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PRYSMIAN GROUP | CONTENTS
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PRYSMIAN GROUP | CONTENTS
CONTENTS
Letter to Stakeholders page 4Group approach to sustainability page 6Methodology page 8
Prysmian Group page 12Presence in the world page 15Vision, Mission, Values page 16Events during the year page 17Principal results achieved in the year page 18Awards and recognition in 2012 page 19Association memberships page 20
Economic and financial responsibility page 23Values and code of ethics page 23Corporate governance page 24Investor relations page 33Economic value distributed to Stakeholders page 34
Product responsibility page 36Customer centricity page 36Research, Development, Innovation page 39Operations page 45Procurement and logistics page 46
Social responsibility page 49Personnel and organisational structure page 50Investment in individuals page 52Industrial relations page 55Internal communications and involvement page 55Health and safety page 56Commitment to the community page 57
Environmental responsibility page 60Energy page 69Waste page 73Water page 81Ozone-depleting substances (*) page 84Biodiversity page 85
Attachments page 86Auditors' report page 87Table of GRI indicators page 89
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LETTER TO STAKEHOLDERS
Publication of the 2012 Sustainability Report confirms the Prysmian Group's drive to present a
transparent report that meets the expectations of stakeholders, who are increasingly involved in the
strategic development of the Group's social responsibilities. In this regard, the Group has made significant
progress since 2011 with the achievement of level C+ for this Sustainability Report, based on the
Guidelines of the Global Reporting Initiative (GRI, version GRI/G3.1). The number of indicators reported
has been expanded and the approach to reporting has been enhanced. This reflects an improved culture
of sustainability within the organisation, with training and information flows that involve personnel at all
levels. With a view to enhancing the effectiveness of the reporting process and guaranteeing the reliability
of the information contained in the Report to all stakeholders, Deloitte was also appointed to check the
details provided and release a "Report on the limited examination of the Sustainability Report".
Sustainability pervades every aspect of the Prysmian Group, from its identity in terms of vision, mission
and values, to the management of corporate processes founded on the concepts of economic, social and
environmental responsibility, as discussed in detail in this Report.
Many events took place in 2012 and the Prysmian Group performed well, confirming the constant efforts
made in all areas of sustainability. In terms of economic and financial responsibility, the creation of
value for shareholders and other stakeholders is a key priority for Prysmian, being an important aspect of
its commitment to accuracy, clarity and transparency in the communication of its business strategy,
objectives and results. Accordingly, contact with the financial markets was particularly intense in 2012,
with more than 400 one-to-one or group meetings at the Company's offices, road shows in the major
financial centres of Europe, North America and Asia, as well as participation at various conferences
organised by leading international brokers. The Group's objective is to achieve a proper balance between
a strategy of investment and the creation of profit in the short term, and a strategy of creating value over
the medium/long term. This balance is pursued via a system of transparent governance based on the
recommendations and rules indicated in the "Code of Self-Regulation for companies listed by Borsa
Italiana - ed. 2011".
Looking at product responsibility, research, development, innovation and respect for the environment
were, once again, key drivers for the competitive advantages needed to meet market expectations,
especially with regard to ethical and sustainability matters. During 2012, Prysmian progressed numerous
innovative projects in relation to both power and telecom cables, with a view to supplying end users with
efficient and functional products and solutions that have a low environmental impact. For example, the
LCA (Life Cycle Analysis) approach adopted for P-Laser cables in the Swedish market has markedly
lowered the environmental impact of raw material usage in production and at end-of-life, with reductions
in CO2 (-30%), fossil fuel consumption (between -40% and -60%) and water consumption (-80%). With
regard to procurement and logistics, the Group continues to seek solutions that are ever more efficient,
not least in environmental terms. As an example, projects have been promoted for the re-use of wooden
drums and the management of logistics, continuing the policy adopted in recent years of prioritising
customer service, with the ultimate objective of improving flexibility, reliability and time to market.
With regard to social responsibility, Prysmian recognises its commitment to the individuals who work as
part of the organisation, as well as those who form the local communities in the territories in which the
Group is active. Accordingly, consistent with its values, Prysmian constantly seeks to ensure the personal
and professional satisfaction of its human resources, and to communicate with and involve local
populations, in order to generate value for these important categories of stakeholder. This commitment is
confirmed by an internal programme organised to manage the Group's human resources, comprising
almost 20 thousand individuals worldwide. The personnel development programme established during
2012 involves four main initiatives: Graduate Program, an international programme for the recruitment
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and induction of outstanding new graduates, Prysmian Group Academy, a management and professional
training and education school established in partnership with SDA Bocconi, Talent and Succession
Management to improve the management of key personnel, and Performance Management, a
programme for the gradual introduction of performance appraisals. With reference to the needs of the
local communities in which the Group is active, the various activities promoted during the year included
an agreement to work with "Save the Children" on a project to help lower maternal, new-born and infant
mortality in Ethiopia, as well as support for associations and non-profit foundations that has included the
donation of cables.
The environmental responsibility of the Group was also confirmed by the concrete actions taken in
2012. These included the definition, updating, dissemination and checking of the Group's Health, Safety &
Environment (HSE) guidelines, designed to establish common rules at Group level for managing the
related matters. By year end, 82% of the Group's 91 factories have ISO 14001 certification and 42%
have been awarded OHSAS 18001. To manage this, the IT system has been updated to gather and
report on HSE data and information at individual factory level. The environmental performance of
Prysmian during the year resulted in the following key statistics: over 6 million GJ of energy consumed by
production systems, 78 tonnes of waste produced and almost 9 million m3
of water consumed. These
numbers, typical of a major industrial group, reflect numerous initiatives designed to lower the
environmental impact of production processes. The statistics reflect a generalised improvement in
performance per unit of production with respect to 2011. In addition, at the start of 2012, HSE
improvement objectives were established for 2012-2014 and communicated internally, involving the HSE
functions in each country and at each business unit. These objectives relate to action on energy efficiency
and the use of resources, such as participation in the Carbon Disclosure Project, and work on the
environmental declarations of products, Life Cycle Assessments and progressive expansion of the
number of factories with ISO 14001 and OHSAS 18001 certification.
A final thought: the survival of the Sustainability Report depends partly on contributions made by the
stakeholders. They are inextricably bound to the Group, communicating their expectations to Prysmian on
such concepts as sustainability and social responsibility. Transparency of information is a value
guaranteed to all stakeholders, along with their right to be heard and to grow together with the Group.
Valerio Battista, Chief Executive Officer
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THE GROUP'S APPROACH TO SUSTAINABILITY
The Prysmian Group is sector leader in the manufacture and supply of cables and systems for energy
and telecommunications. This leadership role has strengthened the desire, and the need, to ensure that
efficient, technologically-advanced service is provided over time, in compliance with the most rigorous
standards. Indeed, the responsibility of being leader guides the Group's approach to sustainability in all its
forms, with a particular focus on sustainable, technological innovation in the solutions offered to
customers, on the environmental responsibility of production processes, on environmental protection and
the management of relations with the local communities in which the Group operates, as well as on safety
at work and the development of personnel.
The medium/long-term strategy adopted by the Group is firmly based on the shared principles established
in the corporate Vision and Mission. Prysmian's Vision Statement affirms belief "in the efficient, effective
and sustainable supply of energy and information as the principal driver for the development of
communities". In accordance with the Mission, the Group is therefore committed to developing and
applying advanced technological solutions that offer customers worldwide "cables and systems for the
transmission of energy and for telecommunications" on an effective, efficient and sustainable basis.
The technologies and processes applied must result in the development of products and solutions that
anticipate and meet the needs of customers. For this reason, the Group tirelessly seeks improvement in
the areas of Research and Innovation, Customer Centricity, Employee Development and Environmental
Sustainability.
Research and
Innovation
Once again, research, development, innovation and respect for the environment have beendrivers enabling the business to exercise the competitive advantages needed to meet marketexpectations, especially with regard to ethical and sustainability matters. Many projectspursued by the Group in the area of Research and Innovation have achieved importantresults in terms of environmental protection including, in particular, reductions inconsumption and the emission of greenhouse gases. Examples include the LCA (Life CycleAnalysis) approach adopted for P-Laser in the Netherlands market, and the new family of LT2.0 BB-XS telecom cables launched in the United States.
Customer
Centricity
"Customer centricity", being the ability to anticipate and satisfy with care the needs ofcustomers, inspires the activities of the entire Prysmian Group. Constant attention is paid tothis at all stages, from design to delivery, by ensuring that service levels meet customerexpectations and are consistent with predetermined and agreed parameters.
Employee
Development
The Prysmian Group's HR policies are founded on a fundamental principle: respect for anddevelopment of the individual. This recognises that the growth and development of theCompany can only be achieved by respecting the fundamental rights of employees andfacilitating their professional growth, involvement and active participation in the business.
The Group actively seeks to develop talents and to utilize and grow, in the best possible way,the recognised and potential skills of all employees. This is done in various ways, includingthe pro-active management of internal mobility, the constant delivery of training courses andthe development of important tools of internal communication.
