September 2023, the Group announced that it had successfully completed the installation
and HV testing of its 1,400 km of submarine and onshore power cables for the Viking Link
Interconnector, the world's longest onshore and offshore HVDC interconnector linking the UK
and Denmark. Viking Link is a joint venture between National Grid and Energinet. The
interconnector, expected to be operational by the end of 2023, will enable clean energy to be
exchanged between the two countries, supporting their journey to net zero. Prysmian's contract,
worth around Euro 700 million, was awarded in August 2019 by National Grid and Energinet and
included the end-to-end design, manufacture and installation of the world's longest
interconnector, covering all 1,250 km of cables for the submarine section and around 135 km of
land cables on the UK side, for the 4 Lots awarded to Prysmian out of a total of 5.
Prysmian signs a Capacity Reservation Agreement with Marinus Link Pty Ltd in
Australia
On 5 September 2023, the Group announced that it had signed a Capacity Reservation
Agreement for a fee of up to Euro 90 million with Marinus Link Pty Ltd, a subsidiary of Australian
TSO TasNetworks, for a new electricity interconnector between Tasmania and the state of
Victoria (Australia). The agreement requires the Commonwealth Government to pay a fee of up
to Euro 90 million in consideration for Prysmian's reservation of capacity until the final contract
is signed, expected by July 2024. With a total capacity of 750 MW, the link will facilitate the flow
of electricity between the two states, enabling efficient transfer of renewable energy from where
it is generated to where it is needed, while also helping Australia meet its emission reduction
targets by saving up to 70 million tonnes of CO2 equivalent by 2050. Further to negotiations,
the contract is expected to be finalised during 2024.
Prysmian awarded Euro 630 million Adriatic Link project by Terna
On 7 September 2023, the Group was awarded a new contract worth around Euro 630 million
by Terna Rete Italia S.p.A., a wholly-owned subsidiary of Terna S.p.A., operator of the Italian
HV and EHV power grid. The Adriatic Link project includes the design, supply, installation and
commissioning of an HVDC submarine interconnector, which will contribute to decarbonisation
of the Italian energy system, thereby strengthening Italy's role as a Mediterranean energy hub.
60
Prysmian signs an agreement worth around Euro 1.1 billion with 50Hertz for the NOR-
11-1 submarine cable and DC31 underground cable projects in Germany
On 29 September 2023, the Group was awarded new contracts worth a total of around Euro 1.1
billion by 50Hertz, a transmission grid operator in Germany.
As part of 50Hertz's tender for "long-term EPCI contracts for HVDC cables", Prysmian has been
awarded contracts for Lot 2, which includes EPCI contracts for the NOR-11-1 submarine and
DC31 underground cable projects, and for Lot 7.
These projects are part of Germany's plan to achieve cumulative installed offshore wind power
capacity of 70 GW by 2045 and to transfer energy generated in the North Sea to consumers in
the eastern and southern regions of Germany.
Under Lot 2, Prysmian will be responsible for the design, manufacture, supply, laying, testing
and commissioning of the two turnkey projects NOR-11-1 and DC31, involving an overall cable
length of around 1,000 km.
With power transmission capacity of 2 GW, NOR-11-1 is a 525 kV HVDC submarine cable project
that will also use an underground cable along the route that will connect the N-11-1 offshore
wind farm to the German grid in the Heide-West area. DC31, the second project in Lot 2, is a
525 kV HVDC underground cable project that will transmit electricity from the Heide-West area
to Klein Rogahn.
Both the ±525 kV HVDC submarine and underground cable systems will consist of two single-
core XLPE-insulated copper cables plus a dedicated XLPE metallic return cable and a fibre optic
cable. The submarine power cables will be produced at the Group's centres of excellence in
Pikkala (Finland) and Arco Felice (Italy), while the submarine fibre cables will be manufactured
in Nordenham (Germany). The underground power cables for both the DC31 project and the
underground section of the NOR-11-1 project will be manufactured in France.
Lot 7, awarded to Prysmian as the primary supplier, consists of a framework provision allowing
50Hertz to contract with Prysmian within an agreed period for future 525 kV offshore and/or
onshore projects with a cable core volume of up to 2,700 km.
Prysmian will use its fleet of state-of-the-art cable-laying vessels for offshore installation
activities, including cable laying and burial.
Prysmian successfully completes cabling operations for Vineyard Wind 1, the US's first
utility-scale offshore wind farm
On 23 October 2023, the Group announced that it had successfully completed the installation
and HV testing of Vineyard Wind 1, the first utility-scale offshore wind farm in the United States.
Located more than 15 miles off the Massachusetts coast, Vineyard Wind consists of an array of
62 wind turbines that will generate 800 MW of electricity powering more than 400,000 homes.
The project was awarded to Prysmian Group by Vineyard Wind, LLC in May 2019. The contract
included the design, manufacture, installation and commissioning of an HVAC cable system
61
consisting of two 220 kV three-core XLPE-extruded cables that will deliver clean energy to the
mainland US power grid and help reduce CO2 emissions by more than 1.6 million tonnes per
year.
The 134 km of submarine power cables were manufactured at Prysmian Group's centres of
excellence in Pikkala (Finland) and Arco Felice (Italy), while marine installation was carried out
using Prysmian Group's Cable Enterprise and Ulisse cable-laying vessels.
Prysmian signs an agreement worth around Euro 900 million for the Clean Path New
York energy project in the US
On 30 October 2023, the Group announced that it had signed an agreement worth approximately
Euro 900 million with Clean Path New York to supply submarine and land cable systems for one
of the largest transmission infrastructure projects in the United States.
Clean Path New York is a $11 billion renewable energy project comprising more than 20 new
wind and solar generation projects totalling 3,800 MW and a new 280 km underground and
submarine power transmission line. Together, these assets will provide more than 7.5 million
megawatt hours of emission-free energy to more than 1.5 million New Yorkers every year. Clean
Path New York is a public-private partnership between Invenergy, energyRe and the New York
Power Authority.
Under the terms of the agreement, Prysmian Group will be responsible for the design,
construction, installation and commissioning of a 400 kV HVDC single-core XLPE-insulated cable
system, subject to Clean Path New York issuing its notice to proceed in spring 2024.
Prysmian wins contract worth over Euro 100 million signed with Petrobras to supply
steel tube and thermoplastic electro-hydraulic umbilicals
On 7 December 2023, further to a competitive tender, the Group signed a contract worth over
Euro 100 million with Petrobras for the supply of 170 km of deepwater electro-hydraulic
umbilicals and related specialised offshore and logistics services.
The state-of-the-art deepwater steel tube and thermoplastic umbilicals will be engineered,
manufactured, tested and delivered in the period 2024-2027 by Prysmian's centre of excellence
for Offshore Specialties and dynamic subsea technologies in Vila Velha (Brazil).
In recent years, the Group has in fact invested in further expanding its industrial assets at the
Vila Velha plant and its delivery logistic options, as well as its entire end-to-end value generation
process, from R&D modelling to offshore services, in order to better meet customers' needs with
technologically advanced cable solutions.
62
Prysmian further expands its cable-laying fleet in support of the global power grid for
energy transition with two new cable-laying vessels to create the industry's largest
fleet
On 21 December 2023, the Group announced an investment of some Euro 350 million for two
new state-of-the-art cable-laying vessels to boost Prysmian's submarine project execution
capabilities. This investment is already included in the medium-term outlook announced by the
Group on 5 October during the Capital Markets Day.
The first cable-laying vessel will be an evolution of the Monna Lisa. Measuring about 185 m long
and some 34 m wide, the new vessel will be equipped with advanced cable-laying solutions, such
as three carousels with a total 19,000 tonne capacity, making it one of the cable-layers with the
highest load capacity on the market and reducing factory-to-site transport time, thus improving
overall project efficiency. A bollard pull in excess of 180 tonnes will allow the vessel to perform
complex installation operations of simultaneously laying and burying (up to 4) cables using
several ploughs, for unparalleled optimisation of offshore operations.
The vessel will be equipped with state-of-the-art DP3 dynamic positioning and seakeeping
systems and will be operational by early 2027. Like the Leonardo da Vinci and the Monna Lisa,
the new vessel will be built by the VARD Group (a subsidiary of the Fincantieri Group), one of
the world's leading designers and builders of specialised vessels for the offshore market.
The other cable-laying vessel will be an evolution of the Ulisse, measuring about 167 m long and
some 40 m wide. It will be equipped with two carousels (one of which split in two concentric
sections) with a total load capacity of 10,000 tonnes. State-of-the-art DP2 dynamic positioning
and seakeeping systems and an eight-point mooring system will enable the vessel to meet the
specific operational requirements for shallow-water cable laying and burial, even in harsh
environmental conditions. The vessel is due to enter service during the first half of 2025.
Both vessels will have green credentials: they will be equipped with high-voltage shore
connection systems to power them with clean energy during loading operations, diesel
generators suitable for biodiesel blends and hybrid batteries just for the vessel that installs in
very deep water (due to its specific activities).
Prysmian's current fleet of six state-of-the-art cable-laying vessels comprises: Giulio Verne, its
former flagship with about 35 years of service in cable installation projects; Cable Enterprise, a
very versatile DP2 vessel, mainly used for installation of offshore wind farm export cables; Ulisse,
an efficient shallow-water installation vessel; Barbarossa, a small barge, recently added to the
fleet and specifically designed for operations in very shallow water and intertidal zones; Leonardo
da Vinci and Monna Lisa, the world's most advanced cable-laying vessels, the latter still under
construction, both unrivalled in the installation of long HVDC interconnections in particularly
deep waters.
Prysmian also has the widest range of high-tech burial equipment, including Hydroplows, HD3
Ploughs and Post Lay Burial machines (Sea Mole, SeaRex and Otter).
63
Prysmian successfully completes the Fécamp offshore wind farm cable project in
France
On 27 December 2023, the Group announced that it had successfully commissioned the inter-
array cable system for the Fécamp offshore wind farm, located in the English Channel, some 24
km off the French coast in Normandy (Seine Maritime department). The Fécamp offshore wind
farm consists of 71 wind turbines with a total capacity of almost 500 MW, capable of generating
clean electricity equivalent to the power needs of over 770,000 people.
Prysmian was awarded this project in 2020 under a contract from EDF Renewables and its
partners.
The complex offshore installation operations were carried out applying Prysmian's specific end-
to-end approach to project management.
This contract confirms the deep trust that EDF Renewables and its partners have in Prysmian,
after previously awarding the Group other projects such as those for the St. Nazaire and
Calvados offshore wind farms.
Other significant events
Prysmian launches the Global Sustainability Academy
On 10 January 2023, the Group announced the launch of the Global Sustainability Academy. The
initiative aims to spread the culture of sustainability within the entire corporate population
worldwide and further strengthen the Group's commitment to implementing its Climate & Social
Ambitions, with reference to employee engagement and up-skilling parameters.
Prysmian unveils the cable industry's first eco-certified optical cables
On 17 March 2023, the Group announced the launch of the first green-certified optical cables
under its ECO CABLE label, the first patented label of its kind in the cable industry. The Group
presented its ECO CABLE labelled product range at the FTTH Conference 2023 in Madrid. All of
the Group's telecom cables have been graded, with around 30% of them now rated as ECO
CABLE compliant. Distribution of ECO CABLE certified Telecom products began in Europe in May,
with the rest to follow later in the year. The Group aims with this initiative to strengthen its
sustainability strategy and active role as a promoter of sustainable development, as well as to
accelerate its race towards net-zero CO2 emissions.
Approval of financial statements at 31 December 2022 and dividend distribution
On 19 April 2023, the shareholders' meeting of Prysmian S.p.A. approved the 2022 financial
statements and the distribution of a gross dividend of Euro 0.60 per share, for a total of some
64
Euro 158 million. The dividend was paid out from 26 April 2023, with record date 25 April 2023
and ex-div date 24 April 2023.
Authorisation to buy and dispose of treasury shares
On 19 April 2023, the shareholders' meeting of Prysmian S.p.A. granted the Board of Directors
authorisation to buy back and dispose of treasury shares, concurrently revoking the previous
authorisation under the shareholder resolution dated 12 April 2022. Under this authorisation it
is possible to make one or more share buybacks such that, at any one time, the total holding of
treasury shares does not exceed 10% of share capital.
New long-term incentive plan (2023-2025)
On 19 April 2023, the shareholders' meeting of Prysmian S.p.A. approved a long-term incentive
plan (2023-2025) that will involve approximately 1,100 beneficiaries among management and
other key Prysmian Group resources, including Prysmian S.p.A.'s Executive Directors and Key
Management Personnel. The Plan involves the grant of new-issue ordinary shares obtained from
a bonus issue funded by profits or retained earnings in accordance with art. 2349 of the Italian
Civil Code, or a combination of new-issue shares and treasury shares. By means of this plan,
Prysmian intends to strengthen the Company's and management's commitment to creating
sustainable value over time for all stakeholders, including by involving a wide range of key people
in over 40 countries who play an important role in the Group's sustainable success. The plan
spans a three-year period and provides for the award of shares upon achievement of economic
and financial performance conditions, Total Shareholders Return and ESG targets. The plan also
allows 50% of the annual bonus, where due, for the years 2023, 2024, 2025 to be deferred in
the form of shares. The annual bonus is also linked to the achievement of ESG targets, as well
as to economic-financial targets. The deferral of the annual bonus also entails an additional
award of "matching" shares which, in the case of the Group's some 50 top managers, is also
dependent on the achievement of ESG targets by 2025. The plan has the following objectives:
-
to motivate participants to achieve long-term results geared towards sustainable value
creation over time;
-
to align the interests of management with those of shareholders through the use of share-
based incentive instruments;
-
to foster stable management ownership of the Company's share capital;
-
to ensure the long-term sustainability of the Group's annual performance, strengthening
staff engagement and retention, including through the mechanism of deferring part of
the annual bonus in shares.
The shareholders of Prysmian S.p.A. also authorised a bonus share capital increase to be
reserved for Prysmian Group employees in execution of the plan. This capital increase may reach
a maximum nominal amount of Euro 950,000 through apportionment, pursuant to art. 2349 of
65
the Italian Civil Code, of a corresponding amount from profits or retained earnings, with the
issue of no more than 9,500,000 ordinary shares of nominal value Euro 0.10 each.
Prysmian launches ECOSLIM™, the small-diameter optical fibre system using up to
90% recycled plastic
On 25 May 2023, the Group announced the global launch of its Ecoslim™ sustainable
telecommunications system, which uses Sirocco HD and Sirocco Extreme optical cables, available
with up to 864 optical fibres. Sirocco HD cables are made with 50% less plastic and are up to
25% smaller in diameter, in line with the Group's commitment to increase the recycled content
of its cables.
Massimo Battaini designated as new Group CEO with effect from the 2024 AGM
On 26 May 2023, the Board of Directors of Prysmian S.p.A. designated Massimo Battaini - a
current Director and Group Chief Operating Officer ("COO") - as the candidate for the position
of Chief Executive Officer ("CEO") of Prysmian Group, in line with the Group Succession Plan,
having been informed by current CEO Valerio Battista of his decision not to carry on as CEO for
the next three-year mandate (2024-2027). Massimo Battaini will be presented as CEO designate
on the slate submitted by the outgoing Board of Directors for its upcoming renewal at the 2024
Annual General Meeting, when Valerio Battista will step down.
Prysmian Group to create a power transmission cable technology hub in Finland to
support grid upgrades for global energy transition
On 1 June 2023, the Group announced the commencement of a new investment of approximately
Euro 120 million in its strategic plant in Pikkala, Finland. The investment, which comes on top of
the Euro 100 million already earmarked in 2022, aims to increase production capacity for 525
kV HVDC submarine cables, thus supporting growing market demand driven by the need to
develop and upgrade power transmission grids for the energy transition.
The new vertical continuous vulcanisation (VCV) lines will more than double Pikkala's current
production capacity for 525 kV extruded submarine cables and 400 kV AC cables by 2026.
Prysmian's leadership team invests in the Company's shares, to hold more than 2% of
share capital
On 6 June 2023, the Group announced that, as of 5 June 2023, Prysmian S.p.A.'s CEO Valerio
Battista, as well as other top managers and beneficiaries of the three-year incentive plan "LTI
Grow 2020-2022" approved by the AGM on 28 April 2020, had started to sell part of the Prysmian
ordinary shares granted to them under the Grow Plan. These sales took place in accordance with
the sell-to-cover mechanism - and, therefore, through transactions on the market - for the sole
purpose of meeting the tax liabilities arising from their award, as provided for under the Grow
Plan. In particular as regards the CEO, the sale concerned part of the 325,743 shares awarded
66
to him. Prysmian Group's leadership team, consisting of CEO Valerio Battista, COO Massimo
Battaini, CFO Pier Francesco Facchini and other senior managers, informed the Company that
they had agreed to the CEO's proposal to invest in the Company's shares a minimum of 30% of
their net incentive, calculated on the portion paid in cash, based on the achievement of the MBO
plan's performance targets for the year 2022. At the end of the sell-to-cover period envisaged
in the Grow Plan, the leadership team will own more than 2% of Prysmian's share capital.
Variation in share capital
On 6 June 2023, the Group announced that Prysmian S.p.A.'s share capital had a new
composition as a result of implementing the resolutions for a bonus issue adopted by the
Company's Extraordinary General Meeting on 12 April 2022 to service the stock grant plans
approved by the shareholders' meetings of 28 April 2020 and 12 April 2022, reserved for
employees and executive directors of the Company and of Prysmian Group companies.
More specifically, the following shares were issued:
-
on 29 May 2023, 292,511 ordinary shares,
-
on 5 June 2023, 8,000,000 ordinary shares.
Science Based Target initiative approves the Group's new Near-Term and Net-Zero
GHG emission reduction targets
On the occasion of its Sustainability Week 2023, the Group announced that its ambitious new
emission reduction targets had been approved by the Science Based Target initiative (SBTi).
Among the highlights, a revision of the near-term targets and approval of the net-zero targets:
-
-47% Scope 1 and 2 emissions (upgrade from the previous 2021 target of -46%) and
-28% Scope 3 emissions (upgrade from the previous 2021 target of -21%), by 2030;
-
-90% (Scope 1 and 2) by 2035 and -90% (Scope 3) by 2050 throughout the value chain.
The Sustainability Week 2023 was an opportunity to underscore how the Group views
sustainability as a driver of its business, by pursuing a strategic vision based on the highest
standards of environmental responsibility in its production processes, and strengthening its
commitment not only to safeguarding the environment and managing relations with the local
communities in which it operates but also to the inclusion and development of its people.
Plan to close Berlin-
Köpenick plant in Germany
On 10 July 2023, German company Draka Comteq Berlin GmbH & CO.KG announced its intention
to initiate a process of informing and consulting employees about a collective redundancy
procedure for the entire workforce of the Köpenick plant in Germany, affecting 82 employees.
The Köpenick plant manufactures signalling cables for the railway industry, an activity which
could be transferred to the Neustadt plant.
67
Industrial activities are due to cease by the end of the year, resulting in the plant's closure.
Discussions between the local works council and trade union will seek to agree balance of
interests and a plan to minimise the social impact, for example by offering employees the
possibility of transfer to other German plants or a redundancy incentive for those who decide to
leave the Group.
The parties conducted and concluded the negotiations in September, signing an overall
agreement and defining a solid social plan that also includes the possibility of relocating the
voluntary workers to the Neustadt site.
The process described was carried out in the name of the great professionalism of Köpenick's
workforce, which is continuing to work in the factory, with no (negative) impact on the production
that will end in December, as well as collaborating in order to carry out the project of transferring
production to the Neustadt site.
Telecom footprint rationalization
Following the reduction in demand that occurred from the second half of 2023 in the Telecom
business, which has consolidated a structural overcapacity of production with respect to the now
definitive level of market absorption in the various segments of the sector, the Group has
implemented various initiatives, including the announcement of the closure of the French factory
in Calais (optical cables) and the English one in Washington (multimedia solution), in the last
quarter 2023. In this context, the local management, negotiated according to local regulations,
in accordance with the local laws and the respective consultation and negotiation procedures
with the PAs has entered into negotiations with the social partners in order to reach an
agreement that implements and supports a social plan consisting of various measures, including
job relocations to other Group sites and redundancy incentives, in order to allow each employee
to find the solution that best suits their personal needs. In Italy, since the beginning of 2024,
management has also started discussions, both at trade union and government level - on its
disengagement from the production of optical fibre in Italy with the consequent declaration of
its intention to initiate a procedure for termination or sale of the fiber optic production plant in
Battipaglia.
Prysmian supports parenthood: new Global Parental Policy launched
On 7 August 2023, the Group announced the global introduction of a new Parental Policy,
consisting of a series of concrete measures to support new parents in best managing their work-
life balance in this new chapter of their lives. The main features of the new global Parental Policy
include the raising of the minimum parental leave for mothers or primary caregivers from 12 to
16 weeks on full pay, and the introduction of a two-week minimum standard parental leave on
full pay for fathers or secondary caregivers. To support parenthood, Prysmian is committed, in
all countries in which it operates, to providing a "New Child Benefit" (also called "Baby Bonus")
68
as an income support measure granted and paid for each new child to new parents, whether
biological or adoptive and members of a couple or single.
Moreover, Prysmian will reinforce the "Leave and Back to Work" programme that supports all
new mothers or primary caregivers from the beginning of their compulsory leave until their first
few months back at work, so as to guarantee a gradual and successful return. Each new mother
will be supported with a dedicated training, mentoring or counselling programme. Through this
new Parental Policy, Prysmian Group aims to set a minimum global standard, focusing on aspects
such as wellbeing and inclusion in all the countries where it operates, thus allowing its employees
to enjoy the same opportunities and minimum benefits.
Capital Markets Day 2023 - Prysmian announces its strategy to lead energy transition
and digital transformation
On 5 October 2023, the Group announced its new strategy, including the future reshaping of its
business into four new segments, and presented its financial and non-financial targets through
until 2027.
As part of the newly presented strategy, the Group also announced its main priorities in terms
of capital allocation, based on robust cash generation expected in the period 2023-2027. In fact,
the Group expects to generate Euro 3.2 billion in cumulative free cash flow over the period 2023-
2027 and has identified three main priorities in executing its capital allocation strategy:
•
M&A and share buyback programme: Up to 55-60% of the cash flow generated is
expected to be used to execute the Share Buyback Programme and M&A transactions.
Timing and allocation between the two options will depend on the opportunities that arise
over the period.
•
Increased dividend: The dividend is another important pillar of the Group's Capital
Allocation Strategy, with the Company intending to progressively increase the total
dividend distributed to shareholders by approximately 10% year-on-year, starting in
2024. A maximum of 30-35% of the flows generated in the period 2023-2027 will be
allocated to the dividend increase.
•
Deleveraging: The third strategic pillar of capital allocation is reduction in debt. Prysmian
plans to continue deleveraging while remaining in the range of 0.5x-1x over the period.
The remaining 10% of the flows generated during the period 2023-2027 will be used to
further reduce debt.
Variation in share capital and new by-laws
On 29 November 2023, the Group announced that the share capital of Prysmian S.p.A. (the
"Company") had a new composition as a result of implementing the resolution for a bonus issue
adopted by the Company's Extraordinary General Meeting on 12 April 2022 to service stock grant
PRYSMIAN GROUP | A. DIRECTORS' REPORT
69
plans reserved for employees of the Company and Prysmian Group companies. More specifically,
the Company issued 97,691 ordinary shares on 21 November 2023.
The notice of change in share capital has been filed with competent Companies’ Register.
The updated Company’s by-laws is available on the Company's website at www.prysmian.com
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Prysmian confirmed as a Leader in S&P Global's Dow Jones Sustainability World Index
2023
On 9 December 2023, the Group announced that it had once again been confirmed as a
sustainability leader in the prestigious Dow Jones Sustainability World Index (DJSI World)
following S&P Global's annual Corporate Sustainability Assessment of companies' sustainability
practices.
In the 2023 edition Prysmian, which is included in the ELQ Electrical Components & Equipment
sector, achieved top scores (100 points) in the environmental areas of Emissions, Resource
Efficiency and Circularity, Waste and Water, confirming the Group's focus on and attention to
these issues.
For Prysmian, sustainability is the main driver to create value: it is fully integrated into the
Group's long-term vision and strategy defined on the basis of the measurable KPIs that constitute
its Climate Change and Social Ambitions. In October, on the occasion of its first Capital Markets
Day, Prysmian updated its sustainability KPIs for 2025-2027, confirming the Scope 1 and 2 Net
Zero targets for 2035 and the Scope 3 Net Zero target for 2050.
The Group intends to continue to lead innovation in the cable industry by developing finer,
lighter, faster and greener products, while creating tangible value for customers and the
communities and territories in which it operates. In fact, the Group achieves its sustainability
goals through constantly working with its partners. Stakeholder engagement is also a core
component of Prysmian's sustainability strategy, enabling it to better understand and anticipate
their needs and expectations.
Prysmian renews partnership with Andretti Formula E for a second consecutive season
On 13 December 2023, the Group announced the renewal of its official partnership with the
Andretti Formula E team for the 2023/2024 ABB FIA Formula E World Championship, following
the sensational Season 9 culminating with Jake Dennis winning the Formula E Drivers' World
Championship.
Prysmian Group will continue to support Andretti Formula E by providing the Team with power
transmission and information solutions across all areas of its sustainable electrification. One of
the main innovations supplied during Season 9 was the PRY-CAM monitoring system, making it
possible to gather valuable data and information on the energy efficiency of the team's pits.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
70
The partnership between Andretti Formula E and Prysmian Group is based on the core values of
innovation, sustainability, challenge and performance, values that will continue to represent a
solid basis for collaboration in this second season. With this initiative, Prysmian Group aims to
strengthen its "Sustain to Lead" strategy and the Group's value proposition by promoting
innovation and sustainable development even in the strategic sectors of e-mobility, renewable
power transmission and distribution and digital solutions.
Andretti is a pillar of Formula E, having been involved since the inaugural race back in 2014, and
heads into the eagerly awaited Season 10 with a track record of 10 wins, 12 pole positions and
a Drivers' World Championship to its credit. The team kicked off Season 10 of the Formula E
championship at the opening race in Mexico City on 13 January 2024. Created in 2011, the ABB
FIA Formula E World Championship is a single-seater motorsport championship for electric cars.
Since the 2020–21 season, Formula E is a FIA World Championship, making it the first single-
seater racing series outside of Formula One to be given world championship status.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
71
11. GROUP PERFORMANCE AND RESULTS
Financial performance
(Euro/million)
2023
2022
% Change
2021
Sales
15,354
16,067
-4.4%
12,736
Adjusted EBITDA before share of net profit/(loss)
of equity-accounted companies
1,595
1,442
10.6%
958
% of sales
10.4%
9.0%
7.5%
Adjusted EBITDA
1,628
1,488
9.4%
976
% of sales
10.6%
9.3%
7.7%
EBITDA
1,485
1,387
7.1%
927
% of sales
9.7%
8.6%
7.3%
Fair value change in derivatives on commodities
6
(31)
13
Fair value share-based payment
(57)
(104)
(33)
Amortisation, depreciation, impairment and
impairment reversal
(574)
(403)
(335)
Operating income
860
849
1.3%
572
% of sales
5.6%
5.3%
4.5%
Net finance income/(costs)
(96)
(110)
(96)
Profit/(loss) before taxes
764
739
3.4%
476
% of sales
5.0%
4.6%
3.7%
Taxes
(217)
(230)
(166)
Net profit/(loss)
547
509
7.5%
310
% of sales
3.6%
3.2%
2.4%
Attributable to:
Owners of the parent
529
504
308
Non-controlling interests
18
5
2
Reconciliation of Operating Income/EBITDA to
Adjusted Operating Income/Adjusted EBITDA
Operating income (A)
860
849
1.3%
572
EBITDA (B)
1,485
1,387
7.1%
927
Adjustments:
Business reorganisation
48
11
21
Non-recurring expenses/(income)
9
47
2
Other non-operating expenses/(income)
86
43
26
Total adjustments (C)
143
101
49
Fair value change in derivatives on commodities (D)
(6)
31
(13)
Fair value share-based payment (E)
57
104
33
Asset impairment and impairment reversal (F)
216
34
6
Adjusted operating income (A+C+D+E+F)
1,270
1,119
13.5%
647
Adjusted EBITDA (B+C)
1,628
1,488
9.4%
976
The Group's sales in 2023 came to Euro 15,354 million, compared with Euro 16,067 million in
2022, posting a negative change of Euro 713 million (-4.4%).
The variation in sales can be broken down into the following main factors:
-
organic sales downturn, accounting for a decrease of Euro 184 million (-1.1%);
-
exchange rate and other effects, generating a decrease of Euro 264 million (-1.6%);
-
fluctuation in the price of metals (copper, aluminium and lead), depressing sales prices
by Euro 265 million (-1.7%).
PRYSMIAN GROUP | A. DIRECTORS' REPORT
72
Organic sales growth by the three operating segments was as follows:
Projects
+15.3%
Energy
-1.3%
Telecom
-18.9%
Group sales amounted to Euro 15,354 million, reflecting mildly negative organic growth of -1.1%
on 2022. The Projects segment recorded double-digit organic growth (+15.3%) thanks to
consistent execution of its interconnection and offshore wind farm projects. Sales in the Energy
business continued to benefit from the growth drivers of energy transition and decarbonisation,
namely expansion and upgrading of electricity grids, power generation from renewable sources,
and development of electric mobility and clouding. Although the Energy segment recorded
overall organic growth of -1.3%, the Industrial & Network Components business posted positive
organic growth of +1.7%. The Telecom segment saw a second-half downturn in volumes,
resulting in organic growth of -18.9% for the year, mainly due to slowdown in the US market.
Adjusted EBITDA increased by 9.4% to Euro 1,628 million, with margins improving significantly
to 10.6% from 9.3% in 2022. This performance was the result of an improvement in the Projects
segment, whose Adjusted EBITDA climbed by 23.5%, or Euro 300 million, thanks to efficient
project execution. Margins in the Energy segment also posted a significant improvement (10.5%
versus 8.1% in 2022), thanks to demand for cables for power distribution networks and to
development of renewable energy production and distribution systems. The improvement was
particularly pronounced in the Industrial & Network Components business, which posted
Adjusted EBITDA of Euro 361 million (+43.2% on 2022). As already mentioned, the Telecom
segment suffered from declining volumes, especially in the United States, and reported Adjusted
EBITDA of Euro 140 million, down from the previous year's Euro 271 million.
EBITDA is stated after net expenses for business reorganisation, net non-recurring expenses and
other net non-operating expenses, totalling Euro 143 million (Euro 101 million in 2022).
Amortisation, depreciation and impairment amounted to Euro 574 million in 2023, up from Euro
403 million in the previous year.
The fair value change in derivatives on commodities was a positive Euro 6 million compared with
a negative Euro 31 million in the previous year.
A total of Euro 57 million in costs were recognised in 2023 to account for the effects of share-
based payment plans for employees (Euro 104 million in 2022).
PRYSMIAN GROUP | A. DIRECTORS' REPORT
73
Reflecting the effects described above, the Group's operating income came to Euro 860 million,
compared with Euro 849 million in 2022, thus reporting a year-on-year increase of Euro 11
million.
Net finance costs amounted to Euro 96 million, down from Euro 110 million in the previous year.
Taxes of Euro 217 million represented an effective tax rate of 28.4% (31.1% in 2022).
Net profit for 2023 was Euro 547 million (of which Euro 529 million attributable to the Group),
compared with Euro 509 million in 2022 (of which Euro 504 million attributable to the Group).
Net financial debt stood at Euro 1,188 million at 31 December 2023, down Euro 229 million from
Euro 1,417 million at the end of 2022. This reduction was made possible by strong cash
generation of Euro 724 million, not including disbursements for antitrust issues, marking an
increase on the previous year when cash generation amounted to Euro 559 million.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
74
Review of Projects operating segment
(Euro/million)
2023
2022
% Change
2021
Sales
2,508
2,161
16.1%
1,594
Adjusted EBITDA before share of net profit/(loss)
of equity-accounted companies
300
243
23.6%
210
% of sales
12.0%
11.2%
13.2%
Adjusted EBITDA
300
243
23.5%
210
% of sales
12.0%
11.2%
13.2%
Adjustments
(18)
(41)
(8)
EBITDA
282
202
40.1%
202
% of sales
11.2%
9.3%
12.7%
Amortisation and depreciation
(80)
(86)
(69)
Adjusted operating income
220
157
40.1%
141
% of sales
8.8%
7.3%
8.8%
The Projects Operating Segment encompasses underground and submarine high-voltage power
cables, submarine telecommunication cables, and offshore specialty cables, as better described
in the "Prysmian Business Model" chapter of this report.
Some of the businesses within this segment fall under the economic activities eligible for the
purposes of the European Taxonomy and, more specifically, activity 3.1 "Manufacture of
renewable energy technologies", activity 3.6 "Manufacture of other low carbon technologies",
activity 3.20 "Manufacture, installation and servicing of high, medium and low voltage electrical
equipment for electrical transmission and distribution" and activity 4.9 "Transmission and
distribution of electricity", as explained in greater detail in the "European Taxonomy" chapter of
this report.
FINANCIAL PERFORMANCE
Projects segment sales reached Euro 2,508 million in 2023, versus Euro 2,161 million in 2022,
recording a positive change of Euro 347 million (+16.1%).
The factors behind this change were:
-
organic sales growth, accounting for an increase of Euro 330 million (+15.3%);
-
metal price fluctuations, producing an increase of Euro 17 million (+0.8%).
The Projects segment's organic growth is mainly attributable to the Submarine Power and
Offshore Specialties businesses.
The main Submarine Power projects on which work was performed during the period were:
-
the NeuConnect interconnector, the Thyrrenian Link, the ADNOC interconnector, the
Egypt KSZ interconnector and the now completed Viking Link between Great Britain and
Denmark;
PRYSMIAN GROUP | A. DIRECTORS' REPORT
75
-
offshore wind projects in the United States, namely Dominion and the now completed
Vineyard Wind project;
-
inter-array projects in France and Germany.
Sales in the period were generated by cable manufacturing activities at the Group's industrial
facilities (Pikkala in Finland, Arco Felice in Italy and Nordenham in Germany) and installation
activities forming part of project execution, carried out using both its own assets and third-party
equipment.
The High Voltage Underground business was in slight retreat, mainly due to the HV business not
related to the German Corridors.
Adjusted EBITDA for 2023 came to Euro 300 million, up from Euro 243 million in 2022.
The Projects segment recorded a double-digit margin of 12.0% in 2023, exceeding the prior year
figure of 11.2%. These results were mainly due to optimal execution and better mix of projects.
The Projects segment is key for energy transition processes, since, as a solution provider, it
offers its customers a whole range of solutions for the implementation of renewable energy
production and distribution projects.
As evidence of this megatrend, the value of the Group's Submarine Power order backlog has
reached a record level of Euro 8.3 billion, mainly consisting of:
- the Dominion contracts in North America, the DolWin4 and BorWin4 contracts for two systems
that connect the electricity grid to offshore wind farms in the German North Sea and the recently
awarded Ijmuiden Ver contract;
- the Biscay Bay connection, lots of the new Thyrrenian Link and Saudi-Egypt contracts, the
NeuConnect contract for a submarine and land interconnector between the German and UK
electricity grids, the Adriatic Link and the recently awarded EGL1 contract.
The Group's High Voltage order backlog is worth around Euro 2.5 billion, mostly consisting of
the German Corridors contracts.
Including the Submarine Telecom and Offshore Specialties businesses, the total order backlog
of the Projects segment is worth approximately Euro 11.1 billion.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
76
Review of Energy operating segment
(Euro/million)
2023
2022
% Change
2021
Sales
11,357
12,033
-5.6%
9,557
Adjusted EBITDA before share of net profit/(loss)
of equity-accounted companies
1,182
968
22.1%
542
% of sales
10.4%
8.0%
5.7%
Adjusted EBITDA
1,188
974
22.0%
546
% of sales
10.5%
8.1%
5.7%
Adjustments
(97)
(52)
(46)
EBITDA
1,091
922
18.2%
500
% of sales
9.6%
7.7%
5.2%
Amortisation and depreciation
(208)
(203)
(184)
Adjusted operating income
980
771
27.2%
362
% of sales
8.6%
6.4%
3.8%
The Energy segment encompasses the Energy & Infrastructure and Industrial & Network
Components businesses, as better explained in the "Prysmian Business Model" chapter of this
report.
Some of the businesses within this segment fall under the economic activities eligible for the
purposes of the European Taxonomy and, more specifically, activity 3.1 "Manufacture of
renewable energy technologies", activity 3.6 "Manufacture of other low carbon technologies",
activity 3.18 "Manufacture of automotive and mobility components" and activity
3.20
"Manufacture, installation and servicing of high, medium and low voltage electrical equipment
for electrical transmission and distribution", as explained in greater detail in the "European
Taxonomy" chapter of this report.
FINANCIAL PERFORMANCE
Energy segment sales came to Euro 11,357 million, versus Euro 12,033 million in 2023, posting
a negative change of Euro 676 million (-5.6%), the main components of which were as follows:
-
negative organic sales growth of Euro 159 million (-1.3%);
-
negative change of Euro 239 million (-2.0%) for exchange rate fluctuations;
-
sales price decrease of Euro 278 million (-2.3%) for metal price fluctuations.
Adjusted EBITDA came to Euro 1,188 million, up from Euro 974 million in 2022, representing an
increase of Euro 214 million (+22.0%), despite a negative exchange rate impact of Euro 29
million. The marked increase on the previous year was mainly due to improved profitability in
the Power Distribution and Overhead Lines businesses, as well as better performance by all the
applications in the Industrial & Network Components division.
The Energy segment reported a margin of 10.5%, compared with 8.1% in the previous year.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
77
The following paragraphs describe market trends and financial performance in each of the Energy
operating segment's business areas.
ENERGY & INFRASTRUCTURE
(Euro/million)
2023
2022
% Change
2021
Sales
7,620
8,196
-7.0%
6,361
Adjusted EBITDA before share of net profit/(loss) of
equity-accounted companies
838
731
14.7%
353
% of sales
11.0%
8.9%
5.5%
Adjusted EBITDA
843
736
14.6%
356
% of sales
11.1%
9.0%
5.6%
Adjusted operating income
704
603
16.7%
233
% of sales
9.2%
7.4%
3.7%
As better explained in the "Prysmian Business Model" chapter of this report, the Energy &
Infrastructure business incorporates:
1)
Trade & Installers: the low-voltage product portfolio includes rigid and flexible cables for
distributing power to and within residential, commercial and industrial buildings;
2)
Power Distribution: the product portfolio includes medium-voltage cable systems for both
overhead and underground installations (and all types of accessories and network components)
for connecting industrial and/or residential buildings to the primary distribution network, as well
as low-voltage cable systems for power distribution. The solutions are primarily designed to
support power transmission and distribution by utilities and grid operators.
FINANCIAL PERFORMANCE
Energy & Infrastructure sales came to Euro 7,620 million in 2023, compared with Euro 8,196
million in 2022, posting a negative change of Euro 576 million (-7.0%), the main components
of which were as follows:
-
negative organic sales growth of Euro 218 million (-2.7%);
-
negative change of Euro 159 million (-1.9%) for exchange rate fluctuations;
-
sales price decrease of Euro 199 million (-2.4%) for metal price fluctuations.
Energy & Infrastructure recorded negative organic sales growth of -2.7% in 2023. Despite the
volume-related decline in sales, the Power Distribution and Overhead Lines businesses
performed strongly thanks to the megatrends involving expansion of electricity transmission
grids and development of renewable energy. Trade & Installers experienced a slight downturn
in volumes and price normalisation mainly in the North American market.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
78
Given the factors described above, Adjusted EBITDA for 2023 came to Euro 843 million, versus
Euro 736 million in the previous year, representing an increase of Euro 107 million (+14.6%),
despite a negative exchange rate impact of Euro 21 million. The Energy & Infrastructure business
reported a margin of 11.1%, compared with 9.0% in the previous year.
INDUSTRIAL & NETWORK COMPONENTS
(Euro/million)
2023
2022
% Change
2021
Sales
3,358
3,442
-2.5%
2,838
Adjusted EBITDA before share of net profit/(loss) of
equity-accounted companies
360
251
43.1%
195
% of sales
10.7%
7.3%
6.9%
Adjusted EBITDA
361
252
43.2%
196
% of sales
10.8%
7.3%
6.9%
Adjusted operating income
296
186
59.6%
139
% of sales
8.8%
5.4%
4.9%
The Industrial & Network Components business incorporates products and cables for Specialties,
Renewable & OEMs, Elevators & Escalators, Automotive and Network Components, Oil & Gas and
EOSS-Electronics and Optical Sensing Solutions. For a better understanding of the business,
please refer to the " Prysmian Business Model" chapter of this report.
FINANCIAL PERFORMANCE
Industrial & Network Components sales came to Euro 3,358 million in 2023, compared with Euro
3,442 million in 2022, recording a negative change of Euro 84 million (-2.5%), the main
components of which were as follows:
-
positive organic sales growth of Euro 59 million (+1.7%);
-
negative change of Euro 73 million (-2.2%) for exchange rate fluctuations;
-
sales price decrease of Euro 70 million (-2.0%) for metal price fluctuations.
Industrial & Network Components turned in a positive performance in 2023 thanks to overall
improvement by all its businesses, especially Renewables and OEM.
Given the factors described above, Adjusted EBITDA in 2023 came to Euro 361 million, up from
Euro 252 million in 2022, representing an increase of Euro 109 million (+43.2%), after a
negative exchange rate impact of Euro 8 million.
The Industrial & Network Components business reported a margin of 10.8%, having improved
from 7.3% in the previous year.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
79
OTHER
(Euro/million)
2023
2022
2021
Sales
379
395
358
Adjusted EBITDA before share of net profit/(loss) of
equity-accounted companies
(16)
(14)
(6)
Adjusted EBITDA
(16)
(14)
(6)
Adjusted operating income
(20)
(18)
(10)
This business area encompasses occasional sales by Prysmian Group operating units of
intermediate goods, raw materials or other products forming part of the production process.
These sales are normally linked to local business situations, do not generate high margins and
can vary in size and from period to period.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
80
Review of Telecom operating segment
(Euro/million)
2023
2022
% Change
2021
Sales
1,489
1,873
-20.5%
1,585
Adjusted EBITDA before share of net profit/(loss) of
equity-accounted companies
113
231
-51.0%
206
% of sales
7.6%
12.3%
13.0%
Adjusted EBITDA
140
271
-48.4%
220
% of sales
9.4%
14.5%
13.9%
Adjustments
(28)
(8)
9
EBITDA
112
263
-57.4%
229
% of sales
7.5%
14.0%
14.4%
Amortisation and depreciation
(70)
(80)
(76)
Adjusted operating income
70
191
-63.5%
144
% of sales
4.7%
10.2%
9.1%
The Telecom segment encompasses the manufacture and development of a wide range of cable
systems and connectivity products used in telecommunication networks. This segment consists
of the following businesses: Fibre Optics, MMS Multimedia Specials and Telecom Solutions, as
better described in the "Prysmian Business Model" chapter of this report. Some of the businesses
within this segment qualify for classification in the economic activities eligible for the purposes
of the European taxonomy, specifically, in activity 3.6 "Manufacture of other low carbon
technologies", as explained in more detail in the "European Taxonomy" chapter of this report.
FINANCIAL PERFORMANCE
Telecom segment sales came to Euro 1,489 million at the end of 2023, compared with Euro
1,873 million in 2022.
The negative change of Euro 384 million (-20.5%) is explained by:
-
negative organic sales growth of Euro 355 million (-18.9%);
-
sales price decrease of Euro 3 million (-0.2%) for metal price fluctuations;
-
negative change of Euro 26 million (-1.4%) for exchange rate fluctuations.
The 2023 slowdown in organic sales growth reflects a temporary downturn in the multimedia
solutions business and a decline in the copper and optical cables business mainly in the North
American market.
Both the multimedia solutions business and the optical and copper cable business are suffering
a slowdown due to overstocking in our customers' warehouses, the former in both Europe and
America, the latter mainly in North America.
Adjusted EBITDA for 2023 came to Euro 140 million, reporting a decrease of Euro 131 million (-
48.4%) from Euro 271 million in 2022, especially due to lower volumes in the second half of the
year mainly in the North American market and to the recognition of one-off expenses in the
fourth quarter.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
81
Results by geographical area
(Euro/million)
Sales
Adjusted EBITDA
2023
2022
2023
2022
EMEA*
6,043
6,381
433
311
North America
4,557
5,132
675
722
Latin America
1,236
1,275
137
120
Asia Pacific
1,010
1,118
83
92
Total (excluding Projects)
12,846
13,906
1,328
1,245
Projects
2,508
2,161
300
243
Total
15,354
16,067
1,628
1,488
(*)
EMEA = Europe, Middle East and Africa
As stated in the Explanatory Notes to the current Integrated Annual Report, the Group's
operating segments are: Energy, Projects and Telecom, reflecting the structure used in the
periodic reports prepared to review business performance. The primary performance indicator
used in these reports, presented by macro type of business (Energy, Projects and Telecom), is
Adjusted EBITDA, defined as earnings (loss) for the period before non-recurring items, the fair
value change in derivatives on commodities and in other fair value items, amortisation,
depreciation and impairment, finance costs and income and taxes.
Although the primary operating segments remain those by business, in order to provide users
of the financial statements with information that is also more consistent with the Group's
geographical diversification, Sales and Adjusted EBITDA have been reported above by
geographical area, excluding the Projects business whose geographical breakdown is
unrepresentative. For this purpose, sales of goods and services are analysed geographically on
the basis of the location of the registered office of the company that issues the invoices,
regardless of the geographic destination of the products sold.
EMEA
EMEA region sales amounted to Euro 6,043 million in 2023, reflecting year-on-year negative
organic growth of -1.7%. Adjusted EBITDA came to Euro 433 million (Euro 311 million in 2022),
reporting a margin on sales of 7.2% (4.9% in the previous year). The improvement in Adjusted
EBITDA and margins was mainly thanks to the positive performance of Power Distribution, OEM
and Renewables, as partially offset by a slowdown in Telecom.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
82
North America
North America region sales amounted to Euro 4,557 million in 2023, reflecting year-on-year
negative organic growth of -5.9%. Adjusted EBITDA came to Euro 675 million (Euro 722 million
in 2022), reporting a margin on sales of 14.8% (14.1% in the previous year). The results were
negatively impacted by Euro 22 million in exchange rate effects. North America reported a major
improvement in Power Distribution and Overhead Lines, which offset the slowdown in the
Telecom business and the price normalisation affecting Trade & Installers.
LATAM
LATAM region sales amounted to Euro 1,236 million in 2023, reflecting year-on-year negative
organic growth of -6.0%. Adjusted EBITDA came to Euro 137 million (Euro 120 million in 2022),
reporting a margin on sales of 11.0% (9.4% in the previous year). The improvement in margins
was achieved thanks to good performance by Trade & Installers.
APAC
APAC region sales amounted to Euro 1,010 million in 2023, reflecting year-on-year negative
organic growth of -2.3%. Adjusted EBITDA came to Euro 83 million (Euro 92 million in 2022),
reporting a margin on sales of 8.2%, in line with 2022. The overall results in APAC were stable
despite Euro 7 million in negative exchange rate effects. In addition, the contribution to profits
by the associate Yangtze Optical Fibre and Cable was Euro 13 million less than in 2022.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
83
Group statement of financial position
RECLASSIFIED STATEMENT OF FINANCIAL POSITION
(Euro/million)
31.12.2023
31.12.2022
Change
31.12.2021*
Net fixed assets
5,709
5,583
126
5,307
Net working capital
518
614
(96)
650
Provisions and net deferred taxes
(734)
(680)
(54)
(662)
Net invested capital
5,493
5,517
(24)
5,295
Employee benefit obligations
333
329
4
446
Total equity
3,972
3,771
201
3,089
of which attributable to non-controlling interests
191
186
5
174
Net financial debt
1,188
1,417
(229)
1,760
Total equity and sources of funds
5,493
5,517
(24)
5,295
(*) The previously published comparative figures have been after finalising the purchase price allocation of Omnisens S.A. and Eksa
Sp.z.o.o
NET FIXED ASSETS
(Euro/million)
31.12.2023
31.12.2022
Change
31.12.2021*
Property, plant and equipment
3,401
3,020
381
2,794
Intangible assets
2,071
2,164
(93)
2,140
Equity-accounted investments
218
387
(169)
360
Other investments at fair value through other
comprehensive income
10
12
(2)
13
Assets and liabilities held for sale
9
-
9
-
Net fixed assets
5,709
5,583
126
5,307
(*) The previously published comparative figures were revised after finalising the purchase price allocation of Omnisens S.A. and Eksa
Sp.z.o.o..
At 31 December 2023, net fixed assets amounted to Euro 5,709 million, compared with Euro
5,583 million at 31 December 2022, posting an increase of Euro 126 million mainly due to the
combined effect of the following factors:
-
Euro 624 million in net capital expenditure on property, plant and equipment and
intangible assets;
-
Euro 406 million in amortisation, depreciation and impairment for the period;
-
Euro 153 million in increases for property, plant and equipment accounted for in
accordance with IFRS 16;
-
Euro 98 million in negative currency translation differences affecting the value of
property, plant and equipment and intangible assets;
-
Euro 169 million in net decrease in the value of equity-accounted investments;
-
Euro 15 million for monetary revaluations due to hyperinflation.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
84
NET WORKING CAPITAL
The following table analyses the main components of net working capital:
(Euro/million)
31.12.2023
31.12.2022
Change
31.12.2021
Inventories
2,264
2,241
23
2,054
Trade receivables
1,987
1,942
45
1,622
Trade payables
(2,199)
(2,718)
519
(2,592)
Other receivables/(payables)
(1,527)
(856)
(671)
(608)
Net operating working capital
525
609
(84)
476
Derivatives
(7)
5
(12)
174
Net working capital
518
614
(96)
650
Net working capital of Euro 518 million at 31 December 2023 was Euro 96 million lower than the
corresponding figure of Euro 614 million at 31 December 2022. Net operating working capital,
which excludes the value of derivatives, amounted to Euro 525 million at 31 December 2023,
remaining proportionately in line with the figure reported a year earlier. In fact, as a percentage
of annualised last-quarter sales, net working capital was 3.7%, in line with the prior year figure
of 3.8%.
EQUITY
The following table reconciles the Group's equity and net profit/(loss) for 2023 with the
corresponding figures reported by Prysmian S.p.A., the Parent Company.
(Euro/million)
Equity
at
31.12.2023
Net profit/
(loss)
2023
Equity
at
3.12.2022
Net profit/
(loss)
2022
Parent Company Financial Statements
2,587
264
2,461
144
Share of equity and net profit of
consolidated subsidiaries, net of carrying
amount of the related investments
1,542
674
1,416
638
Reversal of dividends distributed to the
Parent Company by consolidated
subsidiaries
-
(340)
-
(243)
Deferred taxes on earnings/reserves
distributable by subsidiaries
(115)
(55)
(60)
(30)
Elimination of intercompany profits and
losses included in fixed assets
(27)
4
(31)
3
Elimination of intercompany profits and
losses included in inventories
(15)
-
(15)
(3)
Non-controlling interests
(191)
(18)
(186)
(5)
Consolidated Financial Statements
3,781
529
3,585
504
PRYSMIAN GROUP | A. DIRECTORS' REPORT
85
NET FINANCIAL DEBT
The following table provides a detailed breakdown of net financial debt:
(Euro/million)
31.12.2023
31.12.2022
Change
31.12.2021
Long-term financial payables
CDP Loans
194
175
19
175
EIB Loans
135
245
(110)
110
Convertible Bond 2021
728
718
10
707
Sustainability-Linked Term Loan 2022
1,193
1,191
2
-
Term Loan
-
-
-
998
Unicredit Loan
-
-
-
200
Mediobanca Loan
-
100
(100)
100
Intesa Loan
-
150
(150)
150
Lease liabilities
234
156
78
158
Interest rate derivatives
-
-
-
3
Other financial payables
4
9
(5)
8
Total long-term financial payables
2,488
2,744
(256)
2,609
Short-term financial payables
CDP Loans
103
1
102
-
EIB Loans
113
1
112
-
Non-convertible bond
-
-
-
763
Convertible Bond 2017
-
-
-
250
Sustainability-Linked Term Loan 2022
25
6
19
-
Term Loan
-
-
-
1
Unicredit Loan
-
200
(200)
-
Mediobanca Loan
100
-
100
-
Intesa Loan
151
1
150
-
Lease liabilities
70
58
12
53
Interest rate derivatives
-
-
-
6
Forex derivatives on financial transactions
9
7
2
3
Other financial payables
46
56
(10)
56
Total short-term financial payables
617
330
287
1,132
Total financial liabilities
3,105
3,074
31
3,741
Long-term financial receivables
3
3
-
3
Long-term bank fees
4
-
4
1
Financial assets at amortised cost
3
3
-
3
Non-current interest rate derivatives
11
59
(48)
-
Current interest rate derivatives
20
13
7
-
Current forex derivatives on financial transactions
2
3
(1)
3
Short-term financial receivables
22
8
14
12
Short-term bank fees
2
2
-
2
Financial assets at fair value through profit or loss
85
270
(185)
244
Financial assets at fair value through other
comprehensive income
24
11
13
11
Cash and cash equivalents
1,741
1,285
456
1,702
Total financial assets
1,917
1,657
260
1,981
Net financial debt
1,188
1,417
(229)
1,760
Net financial debt of Euro 1,188 million at 31 December 2023 has decreased by Euro 229 million
from Euro 1,417 million at 31 December 2022. As regards the principal factors behind the change
in net financial debt, reference should be made to the next section containing the "Statement of
cash flows".
PRYSMIAN GROUP | A. DIRECTORS' REPORT
86
STATEMENT OF CASH FLOWS
(Euro/million)
2023
2022
Change
2021
EBITDA
1,485
1,387
98
927
Changes in provisions (including employee benefit
obligations)
82
15
67
19
Net gains on disposal of fixed assets
-
(1)
1
(2)
Share of net profit/(loss) of equity-accounted companies
(33)
(47)
14
(27)
Net cash flow from operating activities (before
changes in net working capital)
1,534
1,354
180
917
Changes in net working capital
197
(105)
302
(28)
Taxes paid
(328)
(221)
(107)
(120)
Dividends from equity-accounted companies
13
10
3
8
Net cash flow from operating activities
1,416
1,038
378
777
Cash flow from acquisitions and/or disposals
-
(7)
7
(93)
Net cash flow used in operating investing activities
(624)
(452)
(172)
(275)
Free cash flow (unlevered)
792
579
213
409
Net finance costs
(72)
(71)
(1)
(79)
Free cash flow (levered)
720
508
212
330
Dividend distribution
(165)
(148)
(17)
(134)
Capital contributions and other changes in equity
(4)
-
(4)
1
Net cash flow provided/(used) in the year
551
360
191
197
Opening net financial debt
(1,417)
(1,760)
343
(1,986)
Net cash flow provided/(used) in the year
551
360
191
197
Equity component of Convertible Bond 2021
-
-
-
49
Partial redemption of Convertible Bond 2017
-
-
-
(13)
Increase in net financial debt for IFRS 16
(153)
(58)
(95)
(63)
Net financial debt from acquisitions and divestments
-
-
-
8
Other changes
(169)
41
(210)
48
Closing net financial debt
(1,188)
(1,417)
229
(1,760)
Net financial debt of Euro 1,188 million at the end of 2023 is Euro 229 million lower than at the
end of 2022 (Euro 1,417 million). This reduction was enabled by the free cash flow generated
by the Group of Euro 724 million, excluding Euro 4 million in outflows for antitrust matters.
The net cash inflow of Euro 724 million was generated by:
a)
Euro 1,538 million in net cash flow provided by operating activities before changes in net
working capital;
b)
Euro 197 million in cash inflows from the change in net working capital;
c)
Euro 624 million in cash outflows for net capital expenditure;
d)
Euro 328 million in tax payments;
e)
Euro 72 million in payments of net finance costs;
f)
Euro 13 million in dividends received from associates.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
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Alternative performance indicators
In addition to the standard financial reporting formats and indicators required under IFRS, this
document contains a number of reclassified statements and alternative performance indicators.
The purpose is to help users better evaluate the Group's economic and financial performance.
Such reclassified statements and performance indicators should not however be treated as
substitutes for the accepted ones required by IFRS.
In this regard, on 3 December 2015, Consob adopted the ESMA guidelines in Italy with
publication of "ESMA Guidelines/2015/1415" which supersede the "CESR Recommendation 2005
(CESR/05-178b)". The alternative performance measures have therefore been revised in light of
these guidelines.
The alternative indicators used for reviewing the income statement include:
•
Adjusted operating income
: operating income before income and expense for business
reorganisation
1
, before non-recurring items
2
, as presented in the consolidated income
statement, before other non-operating income and expense
3
d before the fair value change in
derivatives on commodities and in other fair value items. The purpose of this indicator is to
present the Group's operating profitability without the effects of events considered to be outside
its recurring operations;
•
EBITDA
: operating income before the fair value change in derivatives on commodities and in
other fair value items and before amortisation, depreciation and impairment. The purpose of this
indicator is to present the Group's operating profitability before the main non-monetary items;
•
Adjusted EBITDA
: EBITDA as defined above calculated before income and expense for
business reorganisation, before non-recurring items, as presented in the consolidated income
statement, and before other non-operating income and expense. The purpose of this indicator
is to present the Group's operating profitability before the main non-monetary items, without
the effects of events considered to be outside the Group's recurring operations;
1
Income and expense for business reorganisation: these refer to income and expense that arise as a result of the closure
of production facilities and/or as a result of projects to optimise organisational structure;
2
Non-recurring income and expense: these refer to income and expense related to unusual events that have not affected
profit or loss in past periods and are not likely to affect the results in future periods;
3
Other non-operating income and expense: these refer to income and expense that management considers should not
be taken into account when measuring business performance.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
88
•
Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies
:
Adjusted EBITDA as defined above calculated before the share of net profit/(loss) of equity-
accounted companies;
•
Organic growth
: growth in sales calculated net of changes in the scope of consolidation,
changes in metal prices and exchange rate effects.
The alternative indicators used for reviewing the reclassified statement of financial position
include:
•
Net fixed assets:
sum of the following items contained in the statement of financial position:
-
Intangible assets
-
Property, plant and equipment
-
Equity-accounted investments
-
Other investments at fair value through other comprehensive income
-
Assets held for sale involving Land and Buildings (excluding financial assets and liabilities
held for sale)
•
Net working capital:
sum of the following items contained in the statement of financial
position:
-
Inventories
-
Trade receivables
-
Trade payables
-
Other non-current receivables and payables, net of long-term financial receivables
classified in net financial debt
-
Other current receivables and payables, net of short-term financial receivables classified
in net financial debt
-
Derivatives, net of interest rate and forex risk hedges of financial transactions classified
in net financial debt
-
Current tax payables
-
Current assets and current liabilities held for sale
•
Net operating working capital:
net working capital, as defined above, net of derivatives not
classified in net financial debt.
•
Provisions and net deferred taxes:
sum of the following items contained in the statement
of financial position:
-
Provisions for risks and charges – current portion
PRYSMIAN GROUP | A. DIRECTORS' REPORT
89
-
Provisions for risks and charges – non-current portion
-
Provisions for deferred tax liabilities
-
Deferred tax assets
•
Net invested capital:
sum of Net fixed assets, Net working capital and Provisions.
•
Employee benefit obligations
and
Total equity:
these indicators correspond to Employee
benefit obligations and Total equity reported in the statement of financial position.
•
Net financial debt:
sum of the following items:
-
Borrowings from banks and other lenders – non-current portion
-
Borrowings from banks and other lenders – current portion
-
Derivatives on financial transactions recorded as Non-current derivatives and classified
under Long-term financial receivables
-
Derivatives on financial transactions recorded as Current derivatives and classified under
Short-term financial receivables
-
Derivatives on financial transactions recorded as Non-current derivatives and classified
under Long-term financial payables
-
Derivatives on financial transactions recorded as Current derivatives and classified under
Short-term financial payables
-
Medium/long-term financial receivables recorded in Other non-current receivables
-
Loan arrangement fees recorded in Other non-current receivables
-
Short-term financial receivables recorded in Other current receivables
-
Loan arrangement fees recorded in Other current receivables
-
Financial assets at amortised cost
-
Financial assets at fair value through profit or loss
-
Financial assets at fair value through other comprehensive income
-
Cash and cash equivalents
PRYSMIAN GROUP | A. DIRECTORS' REPORT
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Reconciliation between the Reclassified Statement of Financial Position presented in the
Directors' Report and the Statement of Financial Position contained in the Consolidated Financial
Statements and Explanatory Notes at 31 December 2023
(Euro/million)
31.12.2023
31.12.2022
Note
As per
financial
statements
As per
financial
statements
Total net fixed assets
A
5,709
5,583
Inventories
6
2,264
2,241
Trade receivables
5
1,987
1,942
Trade payables
13
(2,199)
(2,718)
Other receivables
5
1,090
1,012
Other payables
13
(2,522)
(1,722)
Current tax payables
(64)
(133)
Derivatives
8
17
73
Items not included in net working capital:
Financial receivables
5
25
11
Prepaid finance costs
5
6
2
Interest rate derivatives
8
31
72
Forex derivatives on financial transactions
8
(7)
(4)
Total net working capital
B
518
614
Provisions for risks and charges
14
(811)
(696)
Deferred tax assets
16
299
203
Deferred tax liabilities
16
(222)
(187)
Total provisions
C
(734)
(680)
Net invested capital
D=A+B+C
5,493
5,517
Employee benefit obligations
E
15
333
329
Total equity
F
11
3,972
3,771
Borrowings from banks and other lenders
12
3,096
3,067
Financial assets at amortised cost
(3)
(3)
Financial assets at fair value through profit or loss
4
(85)
(270)
Financial assets at fair value through other
comprehensive income
7
(24)
(11)
Cash and cash equivalents
9
(1,741)
(1,285)
Financial receivables
5
(25)
(11)
Prepaid finance costs
5
(6)
(2)
Interest rate derivatives
8
(31)
(72)
Forex derivatives on financial transactions
8
7
4
Net financial debt
G
1,188
1,417
Total equity and sources of funds
H=E+F+G
5,493
5,517
PRYSMIAN GROUP | A. DIRECTORS' REPORT
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Reconciliation between the principal income statement indicators and the Income Statement
contained in the Consolidated Financial Statements and Explanatory Notes for 2023
(Euro/million)
2023
2022
As per
income
statement
As per
income
statement
Sales
A
15,354
16,067
Change in inventories of finished goods and work in
progress
52
(30)
Other income
70
70
Raw materials, consumables and supplies
(9,705)
(10,588)
Personnel costs
(1,804)
(1,758)
Other expenses
(2,572)
(2,525)
Operating costs
B
(13,959)
(14,831)
Share of net profit/(loss) of equity-accounted
companies
C
33
47
Fair value share-based payment
D
57
104
EBITDA
E = A+B+C+D
1,485
1,387
Other non-recurring expenses and revenues
F
(9)
(47)
Personnel costs for business reorganisations
G
(11)
(6)
Other expenses and revenues for business
reorganisations
H
(37)
(5)
Other non-operating expenses
I
(86)
(43)
Total adjustments to EBITDA
L = F+G+H+I
(143)
(101)
Adjusted EBITDA
M = E-L
1,628
1,488
Share of net profit/(loss) of equity-accounted
companies
N
33
46
Adjusted EBITDA before share of net
profit/(loss) of equity-accounted companies
O = M-N
1,595
1,442
(Euro/million)
2023
2022
As per
income
statement
As per
income
statement
Operating income
A
860
849
Other non-recurring expenses and revenues
(9)
(47)
Personnel costs for business reorganisations
(11)
(6)
Other expenses and revenues for business reorganisations
(37)
(5)
Other non-operating expenses
(86)
(43)
Total adjustments to EBITDA
B
(143)
(101)
Fair value change in derivatives on commodities
C
6
(31)
Fair value share-based payment
D
(57)
(104)
Non-recurring impairment and releases
E
(216)
(34)
Adjusted operating income
F=A-B-C-D-E
1,270
1,119
PRYSMIAN GROUP | A. DIRECTORS' REPORT
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12. RISK FACTORS
Prysmian Risk Model
Prysmian Group's value creation policy has always been based on effective management of risks
and opportunities. Since 2012, by adopting the provisions on risk management introduced by
the "Italian Stock Exchange Corporate Governance Code for Listed Companies" (Corporate
Governance Code), Prysmian has taken the opportunity to strengthen its governance model and
implement an evolving system of Risk Management that promotes proactive management of
risks and opportunities using a structured and systematic tool to support the main business
decision-making processes. In fact, this Enterprise Risk Management (ERM) model, developed
in line with internationally recognised models and best practices, such as the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and ISO 31000, enables the
Board of Directors and management to make informed assessments of risk scenarios that could
jeopardise the achievement of strategic objectives, and to adopt additional tools able to
anticipate, mitigate or manage significant exposures and to pursue opportunities, in line with
the Group's Risk Appetite, defined as the type and extent of risk that Prysmian is able and willing
to assume.
The Group Chief Risk Officer (CRO), designated to manage the ERM process, is responsible for
ensuring, together with management, that the main risks/opportunities facing Prysmian and its
subsidiaries are promptly identified, assessed, managed and monitored over time.
During periodic meetings with the Control and Risks Committee, consisting of non-executive
members of the Board of Directors, the CRO updates the Committee on the findings of the
analyses and actions taken, as well as about any developments in the Group's ERM programme.
Prior to doing so the CRO will report to an internal risk management committee consisting of the
Group's senior management.
The Control and Risks Committee is also updated, at least once a year, on any new issues for
which more in-depth training or education is needed, including new tools and methods for risk
management and monitoring. Reference should be made to the "Corporate Governance" section
of this report for a discussion of the governance structure adopted and the responsibilities
designated to the bodies involved.
The ERM model adopted (and formalised within the Group ERM Policy which incorporates the
guidelines for the Internal Control and Risk Management System approved by the Board of
Directors back in 2014) follows a top-down approach, meaning it is directed by Senior
Management and medium/long-term business objectives and strategies. It extends to all the
types of potentially significant risks/opportunities for the Group, represented in the Risk Model
- shown in the figure below - that uses five categories to classify the risks of an internal or
external nature characterising the Prysmian business model:
PRYSMIAN GROUP | A. DIRECTORS' REPORT
93
-
Strategic Risks: risks arising from external or internal factors such as changes in the
market environment, from bad and/or improperly implemented corporate decisions and
from failure to react to changes in the competitive environment, which could therefore
threaten the Group's competitive position and achievement of its strategic objectives;
-
Financial Risks: risks associated with the quantity of financial resources available and
with the ability to manage currency and interest rate volatility efficiently;
-
Operational Risks: risks arising from the occurrence of events or situations that, by
limiting the effectiveness and efficiency of key processes, affect the Group's ability to
create value;
-
Legal and Compliance Risks: risks related to violations of national, international and
industry-specific legal and regulatory requirements, and to unprofessional conduct in
conflict with company ethics, exposing the Group to possible penalties and undermining
its reputation in the marketplace;
-
Planning and Reporting Risks: risks related to the adverse effects of disclosing
incomplete, incorrect and/or untimely information with possible impacts on the Group's
strategic, operational and financial decisions.
Members of management involved in the ERM process are required to use a clearly defined
common method to measure and assess specific risk events in terms of Impact, Probability of
occurrence and adequacy of the existing Level of Risk Management, meaning:
-
economic-financial impact
on expected EBITDA or cash flow, net of any insurance
coverage and countermeasures in place, and/or qualitative impact on
reputation
and/or
operational efficiency/ continuity
and
sustainability
, measured on a scale that goes
from minor (1) to very high (4);
PRYSMIAN GROUP | A. DIRECTORS' REPORT
94
-
probability
that a particular event may occur, measured on a scale going from remote
(1) to probable (4);
-
level of control,
meaning the maturity and efficiency of existing risk management
systems and processes, measured on a scale that goes from adequate (green) to
inadequate/non-existent (red).
The overall assessment must also take into account the future outlook for risk, i.e. the possibility
that the exposure is increasing, constant or decreasing over the period considered.
The results of measuring exposure to the risks analysed are then represented on a 4x4 heat
map, which, by combining the variables in question, provides an immediate picture of the most
significant risk events.
Risk assessment criteria
This overall picture of the Group's risks allows the Board of Directors and Management to reflect
upon the level of the Group's risk appetite, and so identify the risk management strategies to
adopt, by assessing which risks and with what priority it is thought necessary to implement,
improve and optimise mitigation actions or simply to monitor the exposure over time. The
adoption of a particular risk management strategy, however, depends on the nature of the risk
event identified, so in the case of:
-
external risks outside
the Group's control, it will be possible to implement tools that
support the assessment of scenarios should the risk materialise, by defining the possible
action plans to mitigate impacts (e.g. continuous monitoring activities, stress testing of
the business plan, taking out of insurance coverage, disaster recovery plans, and so on);
-
risks partially manageable
by the Group, it will be possible to intervene through systems
of risk transfer, monitoring of specific indicators of risk, hedging activities, and so on;
PRYSMIAN GROUP | A. DIRECTORS' REPORT
95
-
internal risks manageable
by the Group, it will be possible, as risks inherent in the
business, to take targeted actions to prevent risk and minimise impacts by implementing
an adequate system of internal controls and related monitoring and auditing.
ERM is a continuous process that forms part of the Group's strategic planning process through
identifying potential events that could affect its sustainability, and which is updated annually
with the involvement of key members of management.
In 2023, this process involved the Group's key business/function managers, allowing the most
significant risk factors to be identified, assessed and managed, including sustainability and
climate change issues, aimed at ensuring lasting value creation for shareholders and
stakeholders.
In particular, as early as 2021, the Group, with the extensive involvement of its management,
had embarked upon a detailed analysis of the topic of climate change and energy transition. This
work, developed in accordance with the requirements of the framework of the Task Force on
Climate-related Financial Disclosures (TCFD) and updated annually, has made it possible to
identify and assess the risks to monitor and opportunities to pursue in the short, medium and
long term, arising from the transition being driven by increasingly stringent decarbonisation
policies. Further information on the analysis, assessment and management of climate change
risks and opportunities can be found in the specific and separately published TCFD Report 2023.
Last but not least, special attention is also being given to the issue of artificial intelligence, a
technology that can offer significant opportunities in various fields of application. Harnessing its
potential would result in the achievement of a major competitive advantage.
On the other hand, the increasingly widespread use of this technology is one of the emerging
risks to be faced in the coming years, partly due to algorithmic bias, faulty data, lack of sources
and evidence of the data used.
Developing an AI adoption strategy, establishing corporate policies and guidelines for use, along
with training and education, are the pillars of an effective plan to manage the risks and
opportunities.
The main risk factors to which the Group's particular type of business model is exposed will now
be presented according to the five-category classification (strategic, financial, operational, legal
and compliance and planning and reporting) used in the Risk Model described earlier, along with
an outline of the strategies adopted to mitigate these risks.
Among the main risk factors, those related to ESG (Environment, Social, Governance) issues
have also been assessed and reported, taking into account the Group's latest update of its
materiality matrix for the purposes of the Non-Financial Statement. More details can be found
in the specific section of the Non-Financial Statement.
With regard to financial risks, these are discussed in more detail in the Explanatory Notes to the
Consolidated Financial Statements (Financial Risk Management). As stated in the Explanatory
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96
Notes to the Consolidated Financial Statements (Basis of preparation), the Directors have
assessed that there are no financial, operating or other kind of indicators that might provide
evidence of the Group's inability to meet its obligations in the foreseeable future and particularly
in the next 12 months. In particular, based on its financial performance and cash generation in
recent years, as well as its available financial resources at 31 December 2023, the Directors
believe that, barring any unforeseeable extraordinary events, there are no material uncertainties
that could cast significant doubts upon the business's ability to continue as a going concern.
Strategic risks
Risks associated with the competitive environment
Many of the products offered by Prysmian Group, primarily in the Trade & Installers and Power
Distribution businesses, are made in conformity with specific industrial standards and so are
interchangeable with those offered by major competitors. Price is therefore a key factor in
customer choice of supplier. The entry into mature markets (e.g. Europe) of non-traditional
competitors, meaning small to medium manufacturing companies with low production costs, and
the need to saturate production capacity, together with the possible occurrence of a contraction
in market demand, translate into strong competitive pressure on prices, with possible
consequences for the Group's expected margins.
Moreover, despite the existence of certain barriers to entry (such as those related to ownership
of technology and know-how), high value-added businesses like high voltage underground and
submarine cables and optical cables are seeing an escalation in competition both from existing
operators and from new players, not necessarily from the industry but with leaner more flexible
organisational models, and/or significant financial resources, with a potentially negative impact
on both the Group's sales volumes and prices.
Prysmian may be unable either to reduce its costs sufficiently to offset the reduction in demand
and the increased pressure on prices, or to effectively limit the greater competition from both
new entrants and existing players, which could have a material adverse effect on its economic
and financial condition and/or results of operations.
In addition, the acceleration of technological innovation observed in recent years, with an
increasingly widespread use of renewable energy and a shift towards digitalisation, also fostered
by the Covid-19 pandemic, represents another area of competition in the medium and long term.
The strategy of rationalising manufacturing footprint currently in progress, the consequent
optimisation of cost structure, the policy of geographical diversification and, last but not least,
the ongoing pursuit of innovative technological solutions, all help the Group to address the
potential effects arising from the competitive environment.
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Risks associated with changes in macroeconomic conditions and demand
Factors such as trends in GDP and interest rates, the ease of borrowing, the cost of raw materials,
and the general level of energy costs, significantly influence market demand. In such
circumstances, government incentives for alternative energy sources and to develop
telecommunication networks could diminish.
Shortages of equipment, materials and labour in some sectors could hamper the production of
goods, causing delays in contract execution and holding back economic recovery. Economic
downturns could have negative impacts on the financial condition and results of operations of
Prysmian Group.
To counter this risk, the Group pursues a policy of geographical diversification on the one hand
and a strategy of cost reduction on the other.
In addition, the Group constantly monitors developments on the global geopolitical stage which,
as a result - for example - of the introduction of specific industrial policies by individual countries,
could require it to revise existing business strategies and/or adopt mechanisms to safeguard its
competitive position.
Key customer dependence risks
The many and diverse types of customers (power transmission and telecom systems operators,
distributors, installers, etc.) and their distribution across an equally wide number of different
countries mitigate customer dependence risk at a group level.
Risk of instability in the Group's countries of operation
Prysmian Group operates and has production facilities and/or companies in Asia, Latin America,
the Middle East, Africa and Eastern Europe. The Group's operations in these countries are
exposed to different risks linked to local regulatory and legal systems, the imposition of tariffs
or taxes, exchange rate volatility, and political and economic instability affecting the ability of
business and financial partners to meet their obligations.
Some of the Group's facilities, particularly in certain locations, are at greater risk of experiencing
economic and political destabilisation, international conflicts, restrictive actions by foreign
governments, nationalisation or expropriation, and changes in regulatory requirements. Other
difficulties could arise from having to contend with terrorist activities, natural disasters, the
introduction of adverse tax laws as well as the development of potential pandemics in countries
that do not have the resources to deal with such outbreaks.
Significant changes in the macroeconomic, political (for instance, the current geopolitical crises,
like the one between Russia and Ukraine and that in the Middle East), fiscal or legislative
environment in such countries could have an adverse impact on the Group's business, results of
operations, assets and financial condition. Consequently, as mentioned in the preceding
paragraphs, the Group constantly monitors developments on the global geopolitical stage that
PRYSMIAN GROUP | A. DIRECTORS' REPORT
98
could require it to revise existing business strategies and/or to adopt mechanisms to safeguard
its competitive position and performance.
Risks related to acquisitions and disposals
The Group reviews potential acquisition targets on an ongoing basis and whenever it acquires
new companies, their integration may pose challenges, particularly if management information
and accounting systems are substantially different from those used elsewhere in the Group. It
is also possible that unforeseen problems may be encountered in one or more of the acquired
entities.
In addition, the Group may have to incur additional debt to finance acquisitions.
Prysmian Group may also dispose of some of its businesses through M&A transactions,
themselves subject to uncertainty. Agreements entered into as part of disposal transactions
typically provide for mutual obligations as well as representations and warranties and seller
obligations to indemnify the buyer for any liabilities arising from the breach of such
representations and warranties. In addition, such agreements typically contain conditions
precedent that must be satisfied prior to completion, otherwise triggering the buyer's termination
rights, meaning that there is no guarantee that outstanding transactions not yet completed will
actually be concluded within the specified timeframe.
Financial risks
Risks associated with availability of financial resources and their cost
The volatility of the international banking and financial system could be a potential risk factor in
terms of obtaining finance and its associated cost. In addition, failure to comply with the financial
and non-financial covenants contained in the Group's credit agreements could limit its ability to
increase its net indebtedness, other factors remaining equal. In fact, should it fail to satisfy one
of these covenants, this would trigger a default event which, unless resolved under the terms of
the respective agreements, could lead to their termination and/or early repayment of any credit
drawn down. In such a situation, the Group might be unable to repay the amounts demanded
early, in turn giving rise to a liquidity risk.
Given the current amount of cash and cash equivalents and undrawn committed credit lines,
totalling about Euro 2,8 million at 31 December 2023, and six-monthly monitoring
11
of financial covenant compliance (fully satisfied at 31 December 2023), the Group is of the
opinion that it has significantly mitigated this risk and that it is capable of raising sufficient
financial resources at a competitive cost. A more detailed analysis of the risk in question,
11
The financial covenants are measured at the half-year reporting date of 30 June and at the full-year reporting date of
31 December.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
99
including a description of the Group's principal sources of finance, can be found in the
Explanatory Notes to the Consolidated Financial Statements.
Exchange rate volatility
Prysmian Group operates internationally and is therefore exposed to exchange rate risk on the
currencies of the different countries in which it operates. Exchange rate risk occurs when future
transactions or assets and liabilities recognised in the statement of financial position are
denominated in a currency other than the functional currency of the company which undertakes
the transaction.
To manage exchange rate risk arising from future trade transactions and from the recognition
of foreign currency assets and liabilities, most Prysmian Group companies use forward contracts
arranged by Group Treasury, which manages the various positions in each currency.
However, since Prysmian prepares its consolidated financial statements in Euro, fluctuations in
the exchange rates used to translate the financial statements of subsidiaries, originally
expressed in a foreign currency, could affect the Group's results of operations and financial
condition. Exchange rate volatility is monitored both locally and centrally, by the Group Finance
department, also using specific indicators designed to intercept potential risk situations which,
when deemed to exceed the defined tolerance limits, will trigger immediate mitigating actions.
A more detailed analysis of the risk in question can be found in the "Financial Risk Management"
section of the Explanatory Notes to the Consolidated Financial Statements.
Interest rate volatility
Changes in interest rates affect the market value of Prysmian Group's financial assets and
liabilities as well as its net finance costs. The interest rate risk to which the Group is exposed is
mainly on long-term financial liabilities, carrying both fixed and variable rates. Fixed rate debt
exposes the Group to a fair value risk. The Group does not operate any particular hedging policies
in relation to the risk arising from such contracts since it considers this risk to be immaterial.
Variable rate debt exposes the Group to a rate volatility risk (cash flow risk). In order to hedge
this risk, the Group uses Interest Rate Swaps (IRS), which transform the variable rate into a
fixed rate, thus reducing the risk caused by interest rate volatility. IRS contracts make it possible
to exchange on specified dates the difference between the fixed rates contracted and the variable
rate calculated with reference to the loan's notional value. A potential rise in interest rates, from
the record lows reached in recent years, could represent a risk factor in coming quarters.
A more detailed analysis of the risk in question can be found in the "Financial Risk Management"
section of the Explanatory Notes to the Consolidated Financial Statements.
PRYSMIAN GROUP | A. DIRECTORS' REPORT
100
Credit risk
Credit risk is represented by Prysmian Group's exposure to potential losses arising from the
failure of business or financial partners to discharge their obligations. This risk is monitored
centrally by the Group Finance department, while customer-related credit risk is managed
operationally by the individual subsidiaries. The Group does not have any excessive
concentrations of credit risk but given the economic and social difficulties faced by some
countries in which it operates, the exposure could undergo a deterioration that would require
closer monitoring. Accordingly, the Group has procedures in place to ensure that its business
partners are of proven reliability and that its financial partners have high credit ratings. In
addition, in mitigation of credit risk, the Group has a global trade credit insurance program
covering almost all its operating companies; this is managed centrally by the Risk Management
function, which monitors, with the assistance of the Group's Credit Management function, the
level of exposure to risk and intervenes when tolerance limits are exceeded due to difficulty in
finding coverage on the market.
It should be noted that credit risk was not particularly impacted during 2023 by the ongoing
conflicts in Europe and the Middle East.
A more detailed analysis of the risk in question can be found in the "Financial Risk Management"
section of the Explanatory Notes to the Consolidated Financial Statements.
Liquidity risk
Liquidity risk indicates the sufficiency of an entity's financial resources to meet its obligations to
business or financial partners on the agreed due dates.
With regard to Prysmian Group's working capital cash requirements, these increase significantly
during the first half of the year when it commences production in anticipation of order intake,
with a consequent temporary increase in net financial debt.
Prudent management of liquidity risk involves the maintenance of adequate levels of cash, cash
equivalents and short-term securities, the availability of sufficient committed credit lines, and
timely renegotiation of loans before their maturity. Given the dynamic nature of the business in
which Prysmian Group operates, the Group Finance department prefers flexible forms of funding
in the form of committed credit lines.
At 31 December 2023, the Group's cash and cash equivalents and undrawn committed credit
lines totalled about Euro 3 billion.
A more detailed analysis of the risk in question can be found in the "Financial Risk Management"
section of the Explanatory Notes to the Consolidated Financial Statements
.
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101
Commodity price volatility risk
The Group's operating results could be affected by changes in the prices of commodities and
strategic materials (such as copper, aluminium, lead, resins and polyethylene compounds as
well as fuels and energy), which are subject to market volatility.
The main commodities purchased by the Group are copper, aluminium and lead, accounting for
more than 50% of the total raw materials used to manufacture its products. The Group
neutralises the impact of possible variations in the price of copper, aluminium and, although less
significant, lead through hedging activities and automatic sales price adjustment mechanisms.
Hedging activities are based on sales contracts or sales forecasts, which if not met, could expose
the Group to the risk of price volatility in the underlying assets.
A dedicated team within the Group Purchasing department monitors and coordinates centrally
those sales transactions requiring the purchase of metals and the related hedging activities
carried out by each subsidiary, ensuring that the level of exposure to risk is kept within defined
tolerance limits.
A more detailed analysis of the risk in question can be found in the "Financial Risk Management"
section of the Explanatory Notes to the Consolidated Financial Statements.
Risks associated with meeting pension plan obligations
Group companies have defined benefit pension plans in place throughout the world, into which
they are required to pay specific contributions. Under these plans, the Group is obliged to provide
a defined level of benefits to plan participants, and is therefore subject to the risk that the related
assets are insufficient to cover the benefits. If a fund is in deficit, its managing trustee it will
require Prysmian Group to fund the plan. In addition, the Group may be called upon to advance
substantial contributions or provide further financial support to certain plans if their
creditworthiness declines or if beneficiaries withdraw en masse from the plans and require
immediate coverage of their deficits. The Group has taken measures to mitigate its exposure to
these risks, including by preventing new participants from joining funded plans and requiring
ongoing contributions from the original beneficiaries, but there can be no assurance that these
measures will be sufficient to mitigate the relevant risks. The costs of defined benefit pension
plans are determined on the basis of a number of actuarial assumptions, including an expected
long-term rate of return on assets and a discount rate. The use of these assumptions makes
pension expense and cash contributions subject to volatility from year to year.
A more detailed analysis of this risk can be found in the note on "Employee benefit obligations"
within the Explanatory Notes to the Consolidated Financial Statements.
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Operational risks
Liability for product quality/defects
Possible defects in the design and manufacture of Prysmian Group's products could give rise to
civil or criminal liability towards its customers or third parties. Therefore, the Group, like other
companies in the industry, is exposed to the risk of product liability legal actions in its countries
of operation. In line with the practice followed by many industry operators, the Group has taken
out insurance which it considers provides adequate protection against the risks arising from such
liability. Should such insurance coverage prove insufficient, the Group's results of operations and
financial condition could be adversely affected.
In addition, the Group's involvement in this kind of legal action and any negative outcome could
expose it to reputational damage, with potentially further adverse consequences for its results
of operations and financial condition.
Risks associated with failure to meet contractual conditions in turnkey projects
Turnkey projects involve operational and management complexities that can affect delivery
times, the quality of the cables produced, the costs estimated at the contractual stage and,
consequently, the agreed consideration and any costs of warranties. The Group uses the
percentage of completion method to account for such projects, whereby the margins recognised
in its financial statements depend on a project's progress and its estimated margins at
completion. Consequently, work in progress and margins on incomplete projects may not be
recognised correctly if the revenues and costs of completion, including any contractual variations
and cost overruns and penalties that might reduce expected margins, have not been estimated
correctly. The percentage of completion method requires the Group to estimate the costs of
project completion and involves making estimates based on factors that could change over time
and therefore have a significant impact on the recognition of revenues and margins. Although
the Group has policies and procedures designed to manage and monitor the implementation of
each project, there can be no assurance that such problems will not arise. This could have a
material adverse effect on the Group's business, financial condition and/or results of operations.
Specifically, projects for high/medium voltage submarine or underground power cables are
characterised by types of contract entailing "turnkey" or end-to-end project management that
therefore demands compliance with deadlines and quality standards, guaranteed by penalties
calculated as an agreed percentage of the contract value and that can even result in contract
termination if the Group (or its subcontractors and/or other third parties used by the Group in
the execution of these projects) fails to comply with specific deadlines and quality standards.
The application of such penalties, the obligation to pay damages, as well as indirect effects on
the supply chain in the event of late delivery or manufacturing problems, could significantly
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affect project performance and hence the Group's margins. Possible damage to market
reputation cannot be ruled out.
Given the complexity of turnkey projects, Prysmian Group has implemented a quality
management process involving an extensive series of tests on cables and accessories before
delivery and installation, as well as specific insurance coverage, often through insurance
syndicates, to mitigate exposure to risks starting from the manufacturing stage through to
delivery.
In addition, the ERM assessments for this particular risk have led the Risk Management function,
with the support of the Sales department, to implement a systematic process of Project Risk
Assessment for all turnkey projects, involving the assignment of a Project Risk Manager, right
from the bidding stage, with the aim of identifying, assessing and monitoring over time the
Group's exposure to specific risks and of foreseeing the necessary mitigation actions. The
decision to present a bid proposal to a customer will therefore also depend on the results of risk
assessment.
Management periodically assesses completed and ongoing contracts, analysing the risks
involved, including a potential domino effect on the order backlog.
In particular, a scenario/sensitivity analysis is carried out, which also examines the unavailability
of strategic assets (vessels and manufacturing facilities), in order to analyse their potential
impact on the entire project portfolio and implement appropriate mitigation actions.
The Group has set aside specific provisions for such risks that represent the best estimate of the
related liabilities based on available information.
Business interruption risk due to dependence on key assets
The submarine cables business is heavily dependent on certain key assets, particularly the plants
in Pikkala (Finland) and Arco Felice (Italy) for the production of a particular type of cable, and
the cable-laying vessels owned by the Group (the "Giulio Verne" and the "Leonardo da Vinci"),
some of whose technical capabilities are hard to find on the market. The loss, if only partial, of
one of these assets due to unforeseen natural events (e.g. earthquakes, storms, etc.) or other
incidents (e.g. fire, terrorist attacks, etc.) and the consequent prolonged business interruption
could have a critical economic impact on the Group's performance. Such assessment is
conducted through scenario/sensitivity analysis, as also described in the previous section.
Prysmian addresses asset dependency risk by having:
-
a systematic Loss Prevention program, managed centrally by the Risk Management
function, which, through periodic on-site inspections, makes it possible to assess the
adequacy of existing systems of protection and to decide any necessary remedial actions
to mitigate the estimated residual risk. As at 31 December 2023, the Group's operating
plants were sufficiently protected and there were no significant risk exposures. Almost all
the plants have been classified as "Excellent Highly Protected Rated (HPR)", "Good HPR"
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or "Good not HPR", in accordance with the methodology defined by internationally
recognised best practices in the field of Risk Engineering & Loss Prevention; limited
exceptions, in a defined geographical area, have been classified as "Fair", for which a
plan for improvement and progress monitoring has therefore been initiated and is still
ongoing;
-
specific disaster recovery & business continuity plans that make it possible to activate,
as quickly as possible, the countermeasures required to contain the impact following a
catastrophic event and manage any resulting crisis;
-
specific insurance schemes covering damage to assets and loss of associated contribution
margin due to business interruption, so as to minimise the financial impact of this risk on
cash flow.
Construction of a new vessel named "Monna Lisa", a sister to the "Leonardo da Vinci", was
announced in 2022 and is currently in progress with the new vessel due to enter service in 2025.
Key supplier dependence risks
In carrying out its operations, Prysmian Group uses numerous suppliers of goods and services,
some of which are important suppliers of raw materials like, for example, certain metals (copper,
aluminium and lead) and some polymer compounds, especially in the high voltage and
submarine cables business.
Dependence on key suppliers obviously constitutes a risk in the event of delivery problems,
quality issues or price rises, especially in a context like present, where the pandemic, recent
geopolitical crises and even localised events have clearly demonstrated the vulnerability of a
complex and now globalised supply chain. In particular, for certain raw material suppliers,
Prysmian is potentially exposed to their industrial risk (fire, explosion, flood, etc.).
The risk is also assessed through scenario/sensitivity analyses, which look at the unavailability
of a given raw material and its impact on the Group's business.
With the objective of preventing and mitigating these risks, the Group has a well-established
qualification system to select and work with reliable suppliers of goods and services and, where
possible, identify possible alternatives, thus avoiding single-source situations.
The mitigation strategy is therefore based on partnerships with a number of key suppliers aimed
at reducing the Group's exposure to supply shortages, on close monitoring of their performance
and on projects and investments in R&D to develop alternative technical solutions.
Risks of dependence on key distributors and resellers for the non-exclusive sale of the
Group's products
Distributors and resellers account for a significant portion of the Group's sales. These distributors
and resellers are not contractually obliged to purchase the Group's products on an exclusive
basis. Therefore, they may purchase competitor products or cease to purchase the Group's
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products at any time. The loss of one or more major distributors could have a material adverse
effect on the Group's business, financial condition and/or results of operations.
ESG-related risks are discussed in the Non-Financial Statement and the TCFD Report 2023.
Legal and compliance risks
Risks related to changes in industry standards and legal requirements
Group companies are required to comply with specific federal, state, local and foreign legal and
regulatory requirements, as well as certain industry standards. Changes in applicable laws and
regulations may affect the growth of the markets in which the Group operates. Growth in the
cable industry is partly due to legislation on energy and alternative and renewable energy
sources, as well as to incentives for investing in utilities and infrastructure. It is not foreseeable
whether, in the future, there will be legislative changes and/or industry standards that are
detrimental to the Group's business. Although the Group's business is managed to mitigate such
risks, there can be no assurance that changes in applicable standards, laws and regulations will
not result in significant costs, which could have a material adverse effect on the Group's
business, financial condition and/or results of operations.
Planning and reporting risks
Planning and reporting risks are related to the adverse effects that any irrelevant, untimely or
incorrect information might have on the Group's strategic, operational and financial and non-
financial decisions. At present, in view of the reliability and effectiveness of internal procedures
for reporting and planning, the Group does not consider these risks to be material.
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13. OTHER INFORMATION
Incentive plans
Information about incentive plans can be found in the Explanatory Notes to the Consolidated
Financial Statements and in the "Prysmian's Human Capital" chapter of the Non-Financial
Statement.
Related party transactions
Related party transactions do not qualify as either atypical or unusual but form part of the normal
course of business by Group companies. Such transactions take place under market terms and
conditions, according to the type of goods and services provided.
The Group has published, including on its website, the procedures adopted to ensure the
transparency and substantive and procedural fairness of related party transactions.
Information about related party transactions, including that required by the Consob
Communication dated 28 July 2006, is presented in Note 33 to the Consolidated Financial
Statements at 31 December 2023.
Atypical and/or unusual transactions
In accordance with the disclosures required by Consob Communication DEM/6064293 dated 28
July 2006, it is reported that no atypical and/or unusual transactions took place during 2023.
Secondary locations and basic corporate information
The list of secondary locations and basic corporate information about the legal entities making
up the Group can be found in Appendix A of the Explanatory Notes to the Consolidated Financial
Statements.
Financial risk management
The management of financial risks is discussed in the Explanatory Notes to the Consolidated
Financial Statements (Financial risk management).
Treasury shares
Information about treasury shares can be found in Note 11 to the Consolidated Financial
Statements at 31 December 2023.
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14. BUSINESS OUTLOOK
The cable industry is increasingly strategic due to long-term market trends which require
resilient, high-performing, sustainable and innovative cable solutions: increased renewable
generation, growing electricity demand, enhanced power grids, massive data growth. In this
context, Prysmian is uniquely positioned to seize current market trends which require resilient,
high-performing, sustainable and innovative cable solutions.
For FY 2024, Prysmian expects to achieve:
o
adjusted EBITDA in the range of Euro 1,575-1,675 million
o
cash flow in the range of Euro 675-775 million (FCF before acquisitions and disposals)
o
scope 1&2 GHG emission reduction of 36% and Scope 3 reduction of 13% vs 2019
At its Capital Markets Day, held on October 5, 2023, the Group presented its strategy to lead
the Energy Transition and Digital Transformation – “Connect, to lead” – thereby outlining 2027
financial targets, consisting of:
o
Adj. EBITDA of Euro 2bn (+/- Euro 100m)
o
Free Cash Flow to Euro 900m-1bn
o
EBITDA conversion in FCF to 47-48%
o
ROCE to 25-28%
These goals assume no material changes in both the geopolitical crisis relating to the conflicts
in Ukraine and in Israel, in addition to excluding extreme dynamics in the prices of production
factors or significant supply chain disruptions. The forecasts are based on the Company's
current business perimeter, assuming a EUR/USD exchange rate of 1.08, and do not include
impacts on cash flows related to Antitrust issues.
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15. CERTIFICATION PURSUANT TO ART. 2.6.2. OF THE
REGULATION OF MARKETS ORGANIZED AND MANAGED BY
BORSA ITALIANA S.P.A.
Suitable measures have been taken to ensure compliance with Art. 15 of the Regulations issued
by CONSOB under Resolution no. 20249 of 28 December 2017 concerning conditions for the
listing of shares of parent companies that control companies incorporated under and regulated
by the law of countries other than EU-member states and which are material to the Consolidated
Financial Statements, and whose requirements have been met.
Milan, 28 February 2024
ON BEHALF OF THE BOARD OF DIRECTORS
THE CHAIRMAN
Claudio De Conto
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16. CONSOLIDATED NON-FINANCIAL STATEMENT
Introduction
This section represents the Consolidated Non-Financial Statement (hereinafter also referred to
as "NFS", "Statement") prepared, pursuant to Arts. 3 and 4 of Italian Legislative Decree 254/16
(hereinafter also the "Decree") as supplemented, by Prysmian S.p.A. The scope of the Non-
financial Statement includes the parent company (Prysmian S.p.A.) and the fully consolidated
companies (hereinafter also "Prysmian" or the "Prysmian Group").
This Statement, approved by the Board of Directors on 28 February 2024, has been prepared
pursuant to the “GRI Sustainability Reporting Standards 2021” issued by the GRI Global
Reporting Initiative, on an “in accordance with” basis. The GRI Standards, currently the most
widely adopted and internationally recognized standards for non-financial reporting, have been
identified by Prysmian as “reference standards” for compliance with the requirements of Italian
Legislative Decree 254/2016.
The main ESG KPIs measured and monitored by the Group are analyzed in the following sections
of this document:
•
Ethics and Integrity;
•
Environmental responsibility;
•
People, Prysmian’s human capital;
•
Sustainable value chain.
Each chapter is organized as follows:
•
a section on the risks identified in relation to the material topics addressed therein;
•
disclosure of the sustainability performance of the Group in accordance with the GRI
Standards 2021;
•
background information and comments on the trends in the data presented.
More information about how this document was prepared can be found in the later section on
“Methodology”.
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Stakeholder engagement and materiality analysis
In 2023, in continuity with previous years, Prysmian conducted an analysis to define material
topics, considering the impacts, opportunities and risks relevant to the business, in line with
international and domestic standards and the demands of its stakeholders.
The materiality analysis conducted by the Group led to the preparation of the Materiality Matrix
below, which illustrates the material topics for Prysmian, both from the standpoint of impacts
generated on the environment, local communities, its employees, collaborators and society at
large, and from the standpoint of economic and financial risks and opportunities.
To identify the most significant topics, detailed evaluations were collected from all stakeholders
in the group on various occasions. The judgments made were then aggregated through the
weighted average method in order to develop an overall summary score for both financial
materiality, placed on the x-axis, and impact materiality, placed on the y-axis.
Each topic was
placed within the matrix depending on its score for the two areas.
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As can be seen from the latter, the analysis led to the identification of 11 Material Topics, four
of which were considered to have "Higher Materiality": "Facilitating decarbonization to achieve
Net-Zero and digitalization"; "Sustainable innovation and circularity"; "Governance, ethics and
integrity"; "Sustainable value chain".
MATERIAL TOPICS
The next paragraphs detail the process that led to the production of the Materiality Matrix and
the description of the Material Topics.
The reporting conducted by Prysmian on the sustainability aspects identified through "
Impact
Materiality
" was done by following the 2021 GRI Universal Standards, which provide for an
analysis of the impacts generated by the company according to the so-called "inside-out" logic,
i.e., those effects on the economy, environment, people and human rights that result from the
organization's activities or its business relationships.
At the same time, the voluntary elaboration of "
Financial materiality
"
examines the risks and
opportunities for the organization that affect or could affect the company's financial position,
financial performance and cash flows, access to financing or cost of capital in the short, medium
or long term. This process made it possible to verify that no relevant topics were left out from
this perspective as well, thus anticipating part of the analyses that will be necessary from 2024
with the implementation of the European Sustainability Reporting Standards (ESRS) and the
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entry into force of the Corporate Sustainability Reporting Directive (CSRD), which will provide
for a "
dual materiality
" approach.
In particular, the Group conducted a gap analysis between GRI and ESRS during 2023 in order
to be better prepared for the future entry into force of the new standards. Prysmian’s financial
analysis drew also on the risk assessments already carried out by the Risk Management function
and those carried out in an Enterprise Risk Management context, including the 2023 TCFD
Report.
Prysmian group’s impact materiality
The process of updating the materiality of the Group comprises four phases, as indicated in the
guidelines for “GRI 3: Material Topics” Standard, which are discussed in the following sections.
Understanding the Context: Desk analysis and Stakeholder Engagement activities
During the desk analysis phase, involving a documentary analysis of internal and external
sources, the context in which Prysmian operates was identified. The following sources were
considered during the desk analysis:
•
reports and articles
on global trends (e.g. World Economic Forum, S&P Global);
•
alignment with the goals set forth in "Prysmian Group Climate Action" and "Social
Ambition";
•
sustainability
reports/non-financial statement of peers and competitors;
•
Group stakeholder engagement activities;
•
ESG rating;
•
regulatory
developments (e.g. Italian Decree 254 on non-financial statement, the
European Taxonomy, GRI Sector Standard and CSRD);
•
scenario analysis on the Group's new strategic plan.
In addition to desk analysis, Prysmian regularly performs a sentiment analysis to monitor
changes in the perception of investors with regard to the most significant sustainability topics.
This activity is performed with the support of an AI tool, which transmits the changes identified
in real time. The concept of “dynamic materiality” is based on the idea that environmental, social
and economic issues considered less important until now might become more material over time.
These analyses can be viewed in real time by visiting the “Materiality” section of the corporate
website of Prysmian Group.
The desk and sentiment analysis activities carried out by Prysmian are joined by
constant
dialogue with Stakeholders
as a foundational element of Prysmian's sustainability strategy.
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This is why during the year the Group organizes stakeholder engagement projects and activities
throughout the value chain, with active listening, the promotion of sustainable behaviors and
the creation of innovative products and services having a lower environmental impact, which are
capable of meeting their needs and expectations (see the “Sustainable innovation for products,
applications and processes” section of this document for more details on sustainable products
and services and the related risks).
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The creation of sustainable value for all stakeholders is also deeply linked to the management
of the value chain, in which Prysmian is adopting a proactive role, both with respect to suppliers
(calculation of Scope 3 emissions, inclusion of ESG KPIs in their assessment) and in relation to
Customers (surveys and specific engagement activities, analysis on product end-of-life that is
part of Scope 3 calculation).
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Dialogue with the Group’s stakeholders
Stakeholder dialogue initiatives are an integral part of the Group's growth strategy, as well as
an effective communication channel.
The purpose of these initiatives is to:
•
identify ideas for improvements that lead to product and process innovation;
•
map the impacts generated and felt by the Group, in order to ensure better management
of reputational and other risks;
•
inform, engage and raise the awareness of stakeholders regarding various aspects of
importance to the Group and the societies in which it operates;
•
identify the needs, problems and expectations of stakeholders in order to embed them in
the Group's strategy and develop a relationship based on trust and transparency.
These engagement initiatives
are pursued in various ways and via multiple channels.
During the year, Prysmian organized several Multi-Stakeholder events, including:
External stakeholder engagement activities:
•
Prysmian Group Sustainability Week;
•
Local events targeting regional/national stakeholders;
•
Topic workshops;
•
Interviews with leading investors, academics and industry experts;
•
Capital Markets Day.
Internal stakeholder engagement activities:
•
Top Management Interviews;
•
Local events during Sustainability Week;
•
Speak up Survey (people engagement survey);
•
Call and meeting with Sustainability Ambassadors;
•
Sustainability Steering Committee;
•
Prysmian Sustainability Academy courses and activities;
•
Sustainability Call for Ideas Project.
To define and implement its stakeholder engagement process, the Prysmian Group follows the
guidelines of the 2015 updated version of the AA1000SES International Standard, developed by
AccountAbility (Institute of Social and Ethical Accountability).
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Sustainability week
Amongst the various stakeholder engagement activities, in 2023 the Group organized a week of
events named “Prysmian Sustainability Week”, held in hybrid mode
to reach a global target. The
event took place in June at the Group's headquarters in Milan, Italy, and was physically attended
by about 400 stakeholders and over 6,500 streaming connections from all over the world.
Attendees were representatives of the Group, including Prysmian directors, managers and
employees, and external speakers, such as leaders of international organizations and partners
in the value chain. The various speakers contributed important points of view on specific
sustainability issues, such as climate change and the energy transition, the circular economy,
recycling, the business impact of environmental processes,
diversity and inclusion, impact on
local communities, sustainable innovation, digitalization and electrification.
2023 Sustainability Call for Ideas Project
The Sustainability Call for Ideas is a Prysmian global initiative aimed at all Group employees in
order to gather ideas in relation to four main sustainability-related themes, implement them
locally, and potentially expand them globally.
The initiative, which involved both white-collar and blue-collar workers from all regions and
business units, covered several sustainability aspects identified by Prysmian's top management:
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safety, customer involvement to improve sustainability throughout the value chain, inclusion
and sustainable products and processes.
The objectives of this global initiative were: to embed sustainability at regional level and in all
production plants by implementing the most significant projects at local level, to promote
visibility of the new sustainability governance and to engage all employees.
Each region and business unit produced its own dedicated Call for Ideas, with regional thematic
experts and a local jury which selected projects to implement and potentially scale globally.
Over 1,100 ideas were collected globally from all regions. Regional juries selected the most
promising projects, and the teams involved were invited to Milan for the Sustainability Call for
Ideas Fair held during sustainability week in June.
The teams presented their ideas to colleagues and external stakeholders who attended the
event, as well as in a live streaming presentation session intended for the entire Prysmian
population.
As a result of the Call for Ideas – and the important results achieved – the Group is committed
to implementing the more than 20 projects selected in the course of 2024.
Dialogue with shareholders
Priority stakeholders certainly include shareholders, concerning whom value creation is one of
the Group's most important objectives. For this reason, Prysmian focuses its strategic and
financial communication policy on the highest standards of fairness, clarity and transparency.
Company activities and procedures aim to lend credibility to company communication flows to
the market, with the goal of increasing and consolidating investor confidence, seeking to foster
a long-term stock investment approach and avoiding information asymmetries. Guaranteeing
that every investor, both current and potential, has the right to receive the same information to
make thoughtful investment choices is a priority for the Group.
Upon publishing its quarterly data, Prysmian
organizes conference calls with institutional
investors and financial analysts. In addition, the Company promptly informs the market about
any action or decision that could have a material impact on the valuation and performance of
the share.
Relations with the financial market were continuous and intense during
2023, with more than 500 conference calls
and
one-to-one or group sessions. Some
were held virtually, while others were held in person at the Milan headquarters and in
the world’s main financial centers such as London, Paris, New York Sydney and Milan.
Prysmian also participated in numerous industry conferences organized by leading international
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brokers, as well as in road shows and topic-specific events focused, for example, on the Energy
Transition,
Digitalization, Innovation and Sustainability.
In addition, the Group is increasingly devoting special attention to its relations with ESG
investors, meaning those that focus their investment strategies on environmental, social and
governance issues. Continuous engagement with them by the Company and top management –
with various organized activities, including the Sustainability Week and dedicated meetings –
has helped to further increase the weight of these investors within Prysmian’s shareholder base.
In fact, the number of ESG investors has increased substantially in the last five years, rising
from about 13% in 2019 to over 49% at present. This latter percentage is well above the average
for both the industrial sector and the Italian market.
In addition to such ESG topics as Energy Transition, Digitalization, Climate Change, the
Management of Human Capital, Diversity and Inclusion, the Sustainable Value Chain and
Remuneration Policy, the meetings with investors also discussed other important matters that
included Electrification, Innovation, Business Performance and Outlook over the short/medium
term, and the financial structure and strength of the Group.
The Investor Relations function has maintained constant contacts with institutional investors,
not least via the website, which includes the recordings of conference calls and presentations to
the financial community, corporate documentation, press releases and all other information
relating to the Group, in both Italian and English.
Identification of the real and potential, positive and negative impacts
generated by Prysmian throughout the entire value chain
Downstream of the Desk Analysis, stakeholders engagement and Risk Assessment activities
already carried out by the Risk Management function in the Enterprise Risk Management area,
Prysmian has identified 30 impacts, separated into real and potential, positive and negative,
generated by the organization and its business relationships, on the economy, the environment
and people, including impacts on their human rights, as indicated in GRI 3 Standard. The impacts
were mapped in relation to specific material topics (11 material topics identified in 2023 vs. 10
in 2022).
Assessment of impacts through stakeholder engagement activities
The next stage regarded the evaluation of identified impacts. The judgments were given by
various types of stakeholders, selected on an ad-hoc basis from the following categories:
-
Internal stakeholders: top management and Group BoD members
-
External stakeholders: investors, academics, university scholars and researchers
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The people involved assigned each impact a value in relation to magnitude (scale of 1 to 4) and
probability of occurrence (scale: low, medium, high). This evaluation
took place throughout the
year through interviews and one-on-one meetings.
For the composition of the materiality matrix and the relative placement of topics within it, only
the magnitude of each impact was considered. However, the interview also concerned an
analysis of the probability of occurrence, in order to better inform the analysis. The methodology
described here, which therefore did not include the use of probability in the ranking, aims to
maintain a conservative approach and prevent potentially significant impacts (i.e., with high
magnitude) from appearing relatively less material due to a low probability of occurrence.
Below is the evaluation grid used by the selected Stakeholders, along with the respective
quantitative metrics:
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Following the assessments made by stakeholders during engagement activities, the impacts
were prioritized, classifying them by order of magnitude (from greatest to smallest). For the
same magnitude, the greater probability of impact occurrence was taken into consideration
12
.
12
Impact on Water and tributaries: for more information on the amount of water consumed, see the chapter of this
document "Environmental Responsibility".
Impact on Facilitating decarbonization to achieve Net Zero (Scope 1, 2 and 3) and digitization: see the chapter of this
document "Environmental Responsibility" for more information.
Impact on Well-being, engagement and skills improvement of human capital: for more information regarding training
hours for employees, please refer to the chapter in this document "People, Prysmian's Human Capital".
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Prioritization of Material Topics
The material topics were then evaluated by internal and external stakeholders to test their
accuracy. Below is the list of 11 material topics (compared to 10 in 2022) identified by Prysmian
in accordance with the GRI standards and ordered according to the results coming from the
materiality assessment carried out.
