CONNECT TO LEAD
2023
Integrated Annual Report
The planet's pathways
Disclaimer
This document contains forward-looking statements, specifically in the section entitled and "Business outlook", that relate to future events and the operating, economic and financial results of Prysmian. 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.
"Connect, to lead" represents the essence of Prysmian's mission and strategic vision. We want to connect the world and together lead the energy transition and digital transformation. We want to push ourselves further and further. Beyond the boundaries of innovation, developing sustainable technologies and solutions in tune with the evolving dynamics of the market. To be the leaders. To be a driving force behind the transformation
Index
Letter from the CEO | 7 | |
A. INTEGRATED ANNUAL REPORT | 9 | |
1. | Introduction: Prysmian approach to the integrated report | 9 |
2. | Highlights | 10 |
Key financial, operating and ESG performance data | 10 | |
3. | Prysmian: Connect, to lead | 12 |
Global leadership | 12 | |
The DNA of Prysmian: mission, vision and values of the Group | 14 | |
Favorable market development: 4 macro-trends | 15 | |
Prysmian's competitive advantages | 16 | |
Prepared for the future | 17 | |
The pillars of the Prysmian's strategy | 18 | |
Prysmian's business model | 20 | |
4. | Prysmian: Sustain, to lead | 22 |
Prysmian's approach to sustainability: a model based on four pillars | 22 | |
Prysmian's commitment to sustainable development and the achievement of the UN SDGs | 23 | |
5. | Prysmian's two ambitions: Climate Change and Social Ambition | 25 |
Climate Change Ambition | 25 | |
Social Ambition | 26 | |
6. | The sustainability scorecard | 27 |
7. | An international network | 30 |
Prysmian in ESG indices | 30 | |
Proactive role in trade associations and organizations | 32 | |
8. | Corporate governance | 34 |
Directors and auditors | 34 | |
Governance and corporate structure | 34 | |
Organization chart | 40 | |
Ownership structure | 42 | |
Shareholders' meeting | 45 | |
9. | Business environment and financial markets | 47 |
Macroeconomic environment | 47 | |
Financial market performance | 48 | |
10. | Significant events during the year | 50 |
11. | Group performance and results | 60 |
Financial performance | 60 | |
Review of Projects operating segment | 62 | |
Review of Energy operating segment | 63 | |
Review of Telecom operating segment | 66 | |
Results by geographical area | 67 | |
Group statement of financial position | 68 | |
Alternative performance indicators | 72 |
2 | Prysmian - Relazione Annuale Integrata 2023 |
12. | Risk factors | 76 |
Prysmian Risk Model | 76 | |
Risk assessment criteria | 78 | |
Strategic risks | 79 | |
Financial risks | 80 | |
Operational risks | 83 | |
Legal and compliance risks | 85 | |
Planning and reporting risks | 85 | |
13. | Other information | 86 |
14. | Business outlook | 87 |
15. | Certification pursuant to Art. 2.6.2. of the regulation of markets organized | |
and managed by Borsa italiana S.p.A. | 87 | |
16. | Consolidated non-financial statement | 88 |
Introduction | 88 | |
Stakeholder engagement and materiality analysis | 89 | |
Prysmian's impact materiality | 91 | |
Dialogue with Prysmian's stakeholders | 93 | |
Sustainability week | 94 | |
2023 Sustainability Call for Ideas Project | 94 | |
Prysmian's Financial Materiality | 101 | |
Ethics and integrity | 106 | |
Business ethics and integrity: the pillars of sustainability | 106 | |
Prysmian's tax strategy | 110 | |
Cybersecurity | 120 | |
Environmental responsibility | 123 | |
Environmental performance of Prysmian | 124 | |
Environmental investments | 125 | |
Environmental data reporting | 127 | |
People, Prysmian's human capital | 140 | |
Composition of human capital | 142 | |
Training and development | 152 | |
Remuneration policy and welfare plans | 155 | |
Respect for Human Rights | 159 | |
Health and safety in the workplace | 161 | |
Sustainable value chain | 166 | |
Prysmian's supply chain | 167 | |
Logistics and transportation | 174 | |
Prysmian's Customers. The Customer Excellence approach | 176 | |
Positive impact on communities | 178 | |
Sustainable innovation for products, applications and processes | 180 | |
The pillars of innovation and the Innovation Steering Committee | 182 | |
Introduction of New Products | 193 | |
Group Investment for a sustainable future | 195 | |
Intellectual Property | 197 | |
Methodology | 200 | |
Calculation of GHG emissions | 201 | |
Calculation of Scope 3 GHG emissions | 202 | |
GRI Content Index | 208 | |
17. | SASB e TCFD | 213 |
SASB Index | 213 | |
TCFD correlation table | 214 | |
Annexes to the Consolidated Non-Financial Statement | 214 | |
18. | EU Taxonomy | 222 |
The process for determining eligibility | 222 | |