Environmental
Sustainability
The Prysmian Group considers the environment and the territory in which it operates as keyassets, to be respected and protected for the future. A policy of environmental responsibilityis pursued Group-wide, resulting in significant reductions in the emission of greenhousegases by improving energy efficiency levels and using renewable sources.
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Various projects commenced in 2012, representing significant milestones in the Group's pursuit of
sustainability, while important results were also achieved in confirmation of the constant work carried out
over the years. The Group's growth strategy seeks to achieve both short and medium/long-term
objectives via a system of governance and a model of business that support achievement of the desired
economic and financial results. Consistent with this, Prysmian will continue along the path of
sustainability, aware that this may well further strength the Group's leadership position.
Stakeholders
In the pursuit of social responsibility, it is fundamental to define clearly the context in which the Prysmian
Group operates. This involves identifying all internal and external parties with interests and expectations
of various kinds (social, economic, professional, human) in relation to the Group.
The term "stakeholder" refers to all individuals or groups that can influence or may be influenced by
actions of the business, which the Prysmian Group must be able to identify in order to understand their
needs and expectations. Given this, the Group has established a process for mapping stakeholders in
order to analyse the composition of each group, the ways in which it is involved, the matters of interest
and the objectives to be reached for each of them.
The Sustainability Report is addressed to these groups in particular. This document bears witness to the
desire of the Prysmian Group to travel a road of transparency with its stakeholders, enabling them to
assess the extent to which the Group's activities both meet their requirements and interests, and are
consistent with the precepts contained in the Mission Statement.
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The Group invests in building a relationship of mutual trust with its counterparts - the stakeholders -
listening to their interests and expectations, and analysing the extent to which these are consistent with
the established objectives. The end goal is to adopt a consistent and transparent strategy for growth and
involvement that generates value for all categories of stakeholder and benefits for the Group as a whole.
Aware of the complexity and importance of its role, the Prysmian Group believes that a steady stream of
value can be created for the various types of stakeholder, both now and in the coming years, via the
development of a sustainability strategy.
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METHODOLOGY
The purpose of this document is to provide accurate and transparent information about the 2012 activities
and performance of the Prysmian Group ("Prysmian" or "the Group") in the economic, social and
environmental fields. This work was carried out in accordance with the established sustainability policies
and objectives, while also maintaining constant dialogue with the Group's stakeholders.
This Sustainability Report has been prepared in conformity with the Sustainability Reporting Guidelines
G3.1, issued in 2011 by the GRI - Global Reporting Initiative, achieving application level C+.
Numerous business functions were involved in preparing the Report. This enabled precise identification of
the significant information and matters to be reported, while also improving internal communication
processes and the overall control of data.
The selection of GRI indicators for inclusion in the Report was based on a careful assessment of their
individual relevance to the activities of Prysmian and their meaningfulness to stakeholders.
Except as indicated, the data and information contained in the Sustainability Report relate to the
companies within the Prysmian Group as of 31 December 2012, and to their activities during 2012. Prior
year information is presented solely for comparative purposes, in order to indicate the performance of the
Group over a period of time. The information for 2011 reports, for the first time, the position of the Group
following the union of Prysmian and Draka.
When certain combined data derives from estimates, this is appropriately highlighted in the Report.
With a view to enhancing the effectiveness of the reporting process and guaranteeing the reliability of the
information contained in the Report to all stakeholders, Deloitte was appointed to check the details
provided. This work was completed with the release of a "Report on the limited examination of the
Sustainability Report", prepared in accordance with auditing standard ISAE3000.
This Report is published in Italian and English on the website of the Prysmian Group,
www.prysmiangroup.com, where previous editions of the document are also available.
The Sustainability Report has been prepared with reference to the corporate governance, social and
consolidated economic and financial information of the Prysmian Group as of 31 December 2012. In
particular, the total employment data relates to those companies falling within the scope of consolidation,
including the full headcount of subsidiaries that are not wholly owned (not considered on a proportional
basis). In addition, the full headcount of companies that are not majority owned (including certain joint
ventures) has also been used, with the exception of YOFC Shanghai Co Ltd, YOFC Wuhan Co Ltd, Ravin
and Power Plus Fujairah. To the extent considered significant, the environmental data and information
relates to the Group's factories, including those operated by joint ventures, as of 31 December 2012. See
the chapter on "Environmental Responsibilities" for further details about the related criteria, exceptions,
scope of reporting and methods of calculation.
The following changes have been made with respect to the 2011 Sustainability Report:
update of the scope of reporting following the purchase and disposal of certain companies and/or
plants including, for example, the shut down of six Group factories during 2012 (Derby in the
United Kingdom, Fercable in Spain, Hickory in the USA, Eschweiler in Germany, Livorno Ferraris
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in Italy and Singapore). Except as stated, the data as of 31 December presented in this Report
takes account of this situation;
revision of content to ensure it reflects the topics of greatest interest to stakeholders;
the types of information provided under the GRI guidelines have been broadened to reach
application level C+, including examination of the Report by an independent entity.
CONTENT OF THE SUSTAINABILITY REPORT
The major topics are addressed in the various main sections following an introduction to the Group. The
areas of sustainability are organised into chapters that provide the precise information required by the
GRI, and also discuss the initiatives and approaches deemed most relevant by Prysmian.
The section on economic and financial information describes the governance structure of Prysmian and
the instruments used to sustain it, commencing from the values contained in the code of ethics, as well as
the economic performance of the Group and communications with shareholders and investors.
This is followed by the section on cables, at the heart of the business, covering the various processes
from purchasing and R&D through to logistics. These pages describe the distinctive characteristics of the
Group's products: sustainable, technological innovation of the solutions offered to the market.
The next chapter is dedicated to human resources and such topics as the development of skills, training
programmes, internal communications and, in general, Prysmian's commitment to enhancing the position
of individuals as a key stakeholder. The HR chapter also describes the Group's activities in relation to
health and safety at work, and the initiatives adopted in favour of local communities. These efforts are
designed to protect and respect the rights of all counterparts that have dealings with Prysmian, thus
demonstrating the Group's social commitment.
The section on the environment focuses on the Group's HSE policies and strategy, and on its
environmental performance, by analysing a number of key aspects. These include the use of natural
resources, the consumption of energy and the related emission of greenhouse gases, and the production
of waste.
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CONTACTS
Please direct comments, requests, opinions and ideas for improving the activities of Prysmian and the
information contained in the Sustainability Report to:
CORPORATE AND BUSINESS COMMUNICATIONS
+39 02 6449 1
HEALTH SAFETY AND ENVIRONMENT
+39 02 6449 1
In order to make this Report readily accessible, an interactive version can be downloaded from the
Group's official website: www.prysmiangroup.com.
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PRYSMIAN GROUP
The Prysmian Group is world leader in the supply of cables and systems for energy and
telecommunications. With over 130 years of experience, sales of about 8 billion euro in 2012,
approximately 20,000 employees in 50 countries and 91 factories, the Group has a consolidated
presence in technologically advanced markets. The broadest range of products, services, technologies
and know how are available, sustained by 17 R&D centres in Europe, the United States and South
America that are staffed by more than 500 experienced professionals.
The current organisational structure of the Prysmian Group was created in 2011 following the purchase of
Draka by Prysmian, both market leaders in the cables industry in terms of innovation and know-how.
Given the increased investment potential and greater geographical coverage, the combined strengths of
the two companies position the Group as the market leader, with the widest range of products, services
and technological know-how currently available.
Listed on Borsa Italiana's FTSE MIB, Prysmian is a public company with a transparent approach oriented
towards maintaining investor confidence over the long term.
The Prysmian Group is active in the development, design, production, supply and installation of a wide
range of cables for the most diverse applications in the Energy and Telecom sectors.
In the Energy sector, the Group supplies terrestrial and submarine cables and systems for power
transmission, special cables for applications in various industrial sectors and medium-low voltage cables
for infrastructure and construction needs.
In the Telecom sector, the Group produces cables and accessories for voice, video and data
transmissions, drawing on a complete range of optical fibres, optical and copper cables and connectors.
The Energy sector comprises the following business areas:
Utilities - Prysmian designs, produces and installs high and ultra-high voltage cables and
systems for underground and submarine power transmission directly from generating stations
and offshore wind farms to the primary distribution grids. The solutions available include leading-
edge turnkey submarine cable systems, with installation at up to depths of 2,000 metres using the
Giulio Verne, one of the world's largest and most technologically advanced cable-laying ships. In
addition, via Global Marine Energy and the Cable Enterprise, another cable layer, the Group
offers high valued-added services for the creation of submarine energy links. These range from
project management to the installation, joining and protection of cables, especially within offshore
wind farms. In this area, the Prysmian Group's technologies cover the cables needed by wind
turbines, as well as those used to link the various turbines to each other and to the shore. With
regard to power distribution, the Group produces medium-voltage cables and systems for joining
industrial and residential structures to the primary distribution grids, and low-voltage cables for
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power distribution and the cabling of buildings. The range of products is completed by network
accessories and components for joining cables and other network components.