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Prysmian's Financial Materiality
On 16 December 2022, the Official Journal of the European Union published the Corporate
Sustainability Reporting Directive (CSRD) – proposed by the European Commission on 21 April
2021 – that, starting from the 2024 Financial Statements, will amend the current reporting
obligations (Non-Financial Reporting Directive transposed into Italian law by Italian Legislative
Decree 254/2016). Among the changes, the Directive introduces the concept of double
materiality that, in addition to the external impacts generated by the business (inside-out
approach), requires the risks incurred and the opportunities that the company can benefit from
in financial terms (outside-in approach) to be reported as well. The European Commission
mandated EFRAG to develop the new reporting standards. As a result, Prysmian, in advance of
legal requirements, decided to set up an analytical system for quantifying risks and
opportunities, in line with the Risk Assessment process and methodology already adopted by the
Group.
The exercise carried out to identify material topics according to the Impact Materiality process
was the starting point for the identification of Financial Materiality. According to paragraph 49 of
ESRS 1, in fact, a topic can also be financially material if it triggers, or could trigger, material
financial effects on the enterprise. Specifically, this occurs when a material topic generates or
can generate risks or opportunities that have a material influence on the enterprise’s
development in terms of cash flow and operating profitability (Free Cash Flow and EBITDA,
respectively).
These financial parameters are in line with the Group's Enterprise Risk Management (ERM)
model. Two time horizons were identified for their assessment: short-medium term (within three
years) and long term (2030). The scale used for quantifying these risks and opportunities (from
1 to 4) is as follows:
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Identification of Risks and Opportunities
Risks and opportunities have been ordered starting from the highest magnitude and ranking
those with the same magnitude by the greatest probability of occurrence. Quantification of the
magnitude associated with each risk/opportunity was carried out with the Risk Management
function as part of the Group's Enterprise Risk Management activities. Below is the table listing
the risks and opportunities identified and sorted according to their relative Magnitude.
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PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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PRYSMIAN GROUP | A. DIRECTORS’ REPORT
131
Evolution of material topics 2023 vs 2022
The shown image illustrates the main evolutions of the Prysmian Group Materiality Matrix from
2022 to 2023
13
.
In 2023, the topics "Sustainable innovation and circularity", "Sustainable value chain" and
"Governance, ethics and integrity" entered the Higher Materiality area, where in 2022 only the
topic "Facilitating decarbonization to achieve Net-Zero and digitalization" was included. This
development reflects the evolving strategy of the Prysmian Group and the messages
communicated to the market during 2023.
In contrast, the material topics related to "Local communities" and "Biodiversity and impacts on
nature" move from "medium materiality" to "low materiality," as they are perceived by
stakeholders – although material to the Group – as less primary.
13
For the deviation analysis, the materiality matrix for 2022 was recalculated by applying the same methodology applied
in 2023. Of particular emphasis are the following between the Materiality analysis of 2022 vs 2023: (1) in 2022, the
"Pollution" and "Water and effluents" topics were not included among the Group Material Topics, and are therefore not
comparable with 2023; the material topic "Sustainable innovation and circularity" can be traced back to two material
topics in 2022 – "Sustainable innovation of products, applications and processes" and "Efficient, sustainable and circular
activities" – for the purpose of comparing 2022 vs 2023, the average of the values for the two Material Topics was taken
into account; (3) a partial review of impacts, risks and opportunities was conducted in 2023, without leading to a
significant deviation in the very nature of the topics.
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Ethics and integrity
For the Prysmian Group, ethics is a categorical imperative. We have always believed that a
successful company cannot be built without a solid foundation of ethical and moral principles.
That is why we work every day to ensure responsible conduct throughout the entire value chain.
Our daily decisions and actions are constantly guided by our Code of Ethics, Anti-Corruption
Policy and Whistleblowing Policy. Being the bearers of innovative ideas for sustainable
development and adopting fair business practices while respecting human rights: this is what
business ethics and integrity mean for us. This is how over time we have consolidated the trust
of our people, thousands all over the world, and all of our stakeholders.
•
More than 10 formalized Governance policies
•
0 Group infringements of anti-corruption regulations
•
Significant Group contribution to the societies in which it operates deriving from taxes
paid
•
100 information security events handled every month in 2023
Business ethics and integrity: the pillars of sustainability
Prysmian Group strives constantly to
promote business integrity and transparency
throughout the entire value chain
. The complexity of business operations and the
international scale of the Group mean that Prysmian is exposed to possible infringements of
applicable laws and regulations, with possible repercussions for stakeholders, including
employees, customers, contractors and suppliers. In addition, these infringements might
damage the Company’s reputation, adversely affect the socio-economic development of the
communities in which it operates and restrict market competition. Partly to mitigate these risks,
the Prysmian Group has defined
governance
rules and implemented a
system of internal
controls
that promote integrity and transparency among all business partners and stakeholders,
as well as strict processes that must be followed. The actions and procedures comprising the
system of internal controls are designed inter alia to provide credible, truthful information to the
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
134
market about the Group’s activities, thus increasing the confidence of current and potential
investors in the business and encouraging them to adopt a long-term approach to their
investments.
The following sections describe the risks identified and the associated mitigation actions pursuant
to Italian Legislative Decree no. 254/2016 with reference to the 2023 material topic:
“Governance, ethics and integrity”.
Risks identified
:
•
Risk of non-compliance with the Code of Ethics, Policies and Procedures
•
Risks of non-compliance with anti-corruption legislation
•
Risks of non-compliance with Antitrust legislation
•
Export-related risks (sanctions, restrictions, trade tariffs, etc.)
Description of risks
Code of Ethics, Policies and Procedures
– The risks relate to violation of the Code of Ethics,
the Policies and the Procedures, with the possibility of incurring judicial or administrative
sanctions, significant financial losses or reputational damage.
Anticorruption
– The legislation and regulations focused on the fight against corruption have
become ever stricter in recent years. At the same time, organizations increasingly have to work
in environments exposed to this risk, while also complying with the myriad of related rules
imposed by various countries around the world, including Italian Legislative Decree 231/2001
and the Anti-corruption Law (Italian Law 190/2012) in Italy, the Foreign Corrupt Practices Act
(“FCPA”) in the United States and the Bribery Act in the United Kingdom. All these regulations
pursue the same objective: to fight and repress corruption. Prysmian Group’s business model
requires constant interaction with numerous third parties (suppliers, intermediaries, agents and
customers). This is especially true in the Projects segment, where the management of large
international projects requires it to operate and engage in business relations in countries that
have significant levels of corruption (as shown by the Corruption Perception Index), often
through commercial agents and local public officials.
Antitrust –
Prysmian’s strong international presence subjects the Group to the antitrust
regulations of the various countries in which it operates. Each of these is more or less severe in
terms of civil-administrative liability and – where applicable – criminal liability. Over the past
decade, the various antitrust authorities have dedicated increasing attention to the business
activities of players in the Group’s market, evidencing a propensity for international collaboration
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
135
among themselves. Prysmian intends to operate in the marketplace in full compliance with the
rules protecting competition.
Control of Exports –
Many countries have specific rules for international trade and apply laws
and regulations that govern trade in products, software, technologies and services, including
financial transactions and brokerage. These export control regimes, governed by the legislation
of the United States, the European Union (see Art. 215 TFEU) and the United Nations (see
chapter VII of the UN Charter), impose restrictions on certain parties (individuals and entities)
and on certain categories and types of product. Failure to comply with the above may result in
fines and criminal and/or civil penalties, including imprisonment, with an adverse effect on the
business, the financial situation and/or the operating results of the Group, and might affect the
ability of bond issuers to fulfil their obligations.
Mitigation actions adopted
The Prysmian Group has deployed a series of organizational tools aimed at enacting the
principles of legality, transparency, fairness and loyalty through which it operates and adopts a
series of initiatives to define its people’s ethical-social and behavioral responsibilities. These
documents, presented below, define how to carry out activities and relate to colleagues, as well
as how to pursue the ambitions of the Group, with particular regard for environmental and social
matters, including human rights.
Code of Ethics, Policies and Procedures
The
Code of Ethics
14
(hereinafter also "Code") represents the “Constitution” of the Group, being
the charter of rights and moral duties that defines the ethical-social responsibilities of each
member of the organization, consistent with Prysmian's Vision and Mission.
Acting as a veritable guide to daily behavior, the Code plays a strategic role for the Group as a
fundamental tool for preventing irresponsible or illegal conduct by those who work in the name
and on behalf of Prysmian. In fact, it covers all areas of compliance and also applies to business
partners who deal with the Group and are required to read it. The Code of Ethics lives and
evolves in parallel with the development of the business and is always open to receive and accept
requests for legality and propriety received from stakeholders. The document is aligned with
international best practices and incorporates the principles embodied in the UN Universal
Declaration of Human Rights and the Fundamental Conventions of the International Labor
Organization (“ILO”).
14
The Prysmian Group Code of Ethics is made known to all stakeholders – external and internal – by publication on the
corporate website
in the
Ethics and integrity
section
,
and on the “Prysmian People” intranet
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136
In this light, the Group adopted a
Human Rights Policy
15
, based on various international
standards (such as the International Charter of Human Rights, Universal Declaration of Human
Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the United Nations
Global Compact, etc.) and applied in all Prysmian’s locations and activities.
In addition, Prysmian has adopted a
Sustainability Policy
16
that defines the vision and
reference values for various areas: Business Integrity, Governance, Products, Social and
Environmental Responsibility. The Policy aims to provide sustainability guidelines for all Group
companies, based on the strategic priorities identified by Prysmian as part of its medium/long-
term vision.
Finally, the Group carries out training activities for all employees and, through the Risk &
Compliance and Internal Audit departments, constantly monitors compliance and the concrete
application of these rules, not tolerating any type of violation.
Anti-corruption
The Group has implemented a series of preventive actions relevant to the fight against
corruption. The most important was the adoption of an
Anti-Corruption Policy
17
that prohibits
bribery of both public officials and private individuals and requires Prysmian's employees to
respect it and, if more restrictive, to observe and comply with all the anti-corruption laws in
force in the countries where the Group operates.
Of the
corruption prevention
activities within the Group, the following actions are highlighted,
which were put in place by Prysmian during 2023:
●
in line with the objectives set in prior years, it continued to monitor anti-corruption
compliance, with the maintenance of
ISO 37001:2016
“
Anti-Bribery Management
Systems
” certification by Prysmian S.p.A. (obtained in 2021) and by Prysmian PowerLink
S.r.l., the subsidiary dedicated to the Projects segment. Alongside these certifications,
Top Management and each Regional CEO have signed Declarations of conformity
confirming their commitment to ensure: (i) understanding of the Group’s compliance
policies and (ii) completion of the training activities and initiatives;
●
risk-based
training activities
on anti-corruption compliance were provided, both online
and in classroom and videoconference sessions;
15
The Prysmian Group’s Human Rights Policy is made known to all stakeholders – external and internal – by publication
on the corporate website
and on the “Prysmian People” intranet.
vb.pdf
16
This Policy, approved by the Group CEO, defines the commitments made by the business and the priorities,
governance, strategies and vision linked to Sustainability. It can be found in the sustainability section of the corporate
website
https://www.prysmiangroup.com/en/sustainability/strong-commitment/integrated-sustainability-strategy
17
The Anti-Corruption Policy of the Prysmian Group was approved in 2019 and most recently updated by the Board of
Directors in 2023. It is made known to all stakeholders – external and internal – by publication on the corporate website
Ethics and Integrity
section, and on the “Prysmian People” intranet.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
137
●
the “
Third Party Program
” was updated. This Group policy is intended to prevent and
manage the risk of corruption deriving from relations with agents, distributors and certain
categories of supplier (“Third Parties”). In particular, before establishing business
relations with any Third Party, the Policy establishes that due diligence must be carried
out in relation to that party using a dedicated
on-line
platform. As a result of the above
activity, a level of risk (high, medium, low) is assigned to each Third Party that,
consequently, is subjected to an approval procedure that differs according to the level of
risk that emerged. Furthermore, the due diligence work must be repeated every 12, 18,
24 or 36 months, depending on the level of risk identified and the type of Third Party
concerned. Furthermore, the Code of Ethics
(which includes an anti-corruption clause) is
accepted and signed by all contractors, suppliers and agents and, pursuant to the “Third-
Party Program” Policy, all new Third Parties must also sign the
anti-corruption certificate;
●
as part of the Compliance function's annual plan,
on-site
visits
were carried out,
including, among other things, an
audit of sample transactions;
●
in relation to
Whistleblowing
: the Group (i) updated its Helpline Policy
18
(for more
information, please refer to the following section "Stakeholder Engagement") in order to
incorporate, among other things, the changes outlined in Directive (EU) no. 2019/1937
and its significant implementing acts; (ii) had its ISO 37002:2021 "Whistleblowing
Management Systems" certification for the parent company Prysmian S.p.A. renewed,
which confirms the soundness of the Group's whistleblowing management system.
The
Conflicts of Interest
(“COI”)
Policy
was issued in 2019, consistent with the Group’s
ongoing commitment to ensuring that the financial and personal interests of employees and
consultants do not conflict with their ability to perform their duties professionally, ethically and
transparently. The Policy was approved by the Group's Board of Directors and published on the
corporate intranet for employees to view. The process requires - through a declaration that all
desk workers in the Group are required to complete - that potential conflict of interest situations
be disclosed for appropriate assessment. In addition, again with reference to COI, a new on-line
platform was implemented in order to report potential conflicts of interest, whether within or
outside the business. In particular, all Prysmian Group employees were required to declare all
personal or financial relationships that could potentially result in a conflict of interest. The
completion rate for the 2023 campaign was 98%, maintaining the same level as in 2022 on a
population of around 8,000 "Desk workers".
The
Gifts and Entertainment Policy
was updated in 2021, which establishes a series of rules
to be satisfied before giving or receiving gifts or forms of entertainment. The policy distinguishes
whether the parties involved are private firms or government bodies/public officials. Also for this
18
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
138
policy, an on-line platform was implemented that governs, based on predetermined parameters,
the process that employees must follow to offer/receive gifts or forms of entertainment and
obtain the required approvals.
Lastly, a specific
Fraud Risk Management Policy
was introduced in 2022 and distributed to
all of the relevant Functions.
Antitrust
With regard to anti-competitive behavior and in compliance with the priorities defined in the ERM
process, the Group has adopted an
Antitrust Code of Conduct
19
worldwide that all directors,
executives and employees of the Group and, insofar as applicable, third parties, are required to
know and follow in the performance of their duties and in dealing with third parties. In addition,
more detailed documents have also been adopted covering current antitrust regulations in the
European Union, North America, China and Australia.
The Antitrust Code of Conduct provides a clear overview of the risks associated with the failure
to apply, or the improper application of, competition rules including, in particular, those
regarding cartels (both horizontal and vertical) and the abuse of dominant positions. The
Antitrust Code of Conduct is complemented by specific procedures as well as a training program,
both online and in the classroom, with the aim of raising awareness among all those who work
on behalf of and for the Prysmian Group.
During 2023, in line with a risk-based approach, the Compliance function carried out a specific
risk assessment activity in some countries of the European Union and, at the same time,
delivered training sessions for some of the Functions most exposed to antitrust risks through
classroom, videoconference and on-line training.
Control of Exports
In order to prevent and mitigate risk relating to exports, Prysmian Group has adopted a policy
for their management and control that includes the following actions:
•
monitoring of the countries and parties subject to restrictions, as well as the level of the
restrictions in force
•
due diligence on the parties subject to restrictions, in order to avoid transactions with
prohibited parties
•
classification of products to determine the applicable export compliance requirements and
understand where and to whom they can be exported, as well as whether or not a license
or other authorizations are required
19
The Antitrust Code of Conduct of the Prysmian Group was updated and approved by the Board of Directors in 2019.
It is made known to all stakeholders – external and internal – by publication on the corporate website
and
on
the
“Prysmian
People”
intranet
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
139
•
basic training for all employees on the topic and targeted training for persons in functions
responsible for international commercial transactions and the control of exports
•
requests for product/technology end-user declarations that they or the buyer complies
with the current export regulations
With respect to
Export Control
, the Compliance Function supports the Group by implementing
IT applications that check all commercial and procurement transactions, on a daily basis, to
avoid matches with the various Economic Sanctions lists (USA, EU, UN etc.). In addition, given
the changing geopolitical context and the application of severe international sanctions, since
2018 Prysmian has started to classify its products with both civil and military (“dual use”)
applications. Commencing from 2020, the Compliance Function periodically delivers training
sessions to employees on this topic.
All Compliance Policies
adopted by the Prysmian Group are published on the corporate
intranet and are available in all the most important official languages of the Prysmian Group as
they are applicable to all employees. The following policies are published on Prysmian Group's
corporate website in the Ethics and Integrity
20
section: Code of Ethics, Human Rights, Helpline,
Anti-corruption and Antitrust Code of Conduct, as they also apply to various external
stakeholders.
Each year, the Compliance Function holds specific meetings with the Regional CEOs and
members of their teams to examine the results of the current year’s compliance initiatives and
discuss the plan for compliance activities in the coming year. These meetings are held at regional
level and are based on an overall analysis of business risks. The outcome of these discussions
guides the selection of monitoring activities, locations to be visited for on-site visits, commercial
agents to be checked and projects to be examined.
20
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
140
Stakeholder Engagement
As part of its own commitment to promoting ethical and legal behavior, Prysmian invites all of
the Group's stakeholders to report any real or potential violations of the law, the Code of Ethics,
and the Policies and corporate procedure, so that they can be examined and dealt with
appropriately. In order to create a culture open to reports and guarantee the necessary
conditions in terms of confidentiality and security, Prysmian has adopted a
Helpline Policy
that,
among other things, specifies the possibility for all Group stakeholders to report misconduct and
alleged unlawful activities
21
. In this sense, Prysmian has implemented several channels through
which a report can be made, including anonymously, which include dedicated telephone lines
and a web portal, both managed by independent operators and available in all official languages
used by the Group.
In terms of reporting, on a quarterly basis, the Compliance Function, in its capacity as the
Whistleblowing Management Function
pursuant to the ISO 37002:2021 standard, provides
updates on the reports received during that quarter, as well as on the progress of any
investigations concluded or still on-going, relating to previous quarters to a special committee
called Helpline Committee.
The Helpline Committee is an internal cross-functional committee consisting of: Chief Risk &
Compliance Officer, Chief Internal Audit Officer, Chief Corporate Affairs Officer, Chief Human
Resources Officer, VP Group Compliance and Industrial Relations & Employment Governance &
Security VP. Although most of the reports made are investigated internally by the Functions in
charge, in exceptional cases, external legal and investigative support is sought and critical issues
are reported to the Top Management in a timely manner.
In addition to the Helpline Committee, the Compliance Function reports the Key Performance
Indicators (“KPIs”) of the reports received during the quarter (e.g. new, closed, confirmed – all
or in part – and unjustified matters, disciplinary or corrective actions taken, analyzed by
categories, region and country) to the Control and Risks Committee, which may - in turn -
request in-depth investigations.
Corrective measures or disciplinary actions are adopted if the legitimacy of these reports is
confirmed by the investigative work carried out. These measures are tailored specifically to each
report and do not necessarily require or involve changes to corporate policies or processes. In
this regard, it should be noted that in 2022 Prysmian was audited and received – at the level of
the parent company Prysmian S.p.A. – the ISO:37002 Certification for its whistleblowing
management system, becoming one of the first companies in Italy in its sector to obtain this
recognition. As anticipated above, this certification was renewed in 2023. Additionally, in
21
The Prysmian Group Helpline Policy is part of the Code of Ethics. It is made known to all stakeholders – external and
internal – by publication on the corporate website, in the Ethics and Integrity section, and on the “Prysmian People”
intranet
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
141
compliance with local legislation in the United Kingdom, Prysmian has adopted a policy and
related procedures for handling complaints.
The Helpline system and the reporting channels were used throughout 2023, as detailed below.
Reports received in 2023
In 2023, out of a total of 180 reports received, 160 were closed by 31 December. Of these 180,
36 were found to be "confirmed" or "partly confirmed", and in these cases a total of 65 corrective
actions were taken, as more than one corrective action was taken for some reports.
These corrective actions comprised: 30 policy or process revisions and specific corrective actions,
14 coaching and training sessions, 9 dismissals and 1 resignation, 9 written or verbal warnings
and 2 Performance Improvement Plans.
The 180 reports received in 2023 fell into the following categories:
•
"HR, Diversity and Workplace Respect" (132 cases), including: Employee Relations (63
cases); Discrimination (21 cases); Wage/Hours issues (17 cases); Policy Issues (11
cases); Workplace Violence & Threats (11 cases); Substance Abuse (5 cases) and Sexual
Harassment (4 cases).
Of the 132 reports, 114 were closed, of which 28 (25%) were
classified as “confirmed” or “partly confirmed”, broken down as follows: 14 under
Employee Relations, 4 related to Policy Issues, 3 under Wage/Hours Issue, 3 under
Workplace Violence, 2 under Sexual Harassment, and 2 related to Discrimination.
•
"Business Integrity" (45 cases) of which: Conflict of Interest (20 cases); Theft of
Goods/Services/Time (5 cases); Product Quality (4 cases); Corruption (2 cases); Fraud
(2 cases); Kickbacks (2 cases); Retaliation (2 cases); Misuse of Assets (1 case), and
Other (7 cases). By the end of 2023, 39 of these 45 reports were closed, of which 7
reports (18%) were classified as “confirmed” or “partly confirmed”, broken down as
follows: 3 under Conflict of Interest, 2 related to Theft of Goods/Services/Time, 1 under
Product Quality Concern, 1 under Misuse of Assets.
•
In the Corruption and/or Kickback category, there were no “confirmed” or “partly
confirmed” reports.
•
"Environment Health and Safety" (3 cases), of which 1 was classified as "partly
confirmed".
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142
Performance in 2023
With regard to anti-corruption issues, in 2023 Prysmian Group recorded the following figures:
12 members of the Board of Directors of Prysmian S.p.A. (100%), 8,504 employees (of which
8,226 white collars and 278 external/sales agents, both of them equal to 100%) and 4,350
business partners received communications about the organization's policies and procedures.
With regard to training on that topic, it should be noted that during the year, the specific
campaign delivered in 2022 was renewed and offered to all newly hired employees (1,003 Desk
Workers) and, in addition, to 24 Agents in LATAM.
With regard to the ongoing Antitrust investigations and litigation brought by third parties against
Group companies consequent and/or related to decisions adopted by the competent authorities,
details of which are outlined in the note on Provisions for risks and charges section in the
Explanatory Notes to the Consolidated Financial Statements, it should be noted that the Group
has recorded a provision for risks and charges of about Euro 184 million as at 31 December
2023. Although the outcome of the outstanding investigations and related disputes is uncertain,
this provision is deemed to represent the best estimate of liabilities based on the information
available at the time of preparing this document. It should also be noted that three investigations
for alleged Antitrust violations, conducted by public authorities against Group companies, were
still underway in 2023. For further details, reference should be made to the note “Provisions for
Risks and Charges” in the Explanatory Notes to the Consolidated Financial Statements.
Lastly, again in 2023, no infringements of anti-corruption regulations were reported against the
Group. Indeed, during the period 2021-2023, the Group did not receive any significant
penalties
22
(monetary or otherwise) for non-compliance with environmental, social or economic
regulations. For the year 2023, an administrative penalty of approximately Euro 30,000 was
assessed for the Marshall (Texas) factory, relating to a delay in uploading the documentation
required by the authorities.
22
Significant monetary penalties mean fines above Euro 10,000.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
143
The group’s tax strategy
The ESG leadership of the Group is founded inter alia on an honest and fair tax strategy,
compliant with regulations, that bases relations with the tax authorities and third parties on
cooperation and transparency. The guiding principles for tax matters and the related governance
procedures adopted by Prysmian are described below
.
The following paragraphs describe the tax risks identified and the associated mitigation actions
pursuant to Italian Legislative Decree 254/2016 with reference to the 2023 material topic:
“Governance, ethics and integrity”.
Risk identified
Risks relating to possible improper applications (interpretations and/or errors and omissions) of
tax law
Description of risk
The complexity of the Group’s business activities and its international scale mean that it might
not apply tax law correctly (interpretations and/or errors and omissions), especially when the
proper tax treatment of transactions that cannot be categorized readily is unclear, not least due
to the rapid evolution of tax regulations in many of the jurisdictions in which Prysmian operates.
Such a situation exposes the company to possible legal proceedings, reputational damage and/or
financial losses, including fines/penalties.
Mitigation actions adopted
Prysmian Group adopts a tax strategy applicable to all Group companies that has been approved
by the Board of Directors of Prysmian S.p.A. This strategy is consistent with the fundamental
values of honesty and propriety embodied in the Code of Ethics, in order to minimize the
substantive impact of any tax and reputational risks.
If there are uncertainties about the proper tax treatment of transactions that cannot be
categorized readily, the Group applies the tax treatment considered most proper and
appropriate, having due regard for legitimate tax-saving opportunities (if any), the opinions of
subject experts and the best sector practices. The company is committed to embracing sound
and reasonable interpretations, taking a cautious approach in order to avoid negative impacts
for the Group.
It should also be noted that the Group has tax provisions for about Euro 126 million as at 31
December 2023.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
144
As a general principle, Prysmian adopts a transparent approach to dealings with the Tax
Authorities and, in the event of conflicting interpretations of the regulations, seeks proactive
discussions with them, including requests for rulings, so that an agreed solution can be found
before its income tax declarations are filed. If the Group, again on the basis of external opinions,
does not agree with the position expressed by the Tax Authorities in the response to the request
for a ruling, it will adjust with a view to risk reduction but reserves the right to seek
reimbursement and/or possibly pursue litigation.
The Group has started to define and
implement the Tax Control Framework (TCF): a system for managing and monitoring tax risks
that has already been applied to the Group’s Italian companies and is currently being extended
to the Group’s other companies. In fact, Prysmian is in favor of initiating "cooperative
compliance" paths globally, while within the Italian scope, in December 2021 the Group
companies were admitted to the cooperative compliance regime with the Italian Revenue
Agency.
The tax strategy of Prysmian Group is founded on the following principles:
•
compliance:
compliance with the law, regulations and circulars issued by the
authorities on tax matters
;
•
legality:
satisfaction by all Group companies of their tax and tax payment obligations;
•
sustainability:
efficient, effective and sustainable management of the tax variable, in
order to support the Prysmian business and, like all other aspects of our business
operations, maximize shareholder value;
•
integrity:
diligent exercise of professional judgment in order to ensure that all tax
decisions are consistent with domestic and international best practices, following
proper analysis and with appropriate documentation;
•
trust and transparency:
positive and transparent approach to the Tax Authorities, in
order to develop and maintain fair and honest relations.
The management of taxation is divided between the Parent Company’s tax function and the CFOs
in each country, as supported by specific tax teams in selected countries (e.g. Italy, USA). Tax
advisors from leading firms/networks are involved in addressing specific tax matters of particular
complexity and/or importance, with coordination by the Parent Company’s tax function.
The tax function is organized as follows:
•
International Tax: support for the CFOs in each country, with the central management
and coordination of transfer pricing, the tax aspects of cross-border operations, non-
routine and/or non-recurring transactions, inspections by the Tax Authorities in
relation to the above operations;
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
145
•
Italian Tax: responsibility for compliance with the Italian regulations governing direct
and indirect taxation (e.g. calculation of taxes, preparation of tax returns),
management of inspections by the Tax Authorities, provision of advice and training to
management on tax matters;
•
“Tax Risk”: responsibility for tax governance, with a specific focus on the tax control
framework;
•
“Local Tax Focal point”: at local (individual entity) level, CFOs – supported, if present,
by the “Local Tax” – are responsible for: managing tax compliance; managing and
disseminating the tax risk culture; facilitating the center-periphery exchange of
information on cross-border matters; promptly involving the Parent Company’s tax
function in the event of non-routine and/or non-recurring transactions; reporting any
changes in the selection/management of tax advisors.
In addition, to foster internal cross-functional coordination, the Group tax manager attends the
meetings of the Audit and Risks Committee at Prysmian S.p.A., in order to report on specific
matters, as well as tax groups organized by the leading trade associations.
Tax reporting in the countries in which the Group operates
Starting with the sustainability reporting for 2021, Prysmian has implemented a tax reporting
model that supplements, on a voluntary basis, the GRI 207-4 Country-by-Country Reporting
(CbCR) information (see the “Requirements” section) with data on the broader Total Tax
Contribution (TTC), which is an ESG metric consistent with the standards defined by GRI 207-4
(see the “Recommendations” section) and the World Economic Forum (WEF).
The reporting model is intended to provide the broad audience of corporate stakeholders with a
concise and immediate snapshot of the company’s fiscal position and contributions to countries'
economic and social systems. Indeed, it makes it possible:
•
on one hand, to provide an overview of the main economic, fiscal and equity figures
representing the size of the business in a given country;
•
and on the other hand, to present in full the tax contribution made to the economic and
social systems of the countries in which the Group operates, including not just income
taxes, but also the other taxes levied on the Group (e.g. payroll taxes, taxes on products
and services), and considering not only those taxes that represent a business cost (Taxes
borne), but also the taxes on third parties collected by the business on behalf of public
administrations using recharge, agency mechanisms etc. (Taxes collected).
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
146
In this sense, Prysmian – continuing on the path toward greater transparency and with a firm
belief in the role played by transparency in the tax realm – has made a significant effort that
has made it possible to already report in this document the figures for 2023, which are shown
for comparative purposes with those for 2022.
Information is provided for the following geographical areas: (i) North America (NORAM), (ii)
Central and South America (LATAM), (iii) Europe, Middle East and Africa (EMEA) and (iv) Asia
Pacific (APAC). Lastly, in each area, information is provided concerning the main countries in
which Prysmian carries on operations
23
.
All data is stated in millions of Euro – except for the number of employees (stated in units) –
and rounded to the nearest unit. The sum of rounded amounts may at times differ from the
rounded total.
Country-by-Country Reporting (CbCR) in accordance with the Requirements section of
GRI 207-4
The following section provides the information required by GRI 207–4 Disclosure and the data
are represented based on the reporting standard established by the OECD in Action 13 Country-
by-Country Reporting
24
.
Regarding information about the reporting scope, the name of the entities and the tax jurisdiction
in which the entities are resident
25
, as well as the respective activity carried out, please refer to
the appropriate appendix "Company and branch detail for FY 2023".
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
147
2023 Country-by-Country Reporting (Euro/million – except for the number of employees)
2023
Revenue
Related
Parties
Revenue
unrelated
parties
Total
Revenues
Profit
and Loss
before
tax
Corporate
income
tax paid
on cash
basis
Corporate
income
tax
accrued
Number
of
employees
(FTE)
Tangible
Assets
Employee
Remuneration
North
America
1,056
4,905
5,961
612
227
164
7,147
1,556
548
Canada
425
502
927
62
26
19
682
127
53
United States
631
4,403
5,034
550
201
145
6,464
1,429
496
LATAM
409
1,852
2,262
125
24
55
3,275
509
125
Brazil
140
618
758
22
2
13
1,673
242
55
Other
269
1,235
1,504
103
22
42
1,602
267
70
EMEA
5,988
9,090
15,078
186
66
65
16,762
3,392
996
France
620
878
1,499
(11)
1
2
2,570
542
176
Germany
219
868
1,087
(21)
1
0
1,446
228
129
Italy
3,051
388
514
12
1
4
766
149
43
Netherlands
103
499
602
40
1
1
706
169
57
Spain
374
781
1,155
26
4
2
1,198
244
74
United
Kingdom
62
556
617
30
5
5
1,046
160
67
Other
1,559
5,120
9,604
111
54
51
9,029
1,900
449
Apac
365
1,097
1,462
21
11
15
2,902
312
98
China
239
411
650
30
5
8
1,608
138
40
Other
126
686
813
(9)
6
7
1,295
174
58
Total
7,819
16,944
24,763
944
328
299
30,086
5,769
1,767
2022 Country-by-Country Reporting (Euro/million – except for the number of employees)
2022
Revenue
Related
Parties
Revenue
unrelated
parties
Total
Revenues
Profit and
Loss before
tax
Corporate
income
tax paid
on cash
basis
Corporate
income
tax
accrued
Number
of
employees
(FTE)
Tangible
Assets
Employee
Remuneration
North
America
1,103
5,391
6,494
594
137
190
7,246
1,495
534
Canada
386
701
1,087
66
14
18
713
142
57
United States
717
4,690
5,408
528
123
172
6,534
1,353
477
LATAM
457
1,521
1,977
44
20
29
3,337
488
103
Brazil
137
607
744
15
1
15
1,621
204
47
Other
320
914
1,234
29
19
14
1,716
284
56
EMEA
6,397
8,924
15,320
(151)
75
61
17,044
3,071
921
France
579
1,009
1,587
(71)
4
3
2,643
503
174
Germany
230
896
1,126
(5)
1
0
1,449
234
110
Italy
3,424
401
506
(10)
-
(0)
747
135
39
Netherlands
111
469
580
16
1
1
740
167
53
Spain
378
784
1,162
3
1
2
1,173
232
68
United
Kingdom
72
629
701
16
3
5
1,128
156
66
Other
1,604
4,735
9,658
(100)
65
50
9,165
1,643
412
Apac
339
1,202
1,542
3
8
14
2,898
328
102
China
221
466
687
15
5
5
1,634
136
43
Other
119
736
854
(12)
4
9
1,264
191
59
Total
8,296
17,038
25,333
491
240
294
30,525
5,381
1,660
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
148
Total Tax Contribution (“TTC”)
Information about the total tax contribution is presented below. This information covers the full
range of taxes paid in the countries where Prysmian is present. The data has been collected and
presented on a cash basis, as this is deemed to be the best way to report the actual total tax
contribution made
26
. As mentioned above, the taxes paid comprise both:
•
Taxes borne
– taxes that represent a cost for Prysmian, and
•
Taxes collected –
taxes on third parties, collected by Prysmian on behalf of the public
administrations using agency and similar mechanisms
27
.
The taxes borne and collected are categorized as follows
28
:
•
Profit taxes
– income taxes
29
;
•
People taxes
– payroll taxes;
•
Product taxes
– taxes on products and services;
•
Property taxes
– property and related taxes;
•
Planet taxes
– environmental taxes.
The total tax contribution made by Prysmian in 2023 amounted to Euro 1,901 million: 63%
collected and 37% borne.
26
It should be noted that as the data were not available on a timely basis and given their irrelevance in terms of amount,
for representative purposes the data on permanent establishments are reported in the tax residence jurisdiction of the
entity to which they belong (the "Main Entity").
27
Despite not representing a cost for Prysmian, these taxes are included as part of the TTC because they also derive
from the economic activities carried out.
28
The following tax categories are considered:
•
Profit – income taxes: this category comprises both corporate income taxes borne (e.g. corporate income taxes
applied at national or local level, taxes on productive activities, as well as withholding taxes) and collected, if
levied on a third party (e.g. withholdings on interest, royalties).
•
People – payroll taxes: this category includes all payroll-related taxes, including income taxes and social security
contributions. The taxes levied on the employer are considered to be taxes borne (e.g. social security
contributions, health insurance, pensions, disability contributions), while the taxes levied on workers are
considered to be taxes collected (e.g. personal income taxes and social security contributions charges to
workers, which are usually withheld by the employer).
•
Products – taxes on products and services: indirect taxes applied to the production, sale or use of goods and
services, including taxes and tariffs levied on trade and international transactions. This category includes taxes
that may be paid by businesses with reference to their consumption of goods and services, regardless of whether
paid to the supplier of the goods and services, or directly to the government. This category includes both taxes
borne (e.g. consumption taxes; turnover taxes; excise taxes; customs duties; import duties, taxes on insurance
contracts; non-deductible VAT) and taxes collected (e.g. net VAT paid).
•
Property – property taxes: taxes on ownership, usage or the transfer of tangible or intangible assets. This
category comprises both taxes borne (e.g. taxes on ownership and the use of property; taxes on capital applied
to increases in risk capital, transfer taxes on the purchase or sale of assets, equity and capital transactions;
registration taxes; stamp duty on the transfer of property; stamp duty on the transfer of shares) and tax
collected (e.g. taxes on lease payments collected by the lessor and paid to the government).
•
Planet – environmental taxes: taxes and levies on energy products (includes vehicle fuel); on motor vehicles
and transport services; and on the supply, use or consumption of goods and services considered to damage the
environment. Examples of planet taxes include: taxes and excise duty on electricity and gas, taxes on the
production of nuclear fuels, carbon taxes and taxes on hydrocarbons.
The data was collected in foreign currency and translated using the average exchange rates for the year.
29
Consistent with the
Total income tax paid (on cash basis)
reported in the table containing the GRI 207-4 data, Profit
Tax Borne does not include the taxes on dividends received from other group entities.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
149
The total tax contribution is spread among the four geographical areas in which the Group
operates, in a manner consistent with the distribution of revenue and the level of employment:
EMEA represents 62% of the Group’s total contribution, North America 23%, Central and South
America 10% and APAC 5%.
Compared with 2022, the total tax contribution has risen by Euro 224 million (+13%).
This increase comprises both higher taxes borne and higher taxes collected and mainly involved
(i) profit taxes borne of Euro 95 million, (ii) people taxes borne of Euro 26 million and (iii) people
taxes collected of Euro 103 million.
Geographically, the increase in TTC concerned, albeit with varying degrees of intensity, EMEA,
NORAM and LATAM.
Please refer to the analysis regarding the main countries in which the Group operates for an
overview of the main factors that triggered the trends in the different tax categories.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
150
Taxes borne
In 2023, taxes borne amount to Euro 709 million. The main share is related to profit taxes,
accounting for 47%. People taxes and product taxes account for 38% and 11% of total taxes
borne, respectively. Of lesser importance are property taxes (4%) and planet taxes (less than
1%).
Compared to 2022, taxes borne increased by about Euro 106 million (+18%), mainly due to the
increase in profit taxes and people taxes.
Taxes collected
In 2023, taxes collected amount to Euro 1,192 million. The main share is related to product
taxes, accounting for 63%. On the other hand, people taxes account for 36% of total taxes
collected. Of less significance are profit taxes (1%) and other taxes (which individually account
for less than 1%).
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
151
Compared to 2022, taxes collected increased by about Euro 119 million (+11%) mainly due to
an increase in people taxes.
Focus on the 10 main countries in which the Group operates
The total tax contribution is mainly concentrated in Brazil, Canada, the United States, France,
Germany, Italy, the Netherlands, Spain, the United Kingdom and China, consistent with the
distribution of revenues and the number of employees.
These ten countries, together making a tax contribution of about Euro 1,404 million, or roughly
74% of the total for the Group, in fact generate about 72% of the Group’s revenues and employ
65% of all personnel.
Details are provided below of the total tax contribution for 2023 and for comparative purposes
for 2022 for main countries.
Table analyzing the total tax contribution in 2023 by geographical area (Euro/million)
2023
North
America
Canada
United States
LATAM
Brazil
Other
EMEA
France
Germany
Italy
Netherlands
Spain
United
Kingdom
Other
APAC
China
Other
Total
Tax Borne
280
30
250
67
18
49
323
72
21
83
8
24
16
99
39
17
22
709
Profit
227
26
201
24
2
22
72
2
1
31
1
4
5
28
11
5
6
334
People
34
3
31
21
11
10
201
62
17
49
6
17
7
43
15
8
7
271
Product
9
-
9
20
4
16
33
4
3
1
-
1
1
23
14
4
10
76
Property
9
1
8
1
-
1
14
5
-
2
-
2
2
3
1
1
-
25
Planet
-
-
-
-
-
-
3
-
-
-
1
-
-
2
-
-
-
3
Tax
Collected
162
40
122
107
34
73
869
86
92
178
96
111
86
220
55
10
45
1,193
Profit
-
-
-
3
1
2
5
-
-
3
-
-
-
2
-
-
-
8
People
111
15
96
46
11
35
259
31
27
106
14
21
19
41
18
7
11
434
Product
50
25
25
58
22
36
606
55
65
69
82
90
67
178
37
3
34
751
Property
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Planet
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total Tax
contribution
442
70
372
174
52
122
1,190
158
113
261
105
135
103
315
95
27
68
1,901
Total tax contribution in 2022 (figures in millions of Euro)
2022
North
America
Canada
United States
LATAM
Brazil
Other
EMEA
France
Germany
Italy
Netherlands
Spain
United
Kingdom
Other
APAC
China
Other
Total
Tax Borne
183
18
165
73
15
58
307
63
38
81
7
19
13
86
40
17
23
603
Profit
137
14
123
20
1
19
72
4
1
40
1
1
3
22
9
5
4
238
People
31
3
28
17
8
9
182
51
30
39
5
15
6
36
14
7
7
244
Product
7
-
7
35
5
30
35
3
7
1
-
-
-
24
18
5
13
95
Property
8
1
7
1
-
1
13
5
-
2
-
2
2
2
1
1
-
23
Planet
-
-
-
-
-
-
3
-
-
-
1
-
-
2
-
-
-
3
Tax
Collected
122
25
97
76
27
49
817
95
98
102
85
94
84
259
59
7
52
1,074
Profit
-
-
-
4
1
3
1
-
-
-
-
-
-
1
1
-
1
6
People
87
14
73
41
9
32
184
22
34
55
13
14
14
32
17
6
11
329
Product
35
10
25
31
17
14
631
73
64
46
72
80
69
227
42
2
40
739
Property
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Planet
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total Tax
contribution
305
42
263
149
42
107
1,124
159
136
183
92
112
96
346
99
24
75
1,677
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
152
In general, in the top ten countries where Prysmian operates, an increase in taxes paid can be
observed between 2023 and 2022. This increase is mainly attributable to two factors: (i) the
increase in people taxes borne and collected due to the increase in salaries for the year, applied
in accordance with the Group's Remuneration Policy and Incentive Plans, which in some countries
is associated with increased employment levels; and (ii) higher profit taxes borne attributable
to the increasing trend in taxable income over the years and the mechanisms for paying these
taxes.
From a more detailed analysis, the most significant changes in the tax contribution in the ten
main countries where Prysmian operates concern:
•
Canada
,
where there is an increase in taxes paid, both borne and collected, due to (i)
higher profit taxes borne of Euro 13 million attributable to payments made in 2023 in
relation to 2022, a tax period in which an increase was recognized in taxable income and
(ii) higher product taxes collected of Euro 14 million due to an increase in the level of
transactions subject to this type of tax;
•
The
United States of America
,
where there is an increase in taxes paid, both borne
and collected, due to (i) higher profit taxes borne of Euro 78 million attributable to the
income tax payment mechanism and, in particular, balance payments made in 2023
relating to 2022, a tax period in which an increase was recognized in taxable income, and
(ii) higher people taxes collected of Euro 22 million attributable to an increase in
remuneration recognized to employees;
•
Brazil
,
where there was an increase in taxes paid, both borne and collected, as a result
of (i) higher people taxes borne of Euro 3 million attributable to both an increase in
remuneration paid to employees and an increase in employment levels, (ii) higher product
taxes collected of Euro 4 million consistent with the increase in revenues and (iii) higher
people taxes collected of Euro 2 million for the same reasons as those described in relation
to people taxes borne;
•
France
, where there was (i) an increase in taxes borne as a result of higher people taxes
borne of Euro 11 million relating to an increase in the remuneration paid to employees
and (ii) a decrease in taxes collected as a result of lower product taxes of Euro 18 million,
consistent with the contraction in revenues despite a Euro 9 million increase in people
taxes collected attributable to higher salaries;
•
Germany
,
where there is a reduction in taxes borne due to lower people taxes of Euro
12 million compared to 2022, when extraordinary contributions were made to employee
pension funds. The total amount of taxes collected remains almost stable due to the effect
of (i) lower people taxes of Euro 5 million for the same reason as that described in
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
153
connection with people taxes borne and (ii) higher product taxes of Euro 5 million relating
to the increase in domestic revenues on which these types of taxes apply;
•
Italy
,
where there is a slight increase in taxes borne and a more significant increase in
taxes collected. With regard to taxes borne, we note (i) higher people taxes of Euro 13
million attributable to both an increase in the remuneration paid to employees and an
increase in employment levels and (ii) lower profit taxes of Euro 11 million compared to
2022, the year in which taxes relating to previous years were paid. On the other hand,
with regard to taxes collected, there are (i) higher people taxes of Euro 47 million due to
the same reasons as those described in relation to people taxes borne and (ii) higher
product taxes of Euro 18 million consistent with the increase in revenues.
•
Spain
, where there is an increase in taxes paid, both borne and collected. Taxes borne
increased as a result of (i) higher profit taxes borne of Euro 3 million and (ii) higher
people taxes of Euro 2 million attributable to both an increase in remuneration paid to
employees and an increase in employment levels. Taxes collected increased due to (i)
higher product taxes collected of Euro 10 million attributable to an increase in the level
of transactions subject to this type of tax and (ii) higher people taxes of Euro 7 million
for the same reasons as those described in connection with people taxes borne.
•
The
Netherlands
, where there was mainly an increase in taxes collected due to (i) higher
product taxes of Euro 11 million consistent with the increase in revenues and (ii) higher
people taxes of Euro 4 million attributable to an increase in remuneration recognized to
employees;
•
The
United Kingdom
, where there is an increase in taxes paid, both borne and collected.
Taxes borne increased as a result of (i) higher profit taxes of Euro 2 million and (ii) higher
people taxes of Euro 1 million attributable to an increase in remuneration recognized to
employees. Taxes collected increased due to the combined effect of (i) higher people
taxes of Euro 5 million due to the same reasons as those described in connection with
people taxes borne and (ii) lower product taxes in the amount of Euro 3 million, correlated
with the decline in revenues.
•
China
, where there is mainly an increase in taxes collected due to higher people taxes
of Euro 2 million.
International Tax Reform – Pillar Two
As better described in Section B. ACCOUNTING PRINCIPLES of the Explanatory Notes, the
Organization for Economic Cooperation and Development (OECD)/G20 Inclusive Framework on
Base Erosion and Profit Shifting (OECD/G20 BEPS) has released the Pillar Two anti-Base Erosion
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
154
rules ("Pillar Two") aimed at addressing the tax challenges arising from the digitization of the
global economy through four new tax mechanisms, requiring multinational enterprises with
consolidated revenues exceeding Euro 750 million to pay a minimum level of income taxation.
The rules of Pillar Two, applicable from the fiscal year 2024, have been substantially adopted by
various jurisdictions in which the Group operates. Therefore, the Group falls within the scope of
application of the substantially adopted Pillar Two rules and has assessed its potential exposure
to these rules based on tax declarations, country-by-country reporting, and the most recent
financial statements of Group companies. Based on this assessment, it has been determined
that, for the majority of jurisdictions in which the Group operates, the effective tax rate is higher
than 15%. However, there might be a limited number of jurisdictions where the exemption
provided by the safe harbor is not applicable, and the tax rate for Pillar Two purposes is close to
15%. The Group, demonstrating its transparency in tax matters and a policy not geared towards
evasive strategies, does not anticipate a significant impact from the exposure of these
jurisdictions to Pillar Two regulations.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
155
Cybersecurity
Creating value for our stakeholders also means protecting their personal and sensitive
data and adopting operational procedures that preserve and leverage the wealth of
information owned by the Group.
Below is the identified risk and related mitigation actions pursuant to Italian Legislative Decree
254/2016 (Consolidated Non-Financial Statement).
Risk identified:
In a rapidly changing world where information has significant value and there is growing
interoperability between networks, systems and applications, it is increasingly complex to
manage and protect information assets, ensuring compliance with applicable regulations. This
increased complexity – combined with the proliferation and evolution of persistent cyber threats
– exposes companies to new kinds of risks, whose harmful effects could have a serious impact
in terms of financial loss, brand reputation, compliance, data leakage and business interruption.
In this ever-changing scenario, it is progressively challenging to achieve a secure environment,
minimizing potential adverse impacts on business operations, and guaranteeing compliance with
regulatory requirements.
This complexity is particularly relevant for manufacturers that continue to focus on significant
innovation in products, services, production processes and industry ecosystems in order to be
competitive in a changing global marketplace, adopting new technologies to ensure customer
centricity and increase value-added services as well as business efficiency.
Prysmian carried out a quantitative assessment, including scenario/sensitivity analyses, of the
impact of cyber-attack risk on manufacturing operations, considering the entire life cycle of
assets, the increasing use of IoT systems in operations, and the likely acceleration of these
technologies due to energy transition programs. Based on the "possible" future scenarios defined
by the IEA, this analysis confirms a medium impact in the mid-term, with rising operating costs
and a medium to high impact in the long term.
Mitigation actions:
In this context, Prysmian Group has developed its Information Security Strategy, the main
objective of which is to establish general guidelines for effectively and efficiently managing,
monitoring and protecting the Group's information assets.
The Group's Information and IT Security structure consists of a Cyber Security Competence
Center that reports directly to the Chief Information Security Officer (CISO), a member of the
headquarters HR staff.
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Also in accordance with the NICE and ECSF frameworks, to provide a common descriptive
language and enable workforce continuity, the unit is divided into five areas of specialization
based on activities, expertise, knowledge and professional roles:
1.
Security Culture, Governance and Assurance;
2.
Security Architectures and Engineering;
3.
Security Operations and Analysis;
4.
Security Digital Forensic and Incident Response;
5.
Industrial Control Systems Security.
The organizational structure calls for the involvement of the Lines of Business in IT security
activities through the Information Security Committee, chaired by the SVP Industrial Relations
& Employment Governance & Security (CSO) and permanently consisting of the Group CIO and
Chief Digital Officer, the Chief Risk & Compliance Officer, the Director of Internal Audit, the SVP
Group Operations, the Chief HR and Organization Officer as well as the CISO.
The Group has adopted a comprehensive set of policies, procedures and operating instructions
with the aim of managing and governing, at different levels of detail, issues and processes
related to information security, in application of the Information Security Strategy and its
Framework.
Security documents, such as policies, procedures and operating instructions, are systematically
revised and shared with employees, published on the corporate intranet and made available via
specific on-line training.
Documents related to security, such as policies, procedures, operating instructions and
recommendations, are systematically revised and shared with employees, published on the
corporate intranet and made available via specific on-line training.
In 2023, the Group's second Cyber Security program was completed, the three-year strategic
roadmap was successfully implemented and activities aimed at strengthening information
security and consolidating the maturity achieved were carried out through a set of actions to
reduce overall cyber and compliance risks.
Some significant initiatives carried out during the year:
1.
The operation of the newly acquired security technologies was consolidated, significantly
maintaining the Group's overall level of security, ensuring that increased and exacerbated
emerging technological risk is adequately limited and managed: the necessary and
ongoing updating of the corporate controls and processes designed to safeguard
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information
assets
provides
further
protection
of
industrial
know-how
and
competitiveness in the market. The current reliable and well-established technology stack
makes it possible to weigh fully the interplay between IT security, privacy, ethics and
transparency, in order to better represent the values of each component and meet fully
the expectations of the Company, fostering cross-organizational cooperation.
2.
An organization's cyber capabilities grow as employees understand more about cyber
risks and their role and responsibilities in recognizing and managing them.
The online training courses and “Cyber Security Culture” readiness exercises (simulated
attacks with a personal impact) are mandatory for all employees. Covering the new and
emerging risks, they include those associated with the extensive use of remote
working. Since 2023, blue-collar categories have also received compulsory training in
production- and factory-related risks, while over 90% of new hires have successfully
completed specific on-boarding training.
The enhancement of periodic multi-channel campaigns (via e-mail and through
corporate social media) has further facilitated the learning, processing and consolidation
of content, making training even more engaging and effective.
3.
Alongside the established training provided to all Group employees, the first Qualified
Information Security Training Program was held in 2023. The program is aimed at
individuals in those functions that work most closely with Security and play a significant
and synergistic role, in their own function, for Group Security.
Already in its first year, the Program has been an important step for improving the
integrity and value of corporate security, in the different lines of business, as well as an
opportunity to develop personal and professional expertise at both technical and
cultural levels in Cyber Security. In 2023, 12 colleagues successfully completed the
three progressive level trainings conducted in cooperation with RINA Academy,
completing the Program until they obtained the ISO27001:2022 Lead Auditor
qualification.
4.
The year's geopolitical events confirmed the accuracy of the strategies established in
2022; information security tactics and operational activities around the world responded
effectively to both the changes that have occurred and the persistence of conditions of
consolidated increased risk.
The need for a strategic vision to understand and limit the risks triggered by
unpredictable cyber weapons and rampant information wars has been fully reflected in
the activities of the Information Security Committee.
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The Committee met 6 times during the year, to monitor continuously the development
of major events, highlight and document threats, analyze and inform the business lines
involved, and supervise and sponsor specific activities and initiatives at the branches in
the countries concerned.
The process of managing IT security risks is based on the ISO/IEC 27005 international standard
and extends the existing general process for the management of business risks adopted by the
Group. This process attaches proper importance to security measures, linking them with known
threats and risks, and draws on the results of the analysis driven by the Threat Model.
After this analysis, the risks considered unacceptable with respect to the Group's risk profile will
be mitigated by defining and implementing risk management actions, which will be appropriately
prioritized with reference to the levels of risk identified.
Dependency on Group vendors and on outsourced products and services for the support of critical
IT operations increases the Company's exposure to cyber risks and attacks. The latest and most
advanced vectors of cyber-attacks are directed at suppliers, making additional requirements for
constant supervision and monitoring of the security of the Group's third parties necessary.
The Group is continuously and consistently monitoring the security of its digital footprint with
the support of cyber scoring agencies and this discipline is applied across the extended
ecosystem: the primary scoring agency is Security Scorecard which has measured the maturity
of corporate security in 2023 with a stable score of 89 (out of 100). This score is calculated in
real time using a proprietary algorithm that examines two extrinsic, observable classes of data:
configuration information (which represents the diligence of a company in implementing risk
mitigation best practices) and security events recorded (such as system compromise, data
breach, breach of confidentiality or breach of information integrity).
Security incidents as well as identifiable and attributable vulnerabilities can have a negative
impact on the overall assessment and must be considered and resolved in a timely manner. The
Group is committed to ensuring and maintaining a score that exceeds 85/100.
If the risk factors are not properly managed with corrective measures and action plans, the
confidentiality, integrity and availability of Group information cannot be properly protected. This
may result in damage or financial losses (loss of market competitiveness due to margin reduction
or cost increases), brand reputational losses, operational losses (business interruption or process
delays) and legal losses (non-compliance with regulations, laws and contractual requirements).
At the beginning of 2019, the Group defined and adopted a series of performance indicators to
evaluate the level of information security. By systematically using KPIs and KRIs, Prysmian
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Group can obtain a continuous and updated overview of security, detecting potential deficiencies
and addressing them in a timely manner.
These indicators cover all areas of the information security framework defined at Group level,
targeting two different needs: business metrics provide the management with the clearest and
most direct status information, while technical metrics measure the efficiency and adequacy of
the technological solutions adopted.
Once again during 2023 the Information Security Committee supervised the operating plans for
the implementation of planned initiatives, with periodic updates.
In 2023, about 100 information security events (“incidents”) of varying severity were managed
every month. In addition, 31 Internet domains used for malspam, phishing and ransomware
campaigns were identified and reported to the competent authorities. Furthermore, each month
more than 200 security clearances were issued, authorizing significant changes to IT systems or
providing access to the company’s critical resources. Lastly, 25 internal investigations were
conducted to contain and prevent theft and fraud, and to tackle potential reputational damage.
Prysmian Group, a strategic business for its national and European know-how, has continued
the collaborations envisaged by its membership of associations and consortia, as well as under
conventions with domestic and international institutions, in the form of information sharing about
significant cyber events, including attacks on its own IT infrastructure.
Growing concerns about an increasingly fragmented and unpredictable world have also triggered
a major change in the perceived effectiveness of the cyber security and privacy regulations.
Some aspects of the standards today represent genuine compliance challenges; however, local
and international certification and attestation regulations and standards are increasingly seen as
a suitable and appropriate approach to ensuring greater IT security and system resilience.
In 2023, certification of Prysmian S.p.A.’s ISO/IEC 27001:2013 information security
management system was confirmed by Bureau Veritas in the areas of Cyber Security,
Information Security and Incident Management. Regarding the governance of foreign
subsidiaries, Cyber Essentials and Assurance certifications were confirmed in 2023 for the UK
subsidiaries and Level 1 CMMC compliance for the Group's U.S. subsidiaries.
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Autonomous indicators:
Description
UM
2023
2022
2021
Number of Information Security training courses
Number
27
18
13
Avg time for high-risk vulnerability resolution
Weeks
15
15
17
Percentage of log sources integrated with SIEM(*) solution
Percentage
89
89
83
Number of Security incidents
Number
1.199
707
780
Percentage of cyber-attacks on total security incidents
Percentage
1
3
7
Avg time for forensic activities after an incident
Hours
4
4
4
(*)
Security software that helps recognize potential security threats and vulnerabilities before they have a chance to disrupt business
operations.
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Environmental responsibility
Prysmian Group's ambition is to be the global benchmark in sustainability. And we nurture this
ambition every day with concrete actions. We are working to be the technology player of choice
in the low-carbon transition. Our investments are aimed at increasingly improving sustainability
throughout our entire value chain to accelerate the development of cutting-edge cable
technologies, assets and services. We are committed to the development of greener and smarter
electricity grids, with the awareness that thinking green means thinking about digitalization.
Because it will only be possible to create a virtuous and sustainable economy if it goes hand-in-
hand with new technologies and an efficient system of information flows.
•
Euro 25,000,000 of environmental investments in 2023
•
A- rating in the CDP environmental reporting system in 2023 (Leadership band)
•
9,631,104 GJ (-3.4% vs previous year) of energy consumed in 2023
•
72% (+1% vs previous year) waste sent for recycling in 2023
•
WASH PLEDGE signed, in line with Group HSEE policy commitments
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The following sections describe the risks identified and the associated mitigation actions pursuant
to Italian Legislative Decree no. 254/2016 with reference to the 2023 material topic: Sustainable
innovation and circularity.
Risk identified
: Environmental risks
Description of risk:
The Group's manufacturing activities are subject to specific environmental
regulations. These include the management of raw materials, energy resources, hazardous
substances, water discharges, atmospheric emissions and waste, as well as the prevention of
pollution and minimization of the impact on environmental matrices (soil, sub-soil, water
resources, atmosphere, biodiversity and impacts on nature). Furthermore, changes in these
regulations tend to impose increasingly stringent requirements on firms, often calling for
improvements in technology (best available techniques) and the relevant risk prevention
systems, which generate additional costs. For these reasons, despite the Group's strong, ongoing
commitment to environmental protection, its business operations might still have an impact on
environmental matrices, with possible implications for the continuity of production and economic
and reputational consequences.
Mitigation actions adopted
The Group is actively committed to safeguarding and protecting the environment and conserving
natural resources, in order to create sustainable value for the benefit of both the organization
and our stakeholders. The Group's commitment to these aspects is expressed not only by the
intrinsic characteristics of our products, but also by how our production systems are managed.
In particular, the prevention and reduction of their environmental impact is achieved, for
example, by the efficient use of natural resources, the optimization of logistics flows and the
responsible management of waste. Prysmian's commitment is evidenced, both internally and
externally, by communicating and applying its Health, Safety, Environment and Energy policy,
(as explained in the section dedicated to Circularity). In order to prevent and mitigate
environmental risks, the Group has adopted an ISO14001-certified environmental management
system at 98% of its production locations. Environmental matters are managed centrally by the
Health, Safety & Environment (HSE) function. In coordinating the local HSE functions, this
function adopts systems intended to guarantee strict compliance with the regulations in
accordance with best practices, collects and analyses environmental data using a centralized
platform, monitors the exposures to risk using specific indicators, organizes specific training and
carries out audit work at the production locations.
In line with the HSEE Policy, the centralized HSE management system (compliant with the ISO
14001 and ISO 45001 standards) is being updated to integrate Energy (in line with the
requirements of the ISO 50001 standard), and by the end of 2024 will be adopted by all Group
PRYSMIAN GROUP | DIRECTORS’ REPORT
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business units in the new HSEE version. Meanwhile, over 12% of sites have already implemented
the Energy Management System by obtaining ISO 50001 certification, in several countries such
as Germany, Turkey, the Netherlands, Costa Rica, Colombia, France and Hungary, in addition to
at the Milan Headquarters.
Environmental performance of the Prysmian Group
At the end of 2023, the percentage of ISO14001-certified production sites, concerning
Environmental Management Systems, is 98%, while the ISO45001-certified ones, concerning
Health and Safety Management Systems, is 75%. Various types of organizational unit within the
Group have also been certified, such as R&D, installation activities, and assembly and distribution
centers, etc., adding up to 6 ISO 14001 certificates and 6 ISO 45001 certificates.
The Group promotes the integrated use of ISO 9001-45001-14001-50001 Management
Systems, IT system support, the definition of specific targets and key performance indicators
(KPIs) for individual Regions or Business Units, as essential elements in the sustainability path
of all its companies, in line with the commitments undertaken at Group level.
The matters identified during periodic internal audits or visits by external bodies are managed
directly by the sites concerned, which determine the actions to be implemented and the related
timing. Where it is not possible to meet the deadline set for compliance, the management at the
sites concerned arranges, with support from the country HSE function, to contact the supervisory
bodies, confirming the willingness of Prysmian to implement the necessary measures and
justifying the request for an extension of the original deadline.
Market requirements for environmental product assessment were also met during 2023, most
of which consisted of certified Environmental Product Declarations (EPDs) or, as the case may
be, "Carbon Foot Print" (CFP) certifications or the maintenance of previous certifications,
according to the needs expressed by certain customers in their tender access requirements as
well as internally for various types of initiatives.
From the methodological perspective, as required by the related regulations, EPDs evidence an
in-depth study of the environmental impact of the products concerned, considering all phases in
their life cycle from the manufacture of their raw materials to their end-of-life and transmission
into waste, including the related production processes, as well as installation and usage (Life
Cycle Assessment – LCA). EPDs do not merely calculate the carbon footprint (represented by
greenhouse gases), but extend the analysis to around 20 other environmental impacts. The
assessments and certifications were conducted in accordance with the specific EPD Product
Category Rules (PCRs) devised by Program Operators in the various countries, selecting those
applicable depending on the case and as requested for competitive tendering.
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165
With this year's contribution, certified EPDs totaled about one hundred, covering roughly 120
cables and conductors, mostly low and medium voltage, manufactured by Prysmian in Brazil,
France, Italy, Romania and Spain. The results of 200 other cables are assumed by extrapolation.
In addition, LCA environmental impact studies on high-voltage cables manufactured in China are
currently underway for EPD certification purposes.
Work to prepare, issue and certify EPDs will continue to expand in the near future, in order to
cover an increasing number of product families. Indeed, with a view to continuous improvement,
a broader strategy is being prepared to direct actions toward an increasingly proactive approach,
which – with a view to the future – will consist of the implementation of a group-wide EPD
management system, with a range of responsibilities and roles both centrally and peripherally,
based on the implementation of certified systems for the large-scale assessment of the
environmental impact of EPD-compliant products. To this end, different alternatives will be
evaluated to establish the Group's objectives regarding the EPD coverage of parts of the product
portfolio.
Note that from 2021 onwards, the performance indicators used by operational functions to
evaluate investments and industrial projects include GHG emission savings, where applicable,
as an indicator of their actual environmental benefit, in addition to their energy and economic
efficiency. Energy Audits that are periodically conducted in different countries provide
information on possible areas of improvement and energy savings and GHG emission. In 2023,
more than 20 Energy Audits were carried out at the Group's production units, pursuant to specific
legislation or within the framework of the Energy Management System (ISO 50001), to verify
the adequacy of the Energy Management System, the achievement of established objectives and
the effectiveness of the energy efficiency measures already implemented or to be implemented.
It should be noted that during the last year, the Internal Audit function also conducted several
audits to assess the adequacy of ESG issue management in Prysmian business units, including
Energy Efficiency.
Environmental investments
In 2023, Group investments dedicated to HSE projects, including work on energy efficiency, the
reduction of direct GHG emissions and the optimization of both the management of water-based
cooling systems and the management of waste, involving circularity initiatives, amounted to
about Euro 25 million. Of these, more than Euro 7 million is related to "GHG Emission Reduction
and Energy Efficiency" projects and initiatives, and more than Euro 1.5 million are related to
waste management, activities associated with the circular economy and water resource
management.
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Prysmian participated in the Carbon Disclosure Project (CDP) global environmental reporting
system, disclosing data on its emissions, climate change risks and opportunities and emission
reduction targets, in addition to publicizing its environmental management initiatives,
particularly those aimed at reducing its carbon footprint. In 2023, the Group received an “A-”
rating, positioning it within the Leadership bracket and ahead of the European average rating of
“B”.
Amongst the multiple targeted emission reduction initiatives, the project to reduce SF
6
was
approved centrally at the end of 2021, with a view to cutting the CO
2
eq
emissions associated
with the use of this gas by 90% over roughly 5 years.
In 2023, activities continued at the Livorno, Gron and Montereau sites: thanks to the significant
efforts made, the involvement of every organizational level in managing and monitoring SF
6
consumption (especially in product testing activities) and the implementation of specific
measures including, the introduction of alternative gases, direct emissions associated with SF
6
were reduced by more than 75% compared to the end of 2022.
The project will continue in the coming years until the established reduction targets are met.
With reference to the regulatory risk relating to energy efficiency, several actions have been
taken, including:
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167
• definition of an Energy Audit Plan at the Group's factories, including sites that are currently
not required by law to perform energy audits;
• development of energy efficiency projects at local and global level;
• periodic plant visits to verify their compliance with the rules and standards defined;
• specific training sessions for all Prysmian personnel involved in energy management, including
raising awareness about energy saving and emission reduction issues, for which the Group has
set reduction targets in accordance with the SBTi (Science-Based Target initiative) that include
a Net-Zero target for Scope 1 and 2 emissions by 2035.
The energy efficiency projects launched or continued in 2023 covered different areas of interest:
amongst the known workstreams, the implementation of LED lamps in the last remaining
unequipped factories in LATAM, North America and Northern Europe continued in the course of
2023, until covering all of the group's factories. Similarly, the replacement of motors (from DC
to AC) and boilers or compressors with more energy-efficient machinery continued at several
factories, with a particular focus on the American (Marshall, Williamsport, Lincoln) and Central
European (Balassagyarmat, Slatina, Neustadt) areas. Additional investments were made for
monitoring the condition of compressed air supply/distribution equipment, leak detection and
subsequent maintenance.
One project that was already partially initiated but was significantly accelerated in 2023 is the
implementation of photovoltaic systems.
In addition to the Arco Felice system, which is already in operation, during 2023 the Vilanova
(Spain), Neustadt (Germany) and Pignataro (Italy) factories also successfully started up their
own plants: the same is happening at the Slatina (Romania) factory, with the system set to
begin operating in Q1 2024. These five capitalized systems will generate a combined total of 8.7
GWh per year.
In parallel with owned systems, in the course of 2023 Prysmian intensified its activities to launch
additional photovoltaic systems built under lease, through multi-year agreements with suppliers
and on-site installations, both on the roofs of its plants and on any adjacent vacant land.
Thus, the Morelena (Portugal) and Abrera (Spain) systems were launched in this mode: the
former operating as of October 2023, the latter as of January 2024, with a total generation of
2.8 GWh per year. These two leased systems join the first one already operating in Kistelek
(Hungary) since mid-2022, alone equivalent to 3.3 GWh per year.
Similar initiatives have already been identified and evaluated and are currently being launched
in China, Germany and other Group regions.
At the same time, in order to increase its renewable energy production, a call for tenders for an
off-site Power Purchasing Agreement has been launched for the companies in Italy: the call for
tenders is expected to close in early 2024.
Lastly, Prysmian is initiating specific work streams aimed at optimizing electricity use: one of
them is the installation of the Prycam, an energy monitoring tool that Prysmian produces and
PRYSMIAN GROUP | DIRECTORS’ REPORT
168
markets and capable of detecting the energy consumed in real time and sending data (and
alarms) to a display platform. During the second half of 2023, the first 150 devices were installed
in strategic machines, in four of the Group's European factories: the goal is to reach 2,000 units
installed in Q1 2024, and at the same time to launch efficiency projects deriving from an analysis
of the information gathered.
Environmental data reporting
The following sections describe the risks identified and the associated mitigation actions pursuant
to Italian Legislative Decree no. 254/2016 with reference to the 2023 material topic: “Facilitating
decarbonization to achieve Net-Zero and digitalization”.
Risk identified
Risk linked to the emission of greenhouse gases, including increased operating costs caused by
the introduction of a carbon tax or the application of the Emission Trading Scheme
Description of risk
This risk has been analyzed considering a possible increase in production costs that could result
from the adoption of more restrictive GHG emission laws and regulations, both in the form of
taxation (carbon taxes) and participation in the emissions market (Emission Trading Schemes –
ETS). Prysmian carried out an in-depth analysis to assess the impact of that risk in relation to
the Group’s direct GHG emissions (Scope 1), considering current policies and those announced
by governments and supranational organizations in the areas in which it operates. The exposure
to risk over the 2022-2035 time horizon and with respect to the IEA scenarios analyzed – STEPS,
APS, SDS and NZE – does not appear critical overall, with a low impact over the medium term
and a medium impact over the long term, although the impact on operating costs could vary
markedly across geographical areas. The carbon tax/ETS risk is monitored constantly, not least
with respect to their possible effects on the cost of the raw materials and energy purchased by
the Group (Scope 2).
Mitigation actions adopted
The Group strives to constantly monitor changes in the laws and regulations governing GHG
emissions at an international level, especially in the countries where its production plants are
located. In addition, the Group has established a strategic plan, reflected in the Sustainability
Scorecard, which includes quantitative targets for reducing greenhouse gas emissions, amongst
PRYSMIAN GROUP | DIRECTORS’ REPORT
169
others. Emission reduction targets have been scientifically validated by the Science-Based Target
initiative (SBTi).
Risk identified
Risks linked to the increased severity of extreme weather events
Description of risk
The Group constantly monitors the exposure of all its production sites, considering the entire life
cycle of the assets, to such weather events as storms, floods, hail etc. using CatNet®, a profiling
tool that measures the exposure to geo-specific risks developed by Swiss Re. An exposure
assessment with an extended time horizon to 2035 in a conservative scenario of high CO2
emissions (RCP 8.5) was carried out using this tool, confirming a low overall exposure. Lastly, a
sensitivity analysis was carried out for the 2023-2040 period, assuming a further increase in the
severity and frequency of the extreme weather events that have affected Group assets over the
past 20 years. This analysis confirmed medium exposure to this risk, involving increased
operating costs. The assessment of risks linked to the increased severity of extreme weather
events has been extended to the entire supply chain, for both upstream and downstream
activities, considering a selection of strategic suppliers and customers.
Mitigation actions adopted
The Group has a well-established loss prevention program at all its production factories, which
seeks to foresee and mitigate material losses and stoppages caused by extreme events, not
least by monitoring changes in the weather. Additionally, risk mitigation actions include a Group
agreement with an international company specialized in disaster recovery & restoration services,
as well as insurance cover for both direct losses and loss of profits due to production stoppages.
The assessment of third-party sustainability risks, including risks linked to the increased severity
of weather events, is a fundamental part of the entire supply chain management process.
Risk identified
Risks linked to the rise in sea level (climate change)
Description of risk
Since 2017, the Group has monitored the risk of climate change and, in particular, of rising sea
levels, with a view to evaluating the potential impact on all production locations, considering the
entire life cycle of key assets. A detailed analysis of the exposure to rising sea levels is carried
out every year, supporting the analyses performed using CatNet®, a profiling tool that measures
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170
the exposure to geo-specific risks developed by Swiss Re, with the analyses performed using
Aqueduct, a web platform made available by the World Resources Institute (WRI), in a
conservative high CO2 emissions scenario (RCP 8.5). The analysis confirmed, over a time horizon
extending out to 2080, the absence of direct impacts on the Group’s production plants.
Nevertheless, the rise in sea level could increase exposure to the risk of coastal flooding caused
by storms; this situation would however affect a very limited number of production factories (<
2%). The impact, mainly in the form of increased operating costs or lost sales, would be low.
The exposure will be monitored so that action can be taken ahead of time, including the
introduction of additional control systems, where necessary. The assessment of risks linked to
the rise in sea level has been extended to the entire supply chain for both upstream or
downstream activities, considering a selection of strategic suppliers and customers.
Mitigation actions adopted
The Group has a well-established loss prevention program at all its production factories, which
seeks to foresee and mitigate material losses and stoppages, not least by monitoring changes
in the weather. Local flood protection measures, such as dams, walls etc. also mitigate the risk
of coastal flooding. Additionally, an agreement has been reached with an international company
specialized in disaster recovery & restoration services and insurance cover has been arranged
for both direct losses and loss of profits due to production stoppages. The assessment of third-
party sustainability risks, including risks linked to the rise in sea level, is a fundamental part of
the entire supply chain management process.
Energy
The table below shows the Group's total energy consumption, including that of its fleet.
Energy Consumed (GJ) (*)
Total 2023
Total 2022
Total 2021
Electricity from renewable sources
1,948,875
1,921,399
2,593,155
Electricity from non renewable sources
4,193,696
4,112,089
3,588,272
Natural gas
2,277,375
2,747,360
3,121,660
LPG
127,805
135,365
136,024
Petrol
7,561
7,424
5,905
Diesel
908,062
896,985
411,316
Fuel oil
17,380
5,571
6,050
Steam (purchased, not produced internally)
5,616
9,791
6,977
Purchase district heating or heat from renewable sources
20,318
-
-
Heat (purchased from distribution networks)
123,539
135,931
150,491
Chilled water
-
-
281
Biogas/biofuel/biomass purchased
877
-
-
Total
9,631,104
9,971,915
10,020,131
(*) The term “Energy Consumed” means the number of Gigajoules (GJ) of energy consumed within the organization. This comprises energy purchased from
sources outside the organization (e.g. electricity, heating, cooling and steam purchased for consumption) or generated by the latter (e.g. fuel used in self-
generation activities).
The 2021 figures include estimates for the Chiplun and Sohar sites. The 2022 and 2023 figures contain estimates for the Chiplun site only, since Sohar reported
normally. The figures for 2021, 2022 and 2023 include consumption by the fleet, which were previously reported separately.
The following table shows the energy intensity of the four business lines expressed in Gigajoules
per kilometer or tons of product.
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171
Energy consumed per km/Ton of product (2023)
Power cables GJ/Ton
Telecom cables GJ/km
Optical Fiber GJ/km
Rod/Ton
3.65
0.02
0.03
2.02
Energy consumed per km/Ton of product (2022)
Power cables GJ/Ton
Telecom cables GJ/km
Optical Fiber GJ/km
Rod/Ton
3.57
0.01
0.04
2.05
Energy consumed per km/Ton of product (2021)
Power cables GJ/Ton
Telecom cables GJ/km
Optical Fiber GJ/km
Rod/Ton
3.38
0.02
0.04
2.24
Greenhouse Gas Emissions
Greenhouse gas emissions, measured in tons of CO
2
equivalent, have been calculated using the
methodologies indicated in “The Greenhouse Gas Protocol: A Corporate Accounting and
Reporting Standard (Revised Edition, 2004)” considering:
-
for
Scope 1 emissions
(direct GHG emissions):
o
fuel consumption data;
o
release of refrigerant gases from air conditioning systems;
o
release of SF
6
gas, mainly used for testing activities.
-
for
Scope 2 emissions
(indirect GHG emissions), the consumption of purchased
energy (mostly electricity).
Indirect GHG emissions (Scope 3) account for over 99% of the Group’s total carbon
footprint. Detailed quantification of Scope 3 emissions has shown that roughly 96% of total
emissions generated throughout the value chain are mainly attributable to use of the products
sold. The procurement of raw materials represents more than 3% of the Group total, while the
remainder is split between logistics, investment and other minor categories.
In 2023 Prysmian identified the suppliers deemed significant according to the sustainability
criteria defined by the Group (169 suppliers of metals and raw materials, representing
approximately 50% of the Prysmian Group's total expenditure) and invited them, in collaboration
with CDP, to report their emissions by responding to the CDP Climate Change questionnaire. The
response rate has increased to 53% since 2022, including some suppliers that answered the
questionnaire for the first time. The companies declared their emissions (Scope 1, 2 and in some
cases Scope 3) and allocated them to Prysmian based on revenue. In addition, many suppliers
stated their goals, the initiatives established to reduce emissions and the performance indicators
used (total GHG emissions and/or emissions intensity relative to turnover). These data, along
with other types of analyses and calculations made by the Group to quantify indirect emissions,
are essential for supplier assessment and selection and the identification of criteria to engage
the entire supply chain on climate issues.
With regard to GHG emission reduction targets, in June 2023 SBTi approved the Prysmian
Group's long-term (net-zero) targets; during the long-term target approval process, Prysmian –
at SBTi's request – also recalculated some Scope 3 categories using updated emission factors.
PRYSMIAN GROUP | DIRECTORS’ REPORT
172
Therefore, the value of Scope 3 for 2022 has been revised from what was published in the 2022
Report and is 274,943,685 tCO2eq. Further information about the methodologies used to
calculate the Scope 1, 2 and 3 Emissions can be found in the "Methodology" section of this
document and Prysmian Group’s 2023 GHG Statement.
Emissions of tCOâ‚‚ (*)
Total 2023
Total 2022 (**)
Total 2021
Scope 1
(1)
Direct emissions from combustion (***)
205,762
232,178
216,874
Emissions from refrigerant gas leaks
5,177
3,696
7,047
Emissions from SF6 gas leaks
15,192
61,852
117,186
Total Scope 1
226,131
297,725
341,107
Scope 2
(2)
Location-based
474,715
501,745
512,458
Market-based
389,928
367,379
365,862
Total
Scope 1 and Scope 2 (Location-
based)
(3)
700,846
799,470
853,565
Scope 1 and Scope 2 (Market-based)
(4)
616,059
665,104
706,969
Scope 3
(5)
267,433,725
274,943,685
284,562,292
Total
Scope1, Scope 2 and Scope 3
268,049,784
275,608,789
285,269,261
(*) As in 2020, the GHG emissions of the Chiplun and Sohar sites were estimated in 2021. This was only necessary for the Chiplun site in 2022.
The amounts reported in the Group Scorecard do not contain these estimated values.
(**) The Scope 2 tCOâ‚‚ data for 2021 include the emissions from the purchase of heat in the form of district heating and steam for 7,468 tCO2.
(***) Direct emissions from combustion include emissions from the fleet already separately disclosed in previous non-financial statements. In
2023, direct emissions from combustion amounted to 147.820 tons of CO2 (about 65% of the Group's Scope 1 emissions of 226.131 tons of
CO2).
(1) Scope 1 emissions comprise the direct emissions of the organization, being those generated from resources under its direct control. Reported
Scope 1 emissions refer to combustion processes (natural gas, LPG, petrol, diesel, fuel oil, marine diesel), refrigerant gas leaks (emissions from
refrigerant gas leaks currently consist of releases of Chlorofluorocarbons – CFCs – and Hydrochlorofluorocarbons – HCFCs – from air conditioning
systems), and SF6 gas leaks.
(2) Scope 2 Emissions comprise the indirect emissions of the organization, being those deriving from its direct consumption excluding generation
activities. These include: purchased electricity, district heating and steam.
(3) Scope 2 Emissions – Location-based method quantifies these emissions with reference to average CO2 emission factors for the energy
generated within well-defined (e.g. local, sub-national or national) geographical boundaries.
(4) Scope 2 Emissions – Market-based method quantifies these emissions with reference to the CO2 emissions of the energy suppliers from
which the reporting company purchases, under contract, an electricity package. Markets differ on the contracts available for the purchase of
energy or on the claim of specific attributes, but may include: energy guarantees of origin and direct contracts with suppliers (RECs, GOs, I-
REC, etc.); supplier-specific emission factors; default emission factors that represent uncontrolled or unclaimed energy and emissions (defined
as “residual mix”); average regional, sub-national or national emission factors.
(5) Scope 3 Emissions comprise the indirect emissions generated by the organization throughout the value chain, via its upstream and
downstream processes. These include the emissions deriving from purchased goods and services, the purchase of capital goods, fuel
consumption and energy-related activities, upstream transportation and distribution, waste generated by operations, business travel, employee
commuting, upstream leased assets, downstream transportation and distribution, use of sold products, end-of-life treatment of sold products,
and investments.
In addition to calculating GHG emissions at Group level, the calculation method developed by
Prysmian can be used to quantify the Carbon Footprint at individual Country/Region level.
In 2023, the Costa Rican organization calculated the Carbon Footprint and obtained certification
in accordance with the ISO 14064 standard.
Prysmian France has also quantified the Carbon Footprint with reference to the French scope, in
accordance with the legislative requirement and in line with the GHG Protocol and the
methodology of the French "Agence de la transition écologique" Ministry, which in turn complies
with ISO 14069 standard. These initiatives show how the Climate Ambition established at Group
level is an integral part of the business across every level of the organization.
The emissions intensity of each business line is shown below in tons of CO
2
eq per ton or kilometer
of product.
PRYSMIAN GROUP | DIRECTORS’ REPORT
173
GHG Emission per km/Ton of product (2023)
Power
cables tCO
2
eq/Ton
Telecom
cables tCO
2
eq/Km
Optical fibers
tCO
2
eq/Km
Rod
tCO
2
eq/Ton
Scope 1
Total Scope 1
0.09710
0.00014
0.00024
0.09221
Scope 2
Location based
0.17380
0.00119
0.00184
0.01329
Market based
0.13082
0.00095
0.00214
0.01558
Total
Scope 1 and Scope 2 (Location
based)
0.27090
0.00134
0.00209
0.10551
Scope 1 and Scope 2 (Market
based)
0.22792
0.00109
0.00239
0.10780
GHG Emission per km/Ton of product (2022)
Scope 1
Total Scope 1
0.10909
0.00014
0.00083
0.09411
Scope 2
Location based
0.18327
0.00113
0.00159
0.01361
Market based
0.13754
0.00093
0.00086
0.01501
Total
Scope 1 e Scope 2 (Location
based)
0.29236
0.00127
0.00242
0.10772
Scope 1 e Scope 2 (Market based)
0.24663
0.00108
0.00169
0.10912
GHG Emission per km/Ton of product (2021)
Scope 1
Total Scope 1
0.09378
0.00019
0.00110
0.10271
Scope 2
Location based
0.18755
0.00136
0.00140
0.01529
Market based
0.12868
0.00116
0.00086
0.02233
Total
Scope 1 e Scope 2 (Location
based)
0.28133
0.00156
0.00250
0.11800
Scope 1 e Scope 2 (Market based)
0.22246
0.00136
0.00195
0.12504
Other atmospheric emissions
At Group level, considerable attention is paid to Greenhouse Gas (GHG) emissions, which have
high significance at Group level, both because of Prysmian's commitments to environmental
sustainability and because these emissions regard all operating units, as they are directly
associated with the use of energy sources and – to a lesser extent – the use of certain
greenhouse gases.
In line with the HSEE Policy’s commitment to preventing pollution and minimizing health risks,
Prysmian also monitors
Volatile Organic Compound
emissions from certain production
processes and maintenance at Group level. Significant reductions in these emissions have
already been achieved in the past by gradually introducing new methods and/or products,
particularly for cable degreasing, cleaning and stamping operations. In any case, Prysmian
continues to monitor this indicator, estimating – as a precaution – that the total amount of VOCs
emitted into the atmosphere is equal to the total consumption of substances containing organic
solvents.
In 2023, the total amount of
Volatile Organic Compounds
(VOCs)
emitted into the atmosphere
was approximately 500 tons.
PRYSMIAN GROUP | DIRECTORS’ REPORT
174
Waste
In order to meet the commitments contained in the HSEE policy, mentioned earlier, the Group
manages the various environmental matters by implementing Environmental Management
Systems (EMS) compliant with the ISO 14001:2015 international standard. The application of
the EMS makes it possible to define plans, processes and practices intended to improve the
organization's environmental performance. In addition, specific procedures and operating
instructions have been prepared at Group level, with regular updates that also reflect any
legislative changes and innovations, for the correct identification of:
1.
Activities, processes, projects and investments that generate waste, and the evaluation
of the associated potential environmental impacts, under both normal and
extreme/emergency conditions;
2.
Types of waste generated, their classification under locally applicable legislation and
proper grouping and reporting, in line with internal criteria established uniformly at
Group level;
3.
Specific instructions and training for staff on the proper handling of waste in the
Group's operating units and for its disposal in accordance with regulatory requirements,
but also in order to minimize the environmental impact of operations downstream in the
supply chain;
4.
Specific instructions and training for staff on the reporting of waste in the database
managed by HSE (database for reporting in the NFS), with particular attention to the
reporting of all types of production waste;
5.
Specific requirements and/or performance indicators applicable to the various types of
suppliers, with random HSE audits to verify waste operations, in accordance with
contractual agreements and regulatory requirements.
In order to track and assess the sustainability of business partners with regard to waste
management activities and processes, some group companies have defined specific criteria
addressing their ability and technologies to process the various categories of waste, in order to
ensure the achievement of their objectives and contribute to reducing the environmental impacts
of waste disposal.
The main types of waste generated by production activities have been split into specific
categories, classifying their level of danger (hazardous waste and non-hazardous waste)
according to the related EU classification, regardless of the country of origin and disposal of the
waste. An exception is made for certain types of waste (such as laboratory chemicals), whose
classification depends on local regulatory requirements.
The data on waste generated is collected and reported promptly at operating unit level using a
common database (HSEDM). The reporting system makes it possible to aggregate this data by
PRYSMIAN GROUP | DIRECTORS’ REPORT
175
legal entity, country, region and ultimately for the entire Group. In general, the operating unit
coincides with the plant, except in certain cases in which there are several operating units within
the same plant. The Group’s commercial and administrative offices and distribution centers are
not included in the waste reporting procedure as they are not material.
Since 2020, operating units input their environmental data both monthly and annually, thus
improving data collection and analysis at the various organizational levels. Further information
about how data is reported can be found in the paragraphs below on “Actions to prevent waste
generation throughout the Prysmian value chain” and “Waste reporting process”.
The management of waste and its proper disposal are regarded as important matters that are
managed locally within the Environmental Management System.
During 2023 special attention was paid to standardizing internal activities for the management
of production waste, a significant item in factory waste management. In cooperation with the
affiliates and industrial directors in each region, an official Group Operating Instruction was
drafted to present the best practices already in use and to define/standardize the basic rules for
separating, handling, weighing and recording factory production waste. The goal is to maintain
control over the process so as to maximize its effectiveness, both from an economic (value
ascribed to the waste) and environmental (better separation and differentiation of the various
types of waste) point of view. Compliance with this Instruction is subject to audit starting in
January 2024.
The level of global deviation within the scope of the company remained constant at 2022
levels. Manufacturing efficiency initiatives continued, both with the cooperation of Central
Manufacturing and at a purely local level. These practices aim to reduce production waste,
making it more efficient.
The following results are provided as examples:
- Presov (Slovakia): extra lengths of cable at the jacketing stage were reduced by 15%
(composite scrap of copper, sheath and possible metal braid).
- Kistelek (Hungary): copper leftover waste at the stranding stage was reduced by 30%.
- Pikkala (Finland): an improved process control and quality mindset led to the reduction of the
overall waste rate from 6.6% to 5.5%, with a change in absolute value of about 800 tons less
waste produced.
- Mudanya (Turkey): improved control of support activities (logistics, R&D testing) have led to
a considerable reduction in "non-production" waste, equivalent to about 1000 tons.
Generation of waste and impacts of the waste generated
The management of waste is highly correlated with the processes that generate it and those
followed for its disposal. Prysmian contributes directly and indirectly to the positive and negative
impacts associated with waste generation. The direct impact of the Group on the creation and
quality of waste is linked to its production activities. In this context and consistent with the
PRYSMIAN GROUP | DIRECTORS’ REPORT
176
European guidelines for waste, Prysmian is committed to preventing the production of waste by
promoting circular activities.
In a broader context, Prysmian intends to become an industry leader in the use of recycled
materials and the design of products that can be recycled more easily. For this purpose, greater
care is dedicated to supplier selection, both up- and downstream of the value chain. This has
resulted on one hand in increased purchases of recycled materials and on the other in the
activation of business relationships with waste managers that share Prysmian's vision in terms
of sustainability and circularity.
Actions to prevent waste generation throughout the Prysmian value chain
Upstream, the Prysmian Group has decided to include more specific HSE requirements in its
processes for selecting new business partners. To achieve this, a project has been underway
since 2021 to implement a vendor management portal in order to standardize various purchasing
processes. This project will make it possible to structure the supplier qualification processes
using questionnaires, with questions covering many topics including HSE.
Downstream, with regard to relations with the various waste management contractors, Prysmian
has introduced specific requirements and/or performance indicators applicable to the various
types of suppliers, with random HSE audits to verify waste operations, in accordance with
contractual agreements and regulatory requirements. Among the performance indicators to be
included in the requirements for competitive tendering, Prysmian is considering adding a
recycled materials percentage. On this last point, some units have already taken advance action.
For example, in the Netherlands, the call for tenders to select a new waste management service
provider included specific requirements regarding circularity and recyclability (requirements
based on the performance of their plants).
Waste reporting process
The waste reporting process uses a common tool (HSEDM) that covers all production sites except
for Chiplun (India); accordingly, data for that plant is estimated.
Environmental data (including the quantity of waste) is input monthly, providing a detailed
picture of how consumption and the production of waste vary over time.
In order to obtain more certain, precise and reliable data and increase the commitment in this
area at various organizational levels, HSE Corporate worked with management in 2022 to
implement a new procedure for the multi-level control and approval of environmental data input
to HSEDM.
The procedure involves reporting the following information:
·
the total weight in tons and the percentage of waste generated, broken down by
composition;
PRYSMIAN GROUP | DIRECTORS’ REPORT
177
·
the total weight in tons and the percentage of hazardous and non-hazardous waste intended
for disposal at external sites, and its breakdown according to disposal methods (incineration,
landfilling, other disposal operations);
·
the total weight in tons of waste not intended for disposal but for recycling at external
sites, with a breakdown by hazardous waste and non-hazardous waste;
·
the methods of calculation and assumptions made, estimation criteria adopted and tools
used to report the waste generated.
In order to report using consistent criteria, as required by the relevant European regulations,
the Corporate HSE function decided to apply the same waste classification criteria in all operating
units. In this respect, the main types of waste generated by production activities have been split
into specific categories, assigning a level of danger (hazardous waste and non-hazardous waste)
to each of them.
There are various destination categories for each type of waste:
-
Recycling – for which Prysmian has set a Group target (increase in % recycled);
-
Incinerator;
-
Landfill;
-
Other (residual category).
The total waste generated by Group, shown in the following table, includes that of the fleet.
Waste produced by type (kg)
Total 2023
Total 2022
Total 2021
Hazardous
12,381,045
14,050,194
13,924,252
Ingredients of hazard compunds
401,187
607,561
568,389
Asbestos
538,141
1,258,609
1,167,066
Equipment containing PCBs
5,194
5,040
339
Solvents
240,960
220,901
154,637
Waste waxes and fats
142,941
173,927
187,043
Waste oil
563,208
686,913
657,773
Copper and aluminium sludge
790,547
867,378
1,052,258
Waste emulsions
3,143,551
3,395,798
2,876,611
Waste ink
13,530
38,131
45,042
Contaminated sawdust
223,509
146,717
98,319
Other hazardous waste
6,318,278
6,649,220
7,116,775
Non-hazardous
222,782,796
220,355,520
199,677,575
Compound scrap
24,669,586
23,682,339
21,956,798
Non-hazardous packaging
25,596,033
25,492,982
26,159,244
Non-hazardous ingredients for compounds
2,317,789
1,875,905
1,156,012
Sludge
23,240,231
22,982,236
1,799,508
Urban waste
21,434,446
23,099,982
23,184,858
Other non hazardous materials
27,353,525
26,334,108
27,567,830
Various alkalis
287,360
462,900
684,360
Scrap cable
97,883,825
96,425,069
97,168,965
Total
235,163,841
234,405,714
213,601,827
The figures for 2023 include estimates for the Chiplun site, while the Sohar site has reported normally
since 2022.
The table below shows the waste destination for the 2021-2023 three-year period:
PRYSMIAN GROUP | DIRECTORS’ REPORT
178
Waste produced
by destination
(kg)
Total 2023
% 2023
Total 2022
% 2022
Total 2021
% 2021
Hazardous
12,381,045
14,050,194
13,924,252
Landfill
1,740,750
14%
2,166,186
15%
2,419,302
17%
Incinerator
2,852,812
23%
2,815,747
20%
3,134,748
23%
Recycled
6,027,126
49%
6,620,003
47%
6,492,312
47%
Other
1,760,357
14%
2,448,257
17%
1,877,890
13%
Non hazardous
222,782,796
220,355,520
199,677,575
Landfill
41,793,434
19%
42,373,457
19%
42,212,602
21%
Incinerator
13,030,721
6%
13,104,990
6%
11,686,255
6%
Recycled
162,821,860
73%
159,240,565
72%
140,297,687
70%
Other
5,136,781
2%
5,636,508
3%
5,481,031
3%
Total
235,163,841
234,405,714
213,601,827
Landfill
43,534,183
19%
44,539,642
19%
44,631,904
21%
Incinerator
15,883,533
7%
15,920,738
7%
14,821,003
7%
Recycled
168,848,986
72%
165,860,569
71%
146,789,999
69%
Other
6,897,138
3%
8,084,765
3%
7,358,921
3%
The final destination of a small amount of waste was still unconfirmed when the report was
published (as permitted by local legislation).
Amongst the initiatives aimed at improved waste management put into place by Group
companies, it is worth mentioning in particular the "zero landfill" goal for all sites set by the Latin
American company as part of its strategic planning, to be achieved by 2025. A dedicated project
was launched with the aim of mapping waste, suppliers and destinations and assessing
opportunities for the diversification of landfill waste.
Part of the increases recorded in 2023 were due to asbestos remediation work that involved sending waste to the landfill.
Circular economy
Prysmian is committed to implementing circular economy practices to reduce its environmental
impact, using fewer resources to manufacture it products and keeping materials within the
production cycle as long as possible.
The Group’s approach to circularity addresses three main aspects:
PRYSMIAN GROUP | DIRECTORS’ REPORT
179
1)
Procurement
of recycled materials:
In recent years, Prysmian has focused effort
on research into and the development of a
supply chain capable of offering recycled materials
, especially metals and plastics for the
insulation and protection of cables. Notably, the use of secondary materials in the cables industry
is often limited by their availability. As an example, this is the case for recycled copper, with
limited market supply that is often only suitable for more basic applications. Accordingly, it is
essential to launch long-term projects based on dialogue with suppliers, which enable them to
make the investments needed to build circular supply chains.
2)
Minimization of scrap materials
:
Over the years, Prysmian has worked hard to make better and more conscious use of its
resources, thus reducing the scrap generated by every production process.
The Group highlights this commitment by applying its
Health, Safety, Environment and
Energy Policy
, as updated and approved by Prysmian Group CEO Valerio Battista and the top
management in 2023, for the systematic management of all HSE aspects and the optimized use
of resources and materials. All these issues are considered mandatory for the achievement of
Group objectives and the creation of value for all stakeholders. Prysmian communicates this
policy to all internal and external stakeholders by publishing it on the Group’s website
30
as well
as on the corporate intranet.
3)
Recycling of waste
downstream of the factories:
For several years now, Prysmian has set targets in order to increase the percentage of recycled
waste, thus also reducing the amount of waste sent to the landfill and/or for incineration. In
addition to communicating its targets, the Company shares its views, ideas and results with
various stakeholders in order to facilitate collaboration and create meaningful relations.
In 2023, the percentage of waste (hazardous + non-hazardous) sent for recycling reached 72%,
and the portion of waste sent to the landfill constitutes, on average, about 19% of the total
amount of waste generated. Please refer to the "Waste reporting process" section and the
relative tables.
Water
The following sections describe the risks identified and the associated water consumption
mitigation actions pursuant to Italian Legislative Decree 254/2016 with reference to the 2023
material
topic: Sustainable innovation and circularity.
30
PRYSMIAN GROUP | DIRECTORS’ REPORT
180
Risk identified:
Risks related to the availability of water
Description of risk:
Water is consumed at Prysmian factories mainly for industrial use and, in
particular, for cooling purposes during certain processes. Cooling water is recirculated, in whole
or in part, at most factories in order reduce the volume of water drawn. Each year, Prysmian
carries out a water stress analysis, considering the ratio of water demand to water available.
This analysis uses the web-based “Aqueduct” platform, developed by the World Resources
Institute (WRI), to evaluate the geographical position of all Group plants exposed to the risk of
reduced water availability, over a time horizon extending out to 2040, considering the entire life
cycle of each asset. The analysis shows that about 25% of the plants are located in areas with
an extremely high water stress risk in a conservative, high CO
2
emissions scenario (indicated by
the Intergovernmental Panel on Climate Change – IPCC, RCP 8.5); however, considering the
mitigation actions adopted, the financial impact remains low. There are similar conclusions for
lower CO
2
emissions scenarios (IPCC, RCP 2.6). The assessment of water availability risks has
been extended to the entire supply chain (upstream or downstream activities and customers),
considering a selection of strategic suppliers and customers.
Mitigation actions adopted
Prysmian regularly measures the volume of water drawn at its production locations, analyzing
and checking the cooling process parameters to ensure the efficiency of water consumption; in
this regard, water supply systems are maintained appropriately in order to avoid significant
leakages. For the majority of factories for which water availability or water stress risks have
been identified, it must also be borne in mind that current production processes employ water
recirculation in order to reduce consumption. Lastly, the mitigation plan already envisages
further improvements in the percentage of water recirculated and/or the installation of new
recirculation systems to optimize water consumption, where necessary or cost effective, thus
lowering exposure to the risk. With regard to the supply chain, the assessment of third-party
sustainability risks, including water availability, is a fundamental part of the entire supply chain
management process.
Prysmian production sites mainly use water for cooling purposes; accordingly, the quality
specifications for industrial water merely seek to prevent all biological and/or corrosion risks
within the cooling circuits. For this purpose, some factories need to use softeners or biological
treatments, depending on the source from which the water is drawn and its characteristics.
On-site wells are the main sources of water, satisfying more than half of all water needs,
supported by other sources of surface water and the public water main. In order to optimize the
consumption of water and energy, the process water used for cooling at many Prysmian plants
PRYSMIAN GROUP | DIRECTORS’ REPORT
181
is recirculated, either totally or partially, depending on the situation. As a result, the volume of
water drawn is low in many cases.
Cooling water is recirculated, either totally or partially, at most plants in order to optimize the
volume of water drawn. From the analysis conducted on 93% of the operating units, the results
show that most of the factories have recirculation systems, with percentages ranging from 99%
to 100% in 45% of the cases and from 95% to 99% in 27% of the cases. Recirculation rates
below 95% were found in about 10% of the plants
.
This situation does not apply to the remaining
11% of plants.
The Group reports any information useful for understanding its water resource management
methods, highlighting the systems and procedures already in place, which help to limit the
significance of its impacts. At the same time, Prysmian communicates the assessments carried
out and the conclusions that have emerged, ensuring maximum transparency to all
Stakeholders.
Considering the quantity and quality of water sources, the type of usage and existing
recirculation systems, it was determined that the most significant water-related impact is not
directly associated with organizational activities, but rather with the supply chain and, in
particular, with the production cycles of suppliers of raw materials, especially metals. For this
reason, in addition to continuing to track and audit “critical” suppliers with reference to
sustainability criteria and indicators, Prysmian extended assessment of the risks related to water
availability to the entire supply chain in 2021.
In addition, the Group has introduced specific
rating systems, including ISO14001 certification and completion of the CDP Water Security
Questionnaire, as indicators of the proper management of all environmental aspects/impacts by
its suppliers.
Also in 2023, the Group's major suppliers (169 suppliers of metals and raw materials,
representing about 50% of the Group's total expenditure) were invited to complete the CDP
Water Security questionnaire. The response rate was 39%, slightly higher than last year.
Information and data reported through the CDP allowed Prysmian to perform an initial
assessment of the significant impacts and/or risks associated with the Water resource in its
Supply Chain, in terms of absolute consumption, efficiency of water resource use – particularly
in areas with "water stress" – and potential pollution of water resources. Prysmian plans to
extend this assessment to a more significant portion of the Supply Chain, and to this end will
reinforce supplier engagement, with the aim of ensuring a higher response rate to the CDP
Water-Security questionnaire and integrating the completion of the survey and the
corresponding score obtained amongst assessment and selection criteria.
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182
At local level, the water-related impact is analyzed via the Environmental Analyses carried out
as part of the ISO 14001:2015 management systems, and in line with local legislation.
In particular, Prysmian:
a.
Measures the volume of water drawn at its plants.
This data is monitored at both
local and Group levels, recorded in the Environmental Management System at
corporate level and disclosed in this Non-Financial Statement, as required by the
guidelines for GRI 303 Water and Effluents. Prysmian assumes that water consumption
is the same as the volume of water drawn. When determining the volume of water
drawn at plants, all variables are measured either directly (through dedicated meter)
or indirectly (using a water report). Water consumption is reported by all plants except
for Chiplun (India), whose data has been estimated. With regard to the discharge of
water, the Group collects data on the quantity of water returned to surface waters in a
specific section of the common database (HSEDM), where each plant can input the
volumes
recorded.
The type of measurements performed on effluents and their frequency are established
locally, partly because industrial discharges are virtually zero in many cases thanks to
recirculation systems. The data is periodically monitored and measured locally within
the Environmental Management System. Increased effort by the Group to monitor
water-related parameters might well result, in future, in a complete calculation of total
discharges so that the trends can be analyzed better.
b.
Carries out a water stress analysis
, considering the ratio of water demand to
available water up to the year 2040. This analysis uses the “Aqueduct” tool, developed
by the World Resources Institute (WRI), as also recommended by “GRI 303 Water and
Effluents” Standard and the Task force on Climate-related Financial Disclosures (TCFD),
to evaluate the geographical position of the Group’s plants exposed to the risk of
reduced water availability.
In 2023, the water drawn from water stress areas represented about 28% of the total
volume drawn by the Group.
Prysmian does not measure or monitor at Group level the volume of water discharges by
treatment method, given the low significance of this parameter. Treatment units are installed
upstream of discharges, if necessary, in order to ensure regulatory compliance, minimize the
potential impact on the receiving body of water and avoid incidents of any kind.
The table below provides information about the amount of water drawn by source in the 2021-
2023 three-year period:
Water drawn (m3) by source 2023
Water stress
areas
All areas
Total
Water from wells
1,497,471
2,430,695
3,928,166
PRYSMIAN GROUP | DIRECTORS’ REPORT
183
Water from public water main
457,524
2,134,877
2,592,401
Water from other sources – Fresh water
-
519,512
519,512
Total
1,954,995
5,085,084
7,040,079
Water drawn (m3) by source 2022
Water stress
areas
All areas
Total
Water from wells
1,704,920
2,476,684
4,181,604
Water from public water main
474,587
2,387,648
2,862,234
Water from other sources – Fresh water
-
717,636
717,636
Total
2,179,507
5,581,968
7,761,474
Water drawn (m3) by source 2021
Water stress
areas
All areas
Total
Water from wells
1,975,482
2,745,141
4,809,692
Water from public water main
432,853
2,120,525
2,601,554
Water from other sources – Fresh water
-
1,208,089
1,230,884
Total
2,408,335
6,073,755
8,642,130
On the other hand, it is presumed that water consumption is well approximated by water drawn.
In line with the pledges of the HSEE Policy, in 2023 Prysmian signed the WASH PLEDGE, which
is the first corporate-sponsored initiative on access to safe water, sanitation and hygiene at the
workplace, launched in 2013 and re-proposed in 2021 by the World Business Council for
Sustainable Development (WBCSD).
With this pledge, signed by the Chief Sustainability Officer of Prysmian Group in July 2023,
Prysmian aims to ensure access to safe water, sanitation and hygiene in the workplace for all
workers at the Group's production units, supporting partners throughout the supply chain and
the communities where our units are located.
Prysmian has already initiated activities relating to WASH issues, requiring all production units
to
complete
the
Self-Assessment
questionnaire
made
available
by
the
WBCSD
by the end of 2023, to conduct an initial screening aimed at supporting
decision-making and the initiatives and actions to be taken.
In early 2024, the HSE and Sustainability functions will analyze the responses obtained,
identifying any gaps and/or required improvements, and define a Plan to be implemented in the
different Regions in the coming years, to ensure compliance with the WASH criteria, providing
for the engagement of the supply chain and local communities where necessary.
Biodiversity
The following section describes the risks identified and the associated mitigation actions pursuant
to Italian Legislative Decree no. 254/2016 with reference to the 2023 material topic: Biodiversity
and impacts on nature
Risk identified
Biodiversity-related risks (e.g., impact on animal and/or plant species near areas where
Prysmian operates, consequences of Prysmian products and dependency on ecosystems)
Mitigation actions
PRYSMIAN GROUP | DIRECTORS’ REPORT
184
The environmental aspects potentially impacted by Prysmian, with possible adverse
consequences for the condition of the biosphere, include the biodiversity of animal and plant
species.
In line with its HSEE Policy, updated in 2023, Prysmian is committed to identifying and assessing
any biodiversity-related risks, applying a hierarchical mitigation approach (avoid, minimize,
restore and compensate) to all operations.
With reference to the Group's
operating units
, Prysmian has established an inventory of
protected areas, which shows that most plants belonging to the Prysmian Group are not located
in or near protected areas or where endangered species are potentially present.
In 2023, to meet and reinforce the commitments made, Prysmian has decided to quantify any
impacts on animals and/or plants in the vicinity of the areas in which it operates, as well as any
impacts/dependencies on ecosystem services that the Group's units rely on, in order to seek
opportunities to reduce and mitigate these risks.
For production sites, the Group screened with the "Biodiversity Risk Filter" tool provided by WWF,
taking into consideration the location of Prysmian sites and applying different risk categories and
indicators. The Group's biodiversity footprint shows that about 13% of Prysmian sites are
potentially affected by significant biodiversity-related risks. However, an analysis at the level of
each plant made it possible to customize the tool result, confirming that the physical and
reputational risks identified have already been assessed and/or mitigated, confirming the
absence of potential dependencies or significant impacts on biodiversity for all of the Group's
production sites.
The construction of new plants or the performance of local activities/services involves careful
planning that on the basis of biodiversity regulations, the presence and geographical proximity
of protected areas or areas where potentially endangered species are present and specific
feasibility studies, aims to reduce impacts on biodiversity, not only in relation to the preservation
of existing conditions, but sometimes from the perspective of Biodiversity Net Gain (BNG). This
goal is continuously monitored through the implementation of actions aimed at avoiding and
preventing the occurrence of negative impacts on biodiversity.
In the context of
marine and land installation activities
, which may take place in areas of
high natural interest, environmental impacts in areas where Prysmian is required to operate,
including biodiversity, are assessed at the project level. Any protection measures to safeguard
species identified as at risk according to national regulations, and the mitigation measures
required in case of undesirable events, are an integral part of the project contract documentation
that contains the specific requirements issued by the competent authorities,
PRYSMIAN GROUP | DIRECTORS’ REPORT
185
Offshore installation may involve operations in areas where there is considerable diversity of
cetacean species that use sounds of different frequency bands for multiple activities, such as
communication, navigation, hunting and, more generally, group social activities such as bonding,
warnings and maternal relationships. In these cases, Marine Mammal Observer (MMO) and
Passive Acoustic Monitoring (PAM) are used on board the vessel to check for "animals of
interest", to conduct pre-operational research of marine mammals before work begins and to
ensure continuous monitoring during operations.
Prysmian applies best practices that can ensure that any material used as an erosion and
offshore cable protection system is made from natural or engineered stone in order not to inhibit
the growth of epibenthic species, by providing three-dimensional complexity in height and in
interstitial spaces where feasible. Prysmian decided to employ bioactive concrete (i.e., containing
bio-enhancing mixtures) to strengthen primary erosion protection (e.g., concrete mattresses)
and to promote biotic growth. In addition, because this type of mattress replicates the local
marine environment, marine species use the infrastructure as their habitat, thus resulting in a
more environmentally sustainable alternative that offers better protection than traditional
concrete mattresses.
Where Posidonia is present, specific equipment that can ensure the protection of this plant is
used to bury the cables in trenches and backfill them. As far as the Elba-Piombino project is
concerned, a buoyancy control machine developed specifically for the protection of underwater
cables in a marine environment inhabited by Posidonia was used. The equipment consists of a
chain trencher installed on a buoyancy control structure and activated by divers. The machine is
equipped with several burying systems, a system for harvesting and repositioning Posidonia,
and a machine to prevent the crushing of plants.
