1
2
Disclaimer
This document contains forward-looking statements, specifically in the sections entitled "Events after the reporting
period" 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
LETTER FROM CEO
A. DIRECTORS’ REPORT
1. INTRODUCTION: PRYSMIAN GROUP APPROACH TO THE INTEGRATED REPORT
....
10
2. HIGHLIGHTS
.........................................................................................................
12
Key financial, operating and ESG performance data
......................................................
12
3. PRYSMIAN GROUP: GLOBAL LEADER
....................................................................
14
The history of Prysmian Group: Innovation and cutting-edge projects
.............................
15
4. VISION, MISSION AND VALUES
............................................................................
19
5. COMMITMENT OF PRYSMIAN GROUP TO ETHICS AND INTEGRITY
........................
20
Public company
........................................................................................................
20
People company
.......................................................................................................
20
Membership of trade associations
...............................................................................
21
6. GROUP ORGANISATION
........................................................................................
24
Business sectors
.......................................................................................................
24
Business model
........................................................................................................
24
Three macro-areas of activity
.....................................................................................
24
7. STRATEGY AND COMMITMENT TO SUSTAINABILITY
.............................................
29
Group strategy: challenges and opportunities
...............................................................
29
Five opportunities for the near future
..........................................................................
29
Prysmian’s competitive advantages
.............................................................................
30
8. SUSTAINABILITY IN THE DNA OF PRYSMIAN GROUP
...........................................
32
9. SDGs - SUSTAINABLE DEVELOPMENT GOALS
........................................................
34
10. CLIMATE CHANGE & SOCIAL AMBITION
.............................................................
36
Climate change ambition
...........................................................................................
36
Social ambition
.........................................................................................................
38
11. SUSTAINABILITY SCORECARD
............................................................................
40
Prysmian Group’s new Sustainability Scorecard
............................................................
41
Prysmian Group in the ESG indices
.............................................................................
43
12. CORPORATE GOVERNANCE
.................................................................................
44
Directors and auditors
...............................................................................................
44
Governance and Corporate Structure
..........................................................................
44
Organisational chart of the Group
...............................................................................
53
4
Ownership structure
..................................................................................................
54
Shareholders' meeting
...............................................................................................
57
13. BUSINESS ENVIRONMENT AND FINANCIAL MARKETS
........................................
59
Macroeconomic environment
......................................................................................
59
Financial market performance
....................................................................................
61
14. SIGNIFICANT EVENTS DURING THE YEAR
..........................................................
65
15. GROUP PERFORMANCE AND RESULTS
.................................................................
74
Financial performance
...............................................................................................
74
Review of Projects operating segment
.........................................................................
77
Review of Energy operating segment
..........................................................................
79
Review of Telecom operating segment
.........................................................................
84
Results by geographical area
......................................................................................
86
Group statement of financial position
..........................................................................
88
Alternative performance indicators
..............................................................................
92
16. RISK FACTORS
....................................................................................................
97
Prysmian Risk Model
.................................................................................................
97
Risk assessment criteria
............................................................................................
99
Strategic risks
.........................................................................................................
101
Financial risks
.........................................................................................................
104
Operational risks
.....................................................................................................
108
Legal and compliance risks
.......................................................................................
111
Planning and reporting risks
......................................................................................
112
17. OTHER INFORMATION
......................................................................................
113
18. BUSINESS OUTLOOK
.........................................................................................
114
19. CERTIFICATION PURSUANT TO ART. 2.6.2 OF THE ITALIAN STOCK EXCHANGE
MARKET REGULATIONS
..........................................................................................
117
20. CONSOLIDATED NON-FINANCIAL STATEMENT
.................................................
119
Introduction
............................................................................................................
119
Sustainability embedded in Prysmian Group’s activities
................................................
122
Materiality analysis 2022
..........................................................................................
126
Ethics and integrity
..................................................................................................
137
Business ethics and integrity: the pillars of sustainability
...........................................
137
Response to Prysmian’s pledges
.............................................................................
142
Performance in 2022
.............................................................................................
147
The Group’s tax strategy
........................................................................................
148
Cyber security
......................................................................................................
157
5
Environmental responsibility
.....................................................................................
166
Environmental performance of the Prysmian Group
...................................................
167
Energy
................................................................................................................
170
Emissions
............................................................................................................
171
Circular economy
..................................................................................................
175
Waste
..................................................................................................................
177
Water
..................................................................................................................
182
Biodiversity
..........................................................................................................
185
People and human rights
..........................................................................................
188
Prysmian Group’s human capital
.............................................................................
188
Responsibility towards people
.................................................................................
194
Remuneration policy and welfare plans
....................................................................
201
Respect for human rights
.......................................................................................
204
Health and safety in the workplace
..........................................................................
209
Sustainable value chain
............................................................................................
216
Prysmian Group’s supply chain
...............................................................................
216
Prysmian Group’s customers
..................................................................................
225
Commitment to communities
..................................................................................
228
Sustainable innovation for products, applications and processes
.................................
230
New Product Introduction
.......................................................................................
238
Group investment for a sustainable future
................................................................
240
Methodology
...........................................................................................................
245
GRI Content Index
...................................................................................................
259
European taxonomy
.................................................................................................
265
Process for determining eligibility
............................................................................
265
Process for determining alignment
..........................................................................
267
Criteria for the calculation of KPIs and background information
...................................
273
Annex to the Consolidated Non-Financial Statement
.....................................................
281
21. AUDITORS’ REPORT
..........................................................................................
291
22. SASB and TCFD
.................................................................................................
295
SASB Index
............................................................................................................
295
TCFD correlation table
..............................................................................................
297
6
B. CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Financial Statements
.........................................................................
299
2. Explanatory notes
................................................................................................
303
3. Certification of the Consolidated Financial Statements pursuant to art. 81-ter of CONSOB
regulation 11971 dated 14 may 1999 and subsequent amendments and additions
...........
432
4. Auditors’ Report
...................................................................................................
433
C. PARENT COMPANY FINANCIAL STATEMENTS
1. Directors’ report
..................................................................................................
442
2. Financial statements
............................................................................................
452
3. Explanatory notes
................................................................................................
458
4. Certification of the Financial Statements pursuant to art. 81-ter of CONSOB regulation
11971 dated 14 may 1999 and subsequent amendments and additions
..........................
524
5. Auditors’ Report
...................................................................................................
526
6. Report of the Board of Statutory Auditors
...............................................................
532
PRYSMIAN GROUP | LETTER FROM CEO
7
LETTER FROM CEO
For our company, 2022 was a year that can certainly be described as a record year following a
difficult time marked by exceptional impact events such as supply chain disruption, the energy
crisis and the shortage of raw materials, as well as inflationary pressures and a changing
macroeconomic and market scenario.
Technology innovation, our efficient and effective supply chain and a customer-centric focus
allowed us to fully seize the opportunities offered by the current energy transition, electrification
and digitalisation trends, enabling us to report results that exceeded all our expectations.
The strong sales growth was accompanied by the jump of over 50% in net profit and cash
generation and debt reduction. The best performances were recorded above all by the businesses
and segments most exposed to secular energy transition, electrification and digitalisation trends,
such as submarine cables and systems for power interconnections and offshore wind farms links,
cables for energy grid hardening, cables for the renewables and electric mobility sectors, data
centres, cables for non-residential constructions and optical cables.
Excellent results were also reported in profitability terms: Adjusted EBITDA jumped by +52.5%,
improving also compared to the upper part of the guidance, revised at €1,475 million in
November 2022. Margins also improved sharply, with the ratio of Adjusted EBITDA to Sales at
9.3%, increasing by 160 bps compared to 7.7% for 2021.
Cash generation continued to be a distinctive trait of our Group, with a Free Cash Flow up
+53.2% that allowed to significantly reduce net financial debt, bringing the ratio of net debt to
Adjusted EBITDA to below 1x. The solidity of our financial structure allows us to keep a balanced
position while sustaining the significant investments planned for the coming three years to
further strengthen our positioning and our ambitions to become a global benchmark for energy
transition, electrification and digitalisation: production capacity adjustments and the new
submarine cable plant in the USA, a new cable-laying vessel alongside the Leonardo da Vinci,
and technology innovation.
Moreover, I would like to underscore that, in a year of record results such as 2022, we also paid
close attention to the adoption of new policies and tools for redistributing the value generated
to all our stakeholders and for engaging all our employees, not only top managers.
Last, but not least, worth of mention is our ESG performance. The reduction of our emissions
and the improvement of the main environmental and social impact KPIs testify to our
commitment to improving our business sustainability. During 2022, the Group pledged even
more ambitious climate target than the previous ones, committing with the Science Based Target
initiative to further reduce its Scope 3 emissions, aligning with the "Well Below 2°C" trajectory,
and updating the goal to 2030 from - 21% to -28%. Furthermore, all social performance KPIs
showed a strong improvement, thanks to the projects and initiatives carried out by Prysmian in
all its regions.
Yet, our climate and social ambitions would not be feasible without the sustainability leadership
model that we have built over the years, and that today allows us to say that we do not “pursue
sustainability” rather “we embody sustainability.” To consolidate the commitment we undertook
with our Social Ambition, in 2022 we inaugurated the Prysmian Sustainability Academy, with the
aim of training the sustainability leaders of tomorrow, promoting inclusion and enhancing
diversity.
PRYSMIAN GROUP | LETTER FROM CEO
8
In view of this very goal of ensuring a thorough, integrated disclosure of our financial and ESG
performance, this year, in advance of the new regulatory requirements, we have prepared our
first Integrated Annual Report.
All in all, the positive start to 2023 confirms the competitive positioning achieved and enables
us to set the goal for 2023 of consolidating our 2022 record performance, continuing to generate
value for our shareholders and for all of our stakeholders.
Valerio Battista
Chief Executive Officer, Prysmian Group
A.
DIRECTORS’ REPORT
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
10
1. INTRODUCTION: PRYSMIAN GROUP APPROACH TO THE
INTEGRATED REPORT
Prysmian Group has published for the first time an Integrated Annual Report, as a tool for
presenting both financial and non-financial data.
A decision that, via a new approach to corporate reporting, highlights the daily efforts made by
the Group to embed sustainability within all business strategies, as well as its role as an enabler
of the energy transition and digitalisation processes. 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 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.. Pursuant to art. 5, para. 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 9 March 2023. The document – compliant with the most updated GRI
Standards, was also 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 new 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
11
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 a limited review by auditors EY S.p.A.
The documentation published for 2022 on sustainability matters also includes:
- the TCFD Report 2022, dedicated to information about the management of climate change
risks in accordance with TCFD (Taskforce on Climate-related Financial Disclosures)
recommendations;
- the GHG Statement 2022, dedicated to calculation of the CO2 emissions generated by Prysmian
and its entire value chain;
- the SASB Report 2022, providing information in compliance with Sustainability Accounting
Standards Board (SASB) framework.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
12
2. HIGHLIGHTS
Key financial, operating and ESG performance data
All percentages related to economics and financials data contained in this report have been
calculated with reference to amounts expressed in thousands of Euro.
(Euro/million)
2022
2021
% Change
2020
Sales
16,067
12,736
26.2%
10,016
Adjusted EBITDA before share of net profit/(loss)
of equity-accounted companies
1,442
958
50.5%
822
Adjusted EBITDA
(1)
1,488
976
52.5%
840
EBITDA
(2)
1,387
927
49.6%
781
Adjusted operating income
(3)
1,119
647
73.0%
515
Operating income
849
572
48.4%
353
Profit/(loss) before taxes
739
476
55.3%
252
Net profit/(loss)
509
310
64.2%
174
(Euro/million)
31.12.2022
31.12.2021
Change
31.12.2020
Net invested capital
5,517
5,295
222
4,915
Employee benefit obligations
329
446
(117)
506
Equity
3,771
3,089
682
2,423
of which attributable to non-controlling interests
186
174
12
164
Net financial debt
1,417
1,760
(343)
1,986
(Euro/million)
2022
2021
% Change
2020
Net capital expenditure
(4)
452
275
64.4%
244
Employees (at period-end)
30,185
29,763
1.4%
28,321
Earnings/(loss) per share
- basic
1.91
1.17
0.68
- diluted
1.90
1.17
0.68
Number of patents
(5)
5,760
5,539
5,581
Number of plants
108
108
104
(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 metal derivatives 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 metal derivatives
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
13
Several of the ESG performance objectives achieved by Prysmian in 2022 are particularly
meaningful when discussing the creation of value shared with the stakeholders. A summary is
presented below. These indicators are also included in the short- and long-term incentive
systems. The relevant sections of the Non-Financial Statement go into greater depth.
2022
2021
Change
%
2020
tCOâ‚‚ emissions - Scope 1 and Scope 2 Market
Based
(1)
665,104
706,969
-6%
758,430
Percentage reduction of CO
2
versus 2019
baseline FY
(2)
-24%
-22%
-2%
-17%
Percentage of waste recycled
(3)
71%
69%
2%
69%
Percentage of women executives (job grade ≥
20)
(4)
16%
14%
2%
13%
Leadership Impact Index (LI)
(5)
55%
54%
1%
57%
Engagement Index
(6)
61%
60%
1%
65%
Suppliers subjected to ESG audit
(7)
72%
68%
4%
63%
(1)
Scope 1
emissions comprise the direct emissions of the organisation, being those generated under its direct control.
The 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 leaks of SF6 gas.
Scope 2
Emissions comprise the indirect emissions
of the organisation, being those deriving from its direct consumption excluding generation activities. These include:
purchased electricity, remote 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 business purchases, under contract,
an electricity supply.
(2)
Percentage reduction in Scope 1 and Scope 2 GHG emissions versus 2019 baseline
:
percentage reduction in
the GHG emissions generated by business activities (Scopes 1 and 2, market based). Includes the emissions of CO2 and
other gases (such as SF6) expressed in CO2 eq (CO2 equivalent). The reduction is calculated with respect to baseline
year 2019.
(3)
Percentage of waste recycled
: share of waste material which is being recycled from certified waste management
(4)
Percentage of women executives (job grade
≥
20)
: share of women in executive positions (grade 20 and above)
as a percentage of total executive employees. The number of employees is the headcount at the end of the period,
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)
Leadership Impact Index:
index summarising the number of participants that expressed strong approval of the 5
specific statements, in the context of a broader survey of employee opinions (Speak Up Survey). The survey is carried
out by third parties that guarantee impartiality and anonymity of the responses.
(6)
Engagement Index
: calculated in the same way as the Leadership Impact Index, but using a smaller number of
questions (2) focused only on employee engagement.
(7)
Suppliers subjected to ESG audits
: total suppliers audited with a focus on environmental and social matters,
identified with reference to the scores assigned following risk analysis / total suppliers. The audits were carried out by
the Group with support from a third party.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
14
3. PRYSMIAN GROUP: GLOBAL LEADER
With a direct presence in more than 50 countries around the world, 108 plants, 26 R&D centres
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. The Goldman
Sachs group exited completely in 2010. Prysmian is one of the few Italian industries with global
reach to achieve public company status: shares are held by international institutional investors
and the creation of shareholder value is a key factor when making strategic decisions at all
levels.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
15
From the start, the DNA of the Prysmian Group has included a commitment to the environment
and the communities in which it operates. This core value is integral to the entire organisation,
which strives constantly to deliver technology in support of the energy transition.
Prysmian works every day to guarantee the sustainability of production processes and safeguard
the environment, working alongside local communities to ensure workplace safety and full
respect for the environment in their territories.
This commitment was strengthened in 2021 with the launch of the Climate Change Ambition and
the Social Ambition. These set challenging new climate and social objectives, designed to
promote the transition to a low-carbon world and a more fair and inclusive working environment.
Due to
the growing attention in recent years to ESG (Environmental, Social, Governance) issues
and their increasingly important weight in the society, the Group's Board of Directors, as early
as March 2020, established the Sustainability Committee to which the supervision of ESG issues
has been attributed. This Committee has strongly encouraged and contributed to the definition
of the Group's long-term ambitions and constantly monitors the performance of its KPIs.
Further information about the strategic integration of sustainability within the Prysmian Group
business is presented in the “Strategy and commitment to sustainability” chapter of this
document.
The history of Prysmian Group: Innovation and cutting-edge projects
From 2005 (when Prysmian was created) up to now, the Group has embarked on a path of
intense growth and innovation.
In 2011, Prysmian acquired Draka, a Dutch multinational operating in the cable and optical fibre
sector. This transaction led to the birth of Prysmian Group, a global market leader able to
integrate products, services, technologies and know-how, by optimising the geographical
footprint and financial solidity of the two companies. In 2018, Prysmian Group acquired General
Cable and consolidated its role as a truly global leader in the cable sector.
Throughout its growth path, the Group has succeeded in creating significant shareholder value,
driven by an even broader and more balanced geographical footprint and an expanded and
synergistic product portfolio.
A history of technological innovations
Prysmian Group has always been committed to redefining energy transmission and distribution
and telecommunications, by anticipating the solutions of the future. The manufacture of the first
60 kV fluid-filled insulated electrical cable dates back to the first half of the 20th century. P-
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
16
Laser technology was instead developed more recently, and its evolution has continued to the
present, with the HVDC 525 kV P-Laser cable. As regard telecommunications, the construction
of the first submarine cable connecting smaller islands in Italy dates back to 1887, while 1974
saw the development of optical fibre technology. More recently, Prysmian Group has launched
cables using FlexRibbon technology, setting a record in terms of cables with the highest fibre
count.
A history of major projects
Prysmian cables make up the nervous system of all global energy flows. In fact, Prysmian has
shaped the very evolution of major power interconnections.
1967 saw the first major
HV submarine interconnection
project known as SA.CO.I. (Sardinia,
Corsica, Italy): a submarine cable that links Sardinia to Italy. Today, it is still the longest serving
cable in the world.
In 2005, Prysmian Group developed BassLink, the longest submarine interconnection system
ever developed at the time, connecting Australia to Tasmania. 2007 saw the launch of Trans Bay
Cable for the HV submarine link between San Francisco and Pittsburgh, California.
In the United States, in 2013 Prysmian also completed the Hudson Project, involving a submarine
power link between New York City and New Jersey. The project followed the completion, in 2007,
of the Neptune Project connecting Long Island to New Jersey.
In Europe as well, the Group has consolidated over time its leadership in the supply of cables
for major
submarine interconnections
. The completion of the SAPEI link (Sardinia-Italian
mainland) — the deepest submarine cable worldwide (at a depth of 1,600 metres in the
Tyrrhenian Sea) — dates back to 2008. More recently, Prysmian has contributed to integrating
the energy markets of the UK and France (IFA1 and IFA2), and those of the UK and Denmark
(Viking project).
In 2015, with the North Sea Link project, Prysmian connected the UK and Norway with the
world’s longest submarine electricity interconnector. In 2017, the Group completed the new
HVDC cable connection between France and the UK, known as ElecLInk.
In 2021, the Group was awarded a contract for the Tyrrhenian Link project, envisaging the laying
of a total of over 1,500 km of submarine cables between Sardinia, Sicily and Campania. This
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
17
project set several technological records, including in terms of length, depth — over 2,000
metres — and technological innovation. This brings us to the present day, in 2022, when
Prysmian set the installation depth record for an innovative non-metallic armoured cable in the
submarine interconnection project between the island of Crete and mainland Greece.
Prysmian Group is a partner in the most recent and important interconnection projects for
solar
and wind farms
in the world, both offshore and onshore. These include, in Europe, the DolWin4
and BorWin4 projects for the cabling of two mega offshore wind farms in northern Germany. In
the United States, Prysmian is involved in the development of Vineyard, the country’s first large-
scale offshore wind farm.
Prysmian plays a key role in the development of
underground cable interconnections and
links
. Among others, Prysmian took part in the completion of the extra-high voltage direct
current Italy-France and France-Spain electrical interconnections. More recently, Prysmian is
contributing to the development of the German Corridors, true "electric highways" that connect
the country from north to south and that will allow the transport of clean energy from wind farms
to the more industrialised areas in the south of Germany.
Prysmian cables deliver energy to the most prestigious buildings around the globe, such as the
Burj Khalifa in Dubai, The Shard in London, the World Trade Center in New York, the Guggenheim
Museum in Bilbao and the Louvre Museum in Abu Dhabi. Prysmian has also contributed to the
development of power grids in some of the largest cities in the world, from New York to Buenos
Aires, from London to St. Petersburg, from Hong Kong to Sydney.
In the
telecommunications
business, Prysmian immediately took over the legacy of Pirelli Cavi,
which with the Unification of Italy had laid the first telegraph cables, and immediately established
itself as a market leader. The Group has always forged partnerships with the main
telecommunications operators in the world for the development of broadband networks to
support digitalisation. Among the most recent projects, the Group is working with Telstra to build
a new state-of-the-art fibre network of up to 20,000 km that will link Australia’s major cities,
thus increasing transmission capacity both between cities and regionally.
In the United States, it is partnering Verizon for the supply of fibre optic products to support the
development and acceleration of 5G services. In the UK, Prysmian works with Openreach to
support the Full Fibre broadband plan being implemented by the UK Government with the aim
of achieving its target of delivering 85% broadband coverage by 2025.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
18
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
19
4. VISION, MISSION AND VALUES
Prysmian has identified the Values, Mission and Vision that, each day, guide the Group’s
operations. These translate into the products it makes and drive the transition to a future of
clean energy and connectivity.
VISION
We believe in the efficient, effective and sustainable supply of energy and data as the main
driver for community development.
MISSION
We offer our customers worldwide cables and solutions for the transport of energy and
telecommunications, using state-of-the art technological solutions.
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.
•
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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
20
5. COMMITMENT OF PRYSMIAN GROUP TO ETHICS AND INTEGRITY
Creating an atmosphere of trust in which people are empowered to make decisions with integrity
is one of Prysmian’s three core values, with ethics having been identified by stakeholders as a
key success factor for the business.
In fact, sustainable value cannot be created without the adoption of fair and ethical business
practices that meet the most stringent standards. Any compromise could jeopardise the hard
work of thousands within the Group who operate worldwide, shaking the confidence of
stakeholders.
As indicated above, trust is one of the three core business values. Trust, ethics and integrity are
evident in the responsible and transparent conduct of all Prysmian personnel in their relations
with the Group's stakeholders. Further information about ethics and integrity is presented in the
“Ethics and Integrity” chapter of the Consolidated Non-Financial Statement forming part of this
report.
Public company
Prysmian Group is a public company listed in the FTSE MIB index of the Milan stock exchange:
a company with a broad shareholder base for which it is fundamental to align the interests of
the Group with those of all its stakeholders. This special nature requires an ability to develop
open and transparent dialogue with our shareholders, employees, customers and suppliers, with
institutions and with the communities in which we work. Prysmian Group has always believed in
the value of stakeholder capitalism, striving to comply with the highest international standards
of governance. For example, 75% of Board members are independent and 42% are women.
Corporate integrity is expressed using a series of instruments and policies disseminated
throughout the entire organisation, including: Code of Ethics, Anti-corruption Policy, Privacy and
data protection, Helpline programme.
People company
Prysmian Group is people-centric, supporting and recognising the abilities of those who work for
the Group and for the community in which it operates. To achieve this, continuous multi-
disciplinary and specialist training programmes have been adopted for our employees.
Developing in full the global know-how of our people, who represent the greatest asset of the
Group, is an integral part of our long-term sustainability strategy. Out of around 30,000
employees, about one third are stable shareholders. Together with management, Group
employees own more than 3% of the share capital, investing directly in the Company and
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demonstrating their confidence in us. The presence of employees as shareholders is a further
driver in the creation of sustainable value for the Group.
Membership of trade associations
Prysmian’s leadership of the power and telecommunication cables industry is also testified
by
the Group’s membership of the most important and strategic trade associations globally.
Participation in their technical round-table discussions enables the Group to play a leading role,
together with major partners and international competitors, in defining the guidelines to be
followed when pursuing sustainable innovation in the energy and telecom sector, and in
preparing technical solutions and standards.
As an industry leader, Prysmian Group is called upon to play a proactive role in promptly
addressing new issues that emerge and finding solutions by sharing best practices with the entire
industry. Accordingly, our inclusion in industry groupings that seek to improve the sustainability
of the industry is strategic for the Group.
Europacable
Founded in 1991, Europacable is an association that represents the cables industry in policy and
regulatory discussions with the EU. At the same time, it reflects a collective commitment to
pursue manufacturing and development objectives founded on ethics, sustainability and high-
quality standards in the cable industry.
The association establishes specific task forces that respond to proposed European regulations
and, in general, to new needs identified by the cable industry. Prysmian participates actively in
various working parties, and even plays a leadership role in those with a specific focus on
sustainability.
These include task forces on the Circular Economy, Climate Change and the European Taxonomy.
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 harmonised regulatory approach and energy education.
Fibre to the Home (FTTH) Council
Founded in 2004, this group with 150 members seeks to accelerate the deployment of optical
fibre connectivity. Its vision is of a sustainable future made possible by economic growth
generated by new services using high-speed FTTH technology.
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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.
Responsible Mica Initiative
In 2021, Prysmian Group joined - as the first company in the cable industry - the Responsible
Mica Initiative (RMI), a non-profit organisation committed to eliminating child labour 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. The social
responsibility of Prysmian Group is one of the pillars of its sustainability strategy, reflecting the
principles embodied in its Human Rights Policy.
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. Its ESG (Environmental, Social e Governance)
values are deeply embedded in the Group’s DNA, inspiring our strategic priorities and influencing
our daily conduct. Consistent with the Global Compact’s ten principles, Prysmian Group adopts
policies and tools that safeguard the environment, human rights and workers’ rights while
supporting local communities and the most vulnerable.
Global Alliance for Sustainable Energy
In 2022, Prysmian Group became a member of the independent “Global Alliance for Sustainable
Energy”, which is open to all players that recognise the urgent need to tackle the climate
emergency with a “just transition”, as well as the need to promote and integrate sustainability
and social responsibility in the renewable energy sector: NGOs, civil society associations and
representatives, utilities, suppliers of materials and equipment manufacturers, renewable energy
project developers and plant builders, technical and technological partners and end users,
including the consumers of industrial, commercial and domestic energy.
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Renewable energy will fuel the world’s development and the alliance’s goal is to ensure that the
renewables sector is fully sustainable and respects human rights throughout the entire value
chain. Its main priority is to tackle climate change and achieve Net Zero for the planet while, at
the same time, improving people’s livelihoods and quality of life. To this end, the alliance will set
sustainability standards and KPIs, achieve ambitious objectives by working together and
promote collaboration between all the partners and players involved.
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6. GROUP ORGANISATION
Business sectors
Prysmian Group operates in the business of underground and submarine cable systems for power
transmission and distribution, special cables for applications in various industrial sectors and
medium and low voltage cables for infrastructure and construction needs.
The Group also operates in the telecommunications sector by manufacturing cables and
accessories for voice, video and data transmission, with a full range of optical fibre, optical and
copper cables, and connectivity systems.
Business model
The business model and the portfolio of products and services are diversified by operating
segment and geographical area. This organisation is a strength for Prysmian Group, with each
segment playing a precise role in the overall strategy that combines stability, growth potential
and the generation of opportunities.
Prysmian Group has implemented a targeted strategy, including via acquisitions, to evolve over
the years from a cable manufacturer towards a network solution provider. By drawing on the
ability to increasingly combine engineering, installation, network monitoring and after-sales
services, the Group provides the value-added needed to ensure recurring revenue streams and
nurture long-term partnerships with customers.
Three macro-areas of activity
The Group is organised in a matrix structure by reference markets and business units, identifying
three macro-areas of activity:
Energy, Projects and Telecom.
ENERGY
This area comprises business segments offering a
complete and innovative portfolio of
products
designed to satisfy the many needs of the markets served. This macro-area is
organised as follows:
A.
Energy & Infrastructure
, which includes the Trade & Installers and Power Distribution
businesses:
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o
Trade & Installers: the portfolio of
low voltage products
includes both rigid and flexible
cables for the distribution of power to and within residential, commercial and industrial
buildings. Trade & Installers represent a sales channel for the Prysmian Group and the
mix of products distributed changes, depending on the geographical areas (e.g.
residential counts for less than 5% in North America, but about 30-35% in Europe). The
Group focuses product development and innovation on high-performance cables such as
fire resistant and low smoke-zero halogen cables that satisfy specific safety requirements.
Recently, the product range has widened further to satisfy the demand for cables serving
major infrastructure - such as airports, sea ports, train stations and data centres - from
a diverse range of customers: international contractors and distributors, wholesalers and
installers.
o
Power Distribution: solutions are
mainly designed to support utilities and grid
operators
in power transmission and distribution. The product portfolio includes
medium-voltage cable systems for overhead and underground installation (together with
all types of network accessories and components) for connecting industrial and/or
residential buildings to the primary distribution grid, as well as low-voltage cable systems
for power distribution. Grid hardening is the main driver of this business.
B.
Industrial & Network Components,
which includes Specialties, Renewable & OEMs
(inclusive of the Crane, Mining, Railway, Rolling Stock, Marine, Solar and Wind sectors),
Elevators & Escalators, Automotive, Network Components, Oil & Gas, and Electronics
(Electronics and Optical Sensing Solutions):
o
Specialties, Renewable & OEMs: The wide range of cables developed by this division for
specific industrial sectors stands out for the
highly specific nature of the solutions
offered
. The vast assortment of cables offered by Prysmian for the transportation market
contributes to the construction of trains and ships, as well as to activities in the
automotive industry (charging of electric vehicles) and the aerospace industry; with
regard to infrastructure, on the other hand, the major fields of application are
railways,
sea ports and airports. The range also includes cables for the mining industry and for
applications in the renewable energy sector (wind and solar), as well as cables for military
use and nuclear power stations, capable of withstanding the most extreme temperatures.
o
Elevators & Escalators: the objective is to supply customers with the best solutions for
the
optimal operation of elevators and escalators
, all branded Draka EHC. The Group
offers a wide variety of products, technical services and solutions that are available
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rapidly and efficiently, regardless of customer location, thanks to the support provided
by a sophisticated logistics and distribution network.
o
Automotive: Prysmian Group offers the
widest range of cables and pre-assembled
components for the global automotive industry
to OEMs, suppliers of systems and
providers of cabling solutions, guaranteeing them full conformity with the latest
environmental standards and requirements.
o
Network Components: in addition to cables, the Group produces
accessories and
network components for joining cables and connecting them to other devices
.
Connectors and terminals for low, medium, high and extra-high voltage cables and
submarine cable systems are essential for industrial, construction and infrastructure
applications, as well as for power transmission and distribution grids.
o
Oil & Gas: Prysmian also offers
a variety of products and solutions for the
petrochemical sector
, capable of covering all offshore and onshore needs: low and
medium voltage power cables, instrumentation and control cables along with Downhole
Technology (DHT) solutions, which involve running cables through steel pipes to power
and control the monitoring systems used in extraction wells.
o
EOSS-Electronics and Optical Sensing Solutions: the Prysmian Group range is completed
by
products and services that manage and monitor the operational status of
electrical assets and systems,
designed, developed, manufactured and sold by the
Group itself, supported by its proprietary cabling systems and applying AI algorithms and
sensing technologies patented by the Group.
PROJECTS
The Projects area comprises
land and submarine HV power cables, submarine cables for
telecommunications and special cables for offshore use
.
The Group designs, manufactures and installs high and extra-high voltage cable systems for the
transmission of electricity from generating stations and within transmission and primary
distribution grids. These
highly specialised, high-tech products
include cables sheathed in
oil- or mass impregnated paper for voltages up to 700 kV, and sheathed in extruded polymers
for voltages up to 600 kV. In addition, cable-laying and installation services are available,
together with network monitoring and preventive maintenance, the repair and maintenance of
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cable connections and emergency services that include prompt action in the event of damage.
Taken together, this means that Prysmian is fully able to install turnkey systems.
The Group has supplied several of the
principal land and submarine links
, as well as
submarine cable connections for the main offshore wind farms, both fixed and floating. The
Group uses specific technologies for undersea power transmission and distribution and is able to
offer sophisticated solutions that satisfy the strictest international standards.
Today, Prysmian can count on a fleet of five state-of-the-art cable-laying vessels: the Giulio
Verne, the former flagship with around 35 years of service on cable installation projects; the
Cable Enterprise, which is mainly used to install export cables for offshore wind farms; the Ulisse,
which carries out efficient installations in shallow waters, using an anchor handling mooring
system; the Barbarossa I, which is a small barge - recently added to the fleet - that was
specifically designed to operate in very shallow waters and in areas that dry out at low tide; and
the Leonardo da Vinci, which is the most advanced cabling-laying vessel in the world. The Group
has also recently announced the construction of a new, state-of-the-art cable-laying vessel.
Additionally, Prysmian has the widest range of burial equipment, such as Hydroplows, submarine
ploughs and various post-lay burial machines (Sea Mole, SeaRex and Otter).
On acquiring General Cable, the Prysmian Group returned to the
submarine Telecom cables
business, which specialises in the production and installation of data transmission cables. The
Offshore Specialties business comprises a vast range of products for the oil industry, including
umbilical cables, flexible pipes and all electrical, optical and data signalling components needed
to operate oil wells, from the seabed to the offshore platform.
TELECOM
As a partner to the world’s main telecom operators, Prysmian Group is active in the development
and manufacture of a wide range of
cable systems and connectivity products used in
telecommunication networks
.
This area comprises the following market segments:
A.
Telecom Solutions: Prysmian offers a wide range of optical fibre and copper cabling
solutions for telecommunications, capable of satisfying every customer need.
Innovation is key
in order to improve and deploy such next-generation networks as
hybrid cables, Fibre-to-the-Antenna (FTTA) and 5G. The Group also offers advanced
optical fibre and hybrid cabling and connectivity systems on both a market-ready and
made-to-measure basis, to satisfy the enormous demands of tomorrow’s networks.
Additionally, the optical connectivity portfolio makes it possible to create or manage
networks that meet both the various present and future needs of customers. The products
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include racks, connectors, wall boxes and termination boxes for customers, as well as
pre-connected products for internal and external use, coaxial and high-density cables,
and pre-connected optical cables. In both cables and connectivity, the Group focuses on
the design of products that provide the highest density in smaller diameters, are easy to
use and optimise fibre management.
B.
MMS Multimedia Specials: Prysmian supports wholesalers, resellers and OEMs with fully
reliable and completely flexible solutions designed to satisfy their current and future
needs. Products include copper and fibre cables for short/medium runs in offices and data
centres; optical and copper cables for various uses, such as cabling for radio and TV
stations and film studios; fire-resistant coaxial cables and cables for connecting base
stations and aerials in mobile networks.
C.
Optical fibre: Prysmian also produces
single-mode and multimode optical fibres and
special fibres, using an innovative proprietary technique
that places the Group at
the forefront of today's technology.
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7. STRATEGY AND COMMITMENT TO SUSTAINABILITY
Group strategy: challenges and opportunities
During 2022 the world faced complex economic, social and political risks that were often
interlinked, such as the war in Ukraine, the isolation of China, the slowdown in global growth
and high rates of inflation, not to mention extreme climate events. Challenges associated with
energy and food supply, scarcity of raw materials and the strategic role of cyber security have
prompted businesses to adopt increasingly flexible and resilient business models. In a volatile,
uncertain, complex and ambiguous world, it is essential to understand the direction of changes
and turn them into opportunities for growth.
Five opportunities for the near future
As a consequence, five global trends have been identified for Prysmian to address in the near
future:
o
Growth of renewables (Energy Transition)
: there will be a progressive move away
from fossil fuels to sustainable sources of energy, such as wind, solar and hydro power.
In order to reduce CO2 emissions and tackle climate change, ever more ambitious
economic plans are being prepared internationally to support these renewable sources.
Estimates expect them to cover 70% of global electricity generation by 2050, which is
more than double the current figure of 30%.
o
Electrification
, meaning the growth of electricity as the main source of power.
Population growth, the steady increase in electricity consumption - stemming from new
habits, such as the use of electric vehicles and heat pumps - and the proliferation of
energy-intensive telecommunication infrastructures, are just some of the drivers that will
cause electricity consumption to rise by 25% by 2030.
o
Cloudification
, meaning the migration of applications run on local servers to web-based
solutions. The need for more and more cloud capacity is contributing to an exponential
increase in the number of data centres, which are becoming ubiquitous. These centres -
annual investment in which will exceed US$ 300 billion by 2030 - need an enormous
quantity of power cables to operate them, as well as telecom cables to transport data
and content. Already, the world's data centres collectively consume more than 300 TWh
per year, which is the equivalent of a country like Italy.
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o
Data booming
, meaning the exponential growth of data consumption, which will require
further major development of fixed and mobile networks.
This exponential increase in data consumption will be evident by 2030, due to the greater
quality and quantity of the infrastructure that carries it. It is estimated that much more
than two-thirds (85%) of the world's homes will have a fibre broadband connection (FTTx)
by 2030.
o
Smartisation and Servitisation
, meaning the growth in the Internet of Things (IoT) in
everyday life and a focus on “Solutions” rather than “Products”. The growth of
technologies and in the speed of data transfers has facilitated the development of remote
monitoring, tracking and control systems. Costs are expected to fall even further (for
example, the cost of bandwidth is 40 times lower than in 2010) and new solutions (like
autonomous driving) will be developed.
Each of these trends brings with it strong
convergence and interdependence
between
energy and digitalisation
. Just think of the case of data centres or 5G towers, where suppliers,
distribution channels, customers and value chains all intersect.
Prysmian’s competitive advantages
Faced with these continual complex changes, Prysmian can count on a solid business model
based on the following competitive advantages:
o
DIVERSIFICATION
A broad product portfolio and diversified geographical coverage capable, respectively, of
exploiting the convergence of Energy and Telecom and attenuating the cyclic nature of
activity in the various Regions and businesses that comprise the Prysmian Group.
o
TECHNOLOGICAL EXCELLENCE
Technological leadership, being at the forefront technically with innovative products and
solutions, while possessing highly qualified and experienced human capital.
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o
DECENTRALISED SUPPLY CHAIN
A global manufacturing footprint, with plants spread around the world that are capable
of developing customised solutions that meet customer needs and of exploiting the
benefits of a decentralised supply chain.
o
AGGREGATION HUB
Ability to complete acquisitions and mergers, acting as an industry aggregator to release
major cost and revenue synergies.
Leveraging these solid competitive advantages, the Prysmian strategy is focused on:
o
CONSOLIDATION OF LEADERSHIP
Consolidating our leadership in core sectors (e.g. interconnections, grid hardening, FTTx),
in which Prysmian is already a protagonist and which show clear and concrete signs of
further major structural growth over the long term.
o
RESEARCH AND DEVELOPMENT/INNOVATION
Development and evolution of skills and the product portfolio in rapidly expanding sectors,
such as Solar, Wind, EV Charging, Data Centres and 5G.
o
SOLUTION PROVIDER
Expansion of the offer to customers by combining the supply of cables with the delivery
of solutions, with a view to becoming a “
solution provider for energy transition and
digitalisation
”.
The pillars of the Prysmian strategy aimed at seizing these growth opportunities thus comprise
an efficient and flexible supply chain, proximity to customers, technological innovation and
constant development of know-how and skills, as well as a constant focus on the environment
and the wellbeing of our people and the communities in which the Group operates. Spanning all
these factors, we find financial strength and the ability of the Group to generate the resources
needed to sustain investment in value-added businesses with a high technological content, as
well as constant improvements in the sustainability of our products and production processes.
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8. SUSTAINABILITY IN THE DNA OF PRYSMIAN GROUP
The Sustainability strategy of Prysmian Group is based on an “Impact Creation” model structured
around two main elements:
1.
IMPACTS
: positive or negative, real or potential, short/medium or long-term impacts on
specific financial parameters may be generated by Prysmian throughout the entire value
chain;
2.
LONG-TERM AMBITIONS
: defined by Prysmian as concrete responses to these impacts.
The substance of the Group’s long-term ambitions and, in particular, the objectives defined, are
based on:
•
constant analysis of sustainability macro-trends, including with the use of AI tools
1
;
•
continuous study of the main international standards for non-financial reporting;
•
active listening to all Group stakeholders, involving various activities designed to map
their requirements and identify any needs in advance.
1
matrix/materiality-analysis
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Furthermore, in order to strengthen its commitment to sustainability even more, Prysmian Group
has adopted a Sustainability Policy that provides a guide to achieving its ESG (Environmental,
Social, Governance) objectives. 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
2
.
2
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9. SDGs - SUSTAINABLE DEVELOPMENT GOALS
As also mentioned in the “Membership of trade associations” section of this document, with a
view to sustainable development, the Prysmian Group has joined the United Nations Global
Compact, the
largest strategic corporate citizenship initiative in the world
, which was
launched to promote a sustainable global economy: respectful of human and workers’ rights,
environmental protection and the fight against corruption.
The Global Compact requires participating businesses and organisations, 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 the fight against corruption.
This initiative promoted by Kofi Annan in 1999, when Secretary-General of the United Nations,
pursues two complementary goals:
•
to make the Global Compact and its
Ten Principles
an integral part of the strategy and
daily operations of participating businesses;
•
to encourage and facilitate dialogue and cooperation among all stakeholders, in support
of the Ten Principles and the
Sustainable Development Goals (SDGs)
for 2030
.
In this regard, the 2015 General Assembly of the United Nations, attended by more than 150
leaders from around the world, adopted the 2030 Agenda for Sustainable Development
comprising 17
Sustainable Development Goals (SDGs)
and 169 targets.
The SDGs and their targets identify the global priorities for 2030 and define an integrated plan
of action for people, the planet, prosperity and peace.
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The following discussion explains how the Prysmian Group contributes to achievement of the
SDGs, indicating the material topics behind each activity (as identified from the “Materiality
analysis 2022” reported in the “Consolidated Non-Financial Statement” section of this
document).
In particular, Prysmian helps to:
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10. CLIMATE CHANGE & SOCIAL AMBITION
Prysmian Group seeks to become a global leader in sustainability. This ambition has
led the Group to establish challenging climate and social objectives that promote the
transition towards a low-emissions world and a more equal and inclusive working
environment.
During 2021, the Prysmian Group introduced two strategic ambitions that will guide its actions
over the medium-long term:
the Climate Change Ambition and the Social Ambition
.
Associating the social ambition with the achievement of environmental objectives is a
fundamental element of Prysmian’s sustainability strategy.
Climate change ambition
The climate strategy of the Prysmian Group adopts science-based targets aligned with the Paris
Accord 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 Accord
(1.5°C);
-
neutralisation of any residual and GHG emissions released into the atmosphere.
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PRYSMIAN GROUP PLEDGES
1. Decarbonisation of 90% of our Scope 1 and 2 carbon footprint by 2035:
▪
gradually eliminating the SF6 gas emissions;
▪
using 100% renewable energy;
▪
neutralising residual emissions.
2. Be Net Zero throughout the entire value chain (Scopes 1 + 2 + 3) by 2050.
In order to honour its pledges, Prysmian has taken the following action:
1.
definition of a short-term emissions-reduction target;
2.
definition of a long-term emissions-reduction target;
3.
launch of projects to neutralise residual emissions.
1.
Short-term SBTs: targets to reduce emissions over 5-10 years in line with the
1.5°C limitation scenario
Initially, in 2021 – year one of its ambition - the following short-term targets were defined by
Prysmian and approved by the SBTi:
o
Scope 1 & 2 targets in line with the hypothesis of keeping the rise in average global
temperature below 1.5°C: -46% by 2030;
o
Scope 3 target in line with the hypothesis of keeping the rise in average global temperature
below 2°C: -21% by 2030.
Subsequently, in 2022, Prysmian committed to a further reduction in Scope 3 emissions
3
,
aligning the Group with the “Well Below 2°C” trajectory and updating the 2030 target from -
21% to -28%.
2.
Long-term SBTs: targets to reduce emissions to a residual level by 2050
Given that the Corporate Net-Zero Standard calls for businesses to work on the decarbonisation
of at least 90% of their Scope 1, 2 and 3 emissions, the Prysmian Group has presented the
following targets:
o
decarbonisation of 90% of its Scope 1 and 2 emissions by 2035;
o
decarbonisation of 90% of its Scope 3 emissions by 2050.
These targets represent a bigger commitment than before, requiring a greater decarbonisation
of operations and envisaging a reduction in the permitted offset percentage.
3
Transition plans have not been affected by Ukraine-Russian crisis
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3.
Neutralisation of residual emissions:
Residual GHG emissions must be offset using methods that remove climate-altering gases from
the atmosphere over a long period of time. These methods fall into three broad categories:
biological
(planting of trees, reforestation),
engineered
(CO2-hardened cement, systems for
the direct capture of CO2 from the atmosphere) and
hybrid
(Biocarbon, Bioenergy with carbon
capture and storage - CCS).
Prysmian Group presented these new and more ambitious targets for validation in November
2022, with approval expected by mid-2023.
Social ambition
The Group’s social ambition mainly concentrates on the commitment to improve diversity,
equality and inclusion (DE&I), digital inclusion, the empowerment of communities, employee
engagement and upskilling. The Group promotes programmes designed to enhance the digital
inclusion of all employees, while eliminating discrimination based on their role or position. By
adopting a pro-active approach, the Group is evolving into an organisation that recognises
diversity, inclusion and gender equality at all levels, committed to facilitating the empowerment
of a larger number of women, so that they can further their careers even in technical and
scientific roles within Prysmian.
The targets for 2030 promote achievement of Prysmian’s social ambition objectives and further
align the Group with the UN Sustainable Development Goals.
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11. SUSTAINABILITY SCORECARD
In order to establish a credible path to sustainability, Prysmian Group has set specific targets so
that progress can be monitored constantly. Aside from the long-term targets, the Group is also
committed to the achievement of short-term goals.
The Sustainability Scorecard comprises 16 targets, progress against which is monitored by the
Sustainability Steering Committee chaired by the Group’s Chief Sustainability Officer. The results
are also discussed and monitored by the Sustainability Committee, established in 2020 as part
of the Group Board of Directors.
Using 2019 as the baseline, 2022 was the target year for achieving the established goals. The
following KPIs do not comprise all those monitored, representing solely the indicators linked to
the Group’s incentive system (further information can be found in the “Sustainability Report”
published by Prysmian Group).
The value referring to the percentage reduction in GHG emissions (Scope 1 and 2, market based)
is calculated with reference to the 2019 baseline, in accordance with the methodology of the
Science Based Targets initiative; all other KPIs refer to the annual performance.
(1)
Leadership Impact Index (LI):
index calculated as the percentage of employees who declared a level of
engagement with the company of at least 5 out of seven points in the Speak Up survey conducted by the company. The
indices and the survey were developed in collaboration with SDA Bocconi in order to ensure their quality and anonymity.
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(2)
Percentage of white-collar women hired with permanent contracts:
share of desk workers women hired with
permanent contract compared to the total employees hired with permanent contract. The index includes all desk workers
hired from External (including global recruiting programs and projects) and all change of contracts from
agency/temporary to permanent
(3)
Injury Rate (IF)
: (total number of injuries with loss of work/hours worked)*200,000. The 2021 figures include only
Prysmian employees and the Prysmian Group fleet but no external personnel. The 2020 figures, on the other hand,
include only Prysmian employees and no external personnel or the Group's fleet.
Work on decarbonising Prysmian Group’s activities has begun with great determination,
achieving a reduction in emissions of about 24% compared with 2019. Three main drivers were
responsible for this achievement: energy efficiency, the elimination of SF6 gas and the
procurement of green energy. Prysmian first implemented a series of energy-saving initiatives
(e.g. LED lighting, machinery upgrades, recovery of thermal energy), the effects of which began
to be felt from 2021. By 2022, Prymian had already invested in energy saving and had allocated
a specific budget of Euro 100 million for use by 2030.
SF6 gas is used in the testing of cables and connectors for high voltage applications and, despite
its great global warming potential, it remains the current market standard. Prysmian is
committed to eliminating this gas from its activities and is investigating a number of alternative
technologies, including dry run solutions and the use of alterative gases currently being piloted
in the industry.
Lastly, Prysmian has made use of the generation and procurement of green electricity in various
countries where it operates, thus heavily reducing emissions from its electricity consumption.
With regard to the targets not yet achieved, the Group is constantly striving to improve its
performance and monitor the related indicators.
Prysmian Group’s new Sustainability Scorecard
Commencing from the end of 2022, Prysmian Group has defined a new three-year Scorecard
(2023-2025, baseline 2022) focused on measuring the impacts generated by its activities via
the use of specific “impact KPIs”. When defining the Scorecard for 2023-2025, the Group also
sought to rationalise the indicators considered in order to simplify the processes of monitoring,
measuring and thus communicating to stakeholders the results achieved each year, thus making
them more efficient. For this reason,
the new Scorecard now contains 12 KPIs
. These were
defined after an analysis of:
•
Long-term ambitions of the Group (
Social Ambition and Climate Change Ambition);
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
42
•
UN Sustainable Development Goals
(SDGs);
•
GRI Standards;
•
New process for carrying out the Materiality analysis
(focused on the external
impacts generated by the business).
The Scorecard is built on 3 pillars strategic for the entire Group - Environment, People &
Community, Innovation - which, in turn, are subdivided into various categories.
This document presents only those KPIs linked to the Group’s incentive system (MBO, LTI),
excluding others included in the 2023 Scorecard. Information about the latter can be found in
the “Sustainability Report 2022” published by the Group.
The percentage reduction in GHG emissions (Scope 1 and 2, market based) is calculated with
respect to the 2019 baseline (870 ktCO2), in accordance with the provisions of the Science Based
Targets initiative; all other KPIs refer to the annual performance.
(1)
Share of recycled content:
p
ercentage on weight of the recycled content of the purchased amount of
selected 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.
(2)
Safety Assessment Plan:
index measuring the maturity level on safety management in the Group’s factories. The
index is composed by four different categories (governance, Employees Engagement, Risk Assessment and Injury
frequency rate). The first three categories are evaluated for each factory through an audit performed by a third party
company, which assigns a value from 1 to 5 to each category, being 5 the maximum score. The Group’s result is the
global average of the factories’ result.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
43
Prysmian Group in the ESG indices
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
44
12. 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 Group seeks a form of governance capable of creating sustainable value over time and
generating a
virtuous spiral with business integrity at its centre. In particular, awareness of the
importance of good corporate governance for the achievement of ambitious and strategic
objectives means ensuring that governance is: effective, while complying with the legal and
regulatory framework, efficient in terms of cost-effectiveness, and fair towards all the Group’s
stakeholders.
Accordingly, the Prysmian Group keeps its corporate governance system constantly aligned with
latest recommendations and regulations, adhering to national and international best practices.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
45
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.
Once again, during 2022 Prysmian continued to comply with the Corporate Governance Code for
listed companies approved by the Corporate Governance Committee.
For further information about:
•
compliance with the principles and recommendations of the Code of Corporate
Governance 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 the Ownership Structure” approved by
the Board of Directors and available in the Company/Governance section of the official website
4
.
Corporate governance structure
The model of governance and control adopted by Prysmian is a traditional one, involving the
presence of a Shareholders’ Meeting, a Board of Directors and a Board of Statutory Auditors.
Prysmian’s corporate governance structure 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 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 Unified Finance Act and can be found
in the "Report on Corporate Governance and Ownership Structure",
prepared in accordance with art. 123-bis of the Unified Finance Act and available in the
Company/Governance section of the official website.
An overview of the Company’s corporate governance structure as of 31 December 2022 now
follows, along with a description of its main features.
4
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
46
Board of Directors
In compliance with the provisions of art. 14 of the By-laws, the Company is currently managed
by a Board of Directors consisting of twelve members - who will remain in office until the date
of the annual general meeting that approves 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, par. 3 of Italian Legislative Decree 58 dated 24 February 1998 (known as the Unified
Finance Act) 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, par. 3 of the Unified
Finance Act. In line with the recommendations of the Corporate Governance Code, the non-
executive Directors are sufficiently numerous and have enough authority to ensure that their
judgement carries significant weight in Board decision-making. At 31 December 2022, seven of
the directors are men and five are women, five are in the 45-55 age group and seven are over
55.
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
47
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 the internal control and risk
management system, namely the Control and Risks Committee, the Director in charge of the
internal control and risk management system, the Chief Audit & Compliance Officer, the Board
of Statutory Auditors and the Managers responsible for preparing company financial reports.
For further information on the composition, appointment and functioning of the Board of
Statutory Auditors, please refer to: Corporate Bodies | Prysmian Group and the "Report on
Corporate Governance and Ownership Structure" (paragraph 4)
5
.
5
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
48
Following best practices within the Anglo-Saxon world and without prejudice to compliance with
any provisions of the regulations in force from time to time, the Company has decided to adopt
a Board Skill Matrix through which the existing skills within the Board are identified as well as
any gaps and, consequently, indications are provided on the skills of the candidates who are
considered useful for the composition of the slates of candidates for the appointment of the
Directors. The following chart contains the results of the application of the aforementioned Board
Skill Matrix to the members of the current Board of Directors.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
49
Source: Description of the policies applied in relation to the composition of the Board of Directors
and the Board of Statutory Auditors, also in the field of diversity, pursuant to article 123-Bis,
c.2.D-bis, of the T.U.F.
6
Board of Statutory Auditors
The Board of Statutory Auditors is called upon to monitor compliance with the law and the by-
laws, as well as compliance with the principles of good business practices in running the
Company and also to review the adequacy of the Company's 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 auditors, including a Chairman, and two alternate
auditors, 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,
paragraph 3 of Italian Legislative Decree 58 dated 24 February 1998 (known as the Unified
Finance Act or “UFA”), and pursuant to art. 2, recommendation no. 7 of Italy’s Corporate
Governance Code.
As at 31 December 2022, 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 the
provisions of the gender-balance requirements for corporate boards.
One Standing Auditor, appointed as Chairman, and one Alternate Auditor were elected to the
Board of Statutory Auditors from the list 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 two other 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 functioning of the Board of
Statutory Auditors, please refer to: Corporate Bodies | Prysmian Group and the "Report on
Corporate Governance and Ownership Structure" (paragraph 11)
7
.
6
7
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
50
Internal committees of the Board of Directors
The Board of Directors has set up internal Committees with investigative, proactive and advisory
functions, adopting regulations that define their duties and rules of operation.
The current Board of Directors of Prysmian S.p.A. has established three internal Committees
and appointed their members, including the Chairmen.
The composition, duties and functioning of the Committees are described in the Corporate
Governance Regulations adopted by the Board of Directors
8
.
The Committees are composed of three non-executive directors, the majority of whom are
independent pursuant to the Corporate Governance Code and the UFA with the exception of the
Remuneration and Nominations Committee on which one member qualifies as independent only
under the UFA. The term of office of each member corresponds to their term in office as a
director.
For further information on the composition, appointment and functioning of the internal
Committees of the Board of Directors, please refer to: Committees | Prysmian Group and the
"Report on Corporate Governance and Ownership Structure" paragraphs 6 et seq)
9
.
Sustainability Committee
The Sustainability Committee is composed of three non-executive independent directors.
The Committee has been assigned powers to investigate, make recommendations and offer
advice with regard to the supervision of sustainability matters associated with business activities
and, in particular, has been tasked with:
8
%282021-02-03%29_Final_0.pdf
9
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
51
a) promoting guidelines for consideration by the Board that integrate sustainability within the
various business processes, in order to ensure the creation of sustainable value over time for
shareholders and all other stakeholders;
b) spreading the culture of sustainability among employees, shareholders, customers and, in
general, stakeholders;
c) assessing the environmental, economic and social impacts deriving from business activities;
d) providing opinions on the annual and long-term sustainability objectives to be achieved with
specific reference to the management of associated medium and long-term risks for the
Company and its subsidiaries, so that they are correctly identified and appropriately measured,
managed and monitored;
e) monitoring the Company’s position in the main sustainability indices;
f) expressing opinions on the initiatives and programmes promoted by the Company or by
subsidiaries on Corporate Social Responsibility (CSR) matters;
g) examining the annual sustainability report, containing non-financial information pursuant to
European Directive 2014/95/EU, before its presentation to the Board;
h) preparing, upon request from the Board, opinions and proposals concerning specific CSR
matters. For further information on the composition, appointment and functioning of the
Sustainability Committee, please refer to the Prysmian Group website (Committees) and the
"Report on Corporate Governance and Ownership Structure" paragraph 7)
10
.
Governance of sustainability
With the aim of constantly improving the ability to enhance the sustainability of its business
activities and related communications to stakeholders, in 2022 Prysmian Group defined a new
governance model that clarifies the role and responsibilities of all players:
1.
The Chief Sustainability Officer (CSO) 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 objectives;
•
managing Sustainability Indices;
•
guaranteeing the execution of Stakeholder Engagement activities;
•
leading the internal Sustainability Committee and the Network of Local Sustainability
Ambassadors;
10
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
52
•
acting as Secretary of the Sustainability Committee;
•
supporting the Administration, Finance and Control Department in the preparation of
the Integrated Report;
•
supervising the definition of the contents of the Sustainability Report.
2.
Group Planning and Control and Group Administration functions, entrusted to the
Managers responsible for the preparation of the financial statements with
responsibility for:
•
monitoring the performance of ESG KPIs;
•
coordinating the collection of non-financial data;
•
drawing up the Integrated Report;
•
verifying the accuracy and quality of data.
3.
The Communication and Public Affairs Division, with responsibility for:
•
developing communication campaigns;
•
collaborating with the CSO for the organisation of Stakeholder Engagement events.
4.
The Sustainability Committee, set up by the Board of Directors, has the
responsibilities described in the section
Corporate Covernance structure
.
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 the creation of the Materiality Matrix;
•
proposing actions to be implemented at the level of Regions, BUs and functions;
•
monitoring and following up sustainability-related KPIs and outcomes.
6.
Regional and BU Leadership Teams play a key role in the Group's sustainability
commitments.
7.
A Local Sustainability Ambassador Network has been established to promote
sustainability culture, local and global ESG initiatives and actions at regional level.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
53
Organisational chart of the Group
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
54
Ownership structure
The ownership structure is shown below.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
55
The geographical ownership structure confirms the predominant presence of the United States,
with 31% of capital held by institutional investors, up slightly from 30% in the prior year,
followed by the United Kingdom with 26%. There is also an upward trend in French and North
European investors, who are increasingly focused on ESG topics. In fact, at the end of 2022,
French and north European ESG investors together account for more than 20% of all institutional
investors, compared with 19% in the previous year. Switzerland, Ireland and the Netherlands
are among the major European countries with increased weightings, while those of Germany
and Spain have decreased slightly. There has also been a slight decline in the proportion of Asian
investors (mainly Japan and Malaysia).
Overall, about 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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
56
offered by the fundamentals of the Company. The percentage of shareholders adopting a passive
or index investment strategy, based on the main stock indices, is stable at 16%, while the Hedge
Fund component - focused on a shorter time horizon - represents just 5% of the institutional
investors, in line with the prior year.
The constant rise in ESG (Environment, Social and Governance) investors, being those that make
environmental, social and governance matters central to their investment strategies, is also
reflected in the ownership of Prysmian Group, where the proportion of those investors is
becoming ever more significant.
Indeed, their weighting within the Prysmian ownership structure has increased substantially over
the past 4 years, rising from about 13% in 2019 to more than 48% in December 2022. According
to the latest Nasdaq data, this percentage is well above average for both the industrial sector
and the Italian market, which is around 32% of all institutional investors. In absolute terms,
Prysmian currently has 236 ESG investors, significantly up from 185 in the prior year and 55
just four years ago. 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.
The increase in these investors within Prysmian’s ownership structure reflects not only the
general growth of ESG investment - due to their greater awareness about these matters - but
also market recognition of the Group’s strategy and firm commitments made in this direction.
In addition, constant listening and the attention dedicated to ESG investors by the Group and
top management via the organisation of various events - such as the Sustainability Week and
dedicated meetings, as well as a proactive approach to the ESG rating agencies and indices -
have helped to increase further the weighting of these investors within Prysmian’s ownership
structure. Lastly, the Company also engages with investment fund managers that focus
specifically on one or more areas of sustainable development, such as Energy Transition or
Climate Change with regard to the Environmental aspect, or the Management of Human Capital,
Diversity & Inclusion, the Sustainable value chain and the Remuneration Policy in relation to the
Social aspect.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
57
Shareholders' meeting
In total, 74.6% of share capital was represented at the Annual General Meeting, with 1,952
shareholders present by proxy.
On 12 April 2022 the Shareholders' Meeting of Prysmian S.p.A., held in first and only calling,
discussed and resolved on several items on the agenda, including approval of the 2021 financial
statements, allocation of the profit for the year and the distribution of dividends, renewal of the
Board of Statutory Auditors with the appointment of statutory auditors and the fixing of their
remuneration, authorisation for the purchase and use of treasury shares, approval of a new
stock grant plan for Prysmian Group employees, consultation on the remuneration report,
authorisation to increase capital by issuing new shares to service the incentive and stock grant
plans already authorised for Prysmian Group employees. The Meeting, attended by proxy by
1,952 shareholders representing 74.6% of share capital, approved every item on the agenda by
large majorities.
The Annual General Meeting also approved the declaration of a dividend of Euro 0.55 per share.
The dividend was paid on 21 April 2022, involving a total pay-out of approximately Euro 145
million.
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58
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59
13. BUSINESS ENVIRONMENT AND FINANCIAL MARKETS
Macroeconomic environment
In 2022, the global economy continued to grow at the strong pace of 2021, following the easing
of pandemic-related restrictions and thanks to national plans supporting the development of
infrastructure projects, energy transition and digitalisation. The strong recovery in economic
activity was accompanied by a significant upswing in inflation, caused mainly by rising energy
and commodity prices and disruptions in supply chains, and amplified as a result of the war in
Ukraine. To contain rising inflation, the major central banks started to reduce some of their
monetary stimulus policies and raised interest rates.
According to its latest estimates, the International Monetary Fund reckons the global economy
grew by 3.4% in 2022, after a 6.2% rebound in 2021 in the wake of the previous year's
contraction caused by the Covid-19 pandemic. Geographically, European economic growth in
2022 was more resilient than expected given the war in Ukraine, partly reflecting government
support for households and businesses affected by the energy crisis, as well as the impetus from
reopening economies. After a period of significant growth occurred during the first months of
the conflict, gas prices also fell by more than expected due to an increase in non-Russian gas
flows and a contraction in demand partly thanks to the warmer-than-usual winter. Overall, the
euro area economy is estimated to have grown by 3.5% in 2022, after a 5.3% rebound in 2021.
Among the fastest-growing countries were Spain and Italy, estimated to have grown by 5.2%
and 3.9% respectively. In contrast, the economies of Germany and France are expected to have
grown at lower but still positive rates of 1.9% and 2.6% respectively. The euro area should see
continued growth in the coming years, also thanks to the impetus of monetary and fiscal policies.
In particular, the Next Generation EU pandemic recovery plan will help ensure a stronger and
more even recovery across euro area countries, by accelerating the transition to a green and
digital economy, supporting structural reforms and driving long-term growth.
After being the top performer among the major developed countries in 2021, the British economy
continued to grow at a brisk pace in 2022, estimated at 4.1% compared with 7.6% the year
before. Russia, on the other hand, is the only one of the world's major economies to end 2022
with negative growth, estimated at -2.2%.
The US economy was the first among the developed economies to have recovered to pre-covid
levels by mid-2021, thanks mainly to the government's massive stimulus package and the Fed's
ultra-expansionary policy that had allowed the economy to emerge from recession in a matter
of months. After the 5.9% growth recorded in 2021, the US economy continued to grow in 2022,
albeit at a slower pace, estimated at 2.0%, reflecting the Federal Reserve's withdrawal of
monetary stimulus, the negative impact of higher interest rates on demand and particularly on
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
60
that for residential investment, as well as persistent problems in supply chains that continued in
2022.
China, the only major economy to have ended 2020 on a positive note despite the pandemic,
continued to grow in 2022, albeit at a slower pace. After rebounding by 8.4% in 2021, the
Chinese economy is expected to have grown by 3.0% in 2022. Growth was dampened by the
rapid spread of Covid-19 in the country and the related lockdowns imposed by the government
under its "zero covid" policy. Moreover, real estate investments continued to contract,
accompanied by slow progress in activities to restructure property developers despite the
persistent slump in the real estate market. The authorities have responded with a further
relaxation of monetary and fiscal policy, new vaccination targets for fragile members of the
population and measures to support the completion of unfinished real estate projects, which,
together with the recent easing of restrictions in the country, should help a faster-than-expected
recovery.
Although expectations for the future are positive, there are still a number of uncertainties that
could weigh on short-term growth prospects, including persistently high inflation, tighter global
financing conditions following central bank rate hikes, together with the evolution of the
pandemic and rising geopolitical tensions related to the ongoing war in Ukraine.
* Source: IMF, World Economic Outlook Update – January 2023
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61
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, and the FTSE4Good and MIB ESG, both
composed of a selected basket of listed companies that demonstrate excellent Environmental,
Social and Governance (ESG) practice. Since 2019, Prysmian Group has also been included in
the Dow Jones Sustainability World index, one of the most important international sustainability
indexes for tracking ESG performance.
The world's main stock indexes recorded a negative performance in 2022 on fears of an economic
recession, impacted by the ongoing tightening of monetary policy by the major central banks to
curb inflationary pressures, the slowdown in demand induced by rising interest rates, as well as
the Ukrainian- related geopolitical crisis Ukraine and the protracted Covid pandemic in China
with its associated lockdowns. The main Italian index (FTSE MIB) was the worst performer of
the major European indexes, losing -13.3%, followed by the German index (DAX) with -12.3%
and the French index (CAC 40) with -9.5%. The Spanish index (IBEX 35) had a slightly better
although still negative performance at -5.6%, while the UK's main index (FTSE 100) was the
only one to register a positive performance, closing 0.9% higher. Overall, the Stoxx Europe 600
fell 12.9%, with the Real Estate, Retail and Technology sectors among the worst performers. At
the opposite end of the scale, the best performers were Oil & Gas and Basic Resources, which
were also the only sectors to close the year in positive territory.
US equity markets also performed poorly in 2022, with all three major indexes reporting steep
falls: Nasdaq 100 -33.0%; S&P 500 -19.4% and Dow Jones Industrial -8.8%. Emerging country
stock markets performed generally better than those in developed countries, except for China,
where lockdowns under the government's "zero covid" policy had an adverse impact on stock
markets and the economy in general. The Brazilian index (Bovespa) recorded one of the best
performances globally, gaining 4.7%, while both the Shanghai Composite and DJ Shenzen lost
ground, closing the year at -15.1% and -24.0% respectively. Hong Kong's main Hang Seng index
also performed negatively, falling by 15.5% in 2022.
The Prysmian stock gained 4.7% in 2022, closing the year at Euro 34.66 per share versus Euro
33.11 at the end of 2021. The stock thus outperformed both the Italian market, whose FTSE
MIB index fell by 13.3% over the year, and the European benchmark sector (Capital Goods
Industrial Services), whose STOXX Europe 600 Index/Ind Goods & Services index fell by 20.1%.
The excellent performance of Prysmian's stock continued the positive trend seen in recent years,
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
62
in which it had climbed by 27.4% in 2019, 35.3% in 2020 and 13.9% in 2021, bringing its overall
gain in the last four years to 105.5%. This overall performance was well above both the FTSE
MIB index, which climbed by +29.4%, and the STOXX Europe 600/Ind Goods & Services index,
which grew by +39.8% over the same four-year period.
The average share price during 2022 was Euro 30.69, up from Euro 29.87 in 2021. Including
dividend pay-outs, the Total Shareholder Return (TSR) offered by the Prysmian stock was +6.6%
in 2022 and +215.6% since its original listing on 3 May 2007. Excluding the contribution of
dividends and so just considering price changes, the performance was +4.7% in 2022 and
+125.6% since the listing date.
Looking at the stock's performance over the four quarters of 2022, this was particularly positive
in the third and fourth quarters, partly supported by the Group's excellent results in the Energy
segment, which allowed it to upgrade its FY2022 earnings forecasts on two separate occasions.
In addition, the Projects segment's achievement in September of its highest-ever order backlog
of approximately Euro 6.8 billion also benefited the stock's performance.
The Group's solidity and expectations of growth in its key markets, also thanks to the 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, 63% were "Buy" and 25% "Hold". At 31 December 2022, the share capital
of Prysmian S.p.A. amounted to Euro
26,814,424.60
, comprising
268,144,246
ordinary shares
with a nominal value of Euro 0.10 each.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
63
During 2022, the stock's liquidity recorded average daily trading volumes of approximately
0.7 million shares, with an average daily turnover of Euro 22 million.
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64
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65
14. SIGNIFICANT EVENTS DURING THE YEAR
Finance activities
Euro 135 million loan to finance R&D activities
On 3 February 2022, the Group announced that it had finalised a Euro 135 million loan from the
European Investment Bank (EIB) to support the Group's R&D program in Europe in the period
through to 2024 as the world's leading company in the energy and telecom cables industry.
The EIB 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.
Euro 1.2 billion Sustainability-Linked Term Loan
On 7 July 2022, the Group entered into a medium-term Sustainability-Linked loan for Euro 1.2
billion 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 medium-term Term Loan
obtained in 2018.
With the aim of strengthening its financial structure and the integration 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 the loan. In fact, the Sustainability-Linked
Term Loan is also linked to the decarbonisation targets already set by the Group (annual GHG
emissions from 2022 to 2026), to the ratio of female white-collar and executive hires to total
Group hires, and to sustainability audits performed in the supply chain.
The interest rates applied are indexed to 1M, 3M and 6M Euribor, as chosen by the company.
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. These contracts
were entered into in 2 tranches: the first in mid-June 2022 for a total of Euro 400 million and
the second at the beginning of July for a total of Euro 800 million, at the same time as which the
interest rate swap contracts entered into to hedge the 2018 term loan, for a total notional value
of Euro 1,000 million, were terminated.
New contracts and other information about contracts
HVDC submarine cable in the Middle East
On 14 January 2022, the Group announced that it had signed a Limited Notice to Proceed (LNTP)
for the supply of power cables, worth approximately Euro 220 million, for a major HVDC
submarine cable project in the Middle East.
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New submarine cable plant in USA and confirmation of award of Commonwealth Wind
and Park Wind City projects
On 17 February 2022, the Group announced that it had finalised the contract to acquire the
Brayton Point site in Massachusetts, subject to a number of conditions, including the securing of
building permits for the new plant.
Prysmian plans to invest around USD 200 million in building the new plant.
NeuConnect contract
On 2 March 2022, the Group announced that it had been awarded a turnkey contract worth
approximately Euro 1.2 billion by NeuConnect Britain Limited and NeuConnect Deutschland
GmbH for the design, manufacture, installation, testing and commissioning of a 725 km
submarine interconnector that will directly link the German and UK electricity grids for the first
time.
Completion of North Sea Link
On 16 March 2022, the Group announced that it had successfully completed the world's longest
submarine power cable between the UK and Norway. The North Sea Link allows renewable
energy to be transferred between the two countries for the first time, supporting them both in
their journey towards net zero.
SEALink project
On 31 March 2022, the Group was awarded a contract by Alaska Power & Telephone Company
(AP&T), worth around Euro 20 million, to supply, install and test two submarine fibre-optic cable
links in south-east Alaska.
Prysmian Group to supply the cable for Australia's fibre network of the future
On 11 May 2022, Prysmian Group announced that it will work with Telstra to develop a state-of-
the-art fibre network that will link up Australia's major cities. As part of the multi-year Australian
fibre network project, Telstra will build a state-of-the-art dual fibre cable system that will link
the country's cities with up to 20,000 km of new optical fibre land cable, increasing transmission
capacity both between cities and regionally.