Industrial - The integrated cabling solutions proposed by the Group represent the most complete
and technologically advanced response to the needs of a wide variety of industrial sectors.
o Renewables – Active in the wind and solar energy markets, the Prysmian Group creates links for
wind farms using technologies that include the cables needed by wind turbines and those joining
the various turbines together.
o Oil & Gas and SURF – For the petrochemicals market, the Prysmian Group offers solutions
covering exploration and onshore-offshore production, as well as the refining of hydrocarbons.
The range includes medium and low-voltage cables, power, instrumentation and control cables;
special DHT (Downhole Technology) cables, such as cables for the control of drilling equipment,
power cables and conduits for hydraulic fluids; multifunctional umbilical cables for the
transmission of power, telecommunications, fluids and chemical products that, together with high-
technology, flexible pipes and conduits for the offshore lifting of oil, enable the Group to offer a
complete range of SURF (Subsea Umbilical, Riser and Flowline) products and services to
operators in the sector.
o Automotive – For the motor vehicle and transport industry, the Group produces standard and
specialty cables in collaboration with leading international manufacturers in the sector.
o Elevators – The Prysmian Group produces a vast range of products for the elevator market,
including flexible cables with connectors and cabling for elevator shafts, thus meeting global
demand for industry-specific cables and components that meet the highest performance, wear
resistance and safety standards.
o Specialties and OEM – These include cable systems for various industry-specific applications,
including trains, aircraft, ships, port systems, cranes, mines, the nuclear industry, defence and the
electro-medical sector.
Trade & Installers – Cables and systems for trade distributors and installers, used in the cabling
of offices and for the distribution of electricity within commercial and residential buildings. The
range of products, considered among the most advanced and complete in the world, is
supplemented by fire-resistant cables that generate low emissions of gas and toxic fumes.
Other - Products, semi-finished items and raw materials included in the manufacturing process,
sometimes produced by Prysmian Group companies.
The Telecom sector comprises the production of cabling systems and connectivity products used in
telecommunications networks. The product portfolio includes optical fibre, optical cables, connectivity
components and accessories, Optical Ground Wire (OPGW) cables and copper cables.
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With centres of excellence in Battipaglia (Italy), Eindhoven (Netherlands) and Douvrin (France) and five
factories around the world, the Prysmian Group is leader in the production of the key component for all
types of optical cable: optical fibre. A wide range of optical fibres is designed and produced to respond to
the vast spectrum of applications demanded by customers, including single-mode, multi-mode and
speciality fibres. In addition, the Group possesses all current technologies needed for the production of
optical fibre, thus ensuring that solutions for the various applications are optimised. The optical fibres are
used in the production of a wide range of optical cables, whether standard or specifically designed for
challenging environments where access is difficult: from underground conduits to overhead power lines,
and from road and rail tunnels to gas and drainage networks.
The Prysmian Group also provides solutions for passive connectivity, guaranteeing the efficient
management of optical fibres within the network. The growing demand for greater bandwidth has brought
optical fibre ever closer to the end customer. The Group is extremely active in this rapidly growing sector
of the market, known as FTTx, with a systems approach based on a combination of existing technologies
and innovative solutions that introduce optical fibres to high-rise buildings and high density housing. Many
of the cables employed in FTTx systems use BendBrightxs, a Prysmian optical fibre insensitive to
bending, which was developed specifically for this application.
The Prysmian Group also produces a wide range of copper cables for buried and overhead cabling, as
well as for residential and commercial buildings. The product portfolio includes cables of varying capacity,
such as xDSL cables for broadband work and those designed for high transmission, low interference and
electromagnetic compatibility.
Cabling systems for communications are produced by the Group for the widest variety of applications
within buildings, industries and transportation systems: cables for radio, television and cinematic
recording studies, cabling for railway environments, such as those buried for long-distance
telecommunications, cables for signalling and train diversion systems, as well as antenna cables for
mobile telephone systems and cables for communications networks.
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VISION, MISSION, VALUES
HISTORY - A journey that began two centuries ago.
With over 130 years of combined experience, Prysmian and Draka have a long history of satisfying the
needs of customers as their primary objective.
The history of our business is intertwined with that of the cable industry as a whole, with major milestones
that have consolidated our reputation as a pioneer in the sector.
At the start of the 20th century, the predecessor of Prysmian achieved international recognition by
working on several high profile projects to lay 5,150 km of telegraph cable across the Atlantic from Italy to
America, as well as to link North Africa with Brazil and install a submarine telephone line between Brazil
and Italy. Around the same period, in 1910, the company that later become Draka was founded.
Both companies expanded by internal growth between 1900 and 1950, broadening their product ranges
and opening factories in such strategic markets as Spain, the United Kingdom, North America, Argentina
and Brazil. Another key moment in the history of Draka came in 1970, with the purchase of the company
by Philips N.V., as part of its Wire & Cable division.
With Drake independent once again, the 1990s saw both companies engaged on acquisitions followed by
major restructuring work, with a view to expanding their industrial and commercial activities. Prysmian
was listed on the Milan Exchange's FTSE MIB in 2007 and became a true public company three years
later. The assets and know-how accumulated in more than a century of history allow the company to
pursue growth in markets and businesses with a high degree of value added.
The Prysmian Group was established in 2011, on the union of Prysmian and Draka. The combination of
the two market leaders gave birth to a new world leader in the cables sector: the Prysmian Group.
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KEY EVENTS DURING THE YEAR
Many of the significant events that took place during the year were of strategic importance for the future
development of the business, both in commercial and organisational terms. The major contracts obtained
will contribute great value, as will the purchase of businesses that reinforce the Group's leadership. The
highlights are indicated below.
February: The Prysmian Group won the contract for the Western HVDC Link, the highest value project
ever assigned in the cables sector. The new submarine electricity link between Scotland and England
represents a technological challenge in terms of both the required voltage (600kV) and capacity (2,200
MW).
February: Draka Elevator cables were chosen for the elevators in the new World Trade Center in New
York City. The Prysmian Group will provide a vast range of cables and accessories for the installation of
more than 100 elevators.
February: The squeeze-out procedure envisaged by the Netherlands Civil Code was completed in
relation to the residual ordinary shares in Draka Holding N.V. The Prysmian Group currently owns the
entire share capital of Draka Holding N.V.
March: The Prysmian Group obtained a contract to supply 203 km of high-voltage cable (220 kV AC) and
related network components, in order to upgrade the electricity grids in Tripoli and Benghazi.
April: The Group completed the purchase of 50% of Telcon Fios e Cabos para Telecomuniçaoes S.A.
and 30% of Draktel Optical Fibre S.A., to become the sole shareholder of these two Brazilian companies
that provide cables and optical fibre for telecommunications.
May: A contract was won for the submarine electricity link between Phu Quoc Island in southern Vietnam
and the national power grid. The Phu Quoc link involves the supply of about 58 km of high-voltage
submarine cable, as well as its installation and subsequent protection.
May: Draka Comteq Finland OY acquired the entire non-controlling interest (25%) in Neva Cables Ltd, a
Russian company. This company is now wholly owned by the Group.
July: Prysmian won a contract for the supply of high technology cables for the new Macau Taipa Ferry
Terminal (P.R.China). This new infrastructure will facilitate sea links between the province of Guangdong
in the south of China and the ports of Macao, Hong Kong and Zuhai.
August: The Group obtained a contract in the Telecom sector for the supply of a major new broadband
network in Argentina. This project involves the creation of an FTTH network linking 4,000 buildings in the
Buenos Aires area. The products involved include optical cables, as well as a wide range of connectivity
components needed for the passive network.
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September: A new project was obtained for a high-voltage submarine cable linking Europe and Asia via
the Dardanelles Strait in Turkey. Once completed, this will be the first high-voltage submarine cable link
established in the country.
September: The Prysmian Group acquired 100% of Global Marine Systems Energy Ltd. (GME) from
Global Marine Systems Ltd. (GMSL). As a British company active in the installation of submarine
electricity cables and systems, GME's strategic assets include a cable laying ship. The company offers
high value-added services for the installation of submarine electricity links, especially for offshore wind
farms.
October: A contract was won in the context of the “MON.ITA.” project, involving a new submarine
electricity link between Montenegro and Italy. This project involves the supply and installation of one of
the two hubs (about 415 km of submarine cable at depths of up to 1,200 m), comprising an ultra-high
voltage system (500 kV DC) delivering 1,000 MW of power.
PRINCIPAL RESULTS ACHIEVED IN THE YEAR
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AWARDS AND RECOGNITION IN 2012
The Prysmian Group received “Top Employers Italia” certification during the year for the management of
human resources. This certification was awarded by CRF, an independent international organisation that
certified 38 Italian companies active in various areas: consultancy, food & beverage, banking and hotels.
This recognition enables the Italian winners to measure themselves against global best practices, and
underscores the merits of the way Group employees are managed. This award stems from the efficient
management of human resources and the desire of Prysmian to create a dynamic internal environment
that affords various opportunities for international mobility. Building on this recognition, the Group can
now implement effective strategies for attracting the best candidates available in the marketplace.
The Prysmian Group was also won the “Top 10 competitive enterprises” prize for the third consecutive
year. This global prize for companies in the optical fibres and cables sector was awarded at the “2012
China Optical Communications & Development and Competitiveness Forum”, held in Beijing during
November. The winners are identified every year by the “Asia-Pacific Optical Communications
Committee” and the “Network Telecom Information Research Institute”, based on the information reported
in the financial statements of listed companies.