After the trenching and jetting activities, the backfilling phase is initiated to reestablish the
original seafloor level down to the base of the leaf substrate, thus facilitating the natural (or
artificial, through replanting) restoration of the plant.
Bird populations whether wintering, migratory, habitually present and/or breeding species are
protected in accordance with European nature directives (Habitats Directive 79/409/EC and Birds
Directive 92/43/EC)
Special Protection Areas (SPAs) for rare or vulnerable species, as well as for all regularly
migrating species, are identified and monitored during project implementation, paying special
attention to the presence of waterways, lakes, swamps and marshes of international significance.
Where necessary, bird deterrents such as "Hawk Kites" are used, or soundproofing systems (eco-
barriers) or other types of deterrents such as reflective tapes are installed.
In 2023, project-based risk analyses that include an assessment of environmental aspects
associated with biodiversity impacts have shown a residual risk that deems the occurrence of
potentially relevant scenarios unlikely.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
186
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
188
People, Prysmian’s human capital
The Prysmian Group has always invested in its people and local communities. Because for us,
growth means being connected and spreading the culture of sustainability throughout the entire
corporate population all over the world. We know that every one of our employees is different
and has a story, and we are aware of the importance of each individual within the organization.
This is the real linchpin of Prysmian’s trajectory. Caring for, valuing and cultivating our people
is the goal of our Social Ambition. Because only by increasing the level of Diversity, Equity and
Inclusion, including digital diversity, will it be possible to be the virtuous company we strive to
become.
•
about 30,000 employees, of whom 20% are women
•
143 hires, +40 vs previous year from global "STEM IT" attraction and recruiting program
•
7,140 employees – including 67% men, 31% women and 2 “other” – involved in the P3
performance assessment process
•
35.67 hours of training per capita in 2023 (+23% vs previous year)
•
64% of employees covered by collective bargaining agreements
•
Human Rights Due Diligence of production sites 100% completed and 9 audits for 9
factories in 2023
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
189
Prysmian recognizes that its people are and always have been a fundamental asset to the
business. The history and the success of the Group derive directly from the know-how and skills
of our employees, as well as from their engagement and constant motivation to support our
growth towards the future.
In an era marked by challenges and uncertainty, such as those characterizing the global socio-
economic and geopolitical context during 2023, Prysmian’s human capital strategy, launched in
2015, has focused increasingly on caring for its people and pursuing sustainability objectives.
The following Prysmian-generated
impacts
are associated with the material theme "Well-being,
engagement and improvement of human capital skills".
•
Positive impacts:
o
Well-being of human capital: promote work-life balance practices within the
organization;
o
Upskilling: reinforcement and improvement of personnel skills and talent
development;
o
Engagement: adoption of policies to safeguard and promote the well-being of
people;
•
Negative impacts:
o
Potential injuries, mental and physical illnesses due to failure to spread the
health and safety culture in the work environment.
Specifically, to mitigate negative impacts and, at the same time, improve on the positive results
already achieved in prior years, Prysmian implemented a series of initiatives during 2023 in the
following areas:
•
constant improvement and development of the organizational model
, consistent
with our business strategies and priorities and the enhancement of talent;
•
strategic planning of resources
in order to ensure the compatibility of our human
capital with the needs of the business in terms of competencies and skills;
•
focus on employer branding and talent attraction
;
•
talent management and widespread career and development opportunities
, with
the implementation of the global performance and potential assessment processes and –
at the same time – with the strengthening of managerial and technical skills with a view
to up-skilling;
•
promotion of diversity and inclusion values
, via practices and policies designed to
create an ever more inclusive working environment that encourages diversity.
•
meritocracy as the basic element for people's development;
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
190
•
employee
engagement development and sense of belonging
to the company
through a structured approach to measuring the internal climate;
•
rewarding and international mobility
as drivers of development, growth and
meritocracy;
•
investment in the well-being of its workforce:
bringing direct benefits to employees
and the business with a view to long-term sustainable growth.
The actions and plans developed and implemented by Prysmian in 2023 regarding these areas
were strongly inspired by the 2030 Social Ambition, which focuses on the areas of Diversity &
Inclusion, Digital Inclusion, Local Community Engagement, Engagement & Training and Health
& Safety. These goals were also confirmed and consolidated during the presentation of the 2027
Strategic Plan during the Prysmian's first Capital Market Day in October 2023.
For more information regarding Prysmian's Social Ambition, please refer to the section
"Prysmian's two ambitions: Climate Change and Social Ambition" of this document.
With reference to the Material 2023 topic "Well-being, engagement and improvement of human
capital skills", below are
the risks
identified by the Group related to personnel management
and mitigation actions pursuant to Italian Legislative Decree 254/2016:
Risk identified
: Risks related to personnel management (not having or losing key resources,
talent management etc.)
Description of risk:
Prysmian promotes the creation and development of an experienced and
well-trained workforce, supporting them in their diversity, in order to create an ever more
inclusive working environment. The Group remains exposed to the risk of not having or losing
key resources in strategic operational functions, especially in a new market context characterized
by the energy transition and the strong push towards digitalization, which require new skills.
These persons can be identified by their managerial responsibilities and/or the specific know-
how needed to implement business strategies. They are difficult to replace in the short term.
Mitigation actions adopted
In order to guarantee business continuity in line with strategic objectives, the Group has
established various programs designed to incentivize continuous training, professional growth
and employee involvement, as well as appropriate systems of remuneration. Among these:
global recruiting and development programs – Build The Future, Stem It, Sell It and Sum It;
performance and talent management systems – Group Academies and Local Schools, the
MyMentorship project, Internal Job Postings and Job Banding; short- and long-term variable
remuneration mechanisms, linked in part to sustainability objectives; non-compete agreements
and broad share ownership. In addition, each year the Group organizes a global engagement
survey, inviting all employees to respond and share their opinions anonymously. This makes it
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
191
possible to initiate global and local action plans for the continuous improvement of the working
environment.
Through the above initiatives focusing on employee engagement and well-being, the Group can
take advantage of the following
opportunities
:
- Increased productivity;
- Reduced staff turnover;
- Reduced costs associated with recruitment programs;
- Retention of key resources and attraction of new talent.
Composition of human capital
As at 31 December 2023
31
the Prysmian workforce numbered 30,086 FTEs, of whom 8,090 desk
workers (comprising executives and white-collar employees), and 21,996 blue-collar staff. Also
included in this calculation is agency staff, amounting to 1,222 FTEs (including 51 desk workers
and 1,171 blue collars).
The number of employees is expressed in Headcount and refers to permanent and fixed-term
contracts only in the following tables.
The following table shows the number of Group employees as at 31 December 2023
32
broken
down by geographical area
33
and by contract type (note the absence of employees for whom a
fixed minimum number of working hours is not guaranteed):
EMEA
APAC
North
America
LATAM
Total
2023
Number of employees
16,197
2,832
7,219
3,351
29,599
Number of permanent employees
15,573
2,796
7,198
3,344
28,911
Number of temporary employees
624
36
21
7
688
Number of full-time employees
15,817
2,831
7,213
3,348
29,209
Number of part-time employees
380
1
6
3
390
31
This is the total workforce of Prysmian Group, calculated in FTEs, and represents 100% of the Group’s total employees,
i.e. all subsidiaries or companies subject to the Group’s management.
32
There may be slight discrepancies when comparing headcount figures for 2021, 2022 and 2023 due to internal
contract transformations and deferred departures of non-operation personnel.
33
For details of the countries included in the respective geographical regions, please refer to the map of the Prysmian
Group factories shown in the “Prysmian Group: Global Leader” section.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
192
The table below shows the number of employees by contract type over the three-year period
2021-2023:
Total 2023
Total 2022
Total 2021
Number of employees
29,599
30,185
29,013
Number of permanent employees
28,911
28,901
27,660
Number of temporary employees
688
1,284
1,353
Number of full-time employees
29,209
29,857
28,695
Number of part-time employees
390
328
318
The following table analyses employees by gender and type of contract:
Prysmian Group no. at 31.12.2023
Male
Female
Other
Total
Number of employees
23,529
6,055
15
29,599
Number of permanent employees
22,972
5,924
15
28,911
Number of temporary employees
557
131
-
688
Number of full-time employees
23,297
5,898
14
29,209
Number of part-time employees
232
157
1
390
Prysmian Group no. at 31.12.2022
Male
Female
Total
Number of employees
24,376
5,809
30,185
Number of permanent employees
23,368
5,533
28,901
Number of temporary employees
1,008
276
1,284
Number of full-time employees
24,191
5,666
29,857
Number of part-time employees
185
143
328
The following table analyses employees by geographical area and position:
Prysmian Group no. as at
31.12.2023
White Collar
Blue Collar
Total
EMEA
4,828
11,369
16,197
APAC
855
1,977
2,832
North America
1,625
5,594
7,219
LATAM
918
2,433
3,351
Total
8,226
21,373
29,599
The following table analyses the percentage split of employees by position, gender and age
group:
Prysmian Group no.
as at 31.12.2023
≤ 30
30-50
≥50
Male
Female
Other
Total
Male
Female
Other
Total
Male
Female
Other
Total
White Collar
52.2%
47.7%
0.1%
100.0%
64.6%
35.3%
0.1%
100.0%
73.9%
26.0%
0.0%
100.0%
Blue Collar
77.7%
22.3%
0.1%
100.0%
84.7%
15.2%
0.0%
100.0%
88.6%
11.3%
0.0%
100.0%
Total
71.6%
28.3%
0.1%
100.0%
79.0%
20.9%
0.1%
100.0%
84.5%
15.5%
0.0%
100.0%
Prysmian Group no.
as at 31.12.2022
≤ 30
30-50
≥50
Male
Female
Total
Male
Female
Total
Male
Female
Total
White Collar
56.2%
43.8%
100.0%
66.5%
33.5%
100.0%
74.5%
25.5%
100.0%
Blue Collar
79.6%
20.4%
100.0%
85.5%
14.5%
100.0%
89.5%
10.5%
100.0%
Total
74.5%
25.5%
100.0%
80.2%
19.8%
100.0%
85.2%
14.8%
100.0%
Prysmian Group no.
as at 31.12.2021
≤ 30
30-50
≥50
Male
Female
Total
Male
Female
Total
Male
Female
Total
White Collar
58.7%
41.3%
100.0%
67.2%
32.8%
100.0%
75.9%
24.1%
100.0%
Blue Collar
81.5%
18.5%
100.0%
86.8%
13.2%
100.0%
90.1%
9.9%
100.0%
Total
76.7%
23.3%
100.0%
81.2%
18.8%
100.0%
86.0%
14.0%
100.0%
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
193
The following tables show, with reference to the entire Prysmian Group, the total number of new
hires and leavers during the three-year period 2021-2023.
2022
New
Hires
EMEA
APAC
North America
LATAM
Group
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Blue Collar
<30
years
546
157
703
143
23
166
623
151
774
456
321
777
1,768
652
2,420
31-50
years
686
171
857
221
29
250
727
229
956
339
277
616
1,973
706
2,679
>50
years
103
23
126
22
1
23
186
63
249
19
17
36
330
104
434
Total
1,335
351
1,686
386
53
439
1,536
443
1,979
814
615
1,429
4,071
1,462
5,533
White Collar
<30
years
147
107
254
25
42
67
46
29
75
35
36
71
253
214
467
31-50
years
222
150
372
78
49
127
79
49
128
64
48
112
443
296
739
>50
years
31
25
56
23
4
27
36
16
52
3
4
7
93
49
142
Total
400
282
682
126
95
221
161
94
255
102
88
190
789
559
1,348
Blue Collar+White Collar
<30
years
693
264
957
168
65
233
669
180
849
491
357
848
2,021
866
2,887
31-50
years
908
321
1,229
299
78
377
806
278
1,084
403
325
728
2,416
1,002
3,418
>50
years
134
48
182
45
5
50
222
79
301
22
21
43
423
153
576
Total
1,735
633
2,368
512
148
660
1,697
537
2,234
916
703
1,619
4,860
2,021
6,881
2022
Leavers
EMEA
APAC
North America
LATAM
Group
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Blue Collar
<30
years
283
132
415
116
13
129
464
110
574
421
214
635
1,284
469
1,753
31-50
years
441
97
538
134
19
153
574
172
746
368
183
551
1,517
471
1,988
>50
years
285
34
319
26
5
31
264
59
323
55
14
69
630
112
742
Total
1,009
263
1,272
276
37
313
1,302
341
1,643
844
411
1,255
3,431
1,052
4,483
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
194
White Collar
<30
years
56
34
90
18
16
34
35
13
48
21
14
35
130
77
207
31-50
years
246
117
363
51
42
93
83
42
125
80
54
134
460
255
715
>50
years
124
39
163
22
5
27
58
23
81
27
6
33
231
73
304
Total
426
190
616
91
63
154
176
78
254
128
74
202
821
405
1,226
Blue Collar+White Collar
<30
years
339
166
505
134
29
163
499
123
622
442
228
670
1,414
546
1,960
31-50
years
687
214
901
185
61
246
657
214
871
448
237
685
1,977
726
2,703
>50
years
409
73
482
48
10
58
322
82
404
82
20
102
861
185
1,046
Total
1,435
453
1,888
367
100
467
1,478
419
1,897
972
485
1,457
4,252
1,457
5,709
2021
New
Hires
EMEA
APAC
North America
LATAM
Group
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Blue Collar
<30
years
472
177
649
128
29
157
603
135
738
513
182
695
1,716
523
2,239
31-50
years
529
148
677
234
55
289
646
174
820
449
129
578
1,858
506
2,364
>50
years
93
18
111
26
-
26
227
55
282
22
8
30
368
81
449
Total
1,094
343
1,437
388
84
472
1,476
364
1,840
984
319
1,303
3,942
1,110
5,052
White Collar
<30
years
97
73
170
19
30
49
38
21
59
50
32
82
204
156
360
31-50
years
188
105
293
83
54
137
68
34
102
111
44
155
450
237
687
>50
years
23
8
31
13
1
14
46
17
63
7
2
9
89
28
117
Total
308
186
494
115
85
200
152
72
224
168
78
246
743
421
1,164
Blue Collar+White Collar
<30
years
569
250
819
147
59
206
641
156
797
563
214
777
1,920
679
2,599
31-50
years
717
253
970
317
109
426
714
208
922
560
173
733
2
743
3,051
>50
years
116
26
142
39
1
40
273
72
345
29
10
39
457
109
566
Total
1,402
529
1,931
503
169
672
1,628
436
2,064
1,152
397
1,549
4,685
1,531
6,216
2021
Leavers
EMEA
APAC
North America
LATAM
Group
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Blue Collar
<30
years
261
99
360
108
17
125
378
87
465
414
139
553
1,161
342
1,503
31-50
years
370
72
442
135
32
167
500
128
628
365
122
487
1,370
354
1,724
>50
years
319
37
356
17
2
19
242
57
299
55
12
67
633
108
741
Total
950
208
1,158
260
51
311
1,120
272
1,392
834
273
1,107
3,164
804
3,968
White Collar
<30
years
64
34
98
13
18
31
21
8
29
15
14
29
113
74
187
31-50
years
157
73
230
51
34
85
70
22
92
90
44
134
368
173
541
>50
years
101
34
135
9
3
12
55
24
79
24
2
26
189
63
252
Total
322
141
463
73
55
128
146
54
200
129
60
189
670
310
980
Blue Collar+White Collar
<30
years
325
133
458
121
35
156
399
95
494
429
153
582
1
416
1,690
31-50
years
527
145
672
186
66
252
570
150
720
455
166
621
1,738
527
2,265
>50
years
420
71
491
26
5
31
297
81
378
79
14
93
822
171
993
Total
1,272
349
1,621
333
106
439
1,266
326
1,592
963
333
1,296
3,834
1,114
4,948
In 2023, the overall outgoing turnover rate was 18.9% (18.3% for the male population and
21.2% for the female population), while the incoming turnover rate was 16.9% (14.8% for the
male population and 24.8% for the female population).
The voluntary turnover rate was 12.2% (11.3% for the male population and 15.4% for the
female population).
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The outgoing turnover rates were: EMEA 12.1%; APAC 13.9%; North America 36.7%; LATAM
17.3%.
With regard to the outgoing turnover rate by age group, the largest movements was among the
under thirties (42.8%), followed by those between thirty and fifty (14.7%) and, lastly by
employees over fifty (13.9%).
The rates for overall incoming turnover were: EMEA 10.2%; APAC 12.6%; North America 32.8%;
LATAM 18.3%.
The incoming turnover rates by age group were: 64.9% under thirty; 10.2% between thirty and
fifty; 4% over 50.
The following table shows the number of Group contractors
34
, calculated as the ratio of total
hours worked by "contractors"/theoretical annual workable hours assumed to be equal to 1,800:
2023
2022
Number of non-employee workers
5,236
4,897
People engagement
Engaging the workforce means, first and foremost, paying attention to and monitoring the needs
and requirements of its people. For this purpose Prysmian organizes an annual global survey to
which it invites all employees, executives, and white-collar and blue-collar workers to respond
and anonymously share their opinions on the work environment, integration, development and
relationship with the organization. This initiative is managed in collaboration with an independent
third party that supports this work to ensure comparability, confidentiality and data consistency.
The analysis of the results of this survey is also enabling us to focus on certain areas through
specific global and local initiatives for the continuous improvement of the work environment.
In 2022 the survey (48 questions for white collar and 20 for blue collar) was administered in
collaboration with SDA Bocconi: 86% of employees, or a large portion of white-collar workers
(83%) and an even larger portion of blue-collar workers (87%), participated in the survey, which
concluded with an Engagement Index
35
of 61% and a Leadership Impact Index
36
of 55%.
34
This disclosure requires the organization to report the number of workers who are not employees and whose work is
controlled by the organization. Control of work implies that the organization directs the work performed or has control
over the means or manner in which the work is performed.
35
The Engagement Index is considered a result greater than or equal to 5 – on a scale from 1 (low) to 7 (high) – based
on two questions from a survey that measures employee engagement.
36
The Leadership Impact Index is considered a result greater than or equal to 5 - on a scale from 1 (low) to 7 (high) –
based on five questions from a survey that measures employee engagement. These indices have been developed in
collaboration with SDA Bocconi.
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Above all, Prysmian has paid enormous attention to the result of the Leadership Impact Index,
which is also integrated into the LTI (Long-Term Incentive) plan that ended in 2022. After a
meticulous phase of sharing and analyzing the outcomes of the survey, the company launched
a granular and articulated action plan in 2023 aimed at continuous improvement of the
company's working environment and micro-climate. These initiatives were developed around
three work areas:
human capital management practices, with a particular focus on the issues of compensation and
recognition, in addition to training and development;
organizational and work environment with projects for collaboration, inclusion, the employee
experience and employee health and well-being;
greater strategic alignment and the strengthening of manager leadership and trust within teams.
To this end, new organizational communication and listening tools have been deployed.
Through close collaboration between HR and the other functions, the company initiated around
200 actions at local and factory level and more than 20 global initiatives.
The new SpeakUp 2023 was launched between November and December 2023 in collaboration
with Polimi University as an independent third party. Once again intended for the entire
population, it ended with 85% participation (90% desk workers and 84% blue collar workers).
The Engagement Index and Leadership Impact Index results reflected the efforts made during
2022, coming to around 63% and 57%, two percentage points higher than the previous year.
In addition, the fact that the company confirmed the inclusion of the Leadership Impact Index
in the 2023-2025 LTI plan demonstrates its full awareness of the importance of people
engagement to the Group's sustainable growth and a solid desire to continue cultivating it over
time.
Ability to attract talent
In an ever-changing labor market environment characterized by challenges such as generational
turnover and gender balance, Prysmian recognizes the strategic importance of talent acquisition,
especially for companies operating in technical-industrial sectors. This commitment has resulted
in constant renewal and development of key projects and initiatives, with the aim of supporting
the business and strengthening the corporate culture.
The initiatives put in place by the Group focused on three main areas:
1.
attraction and employer branding programs, to improve the company's visibility in the labor
market;
2.
promotion of internal mobility via the Internal Job Posting tool;
3.
digital innovations in the recruiting process in order to improve the candidate experience
thanks to the personnel management platform, Workday.
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With the aim of making selection processes increasingly rigorous and methodologically sound,
and for this reason exclusively oriented towards the search for merit and talent, 2023 was also
the year of the launch of new policies such as the "Conflict of Interests in Recruitment", and the
updating of existing policies such as the "Diversity Recruitment Policy", first adopted in 2019.
Investments continued to be made in training relating to the candidate selection and interview
process for both the HR function and line managers, generating more than 30 total hours of
training.
In line with the objectives of Social Ambition, the global "STEM IT" attraction and recruiting
program was then further strengthened, which supported almost 40 more new hires than in
2022, ending with a total of 143 hires.
“STEM IT” envisages a training, development and career-
support path for new colleagues joining the R&D, Production, Logistics, Project Service &
Installation, Quality, IT and HSE areas of Prysmian. “STEM IT” female recruits (62% in 2023)
are supported by a dedicated training initiative known as “Women in STEM IT”, which is intended
to support their development and leadership within the organization. In this sense, "STEM IT" is
a program that assumes particular relevance in meeting the goal of +500 STEM women in 2027,
a message recently reinforced by Prysmian on Capital Market Day.
With a view to the continuous development of its human capital, Prysmian intends to facilitate
internal mobility, and to this end has launched Internal Job Posting (IJP), a system for posting
and applying for open positions within the Group, fostering the internal development and
enhancement of people already working in the company who show growth potential.
The IJP had been launched as a pilot project in the United States in 2019 and was then expanded
globally starting in 2021. Thanks to the launch of the Workday digital platform in March that
year, the number of colleagues who have taken the opportunity for a professional transition
through the IJP has increased sharply (+17% during the last year): 136 in 2021, then 171 in
2022 and 200 in 2023.
In summary, in the more than 10 years since its launch, the Group's Recruiting Programs have
greatly contributed to attracting valuable resources externally, while also playing a key role in
the progressive achievement of gender balance in employee hiring globally. They also provided
new colleagues with important training and development opportunities that over time fostered
their growth and engagement within the organization. The various programs are described in
detail below.
Build the Future, Graduate Program
The numbers from 2023:
•
57 new graduates
•
almost 35,000 candidates
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•
60% female representation
•
12 editions since 2012
The objective of the Graduate Program is to recruit, support and develop new graduates for
central roles in areas key to the future of Prysmian, such as Operations, R&D and Sales. The
Graduate Program comprises various stages, from a careful selection process to the assignment
of an important technical or managerial role after three years of international experience. Further
growth in recruitment is expected in 2024. Notably, since 2021 Build the Future has been
accompanied by “Empower your community”, a program intended to recruit new graduates who,
by directly supporting the Group’s companies, are primarily engaged roles linked to digitalization
and sustainability. Five new graduates were recruited as part of the “Empower your community”
program in 2023. This number will surpass ten hires in 2024 as the program is expanded to
more regions.
2024 will be the year of the 13th edition of the Graduate Program, which over the last year has
also been revisited and redesigned in order to increasingly meet business needs and
development requirements.
The new structure includes a 5-year program in which the first year will be devoted to job rotation
in the two main departments of R&D and Operations. The second year will still run locally,
consolidating experience in one of the two departments and in preparation for a 3-year
international assignment, the duration of which has remained unchanged.
The program is open to applicants with a STEM background.
STEM IT
The numbers from 2023:
•
143 professionals hired
•
62% female recruitment
The objective of the STEM IT program is to introduce new talents who are diverse in terms of
culture and background and who can contribute to the process of cultural change and
enhancement taking place at Prysmian. The program, in addition to training ("on Boarding &
Training on the Job") of about 2 months for integration within the local organization and the role,
also includes the assignment of a corporate mentor and ongoing technical training relying on
Prysmian Faculty trainers and the involvement of internationally prestigious universities.
The STEM IT training is spread over 5 years and encompasses the following modules:
fundamentals of cable manufacturing, Product Management, Industry 4.0, Soft Skills,
Sustainability and Project Leadership.
As mentioned previously, the STEM IT program also features a section dedicated entirely to
female leadership, known as “Women in STEM IT”.
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SELL IT
The numbers from 2023:
•
48 salespersons hired
•
69% female recruitment
The objective of the SELL IT program is sales force growth and development. Following the same
steps as the STEM IT Program, SELL IT also starts with a careful selection of candidates and
continues with a training program ("On Boarding & Training on the Job") of about 2 months,
aimed at placing them in the local reality and the role. This also includes the assignment of a
corporate mentor and ongoing technical training through Prysmian Faculty trainers and the
involvement of universities of international standing.
SELL IT training is spread over 5 years and includes the following modules: Product Management,
Marketing and Sales Skills, Soft Skills, Sustainability and Advanced Negotiation. Recruitment
through the SELL IT program has seen an increase compared to 2021 and 2022.
SUM IT
•
9 professionals
•
44% female recruitment
SUM IT, launched in 2020, is entirely dedicated to professionals working within the industrial
control function.
The program follows the training path already described in previous projects and is spread over
five years. It includes the following modules: fundamentals of cable manufacturing, industrial
controlling, reporting, soft skills and sustainability.
Overall and consistent with the gender balance objectives, the Group’s Global Recruiting
Programs have seen growing recruitment of women over the last three years, as shown in the
table below:
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200
Performance and Talent Management
Prysmian People Performance P3
The Prysmian Group believes that every employee can make a significant contribution to the
company's success.
The “Prysmian People Performance (P3)” program, intended for all desk workers globally,
provides the opportunity to set clear goals and align them with the company’s targets. P3,
supported by the online HR platform, not only monitors individual performance, but also
promotes behaviors aligned with the leadership model. In this way, transparent and direct
communication is fostered between managers and employees, allowing for the ongoing sharing
of results and distinguishing performance based on objective assessments. The project includes
occasions for frequent and structured interaction between manager and employee: in the initial
goal setting phase, mid-year and at the end of the project to share assessments. In addition,
the Workday platform offers feedback tools available at any time: it is possible to provide them
to anyone in the company, requesting them for oneself as well as for another employee. During
the year, new ways were also activated to provide immediate and agile judgments.
During 2023, the company was engaged in the execution of a global initiative aimed at training
on effective global feedback sharing that reached a total of 3,878 people.
In 2022, the P3 performance assessment process involved 7,140 employees (including 4,877
men and 2,239 women) and wrapped up in March 2022. The 2023 P3 was launched in February,
involving 8,081 desk workers. This cycle will end in spring 2024, including the final stages of
calibration and subsequent feedback. Final data, including gender details, are provided in the
table below.
2023
Male
Female
Other
Total
Number WC employees in the P3 program
4,815
2,202
123
7,140
Percentage WC employees in the P3
program
67%
31%
2%
100%
Number WC employees - Poor evaluation
195
67
25
287
Number WC employees - Solid evaluation
3,718
1,786
88
5,592
Number WC employees - Outstanding
evaluation
902
349
10
1,261
The final assessment is based on two criteria:
• "Achievements": measurable targets based on specific KPIs linked to the role;
• "Leadership: behavioral guidelines.
Behavioral guidelines are based on the Leadership model shown below, divided into six key
principles, as well as compliance with the Code of Ethics.
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Prysmian People Performance Potential (P4)
With the aim of implementing a process to identify talent and develop succession plans, in 2017
the Prysmian Group introduced a two-year structured tool called "Prysmian People Performance
Potential (P4)". This program assesses the potential of talented individuals, i.e. those who were
high performers in P3 over the previous two years, based on three indicators: motivation, change
leadership and speed of learning. At the end of the potential assessment, it is essential to define
a growth plan for talent development. During 2023, 31% of Desk Workers were involved in the
P4 assessment, which is the same percentage of those who received an evaluation for two
consecutive years meeting the criteria described above. In addition, the discussion process
regarding Succession Plans occurs every two years and in 2023 involved 1686 positions (all
group executive positions and some other relevant middle management positions including
factory managers and their front lines), a significant increase from the 386 positions discussed
in 2021. This exercise has provided visibility on the 60% of these positions found to have at
least one successor compared to 40% with no succession plans about which specific action plans
are in place.
The new performance and development evaluation process
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202
An innovative annual process was implemented in 2023 to assess the performance and identify
the potential of all desk workers, amounting to around 8,000 people. This new system stands
out due to its simplicity, inclusiveness and, above all, its person-centered orientation. This
system, which starting from January 2024 has replaced the previous P3 and P4 assessment
systems, provides opportunities for employees to guide and share their aspirations, geared
toward professional and personal growth, by promoting a culture of continuous feedback
between manager and employee and vice versa (reverse feedback), as well as between
colleagues.
In the final months of 2023, training sessions were organized for all desk workers with a view
to providing information and tools on the new performance process called P+. Several activities
are planned at global and regional level in 2024 to accompany and support our people in this
significant change in both methodology and culture (change management).
Training and development
Staff training and development are fundamental components of Prysmian's responsibility to
People. In 2023, the total average training hours per employee was 35.7, 23% per FTE more
than the previous year. This represents significant progress from 2021, when there was an
average of 18 hours of training per employee. The positive trend is in line with the growth targets
outlined in the Group's 2030 Social Ambition.
Hours of training provided
Male
Female
Other
Total
White Collar
240,725
135,309
95
376,130
Blue Collar
566,641
117,247
705
684,593
Totale
807,366
252,556
801
1,060,723
Average training hours provided per employee
Male
Female
Other
Total
White Collar
44
50
17
46
Blue Collar
31
36
85
32
Totale
34
42
58
36
The Prysmian Group's educational offerings are structured through the following initiatives: the
School of Management, the Professional School and the Digital School that cover a global scope,
and the Local Schools that meet the specific educational needs of individual regions.
The
School of Management
focuses on the managerial growth of potential and talent (in
accordance with the internal P4 talent management process) and the training of newly hired
graduates through the above-mentioned "Build the Future." The latter are particularly involved
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
203
in a training program called "Post Graduate Program" that aims to accompany the entry of these
young talents into the company, supporting their all-round skills development and investing in
both technical and business and leadership subjects.
The year 2023 was also the year of the second editions of the Leadership Programs for Middle
Managers (Journey to International Leadership – JIL) and Executives (Journey to Advanced
Leadership – JAL), with the involvement of a further 130 people, in addition to the 130 already
appointed in 2022 and who will complete the journey in 2024. The JIL and JAL, both with a total
duration of 18 months, primarily aim to train participants in key general management content,
while accompanying them towards the application of these concepts at Prysmian, thus fostering
the sharing of the Group's strategic objectives for the coming years and the strengthening of the
one-company culture. Participants are also required to work on concrete projects, once again
choosing and then applying theories and tools learned during the training courses, thus fostering
a healthy cross-fertilization between classroom activities and daily operations that makes the
JIL and JAL two effective training and development initiatives that are in step with the most
recent trends in executive education.
Consistent with the one-company logic, the Group's commitment in terms of management
training extends across its entire scope (Region and Business Division) through Regional
Leadership Programs (RLPs). The RLP is a development journey that allows for a broader
population of managers to be rapidly involved in the flow of change and to contribute to the
achievement of the strategic goals of the Region and thus of the Group, creating a link between
the local and the global, but responding to regional growth requirements. The goal is to ensure
alignment with and knowledge of the Group's strategy amongst everyone in the company who
also plays a key role at regional and local level.
The portfolio of people development initiatives is further enhanced with an internal Mentoring
program called "MyMentorship" intended for all employees with corporate seniority of more than
one year who are interested in boosting their technical or soft skills. Mentoring is also a powerful
tool for exchange and contamination amongst managers, and its combination with the programs
described above (RLP, JIL, JAL) has been confirmed. In 2023, 231 new mentoring tracks were
activated.
The
Professional School
, on the other hand, is devoted to the development of advanced
strategic skills at technical-functional level, with a view to international networking and career
development for "high-performing" employees (based on the internal P3 process) and new hires
through the STEM IT, SELL IT and SUM IT programs. A range of 29 Professional courses, divided
by function, is available: Manufacturing, Supply Chain, IT & Digital, Purchasing, Sales, Quality,
R&D and HSE, in addition to cross-functional courses dedicated to all, such as Project Leadership
and Advanced Negotiation Skills. More than 150 internal Corporate and Regional instructors
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
204
collaborate on course implementation, putting their knowledge at the service of our talent.
In
the course of 2023, there were 1025 participants in the Professional School. In addition to all of
the technical and functional academies, the Professional School offers an internal Master in
Human Resources, now in its third edition, which trained colleagues from around the world this
year.
Digital
, the third and final Corporate Academy School, offers about 30 courses and supports the
global sharing of technical and functional content for Desk Workers and Non-Desk Workers. In
2023, the number of courses increased by 30% and participants by 13% to a total of 9,265
people involved.
Local Schools
, present across all regions since in 2021, respond to contingent needs linked to
workforce characteristics, the local business and the relevant market.
The organization of each School is autonomous, delegated to the regional HR team, but aligned
and in synergy with the Corporate team, particularly in the coordination of programs and
initiatives with a cross-regional impact and for training data monitoring activities that are part
of the measurement of the Integrated Report indices.
In 2023, the educational offerings of the Local Schools were enhanced through the training of
local teachers in two areas:
- Soft Skills (70 trainers certified in Conflict Management, Problem Solution Fit, Smart
Decision Making, Remote Meeting Management, Customer Centricity, Remote Public
Speaking, Stress Management, Emotional Intelligence, Influence and Communication
Skills, and more than 69 sessions delivered)
- Professional School Fundamentals courses delegated and customized locally by the
Regions: Manufacturing Fundamentals, HSE Fundamentals and Supply Chain
Fundamentals.
Thanks to the delegation of Fundamentals in 2023, more than 400 people in 8 regions were
trained in 2023, also involving participants in the STEM IT, SELL IT and SUM IT programs.
To foster mutual enrichment and the exchange of good and best practices between regions and
BUs, and ensure local-global alignment, the global Academy team leads weekly meetings with
regional and business People Development Leaders, thereby facilitating the dissemination of
Local School training plans.
Lastly, in 2023 Prysmian consolidated the activities of the
Global Sustainability Academy
,
which involves all Group employees in the more than 50 countries in which the business
operates. The initiative – launched in 2022 – aims to spread the culture of sustainability within
the entire company population and further strengthen the Group's commitment to implementing
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
205
its Climate & Social Ambitions. The Sustainability Academy training program features the
involvement of internationally prestigious Business Schools.
In 2023 the structure of the program comprises five modules – Awareness, Knowledge, Impact,
Leadership and ESG KPIs – which are differentiated depending on the target audience. In 2023,
more than 5,000 employees were involved in the Sustainability Academy training programs.
In 2023, Prysmian also strengthened investments in the global and uniform tracking of training
data, and in particular the digital collection and counting of training hours at local level. The
company has updated and digitalized part of the global internal control procedure for the
collection of training hours, making it increasingly straightforward to record hours delivered in
order to communicate them transparently and effectively to the outside world. On a quarterly
basis, the global Academy in particular provides the Regions and Business Units with support for
the overall calculation of training hours and to perform a spot check of the data entered into the
system and the relative feedback in the event of inconsistencies, with a view to continuous
improvement.
Dialogue with Social Partners and Collective Bargaining
In 2023, the percentage of Group employees covered by collective bargaining agreements was
64%.
For employees not covered by collective bargaining agreements negotiated directly by Prysmian
and the works council, Prysmian applies the working and employment conditions envisaged in
the collective bargaining agreements negotiated and agreed at national or industry level (i.e.
not directly by Prysmian or by members of the works council, but rather by relevant industry
employers’ associations and national or industry trade unions). In the absence of a collective
agreement applicable to the specific factory/site/workplace, Prysmian applies dedicated
employment policies that are notified to individual employees and accepted by them through the
formalization of their personal employment contracts. The situation clearly varies a great deal
but, in all cases, the terms and conditions of employment are always well defined and collectively
known and accepted.
With reference to organizational changes and the related minimum notice period, each country
in which the Group is present complies with the related local regulations in force.
The Group steadfastly maintains its focus on cultivating social dialogue on a constructive and
continuous improvement basis, firmly believing that the contribution of the social partners is
always a decisive stimulus and support in Human Resource management policies.
Notwithstanding the fact that workers' representatives and trade unions operate freely, subject
to local legislation and practices, the Group guarantees their involvement and consultation in
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
206
the main collective personnel management processes at all existing trade union levels, from
factory level to international level (European Works Council).
In many of the countries in which the Group operates, 2023 was also a year marked by the
signing of agreements with workers' representatives and trade unions: any corporate process or
project with an impact on HR for which union consultation was required in most cased ended
with the finalization of an agreement or with a record of a complete disclosure procedure. Union
agreements concerned both ordinary renewals of the economic and regulatory parts of expiring
collective bargaining agreements and new working time conditions and shifts when necessary
due to specific market conditions.
It should be highlighted that, as usual, with reference to organizational changes and the related
minimum notice period, each country in which the Group is present complies with the related
local regulations.
In addition, at European level, on 26 May 2023 Prysmian renewed the agreement establishing
the European Works Council (EWC) with union representatives from the majority of European
factories.
Under the new agreement, the Committee will consist of 27 union representatives from all
European countries where the Prysmian Group has a presence. The presence of an executive
body (called the Select Committee) of the European Works Council was also confirmed, which
can count on the contribution of seven members, elected by the 27 members of the General
Committee.
Trade union conflict within the Group was insignificant at global level in 2023, thanks to the
constant pursuit of the described industrial relations policy aimed at preventing any source of
dispute that could potentially generate conflict at different levels, through constructive dialogue,
usually accompanied by proactive union consultation.
During 2023, Prysmian announced that it will cease operations at some of its production facilities
(Calais, Köpenick and Washington). Aware of its responsibilities to the local areas, the company
is defining all viable solutions in full cooperation with public authorities and union representatives
in order to reduce impacts on communities. Negotiations have been initiated with stakeholders
to implement social plans involving various measures, including job relocations to other Group
sites and redundancy incentives. The goal is to enable each employee to find the most suitable
solution for their personal needs.
In 2022, Prysmian launched an innovative share-based variable compensation (BE-IN) and profit
sharing plan on the Company's shares, potentially targeting more than 25,000 of the Group’s
blue- and white-collar employees across more than 35 countries. Approved by an overwhelming
majority at the Shareholders' Meeting, the Plan is spread over the years 2022, 2023 and 2024
and calls for the allocation of up to 3,000,000 shares.
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The main objective of the plan is to share the value creation generated by Prysmian with a broad
base of employees, mainly blue-collar workers; the plan also aims to strengthen engagement
and the sense of belonging of the Group's employees by promoting their stable investment in
the Company's share capital.
For Prysmian's management, it is crucial to align the interests of all Stakeholders, from
employees to shareholders, around the common goal of long-term sustainable value creation.
To achieve this goal, it is therefore essential to involve those who are not recipients of share-
based incentive plans usually reserved for managers and executives, such as the GROW plan.
Employees may participate in the plan on a voluntary basis, unless established otherwise in any
agreements with trade union organizations, by opting to receive the payment of a portion of the
monetary incentive to which they are entitled or production bonuses in the form of shares, the
number of which will be calculated based on the extent of each individual bonus and the
assignment value (the average share price in the 30 trading days prior to the assignment date).
The Company may define a minimum and/or predetermined percentage for the conversion of
the monetary bonus into shares on an annual and individual basis. The plan also calls for
employees to be awarded an additional number of shares, for a value of up to a maximum of
50% of the share of the monetary bonus covered by shares, as well as an additional amount of
shares after 12 months, provided that the shares initially received are not sold before the end
of that annual period.
With the necessary adjustments, the Plan can also be activated even when there are no pre-
existing collective monetary incentives.
In 2023, the local management of many Group factories and affiliates negotiated and agreed
with the local company committee and the trade unions to implement the Plan when requested.
The global implementation process has been satisfactory, reaching more than 50% of the plan's
eligible population, with the prospect of increasing this percentage even more next year.
Employee involvement in share ownership is of paramount importance at Prysmian, which
already stands out due to its decision to pay the bulk of incentives reserved for management,
the annual MBO and the three-year Long-Term Incentive Plan, in shares. In addition, with the
YES Plan launched in 2013, Prysmian employees also have the opportunity to buy Company
shares under favorable conditions during multiple annual periods.
Currently, Prysmian employees, including Top Management, hold about 3% of the Company's
share capital, a significant percentage in a Public Company where there are no majority
shareholders capable of exercising control.
Remuneration Policy and Welfare Plans
Like all people-oriented initiatives, also the remuneration policy adopted by Prysmian is designed
to attract and recognize talented resources, who have the skills needed to address the
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208
complexity and specialized nature of the business, in addition to the international competitive
context in which the Group operates. This policy is defined in a way that aligns the long-term
interests of employees, management and shareholders, pursuing the priority objective of
creating sustainable value over time for all stakeholders. The remuneration policy is largely
founded on the principle of sharing the results achieved, via systems that establish a real and
verifiable link between pay and performance, both individually and at Prysmian Group level.
The remuneration policy for expatriate employees and senior executives is determined centrally
while, for other personnel, local programs are implemented in accordance with the guidelines on
remuneration defined centrally.
The remuneration policy for executive directors and key management personnel is determined
as the result of a shared and transparent process, during which both the Remuneration and
Nominations Committee
37
and the Board of Directors play a central role. Indeed, the Committee
periodically submits the remuneration policy to the Board of Directors for approval and checks
on its application during the year, engaging the shareholders when necessary for their feedback
and input. The pay structure for executive directors, key management personnel and executives
comprises a fixed remuneration component, a short-term variable remuneration component and
a medium/long-term variable remuneration component.
For 2023, the ratio between the total annual remuneration (fixed remuneration plus annual
variable remuneration and long-term variable remuneration) of the Chief Executive Officer
38
and
the total median annual remuneration of Group employees, overall worldwide is equal to 70.
In 2023, annual total compensation for the Chief Executive Officer decreased compared to 2022
due to the lower value of the long-term variable component, so the ratio of the percentage
decrease in annual total compensation for the Chief Executive Officer to the median percentage
increase in annual total compensation for all employees was -7.7 (the ratio of the percentage
increase in annual total compensation for the Chief Executive Officer to the median percentage
increase in annual total compensation for all employees had been 0.90 in 2022).
Furthermore, the ratio between the total annual remuneration for 2023 (fixed remuneration plus
annual variable remuneration and long-term variable remuneration) of the Chief Executive
Officer, compared to the median annual remuneration of Group employees overall worldwide is
equal to 60 (compared to 89 in 2022).
37
Further information about the activities of the Remuneration and Nominations Committee and the vote expressed by
the shareholders is available in
Section II
of the “Report on Remuneration Policy and Compensation Paid”
prysmian-
remuneration-report-2023-eng.pdf (prysmiangroup.com)
38
Temporary workers, agencies, interns, Nantong plant workers and workers employed on vessels were excluded from
the calculation of average and median wages.
The average and median remuneration was determined using the theoretical gross annual remuneration as at 31
December 2023 plus variable components (MBO and LTI plans) related to the relevant year according to best estimates
where data were not available, excluding non-recurring items and labor costs.
For part-time workers, the theoretical full-time figure of gross annual compensation as at 31 December 2023 was taken
into account.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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The ratio of the percentage decrease in annual total compensation for the Chief Executive Officer
to the average percentage change in annual total compensation for all employees was -9.1 (the
ratio of the percentage increase in annual total compensation for the Chief Executive Officer to
the average percentage change in annual total compensation for all employees had been 0.58
in 2022).
Shareholders, together with investors, are regularly urged to provide feedback and suggestions
regarding the remuneration policy. Their opinions are considered when preparing the mentioned
policy, which is periodically submitted to a vote at the shareholders’ meeting.
As part of its transparency on remuneration issues, Prysmian has issued guidelines, in
compliance with local laws, that link pay measures at all levels of the organization and variable
remuneration plans to individual performance assessment. The fixed component of remuneration
is reviewed annually and, if necessary, updated to remain competitive with market conditions,
the position held and personal performance, while always complying with local regulations. This
meritocratic approach is based on a global system of organizational position and performance
evaluation, which is applied on a consistent basis throughout the Group.
Sustainability is playing an increasingly important role in the remuneration policy of Prysmian
39
.
Part of the variable short- and long-term remuneration of all managers, including executive
directors and key management personnel, is linked to the achievement of sustainability targets,
which are monitored using ESG indicators.
Welfare System
Throughout the Group, the monetary package is supplemented by additional benefits, such as
supplementary pension and healthcare policies, personal injury insurance, a company car for
those entitled and company canteen or restaurant vouchers. These benefits are adapted to local
conditions, having regard for market characteristics and relevant regulations.
Participation in the creation of sustainable value over time is open to all employees, via the
Value4All program based on share ownership plans allowing them to become stable
shareholders.
The Value4All program includes both the
YES
Plan
, the discount purchase plan for employees
now in its tenth year in 2023, and the
BE IN Plan
, the new plan dedicated to the non-managerial
population that allows for the conversion of production bonuses into shares.
39
Further information about Prysmian's remuneration policy for executive directors and key management personnel as
well as ESG goals linked to variable remuneration can be found in the document "Report on Remuneration Policy and
Compensation Paid"
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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The objectives pursued by Prysmian via the Value4All program are to increase the participation,
engagement, sense of belonging and business understanding of employees, ensuring that the
interests of shareholders, customers and employees converge over time, and reinforcing the
internal perception of Prysmian as a single and unique enterprise, truly “One Company”, thus
building a stable base of employee-shareholders.
For more details on the BE IN Plan, please refer to the section "Dialogue with social partners and
collective bargaining".
This focus on individuals is confirmed by Prysmian Group's commitment to investing in the
development of employee-company relations, via numerous initiatives designed to foster
engagement. The Group also enters into agreements with external partners for the supply of
products and services at special rates for employees, such as discounts on theatre tickets, gym
subscriptions, magazines and products purchased in shops. These benefits are equally valid for
full-time and part-time employees.
As of 1 January 2023, the Global Maternity Policy, revised in 2021, was fully implemented in all
Group countries. As of 15 May 2023, a new Global Parental Policy was formalized and
implemented in all Group countries. The “Diversity, Equity, Inclusion and Equal opportunity”
section of this document contains further information on this topic.
This year, Prysmian Group again implemented national initiatives (Italy/Headquarters) that
make it possible to:
• obtain a free flu jab, delivered on company premises;
• donate blood in collaboration with Avis;
• take advantage of an increasingly comprehensive free check-up service in collaboration with
Niguarda Hospital with a view to prevention and a focus on the health of employees in the Milan
Bicocca area (with a change in the frequency of check-ups from biannual to annual for those
over 55);
• participate in health and wellness programs based on employee demographic characteristics,
such as cancer prevention and early detection examinations for men and women and breast
examinations for all women;
• participate in initiatives dedicated to sports and physical activity and take advantage of a
discounted membership to a yoga/Pilates center, as well as participate in monthly Pilates classes
dedicated to specific departments;
• participate in first-aid training seminars;
• obtain insurance coverage at special rates with AON;
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
211
• participate in the award of 80 scholarship for Secondary School and 20 scholarships for the
University education of the children of employees. These scholarships were set aside in 2023
and will be awarded in early 2024;
• receive an annual pass for public transport at a discounted price under an agreement with
ATM;
• participate in gender-based violence awareness seminars for women, and seminars organized
in collaboration with Feltrinelli Education focusing on emotions, as well as seminars on mental
health and stress management.
Again at Corporate level with a view to tackling the emergency caused by higher energy costs
and inflation, Prysmian has launched various initiatives to protect the purchasing power of
employees, including:
- distribution of petrol vouchers worth Euro 200 to all employees, for a total value of about Euro
480 thousand;
- increase in the value of meal vouchers for all employees, for a total value of about Euro 210
thousand.
Diversity, Equity, Inclusion and Equal Opportunity
The following
impacts
generated by Prysmian are associated with the material topic "Equity,
diversity, inclusion and respect for human rights":
•
Positive impacts:
o
Promotion of specific programs to develop a more inclusive and equitable work
environment;
o
Promotion of practices to support gender equality, both within group
management
and the Board of Directors.
•
Negative impacts:
o
Lack of practices to promote social sustainability within the corporate structure
and business model, including the violation of human rights.
With reference to human resource management and the sustainability of the company's human
capital, Prysmian has set as a strategic goal the enhancement of Diversity, Equity and Inclusion
(DE&I) and equal opportunity through the development and updating of processes and
procedures, innovative data-driven programs and an increasingly inclusive corporate culture. In
line with this commitment, Prysmian has formalized a global "
DE&I Manifesto
", which is
available on the Corporate website, in accordance with the Social Ambition 2030. In addition,
each Region or Business Unit has designated at least one
Local DE&I Partner
responsible for
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
212
disseminating the DE&I Manifesto and organizing activities based on local needs or
environments.
This year's portfolio of global DE&I activities is presented below, with many initiatives also
implemented locally.
1. Global Diversity Recruitment Policy
, available on the Group’s corporate website
40
: this
procedure, which has been formalized at corporate level, defines an appropriate selection and
recruitment process that applies a standardized methodology to ensure equal opportunity at all
stages in the selection process, while also avoiding stereotypes linked to gender or other
diversities. The Diversity Recruitment Policy was made official globally in March 2019, renewed
in November 2023 and translated into six languages in addition to English (Italian, German,
Spanish, French, Portuguese and Chinese).
2. In order to foster a work environment that ensures equal opportunity, inclusion and non-
discrimination, the Company supports the principle of pay equity by periodically monitoring the
Gender Pay Gap
which, as part of its Social Ambition goals, it has committed to eliminating by
2030 on the basis of an annual action plan and the allocation of a dedicated budget. The Gender
Pay Gap analysis performed, the results of which are expressed in percentage terms as the
male/female wages-salary ratio by position and geographical area, is shown below:
2023
EMEA
North
America
LATAM
APAC
Total
Executive
-1%
-3%
3%
12%
2%
Managerial positions
3%
5%
5%
15%
5%
Employees
4%
2%
6%
9%
5%
Total
4%
3%
5%
10%
5%
By 2023, the efforts and policies put in place by the Group in all regions aimed at recognizing
equal pay for equal work to women and men have made it possible to eliminate the gap for
certain qualifications in certain regions (negative values for Executives in EMEA & North America
indicate higher average wages for women than average wages for men at the same level in the
same region) and keep the gender pay
gap within the overall average value of 5%.
3. In 2023, more and more attention was paid to facilitating work-life balance, in addition to
providing existing support measures such as flexible schedules and remote work.
Prysmian has strengthened its commitment to parenting, not only through the
new
Global
Parental Policy
(described in the following point), but also through further support in the
transition of parents back to work, and with the creation of breastfeeding rooms at various
40
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
213
locations in China, Romania and the United States (one is currently under construction at the
Group's headquarters in Milan).
In certain locations, such as the United States, support is offered to families through the
Employee Assistance Program, which connects employees with backup care providers, or in Italy
through "Missione Genitori", which provides assistance, coaching and concierge services to
parents of children under 18 years of age.
4.
The
Global Parental Policy
, launched in May 2023 and available on the Group's Corporate
website
41
, will be fully in effect throughout the Group as starting from 1 January 2024, with the
stated aim of recognizing the high value of parenthood for personal and professional
development. The policy is based on four pillars: 16 weeks of fully paid leave for mothers/primary
caregivers, 2 weeks of fully paid leave for fathers/secondary caregivers, Baby Bonus and Family
Support, additional leave support and specific return-to-work procedures. Implementations and
specifications based on local factors are possible.
5. On the subject of overall employee
Well-being
, the Group has created a Steering Committee,
a network of "Well-being Ambassadors" and a "Well-being Manifesto" to better define the Group's
goals on the subject and promote a culture in this regard.
In 2023, the month of May was dedicated to raising awareness of mental health through global
and local communications and activities. A global series of seminars on mental health and stress
management was launched, and many activities were carried out locally, such as the creation of
a creative newsletter managed by Italian employees and the designation of four gender-neutral
bathrooms at the Milan headquarters.
6. During the year, the decision was made to design and launch a program based on
Inter-
Generational Communication
. The program, called
GenSync
, was initiated in the R&D
department (identified following specific analyses as the department in which the management
of this issue was most urgent and prioritized) and consists of four phases, including an in-person
group session in which specific regional factors are identified and incorporated into training
materials. This program, which began in the Central and Eastern European region, will be
implemented in three more R&D centers in 2024, continuing with the Group's other R&D centers
in 2025.
7. During 2023,
internal and external communication
campaigns
on Diversity, Equity and
Inclusion (DE&I)
continued both globally and locally and were strengthened to raise employee
and stakeholder awareness of these issues. Prysmian holds 3 global educational workshops
(Women's Day, Cultural Diversity Day, Men's Day) every year on DE&I topics that include
statements from Group leaders. The DE&I Local Partner Network also organizes regional
workshops
dedicated
to
relevant
local
issues.
On-demand trainings are also available for all Group staff on the Workday platform, which
41
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
214
feature topics such as inclusive leadership and unconscious biases and in which managers are
reminded to check for and remove any biases during the performance assessment process; some
regions also require mandatory annual training on the topic.
The DE&I topic has also been included as part of official global onboarding and induction
processes, as well as professional development programs.
8. In 2021, the company launched a
Global Policy
, available on the Group Corporate website
42
,
against all forms of workplace harassment
, including sexual harassment, defamation,
bullying and intimidation, including from third parties who interact with our employees. The
document outlines two procedures, one formal and the other informal, for reporting cases of
harassment and requesting official action by the Compliance team. This year, the training
accompanying this policy was translated into 7 more languages and made mandatory on an
annual basis. Through the DE&I Local Partner Network, this training will also be disseminated to
Group
factories
and
delivered
in
person
where
needed.
9. In 2023, Prysmian launched its first global
Employee Resource
Group
(ERG)
,
which is
dedicated to STEM Women. ERG is open to all employees and has the mission of identifying and
suggesting recommendations/changes to create more inclusive factory environments, support
women currently in STEM roles, increase their retention, leverage the Group's partnerships with
the relevant associations and serve as a point of reference for available local services and support
programs.
10. On
disability
, Prysmian began work in 2023 to better understand the accessibility of its
offices and factories, with the goal of launching a global Employee Resource Group (ERG)
dedicated to disability in 2024. ERG aims to learn more about the Group's demographics, raise
awareness, create a sustainable plan and educate and engage the population on this issue.
With reference to the Group's total workforce, 2.08% of employees (more than 600 people)
reported being a person with disabilities.
In addition, with reference to gender targets, the table below shows the 2023 results of the main
targets relating to the Group's Social Ambition:
42
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215
Respect for Human Rights
Prysmian Group takes many concrete steps to ensure respect for and protection of the human
rights of all those involved in its business activities and value chain. A full audit plan has been
implemented, with remote and on-site checks at the industrial plants, to identify any potential
discrepancies with internationally recognized human rights principles.
Human rights due diligence
With reference to the 2023 material topic: "Equity, diversity, inclusion and respect for human
rights", below are
the risks
identified by the Group and the related mitigation actions pursuant
to Italian Legislative Decree 254/2016:
Risk identified
: Risks related to the social sustainability of the organizational structure and
business model
Description of risk:
Prysmian Group faces daily complexities arising from the management of
organizational and business activities carried out by persons with different social and cultural
backgrounds. Despite constant commitment, careful supervision and periodic awareness
building, with the provision of specific information and training sessions, it is never possible to
exclude episodic improper conduct in violation of policies, procedures and the Code of Ethics
and, therefore, of current regulations concerning human rights by those who carry out activities
on behalf of Prysmian, with consequent possible penalties, significant reputational damage and
business impacts.
Mitigation actions adopted:
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
216
As an international business operating in many countries and communities, Prysmian is
passionately committed to respecting and safeguarding the human rights of all employees and
all those affected by our activities. The objective is to ensure that Prysmian Group is not involved
in any way, either directly or indirectly, in activities that violate human rights.
With this in mind, the Group Human Rights Policy was introduced in 2017. This policy, available
on the corporate website of the Group
43
, is based on various international standards (such as
the Universal Declaration of Human Rights, the Declaration on Fundamental Principles and Rights
at Work of the International Labor Organization (ILO), the United Nations Global Compact etc.)
and applied at all locations and in all Prysmian activities.
In addition, a Human Rights Due Diligence process, available on the Corporate website
44
, has
been in operation since 2018, enabling Prysmian to map the potential impacts that Group
operations
may have on respect for human rights.
1.
ASSESS: Assessment of the current and potential impact on Human Rights,
considering the risk of violations at country and factory level, identified using desk
analysis and self-assessment tools.
2.
ACT: Assessment of the results and performance of audits at high-risk plants;
definition of actions necessary to prevent and/or mitigate the potential impact
identified.
3.
MONITOR: Monitoring of performance via checks and audits over a period of years.
4.
RESOLVE: Resolution of violations.
5.
COMMUNICATE: Communication of performance in the Sustainability Report.
Applying this Due Diligence process, the assessment of all production locations that commenced
in 2022 was completed during 2023
45
.
Following this assessment, 9 plants found to be at high risk of violating human rights were
audited to check if there was any substance to this analysis.
The Prysmian Group also requires suppliers to show rigorous respect for human rights, applying
a specific Due Diligence process that assesses the risk at supply chain level. This is described in
more detail in the “Sustainable value chain” section of this document.
43
44
45
This analysis, based on the Group reporting scope in 2021, excluded the Chiplun (India) plant.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
217
Furthermore, 11,168
46
hours of training were provided in 2023 on the topics of Ethics and Human
Rights, with a view to raising and disseminating awareness about them within Prysmian.
More information about Prysmian's human rights due diligence process can be found in the
Human Rights section of the corporate website
47
.
Health and safety in the workplace
Safety is central to all Prysmian Group activities.
As part of the company's value system and commitment, Safety is the main guideline of an
efficient organization that aims to build a culture of prevention that generates positive impacts
across all of its key elements: Human Capital, Production, Property, Quality, relations with
Customers and Suppliers.
The commitment to ensuring the occupational health and safety of all of employees, interns,
contractors and anyone working within the organization is embodied in the Zero & Beyond
philosophy.
Zero & Beyond is a commitment to making the lives of people safer and ensuring safety in every
single moment of daily life, from the workplace to the community. Z&B is an approach based on
the belief that human life and health are indispensable values that take priority over everything
else. This is why the Group firmly believes that every injury or accident can be prevented and
that promoting the idea of safety and constantly improving it is everyone's responsibility.
This shared vision of Safety Culture is supported by numerous initiatives at local level and is
broken down into various strategies to consolidate and promote the proper attitudes and conduct
in order to always ensure greater safety in the workplaces.
All information about Zero & Beyond is available on the Group website
48
and sponsored by the
Top Management. All Group personnel, whether Desk Workers or Non-Desk Workers, at Regional
and plant level, have been involved to ensure their awareness of the strategy adopted and are
encouraged to participate as its promoters. The strategy has been and continues to be
disseminated in practice, via workshops, and at the visual communication level, via banners,
logos and the use of “Zero & Beyond” clothing.
In addition, the Prysmian HSEE Policy was updated in 2023, approved by CEO Valerio Battista
and published on the Corporate website
49
. This policy contains all the principles that Group
companies pledge to respect, including:
46
Training hours refers to all the courses held at Prysmian Group and classified as “Ethics & human rights” in 2023.
47
48
49
06-2023-VB.pdf
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
218
•
The management of activities and processes using health, safety, environment and
energy (HSEE) management systems compliant with international standards, with a
commitment to make continuous improvements;
•
The identification of hazards associated with their activities, the assessment of potential
health risks and their elimination and/or minimization via appropriate prevention
measures, not only via the adoption of collective and individual protection systems, but
also by encouraging a culture of safety that influences behaviors;
•
The demonstration of leadership capable of involving all levels with the organization and
all those who work for the Group, ensuring that operational procedures and
responsibilities are defined precisely, communicated appropriately and covered by
specific training;
•
The communication of HSEE information to all internal and external stakeholders, in
accordance with specific procedures and programs.
As a further guarantee and commitment to the management of occupational health and safety
matters, all Group plants will be ISO 45001-certified by 2026.
Prysmian applies established procedures for the management of injuries, which are the tip of
the iceberg in the reactive safety management system. Injuries can have negative impacts in
human, financial and technical terms, as well as on the reputation of the organization itself. The
next section describes the procedure adopted for the in-depth analysis of events, so that their
root causes can be identified and eradicated in order to prevent their recurrence.
Occupational health and safety management system
The following sections describe the health and safety risks identified and the associated
mitigation actions pursuant to Italian Legislative Decree 254/2016 with reference to the 2023
material topic: Well-being, engagement and improvement of human capital skills
Risk identified
: Health and safety risks
Description of risk:
The main health and safety risks to which Group personnel and contractors
are exposed are linked to the work carried out by them at production locations, on vessels and
at construction sites.
Mitigation actions adopted:
The Group has always been committed to protecting the integrity, health and welfare of workers
in their workplaces. With particular reference to health and safety risks, the Group has adopted
a centralized management system based on the identification and evaluation of factors deemed
critical at various levels: Group, country and business unit. This approach provides a complete
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
219
picture of the risks associated with individual production activities, in order to manage, monitor
and minimize the health and safety risks.
In order to apply the health and safety standards defined at Group level, Prysmian uses tools
and operating procedures for collecting, evaluating, aggregating and reporting data at central
level, as well as the implementation and verification of corrective and preventive actions and the
monitoring of significant events (injuries, near misses, non-conformities and reporting). Other
mitigation actions aim to train staff not only for the transfer of technical knowledge, but also to
impart an understanding of the approach taken and the risks incurred as a result of non-
compliance with H&S rules and procedures.
To increase and strengthen the safety culture at Prysmian's factories, in 2023 the Group
promoted a multi-year audit program ("Safety Assessment Program") conducted by a third
party, with the aim of measuring the maturity of the safety culture at Prysmian's sites through
a customized protocol to assess safety performance across 4 main streams (Governance,
Employee Engagement, Risk Assessment and Frequency Index). Through the Safety Assessment
Program, Prysmian aims to raise awareness of key plant risks and issues at every organizational
level and, through specific improvement plans, to cultivate a continuous improvement mindset
by identifying strengths and weaknesses for each site while also aiming to reduce injuries.
Prysmian has therefore redefined new quantitative targets within its Impact Sustainability
Scorecard while taking into account the result of the Safety Assessment Program (plant Maturity
Level and reduction of frequency and severity indices monitored at group level).
Risk identified:
Risks related to changes in the legislative environment governing Health,
Safety and the Environment.
Description of risk:
The Group's production activities are subject to national and international
laws and regulations governing Health, Safety and the Environment. Future legislative and/or
regulatory changes, more or less foreseeable, might affect the operations of the Group, its ability
to compete in the marketplace and its financial results, unless those changes are identified,
anticipated and managed on a timely basis. In particular, the Group has analyzed the potential
regulatory risk relating to energy efficiency, including the introduction of more stringent
reporting requirements and possible changes in local legislation that transposes the “Energy
Efficiency Directive” 2012/27/EU (EED), as amended, on energy end-use efficiency.
Mitigation actions adopted
Via the HSE Management System, centralized and coordinated by the Corporate HSE team, the
Group monitors constantly any changes and/or developments in the HSE requirements,
including:
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
220
•
changes in HSE legislation at local and Group level and related periodic reporting to the
top management, in order to discuss any actions needed to comply with the regulations;
•
implementation of initiatives and projects designed to mitigate risks and promote
continuous improvement.
To ensure a systematic and concrete approach to safety, the Group adopts the ISO 45001:2018
“Occupational health and safety management system” for 75% of corporate assets. In particular,
the adoption of ISO 45001 certification enables the organization to:
•
establish systematic processes that take account of the business context by evaluating
risks and opportunities;
•
determine the risks associated with its activities, in an attempt to eliminate them or
introduce ad-hoc controls to minimize their severity;
•
establish operational controls;
•
increase awareness of the matter by all interested parties at every level within the
organization;
•
ensure that workers play an active role in health and safety matters.
The Group has issued a procedure that defines the methodology for identifying, assessing and
documenting all workplace health and safety risks, in order to eliminate or reduce them, keep
any residual risks under control and comply with legal requirements.
The corporate risk assessment procedure is endorsed and adapted at local level, in compliance
with current laws. Accordingly, all systematic risk management activities are carried out at plant
level, including the reporting of hazards, near misses and unsafe conditions identified by
operators; all of these activities follow established local management and reporting procedures.
Corporate has issued a specific group procedure on the management of workplace incidents.
This procedure, endorsed and applied at local level, requires all incidents – with or without lost
days – to be reported and analyzed by specified deadlines using Group software. The objective
is to share information about the most significant incidents and raise cross-functional awareness
at all factories.
As far as training is concerned, in order to ensure compliance with current regulations, the HR
functions, at country level, with support from the safety managers, prepare training plans for
their personnel and develop specific training courses for the various categories of worker,
depending on their roles, duties, levels of responsibility and working environment. At corporate
level, the HSE team provides training on group procedures to be applied locally and specific
training to enhance the skills of Group resources through the HSE Academy.
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In order to monitor the employee safety KPIs, monthly reviews are carried out at both plant and
regional level to identify possible improvements and structured action plans, as well as strengths
and best practices to share with other facilities.
All occupational health and safety projects presented to the Investment Committee were
approved. These projects focused on the following areas: forklifts, asbestos, fire detection
systems, system for managing the treatment of water and waste. Again in 2023 all plants
continued to improve traffic management and adapt the fleet of forklifts to the best safety
standards defined in Group guidelines.
The following table analyses Group personnel by type of worker included within the reporting
scope. The Frequency Rate has fallen by 4% with respect to 2022, while the Severity Rate has
increased by 10% due to the ongoing effects of injuries suffered in 2022. The most common
problems relate to
the musculo-skeletal system..
Prysmian Group 2023
Group (total)
Prysmian
employees
Temporary Agency
Workers (*)
Contractors
(**)
Severity rate (IG)
(1)
58.58
59.18
50.77
32.74
Frequency rate (IF)
(2)
1.34
1.28
2.05
1.10
Hours worked
60,184,536
55,898,961
4,285,576
9,425,531
(1)
Severity rate
: ratio of days lost due to injury to the number of hours worked, multiplied by a factor of 200,000.
(2)
Frequency rate
: ratio of injuries with loss of working days in excess of 24 hours to the number of hours worked, multiplied by factor
of 200,000. The calculation of injuries only considers those suffered in the workplace and not during travel between home and work,
unless transportation was organized by the company.
(*)
Temporary agency workers
: workers employed by staffing agencies.
(**)
Contractors
: This disclosure requires the organization to report the number of workers who are not employees and whose work is
controlled by the organization. Control of work implies that the organization directs the work performed or has control over the means or
manner in which the work is performed.
Prysmian Group 2023
Prysmian
employees
Temporary Agency
Workers
Contractors
Number of fatalities
-
-
-
Fatality rate
(1)
-
-
-
No. of reportable injuries
359
44
52
of which with serious consequences
(2)
11
-
1
Severity rate (IG)
59.18
50.77
32.74
Frequency rate (IF)
1.28
2.05
1.10
Frequency rate for injuries with serious
consequences (IF)
0.04
-
0.02
Hours worked
55,898,961
4,285,576
9,425,531
No. of occupational diseases
(3)
28
-
-
Occupational disease rate
(4)
0.50
-
-
(1)
Death rate
: ratio of the number of fatalities to hours worked, multiplied by a factor of 200,000.
(2)
Frequency Rate for injuries with serious consequences
: ratio of injuries with loss of working days in excess of 180 days to hours
worked, multiplied by a factor of 200,000. Injuries with serious consequences are defined as those lasting more than 180 days.
(3)
Occupational diseases
: illnesses contracted in the course of and as a result of the hazardous work to which the worker is assigned
(e.g. deafness from noise, tumors caused by paints, dyes or carcinogenic substances etc.). The risk may be caused by the work that the
worker does, or by the environment in which the work is performed.
(4)
Rate of occupational diseases
: ratio of the number of occupational diseases reported and recognized during the year to the number
of hours worked, multiplied by a factor of 1,000,000.
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Prysmian Group 2022
Prysmian
employees
Temporary Agency
Workers
Contractors
Number of fatalities
-
-
-
Fatality rate
-
-
-
No. of reportable injuries
360
52
45
of which with serious consequences
8
-
-
Severity rate (IG)
54.20
44.12
31.56
Frequency rate (IF)
1.32
2.39
1.02
Frequency rate for injuries with serious
consequences (IF)
0.03
-
-
Hours worked
54,582,051
4,351,680
8,814,534
No. of occupational diseases
35
-
-
Occupational disease rate
0.64
-
-
Prysmian Group 2021
Prysmian employees
Temporary agency workers
Number of fatalities
1
1
Fatality rate
0.004
0.050
No. of reportable injuries
394
49
of which with serious consequences
11
1
Severity rate (IG)
46.98
49.92
Frequency rate (IF)
1.49
2.44
Frequency rate for injuries with serious
consequences (IF)
0.04
0.05
Hours worked
52,997,509
4,018,110
No. of occupational diseases
58
-
Occupational disease rate
1.02
-
One of the two fatalities in 2021 was a contractor and not a temporary agency worker.
In relation to contractors, these include employees of subcontracting companies that the Group
uses to build turnkey transmission systems. In this regard, Prysmian is committed to ensuring
that the highest standards are met during project implementation activities, whether carried out
directly or contracted out to specialized companies, both onshore and offshore.
In this respect, Prysmian demands the same commitment from its contractors to ensuring the
health and safety of their employees.
Prysmian monitors the HSE Performance and Key Performance Indicators of all Projects in which
it is the main contractor and those in which it participates as a member of a consortium and is
responsible for health and safety management.
The following table shows the occupational diseases reported and recognized in 2023.
Hazards
Associated risk
Actions taken to eliminate the hazard
and minimize the risks
Noise
Hearing system damage
Acoustic analysis; training in the use of PPE;
update of the list of identified Risk Agents;
dosimetric measurement of noise to
determine the level of exposure to the risk
Hazard for the
musculoskeletal system
(ergonomics)
Physical exertion; high level of repetition and
frequency of a movement affecting one part
of the body; ergonomic risk; manual handling
of loads; vibration risk
Ergonomic analysis of the factory to minimize
physical exertion and repetitive movements
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Sustainable value chain
The Prysmian Group knows that a sustainable value chain is critical to being competitive and
resilient. Therefore, all of our production processes take place with sustainability in mind. We
anticipate our customers' needs and requirements by strengthening the connection with
suppliers and focusing on creating value for them and all of our stakeholders. The integration
between our economic and social mission is at the heart of our management model. We work
for a sustainable future every day, constantly seeking out a balance between shared value with
the consumer, society and the Planet. Our technological and industrial leadership amplifies our
positive impact on the community. Because only by truly feeling part of the community can
concrete work plans be implemented for ethical business and sustainable business growth.
•
500 suppliers subjected to ESG audit
•
About Euro 2,000,000 contributed to local communities in 2023 in terms of contributions
in cash, products and working hours of employees.
•
More than Euro 600,000 donated to local communities in Turkey and Syria following the
earthquake
•
Euro 128,000,000 in R&D capital expenditure in 2023
•
more than 50 collaborations with research centers and universities
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Prysmian Group’s supply chain
Prysmian’s supply chain plays a decisive role in the business and the sustainability strategy of
the Group. On the one hand, it endeavors to keep plant capacity saturated and eliminate
production bottlenecks while, on the other, it guarantees a competitive advantage thanks to the
careful selection of suppliers in ESG terms and constant engagement with them, by forging long-
term partnerships.
The following sections describe the risks identified and the associated mitigation actions pursuant
to Italian Legislative Decree no. 254/2016 with reference to the 2023 material topic: Sustainable
value chain
Risk identified
: Risks related to the sustainability of the Group supply chain
Description of risk:
The Group's business model, with a global presence in over 50 countries
and a high diversification of product applications, is based on a complex supply chain that
requires a continuous interface with numerous suppliers of different sizes and cultural
backgrounds. Without prior investigation and control, the management of a complex supply
chain might result in the Group procuring goods and services from suppliers that do not comply
with its guidelines and policies, with the risk of supporting suppliers that do not operate in line
with international standards. In addition, the Group believes it has a responsibility that goes
beyond its organizational boundaries and, therefore, by managing the sustainability of its supply
chain (upstream or downstream activities and customers), it is also able to limit any reputational
risks that may arise.
Mitigation actions adopted
In addition to its commitment to the evaluation of counterparties, the Group has adopted
guidelines and policies with which suppliers are required to comply (for example, the Code of
Ethics and the Code of Business Conduct). There will be an immediate reaction should it emerge
that third parties involved in the supply chain have implemented actions not conforming to the
principles of environmental and social sustainability, which would expose the Group to potentially
significant image and reputational risks. If the issues flagged are not promptly resolved and
eliminated, the Group reserves the right to activate a procedure for the termination of existing
business activities and temporary, or, in serious cases, definitive exclusion from the Group's
supplier list. The assessment of risks related to the sustainability of third parties is a fundamental
step in the entire supply chain management process that defines clear rules for i) the introduction
of new suppliers, ii) the periodic evaluation of the supply chain, iii) the monitoring and
improvement of the supply chain management strategy. In this regard, with a view to enhancing
its social and environmental strategies in the supply chain area, the Group has defined a Supply
Chain Strategy and related actions that supplement the ESG factors throughout the value chain.
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Sustainability of suppliers
The sustainability of suppliers must be assured from both a social and an environmental
standpoint. Prysmian is committed to having a supply chain that respects all aspects of workers’
rights, in line with the high standards applied by the Group to all direct counterparties.
From an environmental standpoint, supplier selection is key to reducing the Scope 3 emissions
of the Group, so that the entire supply chain can achieve carbon neutrality by 2050. In addition,
Prysmian seeks to support those suppliers that use recycled materials in their production
processes. This applies both to metals, especially copper, and to plastics, such as polyethylene.
Notably, transportation and logistics also have a non-negligible impact on the Group's emissions.
Accordingly, Prysmian is focused on continuously monitoring and optimizing its logistical flows,
in order to ensure the sustainability of the business in economic and environmental terms, given
the considerable weight and volume of the products handled. In this context, constant efforts
are made to reduce CO2 emissions by improving the efficiency of the distribution networks and
fleets of the various logistics partners.
For its supply chain, Prysmian aims for excellence in terms of service level, striving to ensure
product availability based on customer needs. This depends not only on business approaches,
but also on the responsibility associated with the Group's leading role in the international
context, absorbing about 2-3% of the world's copper production, and in the electrical and
electronics sector, where the share rises to about 7% of copper used.
The policy adopted by Prysmian authorizes the use of raw materials only if they have received
technical approval and have been sourced from qualified suppliers. Consistent with the
procedures adopted by the Group, the Purchasing area – in collaboration with the Quality and
R&D functions – carries out product/process audits at suppliers to assess their ability to
manufacture the materials concerned and guarantee the required technical performance, in
addition to expected quality.
PRYSMIAN GROUP SUPPLIERS
Being a global leader in manufacturing and having to directly source metals and raw materials
entails a number of challenges, including the need to continuously monitor the entire
procurement base, ensuring that all of Prysmian’s business partners apply ethical conduct in
their business processes. Prysmian can count on a broad and diversified procurement base, with
mutually advantageous business relationships. Most of the Group’s suppliers are established
leaders in their markets, applying best practices for the management of ESG factors. At the
same time, the Group also works with smaller players which can benefit from working with a
customer like Prysmian, willing to support their business continuity and make recommendations
on how to improve their sustainability management.
Base metal
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227
The Base Metal category includes three raw materials: aluminum, copper and lead; the first two
account for the majority of raw materials purchased by the Group. The essential element of the
cable conductor manufacturing process is copper and aluminum wire rod. These metals are
purchased from the world's major mining companies, while Prysmian manufactures only modest
amounts of wire rod itself (less than 10% for copper and about 25% for aluminum compared to
total requirements). Given the highly fragmented copper market, the Prysmian Group represents
one of the major economic players in the industry. The Group's metal procurement strategy
takes into consideration three aspects:
• the importance of suppliers within the Group's value chain
• the high consumption of metals
• the widespread geographical distribution of Prysmian's production sites
With specific reference to aluminum sourcing, the choice is increasingly leaning toward vertically
integrated suppliers (with processes that produce aluminum wire rod from alumina directly)
versus non-integrated producers (producers who purchase aluminum ingots for wire rod
production). This strategy, in addition to having several advantages in terms of both supply
security and costs, is also much more environmentally sustainable, thanks to the simplification
of logistics flows and the elimination of the ingot remelting cycle. In view of the high power
consumption required by the metalworking processes, Prysmian has also adopted ecological
footprint as a criterion for supplier selection, allocating significant portions of its portfolio to
aluminum manufacturers with a reduced environmental impact. Collaborating with leading
companies in the copper and aluminum sectors, which are equally concerned with environmental
sustainability, thus allows for the creation of a highly sustainable end-to-end cycle. In addition,
Prysmian has been working to make trade more sustainable through increased digitalization and,
in the future, it aims to adopt an increasing number of initiatives in collaboration with suppliers.
Raw materials
While Base Metal is mainly used for energy cable conductors, all other raw materials prove useful
for a wider range of products and applications:
• Cable raw materials (used for insulation and conductor protection), such as polyethylene and
PVC-based compounds, rubbers, special plastics, yarns, tapes and galvanized steel cables
• Raw materials for optical fibers such as coatings, glass tubes, high-purity quartz sand and
silicon-based donor products
• Components for energy and telecommunications accessories such as connectors, composite
insulators for metal parts, enclosures and junction boxes
• Raw materials and components for elevators and escalators
• Materials and components for optical and electronic sensing solutions
With a broad range and small volume of raw materials purchased, Prysmian is not a significant
partner for most of the suppliers of the raw materials listed above. Typically, Prysmian uses
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228
either goods that are widely available from multiple sources or high-performance raw materials
that are produced only by a small number of suppliers, often highly specialized multinational
companies characterized by strong technological know-how and high specialization in the cable
and conductor market. Prysmian regularly assesses potential financial and operational risks,
which may derive from circumstances such as single-source sourcing or supply-demand
imbalance. These risks are managed by entering into long-term supply agreements when there
is only one supplier or when its replacement would entail considerable difficulty and take a long
time. In the event of risks linked to limitations in market supply, Prysmian works with the
technical functions to identify alternative suppliers in order to diversify supply options.
Non-raw materials
The Non-Raw Material category incorporates all the services and goods which are not directly
connected to the end products. Excluding installation services, this category specifically includes:
transportation, packaging, MRO (maintenance, repair, and operations services) and utilities,
which account for more than 50% of total expenditure for the category. Services that fall under
these four definitions are handled in very different ways, depending on the level of centralization
required:
Transportation: for these services, there is strong support from headquarters in managing global
or domestic agreements with international suppliers that provide specific expertise in logistics
aspects and management of billing process. Relationships with these suppliers are established
through long-term partnerships with the following objectives: highest quality and efficiency in
logistics flows, high level of service and on-time delivery, cost management and price stability
to avoid "spot" market fluctuations. Increasing attention is also paid to the ability of
transportation and logistics suppliers to measure and report CO2 emissions generated "on
behalf" of the Prysmian Group.
Packaging, in turn broken down into:
Reels: they represent the most common packaging method for transporting cables to their final
destination, which is generally defined on the basis of national contracts coordinated by
headquarters. The Prysmian Group mainly purchases wood and steel reels, with a smaller share
of plastic and plywood reels. Steel reels are returnable and, after being repaired, are
reintroduced into the cycle, while wooden reels are not always reused. As a result, one of the
Group's most important goals is to increase the amount of reused wooden reels. Initiatives are
also underway to replace some of those purchased already assembled with reel kits, with the
aim of reducing the space needed to transport them and, consequently, the carbon footprint of
transport operations. Regarding plastic reels, the Group is considering the use of alternative
materials and is trying to increase the use of recycled plastic materials instead of virgin plastic.
In 2021, Prysmian entered into a partnership with a selected supplier of plastic reels with the
aim of using its own plastic waste to close the cycle.
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229
Starting in 2023, the company launched a program to promote the responsible use of wood used
for reels and packaging as much as possible by mapping suppliers with certifications that support
the responsible use of the material (PFEC, FSC, Canadian Wood Pallet certification program,
Timber Trade Federation). 60% of the group's expenditure on wood products comes from
suppliers holding such certifications. The ultimate goal is to increase this share.
Other packaging materials
: pallets, wooden planks, endcaps and foam materials used to
cover the reel once it is loaded. This part of expenditure is managed at the local level, with the
aim of reducing costs as much as possible and promoting the adoption of more environmentally
sustainable solutions.
MRO (Maintenance, Repair and Operations): this category includes a wide range of materials
and services, mainly spare parts (mechanical and electrical) and PPE. These services are mostly
handled nationally, while in some cases facilities may refer to local workshops that offer better
service at more competitive prices than the major players. The objective is to maintain PPE
management at national level so that strict controls are in place to ensure that all safety
requirements are met. Spare parts management is also largely centralized, while local
agreements may be made for repairs to ensure more efficient management.
Utilities: amongst these supplies, the largest share is related to electricity (85%). Each year, the
Group analyzes utility expenditure in detail, evaluating the possibility of using more
environmentally friendly energy sources (e.g., investment in solar panels and farms at selected
factories), increasing plant efficiency to reduce energy consumption (e.g., LED lighting
initiatives) and investing in the purchase of GO (Guarantees of Origin) certifications.
The table below shows the expenditure for each of the macro-categories presented above:
2023
2022
2021
Base metal
55%
56%
59%
Non-raw materials
19%
23%
19%
Raw materials
26%
21%
22%
The highest expenditure is in the Base metal category and can be attributed to the specific nature
of the Group's production.
The next table shows the amount of materials used broken down by weight:
Materials used by weight or volume [kton]
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
230
2023
2022
2021
Metals
1,161
1,219
1,189
Compounds (*)
348
365
374
Ingredients
274
288
299
Chemicals
6
6
6
Other (yarns, tapes and oils)
27
26
25
Total
1,816
1,904
1,893
(*)
Compounds: in the processing of rubber, mixtures of polymers and ingredients (talc, kaolin, carbon, etc.) having various functions
(e.g. strengtheners, accelerants, colorants).
The percentage of renewable materials used is equal to 1%.
Depending on the raw materials sourced, Prysmian identifies two main risks, namely their carbon
footprint and their origin. With regard to environmental impacts, the Group has established the
following long-term partnerships:
-
a long-term collaboration with the Carbon Disclosure Project (CDP) to tackle climate
risk and find new alternatives with a lower environmental impact in relation to the
materials it uses. The CDP helps Prysmian to collect and analyze Scope 1 and Scope
2 emission data from suppliers, following which feedback is sent and new targets are
set for the continuous reduction of adverse environmental effects. In 2023, the
Group concentrated on improving the response rate from the suppliers involved
(which represent about 50% of total expenditure by the Group);
-
partnership with the Carbon Trust: the Carbon Trust has helped the Group set its
Science-Based Targets. See the “Climate Change & Social Ambition” section of this
document for further information.
With regard to the social impacts deriving from the origin of its materials, Prysmian adopts
measures to monitor and prevent potential infringements of human rights:
1.
Prysmian Group implements a “Conflict Minerals Policy”, with the aim of guaranteeing a conflict
-
free supply chain that does not contribute to fueling armed clashes in conflict zones and high-risk
areas; this is objective is pursued through the following activities:
-
identification of purchased materials and/or semi-finished products containing 3TG (tin,
tungsten, tantalum and gold);
-
requesting all new and regular suppliers of products containing the above materials to complete
the latest version of the Conflict Minerals Reporting Template (CMRT), developed by the
Responsible Minerals Initiative (RMI) (using international formats and standards);
-
analysis of the information received for red flags and inconsistencies and implementation of
appropriate corrective actions.
The policy, drawn up in 2017 and approved by the Group CEO, is publicly available on the Group
website.
2.
In order to manufacture certain safety cables and make them fire-resistant, Prysmian contacts
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
231
producers and distributors to purchase limited quantities of certain types of glass-based tape
containing low percentages of mica. This mineral is n
ot used directly in the Group’s products and
production processes. Mica is mined in geographical areas where several factors contribute to
unsustainable working conditions and the use of child labor. Since 2016, Prysmian Group has
been involving suppliers of mica-containing products in activities to raise awareness of working
conditions. The Group gives special attention to the analysis of risks present in the supply chain
and makes responsible efforts to work with suppliers that share the objectives defined in its
Human Rights Policy, requiring appropriate disclosures regarding mica sources and to certify the
absence of child labor. Prysmian Group is also committed to reducing as much as possible the
amounts of mica in its products. The volumes of mica purchased are now in the range of 0.05%
of total raw material requirements for the GroupPrysmian has been addressing this issue since
2016 by requiring all suppliers to provide appropriate information about their mica sources and
certify the absence of child labor. In 2021, Prysmian Group became the first business in the cable
industry to join the Responsible Mica Initiative (RMI). Membership of the RMI enables Prysmian
to exercise even more effective control over its supply chain.
In addition to the Code of Ethics and the Human Rights Policy already described in “Ethics and
Integrity” section and the Conflict Minerals Policy presented above, Prysmian applies the
following policies to manage business relationships with its supplier base:
Supply chain strategy and vendor management
The increasing development of supply chain sustainability activities has made it necessary to
develop a specific strategy. The "Supply Chain Strategy and Vendor Management" document
summarizes the main characteristics of Prysmian’s supply chain strategy and the actions taken
to integrate ESG factors into its management. The document has been available on the corporate
website since 2021.
50
50
I-2023-prysmiangroup-purchasing-supplychainstrategy-public-final.pdf
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232
Code of business conduct
With a view to ensuring compliance with ethical, economic, environmental and social standards
throughout the value chain, Prysmian Group has adopted a Code of business conduct that
promotes a responsible and sustainable supply chain. This document, prepared by the Supply
Chain function and approved by the Group CEO, is available on the corporate website
51
.
The principles set out in the Code apply to the business transactions and daily activities of the
employees of all Group entities and their suppliers, business partners, commercial agents, sub-
contractors and distributors.
The document covers the following topics:
-
business integrity (fair trade, conflicts of interest, gifts and offers of entertainment,
corruption, corporate responsibility);
-
human rights and workers’ rights (child and forced labor, occupational health and
51
519.pdf
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
233
safety, non-discrimination, freedom of association and collective bargaining);
-
environment (principle of precaution, use of raw materials and compliance, energy
consumption, greenhouse gases and other emissions, water consumption, waste
generation and recycling).
Prysmian’s application of the related guidelines is impressed on suppliers at the preliminary
stages of collaboration.
Finally, with regard to the economic impacts resulting from its procurement practices, in order
to report on the company's commitment to fostering the growth of all geographical areas in
which it operates, Prysmian also monitors and reports the percentage of expenditure on goods
and services devoted to local suppliers:
2023
2022
2021
EMEA
70.8
69.0
60.1
APAC
86.7
84.0
76.3
North America
94.0
100.0
99.3
LATAM
95.7
95.0
80.2
The Group considers suppliers to be “local” when they are based in the same country as Prysmian
companies.
Supplier analysis and management
As envisaged by the Supply Chain Strategy, Prysmian Group carries out the following assessment
activities to analyze further and monitor the related risks:
1.
Supplier Desk Analysis:
The main purpose of developing the Supplier Desk Analysis is to assess the sustainability
of major suppliers. The analysis considers social, economic and environmental (ESG)
criteria and is performed by a third-party partner of Prysmian Group on relevant topics
for the Group. Specifically, the Sustainability Partner analyzes the websites of each
supplier plus any other forms of public information, evaluating available data relating to
three macro areas:
o
sustainability and management systems;
o
environmental criteria;
o
human rights and workers' rights.
In 2023, the assessment analysis of suppliers with potential social and environmental impacts
involved 500 suppliers, compared to 150 in 2020, covering 67% of the Group's expenditure. The
analysis identified specific environmental, social and governance risks in the supply base.
2.
Supplier risk analysis
:
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234
The supply chain risk analysis is based on the assessment and analysis of data obtained from
the Desk Analysis (therefore considering the same 500 suppliers described in point 1), and
combines sustainability scores obtained with a list of parameters deemed critical by Prysmian
for risk assessment purposes. The combination of these elements enables Prysmian to identify
the clusters of risk and, among these, critical suppliers. The table below shows the critical aspects
rated by Prysmian:
3.
Sustainability audits and potential impact management:
A sustainability audit program was implemented in 2017, with the goal of performing 30
ESG audits by the end of 2022. This goal was achieved and the auditing program has
been extended beyond 2022. These audits were performed with support from an external
consultant. Suppliers subject to audits are identified based on the score assigned to them
downstream of the Risk Analysis. The results of the audits performed are shared with
them, with the aim of generating positive change in those that are underperforming. If
the results are satisfactory, the supplier is no longer considered to be high risk. If the
audit results are not satisfactory, a follow-up audit is carried out on the basis of an agreed
action plan. The Group's major suppliers are regularly involved in specific activities, such
as workshops and collaboration on the development of more sustainable products, in order
to generate a medium/long-term impact on the industry. With regard to base metals,
many Prysmian suppliers participate in the most important industry initiatives, such as
the Copper Mark and the Aluminum Stewardship Initiative (ASI).
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
235
Negative environmental impacts in the supply chain and actions taken
2023
Number of
suppliers
%
Evaluated suppliers
500
Suppliers with a current or potential negative impact
97
19.4%
Suppliers with a current or potential negative impact for which an improvement plan has been
adopted
0
0.0%
Suppliers with a current or potential negative impact with whom business relations have been
suspended based as a result of the assessment
0
0.0%
Suppliers with a current or potential negative impact for which an improvement plan has been
adopted (percentage)
0
0.0%
Suppliers with a current or potential negative impact with which business relations have been
suspended as a result of the assessment (percentage)
0
0.0%
Number and percentage of suppliers assessed for social impacts
2023
Number of
suppliers
%
Evaluated suppliers
500
Suppliers with a current or potential negative impact
98
19.6%
Suppliers with a current or potential negative impact for which an improvement plan has been
adopted
0
0.0%
Suppliers with a current or potential negative impact with whom business relations have been
suspended based as a result of the assessment
0
0.0%
% of expenditure
2023
Percentage of expenditure on suppliers assessed for environmental impacts
71.0%
Percentage of expenditure on suppliers with potential/current negative impact
1.0%
Percentage of expenditure on suppliers with potential/current negative impact for which improvements have
been established
0.0%
Percentage of expenditure on suppliers with potential/current negative impact with which relationships were
suspended as a result of the assessment
0.0%
In 2023, Prysmian adjusted its approach to sustainability audits and action plan development,
prioritizing strategic suppliers with the greatest influence on the end product and those that play
vital roles in supporting the company's operations. Although the importance of ESG factors is
recognized throughout the supply chain (smaller suppliers included), a risk-based audit approach
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was adopted, which led Prysmian to focus on the resources with the most significant potential
impact. The 97 suppliers with possible negative environmental impacts and the 98 with a
potential negative social impact – mentioned in the tables above – are not considered strategic
for the Group, as they cumulatively represent only 1% of total procurement. However,
conservatively, based on the results of the Desk Analysis, it was still decided to conduct 6
sustainability audits in 2023, following the approach described above. The following suppliers
were audited in 2023: Rio Tinto Alcan, Plasínco, Arlanxeo, Indore, Scapa, Tervakoski. The results
of the 6 audits showed that the potential impacts that could be generated by these suppliers –
both environmental and social – were not significant.
As a consequence of above described sustainability audit for supplier was of 36.
Involvement of suppliers in the Group's ESG matters
Prysmian involves its suppliers in various activities in order to build awareness about ESG
matters. A number of initiatives are presented below:
•
the actions regarding ESG factors promoted by Prysmian are made available to all
stakeholders on the corporate website;
•
since 2015, the annual “Purchasing Fundamentals” training course includes a broad,
in-depth section on the topic of sustainability in purchasing. Each year, 30
managers (with differing levels of seniority) from Prysmian companies all over the
world are invited to attend this training course;
•
Prysmian began development of the Vendor Management portal in 2021. This
modular, web-based application will improve the efficiency of supplier relationship
management and enable the Company to monitor their ESG compliance. This
platform, comprising 4 modules, seeks to harmonize and improve the business
processes involved. The project went live in 2022, starting with the headquarters
and the pilot regions, and is now being integrated worldwide; supplier screening in
the onboarding phase is differentiated on the basis of the product/service purchased
and the relevance of the supplier to the Group (i.e., strategic vs tactical suppliers).
The onboarding questionnaire is designed to assess the alignment of the supplier
practices/policies with those of the Prysmian Group;
•
a member of the Purchasing Department sits on Prysmian Group's Sustainability
Steering Committee, given that procurement is an area of interest for the
sustainability of operations. Some members of the Purchasing Team who manage
and follow-up ESG activities are also directly involved in procurement activities,
giving them greater knowledge of the supplier base and a superior ability to manage
initiatives with suppliers.
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Logistics and transportation
For much of 2023, until the outbreak of conflict in the Middle East, there was a gradual easing
of the tensions that had strained global supply chains from 2020 onward.
Unlike the previous three years, there were no drastic discontinuities either in terms of demand
or disruptions to the supply chain.
Regarding the first aspect, the volatility of sales volumes brought a sharp focus back to inventory
management, after a two-year period in which the supply of raw materials to ensure business
continuity had been the top priority.
With this in mind, the work of Operations, both in terms of planning and supplier management,
has made it possible to limit the negative effects of the lack of volume growth on net working
capital, reducing the level of inventories on finished products and beginning a path of
optimization on raw materials and semi-finished products, which will continue in 2024.
Also in the direction of rebalancing the Group's industrial set-up according to long-term
objectives and the macroeconomic scenario, a number of refootprint projects were defined in
2023, in both Energy and Telecom. In particular, the factory in Koepenick (railways signaling
cables) was shut down, relocating the businesses in Germany to Neustadt; in the Telecom
segment, on the other hand, the decision was approved to close the French factory in Calais
(optical cables), maintaining volumes within national borders in Montereau and Chavanoz, and
the British factory in Washington (multimedia solutions).
As for the supply chain, there were no structural criticalities on key raw materials for the group
in 2023. Some supply difficulties specifically occurred due to changes in the sales mix, in both
metals and compounds. For better management and prevention of this type of critical issue,
collaboration between the supply chain and purchasing at HQ level, which had already been
initiated at the most critical times in the previous two years, was strengthened.
Another element that has become less critical than in the immediate post-pandemic period is
transportation costs, particularly sea freight. Several intercontinental flows were established or
strengthened in 2023, greatly increasing factory saturation in low labor cost countries
(Indonesia, Oman) and generating additional and profitable sales in the United States and
Europe, mainly of Medium-Voltage cables. In addition to these strategic corridors, lower costs
and better availability of containers has made it possible to activate some more tactical
intercompany flows, such as the supply for Europe of aluminum conductors from Oman and
Brazil.
Expectations for 2024 are for a further consolidation of flows from Asia to Europe and the United
States, with a strengthening of China's role in high-voltage cable production.
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TRANSPORT ROUTES
In line with previous years, overland transportation remains the vehicle type most used by the
Group (86.7%).
Unlike in the previous two-year period, the use of air transport for transoceanic fiber flows
declined in 2023.
However, this trend is not reflected in the expenditure-based mix allocation due to tariff effects:
on one hand, the unit expenditure for sea containers, which had greatly increased in 2022, has
reduced; on the other hand, tariffs for air transport remain high.
Description
2023
2022
2021
2020
2019
2018
2017
By air
3.2%
2.8%
3.0%
2.0%
3.0%
3.6%
3.5%
By sea
10.1%
12.8%
7.5%
8.3%
10.0%
6.9%
7.0%
By land
86.7%
84.3%
89.5%
89.7%
87.0%
89.5%
89.5%
Reels made of wood and other materials
Strongly committed to implementing sustainable business practices, the Prysmian Group focuses
on developing new products and services to help significantly reduce CO
²
emissions and
collaborates with its customers to achieve a shared commitment to sustainability and improve
circularity.
An important initiative has been launched in France: the extension of the Alesea™ system on
the reel fleet and the implementation of the eco-contribution from 1
st
June.
Indeed, many drums shipped to French customers were lost or returned after several years,
significantly impacting efforts made to reuse them.
To solve this problem, since the end of 2022, a large proportion of drums shipped by the
Prysmian Group to France have been equipped with the Alesea™ drum geolocation device. The
implementation of this solution has helped, and will help in the years to come, to reduce the
Group’s carbon footprint by ensuring that reels can be rented and returned efficiently. This
increased efficiency led to an improvement in country performance of about +4%.
Other projects have also succeeded in optimizing drum management while minimizing the carbon
cost of our logistics.
Thanks also to these initiatives, Prysmian was able to counterbalance the negative effects
generated by a lengthening of reel turnaround times by some of our Key Accounts that have
accumulated delays in cable installation. The path that Prysmian has taken on this issue has
allowed it to record performance on the whole growing, moving up from 46% in 2019 to 53% in
2023.
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Prysmian Group customers – The Customer Excellence approach
Customers are central to all our corporate activities, from design to execution and the creation
of new products.
Every year Prysmian uses special tools, including online surveys, and implements specific
initiatives aimed at assessing the level of customer satisfaction and, more generally, the entire
customer experience.
Constant monitoring of satisfaction survey results is a key element for Prysmian for several
reasons:
1.
Continuous Improvement:
Survey results provide a detailed picture of customers'
experiences, identifying areas of strength and possible critical issues. This information is valuable
to the continuous improvement process, enabling Prysmian to make targeted updates to
products, services and operational processes.
2.
Alignment with Expectations:
Monitoring customer satisfaction helps Prysmian ensure
that its products and services are in line with market expectations. This makes it possible to
adapt readily to any changes in customer preferences and the business environment, while
maintaining competitive positioning.
3.
Building Lasting Relationships:
Customer satisfaction is critical to building lasting
business relationships. Regular monitoring enables Prysmian to understand the dynamics of
customer relationships, identifying opportunities to strengthen trust and loyalty through
personalized service tailored to specific needs.
4.
Customer-Oriented Innovation:
The survey analysis guides Prysmian in the innovation
of its products. Understanding customers' needs and expectations enables the Group to develop
cutting-edge solutions while ensuring that they are relevant and meet market demands.
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240
5.
Impact on Reputation:
Corporate reputation is closely linked to customer satisfaction.
Monitoring survey results enables Prysmian to proactively manage its image, responding
promptly to any critical issues and taking advantage of positive elements to strengthen its
position in the industry.
6.
Global Market-oriented approach:
Prysmian is a global company, and monitoring
customer satisfaction allows strategies to be adapted internationally. Understanding the different
needs and preferences of customers in different regions enables the targeted adaptation of
operations, consolidating presence and competitiveness on a global scale.
7.
Timely Response:
Constant monitoring of survey results enables Prysmian to respond
promptly to customer needs and concerns. A prompt response demonstrates the company's
commitment to ensuring maximum satisfaction and building a long-term trusting relationship.
Results of the 2023 on-line surveys:
• Target: 28 countries;
• Scope: Europe – North America – Latin America – OSEA – United Kingdom – Turkey;
•
Customer scope: Main customers – mainly in the distribution channel;
•
RESPONSE RATE:
37%
OF SCOPE
The customers interviewed were presented with 6 main macro-categories of drivers (Commercial
strategy, Innovative products and solutions, Supply chain activities, Customer support,
Marketing, Digitalization).
Respondents were asked to rate, with a score from 1 (lowest) to 5 (highest), the importance of
each driver and their level of satisfaction with Prysmian's performance. The results of the survey
conducted in 2023 are summarized below.
For Prysmian's main customers in the distribution sector, the Supply Chain is a highly important
factor, with a score of 4.5 in terms of importance, while the satisfaction regarding this element
was rated 3.6, marking a slight improvement from 2022 (3.5). Prysmian will continue to pay
special attention to supply chain management, recognizing it as a fundamentally important item
in implementing actions aimed at improving customer satisfaction.
Commercial Strategy and Customer Care Support, both scoring 4.4, are two just as important
drivers for Prysmian Group's customers. Business strategy evaluation improved also in 2022
from a customer satisfaction level of 3.6 in 2022 to 3.9 in 2023. In addition, the satisfaction
level for Customer Care Support remained constant at 4.
The improvement in Prysmian's performance also affected the topic of Digitization, going from
3.6 to 3.7, while holding steady in terms of importance (3.9).
Customers were also asked to measure the NPS (Net Promoter Score), indicating how likely they
are to recommend Prysmian Group to a friend or a colleague.
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The NPS (Net Promoter Score) – instrument used to measure customer satisfaction – has
performed significantly well in Northern Europe (+54%). The worst hit region is Oceania, while
the UK improved with +25% (compared to 0% in 2022). Turkey's (+41%) and Southern
Europe's (+27%) performance has remained essentially stable since 2022. Globally, the NPS is
+36% in 2023, showing an improvement from +32% in 2022.
Given these results, the Customer Excellence and Commercial Innovation Team has arranged a
series of meetings in the various areas to discuss them. Countries and regions will prepare and
implement specific actions in support of their customers.
Prysmian Group: quality processes and solutions
Quality helps organizations to be efficient and competitive by providing a reference framework
that supports a culture of excellence. The expectations of customers and stakeholders translate
into a strategy that leverages tools designed to enhance business processes and the value
delivered.
At Prysmian Group, Quality helps to form a corporate culture in which excellence is the norm.
To support this cultural approach, a vast amount of training has been provided in recent years
to employees of all corporate functions on the principles of Quality, tools and methodologies for
solving and preventing problems.
The effectiveness of these activities can be seen in the performance of our indicators, which
show an annual trend of continuous and progressive reduction in the number of complaints. A
complaint is defined as any written notification from a customer of a potential product non-
conformity that Prysmian recognizes as such.
Aiming for excellence and high quality as a competitive lever also means making optimal use of
data within the decision-making process. To extend and exploit the available data base, thus
supporting this strategic process, the Group continued to work on innovative digital solutions
capable of analyzing huge amounts of data and allowing for better decision-making.
In the course of 2023, the Data Driven Performance project (aimed at using advanced data
analysis techniques and artificial intelligence to improve the performance of production
processes) was consolidated at fiber optic production sites and also implemented in factories
dedicated to cable production, including those in Nordenham and Gron. The Industrial IOT
project was introduced to enable better connectivity of production lines and greater usability of
process data. The extension of FastTrack MES to Group factories also continues, making product
quality management even more robust throughout the production cycle.
Timeliness and efficiency of service
For years, increasingly widespread and efficient Supply Chains have acted as a driver for the
global economy, providing goods at a lower cost, offering greater choice and stimulating greater
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242
economic growth. That was true until the pandemic came and all the supply chains were
disrupted.
In 2023, many companies struggled to recover from that huge system shock. Now the crisis in
Europe and tensions in the China Sea add new uncertainty.
As a result, most are reviewing their supply chains and evaluating a range of solutions to reduce
complexity and risk, and increase resilience. However, companies face significant obstacles,
including continuing labor and raw material shortages, external geopolitical and climate risks
and a lack of alternative suppliers.
Within such a complex global context, Prysmian is addressing these issues by taking action to
simplify and secure its systems, aiming for a more robust supply chain better able to withstand
future shocks.
Prysmian continued to maintain its strategic focus on Customer Centricity, striving to sustain an
adequate level of service performance in terms of shipment reliability and "lead time" from order
receipt to product delivery to customers.
The main purpose of the actions taken by Prysmian's Supply Chain was to adjust the operations
of its factories by mitigating the most critical implications of the Russia-Ukraine Conflict and the
new shadows cast by the Israel-Palestine conflict.
The measure of On Time Delivery (OTD), or the ability to serve the customer by meeting the
delivery date promised when the order is confirmed, saw a major upswing in 2023. This has
been achieved thanks to the “tailor-made” assistance provided by our Customer Care
departments, geared toward minimizing the impacts of difficult delivery management and above
all, the demonstrated ability to recover the burdensome order backlog accumulated over the last
year.
All of this has taken place, despite the impact in the Energy sector of Argentina's difficult political
situation and some fortuitous events, such as a fire at the Cavinova plant or, in the case of
Telecom, the extreme criticality resulting from the erosion of demand worldwide.
In the Energy business, service performance remained stable compared to the previous year as
far as the Prysmian scope is concerned (92%), while in the former GC(*) area we highlight an
important improvement mainly related to the performance in the US for both Energy and
Telecom.
(*) GC performance was added in 2022 to the service level measurement of EHC's Escalator business, which adopts an
OTD calculation similar to that used for former GC plants
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243
Positive impact on communities
One of the drivers of the sustainability strategy that has characterized Prysmian for years is the
engagement of local communities, which represent one of the stakeholders receiving the value
generated by the Group, which thus contributes to the socio-economic development of the areas
in which the company operates.
Donations
In 2019, the Group adopted a Donations policy, revised and updated in November 2023
52
, for
identifying all deserving activities. These donations are aimed at meeting the needs of
communities or the general public, in line with the Vision, Mission, values, Code of Ethics and
Policies put into place by the Group. This policy defines the main types of contributions that can
be made, the guiding principles and operating methods, as well as the monitoring and
communication of these activities. In 2023, about
Euro
2,000,000 was given
to support local
communities through contributions in cash, in products and in working hours of employees.
52
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245
Group initiatives
In relation to the “Impact on local communities” material topic, the following impacts generated
have been identified:
Positive impacts through local employment and local procurement and the payment of taxes and
other amounts to local governments, as well as community development programs and
investment in infrastructure and public services;
Negative impact potentially generated following changes in the territory and land use changes
to accommodate Prysmian's activities.
Among the main activities supported and carried out by Prysmian in 2023 to contribute to the
development of local communities and to mitigate any negative effects arising from the Group's
operations are:
-
Support to local communities in Turkey and Syria following the 6.8 magnitude earthquake
that struck the area in February. Through its own donation of more than Euro 600,000
and a public crowd funding campaign launched on the GoFundMe platform, in which
employees also participated and via which an additional Euro 45,000 was raised, the
Group, together with local authorities, financed the construction of the Prysmian Group
Village where 150 containers were placed for housing purposes for more than 100
families;
-
Support to communities impacted by the flood that hit Emilia-Romagna with more than
200 mm of water falling in less than 36 hours and more than 30 thousand displaced. The
Group contributed to community support by launching a donation campaign on the
GoFundMe platform open to all employees and doubled the donations it received from
employees for a total donation of more than Euro 12,000. In addition, Prysmian promoted
the organization of volunteer activities by its employees: 42 of them lent support to the
municipality of Forli by offering valuable help in handling reimbursement paperwork for
damages suffered by the community, lightening the workload for municipal staff. Finally,
the Group promoted "in-kind" donations with the collection of basic necessities such as
food, cleaning and hygiene products.
-
On the occasion of Mental Health Month, with the help of Legambiente Italia, the Group
organized a volunteer day for its employees.
During the event, guests contributed to the maintenance of a public green space in the
city of Mila, the Paolo Pini Gardens, that will be used as public garden. Specifically, for
around 4 hours, 30 employees pruned branches, weeded and collected leaves for the
creation of hedges and vegetable gardens. The area being maintained is frequented by
the elderly and users of area health services; the work aimed to make the walking paths
safe for the benefit of the community. The activity had a twofold value: environmental
(useful actions to improve green areas) and social (the spaces, once restored, will be
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
246
used by the children of "Il Giardino degli Aromi Onlus", the association with which
Prysmian collaborated during the event).
-
Prysmian Malaysia organized a blood drive in August with the support of the local
authority and health organizations, that involved more than 50 employee at Prysmian
Melaka headquarters. The local authorities expressed their gratitude to the participants,
stressing that the contributions of all donors will be vital to having an adequate and
constant supply of blood during medical emergencies. In addition, donors received prize
tokens from Prysmian Malaysia, a testament to the company's commitment to
empowering its employees and their willingness to participate in initiatives that have an
impact on local communities.
-
Prysmian Thailand made a donation of power cables to the Department of Skills
Development of the Ministry of Labor. The cables will be used for educational purposes
by universities and research centers for the training and development of young technical
specialists in the field. This donation highlighted the importance for Prysmian to support
the training and development of young local talent to provide them with career
opportunities and improve their quality of life.
-
In line with the objective set forth in Prysmian's 2030 Social Ambition to empower the
local communities in which it operates, with a focus on developing countries and
vulnerable communities, in 2023 two of the Group’s programs aimed at training women
for factory work were expanded: "Elas in Industria" for 65 women in Brazil and "SHE
STEMS" for 20 women in Oman. In Colombia, "Energizing your Future" concluded its first
mentoring program for 18 at-risk high school students, while in the Netherlands, the
United States and the United Kingdom, Prysmian employees introduced STEM topics to
elementary school students. Scholarships dedicated to supporting minority students of
all ages have been awarded in many Group regions.