SuedOstLink project in Germany
On 24 June 2022, the Group announced that German transmission system operator TenneT TSO
GmbH had awarded Prysmian a contract worth approximately Euro 700 million to develop the
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67
second 2 GW system to extend the SuedOstLink with 546 km of 525 kV HVDC underground
cable.
Contracts worth Euro 250 million to develop two new submarine power
interconnections between two Canary Islands and between the Spanish mainland and
Ceuta in North Africa
On 18 July 2022, the Group was awarded two contracts worth approximately Euro 250 million
by Red Eléctrica (Red Eléctrica de España, S.A.U.) for the development of two projects: a
submarine power interconnection between the islands of Tenerife and La Gomera, and another
submarine power interconnection between the Spanish mainland and Ceuta, a Spanish city on
the north coast of Africa.
Contracts from Amprion worth over Euro 800 million to cable two mega offshore wind
farms in Germany
On 15 September 2022, the Group announced that it had been awarded two major contracts
worth a total of more than Euro 800 million by Amprion Offshore GmbH, a subsidiary of German
transmission system operator Amprion. Prysmian will be responsible for the design, supply,
installation and commissioning of land and submarine cables for two systems connecting the
electricity grid to DolWin4 and BorWin4, two offshore wind farms in the German North Sea,
which will transmit combined total power of 1.8 GW.
Prysmian to provide power grid asset management services to French operator RTE
On 2 November 2022, Prysmian Group was awarded a contract by French transmission system
operator Réseau de Transport d'Électricité (RTE) to provide inspection, maintenance, and repair
services for the Prysmian submarine export cables connecting the three offshore wind farms off
the French coast of Normandy to the mainland. The 15-year inspection, maintenance and repair
contract will cover the three 220 kV XLPE-insulated single-armoured HVAC submarine cables of
the Fécamp (2x18 km offshore), Calvados (2x16 km offshore) and St. Nazaire (2x34 km
offshore) wind farms.
Euro 60 million contract as part of the "Lightning Project" in the Middle East
On 15 November 2022, the Group announced that it had finalised a new Euro 60 million
submarine cable-laying contract under the Lightning Project for a 320 kV HVDC interconnection
in the United Arab Emirates. The Euro 220 million Lightning Project was awarded to Prysmian
under a Limited Notice to Proceed (LNTP) in January 2022 by Samsung C&T through its EPC
consortium with Jan De Nul Group.
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New submarine power interconnection in Cyclades islands
On 18 November 2022, the Group announced that it had been awarded a contract worth some
Euro 150 million by IPTO (Independent Power Transmission Operator), a Greek electricity grid
operator, to connect the islands of Milos, Folegandros and Santorini.
Other significant events
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 was then 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
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.
Admission of the Group's seven Italian companies to the "Cooperative Compliance"
program
On 3 January 2022, the Group announced that it had been admitted to the Cooperative
Compliance program with the Italian Revenue Agency after the Group's seven Italian companies
successfully passed the rigorous review of the adequacy of the Tax Control Framework for
detecting, measuring, managing and controlling tax risk. Admission to the program, which
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
69
applies from tax period 2020, will allow the Group to establish a relationship based on trust and
transparency with the Italian tax authorities, aimed at the pre-emptive analysis of issues with
the highest tax risk and an ever-increasing level of oversight of the most relevant tax issues.
Investigation by Germany's Federal Cartel Office (FCO)
On 18 January 2022, the Group announced that the German Federal Cartel Office (FCO) had
carried out inspections at some of the Group's sites in Germany. The inspections were conducted
as part of an investigation by the FCO into alleged coordination in setting the standard metal
surcharges applied by the industry in Germany. Prysmian is co-operating with the FCO.
Approval of financial statements at 31 December 2021 and dividend distribution
On 12 April 2022, the shareholders' meeting of Prysmian S.p.A. approved the financial
statements for 2021 and the distribution of a gross dividend of Euro 0.55 per share, for a total
of some Euro 145 million. The dividend was paid out from 21 April 2022, with record date 20
April 2022 and ex-dividend date 19 April 2022.
Appointment of the Prysmian S.p.A. Board of Statutory Auditors
On 12 April 2022, the shareholders' meeting of Prysmian S.p.A. appointed the following new
members of the Board of Statutory Auditors for the next three years:
•
Stefano Sarubbi (Chairman of the Board of Statutory Auditors)
•
Roberto Capone (Standing Auditor)
•
Laura Gualtieri (Standing Auditor)
•
Stefano Rossetti (Alternate Auditor)
•
Vieri Chimenti (Alternate Auditor)
Authorisation to buy and dispose of treasury shares
On 12 April 2022, 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 28 April 2021. Under this authorisation it
is possible to make one or more buybacks of shares such that, at any one time, the total holding
of treasury shares does not exceed 10% of share capital.
New stock grant plan for employees other than managers already covered by
individual incentive schemes
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
70
future value creation and to strengthen the level of employee engagement; the plan is subject
to consultation at local level with the relevant trade union representatives, where required.
In this regard, the Prysmian S.p.A. shareholders' meeting adopted a resolution to reduce the
capital increase servicing the incentive plan for Prysmian Group employees approved by
shareholders on 28 April 2020, from a maximum nominal amount of Euro 1,100,000.00,
corresponding to 11,000,000 new ordinary shares, to a maximum nominal amount of Euro
800,000.00, corresponding to 8,000,000 new ordinary shares, and to approve a bonus issue of
shares to be reserved for Prysmian Group employees in execution of the stock grant plan
approved above, allocating 3,000,000 new ordinary shares to service the new stock grant plan
for employees other than managers already covered by individual incentive schemes.
New investments in optical cable manufacturing at the Jackson plant in USA
On 16 May 2022, the Group announced it was investing another USD 30 million on top of the
USD 85 million already announced to increase optical fibre cable manufacturing capacity and
capability at its North American plants.
Sustainability Week: “We are what we do. Sustainability is not an act, but a habit”
Prysmian Group organised "Sustainability Week," a week-long digital event, running from 20 to
24 June 2022, aimed at discussing relevant sustainability issues and listening to stakeholders.
Top management from the Milan headquarters, business units and regional offices around the
world discussed progress in the area of ESG, the impact on the Group's operations, innovations
and cutting-edge technologies developed over the past year. The event was not only an
opportunity to underline how Prysmian's role as an enabler of the energy transition process is
highly strategic in ensuring the decarbonisation process of the economy globally, but also an
effective means of gathering feedback from customers, investors, suppliers, analysts,
associations and universities through online events with special guests including industry leaders
and expert researchers.
During Sustainability Week participants also had the opportunity to share experiences relating
to People, Culture and Social Sustainability, by discussing the various objectives set by the Group
in terms of diversity, equality and inclusion (DE&I), digital inclusion, community empowerment
and employee engagement and upskilling. Drawing on the past experience of Prysmian Group's
Sustainability Day, the event consisted of some 27 events held in all the Group's regions: Europe,
North America, Latin America, Middle East, China and Oceania-Southeast Asia, involving regional
CEOs and Sustainability Ambassadors, and local Stakeholders in their own language in order to
promote engagement on the ground. A Sustainability Stakeholder Survey was conducted during
the event in order to update Prysmian Group's Materiality Matrix for 2022.
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71
President Joe Biden visits the new US high-tech renewable energy hub
On 21 July 2022, the Group welcomed US President Joe Biden on a visit to the Brayton Point site
(Massachusetts), which will be home to its new submarine power cables manufacturing facility.
As part of its plan to support the development of offshore wind power in the United States,
Prysmian Group is committed to transforming the site of the former Somerset coal-fired power
station into a high-tech hub for the energy transition process. The Brayton Point facility will
manufacture innovative inter-array and export submarine cables of up to 275 kV AC and 525 kV
DC, needed to connect offshore wind farms to mainland power grids. The plant will also have an
R&D facility with a high-voltage testing lab, which will be the first of its kind in the United States.
Prysmian Group confirms its excellent score in Dow Jones Sustainability Assessment
On 26 September 2022, the Group announced that it has confirmed last year's excellent score
in the Electrical Components & Equipment category of the S&P Global Corporate Sustainability
Assessment, following the 2022 annual review.
Prysmian maintained its top scores (100 points) in Innovation Management, Environmental
Reporting and Social Reporting, reaffirming the focus and attention dedicated to these areas.
For Prysmian Group, sustainability is a driver of growth and innovation, integrated into the
priorities of decarbonisation, circular economy, product development and digitalisation projects.
Prysmian further expands its cable-laying vessel fleet to support energy transition
On 22 November 2022, the Group announced an investment of approximately Euro 200 million
(plus about Euro 40 million for cable installation equipment) for a new state-of-the-art cable-
laying vessel, which will be fully operational by the first quarter of 2025, and will strengthen
Prysmian's project execution capabilities and its EPCI (Engineering, Procurement, Construction,
Installation) solutions. Like the Leonardo da Vinci, the new vessel will be built by the VARD Group
(a Fincantieri Group subsidiary), one of the world's leading designers and builders of specialised
vessels for the offshore market, and will stand out for its technical performance, operational
flexibility and sustainability. The new cable-laying vessel will be very similar to the Leonardo da
Vinci, which was delivered in 2021 and exceeded all expectations in its first year of operation,
being widely recognised by the market as the best-in-class vessel to meet the growing demand
of the submarine cable industry. With a hull substantially the same as that one of the Leonardo
Da Vinci, a length of approximately 170 metres and a breadth of about 34 metres, the new
cable-laying vessel will also be fitted with similar cable installation equipment: the main laying
line with a winch for deep water installation at over 3,000 metres; a second independent laying
line with linear caterpillars to boost operational flexibility; 2 carousels of 7,000 and 10,000
tonnes, providing the highest loading capacity on the market, helping reduce factory-to-site
transport time and thus improving overall project efficiency. Bollard pull in excess of 180 tonnes
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
72
will allow complex installation operations to be carried out by supporting a wide variety of burial
equipment. The vessel will be equipped with state-of-the-art DP3 dynamic positioning and
seakeeping systems and will have a maximum transit speed in excess of 16 knots. Like the
Leonardo da Vinci, the new vessel will also have green credentials: the high cable-load capacity
and sailing speed will significantly reduce the number of cable installation campaigns compared
with other vessels, leading to a reduction in overall CO2 emissions and about a 40% decrease
in fuel consumption with respect to traditional cable-laying vessels. Moreover, the very efficient
and green engines will cut NOX emissions by 85%, allowing the vessel to comply with the most
stringent international environmental requirements. In addition, the new vessel will be equipped
with a 3 MW battery pack.
Prysmian's existing fleet of five 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 barge for shallow-water installation which uses an anchor-handling mooring system;
Barbarossa, a small barge, recently added to the fleet and specifically designed for operations
in very shallow water and intertidal zones; and Leonardo da Vinci, the world's most advanced
cable-laying vessel. 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). Once
operational, the new vessel will be employed in the execution of major projects, including
Dominion Energy, the largest submarine cabling project ever awarded to Prysmian in the USA;
the Neuconnect Energy Link project, the first power transmission cable between the UK and
Germany; and the Dolwin4 and Borwin4 projects, two offshore wind farm grid connection cable
systems in Germany.
Prysmian Group and FiberHome Telecommunication Technologies Co. settle claim over
patent infringement
On 22 November 2022, Prysmian Group and FiberHome Telecommunication Technologies Co.,
Ltd. a leading provider of information and telecom network products and solutions
("Fiberhome"), announced that they had settled the litigation regarding patent infringement and
invalidity in Germany. The legal action had been brought by Prysmian Group in July 2020 in the
District Court of Munich. Prysmian Group had claimed that Fiberhome products infringed the
German designations of Prysmian's European patents EP 2390700 B1 and EP 1,668,392B1 ("the
Patents") for fibre optic cables. In response, FiberHome had initiated an action in the German
Federal Patent Court to nullify the Patents. Following extensive discussions, Prysmian Group and
FiberHome reached a mutually satisfactory agreement concerning product sales that occurred
prior to the date of the agreement (while future product sales are not covered by this
agreement). Further to the payment of a settlement by FiberHome to Prysmian, an agreement
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73
was reached to terminate these legal actions (and any other potential past claims) with respect
to European patent families validated in Germany, Spain, Poland and the Netherlands. European
patent EP '392 relates to optical telecommunication cables, and in particular to an optical
telecommunication cable with a very small diameter. European patent EP '700 is for optical
telecommunication cables, specifically cables with an optimised bundling design.
Prysmian takes another step forward in its climate change commitment
On 14 December 2022, the Group announced that its score in the CDP Carbon Disclosure Project
climate change 2022 ranking had increased to "A-" (from "B" in 2021).
The Group's latest score represents an important step forward in promoting decarbonisation
throughout the value chain and confirms its leading role in transparency and the fight against
climate change.
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15. GROUP PERFORMANCE AND RESULTS
Financial performance
(Euro/million)
2022
2021
% Change
2020
Sales
16,067
12,736
26.2%
10,016
Adjusted EBITDA before share of net profit/(loss)
of equity-accounted companies
1,442
958
50.5%
822
% of sales
9.0%
7.5%
8.2%
Adjusted EBITDA
1,488
976
52.5%
840
% of sales
9.3%
7.7%
8.4%
EBITDA
1,387
927
49.6%
781
% of sales
8.6%
7.3%
7.8%
Fair value change in metal derivatives
(31)
13
(4)
Fair value stock options
(104)
(33)
(31)
Amortisation, depreciation, impairment and
impairment reversal
(403)
(335)
(393)
Operating income
849
572
48.4%
353
% of sales
5.3%
4.5%
3.5%
Net finance income/(costs)
(110)
(96)
(101)
Profit/(loss) before taxes
739
476
55.3%
252
% of sales
4.6%
3.7%
2.5%
Taxes
(230)
(166)
(78)
Net profit/(loss)
509
310
64.2%
174
% of sales
3.2%
2.4%
1.7%
Attributable to:
Owners of the parent
504
308
178
Non-controlling interests
5
2
(4)
Reconciliation of Operating Income/EBITDA to
Adjusted Operating Income/Adjusted EBITDA
Operating income (A)
849
572
48.4%
353
EBITDA (B)
1,387
927
49.6%
781
Adjustments:
Business reorganisation
11
21
32
Non-recurring expenses/(income)
47
2
9
Other non-operating expenses/(income)
43
26
18
Total adjustments (C)
101
49
59
Fair value change in metal derivatives (D)
31
(13)
4
Fair value stock options (E)
104
33
31
Asset impairment and impairment reversal (F)
34
6
68
Adjusted operating income (A+C+D+E+F)
1,119
647
73.0%
515
Adjusted EBITDA (B+C)
1,488
976
52.5%
840
The Group's sales in 2022 came to Euro 16,067 million, compared with Euro 12,736 million in
2021, posting a positive change of Euro 3,331 million (+26.2%).
The main factors behind this change were:
-
positive organic sales growth, accounting for an increase of Euro 1,835 million (+14.4%).
Excluding the Projects segment, organic sales growth would have been +12.1%;
-
favourable exchange rate effects, generating an increase of Euro 830 million (+6.6%);
-
fluctuation in the price of metals (copper, aluminium and lead), generating a sales price
increase of Euro 592 million (+4.6%);
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75
-
increase of Euro 74 million (+0.6%) due to the change in the scope of consolidation after
acquiring control of Omnisens S.A. and Eksa Sp.z.o.o..
Organic sales growth by the three operating segments was as follows:
Projects
+30.3%;
Energy
+12.3%;
Telecom
+10.9%.
The year 2022 delivered record results for the Group, with Adjusted EBITDA of Euro 1,488 million
and organic growth of +14.4% year-on-year.
The Group achieved a record level of EBITDA and this has been driven by a strong customer
focus, a broad business portfolio, operational discipline and by the high exposure to secular
trends.
The organic growth described above is explained by the following main factors:
-
growth of +30.3% in the Projects segment, driven by the Submarine business;
-
an increase in the Energy segment, driven by Energy & Infrastructure, which recorded
+14.7% organic sales growth, with a particularly positive performance by Power
Distribution (+18.8%). Also, the business Industrial & Network Components recorded a
positive organic growth of +8.7%, thanks to the excellent performance of Renewables;
-
an increase by the Telecom segment with +10.9% organic sales growth, including solid
growth in the optical business.
The Group's Adjusted EBITDA (before net expenses for business reorganisation, net non-
recurring expenses and other net non-operating expenses) came to Euro 1,488 million in 2022,
up Euro 512 million (+52.5%) on the corresponding 2021 figure of Euro 976 million. The
Adjusted EBITDA margin on sales was 9.3% (7.7% in 2021).
EBITDA is stated after net expenses for business reorganisation, net non-recurring expenses and
other net non-operating expenses, totalling Euro 101 million (Euro 49 million in 2021).
Amortisation, depreciation and impairment amounted to Euro 403 million in 2022, up from Euro
335 million in the previous year.
The fair value change in metal derivatives was a negative Euro 31 million compared with a
positive Euro 13 million in the previous year.
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76
A total of Euro 104 million in costs were recognised in 2022 to account for the effects of the
long-term incentive plans and employee share purchase scheme (Euro 33 million in 2021).
Reflecting the effects described above, the Group's operating income came to Euro 849 million,
compared with Euro 572 million in 2021, thus reporting a year-on-year increase of Euro 277
million.
Net finance costs amounted to Euro 110 million, slightly up from Euro 96 million in the previous
year.
Taxes of Euro 230 million represented an effective tax rate of 31.1% (35% in 2021).
Net profit for 2022 was Euro 509 million (of which Euro 504 million attributable to the Group),
compared with Euro 310 million in 2021 (of which Euro 308 million attributable to the Group).
Net financial debt stood at Euro 1,417 million at 31 December 2022, down Euro 343 million from
Euro 1,760 million at 31 December 2021. In the past 12 months, the Group generated Euro 559
million in free cash flow, excluding Euro 7 million in outlays for acquisitions and Euro 44 million
in outlays for antitrust matters.
With reference to the most significant contract awards in the Projects segment, the Group
secured contracts worth Euro 3.4 billion during 2022, foremost of which the Neuconnect
interconnection project for Euro 1.2 billion, a submarine cable project in the Middle East for Euro
280 million, an extension of the SuedOstLink project for Euro 700 million, the construction of
two submarine interconnections in Spain for Euro 250 million, the Dolwin4 and Borwin4 projects,
worth a total of Euro 800 million, for the cabling of two mega offshore wind farms in Germany,
and a Euro 150 million contract for a new submarine power interconnection in the Cyclades
islands.
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77
Review of Projects operating segment
(Euro/million)
2022
2021
% Change
2020
Sales
2,161
1,594
35.6%
1,438
Adjusted EBITDA before share of net profit/(loss)
of equity-accounted companies
243
210
15.8%
186
% of sales
11.2%
13.2%
13.0%
Adjusted EBITDA
243
210
15.9%
186
% of sales
11.2%
13.2%
13.0%
Adjustments
(41)
(8)
(13)
EBITDA
202
202
-0.2%
173
% of sales
9.3%
12.7%
12.1%
Amortisation and depreciation
(86)
(69)
(64)
Adjusted operating income
157
141
11.3%
122
% of sales
7.3%
8.8%
8.5%
The Projects Operating Segment encompasses underground and submarine high-voltage power
cables, submarine telecommunication cables, and offshore specialty cables, as better described
in the "Group Organisation" section of this report.
This segment fully qualifies for classification in the economic activities eligible for the purposes
of the European taxonomy, specifically in activity 4.9 "Transmission and distribution of
electricity", as explained in more detail in the "European Taxonomy" section of this report.
FINANCIAL PERFORMANCE
Sales by the Projects segment amounted to Euro 2,161 million in 2022, versus Euro 1,594 million
in 2021, recording a positive change of Euro 567 million (+35.6%).
The factors behind this change were:
-
organic sales growth, accounting for an increase of Euro 483 million (+30.3%);
-
exchange rate trends, resulting in an increase of Euro 50 million (+3.2%);
-
metal price fluctuations, producing an increase of Euro 34 million (+2.1%).
The Projects segment's organic growth is largely attributable to Submarine Power contracts in
progress, which recorded a higher level of activity than in the previous year, as well as to
inflationary forces emerging during the year.
The High Voltage Underground business also reported significant growth, particularly in France,
thanks to the growing contribution of cable manufacturing for the German Corridors, and in
Oceania, North Europe, North America and LATAM.
The Submarine Telecom business saw no significant change in business volumes, while the
Offshore Specialties business showed signs of growth.
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78
The main Submarine Power projects on which work was performed during the period were: the
Crete-Attica interconnector project in Greece, the Viking Link between Great Britain and
Denmark, the two interconnection projects in Turkey, offshore wind projects in France and the
United States, plus contracts to supply just export and inter-array cables for offshore wind farms.
Sales in the period were the result of cable manufacturing activities by the Group's industrial
facilities (Pikkala in Finland, Arco Felice in Italy, Drammen in Norway and Nordenham in
Germany) and installation services, performed with the assistance of both its own assets and
third-party equipment.
Adjusted EBITDA for 2022 came to Euro 243 million, up from Euro 210 million in 2021. The lower
margin is attributable to several factors, including the execution of a different project mix in the
Underground High Voltage and Submarine businesses (20% of sales 2022 from lower-margin
projects awarded in 2018-2019), the cost of non-recurring events in the Submarine Telecom
business, and above all inflationary forces.
In the fourth quarter of the year, however, Projects recorded double-digit margins (of 13.0%).
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. In this regard, the Projects segment aims to intercept the
demand for technical solutions to support renewable energy production, expected to grow until
2050.
As evidence of this megatrend, the value of the Group's Submarine Power order backlog
increased by Euro 1,650 million during the year to a record level of Euro 3.4 billion, mainly
consisting of:
- offshore wind contracts in Great Britain (Sofia), the offshore contract in North America
(Vineyard Wind), the DolWin4 and BorWin4 contracts for two systems that connect the electricity
grid to offshore wind farms in the German North Sea;
- the interconnector between Great Britain and Denmark (Viking Link), the Crete-Attica link in
Greece, the interconnection contracts in Turkey and the Middle East, the lots of the new
Thyrrenian Link and Saudi-Egypt contracts, the NeuConnect contract for a 725 km onshore and
submarine interconnector to link the German and UK electricity grids directly for the first time.
The Group's High Voltage order backlog is worth around Euro 2.3 billion, mostly consisting of
German Corridor contracts.
Including the Submarine Telecom and Offshore Specialties businesses, the total order backlog
of the Projects segment is worth some Euro 6.6 billion.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
79
In order to facilitate the energy transition to renewable sources necessary to achieve
sustainability goals worldwide, Prysmian has embarked upon an investment strategy that
includes, among others, the purchase of a new cable-laying vessel for about Euro 200 million
and the construction of a new submarine cable manufacturing facility at Brayton Point
(Massachusetts - USA) for about Euro 200 million.
Review of Energy operating segment
(Euro/million)
2022
2021
% Change
2020
Sales
12,033
9,557
25.9%
7,207
Adjusted EBITDA before share of net profit/(loss)
of equity-accounted companies
968
542
78.6%
436
% of sales
8.0%
5.7%
6.1%
Adjusted EBITDA
974
546
78.3%
440
% of sales
8.1%
5.7%
6.1%
Adjustments
(52)
(46)
(45)
EBITDA
922
500
84.1%
395
% of sales
7.7%
5.2%
5.5%
Amortisation and depreciation
(203)
(184)
(185)
Adjusted operating income
771
362
112.9%
255
% of sales
6.4%
3.8%
3.5%
The Energy segment encompasses the Energy & Infrastructure and Industrial & Network
Components businesses, as better explained in the "Group Organisation" section 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 3.1 "Manufacture of
renewable energy technologies" and activity 3.6 "Manufacture of other low carbon technologies",
as explained in more detail in the "European Taxonomy" section of this report.
Sales by the Energy segment came to Euro 12,033 million, versus Euro 9,557 million in 2021,
posting a positive change of Euro 2,476 million (+25.9%), the main components of which were
as follows:
-
positive organic sales growth of Euro 1,179 million (+12.3%);
-
positive change of Euro 683 million (+7.2%) for exchange rate fluctuations;
-
sales price increase of Euro 540 million (+5.6%) for metal price fluctuations;
-
positive change of Euro 74 million (+0.8%) due to the acquisition of Eksa Sp.z.o.o.,
consolidated from 1 January 2022, and of Omnisens S.A., consolidated from 1 November
2021.
Adjusted EBITDA came to Euro 974 million, up from Euro 546 million in 2021, reporting a positive
change of Euro 428 million (+78.3%), of which Euro 88 million attributable to exchange rates,
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
80
and a major gain on pre-pandemic levels due to a recovery in prices that made up for the rise
in costs of the main raw materials, energy and transport, even though volumes remained stable.
The strong performance of the Energy segment was also due to the ongoing trend towards
electrification, i.e. the growth of electricity as the main source of power.
The Energy segment reported a margin of 8.1% compared with a margin of 5.7% in 2021.
The following paragraphs describe market trends and financial performance in each of the Energy
operating segment's business areas.
ENERGY & INFRASTRUCTURE
(Euro/million)
2022
2021
% Change
2020
Sales
8,196
6,361
28.9%
4,735
Adjusted EBITDA before share of net profit/(loss) of
equity-accounted companies
731
353
107.4%
272
% of sales
8.9%
5.5%
5.8%
Adjusted EBITDA
736
356
107.2%
275
% of sales
9.0%
5.6%
5.8%
Adjusted operating income
603
233
159.9%
152
% of sales
7.4%
3.7%
3.2%
As better explained in the chapter “Group’s Organisation”, 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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
81
FINANCIAL PERFORMANCE
Sales by the Energy & Infrastructure business area amounted to Euro 8,196 million in 2022,
compared with Euro 6,361 million in 2021, posting a positive change of Euro 1,835 million
(+28.9%), the main components of which were as follows:
-
positive organic sales growth of Euro 933 million (+14.7%);
-
positive change of Euro 424 million (+6.7%) for exchange rate fluctuations;
-
sales price increase of Euro 414 million (+6.5%) for metal price fluctuations;
-
increase of Euro 64 million (+1.0%) due to the acquisition of Eksa Sp.z.o.o. with effect
from 1 January 2022.
The Energy & Infrastructure business's positive organic sales growth of +14.7% in 2022 was
mainly due to the excellent performance of Trade & Installers, also supported by the growth
drivers of energy transition and decarbonisation, namely expansion and enhancement of
electricity grids, power generation from renewable sources, the development of clouding and the
development of the non-residential construction market. In addition, the Power Distribution
business enjoyed double-digit growth in all regions.
Trade & Installers enjoyed positive organic growth, albeit with geographical differences: good in
South, North and Central Europe, recovering in the Middle East and slightly down in the United
Kingdom. Growth was robust in North America and in line with expectations in LATAM and APAC.
These factors significantly boosted the profitability of the Trade & Installers business compared
with the previous year.
The Power Distribution business posted very strong organic growth in every region. There was
a general improvement in profitability, due to the recovery of rising costs through higher sales
prices and a favourable product mix in the Middle East, North America and LATAM. In Europe,
persistently strong price pressure, especially in Central Europe and the United Kingdom, and
difficulties in recovering key commodity price increases were partially offset by gains in industrial
efficiency.
In the Overhead Lines business, volumes reported a year-on-year contraction in both North
America and LATAM, despite which a good level of profitability was achieved.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
82
Given the factors described above, Adjusted EBITDA for 2022 came to Euro 736 million, versus
Euro 356 million in 2021, reflecting an increase of Euro 380 million (+107.2%), of which Euro
66 million attributable to exchange rate effects. The Energy & Infrastructure business reported
a margin of 9.0%.
INDUSTRIAL & NETWORK COMPONENTS
(Euro/million)
2022
2021
% Change
2020
Sales
3,442
2,838
21.3%
2,252
Adjusted EBITDA before share of net profit/(loss) of
equity-accounted companies
251
195
28.6%
165
% of sales
7.3%
6.9%
7.3%
Adjusted EBITDA
252
196
28.5%
166
% of sales
7.3%
6.9%
7.4%
Adjusted operating income
186
139
33.6%
109
% of sales
5.4%
4.9%
4.8%
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 "Group Organisation" section of this report.
FINANCIAL PERFORMANCE
Sales by the Industrial & Network Components business area amounted to Euro 3,442 million in
2022, versus Euro 2,838 million in 2021, recording a positive change of Euro 604 million
(+21.3%), the main components of which were as follows:
-
positive organic sales growth of Euro 247 million (+8.7%);
-
positive change of Euro 237 million (+8.3%) for exchange rate fluctuations;
-
sales price increase of Euro 110 million (+3.9%) for metal price fluctuations;
-
positive change of Euro 10 million (+0.4%) due to the acquisition of Omnisens S.A..
Industrial & Network Components enjoyed a positive performance in 2022, thanks to strong
growth in the OEM business and especially in Renewables. This performance benefited from
growing trends towards both renewables and electrification.
Specialties, OEM and Renewables all recorded growth in both volumes and profitability, with
strong organic growth in line with forecast market trends and displaying good resilience to the
global economic situation, particularly in Europe, LATAM and APAC. The Renewables business,
reported a very strong growth in Europe and LATAM, while the OEM business turned in a robust
performance in the mobility and mining sectors.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
83
The Elevator business enjoyed a positive performance in all regions, making up for the difficulties
experienced in China caused by partial Covid-19 lockdowns.
There was a slight downturn in organic growth by the Automotive business, with a contraction
in volumes in North America and Asia.
The Network Components business area grew compared with 2021, driven by the MV segment
in the Americas, which was nonetheless stable in Europe despite strong price pressure. The HV
and EHV businesses both reported stronger growth than in the previous year, with the recovery
due to the phasing of certain projects in APAC and LATAM.
Given the factors described above, Adjusted EBITDA in 2022 came to Euro 252 million, up from
Euro 196 million in 2021, reflecting an increase of Euro 56 million (+28.5%), of which Euro 22
million attributable to exchange rate effects.
The Industrial & Network Components business reported a margin of 7.3%, up from 6.9% in the
previous year.
OTHER
(Euro/million)
2022
2021
2020
Sales
395
358
220
Adjusted EBITDA before share of net profit/(loss) of
equity-accounted companies
(14)
(6)
(1)
Adjusted EBITDA
(14)
(6)
(1)
Adjusted operating income
(18)
(10)
(6)
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
84
Review of Telecom operating segment
(Euro/million)
2022
2021
% Change
2020
Sales
1,873
1,585
18.2%
1,371
Adjusted EBITDA before share of net profit/(loss) of
equity-accounted companies
231
206
12.1%
200
% of sales
12.3%
13.0%
14.6%
Adjusted EBITDA
271
220
23.1%
214
% of sales
14.5%
13.9%
15.6%
Adjustments
(8)
9
8
EBITDA
263
229
15.1%
222
% of sales
14.0%
14.4%
16.2%
Amortisation and depreciation
(80)
(76)
(76)
Adjusted operating income
191
144
33.3%
138
% of sales
10.2%
9.1%
10.1%
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 "Group Organisation" section 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" section
of this report.
FINANCIAL PERFORMANCE
Sales by the Telecom operating segment came to Euro 1,873 million at the end of 2022,
compared with Euro 1,585 million in 2021.
The positive change of Euro 288 million (+18.2%) is explained by:
-
organic sales growth of Euro 173 million (+10.9%);
-
sales price increase of Euro 18 million (+1.1%) for metal price fluctuations;
-
positive change of Euro 97 million (+6.2%) for exchange rate fluctuations.
Organic sales growth in 2022 was driven by continued progress in the optical business,
particularly in North America, which reported rising volumes and prices.
In Europe, there was a slight recovery in volumes. Major European customers accepted an
upward price revision justified by the rising cost of raw materials and energy.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
85
Globally, copper cables continued their steady decline with the retirement of traditional networks
in favour of new-generation ones.
The high value-added business of optical connectivity accessories continued to perform well,
prompted by the development of new FTTx (last-mile broadband) networks, particularly in Great
Britain.
The Multimedia Solutions business recorded positive organic growth due to an upturn in North
American market volumes.
Adjusted EBITDA for 2022 came to Euro 271 million, reporting an increase of Euro 51 million
(+23.1%) from Euro 220 million in 2021.
The Telecom segment posted a margin of 14.5% (13.9% in 2021).
The segment's good results were also linked to Prysmian's ability to provide the market with
innovative products in response to cloudification and data booming megatrends. These trends
have driven the Group towards an investment strategy aimed at increasing optical cable
production capacity in North America (for example, the investments in the Jackson plant).
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
86
Results by geographical area
(Euro/million)
Sales
Adjusted EBITDA
2022
2021
2022
2021
EMEA*
6,381
5,272
311
265
North America
5,132
3,808
722
336
Latin America
1,275
1,060
120
99
Asia Pacific
1,118
1,002
92
66
Total (excluding Projects)
13,906
11,142
1,245
766
Projects
2,161
1,594
243
210
Total
16,067
12,736
1,488
976
(*)
EMEA = Europe, Middle East and Africa
As stated in the Explanatory Notes to the current Annual Integrated 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 metal price derivatives 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 more consistent with the Group's greater
geographical diversification following the General Cable acquisition, 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
The EMEA region's sales amounted to Euro 6,381 million in 2022, reflecting year-on-year organic
growth of +10.7%. Adjusted EBITDA came to Euro 311 million (Euro 265 million in 2021),
reporting a margin on sales of 4.9%, (5.0% in 2021). The solid results are attributable to the
Energy & Infrastructure, OEM and Renewables businesses.
North America
The region's sales amounted to Euro 5,132 million in 2022, reflecting year-on-year organic
growth of +18.3%. Adjusted EBITDA amounted to Euro 722 million (Euro 336 million in 2021),
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
87
reporting a margin on sales of 14.1% (8.8% in 2021). All the main business areas recorded
excellent results thanks to the Group's position as market leader.
LATAM
The LATAM region's sales amounted to Euro 1,275 million in 2022, reflecting organic growth of
+8.2%. Adjusted EBITDA came to Euro 120 million (Euro 99 million in 2021), reporting a margin
on sales of 9.4%, like the year before. Growth was primarily driven by the Renewables business
which, together with Energy & Infrastructure, accounted for the increase in Adjusted EBITDA.
APAC
The APAC region's sales amounted to Euro 1,118 million in 2022, reflecting organic growth of
+0.7%. Adjusted EBITDA came to Euro 92 million (Euro 66 million in 2021), reporting a margin
on sales of 8.2% (6.6% in 2021). The Group has recorded a positive performance, despite Covid
impacting China results. The positive performance was also supported by recovery in the
performance of the associate Yangtze Optical Fibre and Cable.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
88
Group statement of financial position
RECLASSIFIED STATEMENT OF FINANCIAL POSITION
(Euro/million)
31.12.2022
31.12.2021*
Change
31.12.2020
Net fixed assets
5,583
5,307
276
4,971
Net working capital
614
650
(36)
523
Provisions and net deferred taxes
(680)
(662)
(18)
(579)
Net invested capital
5,517
5,295
222
4,915
Employee benefit obligations
329
446
(117)
506
Total equity
3,771
3,089
682
2,423
of which attributable to non-controlling interests
186
174
12
164
Net financial debt
1,417
1,760
(343)
1,986
Total equity and sources of funds
5,517
5,295
222
4,915
(*) The previously published comparative figures have been revised after finalising the purchase price allocation of
Omnisens S.A. and Eksa Sp.z.o.o. More details can be found in the Explanatory Notes: Section C. Restatement of
comparative figures.
NET FIXED ASSETS
(Euro/million)
31.12.2022
31.12.2021*
Change
31.12.2020
Property, plant and equipment
3,020
2,794
226
2,648
Intangible assets
2,164
2,140
24
1,997
Equity-accounted investments
387
360
27
312
Other investments at fair value through other
comprehensive income
12
13
(1)
13
Assets and liabilities held for sale
-
-
-
1
Net fixed assets
5,583
5,307
276
4,971
(*) The previously published comparative figures have been revised after finalising the purchase price allocation of
Omnisens S.A. and Eksa Sp.z.o.o. More details can be found in the Explanatory Notes: Section C. Restatement of
comparative figures.
At 31 December 2022, net fixed assets amounted to Euro 5,583 million, compared with Euro
5,307 million at 31 December 2021, posting an increase of Euro 276 million mainly due to the
combined effect of the following factors:
-
Euro 452 million in net capital expenditure on property, plant and equipment and
intangible assets;
-
Euro 403 million in amortisation, depreciation and impairment for the period;
-
Euro 58 million in increases for property, plant and equipment accounted for in
accordance with IFRS 16;
-
Euro 123 million in positive currency translation differences affecting property, plant and
equipment and intangible assets;
-
Euro 27 million for the net increase in equity-accounted investments;
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
89
-
Euro 21 million for monetary revaluations due to hyperinflation.
NET WORKING CAPITAL
The following table analyses the main components of net working capital:
(Euro/million)
31.12.2022
31.12.2021
Change
31.12.2020
Inventories
2,241
2,054
187
1,531
Trade receivables
1,942
1,622
320
1,374
Trade payables
(2,718)
(2,592)
(126)
(1,958)
Other receivables/(payables)
(856)
(608)
(248)
(515)
Net operating working capital
609
476
133
432
Derivatives
5
174
(169)
91
Net working capital
614
650
(36)
523
Net working capital of Euro 614 million at 31 December 2022 was Euro 36 million lower than the
corresponding figure of Euro 650 million at 31 December 2021. Net operating working capital,
which excludes the value of derivatives, amounted to Euro 609 million at 31 December 2022,
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 3.8%, just slightly above the prior year
figure of 3.5%.
EQUITY
The following table reconciles the Group's equity and net profit/(loss) for 2022 with the
corresponding figures reported by Prysmian S.p.A., the Parent Company.
(Euro/million)
Equity
at
31.12.2022
Net profit/
(loss)
2022
Equity
at
3.12.2021
Net profit/
(loss)
2021
Parent Company Financial Statements
2,461
144
2,295
139
Share of equity and net profit of
consolidated subsidiaries, net of carrying
amount of the related investments
1,416
638
870
293
Reversal of dividends distributed to the
Parent Company by consolidated
subsidiaries
-
(243)
-
(121)
Deferred taxes on earnings/reserves
distributable by subsidiaries
(60)
(30)
(30)
-
Elimination of intercompany profits and
losses included in fixed assets
(31)
3
(35)
2
Elimination of intercompany profits and
losses included in inventories
(15)
(3)
(12)
(3)
Non-controlling interests
(186)
(5)
(173)
(2)
Consolidated Financial Statements
3,585
504
2,915
308
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
90
NET FINANCIAL DEBT
The following table provides a detailed breakdown of net financial debt:
(Euro/million)
31.12.2022
31.12.2021
Change
31.12.2020
Long-term financial payables
CDP Loans
175
175
-
100
EIB Loans
245
110
135
110
Non-convertible bond
-
-
-
748
Convertible Bond 2021
718
707
11
-
Convertible Bond 2017
-
-
-
489
Sustainability-Linked Term Loan 2022
1,191
-
1,191
-
Term Loan
-
998
(998)
996
Unicredit Loan
-
200
(200)
200
Mediobanca Loan
100
100
-
100
Intesa Loan
150
150
-
150
Lease liabilities
156
158
(2)
143
Interest rate swaps
-
3
(3)
12
Other financial payables
9
8
1
9
Total long-term financial payables
2,744
2,609
135
3,057
Short-term financial payables
CDP Loans
1
-
1
1
EIB Loans
1
-
1
8
Non-convertible bond
-
763
(763)
14
Convertible Bond 2017
-
250
(250)
-
Sustainability-Linked Term Loan 2022
6
-
6
-
Term Loan
-
1
(1)
1
Unicredit Loan
200
-
200
-
Intesa Loan
1
-
1
Lease liabilities
58
53
5
52
Interest rate swaps
-
6
(6)
7
Forward currency contracts on financial transactions
7
3
4
9
Other financial payables
56
56
-
51
Total short-term financial payables
330
1,132
(802)
143
Total financial liabilities
3,074
3,741
(667)
3,200
Long-term financial receivables
3
3
-
2
Long-term bank fees
-
1
(1)
3
Financial assets at amortised cost
3
3
-
4
Non-current interest rate swaps
59
-
59
-
Current interest rate swaps
13
-
13
-
Current forward currency contracts on financial
transactions
3
3
-
4
Short-term financial receivables
8
12
(4)
4
Short-term bank fees
2
2
-
2
Financial assets at fair value through profit or loss
270
244
26
20
Financial assets at fair value through other
comprehensive income
11
11
-
11
Financial assets held for sale
-
-
-
1
Cash and cash equivalents
1,285
1,702
(417)
1,163
Total financial assets
1,657
1,981
(324)
1,214
Net financial debt
1,417
1,760
(343)
1,986
Net financial debt of Euro 1,417 million at 31 December 2022 has decreased by Euro 343 million
from Euro 1,760 million at 31 December 2021. 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
91
STATEMENT OF CASH FLOWS
(Euro/million)
2022
2021
Change
2020
EBITDA
1,387
927
460
781
Changes in provisions (including employee benefit
obligations)
15
19
(4)
(163)
Net gains on disposal of fixed assets
(1)
(2)
1
(20)
Share of net profit/(loss) of equity-accounted
companies
(47)
(27)
(20)
(18)
Net cash flow from operating activities (before
changes in net working capital)
1,354
917
437
580
Changes in net working capital
(105)
(28)
(77)
259
Taxes paid
(221)
(120)
(101)
(142)
Dividends from equity-accounted companies
10
8
2
8
Net cash flow from operating activities
1,038
777
261
705
Cash flow from acquisitions and/or disposals
(7)
(93)
86
(5)
Net cash flow used in operating investing activities
(452)
(275)
(177)
(244)
Free cash flow (unlevered)
579
409
170
456
Net finance costs
(71)
(79)
8
(86)
Free cash flow (levered)
508
330
178
370
Dividend distribution
(148)
(134)
(14)
(70)
Capital contributions and other changes in equity
-
1
(1)
1
Net cash flow provided/(used) in the year
360
197
163
301
Opening net financial debt
(1,760)
(1,986)
226
(2,140)
Net cash flow provided/(used) in the year
360
197
163
301
Equity component of Convertible Bond 2021
-
49
(49)
-
Partial redemption of Convertible Bond 2017
-
(13)
13
-
Increase in net financial debt for IFRS 16
(58)
(63)
5
(79)
Net financial debt from acquisitions and divestments
-
8
(8)
-
Other changes
41
48
(7)
(68)
Closing net financial debt
(1,417)
(1,760)
343
(1,986)
Net financial debt of Euro 1,417 million at the end of 2022 is Euro 343 million lower than at the
end of 2021 (Euro 1,760 million). This reduction was made possible by the free cash flow
generated by the Group of Euro 559 million, excluding Euro 7 million in flows from acquisitions
and disposals and excluding Euro 44 million in outflows for antitrust matters. The net inflow of
Euro 559 million was generated by:
a)
Euro 1,405 million in net cash flow provided by operating activities before changes in net
working capital;
b)
Euro 105 million in cash flow absorbed by the increase in net working capital;
c)
Euro 7 million in cash outlays for restructuring costs;
d)
Euro 452 million in net capital expenditure;
e)
Euro 71 million in payments of net finance costs;
f)
Euro 221 million in tax payments;
g)
Euro 10 million in dividends received from associates.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
92
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
11
, before non-recurring items
12
, as presented in the consolidated income
statement, before other non-operating income and expense
13
and before the fair value change
in metal derivatives 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 metal price derivatives 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;
•
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;
11
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;
12
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;
13
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
93
•
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
-
Provisions for risks and charges – non-current portion
-
Provisions for deferred tax liabilities
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
94
-
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
95
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 2022
(Euro/million)
31.12.2022
31.12.2021*
Note
As per
financial
statements
As per
financial
statements
Total net fixed assets
A
5,583
5,307
Inventories
6
2,241
2,054
Trade receivables
5
1,942
1,622
Trade payables
12
(2,718)
(2,592)
Other receivables
5
1,012
661
Other payables
12
(1,722)
(1,197)
Current tax payables
(133)
(54)
Derivatives
8
73
165
Items not included in net working capital:
Financial receivables
5
11
15
Prepaid finance costs
5
2
3
Interest rate swaps
8
72
(9)
Forward currency contracts on financial transactions
8
(4)
-
Total net working capital
B
614
650
Provisions for risks and charges
13
(696)
(654)
Deferred tax assets
15
203
182
Deferred tax liabilities
15
(187)
(190)
Total provisions
C
(680)
(662)
Net invested capital
D=A+B+C
5,517
5,295
Employee benefit obligations
E
14
329
446
Total equity
F
10
3,771
3,089
Borrowings from banks and other lenders
11
3,067
3,729
Financial assets at amortised cost
(3)
(3)
Financial assets at fair value through profit or loss
4
(270)
(244)
Financial assets at fair value through other
comprehensive income
7
(11)
(11)
Cash and cash equivalents
9
(1,285)
(1,702)
Financial receivables
5
(11)
(15)
Prepaid finance costs
5
(2)
(3)
Interest rate derivatives
8
(72)
9
Forward currency contracts on financial transactions
8
4
-
Net financial debt
G
1,417
1,760
Total equity and sources of funds
H=E+F+G
5,517
5,295
(*) The previously published comparative figures have been revised after finalising the purchase price allocation of
Omnisens S.A. and Eksa Sp.z.o.o. More details can be found in the Explanatory Notes: Section C. Restatement of
comparative figures.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
96
Reconciliation between the principal income statement indicators and the Income Statement
contained in the Consolidated Financial Statements and Explanatory Notes for 2022
(Euro/million)
2022
2021
As per
income
statement
As per
income
statement
Sales
A
16,067
12,736
Change in inventories of finished goods and work in
progress
(30)
229
Other income
70
125
Raw materials, consumables and supplies
(10,588)
(8,906)
Personnel costs
(1,758)
(1,486)
Other expenses
(2,525)
(1,831)
Operating costs
B
(14,831)
(11,869)
Share of net profit/(loss) of equity-accounted
companies
C
47
27
Fair value stock options
D
104
33
EBITDA
E = A+B+C+D
1,387
927
Other non-recurring expenses and revenues
F
(47)
(2)
Personnel costs for business reorganisations
G
(6)
(13)
Other expenses and revenues for business
reorganisations
H
(5)
(8)
Other non-operating expenses
I
(43)
(26)
Total adjustments to EBITDA
L = F+G+H+I
(101)
(49)
Adjusted EBITDA
M = E-L
1,488
976
Share of net profit/(loss) of equity-accounted
companies
N
46
18
Adjusted EBITDA before share of net
profit/(loss) of equity-accounted companies
O = M-N
1,442
958
(Euro/million)
2022
2021
As per
income
statement
As per
income
statement
Operating income
A
849
572
Other non-recurring expenses and revenues
(47)
(2)
Personnel costs for business reorganisations
(6)
(13)
Other expenses and revenues for business reorganisations
(5)
(8)
Other non-operating expenses
(43)
(26)
Total adjustments to EBITDA
B
(101)
(49)
Fair value change in metal derivatives
C
(31)
13
Fair value stock options
D
(104)
(33)
Non-recurring impairment and releases
E
(34)
(6)
Adjusted operating income
F=A-B-C-D-E
1,119
647
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
97
16. 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. A special
Internal Risk Management Committee (consisting of the Group's Senior Management) also
ensures, through the CRO, that the ERM process develops dynamically, by taking account of
changes in the business, needs and events that have an impact on the Group over time. The
CRO reports periodically on such developments to senior management. 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 risk/opportunity for the Group, represented in the Risk Model - shown in the following
diagram - that uses five categories to classify the risks of an internal or external nature
characterising the Prysmian business model:
-
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
98
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
99
operational efficiency/ continuity
and
sustainability
, measured on a scale that goes
from minor (1) to very high (4);
-
probability
that a particular event may occur within the specific planning period,
measured on a scale that goes 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:
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
100
-
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;
-
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, as stated in the ERM Policy, 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 2022, 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), has made it possible to identify and assess the
risks for monitoring and opportunities for pursuit in the short, medium and long term, arising
from the transition induced by ever stricter 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 2022.
The main risk factors to which the Group's particular type of business model is exposed will now
be presented according to the classification in five families (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
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
101
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 2022, 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 a further 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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
102
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 is pursuing 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 (e.g. the current crisis between Russia and
Ukraine), fiscal or legislative environment of such countries could have an adverse impact on
the Group's business, results of operations, assets and financial condition. Consequently, as
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
103
mentioned in the preceding paragraphs, the Group constantly monitors developments on the
global geopolitical stage that could require it to revise existing business strategies and/or to
adopt mechanisms to safeguard its competitive position and performance.
Risk of market contraction or softer demand due to pandemic
The global macroeconomic situation deteriorated over the course of 2020 following the spread
of the Covid-19 pandemic.
In response to this health emergency, governments in most countries adopted containment
measures, including travel bans, quarantines and other public emergency measures, both in the
first phase and during the subsequent waves that followed until 2022. During 2022 there were
similar containment measures to those experienced in the early stages of the pandemic but
limited to more confined geographies. It cannot be excluded that in the future there may be
further restrictions that could lead to serious repercussions on economic activity and on the
entire production system. The program of extraordinary measures, swiftly deployed by the Group
since the onset of the Covid-19 pandemic, has proved effective and has put people first.
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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
104
The following ESG-related risks are discussed in the Non-Financial Statement:
•
Risks related to technological innovation and in particular emerging, alternative or
replacement climate-related technologies;
•
Risk of loss of competitiveness or leadership in the energy transition business;
•
Risks associated with managing third-party patents for increasingly complex products.
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 in excess of Euro 2,285 million at 31 December 2022, and six-monthly monitoring
14
of financial covenant compliance (fully satisfied at 31 December 2022), 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,
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.
14
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
105
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.
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
department, which monitors, with the assistance of the Group's Credit Management function,
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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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 2022 by the spread of
the Covid-19 pandemic nor by the Russian-Ukrainian conflict.
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 2022, the Group's cash and cash equivalents and undrawn committed credit
lines totalled in excess of Euro 2 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
.
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.
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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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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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 could 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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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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 ad hoc 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
department, 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. 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 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.
Prysmian addresses asset dependency risk by having:
-
a systematic Loss Prevention program, managed centrally by the Risk Management
department, 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 2022, 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"
or "Good not HPR", in accordance with the methodology defined by internationally
recognised best practices in the field of Risk Engineering & Loss Prevention; limited
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
110
exceptions, in a defined geographical area, have been classified as "Fair", for which a
plan to improve and monitor progress has therefore been initiated;
-
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.
Lastly, the construction of a new vessel was announced during the year with similar
characteristics to the "Leonardo da Vinci", and due to start operating 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.).
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
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.
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The following ESG-related risks are discussed in the Non-Financial Statement:
•
Environmental risks
•
Risks related to personnel management (lack or loss of key resources, talent
management, etc.)
•
Health and safety risks
•
Risks related to the sustainability of the Group supply chain
•
Cyber security risks
•
Risks related to the increased severity of extreme weather events
•
Risk related to GHG emissions, including higher operating costs due to the introduction
of a carbon tax or implementation of an emission trading scheme
•
Risks related to the rise in sea level
•
Risks related to availability of water
Legal and compliance risks
The following ESG-related legal and compliance risks are discussed in the Non-Financial
Statement:
•
Risks of non-compliance with Code of Ethics, Policies and Procedures;
•
Risks of non-compliance with data protection legislation;
•
Risks of non-compliance with anti-bribery legislation;
•
Risks of non-compliance with antitrust legislation;
•
Risks arising from export restrictions, trade tariffs and other changes in trade policy;
•
Risks related to changes in the Health, Safety and Environment regulatory
environment;
•
Risks related to the social sustainability of the Group's organisational structure and
business model;
•
Risks related to potential incorrect application (interpretation and/or errors and
omissions) of tax obbligations.
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112
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 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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17. OTHER INFORMATION
Incentive plans
Information about incentive plans can be found in the Explanatory Notes to the Consolidated
Financial Statements and in the "People and Human Rights" 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 32 to the Consolidated Financial
Statements at 31 December 2022.
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 2022.
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 10 to the Consolidated Financial
Statements at 31 December 2022.
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18. BUSINESS OUTLOOK
After the rebound that followed the Covid-19 pandemic, global economy is now facing a phase
of volatility and great uncertainty. Inflation has reached its peak for several decades, mainly due
to the hikes in energy and commodity prices, and supply chain bottlenecks. To mitigate rising
inflation, the main central banks began to pare back some monetary stimuli and to increase
interest rates. At the same time, the Russian war in Ukraine and the supply chain slowdowns —
also triggered by the pandemic consequences — continued to impact the world economic outlook.
After a 6.2% rebound in 2021, the global economy is expected to grow by 3.4% in 2022 and by
2.9% in 2023, according to the most recent estimates by the International Monetary Fund in
January 2023. These estimates have been revised upwards compared to October 2022, reflecting
a greater-than-expected resilience for many economies, including Europe and the United States.
In detail, considering the war in Ukraine, Europe’s economic growth was higher than expected
and partly reflects the supporting measures for households and businesses approved by the
main governments, in addition to the dynamic trend driven by the post-Covid reopening of
economies. Gas prices have also traced back compared to the peaks reached last autumn, thanks
to non-Russian gas supplies and demand contraction, also due to winter temperatures that
exceeded seasonal average data.
Short-term growth forecasts are impacted by several elements of uncertainty, including the
persistently high inflation levels, increasing interest rates and the geopolitical tensions due to
the ongoing war in Ukraine.
The record results for 2022 further confirmed Prysmian Group’s focus on proactively and
seamlessly serving its customers, also leveraging its efficient and geographically widespread
industrial footprint. This approach is supported by the excellent results achieved by the Energy
segment, which hit a record level, by the Telecom business’ solid performance, and the ongoing
improvement of the Projects business, in line with expectations, with €3.4 billion orders awarded
in the year and an order backlog of approximately €6.6 billion. Including the €1.8 billion order
secured in March 2023 (Imjuiden) as well, the order backlog amounts to about €8.4 billion — an
all-time high.
As a result, for the full year 2023 Prysmian Group expects demand to remain virtually stable in
the construction and industrial cables businesses, after last year’s excellent performance, with
results that will depend on the capacity to implement pricing polices able to offset the impact on
costs generated by inflation-driven pressures. In the high-voltage underground and submarine
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115
cables and systems business, the Group aims to confirm its leadership on the market, which is
expected to grow sharply, driven by the development of offshore wind farms and
interconnections to support the energy transition, as well as the start of a significant market
uptrend in the United States, where the Group has decided to expand its production capacity
with the construction of the new submarine cable plant at Brayton Point, Massachusetts. In order
to fully seize the significant opportunities offered by the market, the Group decided to expand
its installation capabilities, ordering a new vessel, which will join the Leonardo Da Vinci. For this
segment, the Group expects results to grow compared to the previous year, thanks to the
growing order book, a solid execution and the full use of the submarine cable business’s capacity.
In the Telecom segment, demand in the optical business is expected to grow. In Europe, the
Telecom business’ margins continue to be negatively impacted by higher energy prices.
The long-term growth drivers are confirmed, mainly linked to the energy transition, the
strengthening of telecommunications networks (digitalisation), and the electrification process.
The Group can also leverage its broad business and geographical diversification, solid capital
structure, efficient and flexible supply chain and lean organisation, all of which is enabling it to
effectively seize growth opportunities.
Given the above considerations, the Group expects to achieve an adjusted EBITDA for FY 2023
in the range of €1,375-1,525 million, and to generate a cash flow in the range of €450-550
million (FCF before acquisitions and disposals).
These forecasts assume no material changes in both the geopolitical crisis relating to the military
conflict in Ukraine and in the development of the health emergency, in addition to excluding
extreme dynamics in the prices of factors of production or significant supply chain disruptions.
The forecasts assume, for the upper part of the range, an essentially stable construction market,
whilst for the lower part they assume a rapid deterioration, particularly in the United States,
where the current inflationary and pricing dynamics provide for considerable growth
opportunities. In addition, the forecasts are based on the Company's current business scope,
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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117
19. CERTIFICATION PURSUANT TO ART. 2.6.2 OF THE
ITALIAN STOCK EXCHANGE MARKET REGULATIONS
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, 9 March 2023
ON BEHALF OF THE BOARD OF DIRECTORS
THE CHAIRMAN
Claudio De Conto
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119
20. CONSOLIDATED NON-FINANCIAL STATEMENT
Introduction
This section represents the Consolidated Non-Financial Statement (hereinafter also the “NFS” or
“Statement”), prepared, pursuant to articles 3 and 4 of Italian Legislative Decree 254/2016
(hereinafter also the “Decree”) as amended, by Prysmian S.p.A.The reporting boundaries of the
Non-Financial Statement includes both the holding (Prysmian S.p.A) and its subsidiaries.
The Consolidated Non-Financial Statement is published as part of the integrated annual report
this year, for the first time. The objective is to offer stakeholders a more complete view of the
results achieved and the challenges currently facing the Group. Prysmian’s new, organic and
transparent method of reporting combines information about economic performance and
sustainable development, with financial data and KPIs relating to environmental, social and
governance aspects.
Commencing from the high-level commitments and strategic positioning of the Group, already
described in the Directors’ Report, Prysmian’s Consolidated Non-Financial Statement seeks to
communicate the Group’s sustainability performance in accordance with the requirements of the
Legislative Decree 254/2016.
This Statement, approved by the Board of Directors on 9 March 2023, 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 recognised standards for non-financial reporting, have been
identified by Prysmian as “reference standards” for compliance with the requirements of the
Decree.
To put this new approach to sustainability into practice, Prysmian Group has developed an
“
Impact Creation
” model, comprising four macro-areas that interconnect to form a circle:
•
the first area comprises
Prysmian
, as a global leader in the sector for energy and
telecom cable systems, and
its value chain
; this describes the Group’s identity and
activities, together with the key players with whom it deals on a daily basis;
•
the second area comprises the real and potential, positive and negative
impacts
generated by Prysmian over the medium-long term
throughout the entire value
chain
;
•
the third area involves
measuring
and constantly
monitoring
the ESG KPIs that
Prysmian has defined as part of its sustainable development strategy;
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
120
•
the fourth area comprises the
long-term
, environmental and social
Ambitions
defined
by the Group as a concrete response to the impacts that it generates through
constant
product
innovation
.
A description of Prysmian, the impacts generated by the Group throughout the entire value chain
– identified via the materiality analysis – and the creation of value for its stakeholders can be
found in the first chapter of the NFS:
•
Sustainability embedded in Prysmian Group’s activities.
The main ESG KPIs measured and monitored by the Group are analysed in the following sections
of this document:
•
Ethics and Integrity;
•
Environmental responsibility;
•
People and human rights;
•
Sustainable value chain.
Each chapter is organised 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 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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122
Sustainability embedded in Prysmian Group’s activities
Creating value through stakeholder engagement
Creating value for stakeholders is an essential element of the Prysmian Group's Sustainability
Strategy.
This commitment
is reflected in stakeholder engagement projects and activities throughout the
value chain, with active listening, the promotion of sustainable behaviours and the creation of
innovative, green products and services capable of meeting their needs and expectations (see
the “Sustainable innovation for products, applications and processes” section of this document
for more about sustainable products and services and the related risks).
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The total economic value generated, being the overall wealth created by the Group for all
stakeholders, amounted to Euro 16,719 million in 2022. Much of this value, Euro 16,211 million,
was redistributed
15
in the form of:
Dialogue with the Group’s stakeholders
Events dedicated to dialogue with those stakeholders whose interests are, or might be, impacted
by our activities, are an integral part of the Group's growth strategy and provide 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.
In particular, Prysmian organised several Multi-Stakeholder Engagement events during the year,
in which stakeholders - both internal and external - were invited to participate actively and
discuss:
15
The economic value directly generated and distributed (EVG&D) has been calculated on an accruals basis, as envisaged
by GRI 201-1.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
124
•
identification of the main impacts
(positive and/or negative, real and/or potential)
of
the Group's activities
throughout the Prysmian value chain, including additional new
actions that the Group could implement to contribute to sustainable development,
considering their magnitude and probability of occurrence;
•
identification of the major impacts felt by the Group with reference to two financial
parameters - Free Cash Flow and Adjusted EBITDA - considering two different time
horizons: short-medium term (3 years) and long term (by 2030);
•
assessment and prioritisation of the above impacts
;
•
clustering of the impacts into material topics
and their subsequent prioritisation via
surveys and one-on-one interviews;
•
assessment, via interactive workshops, of their perception
of the Group's
initiatives and activities regarding the targets of the UN Sustainable Development Goals
(SDGs).
Among the various 2022 stakeholder engagement activities, the Group organised for the first
time a “Prysmian Sustainability Week” that was held on a virtual basis in order to reach a global
audience of stakeholders. The event was streamed live in June to around 6,000 people connected
from all over the world and was later seen by many more, who viewed the recordings made by
the various streaming platforms. Speakers included representatives of the Group, including
Prysmian directors, managers and employees, as well as such external guests, such as leaders
of international organisations and partners in the value chain. Drawing on their personal and
professional experiences, the various speakers contributed important points of view on specific
sustainability issues, like “climate change and energy transition, the circular economy, recycling,
the business impact of environmental processes, diversity & inclusion, impact on local
communities, sustainable innovation, digitalisation and electrification etc.”.
In order to carry out stakeholder engagement activities in a manner consistent with the new GRI
Standard 3, the Prysmian Group also interviewed industry experts (including top academics from
a number of leading Italian universities), international ESG investors, members of the Group’s
top management team and Board of Directors.
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).
Creating value for shareholders and other stakeholders is a key priority for the Prysmian Group,
whose policy of strategic and financial communication is based on the highest standards of
accuracy, clarity and transparency. Corporate activities and procedures are designed to provide
the market with credible information about the business, with a view to increasing and
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
125
consolidating the confidence of investors and fostering a long-term approach to investment in
our shares. Every effort is made to avoid biased disclosures and ensure that all current and
potential investors receive the same information, so that balanced investment decisions can be
made.
Upon publishing its quarterly data, Prysmian organises 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 2022, with
more than 500 conference calls and one-on-one or group sessions. Some were held virtually,
while others were held in person at the parent company’s Milan headquarters and in the world’s
main financial centres such as London, Paris, New York, Sydney and Milan. Prysmian also
participated in numerous industry conferences organised by leading international brokers, as
well as in road shows and topic-specific events focused, for example, on Energy Transition,
Digitalisation, 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 organised activities, as well as the Sustainability Week and dedicated meetings -
has helped to further increase the weighting of these investors within Prysmian’s shareholder
base. In fact, the weighting of ESG investors has increased substantially in recent years, rising
from about 13% in 2019 to over 48% 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, Digitalisation, 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
16
, 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. Other available information includes the
financial calendar, documents relating to shareholders' meetings, the Code of Ethics and the
names of the analysts who cover the stock, as well as specific sections about Corporate
Governance, Risk Factors and Share Performance.
16
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Contact details for the Investor Relations Office:
Maria Cristina Bifulco - Chief Sustainability Officer and Group Investor Relations VP
mariacristina.bifulco@prysmiangroup.com
Investor Relations Office
investor.relations@prysmiangroup.com
Materiality analysis 2022
Prysmian Group
’s approach to the
analysis of materiality
was revised in 2022.
There was a two-fold objective:
-
adopt the guidelines for the new GRI Universal Standards 2021, which envisage an
analysis of the impacts generated by the business on the economy, the environment,
people and human rights using an “inside-out” approach (hereinafter “
Impact
Materiality
”);
-
anticipate the changes in sustainability reporting expected when the Corporate
Sustainability Reporting Directive (CSRD) comes into force, with application of the
“double materiality” approach. In addition to the requirements documented in the GRI
Standards, this approach also takes into consideration - from an “outside-in” standpoint
- the financial impacts on the business of addressing ESG matters (hereinafter “
Financial
Materiality
”).
This analysis drew, in part, on the risk assessments already carried out by the Prysmian Group’s
Risk Management function, as well as on work performed in an enterprise risk management
context (source: TCFD 2021).
Approach to impact materiality (inside-out)
Impacts generated by the business on the economy, the environment, people and
human rights, in accordance with the GRI Universal Standards.
In order to report non-financial information in accordance with the major national and
international standards, embed the needs and expectations of stakeholders in the activities of
the organisation and identify important trends with regard to sustainability, during 2022
Prysmian began an analytical process for the definition of material topics by identifying the
impacts generated of greatest significance to the business.
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The process of updating the materiality of the Group comprises four phases, as indicated in the
guidelines for “GRI Standard 3: Material Topics”, which are discussed in the following sections:
1. Understanding the Context
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. WEF, S&P Global Organization, PwC, OECD,
ILO);
•
sustainability reports/non-financial statement of peers and competitors;
•
regulatory developments (e.g. Decree 254 on non-financial statement, the European
Taxonomy);
•
GRI Sector Standards.
In addition to desk analysis, Prysmian carried out – and carries out constantly – a sentiment
analysis designed 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
17
.
2. Identification of the real and potential, positive and negative impacts generated by Prysmian
throughout the entire value chain.
Downstream of the desk analysis and drawing on the risk assessment already carried out by the
Risk Management function (source: TCFD Report 2021 of the Prysmian Group and ERM-related
activities), Prysmian has identified 21 impacts, separated into real and potential, positive and
negative, generated by the organisation and its business relationships, on the economy, the
environment and people, including impacts on their human rights, as indicated in GRI Standard
17
matrix/materiality-analysis
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3. Impact assessment and assignment of significance levels
The impacts identified were assessed by various types of stakeholders, selected on an ad hoc
basis from the following categories:
-
Internal stakeholders: Top management and Group Board members;
-
External stakeholders: investors, selected customers;
-
Sector experts: academics, university faculty and researchers.
A level of significance (from 1 to 5) was assigned to each impact, depending on its magnitude
and probability of occurrence. This assessment was made over the year, during interviews,
meetings and other stakeholder engagement activities, as discussed in the previous section.
External stakeholder engagement activities:
•
Prysmian Group Sustainability Week;
•
Topic workshops;
•
External Stakeholder Survey;
•
Interviews with main investors.
Internal stakeholder engagement activities:
•
Interviews with Top Executives;
•
Senior Leaders Survey;
•
Sustainability Steering Committee.
4. Prioritisation of the most significant impacts
Following the assessments made by stakeholders during engagement activities, the positive and
negative impacts were prioritised separately, classifying them in order of magnitude (from
greatest to smallest). For the same magnitude, the greater probability of occurrence was taken
into consideration. The positive and negative impacts were associated with specific material
topics, which were in turn assessed for accuracy by internal and external stakeholders.
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Downstream of this process, the impacts were associated with the topics and GRI standards in
a special correlation table under the areas identified in the Decree (environmental, human rights,
social, anti-bribery, employees and/or transversal across all areas) in order to align the reporting
with the express requirements of Decree 254/2016. “Correlation table Decree 254/2016,
Material Aspects and GRI Aspects” is presented as an attachment to this document.
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Impact materiality: positive impacts
In the table below, the levels of magnitude and probability of occurrence of each positive impact
are indicated in two different shades of green. All the positive impacts have been ordered starting
from the highest magnitude and ranking those with the same magnitude by the greatest
probability of occurrence. The first 5 impacts listed have a different background colour to
highlight their importance more clearly.
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Impact materiality: negative impacts
In the table below, the levels of magnitude and probability of occurrence of each negative impact
are indicated in two different shades of green. All the negative impacts have been ordered
starting from the highest magnitude and ranking those with the same magnitude by the greatest
probability of occurrence. The first 5 impacts listed have a different background colour to
highlight their importance more clearly.
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The new GRI approach to materiality analysis has led Prysmian to identify 10 material topics
that remain consistent with those reported previously. The 10 material topics, indicated in the
table below, were tested by the Group’s stakeholders and prioritised according to their
importance, with the following result:
The disclosures correlated with each material topic are presented in the following chapters of
this document.
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133
Approach to double materiality via financial materiality (outside-in)
Financial impacts on the business of addressing ESG matters, in accordance with the
Corporate Sustainability Reporting Directive (CSRD).
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 will amend the current reporting obligations (Non-Financial Reporting Directive
transposed into Italian law by 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 financial
impacts felt by the business to be reported as well (outside-in approach).
The European Commission has mandated EFRAG to develop the new reporting standards, but
EFRAG has not yet issued guidelines for quantifying the above financial impacts.
For this reason, Prysmian has decided to implement an analytical system for the quantification
of impacts felt, consistent with the risk assessment process and methodology already adopted
by the Group.
The exercise carried out to define Impact Materiality was the starting point for the identification
of Financial Materiality. The impacts identified in the points listed above were assessed in terms
of the financial impacts felt, using the interpretative model described below.
The following financial parameters were used to quantify the impacts felt: Free Cash Flow and
Adjusted EBITDA, in line with the Enterprise Risk Management (ERM) model of the Group. Two
time horizons were identified for their assessment: short term (within three years) and long
term (2030).
The following tables consider the evaluation of the impacts within a range from 1 to 5.
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137
Ethics and integrity
Prysmian Group strives constantly to ensure ethical and responsible conduct throughout the
entire value chain. Its solid documentary framework, from the Code of Ethics to the Anti-
corruption and Helpline Policies, means that daily business can dedicate particular attention to
environmental and social matters, with a special focus on human rights.
Integrity underpins the 3 pillars of sustainability
The Ethics and Integrity of Prysmian Group underpin all Group activities:
•
Ethics in business activities:
Applying the concept of business ethics means operating
in the market with respect for the rules and standards governing transparency and
competitive behaviour;
•
Ethics in internal relations
: For Prysmian, intellectual capital and the development of
talent are strategic assets that secure the future growth of the Group.
•
Ethics in environmental and social matters:
Prysmian seeks to be environmentally
responsible in terms of both products and processes.
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
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.
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138
The following tables, presenting the risks identified and the mitigation actions, are published
pursuant to Legislative Decree 254/2016 (Consolidated Statement of Non-financial Information)
Risk identified
Material topic 2022
Failure to comply with the Code of Ethics, Policies and
Procedures
Governance, ethics and integrity
Description of risk
This risk relates to illegal or unlawful conduct and infringements of existing laws and regulations, as well as to the anti-
corruption, antitrust and export control matters identified earlier, with the possibility of incurring administrative or judicial
penalties, significant financial losses and/or reputational damage.
Mitigation actions adopted
The Prysmian Group puts in place a series of organisational tools aimed at implementing the principles of legality,
transparency, fairness and loyalty through which it operates. In particular, the Group:
•
has adopted a Code of Ethics containing guidelines and ethical and behavioural principles that all those carrying
out activities on behalf of Prysmian or its subsidiaries are required to observe (including managers, officials,
employees, agents, representatives, external collaborators, suppliers and consultants);
•
provides training to all employees and those who work in the name and on behalf of the Group (e.g agents and
intermediaries);
•
through the Internal Audit & Compliance Department, constantly monitors compliance and the concrete
application of these rules, not tolerating any type of violation.
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139
Risk identified
Material topic 2022
Risks of non-compliance with the anti-bribery legislation
Governance, ethics and integrity
Description of risk
The legislation and regulations focused on the fight against corruption have become ever stricter in recent years. At the
same time, organisations 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 Legislative Decree 231/2001 and the
Anti-corruption Law (Law 190/2012) in Italy, the Foreign Corrupt Practices Act 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.
Mitigation actions adopted
Prysmian Group acts to prevent corruption-related risks via:
•
Group compliance policies (such as Anti-Corruption, Gifts & Entertainment, Conflicts of Interest etc.)