In July, the Group won the German “Industry Award 2012” (Industriepreis 2012). This annual award
goes to companies demonstrating considerable achievements in the economic, social, technological and
environmental areas. Specifically, the Prysmian Group won the innovation prize for its IQ Protolon
"intelligent" cable, which uses electronic sensors installed internally to identify tension, torsion, flexing and
temperature. In addition, working in on-line mode, this cable can be installed at a depth of up to one metre
below ground. This recognition is very important since, once again, it highlights the Group's constant R&D
efforts to create innovative and sustainable products, in line with market demand.
Lastly, the Prysmian Group has been awarded three major prizes by "Kone Elevator" and "Schindler
Elevator", two of the world's largest operators in the elevator sector. At the annual meeting dedicated to
"Kone Elevator” suppliers, Prysmian was awarded the Bronze Status prize for the EMEA market and the
Gold Status prize for the US market. The third prize, from Schindler Elevator US, was awarded during its
"Outstanding Supplier” conference in the complex projects category, for the Group's work on the new
World Trade Towers in New York.
Schindler Elevator US also awarded the Group its first Environmental Sustainability Award, which is
discussed in the side panel.
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ENVIRONMENTAL SUSTAINABILITY AWARD FROM SCHINDLER ELEVATOR
The Prysmian Group, through its brand Draka Elevator, was awarded as “2012 Outstanding Supplier” by
Schindler Elevator Corporation, which is the second largest elevator company in the world.
The prize was presented during Schindler's annual Supplier Day, held at its North American headquarters
in Morristown, New Jersey. The Group is Schindler’s only supplier to have obtained this
recognition for three consecutive years.
In addition to recognising suppliers for outstanding quality and service, Schindler has now added an
annual Environmental Sustainability Award for partners that make a direct contribution to Schindler's
environmental policy.
Participation in the 2012 E3 (Economy-Energy-Environment) programme, in collaboration with North
Carolina State University, helped to achieve this objective. The actions taken to improve energy efficiency
and sustainability associated with the E3 program have enabled the Prysmian Group to reduce its
environmental impact, gaining a competitive advantage from measurement of the carbon footprint, the
decreased contribution to landfills and a comprehensive waste management program. The Prysmian
Group has also embarked on promoting sustainable partnerships with other suppliers, by developing
environment-friendly products and special energy-efficient packages (I2 LED lighting) for new elevator
cabs and modernisation projects.
ASSOCIATION MEMBERSHIPS
Prysmian's leadership of the cables sector i further confirmed by the Group's membership of the principal
and most strategic global trade associations. Participation in technical round-table discussions means that
Prysmian can play a prominent role in the definition of guidelines, and in debates with partners and
competitors.
Europacable
Founded in 1991, the members of this association represent about 85% of the European cables market.
The major global players in the sector are all members, together with 200 SMEs with a high degree of
specialisation.
Friends of the Supergrid (FOSG)
This association promotes the development of a large scale, pan-European offshore electricity grid, to
benefit from the energy generated from renewable sources. FOSG brings together technology firms
specialised in electricity transmission systems and firms that develop, install, own and manage the related
infrastructure.
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Norstec
This association represents the leading global operators in the energy sector, with a view to supporting
the production of renewable energy by offshore wind farms in the North Sea. Further information is
provided in the box to the side.
Medgrid
This project was started in 2009 to study the feasibility of an electricity link across the Mediterranean,
between Europe and the wind and solar farms established in North Africa. 20 of Europe's leading
operators in the energy sector are participating in this project.
FTTH Council
This non-profit organisation was founded to accelerate the adoption of Fibre To The Home (FTTH)
technology. Members include manufacturers, system designers, consultancy firms and academic
organisations. The main aim of the FTTH Council is to exercise its influence with regulators and other
bodies, such as the European Union, in order to create a regulatory environment that favours the
adoption of this technology. The Prysmian Group is an active member of the FTTH Council in Europe,
North America, the Middle East, North Africa, Latin America and Asia-Pacific.
In addition, during 2012 Prysmian participated, through its HSE representatives, in the work of the IEC
(International Electrotechnical Commission), a regulatory body, and in important round-table discussions
at both national and European level. These included participation in the activities of the Environmental
Working Party of the AICE (Italian trade association for the cables industry and member of Confindustria,
Confederation of Italian Industry), the ECOE (Environmental Committee of Europacable), and the
“REACH”, “Environmental Product” and “Energy Efficiency” Task Forces of Orgalime (the European
Association of Engineering Equipment Manufacturers).
The related activities, carried out with a key contribution from the Prysmian Group, are designed to
examine regulatory requirements in detail for the benefit of members and promote various initiatives.
Among these:
analysis of the various European and Italian environmental regulations (by the AICE Working
Party) that could affect members of the sector represented, such as the European directives that
place restrictions on hazardous substances (RoHS), and those on waste, serious accidents,
volatile organic substances (VOC), integrated pollution prevention and control (IPPC) and energy
efficiency;
contribution to the development of industry standards that contain environmental requirements;
specific initiatives, such as the Environmental Product Declaration (EPD);
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in-depth examination and dissemination of the European REACH Regulation (Registration,
Evaluation, Authorisation and Restriction of Chemicals),
in order to address the many requirements and obligations envisaged.
Via the various working parties, the trade associations develop and disseminate tools for the
management of legislative requirements and for the development for sector-specific initiatives, such as
the environmental declaration required for cables.
PRYSMIAN GROUP AMONG THE FOUNDERS OF NORSTEC
Prysmian was one of the founders of Norstec, an association that represents the leading global operators in
the energy sector, with a view to supporting the production of renewable energy by offshore wind farms in
the North Sea.
Norstec, supported by David Cameron, the British Prime Minister, brings together more than forty
companies specialised in power transmission technologies and infrastructure, including many global players
(such as Alstom, Areva, E.On, National Grid, Siemens, Vattenfall and Vestas), as well as developers,
researchers and sector bodies. The objective is to promote policies for the development of offshore wind
farms in the North Sea, drawing on the available resources and transforming them into economic and
growth opportunities. Association members collaborate and share information in order to ensure they obtain
full benefit from the enormous potential deriving from clean energy in that area.
By membership of Norstec, the Group - already world leader in linking offshore wind farms - strengthens its
commitment in support of more efficient and eco-sustainable grids throughout the world, as well as its
leadership in the installation of links for power transmission and distribution.
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ECONOMIC AND FINANCIAL RESPONSIBILITY
VALUES AND CODE OF ETHICS
The sustainability strategy adopted by the Prysmian Group is founded on the system of values that mark
the behaviour of individuals both within and outside the organisation. The Code of Ethics establishes the
principles for all to follow, consistent with the vision and mission of the Group.
Even the European Commission has commented on the importance of adhering to a code of ethics,
defined as "an important, innovative tool for promoting the fundamental rights of individuals, employment
and the territory, and a good policy for fighting corruption."
Accordingly, for Prysmian, the Code of Ethics represents the Group's "Constitution", being the charter of
rights and moral duties that defines the ethical-social responsibilities of each participant in the
organisation. Given its position as a true practical guide for daily activities, the Code of Ethics plays a
strategic role in the life of the business. The Code of Ethics is a tool for preventing irresponsible or illegal
conduct by those who work in the name and on behalf of the Group.
The Code of Ethics lives and evolves with the development of the business in the competitive world. It is
always open to receive and accepts requests for legality and propriety expressed by any group of
stakeholders.
Three core values mark the activities of Prysmian: Excellence, Integrity and Understanding.
Excellence: doing well is never enough. A rigorous approach and entrepreneurial leadership are
combined to offer innovative and complete solutions for every kind of business.
Integrity: when it comes to ethics, no challenge is too great or too small, if the objective is to achieve the
best.
Understanding: great respect for different opinions and ideas, and a lively interest in the needs of our
customers.
The Code of Ethics is underpinned by three pillars:
- Ethics in business activities: the profit motive does not justify recourse to improper means and
behaviour. Profit must be achieved by respect for the rules and competitors, and by fair and
transparent actions that anticipate and meet market needs, thus generating value for distribution
to the shareholders and other stakeholders;
- Ethics in internal relations: the Group knows that it cannot think about the future without
considering its ties with employees, which are strengthened by respecting their rights,
expectations and needs, and by facilitating improvement in their living conditions and professional
growth. The individual is central to all activities, as the engine for future development;
- Ethics in environmental and social matters: the Prysmian Group operates worldwide with respect
for the environment and the social communities in whose context it operates. This approach is
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founded on strong belief in the principle of sustainable development that respects the rights of
future generations. At the same time, the Group encourages the responsible use of resources
and promotes local projects designed to enhance well-being in the areas concerned.
All companies within the Prysmian Group agree to comply strictly with the Code of Ethics, applicable
regulations and the rules and procedures adopted from time to time by the Prysmian Group in order to
implement the Code of Ethics in full.
The full version of the Code of Ethics can be found on the website of the Prysmian Group
www.prysmiangroup.com).