Sustainable innovation for products, applications and processes
Through sustainability and innovation, the Group is strongly committed to finding new solutions,
materials and processes that bring benefits. In fact, being an enabler of the energy transition
and digitalization means having the ability to innovate constantly. Innovation is the driver that
defines and underpins all of the Group’s social and environmental ambitions. Innovation and
sustainability are inextricably bound together, requiring Prysmian to adopt a holistic and
integrated approach: efforts in innovation strengthen the commitment to achieving the long-
term targets set. Sustainability is now embedded in the creation of value for customers, making
it tangible and visible, through the development of innovative, green solutions.
The following sections describe the risks identified and the associated mitigation actions pursuant
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247
to Italian Legislative Decree no. 254/2016 with reference to the 2023 material topic:
“Sustainable innovation and circularity”.
Risk identified:
Risk of loss of competitiveness or leadership in the energy transition business
Description of risk
The new energy transition policies and resulting new market opportunities are rapidly changing
an already competitive context, with the potential entry or strengthening of new players and the
development of new technologies, which may reduce or interrupt Prysmian's leadership.
Exposure to this risk has been analyzed over the 2022-2035 time horizon, considering the four
IEA emission scenarios: (STEPS, APS, SDS and NZE), with an impact in the form of lower
revenues and/or profitability assessed as low-medium over the medium term and medium-high
over the long term.
Mitigation actions adopted
Prysmian has carried out an in-depth analysis of its business activities in relation to the entry of
new competitors into the HV Underground, Submarine Energy and Submarine Telecom sectors.
Assessment of the risk of new players also considered companies with significant financial
resources, not necessarily active in the cables sector, that might see the energy transition sector
as an important business opportunity. Adopting a quantitative approach, this activity analyzed
the demand for these businesses in the 2022-2035 period, highlighting the main drivers that
might prompt new players to enter the market. This will enable Prysmian to monitor the risk
carefully as it evolves, and facilitate any necessary refinement of its medium/long-term strategy.
Risk identified:
Risk related to technological innovation and, in particular, to emerging,
alternative or replacement climate-related technologies
Description of risk:
The acceleration of technological innovation in recent years, with ever
more massive use of renewable energy and an already established path towards digitalization,
consolidated during the COVID-19 pandemic, exposes the Group’s cultural and organizational
model to the risk of being unprepared for such rapid change. Prysmian has assessed the possible
impact on the business of new emerging, alternative or replacement technologies linked to the
climate and renewables (e.g. hydrogen, higher capacity batteries, E-Vehicle technologies,
wireless technologies, etc.). Exposure to this risk was analyzed over the 2022-2035 time horizon,
considering the four IEA emission scenarios (STEPS, APS, SDS and NZE), confirming a medium-
low impact, which becomes medium-high in a Net-Zero scenario over the long term.
Mitigation actions adopted
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248
In terms of mitigation actions, the diversified portfolio of activities with a global geographical
presence is a strength for Prysmian Group, as the only world leader with a business model
balanced among areas with differing profiles, where each segment plays a precise role in the
overall strategy, considering stability, growth potential and the generation of opportunities.
Prysmian aims to maintain its leading role in R&D, with 26 centers of excellence, advanced
proprietary technologies, 1,000 experienced professionals, 5,800 patents granted or pending
and relationships with the world’s leading universities and research centers. The appointment of
a Chief Innovation Officer (CIO) and a Chief Digital Officer, reporting directly to the CEO, and
the establishment of a Group Innovation Steering Committee, chaired by the CIO, further
consolidate the Group’s commitment to innovation, research and development. The Group
strategy is completed by roadmaps dedicated to innovation, cost reduction and projects in the
Projects and Telecom sectors, innovation competitions among employees, also involving key
customers, and a professional development plan dedicated to strengthening the innovation skills
of employees.
Risk identified
Risks related to possible infringement of third-party patents
Description of risk
The increasing rise in new product offerings and the opening to new markets, in part also
accelerated by decarbonization policies, leads to an increased likelihood that Prysmian's products
will include solutions patented by third parties with the risk of incurring litigation costs. Exposure
to this risk was analyzed over the 2023-2035 time horizon, considering the four IEA emission
scenarios (STEPS, APS, SDS and NZE), confirming a low impact over the medium term, due to
continuous application of the mitigation measures adopted, which becomes low-medium over
the long term.
Mitigation actions adopted
Prysmian's Intellectual Property department, supported as necessary and on specific issues, by
external professionals, constantly analyzes the possible existence of third-party patents with
respect to new products and markets, undertaking to comply with third-party intellectual
property rights when aware of their existence. Prysmian's strong patent portfolio is an important
deterrent against litigation.
The Pillars of Innovation and the Innovation Steering Committee
Innovation at Prysmian is about meeting customers' needs, understanding their business goals
quickly and effectively and developing environmentally and community-conscious solutions with
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249
them. To meet its commitment to innovation and sustainability, R&D implements internal
processes and activities every day to ensure their effectiveness.
Prysmian established the Innovation Steering Committee in 2020. It acts as the control room of
the Group's innovation activities by leveraging the expertise of the R&D department, Corporate
Hangar, EOSS and the Digital Innovation department:
1.
Research and Development
The Group has invested primarily in areas that promote the development of cable
infrastructures for power and data transmission: EHV underground power transmission
systems, ever longer and more efficient submarine cable systems that can be laid at ever
greater depths, fiber optic solutions with a higher number of cables in a miniaturized space for
easy handling in the field.
2.
Digital Ambition
Prysmian's Digital Ambition aims to generate long-term value for the company's business in
order to maintain the Group's leadership in the energy and digital sectors. Digital tools and
solutions are key assets to enable a future of cutting-edge innovation and continue to deliver
outstanding performance to the market, contributing to the defense of the Groups’ competitive
positioning.
This ambition gave birth to Prysmian's new Digital Strategy, called BODI, which aims to develop
an innovation model fully integrated into the company's operational processes.
The acronym highlights the importance of an organic vision of innovation as the backbone
system of the company through 4 dimensions:
•
B for business oriented, emphasizing attention to the needs of our stakeholders as well as to
market opportunities;
•
O for open innovation, to consolidate awareness of the necessary level of openness to
ecosystems external to companies, start-ups and research centers;
•
D for digital and digitalization, to be brought first and foremost in data, business processes and
the broader culture;
•
I for impact, to support a concrete approach to innovation aimed at generating measurable
value.
Prysmian's portfolio of innovation initiatives and digital solutions continues to grow and
concerns a variety of areas, from manufacturing to the supply chain, from finance to purchasing
and sustainability, from solutions dedicated to our customers to those that aim to improve the
way we work and communicate. The coming months will certainly be devoted to identifying
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250
new opportunities opened up by the use of technologies such as Generative AI and RPA (Robot
Process Automation), which will help make the company even more efficient and able to
respond to customer requests even more rapidly, maximizing the level of quality that has
always characterized us as a market leader.
3.
Open innovation infrastructure: Corporate Hangar
Prysmian Group has further strengthened its relationship with its venture builder Corporate
Hangar to accelerate the path toward innovation and sustainability. In 2023, Corporate Hangar
founded 2 start-ups, RevIoT and E-WAWE, in parallel with the acceleration of Alesea, Kablee
and Cultifutura created in previous years and the development of new projects with high
potential that will become the next corporate start-ups.
Capitalizing on the expertise developed in recent years, RevIoT harnesses the potential of IoT
for tracking fixed and mobile assets, enabling remote monitoring and improving maintenance
and warehouse management activities. E-WAWE increases the efficiency of industrial and
commercial facilities through an innovative power grid monitoring system while increasing
safety.
In 2023, Corporate Hangar also promoted new projects in the areas of grid monitoring,
distributed charging of electric vehicles and recycling of raw materials. In parallel, it worked to
promote corporate entrepreneurship in the Prysmian Group, through the organization of an
Innovation Contest for a business unit of the group and the Sustainability Call for Ideas (SC4I),
collecting more than 1,000 ideas from employees around the world.
For more details on the Sustainability Call for Ideas, please refer to the “Dialogue with the
Group’s stakeholders” paragraph.
4.
EOSS (formerly Prysmian Electronics)
EOSS is not only a legal entity, but also an integrated business unit dedicated to the design of
electronic and optical solutions for monitoring cable systems. Whether high- or low-voltage
cables, the goal is to collect data, acquired from the different digital architectures, that can
provide useful information to better understand their performance. The main feature of the
EOSS business model is to provide, through the monitoring system, not only the physical
parameters related to the monitored asset, but the diagnosis of its status and performance as
well.
R&D activities in 2023 mostly concentrated on completing the architecture for single-phase and
three-phase Pry-Cam Home with a digital platform to collect and visualize data in a more
structured fashion, as well as on the implementation of an AI approach to various issues related
to the use of instruments within various businesses.
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EOSS has also worked to expand the range of products for certain specific applications relevant
to the current core business, such as overhead line monitoring, home electric vehicle charging
and solar farm monitoring. Two major developments have also been initiated for fire detection
applications using DTS Raman and verification of the state of use of elevator ropes with the
Elevator BU.
Continuing the activities of previous years, in 2023 the Innovation Steering Committee
strengthened its role in coordinating activities aimed at consolidating the Group's main areas
of innovation and further promoting the entrepreneurial culture of employees.
The following measures were introduced in 2023:
•
Review and consolidation of the global
innovation portfolio
aligned with the Group’s
objectives, ensuring that high potential projects are accelerated with the right resources;
•
Strengthening of the
governance of innovation initiatives
, both by structuring processes
for managing initiatives and by establishing models for measuring the value that can be
generated;
•
Increase in R&D spending, linking Innovation activities with Sustainability in support of the
Climate Change Ambition
;
•
Strengthening of collaboration and synergies both among the entities participating in
Steering Committee and externally with potential customers to offer higher value-added
products and services and reinforce Prysmian's position as a leading supplier of cables and
systems capable of handling customer needs;
•
Promotion of greater employee engagement in the areas of innovation via initiatives such
as Wired for Innovation (to introduce employees to international experts in areas of
innovation relevant to the Group) and Innovation contests. The first Sustainability Call for
Ideas and Sustainability Week 2023 were also launched in 2023 (please refer to the
“Dialogue with the Group’s Stakeholders” paragraph for more details).
The R&D Team
Globally, Prysmian Group R&D has more than 1,000 professionals working in 26 centers of
excellence. The R&D Headquarters is located next to the Milan office and coordinates the
activities carried out by the local R&D centers, promoting innovative and sustainable projects
with a medium- and long-term perspective. In its laboratories, new cables and technologies can
be developed in complete autonomy, being able to benefit from: an experimental prototypes
room for the production of cables and compounds, a facility equipped with the most advanced
systems for testing EHV cables and a physical-chemical lab complete with cutting-edge
instruments for accurately analyzing the properties of cables and materials.
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The creation of a test hub for the study and development of systems to support the energy
transition continues in the area of the Italian plant in Quattordio. In 2023, a mechanical test
area for the study of submarine systems was built and, at the same time, the electrical laboratory
was completed. To date it includes 2 640-kV HVAC test systems and 1 1200-kV HVDC test
system. A 600-kV HVAC system is also being completed for testing under conditions simulating
the actual installation.
Finally, the design and approval process with local authorities for the construction of a second
laboratory capable of accommodating 6 1200-kV HVDC test areas has been completed. The hub
is expected to be completed in the first quarter of 2025.
Group R&D is responsible for the overall innovation strategy, which seeks to make Prysmian a
major player in the value chain, supporting the energy transition, digitalization and
sustainability. The local R&D centers are active operationally in new product development, as
well as in the design-to-cost program and the rationalization of product families.
Sustainability has become increasingly central to the Group’s R&D activities since the 2022
launch of the “Design For Sustainability (D4S)” program, which will change the way the entire
R&D community and its network operate. The development of new products now considers their
value in terms of sustainability, applying the Eco Cable criteria at the base of the D4S program.
In addition, with the adoption of the "Accolade" management software, sustainability will be
among the main criteria for evaluating the project portfolio in different countries/BUs. During
2023, the "Design for Sustainability" (D4S) program became an established practice within the
Group's R&D, and to ensure that the products thus designed and manufactured find adequate
market outlets, the Sustainability for Business (SfB) function was created in the second half of
the year. It is responsible for promoting the marketing of sustainable products internally, both
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by accelerating the spread of the ECOCABLE brand and by assisting the Sales function in dealing
with key customers. This function also has dual reporting with the CSO (Chief Sustainable
Officer) in order to ensure harmonization between Corporate strategies and subsequent
execution by the various Regions, BUs and Corporate Functions.
Thanks to this new structure, Prysmian's R&D has continued to provide fundamental support to
the business, enabling its growth both in terms of profitability thanks to the design-to-cost (DTC)
program, which reached a new record during 2023 in terms of global results, and thanks to the
launch of new products on the market (NPI).
Worth mentioning were the following projects, which are part of a program to implement
structured procedures for R&D process management at the project management and product
engineering levels:
•
Accolade program, which aims to introduce a standardized and uniform methodology
for the management of R&D projects in different countries, including the phase of
economic evaluation and the selection of priority projects. The program can be
considered currently implemented in the United Kingdom, Latin America, North
America, Northern Europe, Central Europe, Oman, Turkey, China, Oceania, as well as
in the Automotive, Network Components, MMS and Elevator-Escalator segments;
•
Pry-CD program, launched in 2022 to meet the needs of the various Engineering/Cable
Design functions of countries and BUs, which need to have a modern and efficient
cable calculation tool at their disposal. Among the main objectives of the Pry-CD
system are that of being developed in an environment 100% compatible with that of
the corporate ERP and, above all, of introducing Environmental Sustainability as a
fundamental criterion to be used for the definition of cable design, in both the Energy
and Telecom areas, based on Eco Cable criteria.
Furthermore, for several years now, R&D has sponsored events to gather innovative ideas and
spread a cutting-edge culture within the group, such as Calls for Ideas and Innovation Contests.
During 2023, the function sponsored 3 initiatives in particular:
•
EEBU Innovation Contest: the Group successfully completed the contest dedicated to
the Elevator & Escalator business unit, formed from the merger of Draka Elevator and
EHC Global. The EEBU Innovation Contest aimed to bring innovation to the vertical
transportation industry by bringing together teams with complementary skills.
•
Call for Ideas for universities and research institutions with PoliHub: the group
launched a targeted "call for ideas" campaign addressed to Italian universities and
research institutes from which more than 50 proposals were collected. The top five
ideas, which stood out for their innovative potential and strategic appropriateness,
were presented to Prysmian Group senior management. This process culminated in the
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selection of an idea for a co-development agreement with the Group, demonstrating
the success of this strategic initiative.
•
Sustainability Call for Ideas: launched in January 2023 and addressed to all group
employees. Please refer to the "Stakeholder Engagement and materiality analysis"
section of this document for more details.
Innovation Ecosystem
Prysmian Group recognizes the importance of partnerships in doing research, as highlighted by
the United Nations Sustainable Development Goals (SDGs). Collaborating with relevant
Stakeholders, from academia to independent research centers, from suppliers to supply chain
counterparts to customers, is essential. Their collaboration and feedback are crucial in identifying
areas that require a greater focus. This is why, over the years Prysmian has established
consolidated partnerships with over 50 leading universities and research centers around the
world. These strategic collaborations offer the Group support in technological research and allow
it to adopt the most innovative and sustainable solutions in all areas of the cables and cabling
sector.
Partnership
Among our many collaborations, the most significant ones in terms of innovation and
sustainability are listed below:
•
Politecnico di Milano (Italy)
•
Politecnico di Torino (Italy)
•
Università degli Studi di Salerno (Italy)
•
Università di Palermo (Italy)
•
Università di Bologna (Italy)
•
Università di Padova (Italy)
•
CNR Research Institute (Italy)
•
National Electrical Energy Research & Application Center (USA)
•
Oak Ridge National Laboratory (USA)
•
Polytechnic University of Catalonia (Spain)
•
Shanghai TICW (China)
•
Fraunhofer Institute (Germany)
•
University of Cantabria (Spain)
•
Delft University of Technology (Netherlands)
•
Wuhan China Electric Power Research Institute (China)
•
Polytechnic University of Bucarest (Romania)
•
Technical University of Berlin (Germany)
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•
Technical University of Dresden (Germany)
•
State Technical University of Jaroslavl (Russia)
•
State University of Saint Petersburg (Russia)
•
Tomsk Polytechnic University of National Research (Russia)
•
UFAL – Universidade Federal De Alagoas (Brazil)
•
Virginia Polytechnic Institute and State University (USA)
•
SCITEC – Istituto di scienze e tecnologie chimiche "Giulio Natta" (Italy)
•
Bursa Uludag University (Turkey)
•
University of Marmara (Turkey)
•
IST – Integrated System Technologies (UK)
•
Inova (Italy)
•
Jade Hochschule Wilhelmshaven (Germany)
•
Kunststoff-Institut Lüdenscheid (Germany)
•
FGH Institute di Mannheim (Germany)
•
PA Consulting (UK)
•
Instituto Eldorado (Brazil)
•
Instituto Eldorado (Brazil)
•
Questek (USA)
•
DexMat (USA)
•
Sintef (Norway)
•
Urban Mining Collective | New Horizon (Netherlands)
In addition to the partnerships mentioned above, major collaborations in which Prysmian took
part in 2023 include, in detail:
•
STI (Surface Technology International)
: since March 2023 we have been
cooperating with STI, which, as a contract manufacturer, produces Power Over Ethernet
hardware for us to realize smart building technologies. STI provides electronic
component design and manufacturing solutions for our printed circuit board assembly
(PCBA) with the main goal of reducing energy consumption.
•
USP – Universidade de São Paulo
: this collaboration, initiated in the 1980s, has led
to many advances over the years. It has now been renovated to enable the development
of new computational tools for Umbilical cable design. As part of this project, the
University of São Paulo will develop, with support from Prysmian, tools for defining cable
cross sections, a "lazy wave" configuration of dynamic cables, collision analysis of riser
cables, and for thermal and electromagnetic analysis. This will enable Prysmian to take
its speed and quality to the next level, providing optimized solutions that use less
materials and resources. All of this is also under the banner of greater sustainability.
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•
ZEPREN Solutions:
the objective of this collaboration is to develop software capable of
sending real-time warning signals and providing statistical data obtained from
Distributed Acousting Sensing (DAS) system detections in a series of use cases involving
the use of overhead transmission line Optical Ground Wire (OPGW) cables. The software
developed interfaces with the "interrogator" of the DAS and transmits alarm signals to
the end user. The use cases examined by the project are: lightning detection, short-
circuit detection, identification of critical intervals due to high wind, bird strike, pylon
mechanical instability and ice sleeves.
•
IBSS of Xi’an Jiaotong
– Liverpool University: Prysmian China Local School started its
partnership with IBSS of Xi’an Jiaotong-Liverpool University in 2021. As a top-ranked
business school, IBSS offers valuable opportunities including cross disciplinary
partnerships in research, learning and teaching. In 2022, in collaboration with IBSS,
Prysmian launched "Sustainable Leadership Training" to enable its employees to better
understand the rationale behind its Social Ambition and share its commitment. The
training provided covers 6 strongly interconnected topics designed to cover as much as
possible of the various aspects of the work. A total of 24 leaders and staff from different
functions participated. Afterwards, participants shared what they had learned with their
teams and challenged each other in a business simulation system.
•
CPqD – Centro de Pesquisa e Desenvolvimento
: the CPqD is involved in
the
evaluation of Optical Ground Wire (OPGW) cables sheared by sharp and very strong kite
wires and
the Mine LED project related to cable lighting for mine applications. The first
study aims to develop a test methodology that can reproduce in the laboratory the
interaction between the OPGW cable and sharp kite wires, allowing the performance of
different models of OPGW cables to be compared. The second project aims to develop
and improve innovative cable lighting solutions for mining applications. For the Min LED
project, CPqD supports Prysmian from design conception to the first prototype made
manually in their laboratory.
•
CIDET – Center for Research and Technological Development
: through CIDET, a
process for certification of conformity with the RETIE regulation was conducted for the
SUPERFLEX cable produced at the Chilean plant. CIDET develops the processes for
internal auditing of factories and laboratories, as well as conducting evaluation of raw
materials and conformity of reports on tests conducted at laboratories accredited to the
ISO/IEC 17025 standard. This certification process allows local products and the
products of any Prysmian plant to be marketed in the Colombian market.
•
Tyromer – University of Waterloo (Canada)
: collaboration is active for two projects.
The first sets out to evaluate the addition of de-vulcanized rubber supplied by Tyromer
("Tire Derived Polymer" or TDP) to one of the SBR rubber compounds used for handrails
with the goal of incorporating a portion of recycled material into SBR rubber handrails.
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The second aims to evaluate the use of Tyromer's technology of using supercritical
carbon dioxide in a twin-screw extruder to achieve de-crosslinking of XLPE (cross-linked
polyethylene) cable sheathing.
•
RICE University | Carbon Hub:
Prysmian is one of the founding members of Carbon
Hub. Carbon Hub (at Rice University in Houston, Texas) aims to accelerate the energy
transition to reliable and sustainable green power generation through the responsible
use of hydrocarbons used as the basic component for ubiquitous carbon materials. Based
on non-competitive collaboration among industry, academia, institutes and non-profit
organizations with related goals, Carbon Hub aims for corporate performance aligned
with environmental and social commitment and responsibility to communities. Carbon
Hub continues to conduct research on carbon nanotubes, focusing particularly on
mechanical and electrical properties, their synthesis and health and safety issues. In
2023, Carbon Hub and the Kavli Foundation established a grant to further develop
carbon nanotube synthesis, paving the way for sustainable materials in the transition to
green energy.
•
University of Colorado
: the research group is working on making copper-graphene
alloys that provide up to 125% IACS electrical conductivity in solid-state Flash welds.
Prysmian takes care of the electrical characterization of the processed cables and
provides support in product design.
Speaking Platform
In order to share the evolution of its research work and best practices, Prysmian participated,
through its managers, in major international conferences with a view to outlining the active role
played in implementing the changes underway. The Group took part in the following conferences:
CRU Wire & Cable Conference 2023, Hamburg, 19-21 June:
✓
Prysmian Group as enabler of the Energy Transition - Xavier Vallez, Global Head of Renewables
Business Unit
✓
Energy Cable Leadership Panel
–
Juan Mogollon, EVP Energy
ABB FIA Formula E Summit: Change. Accelerated. Live! – London, 28 July
Panel: "Track to road technology transfer: electrification case study"
Speaker: Srinivas “Srini” Siripurapu, Chief Innovation and R&D Officer
FTTH Council Europe Conference – Madrid, 18-20 April:
✓
Workshop with Dura-Line, Plummettaz and Lyntia: "Upgrade Without Overbuild via
Asset Reuse"
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✓
"Diversity and Inclusion" workshop "Attracting talent to the FTTH industry – sharing
best practices” – Coralia Caravello (HR Southern Europe) regarding Prysmian Group's
commitment to D&I policies and initiatives at local level
✓
VoI speaking slots "Reduce the carbon footprint of your FTTH roll out" – Alessandro
Pirri regarding the green and sustainable approach for the optical cable industry
FT Tech and Politics Forum, Brussels, 7 November:
✓
Informal chat: "Digitalization and sustainability: The global transition to a low-carbon
economy”. Digital networks can enable more efficient use of resources and be a driver
for new green sectors. What are the key challenges and opportunities for the ICT
sector in the present green transition? How can the industry collaborate with
governments and other stakeholders to accelerate the adoption of green digital
technologies? How can digital technologies be used to improve the resilience of digital
infrastructure in light of climate change? What is the telecom industry doing to reduce
its very significant carbon footprint?" – Toni Bosch, SVP Telecom Solutions
-
CEO Talk "The Enterprise of the Future. Sustainable, Inclusive and
Technological",
12 July 2023 – M. Battaini, CEO-designate of Prysmian Group – RCS
Academy;
-
Italian Energy Summit, "Energy transition and innovation to win the global
challenges"
. 27 September, M. Battaini, CEO-designate of Prysmian Group, Il Sole 24
Ore;
-
Green Talk "Transition to Net Zero, Innovating Energy”.
10 October, M. Battaini,
CEO-designate of Prysmian Group – RCS Academy;
-
Green Talk "Supply chain, industry and circularity”.
24 October, C. Bifulco,
Prysmian Group Chief Sustainability Officer and Group IR VP – RCS Academy;
-
Global Inclusion, "Freedom is participation”.
13 November, F. Rutschmann,
Prysmian Group Chief HR and Organization Officer, Il Sole 24 Ore;
-
FT DIGITAL DIALOGUE, "Upscaling the Power Grid for the Energy Transition”.
6 December – M. Battaini, CEO-designate of Prysmian Group, Financial Times.
-
"Sustainability driving Innovation”: Elfack – Northern Europe's largest
exhibition on energy and electrification.
5 May 2023. Speakers: Frank Middle,
Chief Sustainability Officer, and Kristoffer Berglund, Chief Engineer Scandinavia.
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-
WIND EUROPE, 27 April, Copenhagen – "Floating: how to get a supply chain?"
– Juliano de Mello, Offshore Wind Business Director, Prysmian
-
Interwire 2023, 9-11 May Atlanta, USA
– presentation: Srinivas Siripurapu
“Innovation, Investments and Incentives – Electrifying the Wire and Cable Industry for
a brighter future”
-
JiCable 2023, 18-22 June Lyon, France
– Closing Panel: Srinivas Siripurapu “The
role of the insulated cable systems for the Energy transition and Sustainability”
The most Cutting-Edge Research and Development Projects
One of the reasons that has always made Prysmian a market leader is its continuous push for
innovation. A list is provided below of the main innovations developed by the Group from its
founding to the present: a history of constant technological growth.
SUBMARINE CABLE PROJECTS
500-kV DC solution for very high depth
Development to enable de-carbonization projects in Italy and better use of energy from
renewable sources. Prysmian has extended the internal qualification of the 1-GW system for
installations up to a maximum depth of 2,200 m by introducing an innovatively designed cable
armor. The submarine cable system and installation and repair methodologies will be definitively
validated by early 2024.
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Energy Transition
High-power AC systems
Development of AC Solutions to connect large-scale offshore wind farms to the coast (400-kV
single-pole AC systems, 275-kV three-pole). This is a strategic project to push for an effective
transition towards renewable energy. Prysmian has completed the development of a large three-
core cable operating at 275-kV with a maximum power of 500 MVA. The development of new
cable systems involves the use of aluminum and copper conductors and bimetallic transition
joints. This new design includes some new features to decrease the losses during operation, to
optimize associated manufacturing costs and to reduce material emission values. The
development work also highlighted important key factors for the future reliability of using AC
cables with large cores.
Energy Transition
525-kV DC extruded submarine cables
Key project to meet the new climate objectives in Europe through the installation of wind farms
very distant from the shore. Prysmian continued the industrialization and the portfolio expansion
for the complete 525-kV submarine cable system with extruded insulation technology and related
accessories. This activity aims to increase system reliability and improve transmissible power by
using larger sections and higher operating temperatures.
Energy Transition
HV cable systems for floating wind farms
A new approach to increase the use of wind farms for clean energy production, moving from
static to floating platforms. To use the high-power offshore wind farms, it is necessary to develop
dynamic high-voltage AC cables to connect the floating station to the coast. Prysmian has started
the development of large-scale 220-kV AC systems that will be completed in 2024.
Energy Transition
LAND CABLE PROJECTS
HVDC solutions for German Corridors
Industrial production of cable systems for German Corridor energy transition projects is ongoing,
for both P-Laser and XLPE insulated versions:
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•
P-Laser production has been active since August 2021 and more than 500 km of
cable have been insulated;
•
XLPE industrial production commenced in June 2022. In 2023, 250 km of cable
were completed.
Technology transfer for the production of 525-kV direct current (HVDC) cable systems with XLPE
insulation continues in the United States, including the completion of prequalification testing on
525-kV systems.
Energy Transition
ENERGY PRODUCTS
PrySolar
The energy transition to renewable energy has generated a surge in the installation of new
photovoltaic systems, both for domestic and industrial applications and for large-scale production
facilities typical of Utilities.
The two types of plants have different requirements due to operating conditions.
Particularly in utility photovoltaic power plants, the wiring between panels and to
inverters can be subject to particularly harsh conditions. In order to guarantee the
performance of the products throughout the life of the plants, it was necessary to
develop and qualify new cables dedicated to this application that, in addition to
complying with industry standards, were particularly resistant to water exposure. For
this purpose, proprietary test methods have been developed to ensure cable
performance
over
time.
Energy Transition
Pry-ID
Cable digital identification system based on RFID technology which enables quick and easy cable
recognition, link to the installation information and providing full tracking of the cable path.
Development of the final version of the app to manage Pry-ID technology has been completed.
Through a series of pilot projects with major customers, it will be possible to validate the app
and the technology. Currently 4 different factories are equipped to use this technology.
Reduced CFP
EV Charging Cables
Fast charging requires development of DC cooled solutions including the integration of a
cooling unit. Cable development has started with two solutions to meet the requirements
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of different partners. Development and evaluation, which were conducted together with a
number of major OEM (Original Equipment Manufacturer) partners, focused on the cooled
version using a Prysmian-owned patent, designed especially for future megawatt charging
stations and High Power Charging (HPC) cooling systems.
Energy Transition
Three-phase PRY-CAM HOME
In keeping with the traditional innovative approach of PRY-CAM's product ranges, 2023
saw the launch of a new electric vehicle charging device. This product can supply electricity
at the usual level of 7.4 kW and 22 kW depending on whether it is connected to a single-
phase or three-phase power source and can perform dynamic charging in synergy with the
Master unit of PRY-CAM HOME.
Reduced CFP – Energy Transition – Safety
Water detection sensor for monitoring HV joints
It is a full monitoring system (sensors, monitoring architecture and SW) to detect water
ingress in HV cable land joints to prevent failure and service interruptions. The final version
of the system will be qualified through a series of tests in our in-house laboratories.
Energy Transition – Safety
E3X – Field application service and Coating Solutions to Enhance OHL Performance
E3X coating solutions have been developed to improve thermal dissipation and absorption
of solar radiation in overhead line conductors. The coating ensures both higher power
transmission at the same temperature and lower losses than a conductor of the same size.
Retrofitting existing lines is made possible by a cleaning and application robot capable of
applying coating to live lines. In 2023, the industrialization of the second-generation robots
was completed with a field trial with the customer. These improvements are targeted to
improve overall operation efficiency in the field and reduce the retrofitting project cost. A
coating for high temperatures (250°C) was also developed. The ability of this coating to
resist oscillations and other mechanical stresses has been demonstrated with some field
experiments.
Reduced CFP
Circuits for electric vehicles
The wireless dynamic charging on a test circuit of BreBeMi has been validated and officially
launched. Prysmian has developed, supplied and installed innovative LVDC P-Laser cable
to power the management units of the charging coils. Moreover, Prysmian with EOSS has
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provided the full monitoring system (PDs, temperature, vibrations, etc.) to support all the
tests that will be performed on the circuit with materials, vehicles and different equipment.
Recently the system has been studied for carrying out similar installations in Europe. A
completely innovative new approach and the first fully wireless dynamic energy transfer
project has been developed to power the entire operational area of an international airport
located in northern Italy.
Energy Transition – Reduced CFP – Enhanced Circularity
Medium Voltage Cable Automated Splicing Machine for Underground Cable Network
System
Reliability and safety of medium-voltage cable splicing is of paramount importance for an
underground cable network system. Manual splicing process posts the safety concerns to
workers and reduces the reliability of the network system. Hence to improve the safety
and reliability of the network, a detailed study to automate the splicing process has been
initiated in collaboration with PA Consulting and 2 major US Utilities. In 2023, we have
completed the conceptualization of the overall process and understood the feasibility of the
single step operations.
Reduced CFP – Safety
Sensor for Oil Pollution in Outdoor HV Sealing Ends
PG is partnering with a startup to develop an innovative sensor to detect pollution and
early signs of degradation of oils inside sealing ends for outdoor use of HV cables. The
sensor will send the oil analysis as output directly to the control room. The device can be
installed on new sealing ends or even as a retrofitting on existing sealing ends. In 2023,
the first prototype of the sensor was validated and the industrialization phase began.
Energy Transition – Safety
TELECOM PRODUCTS
Sirocco Extreme cables for micro-ducts
They are part of a new range of extremely dense fiber optical cables that utilize the world’s first
commercially available 180 μm fiber optic. The cables offer the highest fiber density available
on the market, a feature that makes it possible to fit them into smaller ducts or install more
fibers in an existing duct. The first cable with 288 fibers was launched at the end of 2020. Two
additional cables with 192 fibers and 576 fibers were launched in 2021. Subsequently, in 2022,
the development of 144-, 432-, and 864-fiber versions began. Development of 144- and 864-
fiber versions continued in 2023. Activity on the 432-fiber version was instead temporarily
suspended to focus on other priorities. Development of the 144- and 864-fiber versions
continued in 2023, while activity on the 432-fiber version was temporarily suspended to focus
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on other priorities. At the end of 2023, qualification tests of the 144- and 864-fiber versions
were completed, and they were then launched..
Reduced CFP – Digitalization
Aging of optical cables over the long term – Sirocco
Generally, underground optical fiber cables have a lifespan of 25 years, and in fact this is the
minimum value included in most customers' specifications for these cables. During 2023,
Prysmian Group started long-term aging tests on the Sirocco cable range to prove that they can
last even more than 50 years after installation. Testing began in May 2023 and ended in January
2024.
Reduced CFP – Digitalization
Mini flat drop cable
Drop cable volumes currently used in North America in the last mile connecting the FTTH network
to the consumer are very high. The cable has a flat profile and measures 8.1 x 4.5 mm. In 2023,
a project was initiated to reduce the size of the drop cable to 5.5 x 2.8 mm and remove the duct
used to lay the optical fiber inside the cable. This will simplify the production process because
the cable can be made in one step using a coating line instead of the usual two steps that involve
first producing a buffer tube on the dedicated line and then applying the coating. The smaller
cable size provides an additional sustainability advantage in that a larger amount of cable can
be shipped on a single reel, resulting in fewer reels per shipment. The cable has been produced
in a prototype version and is currently undergoing testing, to be completed in the first quarter
of 2024.
Reduced CFP – Digitalization
Smart building solutions
Buildings generate the highest amount of CO
2
emissions globally. To tackle this problem,
Prysmian developed a smart building solution using PoE (Power over Ethernet) technology. A
large amount of energy is lost inside buildings when converting alternating current to direct
current. This is especially the case with building lighting and emergency lights. Today, all new
lights installed in buildings are LEDs and do not require high AC voltage but run on 48-V DC.
Converting AC to DC for lighting generates waste, so our solution aims to use PoE technology to
power and control the lights, emergency lights and IoT devices in the building with a simple
plug-and-play solution using Ethernet cables. Several products were developed during 2022 and
2023, including a 24-port switch, a LED driver for LED lights, an emergency point of withdrawal
(POD) to control emergency lights, an IoT Gateway to connect IoT devices, and a sensor to
measure various parameters including occupancy level, air quality and temperature. The
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certification phase of the products has begun, and they are expected to be ready in the third
quarter of 2024.
Reduced CFP – Digitalization
Hybrid Cables
The ever increasing spread of 5G and IoT requires the use of distributed antennas and sensors
that utilize power and data. This is driving the need for a new range of small hybrid cables that
can be used to deliver both data and low voltage power. Three more cables were developed in
2023. The first is a 2.5 mm
2
four-pole cable containing up to 24 fibers. The second is a 1 mm
2
four-pole cable with up to 24 fibers, and the third is a 1 mm
2
two-pole cable with up to 6 fibers.
Reduced CFP – Digitalization
Multi-core fiber
The project consists of developing a multi-core fiber where each fiber contains four separate
cores. This solution offers four times the capacity of a standard fiber within the same space,
enabling cables to be manufactured with four times the capacity in the same diameter. In 2022,
fiber drawing trials took place in Douvrin (France) while the first cable prototype was made in
Lexington (USA). More fiber and cable trials were conducted in 2023, but the process was slowed
down as Telecom business declined. Activities are expected to resume again in the latter part of
2024 as the market recovers.
Reduced CFP – Digitalization
Pre-terminated Very High Fiber Count Cables
Development of the fully pre-terminated FlexRibbon cable having an extremely high fiber count,
with ultra-compact 144-fiber expanded beam connectors. This solution would enable customers
to simply install the cable through the duct and plug it into a patch panel without the need for
splicing in the field. After making first prototypes in 2021, further work was carried out in 2022
to make the first prototype cable for a field trial. The cable was made in Lexington (USA) while
the sealing end with EBO connectors was made by a third-party supplier. The first field test was
carried out in January 2023, but was unsuccessful because the duct was found to be too small
in size. More tests were conducted during 2023, and we are currently awaiting a field trial with
the end user, expected before the end of 2024.
Reduced CFP – Digitalization
96-fiber ULW cable
Currently British Telecom uses a 36-fiber ULW cable to distribute optical fiber within its FTTH
network in the United Kingdom. Many thousands of kilometers of this cable are used each year.
In 2022, a 96-fiber version was developed in the same diameter as the 36-fiber cable, which
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provides additional capacity in the same space. Several versions of the cable were made and
tested during 2023, with some critical issues in meeting the performance indicated in the
customer's specifications coming to light. A solution was finally found in the third quarter of
2023, and the cable was sent to the customer for approval testing. Final approval was obtained
in the last quarter of 2023, and to date the cable is on the market. This will enable a reduction
in the carbon footprint as it will be possible to install fewer cables in the network.
Reduced CFP – Digitalization
Mini CSP (Customer Splice Point)
A Mini CSP for OpenReach was developed in 2023. This is a new product designed taking a
creative thinking approach. In the design phase, a solution smaller than the product currently in
use was developed. It saves a total of 150 g of plastic, metal and rubber per piece. Due to its
design, the box contains only the parts needed for installation, with no additional elements. The
existing product was supplied with several additional components, some of which were used in
only 10% of installations.
Since this product is consumed in very high volumes (~1 million
pieces per year), it was extremely important to eliminate the waste of the pieces that were
usually sent to landfills.
Reduced CFP – Digitalization
Use of regrinds – Connectivity
In 2023, using regrinds in Connectivity was studied. During the injection into the mold process,
a large amount of waste material escapes from the sprue that injects the plastic into the mold.
The first piece to be analyzed was the LMJ muffle base. The feeding system inside the instrument
produces 156 g of waste material per molded base. This material is now reground and used to
mold three small components used in another product. Other products are currently being
evaluated for 2024.
Reduced CFP – Digitalization
NETWORK COMPONENTS
“Twin-Plug” asymmetric joints for 400- & 525-kV DC cables
The introduction of gas-free solutions such as the Twin-Plug will totally eliminate any CO
2
emission. In addition to successfully completing prequalification tests for 525-kV DC systems,
performance tests were carried out to assess the reliability margin under higher stress on 525-
kV DC cable systems with XLPE insulation. Qualification testing of the asymmetric configuration,
including systems with XLPEP-Laser insulation, was completed in the first quarter of 2024.
Energy Transition – Reduced CFP
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Asymmetric rigid repair joint (RRJ) for 275-kV shallow water cables
The development and qualification of the new rigid repair joint (RRJ) for 275-kV cables for
shallow water submarine applications were successfully completed in 2022. Type-test
qualification of the asymmetrical rigid repair joint (RRJ) on unreinforced cables, including with
2,000 mm
2
aluminum and 2,000 mm
2
copper bimetallic conductor, was successfully completed
in the first quarter of 2023.
Energy Transition
Very high-voltage AC and high-voltage DC dry outdoor sealing ends (ODSE)
Development and qualification of a full range of self-supporting dry ODSE for technologies up to
400-kV AC and 420-kV DC.
The development of dry 400-kV DC ODSE involves the use of EPDM internal cone technology to
manage the distribution of electrical stress on the cable part. Validation with testing will be
completed in the first quarter of 2024. Subsequently, the sealing end will undergo full
prequalification testing on 2,500 mm
2
cable systems with XLPE insulation. The dry 400 kV AC
ODSE sealing end requires the use of EPDM internal cone technology to manage distribution of
electrical stress on the cable part.
Definition of the configuration was completed in the second
quarter of 2023, while prototyping is currently in progress. Validation with testing is expected to
be completed by the end of the second quarter of 2024.
Energy Transition – Reduced CFP
Introduction of New Products
As with all R&D core activities, New Product Introductions
(NPI)
are monitored on an ongoing
basis. The main objective of this process is to raise awareness of the importance of innovation
as a success factor, and of new product development as a driver for improving the organization’s
performance. Consolidation of new product processes, combined with General Cable legacy
activities, generates additional value in order to sustain the business, outperform competitors
and win new customers.
The main activities relating to new products are supported by data management software for
global innovation (Sopheon Accolade®), the main information regarding which is provided
below:
•
Accolade is an innovation management tool, designed to manage and measure
innovation, new product development and technology transfer programs. At Prysmian,
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Accolade acts as the “Single Source of Truth” (SSOT) for product development, being the
only tool capable of gathering all relevant data. This global platform will further improve
the process of prioritizing and therefore assigning resources to strategic projects, thereby
increasing value creation and the innovation success rate;
•
the platform enables the configuration of processes, deliverables and metrics specific to
the business, providing support for strategic planning, portfolio management and efficient
project execution;
•
the platform increases process efficiency through improved coordination and information
sharing among Prysmian Group's R&D, Operations, Sales and Quality functions;
•
Accolade will be implemented in all of the Group's integrated regions and business units
by 2024: during 2023, the UK, Latin America, North America, Northern Europe, Central
Europe, Oman, Turkey, China, Oceania, as well as in the Automotive, Network Components,
MMS and Elevator-Escalator segments fully completed the rollout;
•
more than 450 new product development projects had been managed within the platform
at the end of 2023.
Better management and more effective monitoring also ensure more accurate reporting. With
regard to this last activity, a specific new tool has been implemented for new products, to assist
with their economic analysis and keep track of the most important projects during the three-
year vitality period. Indeed, it is used to set vitality objectives (NP revenue/global revenue) for
each region/business unit, in order to maintain the focus on development and analyze progress
in coming years.
The R&D function implemented numerous new product development projects during 2023,
leading to:
over 80 new products in the Innovation category
(new product Category/Type that
does not exist in the global market);
over 760 new products in the Development category
(new product Category/Type
that does not exist within Prysmian Group, but already exists in the market).
The company achieved incredible results, thanks to new technologies and products that allowed
the group to achieve the best result in the innovation category, compared to previous years. The
result achieved in 2023 in terms of category vitality was 4.2% compared to 2% of 2022. This
growth has allowed us to lead the market and promote innovative products before our
competitors.
The Q3 2023 parameter measuring the vitality of the Group reflects an increase with respect to
the same period in 2022, rising from 17.1% to 20.7%:
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Group Investment for a Sustainable Future
In 2023, Prysmian increased investment in support of its ambition to be an enabler of the energy
transition, responding to accelerating demand for digitalization and electrification solutions. The
strategy, aligned with the five-year plan unveiled on Capital Markets Day in October 2023,
specifically calls for a selective acceleration of investment to meet growing demand, mainly in
the Projects area. Over the 2023-2027 period, investment will grow 1.7 times over the previous
five years to Euro 2.7 billion.
Industrial activities
The geographical distribution and capabilities of the various plants allowed the Prysmian Group
to consolidate its industrial strategy even further during 2023. This strategy is based on the
following factors:
1. production of high value-added, high-tech products in a limited number of plants destined to
become centers of excellence with high technological skills and where it is possible to leverage
economies of scale, consequently improving production efficiency and reducing capital invested;
2. constant pursuit of greater manufacturing efficiency in the commodities sector, while
maintaining a widespread geographical presence to minimize distribution costs. In 2023, the
value of gross investment was Euro 624 million, up from the previous year (Euro 454 million)
due to increased investment in production and installation capacity, which is essential to meet
the needs of the energy transition.
Capacity/Product mix
Investment to increase production capacity and take account of changes in mix accounted for
80% of the total.
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270
Projects
Aiming to support the growing demand for submarine cable systems for interconnection projects
and offshore wind farms and to strengthen execution capacity, Prysmian announced an
investment of about Euro 350 million for two new state-of-the-art cable laying vessels.
The first cable-laying vessel will be the evolution of the Mona Lisa class. With a length of about
185 m and a width of about 34 m, the new vessel will be equipped with advanced cable
installation solutions, such as three rotating platforms with a total capacity of 19,000 tons,
making it among the cable-layers with the highest carrying capacity on the market. The towing
force, exceeding 180 tons, will enable complex installation operations by simultaneously carrying
out cable laying and burying (up to 4 cables) using several plows, for unparalleled optimization
of offshore operations. The vessel will be operational by early 2027. The other cable-laying
vessel will be the Ulysses-class evolution, with a length of about 167 m
and a width of about 40 m. The vessel will be equipped with two rotating platforms, one of which
is divided into two concentric sections, for a total cargo capacity of 10,000 tons. The vessel will
be operational by the first half of 2025. Both vessels will have green credentials: they will be
equipped with high-voltage shore connection systems that will power them with clean energy
during loading operations (shore
connection), diesel generators suitable for biodiesel blends and hybrid batteries only for the
vessel that will install at high depths (for special activities).
In the same area, the construction of the cable-laying vessel Monna Lisa, an investment of about
Euro 200 million, which began in 2022, plus an adjustment of about Euro 40 million for cable
installation equipment, continues on schedule. The Monna Lisa will be operational from early
2025.
Among the most significant investments aimed at increasing the production capacity of the
Projects Business Unit, which is necessary to meet growing market demands, are those aimed
at further upgrading the plants in Pikkala (Finland) and Gron (France).
In Pikkala, plant expansion continues with the construction of a tower about 185 m high that will
house a new vertical extrusion line for the production of 525-kV DC or 400-kV AC submarine
high-voltage cables, for a total investment of about Euro 120 million. A further expansion step
has also been approved during 2023, which includes the installation of a second vertical extrusion
line within the tower under construction and all the necessary machinery to complete the other
steps of the production process based on the incremental volumes generated by the new
insulation line, for a total investment of approximately Euro 120 million. An investment has been
approved at Gron to install an additional silicone oil insulation line, which will support the
production of 525-kV terrestrial HVDC cables with XLPE insulation or proprietary P-laser
technology and all the necessary machinery to complete the other steps of the production
process based on the incremental volumes generated by the new insulation line. The project,
which follows the previous expansion that began in 2022 and is nearing completion, involves an
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271
investment of more than Euro 50 million. Planning continues for the new Brayton Point
(Massachusetts – U.S.) plant, which involves the conversion of an area formerly occupied by a
coal-fired thermal power plant into a state-of-the-art inter-array and export submarine cable
production site. The expansion of high-voltage cable installation and manufacturing capacity was
accompanied by the strengthening of testing capacity through the approval of an investment to
increase the number of HVDC test bays and mechanical test areas at the Quattordio (Italy) site.
The investment of more than Euro 20 million will support an ongoing innovation process to
research new materials and/or technologies for HVDC applications.
Energy
Investment in this business segment has focused on certain specific sectors, in order
to support the growth in market demand. An investment of approximately Euro 60 million was
approved in DuQuoin, Illinois, for a major increase in medium-voltage cable capacity that will be
mainly for renewable energy (solar and wind) distribution markets. The project involves the
expansion of the plant with about 9,000 square meters of new production space and the
necessary machinery for an approximately 50% increase in renewable energy cable production
capacity. Investments continue to be made in Sedalia (Missouri) to expand the plant for the
production
of
low-voltage
aluminum
cables,
which
mainly
serve
the
residential/commercial/industrial construction market and the photovoltaic market, and in
Williamsport (Pennsylvania) to increase the capacity to produce HV cables for overhead
distribution lines. Finally, several investments are being made in Europe aimed at increasing
capacity and expanding medium- and low-voltage cable capability in order to support market
demands.
Telecom
In the Telecom business segment, investments were finalized to increase optical cable production
capacity in Jackson (Tennessee) for the production of Loose Tube and Drop cables, and in Dee
Why (Australia) to upgrade plant capacity in order to produce cables for Telstra's new Australian
fiber-optic network that will reach 20,000 km, connecting the country's major cities.
Efficiency and Industrial Footprint
About 4% of total investment was allocated to achieving efficiency improvements and reductions
in fixed and variable costs (mainly product design and material usage). The Group has continued
to invest in cost optimization throughout the Telecom segment's production chain. Specifically,
investments continued in 2023 in upgrading machinery with the best production technologies
currently available within the Group.
Again in 2023, Prysmian Group continued with its 10-year Euro 100 million sustainability
investment program. These investments, totaling Euro 7 million in 2023, involve several types
of activities, including the installation of photovoltaic systems in some of the Group's facilities,
various measures to reduce energy consumption, and a multi-year plan to reduce the use of SF6
gas.
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272
IT, Research and Development
Around 8% of capital expenditure was dedicated to further development of the Group’s IT
systems, Digital Transformation initiatives and R&D. In 2023, following the integration strategy
of the Prysmian Group, the group ERP system (SAP 1C) was implemented in the U.S. for the
Elevators Business, bringing the total number of production plants to 84, also adding the
corresponding 6 distribution centers, managed in the single SAP 1C system, present in more
than 30 countries. In the Operations area, the Corporate MES implementation project
(FastTrack) was successfully completed at the Livorno (Network Components) facility in June
2023, while the Vilanova (Energy, Spain) factory began the go-live phase during Q4 2023 and
was completed in January 2024. FastTrack implementation has also been launched at the Energy
facilities in Kistelek (Hungary) and Neustadt (Germany), as well as the Telecom facility in Jackson
(United States) and Suzhou (China); for all four sites, project completion is expected by the first
half of 2024. Two more factories, already identified, will see implementation during the second
half of 2024.
Base-load
Capital expenditure for structural maintenance activities amounted to about 8% of the total. The
main component of this amount is related to the continuation of the modernization of offices and
production sites in order to support the well-being and safety of people, and the reliability of
machinery.
Intellectual Property
The protection of the patent and trademark portfolio is a key element of the Group's activities,
also in relation to the growth strategy in high-tech market segments. At the end of 2023, the
number of patents and patent applications of the Prysmian Group and the number of patent
families remained basically unchanged.
The strategy of filing patents in new countries to go
along with the expansion of Prysmian's presence around the world continues.
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The number of new filings per year is decreasing although the number of ROI (Record of
Invention) received remains high, that is, inventions sent to the Intellectual Property
department. Apparently, the number of patentable inventions compared to the number of ROIs
received continues to be lower than in the past.
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275
It is important to note that again in 2023 the Group's patents were used in infringement cases
in Italy and France. There are two lawsuits still underway in Italy and France, while for the others
an agreement has been reached with the other party. These legal initiatives are part of a broader
strategy undertaken by the Group in order to protect investments made in R&D.
In terms of trademarks, the Prysmian Group filed 5 new trademark families, abandoned 149
trademarks no longer in use locally and aligned registrations with the Group's strategies. At the
end of 2023, Prysmian owned 4,583 trademark registrations related to 861 trademark families.
The data come from Prysmian's internal database, which is constantly updated by the Intellectual
Property department in line with the main patent databases available. Also among the tools used
by the Intellectual Property department is a new website for collecting ROIs and applications for
new trademarks. The internal database regularly cross-references data with the databases of
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276
patent and trademark offices. The data are also cross-referenced with databases of external
legal advisers who manage certain stages of the patent and trademark granting process.
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Methodology
The data and information provided in Non-Financial Statement (NFS), refer to all companies
belonging to the Prysmian Group as at 31 December 2023, consolidated on a line-by-line basis.
The scope of the data is clearly indicated in the text, in the tables and in the section “Notes on
the data and information”.
In addition, within the NFS, additional KPIs specific to the sector in which the Group operates
have been integrated, taking into consideration:
•
the indicators published by the Sustainability Accounting Standards Board (SASB),
clearly identified in the table in the "SASB Index" section;
•
the indicators published by the TCFD, identified in the "TCFD Correlation Table" section.
Both these indicator types are to be considered additional to the information prepared in
accordance with the GRI Standards to respond to the requests of arts. 3 and 4 of Italian
Legislative Decree 254/16.
The document takes into account the sustainability matters considered of highest priority for the
Group, as identified in the materiality analysis (see the section entitled “Stakeholder
Engagement and Materiality analysis”). As required by the Reporting Standard, this section
includes the “GRI Content Index” containing details of the indicators reported.
The process of collecting the data and information necessary for the drafting of the NFS has
involved various functions of the Group companies and has been designed to ensure reporting
in line with the GRI principles of precision, balance, clarity, comparability, completeness,
sustainability, timeliness and reliability. In particular, the data was collected using a digital
platform, which enables information to be centralized and activates a virtuous analysis-
management circle for these indicators.
The Consolidated Non-Financial Statement is published annually.
Except for the information reflected in the indicators summarized in the “SASB Index” and the
“TCFD Correlation table”, the NFS has undergone a limited assurance review, in accordance with
the International Standard on Assurance Engagements (ISAE 3000 Revised), by EY S.p.A. The
review was carried out in accordance with the procedures indicated in the “Independent Auditors’
Report” included in this document.
With regard to the materiality analysis conducted by the Group, only the part relating to financial
materiality was not included in the limited review by EY S.p.A. Those quantitative indicators
unrelated to any general or topic-specific disclosures required by the GRI Standards, as identified
in the Content Index, were not included in the limited assurance review by EY S.p.A.
For comments, requests, opinions and suggestions for improvement on Prysmian's operations
and the information contained in the document, you can contact:
SUSTAINABILITY DEPARTMENT [email protected]
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279
Notes on the data and information
In general, for all data analyzed by geographical segment, the following regions were considered:
North America, Latin America, EMEA (Europe, Middle East and Africa) and APAC regions. For
details of the countries included in the geographical regions, please refer to the map of the
Group’s factories shown in the “Global leadership” section.
Workforce data
For 2023, the headcount figures of the companies forming part of the Prysmian Group as at 31
December 2023 and consolidated on a line-by-line basis were considered.
With reference to pay data, the workforce of "Nantong Haixun Draka Elevator Products Co. LTD”
and “Nantong Zhongayo Draka Elevator Products Co. LTD” is excluded.
With reference to employee gender data, the "other" category includes a non-binary qualification
declared by the employee or the employee’s failure to specify a gender.
Environmental data
The environmental data presented in the document is derived from a reporting system that, with
respect to the stated reporting scope, does not include offices and distribution centers as they
have a reduced environmental impact compared with the Group’s production activities. The
following points have to be noted:
• Chiplun plant (India): the data included in the reporting scope is estimated on the basis of
actual production in the years 2022 and 2023. For the year 2021, the data were estimated on a
linear basis.
• Sohar plant (Oman): the data, included in the reporting scope, for the years 2021 were
estimated on a linear basis.
The data relating to this site are included in the figures reported in this document, except when
expressly indicated otherwise. Environmental data is not yet reported in relation to the
installation of underground cables (the environmental aspects and methods of management
differ greatly from those of the operating units), except the CO
2
eq emissions coming from those
installation performed by contractors, which are estimated thanks to a spent-based methodology
and included in the purchased goods and services category of the Group’s Scope 3 emissions.
Note also that environmental performance indicators may contain estimates, if final data is not
yet available at the time of preparing the Consolidated Non-Financial Statement.
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280
Calculation of GHG emissions
Greenhouse gases analyzed
The GHG emissions included in this document comprise CO
2
, HFC, PFC and SF
6
. Other gases
such as CH
4
and N
2
O whose emissions were found to be insignificant were also analyzed. GHG
emissions are expressed in CO
2
eq, the standard unit of measurement for the global warming
potential (GWP) of greenhouse gases, calculated as the warming power of a unit of gas with
respect to that of carbon dioxide. The GWP values used to calculate the CO
2
eq are taken from
the Fourth Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC)
and cover a period of 100 years. With regard to refrigerant gases, the GWP values associated
with them were considered. In all cases, an oxidation factor of 1 is presumed.
Sources of Scope 1, Scope 2 and Scope 3 emissions
Scope 1 GHG emissions derive from sources owned or controlled by the Group, including:
• natural gas;
• LPG;
• petrol;
• diesel;
• fuel oil;
• marine diesel;
• refrigerant gas leaks;
• SF
6
gas leaks.
Scope 2 GHG emissions derive from purchased energy that was produced outside of the Group,
but consumed by it, including:
• electricity generated from renewable sources and obtained as a result of purchasing Guarantee
of Origin (GO) certificates and EECSs (European Energy Certificates System);
• electricity produced from fossil fuels;
• district heating;
• steam.
Scope 3 GHG emissions considered in this document relate to the following sources, identified
with reference to the GHG Protocol guidelines:
• purchased goods and services;
• capital goods;
• fuels and energy-related activities;
• upstream transportation and distribution;
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281
• waste generated in operations;
• business travel;
• employee commuting;
• upstream leased assets;
• downstream transportation and distribution;
• use of sold products;
• end-of-life treatment of sold products;
• investments.
Note that Scope 3 categories excluded from the above list have been omitted because they are
not material. More information can be found in the “2023 GHG Statement” prepared by the
Group.
Emission factors
Sources of emission factors for the Scope 1 calculation:
•
2021:
o
Fuels: Defra 2021;
o
F-GAS: GHG Protocol.
•
2022:
o
Fuels: Defra 2022;
o
F-GAS: GHG Protocol.
•
2023:
o
Fuels: Defra 2023;
o
F-GAS: GHG Protocol.
Sources of emission factors for the Scope 2 calculation are:
•
2021:
o
Location-based: Terna 2019;
o
Market-based: AIB 2020 (for European countries) and Center for Resource
Solutions (for the USA and Canada), using the “2021 Green-e Energy Residual Mix
Emissions Rates” as source where available, otherwise Terna 2019.
•
2022:
o
Location-based: Terna 2019;
o
Market-based: AIB 2021 (for European countries) and Center for Resource
Solutions (for the USA and Canada), using the “2022 Green-e Energy Residual Mix
Emissions Rates” as source where available, otherwise Terna 2019.
•
2023:
o
Location-based: IEA 2023;
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282
o
Market-based: AIB 2022 (for European countries) and Center for Resource
Solutions (for the USA and Canada), using EPA as source (2023 Green-e Energy
Residual Mix Emissions Rates sheet) where available, otherwise IEA 2023.
As of 2022, TERNA no longer publishes Location-based Emission Factors. For 2022 reporting,
due to TERNA’s publication delay, emissions were calculated by maintaining the TERNA factors
used for 2021 (as per the procedure). While, starting from FY 2023, Prysmian decided to switch
to IEA as the source for Location-based factors.
The following checks and assessments were performed to confirm that the introduction of the
new IEA factors into the Group's GHG emission calculation and reporting tools did not make it
necessary to re-state the Baseline:
-
Calculation of deviation in emission values (2019-2020-2021) due to the change in the
Location-based data source (IEA instead of TERNA): the changes, averaging about 1
-
2%, were considered insignificant at Group level
;
-
Recalculation of 2022 emissions, with new factors (IEA 2022), and comparison of values
obtained with those published in the 2022 NFS (calculated with the TERNA factors
already used for 2021). Again, the deviation in total emissions (Scope 1 and Scope 2
Market-based) associated with the change in data source was not significant (+0.92%,
using IEA), so there was no need for a recalculation of emissions for the year 2022,
which is the baseline for the reduction targets for the next three years (2023-2025);
-
The rate relating to electricity covered by GOs associated with nuclear energy has been
quantified as having zero direct emissions.
-
Calculation of Scope 3 GHG emissions
For Scope 3 emissions calculations, the data source for location-based factors is the IEA,
so no comparisons are needed.
Category 1: Purchased goods and services
Purchase-related emissions are split into two categories:
•
category 1.a – product-related, including all goods and services purchased that are
directly linked to production of the product;
•
category 1.b – non-product related, including all other goods and services purchased
that are not directly linked to the production process, but are needed for the functioning
of the organization.
The methodology used to calculate these emissions is described below:
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283
•
category 1.a – the calculation considers the data for purchased metals and the bills of
materials for components. It uses specific emission factors for each of the metals,
depending on the form of the metal purchased, the location of the supplier of each metal,
the recycled content of each metal. For other raw materials, emission factors are taken
from the Ecoinvent database, applying the EU guidelines on product environmental
footprint (“EU-PEF”);
•
category 1.b – for each category of expenditure, a specific emission factor is taken from
the EEIO database
53
, either as raw data or calculated as an average of other emission
factors. In this case, the emission factors do not make any assumptions about recycling,
as this is not an established market practice.
The exclusions for each of the above categories are presented below:
•
for category 1.a – metals: data for the following countries is excluded: Ivory Coast,
Tunisia, India, the OAPIL plant in Oman and the former reporting scope of EHC;
•
for category 1.a
– compounds and other materials and category 1.b
– non-product-
related emissions: only data relating to Chiplun (India), OAPIL (Oman) and EHC (Canada
and China) are excluded;
Category 2: Capital goods
The calculation methodology is based on Prysmian’s capital expenditure, estimating the portion
relating to each of the following 8 categories: buildings, utilities, purchased machinery,
customized machinery, refurbished machinery, control systems, production engineering and
vessels. Emission factors are calculated for each of these 8 expenditure categories by averaging
the relevant EEIO emission factors. Assumptions are then made about the portion of investment
in each expenditure category associated with the procurement of a material or service. Lastly,
the emissions are calculated by multiplying the expenditure on each category by a combined
average of the material emission factor and the service emission factor.
Category 3: Fuels and energy-related activities (not included in Scope 1 or 2)
Emissions are calculated by multiplying the quantities of fuel, electricity and thermal energy by
the relevant upstream emission factors. The 2023 conversion factors issued by the International
Energy Agency (IEA)
54
and DEFRA
3
(UK Department for Environment, Food and Rural Affairs)
53
Source of emission factors:
Open Input Output (2011), Sustainability Consortium, University of Arkansas.
Please
consider that EEIO factors are yearly adjusted for global inflation, average global improvements in CO
2
eq/GDP, and
switch to service sector of global economy.
54
Source of emission factors: IEA (2023), “Emission Factors”
3
Source of emission factors: DEFRA (2023), “UK Government GHG Conversion Factors for Company Reporting”.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
284
are used to calculate the upstream emissions of purchased fuels, electricity and thermal energy,
including transport and distribution (T&D) losses.
Category 4: Upstream transportation and distribution
Two methods of calculation are used for this category, one for inbound logistics and one for
outbound logistics.
•
The calculation of inbound logistics emissions is based on an estimate that uses product
quantitative information relating to purchased goods and services (category 1.a) and
EEIO emission factors.
•
The outbound logistics calculation is based on the distance travelled, the weight carried
and the method of transport. Given that the Prysmian data includes thousands of
individual journeys, making it difficult to extract the distances for each route, the
distance is estimated by grouping the journeys for each country and assuming that all
journeys go from one capital city to another. In the case of journeys within the same
country, it is assumed that they go from the capital to the second-largest city. In
addition, since no data was provided on the method of transport, it was estimated that
all journeys of less than 3,000 km were made on the road, while all those of more than
3,000 km were made 10% on the road and 90% by sea (journeys by air for logistical
purposes are minimal). The emissions for each journey are then calculated by firstly
determining the “tons-km” (multiplying the total distance travelled by the weight
transported) and then multiplying it by the applicable DEFRA emission factor. The
emissions from outbound logistics not performed by the Group or outsourced are
included in category 9.
The emission factors used for the category 4 calculation include Well-To-Tank (WTT)
emissions.
Data for the following Units is excluded from this emissions category: Chiplun (India), OAPIL
(Oman), Automotive B.U. (only Tunisia, North America and Mexico), Ivory Coast, Russia, EHC
(North America Elevator), Projects (Powerlink, NSW and the Arco Felice factory) and other
minor streams among China logistic centers and European semi-finished products.
Category 5: Waste generated in operations
Waste data for the calculation of emissions is provided by each production site, while the waste
data of offices is estimated with reference to sector averages. Waste data includes a subdivision
by the location of final processing. The data is expressed in kg and subsequently combined with
the DEFRA emission factors for waste processing. Given that office waste data was not
available, a sector average was used for the calculation. The kg of waste per m
2
was determined
using the average kg of waste per employee and the average density of employees per m
2
,
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
285
given the surface area occupied by Prysmian. The result was weighted considering the average
of the waste sent to landfills vs that recycled by an office.
Category 6: Business travel
The methodology used to calculate these emissions is described below:
•
the cost of business travel was recorded for each reporting year, distinguishing between
air and rail travel andcar rental.
•
Emissions were calculated by multiplying the cost by the related EEIO emission factors
for each category of travel.
Category 7: Employee commuting
Emissions were calculated as the product of the number of employees times an emission factor
of = 1700kgCO
2
eq/year for each employee's commute. The mean factor is derived by using the
"Quantis Scope 3 Evaluator" tool.
Category 8: Upstream leased assets
The calculation for this emissions category considers the electricity consumption values available
and the surface area occupied by Prysmian. Subsequently, the IEA emission factors for each
country are applied to the related kWh. An average of kWh/m
2
is calculated if the kWh data is
missing or not provided.
Category 9: Downstream transportation and distribution
This category includes the emissions generated by product transportation and distribution
activities that are not controlled or paid for by the reporting entity. Specifically, the scope of
category 9 includes ex-works (EXW) deliveries and other Incoterm types.
The emissions calculation is based on the distance travelled, the weight carried and the method
of transport. Since no data was provided on the mode of transport, it was estimated that all
journeys of less than 3,000 km were made on the road, while all those of more than 3,000 km
were made 10% on the road and 90% by sea (journeys by air for logistical purposes are
minimal). The emissions for each journey are then calculated by firstly determining the “tons-
km” (multiplying the total distance travelled by the weight transported) and then multiplying it
by the applicable DEFRA emission factor. The emission factors used for the category 9 calculation
include Well-To-Tank (WTT) emissions. Data for the following Units is excluded from this
emissions category: Chiplun (India), OAPIL (Oman), Automotive B.U. (only Tunisia, North
America and Mexico), Ivory Coast, Russia, EHC (North America Elevator), Projects (Powerlink,
NSW and the Arco Felice factory) and other minor streams among China logistic centers and
European semi-finished products.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
286
Category 11: Use of sold products
A model has been developed for the calculation of emissions that determines the annual cable
losses, by type of cable and by country, from 2023 until end of life (between 2046 and 2063,
depending on the cable). These annual losses are then multiplied by the emission factor for
electricity in the country concerned, being the emission factor for national grid generation and
for Well To Tank (WTT) generation provided by the IEA. The emission factor for a country is
different for each year from now until 2063, in order to take account of the expected changes
in the CO
2
intensity of the grids. Grid decarbonization forecasts are calculated for each country
in which Prysmian cable losses exceed 5% of the total losses and for those in which the forecast
data is easily obtained. Regional proxies are used for countries in which the losses are less
than or equal to 5% and whose forecasts are difficult to obtain: for example, EU data is used
for Belgium and data for the Asia Pacific area is used for New Zealand.
Category 12: End-of-life treatment of sold products
The methodology used to calculate these emissions is described below. In particular the
following assumptions are made:
•
the quantity of cables produced is the same as the quantity of cables sold to customers;
•
“power cables” and “wire rods” are produced by the Energy and Projects divisions and
represent 90% of sales, while “telecom cables” and “fiber optic” are produced by the
“Telecom” division and account for the remaining 10%;
•
90% of the cables are recycled at their end of life, while the remaining 10% are
transferred to landfills;
•
“power cables” consist of 90% metal and 10% plastic, while “wire rods” are 100% metal.
The emissions of “power cables” and “wire rods” are calculated, as they are the only categories
for which metric data expressed is available in tons of product, rather than km. This is because
the BDEFRA emission factors are expressed in kgCO
2
eq/ton. The calculation involves
multiplying the weight of the metals and plastic by the related BEIS emission factors, for both
the quantity recycled and that transferred to landfills. The value obtained is then uplifted by
10% to account for “telecom cables” and “fiber optic”.
Category 15: Investments
Emissions are calculated using the following equation:
•
CO
2
eq = SUM (USD invested per sector x emission factor for the sector (kgCO
2
eq/million
USD)).
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
287
Different emission factors are used depending on the sector in which subsidiaries operate and,
therefore, each investment is compared with the sector concerned. Most investments are
assigned to the “industrials” category, others to “materials” and still others – where subsidiary
information is not available – to an average “global” emission factor.
Note that some categories are excluded – treated as zero emissions – as they are not relevant
to Prysmian. These categories are listed below.
-
Category 10
: this category is excluded because Prysmian sells finished products
to end users, without intermediate products that might be processed further or
transformed into other products.
-
Category 13
: Prysmian does not lease assets to third parties and, accordingly,
this category is excluded.
-
Category 14
: Prysmian does not have franchises and, accordingly, this category
is excluded from the Scope 3 inventory.
Health and safety data
Health and safety data (FR, SR) does not include: for 2021, 2022 and 2023, the company
Associated Cables Pvt. Ltd. (Chiplun site).
Data on occupational diseases do not include: for 2020, Associated Cables Pvt. Ltd. (Chiplun
site), Oman Aluminium Processing Industries LLC (Sohar site) and Oman Cables Industry
(Muscat site); for 2021 Associated Cables Pvt. Ltd. (Chiplun site) and Oman Aluminium
Processing Industries LLC (Sohar site); for 2022 and 2023 Associated Cables Pvt. Ltd. (Chiplun
site).
The injury-related indices are calculated as follows:
•
Frequency rate (FR): (total number of injuries with loss of work/hours worked) *
200,000;
•
Fatalities are included in the calculation of the Frequency rate;
•
Severity rate (SR): (number of days lost/hours worked) * 200,000;
•
Occupational disease rate: cases of occupational disease (officially notified/hours worked)
* 1,000,000;
•
Absentee rate: total hours of absence/hours to be worked;
•
Fatality rate: (number of fatalities/hours worked) * 200,000;
•
The frequency, severity, fatality and occupational disease rates were calculated using, as
the denominator, the hours worked by employees and external collaborators (including
temporary agency workers and contractors). This calculation applies to 2021, 2022 and 2023.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
288
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
289
Correlation table pursuant to Italian Legislative Decree 254/2016, Material topics and
GRI Aspects
IT.
LEG.
Decree
254/16
Material
topics
for
Prysmian Group
GRI
Standards
Chapter/Page
Organizational Model
Governance, Ethics and
Integrity
GRI
3-3
GRI 2-23
Ethics and integrity
Environmental
responsibility
People, Prysmian’s human
capital
Sustainable value chain
-
GRI
2-1
GRI
2-2
GRI
2-3
GRI
2-4
GRI
2-5
GRI
2-6
GRI
2-9
GRI
2-10
GRI
2-11
GRI
2-12
GRI
2-13
GRI
2-14
GRI
2-15
GRI
2-16
GRI
2-17
GRI
2-18
GRI
2-19
GRI
2-20
GRI
2-21
GRI
2-22
GRI
2-24
GRI
2-25
GRI
2-26
GRI
2-27
GRI
2-28
GRI
2-29
Methodology
Prysmian: Connect, to lead
Major events in 2023
Corporate Governance
External reference: "Report
on Corporate Governance
and Ownership Structure"
2022
Letter
from
the
Chief
Executive Officer
Prysmian: Sustain, to lead
Ethics and integrity
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
290
GRI
2-30
GRI
3-1
GRI 3-2
External reference: "Report
on remuneration policy and
compensation paid" 2022
Proactive
role
in
trade
associations
Remuneration policy and
welfare plans
Respect for human rights
Prysmian Group Customers
– the Customer Excellence
Approach
Sustainable value chain
Stakeholder
engagement
and materiality analysis
Staff
Well-being,
engagement
and
improvement
of
human capital skills
GRI
3-3
GRI 401-1
GRI 401-2
GRI
402-1
GRI
403-1
GRI
403-2
GRI
403-3
GRI
403-4
GRI
403-5
GRI
403-6
GRI
403-7
GRI
403-9
GRI
403-10
GRI 404-1
GRI 404-3
Respect for human rights
Remuneration policy and
welfare plans
Health and safety in the
workplace
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
291
-
GRI
2-7
GRI 2-8
Prysmian: Connect, to lead
Respect for human rights
Human Rights
Equity, diversity, inclusion
and respect for human
rights
GRI
3-3
GRI 405-1
Respect for human rights
Anti-corruption
Governance, ethics and
integrity
GRI 3-3
GRI
205-2
GRI 205-3
Business
ethics
and
integrity:
the
pillars
of
sustainability
Environment
Biodiversity and impacts
on nature
GRI
3-3
GRI 304-3
Environmental
responsibility
Facilitating
decarbonization to achieve
Net-Zero and digitalization
GRI
3-3
GRI 302-1
GRI
302-3
GRI
305-1
GRI 305-2
GRI 305-3
GRI
305-4
Environmental
responsibility
Pollution
GRI 3-3
GRI 305-7
Environmental
responsibility
Water and tributaries
GRI 3-3
GRI 303-1
GRI 303-2
GRI 303-3
GRI 303-5
Environmental
responsibility
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
292
Sustainable value chain
GRI 3-3
GRI
308-2
Sustainable value chain
Sustainable
innovation
and circularity
GRI
3-3
GRI 301-1
GRI 302-1
GRI
302-3
GRI 303-1
GRI 303-2
GRI 303-3
GRI 303-5
GRI
305-7
GRI
306-1
GRI
306-2
GRI 306-3
GRI 306-4
GRI 306-5
Sustainable innovation for
products, applications and
processes
Sustainable value chain
Environmental
responsibility
Energy
Greenhouse gas emissions
Other
atmospheric
emissions
Water
Waste
Social
Cybersecurity and data
protection
GRI
3-3
GRI 418-1
Cybersecurity
Sustainable value chain
GRI 3-3
GRI
414-2
Sustainable value chain
Governance, ethics and
integrity
GRI
3-3
GRI
206-1
GRI
207-1
GRI
207-2
GRI
207-3
GRI 207-4
Business
ethics
and
integrity: the pillars of
sustainability
The Group’s tax strategy
Local communities
GRI
3-3
GRI 203-1
Positive
impact
on
communities
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
293
Sustainable value chain
GRI
3-3
GRI
201-2
GRI
203-1
GRI 204-1
Environmental
responsibility
Positive
impact
on
communities
Sustainable value chain
PRYSMIAN GROUP | DIRECTORS’ REPORT
294
GRI Content Index
Statement of Use
Prysmian
has
submitted
reporting
in
accordance with the GRI Standards for the
period
1 January 2023 – 31 December 2023
GRI 1 used
GRI 1 – Foundation – 2021 version
Relevant GRI sector standards
Not applicable
GRI aspects
GRI Standards
Omissions
Chapter/Page
Disclosure
Description
GENERAL DISCLOSURES
The Organization
and its reporting
procedures
2-1
Organizational
details
Methodology
Prysmian:
Connect, to lead
2-2
Entities included in
the
organization’s
sustainability
reporting
Methodology
2-3
Reporting
period,
frequency
and
contact point
Methodology
2-4
Restatements
of
information
Methodology
2-5
External assurance
Methodology
Activities
and
workers
2-6
Activities,
value
chain
and
other
business
relationships
Major events in 2023
Prysmian: Connect, to lead
Prysmian: Sustain, to lead
Prysmian Group customers
– the Customer Excellence
approach
Sustainable value chain
2-7
Employees
Prysmian: Connect, to lead
Respect for human rights
2-8
Workers who are not
employees
Respect for human rights
Governance
2-9
Governance
structure
and
composition
Corporate Governance
External
reference:
"Report
on
Corporate
Governance
and
PRYSMIAN GROUP | DIRECTORS’ REPORT
295
GRI aspects
GRI Standards
Omissions
Chapter/Page
Disclosure
Description
Ownership
Structure"
2022
2-10
Nomination
and
selection
of
the
highest governance
body
External
reference:
"Report
on
Corporate
Governance
and
Ownership
Structure"
2022
2-11
Chair of the highest
governance body
Corporate Governance –
Page X
External
reference:
"Report
on
Corporate
Governance
and
Ownership
Structure"
2022
2-12
Role of the highest
governance body
in
overseeing
the
management
of
impacts
External
reference:
"Report
on
Corporate
Governance
and
Ownership
Structure"
2022
2-13
Delegation
of
responsibility
for
managing impacts
External
reference:
"Report
on
Corporate
Governance
and
Ownership
Structure"
2022
2-14
Role of the highest
governance body in
sustainability
reporting
External
reference:
"Report on Corporate
PRYSMIAN GROUP | DIRECTORS’ REPORT
296
GRI aspects
GRI Standards
Omissions
Chapter/Page
Disclosure
Description
Governance
and
Ownership
Structure"
2022
2-15
Conflicts of interest
Risk factors
2-16
Communication
of
critical concerns
Ethics and integrity
2-17
Collective knowledge
of
the
highest
governance body
External
reference:
"Report
on
Corporate
Governance
and
Ownership
Structure"
2021
2-18
Evaluation
of
the
performance of the
highest governance
body
External
reference:
"Report
on
Corporate
Governance
and
Ownership
Structure"
2021
2-19
Remuneration
policies
Respect for human rights –
Page X
External
reference:
“Report on remuneration
policy and compensation
paid” 2021
2-20
Process to determine
remuneration
External
reference:
“Report on remuneration
policy and compensation
paid” 2021
2-21
Annual
total
compensation ratio
Remuneration policy and
welfare plans
Strategy, policies
and practices
2-22
Statement
on
sustainable
development
strategy
Letter from the CEO
2-23
Policy commitments
Ethics and integrity
PRYSMIAN GROUP | DIRECTORS’ REPORT
297
GRI aspects
GRI Standards
Omissions
Chapter/Page
Disclosure
Description
Environmental
responsibility
Respect for human rights
Sustainable value chain
2-24
Embedding
policy
commitments
Ethics and integrity
Environmental
responsibility
Respect for human rights
Sustainable value chain
2-25
Processes
to
remediate negative
impacts
Ethics and integrity
Environmental
responsibility
Respect for human rights
Sustainable value chain
2-26
Mechanisms
for
seeking advice and
raising concerns
Ethics and integrity
2-27
Compliance
with
laws and regulations
Ethics and integrity
2-28
Membership
associations
Proactive role in trade
associations
Involvement
of
Stakeholders
2-29
Approach
to
stakeholder
engagement
Stakeholder engagement
and materiality analysis
2-30
Collective bargaining
agreements
Dialogue
with
social
partners
and
collective
bargaining
MATERIAL TOPICS
PRYSMIAN GROUP | DIRECTORS’ REPORT
298
GRI aspects
GRI Standards
Omissions
Chapter/Page
Disclosure
Description
Disclosure
of
material topics
3-1
Process to determine
material topics
Stakeholder engagement
and materiality analysis
3-2
List
of
material
topics
Stakeholder engagement
and materiality analysis
FACILITATING DECARBONIZATION TO ACHIEVE NET-ZERO AND DIGITALIZATION
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Sustainable value chain
302: Energy
302-1
Energy consumption
within
the
organization
Energy
302-3
Energy intensity
Energy
305: Emissions
305-1
Direct
(Scope
1)
GHG emissions
Greenhouse
gas
emissions
305-2
Energy
indirect
(Scope
2)
GHG
emissions
Greenhouse
gas
emissions
305-3
Other
indirect
(Scope
3)
GHG
emissions
Greenhouse
gas
emissions
305-4
GHG
emissions
intensity
Greenhouse
gas
emissions
LOCAL COMMUNITIES
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Positive
impact
on
communities
203: Indirect economic
impacts
203-1
Infrastructure
investments
and
services supported
Positive
impact
on
communities
SUSTAINABLE VALUE CHAIN
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Sustainable value chain
201:
Economic
201-2
Financial
Sustainable value chain
PRYSMIAN GROUP | DIRECTORS’ REPORT
299
performance
implications
and
other
risks
and
opportunities due to
climate change
204:
Procurement
practices
204-1
Proportion
of
spending on local
suppliers
Sustainable value chain
308:
Supplier
environmental
assessment
308-2
Negative
environmental
impacts
in
the
supply
chain
and
actions taken
Sustainable value chain
414: Supplier social
assessment
414-2
Negative
social
impacts
on
the
supply
chain and actions
taken
Sustainable value chain
GOVERNANCE, ETHICS AND INTEGRITY
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Business
ethics
and
integrity: the pillars of
sustainability
205: Anti-corruption
205-2
Communication and
training
on
anti-
corruption
regulations
and
procedures
Business
ethics
and
integrity: the pillars of
sustainability
205-3
Confirmed incidents
of
corruption
and
actions taken
Business
ethics
and
integrity: the pillars of
sustainability
206: Anti-competitive
behavior
206-1
Legal
actions
for
anti-competitive
behavior,
antitrust
and
monopoly
practices
Business
ethics
and
integrity: the pillars of
sustainability
PRYSMIAN GROUP | DIRECTORS’ REPORT
300
207: Tax (2019)
207-1
Approach to taxation
The Group’s tax strategy
207-2
Tax
governance,
control
and
risk
management
The Group’s tax strategy
207-3
Stakeholder
engagement
and
management
concerns related to
tax
The Group’s tax strategy
207-4
Country-by-country
reporting
The Group’s tax strategy
Annexes
WATER AND EFFLUENTS
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Water
303:
Water
and
effluents (2018)
303-1
Interaction
with
water as a shared
resource
Water
303-2
Management
of
water
discharge-
related impacts
Water
303-3
Water withdrawal
Water
303-5
Water consumption
Water
BIODIVERSITY AND IMPACTS ON NATURE
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Biodiversity
304: Biodiversity
304-3
Habitats protected or
restored
Biodiversity
POLLUTION
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Biodiversity
305: Emissions
305-7
Other significant air
Other
atmospheric
PRYSMIAN GROUP | DIRECTORS’ REPORT
301
emissions
emissions
WELL-BEING, ENGAGEMENT AND IMPROVEMENT OF HUMAN CAPITAL SKILLS
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Respect
for
human
rights
401-1
New employee hires
and
employee
turnover
Respect
for
human
rights
401: Employment
401-2
Benefits provided to
full-time employees
that are not provided
to temporary or
part-time employees
Remuneration
policies
and welfare plans
402:
Labor/management
relations
402-1
Minimum
notice
periods regarding
operational changes
Respect
for
human
rights
403-1
Occupational health
and
safety
management system
Health and safety in the
workplace
403-2
Hazard
identification,
risk
assessment,
and
accident
investigation
Health and safety in the
workplace
403-3
Occupational health
services
Health and safety in the
workplace
403-4
Worker participation,
consultation
and
communication
on
occupational health
and safety
Health and safety in the
workplace
403-5
Worker training on
occupational health
Health and safety in the
workplace
PRYSMIAN GROUP | DIRECTORS’ REPORT
302
and safety
403-6
Promotion of worker
health
Welfare system
403-7
Prevention
and
mitigation
of
occupational health
and safety impacts
directly
linked
by
business
relationships
Health and safety in the
workplace
403-9
Work-related
injuries
Health and safety in the
workplace
403-10
Work-related
ill
health
Health and safety in the
workplace
404:
Training
and
education
404-1
Average
hours
of
training per year per
employee
Training
and
development
404-3
Percentage
of
employees
receiving
regular
performance and
career development
reviews
Training
and
development
EQUITY, DIVERSITY, INCLUSION AND RESPECT FOR HUMAN RIGHTS
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Respect
for
human
rights
405:
Diversity
and
equal opportunity
405-1
Diversity
in
governance
bodies
and
among
employees
Diversity,
equity,
inclusion
and
equal
opportunity
CYBERSECURITY AND DATA PROTECTION
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Cybersecurity
PRYSMIAN GROUP | DIRECTORS’ REPORT
303
418: Customer privacy
418-1
Substantiated
complaints
concerning breaches
of customer privacy
and
losses
of
customer data
Cybersecurity
SUSTAINABLE INNOVATION AND CIRCULARITY
GRI 3 - Material topics
- Version 2021
3-3
Management
of
material topics
Waste
301: Materials
301-1
Materials used by
weight or volume
Sustainable value chain
306: Waste
306-1
Waste
generation
and
significant
waste-related
impacts
Waste
306-2
Management
of
significant
waste-
related impacts
Waste
306-3
Waste generated
Waste
306-4
Waste diverted from
disposal
Waste
306-5
Waste directed to
disposal
Waste
PRYSMIAN GROUP | DIRECTORS’ REPORT
305
SASB Index
Within the 2023 Non-Financial Statement, for purposes other than to comply with the
requirements of Italian Legislative Decree 254/2016, additional specific KPIs for the sector in
which the Prysmian Group operates have been added, having regard for the indicators published
by the Sustainability Accounting Standards Board (SASB).
Sector
Resource Transformation
Industry
Electrical & Electronic Equipment
General Issue
Category
Disclosure
Description
Chapter/Page
Energy
management
RT-EE-
130a.1.
1) Total energy consumed, (2)
percentage grid electricity, (3)
percentage renewable
Environmental performance
Annexes - Environment
Hazardous
waste
management
RT-EE-
150a.1.
Amount
of
hazardous
waste
generated, percentage recycled
Environmental performance
Annexes - Environment
Product safety
RT-EE-
250a.1.
Number of recalls issued, total
units recalled
Prysmian
Group:
quality
processes and solutions
Product
lifecycle
management
RT-EE-
410a.3.
Revenue from renewable energy-
related
and
energy
efficiency
related products
Prysmian
Group
for
the
energy transition
Materials
sourcing
RT-EE-
440a.1.
Description of the management of
risks associated with the use of
critical materials
Governance
and
the
management of risks and
opportunities
Sustainable supply chain
Business ethics
RT-EE-
510a.1.
Description of policies and practices
for prevention of: (1) corruption
and
bribery
and
(2)
anti-
competitive behavior
Ethics
and
integrity
in
Prysmian Group
Business ethics
RT-EE-
510a.2.
Total amount of monetary losses as
a result of legal proceedings
associated
with
bribery
or
corruption
Ethics
and
integrity
in
Prysmian Group
Business ethics
RT-EE-
510a.3.
Total amount of monetary losses as
a result of legal proceedings
associated with anti-competitive
behavior regulations
Ethics
and
integrity
in
Prysmian Group
PRYSMIAN GROUP | DIRECTORS’ REPORT
306
Sector
Infrastructure
Industry
Engineering & Construction Services
General Issue
Category
Disclosure
Description
Chapter / Page
Workforce
health
and
safety
IF-EN-
320a.1.
1) Total recordable incident rate
(TRIR) and (2) fatality rate for (a)
direct employees and (b) contract
employees
Occupational
health
and
safety x
Annexes - Health and safety
Business ethics
RT-EE-
510a.1.
Description of policies and practices
for prevention of: (1) corruption
and
bribery
and
(2)
anti-
competitive behavior
Ethics
and
integrity
in
Prysmian Group
Business ethics
RT-EE-
510a.2.
Total amount of monetary losses as
a result of legal proceedings
associated
with
bribery
or
corruption
Ethics
and
integrity
in
Prysmian Group
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
308
TCFD correlation table
The Task force on Climate-related Financial Disclosures (TCFD) has issued a series of
recommendations for the consistent, voluntary disclosure of information by an organization to
investors, lenders and insurance underwriters about its general strategy and governance, as well
as its climate-related financial risks and opportunities, and related parameters and targets.
The objective of Prysmian’s TCFD Report is to highlight the transparent approach taken to
sustainability, as well as to provide additional climate-related information that is readily
accessible and understandable by investors and other users.
RECOMMENDED TCFD DISCLOSURE
Disclose the metrics used by the
organization
to
assess
its
climate-related
risks
and
opportunities, consistent with its
strategy and risk management
process.
Disclose the Scope 1, Scope 2
and, if necessary, Scope 3 GHG
emissions and related risks.
Describe the targets used by the
organization
to
manage
its
climate-related
risks
and
opportunities,
and
its
performance against the targets
set.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
310
Annexes to the Consolidated Non-Financial Statement
Group companies considered for taxation 2023
1
in 2023 Prysmian was active in over 50 coutries with more that 170 companies and 40 branches.
Please refer to the following table containing the list of entities considered in the reporting
perimeter.
Country
Region
Entity
Activity
Australia
APAC
Prysmian Australia Pty Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
China
APAC
Prysmian Tianjin Cables Co. Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
China
APAC
Prysmian Cable (Shanghai) Co. Ltd.
Sales, Marketing or Distribution; Administrative,
Management or Support Services
China
APAC
Prysmian (China) Investment Company
Ltd.
Administrative, Management or Support Services;
Holding shares or other equity instruments
China
APAC
Nantong Haixun Draka Elevator Products
Co. LTD
Manufacturing or Production; Sales, Marketing or
Distribution
China
APAC
Nantong
Zhongyao
Draka
Elevator
Products Co. LTD
Manufacturing or Production; Sales, Marketing or
Distribution
China
APAC
Suzhou Draka Cable Co. Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution; Administrative, Management or
Support Services
China
APAC
Prysmian Technology Jiangsu Co. Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
China
APAC
EHC Escalator Handrail (Shangai) Co. Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution;
China
APAC
EHC Lift Components (Shangai) Co. Ltd.
Research and Development; Manufacturing or
Production; Sales, Marketing or Distribution;
China
APAC
EHC Engineered Polymer (Shangai) Co.
Ltd.
Research and Development; Manufacturing or
Production; Sales, Marketing or Distribution;
China
APAC
EHC Lift Components (Shanghai) Co., Ltd
FoShan Branch
Sales, Marketing or Distribution
China
APAC
Prysmian Cable (Shanghai) Trading Co
Ltd - Suzhou Branch
Manufacturing or Production; Sales, Marketing or
Distribution
China
APAC
Prysmian PowerLink - Branch China
Provider of services to unrelated parties
French Polynesia
APAC
Prysmian Cables et Systèmes France SAS
- Branch Tahiti
Provider of Services to Unrelated Parties
Hong Kong
APAC
Prysmian Hong Kong Holding Ltd. HK
Sales, Marketing or Distribution; Provider of
services to unrelated parties; Holding shares or
other equity instruments
India
APAC
Jaguar
Communication
Consultancy
Services Private Ltd.
Provider of Services
India
APAC
Associated Cables Pvt. Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
India
APAC
Prysmian Cavi e Sistemi S.r.l. – Branch
India
Dormant
Indonesia
APAC
PT. Prysmian Cables
Indonesia
Manufacturing or Production; Sales, Marketing or
Distribution
Malaysia
APAC
Sindutch Cable Manufacturer Sdn Bhd
Manufacturing or Production; Sales, Marketing or
Distribution
Malaysia
APAC
Draka (Malaysia) Sdn Bhd
Dormant
New Zealand
APAC
Prysmian New Zealand Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
Philippines
APAC
Prysmian PowerLink - Branch Filippine
Provider of services to unrelated parties
Philippines
APAC
Draka Philippines Inc.
Manufacturing or Production; Sales, Marketing or
Distribution
Singapore
APAC
Prysmian Cables Asia-Pacific Pte Ltd.
Dormant
Singapore
APAC
Draka Cableteq Asia Pacific Holding Pte
Ltd.
Holding shares or other equity instruments
Singapore
APAC
Singapore Cables Manufacturers Pte Ltd.
Sales, Marketing or Distribution; Administrative,
Management or Support Services
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
311
Singapore
APAC
Cable Supply and Consulting Company
Private Limited
Holding shares or other equity instruments
Singapore
APAC
Draka NK Cables (Asia) Pte Ltd.
Dormant
Singapore
APAC
Prysmian PowerLink - Branch Singapore
Provider of services to unrelated parties
Thailand
APAC
MCI-Draka Cable Co. Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
China
APAC
Prysmian Wuxi Cable Co. Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
Algeria
EMEA
Prysmian Cables et Systèmes France SAS
– Branch Algeria
Dormant
Algeria
EMEA
Silec
Cable
SAS
–
Branch
Algeria
(dormant)
Dormant
Angola
EMEA
General Cable Condel, Cabos de Energia e
Telecomunicaçoes
SA
Manufacturing or Production; Sales, Marketing or
Distribution
Austria
EMEA
Prysmian OEKW GmbH
Sales, Marketing or Distribution
Bahrain
EMEA
Prysmian PowerLink - Branch Baharain
Provider of services to unrelated parties
Belgium
EMEA
Draka Belgium N.V.
Sales, Marketing or Distribution
Belgium
EMEA
Silec Cable SAS – Branch Belgium
Provider of services to unrelated parties
Cote d'Ivoire
EMEA
SICABLE - Sociète Ivoirienne de Cables
S.A.
Manufacturing or Production; Sales, Marketing or
Distribution
Czech Republic
EMEA
Prysmian Kabely, s.r.o.
Manufacturing or Production; Sales, Marketing or
Distribution
Czech Republic
EMEA
Prysmian Kablo SRO - Branch Czech
Republic
Sales, Marketing or Distribution
Denmark
EMEA
Prysmian Group Denmark A/S
Sales, Marketing or Distribution
Denmark
EMEA
Prysmian PowerLink - Branch Denmark
Provider of services to unrelated parties
Estonia
EMEA
Prysmian Group Baltics AS
Manufacturing or Production; Sales, Marketing or
Distribution
Finland
EMEA
Prysmian Group Finland OY
Manufacturing or Production; Sales, Marketing or
Distribution
France
EMEA
Prysmian Cables et Systèmes France SAS
Manufacturing or Production; Sales, Marketing or
Distribution
France
EMEA
Prysmian (French) Holdings S.A.S.
Holding shares or other equity instruments
France
EMEA
Draka Comteq France S.A.S.
Research and Development; Holding / managing
intellectual
property;
Manufacturing
or
Production; Sales, Marketing or Distribution
France
EMEA
Draka Paricable S.A.S.
Sales, Marketing or Distribution
France
EMEA
Draka Fileca S.A.S.
Manufacturing or Production; Sales, Marketing or
Distribution
France
EMEA
Draka France S.A.S.
Holding shares or other equity instruments
France
EMEA
P.O.R. S.A.S.
Other activities (società per scopi speciali)
France
EMEA
Silec Cable, S.A.S.
Manufacturing or Production; Sales, Marketing or
Distribution
France
EMEA
EHC France SARL
Sales, Marketing or Distribution;
France
EMEA
Prysmian PowerLink - Branch Francia
Provider of services to unrelated parties
Germany
EMEA
Prysmian Kabel und Systeme GmbH
Manufacturing or Production; Sales, Marketing or
Distribution
Germany
EMEA
Prysmian
Unterstuetzungseinrichtung
Lynen GmbH
Other (fondo pensione)
Germany
EMEA
Draka Comteq Germany GmbH & Co. KG
Manufacturing or Production Sales; Marketing or
Distribution
Germany
EMEA
Draka Comteq Berlin GmbH & Co. KG
Manufacturing or Production; Sales, Marketing or
Distribution
Germany
EMEA
Draka Comteq Germany Verwaltungs
GmbH
Dormant
Germany
EMEA
Draka Deutschland Erste Beteiligungs
GmbH
Holding shares or other equity instruments
Germany
EMEA
Draka Deutschland GmbH
Holding shares or other equity instruments
Germany
EMEA
Draka Deutschland Verwaltungs GmbH
Dormant
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
312
Germany
EMEA
Draka Deutschland Zweite Beteiligungs
GmbH
Holding shares or other equity instruments
Germany
EMEA
Prysmian Projects Germany GmbH
Other - Provider of services
Germany
EMEA
Höhn GmbH
Other activities (Real Estate)
Germany
EMEA
Kaiser Kabel GmbH
Other activities (Real Estate)
Germany
EMEA
NKF Holding (Deutschland) GmbH i.L
Dormant
Germany
EMEA
Prysmian Cable Industrial GmbH.
Manufacturing or Production
Germany
EMEA
Norddeutshce Seekabelwerke GmbH
Manufacturing or Production; Sales, Marketing or
Distribution;
Germany
EMEA
EHC Germany Gmbh
Manufacturing or Production; Sales, Marketing or
Distribution;
Germany
EMEA
Prysmian PowerLink - Branch Germania
Provider of services to unrelated parties
Greece
EMEA
Prysmian PowerLink Services Ltd. - Branch
Grecia
Dormant
Greece
EMEA
Prysmian PowerLink - Branch Grecia
Provider of services to unrelated parties
Hungary
EMEA
Prysmian MKM Magyar Kabel Muvek Kft.
Manufacturing or Production; Sales, Marketing or
Distribution
Ireland
EMEA
Prysmian Re Company Designated Activity
Company
Insurance
Italy
EMEA
Fibre Ottiche Sud - F.O.S. S.r.l.
Manufacturing or Production
Italy
EMEA
Prysmian Treasury
S.r.l.
Internal Group Finance
Italy
EMEA
Prysmian Cavi e Sistemi Italia S.r.l.
Manufacturing or Production; Sales, Marketing or
Distribution
Italy
EMEA
Prysmian Cavi e Sistemi S.r.l.
Administrative, Management or Support Services;
Holding shares or other equity instruments
Italy
EMEA
Prysmian Spa
Research and Development; Holding / Managing
Intellectual Property; Purchasing or Procurement;
Administrative, Management or Support Services;
Holding Shares or Other Equity Instruments
Italy
EMEA
Prysmian PowerLink
Manufacturing or Production; Sales, Marketing or
Distribution; Provider of Services to Unrelated
Parties;
Italy
EMEA
Electronic and Optical Sensing Solutions
S.r.l
Research and Development; Manufacturing or
Production;
Italy
EMEA
Prysmian Servizi S.p.A
Dormant
Lebanon
EMEA
Prysmian Cables et Systèmes France SAS
- Branch Libano
Provider of services to unrelated parties
Malta
EMEA
Prysmian Cavi e Sistemi Italia S.r.l. -
Branch Malta
Dormant
Montenegro
EMEA
Prysmian PowerLink - Branch Montenegro
Provider of services to unrelated parties
Netherlands
EMEA
Prysmian PowerLink - Branch Netherlands
Provider of services to unrelated parties
Netherlands
EMEA
Prysmian Netherlands B.V.
Manufacturing or Production; Sales, Marketing or
Distribution
Netherlands
EMEA
Draka Holding B.V.
Administrative, Management or Support Services;
Holding shares or other equity instruments
Netherlands
EMEA
Draka Comteq Fibre B.V.
Research and Development; Manufacturing or
Production Sales, Marketing or Distribution
Netherlands
EMEA
Donne Draad B.V.
Dormant
Netherlands
EMEA
Draka Comteq B.V.
Holding shares or other equity instruments;
Managing intellectual property
Netherlands
EMEA
NKF Vastgoed I B.V.
Holding (Real Estate)
Netherlands
EMEA
NKF Vastgoed III B.V.
Holding (Real Estate)
Netherlands
EMEA
Prysmian Netherlands Holding B.V.
Holding shares or other equity instruments
Norway
EMEA
Prysmian Group Norge AS
Manufacturing or Production; Sales, Marketing or
Distribution
Oman
EMEA
Oman Cables Industry (SAOG)
Manufacturing or Production Sales, Marketing or
Distribution
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
313
Oman
EMEA
Oman Aluminum Processing Industries LLC
Manufacturing or Production
Poland
EMEA
Draka Kabely s.r.o. – Branch Poland
Dormant
Poland
EMEA
Prysmian Poland sp.z.o.o
Sales, Marketing or Distribution
Portugal
EMEA
SILEC Cable, S.A.S. - Branch Portugal
Dormant
Portugal
EMEA
General
Cable
Investments,
SGPS,
Sociedade Unipessoal, S.A.
Holding shares or other equity instruments
Portugal
EMEA
General
Cable
Celcat,
Energia
e
Telecomunicaçoes SA
Manufacturing or Production; Sales, Marketing or
Distribution
Qatar
EMEA
Prysmian Cavi e Sistemi S.r.l. – Branch
Qatar
Provider of services to unrelated parties
Qatar
EMEA
Prysmian PowerLink - Branch Qatar
Provider of services to unrelated parties
Romania
EMEA
Prysmian Cabluri Si Sisteme S.A.
Manufacturing or Production; Sales, Marketing or
Distribution
Russia
EMEA
Limited Liability Company Prysmian RUS
Sales, Marketing or Distribution; Administrative,
Management or Support Services
Russia
EMEA
Limited
Liability
Company
Rybinskelektrokabel
Manufacturing or Production; Sales, Marketing or
Distribution
Saudi Arabia
EMEA
Prysmian PowerLink - Branch Arabia
Saudita
Provider of services to unrelated parties
Saudi Arabia
EMEA
Prysmian Powerlink Saudi LLC
Dormant
Slovakia
EMEA
Prysmian Kablo s.r.o.
Manufacturing or Production; Sales, Marketing or
Distribution
South Africa
EMEA
National Cables (Pty) Ltd.
Dormant
South Africa
EMEA
Prysmian Spain SA EPC - Branch South
Africa
Sales, Marketing or Distribution; Provider of
services to unrelated parties
Spain
EMEA
Prysmian Cables Spain, S.A. (Sociedad
Unipersonal)
Manufacturing or Production; Sales, Marketing or
Distribution
Spain
EMEA
Draka
Holding,
S.L.
(Sociedad
Unipersonal)
Holding shares or other equity instruments
Spain
EMEA
GC Latin America Holdings, S.L.
Holding shares or other equity instruments
Spain
EMEA
General Cable Holdings (Spain), S.L.
Holding shares or other equity instruments
Spain
EMEA
Grupo General Cable Sistemas, S.L.
Manufacturing or Production Sales, Marketing or
Distribution Holding shares or other equity
instruments
Spain
EMEA
EHC Spain & Portugal, SL
Sales, Marketing or Distribution
Spain
EMEA
Prysmian PowerLink - Branch Spagna
Provider of services to unrelated parties
Sweden
EMEA
Prysmian Group Sverige AB
Manufacturing or Production; Sales, Marketing or
Distribution
Switzerland
EMEA
Omnisens SA
Manufacturing or Production; Sales, Marketing or
Distribution;
Tunisia
EMEA
Silec Cable SAS – Branch Tunisia
Provider of services to unrelated parties
Tunisia
EMEA
Auto Cables Tunisie S.A.
Manufacturing or Production; Sales, Marketing or
Distribution
Tunisia
EMEA
Prysmian Cables and Systems Tunisia S.A.
Manufacturing or Production
Tunisia
EMEA
Prysmian Cables et Systèmes France SAS
- Branch Tunisia
Provider of services to unrelated parties
Turkey
EMEA
Prysmian PowerLink - Branch Turchia
Dormant
Turkey
EMEA
Turk Prysmian Kablo Ve Sistemleri A.S.
Research and Development; Manufacturing or
Production; Sales, Marketing or Distribution
Turkey
EMEA
Turk Prysmian –Prysmian Powerlink Adi
Ortakligi
Dormant
Turkey
EMEA
Turk Prysmian-Prysmian Po'
Manufacturing or Production; Sales, Marketing or
Distribution;
United
Arab
Emirates
EMEA
Prysmian Cables et Systèmes France SAS
- Branch Abu Dhabi
Provider of services
United
Arab
Emirates
EMEA
Silec Cable SAS – Branch Abu Dhabi
Provider of services to unrelated parties
United
Arab
Emirates
EMEA
Prysmian Cavi e Sistemi S.r.l. - Branch
AbuDhabi
Provider of services to unrelated parties
United
Arab
Emirates
EMEA
Prysmian PowerLink - Branch Emirati Arabi
(Abu Dhabi)
Provider of services to unrelated parties
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
314
United Kingdom
EMEA
Cable Makers Properties & Services Ltd.
Other (organizzazione professionale)
United Kingdom
EMEA
Prysmian Cables & Systems Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
United Kingdom
EMEA
Prysmian Construction Company Ltd.
Dormant
United Kingdom
EMEA
Comergy Ltd.
Dormant
United Kingdom
EMEA
Prysmian Cables (2000) Ltd.
Dormant
United Kingdom
EMEA
Prysmian Pension Scheme Trustee Ltd.
Other
United Kingdom
EMEA
Draka Comteq UK Ltd.
Manufacturing or Production Sales; Marketing or
Distribution
United Kingdom
EMEA
Draka UK Ltd.
Dormant
United Kingdom
EMEA
Prysmian UK Group Ltd.
Holding shares or other equity instruments
United Kingdom
EMEA
Prysmian PowerLink Services Ltd.
Provider of Services
United Kingdom
EMEA
EHC Escalator Handrail (UK) Limited
Administrative, Management or Support Services
United Kingdom
EMEA
Prysmian PowerLink - Branch Uk
Provider of services to unrelated parties
Argentina
LATAM
Prysmian
Consultora
Conductores
e
Instalaciones SAIC
Holding shares or other equity instruments
Argentina
LATAM
Prysmian Energia Cables y Sistemas de
Argentina S.A.
Manufacturing or Production; Sales, Marketing or
Distribution
Brazil
LATAM
Prysmian Cabos e Sistemas do Brasil S.A.
Manufacturing or Production; Sales, Marketing or
Distribution
Brazil
LATAM
Draka Comteq Cabos Brasil S.A.
Manufacturing or Production; Sales, Marketing or
Distribution
Chile
LATAM
Cobre Cerrillos S.A.
Manufacturing or Production; Sales, Marketing or
Distribution
Colombia
LATAM
Productora de Cables Procables S.A.S.
Manufacturing or Production; Sales, Marketing or
Distribution
Colombia
LATAM
SILEC Cable, S.A.S. - Branch Colombia
Dormant
Costa Rica
LATAM
Conducen, S.R.L.
Manufacturing or Production; Sales, Marketing or
Distribution
Dominican
Republic
LATAM
General Cable Caribbean, S.R.L
Dormant
Ecuador
LATAM
Cables
Electricos
Ecuatorianos
C.A.
CABLEC
Sales, Marketing or Distribution
Guatemala
LATAM
Proveedora de Cables y Alambres PDCA
Guatemala, S.A.
Dormant
Honduras
LATAM
Electroconductores de Honduras, S.A. de
C.V.
Dormant
Mexico
LATAM
Draka Durango S. de R.L. de C.V.
Manufacturing or Production
Mexico
LATAM
Draka Mexico Holdings S.A. de C.V.
Holding shares or other equity instruments
Mexico
LATAM
NK Mexico Holdings S.A. de C.V.
Dormant
Mexico
LATAM
Prysmian Cables y Sistemas de Mexico S.
de R. L. de C. V.
Manufacturing or Production; Sales, Marketing or
Distribution
Mexico
LATAM
General Cable de Mexico, S.A de C.V.
Manufacturing or Production; Sales, Marketing or
Distribution
Mexico
LATAM
General de Cable de Mexico del Norte, S.A.
de C.V.
Manufacturing or Production
Mexico
LATAM
Prestolite de Mexico, S.A. de C.V.
Manufacturing or Production
Mexico
LATAM
Servicios Latinoamericanos GC, S.A. de
C.V.
Dormant
Mexico
LATAM
Prysmian Cables y Sistemas S.A. - Branch
Mexico
Dormant
Peru
LATAM
General Cable Peru S.A.C.
Sales, Marketing or Distribution
Trinidad
and
Tobago
LATAM
General Cable Trinidad Limited
Dormant
Canada
NORAM
Prysmian Cables and Systems Canada Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
Canada
NORAM
Draka Elevator Products Incorporated
Sales, Marketing or Distribution
Canada
NORAM
General Cable Company Ltd.
Manufacturing or Production; Sales, Marketing or
Distribution
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
315
Canada
NORAM
EHC Global Inc. (Parent Company)
Holding Shares or Other Equity Instruments
Canada
NORAM
EHC Canada Inc.
Research and Development; Holding / managing
intellectual
property;
Manufacturing
or
Production; Sales, Marketing or Distribution;
Administrative, Management or Support Services
United States
NORAM
Norddeutshce Seekabelwerke GmbH –
Branch US
Provider of services to unrelated parties
United States
NORAM
Prysmian Construction Services Inc.
Other services
(Società di Payroll)
United States
NORAM
Prysmian Cables and Systems USA, LLC
Manufacturing or Production; Sales, Marketing or
Distribution; Administrative, Management or
Support Services
United States
NORAM
Prysmian Cables and Systems (US) Inc.
Holding shares or other equity instruments
United States
NORAM
Draka Elevator Products, Inc.
Manufacturing or Production; Sales, Marketing or
Distribution
United States
NORAM
Draka Transport USA, LLC
Manufacturing or Production; Sales, Marketing or
Distribution
United States
NORAM
General Cable Corporation
Administrative, Management or Support Services;
Holding shares or other equity instruments
United States
NORAM
General Cable Overseas Holdings, LLC
(Merged during 2023)
Holding Shares or Other Equity Instruments
United States
NORAM
General Cable Technologies Corporation
Holding / managing intellectual property
United States
NORAM
Phelps Dodge Enfield Corporation
Holding shares or other equity instruments
United States
NORAM
Phelps Dodge National Cables Corporation
Holding shares or other equity instruments
United States
NORAM
GK Technologies, Incorporated (Merged
during 2023)
Holding Shares or Other Equity Instruments
United States
NORAM
Prysmian group Speciality cables LLC
Manufacturing or Production; Sales, Marketing or
Distribution
United States
NORAM
EHC USA Inc.