•
The Third-Party Program, which is a tool to perform due diligence - using a dedicated on-line platform - before
establishing relations of any kind with certain third parties (such as agents, distributors and particular categories
of supplier);
•
Training on the above issues for all employees;
•
Compliance Audits (organised into Site Reviews, Project Audits and Third-Party Audits);
•
The Anti-bribery Management System adopted by both Prysmian Group and Prysmian PowerLink S.r.l., the
subsidiary dedicated to the Projects segment, which are both ISO 37001:2016 certified.
Risk identified
Material topic 2022
Risks of non-compliance with Antitrust legislation
Governance, ethics and integrity
Description of risk
Prysmian’s strong international presence subjects the Group to the antitrust regulations of the various countries in which
we operate. 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 among themselves.
Prysmian intends to operate in the marketplace in full compliance with the rules protecting competition.
Mitigation actions adopted
In order to mitigate the risk, the Group has adopted worldwide an Antitrust Code of Conduct that all directors, executives
and employees of the Group, as well as third parties where applicable, are expected to know and comply with in the
performance of their duties and in dealing with third parties. With a focus on Europe, the USA, China and Australia, the
Antitrust Code of Conduct provides a clear overview of the risks associated with failure to apply, or improper application
of, the competition rules including, in particular, those regarding cartel (both horizontal and vertical) and the abuse of
dominant positions. The Antitrust Code of Conduct is accompanied by a training programme (Integrity First) involving
both on-line and classroom sessions, aimed at raising the awareness of the need to comply with the applicable antitrust
regulations among all those who work in the name and on behalf of Prysmian Group.
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140
Risk identified
Material topic 2022
Export-related risks (sanctions, restrictions, trade tariffs etc.)
Governance, ethics and integrity
Description of risk
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 broking activities. 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
In order to prevent and mitigate the risk, Prysmian Group has adopted a policy for the management and control of exports
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 licence or other authorisations is required;
•
basic training for all employees on export controls and targeted training for persons in functions responsible for
international commercial transactions and the control of exports;
•
requests for end-user declarations that the buyer or the end user of the goods / technology complies with the
current export regulations.
Prysmian Group has adopted a series of initiatives to define the ethical-social and behavioural
responsibilities of its personnel: from the Code of Ethics to the Anti-Corruption Policy, and from
the Antitrust Code of Conduct to the Helpline (Whistleblowing) Policy, to mention just a few.
These documents 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.
Among these documents, the Code of Ethics 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 organisation.
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141
The
Code of Ethics
18
(hereinafter “Code”) establishes the principles of conduct that everyone
must follow, consistent with the vision and mission of Prysmian. Acting as a veritable guide to
daily behaviour, 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, the Code covers all areas of compliance and also applies to business partners
who deal with the Group and are required to read it.
The Code lives and evolves in parallel with the development of the business in a competitive
context. It is always open to receive and accept requests for legality and propriety received from
stakeholders. The Code complies with international best practices and incorporates the principles
embodied in the UN Universal Declaration of Human Rights and the Fundamental Conventions
of the International Labour Organization (ILO).
In this light, the Group also adopted a
Human Rights Policy
19
in 2017. This policy is based on
various international standards (such as the 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.
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
20
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.
18
The Code of Ethics 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
,
in the Ethics and Integrity section, and on the “Prysmian People” intranet
19
The Human Rights Policy of the Prysmian Group was approved by the CEO in 2017. It is made known to all stakeholders
– external and internal – by publication on the corporate website www.prysmiangroup.com and on the “Prysmian People”
intranet
vb.pdf
20
The Anti-Corruption Policy of the Prysmian Group was approved in 2019 and updated by the Board of Directors in
2021. 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
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142
With regard to anti-competitive behaviour and in compliance with the priorities defined in the
ERM process, the Group has adopted an
Antitrust Code of Conduct
21
that all directors,
executives and employees of the Group 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.
In addition, Prysmian has adopted a
Sustainability Policy
22
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.
Response to Prysmian’s pledges
Given the ambitions of the Prysmian Group to conduct its business in an ethical and transparent
manner, a series of actions have been implemented to guarantee respect for the pledges made.
In this context, every two years the Group holds specific
on-line training sessions on the
Code of Ethics
. This training session was completed by 96% of the corporate population in
2022.
Specific actions by Prysmian to
prevent corrupt practices
within the Group include:
●
on-site monitoring
combined with an audit of sample transactions, as part of the annual
plan of the Compliance function;
●
in line with the objectives set in prior years, during 2022 the Prysmian Group 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 certification for the first time 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
21
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
www.prysmiangroup.com, in the Ethics and Integrity section, and on the “Prysmian People” intranet
%202018.pdf
22
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
143
training activities and initiatives. This commitment has also been extended to the first
hierarchical reporting levels of the Regional CEOs;
●
specific
training
has been delivered on compliance with the
anti-corruption rules
applicable to all Group personnel, with the direct involvement of top management;
●
the “
Third Party Program
” was implemented during 2019. 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 or risk identified. Furthermore, the due diligence work must be
repeated every 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,
following introduction of the new Third-Party Program Policy, all new Third Parties must
also sign the anti-corruption certificate;
●
with regard to
Antitrust
matters, the nature of Prysmian's business means that
competition is an inherent part of the activities of the Group's commercial functions. For
this reason, the Compliance function assists with the delivery of relevant training
sessions. Employees in the commercial functions have received classroom, video
conference and on-line training over the past 12 months, together with personnel from
various other functions and organisational levels;
●
on the topic of
Whistleblowing
, Prysmian has adopted a specific Helpline Policy
23
and,
during 2022, the parent Prysmian S.p.A. obtained ISO 37002:2021 “Whistleblowing
Management Systems” certification, which confirms the soundness of the Group’s
approach;
•
in the area of
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;
23
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
144
•
again commencing from 2020, the Company runs questionnaire campaigns with regard
to
“Conflicts of interest”.
See the section on “Conflicts of interest and important
disclosures” for further information;
•
lastly, the
Fraud Risk Management Policy
was introduced in 2022 and communicated
to all functions that could be primarily affected. The Compliance function is delivering
worldwide training on this topic.
All compliance policies
adopted by the Prysmian Group (including, in addition to the above,
the following policies: Global Compliance, Gifts & Entertainment, Donations, Sponsorship, Third-
Party Program, Conflicts of Interest and Export Control)
are published on the corporate
intranet
and are available in all official languages of the Prysmian Group, as they apply to every
employee. The following policies are published on Prysmian Group's corporate website in the
Ethics and Integrity section
24
: 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, commercial agents to be checked and
projects to be examined.
The
Conflicts of Interest policy
(“COI”) 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. Should conflicts of interest arise, the process -
including an annual call to declare potential COIs - requires them to be communicated so they
can be assessed appropriately. In addition, again with reference to COI, a new on-line platform
was implemented in 2021 in order to report potential conflicts of interest, whether within or
outside the business. In particular, all Prysmian Group employees have been requested to
disclose every personal or financial relationship that might give rise to a conflict of interest (98%
completion for the 2022 campaign, a 1% improvement on 2021, out of a population of about
8,000 desk workers).
24
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
145
The
Gifts and Entertainment
policy was updated in 2021, establishing a series of rules to be
satisfied before giving or receiving gifts or forms of entertainment. The policy distinguishes the
approach to private firms from that to government bodies/public officials. Again in 2021, a new
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.
With regard to management of the reports received via the Helpline and other available channels,
a Group
Helpline Committee
meets every quarter to provide updates on the reports received
during that quarter, as well as on the progress of any investigations carried over from previous
quarters.
The Helpline Committee members comprise senior managers from the Operations, HR, Corporate
Affairs and Compliance functions. The Chief Operating Officer also participates as an observer.
Notably, the majority of the matters raised cannot be considered “critical”. Nevertheless,
exceptional cases that sometimes need external legal and investigative support are notified
promptly to top management.
In addition to updating the Helpline Committee on a quarterly basis, the Compliance function
also reports the KPIs for the quarter (e.g. new, closed, confirmed and unjustified matters,
disciplinary or corrective actions taken - analysed by categories, region and country) to the
Control and Risks Committee, which may request clarification about the resolution of any issues
that have arisen.
The Group does not have global whistleblowing mechanisms/procedures/policies in place
because applying them in all the different jurisdictions in which it is present, either locally or
national, might not comply with local employment laws and practices. Prysmian applies the
Helpline Policy and related procedures to manage all official complaints made by employees.
Corrective or disciplinary measures may be adopted if these complaints are confirmed by the
investigative work carried out. These measures are tailored specifically to each complaint made
and do not necessarily require or involve changes to corporate policies or processes. Notably,
Prysmian was audited in 2022 and awarded ISO 37002 certification for Whistleblowing
Management Systems, becoming one of the first Italian companies to obtain this recognition.
Additionally, in compliance with local legislation in the United Kingdom, the Company has
adopted a policy and related procedures for handling complaints.
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146
Involvement of Stakeholders
As part of its commitment to ethical and legal behaviour, Prysmian invites all the Group's
stakeholders to report any real or apparent violations of the law, the Code of Ethics, or of ethical
standards, so that they can be examined and dealt with appropriately. In order to meet this
requirement and create the necessary conditions of confidentiality, security and ease of
reporting, in 2017 Prysmian adopted a
Helpline Policy
that allowed everyone (employees and
non-employees) to report to the Group any misconduct and alleged unlawful activities identified
within the organisation.
This process uses two channels for collecting reports, comprising dedicated telephone lines and
a web portal, that are both managed by independent operators and available in the 26 languages
used by the Group. A management committee (comprising a representative from Human
Resources, the Corporate Affairs Department and the Compliance Function) has also been set
up to evaluate reports and assign investigative work. Lastly, in order to facilitate communications
between the Group and employees, and between the Group and third parties, making them more
open and reducing the fear of reprisals, the above process has been rebranded from Whistle-
blowing
25
to Helpline
26
, with a consequent update of the policy itself.
The Helpline system and the reporting channels described above remained in place and in use
throughout 2022, as detailed below.
25
The Whistleblowing Policy of the Prysmian Group is part of the Code of Ethics. It is made known to all stakeholders –
external and internal – by publication on the corporate website www.prysmiangroup.com, in the Ethics and Integrity
section,
and
on
the
“Prysmian
People”
intranet
26
The Helpline Policy of the Prysmian Group is part of the Code of Ethics. It is made known to all stakeholders – external
and internal – by publication on the corporate website
Prysmian Group Helpline System | Prysmian Group
and on the
“Prysmian People” intranet
%20Helpline%20Policy_11102019%20%28003%29%20IF%20logo_final_%4029112019.pdf
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
147
Reports received in 2022
Out of a total of 76 reports received in 2022, 62 were closed during the year, by 31 December
2022.
Out of the 76 reports received, 18 were “confirmed” or “partly confirmed” and a total of 27
corrective actions were adopted, given that more than one corrective action was taken in relation
to certain reports.
These corrective actions comprised: 11 policy or process revisions and specific corrective actions,
7 written or verbal warnings, 5 coaching and training sessions, and 4 dismissals and/or
resignations.
The 76 reports received in 2022 fell into the following categories:
- “HR, diversity and workplace respect” including – for example - benefit-related matters
and possible discrimination in the workplace (49 cases);
- “Business integrity” including – for example – such matters as conflicts of interest;
corruption; theft of goods/services/time; fraud; audit or accounting irregularities;
kickbacks; retaliation; misuse of assets (26 cases). Of these 26 reports, the following 8 were
classified as “confirmed” or “partly confirmed”: 3 conflicts of interest, 1 fraud case, 1 theft
of goods/services/time, 2 audit or accounting irregularities and 1 misuse of assets. None of
the corruption and/or kickback reports were classified as “confirmed” or “partly confirmed”.
- “Environment, Health and Safety” (1 case).
Performance in 2022
With regard to anti-corruption issues, in 2022 Prysmian Group recorded the following figures:
12 members of the Board of Directors of Prysmian S.p.A. (100%), 8,539 employees (of which
8,219 white collars, and 320 external/sales agents, both of them equal to 100%), and 3,564
business partners received communication about the organization's anti-corruption policies and
procedures. On the other hand, with regard to anti-corruption training, it should be noted that
it was provided to 3 members of the Board of Directors (equal to 25% of the total), and to 8,539
employees (of which 8,219 white collar and 320 external/sales agents, both equal to 100% of
them).
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
148
With regard to the ongoing Antitrust investigations and litigation brought by third parties against
Group companies consequent to and/or connected with decisions adopted by the competent
authorities, details of which are outlined in the note on Provisions for risks and charges 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 179 million at 31 December 2022.
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 2022. 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, no infringements of anti-bribery regulations were reported against the Group during
2022.
Indeed, during the period 2020-2022, the Group did not receive any significant penalties
27
(monetary or otherwise) for non-compliance with environmental, social or economic regulations.
The Group’s tax strategy
The ESG leadership of the Group is founded inter alia on an honest and fair tax strategy,
compliant with the regulations, that bases relations with the tax authorities and third parties on
cooperation and transparency. The guiding principles for tax matters and related governance
procedures adopted by Prysmian are described below.
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 minimise the
substantive impact of any tax and reputational risks.
The tax strategy of Prysmian Group is founded on the following principles:
•
compliance
: conformity with the tax laws, regulations and circulars issued by the tax
authorities;
•
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, maximise shareholder value;
27
For monetary penalties, significant means fines above Euro 10,000.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
149
•
integrity
: diligent exercise of professional judgement 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.
Tax management by complex multinational groups, such as Prysmian, may give rise to
uncertainties about the correct tax treatment of transactions that do not fall into clearly defined
categories. In these cases, the Group applies the tax treatment deemed most correct and
appropriate, having due regard for any legitimate tax-saving opportunities and for the opinions
of subject experts and related best practices. Prysmian strives to endorse sound and reasonable
interpretations, adopting a cautious approach in order to avoid any reputational losses for the
Group.
As a general principle, Prysmian adopts a
transparent and proactive approach to relations
with the tax authorities
. Indeed, the Group has an open, honest and collaborative attitude.
Prysmian is committed to transparency in the management of tax matters. If the regulations are
subject to conflicting interpretations, the Group enters into proactive discussions with the tax
authorities and even requests advance rulings, so that agreed solutions can be found before tax
returns are filed.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
150
Governance and control of tax risks
The following table, presenting the risks identified and related mitigation actions, is published as
it relates to “Governance, ethics and integrity”, one of the Gorup’s material topics.
Risks identified
Material Topic 2022
Risks
relating
to
possible
improper
applications
(interpretations and/or errors and omissions) of tax law
Governance, ethics and integrity
Description of risks
The complexity of the Group’s business activities and its international scale mean that it might not apply (interpretations
and/or errors and omissions) tax law correctly, 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, thus exposing the Group to possible legal proceedings, reputational losses and/or financial losses
including fines/penalties.
Mitigation actions adopted
Prysmian Group adopts a tax strategy for all Group companies that is consistent with the fundamental values of honesty
and fairness set out in the Code of Ethics, in order to minimise any material impacts deriving from tax and reputational
risks.
If there are uncertainties about the proper tax treatment of transactions that cannot be categorised 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 related best practices. Prysmian 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 107 million as at December
31st 2022.
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 the tax authorities, including requests for
rulings, so that an agreed solution can be found before its income tax declarations are filed. Lastly, the Group has initiated
an internal process for defining and implementing the Tax Control Framework (TCF): a system for the management and
monitoring of tax risks already adopted by the Group’s Italian companies.
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 organised 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
151
•
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 Risks: responsibility for tax governance, with specific focus on the tax control
framework (Italian companies).
At local (individual entity) level, CFOs are responsible for: managing tax compliance; managing
and disseminating the tax risk culture; facilitating the centre-periphery exchange of information
on cross-border matters; involving the Parent Company’s tax function promptly in the event of
non-routine
and/or
non-recurring
transactions;
notifying
any
changes
in
the
selection/management of tax advisors.
Within the Group, work has started on defining and implementing the Tax Control Framework
(TCF): a system for managing and monitoring tax risks that has already been applied to the
Group’s Italian companies. Prysmian also supports adopting cooperative compliance approaches
abroad. In December 2021, the Prysmian Group’s Italian companies were admitted to the
cooperative compliance regime operated by the Italian tax authorities.
In addition, the Group tax manager attends the meetings of the Audit Committee at Prysmian
S.p.A., in order to report on specific matters, and participates in tax groups organised by the
leading trade associations.
Tax reporting in the countries in which the Group operates
Commencing from the Consolidated Non-Financial Statement 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 WEF. This makes
it possible:
•
on the one hand, to provide an overview of revenues, profit before tax, income taxes -
both paid and accrued - and the number of employees, as well as other economic and
financial data; and, on the other
•
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
152
the taxes on third parties collected by the business on behalf of public administrations
using recharge, agency mechanisms etc. (Taxes collected).
As envisaged in GRI 207-4, given that the information to be disclosed in the latest consolidated
financial statements (2022) is not available yet, the information and data presented below
relates to 2021, being the time period covered by the consolidated financial statements
“immediately preceding the most recent ones”.
Economic, financial and tax-related information is presented for the following areas: Nord
America, EMEA, APAC and Latin America. Lastly, revenue information is provided for the main
countries in each area
28
.
All data is stated in millions of euro (except for the number of employees, which is stated in
FTEs).
Country-by-Country Reporting (CbCR) in accordance with the Requirements section of
GRI 207-4
The disclosures envisaged by GRI 207–4 are presented below. This information includes
economic, financial and tax-related data needed to understand the size of the business, as well
as the income taxes accrued and paid in the countries where Prysmian is present.
The data is presented in accordance with the OECD Reporting Standard - Action 13 Country-by-
country reporting and, as mentioned above, relates to 2021
29
.
28
Brazil, Canada, the United States, France, Germany, Italy, the Netherlands, Spain, the United Kingdom and China.
29
When evaluating the data in the table, note that any differences with respect to the consolidated financial statements
are mainly attributable to: i) the Action 13 Country-by-country reporting criteria, which call for aggregated rather than
consolidated information; and ii) consolidation adjustments, made in accordance with the accounting standards adopted
when preparing the consolidated financial statements, and not allocated to individual Prysmian entities. Note also that:
•
Revenue Related Parties
and
Revenue Unrelated Parties
include non-recurring and financial income, as well as
revenues from ordinary operations. However, they do not include dividends received from other legal entities
within the Group.
Revenue Related Parties
includes the revenues
•
Profit (Loss) Before Income Tax
does not include dividends received from other group entities within the Group.
•
Total Income Tax Paid (on cash basis)
comprises the income taxes paid during the reporting year, regardless
of the tax year to which they relate.
They do not include taxes on dividends received from other legal.
•
Total Income Tax Accrued – Current Year
comprises the current income tax charge for the year. The total does
not include deferred taxes, provisions for unconfirmed tax liabilities or the taxes on dividends received from
other legal entities within the Group.
•
Reasons for the difference between
Total Income Tax Accrued - Current Year
and the theoretical tax due (GRI
207-4-b-x) are described in Note 26 - Taxes of the 2021 Consolidated Financial Statements;
•
The
Number of Employees
is calculated at year end using the
Full-Time Equivalent
(FTE) methodology;
•
(Net) Tangible assets
comprise the net carrying amount of property, plant, equipment and inventories.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
153
The figures for 2020 are below:
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
658
3,151
3,809
221
62
46
5,449
1,141
408
Canada
229
334
563
19
11
8
576
107
39
United States
429
2,817
3,246
202
51
38
4,873
1,034
370
LATAM
204
885
1,088
40
13
17
4,191
338
76
Brazil
85
405
490
28
1
12
1,548
154
33
Other
119
479
598
13
12
5
2,643
184
43
EMEA
3,641
5,727
9,368
(244)
41
44
16,479
2,545
816
France
325
790
1,115
46
1
12
2,554
430
159
Germany
193
660
853
(4)
2
1
1,825
292
133
Italy
1,818
1,161
2,979
(82)
13
(0)
2,371
592
172
Netherlands
151
357
507
9
9
15
848
171
64
Spain
214
455
669
(256)
0
1
1,306
214
72
United
Kingdom
126
465
591
(14)
(1)
(2)
1,167
205
58
Other
814
1,840
2,654
56
16
16
6,408
641
157
Apac
218
902
1,120
(8)
6
8
2,906
275
78
China
122
385
507
39
4
5
1,382
115
28
Other
96
518
613
(47)
2
3
1,524
159
50
Total
4,720
10,665
15,385
10
123
114
29,023
4,298
1,378
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
788
3,964
4,752
164
48
88
5,868
1,313
424
Canada
299
536
835
28
9
11
699
127
50
United States
489
3,428
3,917
136
39
77
5,169
1,186
374
LATAM
374
1,197
1,571
56
13
20
4,374
415
87
Brazil
125
472
597
19
2
4
1,607
170
36
Other
249
725
974
37
11
16
2,767
245
51
EMEA
4,848
7,535
12,383
266
43
64
16,482
2,887
851
France
429
950
1,379
92
5
6
2,594
463
164
Germany
290
836
1,126
10
1
3
1,910
322
141
Italy
2,453
1,688
4,141
18
10
19
2,526
694
179
Netherlands
195
393
588
45
7
12
902
192
64
Spain
324
599
923
(3)
-
-
1,180
224
70
United Kingdom
133
629
762
32
4
5
1,182
223
64
Other
1,024
2,440
3,464
72
16
19
6,188
769
169
Apac
314
1,139
1,453
26
15
12
3,039
360
92
China
201
499
700
32
7
5
1,669
148
37
Other
113
640
753
(6)
8
7
1,370
212
55
Total
6,324
13,835
20,159
512
119
184
29,763
4,975
1,454
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
154
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. 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
30
.
The taxes borne and collected are categorised as follows
31
:
•
Profit taxes
– income taxes
32
;
•
People taxes
– payroll taxes;
•
Product taxes
– taxes on products and services;
•
Property taxes
– property and related taxes;
•
Planet taxes
– environmental taxes.
30
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.
31
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.
32
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
155
The total tax contribution made by Prysmian in 2021 amounted to Euro 1,489 million: 69%
collected and 31% borne.
The total tax contribution is spread among the three geographical areas in which the Group
operates, in a manner consistent with the distribution of revenue and the level of employment:
EMEA represents 68% of the Group’s total contribution, while the Americas and APAC account
for 22% and 10% respectively.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
156
Compared with 2020, the total tax contribution has risen by about Euro 128 million (+9%). This
increase comprises both higher taxes borne and higher taxes collected and relates, albeit with
differing intensities, to all geographical areas.
Table analysing the total tax contribution in 2021 by geographical area (Euro/ million)
Table analysing the total tax contribution in 2020 by geographical area (Euro/ million)
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 996 million, or just under
70% of the total for the Group, in fact generate about 75% of the Group’s revenues and employ
65% of all personnel.
The principal changes between 2020 and 2021 in the tax contributions of the ten main countries
in which Prysmian operates are described below:
•
In
Brazil,
product taxes collected fell by Euro 13 million due to the effect of sales that,
under special tax regimes enjoyed by purchasers, were not subject to ICMS (“
Imposto
sobre Circulação de Mercadorias e Serviços
”), an indirect tax similar to VAT;
•
In
Canada
, product taxes borne rose by Euro 5 million as a result of higher imports,
resulting in increased customs duties and charges;
•
In the
United States of America
, profit taxes borne fell by Euro 11 million due to the
workings of the income tax payment mechanism and, in particular, to payments made in
2020 with regard to prior years;
North
America
Canada
United
States
LATAM
Brazil
Other
EMEA
France
Germany
Italy
Netherlands
Spain
United
Kingdom
Other
APAC
China
Other
Total
Tax Borne
105.31
25.46
79.85
54.38
11.32
43.06
245.47
63.23
30.4
46.18
15.68
16.37
13.03
60.58
61.89
16.97
44.92
467.05
Profit
49.59
9.24
40.35
12.76
1.66
11.1
43.71
5.44
1.08
10.41
6.85
0.03
4.12
15.78
15.44
7.21
8.23
121.5
People
27.21
1.66
25.55
18.62
5.87
12.75
165.94
49.36
26.67
32.44
6.82
14.71
5.55
30.39
11.5
6.37
5.13
223.27
Product
20.27
13.7
6.57
22.13
3.48
18.65
19.7
2.2
2.17
1.22
0.39
0.18
0.74
12.8
33.91
2.39
31.52
96.01
Property
8.24
0.86
7.38
0.86
0.31
0.55
13.74
6.16
0.48
1.94
0.24
1.45
2.21
1.26
0.59
0.55
0.04
23.43
Planet
-
0
0
0.01
0
0.01
2.38
0.07
0
0.17
1.38
0
0.41
0.35
0.45
0.45
0
2.84
Tax Collected
98.32
13.745
84.57
73.98
20.09
53.89
760.43
109.04
94.87
45.41
72.69
75.72
116.51
246.19
89.36
45.03
44.33
1,022.085
Profit
0.26
0.255
0
2.89
0.34
2.55
1.52
0
0
0.04
0
0
1.04
0.44
0.45
0
0.45
5.115
People
79.60
11.66
67.94
23.43
6.43
17
175.97
24.13
37.48
45.36
16.56
13.45
12.31
26.68
15.02
4.7
10.32
294.02
Product
18.46
1.83
16.63
47.66
13.32
34.34
582.53
84.91
57.39
0.01
56.13
62.11
103.16
218.82
73.89
40.33
33.56
722.54
Property
-
0
0
-
0
0
0.22
0
0
0
0
0.16
0
0.06
0
0
0
0.22
Planet
-
0
0
-
0
0
0.19
0
0
0
0
0
0
0.19
0
0
0
0.19
Total Tax contribution
203.63
39.205
164.42
128.36
31.41
96.95
1,005.9
172.27
125.27
91.59
88.37
92.09
129.54
306.77
151.25
62
89.25
1,489.135
North
America
Canada
United
States
LATAM
Brazil
Other
EMEA
France
Germany
Italy
Netherlands
Spain
United
Kingdom
Other
APAC
China
Other
Total
Tax Borne
117.92
21.91
96.01
46.44
10.01
36.43
252.54
70.53
27.60
48.77
17.15
19.17
7.76
61.56
23.86
11.48
12.38
440.76
Profit
62.56
10.79
51.77
13.57
2.50
11.06
51.32
11.03
2.60
12.74
8.54
-
-0.89
17.29
7.33
4.20
3.13
134.78
People
31.42
1.84
29.58
16.75
5.91
10.84
168.05
48.38
23.26
32.85
6.69
15.56
5.45
35.85
11.49
4.09
7.40
227.71
Product
15.07
8.59
6.48
15.36
1.44
13.92
12.10
1.78
1.25
0.85
0.25
0.12
0.79
7.06
3.98
2.19
1.78
46.51
Property
8.87
0.69
8.18
0.74
0.15
0.59
17.02
9.22
0.49
2.21
0.20
1.53
2.05
1.31
0.53
0.47
0.06
27.16
Planet
-
-
-
0.02
-
0.02
4.06
0.12
-
0.12
1.46
1.95
0.35
0.06
0.52
0.52
-
4.60
Tax Collected
97.96
11.45
86.51
58.29
34.93
23.35
689.53
120.87
68.18
54.43
67.14
62.02
84.94
231.96
74.98
46.79
28.19
920.76
Profit
0.18
0.18
-
3.00
2.01
0.98
1.59
-0.49
-
0.04
0.30
-
1.26
0.47
0.23
-
0.23
5.00
People
78.83
10.33
68.50
20.17
6.54
13.64
167.82
21.23
37.95
43.48
17.07
16.80
11.13
20.16
7.79
4.27
3.52
274.61
Product
18.95
0.94
18.01
35.12
26.38
8.73
519.60
100.12
30.24
10.91
49.75
45.22
72.55
210.82
66.96
42.52
24.44
640.63
Property
-
-
-
-
-
-
0.02
-
-
-
0.02
-
-
-
-
-
-
0.02
Planet
-
-
-
-
-
-
0.50
-
-
-
-
-
-
0.50
-
-
-
0.50
Total Tax contribution
215.88
33.37
182.52
104.71
44.94
59.77
942.08
191.40
95.78
103.20
84.29
81.18
92.70
293.52
98.85
58.27
40.57
1.361.52
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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•
In
France
, profit taxes borne fell by about Euro 6 million due to the workings of the
income tax payment mechanism (the advances paid in 2021 were determined with
reference to the results for 2020) and product taxes collected were about Euro 15 million
lower;
•
In
Italy
, product taxes collected fell by Euro 10 million due, in the main, to the lower
VAT payments made in 2021 compared with 2020. This was due to (i) the adoption of
Group VAT from 2021 and (ii) the VAT overpaid in 2020, which gave rise to VAT credits
that were only offset from 2021;
•
In
Germany
,
Spain
and the
Netherlands
, product taxes collected increased
respectively by Euro 27 million, Euro 17 million and Euro 6 million, largely due to higher
sales;
•
In the
United Kingdom
, (i) profit taxes borne increased by Euro 5 million due to greater
profitability in 2021 compared with 2020, a year adversely affected by Covid-19 and
Brexit; (ii) product taxes collected increased by Euro 30 million, as a result of higher VAT
payments in 2021, which also included the payment of VAT for 2020 following a payment
extension granted during the pandemic.
Cyber security
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.
In a rapidly changing world where information has significant value and there is a 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 serious negative impacts
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 to
regulatory requirements.
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The following tables on identified risks and the related mitigation actions are published pursuant
to Legislative Decree 254/2016 (Consolidated Statement of Non-financial Information).
Risk identified
Material topic 2022
Cyber security risks
Cyber security and data protection
Description of risk
The increasing spread of technologies that allow the transfer and sharing of sensitive information via virtual spaces leads
to the emergence of greater IT vulnerabilities. The Group therefore strives to protect its IT systems from the theft of or
damage to hardware, software and the information held, as well as from interruptions in the services provided by them.
In fact, the exposure to potential cyber attacks derives from several factors, such as the global distribution of IT systems
and the cloud storage of high value-added information (such as patents, technological innovation projects, as well as
financial projections and strategic plans not yet disclosed to the market). Prysmian has carried out an analysis to assess
quantitatively the impact of the cyber attack risk on productive activities, considering the entire life cycle of assets, the
growing use of IoT systems in operations and the probable acceleration of these technologies due to the energy transition
programmes. Based on the “possible” future scenarios defined by the IEA, this analysis confirms a medium impact over
the medium term, with increased operating costs and capital, and a medium-high impact over the long term.
Mitigation actions adopted
Since 2016 the Group has implemented an Information Security Strategy that defines the related governance structure
adopted by the Group and provides guidelines for cyber risk management in the field of IT architectures and company
processes. In particular, the Group has implemented a Cyber Security Program, complete with governance, policies and
procedures, training, security reports, technologies and processes for monitoring, analysing and containing incidents,
security assessments for selected plants, periodic review of the threat model and further analysis of the complex structural
factors involved in the development of modern security for the Group as a whole. Manufacturing cyber attacks are
increasingly frequent in the industrial sector and, in this regard, a programme to segregate the networks of production
plants is currently in progress, starting with those considered most strategic. Once again, the cyber security committee
met periodically during 2022 to supervise the activities of this programme. Special consideration was given to the Russia-
Ukraine geopolitical crisis and its possible consequences for the Group, which are not believed to be significant. Lastly,
multi-channel security campaigns and training were delivered throughout the Group during the year, with controlled
social engineering and phishing activities designed to test the readiness of personnel to recognise these common types
of cyber attack. Together with the Cyber Security function, the Audit function also carried out ad hoc audits (vulnerability
assessments and penetration tests) on the technical specifications repository for cables.
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Risk identified
Material topic 2022
Risks relating to data processing
Cyber security and data protection
Description of risk
In the current context, marked by the increasing globalisation of business, the proliferation of channels and methods of
access to information, as well as an increase in the volume and types of data managed, the Prysmian Group is tackling
the different data management topics that range from alignment with the latest industry regulations, to defence against
potential threats against the confidentiality, completeness, accuracy and availability of information. Furthermore, the
European GDPR (General Data Protection Regulation) entered into force in May 2018 and has become one of the major
points of reference for a renewed effort in the area of data protection, with a focus on personal data.
Mitigation actions adopted
The programme for the protection of personal data adopted by the Group is based on the following fundamental elements
that involve the entire business structure:
•
implementation of a model based on mapping the personal data processed by business functions and keeping a
register of processing activities;
•
definition of a governance model designed to comply with the requirements of the GDPR and other emerging
data protection requirements;
•
evaluation and implementation of adequate technical and organisational measures to ensure a level of security
appropriate to the risk, partly with the help of new tools such as the data protection impact assessment
introduced by the GDPR;
•
definition of the communications and training materials specifically reserved for the roles identified with the data
protection organisational model.
This complexity is particularly relevant for manufacturers continuing to drive extensive
innovation in products and services, manufacturing processes, and industrial ecosystem to
compete in this changing global marketplace by adopting new technologies to achieve customer
centricity and increase value-added services and business efficiency. In this context, Prysmian
Group developed an Information Security Strategy, whose main objective is to set an overall
direction to address the management, control, and protection of the Group’s information assets
efficiently and effectively.
The structure of Information and IT security management provides a Cyber Security Unit directly
reporting to the Chief Information Security Officer (CISO) which is a member of the HQ HR staff.
The unit is structured to manage four main capabilities:
1.
Governance, ensure the organization has the right governance structures in place to
enhance and maintain its preventive, detective and respond & recover security
capabilities;
2.
Prevention, mitigate cyber exposure surface thanks to preparation and protection of
the organization assets;
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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3.
Detection, ensure the organization is aware of the internal and external threats and
can proactively mitigate them and
4.
Response & Recovery, defend the organization against successful cyber-attacks and
recover from the impacts generated.
The organizational structure envisages the involvement of the Business Lines in activities related
to IT security through the Information Security Committee, in the figures of the Head of
Industrial Relations (CSO), the Chief Digital Officer (CDO), the Chief Audit & Compliance Officer,
the Chief Risk Manager Officer (CRO), the Group Business Operations Officer and the Chief HR
& Organization Officer.
The Group is provided with a comprehensive set of policies, procedures, and operating
instructions to address and regulate, at different level of details, Information Security topics and
processes, according to the Information Security Strategy and Framework.
Security documents as policies, procedures, operating instruction, and recommendations are
regularly reviewed and endorsed with employees, published and available on the corporate
intranet or administered through specific online training.
With the first Cyber Security program completed, a new three-year strategic roadmap was
designed in 2021, which contains initiatives aimed at strengthening information security and
consolidating the maturity achieved through a set of new initiatives to reduce overall cyber and
compliance risks.
Insieme di software e applicazioni che, legati l’uno all’altro, portano alla creazione di progetti
informatici e tecnologici
Consistently with the three-year Roadmap, in 2022 main initiatives were completed:
1.
The deployment of the new security technologies acquired last year was completed on
the entire perimeter of the IT, IoT and OT assets, making them fully operational,
consolidated and integrated into the processes set forth in the Security Frameworks,
significantly increasing the general level of security of the Company. This guaranteed that
the emerging exacerbation of technological risks has been adequately contained and
managed: the necessary and constantly adaptation of company defenses and processes
for safeguarding IT assets are further elements of protection of industrial know-how and
competitiveness of market. The current trustworthy technology stack
33
also enables
focusing on the interplay between cybersecurity, privacy, ethics, and transparency, with
33
Set of software and applications that, linked to each other, lead to the creation of IT and technology projects
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
161
the aim of protecting all stakeholders’ interests and upholding societal expectations to
aid cross-organizational cooperation.
2.
An organization’s cyber capabilities grow with its employees’ understanding of cyber risks
and their personal role and responsibility in helping to manage them.
Cyber Security Culture’s online trainings and readiness exercises (simulated attacks
targeting the human vector) are mandatory for all employees, with reference to
emerging risk dimensions, including those related to the extensive use of remote
working. From 2022 Blue Collars employees’ categories also received mandatory training
for risks linked to their activities, over 90% of the overall new hires have successfully
completed their special on-boarding trainings.
The enhancement of periodic multi-channel campaigns (via email and posted on internal
social network) allowed to further encourage learning, processing and consolidation of
content, making trainings more engaging and effective.
3.
Geopolitical events of the past year have significantly affected cyber strategy and tactical
cyber security operations around the world. The need for a strategic vision to contain the
risks triggered by unpredictable cyber weapons and rampant information warfare has
found fulfillment in the action of the Information Security Committee. It has been
convened 6 times for the following purposes: follow the evolution of relevant events,
highlight the attention paid to threats, perform analysis by correlating the involved
Business lines, request and sponsor initiatives in the branches of the countries concerned.
Pivot deliveries are new technological security solutions, strengthening of internal
measures and controls for third parties who have access to corporate environments and
data.
Special Security Plans were developed and implemented for the branches in Russia and
Finland and the network segregation and segmentation plan for all North American
factories was accelerated and completed.
The Information Security Risk Management process is based on the ISO / IEC 27005 standard
and integrate the Enterprise Risk Management process of Prysmian Group. This process allows
the Group to give the proper relevance to security measures, correctly linking them to the threats
that affect the scope of analysis and the related risks, also retrieving data sourced from the
intelligence process driven by the Threat Model
34
.
34
Security process by which potential threats are identified, classified and analyzed, assessing their risk and providing
the necessary countermeasures
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
162
After the analysis, the risks that are considered not acceptable, with respect to the Group risk
appetite, should be mitigated by means of the definition and implementation of treatment
actions, properly prioritized based on risk values.
Technologies are now shared across a multitude of organizations. These organizations
consequently have common dependencies or weaknesses. Reliance on the Group's suppliers as
well as all outsourced products and services that support critical IT operations increase the
Company's cyber risk and attack surface. The most recent and evolving cyber-attack vectors are
turning to suppliers and leading to additional requirements for the supervision and continuous
monitoring of the security of the Group's Third Parties.
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 rated the Company security
maturity in 2022 between 85 to 90 (out of 100). This rating is calculated in real time with a
proprietary algorithm that examines two classes of externally observable data: configuration
information (which represents how diligent a company is in implementing best practices to
mitigate risk) and observed security events (which are evidence of cyber events like system
compromises or data breaches).
Security incidents or identified vulnerabilities can negatively impact the company’s rating. They
are addressed in a timely manner and the Group strives to maintain the score above 85/100.
If the risks factors are not properly managed with remediation actions and treatment plan, the
confidentiality, integrity and availability of Group Information cannot be properly protected and
this can result in damages or loss in financial (loss of competitiveness on the market in terms of
margin reduction or cost increase), reputational (loss of brand reputation), operational
(interruption or delay of business processes) and legal (lack of compliance to regulations, laws
and contractual requirements) domains.
At the beginning of 2019, the Group defined and adopted a set of Key Performance Indicators
useful for evaluating the level of Information Security. By using KPIs and periodically monitoring
them, Prysmian Group can have a continuous and updated overview of Security, detecting
potential deficiencies and addressing them in a timely manner.
The indicators cover all areas of the Information Security framework defined at Group level,
targeting two different needs: business-oriented metrics provide management the clearest and
most direct possible representation of Prysmian Information Security status, while technically
driven metrics measure and improve the posture of the Group technology.
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163
As for the Group Cyber Security Program, the Information Security Committee supervised the
operating plans for the implementation of the planned initiatives during periodic updates in 2022.
In 2022 over 59 information security events ("incidents") with various severity were monthly
handled, 37 suspect internet domains used for electronic fraud campaigns (malspam, phishing
and ransomware) were identified and reported. Over 158 monthly security clearances were
issued, to authorize significant changes on IT systems or providing access to Company critical
assets. Lastly, 26 investigations were conducted to reduce and prevent theft and fraud activities,
business interruption and reputational damage, carried out by insiders and hostile external
hacktivists.
Prysmian Group, as a strategic know-how company, has continued the collaborations provided
by membership of associations and consortia and agreements with national and international
institutions, through information sharing activities on relevant cyber events, also recorded on its
IT infrastructures.
Concerns about an increasingly fragmented and unpredictable world also ignited a notable shift
in perception of the effectiveness of cybersecurity and privacy regulations.
Some elements of cybersecurity regulations represent compliance challenges; however,
regulations, international and local standard of certification and attestations are increasingly
seen as an effective measure in order to move towards cybersecurity and resilience activities.
Prysmian Group confirmed in 2022 its Bureau Veritas ISO/IEC 27001:2013 certification relating
to the information security management system on the scope of Cyber Security, Information
Security and Incident Management. As regards the foreign subsidiaries, Cyber Essentials and
Assurance certifications were confirmed in 2022 for the UK subsidiaries and the first level
Cybersecurity Maturity Model Certification (CMMC) compliance for the US subsidiaries of the
Group.
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164
In order to monitor CyberSecurity activities, the Prysmian Group has independently chosen to
report the following indicators:
Description
UM
2022
2021
2020
Number of Information Security training courses
Number
18
13
11
Average time for high-risk vulnerability resolution
Weeks
15
17
33
Percentage of log sources integrated with SIEM
solution
(*)
Percentage
89
83
82
Number of Security incidents
Number
707
780
1,439
Percentage of cyber-attacks on total security
incidents
Percentage
3
7
9
Average 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 has made a firm long-term commitment to reduce its environmental impact
throughout the entire value chain. Being an enabler of the low-carbon transition and
digitalisation means having the ability to innovate constantly. As ever, this aspect defines and
underpins the long-term environmental ambitions of the Group, stimulating constant efforts to
adopt leaners production processes with an ever lower environmental impact. To achieve these
objectives, it is essential to make strategic decisions that foresee, mitigate and manage the risks
associated with environmental matters. Via an effective system of information flows, Prysmian
Group is able to manage all business-related risks and ensure that sustainability remains an
integral part of our activities.
The following tables , presenting the risks identified risks and related mitigation actions are
published pursuant to Legislative Decree 254/2016 (Consolidated Non-financial Statement)
Risk identified
Material topic 2022
Environmental risks
Efficient, sustainable and circular activities
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 minimisation of the impact on environmental matrices (soil, sub-soil, water resources and the
atmosphere). 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 the environmental matrices, with possible implications for the continuity of production
and economic and reputational consequences
.
Mitigation actions adopted
In order to prevent and mitigate environmental risks, the Group has adopted an ISO14001-certified environmental
management system at 97% 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
centralised platform, monitors the exposures to risk using specific indicators, organises specific training and carries out audit
work at the production locations.
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167
Environmental performance of the Prysmian Group
Through its activities, Prysmian plays a key role in energy transition and decarbonisation. For
example, with its specifically designed submarine power distribution cables, the Company
enables energy to be transported to land from offshore wind farms. Prysmian also enables the
cross-border transportation of energy, reaching and connecting different countries. Via the
production of optical fibre, the Group helps to digitalise society, considered an essential step in
the development of a low-carbon economy and a new growth model. The Group has decided to
make a concrete commitment to reduce the GHG emissions that derive from its activities and
value chain, setting targets for the reduction of emissions (Scopes 1, 2 and 3) towards the Net-
Zero target, thus helping to decarbonise the economy. Further information can be found in the
earlier “Climate Change & Social Ambition” section of this document.
Prysmian impacts on the environment via its manufacturing activities, creating direct emissions
(Scope 1) from combustion, releases into the atmosphere of SF6 gas used mainly for testing
purposes, and leaks of refrigerant gases used mostly in air-conditioning systems, as well as
indirect emissions from energy consumption (Scope 2). Indirect GHG emissions (Scope 3)
account for over 99% of the Group’s total carbon footprint. In order to contribute even more
significantly to the reduction of emissions and analyse in even greater depth the business
activities at all levels in the value chain, Prysmian has included its Scope 3 emissions in the Non-
Financial Statement for the first time and, like previous years, in both a specific GHG Statement
and in the CDP Climate Change questionnaire. Detailed quantification of Scope 3 emissions has
shown that over 97% of total emissions generated throughout the value chain are mainly
attributeble to use of the products sold. The procurement of raw materials represents about
2.4% of the Group total, while the remainder is split between logistics, investment and other
minor categories.
The Group is actively committed to safeguarding and protecting the environment and
conservinge natural resources, in order to create sustainable value for the benefit of both the
organisation 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 optimisation 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).
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168
In 2021, Prysmian submitted its GHG emission-reduction targets to the Science-Based Targets
initiative (SBTi). Further details are presented in the “Climate Change & Social Ambition” section
of this document.
In order to satisfy market requirements, about 30 Environmental Product Declarations (EPDs)
were prepared, certified and registered for about 300 products in 2022, including medium and
low voltage cables, as well as conductors, made in Brazil, France, Italy, Romania and Spain. As
established in 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 manufacture of
their raw materials to their end-of-life retirement and transformation 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. 2022 was a turning point in this
sense, with the extension of this activity to a far greater number of products than in prior years.
The assessments and certifications were conducted in accordance with the specific Product
Category Rules (PCRs) devised, as appropriate, for EPDs in the various countries and as
requested for competitive tendering. 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. As part of
continuous improvement efforts, a broader strategy will be devised to guide an increasingly
proactive approach, and different ways will be evaluated to set the Group’s objectives for the
EPD coverage of sections of the product portfolio.
Great attention has been given to the collection and analysis of HSE data, in accordance with
Group-level criteria. Data deemed “material” is reported by business units on a monthly basis,
thus allowing for a more reliable and up-to-date database. This allows the HSE functions at
Regional and Corporate level to analyse this data throughout the year. They can therefore not
only review its development and ongoing compliance with local legislative requirements, but also
make forecasts and launch or extend, to an increasingly larger number of units, those specific
actions and/or projects coordinated at central level, including initiatives aimed at achieving
Group-level targets (see the “
Actions to prevent waste generation throughout the
Prysmian value chain
” section for further information). Of note in this context are:
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
169
-
energy efficiency projects designed to reduce energy consumption and greenhouse gas
(GHG) emissions at Group level;
-
initiatives to improve waste management by increasing the portion recycled;
-
optimal use of water resources via the introduction of partial or total recirculation
mechanisms as part of the Group’s cooling systems;
-
constant improvement of the systems and tools for managing Health, Safety,
Environmental and Energy matters at both production unit and organisational level.
Note that from 2021 onwards, the performance indicators used by operational functions to
evaluate investments and industrial projects include GHG savings, where applicable, as an
indicator of their actual environmental benefit, in addition to their energy and economic
efficiency. The energy efficiency projects launched or progressed in 2022 covered several areas
of interest. Some of them had been previously studied and analysed by the HSE function jointly
with other central functions, with the goal of implementing the already validated initiatives in an
increasing number of the Group’s regions and plants.
In 2022, Group investment dedicated to all HSE projects, including work on energy efficiency,
the reduction of direct GHG emissions and optimisation of both the management of water-based
cooling systems and the management of waste, amounted to about Euro 37 million. Of this,
about Euro 16 million was invested in initiatives for the improvement of environmental
management, as shown in the chart below.
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170
The environmental projects / investments involved about eighty sites in 30 countries within the
Prysmian reporting boundary.
The project to reduce SF6 was approved centrally at the end of 2021, with a view to cutting the
CO2e emissions associated with the use of this gas by 90% over 5 years. The Livorno and
Montereau plants were involved in 2022 and, due to the improved management and monitoring
of consumption while using SF6 (mainly in product testing activities), a 76% reduction in
environmental impact was achieved at Livorno and a 10% reduction at Montereau. Largely as a
result of these projects, the Group’s direct emissions associated with the escape of SF6 have
fallen by 47%.
This project will continue in the coming years with further investment in the minimisation of SF6
releases.
Since 2013, Prysmian has made its environment management initiatives public by participating
in the CDP (Carbon Disclosure Project) global environmental reporting system. In 2022, the
Group received an [A-] rating, positioning it within the Leadership band and ahead of the
European average of [B].
Energy
The Group’s total energy consumption, shown in the following table, includes that one of its fleet.
For this reason, the comparative figures for 2021 and 2020 differs slightly from those reported
in the published Consolidated Non-Financial Statement for 2021, in which the fleet data was
presented separately.
Energy Consumed (GJ) (*)
Total 2022
Total 2021
Total 2020
Electricity from renewable sources
1,921,399
2,593,155
2,099,436
Electricity from non renewable sources
4,112,089
3,588,272
3,800,896
Natural gas
2,747,360
3,121,660
3,144,106
LPG
135,365
136,024
111,009
Petrol
7,424
5,905
13,232
Diesel
896,985
411,316
417,954
Fuel oil
5,571
6,050
24,659
Steam (purchased, not produced internally)
9,791
6,977
3,381
Heat (purchased from distribution networks)
135,931
150,491
126,872
Chilled water
-
281
374
Total
9,971,915
10,020,131
9,741,919
(*)
The term “Energy Consumed” means the number of GigaJoules (GJ) of energy consumed within the organisation. This
comprises energy purchased from sources outside the organisation (e.g. electricity, heating, cooling ans steam
purchased for consumption) or generated by the latter (e.g. fuel used in self-generation activities).
The 2020 and 2021 figures includes estimates for the Chiplun and Sohar plants. The 2022 figures contains estimates for
the Chiplun plant only, since Sohar reported normally. The figures for 2020, 2021 and 2022 includes consumption by
the fleet, which were previously reported separately.
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171
The following table shows the energy intensity of the four business lines expressed in GigaJoules
per kilometre or tonne of product:
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
Energy consumed per km/Ton of product (2020)
Power cables GJ/Ton
Telecom cables GJ/km
Optical Fiber GJ/km
Rod/Ton
3.56
0.02
0.04
2.18
Emissions
The following tables, presenting the risks identified and related mitigation actions are published
pursuant to Legislative Decree 254/2016 (Consolidated Non-financial Statement)
Risk identified
Material topic 2022
Risk linked to the emission of greenhouse gases, including
increased operating costs caused by the introduction of a
carbon tax or application of the Emission Trading Scheme
Decarbonisation on the path to Net Zero and digitalisation
Description of risk
This risk has been analysed 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 has 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 organisations in the territories in which it operates. The exposure to risk over the 2022-2035 time horizon and
with respect to the IEA scenarios analysed - 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
between territories. 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 monitor constantly the 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 defined a strategic plan
(Sustainability Scorecard) with quantitative targets for the reduction of GHG emissions, using specific indicators aligned with
the GRI Standards. The targets for reducing Scopes 1 and 2 emissions have been validated on a scientific basis in accordance
with the Science-Based Target Initiative (SBTi), with a commitment to reach Net Zero by 2035.
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Risk identified
Material topic 2022
Risks linked to the increased severity of extreme weather
events
Decarbonisation on the path to Net Zero and digitalisation
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. This tool has also been used to evaluate their exposure over a time horizon extended out to 2035, in
a conservative high CO2 emissions scenario (RCP 8.5), confirming their low overall exposure to risks deriving from changes in
the summer/winter rainfall and higher temperatures, with the exception of a few sites in areas with a maximum temperature
rise of 1.5°C. Lastly, a sensitivity analysis was carried out for the period 2020-2040, 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 or loss of revenues. Similar conclusions were reached for
lower CO2 emissions scenarios (RCP 2.6). The assessment of risks linked to the increased severity of extreme weather events
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
The Group has a well established loss prevention programme at all its production plants, 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 specialised 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.
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Risk identified
Material topic 2022
Risks linked to the rise in sea level (climate
change)
Decarbonisation on the path to Net Zero and digitalisation
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 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 plant. 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 plants (<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. Similar
conclusions have been reached for low CO2 emissions scenarios (RCP 2.6). The assessment of risks linked to the rise in
sea level 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
The Group has a well established loss prevention programme at all its production plants, 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, agreement has been reached with an
international company specialised 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.
Greenhouse gas emissions, measured in tonnes of CO2 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 SF6 gas, mainly used for testing activities.
-
for
Scope 2 emissions
(indirect GHG emissions), the consumption of purchased
energy (mostly electricity).
Prysmian Group is a multinational and diversified concern; for this reason, and consistent with
the requirements of the reporting standard, two main methods are used to account for Scope 2
emissions: the Location-based method and the Market-based method. Both methods, described
below, are recognised and required by the GHG Protocol and are necessary for the reporting of
Scope 2 emissions in the "CDP's Climate Change program" starting in 2016.
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174
The Group’s total GHG emissions, shown in the following table, include those ones of its fleet.
For this reason, the comparative figures for 2021 and 2020 differs slightly from those reported
in the published Consolidated Non-Financial Statement for 2021, in which the fleet data was
presented separately.
Emissions of tCOâ‚‚
(*)
Total 2022
Total 2021
(**)
Total 2020
Scope 1
(1)
Direct emissions from combustion (***)
232,178
216,874
219,519
Emissions from refrigerant gas leaks
3,696
7,047
7,626
Emissions from SF6 gas leaks
61,852
117,186
108,610
Total Scope 1
297,725
341,107
335,755
Scope 2
(2)
Location-based
501,745
512,458
519,589
Market-based
367,379
365,862
422,675
Total
Scope 1 and Scope 2 (Location-
based)
(3)
799,470
853,565
855,344
Scope 1 and Scope 2 (Market-based)
(4)
665,104
706,969
758,430
Scope 3
(5)
269,684,778
284,562,292
291,462,668
(*)
As in 2020, the GHG emissions of the Chiplun and Sohar plants were estimated in 2021. This was only necessary for the Chiplun plant
in 2022. The amounts reported in the Group Scorecard do not contain these estimated values.
(** )
The Scope 2 tCOâ‚‚ data for 2021 includes the emissions from the purchase of heat in the form of district heating and steam for 7,468
tCOâ‚‚.
(***)
Direct emissions from combustion include emissions from the fleet already separately disclosed in previous Non-financial Statement.
(1)
Scope 1 Emissions comprise the organization’s direct emissions, being those generated by resources under its direct control. The
reported Scope 1 emissions refer to combustion processes (using natural gas, LPG, petrol, diesel, fuel oil, marine diesel), leakage of
refrigerant gases (HFC, PFC) and lleakage of SF6 gas.
(2)
Scope 2 Emissions comprise the indirect emissions of the organisation, 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 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 organisation 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 2022, Prysmian identified 170 suppliers (approximately 60% of the Prysmian Group's total
expenditure) deemed significant according to the sustainability criteria defined by the Group and
invited them, in collaboration with CDP, to report their emissions, by responding to the CDP
Climate Change questionnaire. The number of replies increased slightly compared to 2021 and
includes several SME providers who replied to the questionnaire for the first time. Prysmian has
noted satisfactorily that a high percentage of suppliers have disclosed their objectives, including
involving their supply chain on climate issues.
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175
Further information about the methodologies used to calculate the Scope 1, 2 and 3 emissions
can be found in the “Methodology” chapter of this document and Prysmian Group’s 2022 GHG
Statement.
The emissions intensity of each business line is shown below in tonnes of CO2e per tonne or
kilometre of product:
GHG Emission per km/Ton of product (2022)
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
0.10909
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 and Scope 2 (Location based)
0.29236
0.00127
0.00242
0.10772
Scope 1 and 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 and Scope 2 (Location based)
0.28133
0.00156
0.00250
0.11800
Scope 1 and Scope 2 (Market based)
0.22246
0.00136
0.00195
0.12504
GHG Emission per km/Ton of product (2020)
Scope 1
Total Scope 1
0.10081
0.00019
0.00114
0.09998
Scope 2
Location based
0.20906
0.00156
0.00146
0.01518
Market based
0.16807
0.00154
0.00092
0.02357
Total
Scope 1 and Scope 2 (Location based)
0.30987
0.00175
0.00260
0.11516
Scope 1 and Scope 2 (Market based)
0.26887
0.00173
0.00205
0.12355
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:
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. 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, dialogue with
suppliers is essential, together with the launch of long-term projects that enable them to make
the investments needed to build circular supply chains.
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176
2)
Minimisation
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 evidences this commitment by applying its
Health, Safety, Environment and
Energy Policy
, as updated and approved by Prysmian Group CEO Valerio Battista in 2020, for
the systematic management of energy and, in general, the optimised use of resources and
materials. All these issues are considered mandatory for the achievement of Group objectives
and the creation of values for all stakeholders. Prysmian communicates this policy to all internal
and external stakeholders by publishing it on the Group’s website
35
as well as on the corporate
intranet.
3)
Recycling
of waste
downstream of the plants:
For some years now, Prysmian has set objectives intended to increase the percentage of recycled
waste. 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. The
2022 Sustainability Week, discussed in the section entitled “Creating value through stakeholder
engagement”, was also an opportunity to present the commitments and sustainable practices
implemented by the Group in the various geographical areas.
With reference to the ISO 14001 standard on Environmental Management Systems, 97% of the
Group’s plants are certified at the end of 2022; additionally, 73% of plants are certified under
ISO 45001 on Health and Safety Management Systems. Various types of organisational unit
within the Group have also been certified, such as R&D, installation activities, and assembly and
distribution centres, 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 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.
During the period 2019-2022, the Group did not receive any significant penalties
36
(monetary or
otherwise) for regulatory non-compliance in the environmental field.
The matters identified during periodic internal audit or visits by external bodies or customers 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, 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.
35
36
For monetary penalties, significant means fines above Euro 10,000.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
177
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 international standard ISO 14001:2015. Application of the EMS
makes it possible to define plans, processes and practices intended to improve the organisation’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 evaluation of
the
associated
potential
environmental
impacts,
both
under
normal
and
abnormal/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 minimise 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
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178
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 centres are
not included in the waste reporting procedure.
Since 2020, operating units input their environmental data both monthly and annually, thus
improving data collection and analysis at the various organisational levels. Further information
about how data is reported can be found in the section on “Actions to prevent waste generation
throughout the Prysmian value chain”.
Various initiatives to improve waste management were implemented during the year; indeed, in
addition to those carried out within individual environmental management systems as part of
continuous improvement efforts, since the issue of sustainability applies to the entire
organisation, a number of practices and initiatives pursued by functions other than HSE have
also impacted on sustainability. In terms of reducing the production of waste, attention is drawn
to the numerous efforts made to improve production efficiency (Lean Six Sigma projects) at
individual plants, with coordination provided by the Manufacturing function. These practices seek
to reduce production scrap rates in order, mainly, to enhance production efficiency but also to
reduce directly the volume of scrap. The following results are provided as examples:
–
Sorocaba (Brazil): by improving production efficiency, bleed-out scrap from the
production of compounds was reduced by 32%, while waste from the production
of sheathing was reduced by 21%.
–
Presov (Slovakia): tin-plated copper scrap was reduced by 31% (the initial target
for this project was 15%)
–
Merlino (Italy): production scrap was reduced from 6.9 % to 1.17%, exceeding
the initial target of 1.2%.
–
Kistelek (Hungary): start-up scrap was reduced by 50%, compared with the initial
target of 20%.
–
Berlin (Germany): conductor insulation scrap was reduced by 35%, compared with
the original target of 30%.
The management of waste and its proper disposal are regarded as important matters that are
managed locally within the Environmental Management System. In addition, the Group has set
a target for increasing the volume of waste sent for recycling, thus reducing the waste sent to
landfills and/or incinerators.
Generation of waste and impacts of the waste generated
The management of waste is highly correlated with the processes that generate 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
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179
quality of waste is linked to its production activities. In this context and consistent with the
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. On the one
hand, this has resulted in increased purchases of recycled materials and, on the other, in the
activation of business relationships with waste managers who 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 address this issue by including 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 standardise
various purchasing processes. This project will make it possible to structure the supplier
qualification processes using questionnaires, whose questions will cover 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), which does not have access to the tool; 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 organisational levels, HSE Corporate worked with management in 2022 to
implement a new procedure for the multi-level control and approval of environmental data input
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180
to HSEDM. In conformity with the GRI standards and, specifically, GRI 306-3, the Prysmian
Group reports the following information:
•
total weight in tonnes and percentage of waste generated, as subdivided based on the
requirements of the indicator (e.g. level of hazard, type of recycling/disposal etc.);
•
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.
Various destination categories are envisaged 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 one of the fleet.
For this reason, the comparative figures for 2021 and 2020 differ slightly from those reported in
the published Consolidated Non-Financial Statement for 2021, in which the fleet data was
presented separately.
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181
Waste generated by type (kg)
Total 2022
Total 2021
Total 2020
Hazardous
14,050,194
13,924,252
11,153,661
Ingredients of hazard compunds
607,561
568,389
217,837
Asbestos
1,258,609
1,167,066
137,775
Equipment containing PCBs
5,040
339
11,121
Solvents
220,901
154,637
173,367
Waste waxes and fats
173,927
187,043
193,438
Waste oil
686,913
657,773
717,190
Copper and aluminium sludge
867,378
1,052,258
1,082,578
Waste emulsions
3,395,798
2,876,611
2,592,846
Waste ink
38,131
45,042
58,898
Contaminated sawdust
146,717
98,319
99,618
Other hazardous waste
6,649,220
7,116,775
5,868,993
Non-hazardous
220,355,520
199,677,575
180,577,201
Compound scrap
23,682,339
21,956,798
21,442,171
Non-hazardous packaging
25,492,982
26,159,244
22,199,310
Non-hazardous ingredients for compounds
1,875,905
1,156,012
747,758
Sludge
22,982,236
1,799,508
2,411,386
Urban waste
23,099,982
23,184,858
22,783,020
Other non hazardous materials
26,334,108
27,567,830
26,617,777
Various alkalis
462,900
684,360
-
Scrap cable
96,425,069
97,168,965
84,375,779
Total
234,405,714
213,601,827
191,730,862
The total 2020 and 2021 figures include estimates for the Chiplun and Sohar plants. The figures
for 2022 include estimates for the Chiplun plant, while the Sohar plant has reported normally
since 2022.
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182
Water
The following table, presenting the risks identified and related mitigation actions, is published
pursuant to Legislative Decree 254/2016 (Consolidated Non-financial Statement)
Risk identified
Material topic 2022
Risks related to the availability of water
Efficient, sustainable and circular activities
Description of risk
Water is consumed at Prysmian plants mainly for industrial use and, in particular, for cooling purposes during certain
processes. Cooling water is recirculated, in whole or in part, at most plants 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 28% of the total water drawn is located in areas
with an extremely high water stress risk in a conservative, high CO2 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 low CO2 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, analysing 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 plants for which water availability or water stress risks
have been evidenced, 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 optimise 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 Group plants 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 plants 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 optimise the
consumption of water and energy, the process water used for cooling at many Prysmian plants
is recirculated, either
totally or partially, depending on the situation. As a result, the volume of
water drawn is low in many cases.
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183
The Group reports on the management of water resources, highlighting a) the systems and
procedures already in place thanks to which the significance of water management is limited,
and b) the assessments performed, making them even more transparent for all stakeholders.
As part of the continuous improvement of environmental performance and the related
management system, Prysmian is committed to maintaining and improving the water
recirculation systems already in place.
In addition, 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 organisational activities, but rather with the supply chain and, in
particular, with the production cycles of the 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 and introduced specific rating systems, including
completion of the CDP Water Security Questionnaire by its suppliers.
In 2022, for the first time, the most relevant suppliers for the Group were invited to participate
in the CDP Water Security questionnaire, thus providing useful information on their management
of water resources, including the risks and associated objectives. The response rate of 37% is
considered a good result for the first year and Prysmian appreciates the high percentage of
suppliers who integrate water security issues into their long-term goals.
Various initiatives to reduce water consumption were implemented during the year, including
one completed at the Cornimont plant in France, where water consumption was reduced
drastically by installing a water recirculation system that minimises the environmental impact
on surface water by minimising the volume of water discharged.
Cooling water is recirculated, either totally or partially, at most plants in order to optimise the
volume of water drawn. Based on an analysis of 94% of the operating units, the results show
that almost all possess recirculation systems, with water recirculation percentages of between
99% and 100% in 44% of cases, between 95% and 99% in 29% of cases, and between 90%
and 95% in another 5% of cases, while recirculation percentages of less than 90% were found
in 5% of plants. This issue does not apply to the remaining 11% of plants.
At local level, the water-related impact is analysed 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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
184
guidelines for GRI 303 Water. 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 (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 and their frequency with respect to the volume of water discharged are
established locally, partly because industrial discharges are virtually zero in many cases
thanks to recirculation systems. Nevertheless, every year this data is 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 analysed 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 web-based “Aqueduct”
platform, developed by the World Resources Institute (WRI), as also recommended by
“GRI Standard 303 Water” 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 2022, 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, minimise the
potential impact on the receiving body of water and avoid incidents of any kind.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
185
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
Water drawn (m3) by source 2020
Water stress
areas
All areas
Total
Water from wells
1,926,023
3,037,448
5,060,794
Water from public water main
380,077
2,126,881
2,556,114
Water from other sources – Fresh water
-
1,207,236
1,230,907
Total
2,306,100
6,371,565
8,847,815
The volume of water drawn is roughly equal to that consumed.
Biodiversity
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.
The various environmental analyses carried out at site level show that Prysmian has no potential
significant impact on biodiversity.
Nevertheless, Prysmian seeks to plan activities that are respectful of natural habitats, in order
to maintain their equilibrium without adversely affecting any of the biological functions of the
areas selected for operations, whether on land or at sea, while restoring any habitats that are
adversely affected by those activities. This undertaking involves carrying out prior feasibility
analyses of new plants and monitoring protected areas in the territories in which the Group
operates, considering such aspects as local legislation on biodiversity and the geographical
proximity of its plants to protected area or where potentially endangered species are present.
In order to consolidate the Group's commitment to protecting biodiversity and nature, Prysmian
has established an inventory of protected areas, prepared directly by each plant, that will be
updated annually. The analyses carried out and the inventories currently show that the majority
of Prysmian Group plants are not located in or near protected areas.
Where necessary, or as agreed with the local authorities, Prysmian plants take part in
conservation, including for example:
-
In 2021 the Sorocaba site in Brazil, within which there is a Permanent Preservation
Area (about 10 hectares, divided into two lots), launched a project agreed with
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
186
CETESB (Governmental Environmental body) to plant or sow seeds for about 960
plant organisms as environmental compensation for use of the protected area.
-
A similar request was made by the Brazilian municipality of Pocos de Caldas in
2022. The site arranged to plant 220 native plant species in an area of 2,630 sq.m.
within the Prysmian site.
-
At the site in Washington (U.K.), an area of 36 sq.m. has been dedicated to the
preservation of local flora and fauna.
Given that marine and onshore installations generally take place in areas of great natural
interest, it may be necessary to take steps to protect the vulnerable species there in accordance
with the relevant national regulations.
As an example: a nest of one of the UK’s “Birds of Conservation Concern” was discovered in
Redcar, at the landing point of the Sofia Project, on 8 June 2022. In agreement with local
authorities and under specific local regulation requirements the area was immediately cordoned
off with cones and security tape, with the subsequent creation of a no-go zone supervised by
Prysmian's project team. This no-go zone was maintained until the eggs hatched (on 4 July
2022). An urgent note was prepared and distributed to colleagues, explaining what to do in
similar cases, together with environmental reports about the project and our awareness of
environmental and sustainability matters.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
188
People and human rights
Prysmian can only implement its ESG Strategy by investing in human capital and the local
territory. Via its Social Ambition, the Group has continued to pursue objectives intended to
improve the level of Diversity, Equality and Inclusion (DE&I) - including digital inclusion - within
the organisation, employee engagement and upskilling, and respect for human rights throughout
the entire value chain. This is because the primary drivers for the creation of value are respect
for people, for their well-being and for the socio-economic development of the communities in
which the business works. For this reason, over the past several years Prysmian has finetuned
a process for updating the assessment of risks and opportunities in the area of sustainability,
with a strong focus on social matters. The main takeaways, including the key strategies adopted
for mitigating these risks and grasping the opportunities identified, are presented below.
Prysmian Group’s human capital
The following table, presenting the risks identified and related mitigation actions, is published
pursuant to Legislative Decree 254/2016 (Consolidated Non-financial Statement).
Risk identified
Material topic 2022
Risks related to personnel management (not having or losing key
resources, talent management etc.)
Greater diversity, inclusion and respect for human rights
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 characterised by the energy transition and the strong
push towards digitalisation, 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 the strategic objectives, the Group has established various programs designed
to incentivise continuous training, professional growth and employee engagement, as well as appropriate systems of remuneration.
Among these: the global recruiting and development programs - Build The Future, Stem It, Sell It and Sum It; the performance and
talent management systems - Group Academies and Local Schools, the MyMentorship project, Internal Job Postings and Job
Banding; the 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 organises a global engagement survey, inviting all
employees to respond and, share their opinions anonymously. This makes it possible to initiate global and local action plans for the
continuous improvement of the working environment.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
189
The Prysmian workforce
37
numbered 30,525 FTEs at 31 December 2022, of whom 8,016 desk
workers (comprising executives and white-collar employees), and 22,509 non-desk (blue-collar)
staff.
Starting with the following tables, the number of employees is expressed in Headcount and refers
to permanent and fixed-term contracts only.
The following table shows the number of Prysmian Group employees at 31 December 2022
38
,
reported by geographical
39
area and type of contract:
EMEA
APAC
North
America
LATAM
Total
2022
Number of employees
15,641
3,741
6,190
4,613
30,185
Number of permanent employees
14,584
3,711
5,998
4,608
28,901
Number of temporary employees
1,057
30
192
5
1,284
Number of full-time employees
15,325
3,738
6,181
4,613
29,857
Number of part-time employees
316
3
9
-
328
The following table analyses the number of employees by type of contract for 2022, 2021 and
2020:
Total 2022
Total 2021
Total 2020
Number of employees
30,185
29,013
27,745
Number of permanent employees
28,901
27,660
26,721
Number of temporary employees
1,284
1,353
1,024
Number of full-time employees
29,857
28,695
27,540
Number of part-time employees
328
318
205
The following table analyses employees by gender and type of contract:
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
37
This is the total workforce of Prysmian Group, calculated in FTE, and represents 100% of the Group’s total employees,
i.e. all subsidiaries or companies subject to the Group’s management. The figure for the Group’s total workforce and
turnover include, Oman Aluminium Processing Industries - OAPIL and Associated Cables Pvt. Ltd., which had been
excluded in previous years.
38
There may be slight discrepancies when comparing headcount figures for 2020, 2021 and 2022 due to internal contract
transformations and deferred departures of non-operation personnel.
39
For details of the countries included in the respective geographical areas, please refer to the map of the Prysmian
Group plants shown in the “Prysmian Group: Global leader” section.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
190
Additional personnel metrics for the year 2021 are shown below.
EMEA
APAC
North America
LATAM
Total 2021
Total
15,829
2,875
5,846
4,463
29,013
Male
Female
Total 2021
Total
23,757
5,256
29,013
The following table analyses employees by geographical area and job grade:
Prysmian Group no. at 31.12.2022
White Collar
Blue Collar
Total
EMEA
4,543
11,098
15,641
APAC
1,119
2,622
3,741
North America
1,487
4,703
6,190
LATAM
1,070
3,543
4,613
Total
8,219
21,966
30,185
The following table analyses the percentage split of employees by job grade, gender and age
group:
Prysmian Group
no. at
31.12.2022
≤30
30-50
≥50
Men
Women
Total
Men
Women
Total
Men
Women
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. at
31.12.2021
≤30
30-50
≥50
Men
Women
Total
Men
Women
Total
Men
Women
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
no. at
31.12.2020
≤30
30-50
≥50
Men
Women
Total
Men
Women
Total
Men
Women
Total
White Collar
60.1%
39.9%
100.0%
68.2%
31.8%
100.0%
76.2%
23.8%
100.0%
Blue Collar
83.2%
16.8%
100.0%
87.5%
12.5%
100.0%
90.3%
9.7%
100.0%
Total
78.1%
21.9%
100.0%
81.9%
18.1%
100.0%
86.1%
13.9%
100.0%
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
191
The following tables show, with reference to the entire Prysmian Group, the total number of new
employee hires and leavers during 2022.
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
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
In 2022, the overall outgoing turnover rate was 18.91% (of which 17.44% men and 25.08%
women), while the incoming turnover rate was 22.80% (of which 19.94% men and 34.79%
women).