CORPORATE GOVERNANCE
The system of corporate governance adopted by the Group is based on the recommendations and rules
contained in the "2011 Code of Self-Regulation for Listed Companies" prepared by the Corporate
Governance Committee of Borsa Italiana S.p.A. and adopted by the Company.
The corporate governance rules directly reflect principles and procedures that the Company has adopted
and undertaken to respect, in order to guarantee that all operations are carried out in an effective and
transparent manner.
The system of corporate governance is based on the central role of the Board of Directors in providing
strategic guidance, and on the transparency of operational decisions and the related decision-making
processes, whether these be internal or with an external impact.
Prysmian S.p.A. manages and coordinates the Group's direct and indirect Italian subsidiaries, pursuant to
article 2497 of the Italian Civil Code.
After carrying out appropriate checks, Prysmian's Board of Directors has recognised that the Company is
not, in turn, subject to management and coordination by other companies, given the absence of likely
indicators of such circumstances: the preparation of strategic, financial and business plans and budgets
at Group level, the issuance of instructions on financial and borrowing policies, the centralisation of
treasury, administration, finance and control functions, the determination of Group growth strategies,
strategic and market positioning for the Group and individual companies, especially if the policies are
likely to influence and determine the concrete actions taken by corporate management.
The principal objectives of the system of corporate governance are to:
- assure Prysmian shareholders of an appropriate level of supervision over the most important
strategic decisions taken by the Group;
- organise a hierarchical decision-making structure, with appropriate involvement of the shareholders
and the Board of Directors in the most important strategic decisions taken by the Group, while
delegating everyday management to executives;
- require strict compliance with governance procedures by management and establish appropriate
consequences for any non-compliance.
The traditional model of governance and control has been adopted, with the presence of a Shareholders'
Meeting, a Board of Directors and a Board of Statutory Auditors. The system of corporate governance is
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based on the core role of the Board of Directors (as the most senior body appointed to manage the
Company in the interests of shareholders), on the transparency of decision-making processes, on an
effective internal control system, on strict rules governing potential conflicts of interest and on appropriate
standards of conduct for related-party transactions.
Prysmian has implemented this system by preparing and adopting codes, standards, rules and
procedures that govern and regulate the conduct of activities at all organisational and operational levels
within the Company.
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 Statutory Auditors
monitors compliance with the law, the by-laws and the principles of proper administration in the conduct
of corporate activities. It also checks the adequacy of the Company's organisational structure, internal
control system and administrative and accounting system.
The independent audit of the financial statements is entrusted to a specialist firm, registered with Consob,
that is appointed at the Shareholders' Meeting.
Further information (i) on the system of corporate governance of Prysmian S.p.A. and (ii) on the
ownership structure, required by art.123-bis of Decree 58 dated 24 February 1998 (TUF), can be found in
the “Report on Corporate Governance and the Ownership Structure” available on the Company's website
www.prysmiangroup.com, in the section on investor relations/corporate governance, which is prepared
pursuant to art. 123-bis of Decree 58/1998 (TUF).
Board of Directors
In accordance with art. 14 of the By-laws, the Company is governed by a Board of Directors consisting of
no fewer than seven and no more than thirteen members, who need not be shareholders. The Directors
are eligible for re-election.
In compliance with the provisions of Decree 58/98, the Company has adopted a list voting system for the
appointment of directors in order to allow, where possible, minority shareholders to nominate and elect
their own directors. The Board of Directors is appointed on the basis of lists presented by the outgoing
Board of Directors and by those shareholders who, together or alone, hold shares representing in total at
least 2% of the share capital eligible to vote at the Ordinary Shareholders' Meeting, or such lower
percentage as may be established by legal or regulatory provisions. Pursuant to Consob Resolution
18,452 dated 30 January 2013, the minimum shareholding requirement for the presentation of lists of
candidates is set at 1% for 2013.
The Company is currently administered by a Board of Directors comprising eleven directors, who will
remain in office until the Shareholders' Meeting called to approve the financial statements for the year
ending on 31 December 2014.
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Board of Statutory Auditors
The Board of Statutory Auditors monitors compliance with the law, the by-laws and the principles of
proper administration in the conduct of corporate activities. It also checks the adequacy of the Company's
organisational structure, internal control system and administrative and accounting system. Following the
entry into force of Decree 39/2010, the Board of Statutory Auditors has been identified as the "Internal
Control and Audit Committee" empowered by this decree to supervise the financial reporting process, the
effectiveness of the systems of internal control, internal audit and risk management, the statutory audit of
the annual separate and consolidated financial statements, and the independence of the external auditing
firm.
Ownership structure
All the shares in circulation as of 31 December 2012 are floating shares, with major shareholdings (in
excess of 2%) accounting for around 23% of share capital. Accordingly, there are no majority or relative
majority shareholders. Prysmian is one of the few Italian manufacturers with a global presence that, in
recent years, has achieved true public company status.
As of 31 December 2012, the share capital of Prysmian S.p.A. amounts to Euro 21,450,878.10,
represented by 214,508,781 ordinary shares with a nominal value of Euro 0.1 each. The ownership
structure at that date is indicated below.
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Analysis of the ownership structure by geographical area confirms the predominance of UK and US
investors, who together held more than 50% of the capital owned by institutional investors at the end of
2012; these were followed by Italian institutional investors with 14% and French investors with 8%.
Compared with the prior year, the weighting of Asian investors - particularly from Hong Kong - has
increased.
About 75% of the capital held by institutional investors is owned by Value or Growth investment funds that
have a medium/long-term time horizon. There has also been a marked increase in the number of
shareholders adopting an Index investment strategy, based on the principal stock indices. This increase
is consistent with the greater weight of Prysmian stock within such baskets.
Organisational Model (Decree 231/2001)
By resolution of the Board of Directors on 24 January 2006, the Company has adopted an organisational
model (the "Model") in compliance with the requirements of Decree 231/2001. Following regular reviews,
the latest version was approved by the Board on 27 August 2008 and updated most recently on 10
November 2010.
The revisions took account of the extension of corporate administrative liability to include new types of
offence, and of the changes made to the Company's organisational structure subsequent to initial
adoption of the current Model.
The Model developed for the Company therefore fully reflects the guidelines identified by analysing and
mapping business processes exposed to the risk of wrongdoing, and is consistent with the Company's
specific characteristics. Accordingly, the Model meets all the effectiveness requirements established by
law.
The Model adopted by the Company comprises the following documents:
(a) Code of Ethics. This sets out the general principles of behaviour (transparency, integrity and
fairness) that underpin the conduct of business and which are also relevant for the purposes of
Decree 231/2001; it also sets out the goals and values that drive the Company's business;
(b) rules of conduct. These contain specific rules for dealing with public officials and are designed to
satisfy the specific requirements of Decree 231/2001 with regard to the prevention of potential
risk situations. In substance, these rules establish conduct to be actively adopted and conduct to
be avoided, thus translating the contents of the code of ethics into practical guidance.
(c) rules of governance. This descriptive document is organised as follows:
Introduction: description of the business and organisation of Prysmian, thus putting the
Model into its specific corporate context;
First Section: general description of the contents of the Decree and the purpose of the
Model;
Second Section: details of the specific rules of governance required by the Model;
the document also contains a list and description of offences, the organisation chart, the contract clauses
and the list of protocols. It also describes how to update the Model and includes a chapter on the
Supervisory Body (duties assigned, reasons for ineligibility, dismissal, disqualification and suspension of
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members, spending budget). Lastly, the document deals with how the Model is distributed and publicised,
how its users are trained, and how it is adopted and continuously updated.
(d) Decision-making and control procedures. For all significant risks identified, these procedures govern:
- the roles and responsibilities of the persons involved;
- the decision-making/authorisation processes;
- how activities at risk are managed and controlled.
In order to guarantee better oversight of internal control activities and in compliance with the
recommendations of Borsa Italiana's Code of Self-Regulation, the Board of Directors has appointed the
CEO - Valerio Battista - as the Executive Director responsible for the risk management and internal
control system and made him responsible, among other duties, for managing this system and monitoring
constantly its overall adequacy, effectiveness and efficiency. The Board of Directors has also appointed
an Internal Audit Manager and made him responsible for verifying that the internal control system is
adequate, fully operational and effective at all times.
During 2012, the Internal Audit department worked with the central HSE function and the local HSE
managers to analyse, with a view to updating, the Organisational Model pursuant to Decree 231/2001
adopted by all Italian companies in the Group.
This analysis focused on the environmental risks associated with the new offences added to those
identified by Decree 231/01, in order to check on their applicability and how they might be committed at
the Group's Italian factories.
Interviews and selected site visits provided the information needed to assess the adequacy and efficiency
of the activities at risk, considering the procedures and operational protocols in place, the proper
definition of roles, the existence of a system of controls and the traceability of information. A number of
operational recommendations were made to improve the traceability of environmental information. These
were implemented immediately at the locations concerned, and will be extended to all Italian and Group
operational units via adjustment of their environmental management systems.
On completion of the work, an environment management protocol was prepared for each company
reviewed, defining the control activities required and the behaviours needed to address the potential
commitment of environmental offences.