Sales, Marketing or Distribution;
1
They may differ from those in the scope of consolidation of the 2023 Consolidated Financial Statements because the
latter do not include entities no longer in existence as at 31 December 2023.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
317
17. EU TAXONOMY
The EU Taxonomy, introduced by EU Regulation 852/2020 (hereafter also the "Regulation" or
the "Taxonomy") and in force since 1 January 2022, is a classification system aimed at identifying
environmentally sustainable economic activities, created with the aim of increasing the
development of sustainable investments and helping to achieve the stated goals of the European
Green Deal.
Specifically, the purpose of the Taxonomy is to ensure reliability, consistency, and comparability
of economic activities that are considered sustainable to protect the investors from
greenwashing, assist companies in the sustainable transition, mitigate market fragmentation
and close the sustainable investment gap.
The submitted disclosure also refers
●
to Delegated Regulation 2021/2139 (hereinafter also referred to as the "Climate
Delegated Regulation"), which introduces the list of economic activities eligible for the EU
Taxonomy for the first two climate objectives and the related technical screening criteria;
●
to EU Regulation 2021/2178 (hereinafter also referred to as the "Article 8 Delegated
Regulation" or "Delegated Regulation on Disclosure");
●
to EU Delegated Regulation 2022/1214 as regards economic activities in certain energy
sectors, amending the Climate Delegated Regulation and the Article 8 Delegated
Regulation;
●
to Delegated Regulation 2023/2485 amending EU Delegated Regulation 2021/2139 by
establishing additional technical screening criteria;
●
to Regulation 2023/2486 (hereinafter also referred to as the "Regulation on remaining
environmental objectives"), supplementing EU Regulation 2020/852, and its technical
screening criteria, and amending the Delegated Regulation on article 8.
The process for determining eligibility
The EU Taxonomy defines as eligible those economic activities described in the Climate
Delegated Regulation and in the Delegated Regulation on remaining environmental objectives.
In order to identify Prysmian's eligible activities, the activities carried out were analyzed to
determine which ones could be classified as those included in the Delegated Regulations with
reference to the six environmental objectives. Taking into account the regulatory update
regarding the EU Taxonomy during 2023, the reconciliation of the activities carried out by the
Group to the activities reported in the Delegated Regulations has been partly changed from
2022. In particular, the most notable change in activity from the previous year involved power
distribution cables, which were previously primarily associated with Activity 3.6
(Manufacture of
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other low carbon technologies
) and, for this reporting period, moved under the new Activity 3.20
(Manufacture, installation and maintenance of high-, medium- and low-voltage electrical
equipment for transmission and distribution of electricity
), to allow for a greater adherence and
representation according to the descriptions provided by the Regulations. Some variations in
economic KPIs (Turnover, CapEx and OpEx) among the various activities are thus due to this
reason.
With respect to the two climate objectives, some of the economic activities attributable to the
Group's business, namely activities 3.1, 3.6 and 4.9, bear the same descriptions for both
objectives. For this reason, they are considered eligible for both the Mitigation and Climate
change adaptation objectives. Activities 3.18 and 3.20, introduced by Delegated Regulation
2023/2485, are only eligible for the Mitigation objective. With regard to the remaining four
environmental objectives, no activities related to the core business of Prysmian have been
identified. Finally, there are no activities associated with the fossil gas and nuclear energy
sectors.
Eligible activities as described by the Regulations are described below.
Table 1 – Eligible economic activities
55
EU
Taxonomy
Economic
Activities
Description of Prysmian's activities
Environment
al objectives
3.1 Manufacture
of
renewable
energy
technologies
Manufacture of cables and accessories for renewable energies (wind
and solar).
Mitigation
and
Adaptation
3.6 Manufacture
of
other
low
carbon
technologies
Manufacture of cables and accessories in the following categories,
whose characteristics allow GHG emissions to be reduced in the sectors
that use them:
●
fiber optic, optical cables and fiber optic submarine cables for
the telecommunications sector;
●
PRY-CAM technology for the accurate remote measurement of
key system-diagnostic parameters, identifying anomalies and
overheating in real time in order to monitor and optimize
energy consumption;
●
Eco Cable-labelled cables
56
, the first green label in the cables
industry;
Mitigation
and
Adaptation
55
In addition, certain capital expenditure has been identified as eligible when related to the purchase of products deriving
from Taxonomy-aligned economic activities, or to individual measures that enable the Group’s activities to be less carbon
intensive or to reduce its GHG emissions.
Further information can be found in the “Criteria for the calculation of KPIs and background information” section.
56
The Eco Cable label uses known and measurable assessment criteria for determining the contribution that Prysmian
cables may make in terms of climate change impact. More information about Eco Cable can be found in the Sustainability
section of the Prysmian Group website.
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3.18 Production
of
automotive
and
mobility
components
Manufacture of vehicle cables and accessories.
Mitigation
3.20
Manufacture,
installation and
servicing
of
high-, medium-
and low-voltage
electrical
equipment
for
transmission
and distribution
of electricity
Manufacture of cables and accessories intended for power transmission
and distribution.
Mitigation
4.9
Transmission
and distribution
of electricity
Manufacturing, installation, and maintenance projects for high-voltage
onshore
and
submarine
systems,
high-voltage
submarine
interconnections and offshore wind farm connection systems.
Mitigation
and
Adaptation
Process for determining alignment
An economic activity is defined as Taxonomy-aligned when it contributes substantially to at least
one of the six environmental objectives
57
, does no significant harm to the other five
environmental objectives and complies with the minimum safeguards.
Subsequent to the identification of eligible economic activities, specific analyses were carried out
on the technical criteria established by the Regulation and Annexes I and II of the Climate
Delegated Regulation to verify the alignment of each of the selected economic activities.
Specifically, because the descriptions of activities 3.1, 3.6 and 4.9 coincide for the Mitigation and
Climate Change Adaptation objectives, an analysis was carried out with respect to both
objectives.
With reference to the new activities
58
introduced by Delegated Regulation 2023/2485, only the
eligibility analysis is mandatory for this reporting year. However, Prysmian carried out the
alignment analysis for these new activities as well, specifically for activities 3.18 and 3.20, in
anticipation of future regulatory obligations.
57
Climate change mitigation, Climate change adaptation, Sustainable use and protection of water and marine
resources, Transition to a circular economy, Pollution prevention and control, Protection and restoration of
biodiversity and ecosystems.
58
Activity 3.18 (
Manufacture of automotive and mobility components
) and Activity 3.20 (
Manufacture, installation
and maintenance of high-, medium- and low-voltage electrical equipment for transmission and distribution of
electricity that contribute or enable a substantial contribution to climate change mitigation
).
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Substantial contribution to the Climate Change Mitigation objective.
Analysis of substantial contribution for activity 3.1
Prysmian manufactures cables and accessories dedicated to the renewable energies business, in
particular wind and solar.
These types of cable therefore satisfy the substantial contribution criterion for activity 3.1.
Analysis of substantial contribution for activity 3.6
The substantial contribution criterion for activity 3.6 requires the technology analyzed to be
aimed at and demonstrate substantial GHG emissions reduction over the life cycle, and that such
reduction with respect to the best alternative technologies/solutions/products available on the
market be calculated using Commission Recommendation 2013/179/EU (or, alternatively,
standard ISO 14067:201897 or standard ISO 14064-1:2018) and checked by an independent
third party. None of the cable families covered by this activity meet the above criterion of
substantial contribution.
It should be noted that, as indicated in the FAQs published by the European Commission in
December 2022, the application of the substantial contribution criterion for activity 3.6 leaves
room for flexibility and is strictly dependent on the sector/activity to which it is applied.
Analysis of substantial contribution for activity 3.18
Requests for the substantial contribution for activity 3.18 set out that the components are for
road passenger vehicles, category M1
59
, M2
60
and M3
61
, whose direct CO
2
emissions (from
exhaust) are zero.
The Group therefore considered the substantial contribution verified only for cables exclusively
for vehicles that produce zero CO
2
emissions.
Analysis of substantial contribution for activity 3.20
The substantial contribution related to Activity 3.20 requires that the activity consists of the
manufacture, installation or maintenance of current-carrying cabling products and equipment
for power transmission and distribution, intended for cabling electrical circuits and transformers
provided that such equipment and transformers contribute to increasing the share of renewable
energy in the system or improve energy efficiency. It is important to highlight that the cables
under this activity, intended for power transmission and distribution, improve energy efficiency
by definition, as they are used both to replace cables and systems that are now outdated, thus
enabling any power losses to be reduced, and to strengthen the high-, medium- and low-voltage
networks needed to connect the new, mostly renewable, installed capacity in the countries where
the Group operates.
59
Vehicles with no more than 8 seats, excluding the driver's seat
60
Vehicles with more than 8 seats, excluding the driver's seat, and weighing not more than 5 tons
61
Vehicles with more than 8 seats, excluding the driver's seat, and weighing more than 5 tons
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The substantial contribution of this activity also specifies elements of non-compliance, for
example, where equipment is directly used to connect or strengthen the connection to a power
plant with a greenhouse gas intensity greater than 100 g CO
2
eq/kWh measured on a life cycle
basis.
This requirement leads to critical information retrieval issues due to the peculiarities of operation
of the various target markets, which in most cases are based on frame agreements for standard
products with predefined purchase volumes and the installation of which is not managed by the
Group. Therefore, a precautionary approach was adopted for the purpose of its verification that
could best reflect the current developments in the efficiency process of the power distribution
sector in each country.
The approach adopted was then to calculate the percentage of new renewable installed capacity
compared to total new installed capacity for each country in which Prysmian operates by
extracting data from the database available on the IRENA website. Then sales revenues were
considered proportionally to the average between the percentages of new renewable capacity
installed and the total in the last two available years (2021 and 2022), for each country.
Furthermore, in the event that the Group has evidence of the use of cables for connecting or
strengthening the connection of a non-renewable source, such revenues will be considered to be
unaligned and therefore excluded from the methodology described above.
Analysis of substantial contribution for activity 4.9
As required by the substantial contribution criterion of the Climate Delegated Regulation,
consideration is only given to projects that include the production and installation of cables and
systems for the transmission and distribution of electricity.
In particular, the criterion is deemed satisfied for all projects that envisage installation of the
infrastructure in the interconnected European system, as required by point 1)a) of the
substantial contribution criterion specified in the Climate Delegated Regulation for activity 4.9.
On the other hand, for projects developed in non-European countries, conformity is checked via
point 1) c) of the substantial contribution criterion of the above Regulation. Only projects that
respect the above criteria comply with the substantial contribution criterion for activity 4.9.
It must be noted that the analysis of the substantial contribution criterion was not affected by
the update of this requirement within the Delegated Regulation 2023/2485 with respect to
economic activity 4.9, as the amended paragraph is not applicable to Prysmian's business.
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Substantial contribution to the Climate Change Adaptation objective
Analysis of substantial contribution for activity 3.1, 3.6, 4.9
The substantial contribution criteria set forth in the Climate Change Adaptation objective are the
same for activities 3.1, 3.6 and 4.9. For these activities, it is possible to say that physical and
non-physical solutions ("adaptation solutions") have been identified as substantially reducing
the most important physical climate risks weighing on the activity (for more details about the
identification of physical risks and climate risk and vulnerability assessment, refer to the
paragraph "Climate Change Adaptation" in this section). However, such solutions have not yet
been implemented or there is no possibility to accurately identify the value of economic KPIs
associated with them (i.e. turnover, CapEx, OpEx).
Therefore, it was not possible to consider these activities as aligned with the Adaptation
objective.
It should also be pointed out that for activities 3.1 and 3.6 there is no DNSH for the Climate
Change Mitigation objective, while for activity 4.9, although it was indicated, it was not verified
due to the failure to meet the substantial contribution requirement.
Compliance with DNSH criteria requiring no significant harm be done
to the other 5 environmental objectives
Compliance with the DNSH (Do No Significant Harm) criteria was verified using a top-down
approach. The analysis started at Group level, followed by more in-depth work and specific
requests at business line, geographical segment and plant level, as well as with regard to
individual activities where necessary, in order to identify and isolate potential areas of non-
conformity using a consistent and uniform approach.
Climate Change Adaptation
The DNSH criterion regarding climate change adaptation is the same for activities 3.1, 3.6, 3.18,
3.20 and 4.9, requiring conformity with Appendix A of Delegated Regulation 2021/2139, which
calls for a sound climate risks and vulnerabilities assessment, as well as adaptation solutions.
The Prysmian Group has devised an enterprise risk management (ERM) plan, applying models
and best practices recognized at an international level, that also assesses climate risks,
opportunities and the related actions.
As in the prior year, a careful analysis of climate change and energy transition matters was also
carried out in 2023. This analysis is described in the TCFD Report published by the Group.
In particular, the climate risks/opportunities considered significant for Prysmian have been
identified from among those contained in Appendix A of Delegated Regulation 2021/2139. In
order to determine the impacts associated with those risks/opportunities, a climate scenario
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323
analysis was developed (starting from an optimistic scenario, before considering the worst case)
over a 10-year time horizon.
The procedures adopted for the management of climate risks include the implementation of
mitigation and adaptation solutions that seek to limit the impact of the risks identified and ensure
business continuity. These solutions include constant monitoring of the more significant risks,
the preparation of preventive actions and measures capable of managing sudden or unexpected
events.
This approach developed by the Group is deemed to satisfy the requirements of the DNSH criteria
to climate change adaptation.
Sustainable use and protection of water and marine resources
Regarding the goal of Sustainable use and protection of water and marine resources, verification
of compliance with Appendix B of the Climate Delegated Regulation is required. This verification
was carried out with respect to production facilities and related procedures, certifications and
assessments related to activities 3.1, 3.6, 3.18, and 3.20, as there is no DNSH criterion for
activity 4.9 regarding this environmental objective.
98% of Group factories hold ISO 14001 certification for their environmental management
systems, through which the sustainable use and protection of water and marine resource are
guaranteed and monitored. Mapping the sites showed that no more than 12% of the sites are
located close to the sea (i.e., within 2 km), and that sites located close to the sea that could
pose a potential hazard to the marine environment are about 5%. For these sites, the
assessment of environmental aspects and impacts, performed through the HSE Management
System, enabled the implementation of measures to prevent and protect various environmental
aspects, including water and in particular surface and marine water. Furthermore, in addition to
compliance with legal requirements and the requirements of specific Environmental Permits, the
sites involved implement a monitoring and control plan, which in many cases is subject to
periodic verification by the relevant authorities.
The commitment of the organization to preventing and managing the potential negative impacts
on water resources is reiterated in specific policies for the water management plans and
confirmed by completion of the
CDP Water Security Questionnaire
.
The DNSH criterion relating to the sustainable use and protection of water and marine resources
is therefore deemed satisfied for all activities to which it applies (3.1, 3.6, 3.18 and 3.20).
Further information about how the Group manages its water resources is presented in the
“Water” paragraph of the “Our environmental responsibility” section.
Transition to a circular economy
For activities 3.1, 3.6, 3.18 and 3.20, techniques that facilitate the circular economy must be
implemented, from the product design phase to waste management.
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Prysmian has developed internal procedures for the selection of materials and raw materials, the
traceability of substances throughout the production process and the management of
environmental impacts. In addition, policies are implemented at production plant level for the
proper collection and disposal of waste in accordance with Group best practices and the
regulatory requirements of the country concerned. For more information about the projects and
research carried out to facilitate the transition to a circular economy, see “Circularity” paragraph
of “Our environmental responsibility” section in this document.
With regard to activity 4.9, a waste management plan must guarantee maximum reuse or
recycling at the end of the life cycle. The Group has developed a waste management plan that,
for the projects analyzed and included in activity 4.9, ensures a high level of recycling and reuse
during manufacturing and installation phases. Further information about the waste generated,
as well as its recycling and disposal, is provided in the “Waste” paragraph of the “Our
environmental responsibility” section.
For the five economic activities indicated above, the techniques, analyses, procedures and
management systems adopted by the Group are deemed compliant with the DNSH requirements
for the transition to a circular economy.
Pollution prevention and control
The criteria in Appendix C of Delegated Regulation 2021/2139 were amended with the
publication of Delegated Regulation 2023/2485. Specifically, criterion f)
62
was updated, while
criterion g) set out in the previous Delegated Regulation was removed and replaced by an
additional section
63
. Therefore, the requirements specified in Appendix C state that economic
activities 3.1, 3.6, 3.18 and 3.20 do not lead to the manufacture, marketing or use of any of the
chemical substances listed in specific European Regulations and Directives referred to in the
Appendix. The Prysmian Group was able to verify all reported criteria in a timely manner (letters
62
substances, either in their pure state or within mixtures or articles, in concentrations greater than 0.1% W/W,
which meet the criteria of Article 57 of EC Regulation no. 1907/2006, which have been identified in accordance
with Article 59, section 1, of that Regulation for a period of at least 18 months, unless operators assess and
document that no other suitable alternative substance or technology is available on the market, and that they
are used under controlled conditions.
63
the activity does not involve the manufacture, the presence in the final product or result, or the placing on the
market of other substances, either in their pure state or within mixtures or articles, in concentrations greater
than 0.1% W/W, that meet the criteria of Regulation (EC) No. 1272/2008 for any of the hazard classes or
categories of hazard listed in Article 57 of Regulation (EC) No. 1907/2006, unless operators have assessed and
documented that no other suitable alternative substance or technology is available on the market, and that they
are used under controlled conditions.
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a
64
,b
65
,c
66
,d
67
,e
68
,f). It is also specified that although verification of the additional paragraph will
become mandatory starting from the reports published in 2025, Prysmian has chosen to verify
compliance as early as this year.
The analysis was carried out first at the central level and then at the level of individual production
facilities and individual material codes through the sharing of detailed questionnaires reporting
the totality of the substances to be verified, with the aim of isolating and excluding from the
scope of alignment those cables containing one or more of the chemicals included in the relevant
Regulations and Directives.
Despite the complexity generated by the requirements set out in Appendix C, Prysmian has
undertaken to identify all the expected substances and has manually verified their presence in
its production processes and final products. In order to facilitate and automate substance
verification activities as much as possible, the Group will consider in the near future the
introduction of possible IT solutions and systems to support these activities.
Analyses of those activities 3.1, 3.18 and 3.20 that satisfy the substantial contribution criterion
found that the majority of the cables and accessories analyzed met the requirements and that
Substances of Very High Concern (“SVHC”), identified in criterion f), were only found in a limited
number of cases. In addition, some cable families were found to have other substances included
in the list of substances required in the additional section.
As regards metallic lead, which in some cases is used in the production of submarine cables, it
has been demonstrated that there are currently no suitable alternative substances available in
the market to replace it, therefore, as provided for in point f) and the following paragraph, cables
containing this substance, and based on such exception, can be considered compliant.
Accordingly, satisfaction of the DNSH criterion relating to the pollution prevention and control
was not verified for the cables identified as containing one or more of the substances listed by
the EU Commission, except as mentioned in the previous paragraph.
With regard to activity 4.9, eligible projects are limited solely to those involving underground or
submarine cables; accordingly, the DNSH requirements referring to the over-ground lines are
not applicable. In addition, no polychlorinated biphenyls (PCBs) are used.
64
substances, either in their pure state or within mixtures or articles, listed in Annex I or II of Regulation (EU)
2019/1021 of the European Parliament and of the Council, except in the case of substances present as
unintentional trace contaminants.
65
mercury, mercury compounds, mercury mixtures, and products with added mercury, as defined in Article 2 of
Regulation (EU) 2017/852 of the European Parliament and of the Council.
66
substances, either in their pure state or within mixtures or articles, listed in Annex I or II of Regulation (EC)
No. 1005/2009 of the European Parliament and the Council.
67
substances, whether in their pure state or within mixtures or articles, listed in Annex II of Directive 2011/65/EU
of the European Parliament and of the Council, except where full compliance with Article 4, section1, of that
Directive is ensured.
68
substances, either in their pure state or within mixtures or an article, listed in Annex XVII of Regulation (EC)
No. 1907/2006 of the European Parliament and of the Council, except when full compliance with the conditions
set out in that Annex is ensured.
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As a result, activity 4.9 is deemed compliant with the DNSH criterion for the pollution prevention
and control.
Protection and restoration of biodiversity and ecosystems
The DNSH criterion refers to Appendix D of the Climate Delegated Regulation, which requires
the impact of economic activities on biodiversity and ecosystems to be considered.
At manufacturing plant level (activities 3.1, 3.6, 3.18 and 3.20), for the purposes of conformity
with the criterion and in view of their proximity to highly sensitive areas, positive consideration
was given to the environmental management systems implemented to mitigate potential adverse
effects, as indicated for the DNSH criterion relating to the sustainable use of water.
The eligible projects included in activity 4.9 were subjected to specific Environmental Impact
Assessments and were found to be compliant with Appendix D. Specifically, environmental action
plans were prepared in accordance with the relevant legislation (both local and international) for
all projects deemed eligible, in order to protect the biodiversity of the animal and plant species
affected by the Group’s activities and infrastructure. Where necessary, or as agreed with the
local authorities, Prysmian plants participate in the protection and restoration of the areas
concerned.
In all cases, whether regarding manufacturing plants or individual projects considered eligible,
the environmental assessments were carried out in compliance with the regulations in force in
the territories concerned.
In addition, the Group has begun a process of mapping areas of environmental concern in order
to create an updated database of the main characteristics and any critical issues of each of them.
This initiative is part of a project to increase the importance of biodiversity issues in the risk
management system.
Further details about the impact of Prysmian on biodiversity is presented in the “Biodiversity”
paragraph in the “Environmental responsibility” section.
The requirements of this criterion are therefore considered to be satisfied by both as regards the
manufacturing sector activities (3.1, 3.6, 3.18 and 3.20) and the energy sector activities (4.9).
Minimum Safeguards
Regarding compliance with art. 3.c) of Regulation 2020/852, the Group analyzed conformity with
the minimum safeguard standards relating to human rights and workers' rights, corruption,
taxation and fair competition.
The assessment considered the design of the Group’s processes and their adequacy in identifying
and preventing possible negative impacts, as well as their compliance with the principles and
the effectiveness with which any events were managed by recourse to corrective actions.
In the absence of further clarification from the European Commission regarding compliance with
minimum safeguards, the Group has taken into consideration the guidelines presented in the
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"Final Report on Minimum Safeguards" published by the Platform on Sustainable Finance in
October 2022. Furthermore, in the FAQs published in June 2023
69
, the European Commission
identified a connection between the minimum safeguards of the Taxonomy and the "do no
significant harm" principle of the SFDR (Sustainable Financial Disclosure Regulation).
Accordingly, this connection involves compliance with PAI (Principal Adverse Impact) indicators
with respect to social and personnel issues, respect for human rights and issues related to anti-
corruption and anti-bribery. This introduces the possibility of adding some indicators to the
minimum safeguards. They include:
-
The unadjusted gender pay gap;
-
gender diversity in the BoD;
-
exposure to controversial weapons (landmines, cluster munitions, chemical weapons and
biological weapons).
Regarding the first indicator, please refer to the "Diversity and Equal Opportunity" section, and
for the second indicator to the "Corporate Bodies" paragraph in the "Governance and
Management of Risks and Opportunities" section.
Finally, the Prysmian Group is not known to be involved in the manufacture or sale of
controversial weapons.
Human rights, including those of workers
In the context of responsible business conduct in terms of human rights, the commitments made
by Prysmian are embodied in the Code of Ethics and the Human Rights Policy. In order to
guarantee respect for that principle throughout the entire supply chain and within the
organization, the Group implements a system of regular due diligence covering its suppliers.
This system maps the risk throughout the supply chain by analyzing the risk factors attributable
to three macro areas: sustainability and management systems; environmental criteria; human
and workers’ rights. Based on the results obtained, the Group arranges for a third party to carry
out specific audits of critical suppliers. From 2017 – the year of process implementation – to
2022, 32 audits were carried out, exceeding the target set at 30; during 2023, 7 additional
audits were performed. The Group also participates in specific human rights initiatives
addressing business-related topics, such as the
Responsible Mica Initiative
(RMI).
Taxation
The Group is committed to the management of taxation, both at Parent Company level and in
each tax jurisdiction. Prysmian has developed a tax strategy founded on transparency and
69
Communication on the interpretation and implementation of certain legal provisions under the EU Taxonomy
Regulation and links with the Sustainable Finance Disclosure Regulation (2023/C 211/01)
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328
cooperation with the tax authorities and third parties, in order to minimize the substantial
impacts of any tax and reputational risks. This strategy represents a fundamental element of its
Tax Control Framework (TCF), the system for monitoring and managing tax risks already applied
by the Italian companies in the Group.
In addition to the tax strategy, Prysmian has developed
policies (such as the Transfer Price Policy), tax notes and training courses on the subject. Further
information is presented in the “The Group’s tax strategy” section of this document.
Fair competition
Prysmian delivers adequate training on the subject of fair competition, in order to increase
awareness among those who work in the name and on behalf of the Group and ensure
compliance with the rules safeguarding competition. For more details, please refer to the
mitigation actions adopted for "Antitrust Non-compliance Risk" in the "Ethics and Integrity"
section of this document.
Anti-corruption
The procedures adopted by the Prysmian Group to mitigate the risk of corruption include the
application of an ISO37001-certified anti-corruption management system, an anti-corruption
policy and
Third Party Program and Process, Gifts & Entertainment
and
Conflicts of Interest
procedures, regarding which periodic employee training is provided. During 2023, in addition to
updating the above policies, a policy regarding the management of relations with the public
administration was introduced. With regard to respect for the principle throughout the supply
chain, in addition to the Code of Ethics that must be accepted by each supplier, the Group
implements the system of due diligence described above in relation to “Human rights, including
those of workers”, in which corruption risk factors are also taken into account.
Disputes
As identified in the assessments detailed above, Prysmian has not been definitively convicted of
labor law, human rights or corruption violations and has not been involved in any cases reviewed
by an OECD National Contact Point (NCP), or interrogated by the Business and Human Rights
Resource Center (BHRRC). On the subject of taxation, the Group was not ordered to pay
significant penalties by the tax authorities of the various countries in which it operates. The
Group has been in the past and still is involved in antitrust investigations and disputes promoted
by third parties, consequent to and/or connected with decisions adopted by certain competition
authorities, the details of which are outlined in the note on Provisions for risks and charges in
the Explanatory Notes to the Consolidated Financial Statements. Following these investigations
and disputes, the Group has implemented a series of internal controls, described in “Fair
competition” paragraph, to reduce the probability of infringements in this area.
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Consistent with the requirements of art. 3.c) of Regulation 2020/852, the Prysmian Group
therefore carries out its economic activities in compliance with the specified minimum
safeguards.
Criteria for the calculation of KPIs and background
information
The key performance indicators (KPIs) specified in the Taxonomy cover Turnover, Capital
Expenditure (CapEx) and Operating Expenditure (OpEx).
The indicators are presented in the templates provided in Annex V of Delegated Regulation
2023/2486 amending Delegated Regulation 2021/2178, as well as in the templates included in
the EU Delegated Regulation 2022/1214 regarding economic activities in certain energy sectors
(i.e. gas and nuclear).
The proportion of Prysmian’s taxonomy-eligible and -aligned economic activities was calculated
with respect to Turnover, CapEx and OpEx in accordance with legal requirements and the
accounting criteria specified in Annex I of the Art. 8 of Delegated Regulation and Annex V of
Delegated Regulation 2023/2486.
Turnover
Definition and reconciliation
The taxonomy-eligible/aligned turnover reflects the ratio of net revenues deriving from
eligible/aligned activities (numerator) to total net revenues (denominator). The denominator of
the Turnover KPI makes reference to the “revenues” caption of the Consolidated Income
Statement as ta 31.12.2023, as consolidated in accordance with IAS 1.82(a). For more
information, see the consolidated accounting schedules contained in the Annual Financial
Statement of the Group, as well as the section on Accounting Policies.
Allocation
The numerator of the Turnover KPI consists of the net revenues associated with the Group
products linked to eligible/aligned activities. The allocation of net revenues to the numerator was
made possible by the Group's highly-detailed management and financial accounting system. The
system made it possible to identify eligible/aligned projects precisely and reconcile them with
the activities concerned, thus making the adoption of estimates unnecessary.
Other background information
The revenues indicated on the numerator are all linked to contracts with customers. No changes
in the composition and reconciliation of revenues from 2022 are to be reported.
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CapEx
Definition and reconciliation
The Taxonomy-eligible/aligned capital expenditure (CapEx) reflects the ratio of CapEx deriving
from eligible/aligned activities (numerator) to total CapEx (denominator). In particular, the
denominator of the CapEx KPI comprises the increases in tangible and intangible assets during
the year before depreciation, amortization, write-downs and write-backs, including those
deriving from business combinations. Total CapEx can be reconciled with the 2023 Consolidated
Financial Statements of the Group by reference to “Gross Capital Expenditure”.
The eligible/aligned portion of CapEx includes:
-
capital expenditure relating to assets or processes associated with taxonomy-
eligible/aligned economic activities (category a.) pursuant to section 1.1.2.2. Annex I
Delegated Regulation art. 8);
-
capital expenditure that is part of a plan (“CapEx plan”) intended to expand taxonomy-
aligned economic activities or enable taxonomy-eligible economic activities to become
aligned (category b.) pursuant to section 1.1.2.2. Annex I Delegated Regulation art. 8);
-
capital expenditure relating to the purchase of products deriving from taxonomy-eligible
economic activities, as well as to individual measures that enable the Group’s activities
to be less carbon intensive or to reduce its GHG emissions (category c.) pursuant to
section 1.1.2.2. Annex I Delegated Regulation art. 8).
Allocation
The capital expenditure on assets or processes associated with taxonomy-eligible/aligned
manufacturing economic activities was allocated after a precise analysis of each expenditure
caption, using the classification adopted when consolidating the Group’s investments. In
particular, when calculating eligibility, Prysmian referenced the activities identified as eligible
when allocating turnover to the associated families of investments. On the other hand, when
calculating alignment, a detailed analysis of each cost item was carried out to identify those
associated with aligned activities. Regarding economic activities 3.1 and 3.20, a timely allocation
of expenditures related to the sites responsible for these activities was carried out.
In the case
of sites where both taxonomy-eligible and/or aligned and/or non-aligned economic activities are
carried out, the portion of CapEx was calculated with reference to the sales of the site,
considering the ratio of taxonomy-eligible/aligned sales to the total sales of the site. This
allocation methodology represents a refinement of the calculation that improves the
transparency and meaningfulness of the CapEx KPI.
Other background information
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Capital expenditures included in a CapEx plan concern the amount of about Euro 590 million for
the construction of new cable-laying vessels. This will expand the alignment of activity 4.9
"Electricity transmission and distribution", thus contributing to the achievement of the "Climate
Change Mitigation" objective. Specifically, these vessels will be used from 2025 on projects
involving the installation of power transmission cables to connect the power grid to offshore wind
farms.
Capital expenditure relating to the purchase of products deriving from taxonomy-eligible
economic activities and individual measures that enable the Group's activities to achieve low
carbon emissions or greenhouse gas reductions are implemented and made operational within
18 months from their recognition in the financial statements and are attributable to economic
activities 7.3 Installation, maintenance and repair of energy efficiency devices, 7.4 Installation,
maintenance and repair of electric vehicle charging stations in buildings (and in parking spaces
appurtenant to buildings) and 7.6 Installation, maintenance and repair of renewable energy
technologies. In order to avoid double counting, any capital expenditure identified in category c,
pursuant to section 1.1.2.2. Annex I of the Delegated Regulation under art. 8, also associated
with capital expenditure included in the denominator relating to assets or processes associated
with taxonomy-eligible/aligned economic activities (category a.) pursuant to section 1.1.2.2.
Annex I of the Delegated Regulation under art. 8) were included in the latter category.
The capital expenditure associated with the above economic activities is treated solely as eligible.
In fact, the Group, in part because of the amount of expenses involved and the timeframe that
would be required for further verification with suppliers, did not proceed with the alignment
analysis.
Consistent with the requirements of the art. 8 of the Delegated Regulation, the Group provides
below the amounts included in the numerator of the alignment KPI.
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Quantitative breakdown by economic activity of the amounts included in the
numerator of the alignment KPI (Euro mln)
Assets
Increases
in property,
plant
and
equipment
Increases
in internally
generated
intangible
assets
Of
which
part of a
CapEx plan
3.1
4
-
3.6
-
-
3.18
-
-
3.20
30
5
4.9
353
6
168
Note that during the year there were no increases to assets resulting from business
combinations.
OpEx
Definition and reconciliation
The Taxonomy-eligible/aligned operating expenses (OpEx) reflect the proportion of
eligible/aligned OpEx included in the non-capitalized direct costs incurred on R&D, short-term
rentals, maintenance and repairs, and the cost of personnel dedicated to the internal
maintenance of plant and equipment with respect to the total OpEx of those categories.
Allocation
In order to ensure a linear process and avoid the risk of double counting, operating expenses
were deemed eligible/aligned if they related directly to taxonomy-eligible/aligned economic
activities. Where the direct allocation of operating expenses was not possible, the eligible/aligned
portion was calculated with reference to the corresponding percentage of turnover.
Other background information
Consistent with the art. 8 of Delegated Regulation, the amounts included in the numerator of
the alignment KPI are detailed below by type of cost.
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Quantitative breakdown of the amounts included in the numerator of the alignment
KPI
OpEx
(Euro mln)
R&D costs
34
Short-term leases
20
Maintenance and repair
53
Other direct expenditure on the routine maintenance of
property, plant and equipment
30
Total
137
Commentary on performance trend and future developments
The introduction in the EU Taxonomy of the new activity 3.20
(Manufacture, installation and
servicing of high-, medium- and low-voltage electrical equipment for the transmission and
distribution of electric power
), which is particularly representative of Prysmian's business, and
3.18 (
Production of automotive and mobility components
) has made it possible to consider power
distribution cables and automotive cables, respectively, entirely within the scope.
The percentage of Taxonomy-aligned Turnover increased significantly, from 11.4% in 2022 to
28.8% in 2023. This increase mainly reflects the effect of the introduction of new activity 3.20,
as well as the positive contribution of aligned investments made in the previous year in the power
transmission business.
The share of Taxonomy-aligned CapEx increased from 41.9% in 2022 to 64.1% in 2023,
confirming Prysmian's increasing focus on the strategic power transmission business.
Prysmian has chosen to adopt a transparent and conservative approach, interpreting the
requirements of the Regulation as strictly as possible. The company has continuously monitored
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
334
European Commission publications and the interpretations and guidance provided by the Platform
on Sustainable Finance, and has also participated in working tables and discussions with other
industry players, particularly within Europacable.
To date, the EU Taxonomy remains a recent and evolving regulation; therefore, further updates
and more guidance on the interpretation and applicability of technical screening criteria can be
expected for future reporting years, which could also significantly impact the eligibility and
alignment results of the Group’s activities.
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Table A – Turnover
Financial year N
2023
Substantial contribution criteria
DNSH (“do no significant harm”) criteria
Economic activities (1)
Code
70
(2)
Turnover (3)
Portion of
turnover,
year N
(4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular economy
(9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum
safeguards (17)
Taxo-nomy
-aligned
(A.1) or
eligible
(A.2)
portion of
turnover,
year N-1
(18)
Cate-gory
(en-ablin
g activity)
(19)
Category
(transitio
n activity)
(20)
EUR M
%
Yes; No;
N/EL
71
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of renewable energy technologies
CCM
3.1
493
3.2%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
4.1%
E
Manufacture of other low carbon technologies
CCM
3.6
0
0.0%
No
No
N/EL
N/EL
N/EL
N/EL
No
No
No
No
No
No
No
0.3%
E
Production of automotive and mobility components
CCM
3.18
21
0.1%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
N/A
E
Manufacture, installation and servicing of high-,
medium- and low-voltage electrical equipment for
transmission and distribution of electricity
CCM
3.20
2,254
14.7%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
N/A
E
Transmission and distribution of electricity
CCM
4.9
1,647
10.7%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
7.0%
E
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
4,415
28.8%
28.8%
0%
0%
0%
0%
0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
11.4%
Of which enabling
4,415
28.8%
28.8%
0%
0%
0%
0%
0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
11.4%
E
Of which transition
0
0.0%
0.0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
0.0%
T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Manufacture of renewable energy technologies
CCM
3.1
CCA
3.1
177
1.2%
EL
EL
N/EL
N/EL
N/EL
N/EL
0.9%
Manufacture of other low carbon technologies
CCM
3.6
CCA
3.6
3,410
22.2%
EL
EL
N/EL
N/EL
N/EL
N/EL
25.6%
Production of automotive and mobility components
CCM
3.18
668
4.4%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Manufacture, installation and servicing of high-,
medium- and low-voltage electrical equipment for
transmission and distribution of electricity
CCM
3.20
1,289
8.4%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Transmission and distribution of electricity
CCM
4.9
CCA
4.9
0
0.0%
EL
EL
N/EL
N/EL
N/EL
N/EL
3.3%
Turnover
of
taxonomy-eligible
but
not
environ-mentally
sustainable
activities
(not
taxonomy-aligned activities) (A.2)
5,543
36.1%
36.1%
0%
0%
0%
0%
0%
29.8%
A. Turnover of taxonomy-eligible activities (A.1 + A.2)
9,959
64.9%
64.9%
0%
0%
0%
0%
0%
41.2%
70
climate change mitigation: CCM; climate change adaptation: CCA; water and marine resources: WTR; circular economy: CE; pollution prevention and control: PPC; biodiversity and ecosystems: BIO.
71
Yes – Activity is taxonomy-eligible and taxonomy-aligned with respect to the relevant environmental objective; No – Activity is taxonomy-eligible but not taxonomy-aligned with respect to the relevant environmental
objective; N/EL – Not eligible; activity is not taxonomy-eligible for the relevant objective; EL – Activity taxonomy-eligible for the relevant objective.
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B. NOT TAXONOMY-ELIGIBLE ACTIVITIES
Turnover of not taxonomy-eligible activities
5,395
35.1%
TOTAL
15,354
100%
Portion of turnover/Total turnover
Taxonomy-aligned for objective
Taxonomy-eligible for objective
CCM
28.8%
64.9%
CCA
0.0%
37.3%
WTR
0.0%
0.0%
CE
0.0%
0.0%
PPC
0.0%
0.0%
BIO
0.0%
0.0%
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Table B – CapEx
Financial year N
2023
Substantial contribution criteria
DNSH (“do no significant harm”) criteria
Economic activities (1)
Code
72
(2)
CapEx (3)
Portion of
CapEx, year
N (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular economy
(9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum
safeguards (17)
Taxo-nomy
-aligned
(A.1) or
eligible
(A.2)
portion of
CapEx, year
N-1 (18)
Cate-gory
(en-ablin
g activity)
(19)
Category
(transitio
n activity)
(20)
EUR M
%
Yes; No;
N/EL
73
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of renewable energy technologies
CCM
3.1
5
0.8%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
0.5%
E
Production of automotive and mobility components
CCM
3.18
0
0.0%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
N/A
E
Manufacture, installation and servicing of high-,
medium- and low-voltage electrical equipment for
transmission and distribution of electricity
CCM
3.20
35
5.6%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
N/A
E
Transmission and distribution of electricity
CCM
4.9
359
57.6%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
41.3%
E
CapEx
of
environmentally
sustainable
activities
(Taxonomy-aligned) (A.1)
400
64.1%
64.1%
0.0%
0.0%
0.0%
0.0%
0.0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
41.9%
Of which enabling
400
64.1%
64.1%
0.0%
0.0%
0.0%
0.0%
0.0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
41.9%
E
Of which transition
0
0.0%
0.0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
0.0%
T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Manufacture of renewable energy technologies
CCM
3.1
CCA 3.1
1
0.1%
EL
EL
N/EL
N/EL
N/EL
N/EL
3.7%
Manufacture of other low carbon technologies
CCM
3.6
CCA 3.6
73
11.6%
EL
EL
N/EL
N/EL
N/EL
N/EL
21.5%
Production of automotive and mobility components
CCM
3.18
3
0.5%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Manufacture, installation and servicing of high-,
medium- and low-voltage electrical equipment for
transmission and distribution of electricity
CCM
3.20
11
1.7%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Transmission and distribution of electricity
CCM
4.9
CCA 4.9
35
5.6%
EL
EL
N/EL
N/EL
N/EL
N/EL
5.4%
Installation, maintenance and repair of energy
efficiency devices
CCM
7.3
1
0.2%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.1%
Installation, maintenance and repair of electric
vehicle charging stations in buildings (and in parking
spaces appurtenant to buildings)
CCM
7.4
1
0.1%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Installation, maintenance and repair of renewable
energy technologies
CCM
7.6
1
0.2%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
CapEx of taxonomy-eligible but not environ-mentally
sustainable
activities
(not
taxonomy-aligned
activities) (A.2)
125
20.0%
20.0%
0.0%
0.0%
0.0%
0.0%
0.0%
%
72
climate change mitigation: CCM; climate change adaptation: CCA; water and marine resources: WTR; circular economy: CE; pollution prevention and control: PPC; biodiversity and ecosystems: BIO.
73
Yes – Activity is taxonomy-eligible and taxonomy-aligned with respect to the relevant environmental objective; No – Activity is taxonomy-eligible but not taxonomy-aligned with respect to the relevant environmental objective;
N/EL – Not eligible; activity is not taxonomy-eligible for the relevant objective; EL – Activity taxonomy-eligible for the relevant objective.
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A. CapEx of taxonomy-eligible activities (A.1 + A.2)
525
84.1%
84.1%
0.0%
0.0%
0.0%
0.0%
0.0%
%
B. NOT TAXONOMY-ELIGIBLE ACTIVITIES
CapEx of not taxonomy-eligible activities
99
15.9%
TOTAL
624
100%
Portion of CapEx/Total CapEx
Taxonomy-aligned for objective
Taxonomy-eligible for objective
CCM
64.1%
84.1%
CCA
0.0%
75.8%
WTR
0.0%
0.0%
CE
0.0%
0.0%
PPC
0.0%
0.0%
BIO
0.0%
0.0%
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Table C – OpEx
Financial year N
2023
Substantial contribution criteria
DNSH (“do no significant harm”) criteria
Economic activities (1)
Code
74
(2)
OpEx (3)
Portion of
OpEx, year N
(4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular economy
(9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water (13)
Pollution (14)
Circular economy
(15)
Biodiversity (16)
Minimum
safeguards (17)
Taxo-nomy-
aligned
(A.1) or
eligible
(A.2)
portion of
OpEx, year
N-1 (18)
Cate-gory
(en-ablin
g activity)
(19)
Category
(transitio
n activity)
(20)
EUR M
%
Yes; No;
N/EL
75
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes; No;
N/EL
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of renewable energy technologies
CCM
3.1
15
3.2%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
3.9%
E
Manufacture of other low carbon technologies
CCM
3.6
0
0.0%
No
No
N/EL
N/EL
N/EL
N/EL
No
No
No
No
No
No
No
0.3%
E
Production of automotive and mobility components
CCM
3.18
1
0.1%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
N/A
E
Manufacture, installation and servicing of high-,
medium- and low-voltage electrical equipment for
transmission and distribution of electricity
CCM
3.20
63
13.6%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
N/A
E
Transmission and distribution of electricity
CCM
4.9
58
12.6%
Yes
No
N/EL
N/EL
N/EL
N/EL
Yes
Yes
Yes
Yes
Yes
Yes
Yes
8.8%
E
OpEx
of
environmentally
sustainable
activities
(Taxonomy-aligned) (A.1)
137
29.5%
29.5%
0.0%
0.0%
0.0%
0.0%
0.0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
13.0%
Of which enabling
137
29.5%
29.5%
0.0%
0.0%
0.0%
0.0%
0.0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
13.0%
E
Of which transition
0
0.0%
0.0%
Yes
Yes
Yes
Yes
Yes
Yes
Yes
0.0%
T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Manufacture of renewable energy technologies
CCM
3.1
CCA
3.1
5
1.1%
EL
EL
N/EL
N/EL
N/EL
N/EL
0.2%
Manufacture of other low carbon technologies
CCM
3.6
CCA
3.6
104
22.5%
EL
EL
N/EL
N/EL
N/EL
N/EL
22.5%
Production of automotive and mobility components
CCM
3.18
15
3.3%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Manufacture, installation and servicing of high-,
medium- and low-voltage electrical equipment for
transmission and distribution of electricity
CCM
3.20
42
9.0%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/A
Transmission and distribution of electricity
CCM
4.9
CCA
4.9
0
0.0%
EL
EL
N/EL
N/EL
N/EL
N/EL
4.0%
OpEx of taxonomy-eligible but not environmentally
sustainable
activities
(not
taxonomy-aligned
activities) (A.2)
166
36.0%
36.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26.7%
A. OpEx of taxonomy-eligible activities (A.1 + A.2)
3
03
65.5%
65.5%
0.0%
0.0
%
0.0
%
0.0%
0.0%
39.8%
74
climate change mitigation: CCM; climate change adaptation: CCA; water and marine resources: WTR; circular economy: CE; pollution prevention and control: PPC; biodiversity and ecosystems: BIO.
75
Yes – Activity is taxonomy-eligible and taxonomy-aligned with respect to the relevant environmental objective; No – Activity is taxonomy-eligible but not taxonomy-aligned with respect to the relevant environmental objective;
N/EL – Not eligible; activity is not taxonomy-eligible for the relevant objective; EL – Activity taxonomy-eligible for the relevant objective.
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B. NOT TAXONOMY-ELIGIBLE ACTIVITIES
OpEx of not taxonomy-eligible activities
160
34.5%
TOTAL
463
100%
Portion of OpEx/Total OpEx
Taxonomy-aligned for objective
Taxonomy-eligible for objective
CCM
29.5%
65.5%
CCA
0.0%
39.4%
WTR
0.0%
0.0%
CE
0.0%
0.0%
PPC
0.0%
0.0%
BIO
0.0%
0.0%
PRYSMIAN GROUP | INTEGRATED ANNUAL REPORT
341
Table D – Nuclear- and fossil gas-related activities
Row
Nuclear energy-related activities
1.
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation
facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process
heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best
available technologies.
NO
3.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat,
including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
NO
Fossil gas-related activities
4.
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using
fossil gaseous fuels.
NO
5.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation
facilities using fossil gaseous fuels.
NO
6.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool
using fossil gaseous fuels.
NO
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
342
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
344
18. AUDIT REPORT ON NON-FINANCIAL DISCLOSURE
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
345
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
346
B. CONSOLIDATED FINANCIAL
STATEMENTS
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
348
1. Consolidated Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Euro/million)
Note
31.12.2023
of which
related
parties
31.12.2022
of which
related
parties
Non-current assets
Property, plant and equipment
1
Goodwill
2
Other intangible assets
2
Equity-accounted investments
3
Other investments at fair value through
other comprehensive income
4
Financial assets at amortised cost
Derivatives
8
Deferred tax assets
16
Other receivables
5
Total non-current assets
Current assets
Inventories
6
Trade receivables
5
Other receivables
5
Financial assets at fair value through
profit or loss
7
Derivatives
8
Financial assets at fair value through
other comprehensive income
4
Cash and cash equivalents
9
Total current assets
Assets held for sale
10
Total assets
Equity
Share capital
11
Reserves
11
Group share of net profit/(loss)
11
Equity attributable to the Group
Equity attributable to non-controlling interests
Total equity
Non-current liabilities
Borrowings from banks and other lenders
12
Employee benefit obligations
15
Provisions for risks and charges
14
Deferred tax liabilities
16
Derivatives
8
Other payables
13
Total non-current liabilities
Current liabilities
Borrowings from banks and other lenders
12
Provisions for risks and charges
14
Derivatives
8
Trade payables
13
Other payables
13
Current tax payables
27
Total current liabilities
Total liabilities
Total equity and liabilities
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
349
CONSOLIDATED INCOME STATEMENT
(Euro/million)
Note
2023
of which
related
parties
2022
of which
related
parties
Sales
17
Change in inventories of finished goods and work
in progress
18
(30 )
Other income
19
Total sales and income
Raw materials, consumables and supplies
20
(9,705 )
(10,588 )
Fair value change in derivatives on commodities
(31 )
Personnel costs
21
(1,804 )
(13 )
(1,758 )
(16 )
Amortisation, depreciation, impairment and
impairment reversals
22
(574 )
(403 )
Other expenses
23
(2,572 )
(7 )
(2,525 )
(8 )
Share of net profit/(loss) of equity-accounted
companies
24
Operating income
Finance costs
25
(1,093 )
(1,116 )
Finance income
26
Profit/(loss) before taxes
Taxes
27
(217 )
(230 )
Net profit/(loss)
Of which:
- attributable to non-controlling interests
- Group share
Basic earnings/(loss) per share (in Euro)
28
Diluted earnings/(loss) per share (in Euro)
28
OTHER COMPREHENSIVE INCOME (Note 11)
(Euro/million)
2023
2022
Net profit/(loss)
Other comprehensive income:
A) Change in cash flow hedge reserve:
(35 )
(34 )
- Profit/(loss) for the year
(45 )
(46 )
- Taxes
B) Other changes relating to cash flow hedges:
(19 )
(11 )
- Profit/(loss) for the year
(24 )
(15 )
- Taxes
C) Change in currency translation reserve
(201 )
D) Financial instruments at fair value:
(8 )
- Profit/(loss) for the year
(12 )
- Taxes
E) Actuarial gains/(losses) on employee benefits
(*)
:
(8 )
- Profit/(loss) for the year
(10 )
- Taxes
(30 )
Total other comprehensive income (A+B+C+D+E):
(271 )
Total comprehensive income/(loss)
Of which:
- attributable to non-controlling interests
- Group share
(*)
Components of comprehensive income that will not be reclassified to profit or loss in subsequent periods.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
350
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Note
11)
(Euro/million)
Share capital
Cash flow
hedge reserve
Currency
translation
reserve
Other
reserves
Group share
of net
profit/(loss)
Equity
attributable to
the Group
Equity
attributable to
non-
controlling
interests
Total
Balance at 31 December 2021
(309 )
Allocation of prior year net profit
(308 )
Fair value share-based payment
Dividend distribution
(145 )
(145 )
(4 )
(149 )
Effect of hyperinflation
Total comprehensive income/(loss)
(33 )
Balance at 31 December 2022
(174 )
(Euro/million)
Share capital
Cash flow
hedge reserve
Currency
translation
reserve
Other
reserves
Group share
of net
profit/(loss)
Equity
attributable to
the Group
Equity
attributable to
non-
controlling
interests
Total
Balance at 31 December 2022
(174 )
Allocation of prior year net profit
(504 )
Fair value share-based payment
Dividend distribution
(158 )
(158 )
(7 )
(165 )
Acquisition of non-controlling
interest
(5 )
(5 )
(5 )
Effect of hyperinflation
Total comprehensive income/(loss)
(35 )
(193 )
(33 )
Balance at 31 December 2023
(367 )
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
351
CONSOLIDATED STATEMENT OF CASH FLOWS (Note 37)
(Euro/million)
2023
of which
related
parties
2022
of which
related
parties
Profit/(loss) before taxes
Amortisation, depreciation and impairment
Net gains on disposal of fixed assets
(1 )
Share of net profit/(loss) of equity-accounted
companies
(33 )
(33 )
(47 )
(47 )
Dividends received from equity-accounted companies
Share-based payments
Fair value change in derivatives on commodities
(6 )
Net finance costs
Changes in inventories
(88 )
(171 )
Changes in trade receivables/payables
(523 )
(16 )
(175 )
Changes in other receivables/payables
Change in employee benefit obligations
(16 )
(16 )
Change in provisions for risks
Net income taxes paid
(328 )
(221 )
A.
Cash flow from operating activities
Cash flow from acquisitions and/or disposals
(7 )
Investments in property, plant and equipment
(599 )
(429 )
Disposals of property, plant and equipment
Investments in intangible assets
(25 )
(25 )
Investments in financial assets at fair value through
profit or loss and financial assets at amortised cost
(33 )
(39 )
Disposals of financial assets at fair value through
profit or loss
Investments in financial assets or equity investments
at fair value through other comprehensive income
(48 )
B.
Cash flow from investing activities
(491 )
(498 )
Capital contributions and other changes in equity
(4 )
Dividend distribution
(165 )
(148 )
Proceeds of new loans
Repayments of loans
(200 )
(2,000 )
Changes in other net financial receivables/payables
and other movements
(103 )
(77 )
Finance costs paid
(140 )
(88 )
Finance income received
C.
Cash flow from financing activities
(424 )
(961 )
D.
Net currency translation difference on cash and
cash equivalents
(45 )
E.
Net increase/(decrease) in cash and cash
equivalents (A+B+C+D)
(417 )
F.
Cash and cash equivalents at the beginning of
the period
G.
Cash and cash equivalents at the end of the
period (E+F)
2. Explanatory Notes
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
353
under the laws of the Republic of Italy. The Company has its registered office in Via Chiese 6,
Prysmian S.p.A. was floated on the Italian Stock Exchange on 3 May 2007 and since September
2007 has been included in the FTSE MIB index, comprising the top 40 Italian companies by
capitalisation and stock liquidity. Since 18 October 2021, the stock has been included in the
MIB® ESG, the first "Environmental, Social and Governance" index dedicated to Italian blue
chips, which features the most important listed issuers demonstrating to have espoused ESG
best practices.
The Company and its subsidiaries (together "the Group" or "Prysmian Group") produce power
and telecom cables and systems and related accessories, and distribute and sell them around
the globe.
These consolidated financial statements were approved by the Board of Directors of Prysmian
S.p.A. on 28 February 2024, which also authorised within the legal terms.
A.1 SIGNIFICANT EVENTS IN 2023
Significant events in the year are reviewed in the Directors' Report in the section entitled
"SIGNIFICANT EVENTS DURING THE YEAR".
B. ACCOUNTING POLICIES
The material accounting policies used to prepare the consolidated financial statements and Group
financial information are discussed below.
The consolidated financial statements at 31 December 2023 have been prepared on a going
concern basis, with the directors having assessed that there are no financial, operating or other
kind of indicators that might provide evidence of material uncertainties as to the Group's ability
to meet its obligations in the foreseeable future and particularly in the next 12 months.
The assessments carried out confirm Prysmian Group's ability to operate in compliance with the
going concern presumption and with its financial covenants.
Prysmian Group's consolidated financial statements at 31 December 2023 have been prepared
in accordance with the International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB), based on the text published in the Official
Journal of the European Union (OJEU).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
354
The primary reporting formats adopted have the following characteristics:
•
the consolidated income statement is prepared in a stepped format with individual items
classified by nature, with other comprehensive income, reporting components of profit
or loss deferred in equity, shown separately;
•
the consolidated statement of financial position presents assets and liabilities according
to maturity, with current items shown separately from non-current ones;
•
the consolidated statement of cash flows is prepared by presenting cash flows using the
"indirect method", as permitted by IAS 7.
In application of art. 264b HGB of the German Commercial Code ("Handelsgesetzbuch"), the
present consolidated financial statements constitute an exemption for Draka Comteq Berlin
GMBH & Co.KG and Draka Comteq Germany GMBH & Co.KG. from the requirement to present
statutory financial statements.
All the amounts shown in the consolidated financial statements are expressed in millions of Euro,
unless otherwise stated.
B.2 NEWLY ADOPTED ACCOUNTING STANDARDS AND PRINCIPLES
The accounting principles and policies and basis of consolidation used to prepare the 2023
Consolidated Financial Statements are consistent with those used for the 2022 Consolidated
Financial Statements. Full details can be found in Note 39. Basis of consolidation and accounting
policies.
The following is a list of new standards, interpretations and amendments whose application
became mandatory from 1 January 2023 but which, based on the assessments performed, have
not had a material impact on the consolidated financial statements at 31 December 2023:
-
Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9;
-
Amendments to IAS 12: Income Taxes: Deferred Tax related to Assets and Liabilities
arising from a Single Transaction;
-
Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement
2: Disclosure of Accounting Policies;
-
Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates;
-
Amendments to IAS 12 Income Taxes: International Tax Reform – Pillar Two Model Rules.
International Tax Reform - Pillar Two Model Rules
The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework
on Base Erosion and Profit Sharing (OECD/G20 BEPS), has published the
Pillar Two anti-Base
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
355
Erosion rules ("Pillar Two")
aimed at addressing the tax challenges arising from the digitalisation
of the global economy.
The Pillar Two Global anti-Base Erosion rules (GloBE Rules) represent the first substantial
proposal to renovate international tax rules in a century. The GloBE Rules propose four new tax
mechanisms whereby multinational enterprises (MNEs) will have to pay a minimum level of tax
on their income.
The Pillar Two rules have been substantively adopted by various jurisdictions in which the Group
operates. These rules will be applicable to the 2024 consolidated financial statements. The
Group, therefore, falls within the scope of substantively enacted Pillar Two legislation and,
therefore, it has assessed its potential exposure to these rules.
It is unclear whether these rules create additional temporary differences, or whether they create
the need to remeasure deferred assets and/or liabilities and what tax rate should be used to do
so. In response to this uncertainty, on 23 May 2023, the IASB issued amendments to IAS 12 -
Income Taxes introducing a mandatory temporary exception to IAS 12 requirements, permitting
a reporting entity not to recognise or disclose information about deferred tax assets and liabilities
related to Pillar Two.
Prysmian Group has applied the temporary exception when preparing its consolidated financial
statements at 31 December 2023.
This assessment has been based on the most recent tax filings, country-by-country reporting
and financial statements of the Group's constituent entities. Based on this assessment, it has
been found that for most of the jurisdictions in which the Group operates, the effective tax rate
is above 15%. However, there may be a limited number of jurisdictions where the safe harbour
relief does not apply and the Pillar Two effective tax rate is close to 15%. The Group does not
expect a material exposure to Pillar Two income taxes in those jurisdictions.
B.3 ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS NOT YET APPLICABLE
AND NOT ADOPTED EARLY BY THE GROUP
The following new accounting standards, amendments and interpretations had been issued at
the date of preparing the present report but are not yet applicable and have not been adopted
early by the Group:
New accounting standards, amendments and interpretations
Mandatory application
as from
Amendments to IAS 1: Presentation of Financial Statements:
- Classification of Liabilities as Current or Non-current;
- Classification of Liabilities as Current or Non-current: Deferral of Effective Date;
- Non-current Liabilities with Covenants.
1 January 2024
Amendments to IFRS 16 Leases: Lease Liability in a Sale as Leaseback
1 January 2024
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Disclosures: Supplier Finance Arrangements (issued on 25 May 2023)
1 January 2024
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of
Exchangeability (issued on 15 August 2023)
1 January 2025
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
356
Preliminary review has indicated that the new accounting standards, amendments and
interpretations listed above are not expected to have a material impact on the Group's
consolidated financial statements.
B.4 PRINCIPAL CHANGES IN THE SCOPE OF CONSOLIDATION
The Group's scope of consolidation includes the financial statements of Prysmian S.p.A. (the
Parent Company) and the companies over which it exercises direct or indirect control, which are
consolidated from the date when control is obtained until the date when such control ceases.
The changes in the scope of consolidation at 31 December 2023, with respect to 31 December
2022, are reported below.
New company formations
Newco
Nation
Date
Prysmian Cable Industrial GmbH
Germany
20 November 2023
Liquidations
Liquidated companies
Nation
Date
General Cable Holdings (UK) Ltd
United Kingdom
16 April 2023
General Cable Services Europe Ltd.
United Kingdom
16 April 2023
Pirelli Cables & Systems (Proprietary) Limited
South Africa
13 April 2023
Alambres y Cables de Panama S.A.
Panama
13 July 2023
Alcap Comercial S.A. (ALCOMER)
Panama
26 July 2023
EHC Technology Development (Shanghai) Co. Ltd
China
26 July 2023
Mergers
Merged companies
Survivor companies
Nation
Date
Elator INC
EHC Canada Inc.
Canada
1 January 2023
EHC Management Company
EHC Canada Inc.
Canada
1 January 2023
Prysmian Consultora Conductores e
Instalaciones S.A.I.C.
Prysmian Energia Cables Y
Sistemas de Argentina S.A.
Argentina
1 October 2023
General Cable Overseas Holdings, LLC
GK Technologies, Incorporated
United States
1 November 2023
GK Technologies, Incorporated
General Cable
Technologies
Corporation
United States
15 December 2023
Name changes
For a clearer understanding of the scope of consolidation, the following table shows the name
changes made during the year:
Previous name
New name
Nation
Date
Draka Kabely, s.r.o.
Prysmian Kabely,s.r.o.
Czech
Republic
1 May 2023
Appendix A contains a complete list of the companies included in the scope of consolidation at
31 December 2023.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
357
C. FINANCIAL RISK MANAGEMENT
The Group's activities are exposed to various types of risk: market risk (including exchange rate,
interest rate and price risks), credit risk and liquidity risk. The Group's risk management strategy
focuses on the unpredictability of markets and aims to minimise the potentially negative impact
on the Group's results. Certain types of risk are mitigated using derivative instruments.
Monitoring of key financial risks is centrally coordinated by the Group Finance Department, and
by the Purchasing Department where price risk is concerned, in close cooperation with the
Group's operating companies. Risk management policies are approved by the Group Finance,
Administration and Control Department, which provides written guidelines on managing the
above risks and on using (derivative and non-derivative) financial instruments.
The impact on profit and equity presented in the subsequent sensitivity analyses has been
determined net of tax, calculated using the Group's weighted average theoretical tax rate.
[a] Exchange rate risk
The Group operates worldwide and is therefore exposed to exchange rate risk caused by changes
in the value of trade and financial flows expressed in a currency other than the unit of account
of individual Group companies.
The principal exchange rates affecting the Group are:
•
Euro/US Dollar: in relation to trade and financial transactions in US dollars by Eurozone
companies on the American market and vice versa;
•
Euro/British Pound: in relation to trade and financial transactions by Eurozone companies
on the British market and vice versa;
•
Euro/Canadian Dollar: in relation to trade and financial transactions by Eurozone
companies on the Canadian market and vice versa;
•
Euro/Hungarian Forint: in relation to trade and financial transactions by Hungarian
companies on the Eurozone market and vice versa;
•
Euro/Romanian Leu: in relation to trade and financial transactions by Eurozone
companies on the Romanian market and vice versa;
•
Euro/Swedish Krona: in relation to trade and financial transactions by Eurozone
companies on the Swedish market and vice versa;
•
Euro/Australian Dollar: in relation to trade and financial transactions by Eurozone
companies on the Australian market and vice versa;
•
British Pound/US Dollar: in relation to trade transactions by North American companies
on the British market;
•
US Dollar/Omani Real: in relation to trade transactions by companies operating on the
Omani market;
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
358
•
Euro/Czech Koruna: in relation to trade and financial transactions by Eurozone companies
on the Czech market and vice versa;
•
Euro/Hong Kong Dollar: in relation to trade and financial transactions by Eurozone
companies operating on the Hong Kong market and vice versa;
•
US Dollar/Chinese Renminbi (Yuan): in relation to trade transactions by companies
operating on the Chinese market;
•
Euro/Singapore Dollar: in relation to trade and financial transactions by Eurozone
companies on the Singapore market and vice versa.
•
Euro/Danish Krone: in relation to trade and financial transactions by Eurozone companies
on the Danish market and vice versa.
In 2023, trade and financial flows exposed to the above exchange rates accounted for around
91% of the total exposure to exchange rate risk arising from trade and financial transactions.
The Group is also exposed to exchange risks on other exchange rates. None of these exposures,
taken individually, accounted for more than 1% of the overall exposure to transactional exchange
rate risk in 2023.
It is the Group's policy to hedge, where possible, exposures in currencies other than the unit of
account of its individual companies. In particular, the Group hedges:
•
firm cash flows: invoiced trade flows and exposures arising from loans receivable and
payable;
•
projected cash flows: trade and financial flows arising from firm or highly probable
contractual commitments.
Such hedges are arranged using derivative contracts.
The following sensitivity analysis shows the post-tax effects on profit of a 5% and 10%
increase/decrease in the exchange rates of the local currencies shown below on the actual rates
at 31 December 2023 and 31 December 2022.
(Euro/million)
2023
2022
-5%
+5%
-5%
+5%
Euro
(1.31)
1.18
(1.01)
0.91
US Dollar
(0.71)
0.65
(1.04)
0.94
British Pound
(0.16)
0.14
(0.02)
0.02
Other currencies
(1.08)
1.00
(0.54)
0.49
Total
(3.26)
2.97
(2.61)
2.36
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
359
(Euro/million)
2023
2022
-10%
+10%
-10%
+10%
Euro
(2.76)
2.26
(2.13)
1.75
US Dollar
(1.51)
1.23
(2.19)
1.79
British Pound
(0.33)
0.27
(0.04)
0.03
Other currencies
(2.29)
1.87
(1.14)
0.94
Total
(6.89)
5.63
(5.50)
4.51
When assessing the potential impact of the above, the assets and liabilities of each Group
company in currencies other than their unit of account were considered, net of any derivatives
hedging the above-stated cash flows.
The following sensitivity analysis shows the post-tax effects on equity reserves of an
increase/decrease in the fair value of designated cash flow hedges following a 5% and 10%
increase/decrease in the exchange rates of the local currencies shown below on the actual rates
at 31 December 2023 and 31 December 2022.
(Euro/million)
2023
2022
-5%
+5%
-5%
+5%
US Dollar
3.46
(3.82)
2.02
(2.23)
Euro
12.46
(13.77)
15.23
(16.83)
British Pound
18.31
(20.23)
20.67
(22.85)
Other currencies
0.38
(0.51)
0.75
(1.02)
Total
34.61
(38.33)
38.67
(42.93)
(Euro/million)
2023
2022
-10%
+10%
-10%
+10%
US Dollar
6.89
(8.43)
7.43
(9.08)
Euro
24.85
(30.38)
32.57
(39.81)
British Pound
36.52
(44.64)
39.53
(48.32)
Other currencies
0.76
(0.93)
2.77
(3.37)
Total
69.02
(84.38)
82.30
(100.58)
The above analysis ignores the effects of translating the equity of Group companies whose
functional currency is not the Euro.
Further details can be found in the individual notes to the financial statements.
[b] Interest rate risk
The interest rate risk to which the Group is exposed is mainly on long-term financial liabilities,
carrying both fixed and variable rates.
Fixed rate debt exposes the Group to a fair value risk. The Group does not operate any particular
hedging policies in relation to the risk arising from such contracts.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
360
Variable rate debt exposes the Group to a rate volatility risk (cash flow risk). In order to hedge
this risk, the Group can use derivative contracts that limit the impact of interest rate changes
on profit or loss.
The Group Finance Department monitors the exposure to interest rate risk and adopts
appropriate hedging strategies to keep the exposure within the limits defined by the Group
Administration, Finance and Control Department, arranging derivative contracts, if necessary.
The following sensitivity analysis shows the effects on consolidated net profit of a 25 b.p. and
50 b.p. increase/decrease in interest rates versus the interest rates applying at 31 December
2023 and 31 December 2022, assuming that all other variables remain equal.
The potential effects shown below refer to net liabilities representing the bulk of Group debt at
the reporting date, for which the impact of the change in interest rates on net finance costs has
been calculated on an annualised basis.
The net liabilities considered for sensitivity analysis include variable rate financial receivables
and payables, cash and cash equivalents and derivatives whose value is influenced by rate
volatility.
(Euro/million)
2023
2022
-0.25%
+0.25%
-0.25%
+0.25%
Euro
(1.20)
1.20
(0.49)
0.49
US Dollar
(0.33)
0.33
(0.40)
0.40
British Pound
(0.11)
0.11
(0.08)
0.08
Other currencies
(0.83)
0.83
(0.75)
0.75
Total
(2.47)
2.47
(1.72)
1.72
(Euro/million)
2023
2022
-0.50%
+0.50%
-0.50%
+0.50%
Euro
(2.40)
2.40
(0.99)
0.99
US Dollar
(0.66)
0.66
(0.80)
0.80
British Pound
(0.22)
0.22
(0.16)
0.16
Other currencies
(1.67)
1.67
(1.50)
1.50
Total
(4.95)
4.95
(3.45)
3.45
At 31 December 2023, the Group had interest rate swap agreements in place that transform the
variable rate into a fixed one. These agreements have been accounted for as cash flow hedges.
An analysis of all these risks can also be found in the Risk Factors chapter of the Directors'
Report.
[c] Price risk
The Group is exposed to price risk in relation to purchases and sales of strategic materials, the
price of which is subject to market volatility. The main raw materials used by the Group in its
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
361
own production processes consist of strategic metals such as copper, aluminium and lead. The
cost of purchasing such strategic materials accounted for approximately 58.2% of the Group's
total cost of materials in 2023 (59.8% in 2022), forming part of its overall production costs.
In order to manage the price risk on future trade transactions, the Group negotiates derivative
contracts on strategic metals, setting the price of expected future purchases or the value of
stocks.
The derivative contracts entered into by the Group are negotiated with leading financial
institutions on the basis of strategic metal prices quoted on the London Metal Exchange ("LME"),
the New York market ("COMEX") and the Shanghai Futures Exchange ("SFE").
The following sensitivity analysis shows the effect on consolidated equity of a 10%
increase/decrease in strategic material prices versus prices at 31 December 2023 and 31
December 2022, assuming that all other variables remain equal.
(Euro/million)
2023
2022
-10%
+10%
-10%
+10%
LME
(78.75)
78.75
(69.43)
69.43
COMEX
(0.56)
0.56
(4.65)
4.65
SME
(3.19)
3.19
(3.16)
3.16
Total
(82.50)
82.50
(77.24)
77.24
The potential impact shown above is solely attributable to increases and decreases in the fair
value of derivatives on strategic material prices which are directly attributable to changes in the
prices themselves. It does not refer to the impact on the income statement of the purchase cost
of strategic materials.
There is a credit risk in relation to trade receivables, cash and cash equivalents, financial
instruments, and deposits with banks and other financial institutions.
Customer-related credit risk is managed by the individual subsidiaries and monitored centrally
by the Group Finance Department. The Group does not have excessive concentrations of credit
risk. It nonetheless has procedures aimed at ensuring that sales of goods and services are made
to reliable customers, taking account of their financial situation, track record and other factors.
Credit limits for major customers are based on internal and external assessments within ceilings
approved by local country management. The utilisation of credit limits is periodically monitored
at local level.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
362
During 2023 the Group had a global insurance policy in place to provide coverage for part of its
trade receivables against any credit losses, net of the deductible.
As for credit risk relating to the management of financial and cash resources, this risk is
monitored by the Group Finance Department, which implements procedures intended to ensure
that Group companies deal with independent, highly rated, reliable counterparties. In fact, at 31
December 2023 (like at 31 December 2022) the vast majority of the Group's financial and cash
resources were held with investment grade counterparties. Credit limits relating to the principal
financial counterparties are based on internal and external assessments, within ceilings set by
the Group Finance Department.
An increase/decrease in the Group's credit rating at 31 December 2023 would not have had
significant effects on net profit at that date.
Prudent management of the liquidity risk arising from the Group's normal operations implies
maintaining an adequate level of cash and short-term deposits, as well as ensuring the
availability of funds by having an adequate amount of committed credit lines.
The Group Finance Department uses cash flow forecasts to monitor the projected level of the
Group's liquidity reserves.
The amount of liquidity reserves at the reporting date is as follows:
(Euro/million)
31.12.2023
31.12.2022
Cash and cash equivalents
1,741
1,285
Financial assets at fair value through profit or loss
85
270
Financial assets at fair value through other comprehensive income
24
11
Undrawn committed lines of credit
1,000
1,000
Total
2,850
2,566
Undrawn committed lines of credit at 31 December 2023 refer to the Revolving Credit Facility
2023 (Euro 1,000 million).
The following table presents a due date analysis of payables, at their repayment value, other
liabilities, and derivatives settled on a net basis; the various due date categories refer to the
period between the reporting date and the contractual maturity of the obligations.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
363
(Euro/million)
31.12.2023
Due within
1 year
Due between
1 - 2 years
Due between
2 - 5 years
Due after
5 years
Borrowings from banks and other lenders
695
270
2,087
405
Derivatives
57
25
11
11
Trade and other payables
4,668
53
-
-
Total
5,420
348
2,098
416
(Euro/million)
31.12.2022
Due within
1 year
Due between
1 - 2 years
Due between
2 - 5 years
Due after
5 years
Borrowings from banks and other lenders
346
550
2,077
188
Derivatives
72
30
20
11
Trade and other payables
4,412
28
-
-
Total
4,830
608
2,097
199
In completion of the disclosures about financial risks, the following is a reconciliation between
the classes of financial assets and liabilities reported in the Group's statement of financial
position and the categories used by IFRS 7 to identify financial assets and liabilities:
(Euro/million)
31.12.2023
Financial
assets at
FVPL
Receivables
and other
assets at
amortised
cost
Financial
assets at
FVOCI
Financial
liabilities at
FVPL
Financial
liabilities at
amortised
cost
CFH
derivatives
Other investments
at FVOCI
-
-
10
-
-
-
Financial assets at
FVOCI
-
-
24
-
-
-
Financial assets at
amortised cost
-
3
-
-
-
-
Trade receivables
-
1,987
-
-
-
-
Other receivables
-
1,090
-
-
-
-
Financial assets at
FVPL
85
-
-
-
-
-
Derivatives (assets)
16
-
-
-
-
105
Cash and cash
equivalents
-
1,741
-
-
-
-
Borrowings from
banks and other
lenders
-
-
-
-
3,096
-
Trade payables
-
-
-
-
2,199
-
Other payables
-
-
-
-
2,522
-
Derivatives
(liabilities)
-
-
-
25
-
79
Total
101
4,821
34
25
7,817
184
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
364
(Euro/million)
31.12.2022
Financial
assets at
FVPL
Receivables
and other
assets at
amortised
cost
Financial
assets at
FVOCI
Financial
liabilities at
FVPL
Financial
liabilities at
amortised
cost
CFH
derivatives
Other investments
at FVOCI
-
-
12
-
-
-
Financial assets at
FVOCI
-
-
11
-
-
-
Financial assets at
amortised cost
-
3
-
-
-
-
Trade receivables
-
1,942
-
-
-
-
Other receivables
-
1,012
-
-
-
-
Financial assets at
FVPL
270
-
-
-
-
-
Derivatives (assets)
10
-
-
-
-
196
Cash and cash
equivalents
-
1,285
-
-
-
-
Borrowings from
banks and other
lenders
-
-
-
-
3,067
-
Trade payables
-
-
-
-
2,718
-
Other payables
-
-
-
-
1,722
-
Derivatives
(liabilities)
-
-
-
20
-
113
Total
280
4,242
23
20
7,507
309
C.1 CAPITAL RISK MANAGEMENT
The Group's objective in capital risk management is mainly to safeguard business continuity in
order to guarantee returns for shareholders and benefits for other stakeholders. The Group also
aims to maintain an optimal capital structure in order to reduce the cost of debt and to comply
with a series of covenants required by the various Credit Agreements (Note 32. Financial
covenants).
The Group also monitors capital using a gearing ratio (i.e. the ratio between net financial debt
and capital). Details of how net financial debt is determined can be found in Note 12. Borrowings
from banks and other lenders. Capital is equal to the sum of equity, as reported in the Group
consolidated financial statements, and net financial debt.
The gearing ratios at 31 December 2023 and 31 December 2022 are shown below:
(Euro/million)
2023
2022
Net financial debt
1,188
1,417
Equity
3,972
3,771
Total capital
5,160
5,188
Gearing ratio
23.02%
27.31%
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
365
IFRS 13 requires assets and liabilities recognised in the statement of financial position at fair
value to be classified according to a hierarchy that reflects the significance of the inputs used in
measuring fair value.
Financial instruments are classified according to the following fair value measurement hierarchy:
Level 1
: Fair value is determined with reference to quoted prices (unadjusted) in active markets
for identical financial instruments. Therefore, the emphasis within Level 1 is on determining both
of the following:
a)
the principal market for the asset or liability or, in the absence of a principal market, the
most advantageous market for the asset or liability; and
b)
whether the entity can enter into a transaction for the asset or liability at the price in that
market at the measurement date.
Level 2
: Fair value is determined using valuation techniques where the input is based on
observable market data. The inputs for this level include:
a)
quoted prices for similar assets or liabilities in active markets;
b)
quoted prices for identical or similar assets or liabilities in markets that are not active;
c)
inputs other than quoted prices that are observable for the asset or liability, for example:
i.
interest rate and yield curves observable at commonly quoted intervals;
ii.
implied volatilities;
iii.
credit spreads;
d)
market-corroborated inputs.
Level 3
: Fair value is determined using valuation techniques where the input is not based on
observable market data.
The following tables present the assets and liabilities that are recurrently measured at fair value:
(Euro/million)
31.12.2023
Level 1
Level 2
Level 3
Total
Assets
Financial assets at fair value:
Derivatives at FVPL
-
16
-
16
CFH derivatives
-
105
-
105
Financial assets at FVPL
85
-
-
85
Other investments at FVOCI
-
-
10
10
Financial assets at FVOCI
24
-
-
24
Total assets
109
121
10
240
Liabilities
Financial liabilities at fair value:
Derivatives at FVPL
-
25
-
25
CFH derivatives
-
79
-
79
Total liabilities
-
104
-
104
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
366
(Euro/million)
31.12.2022
Level 1
Level 2
Level 3
Total
Assets
Financial assets at fair value:
Derivatives at FVPL
-
10
-
10
CFH derivatives
-
196
-
196
Financial assets at FVPL
270
-
-
270
Other investments at FVOCI
-
-
12
12
Financial assets at FVOCI
11
-
-
11
Total assets
281
206
12
499
Liabilities
Financial liabilities at fair value:
Derivatives at FVPL
-
20
-
20
CFH derivatives
-
113
-
113
Total liabilities
-
133
-
133
Financial assets classified in fair value Level 3 have reported no significant movements in either
2023 or 2022.
Given the short-term nature of trade receivables and trade payables, their carrying amounts,
net of any allowance for doubtful accounts, are treated as a good approximation of fair value.
During 2023 there were no transfers of financial assets and liabilities between the different levels
of the fair value hierarchy.
VALUATION TECHNIQUES
Level 1
: The fair value of financial instruments quoted in an active market is based on market
price at the reporting date.
Level 2
: Derivatives classified in this category include interest rate swaps, currency forwards
and derivative contracts on metals and other commodities that are not quoted in active markets.
Fair value is determined as follows:
•
for interest rate swaps, it is calculated on the basis of the present value of forecast future
cash flows;
•
for currency forwards, it is determined using the forward exchange rate at the reporting
date, appropriately discounted;
•
for metal derivatives, it is determined using the prices of such metals at the reporting
date, appropriately discounted.
Level 3
: The fair value of instruments not quoted in an active market is primarily determined
using valuation techniques based on estimated discounted cash flows.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
367
C.3 RISKS RELATED TO CLIMATE CHANGE
As explained in more detail in the section of the Directors' Report on "Prysmian's two ambitions:
Climate Change and Social Ambition", the Group has a "Net Zero" strategy. In order to
implement this decarbonisation strategy, Prysmian Group continued in 2023 with its
Sustainability-related investment program; the goal is to reduce overall CO2 equivalent
emissions by between 55% and 60 (from 2019 levels) and achieve Net Zero Emission (for Scope
1 and 2 greenhouse gases, i.e. direct and indirect emissions generated by the organisation) by
2035. These investments involve different strands, including the installation of photovoltaic
systems at some of the Group's plants, various measures to reduce energy consumption, and a
multi-year plan to reduce the use of SF6 gas.
In this context, the Group analyses and assesses the risks and opportunities of climate change
and has also set targets to reduce Scope 3 emissions (generated by the value chain) to zero by
2050.
The consequences in terms of investments, costs and other cash flow impacts are considered
when preparing the accounting estimates. The impairment tests carried out for the purposes of
these financial statements have taken into account the impacts on investment flows, as far as
they can be currently estimated, without any significant effects on the test results. In addition,
challenges associated with climate change commitments have been considered, and the Group
has not identified any additional issues that may have a material impact on the impairment tests.
More details about the impact of climate change on impairment testing can be found in Note 2.
Goodwill and other intangible assets.
It is also possible that in the future the carrying amount of assets or liabilities recognised in the
Group's financial statements may be subject to different impacts as the strategy of managing
climate change evolves. Although these aspects are not currently foreseeable, they are the
subject of increasingly frequent and coordinated monitoring by the various company
departments.
Other climate change-related impacts are discussed in Note 1. Property, plant and equipment as
regards investments and in Note 12. Borrowings from banks and other lenders and in Note 32.
Financial covenants as regards sustainability-linked loans and covenants.
C.4 RISKS RELATED TO IMPACT OF RUSSIAN-UKRAINIAN CONFLICT
With reference to the direct economic and financial consequences of the ongoing conflict between
Russia and Ukraine on the Group's assets and liabilities, it should be noted that the Group has
no operations in Ukraine, while it operates on the Russian market through its subsidiary, which
is active almost exclusively at a local level and whose net invested capital and revenue account
for 0.4% and around 0.4% of the Group's respective totals.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
368
The Group's exposure is therefore limited. The Group is keeping developments in the conflict
under constant monitor in order to identify any changes in the geopolitical context that might
require it to revise its existing business strategies and/or to adopt actions to safeguard its
competitive position, investments, business performance and resources. The possible impacts of
the conflict considered when preparing the current consolidated financial statements mainly
relate to the recoverability of receivables and investments, for which no impairment loss has
been identified.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
369
D. SEGMENT INFORMATION
Further to the Group's new strategy presented at the Capital Markets Day on 5 October 2023,
on 19 December 2023, Prysmian announced changes to its internal organisational structure and
operating segments. Effective 1 January 2024, four new business segments will be in place:
Renewable Transmission, Power Grid, Electrification and Digital Solutions. Please refer to the
"Prysmian Business Model" chapter of the Directors' Report for a more detailed description of
the new operating segments.
In accordance with IFRS 8 and taking into account the organisational structure, and the
management, internal reporting and performance monitoring systems in place at 31 December
2023, the directors have maintained the current structure for the purposes of identifying the
operating segments, which will therefore be changed in 2024.
The current structure of the operating segments is as follows:
•
Energy
, whose smallest identifiable CGUs are Regions/Countries depending on the
specific organisation;
•
Projects,
whose smallest identifiable CGUs are the High Voltage, Submarine Power,
Submarine Telecom and Offshore Specialties businesses;
•
Telecom
, whose smallest CGU is the operating segment itself.
The structure of the disclosure corresponds to the Group's organisational structure in place at
31 December 2023, as well as the report periodically prepared to review business performance.
This report presents operating performance by macro type of business (Energy, Projects and
Telecom) and the results of operating segments primarily on the basis of Adjusted EBITDA,
defined as earnings (loss) for the period before non-recurring items, the fair value change in
derivatives on commodities and in other fair value items, amortisation, depreciation and
impairment, finance costs and income, and taxes. This report also provides information about
the statement of financial position for the Group as a whole but not by operating segment.
In order to provide users of the financial statements with clearer information, certain financial
information is also reported for the sales channels and business areas included within the
individual operating segments:
A)
Projects operating segment: this encompasses underground and submarine high-voltage
power cables, submarine telecommunication cables, and offshore specialty cables, as
better described in the "Group Organisation" section of the Directors' Report. This
segment is key for energy transition processes, since, as a solution provider
,
it offers its
customers a whole range of solutions for the implementation of renewable energy
production and distribution projects.
B)
Energy operating segment: this encompasses the Energy & Infrastructure and Industrial
& Network Components businesses, as better explained in the "Group Organisation"
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
370
section of the Directors' Report. The Energy segment provides products and services that
respond to needs arising from trends towards both electrification and growth in
renewables.
C)
Telecom operating segment: this encompasses the manufacture and development of a
wide range of cable systems and connectivity products used in telecommunication
networks. This segment consists of the following businesses: Fibre Optics, MMS
Multimedia Specials and Telecom Solutions, as better described in the "Group
Organisation" section of the Directors' Report. This segment provides products and
services to support cloudification and data booming megatrends.
All Corporate fixed costs are allocated to the Projects, Energy and Telecom operating segments.
Revenues and costs are allocated to each operating segment by identifying all revenues and
costs directly attributable to that segment and by allocating indirectly related costs.
Group operating activities are organised and managed separately according to the nature of the
products and services provided: each segment offers different products and services to different
markets. Sales of goods and services are analysed geographically on the basis of the location of
the registered office of the company that issues the invoices, regardless of the geographic
destination of the products sold. All transfer prices are set using the same conditions applied to
other transactions between Group companies and are generally determined by applying a mark-
up on production costs.
Assets and liabilities by operating segment are not included in the data reviewed by management
and so, as permitted by IFRS 8, this information is not presented in the current report.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
371
D.1 OPERATING SEGMENTS
The following tables present information by operating segment:
(Euro/million)
2023
Projects
Energy
Telecom
Group
total
E&I
Industrial
& NWC
Other
Total
Energy
Sales
(1)
2,508
7,620
3,358
379
11,357
1,489
15,354
Adjusted EBITDA before
share of net
profit/(loss) of equity-
accounted companies
300
838
360
(16)
1,182
113
1,595
% of sales
12.0%
11.0%
10.7%
10.4%
7.6%
10.4%
Adjusted EBITDA (A)
300
843
361
(16)
1,188
140
1,628
% of sales
12.0%
11.1%
10.8%
10.5%
9.4%
10.6%
Adjustments
(18)
(58)
(38)
(1)
(97)
(28)
(143)
EBITDA (B)
282
785
323
(17)
1,091
112
1,485
% of sales
11.2%
10.3%
9.6%
9.6%
7.5%
9.7%
Amortisation and
depreciation (C)
(80)
(139)
(65)
(4)
(208)
(70)
(358)
Adjusted operating
income (A+C)
220
704
296
(20)
980
70
1,270
% of sales
8.8%
9.2%
8.8%
8.6%
4.7%
8.3%
Fair value change in
derivatives on commodities
(D)
6
Fair value share-based payment (E)
(57)
Asset (impairment) and
impairment reversal (F)
(216)
Operating income (B+C+D+E+F)
860
% of sales
5.6%
Finance income
997
Finance costs
(1,093)
Taxes
(217)
Net profit/(loss)
547
% of sales
3.6%
Attributable to:
Owners of the parent
529
Non-controlling interests
18
(1)
Sales of the operating segments and business areas are reported net of intercompany transactions and net of
transactions between operating segments, consistent with the presentation adopted in the regularly reviewed reports.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
372
(Euro/million)
2022
Projects
Energy
Telecom
Group
total
E&I
Industrial
& NWC
Other
Total
Energy
Sales
(1)
2,161
8,196
3,442
395
12,033
1,873
16,067
Adjusted EBITDA before
share of net
profit/(loss) of equity-
accounted companies
243
731
251
(14)
968
231
1,442
% of sales
11.2%
8.9%
7.3%
8.0%
12.3%
9.0%
Adjusted EBITDA (A)
243
736
252
(14)
974
271
1,488
% of sales
11.2%
9.0%
7.3%
8.1%
14.5%
9.3%
Adjustments
(41)
(39)
(13)
-
(52)
(8)
(101)
EBITDA (B)
202
697
239
(14)
922
263
1,387
% of sales
9.3%
8.5%
6.9%
7.7%
14.0%
8.6%
Amortisation and
depreciation (C)
(86)
(133)
(66)
(4)
(203)
(80)
(369)
Adjusted operating
income (A+C)
157
603
186
(18)
771
191
1,119
% of sales
7.3%
7.4%
5.4%
6.4%
10.2%
7.0%
Fair value change in
derivatives on commodities
(D)
(31)
Fair value share-based payment (E)
(104)
Asset (impairment) and
impairment reversal (F)
(34)
Operating income (B+C+D+E+F)
849
% of sales
5.3%
Finance income
1,006
Finance costs
(1,116)
Taxes
(230)
Net profit/(loss)
509
% of sales
3.2%
Attributable to:
Owners of the parent
504
Non-controlling interests
5
(1)
Sales of the operating segments and business areas are reported net of intercompany transactions and net of
transactions between operating segments, consistent with the presentation adopted in the regularly reviewed reports.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
373
D.2 GEOGRAPHICAL AREAS
The following table presents sales of goods and services by geographical area. Sales of goods
and services are analysed geographically on the basis of the location of the registered office of
the company that issues the invoices, regardless of the geographic destination of the products
sold.
(Euro/million)
2023
2022
Sales
15,354
16,067
EMEA*
8,043
8,097
(of which Italy)
1,966
1,585
North America
4,860
5,394
Latin America
1,374
1,361
Asia Pacific
1,077
1,215
*
EMEA: Europe, Middle East and Africa.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
374
Details of this line item and related movements are as follows:
(Euro/million)
Land
Buildings
Plant and
machinery
Equipment
Other
assets
Assets under
construction
and advances
Total
Balance at 31
December 2022
304
815
1,203
56
127
515
3,020
Movements in 2023:
- Investments
-
37
44
4
5
509
599
- Depreciation
-
(63)
(150)
(16)
(51)
-
(280)
- Impairment
-
(16)
(19)
(3)
(8)
(2)
(48)
- Currency translation
differences
(5)
(15)
(23)
(4)
-
(11)
(58)
- Increases for leases
(IFRS 16)
2
37
1
2
111
-
153
- Monetary revaluation
for hyperinflation
1
3
8
1
1
1
15
- Other
4
21
110
4
13
(152)
-
Balance at 31
December 2023
306
819
1,174
44
198
860
3,401
Of which:
- Historical cost
325
1,416
2,968
219
474
888
6,290
- Accumulated
depreciation and
impairment
(19)
(597)
(1,794)
(175)
(276)
(28)
(2,889)
Net book value
306
819
1,174
44
198
860
3,401
(Euro/million)
Land
Buildings
Plant and
machinery
Equipment
Other
assets
Assets under
construction
and advances
Total
Balance at 31 December
2021 (*)
287
796
1,243
61
130
277
2,794
Movements in 2022:
- Investments
10
11
32
4
16
356
429
- Disposals
(1)
-
-
-
-
-
(1)
- Depreciation
-
(63)
(159)
(18)
(51)
-
(291)
- Impairment
-
(1)
(12)
-
-
(21)
(34)
- Currency translation
differences
1
15
27
1
1
2
47
- Increases for leases
(IFRS 16)
-
34
5
3
16
-
58
- Monetary revaluation for
hyperinflation
3
7
7
1
1
2
21
- Other
4
16
60
4
14
(101)
(3)
Balance at 31 December
2022
304
815
1,203
56
127
515
3,020
Of which:
- Historical cost
322
1,358
2,746
214
372
538
5,550
- Accumulated
depreciation and
impairment
(18)
(543)
(1,543)
(158)
(245)
(23)
(2,530)
Net book value
304
815
1,203
56
127
515
3,020
(*) The previously published comparative Consolidated Financial Statements have been revised after finalising the purchase price
allocation of Omnisens S.A. and Eksa Sp.z.o.o.
In 2023, the value of gross investments was Euro 624 million, of which Euro 599 million for
property, plant and equipment and Euro 25 million for intangible assets, discussed in the next
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
375
note, up from the previous year's figure of Euro 454 million (of which Euro 429 million for
property, plant and equipment and Euro 25 million for intangible assets, discussed in the next
note), due to higher investment in production and installation capacity, essential for keeping
pace with the demands of energy transition. The main investments are described below:
•
Projects to increase and technologically upgrade production capacity and develop new
products/markets: Euro 496 million (80% of total investments):
Projects segment
: With the aim of supporting growing demand for submarine cable
systems serving interconnection projects and offshore wind farms, and of strengthening
execution capability, Prysmian has announced an investment of around Euro 350 million
in two new state-of-the-art cable-laying vessels. The first will be an evolution of the
Monna Lisa. Measuring about 185 m long and some 34 m wide, the new vessel will be
equipped with advanced cable-laying solutions, such as three carousels with a total
19,000 tonne capacity, making it one of the cable-layers with the highest load capacity
on the market. A bollard pull in excess of 180 tonnes will allow the vessel to perform
complex installation operations of simultaneously laying and burying (up to 4) cables
using several ploughs, for unparalleled optimisation of offshore operations. The vessel
will be operational by early 2027. The other cable-laying vessel will be an evolution of the
Ulisse, measuring about 167 m long and some 40 m wide. It will be equipped with two
carousels (one of which split in two concentric sections) with a total load capacity of
10,000 tonnes. The vessel is due to enter service during the first half of 2025. Both
vessels will have green credentials: they will be equipped with high-voltage shore
connection systems to power them with clean energy during loading operations, diesel
generators suitable for biodiesel blends and hybrid batteries just for the vessel that
installs in very deep water.
Construction of the Monna Lisa, started in 2022, has proceeded according to schedule.
The overall investment in this cable-laying vessel is around Euro 200 million plus Euro 40
million for cable-installation equipment. The Monna Lisa will be operational from early
2025.
The more significant investments in increasing the production capacity of the Projects
business unit, needed to meet the market's growing demands, have included additional
upgrades to the plants in Pikkala (Finland) and Gron (France). Expansion of the Pikkala
plant has continued with the construction of a 185m-tall tower that will house a new
vertical extrusion line for the production of 525 kV DC or 400 kV AC high voltage
submarine cables, involving a total investment of about Euro 120 million. An additional
Euro 120 million in investment was approved during 2023 for the installation of a second
vertical extrusion line inside the tower currently under construction and of all the
machinery required to complete other stages of the production process based on the
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
376
incremental volumes generated by the new insulation line. At Gron, an investment was
approved for the installation of an additional silicon oil insulation line, which will support
the production of 525 kV HVDC underground cables with XLPE insulation or proprietary
P-laser technology, and for all the machinery needed to complete other stages of the
production process based on the incremental volumes generated by the new insulation
line. The project, which follows a previous expansion initiated in 2022 and now nearing
completion, involves an investment of over Euro 50 million.
Preparatory work has continued for construction of the new Brayton Point plant
(Massachusetts - United States), involving the conversion of an area previously occupied
by a coal-fired thermal power plant into a state-of-the-art inter-array and export
submarine cable manufacturing complex.
The expansion of high-voltage cable installation and production capacity was
accompanied by an upgrade of testing capacity, with the approval of an investment to
increase the number of HVDC test bays and mechanical test areas at the Quattordio site
in Italy. This investment of over Euro 20 million will support ongoing innovation involving
the search for new materials and/or technologies for HVDC applications.
Energy segment
: Investments in this business segment have focused on certain specific
sectors in order to support growing market demands. An investment of around Euro 60
million was approved for a major increase in medium-voltage cable production capacity
at the DuQuoin plant (Illinois, USA), which will mainly serve the renewable energy (solar
and wind) distribution markets. The project will add approximately 9,000 sqm of new
production space and invest in all the necessary machinery to boost renewable energy
cable production capacity by around 50%. Investments have continued at Sedalia
(Missouri) to expand the plant that manufactures low-voltage aluminium cables mainly
for the residential/commercial/industrial construction and photovoltaic markets, and at
Williamsport (Pennsylvania) to increase capacity to manufacture high-voltage cables for
overhead distribution lines. Lastly, a number of investments are underway in Europe,
aimed at increasing capacity and expanding medium and low voltage cable capability to
support market demands.
Telecom segment
: Investments have focused on increasing optical cable production
capacity in Jackson (Tennessee) for the manufacture of Loose Tube and Drop cables, and
in Dee Why (Australia) to expand cable manufacturing capacity to serve Telstra's new
20,000 km Australian fibre-optic network, connecting the country's major cities.
•
Multiple projects to improve industrial efficiency and rationalise production capacity: Euro
27 million (4% of total investments).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
377
The Group has continued to invest in cost optimisation throughout the Telecom segment's
production chain. Specifically, 2023 saw continued investment in upgrading machinery
with the best production technologies currently available within the Group.
In 2023, Prysmian moved ahead with its Euro 100 million 10-year investment program
in Sustainability. These investments, totalling Euro 7 million in 2023, involve several
types of intervention, including the installation of photovoltaic systems at some of the
Group's plants, various measures to reduce energy consumption, and a multi-year plan
to reduce the use of SF6 gas.
•
Structural work: Euro 52 million (8% of total investments).
The main component of this expenditure related to ongoing modernisation of offices and
production sites, in order to support people's wellbeing and safety, and the reliability of
machinery.
More details about investments can be found in "Group Investments for a Sustainable
Future" within the Consolidated Non-Financial Statement forming part of the Directors'
Report.
At 31 December 2023, the value of machinery pledged as collateral against long-term loans was
approximately Euro 1 million.
During the reporting period just ended, Prysmian Group reviewed whether there was any
evidence that its CGUs might be impaired, but did not identify any.
However, as a result of specific market situations, impairment losses have been recognised
against certain specific assets belonging to larger CGUs for which no explicit indicators of
impairment had been found. This has involved recognising Euro 48 million in impairment losses
in 2023, mainly attributable to impairment of certain assets at the Battipaglia site in Italy.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
378
2. GOODWILL AND OTHER INTANGIBLE ASSETS
Details of this line item and related movements are as follows:
Patents
Concessions,
licences,
trademarks
and similar
rights
Goodwill
Software
Other
intangible
assets
Intangibles in
progress and
advances
Total
Balance at 31
December 2022
5
72
1,691
76
301
19
2,164
Movements in 2023:
- Investments
-
1
-
8
1
15
25
- Amortisation
(1)
(14)
-
(27)
(36)
-
(78)
- Currency translation
differences
-
(1)
(31)
-
(8)
-
(40)
- Other
-
1
-
16
-
(17)
-
Balance at 31
December 2023
4
59
1,660
73
258
17
2,071
Of which:
- Historical cost
65
203
1,660
233
650
38
2,849
- Accumulated
amortisation and
impairment
(61)
(144)
-
(160)
(392)
(21)
(778)
Net book value
4
59
1,660
73
258
17
2,071
(Euro/million)
Patents
Concessions,
licences,
trademarks
and similar
rights
Goodwill
Software
Other
intangible
assets
Intangibles
in progress
and
advances
Total
Balance at 31
December 2021 (*)
5
80
1,635
72
327
21
2,140
Movements in 2022:
- Investments
-
1
-
9
-
15
25
- Amortisation
(1)
(14)
-
(20)
(43)
-
(78)
- Currency translation
differences
1
2
56
-
17
-
76
- Other
-
3
-
15
-
(17)
1
Balance at 31
December 2022
5
72
1,691
76
301
19
2,164
Of which:
- Historical cost
65
202
1,711
209
657
40
2,884
- Accumulated
amortisation and
impairment
(60)
(130)
(20)
(133)
(356)
(21)
(720)
Net book value
5
72
1,691
76
301
19
2,164
(*) The previously published comparative Consolidated Financial Statements have been revised after finalising the
purchase price allocation of Omnisens S.A. and Eksa Sp.z.o.o.
In 2023, the value of gross investments in intangible assets was Euro 25 million. In 2023, as
part of Prysmian Group's integration strategy, the Group ERP system (SAP 1C) was rolled out to
the Elevators business in the United States, bringing the total number of plants to 84, plus 6
corresponding distribution centres, that are managed using the single SAP 1C platform present
in over 30 countries.
In the Operations area, the Corporate MES FastTrack implementation project was successfully
completed at the Livorno plant (Network Components) in June 2023, while the Vilanova plant
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
379
(Energy) in Spain embarked on the go-live phase during Q4 2023, reaching completion in
January 2024.
FastTrack roll-outs also got underway at the Energy plants in Kistelek (Hungary) and Neustadt
(Germany), as well as the Telecom plants in Jackson (USA) and Suzhou (China); all four projects
are expected to reach completion during the first half of 2024. Two other factories, which have
already been identified, will be involved in the roll-out during the second half of 2024.
Goodwill
At 31 December 2023, Prysmian Group reported Euro 1,660 million in Goodwill (Euro 1,691
million at 31 December 2022), down from the previous year due to currency translation
differences.
Goodwill impairment test
As reported in Note 40 (b) Estimates and assumptions, the Group's activities are organised in
three operating segments: Projects, Energy and Telecom. The Projects segment consists of the
High Voltage, Submarine Power, Submarine Telecom and Offshore Specialties CGUs; the Energy
segment consists of a number of CGUs corresponding to the Regions or Countries in keeping
with the organisation structure; lastly, the Telecom segment consists of a single CGU that
coincides with the operating segment itself. Goodwill, acquired on the occasion of business
combinations, has been allocated to groups of CGUs, corresponding to the operating segments,
which are expected to benefit from the synergies of such combinations and which represent the
lowest level at which Management monitors business performance.
Goodwill has therefore been allocated to each of the operating segments: Projects, Energy and
Telecom:
(Euro/million)
31.12.2022
Currency
translation
differences
31.12.2023
Energy goodwill
1,146
(22)
1,124
Projects goodwill
244
(4)
240
Telecom goodwill
301
(5)
296
Total goodwill
1,691
(31)
1,660
The cash flows for all CGUs were determined as follows:
a)
post-tax cash flow for 2024 was based on the Group's 2024 budget, approved by the
Board of Directors on 8 February 2024;
b)
cash flow forecasts for 2025-2027 were based on the multi-year plan developed by
management, approved by the Board of Directors on 4 October 2023 and disclosed
during the Capital Markets Day on 5 October 2023. Risks and opportunities related to
sustainability and climate change were implicitly considered in the cash flow forecasts.
In the Projects segment, for example, the explicit flows used in the impairment test
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
380
considered the opportunities arising from electrification and the energy transition to
renewable sources. The flows used in the impairment test for the Energy segment took
account of impacts from electrification and energy transition, just as flows in the Telecom
segment reflect impacts related to digitalisation;
c)
terminal value was calculated using a 2% perpetual growth rate, consistent with
expected long-term world growth forecasts;
d)
impairment tests took into consideration sustainability-related investments intended to
achieve the target of a 55%-60% reduction in global CO2 equivalent emissions by 2030
(from the 2019 baseline) and the Zero Emissions target (Scope 1 and 2) by 2035, thus
taking account of the risks and opportunities arising from climate change;
e)
as described in section C) Financial Risk Management, given the recent results and size
of our Russian subsidiary, no significant direct impacts have been identified with regard
to macroeconomic and geopolitical uncertainty. Furthermore, the crisis in the Middle East
is not expected to have a significant direct impact.
The rate used to discount cash flows was determined on the basis of market information about
the cost of money and asset-specific risks (Weighted Average Cost of Capital, WACC). The
outcome of the test has shown that the recoverable amount of the individual operating segments
is higher than their net invested capital (including the share of allocated goodwill). In particular,
recoverable amount was higher than carrying amount for the Projects operating segment
(501%), Energy operating segment (100%) and Telecom operating segment (94%).
A WACC of 9.2% was used for the Projects segment. For recoverable amount to be equal to
carrying amount, a theoretical WACC of 30.6% would have to be used for this segment. A WACC
of 9.8% was used for the Energy segment. For recoverable amount to be equal to carrying
amount, a theoretical WACC of 16.9% would have to be used for this segment. A WACC of 7.9%
was used for the Telecom segment. For recoverable amount to be equal to carrying amount, a
theoretical WACC of 13.1% would have to be used for this segment.
For recoverable amount to be equal to carrying amount, the growth rate in terminal value for all
segments would have to be negative.
Lastly, by way of pre-emptively checking that the results of goodwill impairment testing were
not affected by the new organisational structure coming into effect on 1 January 2024, a specific
quantitative test was carried out by aggregating the results/headroom of impairment tests for
the new organisation using specific mapping criteria between the future and current operating
segments, in order to reconcile them to the current structure. The exercise performed on the
basis of the new segment structure also confirmed the absence of the need for impairment.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
381
3. EQUITY-ACCOUNTED INVESTMENTS
This balance, amounting to Euro 218 million, has decreased by Euro 169 million since 31
December 2022, when it amounted to Euro 387 million, reflecting the effects shown in the
following table:
(Euro/million)
31.12.2023
Investments in
associates
Opening balance
387
Movements:
- Currency translation differences
(21)
- Share of net profit/(loss)
33
- Dividends
(13)
- Impairment
(168)
Closing balance
218
(Euro/million)
31.12.2022
Investments in
associates
Opening balance
360
Movements:
- Currency translation differences
(8)
- Share of net profit/(loss)
47
- Dividends
(10)
- Other movements
(2)
Closing balance
387
Details of investments in equity-accounted companies are as follows:
(Euro/million)
31.12.2023
31.12.2022
Yangtze Optical Fibre and Cable Joint Stock Limited Company
174
335
Yangtze Optical Fibre & Cable (Shanghai) Co. Ltd.
19
27
Kabeltrommel Gmbh & Co.K.G.
7
6
Elkat Ltd.
9
11
Power Cables Malaysia Sdn Bhd
9
8
Total equity-accounted investments
218
387
The value of investments includes Euro 33 million for the share of net profit (loss) of equity-
accounted companies.
Information about the nature of the main investments in associates:
Company name
Registered office
% owned
Yangtze Optical Fibre and Cable Joint Stock Limited Company
China
23.73%
Yangtze Optical Fibre & Cable (Shanghai) Co. Ltd
China
42.80%
Kabeltrommel GmbH & Co.K.G.
Germany
44.93%
Power Cables Malaysia Sdn Bhd
Malaysia
40.00%
Elkat Ltd.
Russia
40.00%
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
382
Yangtze Optical Fibre and Cable Joint Stock Limited Company is a Chinese company formed in
1988 whose main shareholders are: China Huaxin Post and Telecommunication Economy
Development Center, Wuhan Yangtze Communications Industry Group Company Ltd. and
Prysmian Group. The company is one of the industry's most important manufacturers of optical
fibre and cables. Its products and solutions are sold in more than 50 countries, including the
United States, Japan, the Middle East and Africa.
The company was listed on the Main Board of the Hong Kong Stock Exchange in December 2014
and in July 2018 was also listed on the Shanghai Stock Exchange.
At 31 December 2023, the fair value of the investment in Yangtze Optical Fibre and Cable Joint
Stock Limited Company is basically in line with carrying amount, after recognising an
impairment loss of Euro 168 million in view of the fact that market value was significantly below
book value.
Yangtze Optical Fibre & Cable (Shanghai) Co. Ltd, formed in 2002 and based in Shanghai (China),
is an associate company, 25% of whose share capital is held by Prysmian Group and 75% by
Yangtze Optical Fibre and Cable Joint Stock Limited Company. The company specialises in the
manufacture and sale of optical fibre and cables, offering a wide range of optical fibre cables and
accessories, services and FTTx solutions.
Kabeltrommel GmbH & Co. K.G. is a German company that heads a consortium for the
production, procurement, management and sale of disposable and reusable cable carrying
devices (drums). The services offered by the company include both the sale of cable drums, and
the complete management of logistical services such as drum shipping, handling and subsequent
collection. The company operates primarily in the German market.
Power Cables Malaysia Sdn Bhd, a company based in Malaysia, manufactures and sells power
cables and conductors, with its prime specialism high voltage products.
Elkat Ltd. is based in Russia and manufactures and sells copper conductors; it is the only
company certified by the LME to test copper cathodes for the local market.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
383
The following table reports key financial figures for the principal investments in associates (n.a.
if figures are not yet available):
(Euro/million)
Kabeltrommel
Gmbh &
Co.K.G.
Yangtze
Optical Fibre
and Cable
Joint Stock
Limited
Company (*)
Elkat Ltd.
Yangtze
Optical Fibre
& Cable
(Shanghai)
Co. Ltd
Power Cables
Malaysia Sdn
Bhd
31.12.2023
30.09.2023
31.12.2023
31.12.2023
31.12.2023
Non-current assets
n.a
1,824
n.a
10
8
Current assets
n.a
2,008
n.a
67
27
Total assets
n.a
3,832
n.a
77
35
Equity
n.a
1,910
n.a
44
17
Non-current liabilities
n.a
727
n.a
3
1
Current liabilities
n.a
1,195
n.a
30
17
Total equity and liabilities
n.a
3,832
n.a
77
35
2023
2023
2023
2023
2023
Sales of goods and services
n.a
1,316
n.a
106
53
Net profit/(loss) for the year
n.a
108
n.a
2
2
Comprehensive income/(loss) for
the year
n.a
119
n.a
2
2
Dividends received
2
11
-
-
-
(*)
The figures for Yangtze Optical Fibre and Cable Joint Stock Limited Company, a company listed on the Hong Kong
Stock Exchange, refer to its latest published financial results which relate to the first nine months of 2023.
(Euro/million)
Kabeltrommel
Gmbh &
Co.K.G.
Yangtze
Optical Fibre
and Cable
Joint Stock
Limited
Company
Elkat Ltd.