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
192
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
1,274
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
193
2020
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
219
104
323
140
24
164
176
28
204
453
211
664
988
367
1,355
31-50
years
201
73
274
114
43
157
207
28
235
246
122
368
768
266
1,034
>50
years
46
4
50
2
-
2
69
12
81
10
6
16
127
22
149
Total
466
181
647
256
67
323
452
68
520
709
339
1,048
1,883
655
2,538
White Collar
<30
years
92
60
152
17
20
37
27
10
37
28
8
36
164
98
262
31-50
years
137
74
211
33
14
47
37
28
65
48
22
70
255
138
393
>50
years
18
4
22
7
1
8
20
6
26
2
1
3
47
12
59
Total
247
138
385
57
35
92
84
44
128
78
31
109
466
248
714
Blue Collar+White Collar
<30
years
311
164
475
157
44
201
203
38
241
481
219
700
1,152
465
1,617
31-50
years
338
147
485
147
57
204
244
56
300
294
144
438
1,023
404
1,427
>50
years
64
8
72
9
1
10
89
18
107
12
7
19
174
34
208
Total
713
319
1,032
313
102
415
536
112
648
787
370
1,157
2,349
903
3,252
2020
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
188
82
270
129
15
144
137
17
154
343
160
503
797
274
1,071
31-50
years
460
62
522
167
57
224
211
31
242
254
120
374
1,092
270
1,362
>50
years
262
18
280
36
11
47
171
32
203
38
9
47
507
70
577
Total
910
162
1,072
332
83
415
519
80
599
635
289
924
2,396
614
3,010
White Collar
<30
years
54
27
81
12
9
21
17
7
24
18
11
29
101
54
155
31-50
years
121
39
160
46
47
93
37
21
58
49
32
81
253
139
392
>50
years
86
14
100
10
5
15
45
22
67
21
6
27
162
47
209
Total
261
80
341
68
61
129
99
50
149
88
49
137
516
240
756
Blue Collar+White Collar
<30
years
242
109
351
141
24
165
154
24
178
361
171
532
898
328
1,226
31-50
years
581
101
682
213
104
317
248
52
300
303
152
455
1,345
409
1,754
>50
years
348
32
380
46
16
62
216
54
270
59
15
74
669
117
786
Total
1,171
242
1,413
400
144
544
618
130
748
723
338
1,061
2,912
854
3,766
The outgoing turnover rates were: EMEA, 12.1%; APAC, 12.5%; North America, 30.6%; LATAM,
31.6%. With regard to outgoing turnover rate by age group, the largest movements was among
the under thirties (40.5%), followed by those between thirty and fifty (16.6%) and, lastly by
those over fifty (11.6%). The rates for overall incoming turnover were: EMEA, 15.1%; APAC,
17.6%; North America, 36.1%; LATAM, 35.1%.
The incoming turnover rates by age group were:
59.6% under thirty; 21.0% between thirty and fifty; 6.4% over fifty. There were 6,881 arrivals
and 5,709 departures. See the above tables for more details.
The number of contractors
40
used by the Group in 2022, calculated using the following formula:
total hours worked by contractors/theoretical annual working hours, assumed to be 1,800, is
equal to 4,897.
40
This disclosure requires the organisation to report the number of workers who are not employees and whose work is
controlled by the organisation. 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 | A. DIRECTORS’ REPORT
194
Dialogue with social partners and collective bargaining
Around 63% of Group employees were covered by collective bargaining agreements in 2022.
For employees not covered by collective bargaining agreements negotiated directly by Prysmian
and the works council, Prysmian - as the legal employer - 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 plant/site/place of work, Prysmian
applies a dedicated employment policy that is notified to individual employees and accepted by
them on formalising 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 organisational changes and the related minimum notice period, each country
in which the Group is present complies with the related local regulations in force.
Responsibility towards people
Prysmian recognises 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. At a time of great difficulty and uncertainty, such as that
characterising the global socio-economic and geopolitical context during 2022, Prysmian’s
human capital strategy, launched back in 2015, has focused increasingly on caring for its people
and pursuing sustainability objectives. The following external impacts generated by Prysmian
have been identified within the “Well-being, engagement and upskilling of human capital”
material topic:
•
Positive impacts:
o
Well-being of human capital: promotion of activities that encourage work/life
balance within the organisation;
o
Upskilling: training and specialisation of skills and development of talent;
o
Engagement: adoption of policies to safeguard and promote the well-being of
people;
•
Negative impacts:
o
Unfilled key roles and failure to attract talent;
o
Failure to satisfy employee expectations with regard to wellbeing, upskilling and
engagement.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
195
Specifically, to mitigate negative impacts and, at the same time, improve on the positive results
already achieved in prior years, Prysmian implemented the following series of initiatives during
2022:
•
constant improvement and development of the organisational 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, not least by
investing in its development;
•
further focus on employer branding and the attraction of talent
: increase
knowledge and awareness of the Prysmian brand as an employer and develop the
positioning of the brand in the international job market, partly via onboarding and global
strategic recruitment programmes;
•
talent
management
and
multiple
career
and
personal
development
opportunities
, with the implementation of global performance and potential assessment
processes via internal promotions, with a particular focus on gender balance; with the
strengthening of managerial and technical skills via upskilling sessions delivered by the
Prysmian Group Academy; with the global mentoring project; with the further
development of the Internal Job Posting tool;
•
promotion of diversity and inclusion
, via practices and policies designed to create an
ever more inclusive working environment that encourages diversity. This area includes
numerous initiatives and measures adopted locally this year to promote the wellbeing of
our people and care for them at both a personal and family level;
•
development of employee engagement and sense of belonging
via a structured
approach to measuring the internal climate, in order to align management and initiatives
with the priorities perceived by employees by, in particular, a broad share ownership
programme designed to make most of them shareholders;
•
rewarding and international mobility
as drivers of development, growth and
meritocracy.
The actions and plans developed and implemented in these areas during 2022 were greatly
influenced by the Social Ambition 2030, which Prysmian devised and published in July 2021. This
ambition focuses particular attention on Diversity & Inclusion, Digital Inclusion, Local Community
Involvement, Engagement & Training, and Health & Safety. In this sense, the ambition affirms
the fundamental role of the Group in the support, growth and development of its employees and
the social contexts concerned.
More information about the Prysmian Group’s Social Ambition can be found in the “Climate
Change & Social Ambition” section of this document.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
196
Given Prysmian's drive to constantly improve its working environment, in 2022 launched another
engagement survey (Speak Up survey) in collaboration with SDA Bocconi, which supports this
work in order to ensure the comparability, confidentiality and consistency of the data obtained.
Targeted once again all employees, including the blue-collar category, overall survey
participation was 86% (83% white collar, 87% blue collar). Furthermore, the Engagement
Index
41
was 61% and the Leadership Impact Index
42
was 55%. The Leadership Impact Index is
also an integral part of the LTI plan vesting in 2022.
The practices and policies adopted by the Group to attract, train and develop talent are described
below.
Ability to attract talent
The Group’s Talent Acquisition function marked its second anniversary in 2022. Its strategies
and culture have developed via the constant renewal and strengthening of projects and initiatives
in three main areas:
1.
Attraction and employer branding program;
2.
Internal mobility via the Internal Job Posting tool;
3.
Digital recruiting innovations and candidate experience obtained at Workdays.
For example, interview training sessions have been created for HR and managers, with over 600
hours of training delivered and facilitated by the Talent Acquisition team during the year.
Consistent with the Social Ambition objectives, a new recruiting and attraction initiative named
“STEM IT” has been launched. The program envisages a training, development and career-
support path for new colleagues joining the R&D, Production, Logistics, Project Service and
Installation, Quality, IT and HSE areas of Prysmian Group. In addition, female recruits hired
through STEM IT participate in a dedicated training initiative known as “Women in STEM IT”,
which is intended to support their development and leadership within the organisation.
With regard to internal mobility and the continous development of human capital, Prysmian
Group launched the Internal Job Posting (IJP) tool in 2019, first as a pilot project in the United
States before the global roll-out in 2021.
41
Engagement Index is taken as result greater than or equal to 5 - on a scale of 1 (low) to 7 (high) - on two questions
in a survey measuring employee engagement.
42
Leadership Impact Index is considered a result greater than or equal to 5 - on a scale of 1 (low) to 7 (high) - on five
questions of a survey measuring employee engagement. The indices were developed in collaboration with SDA
Bocconi.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
197
IJP highlights how much of the investment in talent and the approach to employer branding is
carried out internally, encouraging persons with potential already employed by the Group, while
also improving the employee experience. Following the launch of Workday (in March 2021), the
experience of colleagues who have taken the opportunity to make a professional change using
the Internal Job Posting tool has improved markedly (+26%): 136 in 2021 and then 171 in 2022.
Over the past 10 years, Group recruiting programs have fostered further diversification of the
training portfolio, not only in terms of attraction, but also in terms of managing the training and
development of colleagues. The training programs offered by the Group are described below.
Build the Future, the Graduate Program
52 new graduates
almost 40,000 candidates
52% female representation
11 editions
Objective: to recruit, support and develop new graduates for central roles in areas key to the
future of Prysmian Group, especially 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 2023.
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 digitalisation and sustainability. Five new graduates were
recruited as part of the “Empower your community” program in 2022. There will be more than
ten recruits in 2023.
Stem It
105 professionals
65% female recruitment
First edition in 2022
Objective: 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 in Prysmian
Group.
In addition to an approximately two-month training period (“On-Boarding & Training on the
Job”), leading to placement in a specific role within local unit, the program includes the
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
198
assignment of a corporate mentor and continuous technical training. The STEM IT program has
a section dedicated entirely to female leadership, known as “Women in STEM IT”.
Sell It
42 salespersons hired
62% female recruitment
Objective: the growth and development of the sales force. Following the same steps as the
"STEM IT" Program, the project starts with a careful selection of candidates. Recruitment through
the Sell It program has seen an increase compared to 2021.
Sum IT
8 professionals
Thousand of applications
75% female recruitment
Third edition
Objective: launched in 2020, this program is entirely dedicated to professionals working within
the industrial and business control function.
Overall and consistent with the gender balance objectives, the Group’s training program have
seen growing recruitment of women over the past three years, as shown in the table below.
2020
2021
2022
Men
80%
56%
39%
Women
20%
44%
61%
Training and development
The training and development of Prysmian Group personnel expanded in a structured manner
during 2022, with a global increase in training hours per FTE of about 60% (from 18 to 29)
compared with the prior year. This trend follows the growth objectives for training linked to
Social Ambition 2030, without however losing sight of its impact on needs, or the tracking and
validation of the related data, which have equal importance.
Prysmian Group’s educational and training programs are structured around the following types
of school: Managerial, Professional and Digital.
The School of Management
focuses on the development of talent (P4
43
), Graduate training
(Global Program), cross-country regional programs (Regional Leadership Programs, five editions
43
In 2017, Prysmian Group introduced a structured two-year program called
“Prysmian People Performance
Potential” (P4)
. This program involves evaluating potential of talents (i.e. those who were high performers in P3 over
the previous 2 years), based on 3 indicators: motivation, leadership of change and speed of learning. During 2022, 27%
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
199
in 2022) and Women in Leadership (Women Leadership Program, 1 edition in 2022). It presented
the first edition of the revised courses for Middle Managers (Journey International Leadership)
and Executives (Journey Advanced Leadership) involving 130 persons, with an additional 130
already identified for the coming year. The new program structure enables participating
managers to work on concrete objectives and projects, applying and - to some extent - choosing
ad hoc content for their 18-month courses. In addition, the Company has adopted an internal
mentoring program (Mymentoring), which has been combined with those indicated above. A
total of 49 different courses were followed in 2022.
The Professional School
, focused instead on the development of technical and functional skills
within an international network, as well as on technical careers for “High achievers” (P3
44
) and
“Experienced” personnel (Global SUM it, STEM it and SELL it Programs), has also been reformed
in collaboration with more than 70 internal trainers and an external training company. While
three courses on fundamentals (mentioned earlier) have been delegated to the Regions following
related Train-the-Trainer activities, the Professional School has added 8 Advanced courses,
raising the total to 23, including courses on negotiation, sustainability and project management
certification. The number of participants has increased to 1,104. In addition to all the technical
and functional academies, the Professional School also offers an internal Master in Human
Resources, now in its second edition, which trained 50 HR colleagues drawn from around the
world in 2022. Furthermore, 200 internal HR trainers were certified in a course on Feedback
created by the Academy, which was then delivered to more than 3,000 colleagues. As one of the
concrete action plans in response to the results of the Speak Up survey, this initiative stands
alongside the Stress Management training course in North America, the enhanced mentorship
path with intergenerational focus in North Europe, the Soft Skills training course in China, and
the Executive Coaching provided in Latin America.
Following the launch of Workday in 2021, initial investments in global uniform tracking of training
data were made in 2022. Prysmian has also adopted a global procedure for monitoring effectively
all steps in the internally controlling data collection. This was followed by training for the entire
Human Resources community. In addition to the steps and dates for collection consolidation and
validation, this procedure also sets the seal on the quarterly support that the Corporate Academy
has provided and will provide to the Regions and Business Units, with a view to continuously
improving data quality via sample checks and data-specific feedback.
of desk workers underwent to P4 evaluation, being the same percentage as those who had a corresponding assessment
over the previous two years.
44
The performance and professional development of Prysmian Group employees are monitored and assessed via the
“Prysmian People Performance” (P3)
program, with support from an on-line platform. In 2022, the P3 performance
process involved 6,793 desk workers, of whom 70% men and 30% women.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
200
Digital
, the third and final Corporate Academy School, offers about 30 courses and support the
global sharing of technical and functional content for Desk Workers and Non-Desk Workers. in
2022, the number of courses and participants rose by 30% and 13% respectively. Once again,
an on-line Leadership course for managers and leaders was promoted by the Digital School
together with Harvard during 2022, repeating the success and acclaim of the previous two
editions.
Prysmian Group has also launched the
Global Sustainability Academy
, which involves all
Group employees in the more than 50 countries in which the business operates. The objective
of this initiative - formalised during 2022 - is to spread a culture of sustainability among all
employees around the world, as well as to strengthen further the Group’s commitment to
progressing the employee engagement and upskilling elements of its Climate & Social Ambition.
Leading international business schools will participate in the learning programme of the
Sustainability Academy.
The Global Sustainability Academy was inaugurated in Muscat, Oman, which is the headquarters
of Oman Cables and Prysmian's MEAT Region, in January 2023.
The structure of the programme, which will run throyghout 2023, comprises five modules -
Awareness, Knowledge, Impact, Leadership and KPIs - whose contents vary depending on the
target audiance. All Academy modules will be delivered using a hybrid approach: some will
involve physical attendance (such as those in Oman), while others will be available on-line or
via podcasts so the entire corporate population can be reached.
In quantitative terms, during 2022:
•
The content offered by the Local Schools launched in 2021 was enhanced by a “Train the
Trainer” programme designed to expand the local training plans by adding:
- soft skills (30 trainers certified, + 30 sessions delivered in 4 areas: Remote Public
Speaking, Influence and Communication Skills, Emotional Intelligence, Stress
Management);
- Professional School courses, as customised locally by the Regions: Manufacturing
Fundamentals, HSE Fundamentals and Supply Chain Fundamentals.
Thanks to this initiative, 6 sessions of Manufacturing Fundamentals, 4 sessions of Supply
Chain Fundamentals, 8 sessions of HSE Fundamentals were delivered in 8 regions during
2022.
•
On-line content was extended with functional and professional courses, as well as content
addressing specific topics, such as Diversity & Inclusion;
•
The training experiences of the Regions and Business Units were shared, for their
reciprocal enrichment;
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
201
•
Local training plans were promoted at the Local Schools, communicating awareness of
them via centralised newsletters sent, for the first time, to all Prysmian employees
reachable by e-mail (hyperlinks to each training plan and all digital courses);
•
Weekly meetings were planned and held with region and Business Unit training managers,
in order to achieve the targeted hours for high-impact training by applying lean and agile
methodologies.
Certain 2022 initiatives stood out for their excellence and success in specific Regions: Technical
Schools (Central East Europe), Sales Schools (Latin America) and Leadership Labs per Shopfloor
Supervisors (North America), becoming best practices for their counterparts as well.
Hours of training delivered:
Male
Female
Total
White Collar
140,424
87,455
227,879
Blue Collar
552,352
90,187
642,539
Totale
692,776
177,642
870,418
Average hours of training delivered per employee
Male
Female
Total
White Collar
25
34
28
Blue Collar
29
30
29
Totale
28
32
29
The average number of hours of training per employee was 29 in 2022, which was considerably
more than in the two prior years, 2020 and 2021, when the average was 18.
Remuneration policy and welfare plans
Remuneration policy
The remuneration policy adopted by Prysmian Group is designed to attract and recognise talent
with the skills needed to address the complexity and specialised nature of the business, as well
as 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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
202
The remuneration policy for executive directors and executives with strategic responsibilities is
determined as the result of a shared and transparent process, during which the Remuneration
and Nominations Committee
45
and the Board of Directors both play a central role. 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, managers with strategic responsibilities and
executives comprises a fixed component, a short-term variable component and a medium/long-
term variable component.
The ratio between the total annual remuneration for 2022 (fixed remuneration plus annual
variable) of the Chief Executive Officer, compared to the median
46
annual remuneration of Group
employees, overall worldwide is equal at 71. The Ratio between the percentage increase in total
annual compensation for the Chief Executive Officer and the median percentage increase in total
annual compensation for all employees
47
is equal to 0.90.
The remuneration policy has been well received by shareholders. Feedback and suggestions
regarding the remuneration policy are regularly solicited from investors and shareholders, and
considered when preparing the policy itself, which is periodically submitted to a vote at the
annual general 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 organisation and variable
remuneration plans to individual performance assessment The fixed element 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 organisational 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
48
.
Part of the variable short- and long-term remuneration of all managers, including the executive
directors and managers with strategic responsibilities, is linked to achievement of sustainability
45
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-2022-eng.pdf (prysmiangroup.com)
46
Temporary workers, workers at the Nantong plant, employees of the Associated Cable company and workers employed
on ships were excluded from the calculation of median remuneration. For the determination of the median remuneration,
the theoretical remuneration at 31 December 2022 plus variable components such as production bonuses and MBOs was
considered. For part-time workers, the theoretical part-time salary at 31 December 2022 was considered.
47
The median percentage increase in total annual remuneration for employees was calculated by considering the
percentage increases in employee compensation between 2022 and 2021 and then calculating the median.
48
Further information about Prysmian’s remuneration policy for executive directors and managers with strategic
responsibilities, as well as the ESG goals linked to their variable remuneration, is available in the sections of the “Report
on Remuneration Policy and Compensation Paid”
prysmian-remuneration-report-2022-eng.pdf (prysmiangroup.com)
entitled
Chief Executive Officer, Executive Directors and Managers with Strategic Responsibilities
,
2020-2022 LTI Plan
,
ESG indicators in the 2022 MBO Plan, Section II.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
203
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.
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.
In addition, a
Global Maternity Policy
has been implemented in all countries where the
Group is present. The “Diversity and equal opportunity” section of this document contains
further information on this topic. These benefits are equally valid for full-time and part-time
employees.
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;
• obtain a free check-up in collaboration with Niguarda Hospital, for prevention purposes and
as part of the attention dedicated to the health of employees in the Milan Bicocca area;
• obtain insurance coverage at special rates with AON;
• participate in the award of 80 scholarship for Upper School pupils and 20 scholarship for the
University education of the children of employees. These scholarship were set aside in 2022
and will be awarded in early 2023;
• receive an annual pass for public transport at a discounted price under an agreement with
ATM.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
204
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 100 to all employees;
•
Distribution of spending vouchers worth Euro 200 and upwards to all employees whitin
certain income brackets.
Participation in the creation of sustainable value over time is open to all employees, via several
share ownership plans allowing them to become stable shareholders.
The objectives pursued by Prysmian via the
YES Plan
, a discounted share purchase plan for
employees, and the BE IN Plan, a plan for the conversion of production bonuses into shares,
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 builnding a stable base of employee-shareholders.
About 37% of employees are stable shareholders in Prysmian Group, collectively owning about
3% of the share capital.
The
BE IN
Plan was approved at the Shareholders’ Meeting held in 2022 and has been in more
than 40 plants, giving 16,000 Group employees the opportunity to become shareholders.
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 recognised human rights principles.
Diversity and equal opportunity
Prysmian has identified the promotion of diversity and equal opportunities, through the
development of an increasingly inclusive organisation, as a strategic objective for the
management of human resources. Given this commitment, Prysmian Group has adopted a global
“Diversity & Inclusion Policy” that is available on its corporate website
49
, with the development
of initiatives to support it. Since 2016, when the “Side by Side” programme was launched, many
49
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
205
local and corporate initiatives have been completed. More specifically, the portfolio of activities
includes:
1.
Global Diversity Recruitment Policy
, available on the Group’s corporate
50
.This procedure,
which has been formalised at corporate level, defines an appropriate selection and recruitment
process that applies a standardised 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, with translations into
seven languages in addition to English (Italian, German, Spanish, French, Portuguese, Russian
and Chinese).
2. A
Gender Pay Gap Analysis
of the entire population of desk-workers identified areas for
improvement and a related action plan, which was progressed during 2022. The results of the
analysis carried out, expressing the male/female wages-salary ratio in percentage terms by job
grade and geographical area, are shown below:
2022
EMEA
North
America
LATAM
APAC
Totale
Executive
7%
3%
3%
21%
7%
Managerial Positions
2%
6%
4%
13%
4%
Employees
2%
2%
4%
10%
4%
Total
2%
3%
4%
10%
4%
3. Health and welfare programs for senior employees, based on local choices
, have been
developed.
As an example, anyone over 55 at the Milan HQ can now have an annual check-up,
rather than every two years.
4.
Actions to improve work-life balance
have been implemented,
such as flexi-hours and
remote working
.
There was an unprecedented relaunch and extension of these practices, which
had already been introduced at several Prysmian Group offices, as a result of the Covid-19
pandemic, particularly remote working. Where compatible with the individual’s role, working
from home not only protected health and safety, but also offered the chance to try out new
digitalised working methods. This led to a strengthening of individual responsibility, trust and
remote team management. The result was the aforementioned New Working Policy. Remote
working was considered as a genuine skill, so there was dedicated training for both clerical staff
and managers between the end of 2020 and the beginning of 2021.
5. Internal and external communications campaigns on
Diversity & Inclusion
matters
continued in 2021 and 2022, supported by success stories based on actual cases (by gender,
50
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
206
age and culture), in order to raise awareness about these topics among employees and
stakeholders.
6. In 2021, Prysmian launched a
Global Policy,
available on its corporate website
51
, against all
types of harassment in the workplace, including sexual harassment, defamation, bullying and
intimidation. The document indicates two procedures, one formal and the other informal, for
reporting cases of harassment and requesting official action by the Compliance team.
7. The
Global Maternity Policy,
launched in May 2020, is still in place and available on the
corporate website
52
. The policy grants 12 weeks of maternity leave to all employees in all
countries. Local implementations are possible.
51
52
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
207
Human rights due diligence
The following table, presenting the risks identified and related mitigation actions is published
pursuant to Legislative Decree 254/2016 (Consolidated Non-financial Statement)
Risk identified
Material topic 2022
Risks related to the social sustainability of the organisational structure
and business model
Greater diversity, inclusion and respect for human rights
Description of risk
Prysmian Group faces daily complexities arising from the management of organisational 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
As an international business active in multiple countries and communities, Prysmian Group is with 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 the Group is not involved in any way, either directly or indirectly, in activities that violate on human rights. In this light, the
Prysmian Human Rights Policy was introduced in 2017, inspired by to various international standards on human rights (such as
the Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the United Nations
Global Compact etc.) and applied at all locations and in all Group activities. In addition, a Human Rights Due Diligence process
has been in operating since 2018, enabling Prysmian to map the potential Human Rights impact of Group operations.
Applying this Due Diligence process, the assessment of plants that commenced in 2021 (100% of production locations) was
completed during 2022.
Following this assessment, various locations found to be at high risk of violating human rights were audited to check if there was
any substance to this analysis. Outside of the Group, Prysmian requires suppliers to show rigorous respect for human rights,
applying a specific Due Diligence process that assesses the risk at supply chain level.
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 objective in mind, the Group Human Rights Policy was introduced in 2017. This policy,
available on the corporate website
53
of the Group, is based on various international standards
(such as the Universal Declaration of Human Rights, the ILO Declaration on Fundamental
Principles and Rights at Work, the United Nations Global Compact etc.) and applied at all
locations and in all Prysmian activities.
53
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208
In addition, a Human Rights Due Diligence process, available on the Group’s corporate
website
54
, has been in operation since 2018, enabling Prysmian to map the potential Human
Rights impact of Group operations.
1.
ASSESS: Assessment of the current and potential impact on Human Rights,
considering the risk of violations at country and plant 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 2021 was completed during 2022
55
.
Following this assessment, 6 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.
Furthermore, 11,875 hours
56
of training were delivered in 2022 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 website
57
.
54
55
This analysis, based on the Group reporting boundary in 2021, excluded the Chiplun (India) plant.
56
Training hours refers to all the courses held at Prysmian Group and classified as “Ethics & Human rights” in 2022.
57
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
209
Health and safety in the workplace
Safety is central to all Prysmian Group activities. Indeed, it is a key, cross-functional element of
the organisation, both in terms of corporate value and in terms of the positive and negative
impacts generated on all other key factors: Human Capital, Production, Property, Quality,
relations with Customers and Suppliers.
This is why, since 2020 Prysmian has pursued a “Zero & Beyond” mission, based on a shared
vision and guided by specific values. “Zero and Beyond” is a philosophy that includes safety in
every aspect of life and in everything that is done, at home and in the community, as part of
our responsibility towards people and the planet. Zero is the ultimate goal in terms of deaths,
injuries, events and occupational diseases, while Beyond is the limit to be reached with this
philosophy.
Complete information about this programme is shared on the Group website
58
and sponsored by
top management. All Group personnel, whether Desk Workers or Non-Desk Workers, at Region
and plant level, have been involved to ensure their awareness of the strategy adopted and
encourage their participation as promoters. The strategy has been and continues to be
disseminated in practice, via workshops, and at the level of visual communication, via banners,
logos and the use of “Zero & Beyond” clothing.
In addition, the Prysmian HSEE Policy was updated in 2020, approved by CEO Valerio Battista
and published on the Corporate website
59
. This policy contains all the principles that Group
companies pledge to respect, including:
•
The management of their activities 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 health
risks and their elimination and/or minimisation 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 behaviours;
•
The demonstration of leadership capable of involving all levels with the organisation 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 programmes.
58
59
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
210
As a further guarantee and commitment to the management of occupational health and safety
matters, all Group plants will be ISO 45001 certified by 2025.
Prysmian applies established procedures for the management of injuries, which are the tip of
the iceberg in the system for managing reactive safety. Injuries can have negative impacts in
human, financial and technical terms, as well as on the reputation of the organisation 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 tables, presenting the risks identified and actions adopted to mitigate them, are
published pursuant to legislative Decree 254/2016 (Consolidated Non-Financial Statement).
Risk identified
Material topic 2022
Health and safety risks
Wellbeing, engagement and upskilling of human capital
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.
The Group has always been committed to protecting that the of the integrity, health and welfare of workers in their workplaces. With
particular reference to health and safety risks, the Group has adopted a centralised management system based on the identification
and evaluation of factors deemed critical at various levels, with respect to the Group, country and operating unit. This approach
allows for a complete picture of the risks associated with individual production activities, in order to manage, monitor and minimise
the health and safety risks.
Mitigation actions adopted
In order to apply the health and safety standards defined at Group level, Prysmian uses tools and operating procedures for collecting,
evaluating, aggregation and reporting of data at central level, as well as the implementation and verification of corrective and
preventive actions; the monitoring of significant events (injuries, near misses, non-conformities and reporting); and training not only
for the transfer of technical knowledge, but also to impart understanding of the approach taken and the risks incurred by non-
compliance with the H&S rules and procedures. Note that 73% of Prysmian Group plants have ISO 45001 certification. In addition,
the Group has defined quantitative targets (Sustainability Scorecard) for reducing the frequency and severity indices monitored.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
211
Risk identified
Material topic 2022
Risks related to changes in the legislative environment governing
Health, Safety and the Environment.
Transversal
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 analysed 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 the efficiency of end-use energy.
Mitigation actions adopted
Via the HSE Management System, centralised and coordinated by the Corporate HSE team, the Group monitors constantly any
changes and/or developments in the HSE requirements, including:
•
changes into HSE legislation at local and Group level and related periodic reporting to 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.
With reference to the regulatory risk relating to energy efficiency, several actions have been taken, including:
• definition of an Energy Audit Plan at the Group's plants, 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 en
ergy 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.
To ensure a systematic and concrete approach to safety, the Group adopts the ISO 45001
“Occupational health and safety management system” for 73% of corporate assets. In particular,
the adoption of ISO 45001 certification enables the organisation to:
establish systematic processes that take account of the business context by evaluating risks,
opportunities and legal requirements;
determine the risks associated with its activities, in an attempt to eliminate them or introduce
ad hoc controls designed to minimise their severity;
establish operational controls;
increase awareness of the matter by all interested parties at every level within the organisation;
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
212
level, including the reporting of hazards, risks and unsafe conditions identified by operators; all
these activities follow established local management and reporting procedures.
Corporate has issued a procedure for 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 analysed by specified deadlines using Group software. The objective is to share
information about the most significant incidents and raise cross-functional awareness at all
plants.
In fact, 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 course for the various categories of worker, depending on their roles, duties,
levels of responsibility and working environment.
At corporate level, the Health and Safety function carries out training based on the Group
procedures to be applied locally, as well as training via the HSE Academy.
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 plants. Each plant and region reviewed is included in a
quarterly follow-up process designed to monitor the progress of their work. In addition, the use
of tools and methodologies for managing reactive, preventive and pro-active safety activities
was consolidated in 2022.
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. Prysmian also developed an
ad hoc risk assessment covering traffic management in which all plants participated. Having
identified various risks, a campaign targeting traffic management has begun at all plants and
will continue over the next few years.
Statistical analyses are carried out on all injuries resulting in lost days that occur throughout the
Group, in order to identify the work-related risks.
The improvements needed, for which specific action plans have been defined, include:
management of traffic and forklifts, with the launch of numerous projects – some already
completed – drawing on funds set aside by the Group. Actions taken to manage and mitigate
the risk include: separation of shared areas, signage, barriers, pedestrian routes,
forklift/pedestrian detection devices.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
213
assessment of the risk of cuts (category with the third largest number of injuries) is in progress,
including the preparation of a census of equipment, a systematic re-assessment of the risks
associated with the use of cutting tools, and the sharing of best practices with other plants.
The following table analyses Group personnel by type of worker included within the reporting
boundary. The Frequency rate has fallen by 11% with respect to 2021, while the Severity rate
has increased by 19% due to the ongoing effects in 2022 of injuries suffered in the prior year.
In addition, the table contains data about the occupational diseases recorded and recognised
during the year. The most common problems relate to the musculoskeletal system and the
auditory system.
Prysmian Group 2022
Group
Prysmian
employees
Temporary agency
workers (*)
Contractors
(**)
Severity rate (IG)
(1)
53.46
54.20
44.12
31.56
Frequency rate (IF)
(2)
1.40
1.32
2.39
1.02
Hours worked
58,933,731
54,582,051
4,351,680
8,814,534
(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 organised by the company.
(*)
Temporary agency workers: workers employed by staffing agencies.
(**)
Contractors: This disclosure requires the organisation to report the number of workers who are not employees and whose work is
controlled by the organisation. Control of work implies that the organisation directs the work performed or has control over the means or
manner in which the work is performed.
Prysmian Group 2022
Prysmian
employees
Temporary agency
workers
Contractors
Number of fatalities
-
-
-
Fatality rate
(1)
-
-
-
No. of reportable injuries
360
52
45
of which with serious consequences
8
-
-
Severity rate (IG)
(2)
54.80
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
(3)
35
-
-
Occupational disease rate
(4)
0.64
-
-
(1)
Fatality rate
: ratio of the number of fatalities to hours worked, multiplied by a factor of 200,000.
(2)
Frequency of 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, tumours 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)
Occupational disease rate
: ratio of the number of occupational diseases reported and recognised during the year to the number of
hours worked, multiplied by a factor of 1,000,000.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
214
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.
Prysmian Group 2020
Prysmian employees
Temporary agency workers
Number of fatalities
-
-
Fatality rate
-
-
No. of reportable injuries
317
5
of which with serious consequences
8.00
-
Severity rate (IG)
46.40
10.91
Frequency rate (IF)
1.29
0.36
Frequency rate for injuries with serious
consequences (IF)
0.03
-
Hours worked
49,057,574
2,805,742
No. of occupational diseases
9
-
Occupational disease rate
0.18
-
The following table shows the occupational diseases reported and recognised in 2022.
Hazards
Associated risk
Actions taken to eliminate the hazard
and minimise the risks
Covid-19 pandemic
Implementation of the Prysmian Covid-19
Protocol
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 plant to minimise
physical exertion and repetitive movements
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216
Sustainable value chain
Prysmian Group constantly strives to understand the needs and requirements of its partners, in
order to develop solutions to their problems ahead of time. This explains Prysmian’s role as a
leader of sustainability, committed at all times to supporting and promoting the creation of
sustainable value for customers and all stakeholders, by facilitating the energy transition and
digitalisation processes, as well as by providing proactive, sustainable leadership. The sourcing
of raw materials and the performance of activities themselves are governed by strict
sustainability policies with regard to environmental impact and respect for human rights and
business ethics. This approach seeks to avoid or mitigate risks, while embracing all opportunities
for the sustainable growth of the Group and its businesses.
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 endeavours 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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
217
Sustainability of suppliers
The following table, presenting the risks identified and actions adopted to mitigate them, is
published pursuant to Legislative Decree 254/2016 (Consolidated Non-Financial Statement).
Risk identified
Material topic 2022
Risks related to the sustainability of the Group supply chain
Sustainable value 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 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 organisational 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.
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 and reflects 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 continuously monitors and optimises its logistical flows, in
order to assure the sustainability of the business in economic and other 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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
218
The supply chain aims to deliver excellent service levels, ensuring availability of the products
needed by customers, given that the Group absorbs about 2-3% of global copper production and
about 7% of the copper used in the electrical and electronics sector.
When sourcing aluminium, the Group increasingly selects
suppliers that are vertically
integrated
(with processes that manufacture aluminium rod directly from aluminium oxide), in
preference to those that are not integrated (manufacturers that purchase aluminium ingots in
order to produce rod). In addition to being economically advantageous and enabling the Group
to guarantee the security of supply, this strategy assures significant environmental benefits
linked tothe simplification of logistics and elimination of the ingot re-melting cycle.
Under Prysmian’s policy, raw materials can only be used 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 to assess the ability of the supplier to manufacture the materials
concerned and guarantee the required technical performance and expected quality.
The Non-Raw Material category incorporates all the services and goods which are not directly
connected to the end products. Excluding installation services, the main Non-Raw Material
categories include: transportation, packaging, MRO (maintenance, repairs and operations) and
utilities, which combined represent over 50% of the total Non-Raw spend.
One of the possible challenges of being a global leader in manufacturing that has to source
metals and raw materials, is the need to continuously monitor the entire procurement base and
ensure that all Prysmian’s business partners apply ethical conduct in their business processes.
The real and potential impacts are above all environmental, given the nature of the materials
used, and social, as some materials may need to be sourced in regions populated by vulnerable
communities. 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. However, the Group
also works with smaller players who 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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
219
Material used by weight or volume [kton
]
2022
2021
2020
Metals
1,219
1,189
1,083
Compounds (*)
365
374
339
Ingredients
288
299
276
Chemical products
6
6
6
Other (yarns, tapes and oils)
26
25
23
Total
1,904
1,893
1,727
(*)
Compounds: in the processing of rubber, mixtures of polymers and ingredients (talc, kaolin, carbon etc.) having various functions (e.g.
strengtheners, accelerants, colourants).
Renewable materials are 1% in 2022.
Depending on the raw materials sourced, Prysmian identifies two main risks, namely their carbon
footprint and their origin. With regard to
environmental impacts
, Prysmian Group manages
the following long-term partnerships:
i. long-term partnership with the Carbon Disclosure Project (CDP) to tackle climate risk
and find new low-carbon opportunities. The CDP helps Prysmian to collect and analyse
Scope 1 and Scope 2 emission data from suppliers, following which feedback is sent to
suppliers and
new targets are set for the continuous reduction of adverse environmental
effects. In 2022, the Group concentrated on improving the response rate from the suppliers
concerned (who represent about 50% of total spending by the Group);
ii. 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 the potential infringements of human rights:
i. Prysmian Group implements a Conflict Minerals Policy, with the aim of guaranteeing a
conflict-free supply chain that does not contribute to fuelling armed clashes in conflict
zones or high-risk areas;
ii. In order to manufacture certain safety cables and make them fire-resistant, Prysmian
contacts producers and distributors to purchase limited quantities of certain types of glass-
based tape containing low percentages of mica. This mineral is not 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 labour.
Prysmian 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 labour.
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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
220
In addition to the Code of Ethics and the Human Rights Policy already described in the chapter
on “Ethics and Integrity”, Prysmian applies the following policies to manage business
relationships with its supplier base:
-
Supply chain strategy
Following the development of sustainability-related activities within the supply chain, in 2016
Prysmian Group started work to integrate ESG factors more closely within its Supply Chain
Strategy, thus highlighting their importance and recognising them as integral to that strategy.
This document seeks to summarise the main characteristics of Prysmian’s Supply Chain Strategy
and the actions taken to integrate ESG factors within it. The document has been available on
the corporate website
60
since 2021.
Introduction of new suppliers
Assessment of the supply
base
Assessment of the supply
base
POLICY
–
Code of Ethics
–
Code of business conduct
–
Conflict Minerals Policy
–
Human Rights Policy
QUESTIONNAIRES
:
–
Supplier
qualification
questionnaire
(Raw
materials and Base metals)
–
Conflict Minerals Reporting
Template (Base metals)
TECHNICAL ASSESSMENT
:
–
Technical product
ASSESSMENT:
–
Supplier Desk Analysis
–
Supplier Risk Analysis
–
Sustainability audit
–
Responsible Mica Initiative
activities
MONITORING
OF
PERFORMANCE
:
–
Purchases dashboard
–
Supplier ratings (ODT)
–
Supplier
management
(Energy projects)
–
Sustainability Scorecard
–
Sustainability training
–
ESG factors as recognition
drivers
-
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
61
.
The principles set down in the Code apply to the business transactions and daily activities of the
60
SupplyChainStrategy-public.pdf
61
l_070519.pdf
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
221
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 labour, occupational health and
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.
-
Conflict minerals policy
Prysmian Group implements a Conflict Minerals Policy, with the aim of guaranteeing a conflict-
free supply chain that does not contribute to fuelling 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
62
.
62
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222
Goods and services purchased locally [%]*
2022
2021
2020
EMEA
69.0
60.1
70.8
APAC
84.0
76.3
79.7
North America
100.0
99.3
97.9
LATAM
95.0
80.2
83.0
* Calculation of the percentage excludes data relating to Italian and Corporate suppliers. The data relates to all Prysmian Group activities.
The calculation procedure uses the methodology adopted in 2018 for Prysmian plants and former General Cable plants, except for form
General Cable plants located in North America, for which specific calculations were made depending on the location of the supplier.
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 analyse 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 of the business aspects of sustainability considers the
relevant social, economic and environmental criteria (ESG) and is performed by a third-
party partner of Prysmian Group. The Sustainability Partner analyses the websites of each
supplier, plus any other forms of public information, in order to evaluate a list of elements
relating to three macro areas:
o
sustainability and management systems;
o
environmental criteria;
o
human rights and workers' rights.
A total of 500 suppliers with potential environmental and social impacts were analysed in 2022,
covering expenditure of Euro 7,784 million. This analysis identified 81 suppliers (16%) with a
potentially negative environmental impact. Among these, 2 suppliers (2% of the total) adopted
an improvement plan designed to mitigate the negative impacts identified. Prysmian’s analysis
also identified 79 suppliers (16%) with a potentially negative social impact. Among these, 2
suppliers (2% of the total) adopted an improvement plan designed to mitigate the negative
impacts identified. The above suppliers are not alone in adopting an improvement plan, but they
were the only ones
classified as Red or High Risk in Prysmian’s annual desk and risk analyses
of suppliers with negative environmental or social impacts.
2.
Risk Analysis:
The supply chain risk analysis is based on assessment and analysis of the data obtained
from the desk analysis (therefore considering the same 500 suppliers described in point
1), and uses sustainability scores combined with a list of parameters deemed critical by
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
223
Prysmian for risk assessment purposes. The combination of these criteria enables
Prysmian to identify the various clusters of risk. The following table shows the
combination and importance of the critical parameters, including ESG factors, assessed
by Prysmian in order to identify any suppliers that may be at risk.
3.
Sustainability audits:
A programme of sustainability audits has been implemented since 2017. The objective,
duly achieved, was to complete 30 audits by the end of 2022. Further details on trends in
the audit results, can be found in the “Scorecard 2020-2022” included in the Sustainability
Report. These audits were performed with support from an external consultant. The audited
suppliers were identified with reference to the scores assigned following the risk analysis.
Sustainability always plays a primary role in supplier assessments and the results of these
audits are shared with suppliers, in order to induce positive change among under-
performers. Follow-up audits are carried out when necessary. 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 Aluminium
Stewardship Initiative (ASI).
In order to assess the effectiveness of actions relating to the purchase of direct materials,
Prysmian pursues the following objectives and targets to support the process:
•
performance of sustainability audits, based on the results of the desk analysis and
the risk analysis. 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;
•
in order to evaluate the progress made, the scope of the desk and risk analyses
is constantly being expanded (currently 500 suppliers, up from 150 in 2020), in
addition to continuing to perform annual sustainability audits
IMPORTANCE:
Speed
and
impact
CRITICAL EXPENDITURE:
Base metals: all
Raw materials: suppliers that
exceed Euro 100 thousand
Non-raw materials: selected
suppliers in high-risk areas or
categories
WEAKNESS: sole supplier and
geographical position
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
224
•
in addition to the above, a 100% response rate is required from all base metal
suppliers that sell the Group materials containing 3TG (i.e. so-called “conflict
minerals”, represented by four chemical elements: tin, tantalum, tungsten and
gold. Based on their initials, they are often referred to as “3TG”), in order to
measure the effectiveness of Prysmian’s Conflict Minerals Policy. Their replies are
analysed to check the status of all foundries within the supply chain operated by
tier one suppliers. This process, combined with participation in the Responsible
Mica Initiative, enables Prysmian to translate Group policies into action.
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
buyers (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 harmonise and improve the business
processes involved;
•
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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Prysmian Group’s customers
Customers are central to all our corporate activities, from design to execution and the creation
of new products. Innovative tools are used and specific actions taken to monitor and understand
customer experience levels.
By working closely with customers, Prysmian is able to develop products that not only satisfy
their requirements, but are also designed to ensure greater sustainability and provide solutions
that contain specific digital elements (e.g. smart cables).
The characteristics of the downstream part of Prysmian Group's value chain differ, depending on
the type of business unit concerned. See the “Group Organisation” section of this document for
further details.
Prysmian cables are designed with the customer in mind. In many cases, they are the result of
collaboration with customers to develop new products. When customised products are made,
customers are invited to our plants and R&D centres in order to participate in the relevant
processes. The Group applies the principles of flexibility throughout the supply chain, with a view
to accelerating the time to market of new products and responding to customer requirements in
the various sectors.
Flexibility to ensure customer satisfaction
Thanks to our global presence, Prysmian is perfectly able to respond to the different customer
needs. Its matrix organisational structure allows the Group to serve very different segments and
markets: local operating and development facilities are used in local markets, but the Business
Units into which the Group is divided are also able to serve global customers by collaborating
internationally.
Understanding the needs of customers via on-line surveys
Prysmian carries out on-line surveys to assess the level of customer satisfaction, so that their
needs can be met in the most efficient manner.
The surveys are used to assess commercial conditions, customer support, brand awareness and
the portfolio of products and services, as well as certain aspects of digitalisation and
sustainability, identifying the main drivers for each category.
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Results of the 2022 on-line surveys:
• Target: 28 countries;
• Survey boundary: Europe – North America – Latin America – OSEA – United Kingdom – Turkey;
• Customer boundary: Main customers - principally in the distribution channel.
RESPONSE RATE: 37% OF THE SURVEY BOUNDARY
The customers interviewed were presented with 6 main macro-categories of driver (Commercial
strategy, Innovative products and solutions, Supply chain activities, Customer support,
Marketing, Digitalisation).
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 supply chain remains a key driver to be addressed by Prysmian Group, given that the results
confirm its great importance (score of 4.5/5) for customers, in which we are investing to improve
the level of satisfaction (score 3.5 of 5). The problems posed for the global supply chain by the
COVID-19 pandemic have added to the pressure on this driver in recent years.
By contrast, Customer Care Support and Product and Solution Innovation both had good
satisfaction levels globally. These two drivers achieved positive scores in 2022: respectively 4/5
and 3.8/5.
Prysmian Group invests constantly in its approach to customer relations, with a specific strategy
focused on the use of digital technology tools. Current projects on e-Commerce/e-Service
platforms are coordinated centrally and implemented at local/regional level.
Customers were also asked to measure their NPS (Net Promoter Score), indicating how likely
they are to recommend Prysmian Group to a friend or colleague.
The overall NPS (Net Promoter Score) for 2022 was +32% (vs +33% for 2021), with strong
performance in Latam (+51%) and Central-East Europe (+43%). The United Kingdom was worst
hit, while OSEA improved getting +19% (from 0% in 2021).
The NPS score is counterbalanced by the CES (Customer Effort Score), a method for measuring
the effort needed by a customer to obtain an answer to a question or a solution to a
problem/concern: +34% (vs +42% for 2021), with strong performance in Central Europe
(+55%) and North Europe (+46%). The United Kingdom, also, showed a positive trend (8% vs
-12% in 2021).
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.
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227
Prysmian Group: quality processes and solutions
Quality helps organisations to do the right thing 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.
In Prysmian Group, Quality helps to form a corporate culture in which doing the right thing is
the norm. To support this cultural approach, a vast amount of training has been provided in
recent years on the principles of Quality, as well as on the methodologies and tools for solving
problems, to both Quality function employees and those in other functions.
The effectiveness of this work is evident from the improvement in our indicators, including a
reduction of about 10% in the number of complaints with respect to the prior year. A complaint
is defined as any written notification from a customer of a potential product non-conformity that
is recognised by Prysmian as such.
Doing the right thing also means making the right decision using the right data. To support this
strategic process, Prysmian has worked with its Digital Innovation Lab to build digital solutions
that help analyse huge amounts of data, in order to make better decisions.
The most promising projects include: Data Driven Performance (a data analysis system that uses
AI to improve the performance of production processes), which is currently active at three optical
fibre production locations (FOS, Douvrin and Claremont), and will soon be extended to other
cable manufacturing plants, including Nordenham and Gron; the PG Connect project, launched
last year and now known as the PG Connect Family, which extends the range of connectivity
solutions using augmented reality; the Machine Vision for Safety project, involving the
development of a visual recognition system capable of identifying risk situations for plant
operators.
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Commitment to communities
Creating value for stakeholders means directly involving people, not just employees, but also
the communities and territories in which the business operates and interacts, consistent with
our Values, Mission and Vision.
One of the drivers of the sustainability strategy that has characterised the Prysmian Group over
the years is “Local Community Involvement”, thus contributing via various initiatives to the
socio-economic development of the territories in which we operate.
In 2019, the Group adopted a Donations policy, revised and updated in June 2022, to identify
all activities that can contribute to satisfying the needs of the community or communities, in line
with the Vision, Mission, Values, Code of Ethics and Policies put in 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. The policy, available
on the corporate intranet, has been approved by the Chief Sustainability Officer, the Compliance
and Internal Audit function and the Group CEO.
In 2022, around Euro 1,700,000 worth of donations were made to local communities in terms of
cash, in-kind donations and donations of time.
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229
Group initiatives
In relation to the “Impact on local communities” material topic, the following impacts generated
by the Prysmian Group have been identified:
-
Positive economic impacts: through employment and procurement in the territory and
the payment of taxes and other amounts to local governments, as well as community
development programmes and investment in infrastructure and public services;
-
Negative impacts: land reclamation and change of land use to accommodate Prysmian’s
activities.
Among the main initiatives supported and carried out by Prysmian globally to contribute to the
development of local communities and seek to mitigate any adverse effects from Group
operations, the most significant were:
-
support for Ukrainian refugees by donating Euro 500,000 to 5 philanthropic organisations
and promoting a fundraising campaign among employees. The Group decided to make
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
230
this donation directly to some of the major local and international NGOs, namely: Save
the Children, the Salesian Young Volunteers of Krakow, Soleterre, the Sovereign Order
of Malta and Progetto Quadrifoglio. Together with “Rise Against Hunger”, a non-profit
organisation, we also promoted a campaign to raise funds among employees that was
well supported;
-
Prysmian donated Euro 125,000 to Soleterre, a non-profit foundation dedicated to the
recognition and protection of the Right to Health in the broadest sense, for the treatment
of paediatric cancer patients. This donation was for the purchase of an ultrasound
scanner, now in operation at the San Matteo Hospital in Pavia, and to enable children in
need of cancer treatment and their mothers to stay at the hospital. Specifically, donation
of this new Esaote MyLabOmega portable ultrasound scanner to the Paediatric
Oncohaematology ward completes a process of upgrading its multidisciplinary diagnostics
in a highly complex area. The new tool improves diagnostic sensitivity and reliability,
while greatly facilitating bedside consultations by avoiding the need to move sick children
and related inconvenience;
See the Sustainability Report for many other Prysmian initiatives in support of the environment
and communities.
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 energy transition and
digitalisation 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.
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Innovation areas
The following table, presenting the risks identified and related mitigation actions, is published
pursuant to Legislative Decree 254/2016 (Consolidated Non-Financial Statement).
Risk identified
Material topic 2022
Risk of loss of competitiveness or leadership in the energy
transition business
Sustainable value chain
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 analysed 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 large 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 analysed the
demand for these businesses in the period 2022-2035, highlighting the main drivers that might prompt new players to
enter into 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.
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, optical fibre
solutions with the highest number of cables in a miniaturised space for easy handling in the field.
2.
Digital Ambition
The Digital Ambition of Prysmian seeks to generate long-term value for the business, in order to
maintain the Group's leadership in the energy and digital sector, promoting solutions based on
the portfolio of products and services offered. Digital tools and solutions are key assets to enable
a future of cutting-edge innovation and deliver outstanding performance to the market: digital
products and services will support the Group’s growth strategy, promoting our collective
intelligence through digitalisation of corporate culture. This ambition rests on three pillars:
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
232
• achievement of efficiency by using data to reduce waste and improve performance;
• development of value-added digital products, by extracting and generating value from
enterprise data;
• promotion of new digital practices within the organisation to empower all personnel.
Innovative digital technologies play a fundamental role in creating growth opportunities that
benefit the Group, customers and other stakeholders, by leveraging the vast quantity of data
already available to optimise the use of resources, ensure accountability in reporting results and
maintain high quality standards. There are now over 30 Local Digital Partners around the world
and various activities seek to raise awareness, such as the PG Connect Contest, a successful
internal call for ideas that promote new remote experiences for both internal and external
customers, and the Digital Week. Digital Innovation moves us closer to sustainable development
based on a holistic approach to economic sustainability, social inclusion and environmental
awareness, allowing resources to be used more efficiently.
3.
Open innovation infrastructure: Corporate Hangar
Prysmian Group has renewed its commitment to Corporate Hangar, which accelerates the path
to innovation and sustainability. Corporate Hangar accelerated three start-ups (Alesea, Kablee,
Cultifutura) in 2022, created in previous years, while also focusing on the development of
innovative new projects with high potential to become the next corporate start-ups. The Group's
Sustainability Report provides more details about these three start-ups.
The most innovative projects developed by Corporate Hanger during 2022 addressed three
different areas. The first project seeks to use IoT to monitor telecom fixed assets remotely, thus
improving their maintenance. The objective of the second project is to increase the efficiency of
industrial and commercial buildings, using an innovative monitoring system for electricity
networks that also improves their safety. The third project seeks to support the sustainability
objectives of Prysmian Group with an innovative technology for recycling plastic.
4.
EOSS (formerly Prysmian Electronics)
As of 2022, 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. Covering both high and
low voltage cables, the objective is to create a dataset, acquired from the digital architecture,
that can provide useful information to better understand their performance. R&D activities in
2022 mostly concentrated on completing the architecture for Pry-Cam Home, with a digital
platform to collection and visualise data in a more structured fashion, as well as on the
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
233
systematic creation of an AI approach to various issues related to the use of instruments within
the core business.
•
Algorithms for analysing Distributed Acoustic Sensing (DAS) data to identify alarm signals
correctly.
•
Algorithms developed for Distributed Temperature Sensing (DTS) technologies for
application in submarine environments and offshore wind farms (RTTR and depth of burial)
•
Algorithms for analysing the current layer in HV cable systems.
•
Algorithms focused on low voltage electricity consumption, to help Pry-Cam Home users
monitor their energy consumption more accurately and, in general, create energy
awareness that contributes to sustainability.
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.
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Key players driving innovation at Prysmian Group
The following tables, presenting the risks identified and related mitigation actions, are published
pursuant to Legislative Decree 254/2016 (Non-Financial Statement).
Risk identified
Material topic 2022
Risk related to technological innovation and, in particular,
to emerging, alternative or replacement climate-related
technologies
Sustainable Innovation of products, applications and
processes
Description of risk
The acceleration of technological innovation in recent years, with ever more mass use of renewable energy and an already
established path towards digitalisation, consolidated during the COVID-19 pandemic, exposes the Group’s cultural and
organisational 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 renewable energy
(e.g. hydrogen, batteries with greater capacity, E-Vehicle technologies, wireless etc.). Exposure to this risk was analysed
over the 2022-2035 time horizon, considering the four IEA
63
emission scenarios (STEPS
64
, APS
65
, SDS
66
and NZE
67
),
confirming a medium-low impact, which becomes medium-high in a Net-Zero scenario over the long term.
Mitigation actions adopted
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 centres 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 centres. 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, involving key customers, and a professional development plan dedicated to
strengthening the innovation skills of employees.
63
IEA – International Energy Agency
64
STEPS – Stated Policy Scenario
65
APS – Announced Pledge Scenario
66
SDS – Sustainable Development Scenario
67
NZE - Net Zero Emissions
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Risk identified
Material topic 2022
Risks associated with the management of third-party
patents for increasingly complex products
Sustainable Innovation of products, applications and
processes
Description of risk
The growing need for integrated solutions, in part accelerated by decarbonisation policies, increases the probability that
Prysmian products will incorporate solutions already patented by third parties, with the risk of incurring litigation costs,
that are often very high given the technical skills required to deal with such cases. Exposure to this risk was analysed
over the 2022-2035 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
The Group maps the applications used to develop integrated solutions and the related proprietary patents, striving to
respect the intellectual property rights of third parties when the existence of their pre-existing rights is known. In addition,
the continuous investment made in filing patents has enabled Prysmian to build a solid patent portfolio that represents a
major deterrent against the improper use of the Group’s proprietary technologies by competitors. This risk is monitored
by the Group's Intellectual Property department, support, when necessary and on specific topics, by external
professionals.
Innovation steering committee
In 2022, the Innovation Steering Committee of Prysmian Group confirmed the pace of activities
aimed at consolidating the Group’s main areas of innovation and improving the entrepreneurial
culture of employees. By uniting the strengths of the R&D department, Corporate Hanger, EOSS
and the Digital Innovation department, the following measures were introduced:
●
creation of a global
innovation portfolio
aligned with the Group’s objectives, namely to
be an innovation LEADER in
energy transition
and
digitalisation
by ensuring that high
potential projects are accelerated with the right resources;
•
increased R&D spending, linking Innovation activities to Sustainability activities in
support of the
climate ambition
;
●
enhanced internal and external collaboration, in order to offer higher value-added
products and services that transform Prysmian into a solution provider of cables and
systems, capable of meeting the needs of customers;
●
Promotion of greater employee engagement in the area of innovation via Innovation
Contests and by creating Wired for Innovation, a new initiative that introduces employees
to international experts in areas of innovation relevant to the Group.
The R&D team
Globally, Prysmian Group R&D has more than 1000 professionals working in 26 Research &
Development centres. The main R&D centre, located near the Milan headquarters, coordinates
the activities of local R&D centres and adopts a medium/long-term approach to special projects
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236
dedicated to revolutionary innovations. 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, an electrical testing facility equipped with the most
advanced systems for testing EHV cables, and a physical-chemical lab complete with cutting-
edge instruments for accurately analysing the properties of cables and materials.
A new R&D facility, currently under construction at the Quattordio (AL) plant in Italy, will have
additional test areas for research into HV and EHV cables, as well as special laboratory
instruments for the analysis of materials. This new facility will work in direct synergy with the
compounds centre at the plant, which was recently upgraded with the installation of a new unit
for the production of semi-conductive materials used in medium and high voltage cables.
Group R&D is responsible for the overall innovation strategy, which seeks to make Prysmian a
major player in the value chain, supporting energy transition, digitalisation and sustainability.
The local R&D centres are active operationally in new product development, the design-to-cost
program and the rationalisation of product families.
*operating expenses of Euro 101.4 million and investment of Euro 12.6 million.
Sustainability is increasingly central to the Group’s R&D activities following the 2022 launch of
the
Design For Sustainability
(D4S)
programme, which will change the way of working of the
entire R&D community and related network. The development of new products now considers
their value in terms of sustainability, applying the Eco Cable criteria at the heart of the D4S
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programme. In addition, the “Accolade” programme will include sustainability among the key
criteria when evaluating project portfolios in various countries/Business Units.
The global economy continued to grow significantly in 2022, following the relaxation of
pandemic-related restrictions and the gradual scaling-back (not yet normalised) of the raw
material shortages that affected business performance in 2021. It was a record year for the
Group, especially for the Energy segment, driven by the solid performance of the Telecom
business and the strong order backlog for Projects. The significant recovery in economic activity
was accompanied by marked inflationary pressures sparked, above all, by higher energy and
raw material prices and supply chain disruptions, which were aggravated by the war in Ukraine.
Against this background, our R&D activities provided fundamental support for the business,
implementing more effective procedures for the qualification of alternative materials and
leveraging the Group’s strengths and global presence.
2022 was another record year for the
Design To Cost (DTC)
programme, not least due to the
strong impetus generated by the significant growth in Group revenues.
The DTC programme has helped mitigate variable cost inefficiencies (mainly attributable to raw
material shortages and their price volatility) and improve the competitiveness of our products in
several segments. Performance in the New Product Introduction (NPI
68
) area was even more
significant, with vitality up by as much as 17% (14% in 2021) and over 100 families of new
products active in the Innovation category.
The Group successfully completed the PG Connect Contest, open to the entire Prysmian
population, and the Joint Innovation Contest, organised together with a major customer active
in Multimedia & Enterprise Solutions. The objective of the Joint Innovation Contest was to
strengthen the customer-supplier relationship via the joint development of ideas, while the
purpose of the PG Connect Contest was to define Prysmian's new remote experience. Both
initiatives made it possible to make interesting ideas scalable, obtain a patent and improve the
customer experience.
Prysmian Group is aware that, as evidenced by the SDGs, research today must develop
partnerships with key stakeholders - from the academic world to independent research centres,
from suppliers and all supply chain counterparties to our customers - whose collaboration and
feedback are extremely important to identify those requirements that need most attention.
Prysmian has established consolidated partnerships with over 50 leading universities and
research centres around the world. These strategic partnerships provide Prysmian with support
68
New Product Introduction (NPI) is
the process of establishing a clear plan to take your product from concept
to its final form
. The steps involved in this process vary from project to project, but the ultimate goals are always the
same: to reduce waste, avoid miscommunication, speed up production, and save money.
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238
for cutting-edge technological research and allow it to adopt state-of-the-art innovations in all
areas of the cable and cabling industry.
The 2022 Sustainability Report contains information about the institutions with which Prysmian
collaborates, the research activities conducted by the team and the international conferences
attended by the Group to share the progress made by its research.
New Product Introduction
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 growing importance of
innovation as a success factor, and of the new product development as a driver for improving
the organisation’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®):
●
Accolade is an innovation management tool, designed to manage and measure
innovation, new product development and technology transfer programmes. In Prysmian,
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 prioritising strategic projects, thereby increasing the value creation and
the success rate of innovation. Accolade also offers support for the correct allocation of
resources for new product development;
●
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;
●
fully implemented during 2022 in the United Kingdom, Latin America, North Europe,
Central Europe, Oman and AUTOMOTIVE, Accolade will be gradually rolled out to all
regions and integrated business units in 2022-2023.
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With regard to reporting on NPI activities, a new tool (created internally using Qlikview and
updated automatically) 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. It
is also used to set vitality objectives (NP results/global results) for each region/business unit, in
order to maintain the focus on new product development and analyse the progress in coming
years.
The R&D function implemented numerous new product development projects during 2022,
leading to:
●
over 100 new products in the Innovation category (Category/Type for a new product
that does not exist in the global market);
●
over 650 new products in the Development category (Category/Type for a new product
that does not exist within Prysmian Group, but already exists in the market).
The Q3 2022 parameter measuring the vitality of the Group reflects an increase with respect to
the same period in 2021, rising from 14.0% to 17.1%.
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240
Group investment for a sustainable future
In 2022, Prysmian increased investment in support of its ambition to be an enabler of the energy
transition, responding to accelerating demand for digitalisation and electrification solutions.
Industrial activities
The geographical distribution and capabilities of the various plants allowed the Prysmian Group
to consolidate its industrial strategy even further during 2022. 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 centres 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 minimise distribution costs.
Gross investment totalled Euro 454 million in 2022, which represents an increase on the previous
year (Euro 283 million). This reflects the greater investment in manufacturing and installation
capacity needed to keep pace with the growing demand for digitalisation and electrification
solutions, that are among the most important requirements of the so-called energy transition.
Capacity/Product mix
Investment to increase production capacity and take account of changes in mix accounted for
67% of the total.
Projects.
The largest investment was the commissioning of a new state-of-the-art cable-laying
vessel, involving an investment of roughly Euro 200 million, plus some Euro 40 million for cable
installation equipment. This project follows that of the recently-completed Leonardo da Vinci,
which entered into service during 2021.
The new vessel, which will join the existing fleet in 2025, will perform all offshore cable
installations for projects in the pipeline. These include the DolWin4 and BorWin4 contracts, which
involve the design, manufacture and installation of an interconnection of around 1,000 km of
320 kV HVDC submarine and land cable, using single-core cables sheathed in XLPE. The
submarine cables will be manufactured at the Pikkala (Finland) and Arco Felice (Italy) plants.
In order to support the higher volumes of the Projects BU, linked to growth in the number of
electrification projects as part of the energy transition, investment in a new plant at Brayton
Point (Massachusetts – United States) for the production of submarine cables was approved in
2022. The project involves converting the area, previously occupied by a coal-fired power
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241
station, into a new state-of-the-art inter-array and export submarine cable manufacturing
complex. This will provide a considerable competitive advantage in a market, such as the United
States, that is pursuing major electrification objectives for the coming years, especially in the
offshore wind sector.
Significant investments were also dedicated to increasing production capacity for HVDC
submarine and underground cables at the Pikkala, Gron and Arco Felice plants. In the first case,
the investment - amounting to more than Euro 100 million in total - involves expanding the plant
and building a 185m tower to house a new vertical extrusion line. Investment associated with
the three “German Corridors” contracts (SuedOst Link, A - Nord, Sud Link) has also continued,
with over 2,500km of 525kV DC cables in total, insulated partly in XLPE and partly with the P-
Laser proprietary technology. The cables are being manufactured at the plants in Gron and
Montereau (France), Pikkala (Finland) and Abbeville (USA).
Energy
. Investment in this business segment has focused on certain specific sectors, in order
to support the growth in market demand. In Sedalia (Missouri), the project involves expanding
the plant for the production of low voltage aluminium cables, which mainly serve the
residential/commercial/industrial construction market and the photovoltaic market; on the other
hand, the investment at Williamsport (Pennsylvania) will increase the capacity to produce HV
cables for overhead distribution lines. Investment continues in Marshall (Texas - USA), in order
to increase the production of medium voltage cables serving the power transmission and
distribution sectors. The growth in global demand for medium voltage cables continues and, to
support this need, the Group has decided to invest further in Europe and Latin America.
Telecom
. Investment continues in the Telecom area, in order to increase the capacity to
manufacture optical cables. In Jackson (Mississippi), expansion of the plant will raise the output
of Loose Tube and Drop cables, optimising the Group’s telecom industrial footprint in the United
States and confirming our global leadership in the technological development of new, reliable
and efficient broadband networks. In Dee Why (Australia), the Group has invested to expand
plant capacity and output in order to supply cables for Telstra's new optical fibre network in
Australia. This will extend over 20,000 km, linking the main cities in this country. The project at
Durango (Mexico) is ongoing, with a view to establishing a centre serving the entire Central and
North American region.
Efficiency and Industrial Footprint
About 10% of total investment was allocated to achieving efficiency improvements and
reductions in fixed and variable costs (mainly product design and material usage). The Group is
continuing to perform an important cost optimisation exercise throughout the production chain
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242
of the Telecom business segment. Specifically, investment continued during 2022 in order to
upgrade the machinery with the best production technologies currently available within the
Group.
In the Energy business, investment to optimise the cost of producing aluminium cables for
special applications has been completed at Sedalia (Missouri - USA). As described in the “Energy
Products” section, there is growing market demand for these cables.
During 2022, Prysmian Group continued its ten-year Euro 100 million programme of investments
in Sustainability; the goal is to reduce overall CO2 equivalent emissions by 48% by 2030
(compared with 2019 levels), and achieve the Zero Emissions target (Scopes 1 and 2) by 2035.
These investments, involving expenditure of Euro 12 million in 2022, are being made in various
directions, including the installation of photovoltaic installations at certain Group plants, various
measures to reduce energy consumption and long-term efforts to cut the use of SF6 gas.
IT, Research and Development
Around 8% of investment was dedicated to further development of the Group’s IT systems,
Digital Transformation initiatives and R&D. In pursuit of Prysmian Group's integration strategy,
during 2022 the Group ERP system (SAP 1C) was implemented in Poland, Peru and Canada,
raising to 83 the number of plants managed entirely by SAP 1C, which is now used in more than
30 countries. In the Operations area, projects to implement the Corporate MES (FastTrack) were
completed successfully at Pikkala (Finland) and Slatina Energy (Romania) during Q2 2022;
analysis work on the new projects at Vilanova Energy (Spain) and Livorno (NWC) started during
Q4, with the systems expected to go live in Q2 2023.
Investments continued and increased in the Customer Centricity programme, including a new
initiative as part of action to strengthen the corporate eServices strategy with the introduction
of a new B2B portal.
Lastly, various initiatives were promoted and progressed in the area of Digital Innovation during
the year, in order to increase the digitalisation of installations and obtain multiple benefits (from
safety to increased production capacity).
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243
Base-load
Capital investment to maintain capacity amounted to about 15% of the total. A significant part
of this amount reflects the continued modernisation of production sites. Another significant base-
load element is linked to the global plan to improve road and traffic safety within Group plants.
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245
Methodology
The data and information provided in Non-Financial Statement, refer to all companies belonging
to the Prysmian Group as at 31 December 2022, 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 DNF, 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 indicators are to be considered additional to the information prepared in accordance
with the GRI Standards to respond to the requests of art. 3 and 4 of 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 “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 centralised and activates a virtuous analysis-
management circle for these indicators.
The Consolidated Non-Financial Statement (refers to GRI Content Index) is published annually.
Except for the information reflected in the indicators summarised 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 assurance 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.
Notes on the data and information
In general, for all data analysed by geographical area, the following regions were considered:
North America, Latin America, EMEA (Europe, Middle East and Africa) and APAC regions. For
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
246
details of the countries included in the geographical regions, please refer to the map of the
Group’s plants shown in the “Prysmian Group: Global Leader” section.
Workforce data
For 2022, the Group’s total figures at 31/12/2022 have been considered.
The total Group employment and turnover data includes Oman Aluminium Processing Industries
– OAPIL and Associated Cables Pvt. Ltd., which were excluded in prior years.
The compensation and gender pay gap
data
excludes Associated Cables Pvt. Ltd. only.
Environmental data
The environmental data presented in the document is derived from a reporting system that, with
respect to the stated reporting boundary, does not include offices and distribution centres 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 boundary are the result of these linear
data for the years 2020 and 2021, while they are estimated on the basis of actual production in
2022;
• Sohar plant (Oman): the data, included in the reporting boundary, for the years 2020 and
2021 were estimated on a linear basis, while in 2022 they are actual.
These sites 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 CO2e 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 Non-Financial Statement. Lastly, the environmental data
of the Montereau plant are included in Energy business.
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Calculation of GHG emissions
Greenhouse gases analysed
The GHG emissions included in this document comprise CO2, HFC, PFC and SF6. Unless
otherwise non specified, CH4 and N2O are included in all the emission factors (for instance for
all the combustion related activities), as the unit of measure is CO2eq. Direct emissions of CH4
and N2O have been assessed and are not material to the overall emissions. GHG emissions are
expressed in CO2e, 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 CO2e 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;
• SF6 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;
• electricity produced from fossil fuels;
• district heating;
• steam.
The 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;
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248
• fuels and energy-related activities;
• upstream transportation and distribution;
• 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 “GHG Statement” prepared by the Group.
Emission factors
Sources of emission factors for the Scope 1 calculation:
•
2020:
o
Fuels: Defra 2020;
o
F-GAS: GHG Protocol.
•
2021:
o
Fuels: Defra 2021;
o
F-GAS: GHG Protocol.
•
2022:
o
Fuels: Defra 2022;
o
F-GAS: GHG Protocol.
Sources of emission factors for the Scope 2 calculation:
•
2020:
o
Location-based: Terna 2018;
o
Market-based: AIB 2019 (for European countries) and Center for Resource
Solutions (for the USA and Canada), using the “2020 Green-e Energy Residual Mix
Emissions Rates” as source where available, otherwise Terna 2018.
•
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;
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249
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.
Calculation of Scope 3 GHG emissions
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 organisation. Installation activities are included in this category.
The methodology used to calculate these emissions is described below:
•
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 and the recycling input rate. For other raw materials,
emission factors are taken from the Ecoinvent database, applying the EU guidelines on
product environmental footprint (“EU-PEF”). The emission factors presume that the most
of the metals used will be recycled at the end of the product’s life cycle;
•
category 1.b – for each category of expenditure, a specific emission factor is
taken from the EEIO database
69
, 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: Côte
d’Ivoire, Tunisia, India, the OAPIL plant in Oman and the former reporting boundary of
EHC, Omnisens and Eksa;
•
for category 1.a – composites and other metals and category 1.b: only data for
the former reporting boundary of Omnisens is excluded;
69
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 CO2e/GDP, and switch
to service sector of global economy.
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250
•
for category 1.b – non-product-related emissions: data for the OAPIL plant in
Oman, the Chiplun plant in India and the former reporting boundary of EHC and
Omnisens is 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,
customised 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 Scopes 1 or 2)
Emissions are calculated by multiplying the quantities of fuel, electricity and thermal energy by
the relevant upstream emission factors. The 2022 conversion factors issued by the International
Energy Agency (IEA)
70
, BEIS (UK Department for Business, Energy and Industrial Strategy) and
DEFRA (UK Department for Environment, Food and Rural Affairs)
71
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.