Risk factors
In the ordinary course of business, the Prysmian Group is exposed to a number of financial and non-
financial risk factors that, if they arise, could have a potentially significant impact on its economic and
financial position. The Group has always sought to maximise shareholder value by taking all necessary
measures to prevent or mitigate the risks inherent in the Group's activities. For this reason, specific
procedures are adopted to manage those risk factors that could influence the results of the business.
In view of the growing complexity of activities, the constantly changing legislative and regulatory
environment and, not least, the persistent instability of the economy and the financial markets, during
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2012 the Board of Directors decided to further increase the attention paid by the Group to the
management of risks. Consistent with the "2011 Code of Self-Regulation for Listed Companies" (Code of
Self-Regulation) and international best practice, the Prysmian Group has begun implementing a dynamic
Enterprise Risk Management system (ERM), designed to identify, measure, analyse and assess risk
situations and events that might affect achievement of the Group's strategic objectives and priorities. This
system, managed in a structured and systematic manner, will help the Board of Directors and
management to determine, in an informed manner, the most effective approach to take in order to
mitigate the impact of such risks and, therefore, allow the strategic objectives to be achieved.
The ERM system will become an integral part of the risk management and internal control system, which
is key to ensuring the effectiveness of the Group's system of corporate governance. The organisational,
management and control model is specifically designed to prevent commitment of the offences envisaged
in Decree 231/01, as well as to provide direct support for the effective application of specific risk
management procedures. The Company constantly updates its Organisational Model in the light of
regulatory changes and the latest legal doctrine, jurisprudence and Confindustria guidelines.
The Prysmian Group adopts and will continue to adopt a global approach to its exposure to risks, whether
external (market and context risks) or internal (strategic, operational, financial and legal risks).
Risks relating to changes in the regulatory framework, especially environmental risks deriving from the
issue of new requirements applicable to the Group or its products, and risks associated with product
liability, are managed ex ante by constantly improving the Group's products and production facilities, as
well as via the careful management of production processes. Insurance cover is also arranged in line with
sector practices. In particular, in order to better understand and effectively control environmental risks, the
Prysmian Group has developed a centralised system designed to:
identify the most significant environmental issues relating to current operations;
identify and assess the potential environmental impact of all operating conditions, including
emergencies;
analyse the environmental and economic risks associated with significant capital investment;
define improvement objectives and/or risk mitigation plans both at Group level and for each
individual country and business sector;
evaluate the Company's assets in a complete and reliable manner, including examination of any
HSE-related issues or liabilities;
identify any environmental risks or contingent liabilities during the due diligence procedures
performed in relation to acquisitions or disposals.
These activities, coordinated centrally by the Health, Safety and Environment (HSE) department, are
carried out using a data management system and specific procedures, with support from dedicated
technical functions.
Following the acquisition of Draka, work to integrate the HSE functions of the two companies commenced
in earnest during 2012. This has involved updating the Group's environment management and health and
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safety at work systems, as well as updating the IT system for the gathering and reporting of HSE data
and information.
Considering the results and cash generated in recent years, as well as the financial resources available
as of 31 December 2012, the Company believes that, barring any extraordinary events, there are no
significant uncertainties that would cast significant doubt on the ability of the business to continue as a
going concern.
A more detailed analysis of risks is presented in the Report on Operations accompanying the
consolidated financial statements as of 31 December 2012.
Internal Audit and Internal Control
The Internal Audit Department prepares an annual audit plan using a risk assessment approach. Risk
factors are analysed and revised every year to ensure that the audit plan properly covers the risks to
which the Group is exposed.
Internal audit staff are given full access to all data, documentation, information and personnel needed in
order to carry out their specific activities.
The Internal Audit Manager attends the meetings of the Risk Management and Internal Control
Committee, reporting on matters identified by the audit work and the improvements agreed. The status of
the audit plan is also reported, along with any proposals to amend the original audit plan and the
implementation status of previously-agreed improvement work.
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The Prysmian Group adopts a series of administrative and accounting procedures to ensure the reliability
of the system of internal controls over financial disclosures. The Company uses policies, procedures and
operating instructions to ensure an effective flow of information from affiliates.
These include the Group Accounting Manual (rules for the use and application of accounting standards),
the Administrative Processes Manual, procedures for the creation and communication of financial
information and other procedures for preparing the consolidated financial statements and periodic
financial disclosures (including the chart of accounts, the consolidation procedure and the procedure for
related-party transactions). The Central Functions for the Prysmian Group are responsible for providing
the documentation to the Affiliates. All accounting policies, procedures and rules are available to every
Affiliate via the Group's intranet. The Affiliates also issue local policies, procedures and rules that comply
with the Company's guidelines.
The Company has adopted a centrally-coordinated system of assessment and a certification process that
ensures the adequacy and effectiveness of the internal control system. This includes checks on the
financial reporting process in order to meet the requirements of Law 262/05 (Investor Protection Law).
The system was developed using the COSO framework to identify both key risks and the principal
controls needed to mitigate them, thus ensuring that the internal control system operates effectively.
Scoping work was performed to identify the critical processes and sub-processes within the Prysmian
Group and the key functions to be addressed. This activity was carried out in 2011, following the
acquisition of the Draka group.
The Internal Audit Department implements the above system at each operating company and for each
process within the Group, testing independently the effectiveness of the key controls identified previously.
The areas for improvement identified during the audit work are reported to the Company's senior
management and to the Risk Management and Internal Control Committee. An action plan is also agreed
with each operating company to strengthen existing controls or rectify any specific weaknesses.
The Internal Audit Department monitors the implementation status of these action plans and updates
senior management and the Risk Management and Internal Control Committee accordingly.
The Chief Executive Officer and Chief Financial Officer of every Group operating company and the heads
of the principal central functions and departments are responsible for maintaining an adequate internal
control system. This includes periodically checking that the key controls identified and tested by the
Internal Audit Department, on implementation of the centrally-coordinated assessment system, continue
to operate effectively and efficiently. As the persons responsible, they are requested to sign a
confirmation, every six months, that the internal control system is operating properly. After signature, this
confirmation is sent to the CFO of the Prysmian Group, the Executives responsible for preparing
corporate accounting documents and the Internal Audit Manager. In support of the confirmations sent, the
responsible persons must also confirm that they have carried out specific testing to verify the operation of
key controls and have retained the documentary evidence supporting their conclusions. This
documentation must be kept available for future examination by the independent auditors. In order to
ensure that this objective is met, each affiliate is required to submit a detailed Internal Control
Questionnaire (ICQ) to the Company. These ICQs document the key controls for each business process
deemed critical and describe how such controls are implemented at the operating company. They also
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describe what types of test were performed during the period concerned, in order to be able to confirm
the adequacy of the controls in place.. The ICQs are updated every six months and are completed by the
"owner" of the business process.
In order to confirm the consistency of the declarations made, the Internal Audit Department reviews at a
central level the ICQs submitted and selects certain Affiliates or business processes for analytical follow-
up audits. A report is prepared on the results of these checks, consistent with the process of reporting on
all other internal audit activities.
During 2012, this system was fully employed in the analysis of all critical business and financial
processes at the 10 most important affiliates acquired on purchase of the Draka group. A further 6
companies within the Draka group were subjected to a partial analysis of their internal processes.
The Company believes that the number of processes analysed and affiliates evaluated using this
assessment system is sufficient to satisfy the control requirements of Law 262/05.
INVESTOR RELATIONS
The creation of value for shareholders and other stakeholders is a key priority for Prysmian, being an
important aspect of its commitment to accuracy, clarity and transparency in the communication of its
business strategy, objectives and results.
The Group's actions and procedures are designed to provide the market with credible information about
the business, thus boosting confidence in the Company and encouraging a long-term investment
approach to its shares. Every effort is made to avoid biased disclosures and ensure that all investors and
potential investors receive the same information so that balanced investment decisions can be made.
The Investor Relations office manages relations with institutional investors and financial analysts, through
a process of transparent and timely communication. More specifically, upon publishing its quarterly data,
the Company organises conference calls with institutional investors and financial analysts and also invites
specialist media representatives to take part. In addition, the Company promptly informs shareholders
and potential shareholders about every action or decision that could have a material impact on their
investment.
Contact with the financial markets was particularly intense in 2012, with more than 400 one-to-one or
group meetings at the Company's offices, roadshows in the major financial centres of Europe, North
America and Asia, as well as participation at various conferences organised by leading international
brokers. In addition, the Group organised various visits to factories in Europe, the United States and Asia
for institutional investors and financial analysts during the year, in order to provide them with more
detailed information about its products and production processes.
Coverage of Prysmian stock remains very high with considerable geographical diversification, even
though the research sector in Italy and worldwide underwent significant consolidation during the year.
Prysmian stock is now tracked regularly by 25 independent offices (28 at the end of 2011): Banca Akros,
Banca Aletti, Banca IMI, Banca Profilo, Barclays Capital, Berenberg, BofA Merrill Lynch, Centrobanca,
Cheuvreux, Citi, Deutsche Bank, Equita, Espirito Santo, Exane BNP Paribas, Fidentiis, Goldman Sachs,
Hammer Partners, HSBC, Intermonte, JP Morgan, Kepler, Mediobanca, Morgan Stanley, Natixis, UBS.