Yangtze
Optical Fibre
& Cable
(Shanghai)
Co. Ltd
Power Cables
Malaysia Sdn
Bhd
31.12.2022
31.12.2022
31.12.2022
31.12.2022
31.12.2022
Non-current assets
10
1,738
8
10
9
Current assets
21
2,095
26
82
34
Total assets
31
3,833
34
92
43
Equity
11
1,976
32
46
17
Non-current liabilities
13
760
-
4
2
Current liabilities
7
1,097
2
42
24
Total equity and liabilities
31
3,833
34
92
43
2022
2022
2022
2022
2022
Sales of goods and services
46
1,954
313
88
77
Net profit/(loss) for the year
5
164
7
1
3
Comprehensive income/(loss) for
the year
5
168
6
1
3
Dividends received
2
8
-
-
-
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
384
4. OTHER INVESTMENTS AND FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
COMPREHENSIVE INCOME
Details are as follows:
(Euro/million)
31.12.2023
31.12.2022
Other investments at fair value through other comprehensive income (non-
current)
10
12
Financial assets at fair value through other comprehensive income (current)
24
11
Total
34
23
Other investments at fair value through other comprehensive income (non-current) report
shareholdings that are not intended for sale in the near term.
Financial assets at fair value through other comprehensive income (current) include securities
that mature within 12 months of the reporting date and those that could possibly be sold in the
near term.
Other investments at fair value through other comprehensive income are analysed as follows:
(Euro/million)
Type of financial
asset
% owned by
the Group
31.12.2023
31.12.2022
Ravin Cables Limited
unlisted shares
51%
9.25
9.25
Tunisie Cables S.A.
unlisted shares
7.55%
0.65
0.93
Cesi Motta S.p.A.
unlisted shares
6.48%
-
0.26
Other
0.46
1.51
Total non-current
10.36
11.95
Other investments and financial assets at fair value through other comprehensive income are
denominated in the following currencies:
(Euro/million)
31.12.2023
31.12.2022
Euro
24
13
Tunisian Dinar
1
1
Indian Rupee
9
9
Total
34
23
Other investments at fair value through other comprehensive income are classified in Level 3 of
the fair value hierarchy, while Financial assets at fair value through other comprehensive income
fall under Level 1 of the fair value hierarchy.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
385
5. TRADE AND OTHER RECEIVABLES
Details are as follows:
(Euro/million)
31.12.2023
Attività non correnti
Non-current
Current
Total
Trade receivables
-
2,085
2,085
Allowance for doubtful accounts
-
(98)
(98)
Total trade receivables
-
1,987
1,987
Other receivables:
Tax receivables
8
298
306
Financial receivables
3
22
25
Prepaid finance costs
4
2
6
Receivables from employees
1
6
7
Pension plan receivables
-
2
2
Construction contracts
-
485
485
Advances to suppliers
-
133
133
Other
20
106
126
Total other receivables
36
1,054
1,090
Total
36
3,041
3,077
(Euro/million)
31.12.2022
Non-current
Current
Total
Trade receivables
-
2,039
2,039
Allowance for doubtful accounts
-
(97)
(97)
Total trade receivables
-
1,942
1,942
Other receivables:
Tax receivables
12
278
290
Financial receivables
3
8
11
Prepaid finance costs
-
2
2
Receivables from employees
1
3
4
Pension plan receivables
-
2
2
Construction contracts
-
503
503
Advances to suppliers
5
44
49
Other
13
138
151
Total other receivables
34
978
1,012
Total
34
2,920
2,954
No individual customer accounted for more than 10% of the Group's net receivables in 2023,
like in 2022.
Trade receivables
The gross amount of past due receivables that are totally or partially impaired is Euro 346 million
at 31 December 2023 (Euro 360 million at 31 December 2022).
Past due impaired receivables are aged as follows:
(Euro/million)
31.12.2023
31.12.2022
1 to 30 days
183
186
31 to 90 days
72
80
91 to 180 days
28
25
181 to 365 days
24
15
More than 365 days
39
54
Total
346
360
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
386
The value of trade receivables past due but not impaired is Euro 94 million at 31 December 2023
(Euro 76 million at 31 December 2022). These receivables mainly relate to customers in the
Projects operating segment which, given the nature of the counterparties, are not considered
necessary to impair.
(Euro/million)
31.12.2023
31.12.2022
1 to 30 days
7
6
31 to 90 days
3
2
91 to 180 days
1
1
181 to 365 days
2
1
More than 365 days
81
66
Total
94
76
The total value of trade receivables not past due is Euro 1,633 million at 31 December 2023
(Euro 1,595 million at 31 December 2022). There are no particular problems with the quality of
these receivables and there are no material amounts that would otherwise be past due if their
original due dates had not been renegotiated.
The following table breaks down trade and other receivables according to the currency in which
they are expressed:
(Euro/million)
31.12.2023
31.12.2022
Euro
1,320
995
US Dollar
785
772
British Pound
294
283
Canadian Dollar
146
68
Chinese Renminbi (Yuan)
108
155
Brazilian Real
95
166
Mexican Peso
46
46
Turkish Lira
36
94
Swedish Krona
33
28
Columbian Peso
24
24
Romanian Leu
24
16
Chilean Peso
21
28
Thai Baht
19
10
Singapore Dollar
16
8
Indonesian Rupiah
15
11
Other currencies
95
250
Total
3,077
2,954
The allowance for doubtful accounts amounts to Euro 98 million at 31 December 2023 (Euro 97
million at 31 December 2022). Movements in this allowance are shown in the following table:
(Euro/million)
31.12.2023
31.12.2022
Opening balance
97
97
Movements:
- Increases in allowance
14
10
- Releases
(10)
(6)
- Bad debt write-offs
(3)
(4)
Closing balance
98
97
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
387
Increases in and releases from the allowance for doubtful accounts are reported in "Other
expenses" in the income statement.
Other receivables
Other receivables include "Prepaid finance costs" of Euro 6 million at 31 December 2023,
primarily relating to arrangement costs for the Revolving Credit Facility 2023 agreed with a
syndicate of leading banks on 20 June 2023.
Prepaid finance costs of Euro 2 million at 31 December 2022 mainly related to the Revolving
Credit Facility 2019.
"Construction contracts" represent the value of contracts in progress, determined as the
difference between the costs incurred plus the related profit margin, net of recognised losses,
and the amount billed by the Group.
The following table shows how these amounts are reported between assets and liabilities:
(Euro/million)
31.12.2023
31.12.2022
Construction contract revenue to date
15,718
13,773
Amounts billed
(16,860)
(14,095)
Net amount due from/(to) customers for construction
contracts
(1,142)
(322)
Of which:
Other receivables for construction contracts
485
503
Other payables for construction contracts
(1,627)
(825)
6. INVENTORIES
Details are as follows:
(Euro/million)
31.12.2023
31.12.2022
Raw materials
755
780
of which allowance for obsolete and slow-moving raw materials
(117)
(84)
Work in progress and semi-finished goods
533
526
of which allowance for obsolete and slow-moving work in progress
and semi-finished goods
(29)
(21)
Finished goods (*)
976
935
of which allowance for obsolete and slow-moving finished goods
(124)
(90)
Total
2,264
2,241
(*)
Finished goods also include those for resale.
7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Details are as follows:
(Euro/million)
31.12.2023
31.12.2022
Listed securities
85
49
Unlisted securities
-
221
Total
85
270
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
388
Financial assets at fair value through profit or loss, amounting to Euro 85 million (Euro 270
million at 31 December 2022) refer to funds in which the Brazilian subsidiaries have temporarily
invested their liquidity. The reduction since 31 December 2022 is primarily due to the Parent
Company's withdrawal of cash previously invested in money market funds.
Movements in these assets are analysed as follows:
(Euro/million)
31.12.2023
31.12.2022
Opening balance
270
244
Movements:
- Currency translation differences
(9)
(8)
- Securities purchased
33
39
- Securities sold
(214)
-
- Other
5
(5)
Closing balance
85
270
8. DERIVATIVES
Details are as follows:
(Euro/million)
31.12.2023
Asset
Liability
Interest rate derivatives (CFH)
11
-
Forex derivatives on commercial transactions (CFH)
7
6
Metal derivatives (CFH)
22
41
Metal derivatives
1
-
Total non-current
41
47
Forex derivatives on commercial transactions (CFH)
5
19
Interest rate derivatives (CFH)
20
-
Metal derivatives (CFH)
40
13
Forex derivatives on commercial transactions
5
6
Forex derivatives on financial transactions
2
9
Metal derivatives
8
10
Total current
80
57
Total
121
104
(Euro/million)
31.12.2022
Asset
Liability
Interest rate derivatives (CFH)
59
-
Forex derivatives on commercial transactions (CFH)
21
31
Metal derivatives (CFH)
52
29
Metal derivatives
3
1
Total non-current
135
61
Forex derivatives on commercial transactions (CFH)
7
22
Interest rate derivatives (CFH)
13
-
Metal derivatives (CFH)
44
31
Forex derivatives on commercial transactions
4
8
Forex derivatives on financial transactions
3
7
Metal derivatives
-
4
Total current
71
72
Total
206
133
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
389
Forex derivatives have a notional value of Euro 3,243 million at 31 December 2023 (Euro 6,225
million at 31 December 2022); total notional value at 31 December 2023 includes Euro 1,201
million in derivatives designated as cash flow hedges (Euro 2,770 million at 31 December 2022).
Interest rate derivatives designated as cash flow hedges (CFH) refer to:
-
interest rate swaps for an overall notional value of Euro 110 million, arranged with the
objective of hedging variable rate interest flows over the period 2018-2024;
-
interest rate swaps for an overall notional value of Euro 100 million, arranged with the
objective of hedging variable rate interest flows over the period 2020-2024;
-
interest rate swaps for an overall notional value of Euro 75 million, arranged with the
objective of hedging variable rate interest flows over the period 2021-2025;
-
interest rate swaps for an overall notional value of Euro 600 million, arranged with the
objective of hedging variable rate interest flows over the period 2022-2027;
-
interest rate swaps for an overall notional value of Euro 300 million, arranged with the
objective of hedging variable rate interest flows over the period 2022-2025;
-
interest rate swaps for an overall notional value of Euro 300 million, arranged with the
objective of hedging variable rate interest flows over the period 2022-2026.
At 31 December 2023, like at 31 December 2022, almost all the derivative contracts had been
entered into with major financial institutions.
Metal derivatives have a notional value of Euro 1,727 million at 31 December 2023 (Euro 2,169
million at 31 December 2022).
The following tables show the impact of offsetting assets and liabilities for derivative instruments,
done on the basis of master netting arrangements (ISDA and similar agreements). They also
show the effect of potential offsetting in the event of currently unforeseen default events:
(Euro/million)
31.12.2023
Gross
derivatives
Amounts
offset
Derivatives
recognised
in statement
of financial
position
Amounts
not offset
(1)
Net
derivatives
Assets
Forex derivatives
19
-
19
(12)
7
Interest rate derivatives
31
-
31
-
31
Metal derivatives
71
-
71
(58)
13
Total assets
121
-
121
(70)
51
Liabilities
Forex derivatives
40
-
40
(12)
28
Interest rate derivatives
-
-
-
-
-
Metal derivatives
64
-
64
(58)
6
Total liabilities
104
-
104
(70)
34
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
390
(Euro/million)
31.12.2022
Gross
derivatives
Amounts
offset
Derivatives
recognised
in statement
of financial
position
Amounts
not offset
(1)
Net
derivatives
Assets
Forex derivatives
35
-
35
(25)
10
Interest rate derivatives
72
-
72
-
72
Metal derivatives
99
-
99
(33)
66
Total assets
206
-
206
(58)
148
Liabilities
Forex derivatives
68
-
68
(25)
43
Interest rate derivatives
-
-
-
-
-
Metal derivatives
65
-
65
(33)
32
Total liabilities
133
-
133
(58)
75
(1)
Derivatives potentially offsettable in the event of default events under master netting arrangements.
The following table shows movements in both reporting periods in the cash flow hedge reserve
for designated hedging derivatives:
(Euro/million)
2023
2022
Gross
reserve
Tax
effect
Gross
reserve
Tax
effect
Opening balance
93
(22)
139
(34)
Changes in fair value
(45)
10
(46)
12
Reserve for other finance costs/(income)
3
-
1
-
Release to construction contract costs/(revenues)
(5)
-
(1)
-
Other
2
-
-
-
Closing balance
48
(12)
93
(22)
9. CASH AND CASH EQUIVALENTS
Details are as follows:
(Euro/million)
31.12.2023
31.12.2022
Cash and cheques
5
4
Bank and postal deposits
1,736
1,281
Total
1,741
1,285
Cash and cash equivalents, deposited with major financial institutions, are managed centrally
through the Group's treasury company and by its various operating units.
Cash and cash equivalents managed by the Group's treasury company amounted to Euro 1,273
million at 31 December 2023, while at 31 December 2022 the figure was Euro 838 million.
The change in cash and cash equivalents is commented on in Note 37. Statement of cash flows.
10. ASSETS HELD FOR SALE
Assets held for sale, amounting to Euro 9 million at 31 December 2023, mainly refer to a building
owned by a foreign subsidiary for which a preliminary sale agreement has been reached.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
391
Consolidated equity has recorded an increase of Euro 201 million since 31 December 2022,
mainly reflecting the net effect of:
-
the net profit for the year of Euro 547 million;
-
the distribution of Euro 165 million in dividends;
-
negative currency translation differences of Euro 201 million;
-
a positive change of Euro 57 million in the share-based payment reserve related to long-
term incentive plans and the employee share purchase plan;
-
a decrease of Euro 8 million in the reserves for actuarial gains and losses on employee
benefits;
-
an increase of Euro 38 million for the effects of hyperinflation;
-
a negative post-tax change of Euro 35 million in the fair value of derivatives designated
as cash flow hedges and of Euro 19 million in their hedging costs;
-
a decrease of Euro 6 million due to a third-party purchase of subsidiary-company shares;
-
a post-tax decrease of Euro 8 million in the fair value of financial assets recorded through
other comprehensive income.
At 31 December 2023, the share capital of Prysmian S.p.A. consisted of 276,534,448 shares,
each of nominal value Euro 0.10 for a total of Euro 27,653,444.80.
Movements in the ordinary shares and treasury shares of Prysmian S.p.A. are reported in the
following table:
Ordinary shares
Treasury shares
Total
Balance at 31 December 2021
268,144,246
(4,652,868)
263,491,378
Allotments and sales *
-
40,837
40,837
Balance at 31 December 2022
268,144,246
(4,612,031)
263,532,215
Capital increase
(1)
8,390,202
-
8,390,202
Allotments and sales
**
-
882,957
882,957
Balance at 31 December 2023
276,534,448
(3,729,074)
272,805,374
(1) Issue of new shares serving the long-term incentive plan for Group employees (8,000,000 shares) and the BE IN plan (390,202 shares).
* Allotment and/or sale of treasury shares under the YES Group employee share purchase plan.
** Allotment and/or sale of treasury shares under Group employee share purchase plans.
Treasury shares
Movements in treasury shares during 2023 refer to the allotment and sale of treasury shares
serving the Group employee share purchase plan.
The following table shows movements in treasury shares during the reporting period:
Number of
shares
Total
nominal
value
(in Euro)
% of
share
capital
Average
unit
value
(in Euro)
Total
carrying value
(in Euro)
Balance at 31 December 2021
4,652,868
465,288
1.74%
20
94,694,176
- Allotments and sales
(40,837)
(4,084)
-
20
(813,473)
Balance at 31 December 2022
4,612,031
461,204
1.72%
20
93,880,703
- Allotments and sales
(882,957)
(88,296)
-
20
(17,588,503)
Balance at 31 December 2023
3,729,074
372,908
1.35%
20
76,292,200
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
392
12. BORROWINGS FROM BANKS AND OTHER LENDERS
Details are as follows:
(Euro/million)
31.12.2023
Non-current
Current
Total
Borrowings from banks and other lenders
333
262
595
Sustainability-Linked Term Loan
1,193
25
1,218
Mediobanca Loan
-
100
100
Intesa Loan
-
151
151
Convertible Bond 2021
728
-
728
Lease liabilities
234
70
304
Total
2,488
608
3,096
(Euro/million)
31.12.2022
Non-current
Current
Total
Borrowings from banks and other lenders
429
58
487
Sustainability-Linked Term Loan
1,191
6
1,197
Unicredit Loan
-
200
200
Mediobanca Loan
100
-
100
Intesa Loan
150
1
151
Convertible Bond 2021
718
-
718
Lease liabilities
156
58
214
Total
2,744
323
3,067
The following tables provide an analysis by maturity and currency of borrowings from banks and
other lenders (excluding lease liabilities) at 31 December 2023 and 2022:
(Euro/million)
31.12.2023
Variable interest rate
Fixed interest rate
Total
Euro
USD
Other
currencies
Euro
USD
Other
currencies
Due within 1 year
497
8
2
20
6
4
537
Due between 1 and 2 years
74
-
-
1
-
-
75
Due between 2 and 3 years
-
-
-
729
-
-
729
Due between 3 and 4 years
1,195
-
-
1
-
-
1,196
Due between 4 and 5 years
-
-
-
1
-
-
1
Due after more than 5 years
254
-
-
-
-
-
254
Total
2,020
8
2
752
6
4
2,792
Average interest rate in period,
as per contract
3.9%
3.4%
21.5%
1.3%
2.2%
29.6%
3.3%
Average interest rate in period,
including IRS effect (a)
2.6%
3.4%
21.5%
1.3%
2.2%
29.6%
2.3%
(a)
Interest rate swaps have been put in place to hedge interest rate risk on variable rate loans in Euro. At 31 December
2023, the total hedged amount equates to 73.2% of Euro-denominated debt at that date. Interest rate hedges consist
of interest rate swaps which exchange a variable rate (3 or 6-month Euribor for loans in Euro) with an average fixed
rate (fixed rate + spread) of 2.1% for Euro-denominated debt. The percentages representing the average fixed rate
refer to 31 December 2023.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
393
(Euro/million)
31.12.2022
Variable interest rate
Fixed interest rate
Total
Euro
USD
Other
currencies
Euro
USD
Other
currencies
Due within 1 year
224
-
7
28
3
2
264
Due between 1 and 2 years
459
9
-
-
-
-
468
Due between 2 and 3 years
74
-
-
-
-
-
74
Due between 3 and 4 years
-
-
-
718
-
-
718
Due between 4 and 5 years
1,194
-
-
-
-
-
1,194
Due after more than 5 years
135
-
-
-
-
-
135
Total
2,086
9
7
746
3
2
2,853
Average interest rate in
period, as per contract
1.0%
1.3%
11.0%
1.3%
2.3%
-
1.1%
Average interest rate in
period, including IRS effect
1.5%
1.3%
11.0%
1.3%
2.3%
-
1.5%
Risks relating to sources of finance and to financial investments/receivables are discussed in the
section entitled "Risks factors" forming part of the Integrated Annual Report contained in this
document.
Borrowings from banks and other lenders and Bonds are analysed as follows:
(Euro/million)
31.12.2023
31.12.2022
CDP Loans
297
176
EIB Loans
248
246
Sustainability-Linked Term Loan
1,218
1,197
Unicredit Loan
-
200
Mediobanca Loan
100
100
Intesa Loan
151
151
Other borrowings
50
65
Borrowings from banks and other lenders
2,064
2,135
Convertible Bond 2021
728
718
Total
2,792
2,853
The Group's principal credit agreements in place at the reporting date are as follows:
Revolving Credit Facility 2019 and 2023
On 3 April 2019, the Group renewed a Euro 1,000 million five-year revolving credit facility with
a syndicate of leading Italian and international banks. This line was extinguished on 20 June
2023 at the same time as agreeing the new Revolving Credit Facility 2023. The new facility may
be drawn down for business and working capital needs, including the refinancing of existing
facilities, and to issue guarantees. It has a five-year term, with an option to extend to six and
seven years. In addition, with the aim of deepening the embedding of ESG factors into the
Group's strategy, Prysmian Group has chosen to include important environmental and social
KPIs among the parameters determining the terms of credit. The renewed revolving credit facility
is in fact Sustainability-Linked, being tied to the decarbonisation targets already set by the Group
(annual GHG emissions from 2023 to 2030), to the ratio of female white-collar and executive
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
394
hires to total Group hires, and to the number of sustainability audits performed in the supply
chain, as better described in the section “Sustainability Linked Term Loan”.
The achievement or failure of these indicators leads to a positive or negative adjustment of the
margin annually applied.
At 31 December 2023, this facility was not being used.
CDP Loans
On 28 October 2019, the Group entered into an agreement with Cassa Depositi e Prestiti S.p.A.
(CDP) for a Euro 100 million long-term loan for 4 years and 6 months from the date of signing,
with a bullet repayment at maturity. The purpose of this loan is to finance part of the Group's
capital expenditure and expenditure on research, development and innovation in Italy and
Europe. Interest rate swaps have been arranged in respect of this loan, for an overall notional
value of Euro 100 million, with the objective of hedging variable rate interest flows over the
period 2020-2024.
On 28 January 2021, a second loan was agreed with CDP for Euro 75 million with a term of 4
years and 6 months, for the purpose of financing part of the Group's expenditure on purchasing
the "Leonardo Da Vinci" cable-laying vessel. This loan, drawn down in full on 9 February 2021,
is repayable in a lump sum at maturity on 28 July 2025. Interest rate swaps have been arranged
in respect of this loan, for an overall notional value of Euro 75 million, with the objective of
hedging variable rate interest flows over the period 2021-2025.
On 6 March 2023, another long-term 6-year loan with CDP was announced for Euro 120 million,
for the purpose of supporting the Group's R&D programs in Italy and Europe (specifically in Italy,
France, Germany, Spain and the Netherlands). The loan, received on 15 February 2023, is
repayable in a lump sum at maturity on 15 February 2029.
At 31 December 2023, the fair value of the CDP Loans approximated their carrying amount.
EIB Loans
On 10 November 2017, Prysmian S.p.A. entered into a loan agreement with the European
Investment Bank (EIB) for Euro 110 million to support the Group's R&D programs in Europe over
the period 2017-2020. The loan was received on 29 November 2017 and is repayable in a lump
sum at maturity on 29 November 2024. Interest rate swaps have been arranged in respect of
this loan, for an overall notional value of Euro 110 million, with the objective of hedging variable
rate interest flows over the period 2018-2024.
On 3 February 2022, the Group announced that it had finalised a loan from the EIB for Euro 135
million to support its European R&D program in the energy and telecom cable systems sector
over the period 2021-2024.
This loan is specifically intended to support projects to be developed at R&D centres in five
European countries: Italy, France, Germany, Spain and the Netherlands.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
395
The loan, received on 28 January 2022, is repayable in a lump sum at maturity on 29 January
2029.
At 31 December 2023, the fair value of the EIB Loans approximated their carrying amount.
Sustainability-Linked Term Loan
On 7 July 2022, the Group entered into a medium-term Sustainability-Linked loan for Euro 1,200
million with a syndicate of leading Italian and international banks. The loan was drawn down in
full on 14 July 2022 and primarily used to refinance the Euro 1 billion term loan obtained in
2018, which was thus repaid early on the same date. Interest rate swaps have been arranged
in respect of this loan, for an overall notional value of Euro 1,200 million, with the objective of
hedging variable rate interest flows.
With the aim of strengthening its financial structure and embedding ESG factors in the Group's
strategy, Prysmian Group has chosen to include important environmental and social KPIs among
the parameters determining the terms of the loan.
In fact, the Sustainability-Linked Term Loan requires annual compliance with ESG indicators.
The indicators to be met for 2023 are as follows:
•
Scope 1 and Scope 2 CO2 emissions, calculated using the market-based method, less
than or equal to 654 ktCO2eq (see the "Scorecard 2023-2025" within the "Non-Financial
Statement" included in the Directors' Report);
•
Performance of at least 34 sustainability audits of its suppliers (see the "Sustainable value
chain" chapter of the "Non-Financial Statement" included in the Directors' Report);
•
41.1% or more of the Group's total white-collar hires must be women (see "Prysmian's
Human Capital" within the "Non-Financial Statement" included in the Directors' Report).
The achievement or otherwise of these indicators entails a positive or negative adjustment of
the annual spread.
At 31 December 2023, the fair value of the Sustainability-Linked Term Loan approximated its
carrying amount.
Unicredit Loan
On 15 November 2018, Prysmian S.p.A. entered into an agreement with Unicredit for a long-
term cash loan for a maximum amount of Euro 200 million for 5 years from the date of signing.
The loan was drawn down in full on 16 November 2018 and repaid in November 2023, at the
natural expiry date.
Mediobanca Loan
On 20 February 2019, the Group entered into an agreement with Mediobanca for a Euro 100
million long-term loan for 5 years from the date of signing. The loan was drawn down in full on
22 February 2019 and is repayable in a lump sum at maturity. The interest rate applied is indexed
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
396
to 3M and 6M Euribor, as chosen by the company. At 31 December 2023, the fair value of this
loan approximated its carrying amount.
Intesa Loan
On 11 October 2019, the Group entered into an agreement with Intesa Sanpaolo for a Euro 150
million long-term loan for 5 years from the date of signing. The loan was drawn down in full on
18 October 2019 and is repayable in a lump sum at maturity. At 31 December 2023, the fair
value of this loan approximated its carrying amount.
The fair value of loans has been determined using valuation techniques that refer to observable
market data (Level 2 of the fair value hierarchy).
The following tables summarise the committed lines available to the Group at 31 December 2023
and 31 December 2022:
(Euro/million)
31.12.2023
Total lines
Drawn
Undrawn
Revolving Credit Facility 2023
1,000
-
1,000
Sustainability-Linked Term Loan
1,200
(1,200)
-
EIB Loans
245
(245)
-
CDP Loans
295
(295)
-
Intesa Loan
150
(150)
-
Mediobanca Loan
100
(100)
-
Total
2,990
(1,990)
1,000
(Euro/million)
31.12.2022
Total lines
Drawn
Undrawn
Revolving Credit Facility 2019
1,000
-
1,000
Sustainability-Linked Term Loan
1,200
(1,200)
-
EIB Loans
245
(245)
-
Unicredit Loan
200
(200)
-
CDP Loans
175
(175)
-
Intesa Loan
150
(150)
-
Mediobanca Loan
100
(100)
-
Total
3,070
(2,070)
1,000
Bonds
As at 31 December 2023, Prysmian Group had the following bond issue in place.
Convertible Bond 2021
On 26 January 2021, the Group announced the successful placement of an equity-linked bond
(the "Bonds") for the sum of Euro 750 million.
The Bonds have a 5-year maturity and denomination of Euro 100,000 each and are zero coupon.
The issue price was Euro 102.50, representing a yield to maturity of minus 0.49% per annum.
The initial price for the conversion of the Bonds into the Company's ordinary shares is Euro
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
397
40.2355, representing a 47.50% premium on the weighted average price by volume of Prysmian
ordinary shares on the Milan Stock Exchange between the start and end of the book-building
process on 26 January 2021.
The shareholders' meeting held on 28 April 2021 authorised the convertibility of the equity-
linked bond and approved the proposal for a share capital increase serving the conversion of the
convertible bond for a maximum nominal amount of Euro 1,864,025.50 by issuing up to
18,640,255 ordinary shares with a nominal value of Euro 0.10 each.
As provided for in the Bond regulations, the Group has the option to call all - but not just a part
- of the Bonds at their principal amount from 12 February 2024, should the share price exceed
130% of the conversion price for at least 20 days within a period of 30 consecutive trading days.
On 14 June 2021, the Bond was admitted to listing on the multilateral trading facility of the
Vienna Stock Exchange.
The following table summarises the values of the Convertible Bond 2021 as at 31 December
2023:
(Euro/million)
Value of Convertible Bond 2021
768
Equity reserve for convertible bond
(49)
Change in conversion option fair value
(16)
Issue date net balance
703
Interest - non-monetary
27
Related costs
(2)
Balance at 31 December 2023
728
At 31 December 2023, the fair value of the Convertible Bond 2021 (equity component and debt
component) was Euro 830 million, of which Euro 693 million attributable to the debt component
and Euro 137 million to the equity component. In the absence of trading on the relevant market,
the fair value of the bond's debt and equity components has been determined using valuation
techniques that refer to observable market data (Level 2 of the fair value hierarchy).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
398
Borrowings from banks and other lenders and Lease liabilities
The following tables report movements in Borrowings from banks and other lenders and in Lease
liabilities:
(Euro/million)
CDP
Loans
EIB
Loans
Conv.
Bond
Sustainability
Term Loan
Unicredit,
Mediobanca
and Intesa
Loans
Other
borrowings/
Lease
liabilities
Total
Balance at
31 December 2022
176
246
718
1,197
451
279
3,067
Currency translation
differences
-
-
-
-
-
(5)
(5)
New funds
120
-
-
-
-
39
159
Repayments
-
-
-
-
(200)
(112)
(312)
Amortisation of bank and
financial fees and other
expenses
(1)
-
1
2
-
-
2
New IFRS 16 leases
-
-
-
-
-
153
153
Interest and other
movements
2
2
9
19
-
-
32
Balance at
31 December 2023
297
248
728
1,218
251
354
3,096
(Euro/million)
CDP
Loans
EIB
Loans
Conv.
Bonds
Non-conv.
Bond
Term
Loan
Unicredit,
Mediobanca
and Intesa
Loans
Other
borrowings/
Lease
liabilities
Total
Balance at
31 December 2021
175
110
957
763
999
450
275
3,729
Currency translation
differences
-
-
-
-
-
-
3
3
New funds
-
135
-
-
1,200
-
26
1,361
Repayments
-
-
(250)
(763)
(1,000)
-
(83)
(2,096)
Amortisation of bank and
financial fees and other
expenses
-
-
1
-
(8)
-
-
(7)
New IFRS 16 leases
-
-
-
-
-
-
58
58
Interest and other
movements
1
1
10
-
6
1
-
19
Balance at
31 December 2022
176
246
718
-
1,197
451
279
3,067
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
399
(Euro/million)
Note
31.12.2023
31.12.2022
CDP Loans
12
194
175
EIB Loans
12
135
245
Convertible Bond 2021
12
728
718
Sustainability-Linked Term Loan 2022
12
1,193
1,191
Mediobanca Loan
12
-
100
Intesa Loan
12
-
150
Lease liabilities
12
234
156
Other financial payables
12
4
9
Total long-term financial payables
2,488
2,744
CDP Loans
12
103
1
EIB Loans
12
113
1
Sustainability-Linked Term Loan 2022
12
25
6
Unicredit Loan
12
-
200
Mediobanca Loan
12
100
-
Intesa Loan
12
151
1
Lease liabilities
12
70
58
Forex derivatives on financial transactions
8
9
7
Other financial payables
12
46
56
Total short-term financial payables
617
330
Total financial liabilities
3,105
3,074
Long-term financial receivables
5
3
3
Long-term bank fees
5
4
-
Financial assets at amortised cost
3
3
Non-current interest rate derivatives
8
11
59
Current interest rate derivatives
8
20
13
Forex derivatives on financial transactions (current)
8
2
3
Short-term financial receivables
5
22
8
Short-term bank fees
5
2
2
Financial assets at FVPL
7
85
270
Financial assets at FVOCI
4
24
11
Cash and cash equivalents
9
1,741
1,285
Total financial assets
1,917
1,657
Net financial debt
1,188
1,417
The following table presents a reconciliation of the Group's net financial debt to the amount
reported in accordance with the requirements of Consob Communication no. 5/21 of 29 April
2021 concerning compliance with the "Guidelines on disclosure requirements under the
Prospectus Regulation" published by ESMA on 4 March 2021 (reference ESMA32-382-1138):
(Euro/million)
Note
31.12.2023
31.12.2022
Net financial debt - as reported above
1,188
1,417
Adjustments to exclude:
Long-term financial receivables
5
6
6
Long-term bank fees
5
4
-
Cash flow hedging derivatives (assets)
31
72
Adjustments to include:
Net non-hedging forex derivatives on commercial
transactions, excluding non-current assets
8
1
4
Net non-hedging metal derivatives, excluding
non-current assets
8
2
5
Recalculated net financial debt
1,232
1,504
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
400
13. TRADE AND OTHER PAYABLES
Details are as follows:
(Euro/million)
31.12.2023
Non-current
Current
Total
Trade payables
-
2,199
2,199
Total trade payables
-
2,199
2,199
Other payables:
Tax and social security payables
1
241
242
Advances from customers
27
1,717
1,744
Payables to employees
2
193
195
Accrued expenses
-
104
104
Other
23
214
237
Total other payables
53
2,469
2,522
Total
53
4,668
4,721
(Euro/million)
31.12.2022
Non-current
Current
Total
Trade payables
-
2,718
2,718
Total trade payables
-
2,718
2,718
Other payables:
Tax and social security payables
1
257
258
Advances from customers
19
952
971
Payables to employees
-
188
188
Accrued expenses
-
111
111
Other
8
186
194
Total other payables
28
1,694
1,722
Total
28
4,412
4,440
Advances from customers include the liability for construction contracts, amounting to Euro
1,627 million at 31 December 2023 (Euro 825 million at 31 December 2022). This liability
represents the excess of amounts billed by the Group over costs incurred plus accumulated
profits (or losses), recognised using the percentage of completion method.
The following table breaks down trade and other payables according to the currency in which
they are expressed:
(Euro/million)
31.12.2023
31.12.2022
Euro
2,988
2,415
US Dollar
712
968
British Pound
306
267
Brazilian Real
160
149
Chinese Renminbi (Yuan)
139
167
Australian Dollar
76
64
Bahraini Dinar
47
-
Canadian Dollar
25
22
Philippine Peso
25
33
Romanian Leu
21
17
Hungarian Fiorint
17
14
UAE Dirham
12
22
Swedish Krona
11
14
Mexican Peso
9
26
Indonesian Rupiah
8
8
Omani Rial
5
-
Other currencies
160
254
Total
4,721
4,440
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
401
14. PROVISIONS FOR RISKS AND CHARGES
Details are as follows:
(Euro/million)
31.12.2023(*)
Non-current
Current
Total
Restructuring provisions
1
55
56
Legal, contractual and other risks
32
496
528
Environmental risks
16
85
101
Tax risks
9
117
126
Total
58
753
811
(*)
Provisions for risks at 31 December 2023 include Euro 118 million for potential liabilities recorded in application of
IFRS 3 - Business Combinations.
(Euro/million)
31.12.2022 (*)
Non-current
Current
Total
Restructuring provisions
-
18
18
Legal, contractual and other risks
26
450
476
Environmental risks
5
90
95
Tax risks
-
107
107
Total
31
665
696
(*)
Provisions for risks at 31 December 2022 include Euro 125 million for potential liabilities recorded in application of
IFRS 3 - Business Combinations.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
402
The following table presents the movements in these provisions during the reporting period:
(Euro/million)
Restructuring
costs
Legal,
contractual
and other
risks
Environ–
mental
risks
Tax
risks
Total
Balance at 31 December 2022
18
476
95
107
696
Increases
43
150
15
7
215
Uses
(7)
(34)
(2)
(3)
(46)
Releases
1
(61)
(6)
(5)
(71)
Currency translation differences
(1)
(5)
(2)
2
(6)
Other
2
2
1
18
23
Balance at 31 December 2023
56
528
101
126
811
The value of the provision for restructuring at 31 December 2023 (Euro 56 million versus Euro
18 million at 31 December 2022) includes liabilities related to plant closure projects, as better
described in in the Directors' Report in the section entitled "SIGNIFICANT EVENTS DURING THE
YEAR".
The provision for contractual, legal and other risks amounts to Euro 528 million at 31 December
2023 (Euro 476 million at 31 December 2022). This provision mainly includes the provision for
Euro 184 million (Euro 180 million at 31 December 2022) related to antitrust investigations in
progress and legal actions brought by third parties against Group companies as a result of and/or
in connection with decisions adopted by the relevant authorities, as described below. The rest of
this provision refers to provisions related to and arising from business combinations, for risks
related to ongoing and completed contracts and for risks related to commercial disputes.
Antitrust - European Commission proceedings in the high voltage underground and submarine
cables business
By way of introduction, it will be recalled that the European Commission started an investigation
in late January 2009 into several European and Asian electrical cable manufacturers to verify the
existence of alleged anti-competitive practices in the high voltage underground and submarine
cables markets. This investigation was concluded with the decision adopted by the European
Commission, also upheld by the European courts, which found Prysmian Cavi e Sistemi S.r.l.
("Prysmian CS") jointly liable with Pirelli & C. S.p.A. ("Pirelli") for the alleged infringement in the
period from 18 February 1999 to 28 July 2005, and Prysmian Cavi e Sistemi S.r.l. jointly liable
with Prysmian S.p.A. ("Prysmian") and The Goldman Sachs Group Inc. (“Goldman Sachs”) for
the alleged infringement in the period from 29 July 2005 to 28 January 2009. Following the
conclusion of this case, the Group paid the European Commission the amount due within the
prescribed term using provisions already set aside in previous years.
Likewise in the case of General Cable, the European courts confirmed the contents of the
European Commission's decision of April 2014, thus definitively upholding the fine levied against
it under this decision. As a result, the Group went ahead and paid a fine for Euro 2 million.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
403
In November 2014 and October 2019 respectively, Pirelli filed two civil actions, recently
combined, against Prysmian CS and Prysmian in the Court of Milan, seeking (i) to be held
harmless from any claim brought by the European Commission in enforcement of its decision
and for any expenses incidental to such enforcement; (ii) to be held harmless from any third-
party claims for damages relating to the conduct forming the subject of the European
Commission's decision and (iii) to be compensated for the damages allegedly suffered and
quantified as a result of Prysmian CS and Prysmian having requested, in certain pending legal
actions, that Pirelli be held liable for the unlawful conduct found by the European Commission in
the period from 1999 to 2005. As part of the same proceedings, Prysmian CS and Prysmian, in
addition to requesting full dismissal of the claims brought by Pirelli, have filed symmetrical and
opposing counterclaims to those of Pirelli in which they have requested (i) to be held harmless
from any claim brought by the European Commission in enforcement of its decision and for any
expenses incidental to such enforcement; (ii) to be held harmless from any third-party claims
for damages relating to the conduct forming the subject of the European Commission's decision
and (iii) to be compensated for damages suffered as a result of the legal actions brought by
Pirelli. This action is currently pending.
In view of the circumstances described and the developments in the proceedings, the Directors,
assisted also by legal counsel, have recognised what they consider to be an adequate level of
provisions to cover the potential liabilities related to the matters in question.
Antitrust - Claims for damages resulting from the European Commission's 2014 decision
During the first few months of 2017, operators belonging to the Vattenfall Group filed claims in
the High Court of London against a number of cable manufacturers, including companies in the
Prysmian Group, to obtain compensation for damages purportedly suffered as a result of the
alleged anti-competitive practices sanctioned by the European Commission. In June 2020, the
Prysmian companies concerned presented their defence as well as serving a summons on
another party to whom the EU decision was addressed. In July 2022, an agreement was reached
for an out-of-court settlement of Vattenfall's claims against the Group companies. However, the
legal proceedings brought by the Group companies against the other party to whom the EU
decision was addressed are continuing.
On 2 April 2019, a writ of summons was served, on behalf of Terna S.p.A., on Pirelli, Nexans
and companies in the Prysmian Group, demanding compensation for damages purportedly
suffered as a result of the alleged anti-competitive practices sanctioned by the European
Commission in its April 2014 decision. This action has been brought before the Court of Milan.
On 24 October 2019, the Prysmian Group companies concerned responded by presenting their
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
404
preliminary defence. By an order dated 3 February 2020, the Court upheld the points raised by
the defendants, giving Terna until 11 May 2020 to complete its writ of summons and scheduling
a hearing for 20 October 2020. Terna duly completed its summons, which was filed within the
required deadline. The proceedings are at a pre-trial stage.
On 2 April 2019, a writ of summons was served, on behalf of Electricity & Water Authority of
Bahrain, GCC Interconnection Authority, Kuwait Ministry of Electricity and Water and Oman
Electricity Transmission Company, on a number of cable manufacturers, including companies in
the Prysmian Group, on Pirelli and Goldman Sachs. This action, brought in the Court of
Amsterdam, once again involved a claim for compensation for damages purportedly suffered as
a result of the alleged anti-competitive practices sanctioned by the European Commission. On
18 December 2019, the Prysmian Group companies concerned presented their preliminary
defence, the hearing of which took place on 8 September 2020. On 25 November 2020, the
Court of Amsterdam handed down a ruling under which it upheld the submissions made and
declined jurisdiction over defendants not based in the Netherlands, thus excluding them from
the proceedings. On 19 February 2021, the plaintiffs announced that they had filed an appeal
against this ruling. The Prysmian Group companies concerned, together with the other third-
party first-instance defendants, have entered an appearance in court contesting the plaintiff's
claims. On 25 April 2023, the Amsterdam Court of Appeal handed down a ruling under which it
decided to submit to the European Court of Justice a number of questions on the interpretation
of European law, which it considers instrumental to its decision. The case has therefore been
stayed pending the European Court of Justice's response.
In September 2022, the Group was informed that companies in the RWE Group had brought an
action in the British courts against Prysmian S.p.A. and Prysmian Cavi e Sistemi S.r.l. involving
a claim for compensation for damages supposedly suffered as a result of the alleged anti-
competitive practices sanctioned by the European Commission in its April 2014 decision. In June
2023, an agreement was reached for an out-of-court settlement, therefore putting an end to
this lawsuit.
Furthermore, in February 2023, the Group received notification of an application by British
consumer representatives requesting authorisation from the relevant local court to initiate
proceedings against a number of cable manufacturers, including Prysmian S.p.A. and Prysmian
Cavi e Sistemi S.r.l., and which also involved a claim for compensation for damages supposedly
suffered as a result of the alleged anti-competitive practices sanctioned by the European
Commission in its April 2014 decision. The case is pending and the Group companies involved
have submitted their preliminary defences.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
405
In view of the circumstances described and the developments in the proceedings, the Directors,
assisted also by legal counsel, have recognised what they consider to be an adequate level of
provisions to cover the potential liabilities related to the matters in question.
In June 2023, a writ of summons, sent on behalf of Saudi Electricity Company, was received by
a number of cable manufacturers, including companies in the Prysmian Group. This action,
brought before the Court of Cologne, once again involves a claim for compensation for damages
purportedly suffered as a result of the alleged anti-competitive practices sanctioned by the
European Commission. The case is pending.
Based on the information currently available, and believing these potential liabilities unlikely to
crystallise, the Directors are of the opinion not to make any provision.
Antitrust - Other investigations
In Brazil, the local antitrust authority started proceedings against a number of manufacturers of
high voltage underground and submarine cables, including Prysmian, notified of such in 2011.
On 15 April 2020, the CADE Tribunal issued the operative part of the decision under which it
held Prysmian liable for the alleged infringement in the period from February 2001 to March
2004 and ordered it to pay a fine of BRL 10.2 million (approximately Euro 1.8 million). Using the
provisions already set aside in previous years, the Group made these payments by the required
deadline. Prysmian Group has filed an appeal against the CADE ruling. The appeal decision is
pending.
At the end of February 2016, the Spanish antitrust authority commenced proceedings to verify
the existence of anti-competitive practices by local low voltage cable manufacturers and
distributors, including the Group's local subsidiaries. On 24 November 2017, the local antitrust
authority notified the Group's Spanish subsidiaries of a decision under which they were held
liable for the alleged infringements in the period from June 2002 to June 2015 and were jointly
and severally ordered to pay a fine of Euro 15.6 million. The Group's Spanish subsidiaries lodged
an appeal against this decision.
The appeal was partially upheld by the local court, which ruled on 19 May 2023 that the time
period used by the authority to calculate the fine should be reduced, with consequent revision
of the fine itself. The Group's Spanish subsidiaries have appealed against this ruling.
The decision of 24 November 2017 also held the Spanish subsidiaries of General Cable liable for
breach of local antitrust law. However, they have obtained immunity from paying the related
fine (quantified at about Euro 12.6 million) having filed for leniency and collaborated with the
local antitrust authority in its investigations. The Spanish subsidiaries of General Cable also
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
406
appealed against the decision of the local antitrust authority. The appeals have recently been
rejected in rulings dated 19 May and 1 June 2023 respectively. These appeals have also been
dismissed by the Spanish Supreme Court, as notified to the companies concerned on 19 January
2023.
In view of the circumstances described and the developments in the proceedings, the Directors,
assisted also by legal counsel, have recognised what they consider to be an adequate level of
provisions to cover the potential liabilities related to the matters in question.
In addition, in January 2022, an investigation was initiated by the German antitrust authority
(Federal Cartel Office) concerning alleged coordination in setting the standard metal surcharges
applied by the industry in Germany. The Group's local subsidiaries have challenged before the
courts the search and seizure orders under which the German authorities carried out inspections
at their offices and seized company documents.
During June 2022, the competition authorities of the Czech Republic and Slovakia conducted
inspections at the offices of the Group's local subsidiaries with regard to alleged anti-competitive
practices in setting metal surcharges. Subsequently, in August 2022 and March 2023, the
competition authorities of the Czech Republic and Slovakia respectively announced the opening
of an investigation into this matter involving, among others, the Group's local subsidiaries.
Given the high degree of uncertainty as to the timing and outcome of these ongoing
investigations, the Directors currently feel unable to estimate the related risk.
Antitrust - Claims for damages ensuing from other investigations
In February 2020, a writ of summons was served on a number of cable manufacturers, including
Prysmian Group's Spanish subsidiaries, under which companies belonging to the Iberdrola Group
have claimed compensation for damages supposedly suffered as a result of the alleged anti-
competitive practices sanctioned by the Spanish antitrust authority in its decision of 24
November 2017. The proceedings are pending before the Court of Barcelona.
In July 2020, a writ of summons was served on a number of cable manufacturers, including
Prysmian Group's Spanish subsidiaries, under which companies belonging to the Endesa Group
have claimed compensation for damages supposedly suffered as a result of the alleged anti-
competitive practices sanctioned by the Spanish antitrust authority in its decision of 24
November 2017. The proceedings are pending before the Court of Barcelona.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
407
During 2022, other third-party lawsuits were filed against certain cable manufacturers, including
the Group's Spanish subsidiaries, to obtain compensation for damages supposedly suffered as a
result of the alleged anti-competitive conduct sanctioned by the Spanish antitrust authority in
its decision of 24 November 2017. The proceedings are pending before the Court of Barcelona.
In view of the circumstances described and the developments in the proceedings, the Directors,
assisted also by legal counsel and maintaining a consistent accounting policy, have adjusted the
related provisions for risks to a level deemed appropriate to cover the potential liabilities for the
matters in question.
With reference to the above matters, certain Group companies have received a number of notices
in which third parties have claimed compensation for damages, albeit not quantified, supposedly
suffered as a result of Prysmian's involvement in the anti-competitive practices sanctioned by
the European Commission and the antitrust authorities in Brazil and Spain.
Based on the information currently available, and believing it unlikely that these potential or
unquantifiable liabilities will arise, the Directors have decided not to make any provision.
Despite the uncertainty of the outcome of the investigations and legal actions in progress, the
amount of the provision set aside, the substance of which explained above, is considered to
represent the best estimate of the liability based on the information available to date and the
developments in the proceedings described above.
The Group provides a number of post-employment benefits through schemes that include
defined benefit plans and defined contribution plans.
The defined contribution plans require the Group to pay, under legal or contractual obligations,
contributions into public or private insurance institutions. The Group fulfils its obligations through
payment of the contributions. At the financial reporting date, any amounts accrued but not yet
paid to such institutions are recorded in "Other payables", while the related costs, accrued on
the basis of employee service, are recognised in "Personnel costs".
The defined benefit plans mainly refer to Pension plans, Statutory severance benefit (for Italian
companies), Medical benefit plans and other benefits such as seniority bonuses.
The liabilities arising under these plans, net of any assets serving such plans, are recognised in
Employee benefit obligations and are measured using actuarial techniques.
Employee benefit obligations are analysed as follows:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
408
(Euro/million)
31.12.2023
31.12.2022
Pension plans
271
262
Italian statutory severance benefit
12
12
Medical benefit plans
14
20
Termination and other benefits
36
35
Total
333
329
Pension plan amendments in 2023
There were no significant amendments to existing pension plans during 2023. The following
notes provide more details about the three main types of benefit: pension plans, statutory
severance benefit and medical benefit plans.
PENSION PLANS
Pension plans relate to defined benefit pension schemes that can be "Funded" or "Unfunded".
Pension plan liabilities are generally calculated according to employee length of service with the
company and the remuneration paid in the period preceding cessation of employment.
Liabilities for "Funded pension plans" are funded by contributions paid by the employer and, in
some cases, by employees, into a separately managed pension fund. The fund independently
manages and administers the amounts received, investing in financial assets and paying benefits
directly to employees. The Group's contributions to such funds are defined according to the
requirements established in the individual countries.
Liabilities for "Unfunded pension plans" are managed directly by the employer who sees to paying
the benefits to employees. These plans have no assets covering the liabilities.
Pension plan obligations and assets at 31 December 2023 and 31 December 2022 are analysed
as follows:
(Euro/million)
31.12.2023
Germany
Great
Britain
France
United
States
Other
countries
Total
Funded pension obligations:
Present value of obligation
-
133
1
80
58
272
Fair value of plan assets
-
(101)
(1)
(69)
(74)
(245)
Asset ceiling
-
-
-
5
5
Unfunded pension obligations:
Present value of obligations
186
-
25
4
24
239
Total
186
32
25
15
13
271
(Euro/million)
31.12.2022
Germany
Great
Britain
France
United
States
Other
countries
Total
Funded pension obligations:
Present value of obligation
-
130
2
85
66
283
Fair value of plan assets
-
(94)
(2)
(76)
(71)
(243)
Asset ceiling
-
-
-
-
3
3
Unfunded pension obligations:
Present value of obligations
177
-
25
4
13
219
Total
177
36
25
13
11
262
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
409
At 31 December 2023, the net value of funded plans in "Other countries" is practically zero and
mainly refers to Canada, Mexico and Spain.
At 31 December 2023, unfunded plans in "Other countries" primarily refer to Sweden and Chile.
Changes during the year in pension plan obligations are analysed as follows:
(Euro/million)
2023
2022
Opening defined benefit obligation
502
729
Current service costs
4
6
Interest costs
22
14
Administrative costs and taxes
3
2
Actuarial (gains)/losses recognised in equity - experience
4
12
Actuarial (gains)/losses recognised in equity - demographic
assumptions
(4)
(3)
Actuarial (gains)/losses recognised in equity - financial assumptions
18
(194)
Disbursements from plan assets
(20)
(27)
Disbursements paid directly by the employer
(15)
(13)
Plan settlements
-
(28)
Currency translation differences
(3)
4
Closing defined benefit obligation
511
502
Changes during the year in pension plan assets are analysed as follows:
(Euro/million)
2023
2022
Opening plan assets
243
370
Interest income on plan assets
12
9
Actuarial gains/(losses) recognised in equity
4
(90)
Contributions paid in by the employer
22
21
Disbursements
(35)
(40)
Plan settlements
-
(30)
Currency translation differences
(1)
3
Closing plan assets
245
243
At 31 December 2023, pension plan assets consisted of equities (25% versus 22% in 2022),
government bonds (31% versus 15% in 2022), corporate bonds (16% versus 23% in 2022),
and other assets (28% versus 39% in 2022).
The asset ceiling recorded a value of Euro 5 million at 31 December 2023 (Euro 3 million at 31
December 2022).
Pension plan costs and income recognised in the income statement are analysed as follows:
(Euro/million)
2023
Germany
Great
Britain
France
United
States
Other
countries
Total
Personnel costs
1
-
-
2
4
7
Interest costs
6
6
1
4
5
22
Expected returns on plan assets
-
(5)
-
(4)
(3)
(12)
Total pension plan costs
7
1
1
2
6
17
(Euro/million)
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
410
2022
Germany
Great
Britain
France
United
States
Other
countries
Total
Personnel costs
1
-
1
3
3
8
Interest costs
3
4
-
4
3
14
Expected returns on plan assets
-
(3)
-
(4)
(2)
(9)
Total pension plan costs
4
1
1
3
4
13
More details can be found in Note 21. Personnel costs.
As evident from the preceding tables, the most significant plans at 31 December 2023 in terms
of accrued employee benefit obligations are those managed in the following countries:
•
Germany;
•
Great Britain;
•
France;
•
United States.
Pension plans in these countries account for more than 90% of the related liability. The principal
risks to which they are exposed are described below:
Germany
There are eight pension plans in Germany, most of which final salary plans with the retirement
age generally set at 65. Although most plans are closed to new members, additional costs may
need to be recognised in the future. As at 31 December 2023, the plans had an average duration
of 11 years (the same as at 31 December 2022).
Total plan membership is made up as follows:
31.12.2023
31.12.2022
Number of participants
Number of participants
Active
1,442
1,200
Deferred
793
820
Pensioners
2,295
2,271
Total membership
4,530
4,291
The German plans do not have any assets that fund the liabilities, in line with the practice in this
country; the Group pays these benefits directly.
The benefits payable in 2024 will amount to Euro 11 million (Euro 10 million at 31 December
2022 for 2023).
Changes in benefits, and so in the recorded liability and service costs, mainly depend on inflation,
salary growth and the life expectancy of plan members. Another variable to consider when
determining the amount of the liability and service costs is the discount rate, identified by
reference to market yields of AA corporate bonds denominated in Euro.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
411
Great Britain
Two defined benefit plans were in operation at 31 December 2023: the Draka pension fund and
the Prysmian pension fund. Both are final salary plans, in which the retirement age is generally
set at 65 for the majority of plan participants. Neither plan has admitted any new members or
incurred any new liabilities since 2013. Currently all employees participate in defined contribution
plans.
As at 31 December 2023, the plans had an average duration of approximately 14 years (19
years at 31 December 2022).
Total plan membership is made up as follows:
31.12.2023
31.12.2022
Draka
pension fund
Prysmian
pension fund
Total
Draka
pension fund
Prysmian
pension fund
Total
Number of
participants
Number of
participants
Number of
participants
Number of
participants
Number of
participants
Number of
participants
Active
-
-
-
-
-
-
Deferred
367
409
776
443
521
964
Pensioners
517
432
949
478
385
863
Total
membership
884
841
1,725
921
906
1,827
Both plans operate under trust law and are managed and administered by a Board of Trustees
on behalf of members and in accordance with the terms of the Trust Deed and Rules and current
legislation. The assets that fund the liabilities are held by the Trust, for both plans.
For the purposes of determining the level of funding, the Trustees appoint an actuary to value
the plans every three years, with annual updates. The latest valuation of the Draka pension fund
and the Prysmian pension fund was conducted at 31 December 2021 and finalised on 31 March
2023. The contribution levels are also set every three years when performing the valuations to
determine the level of plan funding, but can be revised annually.
The Trustees decide on the investment strategy in agreement with the company. The strategies
differ for both plans. In particular, the Draka pension fund has invested its assets as follows:
11% in equities, 53% in bonds and 36% in other financial instruments. The Prysmian pension
fund has invested its assets as follows: 6% in equities, 72% in bonds and 22% in other financial
instruments.
In Great Britain, one of the main risks for the Group is that mismatches between the expected
return and the actual return on plan assets would require contribution levels to be revised.
The liabilities and service costs are sensitive to the following variables: life expectancy of plan
participants and future growth in benefit levels. Another variable to consider when determining
the amount of the liability is the discount rate, identified according to market yields of AA-rated
corporate bonds denominated in pounds sterling.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
412
The benefits payable in 2024 will amount to Euro 5 million (Euro 9 million at 31 December 2022
for 2023).
France
There were five pension plans in operation in France at 31 December 2023, of which four are
unfunded retirement benefit plans and one is a partially funded pension plan.
All plans have a retirement age generally set between 62 and 64 according to the date of birth.
They are all open to new members, except for the funded plan which does not admit new
members or incur new liabilities.
As at 31 December 2023, the plans had an average duration of approximately 11 years, in line
with the previous year.
Total plan membership is made up as follows:
31.12.2023
31.12.2022
Number of participants
Number of participants
Active
2,457
2,457
Deferred
-
-
Pensioners
21
21
Total membership
2,478
2,478
In France, the principal risk for the Group is salary growth, which affects the benefits that the
company has to pay the employee. In the case of the retirement benefit plans, the benefits vest
only upon attaining retirement age; consequently, the cost to the company will depend on the
probability that an employee does not leave the company before that date. There are no life
expectancy risks relating to these plans. The liabilities and service costs are sensitive to the
following variables: inflation, salary growth and the discount rate, determined according to
market yields of AA corporate bonds denominated in Euro.
The main risks for the funded plan are those associated with inflation and life expectancy, both
of which affect contribution levels. The plan's assets are entirely invested in insurance funds,
whose main risk is that a mismatch between the expected return and the actual return on plan
assets would require a revision of contribution levels.
United States
There were four pension plans in operation in the United States at 31 December 2023, of which
two are funded plans that pay an income upon retirement; one is a supplementary unfunded
plan and another is an unfunded deferred compensation plan.
All the plans generally set the retirement age at 65. They are all closed to new members and do
not admit new members or incur new liabilities, except for the "Master Pension Plan" into which
it is still possible to pay.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
413
As at 31 December 2023, the plans had an average duration of approximately 10 years, in line
with the previous year.
Total plan membership is made up as follows:
31.12.2023
31.12.2022
Number of participants
Number of participants
Active
319
346
Deferred
547
603
Pensioners
1,003
1,013
Total membership
1,869
1,962
The benefits and contributions payable in 2024 will amount to Euro 1 million (Euro 1 million at
31 December 2022 for 2023).
The weighted average actuarial assumptions used to value the pension plans in the principal
countries (Germany, Great Britain, France and United States) are as follows:
31.12.2023
Germany
Great Britain
France
United States
Interest rate
3.20%
4.50%
3.20%
5.00%
Expected future salary
increase
2.87%
N/A
2.47%
2.50%
Expected increase in
pensions
2.33%
3.20%
2.20%
3.00%
Inflation rate
2.50%
N/A
2.40%
N/A
Life expectancy at age
65:
Male
Female
Male
Female
Male
Female
Male
Female
People currently aged 65
20.80
24.20
19.82
23.28
25.86
29.41
20.23
22.15
People currently aged 50
22.90
25.90
20.33
20.33
27.94
31.62
21.38
23.26
31.12.2022
Germany
Great Britain
France
United States
Interest rate
3.70%
4.75%
3.75%
5.35%
Expected future salary
increase
3.07%
-
2.47%
2.50%
Expected increase in
pensions
2.60%
3.44%
1.65%
-
Inflation rate
2.60%
3.25%
2.40%
3.00%
Life expectancy at age
65:
Male
Female
Male
Female
Male
Female
Male
Female
People currently aged 65
20.70
22.70
20.35
23.08
25.86
29.41
20.17
22.09
People currently aged 50
24.10
25.80
20.93
23.98
27.94
31.62
21.30
23.19
The following table presents a sensitivity analysis of the effects of an increase/decrease in the
most significant actuarial assumptions used to determine the present value of benefit
obligations, namely the interest rate, inflation rate and life expectancy.
Inflation rate sensitivity includes those effects relating to assumptions about salary increases
and increases in benefits.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
414
31.12.2023
Germany
Great Britain
France
United States
Interest rate
- 0.50%
+ 0.50%
- 0.50%
+0.50%
- 0.50%
+ 0.50%
- 0.50%
+ 0.50%
Change in pension plans
5.56%
-5.22%
7.08%
-6.37%
5.38%
-5.09%
4.65%
-3.95%
Inflation rate
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
Change in pension plans
-2.61%
1.31%
-1.78%
1.84%
-2.69%
2.51%
N/A
N/A
31.12.2023
Germany
Great Britain
France
United States
1-year increase in life
expectancy
4.76%
4.14%
0.77%
3.48%
31.12.2022
Germany
Great Britain
France
United States
Interest rate
- 0.50%
+ 0.50%
- 0.50%
+0.50%
- 0.50%
+ 0.50%
- 0.50%
+ 0.50%
Change in pension plans
5.63%
-5.15%
9.62%
-8.58%
5.21%
-4.93%
4.20%
-3.42%
Inflation rate
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
Change in pension plans
-2.41%
2.49%
-2.21%
2.26%
-2.61%
2.68%
0.73%
0.73%
31.12.2022
Germany
Great Britain
France
United States
1-year increase in life
expectancy
5.06%
5.44%
0.75%
3.04%
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
415
STATUTORY SEVERANCE BENEFIT
Statutory severance benefit, which refers to Italian companies only, is analysed as follows:
(Euro/million)
2023
2022
Opening balance
12
15
Current service costs
1
1
Actuarial (gains)/losses recognised in equity
-
(3)
Disbursements
(1)
(1)
Closing balance
12
12
No actuarial gains or losses were recorded at 31 December 2023. Actuarial gains and losses
basically reflect variations in the associated economic parameters (the discount and inflation
rates).
Under Italian law, the amount due to each employee accrues with service and is paid when the
employee leaves the company. The amount due upon termination of employment is calculated
on the basis of the length of service and the taxable remuneration of each employee. The liability
is adjusted annually for the official cost of living index and statutory interest, and is not subject
to any vesting conditions or periods, or any funding obligation; there are therefore no assets
that fund this liability.
The benefits are paid in the form of a lump sum, in accordance with the related rules. In certain
circumstances, the benefit plan also allows the payment of partial advances against the full
amount of the accrued benefit.
The main risk is the volatility of the inflation rate and the interest rate, as determined by the
market yield on AA corporate bonds denominated in Euro.
The actuarial assumptions used to value statutory severance benefit are as follows:
31.12.2023
31.12.2022
Interest rate
3.20%
3.80%
Expected future salary increase
2.20%
2.40%
Inflation rate
2.20%
2.40%
The following table presents a sensitivity analysis of the effects of an increase/decrease in the
most significant actuarial assumptions used to determine the present value of benefit
obligations, namely the interest rate and inflation rate:
31.12.2023
31.12.2022
Interest rate
- 0.50%
+ 0.50%
- 0.50%
+ 0.50%
Change in statutory severance benefit
4.39%
-4.19%
4.33%
-4.14%
Inflation rate
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
Change in statutory severance benefit
-1.42%
1.43%
-1.38%
1.41%
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
416
MEDICAL BENEFIT PLANS
Some Group companies provide medical benefit plans for retired employees. In particular, the
Group funds medical benefit plans in Brazil, Canada and the United States. The US plans account
for more than 90% of the total obligation for medical benefit plans.
Apart from interest rate and life expectancy risks, medical benefit plans are particularly
susceptible to increases in the cost of meeting claims. None of the medical benefit plans has any
assets to fund the associated obligations, with benefits paid directly by the employer.
The obligation in respect of medical benefit plans is analysed as follows:
(Euro/million)
2023
2022
Opening balance
20
31
Current service costs
1
2
Interest costs
1
0
Actuarial (gains)/losses recognised in equity - experience
(6)
(14)
Disbursements
(1)
(1)
Currency translation differences
1
2
Closing balance
14
20
The actuarial assumptions used to value medical benefit plans are as follows:
31.12.2023
31.12.2022
Interest rate
5.26%
5.50%
Expected future salary increase
-
-
Increase in claims
3.50%
3.50%
Life expectancy at age 65:
Male
Female
Male
Female
People currently aged 65
20.70
22.75
20.55
22.63
People currently aged 50
21.81
23.78
21.67
23.67
The following table presents a sensitivity analysis of the effects of an increase/decrease in the
most significant actuarial assumptions used to determine the present value of benefit
obligations, such as the interest rate, inflation rate/growth in healthcare costs and life
expectancy.
31.12.2023
31.12.2022
Interest rate
-0.50%
+0.50%
-0.50%
+0.50%
Change in medical benefit plans
5.47%
-5.11%
6.35%
-5.87%
Medical inflation rate
-0.25%
+0.25%
-0.25%
+0.25%
Change in medical benefit plans
-2.40%
2.51%
-1.75%
1.87%
31.12.2023
31.12.2022
1-year increase in life expectancy
3.47%
3.11%
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
417
Number of employees
Average headcount in the period is reported below, compared with closing headcount at the end
of each period.
2023
Average
%
Closing
%
Non-desk staff
22,556
74%
21,997
73%
Desk staff and management
8,048
26%
8,091
27%
Total
30,604
100%
30,088
100%
2022
Average
%
Closing
%
Non-desk staff
22,693
74%
21,966
73%
Desk staff and management
7,911
26%
8,219
27%
Total
30,604
100%
30,185
100%
16. DEFERRED TAXES
The balance of deferred tax assets at 31 December 2023 is Euro 299 million (Euro 203 million
at 31 December 2022) while that of deferred tax liabilities is Euro 222 million (Euro 187 million
at 31 December 2022).
Movements in deferred taxes are analysed as follows:
(Euro/million)
Fixed assets
Provisions
(1)
Tax losses
Other
Total
Balance at 31 December 2021*
(227)
196
9
15
(8)
Currency translation differences
(11)
1
-
-
(10)
Impact on income statement
28
18
(3)
5
48
Impact on equity
-
(26)
-
12
(14)
Balance at 31 December 2022
(210)
189
6
32
16
Currency translation differences
-
-
-
2
2
Impact on income statement
26
37
41
(64)
39
Impact on equity
-
2
-
19
22
Other and reclassifications
-
(1)
-
(1)
(2)
Balance at 31 December 2023
(184)
227
47
(13)
77
(1)
These comprise Provisions for risks and charges (current and non-current) and Employee benefit obligations.
(*) The previously published comparative Consolidated Financial Statements have been revised after finalising the
purchase price allocation of Omnisens S.A. and Eksa Sp.z.o.o.
The Group has not recognised any deferred tax assets on Euro 769 million in carryforward tax
losses at 31 December 2023 (Euro 1,017 million at 31 December 2022). Unrecognised deferred
tax assets relating to the above carryforward tax losses and to deductible temporary differences
amount to Euro 186 million (Euro 237 million at 31 December 2022).
At 31 December 2023, it has however recognised deferred tax assets of Euro 41 million on
carryforward tax losses of Euro 234 million (Euro 28 million at 31 December 2022).
The following table presents details of carryforward tax losses:
(Euro/million)
31.12.2023
31.12.2022
Carryforward tax losses
1,003
1,045
of which recognised as deferred tax assets
234
28
Carryforward expires within 1 year
9
9
Carryforward expires between 2-5 years
34
47
Carryforward expires beyond 5 years
10
39
Unlimited carryforward
950
950
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
418
17. SALES
Details are as follows:
(Euro/million)
2023
2022
Finished goods
12,455
13,817
Construction contracts
1,996
1,607
Services
108
106
Other
795
537
Total
15,354
16,067
18. CHANGE IN INVENTORIES OF FINISHED GOODS AND WORK IN PROGRESS
Details are as follows:
(Euro/million)
2023
2022
Finished goods
34
(67)
Work in progress
18
37
Total
52
(30)
19. OTHER INCOME
Details are as follows:
(Euro/million)
2023
2022
Rental income
2
3
Insurance reimbursements and indemnities
17
17
Gains on disposal of property
1
4
Other revenue and income
50
46
Total
70
70
20. RAW MATERIALS, CONSUMABLES AND SUPPLIES
Details are as follows:
(Euro/million)
2023
2022
Raw materials
9,717
10,768
Change in inventories
(12)
(180)
Total
9,705
10,588
21. PERSONNEL COSTS
Details are as follows:
(Euro/million)
2023
2022
Wages and salaries and social security
1,574
1,545
Fair value share-based payments
57
104
Pension plans
7
10
Medical benefit costs
-
1
Termination and other benefits
34
28
Business reorganisation
37
5
Other personnel costs
95
65
Total
1,804
1,758
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
419
Share-based payments
At 31 December 2023, Prysmian S.p.A. had share-based payment plans in place for managers
and employees of Group companies and executive directors and executives with strategic
responsibilities in the Companymembers of the Company's Board of Directors. These plans are
described below.
Employee share purchase plan– YES
The YES plan is based on financial instruments and reserved for employees of Prysmian S.p.A.
and/or of its subsidiaries.
The plan has offered the opportunity to purchase Prysmian's ordinary shares on preferential
terms, with a maximum discount of 25% on the stock price, given in the form of treasury shares
(the so-called discounted shares), except for certain managers for whom the discount was 15%,
and the executive Directors and key management personnel, for whom the discount was 1% on
the stock price.
The plan has therefore qualified as "of particular relevance" within the meaning of art. 84-bis,
par. 2 of the Issuer Regulations.
The shares purchased or received free of charge are subject to a retention period, during which
they cannot be sold.
The shares purchased by participants, as well as those received by way of discount and entry
bonus, are subject to a retention period, during which they cannot be sold and the length of
which varies according to relevant local regulations.
All those who signed up to the plan have also received an entry bonus of eightsix free shares,
or rather three free shares for employees who have already participated in at least one of the
purchase cycles in the previous two years, taken from the Company's portfolio of treasury
shares, only available with their first-time purchase during the same financial year. If an
employee had already participated in the 2013 plan, they have received eight shares as an entry
bonus to the new plan. For those who had already purchased shares in a 2017 purchase window,
the entry bonus was three shares.
The shares purchased by participants, as well as those received by way of discount and entry
bonus, are subject to a retention period, during which they cannot be sold and the length of
which varies according to relevant local regulations.
Furthermore, a loyalty bonus of five shares is provided for those who choose to extend the
retention period of the shares granted in 2019, 2020, and 2021.
On 28 April 2021, the shareholders of Prysmian S.p.A. approved an extension of the share
ownership plan, for Prysmian Group employees.
In line with past practice, the extension provides the opportunity to purchase Prysmian's ordinary
shares on preferential terms, with a maximum discount of 25% on the stock price, given in the
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
420
form of treasury shares. The shares purchased are subject to a retention period, during which
they cannot be sold. The extension which has added new purchase windows in the years 2022,
2023 and 2024.
Beneficiaries of the plan also include the executive directors of Prysmian S.p.A. as well as key
management personnel, for whom the discount is 1%. “A total maximum of 600,000 own shares
are allocated for the purposes of discounted shares, entry bonus shares, and loyalty bonus
shares throughout the duration of the plan (2022-2024)”
Costs of Euro 2 million have been recognised as "Personnel costs" in the income statement at
31 December 2023 for the fair value of shares that will be allotted under this plan.
The fair value of the shares has been determined using the Montecarlo binomial pricing model,
based on the following assumptions:
Windows
Grant date
12 April 2022
Share purchase date
from 16 June 2022 to 16 September 2025
End of retention period
from 16 June 2025 to 16 September 2027
Residual life (in years)
1.74
Share price at grant date (Euro)
€30.87
Risk-free interest rate
from 0.32% to 0.54%
Expected dividend %
1.80%
Share fair value at grant date (Euro)
from €23.94 to €19.27
The Report on Remuneration Policy and Compensation Paid andT the information memorandum,
prepared under art. 114-bis of Legislative Decree 58/98 and describing the characteristics of the
above plan, is publicly available on the Company's website at
http://www.prysmian.com/
, from
its registered offices and from Borsa Italiana S.p.A.
2020-2022 long-term incentive plan
The results achieved under the Group's 2020-2022 LTI Plan were approved by the Board of
Directors on 9 March 2023 after receiving the Remuneration and Nominations Committee's
favourable opinion, confirming a performance of 140 points, on a scale ranging between a
minimum qualifying level of 50 points, a target level of 100 points and a maximum level of 150
points, and the grant of a total of 8,593,072 shares.
"Grow" 2023-2025 long-term incentive plan
On 19 April 2023, the shareholders' meeting of Prysmian S.p.A. approved a long-term incentive
plan (2023-2025) that will cover approximately 1,100 beneficiaries among management and
other key Prysmian Group resources, including Prysmian S.p.A.'s Executive Directors and Key
Management Personnel. The Plan involves the grant of new-issue ordinary shares obtained from
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
421
a bonus issue funded by profits or retained earnings in accordance with art. 2349 of the Italian
Civil Code, or a combination of new-issue shares and treasury shares. By means of this plan,
Prysmian intends to strengthen the Company's and management's commitment to creating
sustainable value over time for all stakeholders, including by involving a wide range of key people
in over 40 countries who play an important role in the Group's sustainable success. The plan
spans a three-year period and provides for the award of shares, Performance share, upon
achievement of economic and financial performance conditions, Total Shareholders Return and
ESG targets. The plan also allows 50% of the annual bonus, where due, for the years 2023,
2024, 2025 to be deferred in the form of shares, Deferred share. The annual bonus is also linked
to the achievement of ESG targets, as well as to economic-financial targets. The deferral of the
annual bonus also entails an additional award of 0.50 "matching" shares which, in the case of
the Group's some 50 top managers, is also dependent on the achievement of ESG targets by
2025. The plan has the following objectives:
-
to motivate participants to achieve long-term results geared towards sustainable value
creation over time;
-
to align the interests of management with those of shareholders through the use of share-
based incentive instruments;
-
to foster stable management ownership of the Company's share capital;
-
to ensure the long-term sustainability of the Group's annual performance, by boosting
staff engagement and retention, including through the mechanism of deferring part of
the annual bonus in shares.
The shareholders of Prysmian S.p.A. also authorised a bonus share capital increase to be
reserved for Prysmian Group employees in execution of the plan. This capital increase may reach
a maximum nominal amount of Euro 950,000 through apportionment, pursuant to art. 2349 of
the Italian Civil Code, of a corresponding amount from profits or retained earnings, with the
issue of no more than 9,500,000 ordinary shares of nominal value Euro 0.10 each.
The actual allocation of shares, in particular with reference to the Performance Shares, is subject
to the level of achievement of the following performance conditions: cumulative Adjusted
EBITDA, cumulative Free Cash Flow, average ROCE, relative TSR measured against a 11-
member peer group and ESG, measured by a set of indicators.
The following table provides details about movements in the plan:
31.12.2023
Number of shares
Shares vested at start of year
-
Change in expected participations
-
Shares vesting in period
1,479,462
Total shares vested at end of year
1,479,462
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
422
Costs of Euro 32 million have been recognised as "Personnel costs" in the income statement at
31 December 2023 for the fair value of shares that will be allotted under this plan.
the plan, and to deferred and matching shares vesting in 2023 has been calculated using the
following assumptions:
Grant date
19 April 2023
Residual life at grant date (in years)
2.33
Exercise price (Euro)
€38.25
Risk-free interest rate
2.73%
Expected dividend %
2.00%
Share fair value (not market based) at grant date
€28.43
Share fair value (market based) at grant date
€21.99
The Report on Remuneration Policy and Compensation Paid andT the information memorandum,
prepared under art. 114-bis of Legislative Decree 58/98 and describing the characteristics of the
above
plan,
areis
publicly
available
on
the
Company's
website
at
http://www.prysmiangroup.com/
from its registered offices and from Borsa Italiana S.p.A.
BE-IN plan
On 12 April 2022, the shareholders of Prysmian S.p.A. approved an equity-settled stock grant
plan for employees of Prysmian S.p.A. and Prysmian Group companies, except for managers
already covered by individual incentive schemes; the plan aims to foster wide participation in
future value creation and to strengthen the level of employee engagement; the plan is subject
to local consultation with the relevant trade union representatives, where required.
The plan, participation in which is voluntary, envisages three allotment cycles for 2022, 2023
and 2024 and provides for the allotment of a maximum of 3,000,000 shares.
By voluntarily joining the plan, the employee agrees to receive, in lieu of payment of part of
their monetary bonus, or in some cases even without converting a monetary bonus, a value
equating to a number of shares, to be calculated on the basis of the allotment value, defined as
the average share price over the 30 trading days preceding definition of the incentive's value.
The number of shares allotted may be increased by an additional number of shares, up to a
maximum of 50% of the shares allotted.
The number of shares received by each participant is determined according to the amount of the
incentive's value.
Allotted shares are freely transferable from the grant date. If these shares are held for the entire
holding period, 12 months, the employee is entitled to receive a number of additional "loyalty
shares". If, during the holding period, the employee sells all or part of the shares received, they
will no longer be entitled to receive additional shares.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
423
The shares are credited to participants annually within specific time frames, identified on a local
basis when rolling out the plan.
Shares credited to participants in 2023, 2024 and 2025 relate to performance in 2022, 2023 and
2024, respectively, with the respective additional shares credited in 2024, 2025 and 2026.
During the plan's rollout, some of these provisions may be adjusted not only to ensure that the
plan nonetheless complies with applicable local rules, legislation and tax and social security
regulations but also to facilitate its implementation for the sake of wider participation.
Costs of Euro 23 million have been recognised as "Personnel costs" in the income statement at
31 December 2023 for the fair value of shares that will be allotted under this plan.
The fair value of shares that will be allotted under this plan has been determined using the
following assumptions:
Grant date
12 April 2022
Residual life at grant date (in years)
1.35
Exercise price (Euro)
0
Risk-free interest rate
2.14%-2.52%
Expected dividend %
1.80%
Fair value at grant date of conversion and premium shares
€32.93
Fair value at grant date of loyalty shares
€28.38
Grant date
30 April 2023
Residual life at grant date (in years)
1.35
Exercise price (Euro)
€37.07
Risk-free interest rate
2.73%
Expected dividend %
2.00%
Fair value at grant date of conversion and premium shares
€30.10
Fair value at grant date of loyalty shares
€23.45
The Report on Remuneration Policy and Compensation Paid andT the information memorandum,
prepared under art. 114-bis of Legislative Decree 58/98 and describing the characteristics of the
above
plan,
areis
publicly
available
on
the
Company's
website
at
http://www.prysmiangroup.com/
from its registered offices and from Borsa Italiana S.p.A.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
424
22. AMORTISATION, DEPRECIATION, IMPAIRMENT AND IMPAIRMENT REVERSALS
Details are as follows:
(Euro/million)
2023
2022
Depreciation of buildings, plant, machinery and equipment
196
210
Depreciation of other property, plant and equipment
18
22
Amortisation of intangible assets
78
78
Depreciation and impairment of right-of-use assets (IFRS 16)
68
59
Impairment of property, plant and equipment
46
34
Impairment of equity-accounted investments
168
-
Total
574
403
Details are as follows:
(Euro/million)
2023
2022
Professional services
135
133
Insurance
74
45
Maintenance costs
164
151
Selling costs
42
129
Utilities
311
367
Travel costs
51
42
Rentals and vessel charter
68
73
Increases in/(releases of) provisions for risks
113
130
Losses on disposal of fixed assets
1
3
Sundry expenses
158
123
Other costs
1,454
1,322
Business reorganisation
1
7
Total
2,572
2,525
Other costs mainly refer to those incurred for project execution.
The Group expensed Euro 107 million in research and development costs in 2023 (Euro 101
million in 2022), insofar as there were no qualifying conditions to justify their capitalisation.
24. SHARE OF NET PROFIT/(LOSS) OF EQUITY-ACCOUNTED COMPANIES
Details are as follows:
(Euro/million)
2023
2022
Share of net profit/(loss) of associates
33
47
Total
33
47
Further information can be found in Note 3. Equity-accounted investments.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
425
25. FINANCE COSTS
Details are as follows:
(Euro/million)
2023
2022
Interest on loans
85
19
Interest on non-convertible bond
-
5
Interest on Convertible Bond 2021 - non-monetary component
9
9
Interest Rate Swaps
-
12
Interest on lease liabilities
11
6
Amortisation of bank and financial fees and other expenses
5
6
Employee benefit interest costs net of interest on plan assets
13
6
Other bank interest
6
7
Costs for undrawn credit lines
3
3
Sundry bank fees
25
21
Other
9
23
Finance costs
166
117
Foreign currency exchange losses
927
999
Foreign currency exchange losses
927
999
Total finance costs
1,093
1,116
26. FINANCE INCOME
Details are as follows:
(Euro/million)
2023
2022
Interest income from banks and other financial institutions
36
13
Interest Rate Swaps
26
-
Non-recurring finance income
2
-
Finance income related to hyperinflation
18
7
Other finance income
1
6
Finance income
83
26
Net gains on forex derivatives
-
14
Gains on derivatives
-
14
Foreign currency exchange gains
914
966
Total finance income
997
1,006
27. TAXES
Details are as follows:
(Euro/million)
2023
2022
Current income taxes
256
278
Deferred income taxes
(39)
(48)
Total
217
230
The following table reconciles the effective tax rate with the Parent Company's theoretical tax
rate:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
426
(Euro/million)
2023
Tax rate
2022
Tax rate
Profit/(loss) before taxes
764
739
Theoretical tax expense
183
24.0%
177
24.0%
Differences in nominal tax rates of foreign
subsidiaries
(14)
-1.8%
(9)
-1.2%
Taxes on distributable reserves
55
7.2%
27
3.6%
Change in tax rates
-
0.0%
-
0.0%
Taxes on dividends
11
1.4%
7
0.9%
Accrual (Release) of Antitrust provision
1
0.1%
6
0.8%
Asset impairment
(2)
-0.3%
-
0.0%
WHT expensed/corporate income tax branch
4
0.5%
3
0.4%
IRAP (Italian regional business tax) and US State tax
25
3.3%
24
3.3%
Prior year current taxes
(11)
-1.4%
-
0.0%
Deferred tax effect on carryforward tax losses
(41)
-5.4%
8
1.1%
Non-deductible costs/ (non-taxable income) and
other
6
1.4%
(13)
-1.8%
Effective income taxes
217
28.4%
230
31.1%
"Deferred tax effect on carryforward tax losses " include deferred tax assets recognised for
companies located in countries that, according to a multi-year business plan, will be able to
utilise the benefit in future years against positive future earnings.
"Taxes on distributable reserves" include the recognition of deferred tax liabilities on profits that
could be distributed by subsidiaries in future years. The increase from the previous year is mainly
attributable to potential profit distributions by US companies.
28. EARNINGS/(LOSS) AND DIVIDENDS PER SHARE
Both basic and diluted earnings (loss) per share have been calculated by dividing the net result
for the period attributable to owners of the parent by the average number of the Company's
outstanding shares.
Diluted earnings/(loss) per share have been affected by the options under the Convertible Bond,
whose conversion was in the money as at 31 December 2023, and by the options under the
employee share purchase plan (YES Plan).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
427
(Euro/million)
2023
2022
Net profit/(loss) attributable to owners of the parent
529
504
Weighted average number of ordinary shares (thousands)
272,679
263,497
Basic earnings per share (in Euro)
1.94
1.91
Net profit/(loss) attributable to owners of the parent for purposes of
diluted earnings per share (*)
537
504
Weighted average number of ordinary shares (thousands)
272,679
263,497
Adjustments for:
New shares from conversion of bonds into shares
18,640
-
Dilution from incremental shares arising from exercise of share-based
payment plans and employee share purchase plans (thousands)
69
2,062
Weighted average number of ordinary shares to calculate diluted
earnings per share (thousands)
291,388
265,558
Diluted earnings per share (in Euro)
1.84
1.90
(*) This figure has been adjusted for interest accruing on the Convertible Bond, net of the related tax effect.
The dividend paid in 2023 amounted to approximately Euro 158 million (Euro 0.60 per share).
With reference to the year ended 31 December 2023, a recommendation to pay a dividend of
Euro 0.70 per share, totalling approximately Euro 191 million, based on the number of
outstanding shares, will be presented to the shareholders for approval in the meeting convened
in single call for 18 April 2024.
29. CONTINGENT LIABILITIES
As a global operator, the Group is exposed to legal risks primarily, by way of example, in the
areas of product liability and environmental, antitrust and tax rules and regulations. The outcome
of legal disputes and proceedings currently in progress cannot be predicted with certainty. An
adverse outcome in one or more of these proceedings could result in the payment of costs that
are not covered, or not fully covered, by insurance, which would therefore have a direct effect
on the Group's financial position and results.
As at 31 December 2023, contingent liabilities for which the Group has not recognised any
provision for risks and charges, on the grounds that an outflow of resources is considered
unlikely, but for which reliable estimates are available, amount to approximately Euro 57 million
and mainly refer to legal and tax issues.
30. COMMITMENTS TO PURCHASE PROPERTY, PLANT AND EQUIPMENT AND
INTANGIBLE ASSETS
Contractual commitments already entered into with third parties as at 31 December 2023 and
not yet reflected in the financial statements amounted to Euro 566 million for investments in
property, plant and equipment (Euro 416 million at 31 December 2022); commitments to third
parties for investments in intangible assets amounted to Euro 2 million at 31 December 2023
(Euro 2 million at 31 December 2022).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
428
31. RECEIVABLES FACTORING
The Group has factored some of its trade receivables on a without-recourse basis. Receivables
factored but not yet paid by customers amounted to Euro 157 million at 31 December 2023
(Euro 296 million at 31 December 2022).
32. FINANCIAL COVENANTS
The credit agreements in place at 31 December 2023, details of which are presented in Note 12.
Borrowings from banks and other lenders, require the Group to comply with a series of covenants
on a consolidated basis. The main covenants, classified by type, are listed below:
a)
Financial covenants
•
Ratio between EBITDA and Net finance costs (as defined in the relevant agreements).
This covenant does not apply to the Revolving Credit Facility 2023 as long as Prysmian
S.p.A. maintains a long-term "Investment Grade" credit rating;
•
Ratio between Net Financial Debt and EBITDA (as defined in the relevant agreements).
The covenants contained in the relevant credit agreements are as follows:
EBITDA/
Net finance
costs
(1)
not less than:
Net financial debt/
EBITDA
(1)
not more than
:
4.00x
3.00x
(1)
The ratios are calculated on the basis of the definitions contained in the relevant credit agreements. The Net Financial
Debt/EBITDA ratio can go as high as 3.5 following extraordinary transactions like acquisitions, no more than three times,
including on non-consecutive occasions.
b)
Non-financial covenants
A number of non-financial covenants have been established in line with market practice applying
to transactions of a similar nature and size. These covenants involve restrictions on the grant of
secured guarantees to third parties and on amendments to the Company's by-laws.
Default events
The main default events are as follows:
•
default on loan repayment obligations;
•
breach of financial covenants;
•
breach of some of the non-financial covenants;
•
declaration of bankruptcy by some relevant Group companies or their involvement in
other insolvency proceedings;
•
issuing of particularly significant court orders;
•
occurrence of events that may adversely and significantly affect the business, the assets
or the financial conditions of the Group.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
429
Should a default event occur, the lenders are entitled to demand full or partial repayment of the
amounts lent and not yet repaid, together with interest and any other amount due. No collateral
security is required.
Actual financial ratios reported at 31 December 2023 and 31 December 2022 are as follows:
31.12.2023
31.12.2022
EBITDA / Net finance costs
(1)(2)
26.90x
27.26x
Net financial debt / EBITDA
(1)
0.56x
0.83x
(1)
The ratios are calculated on the basis of the definitions contained in the relevant credit agreements.
(2)
This covenant does not apply to the Revolving Credit Facility 2023.
The above financial ratios comply with both covenants contained in the relevant credit
agreements and there are no instances of non-compliance with the financial and non-financial
covenants indicated above.
33. RELATED PARTY TRANSACTIONS
Transactions by Prysmian S.p.A. and its subsidiaries with associates mainly refer to:
•
trade relations involving purchases and sales of raw materials and finished goods;
•
services (technical, organisational and general) provided by head office for the benefit of
group companies;
•
recharge of royalties for the use of trademarks, patents and technological know-how by
group companies.
The related party disclosures also include the compensation paid to Directors, Statutory Auditors
and Key Management Personnel.
All the above transactions form part of the Group's continuing operations.
The following tables provide a summary of related party transactions and balances for the years
ended 31 December 2023 and 31 December 2022:
(Euro/million)
31.12.2023
Equity-accounted
companies
Compensation
of directors,
statutory
auditors
and key
management
personnel
Total
related
parties
Total
reported
amount
Related
party
% total
Equity-accounted investments
218
-
218
218
100.0%
Trade receivables
3
-
3
1,987
0.2%
Other receivables
2
-
2
1,090
0.2%
Trade payables
4
-
4
2,199
0.2%
Other payables
-
5
5
2,522
0.2%
Provisions for risks and charges
-
5
5
811
0.6%
(Euro/million)
31.12.2022
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
430
Equity-accounted
companies
Compensation
of directors,
statutory
auditors
and key
management
personnel
Total
related
parties
Total
reported
amount
Related
party
% total
Equity-accounted investments
387
-
387
387
100.0%
Trade receivables
-
-
-
1,942
0.0%
Other receivables
3
-
3
1,012
0.3%
Trade payables
17
-
17
2,718
0.6%
Other payables
-
2
2
1,722
0.1%
Provisions for risks and charges
-
8
8
696
1.1%
(Euro/million)
2023
Equity-accounted
companies
Compensation
of directors,
statutory
auditors
and key
management
personnel
Total
related
parties
Total
reported
amount
Related
party
% total
Other income
6
-
6
70
8.6%
Personnel costs
-
(13)
(13)
(1,804)
0.7%
Other expenses
(6)
(1)
(7)
(2,572)
0.3%
Share of net profit/(loss) of equity-
accounted companies
33
-
33
33
100.0%
(Euro/million)
2022
Equity-accounted
companies
Compensation
of directors,
statutory
auditors
and key
management
personnel
Total
related
parties
Total
reported
amount
Related
party
% total
Other income
7
-
7
70
10.0%
Personnel costs
-
(16)
(16)
(1,758)
0.9%
Other expenses
(6)
(2)
(8)
(2,525)
0.3%
Share of net profit/(loss) of equity-
accounted companies
47
-
47
47
100.0%
Transactions with associates
Trade and other payables refer to goods and services provided in the ordinary course of the
Group's business. Trade and other receivables refer to transactions carried out in the ordinary
course of the Group's business.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
431
Top management compensation
Top management compensation is analysed as follows:
(Euro/000)
2023
2022
Salaries and other short-term benefits - fixed part
4,482
4,540
Salaries and other short-term benefits - variable part
2,161
2,726
Other benefits
2,141
290
Share-based payments
3,937
8,923
Other costs
1,300
1,833
Total
14,021
18,312
of which Directors
6,965
11,233
The amounts shown in the table are the costs recognised in profit or loss for the year.
At 31 December 2023, employee benefit obligations pertaining to top managers amounted to
Euro 5 million.
34. COMPENSATION OF DIRECTORS AND STATUTORY AUDITORS
The compensation of the executive and non-executive Directors of Prysmian S.p.A. came to Euro
6.96 million in 2023 (Euro 11.2 million in 2022). The compensation of the Statutory Auditors of
Prysmian S.p.A. came to Euro 0.2 million in 2023, the same as the year before. Compensation
includes emoluments, and any other types of remuneration, pension and medical benefits,
received for their service as Directors or Statutory Auditors of Prysmian S.p.A. and other
companies included in the scope of consolidation, and that have constituted an expense for
Prysmian.
35. ATYPICAL AND/OR UNUSUAL TRANSACTIONS
In accordance with the disclosures required by Consob Communication DEM/6064293 dated 28
July 2006, it is reported that no atypical and/or unusual transactions took place during 2023.
36. SIGNIFICANT NON-RECURRING EVENTS AND TRANSACTIONS
As required by Consob Communication DEM/6064293 dated 28 July 2006 and in accordance with
the ESMA Guidelines/2015/1415, the following table presents the effects of non-recurring events
and transactions on profit or loss:
(Euro/million)
2023
2022
Non-recurring other income/(expenses)
Antitrust
(9)
(47)
Non-recurring other finance income/(costs)
Non-recurring other finance income/(costs)
2
-
Total
(7)
(47)
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
432
37. STATEMENT OF CASH FLOWS
The decrease in net working capital provided Euro 197 million in cash flow. After Euro 328 million
in tax payments and Euro 13 million in dividend receipts, operating activities in 2023 therefore
generated a net cash inflow of Euro 1,416 million, which included Euro 4 million for antitrust
matters.
Net operating capital expenditure used Euro 624 million in cash in 2023, a large part of which
relating to projects to increase and rationalise production capacity and to develop new products.
More details can be found in Note 1. Property, plant and equipment of these Explanatory Notes.
Cash flow from financing activities was influenced by the distribution of dividends, amounting to
Euro 165 million. Finance costs paid, net of finance income received, came to Euro 72 million.
38. INFORMATION PURSUANT TO ART.149-DUODECIES OF THE CONSOB ISSUER
REGULATIONS
Pursuant to art. 149-duodecies of the Consob Issuer Regulations, the following table shows the
fees in 2023 for audit work and other services provided by the independent auditors EY S.p.A.
and companies in the EY network:
(Euro/000)
Recipient
Supplier of
services
Fees for 2023
Fees for 2022
Audit services
Parent Company - Prysmian S.p.A.
EY S.p.A.
821
798
Italian subsidiaries
EY S.p.A.
496
461
Foreign subsidiaries
EY S.p.A.
1,315
1,360
Foreign subsidiaries
EY network
2,000
1,925
Certification services
Parent Company - Prysmian S.p.A.
EY S.p.A.
230
303
Italian subsidiaries
EY S.p.A.
12
15
Foreign subsidiaries
(1)
EY network
47
-
Other services
Parent Company - Prysmian S.p.A.
EY S.p.A.
60
60
Italian subsidiaries
EY S.p.A.
-
20
Foreign subsidiaries
(1)
EY network
125
161
Total
5,106
5,103
(1)
Tax and other services.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
433
39. BASIS OF CONSOLIDATION AND ACCOUNTING POLICIES
The financial statements of the Group's consolidated operating companies have been prepared
for the financial years ended 31 December 2023 and 31 December 2022, and have been
specifically and appropriately adjusted, where necessary, to bring them into line with the Group's
accounting policies and principles.
Subsidiaries
The Group consolidated financial statements include the financial statements of Prysmian S.p.A.
(the Parent Company) and the subsidiaries over which the Parent Company exercises direct or
indirect control. Subsidiaries are consolidated from the date control is acquired until the date
such control ceases. Specifically, control exists when the parent Prysmian S.p.A. has all of the
following:
•
decision-making power, meaning the ability to direct the investee's relevant activities,
i.e. the activities that significantly affect the investee's returns;
•
exposure, or rights, to variable returns from its involvement with the investee;
•
the ability to use its power.
The existence of potential voting rights exercisable at the reporting date is also taken into
consideration for the purposes of determining control.
Subsidiaries are consolidated on a line-by-line basis commencing from the date control is
effectively obtained by the Group; at the date of obtaining control, the carrying amount of an
investment is eliminated against the corresponding portion of the investee's equity by allocating
its fair value to individual assets, liabilities and contingent liabilities. Any residual difference, if
positive, is recognised as "Goodwill". If the acquisition is achieved in stages, the entire
investment is remeasured at fair value on the date control is obtained; after this date, any
additional acquisitions or disposals of equity interests, without a change of control, are treated
as transactions between owners recognised in equity. Costs incurred for the acquisition are
always expensed immediately to profit or loss; changes in contingent consideration are
recognised in profit or loss. The share of equity and share of the result for the period attributable
to non-controlling interests are presented separately within the financial statements.
Subsidiaries cease to be consolidated from the date control is transferred to third parties; the
disposal of an equity interest involving a loss of control results in recognising in profit or loss (i)
the gain or loss arising on the difference between the consideration received and the respective
share of equity transferred to third parties, (ii) any amounts relating to the subsidiary recognised
in other comprehensive income that may be reclassified to profit or loss and (iii) the gain or loss
from adjusting any non-controlling interest retained by Prysmian Group to its fair value
calculated at the date control is lost.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
434
Associates and joint arrangements: joint ventures and joint operations
Associates are those entities over which the Group has significant influence. Investments in
associates are accounted for using the equity method and are initially recorded at cost.
Companies managed under contractual arrangements whereby two or more parties, who share
control through unanimous consent, have the power to make relevant decisions and govern the
exposure to variable future returns, qualify as joint operations and as such are accounted for in
the joint operator's accounts directly in proportion to the interest held in the joint operation. In
addition to recording the relevant share of assets, liabilities, revenues and expenses, a joint
operator also recognises its obligations under the related arrangement. Equally, if a party
participates in, but does not have joint control of, a joint operation, it nonetheless recognises in
its own financial statements its share of the joint operation's assets and liabilities, revenues and
expenses as well as its contractual obligations under the arrangement.
Other investments in joint ventures, over which significant influence is exercised but which do
not qualify as joint operations, are accounted for using the equity method.
Like in the 2022 consolidated financial statements, the Indian company Ravin Cables Limited is
not under the Group's control for the reasons described in more detail below.
Ravin Cables Limited
In January 2010, Prysmian Group acquired a 51% interest in the Indian company Ravin Cables
Limited ("Ravin"), with the remaining 49% held by other shareholders directly or indirectly
associated with the Karia family (the "Local Shareholders"). Under the agreements signed with
the Local Shareholders, after a limited transition period, management of Ravin would be
transferred to a Chief Executive Officer appointed by Prysmian. However, this failed to happen
and, in breach of the agreements, Ravin's management remained in the hands of the Local
Shareholders and their representatives. Consequently, having now lost control, Prysmian Group
ceased to consolidate Ravin and its subsidiary Power Plus Cable Co. LLC. with effect from 1 April
2012. In February 2012, Prysmian found itself forced to initiate arbitration proceedings before
the London Court of International Arbitration (LCIA), requesting that the Local Shareholders be
declared in breach of contract and ordered to sell the shares representing 49% of Ravin's share
capital to Prysmian. In a ruling handed down in April 2017, the LCIA upheld Prysmian's claims
and ordered the Local Shareholders to sell the shares representing 49% of Ravin's share capital
to Prysmian. However, the Local Shareholders did not voluntarily enforce the arbitration award
and so Prysmian had to initiate proceedings in the Indian courts in order to have the arbitration
award recognised in India. Having gone through two levels of the court system, these
proceedings were finally concluded on 13 February 2020 with the pronouncement of a ruling by
the Indian Supreme Court under which the latter definitively declared the arbitration award
enforceable in India. In view of the continuing failure of the Local Shareholders to comply
voluntarily, Prysmian has requested the Mumbai court to enforce the arbitration award so as to
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
435
purchase the shares representing 49% of Ravin's share capital as soon as possible. This case is
currently still in progress and so control of the company is considered to have not yet been
acquired.
Translation of foreign operation financial statements
The assets and liabilities of consolidated foreign operations expressed in currencies other than
the Euro are translated using the closing exchange rate on the reporting date; revenues and
expenses are translated at the average exchange rate prevailing in the reporting period. The
resulting translation differences are presented in equity, specifically in the "Currency translation
reserve" included in other comprehensive income, until disposal of the related foreign operation.
Foreign currency transactions are recorded at the exchange rate prevailing on the transaction
date. Monetary assets and liabilities are translated at the closing exchange rate on the reporting
date. Exchange differences arising on translation and those realised on the settlement of
transactions are recorded in finance income and costs.
IAS 29 - Financial Reporting in Hyperinflationary Economies
establishes that if a foreign entity
operates in a hyperinflationary economy, revenues and expenses are translated using the
exchange rate current at the reporting date; accordingly, all amounts in the income statement
are restated by applying the change in the general price index between the date when income
and expenses were initially recorded in the financial statements and the reporting date.
The Group controls companies based in Turkey, a country that has qualified since 2022 for
treatment as a hyperinflationary economic environment, in accordance with international
accounting standards. Cumulative consumer price inflation over the past 3 years reached 268%
in December 2023.
In accordance with IAS 29, the restatement of financial statements as a whole requires the
application of specific procedures as well as judgement. With reference to the income statement,
income and expenses have been restated by applying the change in the general price index. The
income statement thus restated has been translated into Euro at the closing rate on 31 December
2023 instead of at the reporting period's average rate. The application of the standard to the
Turkish subsidiaries has had a negative impact of Euro 3 million on net sales and a negative
impact of Euro 6 million on net profit.
With reference to the statement of financial position, monetary items have not been restated
because they are already expressed in terms of the monetary unit current at the end of the
reporting period; non-monetary assets and liabilities have been revalued from the date the
assets and liabilities were originally recorded through until the reporting date. This has resulted
in the recognition of an overall expense of Euro 7 million, reported in the income statement
under net Finance income (costs).
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This standard accounting has been applied to the subsidiary in Argentina since 1 July 2018.
Inflation in Argentina has accelerated even more in 2023, causing cumulative consumer price
inflation over the last 3 years to reach 816%. The income statement thus restated has been
translated into Euro at the closing rate on 31 December 2023 instead of at the average rate for
the reporting period. The effects coming from the application of the standard for the Argentine
subsidiary resulted in a negative change in sales of Euro 43 million and a negative impact on net
income of Euro 28 million. With regard to the balance sheet, the monetary items have not been
restated as they are already expressed in the unit of measurement current at the end of the
period; Non-cash assets and liabilities were revalued from the date on which the assets and
liabilities were initially recognised until the end of the period. This resulted in the recognition of
a total income of Euro 8 million, which was recognised in the profit and loss under net financial
income (expense).
It should be noted that as of 1 January 2024, the Argentine company switched its functional
currency from the Argentine peso to the US dollar. IAS 29 will therefore no longer be applied to
the Argentine subsidiary.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
437
The exchange rates applied are as follows:
Closing rates
at
Period average
rates
31.12.2023
31.12.2022
2023
2022
Europe
British Pound
0.869
0.887
0.870
0.853
Swiss Franc
0.926
0.985
0.972
1.005
Hungarian Forint
382.80
400.87
381.85
391.29
Norwegian Krone
11.241
10.514
11.425
10.103
Swedish Krona
11.096
11.122
11.479
10.630
Czech Koruna
24.724
24.116
24.004
24.566
Danish Krone
7.453
7.437
7.451
7.440
Romanian Leu
4.976
4.950
4.947
4.931
Turkish Lira
32.633
19.971
25.732
17.396
Polish Zloty
4.340
4.681
4.542
4.686
Russian Rouble
99.192
75.655
92.241
72.549
North America
US Dollar
1.105
1.067
1.081
1.053
Canadian Dollar
1.464
1.444
1.459
1.369
South America
Colombian Peso
4,268
5,172
4,675
4,474
Brazilian Real
5.350
5.565
5.401
5.439
Argentine Peso
893.337
188.959
319.536
137.751
Chilean Peso
977.070
913.820
908.197
917.925
Costa Rican Colón
575.561
631.449
586.940
680.721
Mexican Peso
18.723
20.856
19.183
21.187
Peruvian Sol
4.082
4.046
4.047
4.038
Oceania
Australian Dollar
1.626
1.569
1.629
1.517
New Zealand Dollar
1.750
1.680
1.762
1.658
Africa
CFA Franc
655.957
655.957
655.957
655.957
Angolan Kwanza
920.402
541.198
746.207
486.921
Tunisian Dinar
3.394
3.322
3.356
3.251
South African Rand
20.348
18.099
19.955
17.209
Asia
Chinese Renminbi (Yuan)
7.851
7.358
7.660
7.079
United Arab Emirates Dirham
4.058
3.917
3.971
3.868
Bahraini Dinar
0.415
0.401
0.407
0.396
Hong Kong Dollar
8.631
8.316
8.465
8.245
Singapore Dollar
1.459
1.430
1.452
1.451
Indian Rupee
91.905
88.171
89.300
82.686
Indonesian Rupiah
17,080
16,520
16,480
15,625
Japanese Yen
156.330
140.660
151.990
138.027
Thai Baht
37.973
36.835
37.631
36.856
Philippine Peso
61.283
59.320
60.163
57.314
Omani Rial
0.425
0.410
0.416
0.405
Malaysian Ringgit
5.078
4.698
4.932
4.628
Qatari Riyal
4.022
3.882
3.936
3.834
Saudi Riyal
4.144
4.000
4.055
3.949
39.1 TRANSLATION OF TRANSACTIONS IN CURRENCIES OTHER THAN THE FUNCTIONAL
CURRENCY
Transactions in currencies other than the functional currency of the company which undertakes
the transaction are translated using the exchange rate applicable at the transaction date.
Draka NK Cables (Asia) Pte Ltd (Singapore), Draka Philippines Inc. (Philippines), Draka Durango
S. de R.L. de C.V., Draka Mexico Holdings S.A. de C.V., Prysmian Cables y Sistemas de Mexico
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
438
S. de R.L. de C.V., Cobre Cerrillos S.A. (Cile) and NK Mexico Holdings S.A. de C.V. (Mexico)
present their financial statements in a currency other than that of the country they operate in,
as their main transactions are not conducted in the local currency but in their reporting currency.
Foreign currency exchange gains and losses arising on completion of transactions or on the year-
end translation of assets and liabilities denominated in foreign currencies are recognised in profit
or loss.
Exchange differences arising on any loans between group companies that form part of the
reporting entity's net investment in a foreign operation are recognised in other comprehensive
income and reclassified from equity to profit or loss on disposal of the net investment.
Property, plant and equipment are stated at the cost of acquisition or production, net of
accumulated depreciation and any impairment. Cost includes expenditure directly incurred to
prepare the assets for use, as well as any costs for their dismantling and removal which will be
incurred as a consequence of contractual or legal obligations requiring the asset to be restored
to its original condition.
Depreciation is charged on a straight-line, monthly basis using rates that allow assets to be
depreciated until the end of their useful lives. When assets consist of different identifiable
components, whose useful lives differ significantly from each other, each component is
depreciated separately using the component approach.
The indicative useful lives estimated by the Group for the various categories of property, plant
and equipment are as follows:
Land
Not depreciated
Buildings
25-50 years
Plant
10-25 years
Machinery
10-25 years
Equipment and Other assets
3-10 years
The residual values and useful lives of property, plant and equipment are reviewed and adjusted,
if appropriate, at least at the end of each full-year reporting period.
From time to time the Group is required to dry dock its cable-laying vessels in order to carry out
inspections and maintenance. Dry-docking costs include the replacement of parts and major
repairs and maintenance. These costs are incurred as part of periodically scheduled inspections
and result in future economic benefits. For this reason, the Group capitalises dry-docking costs
as they occur and depreciates them on a straight-line basis over a period of 3 to 5 years, which
is generally the period until the next scheduled dry-docking.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
439
If the period until the next scheduled dry-docking is shorter than expected, any undepreciated
dry-docking costs are immediately expensed to profit or loss before the next scheduled dry-
docking.
A lease is a contract that guarantees the right to use an asset (the leased asset) for a period of
time in exchange for a payment or a series of payments.
At the date leased assets become available for use, lessees shall recognise the rights of use as
non-current assets and a corresponding financial liability.
Lease payments are divided into interest expense, recognised in profit or loss, and repayment
of principal, accounted for as a reduction in the financial liability. Right-of-use assets are
depreciated every month on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets.
Right-of-use assets and lease liabilities are initially measured at the present value of future lease
payments.
The present value of lease liabilities includes the following payments:
•
fixed payments;
•
variable lease payments that depend on an index or a rate;
•
exercise price of a purchase option reasonably certain to be exercised;
•
payments of penalties for terminating the lease if the termination option is reasonably
certain to be exercised;
•
optional payments after the non-cancellable period, if the lease is reasonably certain to
be extended beyond the non-cancellable period.
Future lease payments are discounted using the incremental borrowing rate. This is based on
the risk-free rate of the country in which the contract is negotiated and on the term of the lease,
and is also adjusted for the Group's credit spread.
Lease extension options are considered for the purposes of determining the lease term, if
reasonably certain to be exercised.
Right-of-use assets are measured at cost, whose initial amount is equal to the lease liability.
The Group applies the exemption for short-term leases since their accounting under IFRS 16 is
not considered to have a significant impact on the overall lease liability.
The financial liability recognised under IFRS 16, amounting to Euro 304 million, is analysed by
maturity as follows:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
440
(Euro/million)
31.12.2023
Less than
1 year
From
1 to 2 years
From
2 to 5 years
More than
5 years
Lease liabilities
70
43
95
96
The following table reports movements in right-of-use assets recognised in Property, plant and
equipment in accordance with IFRS 16:
(Euro/million)
Land
Buildings
Plant and
machinery
Equipment
Other
assets
Total
Balance at 31
December 2022
14
106
14
9
55
198
Movements in
2023:
- Investments
2
37
1
2
111
153
- Depreciation and
impairment
(1)
(27)
(2)
(5)
(33)
(68)
- Currency
translation
differences
-
(1)
2
-
(1)
-
Balance at 31
December 2023
15
115
15
6
132
283
Of which:
- Historical cost
18
182
21
19
219
459
- Accumulated
depreciation
(3)
(67)
(6)
(13)
(87)
(176)
Net book value
15
115
15
6
132
283
(Euro/million)
Land
Buildings
Plant and
machinery
Equipment
Other
assets
Total
Balance at 31
December 2021
14
93
11
11
67
196
Movements in
2022:
- Investments
-
35
5
2
16
58
- Depreciation
1
1
-
-
1
3
- Currency
translation
differences
(1)
(23)
(1)
(5)
(29)
(59)
- Other
-
-
(1)
1
-
-
Balance at 31
December 2022
14
106
14
9
55
198
Of which:
- Historical cost
17
164
19
20
128
348
- Accumulated
depreciation
(3)
(58)
(5)
(11)
(73)
(150)
Net book value
14
106
14
9
55
198
39.3 GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill represents the difference between the cost incurred for acquiring a controlling interest
(in a business) and the fair value of the assets and liabilities identified at the acquisition date.