•
Inbound transport data was not available and so an estimate was used. The data sources
used for the estimate include 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
70
Source of emission factors:
IEA (2022), “Emission Factors”
71
Source of emission factors:
DEFRA (2022), “UK Government GHG Conversion Factors for Company Reporting”
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251
than 3,000 km were made by road, while all those of more than 3,000 km were made
10% by 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 “tonnes-km”
(multiplying the total distance travelled by the weight transported) and then multiplying
it by the applicable BEIS/DEFRA emission factor. The emissions from outbound logistics
not performed by the Group or outsourced are included in category 9.
Data for the following Units is excluded from this emissions category: Belgium, Côte d’Ivoire,
Russia and Automotive business (limited to Tunisia, and North America), Projects (PPL, NSW and
the Arco Felice plant), OAPIL (Oman), Chiplun (India), EHC (North America), the MMS business
(US, Brazil) and other minor streams in among China logistic centers and European semifinished.
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 BEIS/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
, 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, car rental and overnight stays.
•
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 using the HGH Protocol’s “Quantis- Scope 3 Evaluator”, considering
the total number of the Group’s employees. This tool provides the tonnes of CO2e for employee
commutes to work. The value obtained is then uplifted by 5% to take account of any missing
quantities or modes of travel.
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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 by road, while all those of more than 3,000 km were
made 10% by 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 “tonnes-km”
(multiplying the total distance travelled by the weight transported) and then multiplying it by
the applicable BEIS/DEFRA emission factor.
Data for the following Units is excluded from this emissions category: Belgium, Côte d’Ivoire,
Russia and Automotive business (limited to Tunisia, and North America), Projects (PPL, NSW and
the Arco Felice plant), OAPIL (Oman), Chiplun (India), EHC (North America), the MMS business
(US, Brazil) and other minor streams in among China logistic centers and European semifinished.
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 2022 until end of life (between 2045 and 2062,
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 2062, in order to take account of the expected changes in
the CO
2
intensity of the grids. Grid decarbonisation 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.
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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 88% of sales, while “telecom cables” and “optical fibre” are produced by
the “Telecom” division and account for the remaining 12%;
•
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 tonnes of product, rather than km. This is because
the BEIS/DEFRA emission factors are expressed in kgCO
2
e/tonne. 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 12%
to account for “telecom cables” and “optical fibre”.
Category 15: Investments
Emissions are calculated using the following equation:
•
CO
2
e = SUM (USD invested per sector x emission factor for the sector (kgCO
2
e/million
USD)).
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 “industrial” 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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
254
-
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 (Frequency rate, Severity rate) does not include: for 2020 and 2021, the
companies Associated Cables Pvt. Ltd. (Chiplun plant) and Oman Aluminium Processing
Industries LLC (Sohar plant); for 2022, Associated Cables Pvt. Ltd. (Chiplun plant).
Data on occupational diseases does not include: for 2020, Associated Cables Pvt. Ltd. (Chiplun
plant), Oman Aluminium Processing Industries LLC (Sohar plant) and Oman Cables Industry
(Muscat plant); for 2021, Associated Cables Pvt. Ltd. (Chiplun plant) and Oman Aluminium
Processing Industries LLC (Sohar plant); for 2022, Associated Cables Pvt. Ltd. (Chiplun plant).
The injury-related indices are calculated as follows:
•
Frequency rate : (total number of injuries with loss of work/hours worked) *200,000;
•
Fatalities are included in the calculation of the Frequency rate;
•
Severity rate: (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 and 2022,
while for 2020 the hours worked were determined as a proportion of the FTEs.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
255
Correlation table Decree 254/2016, Material Aspects and GRI Aspects
Legislative
Decree No.
254/16
Material topics for
Prysmian Group
GRI
Standard
Chapter/Page
Organisational
Model
Governance, ethics and
integrity
GRI
3-3
GRI 2-23
Ethics and integrity - Page 137
Environmental responsibility - Page 166
People and human rights - Page 188
Sustainable value chain - Page 216
-
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
GRI 2-30
GRI
3-1
GRI 3-2
Methodology - Page 245
Prysmian Group: a global leader - Page 14
Highlights – Page 12
Corporate governance – Page 44
External reference: “Report on Corporate
Governance and the Ownership Structure” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
Letter of the CEO – Page 7
Strategy and commitment to sustainability -
Page 29
Risk factors – Page X
Ethics and integrity - Page 137
External reference: “Report on remuneration
policy and compensation paid”
2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
Memberships in trade associations -
Page 21
Environmental responsibility - Page 166
Memberships in trade associations -
Page 21
Remuneration policies and welfare
plans – Page 201
People and human rights – Page 188
Prysmian Group’s customers – Page 225
Sustainable value chain - Page 216
2022 Materiality analysis – Page 126
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
256
Personnel
Human capital’s well-
being, engagement &
upskilling
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
People and human rights - Page 188
Remuneration policies and welfare
plans - Page 201
Occupational health and safety - Page 210
-
GRI
2-7
GRI 2-8
Prysmian Group: a global leader - Page 14
People and human rights – Page 188
Human Rights
Greater
diversity,
inclusion & respect for
human rights
GRI
3-3
GRI 405-1
People and human rights - Page 188
Anti-corruption
Governance, ethics and
integrity
GRI 3-3
GRI 205-2
GRI 205-3
Ethics and integrity - Page 137
Environment
Biodiversity
and
impacts on nature
GRI
3-3
GRI 304-3
Environmental responsibility - Page 166
Decarbonisation
towards net-zero and
digitalisation
GRI
3-3
GRI 302-1
GRI 302-3
GRI 305-1
GRI 305-2
GRI 305-3
GRI 305-4
Environmental responsibility - Page 166
Sustainable innovation
for
products,
applications
and
processes
GRI 3-3
Sustainable innovation for products,
applications and processes - Page 230
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
257
Sustainable
value
chain
GRI 3-3
GRI 308-2
Sustainable value chain - Page 216
Efficient,
sustainable
and circular operations
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 306-1
GRI 306-2
GRI 306-3
Sustainable value chain - Page 216
Environmental responsibility - Page 166
Energy - Page 170
Emissions - Page 171
Water - Page 182
Waste - Page 177
Social
Cyber
security
and
data protection
GRI
3-3
GRI 418-1
Cybersecurity - Page 157
Sustainable
value
chain
GRI 3-3
GRI 414-2
Sustainable value chain - Page 216
Governance, ethics and
integrity
GRI
3-3
GRI 206-1
GRI 207-1
GRI 207-2
GRI 207-3
GRI 207-4
Ethics and integrity - Page 137
The Group’s tax strategy - Page 148
Impacts
on
local
communities
GRI
3-3
GRI 203-1
Commitment to the community – Page 228
Sustainable
value
chain
GRI
3-3
GRI 201-2
GRI 203-1
GRI 204-1
Environmental responsibility - Page 166
Commitment to the community – Page 228
Sustainable value chain - Page 216
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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259
GRI Content Index
GRI Aspects
GRI Standards
Omissions
Chapter/Page
Disclosure
Description
Organisation
and
reporting
procedures
2-1
Organisational details
Methodology - Page 245
Prysmian Group: Global leader - Page 14
2-2
Entities included in the
organisation’s
sustainability reporting
Methodology - Page 245
2-3
Reporting
period,
frequency and contact
point
Methodology - Page 245
2-4
Restatements
of
information
compared
with last report
Methodology - Page 245
2-5
External assurance
Methodology - Page 245
Activities
and
workers
2-6
Activities, value chain
and
other
business
relationships
Highlights - Page 12
Prysmian Group: Global leader - Page 14
Strategy and commitment to sustainability -
Page 29
Prysmian Group’s customers- Page 225
Sustainable value chain - Page 216
2-7
Employees
Prysmian Group: Global leader - Page 14
People and human rights - Page 188
2-8
Workers who are not
employees
People and human rights - Page 188
Governance
2-9
Governance
structure
and composition
Corporate governance - Page 44
External
reference:
“Report
on
Corporate
Governance and Ownership” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
2-10
Nomination
and
selection of the highest
governance body
External
reference:
“Report
on
Corporate
Governance and Ownership” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
2-11
Chair of the highest
governance body
Corporate governance - Page 44
External
reference:
“Report
on
Corporate
Governance and Ownership” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
2-12
Role
of
the
highest
governance
body
in
overseeing
the
management of impacts
External
reference:
“Report
on
Corporate
Governance and Ownership” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
2-13
Delegation
of
responsibility
for
managing impacts
External
reference:
“Report
on
Corporate
Governance and Ownership” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
2-14
Role
of
the
highest
governance
body
in
sustainability reporting
External
reference:
“Report
on
Corporate
Governance and Ownership” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
2-15
Conflicts of interest
Risk factors - Page 97
2-16
Communication
of
critical concerns
Ethics and integrity - Page 137
2-17
Collective knowledge of
the highest governance
body
External
reference:
“Report
on
Corporate
Governance and Ownership” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
260
2-18
Evaluation
of
the
performance
of
the
highest governance body
External
reference:
“Report
on
Corporate
Governance and Ownership” 2021
files/02_Report%20on%20Corporate%20
Governance%202022.pdf
2-19
Remuneration policies
People and human rights - Page 188
External reference: “Report on remuneration
policy and compensation paid” 2021
/files/atoms/files/prysmian-remuneration-
report-2022-eng.pdf
2-20
Process
to
determine
remuneration
External reference: “Report on remuneration
policy and compensation paid” 2021
/files/atoms/files/prysmian-remuneration-
report-2022-eng.pdf
2-21
Annual
total
compensation ratio
Remuneration Policies and Welfare plans – Pag.
201
Strategy,
policies
and
procedures
2-22
Statement
on
sustainable development
strategy
Letter from the CEO - Page 7
2-23
Policy commitments
Ethics and integrity - Page 137
Environmental responsibility - Page 166
People and human rights - Page 188
Sustainable value chain - Page 216
2-24
Embedding
policy
commitments
Ethics and integrity - Page 137
Environmental responsibility - Page 166
People and human rights - Page 188
Sustainable value chain - Page 216
2-25
Processes to remediate
negative impacts
Ethics and integrity - Page 137
Environmental responsibility - Page 166
People and human rights - Page 188
Sustainable value chain - Page 216
2-26
Mechanisms for seeking
advice
and
raising
concerns
Ethics and integrity - Page 137
2-27
Compliance with laws
and regulations
Ethics and integrity - Page 137
2-28
Membership associations
Creating
value
through
stakeholder
engagement- Page 122
Stakeholder
engagement
2-29
Approach to stakeholder
engagement
Creating
value
through
stakeholder
engagement- Page 122
2-30
Collective
bargaining
agreements
People and human rights - Page 188
Information on
material topics
3-1
Process
to
determine
material topics
Creating
value
through
stakeholder
engagement- Page 122
3-2
List of material topics
Creating
value
through
stakeholder
engagement- Page 122
201:
Economic
performance
3-3
Management
of
material topics
Sustainable value chain - Page 216
201-2
Financial
implications
and
other
risks
and
opportunities due
to climate change
Environmental responsibility - Page 166
203:
Indirect
economic impacts
3-3
Management
of
material topics
Commitment to communities - Page 228
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261
203-1
Infrastructure
investments
and
services supported
Commitment to communities - Page 228
204:
Procurement
practices
3-3
Management
of
material topics
Sustainable value chain - Page 216
204-1
Proportion
of
spending on local
suppliers
Sustainable value chain - Page 216
205: Anti-corruption
3-3
Management
of
material topics
Ethics and integrity - Page 137
205-2
Communication
and training about
anti-corruption
policies
and
procedures
Ethics and integrity - Page 137
205-3
Confirmed
incidents
of
corruption
and
actions taken
Ethics and integrity - Page 137
206:
Anti-
competitive
behaviour
3-3
Management
of
material topics
Ethics and integrity - Page 137
206-1
Legal actions for
anti-competitive
behaviour,
anti-
trust
and
monopoly
practices
Ethics and integrity - Page 137
207: Tax (2019)
3-3
Management
of
material topics
The Group’s tax strategy - Page 148
207-1
Approach to tax
The Group’s tax strategy - Page 148
207-2
Tax
governance,
control and risk
management
The Group’s tax strategy - Page 148
207-3
Stakeholder
engagement
and
management
of
tax concerns
The Group’s tax strategy - Page 148
207-4
Country-by-
country reporting
The Group’s tax strategy - Page 148
Annexes - Page 281
301: Materials
3-3
Management
of
material topics
Sustainable value chain - Page 216
301-1
Materials used by
weight or volume
Sustainable value chain - Page 216
302: Energy
3-3
Management
of
material topics
Energy - Page 170
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262
302-1
Energy
consumption
within
the
organisation
Energy - Page 170
302-3
Energy intensity
Energy – Page 170
303:
Water
and
effluents (2018)
3-3
Management
of
material topics
Water - Page 182
303-1
Interactions
with
water as a shared
resource
Water - Page 182
303-2
Management
of
water
discharge-
related impacts
Water - Page 182
303-3
Water withdrawal
Water - Page 182
303-5
Water
consumption
Water – Page 182
304: Biodiversity
3-3
Management
of
material topics
Biodiversity - Page 185
304-3
Habitats protected
or restored
Biodiversity - Page 185
305: Emissions
3-3
Management
of
material topics
Emissions - Page 171
305-1
Direct (Scope 1)
GHG emissions
Emissions - Page 171
305-2
Energy
indirect
(Scope
2)
GHG
emissions
Emissions - Page 171
305-3
Other indirect GHG
emissions (Scope
3)
Emissions - Page 171
305-4
Intensity of GHG
emissions
Emissions - Page 171
306: Waste (2020)
3-3
Management
of
material topics
Waste - Page 177
306-1
Waste generation
and
significant
waste-related
impacts
Waste - Page 177
306-2
Management
of
the
significant
waste-related
impacts
Waste - Page 177
306-3
Waste generated
Waste - Page 177
3 -3
Management
of
material topics
Sustainable value chain - Page 216
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263
308: Environmental
assessment
of
suppliers
308-2
Negative
environmental
impacts
in
the
supply chain and
actions taken
Sustainable value chain - Page 216
401: Employment
3-3
Management
of
material topics
People and human rights- Page 188
401-1
New
employee
hires
and
employee turnover
People and human rights- Page 188
401-2
Benefits provided
to
full-time
employees
that
are not provided to
temporary or part-
time employees
Remuneration policies and welfare plans –
Page 201
402:
Management
of
work
and
industrial relations
402-1
Minimum
notice
periods regarding
operational
changes
People and human rights - Page 188
403:
Occupational
health and safety
(2018)
3-3
Management
of
material topics
Occupational health and safety - Page 210
403-1
Occupational
health and safety
management
system
Occupational health and safety - Page 210
403-2
Hazard
identification, risk
assessment
and
incident
investigation
Occupational health and safety - Page 210
403-3
Occupational
health services
Occupational health and safety - Page 210
403-4
Worker
participation,
consultation
and
communication on
occupational
health and safety
Occupational health and safety - Page 210
403-5
Worker training on
occupational
health and safety
Occupational health and safety - Page 210
403-6
Promotion
of
worker health
Occupational health and safety - Page 210
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264
403-7
Prevention
and
mitigation
of
occupational
health and safety
impacts
directly
linked by business
relationships
Occupational health and safety - Page 210
403-9
Work-related
injuries
Occupational health and safety - Page 210
403-10
Work-related
ill
health
Occupational health and safety - Page 210
404: Training and
education
3-3
Management
of
material topics
People and human rights - Page 188
404-1
Average hours of
training per year
per employee
People and human rights - Page 188
404-3
Percentage
of
employees
receiving
regular
performance
and
career
development
reviews
People and human rights - Page 188
405: Diversity and
equal opportunity
3-3
Management
of
material topics
People and human rights - Page 188
405-1
Diversity
of
governance bodies
and employees
People and human rights - Page 188
414: Supplier social
assessment
3-3
Management
of
material topics
Sustainable value chain – Page 216
414-2
Negative
social
impacts
in
the
supply chain and
actions taken
Sustainable value chain – Page 216
418:
Customer
privacy
3-3
Management
of
material topics
Cyber security - Page 157
418-1
Substantiated
complaints
concerning
breaches
of
customer privacy
and
losses
of
customer data
Cyber security - Page 157
Sustainable
innovation
of
products,
applications
and
processes – Topics
not addressed by the
GRI Standards
3-3
Management of the
material topic
Sustainable
innovation
for
products,
applications and processes- Page 230
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265
European taxonomy
This section complies with the reporting requirements set out in Regulation (EU) 2020/852
(hereinafter, the “Regulation” or the “Taxonomy”).
The disclosures also make reference to Delegated Regulation 2021/2139 (hereinafter, the
“Climate Delegated Act”), which lists the EU Taxonomy-eligible economic activities for the first
two climate objectives and the related technical screening criteria, and to Regulation 2021/2178
(hereinafter, the “Art. 8 Delegated Act” or the “Disclosure Delegated Act”).
Further information about the analyses presented below can be found in the “EU Taxonomy”
section of Prysmian Group’s Sustainability Report.
Process for determining eligibility
An activity is defined as eligible if it is described in the Climate Delegated Act. In order to identify
Taxonomy-eligible activities, the activities carried out by the Prysmian Group were analysed to
determine which of them could be associated with those included in the annexes to the Climate
Delegated Act. For the purposes of this analysis and to avoid the risk of double counting,
activities were only analysed in relation to the climate change mitigation objective, given the
greater impact of the Prysmian business on that objective. The eligible activities are presented
below.
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266
Table 1 - Eligible economic activities
Economic activities
Description of the activities of the Prysmian Group
3.1
Manufacture
of
renewable
energy
technologies
Manufacture of cables and accessories for renewable energies (wind
and solar).
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:
●
cables labelled Eco Cable, the first green label in the cables
industry;
72
●
optical fibre, optical cables and optical fibre submarine cables
for the telecommunications sector;
●
special cables for exclusive use in electric cars;
●
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 optimise
energy consumption.
4.9 Transmission and
distribution
of
electricity
Projects in the following categories:
●
manufacture, installation and maintenance of HV terrestrial
systems;
●
manufacture, installation and maintenance of HV submarine
interconnections;
●
manufacture, installation and maintenance of systems for the
connection of offshore wind farms.
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 to reduce its GHG
emissions.
Further information can be found in the section entitled “Criteria for the calculation of KPIs and
background information”.
72
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.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
267
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, does no significant harm to the other five environmental
objectives and complies with the minimum safeguards standards.
After identifying the eligible economic activities, specific analyses were carried out on the
technical screening criteria specified in the Regulation and Annex I of the Climate Delegated Act,
in order to check the alignment of each economic activity with the objective of “climate change”
mitigation.
Substantial contribution
Analysis of substantial contribution for activity 3.1
Prysmian Group 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 analysed 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.
Only some of the families of low-emission cables and accessories deemed eligible also satisfy
the substantial contribution criterion, being presented as among the best alternatives available
on the market with ISO 14067:2018 certification.
The substantial contribution made by activity 3.6 remains unclear and, as indicated in the FAQs
published by the European Commission in December 2022, the application of this criterion is
both somewhat flexible and strictly dependent on the sector / activity to which it is applied.
Analysis of substantial contribution for activity 4.9
As required by the substantial contribution criterion of the Climate Delegated Act, 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 Act for activity 4.9.
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
268
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. This means solely
those transmission and distribution infrastructure projects whose average grid emission factor
73
or, in the case of several interconnected grids, whose weighted average grid emission factor, is
less than the maximum limit of 100 g CO2e/kWh.
Only projects that respect the above criteria comply with the substantial contribution criterion
for activity 4.9.
Compliance with DNSH criteria requiring no significant harm be done to the other 5
environmental objectives
Compliance with the DNSH 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 area 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 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 recognised 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 2022. 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
analysis was developed (starting from an optimistic scenario, before considering the worst case)
over a 15-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.
73
Source: International comparisons, TERNA
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
269
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
Conformity with Appendix B of the Climate Delegated Act was checked for production plants in
relation to activities 3.1 and 3.6, and to the related procedures, certifications and assessments.
The DNSH criterion does not apply to activity 4.9
97% of Group plants hold ISO 14001 certification for their environmental management systems,
which guarantee and monitor the sustainable use and protection of water and marine resources.
The commitment of the organisation 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 both activities (3.1 and 3.6).
Further information about how the Group manages its water resources is presented in the
“Water” section of the chapter on “Environmental responsibility”.
Transition to a circular economy
For activities 3.1 and 3.6, techniques that facilitate the circular economy must be implemented,
from the product design phase to the management of waste.
The Prysmian Group 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 the “Circular economy”
section of the chapter on “Environmental responsibility” 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 analysed and included in activity 4.9, ensures a high level of recycling and reuse
during manufacturing and installation phases.
Further information about the waste produced, as well as its recycling and disposal, is presented
in the “Waste” section of the chapter on “Environmental responsibility”.
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For the three 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 specified in Appendix C of Delegated Regulation 2021/2139 require that economic
activities 3.1 and 3.6 do not lead to the manufacture, placing on the market or use of any of the
chemical substances listed in European Regulations and Directives.
The analysis was carried out for each material code at each manufacturing plant using detailed
questionnaires, with the aim of isolating cables containing one or more of the chemical
substances mapped in the relevant Regulations and Directives and excluding them from the
alignment perimeter.
Specifically, the Prysmian Group was able to check satisfaction of criteria letters a) to f) in detail,
since they address a clear and well-defined perimeter.
Despite the uncertainty generated by criterion g) and the limited time available following the
indications given by the European Commission in the FAQs published in December 2022, the
Group nevertheless carried out checks on the hazardous substances considered most significant,
making reference to the lists provided by the Commission.
Analyses of those activities 3.1 and 3.6 that satisfy the substantial contribution criterion found
that the majority of the cables analysed met the requirements;
Substances of Very High Concern
(SVHC), identified in criterion f), were only found in a limited number of cases (linked to activity
3.1).
Lastly, given the absence of complete and timely instructions from the EU Commission, the
Group decided to exclude application of the “essential use for the society” concept from the
analysis.
Accordingly, satisfaction of the DNSH criterion relating to the prevention and reduction of
pollution was not verified for the cables identified as containing one or more of the substances
listed by the EU Commission.
With regard to activity 4.9, eligible projects are limited solely to those involving underground or
submarine cables; accordingly, the requirements for over-ground lines are not applicable. In
addition, no polychlorinated biphenyls (PCBs) are used. As a result, activity 4.9 is deemed to
comply with the DNSH criterion for the prevention and reduction of pollution.
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Protection and restoration of biodiversity and ecosystems
The DNSH criterion refers to Appendix D of the Climate Delegated Act, which requires the impact
of economic activities on biodiversity and ecosystems to be considered.
At plant level (activities 3.1 and 3.6), 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 the 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 vegetable
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.
Further details about the impact of the Group on biodiversity is presented in the “Biodiversity”
section of the chapter on “Environmental responsibility”.
The requirements of this criterion are therefore considered to be satisfied by both the
manufacturing sector activities (3.1 and 3.6) and energy sector activities (4.9).
Minimum Safeguards
Regarding conformity with art. 3.c) of Regulation 2020/852, the Group analysed compliance with
the minimum safeguards 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.
Human rights, including those of workers
In the context of responsible business conduct in terms of human rights, the commitments made
by the Prysmian Group 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
organisation, the Group implements a system of regular due diligence covering its suppliers.
This system maps the risk throughout the supply chain by analysing the risk factors attributable
to three macro areas: sustainability and management systems; environmental criteria; human
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272
and workers’ rights. Based on the results obtained, the Group arranges for third parties to carry
out specific audits of critical suppliers. In particular, 5 audits were carried out in 2022, raising
the total number of suppliers audited to 30 since implementation of the process in 2017. The
Group also participates in specific human rights initiatives addressing business-related topics,
such as the Responsible Mica Initiative (RMI).
Taxation
The Group attaches great importance 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 cooperation with the tax authorities and third parties, in order to minimise the
substantive 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 “Tax strategy of the Group” section of this
document.
Fair competition
The Prysmian Group 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. Further details are presented in the “Ethics
and integrity” chapter of this document.
Anti-corruption
The procedures adopted by the Prysmian Group to mitigate the risk of corruption include the
application of an anti-corruption management system (ISO 37001 certified), an anti-corruption
policy and
Third Party Program and Process, Gifts & Entertainment
and
Conflicts of Interest
procedures, regarding which periodic employee training is provided. 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, the Prysmian Group has not been definitively
condemned for the infringement of human rights or workers’ rights, for corruption or for tax
offences, and has not been involved in any cases examined by an OECD
National Contact Point
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(NCP), or interviewed by the
Business and Human Rights Resource Center
(BHRRC). 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 expenses 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 the section
on “Fair competition”, to reduce the probability of infringements in this area.
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
standards.
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).
They are presented in the templates provided in Annex II of the Art. 8 Delegated Act. Given that
the regulator mandated the adoption of a simplified version of the Taxonomy in 2021, this past
year was the first to report on alignment. Accordingly, no comparative alignment data is
presented, since it is not available.
The proportion of the Group’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 Attachment I of the Art. 8 Delegated Act.
EU taxonomy 2022: main Prysmian results
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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 2022 Consolidated Income
Statement, 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 allowed 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 traceable to contracts with customers. No
changes in the composition and reconciliation of revenues are reported, since 2022 was the first
year of alignment-level reporting in which that level of detail is provided.
CapEx
Definition and reconciliation
The Taxonomy-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 fixed assets
during the year before depreciation, amortisation, writedowns and writebacks, including those
deriving from business combinations. Total CapEx can be reconciled with the 2022 Consolidated
Financial Statements of the Group by reference to “Gross investments”.
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 para. 1.1.2.2 of Annex I, Art.
8 Delegated Act);
-
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 para. 1.1.2.2 of Annex I, Art. 8 Delegated Act);
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
275
-
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 para.
1.1.2.2 of Annex I, Art. 8 Delegated Act).
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, the Group 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 expenditure caption was carried out to identify
those associated with aligned activities. With regard to the manufacture of renewable energy
technologies, the related expenditure was allocated precisely to the sites responsible for that
economic activity. In the case of sites where both Taxonomy-eligible/aligned and non-aligned
economic activities are carried out, the portion of CapEx was calculated with reference to the
actual 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
The capital expenditure included in a CapEx plan relates to the investment of about Euro 240
million in the construction of a new cable-laying vessel. This will expand the alignment of activity
4.9 Transmission and distribution of electricity
, thus contributing to achievement of the “climate
changes mitigation” objective. In particular, this vessel will be deployed from 2025 on projects
involving the installation of cables for energy transmission for connecting the electricity grid to
offshore wind farms.
The 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 intensives or to reduce its GHG emissions, is completed and made operational within
18 months of its recognition in the financial statements. This CapEx is principally attributable to
economic activity
7.3 Installation, maintenance and repair of devices for energy efficiency
.
In order to avoid double counting, any capital expenditure identified in category (c), para.
1.1.2.2 of Annex I, Art. 8 Delegated Act, but also included in the denominator relating to assets
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
276
or processes associated with Taxonomy-eligible/aligned economic activities (category a in para.
1.1.2.2 of Annex I, Art. 8 Delegated Act), was included in the latter category.
The capital expenditure associated with the above economic activities is treated solely as eligible.
Given the amount of the expenditure concerned, the Group did not perform the alignment
analysis because that would have required involving the respective suppliers.
Consistent with the requirements of the Art. 8 Delegated Act, the amounts included in the
numerator of the alignment KPI are detailed below.
Quantitative breakdown by economic activity of the amounts included in the
numerator of the alignment KPI (Euro mln)
Activity
Increases in property, plant and equipment
Of which part of a CapEx plan
3.1
2.3
4.9
187.7
40.8
The capital expenditure incurred to increase the intangible assets generated internally was less
than Euro 0.0 million and there were no increases in assets deriving from business combinations
during the year.
OpEx
Definition and reconciliation
The Taxonomy-aligned operating expenses (OpEx) reflect the portion of eligible and aligned
OpEx included in the non-capitalised 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.
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
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Consistent with the Art. 8 Delegated Act, the amounts included in the numerator of the alignment
KPI are detailed below by type of cost.
Quantitative breakdown of the amounts included in the numerator of the alignment
KPI
OpEx
(Euro mln)
R&D costs
18.5
Short-term leases
8.3
Maintenance and repairs
19.0
Other direct expenditure on the routine maintenance of
property, plant and equipment
10.3
Total
56.1
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Table A - Turnover
Substantial contribution criteria
DNSH criteria
Economic activities
Code(s)
Absolute turnover
Proportion of turnover
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Minimum safeguards
Taxonomy-aligned
proportion of turnover,
year N
Taxonomy-aligned
proportion of turnover,
year N-1
Category (enabling
activity)
Category (transitional
activity)
Mln EUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
3.1. Manufacture of renewable energy technologies
C27.3
666.7
4.1%
100%
0%
N/A
N/A
N/A
N/A
N/A
Y
Y
Y
Y
Y
Y
4.1%
N/A
E
3.6. Manufacture of other low carbon technologies
C27.3
45.2
0.3%
100%
0%
N/A
N/A
N/A
N/A
N/A
Y
Y
Y
Y
Y
Y
0.3%
N/A
E
4.9. Transmission and distribution of electricity
F42.22
1,120.9
7.0%
100%
0%
N/A
N/A
N/A
N/A
N/A
Y
N/A
Y
Y
Y
Y
7.0%
N/A
E
Turnover of environmentally sustainable
activities (Taxonomy-aligned activities) (A.1)
1,832.7
11.4%
100%
0%
N/A
N/A
N/A
N/A
11.4%
N/A
11.4%
A.2 Taxonomy-Eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities)
3.1. Manufacture of renewable energy technologies
C27.3
140.6
0.9%
0.0%
3.6. Manufacture of other low carbon technologies
C27.3
4,113.2
25.6%
0.0%
4.9. Transmission and distribution of electricity
F42.22
527.9
3.3%
0.0%
Turnover of Taxonomy-eligible not but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2)
4,781.8
29.8%
0.0%
Total Turnover of Taxonomy eligible activities
(A.1 + A.2) (A)
6,614.6
41.2%
100%
0%
N/A
N/A
N/A
N/A
11.4%
N/A
11.4%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities
(B)
9.452,1
58.8%
Total (A + B)
16,066.6
100.0%
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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Table B - CapEx
Substantial contribution criteria
DNSH criteria
Economic activities
Code(s)
Absolute CapEx
Proportion of CapEx
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Minimum safeguards
Taxonomy-aligned
proportion of CapEx,
year N
Taxonomy-aligned
proportion of CapEx,
year N-1
Category (enabling
activity)
Category (transitional
activity)
Mln EUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
3.1. Manufacture of renewable energy technologies
C27.3
2.4
0.5%
100%
0%
N/A
N/A
N/A
N/A
N/A
Y
Y
Y
Y
Y
Y
0.5%
N/A
E
4.9. Transmission and distribution of electricity
F42.22
187.7
41.3%
100%
0%
N/A
N/A
N/A
N/A
N/A
Y
N/A
Y
Y
Y
Y
41.3%
N/A
E
CapEx of environmentally sustainable activities (Taxonomy-
aligned) (A.1)
190.1
41.9%
100%
0%
N/A
N/A
N/A
N/A
41.9%
N/A
41.9%
A.2 Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
3.1. Manufacture of renewable energy technologies
C27.3
16.9
3.7%
0%
3.6. Manufacture of other low carbon technologies
C27.3
97.7
21.5%
0%
4.9. Transmission and distribution of electricity
F42.22
24.7
5.4%
0%
7.3. Installation, maintenance, and repair of energy efficiency
equipment
Various
0.3
0.1%
0%
CapEx of Taxonomy-eligible not but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
139.6
30.7%
0%
Total CapEx of Taxonomy eligible activities (A.1 + A.2) (A)
329.7
72.6%
100%
0%
N/A
N/A
N/A
N/A
41.9%
N/A
41.9%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex of Taxonomy-non-eligible activities (B)
124.5
27.4%
Total (A + B)
454.1
100.0%
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Table C
–
OpEx
Substantial contribution criteria
DNSH criteria
Economic activities
Code(s)
Absolute OpEx
Proportion of OpEx
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
Biodiversity and
ecosystems
Minimum safeguards
Taxonomy-aligned
proportion of OpEx,
year N
Taxonomy-aligned
proportion of OpEx,
year N-1
Category (enabling
activity)
Category (transitional
activity)
Mln EUR
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
3.1. Manufacture of renewable energy technologies
C27.3
17.0
3.9%
100%
0%
N/A
N/A
N/A
N/A
N/A
Y
Y
Y
Y
Y
Y
3.9%
N/A
E
3.6. Manufacture of other low carbon technologies
C27.3
1.1
0.3%
100%
0%
N/A
N/A
N/A
N/A
N/A
Y
Y
Y
Y
Y
Y
0.3%
N/A
E
4.9. Transmission and distribution of electricity
F42.22
38.0
8.8%
100%
0%
N/A
N/A
N/A
N/A
N/A
Y
N/A
Y
Y
Y
Y
8.8%
N/A
E
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
56.1
13.0%
100%
0%
N/A
N/A
N/A
N/A
13.0%
N/A
13.0%
A.2 Taxonomy-Eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities)
3.1. Manufacture of renewable energy technologies
C27.3
1.0
0.2%
0.0%
3.6. Manufacture of other low carbon technologies
C27.3
96.8
22.5%
0.0%
4.9. Transmission and distribution of electricity
F42.22
17.3
4.0%
0.0%
OpEx of Taxonomy-eligible not but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2)
115.1
26.7%
0.0%
Total OpEx of Taxonomy eligible activities (A.1
+ A.2) (A)
171.2
39.8%
100%
0%
N/A
N/A
N/A
N/A
13.0%
N/A
13.0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Opex of Taxonomy-non-eligible activities (B)
259.4
60.2%
Total (A + B)
430.7
100.0%
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Annex to the Consolidated Non-Financial Statement
Prysmian Group legal entities considered for Taxes 2021
1
In 2021 Prysmian was active in over 50 countries with more than 170 companies and 40
branches. Please refer to the following table containing the list of entities considered in the
reporting boundary.
Country
Region
Entity
Activity
Australia
APAC
Prysmian Australia Pty Ltd.
Manufacturing or Production;
Sales, Marketing or Distribution
China
APAC
Draka Shanghai Optical Fibre Cable Co. Ltd.
Dormant
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
Phelps Dodge Yantai Cable Company, Ltd.
Dormant
China
APAC
Prestolite Wire (Shanghai) Company, Ltd
Dormant
China
APAC
Prysmian (China) Investment Company Ltd.
Administrative, Management or
Support Services; Holding
shares or other equity
instruments
China
APAC
Prysmian Cable (Shanghai) Co. Ltd.
Sales, Marketing or
Distribution; Administrative,
Management or Support
Services
China
APAC
Prysmian Cable (Shanghai) Trading Co Ltd -
Suzhou Branch
Manufacturing or Production;
Sales, Marketing or Distribution
China
APAC
Prysmian Hong Kong Holding Ltd.
Sales, Marketing or
Distribution; Provision of
services to unrelated parties;
Holding shares or other equity
instruments
China
APAC
Prysmian PowerLink – China Branch
Provision of services to
unrelated parties
China
APAC
Prysmian Technology Jiangsu Co. 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 Wuxi Cable 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
Shanghai Guang Ye Optical Cable Co. Ltd
Dormant
China
APAC
EHC Escalator Handrail (Shanghai) Co. Ltd.
Manufacturing or Production;
Sales, Marketing or
Distribution;
China
APAC
EHC Lift Components (Shanghai) Co. Ltd.
Research and Development;
Manufacturing or Production;
Sales, Marketing or
Distribution;
China
APAC
EHC Engineered Polymer (Shanghai) 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
Indonesia
APAC
PT.Prysmian Cables Indonesia
Manufacturing or Production;
Sales, Marketing or Distribution
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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Malaysia
APAC
Draka (Malaysia) Sdn Bhd
Dormant
Malaysia
APAC
Draka Marketing and Services Sdn Bhd
Dormant
Malaysia
APAC
Sindutch Cable Manufacturer Sdn Bhd
Manufacturing or Production;
Sales, Marketing or Distribution
New Zealand
APAC
Prysmian New Zealand Ltd.
Manufacturing or Production;
Sales, Marketing or Distribution
Philippines
APAC
Draka Philippines Inc.
Manufacturing or Production;
Sales, Marketing or Distribution
Philippines
APAC
Prysmian PowerLink – Philippines Branch
Provision of services to
unrelated parties
Singapore
APAC
Cable Supply and Consulting Company Private
Limited
Holding shares or other equity
instruments
Singapore
APAC
Draka Comteq Singapore Pte Ltd.
Dormant
Singapore
APAC
Draka NK Cables (Asia) Pte Ltd.
Dormant
Singapore
APAC
Draka Offshore Asia Pacific Pte Ltd.
Dormant
Singapore
APAC
Prysmian Cable Systems Pte Ltd.
Dormant
Singapore
APAC
Prysmian Cables Asia-Pacific Pte Ltd.
Dormant
Singapore
APAC
Prysmian PowerLink – Singapore Branch
Provision of services to
unrelated parties
Singapore
APAC
Singapore Cables Manufacturers Pte Ltd.
Sales, Marketing or
Distribution; Administrative,
Management or Support
Services
Singapore
APAC
Draka Cableteq Asia Pacific Holding Pte Ltd.
Holding shares or other equity
instruments
Tahiti
APAC
Prysmian Cables et Systèmes France SAS –Tahiti
Branch
Provision of services to
unrelated parties
Thailand
APAC
MCI-Draka Cable Co. Ltd.
Manufacturing or Production;
Sales, Marketing or Distribution
Algeria
EMEA
Prysmian Cables et Systèmes France SAS –
Algeria Branch
Dormant
Algeria
EMEA
Silec Cable SAS – Algeria Branch
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 – Baharain Branch
Provision of services to
unrelated parties
Belgium
EMEA
Draka Belgium N.V.
Sales, Marketing or Distribution
Belgium
EMEA
Silec Cable SAS – Belgium Branch
Provision 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
Draka Kabely, s.r.o.
Manufacturing or Production
Sales; Marketing or Distribution
Czech Republic
EMEA
Prysmian Kablo SRO - Czech Republic Branch
Sales, Marketing or Distribution
Denmark
EMEA
Prysmian Group Denmark A/S
Sales, Marketing or Distribution
Denmark
EMEA
Prysmian PowerLink – Denmark Branch
Provision 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
Draka Comteq France S.A.S.
Research and Development;
Holding / managing intellectual
property; Manufacturing or
Production; Sales, Marketing or
Distribution
France
EMEA
Draka Fileca S.A.S.
Manufacturing or Production;
Sales, Marketing or Distribution
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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France
EMEA
Draka France S.A.S.
Holding shares or other equity
instruments
France
EMEA
Draka Paricable S.A.S.
Sales, Marketing or Distribution
France
EMEA
P.O.R. S.A.S.
Other activities (special
purpose entity)
France
EMEA
Prysmian (French) Holdings S.A.S.
Holding shares or other equity
instruments
France
EMEA
Prysmian Cables et Systèmes France S.A.S.
Manufacturing or Production;
Sales, Marketing or Distribution
France
EMEA
Prysmian PowerLink – Francia Branch
Provision of services to
unrelated parties
France
EMEA
Silec Cable, S. A. S.
Manufacturing or Production;
Sales, Marketing or Distribution
France
EMEA
EHC France SARL
Sales, Marketing or
Distribution;
Germany
EMEA
Draka Comteq Berlin GmbH & Co. KG
Manufacturing or Production;
Sales, Marketing or Distribution
Germany
EMEA
Draka Comteq Germany 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
Germany
EMEA
Draka Deutschland Zweite Beteiligungs GmbH
Holding shares or other equity
instruments
Germany
EMEA
Draka Service GmbH
Provision of technical 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
Norddeutsche Seekabelwerke GmbH
Manufacturing or Production;
Sales, Marketing or Distribution
Germany
EMEA
Prysmian Kabel und Systeme GmbH
Manufacturing or Production;
Sales, Marketing or Distribution
Germany
EMEA
Prysmian PowerLink – Germany Branch
Provision of services to
unrelated parties
Germany
EMEA
Prysmian Unterstuetzungseinrichtung Lynen
GmbH
Other (pension fund)
Germany
EMEA
EHC Germany Gmbh
Manufacturing or Production;
Sales, Marketing or
Distribution;
Greece
EMEA
Prysmian PowerLink – Greece Branch
Provision of services to
unrelated parties
Greece
EMEA
Prysmian PowerLink Services Ltd. – Greece
Branch
Other
Hungary
EMEA
Prysmian MKM Magyar Kabel Muvek Kft.
Manufacturing or Production;
Sales, Marketing or Distribution
India
EMEA
Associated Cables Pvt. Ltd.
Manufacturing or Production;
Sales, Marketing or Distribution
India
EMEA
Jaguar Communication Consultancy Services
Private Ltd.
Dormant
Ireland
EMEA
Prysmian PowerLink – Irland Branch
Dormant
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
General Cable Italia S.r.l.
Dormant
Italy
EMEA
Prysmian Cavi e Sistemi Italia S.r.l.
Manufacturing or Production;
Sales, Marketing or Distribution
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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Italy
EMEA
Prysmian Cavi e Sistemi S.r.l.
Administrative, Management or
Support Services; Holding
shares or other equity
instruments
Italy
EMEA
Prysmian Electronics S.r.l.
Manufacturing or Production
Italy
EMEA
Prysmian PowerLink S.r.l.
Manufacturing or Production;
Sales, Marketing or Distribution
Provision of services to
unrelated parties
Italy
EMEA
Prysmian S.p.a.
Research and Development;
Holding / managing intellectual
property; Purchasing or
Procurement; Administrative,
Management or Support
Services; Holding shares or
other equity instruments
Italy
EMEA
Prysmian Treasury S.r.l.
Internal Group Finance
Lebanon
EMEA
Prysmian Cables et Systèmes France SAS –
Lebanon Branch
Provision of services to
unrelated parties
Malta
EMEA
Prysmian Cavi e Sistemi Italia S.r.l. – Malta
Branch
Dormant
Montenegro
EMEA
Prysmian PowerLink – Montenegro Branch
Provision of services to
unrelated parties
Netherlands
EMEA
Draka Comteq B.V.
Holding shares or other equity
instruments; Managing
intellectual property
Netherlands
EMEA
Draka Comteq Fibre B.V.
Research and Development;
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
General Cable Holdings Netherlands C.V.
Holding shares or other equity
instruments
Netherlands
EMEA
NKF Vastgoed I B.V.
Holding (Real Estate)
Netherlands
EMEA
NKF Vastgoed III B.V.
Holding (Real Estate)
Netherlands
EMEA
Prysmian Netherlands B.V.
Manufacturing or Production;
Sales, Marketing or Distribution
Netherlands
EMEA
Prysmian Netherlands Holding B.V.
Holding shares or other equity
instruments
Netherlands
EMEA
Prysmian PowerLink – Netherlands Branch
Provision of services to
unrelated parties
Netherlands
EMEA
Donne Draad B.V.
Sales, Marketing or
Distribution
Netherlands
EMEA
Draka Kabel B.V.
Dormant
Norway
EMEA
General Cable Nordic A/S
Dormant
Norway
EMEA
Prysmian Group Norge AS
Manufacturing or Production;
Sales, Marketing or Distribution
Oman
EMEA
Oman Aluminium Processing Industries (SPC)
Manufacturing or Production
Oman
EMEA
Oman Cables Industry (SAOG)
Manufacturing or Production
Sales, Marketing or Distribution
Poland
EMEA
Draka Kabely s.r.o. – Poland Branch
Dormant
Poland
EMEA
Eksa SP. ZOO
Sales, Marketing or Distribution
Portugal
EMEA
General Cable Celcat, Energia e
Telecomunicaçoes SA
Manufacturing or Production;
Sales, Marketing or Distribution
Portugal
EMEA
General Cable Investments, SGPS, Sociedade
Unipessoal, S.A.
Holding shares or other equity
instruments
Portugal
EMEA
SILEC Cable, S.A.S. – Portugal Branch
Dormant
Qatar
EMEA
Prysmian Cavi e Sistemi S.r.l. – Qatar Branch
Provision of services to
unrelated parties
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
286
Qatar
EMEA
Prysmian PowerLink - Branch Qatar
Provision 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 – Saudi Arabia Branch
Provision 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
General Cable Phoenix South Africa Pty. Ltd.
Dormant
South Africa
EMEA
National Cables (Pty) Ltd.
Dormant
South Africa
EMEA
Prysmian Spain SA EPC - South Africa Branch
Sales, Marketing or
Distribution; Provision of
services to unrelated parties
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
Prysmian Cables Spain, S.A. (Sociedad
Unipersonal)
Manufacturing or Production;
Sales, Marketing or Distribution
Spain
EMEA
Prysmian PowerLink – Spain Branch
Provision of services to
unrelated parties
Sweden
EMEA
Prysmian Group North Europe AB
Holding shares or other equity
instruments
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
Auto Cables Tunisie S.A.
Manufacturing or Production;
Sales, Marketing or Distribution
Tunisia
EMEA
Eurelectric Tunisie S.A.
Manufacturing or Production
Tunisia
EMEA
Prysmian Cables et Systèmes France SAS –
Tunisia Branch
Provision of services to
unrelated parties
Tunisia
EMEA
Silec Cable SAS – Tunisia Branch
Provision 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 Powerlink Adi Ortakligi
II
Dormant
Turkey
EMEA
Turk Prysmian-Prysmian Po'
Manufacturing or Production;
Sales, Marketing or
Distribution;
United Arab
Emirates
EMEA
Prysmian Cables et Systèmes France SAS - Abu
Dhabi Branch
Dormant
United Arab
Emirates
EMEA
Prysmian Cavi e Sistemi S.r.l. – Abu Dhabi
Branch
Provision of services to
unrelated parties
United Arab
Emirates
EMEA
Prysmian PowerLink - Abu Dhabi Branch
Provision of services to
unrelated parties
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
287
United Arab
Emirates
EMEA
Silec Cable SAS – Abu Dhabi Branch
Provision of services to
unrelated parties
United Kingdom
EMEA
Cable Makers Properties & Services Ltd.
Other (professional services)
United Kingdom
EMEA
Comergy Ltd.
Dormant
United Kingdom
EMEA
Draka Comteq UK Ltd.
Manufacturing or Production
Sales; Marketing or Distribution
United Kingdom
EMEA
Draka UK Group Ltd.
Dormant
United Kingdom
EMEA
Draka UK Ltd.
Dormant
United Kingdom
EMEA
General Cable Holdings (UK) Limited
Holding shares or other equity
instruments
United Kingdom
EMEA
General Cable Services Europe Limited
Dormant
United Kingdom
EMEA
NSW Technology Limited
Dormant
United Kingdom
EMEA
Prysmian Cables & Systems Ltd.
Manufacturing or Production;
Sales, Marketing or Distribution
United Kingdom
EMEA
Prysmian Cables (2000) Ltd.
Dormant
United Kingdom
EMEA
Prysmian Construction Company Ltd.
Dormant
United Kingdom
EMEA
Prysmian Pension Scheme Trustee Ltd.
Other
United Kingdom
EMEA
Prysmian PowerLink – UK Branch
Provision of services to
unrelated parties
United Kingdom
EMEA
Prysmian PowerLink Services Ltd.
Provision of technical services
United Kingdom
EMEA
Prysmian UK Group Ltd.
Holding shares or other equity
instruments
United Kingdom
EMEA
Prysmian Telecom Cables and Systems UK Ltd.
Dormant
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
Draka Comteq Cabos Brasil S.A.
Manufacturing or Production;
Sales, Marketing or Distribution
Brazil
LATAM
General Cable Brasil Indústria e Comércio de
Condutores Elétricos Ltda
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
EHC Brazil Ltda
Manufacturing or Production;
Sales, Marketing or Distribution
Cayman Islands
LATAM
Phelps Dodge Yantai China Holdings, Inc.
Holding shares or other equity
instruments
Cayman Islands
LATAM
YA Holdings, Ltd.
Holding shares or other equity
instruments
Chile
LATAM
Cobre Cerrillos S.A.
Manufacturing or Production;
Sales, Marketing or Distribution
Chile
LATAM
Prysmian Cables Chile SpA
Dormant
Colombia
LATAM
Productora de Cables Procables S.A.S.
Manufacturing or Production;
Sales, Marketing or Distribution
Colombia
LATAM
SILEC Cable, S.A.S. – Colombia Branch
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
El Salvador
LATAM
Conducen Phelps Dodge Centroamerica-El
Salvador, S.A. de C.V.
Dormant
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
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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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
NK Mexico Holdings S.A. de C.V.
Dormant
Mexico
LATAM
PDIC Mexico, S.A. de C.V.
Dormant
Mexico
LATAM
Prestolite de Mexico, S.A. de C.V.
Manufacturing or Production
Mexico
LATAM
Prysmian Cables y Sistemas de Mexico S. de R.
L. de C. V.
Manufacturing or Production;
Sales, Marketing or Distribution
Mexico
LATAM
Prysmian Cables y Sistemas S.A. – Mexico
Branch
Dormant
Mexico
LATAM
Servicios Latinoamericanos GC, S.A. de C.V.
Administrative, Management or
Support Services
Mexico
LATAM
Silec Cable SAS – Mexico Branch
Dormant
Panama
LATAM
Alambres y Cables de Panama, S.A.
Dormant
Panama
LATAM
Alcap Comercial S.A.
Dormant
Panama
LATAM
Cahosa S.A.
Holding shares or other equity
instruments
Peru
LATAM
General Cable Peru S.A.C.
Sales, Marketing or Distribution
Puerto Rico
LATAM
Conducen SRL - Puerto Rico Branch
Dormant
Trinidad and
Tobago
LATAM
General Cable Trinidad Limited
Dormant
Canada
North America
Draka Elevator Products Incorporated
Sales, Marketing or Distribution
Canada
North America
General Cable Company Ltd.
Manufacturing or Production;
Sales, Marketing or Distribution
Canada
North America
Prysmian Cables and Systems Canada Ltd.
Manufacturing or Production;
Sales, Marketing or Distribution
Canada
North America
CA2000:EHC Global Inc.
Holding shares or other equity
instruments
Canada
North America
EHC Canada Inc.
Research and Development;
Holding / managing intellectual
property; Manufacturing or
Production; Sales, Marketing or
Distribution; Administrative,
Management or Support
Services
Canada
North America
EHC Elator Inc.
Sales, Marketing or Distribution
Canada
North America
EHC Management Company Inc.
Dormant
United States
North America
Diversified Contractors, Inc.
Dormant
United States
North America
Draka Elevator Products, Inc.
Manufacturing or Production;
Sales, Marketing or Distribution
United States
North America
Draka Transport USA, LLC
Manufacturing or Production;
Sales, Marketing or Distribution
United States
North America
GC Global Holdings, Inc.
Holding shares or other equity
instruments
United States
North America
EHC USA Inc.
Sales, Marketing or
Distribution;
United States
North America
General Cable Canada Holdings LLC
Holding shares or other equity
instruments
United States
North America
General Cable Corporation
Administrative, Management or
Support Services; Holding
shares or other equity
instruments
United States
North America
General Cable Industries, Inc.
Research and Development;
Manufacturing or Production;
Sales, Marketing or
Distribution; Holding shares or
other equity instruments
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
289
United States
North America
General Cable Industries LLC
Manufacturing or Production
Sales, Marketing or Distribution
United States
North America
General Cable Overseas Holdings, LLC
Holding shares or other equity
instruments
United States
North America
General Cable Technologies Corporation
Holding / managing intellectual
property
United States
North America
GK Technologies, Incorporated
Holding shares or other equity
instruments
United States
North America
Norddeutshce Seekabelwerke GmbH – US Branch
Provision of services to
unrelated parties
United States
North America
Phelps Dodge Enfield Corporation
Holding shares or other equity
instruments
United States
North America
Phelps Dodge National Cables Corporation
Holding shares or other equity
instruments
United States
North America
Prysmian Cables and Systems (US) Inc.
Holding shares or other equity
instruments
United States
North America
Prysmian Cables and Systems USA, LLC
Manufacturing or Production;
Sales, Marketing or
Distribution; Administrative,
Management or Support
Services
United States
North America
Prysmian Construction Services Inc.
Other services
(Payroll
services)
(*)
They may differ from those in the scope of the 2021 Consolidated Financial Statements as the latter does not include
entities no longer existing at 31.12.2021.
AUDITORS’ REPORT
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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PRYSMIAN GROUP | A. DIRECTORS’ REPORT
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PRYSMIAN GROUP | A. DIRECTORS’ REPORT
295
22. SASB and TCFD
SASB Index
For reasons other than compliance with the requirements of Legislative Decree 254/2016, NFS
2022 includes additional specific KPIs for the sector in which the Prysmian Group operates,
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
responsibility
-
Page 166
Hazardous waste
management
RT-EE-
150a.1.
Amount of hazardous waste generated,
percentage recycled
Environmental
responsibility
-
Page 166
Product safety
RT-EE-
250a.1.
Number of recalls issued, total units
recalled
Prysmian Group’s customers -
Page 225
Product lifecycle
management
RT-EE-
410a.3.
Revenue
from
renewable
energy-
related and energy efficiency related
products
Strategy and commitment to
sustainability - Page 29
Materials
sourcing
RT-EE-
440a.1.
Description of the management of risks
associated with the use of critical
materials
Ethics and integrity - Page 137
Environmental
responsibility
-
Page 166
People and human rights - Page
188
Sustainable value chain - Page
216
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 - Page 137
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 - Page 137
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 - Page 137
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
296
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 -
Page 209
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 - Page 137
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 - Page 137
PRYSMIAN GROUP | A. DIRECTORS’ REPORT
297
TCFD correlation table
Within the 2022 Non-Financial Statement, for purposes other than that of complying with the
requirements of Legislative Decree 254/2016, additional specific KPIs have been integrated for
the sector in which Prysmian Group operates, taking into consideration the indicators published
by the TCFD.
The Task force on Climate-related Financial Disclosures (TCFD) has issued a series of
recommendations for the consistent, voluntary disclosure of information by an organisation 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.
TCFD DISCLOSURE RECOMMENDATIONS
Disclose the metrics used by the
organisation
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
organisation
to
manage
its
climate-related
risks
and
opportunities,
and
its
performance against the targets
set.
B. CONSOLIDATED FINANCIAL STATEMENTS
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
299
1. Consolidated Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Euro/million)
Note
31.12.2022
of which
related
parties
31.12.2021*
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 FVOCI
4
Financial assets at amortised cost
Derivatives
8
Deferred tax assets
15
Other receivables
5
Total non-current assets
Current assets
Inventories
6
Trade receivables
5
Other receivables
5
Financial assets at FVPL
7
Derivatives
8
Financial assets at FVOCI
4
Cash and cash equivalents
9
Total current assets
Total assets
Equity
Share capital
10
Reserves
10
Group share of net profit/(loss)
10
Equity attributable to the Group
Equity attributable to non-controlling interests
Total equity
Non-current liabilities
Borrowings from banks and other lenders
11
Employee benefit obligations
14
Provisions for risks and charges
13
Deferred tax liabilities
15
Derivatives
8
Other payables
12
Total non-current liabilities
Current liabilities
Borrowings from banks and other lenders
11
Provisions for risks and charges
13
Derivatives
8
Trade payables
12
Other payables
12
Current tax payables
Total current liabilities
Total liabilities
Total equity and liabilities
(*) 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. More details can be found in Section C. Restatement of comparative figures.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
300
CONSOLIDATED INCOME STATEMENT
(Euro/million)
Note
2022
of which
related
parties
2021
of which
related
parties
Sales
16
Change in inventories of finished goods and work
in progress
17
(30 )
Other income
18
Total sales and income
Raw materials, consumables and supplies
19
(10,588 )
(8,906 )
(2 )
Fair value change in metal derivatives
(31 )
Personnel costs
20
(1,758 )
(16 )
(1,486 )
(10 )
Amortisation, depreciation, impairment and
impairment reversals
21
(403 )
(335 )
Other expenses
22
(2,525 )
(8 )
(1,831 )
(7 )
Share of net profit/(loss) of equity-accounted
companies
23
Operating income
Finance costs
24
(1,116 )
(785 )
Finance income
25
Profit/(loss) before taxes
Taxes
26
(230 )
(166 )
Net profit/(loss)
Of which:
- attributable to non-controlling interests
- Group share
Basic earnings/(loss) per share (in Euro)
27
Diluted earnings/(loss) per share (in Euro)
27
OTHER COMPREHENSIVE INCOME (Note 10)
(Euro/million)
2022
2021
Net profit/(loss)
Other comprehensive income:
A) Change in cash flow hedge reserve:
(34 )
- Profit/(loss) for the year
(46 )
- Taxes
(20 )
B) Other changes relating to cash flow hedges:
(11 )
- Profit/(loss) for the year
(15 )
- Taxes
C) Change in currency translation reserve
D) Actuarial gains/(losses) on employee benefits (*):
- Profit/(loss) for the year
- Taxes
(30 )
(9 )
Total other comprehensive income (A+B+C+D):
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
301
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Note
10)
(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 2020
(590 )
Allocation of prior year net profit
(178 )
Fair value - stock options
Dividend distribution
(132 )
(132 )
(2 )
(134 )
Issue of Convertible Bond 2021
Redemption of Convertible Bond 2017
(13 )
(13 )
(13 )
Disposal of non-controlling Interests
(1 )
(1 )
Other movements in equity
Capital paid in by non-controlling interests
Effect of hyperinflation
Total comprehensive income/(loss)
Balance at 31 December 2021
(309 )
(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 - stock options
Dividend distribution
(145 )
(145 )
(4 )
(149 )
Effect of hyperinflation
Total comprehensive income/(loss)
(33 )
Balance at 31 December 2022
(174 )
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
302
CONSOLIDATED STATEMENT OF CASH FLOWS (Note 36)
(Euro/million)
2022
of which
related
parties
2021
of which
related
parties
Profit/(loss) before taxes
Amortisation, depreciation and impairment
Net gains on disposal of fixed assets
(1 )
(2 )
Share of net profit/(loss) of equity-accounted
companies
(47 )
(47 )
(27 )
(27 )
Dividends received from equity-accounted
companies
Share-based payments
Fair value change in metal derivatives
(13 )
Net finance costs
Changes in inventories
(171 )
(449 )
Changes in trade receivables/payables
(175 )
Changes in other receivables/payables
Change in employee benefit obligations
(16 )
(15 )
Change in provisions for risks
Net income taxes paid
(221 )
(120 )
A.
Cash flow from operating activities
Cash flow from acquisitions and/or disposals
(7 )
(85 )
Investments in property, plant and equipment
(429 )
(258 )
Disposals of property, plant and equipment
Investments in intangible assets
(25 )
(25 )
Disposals of (investments in) financial assets at fair
value through profit or loss and financial assets at
amortised cost
(39 )
(222 )
B.
Cash flow from investing activities
(498 )
(582 )
Capital contributions and other changes in equity
Dividend distribution
(148 )
(134 )
Proceeds of new loans
Repayments of loans
(2,000 )
(269 )
Changes in other net financial receivables/payables
and other movements
(77 )
(28 )
Finance costs paid
(88 )
(104 )
Finance income received
C.
Cash flow from financing activities
(961 )
D.
Exchange (losses) gains on cash and cash
equivalents
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
304
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 that demonstrate the implementation of
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 9 March 2023, which also authorised their publication on 18 March 2023.
A.1 SIGNIFICANT EVENTS IN 2022
Significant events in the year are reviewed in the Directors' Report in the section entitled
"SIGNIFICANT EVENTS DURING THE YEAR"
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
305
B. ACCOUNTING PRINCIPLES
The main accounting principles used to prepare the consolidated financial statements and Group
financial information are discussed below.
The consolidated financial statements at 31 December 2022 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 2022 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).
The primary financial statements adopted have the following characteristics:
ï‚·
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;
ï‚·
the consolidated statement of financial position presents assets and liabilities according
to maturity, with current items shown separately from non-current ones;
ï‚·
the 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 Group's 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 2022
Consolidated Financial Statements are consistent with those used for the 2021 Consolidated
Financial Statements. More complete details can be found in Note 38. Basis of consolidation and
accounting policies.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
306
The following is a list of new standards, interpretations and amendments whose application
became mandatory from 1 January 2022 but which, based on the assessments performed, have
not had a material impact on the consolidated financial statements at 31 December 2022:
ï‚·
Amendments to IFRS 3 Business Combinations;
ï‚·
Amendments to IAS 16 Property, Plant and Equipment;
ï‚·
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets;
ï‚·
Annual Improvements 2018-2020.
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 as
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
IFRS 17
1 January 2023
Amendments to IAS 12: Income Taxes: Deferred Tax related to Assets and Liabilities
arising from a Single Transaction
1 January 2023
Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting policies;
1 January 2023
Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and
Errors
1 January 2023
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
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 2022, compared with 31 December
2021, are reported below.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
307
Liquidations
Liquidated companies
Nation
Date
EHC Japan K.K
Japan
1 June 2022
Prysmian Cable Systems Pte Ltd
Singapore
4 July 2022
General Cabel Holdings Netherlands C.V.
Netherlands
4 August 2022
NSW Technology Ltd
United Kingdom
9 August 2022
Prestolite Wire (Shangai) Company Ltd
China
22 August 2022
Prysmian Cables Chile SpA
Chile
26 August 2022
Tasfiye Halinde EHC Turkey Asansör ve Yürüyen Merdiven Sanayi
Limited
Ş
irketi
Turkey
15 September 2022
General Cable Phoenix South Africa PTY LTD
Conducen Phelps Dodge Centroamérica - El Salvador, S.A. de C.V.
South Africa
El Salvador
15 November 2022
28 November 2022
PDIC Mexico S.A. de C.V
Mexico
16 December 2022
Mergers
Merged companies
Survivor companies
Nation
Date
General Cable Industries Inc
Prysmian Cables and
Systems USA LLC
United
States
1 January 2022
EHC Brazil Ltda
Prysmian Cabos
e
Sistemas do Brazil S.A.
Brazil
31 March 2022
Prysmian Group North Europe AB
Prysmian Group Sverige AB
Sweden
8 December 2022
General Cable Nordic AS
Prysmian Group Norge AS
Norway
23 November 2022
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
Eksa sp.z.o.o
Prysmian Poland sp.z.o.o
Poland
10 February 2022
EHC Turkey Asansör ve Yürüyen
Merdiven Sanayi Limited
Ş
irketi
Tasfiye Halinde EHCTurkey Asansör ve
Yürüyen Merdiven Sanayi Limited
Ş
irketi
Turkey
13 June 2022
Draka Service Gmbh
Prysmian Projects Germany GmbH
Germany
8 September 2022
Prysmian Electronics S.r.l
Electronic and Optical Sensing Solutions
S.r.l
Italy
27 October 2022
New company formations
Newco
Nation
Date
Prysmian Projects North America, LLC
United States
7 April 2022
Prysmian Servizi S.p.A.
Italy
30 November 2022
Appendix A contains a complete list of the companies included in the scope of consolidation at
31 December 2022.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
308
C. RESTATEMENT OF COMPARATIVE FIGURES
Some of the previously published figures in the consolidated financial statements at 31 December
2021, presented in the current report for comparative purposes, have been revised after
finalising the purchase price allocation for the business combinations described below, accounted
for on a provisional basis in the consolidated financial statements at 31 December 2021.
Purchase price allocation of Omnisens S.A. and Eksa Sp.z.o.o.
After acquiring control of Omnisens S.A., on 11 November 2021, and Eksa Sp.z.o.o., on 31
December 2021, the fair values of the assets acquired, liabilities assumed and contingent
liabilities were determined at 31 December 2021 on a provisional basis, as permitted by
IFRS 3
- Business Combinations
, insofar as the related valuation processes were still in progress.
These valuations, subject to revision within twelve months of the acquisition date, as permitted
by
IFRS 3 - Business Combinations
, have resulted in the restatement of the Consolidated
Financial Statements at 31 December 2021.
Details of these amendments are presented in the following restated statement of financial
position at 31 December 2021. The finalisation of the purchase price allocation processes for
Omnisens S.A. and Eksa Sp.z.o.o. has not resulted in any need to restate the consolidated
income statement.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
309
(Euro/million)
31.12.2021
published
Effect of
Omnisens S.A.
and Eksa price
allocation
31.12.2021
restated
Non-current assets
Property, plant and equipment
2,794
2,794
Goodwill
1,643
(8)
1,635
Other intangible assets
494
11
505
Equity-accounted investments
360
360
Other investments at fair value through other
comprehensive income
13
13
Financial assets at amortised cost
3
3
Derivatives
105
105
Deferred tax assets
182
-
182
Other receivables
34
34
Total non-current assets
5,628
3
5,631
Current assets
Inventories
2,054
2,054
Trade receivables
1,622
1,622
Other receivables
627
627
Financial assets at fair value through profit or loss
244
244
Derivatives
128
128
Financial assets at fair value through other
comprehensive income
11
11
Cash and cash equivalents
1,702
1,702
Total current assets
6,388
-
6,388
Total assets
12,016
3
12,019
Equity
Share capital
27
27
Reserves
2,580
2,580
Group share of net profit/(loss)
308
308
Equity attributable to the Group
2,915
-
2,915
Equity attributable to non-controlling interests
174
174
Total equity
3,089
-
3,089
Non-current liabilities
Borrowings from banks and other lenders
2,606
2,606
Employee benefit obligations
446
446
Provisions for risks and charges
46
46
Deferred tax liabilities
188
2
190
Derivatives
26
26
Other payables
6
6
Total non-current liabilities
3,318
2
3,320
Current liabilities
Borrowings from banks and other lenders
1,123
1,123
Provisions for risks and charges
607
1
608
Derivatives
42
42
Trade payables
2,592
2,592
Other payables
1,191
1,191
Current tax payables
54
54
Total current liabilities
5,609
1
5,610
Total liabilities
8,927
3
8,930
Total equity and liabilities
12,016
3
12,019
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
310
D. 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:
ï‚·
Euro/US Dollar: in relation to trade and financial transactions in US dollars by Eurozone
companies on the American market and vice versa;
ï‚·
Euro/British Pound: in relation to trade and financial transactions by Eurozone companies
on the British market and vice versa;
ï‚·
Euro/Canadian Dollar: in relation to trade and financial transactions by Eurozone
companies on the Canadian market and vice versa;
ï‚·
Euro/Hungarian Forint: in relation to trade and financial transactions by Hungarian
companies on the Eurozone market and vice versa;
ï‚·
British Pound/US Dollar: in relation to trade transactions by North American companies
on the British market;
ï‚·
Euro/Australian Dollar: in relation to trade and financial transactions by Eurozone
companies on the Australian market and vice versa;
ï‚·
Euro/Romanian Leu: in relation to trade and financial transactions by Eurozone
companies on the Romanian market and vice versa;
ï‚·
Euro/Swedish Krona: in relation to trade and financial transactions by Eurozone
companies on the Swedish market and vice versa;
ï‚·
Euro/Czech Koruna: in relation to trade and financial transactions by Eurozone companies
on the Czech market and vice versa;
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
311
•
Euro/Norwegian Krone: in relation to trade and financial transactions by Eurozone
companies on the Norwegian market and vice versa;
•
Euro/Chinese Renminbi (Yuan): in relation to trade and financial transactions by Eurozone
companies on the Chinese market and vice versa;
•
US Dollar/Chinese Renminbi (Yuan): in relation to trade transactions by companies
operating on the Chinese market and vice versa;
•
Euro/Mexican Peso: in relation to trade and financial transactions by Eurozone companies
on the Mexican market and vice versa.
In 2022, 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 2022.
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 effects on net profit of a 5% and 10%
increase/decrease in local currency exchange rates, against the currencies shown below,
compared with actual exchange rates at 31 December 2022 and 31 December 2021.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
312
(Euro/million)
2022
2021
-5%
+5%
-5%
+5%
Euro
(1.01)
0.91
(1.03)
0.93
US Dollar
(1.04)
0.94
(0.87)
0.79
British Pound
(0.02)
0.02
(0.62)
0.56
Other currencies
(0.54)
0.49
(0.61)
0.55
Total
(2.61)
2.36
(3.13)
2.83
(Euro/million)
2022
2021
-10%
+10%
-10%
+10%
Euro
(2.13)
1.75
(2.18)
1.78
US Dollar
(2.19)
1.79
(1.84)
1.51
British Pound
(0.04)
0.03
(1.30)
1.07
Other currencies
(1.14)
0.94
(1.29)
1.05
Total
(5.50)
4.51
(6.61)
5.41
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 local currency exchange rates, against the currencies shown below,
compared with actual at 31 December 2022 and 31 December 2021.
(Euro/million)
2022
2021
-5%
+5%
-5%
+5%
US Dollar
2.02
(2.23)
3.22
(3.56)
Euro
15.23
(16.83)
16.75
(18.51)
British Pound
20.67
(22.85)
3.69
(4.08)
Other currencies
0.75
(1.02)
0.82
(0.89)
Total
38.67
(42.93)
24.48
(27.04)
(Euro/million)
2021
2020
-10%
+10%
-10%
+10%
US Dollar
7.43
(9.08)
6.15
(7.51)
Euro
32.57
(39.81)
31.97
(39.08)
British Pound
39.53
(48.32)
7.05
(8.62)
Other currencies
2.77
(3.37)
1.54
(1.90)
Total
82.30
(100.58)
46.71
(57.10)
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
313
[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.
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 the income statement.
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.
increase/decrease in interest rates versus the interest rates applying at 31 December 2022 and
31 December 2021, 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)
2022
2021
-0.25%
+0.25%
-0.25%
+0.25%
Euro
(0.49)
0.49
(1.07)
1.07
US Dollar
(0.40)
0.40
(0.50)
0.50
British Pound
(0.08)
0.08
(0.28)
0.28
Other currencies
(0.75)
0.75
(0.77)
0.77
Total
(1.72)
1.72
(2.62)
2.62
At 31 December 2022, 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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
314
[c] Price risk
The Group is exposed to price risk in relation to purchases and sales of strategic materials, whose
purchase price is subject to market volatility. The main raw materials used by the Group in its
own production processes consist of strategic metals such as copper, aluminium and lead. The
cost of purchasing such strategic materials accounted for approximately 59.8% of the Group's
total cost of materials in 2022 (62.8% in 2021), 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 2022 and 31
December 2021, assuming that all other variables remain equal.
(Euro/million)
2022
2021
-10%
+10%
-10%
+10%
LME
(69.43)
69.43
(48.69)
48.69
COMEX
(4.65)
4.65
(1.95)
1.95
SME
(3.16)
3.16
(2.13)
2.13
Total
(77.24)
77.24
(52.77)
52.77
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
315
Credit risk is connected with 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.
During 2022 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 2022 (like at 31 December 2021) 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 2022 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:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
316
(Euro/million)
31.12.2022
31.12.2021
Cash and cash equivalents
1,285
1,702
Financial assets at fair value through profit or loss
270
244
Financial assets at fair value through other comprehensive income
11
11
Undrawn committed lines of credit
1,000
1,000
Total
2,566
2,957
Undrawn committed lines of credit at 31 December 2022 refer to the Revolving Credit Facility
2019 (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.