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The Investor Relations function has maintained constant contacts with institutional investors, not least via
the new official website www.prysmiangroup.com, which has a completely new interface and updated
content. This includes the recordings of audio/visual 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. The Investor Relations section also contains the financial calendar, meeting
documents, the code of ethics and contact information for the analysts that track the stock, as well as
specific sections on Corporate Governance, Risk Factors and the share price.
In recent years, socially responsible investors (SRI) whose investment strategies include social and
environmental considerations, as well as financial matters, have shown increasing interest in the
sustainability issues addressed by the Prysmian Group. This was confirmed throughout 2012 at meetings
and contacts between the Investor Relations function and institutional investors and ethical funds. These
groups requested information about the Group's approach to sustainability and its principal environmental
and social performance indicators, as well as its economic parameters. In addition, Prysmian has
responded to questionnaires submitted by specialist companies seeking to understand better its social
and environmental strategies.
ECONOMIC VALUE DISTRIBUTED TO STAKEHOLDERS
The creation and distribution of economic value provide an initial indication of how the Prysmian Group
generates wealth for its stakeholders.
Economic value represents the wealth produced by the Group that, in various forms, is distributed to the
stakeholders in the following ways: remuneration of human resources (direct remuneration, comprising
wages, salaries and severance indemnities, and indirect remuneration in the form of social security and
pension contributions), remuneration of lenders (interest expense), remuneration of shareholders
(dividends paid), remuneration of the Public Administration (total taxes paid), gifts and donations to the
community. The value retained by the Group is represented by the profit reserves carried forward.
The schedule showing how the economic value generated by Prysmian is allocated was prepared with
reference to the income statement captions reported in the consolidated financial statements as of 31
December 2012.
The economic value generated by Prysmian in 2012, net of reclassified costs, amounted to 1,616 million
euro or about 20% of consolidated sales. The largest part of this value is represented by the
remuneration of human resources (64%), followed by the remuneration of the shareholders (11%),
lenders (9%) and the Public Administration (4%).
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PRODUCT RESPONSIBILITY
The Prysmian Group is active in the design, development, production, supply and installation of terrestrial
and submarine cables and systems operating at high and ultra-high voltages for the transmission of
electricity, industrial cables for applications in various sectors (from Oil, Gas & Petrochemicals to
transport, mining and renewable energy installations), and optical cables for the transmission of voice,
video and data.
Quality and innovation are the hallmarks of Prysmian's approach, both in sectors where the level of
technology, the ability to innovate constantly and the commitment to offering high value-added services
together establish a differentiated competitive positioning, and in those sectors where products are more
standardised, such as medium and low-voltage cables. The Group is organised into two operating
sectors: Energy and Telecom.
SUSTAINABLE TECHNOLOGIES IN THE RENEWABLE ENERGY SECTOR
The Prysmian Group was particularly involved in the renewable energy sector during 2012, assisting in
the construction of major wind and solar farms around the world.
As part of the development of wind energy in Argentina, the Group supplied electricity and
telecommunications cables to Loma Blanca, the largest wind farm currently under construction in South
America. Loma Blanca is part of a national programme launched by Argentina to promote the use of
energy from renewable sources. The objective within the next ten years is for 8% of local electricity
consumption to be clean energy. Using medium-voltage electricity cables and OPGW telecom cables, the
power output of the finished wind farm will be 200 MW.
Among the various projects in the solar energy sector, the Group has supplied P-Sun and Airbag MV
cables to the Sant'Alberto solar park near Ravenna in Italy. The revolutionary Airbag MV cables offer
numerous advantages in terms of both delivery and installation: they are laid directly into the ground at a
depth of 90 cm, rather than 110 cm (increasing the installation rate from 250 m/h to 600 m/h), and employ
technologies with a low environmental impact, such as horizontal drilling.
CUSTOMER CENTRICITY
The Group applies a customer-centric approach, reflecting an ability to anticipate and satisfy the needs of
customers with the maximum possible attention. This approach is sustained by the constant analysis of
customer needs throughout the entire life cycle of the product, from design to delivery, providing service
levels in line with customer expectations that are monitored with respect to predetermined and agreed
parameters. The Prysmian Group is able to develop solutions that meet specific standards, as well as
solutions that are customised to meet specific needs. This flexibility is achieved due to the fast, smooth
organisation of the entire supply chain, capable of accelerating decisions and the time to market, while
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also adapting to the needs of various industries, as well as to the continuous investment made in
innovation. The Group is always setting more challenging objectives, with the aim of being a benchmark
in terms of quality of service, speed and flexibility.
The Prysmian Group is working with utilities and grid managers on a number of major submarine
electricity links around the world, such as SAPEI and the recent MON.ITA in Italy. The record-breaking
Westernlink project is progressing In the United Kingdom. This involves a number of industry firsts, in
terms of voltage (600 kV), highest operational rating for an insulated cable (2,200 MW) and distance (over
400 km).
The Trans Bay, Neptune and Hudson projects in the United States are illuminating large areas from San
Francisco to New York City with electricity from different sources, including renewables and natural gas.
The Group is also world leader in submarine links for offshore wind farms. In addition to the major
projects completed in recent years throughout Europe, particularly in the United Kingdom, Prysmian has
also supplied cabling solutions for the SylWin1 wind farm in Germany. This farm represents a milestone
in the sectors with a power rating of 864 MW and a voltage of 320 kV DC.
In terms of underground terrestrial infrastructure, the Prysmian Group has helped to build electricity grids
in some of the world's largest cities, from New York to Buenos Aires, from London to St. Petersburg, and
from Singapore to Hong Kong.
The Group supports the petrochemical industry by offering operators a complete range of SURF products
and services, from umbilical cables for offshore platforms and high-technology flexible pipes for the lifting
of petroleum, to the DHT technology obtained on the acquisition of Draka. A recent contract from
Petrobras, Brazil, awarded on the basis of all these technologies, confirms one of the primary advantages
obtained from creation of the new Group.
In the renewable energies market, Prysmian technologies have been employed to establish several of the
world's largest solar and wind farms, such as the Ohotnikovo PV plant in the Ukraine and the principal
wind farms in southern Italy.
The Group's fire-resistant cables can be found at the heart of the most spectacular, state-of-the-art
developments, including the Wimbledon tennis stadium and the new Shard skyscraper in London, the
tallest in western Europe, as well as in Masdar City, United Arab Emirates, which is the world's first
carbon-neutral city. By cabling the Burj Khalifa in Dubai, the world's tallest building at 828 metres high,
Prysmian has guaranteed safety on each of its 162 floors with elevator cables and fire-resistant cables
whose length exceeds 1,300 times the height of the tower. In Singapore, the Prysmian Group's cabling
solutions have helped to build the Marina Bay Sands, the most expensive and luxurious casino resort
ever built and one of the world's most complex and challenging construction projects.
Turning to the Elevator industry, the Group's cables can be found in many of the world's tallest or most
prestigious buildings, such as the new World Trade Center that is nearing completion in New York City.
In the transport sector, Prysmian has cabled some of the world's biggest passenger aircraft and ships,
like the Royal Caribbean's GENESIS fleet, the fastest trains, including those designed by Alstom and
Siemens, and the most innovative metro systems, like that in Istanbul. In addition, three million
passengers travel on the London Underground each day, using 275 stations along 400 km of track,
thanks to Prysmian and Draka fire-resistant cables.
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By measuring the thickness of ice on land and water, satellites equipped with Prysmian cables are
continuously monitoring the planet by providing detailed images of specific locations and the trends in
climate change. The Group is proud to be involved in major space projects as a partner of the European
Space Agency.
Prysmian is the world's leading producer of Telecom cables, with a wide range of optical fibre solutions
for voice, video and data, continuous investment in R&D and more than 30 factories dedicated to this
sector. In this way, the Group helps develop the infrastructure of many leading operators and supports
information flows and communications between communities around the world. High fibre-count ribbon
cables are helping the Australian government to achieve its goal of creating a "Fibre-to-the-Premises"
network that will connect 93% of the country's residential and commercial buildings. This project confirms
the Prysmian Group's central role in the largest infrastructure challenge ever faced in Australia's history.
The quality of the Group's optical fibres also allows us to tackle the most delicate and forward-looking
challenges. Draka optical fibre cables were chosen for the construction of the Large Hadron Collider
(LHC), the largest particle accelerator at CERN in Geneva. The 1,500 km of cable installed in the tunnel,
to convey the vast quantity of data generated by experiments to the supercomputer, have enabled the
Prysmian Group to receive a Golden Hadron, an award for suppliers that not only meet the needs and
requirements of CERN, but also exceed their contractual obligations.
Customer Satisfaction
The Prysmian Group aims to be the "preferred supplier" where customer satisfaction is concerned. To
achieve this, in addition to the regular monitoring of key service indicators, such as reliability and speed,
the Group has conducted specific customer satisfaction surveys since 2003. These surveys are carried
out every two years, simultaneously involving over 2,500 customers in more than 20 countries around the
world.