Goodwill is not amortised, but is tested for impairment at least annually to identify any
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
441
impairment losses. This test is carried out with reference to the cash-generating unit ("CGU") or
group of CGUs to which goodwill is allocated and at which level it is monitored. More information
can be found in Note 2. Goodwill and Other intangible assets.
Other intangible assets
Other intangible assets are recognised in the financial statements at acquisition cost and/or
production cost, including all costs directly attributable to make the assets available for use, net
of accumulated amortisation and any impairment. Amortisation commences when the asset is
available for use and is calculated on a straight-line basis over the asset's estimated useful life.
Other intangible assets have a finite useful life.
Other intangible assets include Patents, concessions, licences, trademarks and similar rights and
Software. These assets are recognised at acquisition cost and amortised on a straight-line basis
over their useful lives.
39.4 IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT AND FINITE-LIFE INTANGIBLE
ASSETS
Property, plant and equipment, rights to use such assets and finite-life intangible assets are
analysed at each reporting date for any evidence of impairment. If such evidence is identified,
the recoverable amount of these assets is estimated and any impairment loss relative to
carrying amount is recognised in profit or loss. The recoverable amount is the higher of the fair
value of an asset, less costs to sell, and its value in use, where the latter is the present value
of the estimated future cash flows of the asset, also taking into account the issues described in
the paragraph on "Risks related to climate change”. The recoverable amount of an asset which
does not generate largely independent cash flows is determined in relation to the cash-
generating unit to which the asset belongs. In calculating an asset's value in use, the expected
future cash flows are discounted using a discount rate reflecting current market assessments
of the time value of money, in relation to the period of the investment and the specific risks
associated with the asset. Additional information about the measurement of cash-generating
units can be found in Note 40. Estimates and assumptions.
In accordance with
IFRS 9 - Financial instruments
, financial assets are initially recorded at fair
value and classified in one of the following categories on the basis of their nature and the purpose
for which they were acquired:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
442
a)
Financial assets at amortised cost;
b)
Financial assets at fair value through profit or loss (FVPL);
c)
Financial assets at fair value through other comprehensive income (FVOCI).
Financial assets are derecognised when the right to receive cash flows from the instrument
expires and the Group has substantially transferred all the risks and rewards of ownership of the
instrument and the related control.
(a)
Financial assets at amortised cost
The Group classifies in this category receivables and securities that it expects to hold to maturity,
meaning that it receives payments of interest and principal from such assets on specified due
dates. Assets at amortised cost are classified in the statement of financial position under
"Financial assets at amortised cost" and presented as current or non-current assets depending
on whether their contractual maturity is less or more than twelve months from the reporting
date.
These assets are reported at amortised cost and written down if any impairment is identified.
(b)
Financial assets at fair value through profit or loss (FVPL)
Financial assets classified in this category are represented by instruments held for trading,
having been acquired for the purpose of selling in the near term and/or complex instruments
whose cash flows cannot be identified simply as principal and interest.
Financial assets at fair value through profit or loss are measured at fair value, with gains and
losses from changes in fair value reported in the income statement under "Finance income" and
"Finance costs", in the period in which they arise.
Assets in this category are classified as current assets.
(c)
Financial assets at fair value through other comprehensive income (FVOCI)
The Group uses this category to record equity investments it does not expect to dispose of in
the near term and with which it has no controlling relationship, classified as non-current assets,
and financial assets in which it invests its liquidity and whose disposal date is not known,
classified as current assets.
The above equity investments are measured at fair value through OCI. Dividends from such
investments are recognised in finance income.
Financial assets classified in this category are measured at fair value through OCI. Interest from
instruments are sold, the related equity reserve is recycled to profit or loss.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
443
Metal derivatives
Metal derivatives not designated as hedging instruments are recognised at fair value through
profit or loss. The related income and expenses are classified in operating income and
expenses. They are recognised as current assets or liabilities in the statement of financial
position if they mature within twelve months, otherwise they are classified as non-current assets
or liabilities.
The Group has designated certain derivatives denominated in EUR, GBP, USD and RMB entered
into with brokers and aimed at mitigating the risk of copper and aluminium price fluctuations,
as cash flow hedges, being hedging instruments associated with highly probable transactions.
In addition, since the qualifying conditions have been met, the Group has extended cash flow
hedge accounting to derivatives contracted from 1 January 2023 and intended to hedge the risk
of fluctuations in gas, electricity and lead prices.
All derivatives designated as cash flow hedges are recognised at fair value through equity, and
therefore designated as hedging instruments. These derivative financial instruments, which
qualify for recognition as hedging instruments, are designed to hedge the price risk of
commodities that are the subject of highly probable future purchase transactions (hedged
items). A derivative that sets the commodity's purchase price is designated as a hedging
instrument, since it relates to a physical commodity purchase that will be made. When the
physical purchase is made, the Group unwinds the buy derivatives with sell derivatives. The
effectiveness of the hedging relationships is assessed from the inception of each derivative
instrument until it is closed out. The fair values of the various derivative financial instruments
used as hedging instruments and movements in the "Cash flow hedge reserve" forming part of
equity are presented in Note 8. Derivatives.
Interest rate derivatives
Interest rate derivatives not designated as hedging instruments are recognised at fair value
through profit or loss. The related income and expenses are classified in finance income and
they mature within twelve months, otherwise they are classified as non-current assets or
liabilities.
Interest rate derivatives designated as hedging instruments are recognised at fair value through
other comprehensive income. When the derivative matures, the related reserve is recycled to
The relationship between the hedged item and the designated interest rate hedge must be
documented. The effectiveness of each hedge is reviewed both at the derivative's inception and
during its life cycle. In particular, interest rate derivatives designated as hedging instruments
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
444
are intended to hedge the risk of cash flow volatility linked to finance costs originating from
variable rate debt.
Forex derivatives
Forex derivatives not designated as hedging instruments are recognised at fair value through
profit or loss. The related income and expenses are classified in finance income and costs. They
are recognised as current assets or liabilities in the statement of financial position if they mature
within twelve months, otherwise they are classified as non-current assets or liabilities.
Forex derivatives designated as hedging instruments are recognised at fair value through other
comprehensive income. When the derivative matures, the related reserve is recycled to profit or
loss.
The relationship between the hedged item and the designated forex hedge must be documented.
The effectiveness of each hedge is reviewed both at the derivative's inception and during its life
cycle. In particular, forex derivatives designated as hedging instruments are intended to hedge
exchange rate risk on contracts or orders. These hedging relationships aim to reduce cash flow
volatility due to exchange rate fluctuations affecting future transactions. In particular, the
hedged item is the value in the company's unit of account of a cash flow expressed in another
currency that is expected to be received/paid under a contract or an order whose amount
exceeds the minimum thresholds set by the Group: all cash flows thus identified are therefore
designated as hedged items in the hedging relationship. The reserve originating from changes
in the fair value of derivative instruments is transferred to profit or loss according to the stage
of completion of the contract itself, where it is classified as contract revenue/costs.
39.7 TRADE AND OTHER RECEIVABLES
Trade and other receivables are initially recognised at fair value and subsequently measured at
amortised cost, net of the allowance for doubtful accounts. Impairment of receivables is
recognised on the basis of Expected Credit Loss (ECL). ECLs are based on the difference between
the cash flows due by contract and all the cash flows that the Group expects to receive,
discounted at an original effective interest rate.
The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages.
-
For credit exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result from default
events that are possible within the next 12 months (a 12-month ECL).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
445
-
For those credit exposures for which there has been a significant increase in credit risk
since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The Group adopts a simplified approach to calculating ECLs for trade receivables and contract
assets: it does not track changes in credit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date. The Group has established a provision matrix that is based
on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors
and the economic environment.
The Group makes use of without-recourse factoring of trade receivables. These receivables are
derecognised because such transactions transfer substantially all the related risks and rewards
of the receivables to the factor.
39.8 INVENTORIES
Inventories are recorded at the lower of purchase or production cost and net realisable value,
defined as the amount the Group expects to obtain from their sale in the normal course of
business, net of selling costs. The cost of inventories of raw materials, ancillaries and
consumables, as well as finished products and goods is determined using the FIFO (first-in, first-
out) method.
The exception is inventories of non-ferrous metals (copper, aluminium and lead) and quantities
of such metals contained in semi-finished and finished products, which are valued using the
weighted average cost method.
The cost of finished and semi-finished products includes design costs, raw materials, direct
labour costs and other production costs (calculated on the basis of normal operating capacity).
39.9 CONSTRUCTION CONTRACTS
Construction contracts (hereafter also "contracts") are recognised at the value agreed in the
contract, in accordance with the percentage of completion method, taking into account the
progress of the project and the expected contractual risks. The progress of a project is measured
by reference to the contract costs incurred at the reporting date in relation to the total estimated
costs for each contract. When the outcome of a contract cannot be estimated reliably, the
contract revenue is recognised only to the extent that the costs incurred are likely to be
recovered. When the outcome of a contract can be estimated reliably, and it is probable that the
contract will be profitable, contract revenue is recognised over the term of the contract. When it
is probable that total contract costs will exceed total contract revenue, the potential loss is
recognised immediately as an expense.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
446
If the contract contains a warranty other than those used in standard market practice, this
warranty is recognised separately.
The Group reports as assets the gross amount due from customers for construction contracts,
where the costs incurred, plus recognised profits (less recognised losses), exceed the billing of
work-in-progress; such assets are reported in "Other receivables". Amounts billed but not yet
paid by customers are reported under "Trade receivables".
The Group records as liabilities the gross amount due to customers for all construction contracts
where billing exceeds the costs incurred plus recognised profits (less recognised losses). Such
liabilities are reported under "Other payables".
39.10 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash, demand bank deposits and other short-term
investments, with a maturity of three months or less. Current account overdrafts are classified
as financial payables under current liabilities in the statement of financial position.
39.11 TRADE AND OTHER PAYABLES
Trade and other payables are initially recognised at fair value and subsequently measured at
amortised cost.
39.12 BORROWINGS FROM BANKS AND OTHER LENDERS
Borrowings from banks and other lenders are initially recognised at fair value, less directly
attributable costs. Subsequently, they are measured at amortised cost, using the effective
interest method. If the estimated expected cash flows should change, the value of the liabilities
is recalculated to reflect this change using the present value of the expected new cash flows and
the effective internal rate originally established. Borrowings from banks and other lenders are
classified as current liabilities, unless the Group has an unconditional right to defer their payment
for at least twelve months after the reporting date.
Borrowings from banks and other lenders are derecognised when they are extinguished and
when the Group has transferred all the risks and expense relating to such instruments.
39.13 EMPLOYEE BENEFITS
he Group operates both defined contribution plans and defined benefit plans.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
447
Defined contribution plans
A defined contribution plan is a plan under which the Group pays fixed contributions to third-
party fund managers and to which there are no legal or other obligations to pay further
contributions should the fund not have sufficient assets to meet the obligations to employees for
current and prior periods. In the case of defined contribution plans, the Group pays contributions,
voluntarily or as established by contract, to public and private pension insurance funds. The
Group has no obligations subsequent to payment of such contributions, which are recognised as
personnel costs on an accrual basis. Prepaid contributions are recognised as an asset which will
be repaid or used to offset future payments, if due.
Defined benefit plans
In defined benefit plans, the total benefit payable to the employee can be quantified only after
the employment relationship ceases, and is linked to one or more factors, such as age, years of
service and remuneration; the related cost is therefore charged to the period's income statement
on the basis of an actuarial calculation. The liability recognised for defined benefit plans
corresponds to the present value of the obligation at the reporting date, less the fair value of
the plan assets, where applicable. Obligations for defined benefit plans are determined annually
by an independent actuary using the projected unit credit method. The present value of a defined
benefit plan is determined by discounting the future cash flows at an interest rate equal to that
of high-quality corporate bonds issued in the liability's settlement currency and which reflects
the duration of the related pension plan. Actuarial gains and losses arising from the above
adjustments and changes in actuarial assumptions are recorded among the components of other
comprehensive income.
Past service costs resulting from a plan amendment are recognised immediately as an expense
in the period the plan amendment occurs.
Other post-employment obligations
Some Group companies provide medical benefit plans for retired employees. The expected cost
of these benefits is accrued over the period of employment using the same accounting method
as for defined benefit plans. Actuarial gains and losses arising from the valuation and the effects
of changes in the actuarial assumptions are accounted for in equity. These liabilities are valued
annually by a qualified independent actuary.
Termination benefits
The Group recognises termination benefits when it can be shown that the termination of
employment complies with a formal plan communicated to the parties concerned that establishes
termination of employment, or when payment of the benefit is the result of voluntary redundancy
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
448
incentives. Termination benefits payable more than twelve months after the reporting date are
discounted to present value.
39.14 PROVISIONS FOR RISKS AND CHARGES
Provisions for risks and charges are recognised for losses and charges of a definite nature, whose
existence is certain or probable, but the amount and/or timing of which cannot be determined
reliably. A provision is recognised only when there is a current (legal or constructive) obligation
for a future outflow of economic resources as the result of past events and it is likely that this
outflow is required to settle the obligation. Such amount is the best estimate of the expenditure
required to settle the obligation. Where the effect of the time value of money is material and the
obligation settlement date can be estimated reliably, the provisions are stated at the present
value of the expected outlay, using a rate that reflects market conditions, the variation in the
time value of money, and risks specific to the obligation.
Increases in the provision due to changes in the time value of money are accounted for as
interest expense.
Risks for which the emergence of a liability is only possible but not remote are reported in the
disclosures about commitments and contingencies and no provision is recognised.
Any contingent liabilities accounted for separately when allocating the cost of a business
combination, are measured at the higher of the amount obtained under the method described
above for calculating provisions for risks and charges and the liability's original present value.
Additional details can be found in Note 29. Contingent liabilities.
Provisions for risks and charges include an estimate of legal costs to be incurred if such costs
are incidental to the discharge of the provision to which they refer.
39.15 REVENUE RECOGNITION
Revenue is recognised at the fair value of the consideration received for the sale of goods and
services in the ordinary course of the Group's business. Revenue is recognised net of value-
added tax, rebates, discounts and expected returns.
Revenue is accounted for as follows:
Revenue from the sale of goods is recognised at the point in time when control of the asset is
transferred to the customer, normally coinciding with shipment or delivery of the goods and
acceptance by the customer. The Group checks whether there are conditions in the contract that
represent separate performance obligations to which a portion of the transaction price must be
allocated (e.g., warranties), as well as the effects arising from the presence of any variable
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
449
consideration, significant financing components or non-cash consideration payable to the
customer. In the case of variable consideration, this is estimated based on the amount to which
the Group will be entitled when the goods are transferred to the customer; such consideration
is estimated at contract inception and is recognised only when it is highly probable. The Group
grants discounts to certain customers when the quantity of products purchased during the period
exceeds a threshold specified in the contract. Discounts are offset against amounts payable by
the customer. To estimate the variable consideration for expected discounts, the Group applies
the "most likely amount" method for contracts with a single-volume discount threshold and the
short-term advances from its customers and the agreed amount of consideration is not adjusted
for the effects of a significant financing component if it expects, at contract inception, that the
period between transfer of the promised good or service to the customer and related customer
payment will not exceed one year.
The method of recognising revenue for construction contracts is outlined in Note 39.9
Construction contracts.
39.16 GOVERNMENT GRANTS
Government grants are recognised on an accrual basis in direct relation to the costs incurred
when there is a formal resolution approving the grant and, when the right to the grant is assured
since it is reasonably certain that the Group will comply with the conditions for its receipt and
that the grant will be received.
(a)
Grants related to assets
Government grants for property, plant and equipment are recorded as deferred income under
"Other payables", classified as current or non-current liabilities for the respective long-term and
short-term portion of such grants. Deferred income is recognised in "Other income" in the income
statement on a straight-line basis over the useful life of the asset to which the grant refers.
(b)
Grants related to income
Grants other than those related to assets are credited to the income statement as "Other
income".
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
450
39.17 COST RECOGNITION
Costs are recognised for goods and services acquired or consumed during the reporting period
or to make a systematic allocation to match costs with revenues.
39.18 TAXES
Current taxes are calculated on the basis of taxable income for the year, applying the tax rates
in force at the reporting date.
Deferred taxes are calculated on all differences arising between the tax base of an asset or
liability and the carrying amount, except for goodwill and differences arising from investments
in subsidiaries, where the timing of the reversal of such differences is controlled by the Group
and they are unlikely to reverse in a reasonably foreseeable future. Deferred tax assets, including
those relating to past tax losses, not offset by deferred tax liabilities, are recognised to the
extent it is likely that future taxable profit will be available against which they can be recovered.
Deferred taxes are determined using tax rates that are expected to apply in the years when the
differences are realised or extinguished, on the basis of tax rates that have been enacted or
substantively enacted at the reporting date.
Current and deferred taxes are recognised in the income statement with the exception of those
relating to items recognised directly in equity, in which case the tax effect is accounted for
directly in equity. Income taxes are offset if they are levied by the same taxation authority, if
there is a legally enforceable right to offset them and if the net balance is expected to be settled.
39.19 EARNINGS PER SHARE
(a)
Basic earnings per share
Basic earnings per share are calculated by dividing the profit attributable to owners of the parent
by the weighted average number of ordinary shares outstanding during the reporting period,
excluding treasury shares.
(b)
Diluted earnings per share
Diluted earnings per share are calculated by dividing the profit attributable to owners of the
parent by the weighted average number of ordinary shares outstanding during the reporting
period, excluding treasury shares. For the purposes of calculating diluted earnings per share,
the weighted average number of outstanding shares is adjusted so as to include the exercise,
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
451
by all those entitled, of existing rights with a potentially dilutive effect, while the profit
attributable to owners of the parent is adjusted to account for any post-tax effects of exercising
such rights.
39.20 TREASURY SHARES
Treasury shares are reported as a deduction from equity. The original cost of treasury shares
and revenue arising from any subsequent sales are treated as movements in equity.
39.21 FINANCE INCOME AND COSTS
For all financial assets and liabilities measured at amortised cost and interest-bearing financial
assets classified as at fair value through other comprehensive income, interest income and
interest expense are recognised using the effective interest rate method. Interest income is
recognised to the extent that it is probable that the economic benefits will flow to the Group and
its amount can be reliably measured.
40. ESTIMATES AND ASSUMPTIONS
The preparation of financial statements requires Management to apply accounting policies and
methods which, at times, rely on judgements and estimates based on past experience and
assumptions deemed to be reasonable and realistic under the circumstances. The application of
these estimates and assumptions affects the amounts reported in the financial statements,
meaning the statement of financial position, the income statement, the statement of
comprehensive income and the statement of cash flows, as well as the accompanying
disclosures. Ultimate amounts, previously reported on the basis of estimates and assumptions,
may differ from original estimates because of uncertainty surrounding the assumptions and
conditions on which the estimates were based.
The following is a brief description of the accounting policies that require Prysmian Group's
Management to exercise greater subjectivity of judgement in making estimates and a change in
whose underlying assumptions could have a material impact on the consolidated financial
statements.
(a)
Provisions for risks and charges
Provisions are recognised for legal and tax risks to reflect the risk of an adverse outcome. The
value of the provisions recorded in the financial statements against such risks represents the
best estimate by Management at the reporting date. This estimate requires the use of
assumptions that depend on factors which may change over time and which could, therefore,
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
452
materially impact the current estimates made by Management when preparing the Group
consolidated financial statements.
(b)
Impairment of assets
Goodwill
The Group's activities are organised in three operating segments: Projects, Energy and Telecom.
The Projects segment consists of the High Voltage, Submarine Power, Submarine Telecom and
Offshore Specialties CGUs; the Energy segment consists of a number of CGUs corresponding to
the Regions or Countries in keeping with the organisation structure; lastly, the Telecom segment
consists of a single CGU that coincides with the operating segment itself. Goodwill, acquired on
the occasion of business combinations, has been allocated to groups of CGUs, corresponding to
the operating segments, which are expected to benefit from the synergies of such combinations
and which represent the lowest level at which Management monitors business performance. In
accordance with the accounting standards adopted and related impairment testing procedures,
the Group tests annually whether Goodwill has suffered any impairment loss. The recoverable
amount is determined by calculating value in use, which requires the use of estimates.
More details about the Goodwill impairment test can be found in Note 2. Goodwill and Other
intangible assets.
Property, plant and equipment and finite-life intangible assets
In accordance with the Group's accounting policies and impairment testing procedures, property,
plant and equipment and intangible assets with finite useful lives are tested for impairment,
recognised through write-down, when there are indicators that their carrying amount may be
difficult to recover through use. To verify the existence of these indicators Management has to
make subjective judgements based on information available within the Group and from the
market, as well as on past experience. If an impairment loss is identified, the Group will
determine the amount of the loss using suitable valuation techniques. Correct identification of
indicators of potential impairment, as well as its very measurement, depend on factors that may
vary over time, thus influencing the judgements and estimates made by Management.
Prysmian Group has assessed during the course of 2023 whether there was any evidence that
its CGUs might be impaired.
Further information can be found in Note 1. Property, plant and equipment.
(c)
Climate change
The estimates and assumptions impacted by climate change are discussed in the relevant section
of the Directors' Report. The opportunities and impacts arising from climate change are also
considered in the impairment tests.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
453
(d)
Depreciation and amortisation
The cost of property, plant and equipment and intangible assets is depreciated/amortised on a
straight-line basis over the estimated useful lives of the assets concerned. The useful economic
life of Group property, plant and equipment and intangible assets is determined by Management
when the asset is acquired. This is based on past experience for similar assets, market conditions
and expectations regarding future events that could impact useful life, including developments
in technology. Therefore, actual economic life may differ from estimated useful life. The Group
periodically reviews technological and industry developments to update residual useful lives. This
periodic review may result in a revision of the depreciation/amortisation period and consequently
of the depreciation/amortisation charge for future years.
(e)
Recognition of revenues and costs from construction contracts
The Group uses the percentage of completion method to account for long-term contracts. The
margins recognised in the income statement depend on the progress of the contract and its
estimated margins upon completion. This means that if work-in-progress and margins on as yet
incomplete work are to be correctly recognised, Management must have correctly estimated
contract revenue and completion costs, including any contract variations and any cost overruns
and penalties that might reduce the expected margin. The percentage of completion method
requires the Group to estimate contract completion costs and involves making estimates
dependent on factors that could potentially change over time and could therefore have a
significant impact on the recognition of revenue and margins in the pipeline.
(f)
Taxes
Consolidated companies are subject to different tax jurisdictions. A high level of judgement is
needed to establish the estimated global tax charge, also because of uncertain tax treatments.
There are many transactions for which the relevant tax liability is difficult to estimate at year
end. The Group recognises liabilities for ongoing tax risks on the basis of estimates, possibly
made with the assistance of outside experts.
(g)
Inventory valuation
Inventories are recorded at the lower of purchase cost (measured using the weighted average
cost formula for non-ferrous metals and the FIFO formula for all others) and net realisable value,
net of selling costs. Net realisable value is in turn represented by the value of firm sales orders
in the order book, or failing that by the replacement cost of the asset or raw material. If
significant reductions in the price of non-ferrous metals were to be followed by order
cancellations, the loss in the value of inventories might not be fully offset by the penalties
charged to customers for cancelling their orders.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
454
(h) Employee benefit obligations
The present value of the pension plans reported in the financial statements depends on an
independent actuarial calculation and on a number of different assumptions. Any changes in
assumptions and in the discount rate used are duly reflected in the present value calculation and
may have a significant impact on the consolidated figures. The assumptions used for the actuarial
calculation are examined by the Group annually.
Present value is calculated by discounting future cash flows at an interest rate equal to that on
high-quality corporate bonds issued in the currency in which the liability will be settled and which
takes account of the duration of the related pension plan.
Further information can be found in Note 15. Employee benefit obligations and Note 21.
Personnel costs.
(i) Incentive and share purchase plans
The employee share purchase plan, open to almost all the Group's employees, offers them an
opportunity to obtain shares under preferential terms and conditions. The operation of this plan
is described in Note 21. Personnel costs. The grant of shares is subject to continued employment
with the Group in the months between signing up to one of the plan's purchase windows and the
purchase of the shares themselves on the equity market. The plan's financial and economic
impact has therefore been estimated on the basis of the best possible estimates and information
currently available.
The 2023-2025 incentive plan involves the allocation of a number of options calculated according
to the achievement of operational, economic and financial performance conditions. The plan's
financial and economic impact has therefore been estimated on the basis of the best possible
estimates and information available at the valuation date. More details can be found in Note 21.
Personnel costs.
The "BE IN" incentive plan provides for the grant of a number of options. Sometimes this number
is determined on the basis of the achievement of performance targets, as well as on the basis
of employee participation. The plan's financial and economic impact has therefore been
estimated on the basis of the best possible estimates and information available at the valuation
date. More details can be found in Note 21. Personnel costs.
41. EVENTS AFTER THE REPORTING PERIOD
Prysmian and Telstra partner to expand optical cable manufacturing plant
On 30 January 2024, Telstra and Prysmian announced an expansion of Prysmian's optical cable
manufacturing plant in Australia in order to produce the industry-leading fibre optic cable
required for Telstra's intercity fibre network, using advanced technology aimed at reducing the
project's environmental impact. Telstra InfraCo is building the intercity fibre network in response
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
455
to the ever-growing demand for fast and capable digital networks. Sustainability has continued
to be a critical focus when developing manufacturing technology. The new fibre optic cable is
59% smaller and 54% lighter than the previous design employed across Telstra's existing fibre
network. The reduced size and weight allow an estimated 35,000 tonnes of COâ‚‚ emissions to be
saved during cable production and transport over the life of the project. To support the rollout
of this major project, Prysmian has invested in three key areas of production to significantly
increase the capacity of its Dee Why plant.
Prysmian launches innovative Sirocco Extreme 864-fibre cable
On 12 February 2024, Prysmian announced the launch of its revolutionary Sirocco Extreme 864f
microduct cable, setting a new standard of innovation for the industry. This groundbreaking
cable features record diameters and fibre density for blown microduct cables. The Sirocco
Extreme 864f microduct cable contains 864 fibres in a 9.8mm diameter, providing an
unprecedented fibre density of 11.5 fibres per mm2. It can be installed in a 12 mm duct, pushing
the boundaries of what is possible in the telecom cable systems industry. Prysmian's Sirocco
Extreme microduct cables use state-of-the-art BendBrightXS 180μm single-mode (ITU-T
G.657.D, G.657.A2) bend-insensitive fibre, ensuring compatibility with existing G.652 fibres and
application in advanced systems.
Prysmian signs contracts with Amprion worth a total of around Euro 5 billion
On 15 February 2024, Prysmian signed contracts for three projects worth a total of around Euro
5 billion with Amprion, one of Europe's leading TSOs, for two offshore grid connection systems
(BalWin1 and BalWin2), and the DC34 underground cable project. The contracts, which have
now entered Prysmian's order backlog, follow its selection as preferred bidder in August 2023.
This is the largest "bundle of contracts" ever awarded to Prysmian in terms of both value and
kilometres of cable. It involves a total of some 4,400 km of ±525 kV HVDC cables and DMR
(Dedicated Metallic Return) cables, of which around 3,400 km are land cables and 1,000 km
submarine cables.
Prysmian signs a contract worth around €1.9 billion with eastern green link 2 limited
On 27 February 2024, Prysmian has finalized the contract worth in the region of €1.9 billion by
Eastern Green Link 2 Limited, a joint venture between SSEN Transmission and National Grid
Electricity Transmission plc, the UK electricity transmission network owners. Under the contact,
Prysmian will deliver a major HVDC cable system for the Eastern Green Link 2 (EGL2) network
development project that shall connect Scotland and England.
The award of the EGL2 contract,
which can now be added to the Prysmian order backlog, follows the earlier selection of Prysmian
as the exclusive preferred bidder in May 2023 and a subsequent commitment made in June 2023
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
456
to assure Prysmian’s continued capacity availability for the project. The new connection is due
to be operational in 2029.
Milan, 28 February 2024
ON BEHALF OF THE BOARD OF DIRECTORS
THE CHAIRMAN
Claudio De Conto
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
457
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
458
SCOPE OF CONSOLIDATION – APPENDIX A
The following companies have been consolidated line-by-line:
Legal name
Office
Currency
Share
Capital
% ownership
Direct parent company
Europe
Austria
Prysmian OEKW GmbH
Wien
Euro
2,053,008
100.00%
Prysmian Cavi e Sistemi S.r.l.
Belgium
Draka Belgium N.V.
Leuven
Euro
61,973
98.52%
Draka Holding B.V.
1.48%
Draka Kabel B.V.
Denmark
Prysmian Group Denmark A/S
Albertslund
Danish Krone
40,001,000
100.00%
Draka Holding B.V.
Estonia
Prysmian Group Baltics AS
Keila
Euro
1,664,000
100.00%
Prysmian Group Finland OY
Finland
Prysmian Group Finland OY
Kirkkonummi
Euro
100,000
77.7972%
Prysmian Cavi e Sistemi S.r.l.
19.9301%
Draka Holding B.V.
2.2727%
Draka Comteq B.V.
France
Prysmian (French) Holdings S.A.S.
Paron
Euro
129,026,210
100.00%
Prysmian Cavi e Sistemi S.r.l.
Prysmian Cables et Systèmes France S.A.S.
Sens
Euro
136,800,000
100.00%
Prysmian (French) Holdings S.A.S.
Draka Comteq France S.A.S.
Paron
Euro
246,554,316
100.00%
Draka France S.A.S.
Draka Fileca S.A.S.
Sainte Geneviève
Euro
5,439,700
100.00%
Draka France S.A.S.
Draka Paricable S.A.S.
Marne La Vallée
Euro
5,177,985
100.00%
Draka France S.A.S.
Draka France S.A.S.
Marne La Vallée
Euro
261,551,700
100.00%
Draka Holding B.V.
P.O.R. S.A.S.
Marne La Vallée
Euro
100,000
100.00%
Draka France S.A.S.
Silec Cable, S. A. S.
Montreau-Fault-Yonne
Euro
60,037,000
100.00%
Grupo General Cable Sistemas, S.L.
EHC France s.a.r.l.
Sainte Geneviève
Euro
310,717
100.00%
EHC Global Inc.
Germany
Prysmian Kabel und Systeme GmbH
Berlin
Euro
15,000,000
93.75%
Draka Deutschland GmbH
6.25%
Prysmian S.p.A.
Prysmian Cable Industrial GmbH
Berlin
Euro
25,000
100.00%
Prysmian Cavi e Sistemi s.r.l.
Prysmian Unterstuetzungseinrichtung Lynen
GmbH
Eschweiler
Deutsche Mark
50,000
100.00%
Prysmian Kabel und Systeme GmbH
Draka Comteq Berlin GmbH & Co. KG
Berlin
Deutsche Mark
46,000,000
50.10%
Prysmian Netherlands B.V.
Euro
1
49.90%
Draka Deutschland GmbH
Draka Comteq Germany Verwaltungs GmbH
Koln
Euro
25,000
100.00%
Draka Comteq B.V.
Draka Comteq Germany GmbH & Co. KG
Koln
Euro
5,000,000
100.00%
Draka Comteq B.V.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
459
Draka Deutschland Erste Beteiligungs GmbH
Wuppertal
Euro
25,000
100.00%
Draka Holding B.V.
Legal name
Office
Currency
Share
Capital
% ownership
Direct parent company
Draka Deutschland GmbH
Wuppertal
Euro
25,000
90.00%
Draka Deutschland Erste Beteiligungs GmbH
10.00%
Draka Deutschland Zweite Beteiligungs GmbH
Draka Deutschland Verwaltungs GmbH
Wuppertal
Deutsche Mark
50,000
100.00%
Prysmian Kabel und Systeme GmbH
Draka Deutschland Zweite Beteiligungs
GmbH
Wuppertal
Euro
25,000
100.00%
Prysmian Netherlands B.V.
Prysmian Projects Germany GmbH
Nordenham
Euro
25,000
100.00%
Draka Deutschland GmbH
Höhn GmbH
Wuppertal
Deutsche Mark
1,000,000
100.00%
Draka Deutschland GmbH
Kaiser Kabel GmbH
Wuppertal
Deutsche Mark
9,000,000
100.00%
Draka Deutschland GmbH
NKF Holding (Deutschland) GmbH i.L
Wuppertal
Euro
25,000
100.00%
Prysmian Netherlands B.V.
Norddeutsche Seekabelwerke GmbH
Nordenham
Euro
50,025,000
100.00%
Grupo General Cable Sistemas, S.L.
EHC Germany GmbH
Baesweiler
Euro
25,200
100.00%
EHC Global Inc
U.K.
Prysmian Cables & Systems Ltd.
Eastleigh
British Pound
113,901,120
100.00%
Prysmian UK Group Ltd.
Prysmian Construction Company Ltd.
Eastleigh
British Pound
1
100.00%
Prysmian Cables & Systems Ltd.
Prysmian Cables (2000) Ltd.
Eastleigh
British Pound
1
100.00%
Prysmian Cables & Systems Ltd.
Cable Makers Properties & Services Ltd.
Esher
British Pound
39
63.84%
Prysmian Cables & Systems Ltd.
36.16%
Third Parties
Comergy Ltd.
Eastleigh
British Pound
1
100.00%
Prysmian Cavi e Sistemi S.r.l.
Prysmian Pension Scheme Trustee Ltd.
Eastleigh
British Pound
1
100.00%
Prysmian S.p.A.
Prysmian UK Group Ltd.
Eastleigh
British Pound
70,011,000
100.00%
Draka Holding B.V.
Draka Comteq UK Ltd.
Eastleigh
British Pound
14,000,002
100.00%
Prysmian UK Group Ltd.
Draka UK Ltd.
Eastleigh
British Pound
1
100.00%
Prysmian UK Group Ltd.
Prysmian PowerLink Services Ltd.
Eastleigh
British Pound
46,000,100
100.00%
Prysmian UK Group Ltd.
Escalator Handrail (UK) Ltd.
Eastleigh
British Pound
2
100.00%
EHC Global Inc.
Ireland
Prysmian Re Company Designated Activity
Company
Dublin
Euro
20,000,000
100.00%
Prysmian Servizi S.p.A.
Italy
Prysmian Cavi e Sistemi S.r.l.
Milan
Euro
50,000,000
100.00%
Prysmian S.p.A.
Prysmian Cavi e Sistemi Italia S.r.l.
Milan
Euro
77,143,249
100.00%
Prysmian S.p.A.
Prysmian Treasury
S.r.l.
Milan
Euro
80,000,000
100.00%
Prysmian S.p.A.
Prysmian PowerLink S.r.l.
Milan
Euro
100,000,000
100.00%
Prysmian S.p.A.
Fibre Ottiche Sud - F.O.S. S.r.l.
Battipaglia
Euro
47,700,000
100.00%
Prysmian S.p.A.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
460
Electronic and Optical Sensing Solutions S.r.l.
Milan
Euro
5,000,000
100.00%
Prysmian S.p.A.
Legal name
Office
Currency
Share
Capital
% ownership
Direct parent company
Prysmian Servizi S.p.A.
Milan
Euro
3,000,000
100.00%
Prysmian S.p.A.
Norway
Prysmian Group Norge AS
Drammen
Norwegian
Krone
22,500,000
100.00%
Draka Holding B.V.
The Netherlands
Draka Comteq B.V.
Amsterdam
Euro
1,000,000
100.00%
Draka Holding B.V.
Draka Comteq Fibre B.V.
Eindhoven
Euro
18,000
100.00%
Prysmian Netherlands Holding B.V.
Draka Holding B.V.
Amsterdam
Euro
52,229,321
100.000%
Prysmian S.p.A.
Draka Kabel B.V.
Amsterdam
Euro
2,277,977
100.00%
Prysmian Netherlands B.V.
Donne Draad B.V.
Nieuw Bergen
Euro
28,134
100.00%
Prysmian Netherlands B.V.
NKF Vastgoed I B.V.
Delft
Euro
18,151
99.00%
Draka Holding B.V.
1.00%
Prysmian Netherlands B.V.
NKF Vastgoed III B.V.
Delft
Euro
18,151
99.00%
Draka Deutschland GmbH
1.00%
Prysmian Netherlands B.V.
Prysmian Netherlands B.V.
Delft
Euro
1
100.00%
Prysmian Netherlands Holding B.V.
Prysmian Netherlands Holding B.V.
Amsterdam
Euro
1
100.00%
Draka Holding B.V.
Poland
Prysmian Poland sp. z o.o.
Sokolów
Polish Zloty
394,000
100.000%
Draka Holding B.V.
Portugal
General Cable Investments, SGPS, Sociedade
Unipessoal, S.A.
Funchal
Euro
8,500,020
100.00%
Draka Holding B.V.
General Cable Celcat, Energia e
Telecomunicaçoes SA
Pero Pinheiro
Euro
13,500,000
100.00%
General Cable Investments, SGPS, Sociedade Unipessoal, S.A.
Czech Republic
Prysmian Kabely, s.r.o.
Velké Meziříčí
Czech Koruna
255,000,000
100.00%
Draka Holding B.V.
Romania
Prysmian Cabluri Si Sisteme S.A.
Slatina
Leu rumeno
403,850,920
99.99987%
Draka Holding B.V.
0.00013%
Prysmian Cavi e Sistemi S.r.l.
Russia
Limited Liability Company Prysmian RUS
Rybinsk city
Russian Rouble
230,000,000
99.00%
Draka Holding B.V.
1.00%
Prysmian Cavi e Sistemi S.r.l.
Limited Liability Company
"Rybinskelektrokabel"
Rybinsk city
Russian Rouble
90,312,000
100.00%
Limited Liability Company Prysmian RUS
Slovakia
Prysmian Kablo s.r.o.
Bratislava
Euro
21,246,001
99.995%
Prysmian Cavi e Sistemi S.r.l.
0.005%
Prysmian S.p.A.
Spain
Prysmian Cables Spain, S.A. (Sociedad
Unipersonal)
Vilanova I la Geltrù
Euro
58,178,234
100.00%
Draka Holding, S.L.
Draka Holding, S.L. (Sociedad Unipersonal)
Santa Perpetua de
Mogoda
Euro
24,000,000
100.00%
Draka Holding B.V.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
461
GC Latin America Holdings, S.L.
Abrera
Euro
151,042,030
100.00%
General Cable Holdings (Spain), S.L.
Legal name
Office
Currency
Share
Capital
% ownership
Direct parent company
General Cable Holdings (Spain), S.L.
Abrera
Euro
138,304,698
100.00%
General Cable Corporation
Grupo General Cable Sistemas, S.L.
Abrera
Euro
22,116,019
100.00%
Draka Holding B.V.
EHC Spain and Portugal, S.L.
Sevilla
Euro
3,897,315
100.000%
EHC Global Inc.
Sweden
Prysmian Group Sverige AB
Nässjö
Swedish Krona
100,000
100.00%
Draka Holding B.V.
Switzerland
Omnisens S.A.
Morges
Swiss Franc
11,811,719
100.00%
Electronic and Optical Sensing Solutions S.r.l.
Turkey
Turk Prysmian Kablo Ve Sistemleri A.S.
Mudanya
Turkish new Lira
216,733,652
83.7464%
Draka Holding B.V.
0,4614%
Turk Prysmian Kablo Ve Sistemleri A.S.
15.7922%
Third Parties
Hungary
Prysmian MKM Magyar Kabel Muvek Kft.
Budapest
Hungarian Forint
5,000,000,000
100.00%
Prysmian Cavi e Sistemi S.r.l.
North America
Canada
Prysmian Cables and Systems Canada Ltd.
New Brunswick
Canadian Dollar
1,000,000
100.00%
Draka Holding B.V.
Draka Elevator Products Incorporated
New Brunswick
Canadian Dollar
n/a
100.00%
Prysmian Cables and Systems USA, LLC
General Cable Company Ltd.
Halifax
Canadian Dollar
295,768
100.00%
Prysmian Cables and Systems USA, LLC
EHC Global Inc.
Oshawa
Canadian Dollar
1,511,769
100.00%
Prysmian Cables and Systems Canada Ltd.
EHC Canada Inc.
Oshawa
Canadian Dollar
39,409
100.00%
EHC Global Inc.
Dominican Repuplic
General Cable Caribbean, S.R.L
Santa Domingo Oeste
Dominican Peso
2,100,000
99.995%
General Cable Corporation
0.005%
Prysmian Cables and Systems USA, LLC
U.S.A.
Prysmian Cables and Systems (US) Inc.
Carson City
US Dollar
330,517,608
100.00%
Draka Holding B.V.
Prysmian Cables and Systems USA, LLC
Wilmington
US Dollar
10
100.00%
General Cable Corporation
Prysmian Construction Services Inc.
Wilmington
US Dollar
1,000
100.00%
Prysmian Cables and Systems USA, LLC
Draka Elevator Products, Inc.
Boston
US Dollar
1
100.00%
Prysmian Cables and Systems USA, LLC
Draka Transport USA, LLC
Boston
US Dollar
-
100.00%
Prysmian Cables and Systems USA, LLC
General Cable Corporation
Wilmington
US Dollar
1
100.00%
Prysmian Cables and Systems (US) Inc.
General Cable Technologies Corporation
Wilmington
US Dollar
1,884
53.08%
Prysmian Cables and Systems USA, LLC
46.92%
General Cable Corporation
Phelps Dodge Enfield Corporation
Wilmington
US Dollar
800,000
100.00%
Prysmian Cables and Systems USA, LLC
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
462
Phelps Dodge National Cables Corporation
New York
US Dollar
10
100.00%
Prysmian Cables and Systems USA, LLC
Legal name
Office
Currency
Share
Capital
% ownership
Direct parent company
EHC USA Inc.
Oshawa
US Dollar
1
100.00%
EHC Global Inc.
Prysmian Group Speciality Cables, LLC
Wilmington
US Dollar
100.00%
Prysmian Cables and Systems USA, LLC
Prysmian Projects North America, LLC
Wilmington
US Dollar
100.00%
Prysmian Cables and Systems USA, LLC
Central/South America
Argentina
Prysmian Energia Cables y Sistemas de
Argentina S.A.
Buenos Aires
Argentine Peso
993,992,914
97.75%
Draka Holding B.V.
2.01%
Prysmian Cavi e Sistemi S.r.l.
0.13%
Third Parties
0.11%
Prysmian Cabos e Sistemas do Brasil S.A.
Brazil
Prysmian Cabos e Sistemas do Brasil S.A.
Sorocaba
Brazilian Real
910,044,391
94.543%
Prysmian Cavi e Sistemi S.r.l.
0.027%
Prysmian S.p.A.
1.129%
Draka Holding B.V.
4.301%
Draka Comteq B.V.
Draka Comteq Cabos Brasil S.A.
Santa Catarina
Brazilian Real
27,467,522
49.352%
Draka Comteq B.V.
50.648%
Prysmian Cabos e Sistemas do Brasil S.A.
Omnisens do Brasil sercicos de solucoes de
monitoracao em fibra otica Ltda
Rio de Janeiro
Brazilian Real
626,050
100.00%
Omnisens S.A.
Chile
Cobre Cerrillos S.A.
Cerrillos
US Dollar
74,574,400
99.80%
General Cable Holdings (Spain), S.L.
0.20%
Third Parties
Colombia
Productora de Cables Procables S.A.S.
Bogotà
Colombian Peso
1,902,964,285
99.96%
GC Latin America Holdings, S.L.
0.04%
General Cable Corporation
Costa Rica
Conducen, S.R.L.
Heredia
Costa Rican
Colón
1,845,117,800
100.00%
GC Latin America Holdings, S.L.
Ecuador
Cables Electricos Ecuatorianos C.A. CABLEC
Quito
US Dollar
243,957
67.14%
General Cable Holdings (Spain), S.L.
24.86%
Cables Electricos Ecuatorianos C.A. CABLEC
8.00%
Third Parties
Guatemala
Proveedora de Cables y Alambres PDCA
Guatemala, S.A.
Guatemala City
Guatemalan
Quetzal
100,000
99.00%
Conducen, S.R.L.
1.00%
Third Parties
Honduras
Electroconductores de Honduras, S.A. de C.V.
Tegucigalpa
Honduran
Lempira
3,436,400
59.39%
General Cable Holdings (Spain), S.L.
40.61%
GC Latin America Holdings, S.L.
Mexico
Draka Durango S. de R.L. de C.V.
Durango
Mexican Peso
163,471,787
99.996%
Draka Mexico Holdings S.A. de C.V.
0.004%
Draka Holding B.V.
Draka Mexico Holdings S.A. de C.V.
Durango
Mexican Peso
57,036,501
99.999998%
Draka Holding B.V.
0.000002%
Draka Comteq B.V.
NK Mexico Holdings S.A. de C.V.
Città del Messico
Mexican Peso
n/a
100.00%
Prysmian Group Finland OY
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
463
Prysmian Cables y Sistemas de Mexico S. de
R. L. de C. V.
Durango
Mexican Peso
173,050,500
99.9983%
Draka Holding B.V.
0.0017%
Draka Mexico Holdings S.A. de C.V.
Legal name
Office
Currency
Share
Capital
% ownership
Direct parent company
General Cable de Mexico, S.A de C.V.
Tetla
Mexican Peso
1,329,621,471
80.41733609%
Prysmian Cables and Systems USA, LLC
19.58266361%
Conducen, S.R.L.
0.00000030%
General Cable Technologies Corporation
General de Cable de Mexico del Norte, S.A.
de C.V.
Piedras Negras
Mexican Peso
10,000
99.80%
General Cable Technologies Corporation
Mexican Peso
0.20%
Prysmian Cables and Systems USA, LLC
Prestolite de Mexico, S.A. de C.V.
Sonora
Mexican Peso
50,000
99.80%
Prysmian Cables and Systems USA, LLC
Mexican Peso
0.20%
General Cable Technologies Corporation
Servicios Latinoamericanos GC, S.A. de C.V.
Puebla
Mexican Peso
50,000
99.998%
General Cable de Mexico, S.A de C.V.
0.002%
General Cable Technologies Corporation
Perù
General Cable Peru S.A.C.
Santiago de Surco
(Lima)
Nuevo sol
peruviano
90,327,868
99.99999%
GC Latin America Holdings, S.L.
0.00001%
Third Parties
Africa
Angola
General Cable Condel, Cabos de Energia e
Telecomunicaçoes
SA
Luanda
Kwanza
angolano
20,000,000
99.80%
General Cable Celcat, Energia e Telecomunicaçoes
SA
0.20%
Third Parties
Ivory Coast
SICABLE - Sociète Ivoirienne de Cables S.A.
Abidjan
CFA Franc
740,000,000
51.00%
Prysmian Cables et Systèmes France S.A.S.
49.00%
Third Parties
South Africa
National Cables (Pty) Ltd.
Illovo
South African
Rand
101
100.00%
Phelps Dodge National Cables Corporation
Tunisia
Auto Cables Tunisie S.A.
Grombalia
Tunisian Dinar
4,050,000
50.998%
Prysmian Cables et Systèmes France S.A.S.
49.002%
Third Parties
Prysmian Cables and Systems Tunisia S.A.
Menzel Bouzelfa
Tunisian Dinar
1,850,000
99.965%
Prysmian Cables et Systèmes France S.A.S.
0.005%
Prysmian (French) Holdings S.A.S.
0.005%
Prysmian Cavi e Sistemi S.r.l.
0.025%
Third Parties
Oceania
Australia
Prysmian Australia Pty Ltd.
Liverpool
Australian Dollar
56,485,736
100.00%
Prysmian Cavi e Sistemi S.r.l.
New Zeland
Prysmian New Zealand Ltd.
Auckland
New Zeland
Dollar
10,000
100.00%
Prysmian Australia Pty Ltd.
Asia
Saudi Arabia
Prysmian Powerlink Saudi LLC
Al Khoabar
Saudi Arabian
Riyal
500,000
95.00%
Prysmian PowerLink S.r.l.
5.00%
Third Parties
China
Prysmian Tianjin Cables Co. Ltd.
Tianjin
US Dollar
36,790,000
67.00%
Prysmian (China) Investment Company Ltd.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
464
33.00%
Third Parties
Prysmian Cable (Shanghai) Co. Ltd.
Shanghai
Chinese
Renminbi (Yuan)
34,867,510
100.00%
Prysmian (China) Investment Company Ltd.
Legal name
Office
Currency
Share
Capital
% ownership
Direct parent company
Prysmian Wuxi Cable Co. Ltd.
Yixing (Jiangsu
Province)
Chinese
Renminbi (Yuan)
240,863,720
100.00%
Prysmian (China) Investment Company Ltd.
Prysmian Hong Kong Holding Ltd.
Hong Kong
Euro
72,000,000
100.00%
Prysmian Cavi e Sistemi S.r.l.
Prysmian (China) Investment Company Ltd.
Beijing
Euro
74,152,961
100.00%
Prysmian Hong Kong Holding Ltd.
Nantong Haixun Draka Elevator Products Co.
LTD
Nantong
US Dollar
2,400,000
75.00%
Draka Elevator Products, Inc.
25.00%
Third Parties
Nantong Zhongyao Draka Elevator Products
Co. LTD
Nantong
US Dollar
2,000,000
60.00%
Draka Elevator Products, Inc.
40.00%
Third Parties
Suzhou Draka Cable Co. Ltd.
Suzhou
Chinese
Renminbi (Yuan)
304,500,000
100.00%
Draka Cableteq Asia Pacific Holding Pte Ltd.
Prysmian Technology Jiangsu Co. Ltd.
Yixing
Chinese
Renminbi (Yuan)
495,323,466
100.00%
Prysmian (China) Investment Company Ltd.
EHC Escalator Handrail (Shanghai) Co. Ltd.
Shanghai
US Dollar
2,100,000
100.00%
EHC Global Inc.
EHC Engineered Polymer (Shanghai) Co. Ltd.
Shanghai
US Dollar
1,600,000
100.00%
EHC Global Inc.
EHC Lift Components (Shanghai) Co. Ltd.
Shanghai
US Dollar
200,000
100.00%
EHC Global Inc.
Philippines
Draka Philippines Inc.
Cebu
Philippine Peso
253,652,000
99.9999975%
Draka Holding B.V.
0.0000025%
Third Parties
India
Associated Cables Pvt. Ltd.
Mumbai
Indian Rupee
183,785,700
99.999946%
Oman Cables Industry (SAOG)
0.000054%
Third Parties
Jaguar Communication Consultancy Services
Private Ltd.
Mumbai
Indian Rupee
157,388,218
99.99999%
Prysmian Cavi e Sistemi S.r.l.
0,000001%
Prysmian S.p.A.
Indonesia
PT.Prysmian Cables Indonesia
Cikampek
US Dollar
67,300,000
99.48%
Draka Holding B.V.
0.52%
Prysmian Cavi e Sistemi S.r.l.
Malaysia
Sindutch Cable Manufacturer Sdn Bhd
Malacca
Malaysian
Ringgit
500,000
100.00%
Draka Cableteq Asia Pacific Holding Pte Ltd.
Draka (Malaysia) Sdn Bhd
Malacca
Malaysian
Ringgit
8,000,002
100.00%
Cable Supply and Consulting Company Pte Ltd.
Oman
Oman Cables Industry (SAOG)
Al Rusayl
Omani Riyal
8,970,000
51.17%
Draka Holding B.V.
48.83%
Third Parties
Oman Aluminium Processing Industries (SPC)
Sohar
Omani Riyal
4,366,000
100.00%
Oman Cables Industry (SAOG)
Singapore
Prysmian Cables Asia-Pacific Pte Ltd.
Singapore
Singapore Dollar
174,324,290
100.00%
Draka Holding B.V.
Draka Cableteq Asia Pacific Holding Pte Ltd.
Singapore
Singapore Dollar
28,630,504
100.00%
Draka Holding B.V.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
465
Singapore Cables Manufacturers Pte Ltd.
Singapore
Singapore Dollar
1,500,000
100.00%
Draka Cableteq Asia Pacific Holding Pte Ltd.
Legal name
Office
Currency
Share
Capital
% ownership
Direct parent company
Cable Supply and Consulting Company
Private Limited
Singapore
Singapore Dollar
50,000
100.00%
Draka Cableteq Asia Pacific Holding Pte Ltd.
Thailand
MCI-Draka Cable Co. Ltd.
Bangkok
Thai Baht
435,900,000
99.999931%
Draka Cableteq Asia Pacific Holding Pte Ltd.
0.000023%
Draka (Malaysia) Sdn Bhd
0.000023%
Sindutch Cable Manufacturer Sdn Bhd
0.000023%
Singapore Cables Manufacturers Pte Ltd.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
466
The following companies have been accounted for using the equity method:
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
Europe
Germany
Kabeltrommel GmbH & Co.KG
Troisdorf
Euro
10,225,837.65
43.18%
Prysmian Kabel und Systeme GmbH
1.75%
Norddeutsche Seekabelwerke GmbH
55.07%
Third parties
Kabeltrommel GmbH
Troisdorf
Deutsche Mark
51,000
41.18%
Prysmian Kabel und Systeme GmbH
5.82%
Norddeutsche Seekabelwerke GmbH
53.00%
Third parties
Nostag GmbH & Co. KG
Oldenburg
Euro
540,000
33.00%
Norddeutsche Seekabelwerke GmbH
67.00%
Third parties
U.K.
Rodco
Ltd.
Woking
British Pound
5
40.00%
Prysmian Cables & Systems Ltd.
60.00%
Third parties
Russia
Elkat Ltd.
Moscow
Russian Rouble
10,000
40.00%
Prysmian Group Finland OY
60.00%
Third parties
Central/South America
Chile
Colada Continua Chilena S.A.
Quilicura (Santiago)
Chile Peso
100
41.00%
Cobre Cerrillos S.A.
59.00%
Third parties
Asia
China
Yangtze Optical Fibre and Cable Joint Stock Limited
Co.
Wuhan
Chinese Renminbi
(Yuan)
757,905,108
23.73%
Draka Comteq B.V.
76.27%
Third parties
Yangtze Optical Fibre and Cable (Shanghai) Co. Ltd.
Shanghai
Chinese Renminbi
(Yuan)
100,300,000
75.00%
Yangtze Optical Fibre and Cable Joint Stock Limited Co.
25.00%
Draka Comteq B.V.
Malaysia
Power Cables Malaysia Sdn Bhd
Selangor Darul Eshan
Malaysian
Ringgit
18,000,000
40.00%
Draka Holding B.V.
60.00%
Third parties
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
467
List of other investments not consolidated pursuant to IFRS 10:
Legal name
% ownership
Direct parent company
India
Ravin Cables Limited
51.00%
Prysmian Cavi e Sistemi S.r.l.
49.00%
Third Parties
United Arab Emirates
Power Plus Cable CO. LLC
49.00%
Ravin Cables Limited
51.00%
Third Parties
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
468
CORPORATE STRUCTURE – APPENDIX B
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
469
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
470
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
471
3. Certification of the Consolidated Financial Statements
pursuant to art. 81-ter of Consob Regulation 11971 dated
14 May 1999 as amended
1.
The undersigned Valerio Battista, as Chief Executive Officer, and Stefano Invernici and
Alessandro Brunetti, as managers responsible for preparing the financial reports of Prysmian
S.p.A., certify, also taking account of the provisions of paragraphs 3 and 4, art. 154-bis of Italian
Legislative Decree 58 dated 24 February 1998, that during 2023 the accounting and
administrative processes for preparing the consolidated financial statements:
•
have been adequate in relation to the business's characteristics and
•
have been effectively applied.
2.
The adequacy of the accounting and administrative processes for preparing the consolidated
financial statements at 31 December 2023 has been assessed on the basis of a procedure
established by Prysmian in compliance with the internal control framework established by the
Committee of Sponsoring Organizations of the Treadway Commission, which serves as a
generally accepted standard model internationally.
It is nonetheless reported that:
-
during 2023, several of Prysmian Group's companies were involved in the information
system changeover project. The process of fine-tuning the new system's operating and
accounting functions is still in progress for some of them; in any case, the system of
controls in place ensures uniformity with the Group's system of procedures and controls.
3.
It is also certified that:
3.1
The consolidated financial statements at 31 December 2023:
a)
have been prepared in accordance with applicable international accounting standards
recognised by the European Union under Regulation (EC) 1606/2002 of the European
Parliament and Council dated 19 July 2002;
b)
correspond to the underlying accounting records and books of account;
c)
are able to provide a true and fair view of the issuer's statement of financial position and
results of operations and of the group of companies included in the consolidation.
3.2
The directors' report contains a fair review of performance and the results of operations,
and of the situation of the issuer and the group of companies included in the consolidation,
together with a description of the principal risks and uncertainties to which they are exposed.
Milan, 28 February 2024
Valerio Battista
Stefano Invernici
Alessandro Brunetti
Chief Executive Officer
Managers responsible for preparing company financial reports
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
472
4. Auditor’s Report
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
473
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
474
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
475
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
476
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
477
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
478
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
479
C.
PARENT COMPANY FINANCIAL STATEMENTS
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
480
SIGNIFICANT EVENTS DURING THE YEAR
CDP lends Euro 120 million for innovation and digitalisation
On 6 March 2023, Prysmian S.p.A. announced that it had obtained a new loan of Euro 120 million
from Cassa Depositi e Prestiti (CDP) to support R&D focused on deploying innovative
technologies and to help consolidate the business's digitalisation processes, while cutting
emissions to facilitate the e nergy transition.
Prysmian's R&D programs are also in step with the Paris Agreements, the European Green Deal
and Horizon Europe directives for the promotion of clean, renewable energy by developing cable
systems that ensure the interconnection of integrated renewable energy systems.
S&P Global Ratings awards Prysmian S.p.A. an investment grade rating
On 6 June 2023, it was announced that Prysmian S.p.A. had been awarded an investment grade
rating by S&P Global Ratings, with the receipt of a BBB- long-term issuer credit rating with stable
outlook.
Revolving Credit Facility 2023
On 20 June 2023, Prysmian S.p.A. renewed a Euro 1,000 million long-term sustainability-linked
revolving credit facility with a syndicate of leading Italian and international banks.
This important five-year credit facility, with a 6- and 7-year extension option, will help further
improve the Group's financial structure by lengthening the average maturity of its debt, while
retaining the flexibility offered by such an instrument. The credit facility carries optimum terms,
also in light of the investment-grade credit rating recently awarded to Prysmian by Standard &
Poor's.
In addition, with the aim of deepening the embedding of ESG factors into the Group's strategy,
Prysmian Group has chosen to include important environmental and social KPIs among the
parameters determining the terms of credit. The renewed revolving credit facility is in fact
Sustainability-Linked, being tied to the decarbonisation targets already set by the Group (annual
GHG emissions from 2023 to 2030), to the ratio of female white-collar and executive hires to
total Group hires, and to the number of sustainability audits performed within the supply chain.
Approval of financial statements at 31 December 2022 and dividend distribution
On 19 April 2023, the shareholders' meeting of Prysmian S.p.A. approved the 2022 financial
statements and the distribution of a gross dividend of Euro 0.60 per share, for a total of some
Euro 158 million. The dividend was paid out from 26 April 2023, with record date 25 April 2023
and ex-div date 24 April 2023.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
481
Authorisation to buy and dispose of treasury shares
On 19 April 2023, the shareholders' meeting of Prysmian S.p.A. granted the Board of Directors
authorisation to buy back and dispose of treasury shares, concurrently revoking the previous
authorisation under the shareholder resolution dated 12 April 2022. Under this authorisation it
is possible to make one or more share buybacks such that, at any one time, the total holding of
treasury shares does not exceed 10% of share capital.
New long-term incentive plan (2023-2025)
On 19 April 2023, the shareholders' meeting of Prysmian S.p.A. approved a long-term incentive
plan (2023-2025) that will involve approximately 1,100 recipients among management and
other key Prysmian Group resources, including Prysmian S.p.A.'s Executive Directors and Key
Management Personnel. The Plan involves the grant of new-issue ordinary shares obtained from
a bonus issue funded by profits or retained earnings in accordance with art. 2349 of the Italian
Civil Code, or a combination of new-issue shares and treasury shares. By means of this plan,
Prysmian intends to strengthen the Company's and management's commitment to creating
sustainable value over time for all stakeholders, including by involving a wide range of key people
in over 40 countries who play an important role in the Group's sustainable success. The plan
spans a three-year period and provides for the award of shares upon achievement of economic
and financial performance conditions, Total Shareholders Return and ESG targets. The plan also
allows 50% of the annual bonus, where due, for the years 2023, 2024, 2025 to be deferred in
the form of shares. The annual bonus is also linked to the achievement of ESG targets, as well
as to economic-financial targets. The deferral of the annual bonus also entails an additional
award of "matching" shares which, in the case of the Group's some 50 top managers, is also
dependent on the achievement of ESG targets by 2025. The plan has the following objectives:
-
to motivate participants to achieve long-term results geared towards sustainable value creation over
time;
-
to align the interests of management with those of shareholders through the use of share-based
incentive instruments;
-
to foster stable management ownership of the Company's share capital;
-
to ensure the long-term sustainability of the Group's annual performance, by boosting staff
engagement and retention, including through the mechanism of deferring part of the annual bonus in
shares.
The shareholders of Prysmian S.p.A. also authorised a bonus share capital increase to be
reserved for Prysmian Group employees in execution of the plan. This capital increase may reach
a maximum nominal amount of Euro 950,000 through apportionment, pursuant to art. 2349 of
the Italian Civil Code, of a corresponding amount from profits or retained earnings, with the
issue of no more than 9,500,000 ordinary shares of nominal value Euro 0.10 each.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
482
Massimo Battaini designated as new Group CEO with effect from the 2024 AGM
On 26 May 2023, the Board of Directors of Prysmian S.p.A. designated Massimo Battaini - a
current Director and Group Chief Operating Officer ("COO") - as the candidate for the position
of Chief Executive Officer ("CEO") of Prysmian Group, in line with the Group succession plan,
having been informed by current CEO Valerio Battista of his decision not to carry on as CEO for
the next three-year mandate (2024-2027). Massimo Battaini will be presented as CEO designate
on the slate submitted by the outgoing Board of Directors for its upcoming renewal at the 2024
Annual General Meeting, when Valerio Battista will step down.
Variation of share capital
On 6 June 2023 and 29 November 2023, Prysmian S.p.A. announced the new composition of its
share capital as a result of implementing the resolutions for a bonus issue adopted by the
Company's Extraordinary General Meeting on 12 April 2022 to service the share-based plans
approved by the shareholders' meetings of 28 April 2020 and 12 April 2022, reserved for
employees and executive directors of the Company and of Prysmian Group companies.
More specifically, the following shares were issued:
-
on 29 May 2023, 292,511 ordinary shares,
-
on 5 June 2023, 8,000,000 ordinary shares;
-
on 21 November 2023, 97,691 ordinary shares.
Prysmian renews partnership with Andretti Formula E for a second consecutive season
On 13 December 2023, the Group announced the renewal of its official partnership with the
Andretti Formula E team for the 2023/2024 ABB FIA Formula E World Championship, following
the sensational Season 9 culminating with Jake Dennis winning the Formula E Drivers' World
Championship.
Prysmian Group will continue to support Andretti Formula E by providing the Team with power
transmission and information solutions across all areas of its sustainable electrification. One of
the main innovations supplied during Season 9 was the PRY-CAM monitoring system, making it
possible to gather valuable data and information on the energy efficiency of the team's pits.
The partnership between Andretti Formula E and Prysmian Group is based on the core values of
innovation, sustainability, challenge and performance, values that will continue to represent a
solid basis for collaboration in this second season. With this initiative, Prysmian Group aims to
strengthen its "Sustain to Lead" strategy and the Group's value proposition by promoting
innovation and sustainable development even in the strategic sectors of e-mobility, renewable
power transmission and distribution and digital solutions.
Andretti is a pillar of Formula E, having been involved since the inaugural race back in 2014, and
heads into the eagerly awaited Season 10 with a track record of 10 wins, 12 pole positions and
a Drivers' World Championship to its credit. The team kicked off Season 10 of the Formula E
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
483
championship at the opening race in Mexico City on 13 January 2024. Created in 2011, the ABB
FIA Formula E World Championship is a single-seater motorsport championship for electric cars.
Since the 2020–21 season, Formula E is a FIA World Championship, making it the first single-
seater racing series outside of Formula One to be given world championship status.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
484
FINANCIAL PERFORMANCE OF PRYSMIAN S.P.A.
The financial information presented and discussed below has been prepared by reclassifying the
accompanying financial statements for the year ended 31 December 2023, which in turn have
been drawn up in accordance with the International Financial Reporting Standards (IFRS) issued
by the International Accounting Standards Board (IASB) and endorsed by the European Union,
and with the implementation guidance for art. 9 of Legislative Decree 38/2005.
In addition to the standard financial reporting formats and indicators required under IFRS, a
number of reclassified statements and alternative performance indicators have also been
presented with the intention of helping users of the financial statements better evaluate the
Company's economic and financial performance. Such reclassified statements and performance
indicators should not however be treated as substitutes for the accepted ones required by IFRS.
INCOME STATEMENT
(Euro/thousand)
2023
2022
Revenues and other income
246,323
245,035
Operating costs
(75,729)
(87,077)
Other expenses
(130,425)
(134,392)
Amortisation, depreciation and impairment
(41,151)
(35,020)
Operating income
(982)
(11,455)
Net finance income/(costs)
(49,805)
(13,964)
Net income from investments
304,761
176,287
Profit/(loss) before taxes
253,974
150,868
Taxes
10,292
(7,100)
Net profit/(loss)
264,266
143,768
In addition to the comments presented below, the more significant changes in individual items
within the Prysmian S.p.A. income statement are discussed in the Explanatory Notes to its
financial statements, to which reference should be made.
The Parent Company's income statement for 2023 reports Euro 264,266 thousand in net profit,
up Euro 120,498 thousand from the previous year.
Revenues and other income of Euro 246,323 thousand (Euro 245,035 thousand in 2022) include
the income of Prysmian S.p.A. from ordinary operations. In accordance with IFRS 15, revenues
and other income also include the net margin on buying strategic metals and selling them to
other Group companies.
Revenues and other income also include amounts charged by Prysmian S.p.A. to Group
companies for coordination and other services provided by head office functions and for royalties
on patents, know-how and trademarks licensed to Group companies.
Operating costs of Euro 75,729 thousand in 2023 (Euro 87,077 thousand in 2022) mostly
comprise personnel costs (Euro 68,690 thousand in 2023 versus Euro 77,955 thousand in 2022),
with the remainder referring to purchases of other consumables (Euro 7,012 thousand in 2023
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
485
versus Euro 9,150 thousand in 2022) and the fair value change in metal derivatives (Euro 27
thousand negative in 2023 versus Euro 28 thousand positive in 2022).
In particular, the decrease in personnel costs is largely attributable to the initial costs recorded
in 2022 for a new share-based plan. Further details can be found in Note 17. Personnel costs of
the Explanatory Notes to the financial statements.
Other expenses of Euro 130,425 thousand in 2023 (Euro 134,392 thousand in 2022) have been
affected by fewer non-recurring costs mostly arising from intercompany transactions.
Further details can be found in the Explanatory Notes to the financial statements under Note 19.
Other expenses.
Net finance costs of Euro 49,805 thousand (Euro 13,964 thousand in 2022) consist of interest
expense on bonds and loans and foreign currency derivative hedge costs, net of finance income
earned mostly from fees for guarantees given on behalf of Group companies. The change is
mainly attributable to the hike in interest rates.
Net income from investments amounts to Euro 304,761 thousand, compared with Euro 176,287
thousand in the previous year, and mostly comprises a total of Euro 327,382 in dividends paid
by the subsidiaries Draka Holding B.V. and Prysmian Treasury S.r.l., minus Euro 35,450
thousand in impairment of the investment in Fibre Ottiche Sud – F.O.S. S.r.l., plus Euro 21,359
thousand for the increase since the grant date in the fair market value of granted shares under
the new 2023-2025 long-term incentive (LTI) plan and the BE IN incentive plan, both of which
recharged to group companies, and minus Euro 8,530 thousand for costs incurred by the
Company for the old LTI plan settled in June 2023.
Income taxes report Euro 10,292 thousand in income (versus a net charge of Euro 7,100
thousand in 2022), of which Euro 9,682 thousand in current tax income and Euro 610 thousand
in deferred tax income. More specifically, current taxes reflect the net effect of the tax charge
for the period and net income from Italian companies arising from the election by the Company
and its Italian subsidiaries for a group tax consolidation. Further information can be found in
Note 22. Taxes of the Explanatory Notes to the financial statements.
Research costs are fully expensed to income, while development costs are capitalised if they
meet the required qualifying conditions.
R&D costs incurred in 2023 Euro 29,352 thousand have been fully expensed to income (Euro
30,485 thousand in 2022); more details can be found in Note 33. Research and development of
the Explanatory Notes to the financial statements.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
486
STATEMENT OF FINANCIAL POSITION
The Parent Company's statement of financial position is summarised as follows:
(Euro/thousand)
31 December 2023
31 December 2022
Net fixed assets
5,922,800
5,913,352
- of which Investments in subsidiaries
5,719,702
5,701,163
Net working capital
(130,865)
(102,073)
Provisions
(46,122)
(53,208)
Net capital employed
5,745,813
5,758,070
Employee benefit obligations
6,218
6,085
Total equity
2,586,850
2,460,945
Net financial debt
3,152,745
3,291,040
Total equity and sources of funds
5,745,813
5,758,070
Note: the composition and method of calculating the above indicators are detailed in the Group's Integrated Annual
Report.
In addition to the comments presented below, the more significant changes in individual items
within the Prysmian S.p.A. statement of financial position are discussed in the Explanatory Notes
to its financial statements, to which reference should be made.
Net fixed assets basically comprise the controlling interests in Prysmian Cavi e Sistemi S.r.l.,
Draka Holding B.V. and the Group's other Italian companies.
The increase of Euro 18,539 thousand in the value of investments in subsidiaries since 2022 is
mainly attributable to the net effect of capital contributions paid to the subsidiaries Electronic
and Optical Sensing Solutions S.r.l., Prysmian Servizi S.p.A. and Fibre Ottiche Sud – F.O.S. S.r.l.,
minus impairment recognised against the value of the investment in Fibre Ottiche Sud – F.O.S.
S.r.l.. The value of investments has also been impacted by the pay-related component of share-
based plans, with underlying Prysmian S.p.A. shares, for employees of other Group companies.
Capital expenditure on "Property, plant and equipment" and "Intangible assets" totalled Euro
29,502 thousand in 2023 (Euro 26,110 thousand in 2022). Expenditure on property, plant and
equipment amounted to Euro 6,609 thousand, relating to the purchase of IT infrastructure for
the Group and fixed installations for the Prysmian Group headquarters; the overall expenditure
also included advances of Euro 4,765 thousand for the purchase of machinery serving the new
R&D centre in Quattordio. Expenditure on intangible assets, totalling Euro 18,157 thousand,
related to the ongoing upgrade of IT systems and Digital Transformation projects, as well as the
purchase of new software. More details can be found in Note 1. Property, plant and equipment
and Note 2. Intangible assets of the Explanatory Notes to the financial statements.
In addition to the additions listed above, the closing balance of net fixed assets in 2023 includes
net additions of Euro 2,559 thousand to account for leases in accordance with IFRS 16.
Net working capital is a negative Euro 130,865 thousand and comprises:
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
487
•
Euro 299,434 thousand as the net negative balance between trade receivables and trade payables
(see Notes 5 and 11 to the financial statements);
•
Euro 168,569 thousand as the net positive balance of other receivables/payables and financial
receivables/payables (see Notes 5 and 11 to the financial statements).
Provisions, inclusive of deferred tax provisions, amount to Euro 46,122 thousand at 31 December
2023 (see Notes 4 and 12 to the financial statements) compared with Euro 53,208 thousand at
31 December 2022. The difference mainly reflects adjustments to the deferred tax provision.
Further information can be found in Note 14. Current tax payables and Deferred tax liabilities in
the Explanatory Notes.
Equity amounts to Euro 2,586,850 thousand at 31 December 2023, reporting a net increase of
Euro 125,905 thousand since 31 December 2022, mostly reflecting the net profit for 2023 after
the dividend distribution during the year and adjustments to the share-based payment reserve.
A more detailed analysis of the changes in equity can be found in the Statement of Changes in
Equity forming part of the Financial Statements presented in the following pages.
The Group's consolidated equity at 31 December 2023 and consolidated net profit for 2023 are
reconciled with the corresponding figures for the Parent Company Prysmian S.p.A. in a table
presented in the Group's Integrated Annual Report.
Net financial debt amounts to Euro 3,152,745 thousand at 31 December 2023, versus Euro
3,291,040 thousand at 31 December 2022.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
488
The following table presents a detailed breakdown of net financial debt.
(Euro/thousand)
Note
31 December
2023
of which
related
parties
(Note 25)
31 December
2022
of which
related
parties
(Note 25)
Long-term financial payables
CDP Loans
10
194,350
174,685
Mediobanca Loan
10
-
99,905
Intesa Loan
10
-
149,781
EIB Loans
10
134,870
244,798
Sustainability-Linked Term Loan
10
1,193,356
1,191,474
Convertible Bond 2021
10
727,830
717,399
Lease liabilities
10
11,444
14,712
Other borrowings
1,937
Total long-term financial payables
2,263,787
2,592,754
Short-term financial payables
CDP Loans
10
103,470
520
Mediobanca Loan
10
100,483
294
Intesa Loan
10
151,342
836
EIB Loans
10
113,085
996
Sustainability-Linked Term Loan
10
24,972
6,114
Unicredit Loan
10
-
200,457
Lease liabilities
10
5,418
5,120
Short-term loans from Group companies
10
440,304
440,304
742,742
742,742
Other borrowings
10
76
9,090
Total short-term financial payables
939,149
966,169
Total financial liabilities
3,202,935
3,558,923
Long-term financial receivables
5
235
177
Long-term bank fees
5
3,621
284
Non-current interest rate derivatives
7
10,508
59,209
Current interest rate derivatives
7
20,115
12,676
Short-term financial receivables
6
12,758
193,417
Short-term financial receivables from Group
companies
5
1,456
1,456
-
Short-term bank fees
5
1,092
1,185
Cash and cash equivalents
8
405
935
Net financial debt
3,152,745
3,291,040
Note 10 of the Explanatory Notes to the financial statements contains a reconciliation of the
Company's net financial debt to the amount reported in accordance with the requirements of
CONSOB communication no. 5/21 of 29 April 2021 concerning compliance with the "Guidelines
on disclosure requirements under the Prospectus Regulation" published by ESMA on 4 March
2021 (reference ESMA32-382-1138).
A more detailed analysis of cash flows can be found in the Statement of Cash Flows, forming
part of the Financial Statements presented in the following pages.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
489
HUMAN RESOURCES, SAFETY AND ENVIRONMENT
Prysmian S.p.A. had a total of 440 employees at 31 December 2023 (436 at 31 December 2022),
of whom 397 management/desk staff (396 at 31 December 2022) and 43 non-desk staff (40 at
31 December 2022).
The Company has taken systematic, ongoing steps to implement all the fundamental activities
required to manage issues concerning the environment, and the health and safety of its
employees.
More details can be found in the Consolidated Non-Financial Statement forming part of the
Group's Integrated Annual Report.
DIRECTION AND COORDINATION
Prysmian S.p.A. is not under the direction and coordination of other companies or entities but
decides its general and operational strategy in complete autonomy. Pursuant to art. 2497-bis of
the Italian Civil Code, the direct and indirect subsidiaries of Prysmian S.p.A. have identified it as
the entity which exercises direction and coordination for them. Such direction and coordination
entails identifying general and operational strategies for the Group as a whole and defining and
implementing internal control systems, models of governance and corporate structure.
INTERCOMPANY AND RELATED PARTY TRANSACTIONS
Information about related party transactions, including that required by the Consob
Communication dated 28 July 2006, is presented in Note 25 to the Parent Company Financial
Statements.
SECONDARY LOCATIONS
The Company does not have any secondary locations.
SHARE CAPITAL AND CORPORATE GOVERNANCE
Share capital amounts to Euro 27,653 thousand at 31 December 2023, consisting of 276,534,448
ordinary shares (including 3,718,405 treasury shares), with a nominal value of Euro 0.10 each.
The total number of outstanding voting shares is 272,816,043, net of the 10,669 treasury shares
held indirectly.
Information about Corporate Governance can be found in Prysmian Group's Integrated Annual
Report.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
490
ATYPICAL AND/OR UNUSUAL TRANSACTIONS
In accordance with the disclosures required by Consob Communication DEM/6064293 dated 28
July 2006, it is reported that no atypical and/or unusual transactions took place during 2023.
RISK FACTORS
Prysmian S.p.A. is exposed in the normal conduct of its business to a number of financial and
non-financial risk factors which, should they arise, could have an impact, even material, on its
results of operations and financial condition. Prysmian S.p.A. adopts specific procedures to
manage the risk factors that might influence its business results. These procedures are the result
of corporate policy which has always been directed at maximising value for shareholders by
taking all necessary steps to prevent the risks inherent in the Company's business.
Based on its financial performance and cash generation in recent years, as well as its financial
resources available at 31 December 2023 and committed undrawn credit lines at that date, the
Company believes that, barring any extraordinary events, there are no material uncertainties
that could cast significant doubt upon the business's ability to continue to operate on a going
concern basis.
More details about risk factors and the system of internal controls can be found in Prysmian
Group's Integrated Annual Report.
FINANCIAL RISK MANAGEMENT POLICIES
Financial risk management policies are discussed in Section C of the Explanatory Notes to the
financial statements.
BUSINESS OUTLOOK
With regard to business outlook, please refer to Prysmian Group's Integrated Annual Report.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
491
STATEMENT OF FINANCIAL POSITION
(in Euro)
Note
31.12.2023
of which
related parties
(Note 25)
31.12.2022
of which
related
parties
(Note 25)
Non-current assets
Property, plant and equipment
1
90,327,812
86,356,289
Intangible assets
2
112,770,729
125,832,341
Investments in subsidiaries
3
5,719,701,514
5,719,701,514
5,701,163,010
5,701,163,010
Derivatives
7
10,508,194
59,208,767
Deferred tax assets
4
575,490
-
Other receivables
5
87,907,198
84,233,856
480,905
Total non-current assets
6,021,790,937
5,973,041,312
Current assets
Trade receivables
5
274,671,900
266,735,183
267,751,421
261,626,895
Other receivables
5
136,469,129
45,707,254
313,399,028
248,362,065
Financial assets at fair value
through profit or loss
6
-
193,419,090
Derivatives
7
21,650,196
1,495,567
14,184,805
1,508,980
Cash and cash equivalents
8
404,507
935,390
Total current assets
433,195,732
789,689,734
Total assets
6,454,986,669
6,762,731,046
Capital and reserves:
Share capital
9
27,653,445
26,814,425
Reserves
9
2,294,930,452
2,290,362,325
Net profit/(loss)
9
264,265,780
143,767,869
Total equity
2,586,849,677
2,460,944,619
Non-current liabilities
Borrowings from banks and other
lenders
10
2,263,786,516
2,592,754,055
Employee benefit obligations
13
6,217,788
259,680
6,085,009
129,127
Derivatives
7
-
-
Other payables
11
219,375
-
Deferred tax liabilities
14
-
10,005,178
Total non-current liabilities
2,270,223,679
2,608,844,242
Current liabilities
Borrowings from banks and other
lenders
10
498,843,643
223,427,951
Provisions for risks and charges
12
46,697,529
6,390,590
43,203,216
5,373,590
Derivatives
7
1,409,785
1,409,785
1,177,325
1,177,325
Trade payables
11
574,105,791
27,365,736
651,916,269
15,949,796
Other payables
11
476,856,565
446,287,239
771,051,672
745,824,357
Current tax payables
14
-
-
2,165,752
1,297,082
Total current liabilities
1,597,913,313
1,692,942,185
Total liabilities
3,868,136,992
4,301,786,427
Total equity and liabilities
6,454,986,669
6,762,731,046
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
492
INCOME STATEMENT
(in Euro)
Note
2023
of which
related parties
(Note 25)
2022
of which
related parties
(Note 25)
Revenues and other income
15
246,323,323
233,109,617
245,035,005
230,897,794
Total revenues and other
income
246,323,323
245,035,005
Raw materials, consumables and
supplies
16
(7,011,799)
(1,439,734)
(9,150,196)
(2,641,791)
Fair value change in metal derivatives
(27,074)
(27,074)
27,662
27,662
Personnel costs
17
(68,689,951)
(5,847,938)
(77,954,822)
(10,114,628)
Amortisation, depreciation,
impairment and impairment
reversals
18
(41,150,888)
(35,020,099)
Other expenses
19
(130,425,377)
(38,717,870)
(134,392,147)
(37,382,480)
Operating income
(981,766)
(11,454,597)
Finance costs
20
(164,332,705)
(42,978,604)
(89,062,002)
(17,080,084)
Finance income
20
114,527,357
69,289,702
75,097,619
68,528,463
Dividends from subsidiaries
21
340,210,884
340,210,884
243,001,115
243,001,115
(Impairment)/revaluation of
investments
3
(35,449,980)
(35,449,980)
(66,714,088)
(66,714,088)
Profit before taxes
253,973,790
150,868,047
Taxes
22
10,291,987
20,716,356
(7,100,178)
6,696,463
Net profit/(loss)
264,265,777
143,767,869
STATEMENT OF COMPREHENSIVE INCOME
(in Euro)
Note
2023
2022
Net profit/(loss)
264,265,777
143,767,869
Other comprehensive income:
A)
Change in cash flow hedge reserve:
(31,440,646)
61,334,194
-
Profit/(loss) for the year
9
(41,369,271)
80,702,886
-
Taxes
9
9,928,625
(19,368,693)
B)
Actuarial gains/(losses) on employee benefits
(*)
(134,520)
782,040
-
Profit/(loss) for the year
9
(177,000)
1,029,000
-
Taxes
9
42,480
(246,960)
Total other comprehensive income (A+B)
(31,575,166)
62,116,234
Total comprehensive income/(loss)
232,690,611
205,884,103
(*)
Components of comprehensive income that will not be reclassified to profit or loss in subsequent periods
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
493
STATEMENT OF CHANGES IN EQUITY
(Euro/thousand)
Share
capital
Share
premium
reserve
Capital
increase
costs
Legal
reserve
Treasury
shares
reserve
Extraord-
inary
reserve
IAS/IFRS
first-time
adoption
reserve
Capital
contri-
bution
reserve
Actuarial
gains/
(losses) on
employee
benefits
Convert-
ible
bond
reserve
Share-
based
payment
reserve
Cash flow
hedge
reserve
Treasury
shares
(*)
Share
issue
reserve
Retained
earnings
Net
profit/
(loss) for
the year
Total
Balance at
31 December 2021
26,814
1,281,071
(14,476)
5,363
92,461
52,688
30,177
6,113
(2,177)
84,321
62,256
(6,860)
(92,461)
1,100
629,505
138,967
2,294,862
Capital increase costs
Dividend distribution
(5,960)
(138,967)
(144,927)
Share-based payments
(813)
104,303
813
822
105,125
Allocation of prior year net profit
-
Non-monetary components of
convertible bond
(34,771)
34,771
-
Total comprehensive income/(loss) for the year
782
61,334
143,768
205,884
Balance at
31 December 2022
26,814
1,281,071
(14,476)
5,363
91,648
52,688
30,177
6,113
(1,395)
49,550
166,559
54,474
(91,648)
1,100
659,137
143,768
2,460,945
Capital increase costs
-
Dividend distribution
(15,403)
(142,818)
(158,221)
Share-based payments
839
(17,586)
(85,766)
17,586
111
137,201
(950)
51,436
Allocation of prior year net profit
-
Non-monetary components of
convertible bond
-
Total comprehensive
income/(loss) for the year
(135)
(31,441)
264,266
232,691
Balance at
31 December 2023
27,653
1,281,071
(14,476)
5,363
74,062
52,688
30,177
6,113
(1,530)
49,550
80,793
23,033
(74,062)
1,211
780,935
264,266
2,586,850
(*) At 31 December 2023, the number of treasury shares held came to 3,718,405 with a total nominal value of Euro 371,841.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
494
STATEMENT OF CASH FLOWS
(in Euro)
2023
of which
related parties
(Note 25)
2022
of which
related parties
(Note 25)
Profit before taxes
253,973,789
150,868,046
Amortisation, depreciation and
impairment
41,150,888
35,020,099
Impairment/(revaluation) of
investments
35,449,980
35,449,980
66,714,088
66,714,088
Dividends
(340,210,884)
(340,210,884)
(243,001,115)
(243,001,115)
Share-based payments
6,300,220
20,518,943
Fair value change in metal
derivatives
27,074
27,074
(27,662)
(27,662)
Net finance costs
49,805,348
(26,311,098)
13,964,384
(51,448,379)
Change in trade
receivables/payables
(84,730,917)
6,307,653
46,540,467
-
Change in other
receivables/payables
184,010,798
125,531,141
(36,812,672)
552,296,729
Change in employee benefit
obligations
(258,895)
130,533
(292,460)
116,851
Change in provisions for risks and
other movements
3,356,721
-
5,376,403
-
Taxes collected/(paid)
(10,985,680)
(10,985,680)
(7,273,430)
(7,273,430)
A.
Cash flow from operating
activities
137,888,442
51,595,090
Investments in property, plant
and equipment
(11,374,442)
(4,765,380)
(2,875,388)
Investments in intangible assets
(18,157,542)
(23,235,163)
Investments in financial assets at
fair value through profit or loss
197,768,000
-
Investments to recapitalise
subsidiaries
(41,430,110)
(41,430,110)
(38,803,000)
(38,803,000)
Dividends received
327,381,884
327,381,884
179,671,995
179,671,995
B.
Cash flow from investing
activities
454,187,790
114,758,444
Dividend distribution
(159,782,301)
(144,058,262)
Sale of treasury shares
1,341,150
821,714
Proceeds of new loans
121,936,924
1,335,000,000
Repayment of loans
(200,000,000)
(1,249,823,897)
Redemption of bonds
-
(750,000,000)
Changes in other net financial
receivables/payables
(328,303,204)
(306,114,200)
542,550,077
552,296,729
Finance costs paid
1
(129,114,408)
(42,710,382)
(71,941,734)
16,169,926
Finance income received
2
101,314,724
55,425,357
71,936,549
53,233,588
C.
Cash flow from financing
activities
(592,607,116)
(265,515,552)
D.
Net increase/(decrease) in
cash and cash equivalents
(A+B+C)
(530,884)
(99,162,018)
E.
Cash and cash equivalents at
the beginning of the year
935,390
100,097,408
F
Cash and cash equivalents at
the end of the year (D+E)
404,507
935,390
1
Finance costs paid of Euro 129,114 thousand include both interest expense and bank fees paid in 2023.
2
Finance income received of Euro 101,314 thousand includes amounts collected from Group companies for recharged fees for guarantees
given.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
495
EXPLANATORY NOTES
A. GENERAL INFORMATION
Prysmian S.p.A. ("the Company") is a company incorporated and domiciled in Italy and organised
under the laws of the Republic of Italy. The Company was formed on 12 May 2005 and as from
1 March 2017 has its registered office in Via Chiese 6, Milan (Italy).
Through its controlling interests in Italian companies and the sub-holding companies Prysmian
Cavi e Sistemi S.r.l. and Draka Holding B.V., the Company indirectly owns equity interests in the
Prysmian Group's operating companies
.
The Company and its subsidiaries produce cables and
systems and related accessories for the energy and telecommunications industries and distribute
and sell them around the globe.
Prysmian S.p.A. was floated on the Italian Stock Exchange on 3 May 2007 and since September
2007 has been included in the FTSE MIB index, comprising the top 40 Italian companies by
capitalisation and stock liquidity.
The financial statements contained herein were approved by the Board of Directors of Prysmian
S.p.A. on 28 February 2024, which decided to publish it within the legal deadlines.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
496
B. ACCOUNTING POLICIES
The accounting policies and standards adopted are the same as those used for preparing the
consolidated financial statements, to which reference should be made, except as described in
Note 34.
B.1 BASIS OF PREPARATION
The 2023 financial statements represent the Separate Financial Statements of Prysmian S.p.A.,
the Parent Company of the Prysmian Group.
The present financial statements have been prepared on a going concern basis, with the
Directors having assessed that there are no financial, operating or other kind of indicators that
might provide evidence of material uncertainties as to the Company's ability to meet its
obligations in the foreseeable future and particularly in the next 12 months. Section C. Financial
risk management and Section C.1 Capital risk management of these Explanatory Notes contain
a description of how the Company manages financial risks, including liquidity and capital risks.
Under Legislative Decree 38 of 28 February 2005 "Exercise of the options envisaged by art. 5 of
European Regulation 1606/2002 on international accounting standards", issuers are required to
prepare not only consolidated financial statements but also separate financial statements for the
Parent Company in accordance with the International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards Board (IASB) and published in the Official
Journal of the European Union.
The term "IFRS" refers to all the International Financial Reporting Standards, all the International
Accounting Standards ("IAS"), and all the interpretations of the International Financial Reporting
Interpretations Committee ("IFRIC").
IFRS have been applied consistently to all the periods presented in this document. The
Company's financial statements have, therefore, been prepared in accordance with IFRS and
related best practice; any future guidance and new interpretations will be reflected in subsequent
years, in the manner established from time to time by the relevant accounting standards.
The financial statements have been prepared on the historical cost basis, except for the valuation
of certain financial assets and liabilities, including derivatives, for which it is compulsory to apply
the fair value method.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
497
REPORTING FORMATS AND DISCLOSURES
The Company has elected to present its income statement according to the nature of expenses,
whereas assets and liabilities in the statement of financial position have been classified as either
current or non-current. The statement of cash flows has been prepared using the indirect
method.
The Company has also applied the provisions of Consob Resolution 15519 dated 27 July 2006
concerning financial statement formats and the requirements of Consob Communication
6064293 dated 28 July 2006 regarding disclosures.
All the amounts shown in the tables in the following Notes are expressed in thousands of Euro,
unless otherwise stated.
B.2 NEWLY ADOPTED ACCOUNTING STANDARDS AND PRINCIPLES
The accounting principles and policies used to prepare the current financial statements are
consistent with those used for the 2022 separate financial statements. This means there are no
new standards or interpretations that have been applied for the first time in these financial
statements and that have had an impact on them. Full details can be found in the Explanatory
Notes to the Consolidated Financial Statements.
A description of the standards and interpretations applicable from 1 January 2023 and of their
effects will now follow.
New standards, interpretations and amendments
The following is a list of new standards, interpretations and amendments whose application
became mandatory from 1 January 2023 but which, based on the assessments performed, have
not had a material impact on the separate financial statements at 31 December 2023:
-
Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9;
-
Amendments to IAS 12: Income Taxes: Deferred Tax related to Assets and Liabilities arising from a
Single Transaction;
-
Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting Policies;
-
Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors: Definition
of Accounting Estimates;
-
Amendments to IAS 12 Income Taxes: International Tax Reform
–
Pillar Two Model Rules.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
498
B.3 ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS NOT YET APPLICABLE
AND NOT ADOPTED EARLY BY THE COMPANY
The following new accounting standards, amendments and interpretations had been issued at
the date of preparing the present report but are not yet applicable and have not been adopted
early by the Company.
New accounting standards, amendments and interpretations
Mandatory application
as from
Amendments to IAS 1: Presentation of Financial Statements:
- Classification of Liabilities as Current or Non-current;
- Classification of Liabilities as Current or Non-current: Deferral of Effective Date;
- Non-current Liabilities with Covenants.
1 January 2024
Amendments to IFRS 16 Leases: Lease Liability in a Sale as Leaseback
1 January 2024
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Disclosures: Supplier Finance Arrangements (issued on 25 May 2023)
1 January 2024
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of
Exchangeability (issued on 15 August 2023)
1 January 2025
Preliminary review has indicated that the new accounting standards, amendments and
interpretations listed above are not expected to have a material impact on the Company's
financial statements.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
499
C. FINANCIAL RISK MANAGEMENT
Prysmian S.p.A. measures and manages its exposure to financial risks in accordance with the
Group's policies.
The main financial risks are centrally coordinated and monitored by the Group Finance
Department. Risk management policies are approved by the Group Finance, Administration and
Control Department, which provides written guidelines on managing the different kinds of risks
and on using financial instruments.
The financial risks to which Prysmian S.p.A. is exposed, directly or indirectly through its
subsidiaries, are the same as those of the companies of which it is the Parent Company.
Reference should therefore be made to Section C. Financial risk management of the Explanatory
Notes to the Group's Consolidated Financial Statements.
The principal types of risks to which the Company is exposed are discussed below:
(a) Exchange rate risk
This arises from foreign currency trade or financial transactions not yet completed and from
foreign currency assets and liabilities already recognised in the accounts. The Company mitigates
this risk by using forward contracts entered into with the Group's central treasury company
(Prysmian Treasury S.r.l.), which manages the various currency positions.
The principal exchange rates affecting the Company are:
•
Euro/US Dollar: in relation to business transactions in US dollars;
•
Euro/British Pound: in relation to business transactions on the British market and vice
versa.
In 2023, trade flows exposed to the above exchange rates accounted for approximately 94% of
the exposure to exchange rate risk arising from business transactions.
It is the Company's policy to hedge, where possible, exposures in currencies other than its unit
of account. In particular, the Company hedges:
•
firm cash flows: invoiced trade flows and exposures arising from loans receivable and
payable;
•
projected cash flows: trade and financial flows arising from firm or highly probable
contractual commitments.
The following sensitivity analysis shows the effects on net profit of a 5% and 10%
increase/decrease in exchange rates versus closing exchange rates at 31 December 2023:
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
500
(Euro/thousand)
2023
2022
-5%
+5%
-5%
+5%
British Pound
(13)
12
(4)
3
US Dollar
(3)
3
(45)
41
Australian Dollar
(15)
14
-
-
Singapore Dollar
-
-
-
-
Chinese Renminbi
(80)
73
(5)
5
Other currencies
(31)
28
(11)
10
Total
(142)
129
(65)
59
(Euro/thousand)
2023
2022
-10%
+10%
-10%
+10%
British Pound
(28)
23
(8)
6
US Dollar
(6)
5
(95)
77
Australian Dollar
(33)
27
-
-
Singapore Dollar
-
-
(11)
9
Chinese Renminbi
(170)
139
(1)
1
Other currencies
(64)
53
(24)
19
Total
(301)
246
(138)
113
When assessing the potential impact of the above, the assets and liabilities in currencies other
than their unit of account were considered, net of any derivatives hedging the above-stated cash
flows.
The following sensitivity analysis shows the post-tax effects on equity reserves of an
increase/decrease in the fair value of designated cash flow hedges following a 5% and 10%
increase/decrease in exchange rates versus closing exchange rates at 31 December 2023:
(Euro/thousand)
2023
2022
-5%
+5%
-5%
+5%
British Pound
(625)
565
(602)
544
Total
(625)
565
(602)
544
(Euro/thousand)
2023
2022
-10%
+10%
-10%
+10%
British Pound
(1,318)
1,079
(1,270)
1,039
Total
(1,318)
1,079
(1,270)
1,039
(b) Interest rate risk
The interest rate risk to which the Company is exposed is mainly due to long-term financial
liabilities, carrying both fixed and variable rates.
Fixed rate debt exposes the Company to a fair value risk. The Company does not operate any
particular hedging policies in relation to the risk arising from such contracts.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
501
The Group Finance Department monitors the exposure to interest rate risk and adopts
appropriate hedging strategies to keep the exposure within the limits defined by the Group
Administration, Finance and Control Department, arranging derivative contracts, if necessary.
The net liabilities considered for sensitivity analysis include variable rate financial receivables
and payables and cash and cash equivalents whose value is influenced by rate volatility. The
Company calculates the pre-tax impact of changes in interest rates on the income statement.
The simulations carried out for balances at 31 December 2023 indicate that, with all other
variables remaining equal, a 25 b.p. increase/decrease in interest rates would have respectively
reduced the level of financial payables by Euro 2,375 thousand (2022: decrease of Euro 986
thousand) or increased them by Euro 2,375 thousand (2022: increase of Euro 986 thousand).
This simulation exercise is carried out on a regular basis to ensure that the maximum potential
loss remains within the limits set by Management.
(c) Price risk
This risk relates to the possibility of fluctuations in the price of strategic materials, whose
purchase price is subject to market volatility and whose procurement from third-party suppliers
is managed centrally by the Company, which then sells them on to Group operating companies.
The Company is exposed to a residual price risk on those purchasing positions that have not
been promptly recharged to Group operating companies. More information about metal
derivatives can be found in Note 7. Derivatives.
(d) Credit risk
The Company does not have excessive concentrations of credit risk insofar as almost all its
customers are companies belonging to the Group. In addition, there are no material unimpaired
past due receivables.
(e) Liquidity risk
Prudent management of the liquidity risk arising from the Company's normal operations involves
having adequate levels of cash and cash equivalents and short-term securities and access to
funds from a sufficient amount of committed credit lines. The Company's Finance Department
prefers flexible forms of funding in the form of committed credit lines
.
At 31 December 2023, cash and cash equivalents stood at Euro 405 thousand, compared with
Euro 935 thousand at 31 December 2022. The Company is able to draw down on the credit lines
granted to the Group in the form of the Revolving Credit Facility 2023 (Euro 1,000 million). More
details can be found in the Explanatory Notes to the Consolidated Financial Statements (Section
C. Financial risk management).
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
502
The following table presents an analysis, by due date, of the payables and liabilities settled on a
net basis. The various due date categories refer to the period between the reporting date and
the contractual maturity of the obligations.
(Euro/thousand)
31 December 2023
Due within
1 year
Due
between
1 - 2 years
Due
between
2 - 5 years
Due after
5 years
Borrowings from banks and other lenders
489,602
74,765
1,933,603
252,166
Lease liabilities
4,963
2,023
3,220
2,288
Derivatives
1,410
-
-
-
Trade and other payables
1,050,962
-
-
-
Total
1,546,937
76,788
1,936,823
254,454
(Euro/thousand)
31 December 2022
Due within
1 year
Due
between
1 - 2 years
Due
between
2 - 5 years
Due after
5 years
Borrowings from banks and other lenders
218,308
459,513
1,983,686
134,843
Lease liabilities
4,512
4,167
2,489
1,158
Derivatives
1,177
-
-
-
Trade and other payables
1,422,968
-
-
-
Total
1,646,965
463,680
1,986,175
136,001
In completion of the disclosures about financial risks, the following is a reconciliation between
the classes of financial assets and liabilities reported in the Company's statement of financial
position and the categories used by IFRS 7 to identify financial assets and liabilities:
(Euro/thousand)
31 December 2023
Financial
assets
at FVPL
Receivables
and other
assets at
amortised cost
Financial
liabilities
at FVPL
Financial
liabilities at
amortised cost
CFH
derivatives
Financial assets at FVPL
Trade receivables
274,672
Other receivables
224,376
Derivatives (assets)
1,535
30,623
Cash and cash equivalents
405
Borrowings from banks and
other lenders
2,762,630
Trade payables
574,106
Other payables
477,076
Derivatives (liabilities)
1,298
112
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
503
(Euro/thousand)
31 December 2022
Financial
assets
at FVPL
Receivables and
other assets at
amortised cost
Financial
liabilities
at FVPL
Financial
liabilities at
amortised cost
CFH
Derivatives
Financial assets at FVPL
193,419
Trade receivables
-
267,751
-
-
-
Other receivables
-
313,880
-
-
-
Derivatives (assets)
1,509
-
-
-
71,885
Cash and cash equivalents
-
935
-
-
-
Borrowings from banks and
other lenders
-
-
-
2,816,182
-
Trade payables
-
-
-
1,422,968
-
Other payables
-
-
-
771,052
-
Derivatives (liabilities)
-
-
1,177
-
-
C.1 CAPITAL RISK MANAGEMENT
The Company's objective in capital risk management is primarily to safeguard business
continuity in order to guarantee returns for shareholders and benefits for other stakeholders.
The Company also aims to maintain an optimal capital structure in order to reduce the cost of
debt and to comply with a series of covenants under the various credit agreements (Note 10.
Borrowings from banks and other lenders and Note 29. Financial covenants).
The Company also monitors capital on the basis of its gearing ratio (ie. the ratio between net
financial debt and capital). Details of the composition of net financial debt can be found in Note
10. Borrowings from banks and other lenders. Capital is defined as the sum of equity and net
financial debt.
The gearing ratios at 31 December 2023 and 31 December 2022 are shown below:
(Euro/thousand)
31 December 2023
31 December 2022
Net financial debt
3,152,745
3,291,040
Equity
2,586,850
2,460,945
Total Capital
5,739,595
5,751,985
Gearing ratio
55%
57%
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
504
C.2 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
IFRS 13 requires assets and liabilities recognised in the statement of financial position at fair
value to be classified according to a hierarchy that reflects the significance of the inputs used in
measuring fair value.
Financial instruments are classified according to the following fair value measurement hierarchy:
Level 1
: Fair value is determined with reference to quoted prices (unadjusted) in active markets
for identical financial instruments. Therefore, the emphasis within Level 1 is on determining both
of the following:
(a)
the principal market for the asset or liability or, in the absence of a principal market, the
most advantageous market for the asset or liability; and
(b)
whether the entity can enter into a transaction for the asset or liability at the price in
that market at the measurement date.
Level 2
: Fair value is determined using valuation techniques where the input is based on
observable market data. The inputs for this level include:
(a)
quoted prices for similar assets or liabilities in active markets;
(b)
quoted prices for identical or similar assets or liabilities in markets that are not active;
(c)
inputs other than quoted prices that are observable for the asset or liability, for example:
i.
interest rate and yield curves observable at commonly quoted intervals;
ii.
implied volatilities;
iii.
credit spreads;
(d)
market-corroborated inputs.
Level 3
: Fair value is determined using valuation techniques where the input is not based on
observable market data.
The following tables present the assets and liabilities that are recurrently measured at fair value:
(Euro/thousand)
31 December 2023
Level 1
Level 2
Level 3
Total
Assets
Financial assets at fair value:
Financial assets at fair value through profit or loss
Derivatives through profit or loss
-
1,535
-
1,535
Hedging derivatives
-
30,623
-
30,623
Total assets
-
32,158
-
32,158
Liabilities
Financial liabilities at fair value:
Derivatives through profit or loss
-
1,298
-
1,298
Hedging derivatives
-
112
-
112
Total liabilities
-
1,410
-
1,410
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
505
(Euro/thousand)
31 December 2022
Level 1
Level 2
Level 3
Total
Assets
Financial assets at fair value:
Financial assets at fair value through profit or loss
193,419
193,419
Derivatives through profit or loss
-
1,509
-
1,509
Hedging derivatives
-
71,885
-
71,885
Total assets
193,419
73,394
-
266,813
Liabilities
Financial liabilities at fair value:
Derivatives through profit or loss
-
1,177
-
1,177
Hedging derivatives
-
-
-
-
Total liabilities
-
1,177
-
1,177
All outstanding derivatives have been entered into with the subsidiary Prysmian Treasury S.r.l.
and all belong to Level 2 of the fair value hierarchy.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
506
1.
PROPERTY, PLANT AND EQUIPMENT
Details of this line item and related movements are as follows:
(Euro/thousand)
Land and
buildings
Plant and
machinery
Equipment
Other
assets
Assets under
construction
and advances
Total
Balance at
31 December 2022
51,939
14,116
2,732
13,690
3,878
86,356
Movements in 2023:
- Investments
1,400
-
336
1,604
10,564
13,904
- Depreciation
(2,864)
(733)
(837)
(5,770)
-
(10,204)
- Impairment
-
-
-
-
-
-
- Reclassifications
481
-
244
1,509
(1,962)
272
Total movements
(983)
(733)
(257)
(2,657)
8,602
3,972
Balance at
31 December 2023
50,956
13,383
2,475
11,033
12,480
90,328
Of which:
- Historical cost
78,341
23,527
12,070
39,401
12,480
165,819
- Accumulated
depreciation and
impairment
(27,385)
(10,144)
(9,595)
(28,368)
-
(75,491)
Net book value
50,956
13,383
2,475
11,033
12,480
90,328
(Euro/thousand)
Land and
buildings
Plant and
machinery
Equipment
Other
assets
Assets under
construction
and advances
Total
Balance at
31 December 2021
53,064
14,851
2,680
15,850
4,628
91,073
Movements in 2022:
- Investments
1,611
-
488
1,794
2,169
6,062
- Depreciation
(2,736)
(735)
(1,179)
(5,350)
-
(10,000)
- Impairment
-
-
-
-
-
-
- Reclassifications
-
-
743
1,396
(2,918)
(779)
- Other
-
-
-
-
-
-
Total movements
(1,125)
(735)
52
(2,160)
(749)
(4,717)
Balance at
31 December 2022
51,939
14,116
2,732
13,690
3,878
86,356
Of which:
- Historical cost
76,460
23,527
11,490
36,288
3,990
151,755
- Accumulated
depreciation and
impairment
(24,521)
(9,411)
(8,758)
(22,598)
(111)
(65,399)
Net book value
51,939
14,116
2,732
13,690
3,878
86,356
"Land and buildings", with a net book value of Euro 50,956 thousand, have recorded a net
decrease of Euro 983 thousand in 2023, reflecting the net effect of asset depreciation (Euro
2,864 thousand) and the effect of applying IFRS 16 (Euro 1,400 thousand).
"Plant and machinery" (Euro 13,383 thousand) and "Equipment" (Euro 2,475 thousand) mostly
refer to instrumentation used for R&D activities and to various fixed installations within Prysmian
Group's headquarters.
"Other assets" (Euro 11,033 thousand) mainly consist of office furniture and equipment and
computer equipment for Euro 5,800 thousand, and capitalisations under IFRS 16 for Euro 5,233
thousand.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
507
"Assets under construction and advances" (Euro 12,480 thousand) mostly refer to expenditure
on plant and machinery for use in R&D and on other equipment intended for the Prysmian
headquarters and the new Quattordio site.
2. INTANGIBLE ASSETS
Details of this line item and related movements are as follows:
(Euro/thousand)
Patents
Concessions,
licences,
trademarks
and similar
rights
Software
Other
intangible
assets
Intangibles in
progress and
advances
Total
Balance at
31 December 2022
37
35,732
75,274
-
14,790
125,832
Movements in 2023:
- Investments
-
881
8,101
-
9,175
18,157
- Disposals
-
-
-
-
-
-
- Amortisation
(5)
(6,016)
(24,926)
-
-
(30,947)
- Reclassifications
-
1,625
12,055
-
(13,952)
(272)
Total movements
(5)
(3,510)
(4,770)
-
(4,777)
(13,062)
Balance at
31 December 2023
32
32,222
70,504
-
10,013
112,770
Of which:
- Historical cost
11,455
74,046
201,173
787
10,013
297,473
- Accumulated
amortisation and
impairment
(11,423)
(41,824)
(130,669)
(787)
-
(184,703)
Net book value
32
32,222
70,504
-
10,013
112,770
(Euro/thousand)
Patents
Concessions,
licences,
trademarks
and similar
rights
Software
Other
intangible
assets
Intangibles in
progress and
advances
Total
Balance at
31 December 2021
41
38,820
69,876
-
18,103
126,839
Movements in 2022:
- Investments
-
669
8,825
-
13,741
23,235
- Disposals
-
-
-
-
(1,202)
- Amortisation
(4)
(5,477)
(19,541)
-
-
(25,022)
- Reclassifications
-
1,720
16,114
-
(17,055)
779
Total movements
(4)
(3,088)
5,398
-
(3,313)
(1,008)
Balance at
31 December 2022
37
35,732
75,274
-
14,790
125,832
Of which:
- Historical cost
11,455
71,540
181,017
787
14,790
279,588
- Accumulated
amortisation and
impairment
(11,418)
(35,808)
(105,743)
(787)
-
(153,756)
Net book value
37
35,732
75,274
-
14,790
125,832
In 2023, the value of gross investments in intangible assets came to Euro 18,157 thousand,
most of which attributable to ongoing enhancement of information systems and Digital
Transformation projects. In 2023, as part of Prysmian Group's integration strategy, the Group
ERP system (SAP 1C) was rolled out to the Elevators business, bringing the total number of
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
508
plants to 84, plus 6 corresponding distribution centres, that are managed using the single SAP
1C platform present in over 30 countries.
"Concessions, licences, trademarks and similar rights" amount to Euro 32,222 thousand at 31
December 2023, with the change since the previous year attributable to amortisation (Euro
6,016 thousand), capitalisations in the year (Euro 1,625 thousand) and new investments (Euro
881 thousand).