(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
(Euro/million)
31.12.2021
Due within
1 year
Due between
1 - 2 years
Due between
2 - 5 years
Due after
5 years
Borrowings from banks and other lenders
1,169
1,279
1,325
62
Derivatives
42
15
8
3
Trade and other payables
3,783
6
-
-
Total
4,994
1,300
1,333
65
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
317
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 consolidated statement of
financial position and the categories used by IFRS 7 to identify financial assets and liabilities:
(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
Cash flow
hedging
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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
318
(Euro/million)
31.12.2021
Financial
assets at
FVPL
Receivables
and other
assets at
amortised
cost
Financial
assets at
FVOCI
Financial
liabilities at
FVPL
Financial
liabilities at
amortised
cost
Cash flow
hedging
derivatives
Other investments
at FVOCI
-
-
13
-
-
-
Financial assets at
FVOCI
-
-
11
-
-
-
Financial assets at
amortised cost
-
3
-
Trade receivables
-
1,622
-
-
-
-
Other receivables
-
661
-
-
-
-
Financial assets at
FVPL
244
-
-
-
-
-
Derivatives (assets)
57
-
-
-
-
176
Cash and cash
equivalents
-
1,702
-
-
-
-
Borrowings from
banks and other
lenders
-
-
-
-
3,729
-
Trade payables
-
-
-
-
2,592
-
Other payables
-
-
-
-
1,197
-
Derivatives
(liabilities)
-
-
-
23
-
45
D.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 31. 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 11. 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 2022 and 31 December 2021 are shown below:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
319
(Euro/million)
2022
2021
Net financial debt
1,417
1,760
Equity
3,771
3,089
Total capital
5,188
4,849
Gearing ratio
27.31%
36.30%
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:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
320
(Euro/million)
31.12.2022
Level 1
Level 2
Level 3
Total
Assets
Financial assets at fair value:
Derivatives at FVPL
-
10
-
10
Cash flow hedging 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
Cash flow hedging derivatives
-
113
-
113
Total liabilities
-
133
-
133
(Euro/million)
31.12.2021
Level 1
Level 2
Level 3
Total
Assets
Financial assets at fair value:
Derivatives at FVPL
-
57
-
57
Cash flow hedging derivatives
-
176
-
176
Financial assets at FVPL
240
4
-
244
Other investments at FVOCI
-
-
13
13
Financial assets at FVOCI
11
-
-
11
Total assets
251
237
13
501
Liabilities
Financial liabilities at fair value:
Derivatives through profit or loss
-
23
-
23
Cash flow hedging derivatives
-
45
-
45
Total liabilities
-
68
-
68
Financial assets classified in fair value Level 3 have reported no significant movements in either
2022 or 2021.
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 2022 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. The market price used for derivatives is the bid price, while for
financial liabilities the ask price is used.
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:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
321
•
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.
D.3 RISKS RELATED TO CLIMATE CHANGE
As explained in more detail in the "Climate Change & Social Ambition" section of the Directors'
Report, the Group has a "Net Zero" strategy. In order to implement this decarbonisation
strategy, Prysmian Group continued in 2022 with its Euro 100 million 10-year Sustainability-
related investment program; the goal is to reduce overall CO2 equivalent emissions by 46% by
2030 (from 2019 levels) and achieve “Net Zero Emissions” (for Scope 1 and 2 greenhouse gases,
i.e. direct and indirect emissions generated by the organisation) by 2035. These investments,
totalling Euro 12 million in 2022, involve several strands, including the installation of photovoltaic
systems in some of the Group's plants, various measures to reduce energy consumption, and a
multi-year plan to reduce the use of SF6 gas. The replacement programs of certain assets, aimed
at the realization of the "Net Zero" strategy, involve the review of their useful lives with a
consequent acceleration of their amortization process.
At the same time, the Group analyses and assesses climate change-related risks and
opportunities 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 impacts on cash flows 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. These aspects are nonetheless currently unforeseeable but monitored
more and more frequently and coordinated among the various company departments.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
322
Other climate change-related impacts are reported in Note 1. Property, plant and equipment as
regards investments and in Note 11. Borrowings from banks and other lenders and in Note 31.
Financial covenants as regards sustainability-linked loans and covenants.
D.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 0.3% and around 0.5% of the Group's respective totals.
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 this Consolidated Financial Report mainly relate to the
recoverability of receivables and investments.
In addition, the assessments regarding the possible presence of indicators of impairment have
also taken into account the indirect consequences of the conflict on market interest rates and
the cost of raw materials and energy.
Although not significantly exposed in the regions affected by the conflict, in view of the possible
negative impact that the conflict itself could have on the results of operations, the Group
therefore felt it advisable to perform a specific impairment test on the Energy North Europe CGU
(in which the Russian subsidiary is included), which revealed no impairment loss and confirmed
significant headroom, which would be entirely eliminated with WACC at a theoretical 25.0%,
significantly higher than WACC used for the test.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
323
E. BUSINESS COMBINATIONS
Omnisens S.A.
Prysmian Group acquired control of Omnisens S.A. on 11 November 2021. For accounting
purposes, the acquisition date was backdated to 1 November 2021.
The total consideration for the acquisition was Euro 18 million.
In 2022, in compliance with IFRS 3, given the acquisition has been completed since twelve
months, the fair value of the assets, liabilities and contingent liabilities has been finalised. The
restatement of comparative figures can be found in the paragraph "C. RESTATEMENT OF
COMPARATIVE FIGURES".
The excess of the purchase consideration over the fair value of net assets acquired has been
recognised as goodwill, quantified as Euro 8 million.
Such goodwill is primarily justified by the future earnings expected from integrating the company
into Prysmian Group, including the benefits of run-rate synergies.
Details of the net assets acquired and goodwill are as follows:
(Euro/million)
Euro
Purchase price
18
Total cost of acquisition (A)
18
Fair value of net assets acquired (B)
10
Goodwill (A-B)
8
(Euro/million)
Euro
Intangible assets
11
Deferred tax liabilities
(2)
Inventories
2
Trade and other receivables
5
Trade and other payables
(6)
Borrowings from banks and other lenders
(1)
Cash and cash equivalents
1
Net assets acquired (B)
10
Prysmian Poland sp.zo.o (formerly Eksa Sp.z.o.o.)
On 31 December 2021 Prysmian Group completed the acquisition of Eksa Sp.z.o.o., 30% of
whose capital it already owned.
The total consideration for the acquisition was Euro 7 million.
In 2022, in compliance with IFRS 3, given the acquisition has been completed since twelve
months, the fair value of the assets, liabilities and contingent liabilities has been finalised. The
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
324
restatement of comparative figures can be found in the paragraph "C. RESTATEMENT OF
COMPARATIVE FIGURES".
The excess of the purchase consideration over the fair value of net assets acquired has been
recognised as goodwill, quantified as Euro 1 million.
Details of the net assets acquired and goodwill are as follows:
(Euro/million)
Euro
Total cost of acquisition (A)
7
Assets already held (B)
3
Fair value of net assets acquired (C)
9
Goodwill/(Badwill) (A+B-C)
1
(Euro/million)
Euro
Property, plant and equipment
1
Trade and other receivables
7
Borrowings from banks and other lenders
(1)
Cash and cash equivalents
3
Provisions for risks and charges
(1)
Net assets acquired (C)
9
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
325
F. SEGMENT INFORMATION
The Group's operating segments are:
ï‚·
Energy
, whose smallest identifiable CGUs are Regions/Countries depending on the
specific organisation;
ï‚·
Projects,
whose smallest identifiable CGUs are the High Voltage, Submarine Power,
Submarine Telecom and Offshore Specialties businesses;
ï‚·
Telecom
, whose smallest CGU is the operating segment itself.
Segment information is structured in the same way as the report periodically prepared for the
purpose of reviewing 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 metal price derivatives 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"
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
326
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
327
F.1 OPERATING SEGMENTS
The following tables present information by operating segment.
(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 metal
derivatives (D)
(31)
Fair value stock options (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
328
(Euro/million)
2021
Projects
Energy
Telecom Corporate
Group
total
E&I Industrial
& NWC
Other
Total
Energy
Sales
(1)
1,594
6,361
2,838
358
9,557
1,585
-
12,736
Adjusted EBITDA
before share of net
profit/(loss) of
equity-accounted
companies
210
353
195
(6)
542
206
-
958
% of sales
13.2%
5.5%
6.9%
5.7%
13.0%
7.5%
Adjusted EBITDA (A)
210
356
196
(6)
546
220
-
976
% of sales
13.2%
5.6%
6.9%
5.7%
13.9%
7.7%
Adjustments
(8)
(29)
(15)
(2)
(46)
9
(4)
(49)
EBITDA (B)
202
327
181
(8)
500
229
(4)
927
% of sales
12.7%
5.2%
6.4%
5.2%
14.4%
7.3%
Amortisation and
depreciation (C)
(69)
(123)
(57)
(4)
(184)
(76)
-
(329)
Adjusted operating
income (A+C)
141
233
139
(10)
362
144
-
647
% of sales
8.8%
3.7%
4.9%
3.8%
9.1%
5.1%
Fair value change in
metal derivatives (D)
13
Fair value stock options (E)
(33)
Asset (impairment) and
impairment reversal (F)
(6)
Operating income (B+C+D+E+F)
572
% of sales
4.5%
Finance income
689
Finance costs
(785)
Taxes
(166)
Net profit/(loss)
310
% of sales
2.4%
Attributable to:
Owners of the parent
308
Non-controlling
interests
2
(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
329
F.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)
2022
2021
Sales
16,067
12,736
EMEA*
8,097
6,633
(of which Italy)
1,585
1,225
North America
5,394
3,902
Latin America
1,361
1,104
Asia Pacific
1,215
1,097
*
EMEA: Europe, Middle East and Africa.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
330
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 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
(Euro/million)
Land
Buildings
Plant and
machinery
Equipment
Other
assets
Assets under
construction
and advances
Total
Balance at 31
December 2020
283
786
1,029
53
119
378
2,648
Movements in
2021:
- Business
combinations
1
2
6
-
1
-
10
- Investments
2
3
91
3
5
154
258
- Disposals
(3)
(3)
-
-
-
-
(6)
- Depreciation
-
(51)
(142)
(19)
(49)
-
(261)
- Impairment
(3)
(1)
(2)
-
-
-
(6)
- Currency
translation
differences
6
21
47
2
3
6
85
- Increases for
leases (IFRS 16)
-
19
1
7
36
-
63
- Monetary
revaluation for
hyperinflation
1
1
2
-
-
1
5
- Other
-
19
211
15
15
(262)
(2)
Balance at 31
December 2021
287
796
1,243
61
130
277
2,794
Of which:
- Historical cost
304
1,278
2,624
203
350
280
5,039
- Accumulated
depreciation and
impairment
(17)
(482)
(1,381)
(142)
(220)
(3)
(2,245)
Net book value
287
796
1,243
61
130
277
2,794
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
331
In 2022, gross capital expenditure, including that on intangible assets (see next note), amounted
to Euro 454 million (of which Euro 429 million related to tangible assets and Euro 25 million
related to intangible assets as better described below ) up from the previous year (Euro 283
million), as a result of increased investments in production and installation capacity, which are
essential to keep up with accelerating demand for digitalisation and electrification solutions
constituting some of the most important requirements of the so-called energy transition.
Details of this expenditure during the course of 2022 are provided below:
ï‚·
Projects to increase and technologically upgrade production capacity and develop new
products/markets: Euro 305 million (67% of the total).
o
Within the Projects segment, the largest investment was in commissioning a
new cable-laying vessel, for a planned total outlay of about Euro 200 million,
plus an extra Euro 40 million for cable-installation equipment. The project
replicates that of the Leonardo da Vinci, which was recently completed and
has been operational since 2021.
In order to support the growth in volumes required by the Projects segment,
linked to the increasing number of electrification projects prompted by the
energy transition, an investment was approved in 2022 for the construction
of a new submarine cable manufacturing plant at Brayton Point
(Massachusetts - USA). The project envisages converting the area, previously
occupied by a coal-fired thermal power plant, into a new state-of-the-art
inter-array and export submarine cable manufacturing complex, which will
provide a significant competitive advantage in a market, like the US one,
which is pursuing major electrification goals in the coming years, particularly
in the offshore wind sector.
Important investments were also made in increasing production capacity for
HVDC submarine and underground cables at the Pikkala, Gron, and Arco
Felice plants. In the case of Pikkala, the investment, of more than Euro 100
million, entails enlarging the plant and building a 185m-high tower that will
house a new vertical extrusion line. In addition, investments continued in
relation to the three German Corridors (SuedOst Link, A-Nord, Sud Link).
o
In the Energy segment, it was decided to invest in certain specific sectors in
order to support growing market demands. The investment projects include
the expansion of production capacity for low-voltage aluminium cables for both
the industrial and residential construction markets and for photovoltaic
systems. Other investments have been geared towards increasing production
capacity for overhead distribution high-voltage cables. All these investments
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
332
provide an adequate response to the trend in electrification and the
progressive energy transition towards renewable sources.
o
In the Telecom segment, investments have continued to boost optical cable
production capacity. Investments in the Telecom segment have been aimed at
seizing the opportunities provided by cloudification and data booming.
ï‚·
Multiple projects to improve industrial efficiency and rationalise production capacity: Euro
45 million (10% of the total).
o
The Group has continued to invest in cost optimisation throughout the Telecom
segment's production chain. Specifically, in 2022, investments continued in
2022 in upgrading machinery with the best production technologies currently
available within the Group. As for the Energy business, in North America
investments were completed at Sedalia, in the state of Missouri, to optimise the
cost of manufacturing aluminium cables for special applications.
In 2022, Prysmian Group continued with its Euro 100 million 10-year
investment program in Sustainability; the goal is to reduce overall CO2
equivalent emissions by 46% by 2030 (on 2019 levels) and achieve the Zero
Emissions target (Scope 1 and 2) by 2035. These investments, totalling Euro
12 million in 2022, involve several strands, including the installation of
photovoltaic systems in some of the Group's plants, various measures to reduce
energy consumption, and a multi-year plan to reduce the use of SF6 gas.
ï‚·
Structural work: Euro 79 million (17% of the total).
o
An important part of this expenditure was related to the continued
modernisation of production sites. Another significant part of the base-load
investment was related to the overall plan to improve road safety within the
plants.
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 2022, 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 (not even related to climate
change), except for that represented by the Russian-Ukrainian conflict, discussed below.
In addition, other assets belonging to larger CGUs, for which no explicit indicators of impairment
were identified, were written down for impairment due to specific market conditions. This led to
the recognition in 2022 of Euro 34 million in impairment losses, mainly attributable to the
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
333
impairment of certain assets at Battipaglia site (Italy), and certain assets at the Jackson (USA)
site as a result of the redevelopment project there.
Impacts of the Russian-Ukrainian conflict
The direct economic and financial consequences of the ongoing conflict between Russia and
Ukraine on the Group's assets and liabilities are discussed in the Risk section of these explanatory
notes.
2. GOODWILL AND OTHER INTANGIBLE ASSETS
Details of these line items 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 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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
334
(Euro/million)
Patents Concessions,
licences,
trademarks
and similar
rights
Goodwill
Software
Other
intangible
assets
Intangibles in
progress and
advances
Total
Balance at 31
December 2020
2
83
1,508
67
320
17
1,997
Movements in
2021:
- Business
combinations
4
4
49
-
23
-
80
- Investments
-
-
-
7
-
18
25
- Amortisation
(1)
(12)
-
(16)
(39)
-
(68)
- Currency
translation
differences
(1)
5
78
1
22
(1)
104
- Other
1
-
-
13
1
(13)
2
Balance at 31
December 2021
(*)
5
80
1,635
72
327
21
2,140
Of which:
- Historical cost
64
196
1,655
185
640
42
2,782
- Accumulated
amortisation and
impairment
(59)
(116)
(20)
(113)
(313)
(21)
(642)
Net book value
5
80
1,635
72
327
21
2,140
(*) 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. More details can be found in Section C. Restatement of
comparative figures.
In 2022, gross capital expenditure on intangible assets came to Euro 25 million. In 2022, as part
of Prysmian Group's integration strategy, the Group ERP system (SAP 1C) was implemented in
Poland, Peru and Canada, bringing to 83 the total number of plants managed using the unique
SAP 1C platform, present in over 30 countries. In the Operations area, the Corporate MES
(FastTrack) implementation projects were successfully completed in Pikkala (Finland) and Slatina
Energy (Romania) during the second quarter of 2022; new projects at the plants in Vilanova
Energy (Spain) and Livorno (Italy) entered the analysis stage during the fourth quarter, with
systems rollout scheduled for the second quarter of 2023.
Investments continued and increased in the Customer Centricity program, with the introduction
of a new B2B portal as part of the Group's strategy to strengthen its eServices.
Lastly, in the area of Digital Innovation, several initiatives were promoted and pursued during
the year in order to increase plant digitalisation and harness the benefits of digitalisation from
different viewpoints (from security to increased production capacity).
Goodwill
At 31 December 2022, Prysmian Group reported Euro 1,691 million in Goodwill (Euro 1,635
million at 31 December 2021), with the increase on the previous year due to currency translation
differences.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
335
Goodwill impairment test
As reported in Note 39 (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)
31.12.2021 (*)
Currency
translation
differences
31.12.2022
Energy goodwill
1,103
43
1,146
Projects goodwill
238
6
244
Telecom goodwill
294
7
301
Total goodwill
1,635
56
1,691
(*) 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. More details can be found in Section C. Restatement of
comparative figures.
The cash flows for all CGUs were determined as follows:
a)
post-tax cash flow for 2023 was taken from the Group's 2023 budget, approved by the
Board of Directors on 9 February 2023;
b)
cash flow forecasts were extended to the subsequent periods 2024-2025 on the basis of
growth projections consistent with expected worldwide growth rates for the Energy and
Telecom segments, while, given the specific nature of the Projects segment based on the
acquisition and development of projects, cash flow forecasts for Projects were extended
to the periods 2024-2027 on the basis of specific management calculations. Risks and
opportunities related to sustainability issues were implicitly considered in the cash flow
forecasts. In the Projects segment, for example, the specific calculation of flows over a
five-year period was intended to consider the opportunities arising from electrification
and energy transition to renewable sources. In the case of the Energy segment, the 2023
budget already reflected impacts from electrification and energy transition, just as flows
in the Telecom segment reflected impacts from cloudification and data booming.
c)
terminal value was calculated using a 2% perpetual growth rate, consistent with expected
long-term world growth forecasts;
d)
investments related to sustainability issues were considered in the impairment tests. In
fact, the Group is committed to its Euro 100 million 10-year Sustainability investment
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
336
programme in order to achieve the goal of a 46% reduction in overall CO2 equivalent
emissions by 2030 (compared to 2019 levels) and reach the Zero Emissions target (Scope
1 and 2) by 2035.
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). Although
the rates used to discount flows were higher in 2022 than in 2021, the test showed that the
recoverable value of the individual segments was higher than their net invested capital (including
the portion of goodwill allocated). In particular, recoverable amount is higher than carrying
amount for the Projects operating segment (234%), Energy operating segment (78%) and
Telecom operating segment (84%).
A WACC of 9.8% was used for the Projects segment. For recoverable amount to be equal to
carrying amount, a theoretical WACC of 18.9% would have to be used. A WACC of 9.4% was
used for the Energy segment. For recoverable amount to be equal to carrying amount, a
theoretical WACC of 14.8% would have to be used. A WACC of 7.7% was used for the Telecom
segment. For recoverable amount to be equal to carrying amount, a theoretical WACC of 12.2%
would have to be used.
For recoverable amount to be equal to carrying amount, the growth rate in terminal value for all
segments would have to be negative.
3. EQUITY-ACCOUNTED INVESTMENTS
This balance, amounting to Euro 387 million, has increased by Euro 27 million since 31 December
2021, when it amounted to Euro 360 million, reflecting the effects shown in the following table:
(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
(Euro/million)
31.12.2021
Investments in
associates
Opening balance
312
Movements:
- Currency translation differences
32
- Share of net profit/(loss)
27
- Dividends
(8)
- Other movements
(3)
Closing balance
360
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
337
Details of investments in equity-accounted companies are as follows:
(Euro/million)
31.12.2022
31.12.2021
Yangtze Optical Fibre and Cable Joint Stock Limited Company
335
311
Yangtze Optical Fibre & Cable (Shanghai) Co. Ltd.
27
27
Kabeltrommel Gmbh & Co.K.G.
6
6
Elkat Ltd.
11
7
Rodco Ltd.
-
2
Power Cables Malaysia Sdn Bhd
8
7
Total equity-accounted investments
387
360
The value of investments includes Euro 47 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%
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 2022, the fair value of the investment in Yangtze Optical Fibre and Cable Joint
Stock Limited Company was Euro 301 million (based on the price quoted on the Hong Kong
market), while book value was Euro 335 million, thus higher than fair value, identified by the
aforementioned market price.
However, taking into account specific analyses, this should not be treated as a lasting situation,
also in view of the fact that, up until November 2022, the market value of the investment was
higher than book value and also in view of the fact that fluctuations in the YoFC share price in
the early part of 2023 caused market value to approximate book value. This situation will
continue to be monitored over the coming months.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
338
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.
The following table reports key financial figures for the principal investments in associates (n.a.
if figures are not yet available):
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
339
(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
30.09.2022
31.12.2022
31.12.2022
31.12.2022
Non-current assets
n.a
1,729
n.a
10
9
Current assets
n.a
2,320
n.a
82
34
Total assets
n.a
4,049
n.a
92
43
Equity
n.a
2,049
n.a
46
17
Non-current liabilities
n.a
781
n.a
4
2
Current liabilities
n.a
1,219
n.a
42
24
Total equity and liabilities
n.a
4,049
n.a
92
43
2022
2022
2022
2022
2022
Sales of goods and services
n.a
1,459
n.a
88
77
Net profit/(loss) for the year
n.a
123
n.a
1
3
Comprehensive income/(loss) for
the year
n.a
127
n.a
1
3
Dividends received
2
8
-
-
-
(*)
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 2022.
(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
31.12.2021
31.12.2021
31.12.2021
31.12.2021
31.12.2021
Non-current assets
10
996
8
10
9
Current assets
22
1,712
31
71
53
Total assets
32
2,708
39
81
62
Equity
11
1,471
26
45
15
Non-current liabilities
12
324
-
5
2
Current liabilities
9
913
13
31
45
Total equity and liabilities
32
2,708
39
81
62
2021
2021
2021
2021
2021
Sales of goods and services
39
1,250
344
64
45
Net profit/(loss) for the year
6
94
4
-
1
Comprehensive income/(loss) for
the year
6
93
4
-
1
Dividends received
3
5
1
-
-
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
340
4. OTHER INVESTMENTS AND FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
COMPREHENSIVE INCOME
Details are as follows:
(Euro/million)
31.12.2022
31.12.2021
Other investments at fair value through other comprehensive income
(non-current)
12
13
Financial assets at fair value through other comprehensive income
(current)
11
11
Total
23
24
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) report securities
that either mature within 12 months of the reporting date or 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
31.12.2022
31.12.2021
Ravin Cables Limited
unlisted shares
51%
9.25
9.25
Tunisie Cables S.A.
unlisted shares
7.55%
0.93
1.03
Cesi Motta S.p.A.
unlisted shares
6.48%
0.26
0.81
Other
1.51
1.57
Total non-current
11.95
12.66
Other investments and financial assets at fair value through other comprehensive income are
denominated in the following currencies:
(Euro/million)
31.12.2022
31.12.2021
Euro
13
14
Tunisian Dinar
1
1
Indian Rupee
9
9
Total
23
24
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
341
5. TRADE AND OTHER RECEIVABLES
Details are as follows:
(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
(Euro/million)
31.12.2021
Non-current
Current
Total
Trade receivables
-
1,719
1,719
Allowance for doubtful accounts
-
(97)
(97)
Total trade receivables
-
1,622
1,622
Other receivables:
Tax receivables
10
229
239
Financial receivables
3
12
15
Prepaid finance costs
1
2
3
Receivables from employees
1
3
4
Pension plan receivables
-
2
2
Construction contracts
-
247
247
Advances to suppliers
5
27
32
Other
14
105
119
Total other receivables
34
627
661
Total
34
2,249
2,283
No individual customer accounted for more than 10% of the Group's net receivables in either
2022 or 2021.
Trade receivables
The gross amount of past due receivables that are totally or partially impaired is Euro 360 million
at 31 December 2022 (Euro 266 million at 31 December 2021).
Past due impaired receivables are aged as follows:
(Euro/million)
31.12.2022
31.12.2021
1 to 30 days
186
124
31 to 90 days
80
53
91 to 180 days
25
13
181 to 365 days
15
23
More than 365 days
54
53
Total
360
266
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
342
The value of trade receivables past due but not impaired is Euro 76 million at 31 December 2022
(Euro 80 million at 31 December 2021). 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)
31.12.2022
31.12.2021
1 to 30 days
6
8
31 to 90 days
2
1
91 to 180 days
1
2
181 to 365 days
1
2
More than 365 days
66
67
Total
76
80
The total value of trade receivables not past due is Euro 1,595 million at 31 December 2022
(Euro 1,346 million at 31 December 2021). 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)
31.12.2022
31.12.2021
Euro
995
725
US Dollar
772
635
British Pound
283
231
Brazilian Real
166
131
Chinese Renminbi (Yuan)
155
164
Turkish Lira
94
9
Canadian Dollar
68
57
Swedish Krona
28
27
Columbian Peso
24
26
Chilean Peso
28
24
Mexican Peso
46
21
Romanian Leu
16
21
Indonesian Rupiah
11
12
Thai Baht
10
12
Singapore Dollar
8
12
Other currencies
250
176
Total
2,954
2,283
The allowance for doubtful accounts amounts to Euro 97 million at 31 December 2022 (Euro 97
million at 31 December 2021). Movements in this allowance are shown in the following table:
(Euro/million)
31.12.2022
31.12.2021
Opening balance
97
95
Movements:
- Increases in allowance
10
12
- Releases
(6)
(6)
- Bad debt write-offs
(4)
(5)
- Currency translation differences and other movements
-
1
Closing balance
97
97
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
343
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 2 million at 31 December 2022 (Euro
3 million at 31 December 2021), primarily relating to arrangement costs for the Revolving Credit
Facility 2019 agreed with a syndicate of leading banks on 3 April 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 invoiced by the Group.
The following table shows how these amounts are reported between assets and liabilities:
(Euro/million)
31.12.2022
31.12.2021
Construction contract revenue to date
13,773
12,144
Amounts invoiced
(14,095)
(12,351)
Net amount due from/(to) customers for construction
contracts
(322)
(207)
Of which:
Other receivables for construction contracts
503
247
Other payables for construction contracts
(825)
(454)
6. INVENTORIES
Details are as follows:
(Euro/million)
31.12.2022
31.12.2021
Raw materials
780
635
of which allowance for obsolete and slow-moving raw materials
(84)
(63)
Work in progress and semi-finished goods
526
483
of which allowance for obsolete and slow-moving work in progress
and semi-finished goods
(21)
(16)
Finished goods (*)
935
936
of which allowance for obsolete and slow-moving finished goods
(90)
(68)
Total
2,241
2,054
(*)
Finished goods also include those for resale.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
344
7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Details are as follows:
(Euro/million)
31.12.2022
31.12.2021
Listed securities
49
35
Unlisted securities
221
209
Total
270
244
Financial assets at fair value through profit or loss, amounting to Euro 270 million (Euro 244
million at 31 December 2021), include Euro 193 million in money market funds in which the
Parent Company has temporarily invested its liquidity, with the remainder referring to funds in
which the Brazilian and Argentine subsidiaries have temporarily invested their liquidity.
Movements in these assets are analysed as follows:
(Euro/million)
31.12.2022
31.12.2021
Opening balance
244
20
Movements:
- Currency translation differences
(8)
-
- Purchase of securities
39
224
- Other
(5)
-
Closing balance
270
244
8. DERIVATIVES
Details are as follows:
(Euro/million)
31.12.2022
Asset
Liability
Interest rate derivatives (CFH)
59
-
Forward currency contracts on commercial transactions (CFH)
21
31
Metal derivatives (CFH)
52
29
Metal derivatives
3
1
Total non-current
135
61
Forward currency contracts on commercial transactions (CFH)
7
22
Interest rate derivatives (CFH)
13
-
Metal derivatives (CFH)
44
31
Forward currency contracts on commercial transactions
4
8
Forward currency contracts on financial transactions
3
7
Metal derivatives
-
4
Total current
71
72
Total
206
133
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
345
(
Euro/million)
31.12.2021
Asset
Liability
Interest rate derivatives (CFH)
-
3
Forward currency contracts on commercial transactions (CFH)
1
10
Metal derivatives (CFH)
102
13
Metal derivatives
2
-
Total non-current
105
26
Forward currency contracts on commercial transactions (CFH)
2
6
Interest rate derivatives (CFH)
-
6
Metal derivatives (CFH)
71
7
Forward currency contracts on commercial transactions
10
4
Forward currency contracts on financial transactions
3
3
Metal derivatives
42
16
Total current
128
42
Total
233
68
Forward currency contracts have a notional value of Euro 6,225 million at 31 December 2022
(Euro 2,574 million at 31 December 2021); total notional value at 31 December 2022 includes
Euro 2,770 million in derivatives designated as cash flow hedges (Euro 873 million at 31
December 2021).
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 2022, like at 31 December 2021, almost all the derivative contracts had been
entered into with major financial institutions.
Metal derivatives have a notional value of Euro 2,169 million at 31 December 2022 (Euro 2,068
million at 31 December 2021).
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:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
346
(
Euro/million)
31.12.2022
Gross
derivatives
Amounts
offset
Derivatives
recognised
in statement
of financial
position
Amounts
not offset
(1)
Net
derivatives
Assets
Forward currency contracts
35
-
35
(25)
10
Interest rate derivatives
72
-
72
-
72
Metal derivatives
99
-
99
(33)
66
Total assets
206
-
206
(58)
148
Liabilities
Forward currency contracts
68
-
68
(25)
43
Interest rate derivatives
-
-
-
-
-
Metal derivatives
65
-
65
(33)
32
Total liabilities
133
-
133
(58)
75
(Euro/million)
31.12.2021
Gross
derivatives
Amounts
offset
Derivatives
recognised
in statement
of financial
position
Amounts
not offset
(1)
Net
derivatives
Assets
Forward currency contracts
16
-
16
(7)
9
Interest rate derivatives
-
-
-
-
-
Metal derivatives
217
-
217
(11)
206
Total assets
233
-
233
(18)
215
Liabilities
Forward currency contracts
23
-
23
(7)
16
Interest rate derivatives
9
-
9
-
9
Metal derivatives
36
-
36
(11)
25
Total liabilities
68
-
68
(18)
50
(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)
2022
2021
Gross
reserve
Tax
effect
Gross
reserve
Tax
effect
Opening balance
139
(34)
56
(14)
Changes in fair value
(46)
12
83
(20)
Reserve for other finance costs/(income)
1
-
1
-
Release to construction contract costs/(revenues)
(1)
-
(1)
-
Closing balance
93
(22)
139
(34)
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
347
9. CASH AND CASH EQUIVALENTS
Details are as follows:
(Euro/million)
31.12.2022
31.12.2021
Cash and cheques
4
1
Bank and postal deposits
1,281
1,701
Total
1,285
1,702
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 838
million at 31 December 2022, while at 31 December 2021 the figure was Euro 1,183 million.
The change in cash and cash equivalents is commented on in Note 36. Statement of cash flows.
Consolidated equity has recorded a positive change of Euro 682 million since 31 December 2021,
mainly reflecting the net effect of:
-
the net profit for the year of Euro 509 million;
-
the distribution of Euro 149 million in dividends;
-
positive currency translation differences of Euro 142 million;
-
a positive change of Euro 104 million in the share-based compensation reserve linked to
stock option plans;
-
an increase of Euro 79 million in the reserves for actuarial gains and losses on employee
benefits;
-
an increase of Euro 42 million for the effects of hyperinflation;
-
a negative post-tax change of Euro 34 million in the fair value of derivatives designated
as cash flow hedges and a negative post-tax change of Euro 11 million for hedging costs.
At 31 December 2022, the share capital of Prysmian S.p.A. comprises 268,144,246 shares, each
of nominal value Euro 0.10 for a total of Euro 26,814,424.60.
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 2020
268,144,246
(4,759,433)
263,384,813
Allotments and sales
(1)
-
106,565
106,565
Balance at 31 December 2021
268,144,246
(4,652,868)
263,491,378
Allotments and sales
(2)
-
40,837
40,837
Balance at 31 December 2022
268,144,246
(4,612,031)
263,532,215
(1)
Allotment and/or sale of treasury shares under the YES Group employee share purchase plan (106,565 shares).
(2)
Allotment and/or sale of treasury shares under the YES Group employee share purchase plan (40,837 shares).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
348
Treasury shares
Movements in treasury shares during 2022 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 2020
4,759,433
475,944
1.77%
20
96,816,950
- Allotments and sales
(106,565)
(10,657)
-
20
(2,122,775)
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
11. BORROWINGS FROM BANKS AND OTHER LENDERS
Details are as follows:
(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
(Euro/million)
31.12.2021
Non-current
Current
Total
Borrowings from banks and other lenders
293
56
349
Term Loan
998
1
999
Unicredit Loan
200
-
200
Mediobanca Loan
100
-
100
Intesa Loan
150
-
150
Non-convertible bond
-
763
763
Convertible Bond 2021
707
-
707
Convertible Bond 2017
-
250
250
Lease liabilities
158
53
211
Total
2,606
1,123
3,729
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
349
Borrowings from banks and other lenders and Bonds are analysed as follows:
(Euro/million)
31.12.2022
31.12.2021
CDP Loans
176
175
EIB Loans
246
110
Sustainability-Linked Term Loan
1,197
-
Term Loan
-
999
Unicredit Loan
200
200
Mediobanca Loan
100
100
Intesa Loan
151
150
Other borrowings
65
64
Borrowings from banks and other lenders
2,135
1,798
Non-convertible bond
-
763
Convertible Bond 2021
718
707
Convertible Bond 2017
-
250
Total
2,853
3,518
The Group's principal credit agreements in place at the reporting date are as follows:
Revolving Credit Facility 2019
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. The funds may be drawn down for business
and working capital needs, including the refinancing of existing facilities. The Revolving Credit
Facility 2019 can also be used for the issue of guarantees. At 31 December 2022, 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.
At 31 December 2022, 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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
350
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 European
Investment Bank (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.
The EIB 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 was received on 28 January 2022 and is repayable in a lump sum at maturity on 29
January 2029.
At 31 December 2022, the fair value of the EIB Loans approximated their carrying amount.
Term Loan
The Term Loan, issued in June 2018 and used by the Group for the purpose of having the
necessary financial resources to pay the General Cable purchase consideration, to refinance the
existing debt of General Cable and its subsidiaries and to finance acquisition-related fees,
commissions, costs and expenses, was repaid early on 14 July 2022 in the amount of Euro 1,000
million.
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 medium-term Term Loan
obtained in 2018.
With the aim of strengthening its financial structure and the integration 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 the loan.
In fact, the Sustainability Linked Term Loan requires compliance with ESG indicators on an
annual basis. The indicators to be met for 2022 are as follows:
ï‚·
Scope 1 and Scope 2 CO2 emissions, calculated using the "market-based method",
less than or equal to 668 ktCO2eq (please refer to "Environmental Responsibility"
within the Consolidated Non-Financial Statement forming part of the Directors'
Report);
ï‚·
Number of at least 30 sustainability audits carried out from the own suppliers (please
refer to "Sustainable Value Chain" within the Consolidated Non-Financial Statement
forming part of the Directors' Report);
ï‚·
A percentage greater than or equal to 40% of women hired with the status of "white
collar" on the total recruitment of "white collar" by the Group (please refer to "Human
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
351
Capital" within the Consolidated Non-Financial Statement forming part of the Directors'
Report).
The achievement or not of these indicators leads to a positive or negative adjustment of the
margin annually applied.
At 31 December 2022, 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 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 2022, the fair value of this loan approximated its carrying amount.
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 2022, 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 2022, 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 2022
and 31 December 2021:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
352
(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
(Euro/million)
31.12.2021
Total lines
Drawn
Undrawn
Revolving Credit Facility 2019
1,000
-
1,000
Term Loan
1,000
(1,000)
-
CDP Loans
175
(175)
-
EIB Loans
110
(110)
-
Unicredit Loan
200
(200)
-
Mediobanca Loan
100
(100)
-
Intesa Loan
150
(150)
-
Total
2,735
(1,735)
1,000
Bonds
During the course of 2022, Prysmian Group had the bond issues in place described in the
following paragraphs.
Non-convertible bond issued in 2015
The Non-Convertible Bond 2015, issued in March 2015, reached maturity in April 2022 and so
has been fully repaid in the amount of Euro 750 million.
Convertible Bond 2017
The Convertible Bond 2017, issued in January 2017 for the sum of Euro 500 million, and partially
redeemed in January 2021, matured in January 2022 and so has been fully repaid in the amount
of Euro 250 million.
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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
353
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
2022:
(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
18
Related costs
(3)
Balance at 31 December 2022
718
At 31 December 2022, the fair value of the Convertible Bond 2021 (equity component and debt
component) was Euro 780 million, of which Euro 658 million attributable to the debt component
and Euro 122 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
354
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.
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
355
(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 2020
100
118
489
762
997
450
256
3,172
Business combinations
-
-
-
-
-
-
4
4
Currency translation
differences
-
-
-
-
-
-
7
7
New funds
75
-
703
-
-
-
19
797
Repayments
-
(8)
(245)
-
-
-
(75)
(328)
Amortisation of bank and
financial fees and other
expenses
-
-
(3)
2
2
-
-
1
New IFRS 16 leases
-
-
-
-
-
-
63
63
Interest and other
movements
-
-
13
(1)
-
-
1
13
Balance at
31 December 2021
175
110
957
763
999
450
275
3,729
The following tables provide an analysis by maturity and currency of borrowings from banks and
other lenders (excluding lease liabilities) at 31 December 2022 and 2021:
(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
(a)
1.5%
1.3%
11.0%
1.3%
2.3%
-
1.5%
a)
Interest rate swaps have been put in place to hedge interest rate risk on variable rate loans in Euro. At 31
December 2022, the total hedged amount equates to 71.0% 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 1.7% for Euro-denominated debt. The percentages
representing the average fixed rate refer to 31 December 2022.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
356
(
Euro/million)
31.12.2021
Variable interest rate
Fixed interest rate
Total
Euro
USD
Other
currencies
Euro
USD
Other
currencies
Due within 1 year
8
11
2
1,035
3
10
1,069
Due between 1 and 2 years
1,197
-
-
1
-
-
1,198
Due between 2 and 3 years
458
8
-
-
-
-
466
Due between 3 and 4 years
76
-
-
-
-
-
76
Due between 4 and 5 years
1
-
-
707
-
-
708
Due after more than 5 years
1
-
-
-
-
-
5
Total
1,741
19
2
1,743
3
10
3,518
Average interest rate in
period, as per contract
1.0%
1.6%
7.2%
1.8%
2.3%
5.2%
1.4%
Average interest rate in
period, including IRS effect
1.3%
1.6%
7.2%
1.8%
2.3%
5.2%
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
357
(Euro/million)
Note
31.12.2022
31.12.2021
CDP Loans
11
175
175
EIB Loans
11
245
110
Convertible Bond 2021
11
718
707
Sustainability-Linked Term Loan 2022
11
1,191
-
Term Loan
-
998
Unicredit Loan
11
-
200
Mediobanca Loan
11
100
100
Intesa Loan
11
150
150
Lease liabilities
11
156
158
Interest rate swaps
8
-
3
Other financial payables
11
9
8
Total long-term financial payables
2,744
2,609
CDP Loans
11
1
-
EIB Loans
11
1
-
Non-convertible bond
11
-
763
Convertible Bond 2017
11
-
250
Term Loan
-
1
Sustainability-Linked Term Loan 2022
11
6
-
Unicredit Loan
11
200
-
Intesa Loan
11
1
-
Lease liabilities
11
58
53
Interest rate swaps
8
-
6
Forward currency contracts on financial transactions
8
7
3
Other financial payables
11
56
56
Total short-term financial payables
330
1,132
Total financial liabilities
3,074
3,741
Long-term financial receivables
5
3
3
Long-term bank fees
5
-
1
Financial assets at amortised cost
3
3
Non-current interest rate swaps
8
59
-
Current interest rate swaps
8
13
-
Forward currency contracts on financial transactions
(current)
8
3
3
Short-term financial receivables
5
8
12
Short-term bank fees
5
2
2
Financial assets at fair value through profit or loss
7
270
244
Financial assets at fair value through other
comprehensive income
4
11
11
Cash and cash equivalents
9
1,285
1,702
Total financial assets
1,657
1,981
Net financial debt
1,417
1,760
The following table presents a reconciliation of the Group's net financial debt to the amount
reported in accordance with the requirements of CONSOB advice notice 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):
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
358
(Euro/million)
Note
31.12.2022
31.12.2021
Net financial debt - as reported above
1,417
1,760
Adjustments to exclude:
Long-term financial receivables
3
6
6
Long-term bank fees
3
-
1
Cash flow derivatives (assets)
72
-
Adjustments to include:
Net non-hedging forward currency contracts
on commercial transactions, excluding non-
current assets
5
4
(6)
Net non-
hedging metal derivatives, excluding
non-current assets
5
5
(26)
Recalculated net financial debt
1,504
1,735
12. TRADE AND OTHER PAYABLES
Details are as follows:
(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
(Euro/million)
31.12.2021
Non-current
Current
Total
Trade payables
-
2,592
2,592
Total trade payables
-
2,592
2,592
Other payables:
Tax and social security payables
1
204
205
Advances from customers
-
549
549
Payables to employees
-
149
149
Accrued expenses
-
130
130
Other
5
159
164
Total other payables
6
1,191
1,197
Total
6
3,783
3,789
Trade payables include around Euro 614 million (Euro 665 million at 31 December 2021) for the
supply of strategic metals (copper, aluminium and lead), for which a payment extension of more
than 60 days has been obtained.
Advances from customers include the liability for construction contracts, amounting to Euro 825
million at 31 December 2022 and Euro 454 million at 31 December 2021. This liability represents
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
359
the excess of amounts invoiced 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)
31.12.2022
31.12.2021
Euro
2,415
1,957
US Dollar
968
809
British Pound
267
164
Chinese Renminbi (Yuan)
167
183
Brazilian Real
149
106
Bahraini Dinar
-
92
Omani Rial
-
65
Mexican Peso
26
40
Canadian Dollar
22
54
Philippine Peso
33
27
Romanian Leu
17
47
Australian Dollar
64
40
UAE Dirham
22
47
Indonesian Rupiah
8
13
Swedish Krona
14
17
Hungarian Forint
14
17
Other currencies
254
111
Total
4,440
3,789
13. PROVISIONS FOR RISKS AND CHARGES
Details are as follows:
(Euro/million)
31.12.2022
(*)
Non-current
Current
Total
Restructuring costs
-
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
.
(Euro/million)
31.12.2021
(*) (**)
Non-current
Current
Total
Restructuring costs
-
21
21
Legal, contractual and other risks
29
395
424
Environmental risks
5
92
97
Tax risks
12
100
112
Total
46
608
654
(*) 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. More details can be found in Section C. Restatement of
comparative figures.
(**) Provisions for risks at 31 December 2021 included Euro 123 million for potential liabilities recorded in application
of
IFRS 3 - Business Combinations
.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
360
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 2021
21
424
97
112
654
Increases
5
157
-
21
183
Uses
(7)
(74)
(4)
(13)
(98)
Releases
(1)
(35)
-
(36)
(72)
Currency translation differences
-
-
4
10
14
Other
-
4
(2)
13
15
Balance at 31 December 2022
18
476
95
107
696
(*) 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. More details can be found in Section C. Restatement of
comparative figures.
The provision for contractual, legal and other risks amounts to Euro 476 million at 31 December
2022 (Euro 424 million at 31 December 2021). This provision mainly includes the provision for
Euro 179 million 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 competent authorities, as described below. The rest of this provision refers to provisions
related to and arising from business combinations and for risks associated with ongoing and
completed contracts.
Antitrust - European Commission proceedings in the high voltage underground and submarine
cables business
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.
On 2 April 2014, the European Commission adopted a decision under which it found that,
between 18 February 1999 and 28 January 2009, the world's largest cable producers, including
Prysmian Cavi e Sistemi S.r.l. ("Prysmian CS"), had engaged in anti-competitive practices in the
European market for high voltage submarine and underground power cables. The European
Commission held Prysmian CS jointly liable with Pirelli & C. S.p.A. ("Pirelli") for the alleged
infringement in the period 18 February 1999 - 28 July 2005, ordering them to pay a fine of Euro
67.3 million, and it held Prysmian CS jointly liable with Prysmian S.p.A. ("Prysmian") and The
Goldman Sachs Group Inc. ("Goldman Sachs") for the alleged infringement in the period 29 July
2005 - 28 January 2009, ordering them to pay a fine of Euro 37.3 million. Prysmian, Prysmian
CS, Pirelli and Goldman Sachs each filed a separate appeal against this decision with the General
Court of the European Union, in first instance, and later with the Court of Justice of the European
Union. In rulings handed down on 24 September 2020, 28 October 2020 and 27 January 2021
respectively, the Court of Justice definitively dismissed the appeals brought by Prysmian and
Prysmian CS, Pirelli and Goldman Sachs, thus upholding the liability and fine envisaged under
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
361
the European Commission's original decision. Further to the ruling dismissing the appeal by
Prysmian and Prysmian CS, the European Commission requested Prysmian Group to pay the
sum of approximately Euro 20 million, corresponding to half of the fine for the period from 29
July 2005 to 28 January 2009. Following the ruling dismissing the Pirelli appeal, the European
Commission requested Prysmian Group to pay the sum of approximately Euro 37 million,
corresponding to half of the fine for the period from 18 February 1999 to 28 July 2005. Using
the provisions already set aside, the Group made these payments by the required deadline
during previous reporting periods.
In a ruling handed down on 14 November 2019, the Court of Justice of the European Union also
dismissed the appeal brought by General Cable, thus definitively confirming the fine previously
levied against it by the European Commission in its April 2014 decision. As a result, the Group
went ahead and paid a fine for Euro 2 million during a previous reporting period.
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 | B. CONSOLIDATED FINANCIAL STATEMENTS
362
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
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. The appeal decision is pending.
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.
Furthermore, in February 2023, the Group received notification of an application by British
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
363
consumer representatives requesting authorisation from the competent 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.
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, on 4 April 2019, the Group learned that another two legal actions had been brought
in the Court of London, one by Scottish and Southern Energy (SSE) group companies and the
other by Greater Gabbard Offshore Winds Limited and SSE group companies, both of which
involving claims for damages purportedly suffered as a result of the alleged anti-competitive
practices sanctioned by the European Commission. Both proceedings have been concluded
through settlements agreed between the parties during 2021 for the first action and in June
2022 for the second action.
Prysmian and Prysmian Cavi e Sistemi were summoned by Nexans France SAS and Nexans SA
to appear before the Court of Dortmund (Germany) in notifications dated 24 and 25 May 2018
respectively. The plaintiffs have asked the Court concerned to ascertain the existence of joint
and several liability between Prysmian and Prysmian Cavi e Sistemi, on the one hand, and
Nexans France SAS and Nexans SA, on the other, for any damages suffered by third parties in
Germany as a result of the alleged cartel in the market for high voltage underground and
submarine power cables sanctioned in the European Commission's decision. The Court concerned
issued a stay of execution dated 3 June 2019 pending the outcome of the appeal against the
European Commission's decision brought before the European Courts by both Prysmian and
Nexans. Following the conclusion of the appeal proceedings pending before the European Court
of Justice, Nexans resumed the previously stayed legal action, but then filed a notice in March
2022, abandoning the action and thus ending the dispute.
Antitrust - Other investigations
In Brazil, the local antitrust authority initiated 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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
364
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 have
appealed against this decision. The appeal decision is still pending. 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 have also appealed against the decision
of the local antitrust authority; the appeal decision is still 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.
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. Further information can be found in the Directors' Report in
the section entitled "Significant events during the year".
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, during August 2022 and March 2023 respectively, the competition authority of
the Czech Republic and Slovakia 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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
365
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.
During the year, 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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
366
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:
(Euro/million)
31.12.2022
31.12.2021
Pension plans
262
359
Italian statutory severance benefit
12
15
Medical benefit plans
20
31
Termination and other benefits
35
41
Total
329
446
Pension plan amendments in 2022
There were no significant amendments to existing pension plans during 2022. 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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
367
Pension plan obligations and assets at 31 December 2022 and 31 December 2021 are analysed
as follows:
(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
(Euro/million)
31.12.2021
Germany
Great
Britain
France
United
States
Other
countries
Total
Funded pension obligations:
Present value of obligation
-
219
2
141
85
447
Fair value of plan assets
-
(151)
(2)
(132)
(85)
(370)
Asset ceiling
-
-
-
-
-
-
Unfunded pension obligations:
Present value of obligations
230
-
32
5
15
282
Total
230
68
32
14
15
359
At 31 December 2022, the net value of funded plans in "Other countries" is practically zero and
mainly refers to Canada, Mexico and Spain.
At 31 December 2022, unfunded plans in "Other countries" primarily refer to Sweden and Chile,
the present value of whose obligations amounts to Euro 5 million and Euro 4 million respectively.
Changes during the year in pension plan obligations are analysed as follows:
(Euro/million)
2022
2021
Opening defined benefit obligation
729
759
Current service costs
6
7
Interest costs
14
10
Administrative costs and taxes
2
2
Actuarial (gains)/losses recognised in equity - experience
12
(4)
Actuarial (gains)/losses recognised in equity - demographic assumptions
(3)
(6)
Actuarial (gains)/losses recognised in equity - financial assumptions
(194)
(31)
Disbursements from plan assets
(27)
(25)
Disbursements paid directly by the employer
(13)
(12)
Plan settlements
(28)
-
Currency translation differences
4
29
Closing defined benefit obligation
502
729
Changes during the year in pension plan assets are analysed as follows:
(Euro/million)
2022
2021
Opening plan assets
370
340
Interest income on plan assets
9
6
Actuarial gains/(losses) recognised in equity
(90)
18
Contributions paid in by the employer
21
20
Disbursements
(40)
(38)
Plan settlements
(30)
-
Currency translation differences
3
24
Closing plan assets
243
370
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
368
At 31 December 2022, pension plan assets consisted of equities (22% versus 23% in 2021),
government bonds (15% versus 15% in 2021), corporate bonds (23% versus 25% in 2021),
and other assets (39% versus 37% in 2021).
The asset ceiling recorded a value of Euro 3 million at 31 December 2022 (zero at 31 December
2021).
Pension plan costs and income recognised in the income statement are analysed as follows:
(Euro/million)
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
(Euro/million)
2021
Germany
Great
Britain
France
United
States
Other
countries
Total
Personnel costs
1
-
3
1
4
9
Interest costs
1
3
-
3
3
10
Expected returns on plan assets
-
(2)
-
(3)
(1)
(6)
Total pension plan costs
2
1
3
1
6
13
More details can be found in Note 20. Personnel costs.
As evident from the preceding tables, the most significant plans at 31 December 2022 in terms
of accrued employee benefit obligations are those managed in the following countries:
ï‚·
Germany;
ï‚·
Great Britain;
ï‚·
France;
ï‚·
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 2022, the plans had an average duration
of 11 years (14 years at 31 December 2021).
Total plan membership is made up as follows:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
369
31.12.2022
31.12.2021
Number of participants
Number of participants
Active
1,200
962
Deferred
820
866
Pensioners
2,271
2,200
Total membership
4,291
4,028
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 2023 will amount to Euro 10 million (Euro 9 million at 31 December 2021
for 2022).
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.
Great Britain
Two defined benefit plans were in operation at 31 December 2022: 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 2022, the plans had an average duration of approximately 19 years, in line
with the previous year.
Total plan membership is made up as follows:
31.12.2022
31.12.2021
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
443
521
964
443
521
964
Pensioners
478
385
863
424
385
809
Total
membership
921
906
1,827
867
906
1,773
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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
370
and the Prysmian pension fund was conducted at 31 December 2021 and will be 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: 8%
in equities, 41% in bonds and 51% in other financial instruments. The Prysmian pension fund
has invested its assets as follows: 10% in equities, 48% in bonds and 42% 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.
The benefits payable in 2023 will amount to Euro 9 million (Euro 5 million at 31 December 2021
for 2022).
France
There were five pension plans in operation in France at 31 December 2022, of which four are
unfunded retirement benefit plans and one is a partially funded pension plan.
All the plans generally set the retirement age at 64 for office workers and 63 for other categories.
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 2022, the plans had an average duration of approximately 10 years, in line
with the previous year.
Total plan membership is made up as follows:
31.12.2022
31.12.2021
Number of participants
Number of participants
Active
2,457
2,457
Deferred
-
-
Pensioners
21
25
Total membership
2,478
2,482
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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
371
following variables: inflation, salary growth, life expectancy of plan participants 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 2022, 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.
As at 31 December 2022, the plans had an average duration of approximately 9 years, in line
with the previous year.
Total plan membership is made up as follows:
31.12.2022
31.12.2021
Number of participants
Number of participants
Active
346
386
Deferred
603
631
Pensioners
1,013
2,769
Total membership
1,962
3,786
The significant decrease in the number of pensioners in 2022 compared with 2021 is due to the
partial settlement of two plans in November 2022.
The benefits and contributions payable in 2023 will amount to Euro 1 million (Euro 1 million at
31 December 2021 for 2022).
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:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
372
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
31.12.2021
Germany
Great Britain
France
United States
Interest rate
1.05%
1.85%
0.95%
2.70%
Expected future salary
increase
2.46%
-
1.97%
2.50%
Expected increase in pensions
2.05%
3.57%
1.90%
0.00%
Inflation rate
2.55%
3.60%
1.90%
3.00%
Life expectancy at age 65:
Male
Female
Male
Female
Male
Female
Male
Female
People currently aged 65
20.50
24.00
20.34
22.34
24.16
27.63
20.06
22.00
People currently aged 50
22.60
25.70
20.94
23.32
26.23
29.84
21.19
23.09
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
373
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%
31.12.2021
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
7.02%
-6.34%
9.51%
-8.42%
5.21%
-4.82%
4.49%
-4.10%
Inflation rate
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
Change in pension plans
-2.54%
2.54%
-2.14%
2.23%
-2.58%
2.67%
0.00%
0.00%
31.12.2021
Germany
Great Britain
France
United States
1-year increase in life
expectancy
5.92%
5.36%
1.61%
3.19%
STATUTORY SEVERANCE BENEFIT
Statutory severance benefit, which refers to Italian companies only, is analysed as follows:
(Euro/million)
2022
2021
Opening balance
15
15
Current service costs
1
-
Actuarial (gains)/losses recognised in equity
(3)
1
Disbursements
(1)
(1)
Closing balance
12
15
Net actuarial gains of Euro 3 million have been recognised at 31 December 2022, basically
reflecting 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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
374
The actuarial assumptions used to value statutory severance benefit are as follows:
31.12.2022
31.12.2021
Interest rate
3.80%
0.85%
Expected future salary increase
2.40%
1.75%
Inflation rate
2.40%
1.75%
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:
31.12.2022
31.12.2021
Interest rate
- 0.50%
+ 0.50%
- 0.50%
+ 0.50%
Change in statutory severance benefit
4.33%
-4.14%
4.45%
-4.15%
Inflation rate
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
Change in statutory severance benefit
-1.38%
1.41%
-1.37%
1.39%
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)
2022
2021
Opening balance
31
30
Current service costs
2
2
Actuarial (gains)/losses recognised in equity - experience
(14)
(2)
Disbursements
(1)
(1)
Currency translation differences
2
2
Closing balance
20
31
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
375
The actuarial assumptions used to value medical benefit plans are as follows:
31.12.2022
31.12.2021
Interest rate
5.50%
2.83%
Expected future salary increase
-
-
Increase in claims
3.50%
3.25%
Life expectancy at age 65:
Male
Female
Male
Female
People currently aged 65
20.55
22.63
20.56
22.63
People currently aged 50
21.67
23.67
21.66
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.
31.12.2022
31.12.2021
Interest rate
-0.50%
0.50%
-0.50%
0.50%
Change in medical benefit plans
6.35%
-5.87%
8.49%
-7.51%
Medical inflation rate
- 0.25%
+ 0.25%
- 0.25%
+ 0.25%
Change in medical benefit plans
-1.75%
1.87%
-2.63%
2.63%
31.12.2022
31.12.2021
1-year increase in life expectancy
3.11%
4.09%
Number of employees
With reference to the number of employees, please refer to the "People and Human Rights"
sector of the Non-Financial Statement 2022.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
376
15. DEFERRED TAXES
The balance of deferred tax assets at 31 December 2022 is Euro 203 million (Euro 182 million
at 31 December 2021) while that of deferred tax liabilities is Euro 187 million (Euro 190 million
at 31 December 2021).
Movements in deferred taxes are analysed as follows:
(Euro/million)
Fixed assets
Provisions
(1)*
Tax losses
Other
Total
Balance at 31 December 2020
(232)
205
11
30
13
Business combinations
(6)
(1)
-
-
(7)
Currency translation differences
(12)
2
-
(6)
(16)
Impact on income statement
22
(2)
(2)
17
35
Impact on equity
-
(7)
-
(22)
(29)
Other and reclassifications
1
(1)
-
(4)
(4)
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
(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. More details can be found in Section C. Restatement of
comparative figures
The Group has not recognised any deferred tax assets on Euro 1,017 million in carryforward tax
losses at 31 December 2022 (Euro 1,005 million at 31 December 2021). Unrecognised deferred
tax assets relating to the above carryforward tax losses and to deductible temporary differences
amount to Euro 237 million (Euro 247 million at 31 December 2021).
At 31 December 2022, it has however recognised deferred tax assets of Euro 6 million on
carryforward tax losses of Euro 28 million (Euro 31 million at 31 December 2021).
The following table presents details of carryforward tax losses:
(Euro/million)
31.12.2022
31.12.2021
Carryforward tax losses
1,045
1,036
of which recognised as deferred tax assets
28
31
Carryforward expires within 1 year
9
11
Carryforward expires between 2-5 years
47
59
Carryforward expires beyond 5 years
39
31
Unlimited carryforward
950
935
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
377
16. SALES
Details are as follows:
(Euro/million)
2022
2021
Finished goods
13,817
11,099
Construction contracts
1,607
1,126
Services
106
77
Other
537
434
Total
16,067
12,736
17. CHANGE IN INVENTORIES OF FINISHED GOODS AND WORK IN PROGRESS
Details are as follows:
(Euro/million)
2022
2021
Finished goods
(67)
124
Work in progress
37
105
Total
(30)
229
18. OTHER INCOME
Details are as follows:
(Euro/million)
2022
2021
Rental income
3
2
Insurance reimbursements and indemnities
17
15
Gains on disposal of property
4
3
Other revenue and income
46
105
Total
70
125
19. RAW MATERIALS, CONSUMABLES AND SUPPLIES
Details are as follows:
(Euro/million)
2022
2021
Raw materials
10,768
9,113
Change in inventories
(180)
(207)
Total
10,588
8,906
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
378
20. PERSONNEL COSTS
Details are as follows:
(Euro/million)
2022
2021
Wages and salaries and social security
1,545
1,349
Fair value-stock options
104
33
Pension plans
10
10
Medical benefit costs
1
2
Termination and other benefits
28
28
Business reorganisation
5
13
Other personnel costs
65
51
Total
1,758
1,486
Share-based payments
At 31 December 2022, the Prysmian Group had share-based compensation plans in place for
managers and employees of Group companies and for members of the Parent Company's Board
of Directors. These plans are described below.
Employee share purchase plan (2022) – YES 2.0
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,
except for certain managers for whom the discount is 15%, and the executive Directors and key
management personnel, for whom the discount is 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.
All those who signed up to the plan also received an entry bonus of six free shares, taken from
the Company's portfolio of treasury shares, only available with their first-time purchase. If an
employee had already participated in the 2013 plan, they 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.
On 28 April 2021, the shareholders of Prysmian S.p.A. approved the extension of the share
ownership plan for Prysmian Group employees.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
379
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
form of treasury shares. The shares purchased will be subject to a retention period, during which
they cannot be sold. The extension 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 will be 1%.
Costs of Euro 1 million have been recognised as "Personnel costs" in the income statement at
31 December 2022 for the fair value of options granted under this plan.
The fair value of the options 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)
2.75
Share price at grant date (Euro)
€30.87
Risk-free interest rate
from 0.32% to 0.54%
Expected dividend %
1.80%
Option fair value at grant date (Euro)
from €23.94 to €19.27
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
, from its registered offices and from Borsa Italiana S.p.A.
Long-term incentive plan 2020-2022
The Prysmian S.p.A. shareholders' meeting of 28 April 2020 approved a long-term incentive
plan, for which it authorised a bonus capital increase, as proposed by the Board of Directors, to
be reserved for Prysmian Group employees. This capital increase could reach a maximum
nominal amount of Euro 1,100,000 through apportionment, pursuant to art. 2349 of the Italian
Civil Code, of a corresponding amount from profits or earnings reserves, with the issue of no
more than 11,000,000 ordinary shares of nominal value Euro 0.10 each. At the same time, the
shareholders also revoked their resolution of 12 April 2018 relating to a similar capital increase,
amending article 6 of the By-laws. The shareholders' meeting held on 12 April 2022 adopted a
resolution to reduce the capital increase from a maximum nominal amount of Euro 1,100,000.00,
corresponding to 11,000,000 new ordinary shares, to a maximum nominal amount of Euro
800,000.00, corresponding to 8,000,000 new ordinary shares.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
380
The long-term incentive plan (LTI), approved by the shareholders on 28 April 2020 pursuant to
art. 114-bis, par. 1, of Italian Legislative Decree no. 58/1998, was in response to the following
key drivers of change:
-
simplification and alignment with best market practices;
-
sustainability of performance over time;
-
greater participation in the creation of long-term value by extending the number of
beneficiaries to a wider group of managers and professionals;
-
retention to support the phase of post-merger integration with General Cable, especially
in certain regions with a particularly competitive talent market.
The Plan extends to some 700 Group employees and involves the allocation of a number of
options calculated according to the achievement of operational, economic and financial
performance conditions. The Plan consists of the following components: Performance Share,
Deferred Share and Matching Share. The Performance Share component consists of the free
allocation of shares to plan participants subject to the achievement of performance conditions,
measured over a three-year period and subject to continued employment. The vesting period is
three years (2020-2022), with disbursement of the shares envisaged in 2023. The Deferred
Share component involves the deferred receipt, through the free allocation of shares subject to
continued employment during the vesting period, of 50% of the bonus earned for the years
2020, 2021 and 2022. The vesting of the annual bonus depends on the achievement of specific
economic, financial, operational and sustainability objectives defined in advance each year.
Lastly, the Matching Share component is combined with the Deferred Shares and consists of the
free allocation to participants of 0.5 additional shares for each Deferred Share granted and
arising from deferred payment of the bonus for each year. In the case of the Chief Executive
Officer and Top Management (consisting of about 40 individuals, including Executive Directors,
Key Management Personnel, front-line positions reporting to the CEO and second-line managers
of key areas), the Matching Share component is subject to the achievement of a pre-determined
performance condition related to sustainability (ESG).
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, relative TSR measured against a 9-member peer group and
ESG, measured by a set of indicators.
The following table provides details about movements in the plan:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
381
31.12.2022
Number of options
Shares vested at start of year
4,306,263
Change in expected participations
28,775
Shares vesting in period
4,705,543
Total shares vested at end of year
9,040,581
Costs of Euro 79 million have been recognised as "Personnel costs" in the income statement at
31 December 2022 for the fair value of options granted under this plan.
In accordance with IFRS 2, the options allotted have been measured at their grant date fair
value. The fair value of options related to performance shares, for the entire period of the plan,
and to deferred and matching shares vesting in 2020 has been calculated using the following
assumptions:
Grant date
28 April 2020
Residual life at grant date (in years)
2.68
Exercise price (Euro)
0
Risk-free interest rate
-0.70%
Expected dividend %
2.30%
Option fair value (market based) at grant date
€13.54
Option fair value (not market based) at grant date
€13.85
As regards deferred and matching shares vesting in 2021, option fair value has been calculated
using the following assumptions:
Grant date
28 April 2021
Residual life at grant date (in years)
1.68
Exercise price (Euro)
0
Risk-free interest rate
-0.72%
Expected dividend %
2.30%
Option fair value (not market based) at grant date
€23.14
As regards deferred and matching shares vesting in 2022, option fair value has been calculated
using the following assumptions:
Grant date
12 April 2022
Residual life at grant date (in years)
0.72
Exercise price (Euro)
0
Risk-free interest rate
0.00%
Expected dividend %
1.80%
Option fair value (not market based) at grant date
€26.16
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
, from its registered offices and from Borsa Italiana S.p.A.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
382
BE-IN long-term incentive 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 on a voluntary basis, 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 the 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 will be determined according to the amount
of the allotment value.
Allotted shares will be freely transferable from the grant date. If these shares are held for the
entire holding period, the employee will be 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.
The shares will be credited to participants annually within specific time frames, identified on a
local basis during the plan's implementation process.
Shares will therefore be credited to participants in 2023, 2024 and 2025 in relation to
performance in 2022, 2023 and 2024, respectively, and the respective additional shares will be
credited to participants in 2024, 2025 and 2026.
During the plan's implementation process, 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 24 million have been recognised as "Personnel costs" in the income statement at
31 December 2022 for the fair value of options granted under this plan.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
383
The fair value of options 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%
Option fair value at grant date of conversion and premium shares
€32.93
Option fair value at grant date of loyalty shares
€28.38
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
, from its registered offices and from Borsa Italiana S.p.A.
21. AMORTISATION, DEPRECIATION, IMPAIRMENT AND IMPAIRMENT REVERSALS
Details are as follows:
(Euro/million)
2022
2021
Depreciation of buildings, plant, machinery and equipment
210
188
Depreciation of other property, plant and equipment
22
18
Amortisation of intangible assets
78
68
Depreciation and impairment of right-of-use assets (IFRS 16)
59
55
Impairment of property, plant and equipment
34
6
Total
403
335
Details are as follows:
(Euro/million)
2022
2021
Professional services
133
113
Insurance
45
50
Maintenance costs
151
114
Selling costs
129
91
Utilities
367
211
Travel costs
42
25
Rentals and vessel charter
73
46
Increases in/(releases of) provisions for risks
130
96
Losses on disposal of fixed assets
3
1
Sundry expenses
123
108
Other costs
1,322
968
Business reorganisation
7
8
Total
2,525
1,831
Other costs mainly refer to those incurred for project execution.
The Group expensed Euro 101 million in research and development costs in 2022 (Euro 95 million
in 2021), insofar as there were no qualifying conditions to justify their capitalisation.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
384
23. SHARE OF NET PROFIT/(LOSS) OF EQUITY-ACCOUNTED COMPANIES
Details are as follows:
(Euro/million)
2022
2021
Share of net profit/(loss) of associates
47
27
Total
47
27
Further information can be found in Note 3. Equity-accounted investments.
24. FINANCE COSTS
Details are as follows:
(Euro/million)
2022
2021
Interest on loans
19
17
Interest on non-convertible bond
5
19
Interest on Convertible Bond 2021 - non-monetary component
9
8
Interest on Convertible Bond 2017 - non-monetary component
-
5
Interest Rate Swaps
12
7
Interest on lease liabilities
6
5
Amortisation of bank and financial fees and other expenses
6
8
Employee benefit interest costs net of interest on plan assets
6
5
Other bank interest
7
3
Costs for undrawn credit lines
3
4
Sundry bank fees
21
17
Non-recurring other finance costs
-
2
Finance costs related to hyperinflation
-
1
Other
23
9
Finance costs
117
110
Foreign currency exchange losses
999
675
Foreign currency exchange losses
999
675
Total finance costs
1,116
785
25. FINANCE INCOME
Details are as follows:
(Euro/million)
2022
2021
Interest income from banks and other financial institutions
13
6
Non-recurring finance income
-
16
Finance income related to hyperinflation
7
-
Other finance income
6
4
Finance income
26
26
Net gains on forward currency contracts
14
24
Gains on derivatives
14
24
Foreign currency exchange gains
966
639
Total finance income
1,006
689
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
385
26. TAXES
Details are as follows:
(Euro/million)
2022
2021
Current income taxes
278
201
Deferred income taxes
(48)
(35)
Total
230
166
The following table reconciles the effective tax rate with the Parent Company's theoretical tax
rate:
(Euro/million)
2022
Tax rate
2021
Tax rate
Profit/(loss) before taxes
739
476
Theoretical tax expense
177
24.0%
114
24.0%
Differences in nominal tax rates of foreign
subsidiaries
(9)
-1.2%
2
0.4%
Taxes on distributable reserves
27
3.6%
-
0.0%
Change in tax rates
-
-
3
0.6%
Taxes on dividends
7
0.9%
9
1.9%
Accrual (Release) of Antritrust provision
6
0.8%
5
1.1%
WHT expensed/corporate income tax branch
3
0.4%
9
1.9%
Deferred tax effect on carryforward tax losses
8
1.1%
1
0.2%
IRAP (Italian regional business tax) and US State
tax
24
3.3%
12
2.5%
Prior year current taxes
-
-
(3)
-0.6%
Non-deductible costs/ (non-taxable income) and
other
(13)
-1.8%
14
2.9%
Effective income taxes
230
31.1%
166
34.9%
27. 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 are affected by the options under the employee stock
ownership plan (YES Plan) as well as by the deferred shares and matching shares that have
vested for 2020 and 2021 under the Long-Term Incentive Plan 2020-2022, and by the options
under the BE-IN Long-Term Incentive Plan to the extent vested. Diluted earnings/(loss) per
share have not however been impacted by the Convertible Bond 2021, whose conversion is
currently out of the money, or by the "deferred share" and "matching share" options for 2022
and the "performance bonus" options under the Long-Term Incentive Plan 2020-2022 which will
be granted only after the shareholders have approved the 2022 financial statements, or by the
"loyalty share" options under the BE-IN Long-Term Incentive Plan, which can be granted only
after the employee has held the allotted shares for at least one year.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
386
(Euro/million)
2022
2021
Net profit/(loss) attributable to owners of the parent
504
308
Weighted average number of ordinary shares (thousands)
263,497
263,408
Basic earnings per share (in Euro)
1.91
1.17
Net profit/(loss) attributable to owners of the parent for purposes of
diluted earnings per share
504
308
Weighted average number of ordinary shares (thousands)
263,497
263,408
Adjustments for:
Dilution from incremental shares arising from exercise of stock options
(thousands)
2,062
610
Weighted average number of ordinary shares to calculate diluted
earnings per share (thousands)
265,558
264,018
Diluted earnings per share (in Euro)
1.90
1.17
The dividend paid in 2022 amounted to approximately Euro 148 million (Euro 0.55 per share).
With reference to the year ended 31 December 2022, a recommendation to pay a dividend of
Euro 0.60 per share, totalling approximately Euro 158 million, based on the number of
outstanding shares, will be presented to the shareholders for approval in the meeting convened
in single call for 19 April 2023.
28. 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 2022, 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 52 million
and mainly refer to legal and tax issues.
29. COMMITMENTS TO PURCHASE PROPERTY, PLANT AND EQUIPMENT AND
INTANGIBLE ASSETS
Contractual commitments already entered into with third parties as at 31 December 2022 and
not yet reflected in the financial statements amount to Euro 416 million for investments in
property, plant and equipment (Euro 85 million at 31 December 2021); commitments to third
parties for investments in intangible assets amount to Euro 2 million at 31 December 2022 (Euro
5 million at 31 December 2021).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
387
30. 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 296 million at 31 December 2022
(Euro 295 million at 31 December 2021).