The process for determining alignment | 223 | |
Criteria for the calculation of KPIs and background information | 229 | |
Commentary on performance trend and future development | 231 | |
19. | Audit report on non-financial disclosure | 239 |
A. Relazione sulla gestione | 3 |
B. | CONSOLIDATED FINANCIAL STATEMENTS | 243 |
1. | Consolidated financial statements | 243 |
2. | Explanatory Notes | 247 |
3. | 3. Certification of the Consolidated Financial Statements pursuant | |
to Art. 81-ter of CONSOB Regulation 11971 dated 14 May 1999 as amended | 343 | |
4. | Auditor's Report | 344 |
C. | PARENT COMPANY FINANCIAL STATEMENTS | 351 |
1. | Directors' report | 351 |
2. | Financial statements | 359 |
3. | Explanatory notes | 363 |
4. | Certification of the separate financial statements pursuant | |
to Art. 81-ter of CONSOB regulation 11971 dated 14 may 1999 as amended | 416 | |
5. | Auditors' Report | 418 |
6. | Report of the Board of Statutory Auditors | 423 |
4 | Prysmian - Relazione Annuale Integrata 2023 |
Letter from the CEO
The year 2023 was an extraordinary year for our Company, as we continued with the positive results achieved during the previous year. Despite a challenging economic environment
-
characterized by a still fragile macroeconomic and market scenario - we have confirmed our position as market leader through a comprehensive and balanced portfolio that is well exposed to structural trends and great resilience. Once again
Prysmian ended 2023 with excellent performance, ensu- ring a creation of value for all our stakeholders.
By carefully understanding the market dynamics, we experienced solid margin expansion and strong cash genera- tion. The revenue figure proves to be essentially stable at €15,354M with significant growth in the Projects business (organic growth +15.3%), supported by solid execution of interconnection and offshore wind farm projects, as well as projects with better profitability in the backlog. We closed the year with a record backlog of about €18 billion.
The results in terms of profitability were significant, with a major increase in Adj EBITDA growing to €1,628M (+9.4% vs 2022). Margins also improved to 10.6% (9.3% in 2022), in addition to an increase in net profit to €547M (+7.5% vs. 2022).
Cash generation remains a key factor in our success, with Free Cash Flow at €724M (+29.5% vs. 2022). The soundness of
the financial structure enables us to sustain with balance the sizeable investments to support growth, to make our leadership even more solid and to seize the opportunities offered by the market.
No less important has been our commitment to ESG performance. Prysmian recognizes that sustainability is an essential element in creating value for all our stakeholders. We have further revised our decarbonization plan upward to contribute even more proactively to the fight against climate change. We continue to drive innovation in the cable industry by developing products that have a lower environmental impact and that can support our customers in their decarbonization goals.
Significant improvements have also been recorded in the goals of inclusiveness and focus on people. The results of initiatives implemented by Prysmian in recent years have enabled the company to intensify its efforts to anticipate achieving some of the targets set for 2030 as early as 2027, such as the KPI on gender equality. I am also proud to note that 46% of our employees, including blue collars, are shareholders in the group, an important lever for the future success of the company, as well as a source of great pride.
In conclusion, I would like to express my gratitude for having had the honor of leading this company for almost two decades. I am extremely pleased with the milestones we have achieved together, supported by a competent and well-established management team and talented colleagues, without whom Prysmian would not be what it is today: a world leader in the cable industry.
With confidence I place the helm in the hands of Massimo Battaini, who has been part of the team since the beginning of this great project and has played a key role in the most important moments for the Group. It is, therefore, a source of pride for me to complete my term, handing over to my successors a solid company with a clear vision for its future. It is a story that, starting tomorrow, I will support from a different position, but with the same closeness.
Valerio Battista
Chief Executive Officer, Prysmian
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Prysmian - Integrated Annual Report 2023
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Prysmian S.p.A. published this content on 16 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 March 2024 07:46:03 UTC.