"Software" amounts to Euro 70,504 thousand at 31 December 2023, with the change since the
previous year attributable to amortisation (Euro 24,926 thousand), capitalisations in the year
(Euro 12,055 thousand) and new investments (Euro 8,101 thousand).
"Intangibles in progress and advances" of Euro 10,013 thousand mostly refer to expenditure on
rolling out the above SAP projects, and on developing other software.
3. INVESTMENTS IN SUBSIDIARIES
These present a balance of Euro 5,719,702 thousand at 31 December 2023, having recorded the
following movements over the year:
(Euro/thousand)
31.12.2022
Capital
contributions
Investment
(impairment)/
revaluation
Capital
contributions
for stock
grants
31.12.2023
Prysmian Cavi e Sistemi S.r.l.
404,391
-
-
5,094
409,485
Draka Holding B.V.
4,796,127
-
-
7,222
4,803,349
Prysmian Cavi e Sistemi Italia S.r.l.
116,282
-
-
89
116,371
Prysmian Power Link S.r.l.
219,821
-
-
115
219,936
Fibre Ottiche Sud - F.O.S. S.r.l.
38,752
30,000
(35,450)
36
33,338
Prysmian Treasury Srl
83,552
-
-
3
83,555
Prysmian Kabel und Systeme GmbH
3,434
-
-
-
3,434
Draka Kabely SRO
1
-
-
-
1
Electronic and Optical Sensing
Solutions S.r.l.
35,803
10,000
-
-
45,803
Prysmian Servizi S.p.A.
3,000
1,430
-
-
4,430
Total investments in subsidiaries
5,701,163
41,430
(35,450)
12,559
5,719,702
The net change of Euro 18,539 thousand in the value of Investments in subsidiaries consists of
an increase of Euro 53,989 thousand and a decrease of Euro 35,450 thousand for impairment.
The increase is attributable to capital contributions paid to Fibre Ottiche Sud S.r.l., Electronic
and Optical Sensing Solutions S.r.l. and Prysmian Servizi S.p.A. and to increases linked to the
pay-related component of share-based plans, with underlying Prysmian S.p.A. shares, for
employees of other Group companies, as explained in Note 17. Personnel costs. Since it is not
recharged, this component has been treated like a capital contribution and so reported as an
increase in the value of the investments in the subsidiaries in which the plan beneficiaries are
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
509
directly or indirectly employed. These increases are matched by a corresponding movement in
the specific equity reserve. Further information can be found in Note 9. Share capital and
reserves.
At the end of the financial year, the Company reviewed whether there was any evidence of
impairment. This review identified the following companies, the investments in which needed to
be tested for recoverability: Prysmian Cavi e Sistemi S.r.l., Draka Holding B.V., Fibre Ottiche
Sud – F.O.S. S.r.l., Prysmian Cavi e Sistemi Italia S.r.l., Prysmian PowerLink S.r.l. and Electronic
and Optical Sensing Solutions S.r.l.. The carrying amount of the investments in these
subsidiaries was compared with their recoverable amount, defined as the higher of value in use
and fair value less costs to sell.
The cash flow projection used to calculate value in use took the post-tax cash flow in the 2024
budget for year one, projecting this to 2025-2026 consistent with the five-year strategic plans
using growth rates ranging between 0.66% and 2.5% depending on the individual company's
country of operation. The WACC (Weighted Average Cost of Capital) used to discount cash flows
for determining value in use was also determined according to company country of operation.
The values of WACC thus determined were in a range of 7.88% to 9.83%. The perpetuity growth
rate for projections after 2024 was 2%.
It should also be noted that any reasonably possible change in the relevant assumptions used
to determine recoverable amount (+/-0.5% change in the growth rate, and +/-0.5% change in
the discount rate) would not produce significantly different results.
Fair value, on the other hand, was calculated on the basis of market inputs, in particular using
the multiples method, with reference to companies in the same sector.
These impairment tests revealed the need for a partial write-down of Euro 35,450 thousand
against the value of the investment in Fibre Ottiche Sud - F.O.S. S.r.l..
The following table summarises key information about investments held in subsidiaries:
Company name
Registered
office
Share capital
% interest
2023
% interest
2022
Prysmian Cavi e Sistemi S.r.l.
Milan
EUR 50,000,000
100
100
Draka Holding B.V.
Amsterdam
EUR 52,229,321
100
100
Prysmian Cavi e Sistemi Italia S.r.l.
Milan
EUR 77,143,249
100
100
Prysmian PowerLink S.r.l.
Milan
EUR 100,000,000
100
100
Fibre Ottiche Sud - F.O.S. S.r.l.
Battipaglia
EUR 47,700,000
100
100
Prysmian Treasury S.r.l.
Milan
EUR 80,000,000
100
100
Prysmian Kabel Und Systeme GmbH
Berlin
EUR 15,000,000
6.25
6.25
Prysmian Pension Scheme Trustee Ltd
Hampshire
GBP 1
100
100
Prysmian Kablo SRO
(1)
Bratislava
EUR 21,246,000
0.005
0.005
Electronic and Optical Sensing Solutions S.r.l.
Milan
EUR 5,000,000
100
100
Prysmian Servizi S.p.A.
Milan
EUR 3,000,000
100
100
Jaguar Communication Consultancy Services
Private Ltd.
(1)
Mumbai
INR 122,268,218
0.000001
0.000001
Prysmian Cabos e Sistemas do Brasil S.A.
(1)
Sorocaba
BRL 910,044,391
0.040177
0.040177
(1)
Controlled indirectly
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
510
4. DEFERRED TAX ASSETS
Deferred tax assets amount to Euro 575 thousand at 31 December 2023 (nil, together with
deferred tax liabilities of Euro 10,005 thousand, at 31 December 2022). The change is primarily
attributable to interest rate movements, impacting the recognised amount of interest rate swaps
and their corresponding tax value.
Details are as follows:
(Euro/thousand)
31 December 2023
31 December 2022
Deferred taxes:
- Deferred tax assets recoverable beyond 12 months
378
(10,201)
- Deferred tax assets recoverable within 12 months
197
196
Total deferred tax assets (liabilities)
575
(10,005)
Movements in deferred taxes are analysed as follows:
(Euro/thousand)
Employee
benefit
obligations
Provisions
for risks
Other
Total
Balance at 31 December 2022
440
5,158
(15,603)
(10,005)
Impact on income statement
-
316
293
609
Impact on equity
42
-
9,929
9,971
Balance at 31 December 2023
482
5,474
(5,381)
575
"Other" mainly includes the tax effect deferred in equity arising on the hedge accounting
treatment of Interest Rate Swaps.
5. TRADE AND OTHER RECEIVABLES
Details are as follows:
(Euro/thousand)
31.12.2023
Attività non correnti
Non-current
Current
Total
Trade receivables
-
274,779
274,779
Allowance for doubtful accounts
-
(107)
(107)
Total trade receivables
-
274,672
274,672
Other receivables:
Tax receivables
-
54,433
54,433
Financial receivables
235
14,213
14,448
Prepaid finance costs
3,621
1,092
4,713
Receivables from employees
16
3,213
3,229
Pension plan receivables
-
143
143
Advances to suppliers
-
12
12
Other
84,035
63,363
147,398
Total other receivables
87,907
136,469
224,376
Total
87,907
411,141
499,048
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
511
(Euro/thousand)
31.12.2022
Attività non correnti
Non-current
Current
Total
Trade receivables
-
267,790
267,790
Allowance for doubtful accounts
-
(38)
(38)
Total trade receivables
-
267,751
267,751
Other receivables:
Tax receivables
-
49,572
49,572
Financial receivables
173
-
173
Prepaid finance costs
284
1,185
1,469
Receivables from employees
24
1,301
1,325
Pension plan receivables
-
-
-
Advances to suppliers
-
-
-
Other
-
261,340
261,340
Total other receivables
481
313,399
313,880
Total
481
581,150
581,631
The following table breaks down trade and other receivables according to the currency in which
they are expressed:
(Euro/thousand)
31 December 2023
31 December 2022
Euro
393,380
429,792
British Pound
22,269
28,869
US Dollar
51,164
75,378
Other currencies
32,235
47,592
Total
499,048
581,631
"Trade receivables" at 31 December 2023 mainly refer to amounts charged by Prysmian S.p.A.
to its subsidiaries for head office services and the resale of strategic materials.
The book value of trade receivables approximates their fair value.
Trade receivables are all due within the next year and do not include any material past due
balances.
"Tax receivables" of Euro 54,433 thousand mainly refer to:
•
foreign tax credits (Euro 6,104 thousand);
•
VAT credits (Euro 18,662 thousand);
•
R&D tax credits (Euro 6,282 thousand);
•
corporate income tax (IRES) credit for Italian companies participating in the national
and world tax consolidation group (Euro 11,077 thousand);
•
regional business tax (IRAP) credit (Euro 3,152 thousand);
•
other tax receivables (Euro 9,156 thousand).
"Financial receivables" mainly refer to accrued income recognised to align the value of interest
rate swaps with market value.
"Prepaid finance costs", amounting to Euro 4,713 thousand, mainly refer to the Company's
portion of the costs incurred to arrange the new revolving credit facilitiy, which are being spread
over the term of such facilities.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
512
"Receivables from employees", amounting to Euro 3,229 thousand, refer to employee loans for
taxes advanced by the Company.
At 31 December 2023, "Other" receivables of Euro 147,398 thousand mainly comprise:
•
Euro 50,604 thousand in receivables from Group companies for recharges of the long-
term BE IN 2022-2024 incentive plan;
•
Euro 33,655 thousand in receivables from Group companies for recharges of the 2023-
2025 long-term incentive plan;
•
Euro 25,986 thousand in receivables from Group companies mainly for the billing of
patent and know-how licences;
•
Euro 19,721 thousand in receivables from Italian Group companies for the transfer of
IRES (Italian corporate income tax) under the national tax consolidation (art. 117 et seq
of the Italian Income Tax Code);
•
Euro 17,334 thousand in prepayments.
The book value of financial receivables and other current receivables approximates the
respective fair value.
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets at fair value through profit or loss report a nil balance at 31 December 2023,
versus Euro 193,419 thousand at 31 December 2022.
In fact, the Company sold the two positions held in monetary funds on 2 August 2023 and 8
September 2023 respectively.
7. DERIVATIVES
Details of these balances are presented below:
(Euro/thousand)
31 December 2023
Asset
Liability
Non-current
Interest rate derivatives (CFH)
10,508
-
Total cash flow hedges
10,508
-
Total non-current
10,508
-
Current
Interest rate derivatives (CFH)
20,115
-
Forex derivatives on commercial transactions (CFH)
112
Total cash flow hedges
20,227
-
Forex derivatives on commercial transactions
1,383
1,397
Metal derivatives
40
13
Total other derivatives
1,423
1,410
Total current derivatives
21,650
1,410
Total
32,158
1,410
31 December 2022
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
513
Asset
Liability
Non-current
Interest rate derivatives (CFH)
59,209
-
Total cash flow hedges
59,209
-
Total non-current
59,209
-
Current
Interest rate derivatives (CFH)
12,676
-
Forex derivatives on commercial transactions (CFH)
-
314
Total cash flow hedges
12,676
314
Forex derivatives on commercial transactions
1,410
818
Metal derivatives
99
46
Total other derivatives
1,509
864
Total current derivatives
14,185
1,177
Total
73,394
1,177
The above derivatives are mostly arranged with Prysmian Treasury S.r.l., the Group's central
treasury company, except for Interest Rates Swaps (IRS) intended to transform the interest
rates on certain loans from floating into fixed and which are arranged directly with leading
financial institutions.
Forex derivatives have a notional value of Euro 42,877 thousand at 31 December 2023, of which
Euro 14,421 thousand designated as cash flow hedges relating to a service agreement and to
currency hedges of metal purchase and sale transactions.
Metal derivatives have a notional value of Euro 6,903 thousand.
Information about the notional value of Interest Rate Swaps can be found in Note 9. Share
capital and reserves - Cash flow hedge reserve.
8. CASH AND CASH EQUIVALENTS
These amount to Euro 405 thousand at 31 December 2023, versus Euro 935 thousand at 31
December 2022, and relate to the cash held on Euro and foreign currency bank current accounts
repayable on demand.
The credit risk associated with cash and cash equivalents is limited insofar as the counterparties
are major national and international banks.
9. SHARE CAPITAL AND RESERVES
Equity amounts to Euro 2,586,850 thousand at 31 December 2023, reporting an increase of Euro
125,905 thousand since 31 December 2022. The changes over the year are discussed in the
following paragraphs on the individual components of equity.
Share capital
Share capital amounts to Euro 27,653 thousand at 31 December 2023, consisting of 276,534,448
ordinary shares (including 3,718,405 treasury shares), with a nominal value of Euro 0.10 each.
The total number of outstanding voting shares is 272,816,043, net of the 10,669 treasury shares
held indirectly.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
514
Share capital at 31 December 2023 is Euro 839 thousand higher than at 31 December 2022
following capital increases in implementation of the LTI and BE IN plans, the latter approved at
the shareholders' meeting on 12 April 2022.
The following table reconciles the number of outstanding shares at 31 December 2021, at 31
December 2022 and 31 December 2023:
Ordinary shares
Treasury shares
Total
Balance at 31 December 2021
268,144,246
(4,642,199)
263,502,047
Allotments and sales
(1)
40,837
40,837
Balance at 31 December 2022
268,144,246
(4,601,362)
263,542,884
Capital increases
(2)
8,390,202
-
8,390,202
Allotments and sales
(3)
-
882,957
882,957
Balance at 31 December 2023
276,534,448
(3,718,405)
272,816,043
(1)
Allotment and/or sale of treasury shares under the YES Group employee share purchase plan (40,837 shares).
(2)
Issue of new shares serving the long-term incentive plan for Group employees (8,000,000 shares) and the BE IN
plan (390,202 shares).
(3)
Allotment and/or sale of treasury shares under Group employee share purchase plans.
More details about treasury shares can be found in the subsequent note on "Treasury shares".
Share premium reserve
This reserve amounts to Euro 1,281,071 thousand at 31 December 2023, the same as at 31
December 2022.
Capital increase costs
This reserve, which reports a negative balance of Euro 14,476 thousand at 31 December 2023,
mainly relates to the costs incurred for the capital increase serving the public mixed exchange
and cash offer for the ordinary shares of Draka Holding B.V., announced on 22 November 2010
and formalised on 5 January 2011, and the costs incurred for the capital increase resolved and
approved in 2018.
Legal reserve
This reserve amounts to Euro 5,363 thousand at 31 December 2023, the same as at 31
December 2022.
Treasury shares reserve
This reserve, which amounts to Euro 74,062 thousand at 31 December 2023 (Euro 91,648
thousand at 31 December 2022), complies with statutory requirements (art. 2357-ter of the
Italian Civil Code).
Treasury shares
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
515
The book value of treasury shares is Euro 74,062 thousand at 31 December 2023 and refers to
3,718,405 ordinary shares with a total nominal value of Euro 371,841.
Movements in treasury shares have been as follows:
Number of
shares
Total
nominal value
(in Euro)
%
of share
capital
Average
unit value
(in Euro)
Total
carrying value
(in Euro)
At 31 December 2021
4,642,199
464,220
1.73%
20
92,461,024
- Share buyback
-
-
-
- Allotments/sales
(40,837)
(4,084)
20
(813,371)
At 31 December 2022
4,601,362
460,136
1.72%
20
91,647,652
- Share buyback
-
-
-
- Allotments/sales
(882,957)
(88,296)
20
(17,586,301)
At 31 December 2023
3,718,405
371,841
1.34%
20
74,061,351
During 2023, the number of treasury shares decreased by a total of 882,957. Of this total,
145,512 and 102,454 shares were allotted to employees who had signed up to the YES share
purchase plan and BE IN incentive plan respectively, 41,919 shares were sold on preferential
terms to employees of another group company under the same plan, while 593,072 shares
related to settlement of the 2020-2022 LTI in June 2023.
Extraordinary reserve
This reserve amounts to Euro 52,688 thousand at 31 December 2023 (the same as at 31
December 2022), and was formed through the apportionment of net profit for 2006, approved
by the shareholders on 28 February 2007.
IAS/IFRS first-time adoption reserve
This reserve was created in accordance with IFRS 1 and reflects the differences arising on first-
time adoption of IAS/IFRS.
It amounts to Euro 30,177 thousand at 31 December 2023, the same as at 31 December 2022.
Capital contribution reserve
This reserve amounts to Euro 6,113 thousand at 31 December 2023, the same as at 31
December 2022.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
516
Actuarial gains/(losses) on employee benefits
The reserve for remeasuring employee benefit plans reports a negative balance of Euro 1,530
thousand at 31 December 2023, reflecting post-tax actuarial losses recognised through other
comprehensive income, in accordance with IAS 19.
Convertible bond reserve
This reserve amounts to Euro 49,550 thousand (net of the related tax effect) at 31 December
2023, the same as a year earlier, and refers to the non-monetary components of bonds,
discussed in more detail in Note 10. Borrowings from banks and other lenders.
Share-based payment reserve
This reserve amounts to Euro 80,793 thousand at 31 December 2023 (Euro 166,559 thousand
at 31 December 2022), reporting a net decrease of Euro 85,766 thousand since 31 December
2022 mainly due to:
•
the transfer of Euro 134 thousand in costs to profit or loss for the period (Euro 274
thousand in 2022) in connection with the YES plan, a share-based plan involving
Prysmian S.p.A. shares;
•
an increase of Euro 2,165 thousand in the carrying amount of investments in
subsidiaries, in which beneficiaries of the YES Plan involving Prysmian S.p.A. shares are
directly or indirectly employed;
•
the release of Euro 140,448 thousand from the reserve upon concluding the 2020-2022
LTI plan;
•
an increase of Euro 37,367 thousand for the 2023-2025 LTI plan. Of this total, Euro
7,749 thousand relates to Prysmian S.p.A. personnel, while Euro 29,618 thousand refers
to the grant date fair value of shares allotted to LTI plan beneficiaries employed in other
Group companies, of which Euro 12,983 thousand not recharged to the subsidiaries;
•
an increase of Euro 15,016 thousand for the BE IN incentive plan, more details about
which can be found in Note 17. Personnel costs. Of this total, Euro 184 thousand relates
to Prysmian S.p.A. personnel, while Euro 14,831 thousand refers to the grant date fair
value of shares allotted to LTI plan beneficiaries employed in other Group companies, of
which Euro 2,590 thousand not recharged to the subsidiaries.
Further information can be found in Note 17. Personnel costs.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
517
Cash flow hedge reserve
The cash flow hedge reserve, presenting a post-tax positive balance of Euro 23,033 thousand at
31 December 2023 (positive Euro 54,474 thousand at 31 December 2022), reports hedging
derivatives that qualify for hedge accounting under IFRS 9.
This reserve refers to the hedge of the Euro 1,200 million Sustainability-Linked Term Loan
contracted with a syndicate of leading Italian and international banks on 7 July 2022 and
maturing on 7 July 2027. The maturities and amortisation schedule of these derivatives are
consistent with the terms of the loan.
The notional value of the interest rate swaps at 31 December 2023 is Euro 1,485,000 thousand.
Share issue reserve
The share issue reserve amounts to Euro 1,211 thousand at 31 December 2023 (Euro 1,100
thousand at 31 December 2022).
Retained earnings
Retained earnings amount to Euro 780,935 thousand at 31 December 2023, reporting an
increase of Euro 121,798 thousand since 31 December 2022, of which Euro 15,403 thousand
drawn from the reserve to pay the 2022 dividend, an increase of Euro 1,341 thousand from
selling YES plan shares to employees of a subsidiary and an increase of Euro 135,860 thousand
after releasing the share-based payment reserve at the end of the 2020-2022 LTI plan.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
518
The following table analyses each component of equity, indicating its origin, permitted use and
availability for distribution, as well as how it has been used in previous years.
(Euro/thousand)
Nature/description
Amount
Permitted
use (A,B,C)
Amount
available for
distribution
Uses in three previous
years
to cover
losses
other
purposes
Share capital
27,653
Capital reserves:
.
Capital contribution reserve
6,113
A,B,C
6,113
.
Share premium reserve
1,281,071
A,B,C
1,281,071
.
Capital increase costs
(14,476)
(14,476)
Earnings reserves:
.
Extraordinary reserve
52,688
A,B,C
52,688
.
IAS/IFRS first-time
adoption reserve
30,177
A,B,C
30,177
.
Legal reserve
5,363
B
.
Share issue reserve
1,211
A,B,C
1,211
.
Convertible bond reserve
49,550
.
Retained earnings
780,935
A,B,C
780,935
57,181
Measurement reserves (*):
.
Share-based payment
reserve
80,793
.
Cash flow hedge reserve
23,033
.
Actuarial gains and losses
on employee benefits
(1,530)
Total reserves
2,294,928
-
-
Undistributable amount
157,209
Distributable amount
2,137,719
Key:
A: to increase capital
B: to cover losses
C: distribution to shareholders
(*) These reserves are not available for distribution under art. 6 of Italian Legislative Decree 38/05.
Dividend distribution
On 19 April 2023, the shareholders of Prysmian S.p.A. approved the financial statements for
2022 and the distribution of a gross dividend of Euro 0.60 per share, for a total of some Euro
158 million. The dividend was paid out from 26 April 2023 to shares outstanding on the record
date of 25 April 2023, with the shares going ex-dividend on 24 April 2023. A recommendation
to pay a dividend of Euro 0.70 per share, for a total of some Euro 191 million in respect of the
year ended 31 December 2023, will be presented to shareholders in the meeting convened in
single call for 18 April 2024.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
519
10. BORROWINGS FROM BANKS AND OTHER LENDERS
These amount to Euro 2,762,630 thousand at 31 December 2023, compared with Euro
2,816,182 thousand at 31 December 2022.
(Euro/thousand)
31 December 2023
Non-current
Current
Total
Long-term financial payables
Mediobanca Loan
-
100,483
100,483
Intesa Loan
-
151,342
151,342
CDP Loans
194,350
103,494
297,844
EIB Loans
134,870
113,085
247,955
Sustainability-Linked Term Loan
1,193,356
24,972
1,218,328
Convertible Bond 2021
727,830
-
727,830
Lease liabilities
11,444
5,418
16,861
Other payables to banks and other lenders
1,937
51
1,988
Total
2,263,787
498,844
2,762,630
(Euro/thousand)
31 December 2022
Non-current
Current
Total
Long-term financial payables
Mediobanca Loan
99,905
294
100,199
Intesa Loan
149,781
836
150,617
CDP Loans
174,685
520
175,205
EIB Loans
244,798
996
245,794
Unicredit Loan
-
200,457
200,457
Sustainability-Linked Term Loan
1,191,474
6,114
1,197,588
Convertible Bond 2021
717,399
-
717,399
Lease liabilities
14,712
5,120
19,832
Other payables to banks and other lenders
-
9,090
9,090
Total
2,592,754
223,428
2,816,182
Borrowings from banks and other financial institutions and Bonds are analysed as follows:
(Euro/thousand)
31 December 2023
31 December 2022
Mediobanca Loan
100,483
100,199
Intesa Loan
151,342
150,617
CDP Loans
297,844
175,205
EIB Loans
247,955
245,794
Sustainability-Linked Term Loan
1,218,328
1,197,588
Unicredit Loan
-
200,457
Other borrowings
1,988
9,090
Borrowings from banks and other financial institutions
2,017,939
2,078,951
Convertible Bond 2021
727,830
717,399
Total
2,745,769
2,796,350
Credit Agreements:
Prysmian S.p.A. had the following Credit Agreements in place during the course of 2023:
Revolving Credit Facility 2019 and 2023
On 3 April 2019, the Group renewed a Euro 1,000 million five-year revolving credit facility with
a syndicate of leading Italian and international banks. This line was extinguished on 20 June
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
520
2023 at the same time as agreeing the new Revolving Credit Facility 2023. The new facility may
be drawn down for business and working capital needs, including the refinancing of existing
facilities, and to issue guarantees. It has a five-year term, with an option to extend to six and
seven years. In addition, with the aim of deepening the embedding of ESG factors into the
Group's strategy, Prysmian Group has chosen to include important environmental and social
KPIs among the parameters determining the terms of credit. The renewed revolving credit facility
is in fact Sustainability-Linked, being tied to the decarbonisation targets already set by the Group
(annual GHG emissions from 2023 to 2030), to the ratio of female white-collar and executive
hires to total Group hires, and to the number of sustainability audits performed in the supply
chain.
At 31 December 2023, this facility was not being used.
CDP Loans
On 28 October 2019, the Group entered into an agreement with Cassa Depositi e Prestiti S.p.A.
(CDP) for a Euro 100 million long-term loan for 4 years and 6 months from the date of signing,
with a bullet repayment at maturity.
The purpose of this loan is to finance part of the Group's capital expenditure and expenditure on
research, development and innovation in Italy and Europe. Interest rate swaps have been
arranged in respect of this loan, for an overall notional value of Euro 100 million, with the
objective of hedging variable rate interest flows over the period 2020-2024.
On 28 January 2021, a second loan was agreed with CDP for Euro 75 million with a term of 4
years and 6 months, for the purpose of financing part of the Group's expenditure on purchasing
the "Leonardo Da Vinci" cable-laying vessel.
This loan, drawn down in full on 9 February 2021, is repayable in a lump sum at maturity on 28
July 2025. Interest rate swaps have been arranged in respect of this loan, for an overall notional
value of Euro 75 million, with the objective of hedging variable rate interest flows over the period
2021-2025.
On 6 March 2023, another long-term 6-year loan with CDP was announced for Euro 120 million,
for the purpose of supporting the Group's R&D programs in Italy and Europe (specifically in
France, Germany, Spain and the Netherlands). The loan, received on 15 February 2023, is
repayable in a lump sum at maturity on 15 February 2029.
At 31 December 2023, the fair value of the CDP Loans approximated their carrying amount.
EIB Loans
On 10 November 2017, Prysmian S.p.A. entered into a loan agreement with the European
Investment Bank (EIB) for Euro 110 million to support the Group's R&D programs in Europe over
the period 2017-2020. The loan was received on 29 November 2017 and is repayable in a lump
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
521
sum at maturity on 29 November 2024. Interest rate swaps have been arranged in respect of
this loan, for an overall notional value of Euro 110 million, with the objective of hedging variable
rate interest flows over the period 2018-2024.
On 3 February 2022, the Group announced that it had finalised a loan from the EIB for Euro 135
million to support its European R&D program in the energy and telecom cable systems sector
over the period 2021-2024.
This loan is specifically intended to support projects to be developed at R&D centres in five
European countries: Italy, France, Germany, Spain and the Netherlands.
The loan, received on 28 January 2022, is repayable in a lump sum at maturity on 29 January
2029.
At 31 December 2023, the fair value of the EIB Loans approximated their carrying amount.
Sustainability-Linked Term Loan
On 7 July 2022, the Group entered into a medium-term Sustainability-Linked loan for Euro 1,200
million with a syndicate of leading Italian and international banks. The loan was drawn down in
full on 14 July 2022 and primarily used to refinance the Euro 1 billion term loan obtained in
2018, which was thus repaid early on the same date. Interest rate swaps have been arranged
in respect of this loan, for an overall notional value of Euro 1,200 million, with the objective of
hedging variable rate interest flows.
With the aim of strengthening its financial structure and embedding ESG factors in the Group's
strategy, Prysmian Group has chosen to include important environmental and social KPIs among
the parameters determining the terms of the loan.
In fact, the Sustainability-Linked Term Loan requires annual compliance with ESG indicators.
The indicators to be met for 2023 are as follows:
•
Scope 1 and Scope 2 CO2 emissions, calculated using the market-based method, less than or equal
to 654 ktCO2eq (see the "Scorecard 2023-2025" within the "Non-Financial Statement" included in the
Group Directors' Report);
•
Performance of at least 34 sustainability audits of its suppliers (see the "Sustainable value chain"
chapter of the "Non-Financial Statement" included in the Group Directors' Report);
•
41.1% or more of the Group's total white-collar hires must be women (see "Prysmian's Human Capital"
within the "Non-Financial Statement" included in the Group Directors' Report).
The achievement or otherwise of these indicators entails a positive or negative adjustment of
the annual spread.
At 31 December 2023, the fair value of the Sustainability-Linked Term Loan approximated its
carrying amount.
Unicredit Loan
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
522
On 15 November 2018, Prysmian S.p.A. entered into an agreement with Unicredit for a long-
term cash loan for a maximum amount of Euro 200 million for 5 years from the date of signing.
The loan was drawn down in full on 16 November 2018 and repaid in November 2023.
Mediobanca Loan
On 20 February 2019, the Group entered into an agreement with Mediobanca for a Euro 100
million long-term loan for 5 years from the date of signing. The loan was drawn down in full on
22 February 2019 and is repayable in a lump sum at maturity. The interest rate applied is indexed
to 3M and 6M Euribor, as chosen by the company. At 31 December 2023, the fair value of this
loan approximated its carrying amount.
Intesa Loan
On 11 October 2019, the Group entered into an agreement with Intesa Sanpaolo for a Euro 150
million long-term loan for 5 years from the date of signing. The loan was drawn down in full on
18 October 2019 and is repayable in a lump sum at maturity.
At 31 December 2023, the fair
value of this loan approximated its carrying amount.
The fair value of loans has been determined using valuation techniques that refer to observable
market data (Level 2 of the fair value hierarchy).
The following tables summarise the committed lines available to the Company at 31 December
2023 and 31 December 2022:
(Euro/thousand)
31 December 2023
Total lines
Drawn
Undrawn
Revolving Credit Facility 2023
1,000,000
-
1,000,000
CDP Loans
295,000
(295,000)
Intesa Loan
150,000
(150,000)
Mediobanca Loan
100,000
(100,000)
Sustainability-Linked Term Loan
1,200,000
(1,200,000)
EIB Loans
245,000
(245,000)
Total
2,990,000
(1,990,000)
1,000,000
(Euro/thousand)
31 December 2022
Total lines
Drawn
Undrawn
Revolving Credit Facility 2019
1,000,000
-
1,000,000
CDP Loans
175,000
(175,000)
Intesa Loan
150,000
(150,000)
Mediobanca Loan
100,000
(100,000)
Sustainability-Linked Term Loan
1,200,000
(1,200,000)
Unicredit Loan
200,000
(200,000)
EIB Loans
245,000
(245,000)
Total
3,070,000
(2,070,000)
1,000,000
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
523
More details about the nature and drawdown of the Group-level facilities shown above can be
found in the Explanatory Notes to the Consolidated Financial Statements (Note 12. Borrowings
from banks and other lenders).
Bonds
As at 31 December 2023, Prysmian S.p.A. had the following bond issue in place:
Convertible Bond 2021
On 26 January 2021, the Group announced the successful placement of an equity-linked bond
(the "Bonds") for the sum of Euro 750 million.
The Bonds have a 5-year maturity and denomination of Euro 100,000 each and are zero coupon.
The issue price was Euro 102.50, representing a yield to maturity of minus 0.49% per annum.
The initial price for the conversion of the Bonds into the Company's ordinary shares is Euro
40.2355, representing a 47.50% premium on the weighted average price by volume of Prysmian
ordinary shares on the Milan Stock Exchange between the start and end of the book-building
process on 26 January 2021.
The shareholders' meeting held on 28 April 2021 authorised the convertibility of the equity-
linked bond and approved the proposal for a share capital increase serving the conversion of the
convertible bond for a maximum nominal amount of Euro 1,864,025.50 by issuing up to
18,640,255 ordinary shares with a nominal value of Euro 0.10 each.
As provided for in the Bond regulations, the Group has the option to call all - but not just a part
- of the Bonds at their principal amount from 12 February 2024, should the share price exceed
130% of the conversion price for at least 20 days within a period of 30 consecutive trading days.
On 14 June 2021, the Bond was admitted to listing on the multilateral trading facility of the
Vienna Stock Exchange.
The following table summarises the values of the Convertible Bond 2021 as at 31 December
2023:
(Euro/thousand)
Value of Convertible Bond 2021
768,750
Equity reserve for convertible bond
(49,550)
Change in conversion option
(16,130)
Issue date net balance
703,070
Interest - non-monetary
26,930
Related costs
(2,170)
Balance at 31 December 2023
727,830
At 31 December 2023, the fair value of the Convertible Bond 2021 (equity component and debt
component) was Euro 830 million, of which Euro 693 million attributable to the debt component
and Euro 137 million to the equity component. In the absence of trading on the relevant market,
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
524
the fair value of the bond's debt and equity components has been determined using valuation
techniques that refer to observable market data (Level 2 of the fair value hierarchy).
Borrowings from banks and other lenders and Lease liabilities
The following tables report movements in Borrowings from banks and other lenders and in Lease
liabilities:
(Euro/thousand)
CDP
EIB
Unicredit
Mediobanca
and
Intesa
Conv.
bonds
Sustainability-
Linked
Term Loan
Other
borrowings
and lease
liabilities
Total
Balance
31.12.2022
175,206
245,794
451,274
717,400
1,197,588
28,923
2,816,180
New funds
120,000
-
1,937
121,937
Repayments/Conversions
(200,000)
(200,000)
Amortisation
of bank and
financial fees
and other
expenses
(359)
49
354
1,062
1,882
2,990
New IFRS 16
leases
(2,970)
(2,970)
Interest and
other
movements
3,000
2,111
197
9,368
18,857
(9,040)
24,494
Total
movements
122,641
2,161
(199,449)
10,431
20,739
(10,073)
(53,550)
Balance
31.12.2023
297,847
247,955
251,825
727,830
1,218,328
18,850
2,762,630
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
525
The following tables provide an analysis by maturity and currency of borrowings from banks and
other lenders (excluding lease liabilities) at 31 December 2023 and 2022:
(Euro/thousand)
31 December 2023
Variable rate
Fixed rate
Euro
Euro
Total
Due within 1 year
488,471
5,493
493,964
Due between 1 and 2 years
75,269
688
75,957
Due between 2 and 3 years
426
728,626
729,052
Due between 3 and 4 years
1,198,876
453
1,199,329
Due between 4 and 5 years
-
-
-
Due after more than 5 years
254,470
-
254,470
Total
2,017,512
735,260
2,752,772
Average interest rate in period, as per
contract
3.9%
1.3%
3.3%
Average interest rate in period, including IRS
effect (a)
2.6%
1.3%
2.3%
a) Interest rate swaps have been put in place to hedge interest rate risk on variable rate loans in Euro. At 31 December 2023, the total hedged amount equates
to 73.4% of Euro-denominated variable-rate debt at that date. Interest rate hedges consist of interest rate swaps which exchange a variable rate (3 or 6-month
Euribor for loans in Euro) with an average fixed rate (fixed rate + spread) of 2.1% for Euro-denominated debt. The percentages representing the average fixed
rate refer to 31 December 2023.
(Euro/thousand)
31 December 2022
Variable rate
Fixed rate
Euro
Euro
Total
Due within 1 year
203,104
15,204
218,308
Due between 1 and 2 years
459,513
-
459,513
Due between 2 and 3 years
74,813
-
74,813
Due between 3 and 4 years
-
717,399
717,399
Due between 4 and 5 years
1,191,474
-
1,191,474
Due after more than 5 years
134,843
-
134,843
Total
2,063,746
732,603
2,796,350
Average interest rate in period, as per
contract
1.0%
1.3%
1.1%
Average interest rate in period, including IRS
effect
1.5%
1.3%
1.5%
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
526
NET FINANCIAL DEBT
(Euro/thousand)
Note
31
December
2023
of which
related
parties
(Note 25)
31
December
2022
of which
related
parties
(Note 25)
Long-term financial payables
CDP Loans
10
194,350
174,685
Mediobanca Loan
10
-
99,905
Intesa Loan
10
-
149,781
EIB Loans
10
134,870
244,798
Sustainability-Linked Term Loan
10
1,193,356
1,191,474
Convertible Bond 2021
10
727,830
717,399
Lease liabilities
10
11,444
14,712
Other financial payables
1,937
Total long-term financial payables
2,263,787
2,592,754
Short-term financial payables
CDP Loans
10
103,470
520
Mediobanca Loan
10
100,483
294
Intesa Loan
10
151,342
836
EIB Loans
10
113,085
996
Sustainability-Linked Term Loan
10
24,972
6,114
Unicredit Loan
10
-
200,457
Lease liabilities
10
5,418
5,120
Short-term loans from Group companies
10
440,304
440,304
742,742
742,742
Other financial payables
10
76
9,090
Total short-term financial payables
939,149
966,169
Total financial liabilities
3,202,935
3,558,923
Long-term financial receivables
5
235
177
Long-term bank fees
5
3,621
284
Non-current interest rate derivatives
7
10,508
59,209
Current interest rate derivatives
7
20,115
12,676
Short-term financial receivables
6
12,758
193,417
Short-term financial receivables from Group
companies
5
1,456
1,456
-
Short-term bank fees
5
1,092
1,185
Cash and cash equivalents
8
405
935
Net financial debt
3,152,745
3,291,040
The following table presents a reconciliation of the Company's net financial debt to the amount
reported in accordance with the requirements of Consob Communication no. 5/21 of 29 April
2021 concerning compliance with the "Guidelines on disclosure requirements under the
Prospectus Regulation" published by ESMA on 4 March 2021 (reference ESMA32-382-1138):
(Euro/thousand)
Note
31 December
2023
of which
related
parties
(Note 25)
31 December
2022
of which
related
parties
(Note 25)
Net financial debt - as reported above
3,152,745
3,291,040
Adjustments to exclude:
Long-term financial receivables and other assets
5
3,621
177
Long-term bank fees
5
235
284
CFH derivatives (assets)
30,623
71,885
Adjustments to include:
Net non-CFH forex derivatives on commercial
transactions, excluding non-current assets
7
13
13
(592)
(592)
Net non-CFH metal derivatives, excluding non-
current assets
7
(27)
(27)
(53)
(53)
Recalculated net financial debt
3,187,210
3,362,741
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
527
11. TRADE AND OTHER PAYABLES
Details are as follows:
(Euro/thousand)
31 December 2023
Non-current
Current
Total
Trade payables
-
574,106
574,106
Total trade payables
-
574,106
574,106
Other payables:
Tax and social security payables
50
16,910
16,960
Advances from customers
-
-
-
Payables to employees
169
12,458
12,627
Accrued expenses
-
402
402
Other
-
6,784
6,784
Financial payables
-
440,303
440,303
Total other payables
219
476,857
477,076
Total
219
1,050,963
1,051,182
(Euro/thousand)
31 December 2022
Non-current
Current
Total
Trade payables
-
651,916
651,916
Total trade payables
-
651,916
651,916
Other payables:
Tax and social security payables
-
9,092
9,092
Advances from customers
-
-
-
Payables to employees
-
10,707
10,707
Accrued expenses
-
492
492
Other
-
8,015
8,015
Financial payables
742,746
742,746
Total other payables
-
771,052
771,052
Total
-
1,422,968
1,422,968
Trade payables mainly comprise invoices received from suppliers of strategic metals and only to
a minor extent those received from suppliers of other goods and outside professional services
involving organisational, legal and IT advice.
Other payables, totalling Euro 477,076 thousand, mainly comprise:
-
social security payables for contributions on employee wages and salaries and amounts
payable into supplementary pension funds;
-
tax payables mainly for tax withheld from employees and not yet paid to the tax
authorities;
-
payables to employees for accrued wages and salaries not yet paid;
-
other payables, mainly referring to amounts owed to Group companies for various
reasons;
-
financial payables of Euro 440,303 thousand, mainly relating to the intercompany
current accounts with Prysmian Treasury S.r.l. in Euro, US dollars and Chinese Renminbi.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
528
Trade payables include around Euro 365,097 thousand for the supply of strategic metals, for
which a payment extension of more than 60 days has been obtained.
The following table breaks down trade and other payables according to the currency in which
they are expressed:
(Euro/thousand)
31 December 2023
31 December 2022
Euro
1,018,092
1,396,943
US Dollar
23,313
17,221
British Pound
1,249
1,928
Other currencies
8,528
6,876
Total
1,051,182
1,422,968
12. PROVISIONS FOR RISKS AND CHARGES
The following table reports movements in these provisions during the reporting period:
(Euro/thousand)
Legal and
contractual risks
Other risks
and charges
Total
Balance at 31 December 2022
33,844
9,359
43,203
Movements in 2023:
- Increases
4,003
164
4,167
- Uses
(270)
-
(270)
- Releases
(403)
-
(403)
- Other
-
-
-
Total movements
3,330
164
3,494
Balance at 31 December 2023
37,174
9,523
46,697
The provisions for risks, amounting to Euro 46,697 thousand at 31 December 2023, report a net
increase of Euro 3,494 thousand since 31 December 2022 after adjusting them to an appropriate
level to cover the potential liabilities concerned.
These provisions include the provision for the antitrust investigations discussed in the following
paragraphs.
Antitrust - European Commission proceedings in the high voltage underground and submarine
cables business
By way of introduction, it will be recalled that the European Commission started an investigation
in late January 2009 into several European and Asian electrical cable manufacturers to verify the
existence of alleged anti-competitive practices in the high voltage underground and submarine
cables markets. This investigation was concluded with the decision adopted by the European
Commission, also upheld by the European courts, which found Prysmian Cavi e Sistemi S.r.l.
("Prysmian CS") jointly liable with Pirelli & C. S.p.A. ("Pirelli") for the alleged infringement in the
period from 18 February 1999 to 28 July 2005, and Prysmian Cavi e Sistemi S.r.l. jointly liable
with Prysmian S.p.A. ("Prysmian") and The Goldman Sachs Group Inc. (“Goldman Sachs”) for
the alleged infringement in the period from 29 July 2005 to 28 January 2009. Following the
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
529
conclusion of this case, the Group paid the European Commission the amount due within the
prescribed term using provisions already set aside in previous years.
Likewise in the case of General Cable, the European courts confirmed the contents of the
European Commission's decision of April 2014, thus definitively upholding the fine levied against
it under this decision. As a result, the Group went ahead and paid a fine for Euro 2 million.
In November 2014 and October 2019 respectively, Pirelli filed two civil actions, recently
combined, against Prysmian CS and Prysmian in the Court of Milan, seeking (i) to be held
harmless from any claim brought by the European Commission in enforcement of its decision
and for any expenses incidental to such enforcement; (ii) to be held harmless from any third-
party claims for damages relating to the conduct forming the subject of the European
Commission's decision and (iii) to be compensated for the damages allegedly suffered and
quantified as a result of Prysmian CS and Prysmian having requested, in certain pending legal
actions, that Pirelli be held liable for the unlawful conduct found by the European Commission in
the period from 1999 to 2005. As part of the same proceedings, Prysmian CS and Prysmian, in
addition to requesting full dismissal of the claims brought by Pirelli, have filed symmetrical and
opposing counterclaims to those of Pirelli in which they have requested (i) to be held harmless
from any claim brought by the European Commission in enforcement of its decision and for any
expenses incidental to such enforcement; (ii) to be held harmless from any third-party claims
for damages relating to the conduct forming the subject of the European Commission's decision
and (iii) to be compensated for damages suffered as a result of the legal actions brought by
Pirelli. This action is currently pending.
In view of the circumstances described and the developments in the proceedings, the Directors,
assisted also by legal counsel, have recognised what they consider to be an adequate level of
provisions to cover the potential liabilities related to the matters in question.
Antitrust - Claims for damages resulting from the European Commission's 2014 decision
During the first few months of 2017, operators belonging to the Vattenfall Group filed claims in
the High Court of London against a number of cable manufacturers, including companies in the
Prysmian Group, to obtain compensation for damages purportedly suffered as a result of the
alleged anti-competitive practices sanctioned by the European Commission. In June 2020, the
Prysmian companies concerned presented their defence as well as serving a summons on
another party to whom the EU decision was addressed. In July 2022, an agreement was reached
for an out-of-court settlement of Vattenfall's claims against the Group companies. However, the
legal proceedings brought by the Group companies against the other party to whom the EU
decision was addressed are continuing.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
530
On 2 April 2019, a writ of summons was served, on behalf of Terna S.p.A., on Pirelli, Nexans
and companies in the Prysmian Group, demanding compensation for damages purportedly
suffered as a result of the alleged anti-competitive practices sanctioned by the European
Commission in its April 2014 decision. This action has been brought before the Court of Milan.
On 24 October 2019, the Prysmian Group companies concerned responded by presenting their
preliminary defence. By an order dated 3 February 2020, the Court upheld the points raised by
the defendants, giving Terna until 11 May 2020 to complete its writ of summons and scheduling
a hearing for 20 October 2020. Terna duly completed its summons, which was filed within the
required deadline. The proceedings are at a pre-trial stage.
On 2 April 2019, a writ of summons was served, on behalf of Electricity & Water Authority of
Bahrain, GCC Interconnection Authority, Kuwait Ministry of Electricity and Water and Oman
Electricity Transmission Company, on a number of cable manufacturers, including companies in
the Prysmian Group, on Pirelli and Goldman Sachs. This action, brought in the Court of
Amsterdam, once again involved a claim for compensation for damages purportedly suffered as
a result of the alleged anti-competitive practices sanctioned by the European Commission. On
18 December 2019, the Prysmian Group companies concerned presented their preliminary
defence, the hearing of which took place on 8 September 2020. On 25 November 2020, the
Court of Amsterdam handed down a ruling under which it upheld the submissions made and
declined jurisdiction over defendants not based in the Netherlands, thus excluding them from
the proceedings. On 19 February 2021, the plaintiffs announced that they had filed an appeal
against this ruling. The Prysmian Group companies concerned, together with the other third-
party first-instance defendants, have entered an appearance in court contesting the plaintiff's
claims. On 25 April 2023, the Amsterdam Court of Appeal handed down a ruling under which it
decided to submit to the European Court of Justice a number of questions on the interpretation
of European law, which it considers instrumental to its decision. The case has therefore been
stayed pending the European Court of Justice's response.
In September 2022, the Group was informed that companies in the RWE Group had brought an
action in the British courts against Prysmian S.p.A. and Prysmian Cavi e Sistemi S.r.l. involving
a claim for compensation for damages supposedly suffered as a result of the alleged anti-
competitive practices sanctioned by the European Commission in its April 2014 decision. In June
2023, an agreement was reached for an out-of-court settlement, therefore putting an end to
this lawsuit.
Furthermore, in February 2023, the Group received notification of an application by British
consumer representatives requesting authorisation from the relevant local court to initiate
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
531
proceedings against a number of cable manufacturers, including Prysmian S.p.A. and Prysmian
Cavi e Sistemi S.r.l., and which also involved a claim for compensation for damages supposedly
suffered as a result of the alleged anti-competitive practices sanctioned by the European
Commission in its April 2014 decision. The case is pending and the Group companies involved
have submitted their preliminary defences.
In view of the circumstances described and the developments in the proceedings, the Directors,
assisted also by legal counsel, have recognised what they consider to be an adequate level of
provisions to cover the potential liabilities related to the matters in question.
In June 2023, a writ of summons, sent on behalf of Saudi Electricity Company, was received by
a number of cable manufacturers, including companies in the Prysmian Group. This action,
brought before the Court of Cologne, once again involves a claim for compensation for damages
purportedly suffered as a result of the alleged anti-competitive practices sanctioned by the
European Commission. The case is pending.
Based on the information currently available, and believing these potential liabilities unlikely to
crystallise, the Directors are of the opinion not to make any provision.
Antitrust - Other investigations
In Brazil, the local antitrust authority started proceedings against a number of manufacturers of
high voltage underground and submarine cables, including Prysmian, notified of such in 2011.
On 15 April 2020, the CADE Tribunal issued the operative part of the decision under which it
held Prysmian liable for the alleged infringement in the period from February 2001 to March
2004 and ordered it to pay a fine of BRL 10.2 million (approximately Euro 1.8 million). Using the
provisions already set aside in previous years, the Group made these payments by the required
deadline. Prysmian Group has filed an appeal against the CADE ruling. The appeal decision is
pending.
At the end of February 2016, the Spanish antitrust authority commenced proceedings to verify
the existence of anti-competitive practices by local low voltage cable manufacturers and
distributors, including the Group's local subsidiaries. On 24 November 2017, the local antitrust
authority notified the Group's Spanish subsidiaries of a decision under which they were held
liable for the alleged infringements in the period from June 2002 to June 2015 and were jointly
and severally ordered to pay a fine of Euro 15.6 million. The Group's Spanish subsidiaries lodged
an appeal against this decision.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
532
The appeal was partially upheld by the local court, which ruled on 19 May 2023 that the time
period used by the authority to calculate the fine should be reduced, with consequent revision
of the fine itself. The Group's Spanish subsidiaries have appealed against this ruling.
The decision of 24 November 2017 also held the Spanish subsidiaries of General Cable liable for
breach of local antitrust law. However, they have obtained immunity from paying the related
fine (quantified at about Euro 12.6 million) having filed for leniency and collaborated with the
local antitrust authority in its investigations. The Spanish subsidiaries of General Cable also
appealed against the decision of the local antitrust authority. The appeals have recently been
rejected in rulings dated 19 May and 1 June 2023 respectively. These appeals have also been
dismissed by the Spanish Supreme Court, as notified to the companies concerned on 19 January
2023.
In view of the circumstances described and the developments in the proceedings, the Directors,
assisted also by legal counsel, have recognised what they consider to be an adequate level of
provisions to cover the potential liabilities related to the matters in question.
In addition, in January 2022, an investigation was initiated by the German antitrust authority
(Federal Cartel Office) concerning alleged coordination in setting the standard metal surcharges
applied by the industry in Germany. The Group's local subsidiaries have challenged before the
courts the search and seizure orders under which the German authorities carried out inspections
at their offices and seized company documents.
During June 2022, the competition authorities of the Czech Republic and Slovakia conducted
inspections at the offices of the Group's local subsidiaries with regard to alleged anti-competitive
practices in setting metal surcharges. Subsequently, in August 2022 and March 2023, the
competition authorities of the Czech Republic and Slovakia respectively announced the opening
of an investigation into this matter involving, among others, the Group's local subsidiaries.
Given the high degree of uncertainty as to the timing and outcome of these ongoing
investigations, the Directors currently feel unable to estimate the related risk.
At 31 December 2023, the provision for antitrust matters pertaining to Prysmian S.p.A., included
within the provision for legal and contractual risks, amounted to Euro 30,316 thousand (Euro
28,003 thousand in 2022).
Despite the uncertainty of the outcome of the investigations and legal actions in progress, the
amount of this provision is considered to represent the best estimate of the liability based on
the information now available.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
533
At 31 December 2023, the provision for other risks amounted to Euro 9,523 thousand, reporting
a net increase of Euro 164 thousand on the year before. This provision refers to risks deemed
probable in connection with tax assessment notices or tax audits carried out by the relevant tax
authorities.
13. EMPLOYEE BENEFIT OBLIGATIONS
Prysmian S.p.A. provides post-employment benefits through schemes that include defined
benefit plans, like the statutory severance benefit and seniority bonuses.
Employee benefit obligations amount to Euro 6,218 thousand at 31 December 2023 (Euro 6,085
thousand at 31 December 2022) and are detailed as follows:
(Euro/thousand)
31 December 2023
31 December 2022
Statutory severance benefit
4,442
4,418
Termination and other benefits
1,776
1,667
Total
6,218
6,085
Employee benefit obligations have had the following impact on the income statement:
(Euro/thousand)
31 December 2023
31 December 2022
Statutory severance benefit
444
453
Termination and other benefits
210
(187)
Total
654
266
STATUTORY SEVERANCE BENEFIT
Details are as follows:
(Euro/thousand)
31 December 2023
31 December 2022
Opening balance
4,418
5,297
Current service costs
292
410
Interest costs
152
43
Actuarial (gains)/losses recognised in equity
177
(1,029)
Disbursements
(597)
(303)
Total movements
24
(879)
Closing balance
4,442
4,418
The actuarial losses recognised at 31 December 2023 (Euro 177 thousand) mainly relate to the
change in the associated economic parameters (the discount and inflation rates).
Under Italian law, the amount due to each employee accrues with service and is paid when the
employee leaves the company. The amount due upon termination of employment is calculated
on the basis of the length of service and the taxable remuneration of each employee. The liability
is adjusted annually for the official cost of living index and statutory interest, and is not subject
to any vesting conditions or periods, or any funding obligation; there are therefore no assets
that fund this liability.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
534
The rules governing this liability were revised by Legislative Decree 252/2005 and Law 296/2006
(Finance Act 2007): amounts accrued since 2007 by companies with at least 50 employees now
have to be paid into the INPS Treasury Fund or to supplementary pension schemes, as decided
by employees, which now take the form of "defined contribution plans". All companies
nonetheless still account for revaluations of amounts accrued before 2007, while those
companies with fewer than 50 employees continue to accrue amounts for this liability not
allocated to supplementary pension schemes.
The benefits relating to this plan are paid to participants in the form of capital, in accordance
with the related rules. In certain circumstances, the benefit plan also allows the payment of
partial advances against the full amount of the accrued benefit.
The main risk is the volatility of the inflation rate and the discount rate, as determined by the
market yield on AA-rated corporate bonds denominated in Euro. Another risk factor is the
possibility that members leave the plan earlier than expected or that higher advance payments
than expected are requested, resulting in an actuarial loss for the plan, due to an acceleration
of cash flows.
The actuarial assumptions used to value statutory severance benefit are as follows:
31 December 2023
31 December 2022
Discount rate
3.20%
3.80%
Expected future salary increase
2.20%
2.40%
Inflation rate
2.20%
2.40%
The following table presents a sensitivity analysis of the effects of an increase/decrease in the
most significant actuarial assumptions used to determine the present value of statutory
severance benefit, namely the discount rate and inflation rate:
31 December 2023
Change in inflation rate
-0.25%
+0.25%
Effects on obligation
-1.57%
+1.59%
Change in discount rate
-0.50%
+0.50%
Effects on obligation
+4.77%
-4.56%
Average headcount in the period is reported below, compared with closing headcount at the end
of each period:
2023
Average
%
Closing
Desk staff and management
397
91%
397
90%
Non-desk staff
42
10%
43
10%
Total
439
100%
440
100%
2022
Average
%
Closing
Desk staff and management
388
91%
396
91%
Non-desk staff
40
9%
40
9%
Total
428
100%
436
100%
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
535
14. CURRENT TAX PAYABLES AND DEFERRED TAX LIABILITIES
Current tax payables report a nil balance at 31 December 2023 (Euro 2,165 thousand at 31
December 2022). At 31 December 2023, the Company is reporting a tax credit for IRES (Italian
corporate income tax) for the Italian companies that participate in the national and world tax
consolidation, as presented in Note 5. Trade and other receivables.
Deferred tax liabilities report a nil balance at 31 December 2023 (Euro 10,005 thousand at 31
December 2022).
Further information can be found in Note 4. Deferred tax assets.
15. REVENUES AND OTHER INCOME
This line item reports Euro 246,323 thousand, versus Euro 245,035 thousand in 2022, and is
detailed as follows:
(Euro/thousand)
2023
2022
Royalties
120,470
123,965
Head office services
93,365
85,526
Other revenues and sundry income
32,488
35,544
of which non-recurring
-
327
Total
246,323
245,035
Royalties mostly refer to amounts charged to Prysmian Group subsidiaries for the use of patents,
know-how and trademarks; they amount to Euro 120,470 thousand at 31 December 2023 (Euro
123,965 thousand in the previous year).
Head office services of Euro 93,365 thousand (Euro 85,526 thousand in the previous year), refer
to charges invoiced by Prysmian S.p.A., under specific contracts for coordination and other
services provided by head office functions to Group companies.
Other revenues and sundry income of Euro 32,488 thousand mainly consist of proceeds received
under legal settlements, expense recharges and other miscellaneous income.
16. RAW MATERIALS, CONSUMABLES AND SUPPLIES
Consumables amount to Euro 7,012 thousand, versus Euro 9,150 thousand in 2022.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
536
17. PERSONNEL COSTS
Details are as follows:
(Euro/thousand)
2023
2022
Wages and salaries
50,157
63,018
of which Fair value share-based payments
6,300
20,519
Social security
11,316
10,840
Retirement pension costs
2,489
2,382
Statutory severance benefit
292
410
Personnel costs for business reorganisation
1,637
219
Other personnel costs
2,799
1,086
Total
68,690
77,955
Personnel costs report a decrease of Euro 9,265 thousand from the previous year, mainly due
to changes in the fair value of share-based payments.
Share-based payments
At 31 December 2023, Prysmian S.p.A. had share-based payment plans in place for managers
and employees of Group companies and executive directors and executives with strategic
responsibilities in the Companymembers of the Company's Board of Directors. These plans are
described below.
Employee share purchase plan – YES
The YES plan is based on financial instruments and reserved for employees of Prysmian S.p.A.
and/or of its subsidiaries.
The plan has offered the opportunity to purchase Prysmian's ordinary shares on preferential
terms, with a maximum discount of 25% on the stock price, given in the form of treasury shares
(the so-called discounted shares), except for certain managers for whom the discount was 15%,
and the executive Directors and key management personnel, for whom the discount was 1% on
the stock price.
The shares purchased by participants, as well as those received by way of discount and entry
bonus, are subject to a retention period, during which they cannot be sold and the length of
which varies according to relevant local regulations.
All those who signed up to the plan have also received an entry bonus of eight free shares, or
rather three free shares for employees who have already participated in at least one of the
purchase cycles in the previous two years, taken from the Company's portfolio of treasury
shares, only available with their first-time purchase during the same financial year.
Furthermore, a loyalty bonus of five shares is provided for those who choose to extend the
retention period of the shares granted in 2019, 2020, and 2021.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
537
On 28 April 2021, the shareholders of Prysmian S.p.A. approved an extension of the share
ownership plan,which has added new purchase windows in the years 2022, 2023 and 2024.
“A total maximum of 600,000 own shares are allocated for the purposes of discounted shares,
entry bonus shares, and loyalty bonus shares throughout the duration of the plan (2022-
2024)”The Company has recognised costs of Euro 134 thousand through profit or loss (in
Personnel costs) at 31 December 2023 for the fair value of shares granted under this plan.
The fair value of the shares has been determined using the Montecarlo binomial pricing model,
based on the following assumptions:
Windows
Grant date
12 April 2022
Share purchase date
from 16 June 2022 to 16 September 2025
End of retention period
from 16 June 2025 to 16 September 2027
Residual life (in years)
1.74
Share price at grant date (Euro)
€30.87
Risk-free interest rate
from 0.32% to 0.54%
Expected dividend %
1.80%
Share fair value at grant date (Euro)
from €23.94 to €19.27
The Report on Remuneration Policy and Compensation Paid andT the information memorandum,
prepared under art. 114-bis of Legislative Decree 58/98 and describing the characteristics of the
above
plan,
areis
publicly
available
on
the
Company's
website
at
, from its registered offices and from Borsa Italiana S.p.A.
"Grow" 2023-2025 long-term incentive plan
On 19 April 2023, the shareholders' meeting of Prysmian S.p.A. approved a long-term incentive
plan (2023-2025) that will cover approximately 1,100 recipients among management and other
key Prysmian Group resources, including Prysmian S.p.A.'s Executive Directors and Key
Management Personnel. The Plan involves the grant of new-issue ordinary shares obtained from
a bonus issue funded by profits or retained earnings in accordance with art. 2349 of the Italian
Civil Code, or a combination of new-issue shares and treasury shares. By means of this plan,
Prysmian intends to strengthen the Company's and management's commitment to creating
sustainable value over time for all stakeholders, including by involving a wide range of key people
in over 40 countries who play an important role in the Group's sustainable success. The plan
spans a three-year period and provides for the award of Performance Share upon achievement
of economic and financial performance conditions, Total Shareholders Return and ESG targets.
The plan also allows 50% of the annual bonus, where due, for the years 2023, 2024, 2025 to be
deferred in the form of Deferred Share. The annual bonus is also linked to the achievement of
ESG targets, as well as to economic-financial targets. The deferral of the annual bonus also
entails an additional award of 0,5 Matching shares for each Deferred Share which, in the case of
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
538
the Group's some 50 top managers, is also dependent on the achievement of ESG targets by
2025. The plan has the following objectives:
-
to motivate participants to achieve long-term results geared towards sustainable value
creation over time;
-
to align the interests of management with those of shareholders through the use of share-
based incentive instruments;
-
to foster stable management ownership of the Company's share capital;
-
to ensure the long-term sustainability of the Group's annual performance, by boosting
staff engagement and retention, including through the mechanism of deferring part of
the annual bonus in shares.
The shareholders of Prysmian S.p.A. also authorised a bonus share capital increase to be
reserved for Prysmian Group employees in execution of the plan. This capital increase may reach
a maximum nominal amount of Euro 950,000 through apportionment, pursuant to art. 2349 of
the Italian Civil Code, of a corresponding amount from profits or retained earnings, with the
issue of no more than 9,500,000 ordinary shares of nominal value Euro 0.10 each.
The actual allocation of shares, in particular with reference to the Performance Shares, is subject
to the level of achievement of the following performance conditions: cumulative Adjusted
EBITDA, cumulative Free Cash Flow, average ROCE, relative TSR measured against a 11-
member peer group and ESG, measured by a set of indicators.
The following table provides details about movements in the plan:
31.12.2023
Number of shares
Shares vested at start of year
-
Change in expected participations
-
Shares vesting in period
341.261
Total shares vested at end of year
341.261
The Company has recognised costs of Euro 7,749 thousand through profit or loss (in Personnel
costs) at 31 December 2023 for the fair value of shares granted under this plan.
In accordance with IFRS 2, the shares allotted have been measured at their grant date fair value.
The fair value of shares related to performance shares, for the entire period of the plan, and to
deferred and matching shares vesting in 2023 has been calculated using the following
assumptions:
Grant date
19 April 2023
Residual life at grant date (in years)
1.32
Exercise price (Euro)
€38.25
Risk-free interest rate
2.73%
Expected dividend %
2.00%
Share fair value (not market based) at grant date
€28.43
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
539
Share fair value (market based) at grant date
€21.99
The Report on Remuneration Policy and Compensation Paid and the information memorandum,
prepared under art. 114-bis of Legislative Decree 58/98 and describing the characteristics of the
above
plan,
areis
publicly
available
on
the
Company's
website
at
, from its registered offices and from Borsa Italiana S.p.A.
BE-IN employees assigning shares plan
On 12 April 2022, the shareholders of Prysmian S.p.A. approved a stock grant plan for employees
of Prysmian S.p.A. and Prysmian Group companies, except for managers already covered by
individual incentive schemes; the plan aims to foster wide participation in future value creation
and to strengthen the level of employee engagement; the plan is subject to local consultation
with the relevant trade union representatives, where required.
The plan, participation in which is voluntary, envisages three allotment cycles for 2022, 2023
and 2024 and provides for the allotment of a maximum of 3,000,000 shares.
By voluntarily joining the plan, the employee agrees to receive, in lieu of payment of part of
their monetary bonus, or in some cases even without converting a monetary bonus, a value
equating to a number of shares, to be calculated on the basis of the allotment value, defined as
the average share price over the 30 trading days preceding definition of the incentive's value.
The number of shares allotted may be increased by an additional number of shares, up to a
maximum of 50% of the shares allotted.
The number of shares received by each participant is determined according to the amount of the
incentive's value.
Allotted shares are freely transferable from the grant date. If these shares are held for the entire
holding period, meaning 12 months from grant date, the employee will be entitled to receive a
number of additional shares. If, during the holding period, the employee sells all or part of the
shares received, they will no longer be entitled to receive additional shares.
The shares are credited to participants annually within specific time frames, identified on a local
basis when rolling out the plan.
Shares granted to participants in 2023, 2024 and 2025 will relate to performance in 2022, 2023
and 2024, respectively, with the respective additional shares credited in 2024, 2025 and 2026.
During the plan's rollout, some of these provisions may be adjusted not only to ensure that the
plan nonetheless complies with applicable local rules, legislation and tax and social security
regulations but also to facilitate its implementation for the sake of wider participation.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
540
The Company has recognised costs of Euro 185 thousand through profit or loss (in Personnel
costs) at 31 December 2023 for the fair value of shares granted under this plan.
The fair value of shares under this plan has been determined using the following assumptions:
Grant date
12 April 2022
Residual life at grant date (in years)
1.35
Exercise price (Euro)
0
Risk-free interest rate
2.14%-2.52%
Expected dividend %
1.80%
Share fair value at grant date of conversion and premium shares
€32.93
Share fair value at grant date of loyalty shares
€28.38
Grant date
30 April 2023
Residual life at grant date (in years)
1.35
Exercise price (Euro)
37.07
Risk-free interest rate
2.73%
Expected dividend %
2.00%
Share fair value at grant date of conversion and premium shares
€30.10
Share fair value at grant date of loyalty shares
€23.45
The Report on Remuneration Policy and Compensation Paid and the information memorandum,
prepared under art. 114-bis of Legislative Decree 58/98 and describing the characteristics of the
above
plan,
areis
publicly
available
on
the
Company's
website
at
, from its registered offices and from Borsa Italiana S.p.A.
18. AMORTISATION, DEPRECIATION AND IMPAIRMENT
Details are as follows:
(Euro/thousand)
2023
2022
Depreciation of buildings, plant, machinery and equipment
3,020
3,363
Depreciation of other property, plant and equipment
1,976
1,668
Amortisation of intangible assets
30,947
25,022
Depreciation and impairment of right-of-use assets (IFRS 16)
5,208
4,969
Total
41,151
35,022
Amortisation and depreciation charges amount to Euro 41,151 thousand in 2023, posting a net
increase of Euro 6,129 thousand on the previous year (when the year-on-year increase was Euro
5,385 thousand), mainly due to higher amortisation for intangible assets that entered into
service.
19. OTHER EXPENSES
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
541
Other expenses amount to Euro 130,425 thousand in 2023, versus Euro 134,392 thousand in
the previous year, analysed as follows:
(Euro/thousand)
2023
2022
Professional services
51,256
49,123
IT costs
35,187
34,706
Insurance
3,652
3,686
Maintenance services
6
9
Operating and other costs
30,773
27,985
Utilities
1,226
1,730
Travel costs
4,350
2,842
Rental costs
1,392
1,211
Increases in provisions for risks
-
50
Non-recurring other expenses and provisions/(releases):
Increase in provisions for risks
2,583
12,000
Business reorganisation costs
-
67
Other non-recurring costs
-
983
Total non-recurring other expenses/(income)
2,583
13,050
Total
130,425
134,392
Professional services of Euro 51,256 thousand (Euro 49,123 thousand in 2022) include costs of
personnel seconded from other Group companies of Euro 15,597 thousand (Euro 15,328
thousand in 2022) and costs incurred to manage the patents portfolio of Euro 3,400 thousand
(Euro 3,460 thousand in 2022).
Professional services also include the compensation of the directors and statutory auditors of
Prysmian S.p.A. and the fees of the independent auditors for audit and related services, details
of which can be found in Notes 25, 27 and 31.
Operating and other costs mainly refer to costs incurred for promotional activities and
attendance at exhibitions and trade fairs.
Rental costs amount to Euro 1,392 thousand (Euro 1,211 thousand in 2022).
As regards "Non-recurring other expenses and provisions", the change primarily reflects the
recognition of Euro 2,583 thousand in provisions for risks, as discussed in the earlier note.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
542
20. FINANCE INCOME AND COSTS
Finance costs are detailed as follows:
(Euro/thousand)
2023
2022
Interest on loans
62,733
16,801
Interest on non-convertible bond
-
5,188
Interest on convertible bond 2017- non-monetary component
-
162
Interest on convertible bond 2021- non-monetary component
9,368
9,248
Amortisation of bank and financial fees and other expenses
5,559
6,357
Interest on lease liabilities
183
127
Employee benefit interest costs
216
60
Other bank interest
55,740
10,444
Costs for undrawn credit lines
2,559
2,737
Sundry bank fees
2,399
748
Other
(4,042)
10,799
Interest Rate Swaps
14,951
11,572
Finance costs
149,666
74,243
Foreign currency exchange losses
14,667
14,819
Total finance costs
164,333
89,062
Amortisation of bank and financial fees and other expenses mainly reflects the portion of loan
arrangement costs amortised in the reporting period.
Other bank interest mainly refers to the EIB Loans (Euro 9,386 thousand), the CDP Loans (Euro
12,486 thousand) and interest on the intercompany current account with Prysmian Treasury
S.r.l. (Euro 33,596 thousand).
Finance income is detailed as follows:
(Euro/thousand)
2023
2022
Interest income from banks and other financial institutions
82
14
Other finance income
101,069
61,026
Finance income
101,151
61,040
Foreign currency exchange gains
13,376
14,058
Total finance income
114,527
75,098
Other finance income mainly refers to fees charged to Group companies for guarantees given by
the Company for their benefit.
21. DIVIDENDS FROM SUBSIDIARIES
During 2023, Prysmian S.p.A. recorded a total of Euro 327,382 thousand in dividends from its
subsidiaries Draka Holding B.V. and Prysmian Treasury S.r.l.. The total amount of dividends also
includes income of Euro 12,829 thousand to account for share-based payments, reflecting the
difference between the grant date fair value of shares and their fair value at the reporting date.
For more details, see Note 34. Share-based payments.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
543
22. TAXES
Details are as follows:
(Euro/thousand)
2023
2022
Current income taxes
(9,682)
7,310
Deferred income taxes
(610)
(210)
Total
(10,292)
7,100
Current income taxes report a net positive Euro 10,292 thousand in 2023, versus a net negative
Euro 7,100 thousand in 2022.
Information about deferred taxes can be found in Note 4. Deferred tax assets.
Taxes charged on profit before taxes differ from those calculated using the theoretical tax rate
applying to the Company for the following reasons:
(Euro/thousand)
2023
Tax rate
2022
Tax rate
Profit before taxes
253,974
150,868
Theoretical tax expense at nominal tax rate
60,954
24.0%
36,208
24.0%
Dividends from subsidiaries
(74,643)
(29.4%)
(40,965)
(27.2%)
Impairment/(Revaluation) of investments in
subsidiaries
8,508
3.3%
16,011
10.6%
Other permanent differences
12,977
5.1%
10,560
7.0%
IRAP for the year
-
0.0%
2,440
1.6%
Other
(4,113)
(1.6%)
(12,739)
(8.4%)
Net effect of group tax consolidation for the year
(13,975)
(5.5%)
(4,415)
(2.9%)
Effective income taxes
(10,292)
(4.1%)
7,100
4.7%
The Company, along with all its Italian resident subsidiaries, participates, as head of the tax
group, in a group tax consolidation, pursuant to art. 117 et seq of the Italian Income Tax Code.
The intercompany transactions arising under such a group tax consolidation are governed by
specific rules and an agreement between the participating companies, which involve common
procedures for applying the tax laws and regulations.
The following companies are members of the tax group:
•
Fibre Ottiche Sud
–
F.O.S. S.r.l.
•
Prysmian Cavi e Sistemi S.r.l.
•
Prysmian Cavi e Sistemi Italia S.r.l.
•
Prysmian Treasury S.r.l.
•
Electronic and Optical Sensing Solutions S.r.l.
•
Prysmian PowerLink S.r.l.
The rate used to calculate the tax charge is 24% for IRES (Italian corporate income tax), and
5.57% for IRAP (Italian regional business tax).
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
544
23. CONTINGENT LIABILITIES
As a global operator, the Company is exposed to legal risks primarily, by way of example, in the
areas of product liability, and environmental, antitrust and tax rules and regulations. The
outcome of existing or future legal disputes and proceedings cannot be predicted with certainty.
The outcome of such proceedings could result in the payment of costs that are not covered, or
not fully covered, by insurance, which would therefore have a direct effect on the Company's
financial condition and results.
As at 31 December 2023, there were no contingent liabilities against which the Company had
not set aside provisions for risks and charges and for which the related legal and tax proceedings
not believed to give rise to significant liabilities.
24. COMMITMENTS
The Company had the following types of commitments at 31 December 2023:
a) Commitments to purchase property, plant and equipment and intangible assets
Contractual commitments, already given to third parties at 31 December 2023 and not yet
reflected in the financial statements, amount to Euro 3,501 thousand (Euro 2,932 thousand at
31 December 2022).
b) Comfort letters in support of bank guarantees given to Group companies
Comfort letters in support of bank guarantees given in the interest of Group companies amount
to Euro 65 thousand at 31 December 2023, all of which relating to P.T. Prysmian Cables
Indonesia (Euro 67 thousand at 31 December 2022).
c) Other guarantees given in the interest of Group companies
These amount to Euro 9,196,577 thousand at 31 December 2023 (Euro 7,409,383 thousand at
31 December 2022), analysed as follows:
(Euro/thousand)
2023
2022
Prysmian Cavi e Sistemi S.r.l.
14,577
30,228
Prysmian Netherlands B.V.
40,293
40,293
Prysmian PowerLink S.r.l.
6,458,428
5,575,651
Prysmian Cables & Systems Limited
22,915
19,037
Prysmian Cables and Systems USA, LLC
2,508,154
1,674,947
Fibre Ottiche Sud - F.O.S. S.r.l.
3,931
9,855
Prysmian Cables Spain SA
49,593
49,516
Prysmian Re Company Ltd
-
9,855
Other companies
98,685
-
Total
9,196,577
7,409,383
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
545
The comfort letters and guarantees given in the interest of Group companies in (b) and (c)
mainly refer to projects and supply contracts and to the offsetting of VAT credits under the Group
VAT settlement.
d) Comfort letters in support of bank guarantees given in the interest of the Company
These amount to Euro 20,064 thousand, versus Euro 20,063 thousand in the previous year.
As required by art. 2427 point 22-ter, it is reported that, in addition to the above disclosures
about commitments, there are no other agreements that are not reflected in the statement of
financial position that carry material risks or rewards and which are critical for assessing the
Company's assets and liabilities, financial position and results of operations.
25. RELATED PARTY TRANSACTIONS
Transactions between Prysmian S.p.A. and its subsidiaries mainly refer to:
•
services (technical, organisational and general) provided by head office to subsidiaries;
•
charging of royalties for the use of patents to the Group companies that benefit from
them;
•
financial transactions entered into by the Parent Company on behalf of, and with, Group
companies.
All the above transactions fall within the ordinary course of business of the Parent Company and
its subsidiaries.
The related party disclosures also include the compensation paid to Directors, Statutory Auditors
and Key Management Personnel.
More details about related party transactions are provided in the table of "Intercompany and
related party transactions (disclosure under art. 2428 of the Italian Civil Code)" appended to the
present Explanatory Notes.
The following tables summarise related party transactions in the years ended 31 December 2023
and 31 December 2022:
(Euro/thousand)
31 December 2023
Investments in
subsidiaries
Trade and
other
receivables
and
derivatives
Trade and
other
payables and
derivatives
Employee
benefit
obligations
and other
provisions
Tax
payables
Subsidiaries
5,719,702
313,938
473,653
-
Other related parties:
Compensation of directors, statutory
auditors and key management
personnel
-
-
1,410
3,780
-
Total
5,719,702
313,938
475,063
3,780
-
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
546
(Euro/thousand)
31 December 2022
Investments in
subsidiaries
Trade and
other
receivables
and
derivatives
Trade and
other
payables and
derivatives
Employee
benefit
obligations
and other
provisions
Tax
payables
Subsidiaries
5,701,163
511,498
767,793
-
Other related parties:
Compensation of directors, statutory
auditors and key management
personnel
-
-
1,435
5,374
-
Total
5,701,163
511,498
769,228
5,374
-
(Euro/thousand)
2023
Revenues
and other
income
Raw
materials,
consumables
and supplies
Cost of
goods and
services
Fair value
change in
metal
derivatives
Personnel
costs
Finance
income/
(costs)
Dividends/
(Impairment)
of investments
Taxes
Subsidiaries
233,110
1,440
37,426
27
-
26,311
304,761
20,716
Other related
parties:
Compensation of
directors,
statutory
auditors and key
management
personnel
-
-
1,291
-
5,848
-
-
-
Total
233,110
1,440
38,718
27
5,848
26,311
304,761
20,716
(Euro/thousand)
2022
Revenues
and other
income
Raw
materials,
consumables
and supplies
Cost of
goods and
services
Fair value
change in
metal
derivatives
Personnel
costs
Finance
income/
(costs)
Dividends/
(Impairment)
of investments
Taxes
Subsidiaries
230,898
2,642
36,300
(28)
-
51,448
176,287
6,696
Other related parties:
Compensation of
directors,
statutory
auditors and key
management
personnel
-
-
1,082
-
10,115
-
-
-
Total
230,898
2,642
37,382
(28)
10,115
51,448
176,287
6,696
Transactions with subsidiaries
These refer to services supplied to and received from Group companies and to current account
transactions with the Group's central treasury company.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
547
Top management compensation
Top management compensation is analysed as follows:
(Euro/thousand)
2023
2022
Salaries and other short-term benefits - fixed part
2,036
2,010
Salaries and other short-term benefits - variable part
1,316
1,692
Other benefits
156
150
Share-based payments
2,340
6,262
Other costs
1,116
1,119
Total
6,964
11,233
of which Directors
6,964
11,233
26. SIGNIFICANT NON-RECURRING EVENTS AND TRANSACTIONS
As required by Consob Communication DEM/6064293 dated 28 July 2006, the effects of non-
recurring events and transactions on the Company's income statement are shown below,
involving net non-recurring expenses totalling Euro 2,583 thousand in 2023 and net non-
recurring expenses of Euro 12,655 thousand in 2022.
(Euro/thousand)
2023
2022
Non-recurring other income
-
327
Non-recurring other expenses
(2,583)
(12,983)
Non-recurring finance costs
-
-
Non-recurring finance income
-
-
Total
(2,583)
(12,655)
The statement of financial position and net financial debt contain no material amounts in
connection with non-recurring events.
27. COMPENSATION OF DIRECTORS AND STATUTORY AUDITORS
Directors' compensation amounts to Euro 6,964 thousand in 2023 (Euro 11,233 thousand in
2022). Statutory auditors' compensation for duties performed in Prysmian S.p.A. amounts to
Euro 175 thousand in 2023 (Euro 175 thousand in 2022). Compensation includes emoluments,
and any other types of remuneration, pension and medical benefits, received for their service as
directors or statutory auditors of Prysmian S.p.A.. Further details can be found in the
Remuneration Report.
28. ATYPICAL OR UNUSUAL TRANSACTIONS
In accordance with the disclosures required by Consob Communication DEM/6064293 dated 28
July 2006, it is reported that no atypical and/or unusual transactions took place during the year.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
548
29. GROUP FINANCIAL COVENANTS
The credit agreements in place at 31 December 2023, details of which are presented in Note 10.
Borrowings from banks and other lenders, require the Group to comply with a series of covenants
on a consolidated basis. The main covenants, classified by type, are listed below:
a) Financial covenants
•
Ratio between EBITDA and Net finance costs (as defined in the relevant agreements),
not applicable to the Revolving Credit Facility 2023 as long as the Company maintains a
long-term "Investment Grade" credit rating;
•
Ratio between Net Financial Debt and EBITDA (as defined in the relevant agreements).
The covenants contained in the relevant credit agreements are as follows:
EBITDA/Net
finance costs
(1)
not less than:
Net financial
debt/EBITDA
(1)
not more than:
4.00x
3.00x
(1)
The ratios are calculated on the basis of the definitions contained in the relevant credit agreements. The Net Financial
Debt/EBITDA ratio can go as high as 3.5 following extraordinary transactions like acquisitions, no more than three times,
including on non-consecutive occasions.
b) Non-financial covenants
A number of non-financial covenants have been established in line with market practice applying
to transactions of a similar nature and size. These covenants involve restrictions on the grant of
secured guarantees to third parties and on amendments to the Company's by-laws.
Compliance with these indicators entails a benefit in terms of lower finance costs, while non-
compliance would result in higher finance costs.
Default events
The main default events are as follows:
•
default on loan repayment obligations;
•
breach of financial covenants;
•
breach of some of the non-financial covenants;
•
declaration of bankruptcy by Group companies or their involvement in other insolvency
proceedings;
•
issuing of particularly significant court orders;
•
occurrence of events that may adversely and significantly affect the business, the assets
or the financial conditions of the Group.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
549
Should a default event occur, the lenders are entitled to demand full or partial repayment of the
amounts lent and not yet repaid, together with interest and any other amount due. No collateral
security is required.
Actual financial ratios reported at period end, calculated at a consolidated level for the Prysmian
Group, are as follows:
31.12.2023
31.12.2022
EBITDA / Net finance costs
(1)(2)
26.90x
27.26x
Net financial debt / EBITDA
(1)
0.56x
0.83x
(1)
The ratios are calculated on the basis of the definitions contained in the relevant credit agreements.
(2)
This covenant does not apply to the Revolving Credit Facility 2023.
The above financial ratios comply with both covenants contained in the relevant credit
agreements and there are no instances of non-compliance with the financial and non-financial
covenants indicated above.
30. STATEMENT OF CASH FLOWS
Operating activities generated a net cash inflow of Euro 137,888 thousand in 2023, inclusive of
Euro 10,986 thousand as the difference between net taxes paid to tax authorities and those
collected from the Group's Italian companies for IRES (Italian corporate income tax) transferred
under the national tax consolidation (art. 117 et seq of the Italian Income Tax Code).
Investing activities generated a net cash inflow of Euro 454,188 thousand, primarily from Euro
327,382 thousand in dividend receipts, as partially offset by Euro 41,430 thousand in capital
contributions to subsidiaries.
Financing activities produced a net outflow of Euro 592,607 thousand. This included a total of
Euro 200,000 thousand in loan repayments. New funds raised in the period in the form of new
loans came to Euro 121,937 thousand.
Net finance costs charged to the income statement amounted to Euro 49,805 thousand, including
non-cash items; excluding these items, net cash finance costs reported in the statement of cash
flows were Euro 27,800 thousand. Non-cash items included in net finance costs mostly related
to non-cash interest expense on bonds and to loan arrangement costs.
After all these effects the Company's overall net cash outflow for 2023 was Euro 531 thousand.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
550
31. INFORMATION PURSUANT TO ART.149-DUODECIES OF THE CONSOB ISSUER
REGULATIONS
Pursuant to art. 149-duodecies of the Consob Issuer Regulations, the following table shows the
fees in 2023 for audit work and other services provided by the independent auditors EY S.p.A.:
(Euro/thousand)
Supplier of
services
Fees for 2023
Fees for 2022
Audit services
EY S.p.A.
821
798
Certification services
EY S.p.A.
310
363
Total
1,131
1,161
32. STATE AID
With regard to the transparency rules governing state aid contained in art. 1, par. 125-129 of
Italian Law 124/2017, as amended by art. 35 of Legislative Decree 34/2019 (the so-called
"growth decree"), published in Italy's Official Journal no. 100 dated 30 April 2019, reference
should be made to the National State Aid Register for details of the state aid and de minimis aid
reported therein.
33. RESEARCH AND DEVELOPMENT
The Group's research and development activities are mostly concentrated within Prysmian
S.p.A.. The central team, in coordination with R&D and engineering centres in the various
countries, has developed numerous projects over the year in the field of both energy and telecom
cables; significant advances have been made in the area of materials and optical fibre
technology.
R&D costs incurred in 2023 have been expensed in full to income and amounted to Euro 29,352
thousand versus Euro 30,485 thousand in 2022.
34. ACCOUNTING POLICIES
The accounting policies and standards adopted are the same as those used for preparing the
consolidated financial statements, to which reference should be made, except as described
below.
DIVIDENDS
Dividend income is recognised in the income statement when the right to receive the dividends
is established, normally coinciding with the shareholders' resolution declaring the same,
irrespective of whether such dividends are paid out of an investee company's pre- or post-
acquisition earnings.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
551
The distribution of dividends to shareholders is recognised as a liability in the Company's financial
statements at the time the distribution of such dividends is approved.
SHARE-BASED PAYMENTS
Granted shares are measured at the fair value determined on their grant date. This value is
charged to the income statement on a straight-line basis over the share vesting period with a
matching entry in equity. This recognition is based on the estimated number of granted shares
that will effectively vest in favour of eligible employees, taking into consideration any conditions
applying to their enjoyment, irrespective of the market value of the shares.
This value is recognised:
a)
as an expense in the income statement, with a matching credit to an equity reserve, for
shares vesting in favour of the Company's employees;
b)
if the related cost is recharged, the part relating to the grant date fair value is recognised
in equity, while the difference between the grant date fair value and the vesting date fair
value or reporting date fair value is recognised in the income statement as a dividend;
c)
as an increase in the value of investments in subsidiaries, with a matching credit to an
equity reserve, for shares vesting in favour of employees of Group companies.
INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries are measured at cost, less any impairment losses.
If there is specific evidence of impairment, the value of investments in subsidiaries, determined
on the basis of cost, is tested for impairment. This involves comparing the carrying amount of
investments with their recoverable amount, defined as the higher of fair value less costs to sell
and value in use.
The value of investments is tested for impairment in at least one of the following circumstances:
•
the carrying amount of the investment in the separate financial statements exceeds the
carrying amount of the investee's net assets, including any associated goodwill, reflected
in the consolidated financial statements;
•
the investee's reported EBITDA is less than 50% of that projected in the business plan,
if this performance indicator is relevant to the company in question;
•
the dividend distributed by the investee exceeds the total comprehensive income of the
investee in the period to which the dividend refers.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
552
If the recoverable amount of an investment is less than its carrying amount, then the latter is
reduced to such recoverable amount. This reduction represents an impairment loss, which is
recognised through profit or loss.
For the purposes of impairment testing, the fair value of investments in listed companies is
determined with reference to market value, regardless of the size of holding. The fair value of
investments in unlisted companies is determined using valuation techniques, amongst which the
market multiples approach.
Value in use is determined using the "Discounted Cash Flow - equity side" method, which involves
calculating the present value of estimated future cash flows generated by a subsidiary, including
cash flows from operating activities and consideration arising from the investment's ultimate
sale, net of its cash position at the valuation date.
If the reasons for a previously recognised impairment loss cease to apply, the carrying amount
of the investment is reinstated but to no more than its original cost, with the related revaluation
recognised through profit or loss.
TREASURY SHARES
Treasury shares are reported as a deduction from equity. The original cost of treasury shares
and revenue arising from any subsequent sales are treated as movements in equity.
35. ESTIMATES AND ASSUMPTIONS
The preparation of financial statements requires Management to apply accounting policies and
methods which, at times, rely on subjective judgements and estimates based on past experience
and assumptions deemed to be reasonable and realistic according to the circumstances. The
application of these estimates and assumptions influences the amounts reported in the financial
statements, meaning the statement of financial position, the income statement, the statement
of comprehensive income and the statement of cash flows, as well as the accompanying
disclosures. Ultimate amounts, previously reported on the basis of estimates and assumptions,
may differ from original estimates because of uncertainty surrounding the assumptions and
conditions on which the estimates were based.
The following is a brief description of the accounting policies that require the Management of
Prysmian S.p.A. to exercise greater subjectivity of judgement when preparing estimates and a
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
553
change in whose underlying assumptions could have a material impact on the financial
statements.
a)
Provisions for risks and charges
Provisions are recognised for legal and tax risks to reflect the risk of an adverse outcome. The
value of the provisions recorded in the financial statements against such risks represents the
best estimate by Management at the reporting date. This estimate requires the use of
assumptions depending on factors that may change over time and which could, therefore, have
a material impact on the current estimates made by Management to prepare the Company's
financial statements.
b)
Impairment of assets
In accordance with the accounting policies applied by the Group, property, plant and equipment
and intangible assets with finite useful lives and equity investments are tested for impairment
when indicators suggest it will be difficult to realise recoverable value through use of the assets,
which are written down accordingly. Verification of the existence of these indicators requires
Management to make subjective judgements based on information available within the Company
and from the market, as well as on past experience. In addition, if a potential impairment loss
is identified, the Company determines the amount of such impairment using suitable valuation
techniques. Correct identification of indicators of potential impairment, as well as the estimates
for determining its amount, depend on factors which can vary over time, thus influencing
judgements and estimates made by Management.
Irrespective of the existence of indicators of potential impairment or otherwise, all intangible
assets not yet ready for use must be tested for impairment once a year.
The Company has no intangible assets with an indefinite useful life recorded in its financial
statements.
c)
Climate change
As more fully explained in the Directors' Report accompanying the consolidated financial
statements and in the Consolidated Non-Financial Statement, the Company, together with the
entire Prysmian Group, has embarked on an ambitious "Net Zero" strategy, aligned with the
requirements of the Paris Agreement. In this context, the Prysmian Group analyses and assesses
the risks and opportunities of climate change and has set targets for the reduction of greenhouse
gas emissions classified as Scope 1 and 2 (direct and indirect emissions generated by its own
activities) and as Scope 3 (generated by the value chain).
The consequences in terms of investments, costs and other cash flow impacts have been
considered when preparing financial forecasts, consistent with the progress of this process. The
replacement program for certain assets, aimed at achieving the "Net Zero" strategy, involves
reviewing the useful lives of these assets, with a consequent acceleration of their depreciation
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
554
process. The 2023 impairment tests have taken into account the impacts on investment flows,
as far as they can be currently estimated, without any significant effects on the test results. It
is also possible that in the future the carrying amount of assets or liabilities recognised in the
Company's financial statements may be subject to different impacts as the strategy of managing
climate change evolves.
d)
Depreciation and amortisation
The cost of property, plant and equipment and intangible assets is depreciated/amortised on a
straight-line basis over the estimated useful lives of the assets concerned. The useful economic
life of the Company's property, plant and equipment and intangible assets is determined by
Management when assets are acquired. This is based on past experience for similar assets,
market conditions and expectations regarding future events that could impact useful life,
including developments in technology. Therefore, actual economic life may differ from estimated
useful life. The Company periodically reviews technological and industry developments to update
residual
useful
lives.
This
periodic
review
may
result
in
a
revision
of
the
depreciation/amortisation period and consequently of the depreciation/amortisation charge for
future years.
e)
Taxes
Current taxes are calculated on the basis of taxable income for the year, applying the tax rates
in force at the reporting date.
Deferred tax assets are recognised to the extent there is likely to be sufficient future taxable
income against which they can be recovered.
f)
Employee benefit obligations
The present value of the pension plans reported in the financial statements depends on an
independent actuarial calculation and on a number of different assumptions. Any changes in
assumptions and in the discount rate used are duly reflected in the present value calculation and
may have a significant impact on the figures reported in the financial statements. The
assumptions used for the actuarial calculation are examined by the Company annually.
Present value is calculated by discounting future cash flows at an interest rate equal to that on
high-quality corporate bonds issued in the currency in which the liability will be settled and which
takes account of the duration of the related pension plan.
Further information can be found in Note 13. Employee benefit obligations and Note 17.
Personnel costs.
g)
Incentive and share purchase plans
The employee share purchase plan, open to almost all the Group's employees, offers them an
opportunity to obtain shares under preferential terms and conditions. The operation of this plan
is described in Note 17. Personnel costs.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
555
The grant of shares is subject to continued employment with the Group in the months between
signing up to one of the plan's purchase windows and the purchase of the shares themselves on
the equity market. The plan's financial and economic impact has therefore been estimated on
the basis of the best possible estimates and information currently available.
The 2023-2025 incentive plan involves the allocation of a number of shares calculated according
to the achievement of operational, economic and financial performance conditions. The plan's
financial and economic impact has therefore been estimated on the basis of the best possible
estimates and information available at the valuation date. More details can be found in Note 17.
Personnel costs.
The "BE IN" incentive plan provides for the grant of a number of shares. Sometimes this number
is determined on the basis of the achievement of performance targets, as well as on the basis
of employee participation. The plan's financial and economic impact has therefore been
estimated on the basis of the best possible estimates and information available at the valuation
date. More details can be found in Note 17. Personnel costs.
36. EVENTS AFTER THE REPORTING PERIOD
There have been no subsequent events that could have an impact on the values reported in
these financial statements.
37. FILING OF FINANCIAL STATEMENTS
The financial statements of Prysmian S.p.A. at 31 December 2023 will be filed within the legally
required term at its registered office and will be available for viewing on the websites of the
company at
, the central storage mechanism at
and the Italian Stock Exchange at
.
The financial statements of the sub-holding company Prysmian Cavi e Sistemi S.r.l. will be filed
at the registered office in Via Chiese 6, Milan; the financial statements of the sub-holding
company Draka Holding B.V. will not be presented, as permitted by Dutch law.
Milan, 28 February 2024
ON BEHALF OF THE BOARD OF DIRECTORS
THE CHAIRMAN
Claudio De Conto
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
556
LIST OF INVESTMENTS IN SUBSIDIARIES AT 31 DECEMBER 2023
(Euro/thousand)
Registered
office
Net book
value
%
owned
Share
capital
in Euro
Total
equity
Prysmian
share
of equity
Net profit/
(loss) for the
year
Italian
subsidiaries
Prysmian Cavi e
Sistemi S.r.l.
Milan, Via Chiese, 6
409,485
100
50,000
353,418
353,418
2,904
Prysmian Cavi e
Sistemi Italia S.r.l.
Milan, Via Chiese, 6
116,371
100
77,143
814,478
814,478
9,779
Prysmian PowerLink
S.r.l.
Milan, Via Chiese, 6
219,936
100
100,000
117,579
117,579
(11,382)
Fibre Ottiche Sud -
F.O.S. S.r.l.
Battipaglia, Strada
Provinciale 135
33,338
100
47,700
33,338
33,338
(32,284)
Prysmian Treasury
S.r.l.
Milan, Via Chiese, 6
83,555
100
80,000
108,165
108,165
11,826
Electronic and
Optical Sensing
Solutions S.r.l.
Milan, Via Chiese, 6
45,803
100
5,000
32,114
32,114
(1,493)
Prysmian Servizi
S.p.a.
Milan, Via Chiese, 6
4,430
100
3,000
3,511
3,511
(918)
Total Italian
subsidiaries
912,918
Foreign
subsidiaries
Draka Holding B.V.
Amsterdam,
Netherlands
4,803,349
100
52,229
4,689,644
4,689,644
340,911
Prysmian Kabel und
Systeme GmbH
Berlin,
Germany
3,434
6.25
15,000
102,558
6,410
16,427
Prysmian Kablo SRO
Bratislava,
Slovakia
1
0.005
21,246
13,360
-
450
Jaguar
Communication
Consultancy
Services Private
Ltd.
Mumbai,
India
-
0.000001
1,986
396
-
(258)
Prysmian Cabos e
Sistemas do Brasil
S.A.
Sorocaba,
Brazil
-
0.040177
170,136
232,660
93
37,034
Total foreign
subsidiaries
4,806,784
Grand total
5,719,702
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
557
INTERCOMPANY
AND
RELATED
PARTY
TRANSACTIONS
(DISCLOSURE UNDER ART. 2428 OF THE ITALIAN CIVIL CODE)
Costs
Revenues
(Euro/thousand)
Investments in
subsidiaries
Receivables
Payables
Goods and services
Finance costs
Goods and services
Finance income
Dividends and
(impairment)
Income (expense) from
group tax consolidation
Associated Cables Pvt. Ltd
-
2
-
-
-
-
-
-
-
Auto Cable Tunisie
-
-
-
-
-
-
-
-
-
Cobre Cerrillos S.A.
-
635
(114)
87
-
(1,242)
-
-
-
Conducen, SRL
-
1,158
-
66
-
(1,132)
-
-
-
Draka Belgium N.V.
-
2
-
-
-
(3)
-
-
-
Draka Comteq Berlin GmbH & Co KG
-
413
-
-
-
(982)
-
-
-
Draka Comteq Cabos Brasil S.A
-
-
(22)
-
-
-
-
-
-
Draka Comteq Fibre BV
-
921
(177)
395
-
(1,144)
-
-
-
Draka Comteq France SAS
-
1,810
(39)
39
-
(3,537)
-
-
-
Draka Comteq Germany GmbH & Co.KG
-
3,202
-
87
-
(38,921)
-
-
-
Draka Comteq UK Limited
-
386
(36)
59
-
(561)
-
-
-
Draka Durango S. de R.L. de C.V.
-
40
(26)
-
-
(1)
-
-
-
Draka Elevator Products INC
-
2,049
(15)
-
-
(2,191)
-
-
-
Draka Elevator Products, Inc.
-
93
-
-
-
(70)
-
-
-
Draka Fileca S.A.S.
-
806
-
-
-
(1,307)
-
-
-
Draka Holding B.V.
4,803,349
2,221
(331)
591
-
(1,615)
-
(317,505)
-
Draka Kabely SRO
-
6,836
(155)
244
-
(140,088)
-
-
-
Draka Paricable SAS
-
1
-
-
-
(16)
-
-
-
Draka Philippines Inc.
-
3,383
(12)
-
-
(28,532)
-
-
-
Draka Transport USA LLC
-
912
-
-
-
(3,387)
-
-
-
EHC Canada Inc.
-
382
-
-
-
(76)
-
-
-
EHC Engineered Polymer (Shanghai) Co. Ltd.
-
(1)
-
-
-
-
-
-
-
EHC Escalator Handrail (Shanghai) Co. Ltd.
-
(2)
(51)
51
-
-
-
-
-
EHC Germany GmbH
-
71
-
-
-
(25)
-
-
-
EHC Lift Components (Shanghai) Co. Ltd.
-
(1)
-
-
-
-
-
-
-
EHC USA Inc.
-
7
-
-
-
(2)
-
-
-
Electronic and Optical Sensing Solutions S.r.l.
45,803
446
(14)
14
-
(244)
-
(50)
(6)
EURELECTRIC TUNISIE S.A.
-
110
(8)
8
-
-
-
-
-
Fibre Ottiche Sud - F.O.S. S.r.l.
33,338
1,083
(839)
865
-
(814)
-
35,361
-
General Cable Celcat, Energia e Telecomunicacoes SA
-
4,824
(35)
23
-
(71,091)
-
-
-
General Cable Company Ltd.
-
2,882
-
-
-
(3,084)
-
-
-
General Cable Corporation
-
21
-
-
-
(22)
-
-
-
General Cable de Mexico, S.A de C.V.
-
684
14-
62
-
(962)
-
-
-
Grupo General Cable Sistemas, S.L.
-
(15)
-
138
-
(37,296)
-
-
-
Jaguar Communication Consultancy Services Private Ltd.
-
452
-
-
-
-
-
-
-
LLC Prysmian RUS
-
616
(69)
812
-
(57)
-
-
-
LLC Rybinskelektrokabel
-
-
(110)
243
-
-
-
-
-
MCI-Draka Cable Co. Ltd
-
4,442
(111)
67
-
(987)
-
-
-
Nantong Zhongyao Draka Elevator Products Co. LTD
-
0
-
-
-
-
Norddeutsche Seekabelwerke GmbH
-
1,608
(162)
720
-
(1,336)
-
-
-
Oman Aluminium Processing Industries LLC
-
3
(8,252)
-
-
45,412
-
-
-
Oman Cables Industry (SAOG)
-
753
(341)
722
-
(1,046)
-
-
-
Omnisens SA
-
171
-
-
-
(38)
-
-
-
P.O.R. S.A.S.
-
-
(2,136)
2,136
-
-
-
-
-
P.T. Prysmian Cables Indonesia
-
609
(44)
48
-
(1,453)
-
-
-
Power Cables Malaysia SND
–
BHD
-
(190)
-
-
-
-
-
-
-
Prestolite de Mexico, S.A. de C.V.
-
3
(39)
39
-
-
-
-
-
Productora de Cables Procables S.A.S.
-
893
(8)
7
-
(954)
-
-
-
Projects Germany GmbH
-
268
(129)
193
-
(201)
-
-
-
Prysmian - OEKW GmbH
-
27
-
-
-
(43)
-
-
-
Prysmian (CHINA) Investment Company Ltd
-
206
(26)
-
-
(13)
-
-
-
Prysmian Australia PTY Ltd
-
3,591
(215)
292
-
(6,733)
-
-
-
Prysmian Cable (Shanghai) Trading Co Ltd - Suzhou Branch
-
(1)
-
-
-
-
-
-
-
Prysmian Cables & Systems Limited
-
19,085
(1,407)
2,016
-
(212,617)
(256)
-
-
Prysmian Cables (Shangai) Trading CO. Ltd
-
363
(42)
-
-
(162)
-
-
-
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
558
PRYSMIAN CABLES AND SYSTEMS (US) INC.
-
1,060
-
-
-
-
-
-
-
Prysmian Cables and Systems Canada LTD
-
2,179
(20)
73
-
(4,200)
-
-
-
Prysmian Cables and Systems USA, LLC
-
34,636
(5,499)
18,954
-
(31,492)
(14,984)
3
-
Prysmian Cables et Systèmes France SAS
-
20,862
(1,024)
1,544
-
(255,752)
(406)
-
-
Prysmian Cables Spain, S.A. (Sociedad Unipersonal).
-
28,800
(692)
997
-
(178,709)
(257)
-
-
Prysmian Cables y Sistemas de Mexico S. de R.L. de C.V.
-
43
26
12
-
(38)
-
-
-
Prysmian Cabluri Si Sisteme S.A.
-
7,307
(1,152)
1,843
-
(51,933)
-
-
-
Prysmian Cabos
e Sistemas do Brasil S.A.
-
2,039
(534)
469
-
(3,816)
-
-
-
Prysmian Cavi e Sistemi Italia S.r.l.
116,372
10,256
(625)
1,085
-
(37,388)
-
(384)
(2,810)
Prysmian Cavi e Sistemi S.r.l.
409,484
24,717
(264)
270
-
(40,983)
-
(818)
(600)
Prysmian Construction Services Inc.
-
131
-
-
-
-
-
-
-
Prysmian Energia Cables y Sistemas de Argentina S.A.
-
47
(69)
339
-
(187)
-
-
-
Prysmian Group Baltics AS
-
8,857
(76)
76
-
(66,579)
-
-
-
Prysmian Group Denmark A/S
-
257
-
-
-
(91)
-
-
-
Prysmian Group Finland OY
-
21,699
(129)
189
-
(143,026)
-
-
-
Prysmian Group Norge AS
-
1,029
(81)
131
-
(975)
-
-
-
Prysmian Group North Europe AB
-
9,319
(64)
106
-
(45,006)
-
-
-
Prysmian Group Specialty Cables LLC
-
758
-
-
-
(860)
-
-
-
Prysmian Hong Kong Holding Limited
-
23
-
-
-
(110)
-
-
-
Prysmian Kabel und Systeme GmbH
3,434
12,243
(152)
480
-
(47,803)
-
-
-
Prysmian Kablo SRO
1
1,206
-
10
-
(2,823)
-
-
-
Prysmian Kablo SRO - Branch Czech Republic
-
(0)
-
-
-
Prysmian MKM Magyar Kabel Muvek Kft
-
17,631
(118)
178
-
(305,179)
-
-
-
Prysmian Netherlands B.V.
-
12,946
(306)
545
-
(144,146)
(604)
-
-
Prysmian New Zealand Ltd.
-
172
(23)
23
-
(125)
-
-
-
Prysmian Pension Scheme Trustee Limited
-
-
-
-
-
Prysmian Poland SP. ZOO
-
333
(27)
64
-
(72)
-
-
-
Prysmian Power Link Srl
219,936
37,137
(5,394)
747
-
(115,061)
(39,927)
(1,355)
(12,553)
Prysmian Powerlink Services Ltd.
-
191
-
-
-
(137)
-
-
-
Prysmian RE Company Designated Activity Company
-
5,132
-
-
-
(5,132)
-
-
-
Prysmian Servizi S.p.A.
4,430
86
-
-
-
(86)
-
-
-
Prysmian Spain SA EPC-Branch South Africa
-
-
(63)
64
-
-
-
-
-
Prysmian Technology Jiangsu Co. Ltd.
-
607
-
-
-
(154)
-
-
-
Prysmian Tianjin Cables Co. Ltd.
-
(2)
(11)
11
-
-
-
-
-
Prysmian Treasury Srl
83,555
8,565
(441,389)
46
42,979
(808)
(12,856)
(20,014)
(4,748)
Prysmian Wuxi Cable Company Ltd
-
1,660
(18)
18
-
(1,062)
-
-
-
RAVIN CABLES LIMITED (India)
-
25
-
-
-
-
-
-
-
SILEC Cable, S.A.S.
-
7,499
-
-
-
(68,050)
-
-
-
Sindutch Cable Manufacturer Sdn Bhd
-
1,707
(26)
42
-
(1,324)
-
-
-
Singapore Cables Manufacturers Pte Ltd
-
943
(46)
59
-
(608)
-
-
-
Société Ivoirienne De Cables S.A.
-
188
-
-
-
(113)
-
-
-
Suzhou Draka Cable Co. Ltd
-
1,945
(392)
393
-
(519)
-
-
-
Turk Prysmian Kablo Ve Sistemleri A.S.
-
45,598
(70)
101
-
(35,696)
-
-
-
General de Cable de Mexico del Norte, S.A. de C.V.
-
24
-
-
-
-
-
-
-
EHC Spain & Portugal, SL
-
32
-
-
-
-
-
-
-
Yangtze Optical Fibre and Cable Joint Stock Limited Co.
-
28
-
-
-
-
-
-
-
TOTAL
5,719,702
398,174
(473,188)
38,893
42,979
(2,108,617)
(69,290)
(304,761)
(20,716)
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
559
CERTIFICATION OF THE SEPARATE FINANCIAL STATEMENTS PURSUANT
TO ART. 81-TER OF CONSOB REGULATION 11971 DATED 14 MAY 1999
AS AMENDED
1.
The undersigned Valerio Battista, as Chief Executive Officer, and Stefano Invernici and
Alessandro Brunetti, as managers responsible for preparing the financial reports of Prysmian
S.p.A., certify, also taking account of the provisions of paragraphs 3 and 4, art. 154-bis of Italian
Legislative Decree 58 dated 24 February 1998, that during 2023 the accounting and
administrative processes for preparing the separate financial statements:
•
have been adequate in relation to the business's characteristics and
•
have been effectively applied.
2.
The adequacy of the accounting and administrative processes for preparing the separate
financial statements at 31 December 2023 has been evaluated on the basis of a procedure
established by Prysmian in compliance with the internal control framework published by the
Committee of Sponsoring Organizations of the Treadway Commission, which represents the
generally accepted standard model internationally.
3.
It is also certified that:
3.1
The separate financial statements at 31 December 2023:
a)
have been prepared in accordance with applicable international accounting standards recognised by
the European Union under Regulation (EC) 1606/2002 of the European Parliament and Council dated
19 July 2002;
b)
correspond to the underlying accounting records and books of account;
c)
are able to provide a true and fair view of the issuer's statement of financial position and results of
operations.
3.2
The directors' report contains a fair review of performance and the results of operations,
and of the issuer's situation, together with a description of the principal risks and uncertainties
to which it is exposed.
Milan, 28 February 2024
Valerio Battista
Stefano Invernici
Alessandro Brunetti
Chief Executive Officer
Managers responsible for preparing company financial reports
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
560
PROPOSAL TO APPROVE THE FINANCIAL STATEMENTS AND TO
ALLOCATE NET PROFIT FOR 2023
Shareholders,
We are submitting the separate financial statements for the year ended 31 December 2023 for
your approval and recommend that you adopt the following:
RESOLUTION
The Shareholders' Meeting:
•
acknowledges the report by the Board of Directors,
•
acknowledges the reports by the Board of Statutory Auditors and by the Independent
Auditors,
•
has examined the financial statements at 31 December 2023, which close with a net
profit of Euro 264,265,777 and
RESOLVES
a)
to approve:
•
the report on operations by the Board of Directors;
•
the financial statements at 31 December 2023;
as presented by the Board of Directors - as a whole and in their individual parts, along with the
proposed provisions - which show a net profit of Euro 264,265,777;
b)
to allocate the net profit for the year as follows:
•
Euro 167,804 to the Legal Reserve, thereby reaching one-fifth of share capital at 31
December 2023, as required by art. 2430 of the Italian Civil Code;
•
approximately Euro 190,971,230 million to pay a gross unit dividend of Euro 0.70 to
each ordinary voting share (taking account of directly held treasury shares);
•
the remainder of Euro 73,126,743 to Retained Earnings.
Any change in the number of treasury shares held by the Company at the time of distribution
will not affect the amount of the dividend per share, established above, but will increase or
decrease the amount allocated to Retained Earnings.
The dividend will be paid out from 24 April 2024, with record date 23 April 2024 and ex-div date
22 April 2024.
Milan, 28 February 2024
ON BEHALF OF THE BOARD OF DIRECTORS
THE CHAIRMAN
Claudio De Conto
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
561
AUDITORS REPORT
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
562
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
563
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
564
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
565
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
566
REPORT OF THE BOARD OF STATUTORY AUDITORS
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
567
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
568
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
569
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
570
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
571
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
572
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
573
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
574