31. FINANCIAL COVENANTS
The credit agreements in place at 31 December 2022, details of which are presented in Note 11,
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);
•
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 entail 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;
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
388
•
occurrence of events that may adversely and significantly affect the business, the assets
or the financial conditions of the Group.
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 2022 and 31 December 2021 are as follows:
31.12.2022
31.12.2021
EBITDA / Net finance costs
(1)
27.26x
15.82x
Net financial debt / EBITDA
(1)
0.83x
1.63x
(1)
The ratios are calculated on the basis of the definitions contained in the relevant credit agreements.
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.
32. 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 2022 and 31 December 2021:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
389
(Euro/million)
31.12.2022
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)
31.12.2021
Equity-accounted
companies
Compensation
of directors,
statutory
auditors and
key
management
personnel
Total
related
parties
Total
reported
amount
Related party
% total
Equity-accounted investments
360
-
360
360
100,0%
Trade receivables
-
-
-
1,622
0.0%
Other receivables
3
-
3
661
0.5%
Trade payables
5
-
5
2,592
0.2%
Other payables
-
2
2
1,197
0.2%
Provisions for risks and charges
-
6
6
654
0.9%
(Euro/million)
2022
Equity-accounted
companies
Compensation
of directors,
statutory
auditors and
key
management
personnel
Total
related
parties
Total
reported
amount
Related party
% total
Sales
-
-
-
16,067
0.0%
Other income
7
-
7
70
10.0%
Raw materials, consumables and
supplies
-
-
-
(10,588)
0.0%
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%
(Euro/million)
2021
Equity-accounted
companies
Compensation
of directors,
statutory
auditors and
key
management
personnel
Total
related
parties
Total
reported
amount
Related party
% total
Sales
31
-
31
12,736
0.2%
Other income
5
-
5
125
4.1%
Raw materials, consumables and
supplies
(2)
-
(2)
(8,906)
0.0%
Personnel costs
-
(10)
(10)
(1,486)
0.7%
Other expenses
(5)
(2)
(7)
(1,831)
0.4%
Share of net profit/(loss) of equity-
accounted companies
26
-
26
27
100.0%
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
390
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.
Top management compensation
Top management compensation is analysed as follows:
(Euro/000)
2022
2021
Salaries and other short-term benefits - fixed part
4,540
5,275
Salaries and other short-term benefits - variable part
2,726
1,299
Other benefits
290
360
Share-based payments
8,923
2,563
Other costs
1,833
2,358
Total
18,312
11,855
of which Directors
11,233
8,134
The amounts shown in the table are the costs recognised in profit or loss for the year.
At 31 December 2022, employee benefit obligations pertaining to top managers amounted to
Euro 8 million.
33. COMPENSATION OF DIRECTORS AND STATUTORY AUDITORS
The compensation of the executive and non-executive Directors of Prysmian S.p.A. came to Euro
11.2 million in 2022 (Euro 8.1 million in 2021). The compensation of the Statutory Auditors of
Prysmian S.p.A. came to Euro 0.2 million in 2022, 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.
34. 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 2022.
35. 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:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
391
(Euro/million)
2022
2021
Non-recurring other income/(expenses)
Antitrust
(47)
(2)
Non-recurring other finance income/(costs)
Non-recurring other finance income/(costs)
-
14
Total
(47)
12
36. STATEMENT OF CASH FLOWS
The increase in net working capital used Euro 105 million in cash flow. After Euro 221 million in
tax payments and Euro 10 million in dividend receipts, operating activities in 2022 therefore
generated a net cash inflow of Euro 1,038 million, which also included outflows of Euro 7 million
for restructuring costs and Euro 44 million for antitrust matters.
Cash flow from acquisitions and/or disposals reported a net outflow of Euro 7 million as a result
of business combinations completed during the reporting period.
Net operating capital expenditure used Euro 452 million in cash in 2022, 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 148 million. Finance costs paid, net of finance income received, came to Euro 71 million.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
392
37. 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 2022 for audit work and other services provided by the independent auditors EY and
companies in the EY network:
(Euro/000)
Recipient
Supplier of services
Fees for 2022
Fees for 2021
Audit services
Parent Company - Prysmian S.p.A.
EY S.p.A.
798
756
Italian subsidiaries
EY S.p.A.
461
424
Foreign subsidiaries
EY S.p.A.
1,360
401
Foreign subsidiaries
EY Network
1,925
3,027
Certification services
Parent Company - Prysmian S.p.A.
EY S.p.A.
303
410
Italian subsidiaries
EY S.p.A.
15
2
Other services
Parent Company - Prysmian S.p.A.
EY S.p.A.
60
-
Italian subsidiaries
EY S.p.A.
20
-
Foreign subsidiaries
(1)
EY Network
161
171
Total
5,103
5,191
(1)
Tax and other services.
38. 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 2022 and 31 December 2021, 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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
393
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.
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.
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
394
Foreign currency transactions are recorded at the exchange rate prevailing on the date of the
transactions. 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, for which, after a long period of monitoring the
country's inflation rates, a consensus was reached that the country qualified to be treated as a
hyperinflationary economic environment, as defined by international accounting standards, as
from the first half of 2022. In fact, a steep devaluation of the local currency and escalating
inflation were both observed. Based on these parameters and taking into account the guidance
of the accounting standard,
IAS 29 - Financial Reporting in Hyperinflationary Economies
has
been applied to the Turkish subsidiaries as from 1 April 2022. The Group's consolidated results
at 31 December 2022 also include the effects of applying the aforementioned accounting
standard to its Turkish subsidiaries, effective 1 April 2022, with the country's cumulative price
inflation having reached 156% over the last 3 years.
In accordance with IAS 29, the restatement of financial statements as a whole requires the
application of certain 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
2022 instead of at the average rate for the reporting period. The application of the standard to
the Turkish subsidiaries has had a negative impact of Euro 1 million on net sales and a negative
impact of Euro 1 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 8 million, reported in the income statement
under net Finance income (costs), while the effects of the standard's first-time application on 1
April 2022 have been recorded directly in equity for an amount of Euro 7 million.
It is recalled that this standard has been applied to the subsidiary in Argentina since 1 July 2018.
Furthermore, inflation in Argentina accelerated even more in 2022, causing cumulative consumer
price inflation to reach 300% over the last 3 years. The income statement thus restated has
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
395
been translated into Euro at the closing rate on 31 December 2022 instead of at the average
rate for the reporting period. The application of the standard to the Argentine subsidiaries has
had a positive impact of Euro 7 million on net sales and a negative impact of Euro 4 million on
net profit.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
396
The exchange rates applied are as follows:
Closing rates at
Period average
rates
31.12.2022
31.12.2021
2022
2021
Europe
British Pound
0.887
0.840
0.853
0.860
Swiss Franc
0.985
1.033
1.005
1.081
Hungarian Forint
400.87
369.19
391.29
358.52
Norwegian Krone
10.514
9.989
10.103
10.163
Swedish Krona
11.122
10.250
10.630
10.146
Czech Koruna
24.116
24.858
24.566
25.640
Danish Krone
7.437
7.436
7.440
7.437
Romanian Leu
4.950
4.949
4.931
4.921
Turkish Lira
19.971
14.709
17.396
10.460
Polish Zloty
4.681
4.597
4.686
4.565
Russian Rouble
75.655
85.300
72.549
87.153
North America
US Dollar
1.067
1.133
1.053
1.183
Canadian Dollar
1.444
1.439
1.369
1.483
South America
Colombian Peso
5,172
4,599
4,474
4,429
Brazilian Real
5.565
6.320
5.439
6.379
Argentine Peso
188.959
116.341
137.751
112.550
Chilean Peso
913.820
964.350
917.925
898.395
Costa Rican Colón
631.449
727.107
680.721
734.925
Mexican Peso
20.856
23.144
21.187
23.985
Peruvian Sol
4.046
4.519
4.038
4.591
Oceania
Australian Dollar
1.569
1.562
1.517
1.575
New Zealand Dollar
1.680
1.658
1.658
1.672
Africa
CFA Franc
655.957
655.957
655.957
655.957
Angolan Kwanza
541.198
635.082
486.921
743.847
Tunisian Dinar
3.322
3.260
3.251
3.288
South African Rand
18.099
18.063
17.209
17.423
Asia
Chinese Renminbi (Yuan)
7.358
7.195
7.079
7.628
United Arab Emirates Dirham
3.917
4.160
3.868
4.344
Bahraini Dinar
0.401
0.426
0.396
0.445
Hong Kong Dollar
8.316
8.833
8.245
9.193
Singapore Dollar
1.430
1.528
1.451
1.589
Indian Rupee
88.171
84.229
82.686
87.439
Indonesian Rupiah
16,520
16,100
15,625
16,921
Japanese Yen
140.660
130.380
138.027
129.877
Thai Baht
36.835
37.653
36.856
37.837
Philippine Peso
59.320
57.763
57.314
58.299
Omani Rial
0.410
0.436
0.405
0.455
Malaysian Ringgit
4.698
4.718
4.628
4.902
Qatari Riyal
3.882
4.123
3.834
4.305
Saudi Riyal
4.000
4.247
3.949
4.435
38.1 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
397
S. de R.L. de C.V. 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 the company's 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
10-15 years
Machinery
10-20 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
398
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:
ï‚·
fixed payments;
ï‚·
variable lease payments that depend on an index or a rate;
ï‚·
exercise price of a purchase option reasonably certain to be exercised;
ï‚·
payments of penalties for terminating the lease if the termination option is reasonably
certain to be exercised;
ï‚·
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 214 million, is analysed by
maturity as follows:
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
399
(Euro/million)
31.12.2022
Less than
1 year
From
1 to 2 years
From
2 to 5 years
More than
5 years
Lease liabilities
58
47
56
53
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 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
(Euro/million)
Land
Buildings
Plant and
machinery
Equipment
Other
assets
Total
Balance at 31
December 2020
13
86
12
8
61
180
Movements in
2021:
- Investments
-
20
1
7
35
63
- Depreciation
2
3
-
1
1
7
- Currency
translation
differences
(1)
(16)
(2)
(5)
(30)
(54)
Balance at 31
December 2021
14
93
11
11
67
196
Of which:
- Historical cost
16
136
14
20
130
316
- Accumulated
depreciation
(2)
(43)
(3)
(9)
(63)
(120)
Net book value
14
93
11
11
67
196
38.3 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
impairment losses. This test is carried out with reference to the cash-generating unit ("CGU") or
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
400
group of CGUs to which goodwill is allocated and at which level it is monitored. Greater
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.
38.4 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
section on "Risk 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 39. 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:
a)
Financial assets at amortised cost;
b)
Financial assets at fair value through profit or loss (FVPL);
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
401
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.
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
402
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, as of 2022, the Group has designated certain EUR-denominated derivatives, entered
into with brokers and aimed at mitigating the risk of lead price fluctuations in relation to specific
sales orders, as cash flow hedges, being hedging instruments associated with highly probable
transactions. 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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
403
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
are intended to hedge the risk of cash flow volatility linked to finance costs originating from
variable rate debt.
Currency derivatives
Currency 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.
Currency 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 currency hedge must be
documented. The effectiveness of each hedge is reviewed both at the derivative's inception and
during its life cycle. In particular, currency 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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
404
38.7 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).
-
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.
38.8 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).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
405
38.9 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.
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".
38.10 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.
38.11 ASSETS AND LIABILITIES HELD FOR SALE
Assets and liabilities held for sale are classified as such if the carrying amount will be recovered
principally through a sale transaction; for this to be the case, the sale must be highly probable
and the related assets/liabilities must be available for immediate sale in their present condition.
Assets/Liabilities held for sale are measured at the lower of carrying amount and fair value less
costs to sell.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
406
38.12 TRADE AND OTHER PAYABLES
Trade and other payables are initially recognised at fair value and subsequently measured at
amortised cost.
38.13 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.
38.14 EMPLOYEE BENEFITS
The Group operates both defined contribution plans and defined benefit plans.
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
407
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 the 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
incentives. Termination benefits payable more than twelve months after the reporting date are
discounted to present value.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
408
38.15 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 28. 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.
38.16 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
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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
409
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 38.9
Construction contracts.
38.17 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 long-term and short-term
portion of such grants respectively. 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
rants other than those related to assets are credited to the income statement as "Other income".
38.18 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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
410
38.19 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.
38.20 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,
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
411
38.21 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.
38.22 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.
39. 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,
materially impact the current estimates made by Management when preparing the Group
consolidated financial statements.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
412
(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 new 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, a calculation that 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 2022 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 section D.3 Risks
related to climate change.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
413
(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 course of formation.
(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
414
(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 14. Employee benefit obligations and Note 20.
Personnel costs.
(i) Incentive and share purchase plans
The employee share purchase plan, directed at almost all the Group's employees, provides an
opportunity for them to obtain shares on preferential terms and conditions. The operation of this
plan is described in Note 20. 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 incentive plan 2020-2022 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 20.
Personnel costs.
The "BE IN" incentive plan provides for the grant of a number of options. In some cases, this
number is determined on the basis of the achievement of performance goals, 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 20. Personnel costs.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
415
40. EVENTS AFTER THE REPORTING PERIOD
Prysmian Group launches the Global Sustainability Academy
On 10 January 2023, the Group announced the launch of the Global Sustainability Academy, as
better described in the "Prysmian Group Human Capital" section of the "Non-Financial
Statement" chapter of the Directors' Report.
Prysmian Group 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 Group 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 medium voltage
cables.
Prysmian Group launches Prysolar, its most innovative cable solution for solar power
generation
On 20 February 2023, the Group announced that it will showcase its full range of technologies
at Genera 2023, the International Energy and Environment Fair being held in Madrid from 21-
23 February 2023 (stand 10D17). With the release of Prysmian PRYSOLAR, the Group now has
the most comprehensive and geographically extensive product capability to serve every
customer in every continent.
Contracts worth Euro 1.8 billion for offshore wind farm connection projects from
Tennet in the Netherlands
On 3 March 2023, the Group announced it had been awarded contracts worth approximately
Euro 1.8 billion in aggregate by the Dutch transmission system operator TenneT for the two grid
connection projects IJmuiden Ver Alpha and Nederwiek 1 to link two future offshore wind farms
located in the Dutch North Sea to the province of Zeeland located in the southwestern part of
the Netherlands.
The delivery of the first connection is scheduled for 2029, whereas the second is scheduled for
2030. Each cable system consists of two single-core 525 kV HVDC cables (with XLPE insulation
for the submarine portion and P-Laser insulation for the land route), one single-core metallic
return cable and one fibre optic cable. Submarine cables will be manufactured at Prysmian
Group’s centres of excellence in Pikkala (Finland) and Arco Felice (Italy), while land cables will
be produced in Gron (France).
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
416
Prysmian Group, a Euro 120 million loan granted by CDP in favour of innovation and
digitalization
On 6 March 2023, Prysmian Group announced a new loan of Euro 120 million granted by Cassa
Depositi e Prestiti (CDP) in order to support Research & Development plans, focused on the
implementation of innovative technologies, contribute to the consolidation of business
digitalization processes and at the same time to reduce emissions to promote the energy
transition.
The development of the R&D activity carried out by Prysmian is also in line with the Paris
Agreement, and the European Green Deal and Horizon Europe directives for the promotion of
clean, renewable energy, ensuring the interconnection of integrated systems of renewable
resources through cable systems.
Milan, 9 March 2023
ON BEHALF OF THE BOARD OF DIRECTORS
THE CHAIRMAN
Claudio De Conto
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
417
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 Unterstuetzungseinrichtung
Lynen GmbH
Eschweiler
Deutsche Mark
50,000
100.00%
Prysmian Kabel und Systeme GmbH
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
418
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
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.
Draka Deutschland Erste
Beteiligungs GmbH
Wuppertal
Euro
25,000
100.00%
Draka Holding B.V.
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 GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
419
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
Prysmian PowerLink Services Ltd.
Eastleigh
British Pound
46,000,100
100.00%
Prysmian UK Group Ltd.
General Cable Holdings (UK) Limited
Eastleigh
British Pound
1
100.00%
GK Technologies, Incorporated
General Cable Services Europe
Limited
Eastleigh
British Pound
1
100.00%
General Cable Holdings (UK) Limited
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%
Draka Holding B.V.
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.
Electronic and Optical Sensing
Solutions S.r.l.
Milan
Euro
5,000,000
100.00%
Prysmian S.p.A.
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
420
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
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
Draka Kabely, s.r.o.
Velké Mezi
í
í
Czech Koruna
255,000,000
100.00%
Draka Holding B.V.
Romania
Prysmian Cabluri Si Sisteme S.A.
Slatina
Leu rumeno
203,850,920
99.9998%
Draka Holding B.V.
0.0002%
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.
GC Latin America Holdings, S.L.
Abrera
Euro
151,042,030
100%
General Cable Holdings (Spain), S.L.
General Cable Holdings (Spain), S.L.
Abrera
Euro
138,304,698
99.349%
GK Technologies, Incorporated
0.6510%
General Cable Overseas Holdings,
LLC
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
421
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
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
39,308
100.00%
EHC Global Inc.
Elator Inc.
Oshawa
Canadian Dollar
100
100.00%
EHC Global Inc.
EHC Management Company Inc.
Oshawa
Canadian Dollar
1
100.00%
EHC Global Inc.
Dominican Repuplic
General Cable Caribbean, S.R.L
Santa Domingo Oeste
Dominican Peso
2,100,000
99.995%
GK Technologies, Incorporated
0.005%
Prysmian Cables and Systems USA,
LLC
Trinidad and Tobago
General Cable Trinidad Limited
Port of Spain
Trinidadian Dollar
100
100.00%
GK Technologies, Incorporated
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%
GK Technologies, Inc
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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
422
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
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 Overseas Holdings,
LLC
Wilmington
US Dollar
-
100.00%
GK Technologies, Incorporated
General Cable Technologies
Corporation
Wilmington
US Dollar
1,000
100.00%
Prysmian Cables and Systems USA,
LLC
Phelps Dodge Enfield Corporation
Wilmington
US Dollar
800,000
100.00%
Prysmian Cables and Systems USA,
LLC
Phelps Dodge National Cables
Corporation
New York
US Dollar
10
100.00%
Prysmian Cables and Systems USA,
LLC
GK Technologies, Incorporated
West Trenton
US Dollar
1,000
100.00%
General Cable Corporation
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
992,359,215
40.01%
Prysmian Consultora Conductores e
Instalaciones SAIC
59.74%
Draka Holding B.V.
0.11%
Prysmian Cabos e Sistemas do Brasil
S.A.
0.13%
Third Parties
Prysmian Consultora Conductores e
Instalaciones SAIC
Buenos Aires
Argentine Peso
543,219,572
95.00%
Draka Holding B.V.
5.00%
Prysmian Cavi e Sistemi S.r.l.
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
423
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
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%
GK Technologies, Incorporated
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.
32.86%
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
27,600,000
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
424
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
NK Mexico Holdings S.A. de C.V.
Città del Messico
Mexican Peso
n/a
100.00%
Prysmian Group Finland OY
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.
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.
0.00000015%
General Cable Technologies
Corporation
0.00000015%
GK Technologies, Incorporated
General de Cable de Mexico del
Norte, S.A. de C.V.
Piedras Negras
Mexican Peso
10,000
99.80%
GK Technologies, Incorporated
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%
GK Technologies, Incorporated
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
Panama
Alambres y Cables de Panama, S.A.
Panama
US Dollar
800,000
78.08%
Prysmian Cables and Systems USA,
LLC
21.92%
GC Latin America Holdings, S.L.
Alcap Comercial S.A.
Panama
US Dollar
10,000
100.00%
Conducen, S.R.L.
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
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
425
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
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
99.97%
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.
0.02%
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.
33.00%
Third Parties
Prysmian Cable (Shanghai) Co. Ltd.
Shanghai
Chinese Renminbi (Yuan)
34,867,510
100.00%
Prysmian (China) Investment
Company Ltd.
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
426
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
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.
EHC Technology Development
(Shanghai) Co. Ltd.
Shanghai
Chinese Renminbi (Yuan)
-
100.00%
EHC Escalator Handrail (Shanghai)
Co. Ltd.
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
122,268,218
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.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
427
Legal name
Office
Currency
Share Capital
% ownership
Direct parent company
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.
Singapore Cables Manufacturers Pte
Ltd.
Singapore
Singapore Dollar
1,500,000
100.00%
Draka Cableteq Asia Pacific Holding
Pte Ltd.
Cable Supply and Consulting
Company Private Limited
Singapore
Singapore Dollar
50,000
100.00%
Draka Cableteq Asia Pacific Holding
Pte Ltd.
Draka NK Cables (Asia) Pte Ltd.
Singapore
Singapore Dollar
200,000
100.00%
Prysmian Group Finland OY
Thailand
MCI-Draka Cable Co. Ltd.
Bangkok
Thai Baht
435,900,000
70.250172%
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.
29.749759%
Third Parties
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
428
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
429
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
Africa
South Africa
Pirelli Cables & Systems (Proprietary) Ltd.
100.00%
Prysmian Cavi e Sistemi S.r.l.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
430
CORPORATE STRUCTURE – APPENDIX B
The companies consolidated on a line-by-line basis at 31 December 2022 are shown below.
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
431
PRYSMIAN GROUP | B. CONSOLIDATED FINANCIAL STATEMENTS
432
3. Certification of the Consolidated Financial Statements pursuant to
art. 81-ter of CONSOB regulation 11971 dated 14 may 1999 and
subsequent amendments and additions
1.
The undersigned Valerio Battista, as Chief Executive Officer, 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. 1-bis of Italian Legislative
Decree 58 dated 24 February 1998, that during 2022 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 2022 has been evaluated 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 2022, 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 2022:
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, 9 March 2023
Valerio Battista
Stefano Invernici
Alessandro Brunetti
Chief Executive Officer
Managers responsible for preparing company financial reports
4. AUDIT REPORT
434
435
436
437
438
439
440
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
441
Index
C. PARENT COMPANY FINANCIAL STATEMENTS
1. Directors’ report
..............................................................................................
442
Significant events during the year
...........................................................................
443
Financial performance of Prysmian S.p.A
. ................................................................
445
Human resources, safety and environment
...............................................................
450
Direction and coordination
.....................................................................................
450
Intercompany and related party transactions
............................................................
450
Secondary locations
..............................................................................................
450
Share capital and corporate governance
..................................................................
450
Atypical and/or unusual transactions
.......................................................................
451
Risk factors
..........................................................................................................
451
Financial risk management policies
.........................................................................
451
Business outlook
...................................................................................................
451
2. Financial statements
........................................................................................
452
Statement of financial position
................................................................................
453
Income statement
.................................................................................................
454
Statement of comprehensive income
.......................................................................
454
Statement of changes in equity
..............................................................................
455
Statement of cash flows
.........................................................................................
456
3. Explanatory notes
............................................................................................
458
List of investments in subsidiaries at 31 december 2022
............................................
521
Intercompany and related party transactions (disclosure under art. 2428 of the italian civil
code)
..................................................................................................................
522
4. Certification of the Financial Statements pursuant to art. 81-ter of CONSOB
regulation 11971 dated 14 may 1999 and subsequent amendments and additions
............................................................................................................................
524
Proposal to approve the financial statements and to allocate net profit for 2022
...........
525
5. Auditors’ Report
..............................................................................................
526
6. Report of the Board of Statutory Auditors
.......................................................
532
B.
DIRECTORS’ REPORT
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
443
Significant events during the year
Euro 135 million loan to finance R&D activities
On 3 February 2022, the Group announced that it had finalised a Euro 135 million loan from the
European Investment Bank (EIB) to support the Group's R&D program in Europe in the period
through to 2024 as the world's leading company in the energy and telecom cables industry.
The EIB 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.
Euro 1.2 billion Sustainability-Linked Term Loan
On 7 July 2022, the Group entered into a medium-term Sustainability-Linked loan for Euro 1.2
billion 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 medium-term Term Loan
obtained in 2018.
With the aim of strengthening its financial structure and the integration 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 the loan. In fact, the Sustainability-Linked
Term Loan is also linked to the decarbonisation targets already set by the Group (annual GHG
emissions from 2022 to 2026), to the ratio of female white-collar and executive hires to total
Group hires, and to sustainability audits performed in the supply chain.
The interest rates applied are indexed to 1M, 3M and 6M Euribor, as chosen by the company.
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. These contracts
were entered into in 2 tranches: the first in mid-June 2022 for a total of Euro 400 million and
the second at the beginning of July for a total of Euro 800 million, at the same time as which the
interest rate swap contracts entered into to hedge the 2018 term loan, for a total notional value
of Euro 1,000 million, were terminated.
Admission of the Group's seven Italian companies to the "Cooperative Compliance"
program
On 3 January 2022, the Group announced that it had been admitted to the Cooperative
Compliance program with the Italian Revenue Agency after the Group's seven Italian companies
successfully passed the rigorous review of the adequacy of the Tax Control Framework for
detecting, measuring, managing and controlling tax risk. Admission to the program, which
applies from tax period 2020, will allow the Group to establish a relationship based on trust and
transparency with the Italian tax authorities, aimed at the pre-emptive analysis of issues with
the highest tax risk and an ever-increasing level of oversight of the most relevant tax issues.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
444
Approval of financial statements at 31 December 2021 and dividend distribution
On 12 April 2022, the shareholders' meeting of Prysmian S.p.A. approved the financial
statements for 2021 and the distribution of a gross dividend of Euro 0.55 per share, for a total
of some Euro 145 million. The dividend was paid out from 21 April 2022, with record date 20
April 2022 and ex-dividend date 19 April 2022.
Appointment of the Prysmian S.p.A. Board of Statutory Auditors
On 12 April 2022, the shareholders' meeting of Prysmian S.p.A. appointed the following new
members of the Board of Statutory Auditors for the next three years:
•
Stefano Sarubbi (Chairman of the Board of Statutory Auditors)
•
Roberto Capone (Standing Auditor)
•
Laura Gualtieri (Standing Auditor)
•
Stefano Rossetti (Alternate Auditor)
•
Vieri Chimenti (Alternate Auditor)
Authorisation to buy and dispose of treasury shares
On 12 April 2022, 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 28 April 2021. Under this authorisation it
is possible to make one or more buybacks of shares such that, at any one time, the total holding
of treasury shares does not exceed 10% of share capital.
New stock grant plan for employees other than managers already covered by
individual incentive schemes
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 consultation at local level with the relevant trade union representatives, where required.
In this regard, the Prysmian S.p.A. shareholders' meeting adopted a resolution to reduce the
capital increase servicing the incentive plan for Prysmian Group employees approved by
shareholders on 28 April 2020, from a maximum nominal amount of Euro 1,100,000.00,
corresponding to 11,000,000 new ordinary shares, to a maximum nominal amount of Euro
800,000.00, corresponding to 8,000,000 new ordinary shares, and to approve a bonus issue of
shares to be reserved for Prysmian Group employees in execution of the stock grant plan
approved above, allocating 3,000,000 new ordinary shares to service the new stock grant plan
for employees other than managers already covered by individual incentive schemes.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
445
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 2022, 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)
2022
2021
Revenues and other income
245,035
292,852
Operating costs
(87,077)
(71,395)
Other expenses
(134,392)
(165,100)
Amortisation, depreciation and impairment
(35,020)
(29,637)
Operating income
(11,455)
26,720
Net finance income/(costs)
(13,964)
(14,550)
Net income from investments
176,287
148,551
Profit/(loss) before taxes
150,868
160,721
Taxes
(7,100)
(21,754)
Net profit/loss)
143,768
138,967
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 2022 reports Euro 143,768 thousand in net profit,
up Euro 4,801 thousand from the previous year.
Revenues and other income of Euro 245,035 thousand (Euro 292,852 thousand in 2021) include
the income of Prysmian S.p.A. from ordinary operations. Following the application of 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 87,077 thousand in 2022 (Euro 71,395 thousand in 2021) mostly
comprise personnel costs (Euro 77,955 thousand in 2022 versus Euro 64,151 thousand in 2021),
with the remainder referring to purchases of other consumables (Euro 9,150 thousand in 2022
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
446
versus Euro 7,000 thousand in 2021) and the fair value change in metal derivatives (Euro 28
thousand positive in 2022 versus Euro 243 thousand negative in 2021).
In particular, the growth in personnel costs in 2022 primarily reflects the recording of higher
costs for stock-option based incentive plans. Further details can be found in Note 17. Personnel
costs of the Explanatory Notes to the financial statements.
Other expenses of Euro 134,392 thousand in 2022 (Euro 165,100 thousand in 2021) 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 13,964 thousand (Euro 14,550 thousand in 2021) 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.
Net income from investments amounts to Euro 176,287 thousand, compared with Euro 148,551
thousand in the previous year, reflecting a total of Euro 179,672 thousand in dividends paid by
the subsidiaries Draka Holding B.V., Prysmian Treasury S.r.l., Prysmian Cavi e Sistemi S.r.l. and
Prysmian PowerLink S.r.l., minus Euro 66,714 thousand in impairment of the investment in Fibre
Ottiche Sud – F.O.S. S.r.l. plus Euro 63,329 thousand for the increase since the grant date in
the fair market value of stock options under the Long-term incentive (LTI) 2020-2022 plan and
the new BE IN incentive plan, both of which recharged to group companies.
Income taxes report a charge of Euro 7,100 thousand (versus a charge of Euro 21,754 thousand
in 2021), of which Euro 7,310 thousand in current tax expense and Euro 210 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.
A total of Euro 30,485 thousand in research costs were expensed to income in the period under
review (Euro 27,236 thousand in 2021); 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
447
STATEMENT OF FINANCIAL POSITION
The Parent Company's statement of financial position is summarised as follows:
(Euro/thousand)
31 December 2022
31 December 2021
Net fixed assets
5,913,352
5,937,889
- of which Investments in subsidiaries
5,701,163
5,719,977
Net working capital
(102,073)
(228,513)
Provisions
(53,208)
(28,372)
Net capital employed
5,758,070
5,681,004
Employee benefit obligations
6,085
7,284
Total equity
2,460,945
2,294,862
Net financial debt
3,291,040
3,378,858
Total equity and sources of funds
5,758,070
5,681,004
Note: the composition and method of calculating the above indicators are detailed in the Group's Integrated Annual
Report.
In additions 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 in the Group's other Italian companies.
The decrease of Euro 18,814 thousand in the value of investments in subsidiaries since 2021 is
attributable to the net effect of capital contributions paid to the subsidiaries Electronic and
Optical Sensing Solutions S.r.l. and Prysmian Servizi S.p.a. 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 stock option 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
26,110 thousand in 2022 (Euro 23,562 thousand in 2021). Expenditure on property, plant and
equipment amounted to Euro 2,875 thousand, relating to the purchase of IT infrastructure for
the Group and fixed installations for the Prysmian Group headquarters. Expenditure on intangible
assets, totalling Euro 23,235 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.
The balance of net fixed assets in 2022 includes net increases of Euro 3,187 thousand to account
for leases in accordance with IFRS 16.
Net working capital is a negative Euro 102,073 thousand and comprises:
•
Euro 384,165 thousand as the net negative balance between trade receivables and trade
payables (see Notes 5 and 11 to the financial statements);
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
448
•
Euro 282,092 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 53,208 thousand at 31 December
2022 (see Notes 4 and 12 to the financial statements) compared with Euro 28,372 thousand at
31 December 2021. The increase is mainly attributable to 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 2,460,945 thousand at 31 December 2022, reporting a net increase of
Euro 166,083 thousand since 31 December 2021, mostly reflecting the net profit for 2022 net
of dividends distributed and adjustments to the stock option 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 2022 and consolidated net profit for 2022 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 3,291,040 thousand at 31 December 2022, compared with
Euro 3,378,858 thousand at 31 December 2021.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
449
The following table presents a detailed breakdown of net financial debt.
(Euro/thousand)
Note
31 December
2022
of which
related
parties
(Note 25)
31 December
2021
of which
related
parties
(Note 25)
Long-term financial payables
CDP Loans
10
174,685
174,528
Mediobanca Loan
10
99,905
99,819
Intesa Loan
10
149,781
149,656
EIB Loans
10
244,798
109,931
Term Loan
10
-
997,797
Sustainability-Linked Term Loan
10
1,191,474
-
Convertible Bond 2021
10
717,399
707,088
Unicredit Loan
10
-
199,681
Interest rate swaps
7
-
2,548
Lease liabilities
10
14,712
17,173
Total long-term financial payables
2,592,754
2,458,221
Short-term financial payables
CDP Loans
10
520
71
Mediobanca Loan
10
294
144
Intesa Loan
10
836
315
EIB Loans
10
996
4
Non-convertible bond
10
-
763,087
Term Loan
10
-
703
Sustainability-Linked Term Loan
10
6,114
-
Convertible Bond 2017
10
-
249,824
Unicredit Loan
10
200,457
303
Lease liabilities
10
5,120
5,721
Short-term loans from Group companies
11
747,242
747,242
194,941
194,941
Other borrowings
10
9,090
1,533
Interest rate swaps
7
-
6,476
Total short-term financial payables
966,169
1,223,121
Total financial liabilities
3,558,923
3,681,342
Long-term financial receivables
5
177
172
Long-term bank fees
5
284
1,420
Non-current interest rate swaps
7
59,209
-
Current interest rate swaps
7
12,676
Short-term financial receivables
6
193,417
199,609
Short-term bank fees
5
1,185
1,185
Cash and cash equivalents
8
935
100,097
Net financial debt
3,291,040
3,378,858
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
450
Human resources, safety and environment
Prysmian S.p.A. had a total of 436 employees at 31 December 2022 (421 at 31 December 2021),
of whom 396 management/desk staff (380 at 31 December 2021) and 40 non-desk staff (41 at
31 December 2021).
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
involves 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 on 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 26,814 thousand at 31 December 2022, consisting of 268,144,246
ordinary shares (including 4,601,362 treasury shares), with a nominal value of Euro 0.10 each.
The total number of outstanding voting shares is 263,542,884, inclusive of 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
451
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 2022.
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, if they should arise, could even have a material impact 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 2022 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
453
2. Financial statements
Statement of financial position
(in Euro)
Note
31.12.2022
of which
related
parties
(Note 25)
31.12.2021
of which
related
parties
(Note 25)
Non-current assets
Property, plant and equipment
1
86,356,289
91,073,444
Intangible assets
2
125,832,341
126,838,617
Investments in subsidiaries
3
5,701,163,010
5,701,163,010
5,719,976,842
5,719,976,842
Derivatives
7
59,208,767
-
Deferred tax assets
4
-
9,400,192
Other receivables
5
480,905
96,529,880
94,920,335
Total non-current assets
5,973,041,312
6,043,818,975
Current assets
Trade receivables
5
267,751,421
261,626,895
224,766,271
221,921,987
Other receivables
5
313,399,028
248,362,065
110,065,881
42,993,019
Financial assets at fair value
through profit or loss
6
193,419,090
199,608,525
Derivatives
7
14,184,805
1,508,980
55,257
55,257
Cash and cash equivalents
8
935,390
100,097,408
Total current assets
789,689,734
634,593,342
Total assets
6,762,731,046
6,678,412,317
Capital and reserves:
Share capital
9
26,814,425
26,814,425
Reserves
9
2,290,362,325
2,129,080,464
Net profit/(loss)
9
143,767,869
138,966,969
Total equity
2,460,944,619
2,294,861,858
Non-current liabilities
Borrowings from banks and other
lenders
10
2,592,754,055
2,455,672,985
Employee benefit obligations
13
6,085,009
129,127
7,283,947
12,333
Derivatives
7
-
2,547,820
Other payables
11
-
281,059
281,059
Deferred tax liabilities
14
10,005,178
-
Total non-current liabilities
2,608,844,242
2,465,785,811
Current liabilities
Borrowings from banks and other
lenders
10
223,427,951
1,021,702,243
Provisions for risks and charges
12
43,203,216
5,373,590
37,771,967
5,473,590
Derivatives
7
1,177,325
1,177,325
6,800,066
323,208
Trade payables
11
651,916,269
15,949,796
562,306,414
11,536,273
Other payables
11
771,051,672
745,824,357
276,213,575
254,787,338
Current tax payables
14
2,165,752
1,297,082
12,970,383
277,163
Total current liabilities
1,692,942,185
1,917,764,648
Total liabilities
4,301,786,427
4,383,550,459
Total equity and liabilities
6,762,731,046
6,678,412,317
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
454
Income statement
(in Euro)
Note
2022
of which
related
parties
(Note 25)
2021
of which
related
parties
(Note 25)
Revenues and other income
15
245,035,005
230,897,794
292,852,059
222,026,112
Total revenues and other
income
245,035,005
292,852,059
Raw materials, consumables and
supplies
16
(9,150,196)
(2,641,791)
(7,000,417)
(4,870,322)
Fair value change in metal derivatives
27.662
27,662
(242,806)
(242,806)
Personnel costs
17
(77,954,822)
(24,221,630)
(64,151,494)
(9,835,072)
Amortisation, depreciation,
impairment and impairment
reversals
18
(35,020,099)
(29,637,006)
Other expenses
19
(134,392,147)
(37,382,480)
(165,100,130)
(89,703,663)
Operating income
(11,454,597)
26,720,206
Finance costs
20
(89,062,002)
(17,080,084)
(80,112,904)
(8,221,036)
Finance income
20
75,097,619
68,528,463
65,562,750
49,547,772
Dividends from subsidiaries
21
243,001,115
243,001,115
153,550,924
153,550,924
(Impairment)/revaluation of
investments
3
(66,714,088)
(66,714,088)
(5,000,000)
(5,000,000)
Profit before taxes
150,868,047
160,720,976
Taxes
22
(7,100,178)
6,696,463
(21,754,007)
12,352,957
Net profit/(loss)
143,767,869
138,966,969
Statement of comprehensive income
(in Euro)
Note
2022
2021
Net profit/(loss)
143,767,869
138,966,969
Other comprehensive income:
A)
Change in cash flow hedge reserve:
61,334,194
7,426,865
-
Profit/(loss) for the year
9
80,702,886
9,772,506
-
Taxes
9
(19,368,693)
(2,345,641)
B)
Actuarial gains/(losses) on employee benefits
(*)
782,040
(230,280)
-
Profit/(loss) for the year
9
1,029,000
(303,000)
-
Taxes
9
(246,960)
72,720
Total other comprehensive income (A+B)
62,116,234
7,196,585
Total comprehensive income/(loss)
205,884,103
146,163,554
(*)
Components of comprehensive income that will not be reclassified to profit or loss in subsequent periods.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
455
Statement of changes in equity (note 9)
(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
Stock
option
reserve
Cash
flow
hedge
reserve
Treasury
shares
(*)
Share
issue
reserve
Retained
earnings
Net
profit/
(loss) for
the year
Total
Balance at
31 December 2020
26,814
1,281,071
(14,476)
5,363
94,583
52,688
30,177
6,113
(1,946)
48,189
38,150
(14,287)
(94,583)
1,100
669,551
80,476
2,208,983
Dividend distribution
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(51,221)
(80,476)
(131,697)
Share-based compensation
-
-
-
-
(2,122)
-
-
-
-
-
24,106
-
2,122
-
11,175
-
35,281
Non-monetary components of
convertible bond
-
-
-
-
-
-
-
-
-
36,132
-
-
-
-
-
-
36,132
Total comprehensive
income/(loss) for the year
-
-
-
-
-
-
-
-
(231)
-
-
7,427
-
-
-
138,967
146,163
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
Dividend distribution
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,960)
(138,967)
(144,927)
Share-based compensation
-
-
-
-
(813)
-
-
-
-
-
104,303
-
813
-
822
-
105,125
Bond repayment
-
-
-
-
-
-
-
-
-
(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
659,138
143,768
2,460,945
(*) At 31 December 2022, the number of treasury shares held came to 4,601,362 with a total nominal value of Euro 460,136.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
456
Statement of cash flows
(in Euro)
2022
of which
related parties
(Note 25)
2021
of which
related parties
(Note 25)
Profit before taxes
150,868,046
160,720,976
Amortisation, depreciation and
impairment
35,020,099
29,637,006
Impairment/(revaluation) of
investments
66,714,088
66,714,088
5,000,000
5,000,000
Net gains (losses) on disposal of
fixed assets
-
-
Dividends
(243,001,115)
(243,001,115)
(153,550,924)
(153,550,924)
Share-based compensation
20,518,943
9,440,001
2,563,190
Fair value change in metal
derivatives
(27,662)
(27,662)
242,806
242,806
Net finance costs
13,964,384
(51,448,379)
14,550,154
(41,326,736)
Change in trade
receivables/payables
46,540,467
(35,291,385)
97,325,164
(42,232,017)
Change in other
receivables/payables
(36,812,672)
(49,189,001)
26,271,800
(2,196,401)
Change in employee benefit
obligations
(292,460)
116,851
(306,491)
(105,000)
Change in provisions for risks and
other movements
5,376,403
-
(440,546)
-
Taxes collected/(paid)
(7,273,430)
(7,273,430)
800,700
800,700
A.
Cash flow from operating
activities
51,595,090
189,690,646
Investments in property, plant and
equipment
(2,875,388)
(2,730,578)
Investments in intangible assets
(23,235,163)
(20,831,017)
Disposals of intangible assets
-
-
Investments in financial assets at
fair value through profit or loss
-
(200,000,000)
Investments to recapitalise
subsidiaries
(38,803,000)
(38,803,000)
(355,000,000)
(355,000,000)
Dividends received
179,671,995
179,671,995
121,500,004
121,500,004
B.
Cash flow from investing
activities
114,758,444
(457,061,591)
Capital payments and movements
in equity
-
-
Dividend distribution
(144,058,262)
(131,067,383)
Sale of treasury shares
821,714
1,029,405
Proceeds of new loans
1,335,000,000
75,000,000
Repayment of loans
(1,249,823,897)
(8,333,333)
Redemption of bonds
(750,000,000)
(261,000,000)
Proceeds of new bonds
-
768,750,000
Changes in other net financial
receivables/payables
542,550,077
552,296,729
(58,032,601)
(57,288,795)
Finance costs paid
1
(71,941,734)
(16,169,926)
(83,576,851)
(7,465,581)
Finance income received
2
71,936,549
53,233,588
64,449,008
46,440,260
C.
Cash flow from financing
activities
(265,515,552)
367,218,245
D.
Net increase/(decrease) in
cash and cash equivalents
(A+B+C)
99,162,018
99,847,300
E.
Cash and cash equivalents at
the beginning of the year
100,097,408
250,108
F
Cash and cash equivalents at
the end of the year (D+E)
935,390
100,097,408
1
Finance costs paid of Euro 71,942 thousand include both interest expense and bank fees paid in 2022.
2
Finance income received of Euro 71,936 thousand includes amounts collected from Group companies for recharged fees for guarantees
given.
EXPLANATORY NOTES
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
458
3. 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 9 March 2023.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
459
B. ACCOUNTING PRINCIPLES
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 2022 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 application of the fair
value method is compulsory.
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
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
460
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 policies and standards used to prepare the current financial statements are
consistent with those used for the 2021 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 2022 and of their
effects will now follow.
New accounting standards, interpretations and amendments
The following is a list of new accounting standards, interpretations and amendments whose
application became mandatory from 1 January 2022 but which have not had a material impact
on the financial statements at 31 December 2022:
•
Amendments to IFRS 3 Business Combinations;
•
Amendments to IAS 16 Property, Plant and Equipment;
•
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets;
•
Annual Improvements 2018-2020.
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 as
at the date of preparing the present report but are not yet applicable and have not been adopted
early by the Company:
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
461
New accounting standards, amendments and interpretations
Mandatory application
as from
IFRS 17
1 January 2023
Amendments to IAS 12: Income Taxes: Deferred Tax related to Assets and Liabilities
arising from a Single Transaction
1 January 2023
Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting policies;
1 January 2023
Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and
Errors
1 January 2023
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
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
462
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 D. 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;
•
Euro/Canadian Dollar: in relation to business transactions on the Canadian market;
•
Euro/Chinese Renminbi: in relation to business transactions on the Chinese market.
In 2022, trade flows exposed to the above exchange rates accounted for most 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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
463
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 2022:
(Euro/thousand)
2022
2021
-5%
5%
-5%
5%
British Pound
(4)
3
(152)
138
US Dollar
(45)
41
(130)
118
Australian Dollar
-
-
(4)
4
Singapore Dollar
-
-
-
-
Chinese Renminbi
(5)
5
(4)
4
Other currencies
(11)
10
(15)
14
Total
(65)
59
(307)
277
(Euro/thousand)
2022
2021
-10%
10%
-10%
10%
British Pound
(8)
6
(322)
263
US Dollar
(95)
77
(275)
225
Australian Dollar
-
-
(9)
8
Chinese Renminbi
(11)
9
(9)
8
Singapore Dollar
(1)
1
-
-
Other currencies
(24)
19
(32)
26
Total
(138)
113
(647)
530
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 2022:
(Euro/thousand)
2022
2021
-5%
5%
-5%
5%
British Pound
482
(436)
31
(28)
Total
482
(436)
31
(28)
(Euro/thousand)
2022
2021
-10%
10%
-10%
10%
British Pound
1,017
(832)
65
(53)
Total
1,017
(832)
65
(53)
(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
464
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 2022 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 986 thousand (2021: decrease of Euro 396
thousand) or increased them by Euro 986 thousand (2021: increase of Euro 396 thousand). This
simulation exercise is carried out on a regular basis to ensure that the maximum potential loss
is 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 2022, cash and cash equivalents stood at Euro 935 thousand, compared with
Euro 100,097 thousand at 31 December 2021. The Company is able to draw down on the credit
lines granted to the Group in the form of the Revolving Credit Facility 2019 (Euro 1,000 million).
More details can be found in the Explanatory Notes to the Consolidated Financial Statements
(Section D. Financial risk management).
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
465
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 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
1,427,468
-
-
-
Total
1,651,465
463,680
1,986,175
136,001
(Euro/thousand)
31 December 2021
Due within
1 year
Due
between
1 - 2 years
Due
between
2 - 5 years
Due after
5 years
Borrowings from banks and other lenders
1,169,188
1,279,024
1,325,336
62,212
Lease liabilities
5,685
4,302
6,245
6,727
Derivatives
6,816
2,532
-
-
Trade and other payables
838,520
-
-
-
Total
2,020,209
1,285,858
1,331,581
68,939
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 2022
Financial
assets
at FVPL
Receivables
and other
assets at
amortised cost
Financial
liabilities
at FVPL
Financial
liabilities at
amortised cost
Cash flow
hedging
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
-
-
-
651,916
-
Other payables
-
-
-
771,051
-
Derivatives (liabilities)
-
-
1,177
-
-
31 December 2021
Financial
assets at
FVPL
Receivables
and other
assets at
amortised cost
Financial
liabilities
at FVPL
Financial
liabilities at
amortised cost
Cash flow
hedging
derivatives
Financial assets at FVPL
199,609
-
-
-
-
Trade receivables
-
224,766
-
-
-
Other receivables
-
206,596
-
-
-
Derivatives (assets)
55
-
-
-
-
Cash and cash equivalents
-
100,097
-
-
-
Borrowings from banks
and other lenders
-
-
-
3,477,375
-
Trade payables
-
-
-
562,306
-
Other payables
-
-
-
276,495
-
Derivatives (liabilities)
-
-
41
-
9,307
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
466
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 2022 and 31 December 2021 are shown below:
(Euro/thousand)
31 December 2022
31 December 2021
Net financial debt
3,291,040
3,378,858
Equity
2,460,945
2,294,861
Total capital
5,751,985
5,673,719
Gearing ratio
57%
60%
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:
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
467
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
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
(Euro/thousand)
31 December
2021
Level 1
Level 2
Level 3
Total
Assets
Financial assets at fair value:
Financial assets at fair value through profit or loss
199,609
-
-
199,609
Derivatives through profit or loss
-
55
-
55
Hedging derivatives
-
-
-
-
Total assets
199,609
55
-
199,664
Liabilities
Financial liabilities at fair value:
Derivatives through profit or loss
-
41
-
41
Hedging derivatives
-
9,307
-
9,307
Total liabilities
-
9,348
-
9,348
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
468
C.3 RISKS RELATED TO CLIMATE CHANGE
The Company's activities are exposed to different types of risks related to climate change, as
described in the Annual Integrated Report, to which reference should be made.
The Company assesses whether climate risks could have a material impact (e.g., the introduction
of regulations to reduce emissions) and, if so, they are included in the significant assumptions.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
469
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 2021
53,064
14,851
2,680
15,850
4,628
91,073
Movements in 2022:
- Investments
-
-
488
218
2,169
2,875
- Increases for leases (IFRS
16)
1,611
1,576
3,187
- Disposals
-
-
-
-
-
-
- Depreciation
(2,736)
(735)
(1,179)
(5,350)
-
(10,000)
- Impairment
-
-
-
-
-
-
- Reclassifications
-
-
743
1,396
(2,918)
(779)
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
3,989
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
(Euro/thousand)
Land and
buildings
Plant and
machinery
Equipment
Other
assets
Assets under
construction
and
advances
Total
Balance at
31 December 2020
53,029
14,710
3,548
11,068
7,276
89,631
Movements in 2021:
- Investments
12
8
175
19
2,517
2,731
- Increases for leases
(IFRS 16)
1,114
8,665
9,779
- Disposals
-
-
-
-
-
-
- Depreciation
(2,586)
(735)
(1,245)
(5,476)
-
(10,042)
- Impairment
-
-
-
-
(111)
(111)
- Reclassifications
1,495
868
202
1,574
(5,054)
(915)
Total movements
35
141
(868)
4,781
(2,647)
1,443
Balance at
31 December 2021
53,064
14,851
2,680
15,850
4,628
91,073
Of which:
- Historical cost
74,849
23,527
10,259
33,098
4,739
146,472
- Accumulated
depreciation and
impairment
(21,785)
(8,676)
(7,579)
(17,248)
(111)
(55,399)
Net book value
53,064
14,851
2,680
15,850
4,628
91,073
"Land and buildings", with a net book value of Euro 51,939 thousand, have recorded a net
decrease of Euro 1,125 thousand in 2022, reflecting the net effect of asset depreciation (Euro
2,736 thousand) and the effect of applying IFRS 16 (Euro 1,611 thousand).
"Plant and machinery" (Euro 14,116 thousand) and "Equipment" (Euro 2,732 thousand) mostly
refer to instrumentation used for R&D activities and to various fixed installations within Prysmian
Group's headquarters.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
470
"Other assets" (Euro 13,690 thousand) mainly consist of office furniture and equipment and
computer equipment for Euro 5,791 thousand, and capitalisations under IFRS 16 for Euro 7,899
thousand.
"Assets under construction and advances" (Euro 3,879 thousand) mostly refer to expenditure on
plant and machinery for use in R&D and on other equipment intended for the Prysmian
headquarters.
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 2021
41
38,820
69,876
-
18,103
126,839
Movements in 2022:
- Investments
-
669
8,825
-
13,741
23,235
- Disposals
-
-
-
-
-
-
- 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
(Euro/thousand)
Patents
Concessions,
licences,
trademarks
and similar
rights
Software
Other
intangible
assets
Intangibles in
progress and
advances
Total
Balance at
31 December 2020
45
43,597
65,700
84
15,164
124,590
Movements in 2021:
- Investments
-
2
5,951
-
14,878
20,831
- Disposals
-
-
-
-
-
-
- Amortisation
(4)
(5,359)
(14,050)
(84)
-
(19,497)
- Reclassifications
-
580
12,275
-
(11,940)
915
Total movements
(4)
(4,777)
4,176
(84)
2,938
2,249
Balance at
31 December 2021
41
38,820
69,876
-
18,103
126,839
Of which:
- Historical cost
11,455
69,151
156,078
787
18,103
255,573
- Accumulated
amortisation and
impairment
(11,414)
(30,331)
(86,202)
(787)
-
(128,734)
Net book value
41
38,820
69,876
-
18,103
126,839
In 2022, gross capital expenditure on intangible assets came to Euro 23,235 thousand, most of
which attributable to ongoing enhancement of information systems and Digital Transformation
projects. In 2022, the group ERP system (SAP 1C), which had successfully migrated to the SAP
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
471
S4/HANA platform in 2021, was implemented in Poland, Peru and Canada, bringing to 83 the
total number of plants managed with the unique SAP 1C system, present in more than 30
countries.
Another area of the business once again this year enjoying significant IT investments was the
Treasury function, with consolidation of its operations of the SAP Treasury S4 platform.
"Concessions, licences, trademarks and similar rights" amount to Euro 35,732 thousand at 31
December 2022, with the change since the previous year attributable to amortisation (Euro
5,477 thousand), capitalisations in the year (Euro 1,720 thousand) and new investments (Euro
669 thousand).
"Software" amounts to Euro 75,274 thousand at 31 December 2022, with the change since the
previous year attributable to amortisation (Euro 19,541 thousand), capitalisations in the year
(Euro 16,114 thousand) and new investments (Euro 8,825 thousand).
"Intangibles in progress and advances" of Euro 14,790 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 5,701,163 thousand at 31 December 2022, having recorded the
following movements over the year:
(Euro/thousand)
31.12.2021
Capital
contributions
Investment
(impairment)/
revaluation
Capital
contributions
for stock
options
31.12.2022
Prysmian Cavi e Sistemi S.r.l.
401,607
2,784
404,391
Draka Holding B.V.
4,789,983
6,144
4,796,127
Prysmian Cavi e Sistemi Italia S.r.l.
116,220
62
116,282
Prysmian PowerLink S.r.l.
219,741
80
219,821
Fibre Ottiche Sud - F.O.S. S.r.l.
105,441
(66,714)
25
38,752
Prysmian Treasury S.r.l.
83,550
2
83,552
Prysmian Kabel und Systeme GmbH
3,434
3,434
Draka Kabely SRO
1
1
Electronic and Optical Sensing
Solutions S.r.l.
-
35,803
35,803
Prysmian Servizi S.p.a.
-
3,000
3,000
Total investments in
subsidiaries
5,719,977
38,803
(66,714)
9,097
5,701,163
The net change in the value of Investments in subsidiaries of Euro 18,814 thousand consists of
an increase of Euro 47,900 thousand and a decrease of Euro 66,714 thousand for impairment.
The increase is due to capital contributions paid to Electronic and Optical Sensing Solutions S.r.l.
and Prysmian Servizi S.p.a. and to increases linked to the pay-related component of stock option
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
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
472
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 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 for impairment testing: Draka
Holding B.V., Fibre Ottiche Sud 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.
The cash flow projection used to calculate value in use took the post-tax cash flow in the 2023
budget for year one, projecting this to 2024-2025 using growth rates ranging between 1.09%
and 3.4% 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 7.73% to 9.84%. The perpetuity growth rate for projections after 2025 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 using the market multiples method, with reference
to companies in the same sector.
These impairment tests revealed the need for a partial write-down of Euro 66,714 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 2022
%
interest
2021
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 21,246,001
0.005
0.005
Electronic and Optical Sensing Solutions S.r.l.
Milan
EUR 5,000,000
100
-
Prysmian Servizi S.p.a.
Milan
EUR 3,000,000
100
-
Jaguar Communication Consultancy Services
Private Ltd.
(1)
Mumbai
INR 122,268,218
0.000001
0.00000
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
473
4. DEFERRED TAX ASSETS
Deferred tax assets report a nil balance at 31 December 2022, compared with Euro 9,400
thousand at 31 December 2021. Further information can be found in Note 14. Current tax
payables and deferred tax liabilities.
5. TRADE AND OTHER RECEIVABLES
Details are as follows:
(Euro/thousand)
31.12.2022
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
Other
-
261,340
261,340
Total other receivables
481
313,399
313,880
Total
481
581,150
581,631
(Euro/thousand)
31.12.2021
Non-current
Current
Total
Trade receivables
-
224,804
224,804
Allowance for doubtful accounts
-
(38)
(38)
Total trade receivables
-
224,766
224,766
Other receivables:
Tax receivables
-
51,211
51,211
Financial receivables
172
-
172
Prepaid finance costs
1,420
1,185
2,605
Receivables from employees
18
1,418
1,436
Other
94,920
56,252
151,172
Total other receivables
96,530
110,066
206,596
Total
96,530
334,832
431,362
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
474
The following table breaks down trade and other receivables according to the currency in which
they are expressed:
(Euro/thousand)
31 December 2022
31 December 2021
Euro
429,792
344,530
British Pound
28,869
23,268
US Dollar
75,378
37,095
Other currencies
47,592
26,469
Total
581,631
431,362
"Trade receivables" at 31 December 2022 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 49,572 thousand mainly refer to:
•
foreign tax credits (Euro 7,153 thousand);
•
VAT credits (Euro 16,852 thousand);
•
R&D tax credits (Euro 4,934 thousand);
•
corporate income tax (IRES) credit for Italian companies participating in the national
and world tax consolidation group (Euro 8,204 thousand);
•
regional business tax (IRAP) credit (Euro 1,028 thousand);
•
other tax receivables (Euro 11,401 thousand).
"Financial receivables" mainly refer to guarantees given for the benefit of employees.
"Prepaid finance costs" of Euro 1,469 thousand mainly consist of the Company's share of the
costs incurred for the Revolving Credit Facility opened on 3 April 2019, which are being amortised
over the term of the agreement, i.e. until April 2024.
At 31 December 2022, "Other" receivables of Euro 261,341 thousand mainly comprise:
•
Euro 209,879 thousand in receivables from Group companies for recharges of the LTI
(long-term incentive) plan 2020-2022;
•
Euro 23,057 thousand in receivables from Group companies for recharges of the short-
term incentive plan (BE IN 2022);
•
Euro 6,215 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 9,211 thousand in receivables from Group companies mainly for the billing of patent
and know-how licences;
•
Euro 12,576 thousand in prepayments.
The change in "Other" receivables is mainly due to receivables from Group companies for the
LTI plan 2020-2022, vesting in 2023, to receivables from Group companies for the new BE-IN
incentive plan and to receivables from Italian Group companies for the transfer of IRES (Italian
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
475
corporate income tax) for the purposes of the national tax consolidation (Euro 6,215 thousand
versus Euro 11,324 thousand in 2021).
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, amounting to Euro 193,419 thousand (Euro
199,609 thousand at 31 December 2021), refer to monetary funds in which the Parent Company
has temporarily invested its liquidity.
7. DERIVATIVES
Details of these balances are presented below:
(Euro/thousand)
31 December 2022
Asset
Liability
Non-current
Interest rate derivatives (cash flow hedges)
59,209
-
Total cash flow hedges
59,209
-
Total non-current
59,209
-
Current
Interest rate derivatives (cash flow hedges)
12,676
-
Forward currency contracts on commercial transactions (cash flow
hedges)
-
314
Total cash flow hedges
12,676
314
Forward currency contracts 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
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
476
31 December 2021
Asset
Liability
Non-current
Interest rate derivatives (cash flow hedges)
-
2,548
Total cash flow hedges
-
2,548
Total non-current
-
2,548
Current
Interest rate derivatives (cash flow hedges)
-
6,477
Forward currency contracts on commercial transactions (cash flow
hedges)
-
282
Total cash flow hedges
-
6,759
Forward currency contracts on commercial transactions
18
30
Metal derivatives
38
12
Total other derivatives
55
41
Total current derivatives
55
6,800
Total
55
9,348
The above derivatives are mostly with Prysmian Treasury S.r.l., the Group's central treasury
company, except for Interest Rates Swaps (IRS) transforming variable into fixed rates which are
arranged directly with leading financial institutions.
Forward currency contracts have a notional value of Euro 50,963 thousand at 31 December
2022, of which Euro 13,634 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 10,559 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 935 thousand at 31 December 2022, compared with Euro 100,097
thousand at 31 December 2021, 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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
477
9. SHARE CAPITAL AND RESERVES
Equity amounts to Euro 2,460,945 thousand at 31 December 2022, reporting an increase of Euro
166,082 thousand since 31 December 2021. The changes over the year are discussed in the
following paragraphs on the individual components of equity.
Share capital
Share capital amounts to Euro 26,814 thousand at 31 December 2022, consisting of 268,144,246
ordinary shares (including 4,601,362 treasury shares), with a nominal value of Euro 0.10 each.
The total number of outstanding voting shares is 263,542,884, inclusive of 10,669 treasury
shares held indirectly.
Share capital at 31 December 2022 is unchanged compared with 31 December 2021.
The following table reconciles the number of outstanding shares at 31 December 2020, at 31
December 2021 and 31 December 2022:
Ordinary shares
Treasury shares
Total
Balance at 31 December 2020
268,144,246
(4,748,764)
263,395,482
Allotments and sales
(1)
106,565
106,565
Balance at 31 December 2021
268,144,246
(4,642,199)
263,502,047
Allotments and sales
(2)
40,837
40,837
Balance at 31 December 2022
268,144,246
(4,601,362)
263,542,884
(1)
Allotment and/or sale of treasury shares under the YES Group employee share purchase plan (106,565 shares).
(2)
Allotment and/or sale of treasury shares under the YES Group employee share purchase plan (40,837 shares).
More details about treasury shares can be found in the subsequent note on "Treasury shares".
Share premium reserve
This amounts to Euro 1,281,071 thousand at 31 December 2022, the same as at 31 December
2021.
Capital increase costs
This reserve, which reports a negative balance of Euro 14,476 thousand at 31 December 2022,
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 2022, the same as at 31
December 2021.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
478
Treasury shares reserve
This reserve, which amounts to Euro 91,648 thousand at 31 December 2022 (Euro 92,461
thousand at 31 December 2021), complies with statutory requirements (art. 2357-ter of the
Italian Civil Code).
Treasury shares
The book value of treasury shares is Euro 91,648 thousand at 31 December 2022 and refers to
4,601,362 ordinary shares with a total nominal value of Euro 460,136.
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 2020
4,748,764
474,876
1.77%
20
94,583,533
- Share buyback
- Allotments and sales
(106,565)
(10,657)
20
(2,122,509)
At 31 December 2021
4,642,199
464,220
1.73%
20
92,461,024
- Share buyback
- Allotments and sales
(40,837)
(4,084)
20
(813,371)
At 31 December 2022
4,601,362
460,136
1.72%
20
91,647,652
During 2022, the number of treasury shares decreased by a total of 40,837 to serve the YES
share purchase plan for Group employees. Of this total, 3,356 shares were allotted to employees
who had signed up to the YES employee share purchase plan, while 37,481 shares were sold to
employees of another group company under the same plan.
Extraordinary reserve
This reserve amounts to Euro 52,688 thousand at 31 December 2022 (the same as at 31
December 2021), 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 2022, the same as at 31 December 2021.
Capital contribution reserve
This reserve amounts to Euro 6,113 thousand at 31 December 2022, the same as at 31
December 2021.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
479
Actuarial gains/(losses) on employee benefits
The reserve for remeasuring employee benefit plans reports a negative balance at 31 December
2022 of Euro 1,395 thousand for post-tax actuarial losses, recognised in 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
2022, having decreased by Euro 34,771 thousand since 31 December 2021, and refers to the
non-monetary components of the Company's outstanding convertible bonds, discussed in more
detail in Note 10. Borrowings from banks and other lenders.
Stock option reserve
This reserve amounts to Euro 166,559 thousand at 31 December 2022 (Euro 62,256 thousand
at 31 December 2021), reporting a net increase of Euro 104,303 thousand since 31 December
2021 mainly due to:
•
the transfer of Euro 274 thousand in costs to profit or loss for the period (Euro 57
thousand in 2021) in connection with the YES plan, a stock option plan involving
Prysmian S.p.A. shares;
•
an increase of Euro 809 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;
•
an increase of Euro 79,030 thousand for the Long-term incentive (LTI) plan 2020-2022.
Of this total, Euro 20,112 thousand relates to Prysmian S.p.A. personnel, while Euro
58,918 thousand refers to the grant date fair value of options allotted to LTI plan
beneficiaries who are employees of other Group companies, of which Euro 5,518
thousand not recharged to the subsidiaries;
•
an increase of Euro 24,190 thousand for the new incentive plan known as BE-IN, about
which more details can be found in the consolidated financial statements. Of this total,
Euro 315 thousand relates to Prysmian S.p.A. personnel, while Euro 23,875 thousand
refers to the grant date fair value for other group employees who joined the plan, of
which Euro 2,590 thousand not recharged to the subsidiaries.
Further information can be found in Note 17. Personnel costs.
Cash flow hedge reserve
The cash flow hedge reserve, presenting a post-tax positive balance of Euro 54,474 thousand at
31 December 2022 (negative Euro 6,860 thousand at 31 December 2021), reports hedging
derivatives that qualify for hedge accounting under IFRS 9.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
480
On 16 June 2022 and 8 July 2022, the Company entered into derivative contracts for a total
value of Euro 1,200 million to hedge the Euro 1,200 million Sustainability-Linked Term Loan
agreed with a syndicate of leading domestic 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 interest rate swaps at 31 December 2022 is therefore Euro 1,485 thousand.
Their fair value is reflected in the reserve of Euro 54,474 thousand reported at 31 December
2022.
Share issue reserve
The share issue reserve amounts to Euro 1,100 thousand at 31 December 2022, the same as at
31 December 2021.
Retained earnings
Retained earnings amount to Euro 659,138 thousand at 31 December 2022, reporting an
increase of Euro 29,633 thousand since 31 December 2021, of which Euro 5,960 thousand drawn
from the reserve to pay the 2021 dividend, net of an increase of Euro 822 thousand from selling
YES plan shares to employees of a subsidiary and an increase of Euro 34,771 thousand following
reclassification from the convertible bond reserve.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
481
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
26,814
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
1,100
A,B,C
1,100
.
Convertible bond
reserve
49,550
.
Retained earnings
659,138
A,B,C
659,138
69,560
Measurement
reserves (*):
.
Stock option reserve
166,559
.
Cash flow hedge
reserve
54,474
.
Actuarial gains and
losses on employee
benefits
(1,395)
Total reserves
2,290,362
-
-
Undistributable
amount
274,551
Distributable
amount
2,015,811
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 12 April 2022, the shareholders of Prysmian S.p.A. approved the financial statements for
2021 and the distribution of a gross dividend of Euro 0.55 per share, for a total of some Euro
145 million. The dividend was paid out from 21 April 2022 to shares outstanding on the record
date of 20 April 2022, with the shares going ex-dividend on 19 April 2022. A recommendation
to pay a dividend of Euro 0.60 per share, for a total of some Euro 158 million in respect of the
year ended 31 December 2022, will be presented to shareholders in the meeting convened in
single call for 19 April 2023.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
482
10. BORROWINGS FROM BANKS AND OTHER LENDERS
These amount to Euro 2,816,182 thousand at 31 December 2022, compared with Euro
3,477,377 thousand at 31 December 2021.
(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
(Euro/thousand)
31 December 2021
Non-current
Current
Total
Long-term financial payables
Mediobanca Loan
99,819
144
99,963
Intesa Loan
149,656
315
149,971
CDP Loans
174,528
71
174,599
EIB Loans
109,931
4
109,934
Unicredit Loan
199,681
303
199,984
Term Loan
997,797
703
998,500
Non-convertible bond
-
763,087
763,087
Convertible Bond 2021
707,088
-
707,088
Convertible Bond 2017
-
249,824
249,824
Lease liabilities
17,173
5,721
22,895
Other payables to banks and other lenders
-
1,533
1,533
Total
2,455,673
1,021,704
3,477,377
Borrowings from banks and other financial institutions and Bonds are analysed as follows:
(Euro/thousand)
31 December 2022
31 December 2021
Mediobanca Loan
100,199
99,963
Intesa Loan
150,617
149,971
CDP Loans
175,205
174,599
EIB Loans
245,794
109,934
Term Loan
-
998,500
Sustainability-Linked Term Loan
1,197,588
-
Unicredit Loan
200,457
199,984
Other borrowings
9,090
1,533
Borrowings from banks and other financial institutions
2,078,951
1,734,483
Non-convertible bond
-
763,087
Convertible Bond 2017
-
249,824
Convertible Bond 2021
717,399
707,088
Total
2,796,350
3,454,482
Credit Agreements:
Prysmian S.p.A. had the following Credit Agreements in place during the course of 2022:
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
483
Revolving Credit Facility 2019
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. The funds may be drawn down for business
and working capital needs, including the refinancing of existing facilities. The Revolving Credit
Facility 2019 can also be used for the issue of guarantees. At 31 December 2022, 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.
At 31 December 2022, 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 European
Investment Bank (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.
The EIB 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 | C. PARENT COMPANY FINANCIAL STATEMENTS
484
The loan was received on 28 January 2022 and is repayable in a lump sum at maturity on 29
January 2029.
At 31 December 2022, the fair value of the EIB Loans approximated their carrying amount.
Term Loan
The Term Loan, issued in June 2018 and used by the Group for the purpose of having the
necessary financial resources to pay the General Cable purchase consideration, to refinance the
existing debt of General Cable and its subsidiaries and to finance acquisition-related fees,
commissions, costs and expenses, was repaid early on 14 July 2022 in the amount of Euro 1,000
million.
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 medium-term Term Loan
obtained in 2018.
With the aim of strengthening its financial structure and the integration 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 the loan.
In fact, the Sustainability Linked Term Loan requires compliance with ESG indicators on an
annual basis. The indicators to be met for 2022 are as follows:
•
Scope 1 and Scope 2 CO2 emissions, calculated using the "market-based method",
less than or equal to 668 ktCO2eq (please refer to "Environmental Responsibility"
within the Consolidated Non-Financial Statement forming part of the Directors'
Report);
•
Number of at least 30 sustainability audits carried out from the own suppliers (please
refer to "Sustainable Value Chain" within the Consolidated Non-Financial Statement
forming part of the Directors' Report);
•
A percentage greater than or equal to 40% of women hired with the status of "white
collar" on the total recruitment of "white collar" by the Group (please refer to "Human
Capital" within the Consolidated Non-Financial Statement forming part of the Directors'
Report).
The achievement or not of these indicators leads to a positive or negative adjustment of the
margin annually applied.
At 31 December 2022, the fair value of the Sustainability-Linked Term Loan approximated its
carrying amount.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
485
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 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 2022, the fair value of this loan approximated its carrying amount.
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 2022, 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 2022, 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
2022 and 31 December 2021:
(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
486
(Euro/thousand)
31 December 2021
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)
Term Loan
1,000,000
(1,000,000)
Unicredit Loan
200,000
(200,000)
EIB Loans
110,000
(110,000)
Total
2,735,000
(1,735,000)
1,000,000
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 11. Borrowings
from banks and other lenders).
Bonds
During the course of 2022, Prysmian Group had the bond issues in place described in the
following paragraphs.
Non-convertible bond issued in 2015
The Non-Convertible Bond 2015, issued in March 2015, reached maturity in April 2022 and so
has been fully repaid in the amount of Euro 750 million.
Convertible Bond 2017
The Convertible Bond 2017, issued in January 2017 and partially redeemed in January 2021,
matured in January 2022 and so has been fully repaid in the amount of Euro 250 million.
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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
487
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
2022:
(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
17,562
Related costs
(3,232)
Balance at 31 December 2022
717,399
At 31 December 2022, the fair value of the Convertible Bond 2021 (equity component and debt
component) was Euro 780 million, of which Euro 658 million attributable to the debt component
and Euro 122 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 | C. PARENT COMPANY FINANCIAL STATEMENTS
488
Borrowings from banks and other lenders and Lease liabilities
The following table reports movements in Borrowings from banks and other lenders and in Lease
liabilities:
(Euro/thousand)
CDP
EIB
Unicredit
Mediobanca
and
Intesa
Non
conv.
bond
Conv.
bonds
Term
loan
Other
borrowings
and lease
liabilities
Total
Balance
31.12.2021
174,599
109,934
449,919
763,087
956,913
998,500
24,427
3,477,377
New funds
135,000
-
-
-
1,200,000
-
1,335,000
Repayments/Conversions
-
-
(750,000)
(249,824)
(1,000,000)
-
(1,999,824)
Amortisation of
bank and
financial fees
and other
expenses
458
(132)
381
475
1,063
(6,323)
-
(4,378)
New IFRS 16
leases
(3,063)
(3,063)
Interest and
other
movements
449
992
974
(13,562)
9,248
5,412
7,559
11,072
Total
movements
607
135,860
1,355
(763,087)
(239,513)
199,089
4,496
(661,193)
Balance
31.12.2022
175,206
245,794
451,274
(0)
717,400
1,197,588
28,923
2,816,182
The following tables provide an analysis by maturity and currency of borrowings from banks and
other lenders (excluding lease liabilities) at 31 December 2022 and 2021:
(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 (a)
1.5%
1.3%
1.5%
a) Interest rate swaps have been put in place to hedge interest rate risk on variable rate loans in Euro. At 31 December 2022, the total hedged amount equates
to 73.7% 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 1.5% for Euro-denominated debt. The percentages representing the average fixed
rate refer to 31 December 2022.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
489
(Euro/thousand)
31 December 2021
Variable rate
Fixed rate
Euro
Euro
Total
Due within 1 year
3,106
1,012,911
1,016,017
Due between 1 and 2 years
1,197,467
1,197,467
Due between 2 and 3 years
459,126
-
459,126
Due between 3 and 4 years
74,784
-
74,784
Due between 4 and 5 years
-
707,088
707,088
Due after more than 5 years
-
-
-
Total
1,734,483
1,719,999
3,454,482
Average interest rate in period, as per
contract
1.0%
1.8%
1.4%
Average interest rate in period, including IRS
effect
1.3%
1.8%
1.5%
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
490
NET FINANCIAL DEBT
(Euro/thousand)
Note
31 December
2022
of which
related
parties
(Note 25)
31 December
2021
of which
related
parties
(Note 25)
Long-term financial payables
CDP Loans
10
174,685
174,528
Mediobanca Loan
10
99,905
99,819
Intesa Loan
10
149,781
149,656
EIB Loans
10
244,798
109,931
Term Loan
10
-
997,797
Sustainability-Linked Term Loan
10
1,191,474
-
Convertible Bond 2021
10
717,399
707,088
Unicredit Loan
10
-
199,681
Interest rate swaps
7
-
2,548
Lease liabilities
10
14,712
17,173
Total long-term financial payables
2,592,754
2,458,221
Short-term financial payables
CDP Loans
10
520
71
Mediobanca Loan
10
294
144
Intesa Loan
10
836
315
EIB Loans
10
996
4
Non-convertible bond
10
-
763,087
Term Loan
10
-
703
Sustainability-Linked Term Loan
10
6,114
-
Convertible Bond 2017
10
-
249,824
Unicredit Loan
10
200,457
303
Lease liabilities
10
5,120
5,721
Short-term loans from Group companies
11
747,242
747,242
194,941
194,941
Other financial payables
10
,090
1,533
Interest rate swaps
7
-
6,476
Total short-term financial payables
966,169
1,223,121
Total financial liabilities
3,558,923
3,681,342
Long-term financial receivables
5
177
172
Long-term bank fees
5
284
1,420
Non-current interest rate swaps
7
59,209
Current interest rate swaps
7
12,676
-
Short-term financial receivables
6
193,417
199,609
Short-term bank fees
5
1,185
1,185
Cash and cash equivalents
8
935
100,097
Net financial debt
3,291,040
3,378,858
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):
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
491
(Euro/thousand)
Note
31 December
2022
of which
related
parties
(Note 25)
31 December
2021
of which
related
parties
(Note 25)
Net financial debt - as reported above
3,291,040
3,378,858
Adjustments to exclude:
Long-term financial receivables and other assets
5
177
172
Long-term bank fees
5
284
1,420
Hedging derivatives (assets)
71,885
Adjustments to include:
Net non-cash flow hedge forward currency
contracts on commercial transactions, excluding
non-current assets
7
(592)
(592)
5
5
Net non-cash flow hedge metal derivatives,
excluding non-current assets
7
(53)
(53)
(269)
(269)
Recalculated net financial debt
3,290,856
3,380,187
11. TRADE AND OTHER PAYABLES
Details are as follows:
(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
(Euro/thousand)
31 December 2021
Non-current
Current
Total
Trade payables
-
562,306
562,306
Total trade payables
-
562,306
562,306
Other payables:
Tax and social security payables
-
8,060
8,060
Advances from customers
-
-
-
Payables to employees
-
10,098
10,098
Accrued expenses
-
401
401
Other
281
62,706
62,706
Financial payables
-
194,949
194,949
Total other payables
281
276,214
276,496
Total
281
838,520
838,802
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 771,052 thousand, comprise:
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
492
-
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 742,746 thousand, mainly relating to the intercompany
current account with Prysmian Treasury S.r.l.
Trade payables include around Euro 467,759 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 2022
31 December 2021
Euro
1,396,943
821,844
US Dollar
17,221
10,149
British Pound
1,928
1,609
Other currencies
6,876
5,200
Total
1,422,968
838,802
12. PROVISIONS FOR RISKS AND CHARGES
The following table reports movements in this balance during the reporting period:
(Euro/thousand)
Legal and
contractual risks
Other risks
and charges
Total
Balance at 31 December 2021
22,337
15,435
37,772
Movements in 2022:
- Increases
12,050
55
12,105
- Uses
(444)
(6,131)
(6,575)
- Releases
-
(100)
(100)
- Other
1
-
1
Total movements
11,607
(6,176)
5,431
Balance at 31 December 2022
33,944
9,259
43,203
The provisions for risks, amounting to Euro 43,203 thousand at 31 December 2022, report a net
increase of Euro 5,431 thousand since 31 December 2021 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
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
493
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.
On 2 April 2014, the European Commission adopted a decision under which it found that,
between 18 February 1999 and 28 January 2009, the world's largest cable producers, including
Prysmian Cavi e Sistemi S.r.l. ("Prysmian CS"), had engaged in anti-competitive practices in the
European market for high voltage submarine and underground power cables. The European
Commission held Prysmian CS jointly liable with Pirelli & C. S.p.A. ("Pirelli") for the alleged
infringement in the period 18 February 1999 - 28 July 2005, ordering them to pay a fine of Euro
67.3 million, and it held Prysmian CS jointly liable with Prysmian S.p.A. ("Prysmian") and The
Goldman Sachs Group Inc. ("Goldman Sachs") for the alleged infringement in the period 29 July
2005 - 28 January 2009, ordering them to pay a fine of Euro 37.3 million. Prysmian, Prysmian
CS, Pirelli and Goldman Sachs each filed a separate appeal against this decision with the General
Court of the European Union, in first instance, and later with the Court of Justice of the European
Union. In rulings handed down on 24 September 2020, 28 October 2020 and 27 January 2021
respectively, the Court of Justice definitively dismissed the appeals brought by Prysmian and
Prysmian CS, Pirelli and Goldman Sachs, thus upholding the liability and fine envisaged under
the European Commission's original decision. Further to the ruling dismissing the appeal by
Prysmian and Prysmian CS, the European Commission requested Prysmian Group to pay the
sum of approximately Euro 20 million, corresponding to half of the fine for the period from 29
July 2005 to 28 January 2009. Following the ruling dismissing the Pirelli appeal, the European
Commission requested Prysmian Group to pay the sum of approximately Euro 37 million,
corresponding to half of the fine for the period from 18 February 1999 to 28 July 2005. Using
the provisions already set aside, the Group made these payments by the required deadline
during previous reporting periods.
In a ruling handed down on 14 November 2019, the Court of Justice of the European Union also
dismissed the appeal brought by General Cable, thus definitively confirming the fine previously
levied against it by the European Commission in its April 2014 decision. As a result, the Group
went ahead and paid a fine for Euro 2 million during a previous reporting period.
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
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
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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
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
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
495
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. The appeal decision is pending.
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.
Furthermore, in February 2023, the Group received notification of an application by British
consumer representatives requesting authorisation from the competent 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.
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, on 4 April 2019, the Group learned that another two legal actions had been brought
in the Court of London, one by Scottish and Southern Energy (SSE) group companies and the
other by Greater Gabbard Offshore Winds Limited and SSE group companies, both of which
involving claims for damages purportedly suffered as a result of the alleged anti-competitive
practices sanctioned by the European Commission. Both proceedings have been concluded
through settlements agreed between the parties during 2021 for the first action and in June
2022 for the second action.
Prysmian S.p.A. and Prysmian Cavi e Sistemi S.r.l were summoned by Nexans France SAS and
Nexans SA to appear before the Court of Dortmund (Germany) in notifications dated 24 and 25
May 2018 respectively. The plaintiffs have asked the Court concerned to ascertain the existence
of joint and several liability between Prysmian S.p.A. and Prysmian Cavi e Sistemi S.r.l., on the
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
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one hand, and Nexans France SAS and Nexans SA, on the other, for any damages suffered by
third parties in Germany as a result of the alleged cartel in the market for high voltage
underground and submarine power cables sanctioned in the European Commission's decision.
The Court concerned issued a stay of execution dated 3 June 2019 pending the outcome of the
appeal against the European Commission's decision brought before the European Courts by both
Prysmian and Nexans. Following the conclusion of the appeal proceedings pending before the
European Court of Justice, Nexans resumed the previously stayed legal action, but then filed a
notice in March 2022, abandoning the action and thus ending the dispute.
Antitrust - Other investigations
In Brazil, the local antitrust authority initiated 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.
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. Further information can be found in the Directors' Report
accompanying the Group's consolidated financial statements in the section entitled "Significant
events during the year".
As at 31 December 2022, the amount of the provision for legal and contractual risks is Euro
33,944 thousand (Euro 22,337 thousand in 2021).
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.
The provision for other risks amounts to Euro 9,259 thousand at 31 December 2022, reporting
a net decrease of Euro 6,176 thousand over the year. The provision refers to risks deemed
probable in connection with tax assessment notices or tax audits carried out by the competent
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.
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Employee benefit obligations amount to Euro 6,085 thousand at 31 December 2022 (Euro 7,284
thousand at 31 December 2021) and are detailed as follows:
(Euro/thousand)
31 December 2022
31 December 2021
Statutory severance benefit
4,418
5,297
Termination and other benefits
1,667
1,987
Total
6,085
7,284
Employee benefit obligations have had the following impact on the income statement:
(Euro/thousand)
31 December 2022
31 December 2021
Statutory severance benefit
453
329
Termination and other benefits
(187)
(195)
Total
266
134
STATUTORY SEVERANCE BENEFIT
Details are as follows:
(Euro/thousand)
2022
2021
Opening balance
5,297
4,979
Current service costs
410
306
Interest costs
43
23
Actuarial (gains)/losses recognised in equity
(1,029)
303
Disbursements
(303)
(314)
Total movements
(879)
318
Closing balance
4,418
5,297
The actuarial gains recognised at 31 December 2022 (Euro 1,029 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.
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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
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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 2022
31 December 2021
Discount rate
3.80%
0.85%
Expected future salary increase
2.40%
1.75%
Inflation rate
2.40%
1.75%
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 2022
Change in inflation rate
-0.25%
0.25%
Effects on obligation
-1.46%
1.49%
Change in discount rate
-0.50%
0.50%
Effects on obligation
4.49%
-4.29%
Average headcount in the period is reported below, compared with closing headcount at the end
of each period:
2022
Average
%
Closing
%
Desk staff and management
388
91%
396
91%
Non-desk staff
40
9%
40
9%
Total
428
100%
436
100%
2021
Average
%
Closing
%
Desk staff and management
374
90%
380
90%
Non-desk staff
41
10%
41
10%
Total
415
100%
421
100%
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
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14. CURRENT TAX PAYABLES AND DEFERRED TAX LIABILITIES
Current tax payables amount to Euro 2,165 thousand at 31 December 2022 (Euro 12,970
thousand at 31 December 2021). At 31 December 2022, 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 reflect the effect of temporary differences between the balance-sheet
value of liabilities at 31 December 2022 and their corresponding tax values.
Deferred tax liabilities amount to Euro 10,005 thousand at 31 December 2022, compared with
a nil balance at 31 December 2021. The change is primarily due to higher interest rates, being
the variable that generated the largest difference between balance-sheet values at 31 December
2022 and the corresponding tax values.
Details are as follows:
(Euro/thousand)
31 December 2022
31 December 2021
Deferred taxes:
-Deferred tax liabilities
(17,671)
(221)
-Deferred tax assets
7,666
9,622
Total deferred tax assets (liabilities)
(10,005)
9,400
Movements in deferred taxes are analysed as follows:
(Euro/thousand)
Employee
benefit
obligations
Provisions
for risks
Other
Total
Balance at 31 December 2021
687
5,277
3,436
9,400
Impact on income statement
-
(119)
329
210
Impact on equity
(247)
-
(19,368)
(19,615)
Balance at 31 December 2022
440
5,158
(15,603)
(10,005)
Further information can be found in Note 22. Taxes.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
500
15. REVENUES AND OTHER INCOME
This line item reports Euro 245,035 thousand, compared with Euro 292,852 thousand in 2021,
and is detailed as follows:
(Euro/thousand)
2022
2021
Royalties
123,965
122,651
Head office services
85,526
78,930
Other revenues and sundry income
35,544
91,271
of which non-recurring
327
63,266
Total
245,035
292,852
Royalties mostly refer to amounts charged to Prysmian Group subsidiaries for the use of patents,
know-how and trademarks; they amount to Euro 123,965 thousand at 31 December 2022 (Euro
122,651 thousand in the previous year).
Head office services of Euro 85,526 thousand (Euro 78,930 thousand in the previous year), refer
to charges invoiced by Prysmian S.p.A., under specific contracts, to its sub-holding company
Prysmian Cavi e Sistemi S.r.l. for coordination and other services provided by head office
functions to Group companies.
Other revenues and sundry income of Euro 35,544 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 9,150 thousand, compared with Euro 7,000 thousand in 2021.
17. PERSONNEL COSTS
Details are as follows:
(Euro/thousand)
2022
2021
Wages and salaries
63,018
48,636
of which Fair Value Stock Options
20,519
9,440
Social security
10,840
10,235
Retirement pension costs
2,382
2,338
Statutory severance benefit
410
306
Personnel costs for business reorganisation
219
1,332
Other personnel costs
1,086
1,305
Total
77,955
64,151
Personnel costs report an increase of Euro 13,804 thousand on the previous year, mainly due to
the increase in the fair value of stock options (Euro 11,079 thousand more than in the previous
year).
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
501
Share-based payments
At 31 December 2022, Prysmian S.p.A. had share-based compensation plans in place for
managers and employees of Group companies and members of the Company's Board of
Directors. These plans are described below.
Employee share purchase plan (2022) – YES 2.0
The plan is based on financial instruments and reserved for employees of Prysmian S.p.A. and/or
of its subsidiaries, including some of the Company's Directors.
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,
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.
All those who signed up to the Plan also received an entry bonus of three to eight free shares,
taken from the Company's portfolio of treasury shares, only available with their first-time
purchase.
The fair value of the options 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)
2.75
Share price at grant date (Euro)
€30.87
Risk-free interest rate
from 0.32% to 0.54%
Expected dividend %
1.80%
Option fair value at grant date (Euro)
from €23.94 to €19.27
Costs of Euro 94 thousand have been recognised as "Personnel costs" in the income statement
at 31 December 2022 for the fair value of options granted under this plan.
On 28 April 2021, the shareholders of Prysmian S.p.A. approved the 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
form of treasury shares. The shares purchased will be subject to a retention period, during which
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
502
they cannot be sold. The extension 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 will be 1%.
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
, from its registered offices and from Borsa Italiana S.p.A.
Long-term incentive plan 2020-2022
The long-term incentive plan (LTI), approved by the shareholders on 28 April 2020 pursuant to
art. 114-bis, par. 1, of Italian Legislative Decree no. 58/1998, is in response to the following key
drivers of change:
-
simplification and alignment with best market practices;
-
sustainability of performance over time;
-
greater participation in the creation of long-term value by extending the number of
beneficiaries to a wider group of managers and professionals;
-
retention to support the phase of post-merger integration with General Cable, especially
in certain regions with a particularly competitive talent market.
The Plan extends to some 800 Group employees and involves the allocation of a number of
options calculated according to the achievement of operational, economic and financial
performance conditions. The Plan consists of the following components: Performance Share,
Deferred Share and Matching Share. The Performance Share component consists of the free
allocation of shares to plan participants subject to the achievement of performance conditions,
measured over a three-year period and subject to continued employment. The vesting period is
three years (2020-2022), with disbursement of the shares envisaged in 2023. The Deferred
Share component involves the deferred receipt, through the free allocation of shares subject to
continued employment during the vesting period, of 50% of the bonus earned for the years
2020, 2021 and 2022. The vesting of the annual bonus depends on the achievement of specific
economic, financial, operational and sustainability objectives defined in advance each year.
Lastly, the Matching Share component is combined with the Deferred Shares and consists of the
free allocation to participants of 0.5 additional shares for each Deferred Share granted and
arising from deferred payment of the bonus for each year. In the case of the Chief Executive
Officer and Top Management (consisting of about 40 individuals, including Executive Directors,
Key Management Personnel, front-line positions reporting to the CEO and second-line managers
of key areas), the Matching Share component is subject to the achievement of a pre-determined
performance condition related to sustainability (ESG).
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
503
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, relative TSR measured against a 9-member peer group and
ESG, measured by a set of indicators.
The following table provides details about movements in the plan:
31 December 2022
Number of options
Options at start of year
4,306,263
Granted
4,705,543
Change in expected participations
28,775
Cancelled
-
Exercised
-
of which for Prysmian S.p.A. employees
-
Options at end of year
9,040,581
Costs of Euro 20,110 thousand have been recognised as "Personnel costs" in the income
statement at 31 December 2022 for the fair value of options granted under this plan.
In accordance with IFRS 2, the options allotted have been measured at their grant date fair
value. The fair value of options related to performance shares, for the entire period of the plan,
and to deferred and matching shares vesting in 2020 has been calculated using the following
assumptions:
Grant date
28 April 2020
Residual life at grant date (in years)
2.68
Exercise price (Euro)
0
Risk-free interest rate
-0.70%
Expected dividend %
2.30%
Option fair value (market based) at grant date (Euro)
€13.54
Option fair value (not market based) at grant date (Euro)
€13.85
As regards deferred and matching shares vesting in 2021, option fair value has been calculated
using the following assumptions:
Grant date
28 April 2021
Residual life at grant date (in years)
1.68
Exercise price (Euro)
0
Risk-free interest rate
-0.72%
Expected dividend %
2.30%
Option fair value (not market based) at grant date
€23.14
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
504
As regards deferred and matching shares vesting in 2022, option fair value has been calculated
using the following assumptions:
Grant date
12 April 2022
Residual life at grant date (in years)
0.72
Exercise price (Euro)
0
Risk-free interest rate
0.00%
Expected dividend %
1.80%
Option fair value (not market based) at grant date
€26.16
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
, from its registered offices and from Borsa Italiana S.p.A.
BE-IN long-term incentive 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 on a voluntary basis, 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 the grant date. 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 will be determined according to the amount
of the allotment value.
Allotted shares will be freely transferable from the grant date. If these shares are held for the
entire holding period, the employee will be 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.
The shares will be credited to participants annually within specific time frames, identified on a
local basis during the plan's implementation process.
Shares will therefore be credited to participants in 2023, 2024 and 2025 in relation to
performance in 2022, 2023 and 2024, respectively, and the respective additional shares will be
credited to participants in 2024, 2025 and 2026.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
505
During the plan's implementation process, 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 315 thousand have been recognised as "Personnel costs" in the income statement
at 31 December 2022 for the fair value of options granted under this plan.
The fair value of options 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%
Option fair value at grant date of conversion and premium shares
€32.93
Option fair value at grant date of loyalty shares
€28.38
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
, from its registered offices and from Borsa Italiana S.p.A.
As at 31 December 2022, there were no outstanding loans or guarantees by the Parent Company
or its subsidiaries to any of the directors, senior managers or statutory auditors.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
506
18. AMORTISATION, DEPRECIATION AND IMPAIRMENT
Details are as follows:
(Euro/thousand)
2022
2021
Depreciation of buildings, plant, machinery and equipment
3,363
3,405
Depreciation of other property, plant and equipment
1,668
1,355
Amortisation of intangible assets
25,022
19,497
Impairment of other assets
-
100
Depreciation and impairment of right-of-use assets (IFRS 16)
4,969
5,280
Total
35,022
29,637
Amortisation and depreciation charges amount to Euro 35,022 thousand in 2022, posting a net
increase of Euro 5,385 thousand on the previous year (increase of Euro 6,744 thousand in the
previous year), mainly due to higher intangible asset amortisation.
19. OTHER EXPENSES
Other expenses amount to Euro 134,392 thousand in 2022, compared with Euro 165,100
thousand in the previous year, analysed as follows:
(Euro/thousand)
2022
2021
Professional services
49,123
41,119
IT costs
34,706
33,827
Insurance
3,686
3,263
Maintenance services
9
15
Operating and other costs
27,985
28,488
Utilities
1,730
851
Travel costs
2,842
1,589
Rental costs
1,211
596
Increases in provisions for risks
50
361
Release of provisions for risks
-
(495)
Non-recurring other expenses and provisions/(releases):
Increase in provisions for risks
12,000
401
Release of provisions for risks
-
-
Business reorganisation costs
67
1,319
Other non-recurring costs
983
53,766
Total non-recurring other expenses/(income)
13,050
55,486
Total
134,392
165,100
Professional services of Euro 49,123 thousand (Euro 41,119 thousand in 2021) include costs for
the use of personnel seconded from other Group companies of Euro 15,328 thousand (Euro
11,974 thousand in 2021) and costs incurred to manage the patents portfolio of Euro 3,460
thousand (Euro 3,593 thousand in 2021).
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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
507
Rental costs amount to Euro 1,211 thousand (Euro 596 thousand in 2021).
As regards "Non-recurring other expenses and provisions", the change primarily reflects the
recognition of Euro 12,000 thousand in provisions for risks.
20. FINANCE INCOME AND COSTS
Finance costs are detailed as follows:
(Euro/thousand)
2022
2021
Interest on loans
16,801
16,435
Interest on non-convertible bond
5,188
18,750
Interest on convertible bond 2017- non-monetary component
162
5,285
Interest on convertible bond 2021- non-monetary component
9,248
8,314
Amortisation of bank and financial fees and other expenses
6,357
7,305
Interest on lease liabilities
127
243
Employee benefit interest costs
60
34
Other bank interest
10,444
1,044
Costs for undrawn credit lines
2,737
3,649
Sundry bank fees
748
248
Other
10,799
1,419
Interest Rate Swaps
11,572
7,272
Non-recurring other finance costs:
Antitrust bank guarantee and interest costs
-
-
Finance costs for partial redemption of convertible bond
-
1,929
Total non-recurring other finance costs
-
1,929
Finance costs
74,243
71,928
Foreign currency exchange losses
14,819
8,185
Total finance costs
89,062
80,113
Amortisation of bank and financial fees and other expenses mainly reflects the Company's share
of costs.
Other bank interest mainly refers to the EIB Loans (Euro 1,324 thousand), the CDP Loans (Euro
1,662 thousand) and interest on the intercompany current account with Prysmian Treasury S.r.l.
(Euro 7,458 thousand).
Finance income is detailed as follows:
(Euro/thousand)
2022
2021
Interest income from banks and other financial institutions
14
104
Other finance income
61,026
42,426
Non-recurring other finance income:
Recovery of Antitrust guarantee costs
-
-
Gain on conversion of conv. bond 2021 from equity linked to convertible
-
15,638
Total non-recurring other finance income
-
15,638
Finance income
61,040
58,168
Foreign currency exchange gains
14,058
7,395
Total finance income
75,098
65,563
Other finance income mainly refers to fees charged to Group companies for guarantees given by
the Company for their benefit.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
508
21. DIVIDENDS FROM SUBSIDIARIES
During 2022, Prysmian S.p.A. recorded a total of Euro 179,672 thousand in dividends received
from its subsidiaries Draka Holding B.V., Prysmian Cavi e Sistemi S.r.l., Prysmian Treasury S.r.l.
and Prysmian PowerLink S.r.l. The total amount of dividends reported in P&L also includes
income of Euro 63,329 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.
22. TAXES
Details are as follows:
(Euro/thousand)
2022
2021
Current income taxes
7,310
20,617
Deferred income taxes
(210)
1,137
Total
7,100
21,754
Current income taxes report an expense of Euro 7,310 thousand in 2022, compared with an
expense of Euro 20,617 thousand in 2021.
Information about deferred taxes can be found in Note 14. Current tax payables and deferred
tax liabilities.
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)
2022
Tax rate
2021
Tax rate
Profit before taxes
150,868
160,721
Theoretical tax expense at nominal tax rate
36,208
24.0%
38,573
24.0%
Dividends from subsidiaries
(40,965)
(27.2%)
(27,702)
(17.2%)
Impairment/(Revaluation) of investments in
subsidiaries
16,011
10.6%
1,200
0.7%
Other permanent differences
10,560
7.0%
5,524
3.4%
IRAP for the year
2,440
1.6%
1,333
0.8%
Other
(12,739)
(8.4%)
17,897
11.1%
Net effect of group tax consolidation for the year
(4,415)
(2.9%)
(15,071)
(9.4%)
Effective income taxes
7,100
4.8%
21,754
13.5%
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:
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
509
•
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).
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 2022, 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 has the following types of commitments at 31 December 2022:
a) Commitments to purchase property, plant and equipment and intangible assets
Contractual commitments, already given to third parties at 31 December 2022 and not yet
reflected in the financial statements, amount to Euro 2,932 thousand (Euro 1,677 thousand at
31 December 2021).
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 67 thousand at 31 December 2022, all of which relating to P.T. Prysmian Cables
Indonesia (Euro 74 thousand at 31 December 2021).
c) Other guarantees given in the interest of Group companies
These amount to Euro 7,409,383 thousand at 31 December 2022 (Euro 5,503,604 thousand at
31 December 2021), analysed as follows:
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
510
(Euro/thousand)
2022
2021
Prysmian Cavi e Sistemi S.r.l.
30,228
48,759
Prysmian Netherlands B.V.
40,293
49,258
Prysmian PowerLink S.r.l.
5,575,651
3,872,694
Prysmian Cables & Systems Limited
19,037
28,043
Prysmian Cables and Systems USA, LLC
1,674,947
1,445,036,51
Fibre Ottiche Sud - F.O.S. S.r.l.
9,855
13,280
Prysmian Cables Spain SA
49,516
42,720
Prysmian Re Company Ltd
9,855
3,814
Total
7,409,383
5,503,604
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 20,063 thousand, versus Euro 20,079 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 year ended 31 December 2022.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
511
(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)
31 December 2021
Investments in
subsidiaries
Trade and
other
receivables
and
derivatives
Trade and
other
payables and
derivatives
Employee
benefit
obligations
and other
provisions
Tax
payables
Subsidiaries
5,719,977
359,940
205,187
-
Other related parties:
Compensation of directors, statutory
auditors and key management
personnel
-
-
1,955
5,486
-
Total
5,719,977
359,940
207,142
5,486
-
(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
245,035
2,642
37,382
(27)
-
51,448
176,285
12,353
Other related
parties:
Compensation
of directors,
statutory
auditors and
key
management
personnel
-
-
1,238
-
3,703
-
-
-
Total
245,035
2,642
38,620
(27)
3,703
51,448
176,285
12,353
(Euro/thousand)
2021
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
222,026
4,870
87,712
243
-
38,968
148,551
12,353
Other related parties:
Compensation
of directors,
statutory
auditors and
key
management
personnel
-
-
1,082
-
9,835
-
-
-
Total
222,026
4,870
88,794
243
9,835
38,968
148,551
12,353
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
512
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.
Top management compensation
Top management compensation is analysed as follows:
(Euro/thousand)
2022
2021
Salaries and other short-term benefits - fixed part
2,010
3,617
Salaries and other short-term benefits - variable part
1,692
1,178
Other benefits
150
118
Share-based payments
6,262
2,563
Other costs
1,119
2,358
Total
11,233
9,835
of which Directors
11,233
8,134
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 12,655 thousand in 2022 and net non-
recurring income of Euro 22,807 thousand in 2021.
(Euro/thousand)
2022
2021
Non-recurring other income
327
63,266
Non-recurring other expenses
(12,983)
(54,167)
Non-recurring finance costs
-
(1,929)
Non-recurring finance income
-
15,638
Total
(12,655)
22,807
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 11,233 thousand in 2022 (Euro 8,134 thousand in
2021). Statutory auditors' compensation for duties performed in Prysmian S.p.A. amounts to
Euro 195 thousand in 2022 (Euro 195 thousand in 2021). 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
513
29. GROUP FINANCIAL COVENANTS
The credit agreements in place at 31 December 2022, 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);
•
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 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.
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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
514
Actual financial ratios reported at period end, calculated at a consolidated level for the Prysmian
Group, are as follows:
31.12.2022
31.12.2021
EBITDA / Net finance costs
(1)
27.26x
15.82x
Net financial debt / EBITDA
(1)
0.83x
1.63x
(1) The ratios are calculated on the basis of the definitions contained in the relevant credit agreements.
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 51,595 thousand in 2022, inclusive of
Euro 7,273 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 114,758 thousand, primarily from Euro
179,672 thousand in dividend receipts, as partially offset by Euro 38,803 thousand in capital
contributions to subsidiaries.
Financing activities generated a net outflow of Euro 265,516 thousand. This included a total of
Euro 1,249,824 thousand in loan repayments and Euro 750,000 thousand in bond redemptions.
New funds raised in the period consisted of Euro 1,335,000 thousand from new loans.
Net finance costs presented in the income statement amount to Euro 13,964 thousand and
include non-cash items; excluding these items, net cash finance costs reflected in the statement
of cash flows amount to Euro 5 thousand. Non-cash items included in net finance costs mostly
refer to non-cash interest expense on bonds and to loan arrangement costs.
After all these effects the Company's overall net cash outflow for 2022 was Euro 99,162
thousand.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
515
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 2022 for audit work and other services provided by the independent auditors EY S.p.A.:
(Euro/thousand)
Supplier of
services
Fees for 2022
Fees for 2021
Audit services
EY S.p.A.
798
756
Certification services
EY S.p.A.
363
410
Total
1,161
1,165
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 2022 have been expensed in full to income and amounted to Euro 30,485
thousand versus Euro 27,236 thousand in 2021.
34. ACCOUNTING POLICIES
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.
The distribution of dividends to shareholders is recognised as a liability in the Company's financial
statements when the distribution of such dividends is approved.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
516
SHARE-BASED PAYMENTS
Stock options are valued on the basis of the fair value determined on their grant date. This value
is charged to the income statement on a straight-line basis over the option vesting period with
a matching entry in equity. This recognition is based on the estimated number of stock options
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
options 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 as a dividend in the income statement;
c)
as an increase in the value of investments in subsidiaries, with a matching credit to an
equity reserve, for options vesting in favour of employees of Group companies.
INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries are carried 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 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.
If the recoverable amount of an investment is less than its carrying amount, then the carrying
amount is reduced to the 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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
517
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
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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
518
b)
Impairment of assets
In accordance with the accounting standards 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 not recorded any intangible assets with an indefinite useful life 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. At the same time, 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 impacts on cash flows have been
considered when preparing financial forecasts, consistent with the state of 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 process. The 2022 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
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
519
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 that it is likely there will 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, directed at almost all the Group's employees, provides an
opportunity for them to obtain shares on preferential terms and conditions. The operation of this
plan is described in Note 17. 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.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
520
36. EVENTS AFTER THE REPORTING PERIOD
Prysmian Group, a Euro 120 million loan granted by CDP in favour of innovation and
digitalization
On 6 March 2023, Prysmian Group announced a new loan of Euro 120 million granted by Cassa
Depositi e Prestiti (CDP) in order to support Research & Development plans, focused on the
implementation of innovative technologies, contribute to the consolidation of business
digitalization processes and at the same time to reduce emissions to promote the energy
transition.
The development of the R&D activity carried out by Prysmian is also in line with the Paris
Agreement, and the European Green Deal and Horizon Europe directives for the promotion of
clean, renewable energy, ensuring the interconnection of integrated systems of renewable
resources through cable systems.
37. FILING OF FINANCIAL STATEMENTS
The financial statements of Prysmian S.p.A. at 31 December 2022 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, 9 March 2023
ON BEHALF OF THE BOARD OF DIRECTORS
THE CHAIRMAN
Claudio De Conto
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
521
List of investments in subsidiaries at 31 december 2022
(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.
Milano, Via Chiese, 6
404,391
100
50,000
351,795
351,795
(14,517)
Prysmian Cavi e
Sistemi Italia
S.r.l.
Milano, Via Chiese, 6
116,282
100
77,143
73,674
73,674
(6,274)
Prysmian
PowerLink S.r.l.
Milano, Via Chiese, 6
219,821
100
100,000
117,579
117,579
(11,382)
Fibre Ottiche
Sud - F.O.S.
S.r.l.
Battipaglia, Strada
Provinciale 135
38,752
100
47,700
38,752
38,752
(28,574)
Prysmian
Treasury S.r.l.
Milano, Via Chiese, 6
83,552
100
80,000
116,433
116,433
24,797
Electronic and
Optical Sensing
Solutions S.r.l.
Milano, Via Chiese, 6
35,803
100
5,000
23,607
23,607
(251)
Prysmian Servizi
S.p.a. (*)
Milano, Via Chiese, 6
3,000
100
3,000
3,000
3,000
-
Total Italian
subsidiaries
901,601
Foreign
subsidiaries
Draka Holding
B.V.
Amsterdam,
Netherlands
4,796,127
100
52,229
4,656,115
4,656,115
46,584
Prysmian Kabel
und Systeme
GmbH
Berlin,
Germany
3,434
6.25
15,000
90,133
5,633
(853)
Prysmian Kablo
SRO
Bratislava,
Slovakia
1
0.005
21,246
12,910
-
(527)
Jaguar
Communication
Consultancy
Services Private
Ltd.
Mumbai,
India
-
0.0000010
1,817
(3)
-
(4)
Prysmian Cabos
e Sistemas do
Brasil S.A.
Sorocaba,
Brazil
-
0.040177
144,003
34,000
14
724
Total foreign
subsidiaries
4,799,562
Grand total
5,701,163
(*)
Company established on November 25
th
2022
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
522
Intercompany and related party transactions (disclosure under art.
2428 of the italian civil code)
Revenues
Costs
(Euro/thousand)
Investments in
subsidiaries
Receivables
Payables
Goods and services
Finance income
Dividends and
(impairment)/revaluation
of investments
Income (expense) from
group tax consolidation
Goods and services
Finance costs
Associated Cables Pvt. Ltd
-
2
-
-
-
-
-
-
-
Auto Cable Tunisie
-
3
-
-
-
-
-
-
-
Cables Electricos Ecuatorianos C.A.
-
3
-
-
-
-
-
-
-
Cobre Cerrillos S.A.
-
2,960
(105)
(836)
-
-
-
76
-
Conducen, SRL
-
1,735
(187)
(890)
-
-
-
188
-
Draka Belgium N.V.
-
-
-
(1)
-
-
-
-
-
Draka Comteq Berlin GmbH & Co KG
-
215
-
(724)
-
-
-
-
-
Draka Comteq Cabos Brasil SA
-
-
(23)
-
-
-
-
-
-
Draka Comteq Fibre BV
-
990
(138)
(494)
-
-
-
278
-
Draka Comteq France SAS
-
5,056
(70)
(2,982)
-
-
-
70
-
Draka Comteq Germany GmbH & Co.KG
-
3,140
(129)
(50,403)
-
-
-
147
-
Draka Comteq UK Limited
-
435
(49)
(642)
-
-
-
139
-
Draka Durango S. de R.L. de C.V.
-
1
(23)
(1)
-
-
-
-
-
Draka Elevator Products INC
-
3,072
(13)
(1,256)
-
-
-
(1)
-
Draka Elevator Products, Inc.
-
20
-
(28)
-
-
-
-
-
Draka Fileca S.A.S.
-
1,105
-
(854)
-
-
-
-
-
Draka Holding B.V.
4,796,127
9,345
(330)
(1,213)
-
(168,598)
-
778
-
Draka Kabely SRO
-
8,951
(48)
(157,948)
-
-
-
122
-
Draka Paricable SAS
-
-
-
(15)
-
-
-
-
-
Draka Philippines Inc.
-
1,448
(19)
(37,012)
-
-
-
15
-
Draka Transport USA LLC
-
(299)
-
(2,364)
-
-
-
-
-
EHC Canada Inc.
-
634
-
-
-
-
-
-
-
EHC Engineered Polymer (Shanghai) Co. Ltd.
-
19
-
-
-
-
-
-
-
EHC Escalator Handrail (Shanghai) Co. Ltd.
-
333
-
-
-
-
-
-
-
EHC Germany GmbH
-
21
-
-
-
-
-
-
-
EHC Lift Components (Shanghai) Co. Ltd.
-
23
-
-
-
-
-
-
-
EHC USA Inc.
-
8
-
-
-
-
-
-
-
Electronic and Optical Sensing Solutions S.r.l.
35,803
1,242
-
(263)
-
(530)
(133)
-
-
EURELECTRIC TUNISIE
S.A.
-
262
-
-
-
-
-
-
-
Fibre Ottiche Sud - F.O.S. S.r.l.
38,752
1,151
(1,039)
(618)
-
66,537
-
940
-
General Cable Celcat, Energia e Telecomunicacoes SA
-
6,298
(16)
(82,081)
-
-
-
39
-
General Cable Company Ltd.
-
2,226
-
(1,696)
-
-
-
-
-
General Cable Condel, Cabos de Energia e
Telecomunicacoes SA
-
3
-
-
-
-
-
-
-
General Cable Corporation
-
(46)
-
(4)
-
-
-
(4)
-
General Cable de Mexico, S.A de C.V.
-
128
54
(523)
-
-
-
21
-
Grupo General Cable Sistemas, S.L.
-
6,333
(8)
(83,211)
-
-
-
43
-
Jaguar Communication Consultancy Services Private Ltd.
-
484
-
-
-
-
-
-
-
LLC Prysmian RUS
-
1,404
(59)
(297)
-
-
-
-
-
LLC Rybinskelektrokabel
-
288
(86)
-
-
-
-
5
-
MCI-Draka Cable Co. Ltd
-
4,145
(101)
(569)
-
-
-
43
-
Nantong Zhongyao Draka Elevator Products Co. LTD
-
-
-
-
-
-
-
-
-
Norddeutsche Seekabelwerke GmbH
-
2,121
(340)
(477)
-
-
-
615
-
Oman Aluminium Processing Industries LLC
-
3
(3,872)
-
-
-
-
48,136
-
Oman Cables Industry (SAOG)
-
358
(355)
(375)
-
-
-
610
-
Omnisens SA
-
998
-
(15)
-
-
-
-
-
P.O.R. S.A.S.
-
-
(1,391)
-
-
-
-
1,391
-
P.T. Prysmian Cables Indonesia
-
560
(11)
(1,006)
-
-
-
15
-
Power Cables Malaysia
SND
–
BHD
-
-
(5)
-
-
-
-
-
-
Prestolite de Mexico, S.A. de C.V.
-
429
-
-
-
-
-
-
-
Productora de Cables Procables S.A.S.
-
1,023
(13)
(574)
-
-
-
8
-
Projects Germany GmbH
-
58
-
(19)
-
-
-
-
-
Prysmian - OEKW GmbH
-
288
-
(16)
-
-
-
-
-
Prysmian (CHINA) Investment Company Ltd
-
1,620
(27)
(6)
-
-
-
(15)
-
Prysmian Australia PTY Ltd
-
5,261
(379)
(5,242)
-
-
-
407
-
Prysmian Cable (Shanghai) Trading
Co Ltd - Suzhou Branch
-
9
-
-
-
-
-
-
-
Prysmian Cables & Systems Limited
-
28,010
(1,150)
(239,366)
(344)
-
-
2,119
-
Prysmian Cables (Shanghai) Trading CO. Ltd
-
2,061
(44)
(164)
-
-
-
-
-
PRYSMIAN CABLES AND SYSTEMS (US) INC.
-
1
-
-
-
-
-
-
-
Prysmian Cables and Systems Canada LTD
-
2,421
(10)
(5,323)
-
-
-
36
-
Prysmian Cables and Systems USA, LLC
-
66,240
(4,217)
(26,094)
(13,737)
(3)
-
22,699
-
Prysmian Cables et Systèmes France SAS
-
27,861
(459)
(277,957)
(406)
-
-
936
-
Prysmian Cables Spain, S.A. (Sociedad Unipersonal).
-
21,818
(599)
(118,935)
(265)
-
-
962
-
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
523
Prysmian Cables y Sistemas de Mexico S. de R.L. de C.V.
-
729
(60)
(48)
-
-
-
59
-
Prysmian Cabluri Si Sisteme S.A.
-
14,953
(215)
(90,789)
-
-
-
217
-
Prysmian Cabos
e Sistemas do Brasil S.A.
-
8
(410)
(166)
-
-
-
528
-
Prysmian Cavi e Sistemi Italia S.r.l.
116,282
11,424
(692)
(46,203)
-
(1,699)
-
1,078
-
Prysmian Cavi e Sistemi S.r.l.
404,390
51,256
-
(77,521)
-
(35,786)
368
3
-
Prysmian Construction Services Inc.
-
32
-
-
-
-
-
-
-
Prysmian Energia Cables y Sistemas de Argentina S.A.
-
190
(54)
(136)
-
-
-
8
-
Prysmian Group Baltics AS
-
9,976
(26)
(72,713)
-
-
-
26
-
Prysmian Group Denmark A/S
-
945
-
(46)
-
-
-
-
-
Prysmian Group Finland OY
-
21,428
(399)
(248,649)
-
-
-
1,231
-
Prysmian Group Norge AS
-
3,257
-
(808)
-
-
-
50
-
Prysmian Group North Europe AB
-
9,314
(110)
(45,507)
-
-
-
203
-
Prysmian Group Specialty Cables LLC
-
1,236
-
(1,426)
-
-
-
-
-
Prysmian Hong Kong Holding Limited
-
23
-
(71)
-
-
-
-
-
Prysmian Kabel und Systeme GmbH
3,434
22,195
(448)
(60,107)
-
-
-
642
-
Prysmian Kablo SRO
1
1,155
(5)
(2,978)
-
-
-
20
-
Prysmian MKM Magyar Kabel Muvek Kft
-
15,914
(65)
(320,628)
-
-
-
103
-
Prysmian Netherlands B.V.
-
16,919
(342)
(165,843)
(739)
-
-
641
-
Prysmian New Zealand Ltd.
-
260
-
(41)
-
-
-
-
-
Prysmian Poland SP. ZOO
-
220
-
(26)
-
-
-
-
-
Prysmian Power Link Srl
219,822
42,388
(642)
(124,611)
(38,638)
(21,081)
(1,844)
986
-
Prysmian Powerlink Services Ltd.
-
270
-
(36)
-
-
-
-
-
Prysmian PowerLink Srl
-
588
-
-
-
-
-
-
-
Prysmian RE Company Designated Activity Company
-
4,434
-
(4,434)
-
-
-
-
-
Prysmian Servizi S.p.A.
3,000
-
-
-
-
-
-
-
-
Prysmian Spain SA EPC-Branch South Africa
-
-
(44)
-
-
-
-
131
-
Prysmian Technology Jiangsu Co. Ltd.
-
1,059
-
(109)
-
-
-
5
-
Prysmian Tianjin Cables Co. Ltd.
-
30
-
-
-
-
-
-
-
Prysmian Treasury Srl
83,552
13,171
(748,509)
(753)
(14,412)
(15,125)
(5,087)
(366)
17,080
Prysmian Wuxi Cable Company Ltd
-
3,651
-
(1,075)
-
-
-
-
-
RAVIN CABLES LIMITED (India)
-
25
-
-
-
-
-
-
-
SILEC Cable, S.A.S.
-
14,288
(11)
(82,581)
-
-
-
144
-
Sindutch Cable Manufacturer Sdn Bhd
-
731
(40)
(1,084)
-
-
-
43
-
Singapore Cables Manufacturers Pte Ltd
-
5,627
(62)
(386)
-
-
-
62
-
Société Ivoirienne De Cables S.A.
-
8
-
(1)
-
-
-
-
-
Suzhou Draka Cable Co. Ltd
-
3,785
(242)
(328)
-
-
-
237
-
Turk Prysmian Kablo Ve Sistemleri A.S.
-
20,195
(106)
(23,721)
-
-
-
147
-
TOTAL
5,701,163
515,958
(767,746)
(2,475,314)
(68,541)
(176,287)
(6,696)
87,016
17,080
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
524
4. Certification of the Financial Statements pursuant to art. 81-ter of
CONSOB regulation 11971 dated 14 may 1999 and subsequent
amendments and additions
1.
The undersigned Valerio Battista, as Chief Executive Officer, 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. 1-bis of Italian Legislative
Decree 58 dated 24 February 1998, that during 2022 the accounting and administrative
processes for preparing the 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 financial
statements at 31 December 2022 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 financial statements at 31 December 2022:
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, 9 March 2023
Valerio Battista
Stefano Invernici
Alessandro Brunetti
Chief Executive Officer
Managers responsible for preparing company financial reports
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
525
Proposal to approve the financial statements and to allocate net profit
for 2022
Shareholders,
We are submitting the financial statements for the year ended 31 December 2022 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 2022, which close with a net
profit of Euro 143,767,869 and
RESOLVES
a)
to approve:
•
the report on operations by the Board of Directors;
•
the financial statements at 31 December 2022;
as presented by the Board of Directors - as a whole and in their individual parts, along with the
proposed provisions - which report a net profit of Euro 143,767,869;
b)
to allocate the net profit for the year as follows:
•
Euro 950,000 to the “Reserve for share issues pursuant to art. 2349 of the Italian Civil
Code”, subject to approval by today’s shareholders’ meeting of both the long-term
incentive plan, which also envisages the possibility of granting new issue shares, and the
capital increase to service said incentive plan;
•
Euro 158 million to pay a gross unit dividend of Euro 0.60 to each ordinary voting share
(taking account of directly held treasury shares), drawn from the residual net profit for
the year and around Euro 15 million from “Retained earnings”.
The dividend will be paid out from 26 April 2023, with record date 25 April 2023 and ex-div date
24 April 2023.
Milan, 9 March 2023
ON BEHALF OF THE BOARD OF DIRECTORS
THE CHAIRMAN
Claudio De Conto
5. AUDITORS’ REPORT
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
527
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
528
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
529
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
530
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
531
6. REPORT OF THE BOARD OF
STATUTORY AUDITORS
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
533
REPORT BY THE BOARD OF STATUTORY AUDITORS TO THE SHAREHOLDERS OF PRYSMIAN S.P.A.
PURSUANT TO ART. 153 ITALIAN LEGISLATIVE DECREE 58/1998
Shareholders,
This report describes the activities performed by the Board of Statutory Auditors of Prysmian S.p.A. (the "Company" and
together with its subsidiaries, the "Group") during the year ended 31 December 2022.
Prysmian S.p.A. is the holding company at the head of a Group that is one of the world's leading operators in the cable
industry, active in the development, design, production, supply and installation of a wide range of land and submarine
cables for various applications in the energy and telecommunications sectors
.
During the year ended 31 December 2022, Prysmian's Board of Statutory Auditors, appointed by the shareholders in their
meeting of 12 April 2022, carried out the supervisory activities required by law, also taking into account the Standards
contained in the Rules of Conduct for Boards of Statutory Auditors, recommended by the Italian accounting profession
(
Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili
), and Consob communications on company
oversight and activities by the Board of Statutory Auditors.
The Board of Statutory Auditors therefore reports that, during the year ended 31 December 2022, it systematically
acquired - starting from the date of its appointment - the information required to perform its duties both through
participation in meetings of the Board of Directors, the Control and Risks Committee, the Remuneration and Nominations
Committee and the Sustainability Committee, and through interviews with managers and representatives of company
structures, as well as review of documentation and verification activities.
The governing bodies have reported to us at least once every quarter on the activities carried out, on the most important
transactions in financial and economic terms, on any transactions in potential conflict of interest, as well as on any atypical
or unusual transactions and on any other activity or transaction considered necessary to bring to our attention
.
***********
1.
In performing its supervisory and audit activities, the Board of Statutory Auditors confirms that it has verified that
the transactions of major financial and economic significance approved and executed comply with the law and the
Company's By-laws and are not manifestly imprudent, risky, in potential conflict of interest, in contrast with
resolutions adopted by the shareholders in general meetings, nor such as to compromise the integrity of the
Company's net assets.
Furthermore, we confirm that we have not found any atypical and/or unusual transactions with Group companies,
third parties or related parties, nor have we received information in this regard from the Board of Directors, the
Independent Auditors, or the director responsible for the internal control and risk management system. The Board of
Directors have provided adequate information in their Report about the effects of ordinary transactions entered into
with subsidiaries on an arm's length basis that have an important financial or economic impact.
2.
The Directors have identified and described the main related party and intercompany transactions as part of the
comments to the separate and consolidated financial statements (hereinafter also referred to as the "financial
statements" for brevity); reference should be made to these sections, also for a description of the characteristics of
such transactions and their effects on profit or loss
.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
534
With regard to related party transactions, the Board of Statutory Auditors reports that, in compliance with the Consob
requirements set out in Resolution 17221 of 12 March 2010 (and subsequent amendments and additions thereto), the
Company has adopted a specific procedure, which is summarised in the "Report on Corporate Governance and
Ownership Structure of Prysmian S.p.A. - 2022", to which reference should therefore be made. This procedure, which
has been revised and updated over time, can be consulted on the Company's website www.prysmiangroup.com in the
"Company/Governance" section
.
The Board of Statutory Auditors has monitored the compliance of the procedures adopted with the principles
recommended by Consob and their actual observance, and has no remarks to make as to the fairness of ordinary
related party transactions and their alignment with the Company's interests
.
3.
The Board of Statutory Auditors considers that the information regarding related party transactions provided by the
Directors in the Notes to the financial statements of Prysmian S.p.A. is adequate.
4.
EY S.p.A. (hereinafter also referred to as the "Independent Auditors") have issued unqualified Audit Reports, dated
today, on the separate and consolidated financial statements for the year ended 31 December 2022, pursuant to art.
14 of Italian Legislative Decree 39 dated 27 January 2010 and art. 10 of Regulation (EU) 537/2014.
The Independent Auditors' Report contains the following opinions and representations:
i. the opinion that the separate financial statements and consolidated financial statements of Prysmian S.p.A. give a
true and fair view of the statement of financial position of the Company and the Group at 31 December 2022, of
their results of operations and cash flows for the year then ended, in compliance with the International Financial
Reporting Standards adopted by the European Union, and with the provisions that implement art. 9 of Italian
Legislative Decree 38 dated 28 February 2005.
The reports set out - as required by the regulations - the key audit
matters, indicated below
.
•
In the separate financial statements: recoverability of the carrying amount of investments in subsidiaries.
•
In the consolidated financial statements: recognition of revenues and margins from construction contracts
and risks related to ongoing and completed contracts; and recoverability of the carrying amount of goodwill.
The aforementioned Audit Reports do not contain any emphasis of matter
.
ii. a consistency opinion that the Directors' Reports accompanying the separate and consolidated financial statements
at 31 December 2022 and certain specific information contained in the "Report on Corporate Governance and
Ownership Structure", as required by art. 123-bis, para. 4 of Italy's Unified Finance Act, for which the Company's
directors are responsible, have been prepared in compliance with the law;
iii. a compliance opinion that the separate and consolidated financial statements have been prepared in XHTML
format, in accordance with the provisions of European Commission Delegated Regulation (EU) 2019/815;
iv. a statement that, based on their knowledge and understanding of the business and related environment gained
during the audit, they have no matters to report with regard to any material misstatements in the Directors' Reports.
EY S.p.A. has also issued today the following other reports:
-
the Additional Report to the Board of Statutory Auditors, in its capacity as the Audit Committee, prepared in
accordance with art. 11 of Regulation (EU) 537/2014, which will be forwarded to the Board of Directors as
required by current regulations.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
535
-
the Report on the Consolidated Non-Financial Statement, prepared pursuant to art. 3, para. 10 of Italian Legislative
Decree 254 dated 30 December 2016 and art. 5 of Consob Regulation 20267 dated 18 January 2018, in which it
represents that no evidence has come to its attention that causes it to believe that Prysmian Group's Consolidated
Non-Financial Statement for the year ended 31 December 2022 has not been prepared, in all material aspects, in
accordance with the requirements of articles 3 and 4 of the aforementioned Decree and with the GRI standards.
EY S.p.A. has also issued today their Statement of Independence, as required by art. 6 of Regulation (EU)
537/2014, from which no evidence emerges that could compromise their independence.
Lastly, the Board of Statutory Auditors acknowledges the Transparency Report prepared by the Independent
Auditors and published on their website in accordance with art. 18 of Italian Legislative Decree 39/2010.
5.
During 2022, and up to the date of preparing this Report, the Board of Statutory Auditors has not received any
complaints under art. 2408 of the Italian Civil Code
.
6.
During 2022, and up to the date of preparing this Report, the Board of Statutory Auditors has not received any other
formal complaints. During the course of its activities and based on the information obtained, the Board of Statutory
Auditors has not observed any omissions, misconduct, irregularities or any other circumstances that would require
reporting to the external Supervisory Authority or disclosure in the present report.
7.
In addition to the duties required by law in respect of listed companies, EY S.p.A. and firms within the EY network
have been engaged to perform additional services other than the statutory audit, the fees for which have been disclosed
in the notes to the consolidated financial statements as required by art. 149-duodecies of the Issuer Regulations, to
which reference should be made. The permitted non-audit services were approved in advance on a case-by-case basis
in accordance with the procedure adopted by the Board of Statutory Auditors, which reviewed their compliance and
relevance with reference to the criteria contained in Regulation (EU) 537/2014.
8.
The Board of Statutory Auditors has monitored the independence of the audit firm, which issued, today, the annual
statement confirming its independence, pursuant to art. 6, para. 2), letter a), of Regulation (EU) 537/2014 and para.
17 of Italian International Audit Standard 260 (ISA Italia 260)
.
Having reviewed the above statement of independence issued by EY S.p.A. and its transparency report, as well as
the engagements awarded to EY S.p.A. and firms in its network, the Board of Statutory Auditors believes there are
no critical issues concerning the independence of EY S.p.A.
9.
On 9 March 2023, the Board of Statutory Auditors issued the Board of Directors with its opinion, provided in
accordance with art. 2389, para. 3, of the Italian Civil Code, on the variable remuneration of the Chief Executive
Officer and other Executive Directors for 2022, also in relation to such remuneration due to them under the LTI plan
.
In accordance with Italy's Corporate Governance Code (the "Corporate Governance Code"), the Board of Statutory
Auditors was consulted when setting the parameters underlying the achievement of functional objectives for the
variable remuneration of the Chief Compliance & Internal Audit Officer
.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
536
10.
As disclosed in the "Report on Corporate Governance and Ownership Structure of Prysmian S.p.A. - 2022", the
Company's Board of Directors held 8 meetings during 2022; the Control and Risks Committee held 9 meetings; the
Remuneration and Nominations Committee held 11 meetings; the Sustainability Committee held 10 meetings. In
addition, two meetings of the Independent Directors were held in 2022
.
The Board of Statutory Auditors previously in office until 12 April 2022 met 4 times. The current Board of Statutory
Auditors has met 10 times since its appointment on 12 April 2022 until the end of 2022 (of which 2 meetings were
held, in whole or in part, jointly with the Control and Risks Committee).
In addition, at least one member of the Board of Statutory Auditors was present in 2022 at:
(ii) every meeting of the Board of Directors;
(iii) every meeting of the Control and Risks Committee, the Remuneration and Nominations Committee and the
Sustainability Committee.
There is also a Monitoring Board, an independent collegial body established in accordance with art. 6, para. 1 (b) of
Italian Legislative Decree 231/2001; the current Monitoring Board has been in office since 28 April 2021 and will
remain so until approval of the financial statements for the year ended 31 December 2023.
When appointing the Monitoring Board's members, the Board of Directors also heeded the recommendation
contained in the Corporate Governance Code to appoint at least one non-executive director and/or member of the
Board of Statutory Auditors and/or head of the Company's legal or audit functions, in order to ensure coordination
between the various parties involved in the internal control and risk management system. The Monitoring Board is
therefore composed of two external members (one of whom has been appointed Chairman) and an internal member,
in the person of the Group's Chief Compliance & Internal Audit Officer. The composition of the Monitoring Board
remained unchanged in 2022.
The Board of Statutory Auditors met with the Monitoring Board during the course of the year for a mutual exchange
of information. The Monitoring Board has reported on its activities during the year and has not notified the Board
of Statutory Auditors of any significant matters.
11.
The Board of Statutory Auditors has examined and monitored, to the extent of its remit, the observance of good
management practices, by participating in the meetings of the Board of Directors and the various Committees, by
gathering information from the Chief Executive Officer and the Company's management, the Chief Compliance &
Internal Audit Officer, the Managers responsible for preparing financial reports, the Risk Management structure
headed by the Group Chief Risk Officer and the other second-tier control functions, as well as through interviews
with the aforementioned persons and representatives of the independent audit firm EY S.p.A., for the purpose of
mutual exchange of relevant data and information; as a result of the aforementioned activities, the Board of Statutory
Auditors has no observations to make in this regard
.
The Board of Statutory Auditors has monitored compliance with the law and the Company's by-laws. In particular,
with regard to the decision-making processes of the Board of Directors, the Board of Statutory Auditors has verified,
also through direct participation in Directors' meetings, that the management decisions taken by the Directors
complied with the law and the Company's by-laws and that the related resolutions were adequately supported by
processes of information, analysis, verification and debate, including, when deemed necessary, by consulting
committees and external professionals for advice. The Board of Statutory Auditors has also verified, to the best of its
knowledge, that the Directors had made the declarations pursuant to art. 2391 of the Italian Civil Code.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
537
No critical issues have emerged as a result of meetings with the Boards of Statutory Auditors and sole Statutory
Auditors of the Company's Italian subsidiaries.
12.
The Board of Directors plays a role of strategic guidance and supervision, in that it is responsible, among other things,
for defining the strategies of the Company and the Group, as well as overseeing their implementation. The Board
pursues the Company's interests, with a view to creating long-term value for the benefit of shareholders, as well as
taking into account the interests of other stakeholders relevant to the Company
.
To execute its resolutions and to manage the business, the Board of Directors, in compliance with legal and statutory
limits, may delegate appropriate powers to one or more directors, who must report to the Board of Directors and the
Board of Statutory Auditors - promptly and in any case at least on a quarterly basis - on the activities carried out, on
the Company's general performance and outlook and on its transactions with the most significant financial and
economic impact.
The Company is currently managed by a Board of Directors consisting of twelve directors. The three-year term of
office of the current Board of Directors began on 28 April 2021 and will end on the date the shareholders meet to
approve the financial statements for the year ended 31.12.2023. The Shareholders' Meeting of 28 April 2021
appointed the current Board of Directors, which took office on the same date.
Since then through to the current date, the office of Chairman has been held by Claudio De Conto, the Company's
legal and judicial representative, while the office of Chief Executive Officer has been conferred on Valerio Battista.
The Chief Executive Officer is considered the main person responsible for managing the Company, after the Board
of Directors, in its meeting of 28 April 2021, vested him with powers to represent the Company legally and judicially,
and with all ordinary management powers and authority necessary or useful for the performance of the Company's
business in its various forms, none excluded with the exception of those otherwise attributed by law and/or regulation
or by the By-laws, to be exercised as a sole signatory, unless otherwise specified, and with the right to sub-delegate.
The Chief Executive Officer is also responsible for creating and maintaining - in execution of the guidelines
established by the Board of Directors - the internal control and risk management system, pursuant to
recommendations 32b) and 34 of the Corporate Governance Code.
Directors Pier Francesco Facchini (CFO) and Massimo Battaini (COO) have been granted management powers by
the Board of Directors and are therefore, together with the CEO, Executive Directors.
The Company has adopted an organisational model that envisages governance of the main activities necessary for
the management, control and development of its business. Under this model, the following functions report to the
Chief Executive Officer as at the date of this Report
:
•
Communication;
•
Finance, Administration & Control & IT;
•
HR & Organization;
•
Corporate Affairs;
•
Innovation;
•
Corporate Strategy & Development;
•
Sustainability;
•
Strategic Advisor;
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
538
•
Project Division;
•
Energy Division;
•
Telecom Division;
•
Chief Operating Officer.
The role of Manager responsible for preparing financial reports is entrusted jointly - taking into account the
Company's organisational structure - to the head of Group Administration, in the person of Stefano Invernici, and to
the head of Group Planning & Control, in the person of Alessandro Brunetti.
The Audit function, which reports directly to the Board of Directors, is entrusted to the Chief Compliance & Internal
Audit Officer, in the person of Alessandro Nespoli.
The Board of Statutory Auditors has become acquainted with, to the extent of its remit, the organisational architecture
chosen by the Company and its implementation and development; it has thus monitored the adequacy of the
organisational structure and its operation, taking into account the Company's objectives, and, as a result of these
activities, has no observations to make in this regard
.
13.
The Board of Statutory Auditors has monitored the implementation and proper operation of the Company's internal
control and risk management system (hereinafter, for the sake of brevity: the internal control system), assessing its
adequacy, with a view to continuous improvement, including through: (i) meetings with the Control and Risks
Committee; (ii) periodic meetings with the Chief Compliance
& Internal Audit Officer; (iii) periodic meetings with
the Chief Risk Officer and with the Managers responsible for preparing the Company's financial reports; (iii) periodic
meetings with the heads of other corporate functions, with particular reference to those functions entrusted with
second-tier control activities; and (iv) obtaining documentation
.
The purpose of these periodic meetings was, among other things, to review the activities carried out by these
functions, risk mapping and audit programmes, also in light of the Company's significant growth in size and changes
in its procedures and organisation. The Board of Statutory Auditors has also examined the periodic reports of the
Control and Risks Committee and of the Chief Compliance & Internal Audit Officer concerning, in particular, audits
of the operation of the internal control system in the various business areas.
The Board of Statutory Auditors has also systematically met with the appointed Independent Auditors for a periodic
exchange of information between the various audit bodies.
The internal control system is currently structured and operates according to the principles and criteria of the
Corporate Governance Code. It is an integral part of the Company's general organisational structure and involves a
plurality of players acting in a coordinated manner according to the respective responsibilities of: (i) the Board of
Directors, for strategic guidance and supervision; (ii) the CEO and management, with particular reference to the
functions responsible for performing second-tier controls, for supervision and management; (iii) the Control and
Risks Committee and the Chief Compliance & Internal Audit Officer, for monitoring and providing support to the
Board of Directors; and (iv) the Board of Statutory Auditors. for supervision.
The establishment and maintenance of the internal control system is currently entrusted to the Chief Executive Officer
and, within their area of responsibility, to the Managers responsible for preparing the Company's financial reports,
so as to ensure the overall adequacy of the system and its actual operation, in a risk-based perspective, which is also
taken into account when defining the agenda of Directors' meetings.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
539
In accordance with the Self-Regulatory Principles adopted by the Company, in exercising its responsibility for the
internal control and risk management system, the Board of Directors also relies on the Audit function, which is
organisationally independent and provided with adequate and sufficient resources to perform its activities. In
particular, in the course of 2022 the Audit function also called upon the support - when necessary, to perform its
activities - of independent consulting firms.
With specific reference to the structure of the internal control system, the Board of Statutory Auditors has also
observed the gradual implementation and evolution of the process implemented by the Company, in line with
benchmark best practices, which have allowed the Company's approach to risk management and compliance to evolve
from a "traditional" model towards an integrated, coordinated approach, both methodologically and organisationally,
also with a view to strengthening second-tier control activities.
Effective 24 January 2006, the Board of Directors adopted its own Organisation, Management and Control Model
(the "231 Organisational Model"), which is periodically reviewed and updated. The Group's other Italian companies
have in turn adopted their own 231 Organisational Models in line with the specific nature and different businesses of
each. On 1 March 2022, the Board of Directors approved the latest revision of the Company's Organisational Model;
among other things, this revision reflected changes in the organisational and legislative framework and, following
risk assessment, updated processes and sensitive activities potentially exposed to the risk of offences, also in order
to align them with current operating practices, as well as certain key controls, in accordance with the regulations
currently in force.
Further information about the internal control system can be found in the "Report on Corporate Governance and
Ownership Structure of Prysmian S.p.A. - 2022".
The Board of Statutory Auditors has examined the overall assessment of the internal control and risk management
system by the Chief Compliance & Internal Audit Officer and the Control and Risks Committee.
The Board of Statutory Auditors considers the internal control and risk management system to be adequate overall.
In particular, the Board of Statutory Auditors has monitored the actions taken by the Company
–
making, where
deemed necessary, suggestions and proposals for improvements - for the continuous strengthening of the internal
control system, and has recommended that the Company continue along this path
.
14.
The Board of Statutory Auditors - also in its capacity as the Audit Committee - has assessed and monitored the
adequacy of the administrative and accounting system and its reliability in correctly representing business operations,
by obtaining information from the heads of the relevant company departments, examining documents and monitoring
the activities and analysing the results of the work performed by EY S.p.A.; we have no observations to make as a
result of these activities
.
The Board of Statutory Auditors has acknowledged the certifications issued by the Chief Executive Officer and the
Managers responsible for preparing financial reports regarding the adequacy - in relation to the characteristics of the
business - and the effective application during 2022 of the administrative and accounting procedures for the
preparation of the statutory financial statements.
With reference to impairment testing of goodwill and assets with an indefinite useful life, in application of
international accounting standards, the Board of Statutory Auditors has overseen (i) the adoption - and periodic
updating - by the Board of Directors of a specific procedure and, subsequently, (ii) the results of the related tests
carried out by management, which have confirmed the recoverability of these assets.
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
540
The Independent Auditors have issued today their Additional Report, prepared in accordance with art. 11 of
Regulation (EU) 537/2014, which has not revealed the presence of any weaknesses detected in the system of internal
controls over the financial reporting process, of sufficient importance to warrant being brought to the attention of the
Board of Statutory Auditors.
The Board of Statutory Auditors has overseen the Company's preparation of the Consolidated Non-Financial
Statement of Prysmian S.p.A. and its subsidiaries. In addition, the Company has prepared an Integrated Annual
Report containing its Consolidated Non-Financial Statement for 2022. EY S.p.A. was engaged to perform a limited
assurance audit of this statement, as a result of which it has issued today its report in accordance with art. 3, para. 10,
of Italian Legislative Decree 254/2016 and art. 5 of Consob Regulation 20267/2018. In this report, the Independent
Auditors have concluded, on the basis of the work performed, that no matters have come to its attention that would
suggest that the Consolidated Non-Financial Statement has not been prepared, in all material aspects, in accordance
with the requirements of art. 3 and art. 4 of the aforementioned decree and the selected GRI Standards, as described
in the "Methodology" section of the Consolidated Non-Financial Statement.
The Board of Statutory Auditors has reviewed the related report by EY S.p.A. and has overseen compliance with the
provisions established by Italian Legislative Decree 254/2016
.
15.
The Board of Statutory Auditors has confirmed, also through meetings with the Managers responsible for preparing
financial reports and the Independent Auditors, compliance with the requirement of art. 114, para. 2, of Italian
Legislative Decree 58/1998, for subsidiaries to provide all the information necessary to fulfil the disclosure
obligations required by law and Regulation (EU) 596/2014. Subsidiaries transmit the required information in a timely
manner
.
The Board of Statutory Auditors has also found that the information provided by subsidiaries located outside the
European Union is adequate for the audit of the annual and interim financial reports, as required by art. 15 of the
Market Regulations adopted under Consob Resolution 20249 dated 28 December 2017
.
16.
The Board of Statutory Auditors has confirmed, through direct checks and information obtained from EY S.p.A., that
the financial statements and directors' report comply with the rules and laws concerning preparation and layout
.
17.
The Company has adopted Italy's Corporate Governance Code (2020 version), drawn up by the Corporate
Governance Committee of the Italian Stock Exchange. The Board of Statutory Auditors has monitored the
arrangements for implementing the Corporate Governance Code for Listed Companies adopted by the Company, as
described in the Report on Corporate Governance and Ownership Structure approved by the Board of Directors on 9
March 2023.
In addition, the Board of Statutory Auditors confirms that it has taken part in induction sessions aimed at deepening
its knowledge of the company and group organisation, business sectors and strategies, in line with the
recommendations of the Corporate Governance Code.
18.
The Board of Statutory Auditors has overseen the activities to confirm the requirements and correct application of
the criteria for directors' independence. The Board of Statutory Auditors has also verified that its own members meet
the independence requirements, pursuant to art. 148, para. 3, of Italian Legislative Decree 58/1998, and has carried
PRYSMIAN GROUP | C. PARENT COMPANY FINANCIAL STATEMENTS
541
out a self-assessment, concluded on 3 March 2023, which concerned, among other things, the operation of the board
itself. Furthermore, it has been verified that the members of the Board of Statutory Auditors, pursuant to art. 19 of
Italian Legislative Decree 39/2010, are, as a whole, competent in the sector in which the Company operates
.
Further information about the Company's corporate governance can be found in the specific section of the "Report
on Corporate Governance and Ownership Structure of Prysmian S.p.A. - 2022".
The Board of Statutory Auditors has monitored that the aforementioned Report provides full disclosure about how
the Company has adopted and implemented the recommendations of the Corporate Governance Code.
In addition, the Board of Statutory Auditors has verified that the 2023 Report on Remuneration Policy and
Compensation Paid, prepared in accordance with art. 123-ter of Italian Legislative Decree 58/1998 and approved by
the Board of Directors on 9 March 2023, has been prepared in accordance with applicable requirements and provides
adequate information about the Company's remuneration policy and compensation paid during the year. This Report
also takes into account the amendments made, further to Consob Resolution 21623 of 10 December 2020, to art. 84-
quater and to Schedule No. 7-bis of Annex 3A of the Issuers' Regulations, following the transposition of Directive
(EU) 2017/828 on the encouragement of long-term shareholder engagement (SHRD 2)
.
19.
The supervisory and audit activities carried out by the Board of Statutory Auditors have not revealed any significant
facts that should be disclosed or mentioned in this Report
.
20.
Given the results of the specific work performed by the Independent Auditors to audit the accounts and verify the
reliability of the financial statements, as well as our own supervisory activities, the Board of Statutory Auditors can
find no reasons to object to the approval of the proposed resolutions presented by the Board of Directors to the
Shareholders' Meeting. The Board of Statutory Auditors expresses a favourable opinion on the approval of the
financial statements for 2022, together with the Directors' Report, and has no objections to the Board of Directors'
proposal for the allocation of the net profit for the year, and for the distribution of a dividend from the net profit for
the year and from retained earnings.
Milan, 17 March 2023
The Board of Statutory Auditors
Stefano Sarubbi
Laura Gualtieri
Roberto Capone