The customer satisfaction surveys are carried out by a leading firm in the sector, using a standardised
telephone questionnaire for customers that is answered by the managers who maintain commercial
relations with Prysmian (purchasing, technical area and logistics). The questions are designed to
measure the level of customer satisfaction with the different elements of the service provided (commercial
& marketing, technical and sales support, management of requests, order processing and invoicing,
range and quality of products).
These surveys represent a key tool for better understanding the service perceived by customers, both in
absolute terms and relative to other market competitors. They also allow the Group to collect further
information about the principal requirements of customers in terms of service. As a result of this work, it is
possible to determine changes over time in the perception of the service offered by Prysmian; identify the
reasons for any dissatisfaction; measure the importance of each component of service in relation to the
overall level of satisfaction; analyse satisfaction with the service in relation to customer characteristics;
compare Prysmian’s performance with that of competitors; identify priorities for the improvement of
service and verify the effectiveness of the actions taken.
The outcome of the surveys provides a basis for the corrective actions implemented in each country,
involving all business functions under the supervision of senior management. Customer surveys also help
validate the internal measurements carried out on a regular basis.
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In general, the results of surveys have enabled the Group to improve its products and services over time,
paying greater attention to the priorities expressed by customers.
RESEARCH, DEVELOPMENT AND INNOVATION
The Prysmian Group has always attributed strategic importance to Research & Development (R&D), in
order to maintain market leadership by providing customers with technologically innovative solutions at
increasingly competitive costs. The acquisition of Draka has added to the Group's know-how and
expanded its expertise in specific high value-added fields such as optical fibres, multimedia (for voice,
data and video communication) and special cables, elevator systems, cables for aviation applications and
cables for the offshore oil industry. Following the integration of Draka's Research and Development
activities, the Group now has a central R&D facility in Milan plus 16 Centres of Excellence, where the
R&D function develops specific products drawing on local know-how. In addition, Prysmian has long-
established relationships with major universities and research centres, including the Polytechnic
University in Milan, the University of Pavia, CNR (the National Research Centre) and Trento's Bruno
Kessler Foundation in Italy, the University of Delft in the Netherlands, the University of Catalunya in Spain
and the National Nanotechnologies Centre in Brazil. In North America, Prysmian is an honorary member
of NEETRAC (National Electric Energy Research and Applications Center) at the Georgia Institute of
Technology.
For Prysmian, environmental sustainability is the fundamental driver of all major development and product
optimisation projects. It represents the key to achieving economic sustainability and an essential
commitment for all leading businesses, in order to assure well-being and the quality of life in today's
society and for future generations. As highlighted in all environmental or sustainability reports made
public from 2009 onwards, Prysmian maintains its long-established commitment to the environment by
working on specific projects, some already in progress, others under preparation at the 17 Research
Centres, often in collaboration with universities and national and international research centres.
Collaboration with the universities is of strategic importance to Prysmian, both to keep constantly updated
on all social issues and to access the most advanced technologies available to the scientific community.
Consideration of the needs and demands of stakeholders is also important for the Group; indeed, this is
one of the most important criteria for the selection of R&D projects. Among the principal internal
stakeholders, the interaction between sales, production, purchasing and logistics is particularly important,
while the key external stakeholders include suppliers of raw materials, customers (especially the utilities),
distributors and certification agencies. In both cases, bilateral communications are guided by meetings
that start by discussing the work planned for the year and continue, at regular intervals, by monitoring
progress based on an internal procedure under which responsibilities and timings are always clearly
defined and checked. Interests change, depending on the type of stakeholder: sales are interested in the
development of new products and the percentage of sales attributable to them; production seeks the
optimisation of processes and the transfer of best practices from one factory to another; purchasing
pursues the selection and qualification of alternative, more economic and eco-sustainable materials, while
customers want innovative products and ever more competitive solutions.
A vast and complete range of technologies is available for the production of compounds and cables for
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subsequent testing: Prysmian possesses technologies for the selection of raw materials, compounding,
film extrusion and injection moulding of thermoplastic and cross-linkable polymers, and their use in
horizontal, catenary and vertical extrusion lines, as well as technologies for the production of conductors,
sheathing and metallic and other protection, whether extruded, welded or glued.
The Prysmian Group produces a vast range of electricity and telecom cables to national, European and
international specifications. Active participation in standardisation groups is also particularly important, so
that the environmental and social aspects can be included in product standardisation documents, thus
harmonising the approaches taken to the sector by different countries.
The majority of actions implemented on environmental sustainability projects involve:
reducing the environmental impact of materials, fluids, electricity and water used in production
processes;
introducing innovative designs that help customers to improve their social position in terms of
environmental commitment;
investment in cables and systems for renewable energy;
participation of and continuous communications with employees and stakeholders, for an
improved understanding of all the environmental, safety and social issues that affect the
manufacturers of cables and their markets.
Principal projects - Telecom sector
The Prysmian Group strengthened its position in the optical fibres and optical cables sector during 2012
by launching BendBrightXS, bend-resistant fibres, and working with several customers on the
development of solutions for the Fibre To The Home (FTTH) and for mobile networks (4G and LTE
networks).
These innovative solutions have a common denominator, in that they improve the total cost of ownership
of various networks by reducing the related installation and maintenance costs. These solutions generally
involve running compact cables through network conduits already used by Telecom operators, and easier
and more economic technical installations. Further opportunities include combining data and electricity
transmission in the same cable.
A further consequence of such new designs is that these innovative solutions have a lower environmental
impact than in the past.
For example, the LT 2.0 BB-XS family of cables has been launched in the US market as the next
generation, large-scale product. The combination of exclusive technologies available to the Prysmian
Group allows optical fibres to be protected by small tubes, resulting in reduced diameter (-19%) and
lighter (-40%) cables, in full compliance with all sector standards and marked by a lower environmental
impact.
Numerous new designs of "mini cables" have been developed for specific markets, including Germany,
Italy and the United Kingdom. The continuous improvement of this type of cable involves reductions in
size and weight, the use of halogen-free materials for internal and external applications, the selection of
eco-sustainable materials for use in production, a reduction in the civil works needed to expand networks
and lower cable transportation requirements.
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Further progress has been made in the field of mobile networks, where the Prysmian Group is developing
a series of hybrid cables (energy and communications) for the US market that address the increasing use
of Fibre To The Antenna. All these solutions incorporate BendBrightXS fibre. The development of this
type of cable is helping to reduce considerably the environmental impact compared with traditional
installations of antenna cables. A special effort has also been made regarding the connectivity
accessories needed for these solutions.
In the Datacom environment, "MaxCapBB" is an innovative multi-mode fibre, resistant to bending, that is
now replacing the standard multi-mode fibres found in local area networks and datacentre applications. A
new family, OM4+, has been introduced that compensates for chromatic dispersion and allows
connections of 50% longer link length at up to 10Gbits/s. This new type of fibre is now incorporated in the
product portfolio of the M&S unit and Prysmian has confirmed its leadership in Category cables with the
launch of the "Cat 6a UTP", a cable that is ideal for business network applications. Key innovations
include the reduced size of the cable and its increased mechanical flexibility, not to mention the reduction
in energy consumed by firms and datacentres that use these cables in their networks.
Among various partnerships with businesses and universities, Prysmian is also working on development
of the next generation of Home network.
Further studies have looked at families of optical fibres and optical cables for special applications, such
as exposure to high temperatures and other extreme environmental conditions. These special fibres are
used in the Oil & Gas and Nuclear sectors, principally for detection and sensing techniques, in order to
use resources better and more rationally, and improve the safety and reliability of operations.
Principal projects - Energy sector
PLaser: LCA in the Netherlands (Delft)
In 2012 the Prysmian Group confirmed its focus on the development of cables with recyclable
thermoplastic insulation using P-Laser technology, emphasising its important during the Life Cycle
Assessment (LCA) carried out at the Delft factory (Netherlands).
In the Netherlands, many operators active in construction and electrical installations declare the highest
level of CO2 emissions based on the ‘CO2 -performance ladder’, a tool originally developed by ProRail
and then used extensively in all purchasing and supplier selection processes. The tool encourages
businesses to be aware of the quantity of CO2 emitted by the production processes and, consequently, to
seek at all times new ways to save energy, use materials more efficiently and employ renewable sources
of energy. All this helps firms to share their knowledge and refer to research institutions, NGOs and
government agencies for the optimisation of new ways to reduce emissions. Many customers in the
construction and installation sector in the Netherlands declare levels 4 or 5 (the highest) for their CO2
emissions on the CO2-performance ladder. Suppliers of cables that declare such a high level of CO2
must validate and publish the emissions data relating to their production processes. Given this, Prysmian
Netherlands has submitted data for all factories, especially Delft, to the national database and performed
the related assessment using LCA (Life Cycle Assessment) methodology under ISO 14040, and the "Eco-
indicator 95" and "Eco-indicator 99" environmental impact methodologies. Estimated values for the
production of P-Laser cable and its end-of-life disposal, compared with traditional XLPE cable used for
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the same purpose, show a reduction in CO2 equivalent (-30%) and on the consumption of fossil resources
(-40%) and water (-70/80%).LCA is an objective methodology for measuring the energetic and environmental impact of a process or
activity. Implementation involves identifying the environmental impact of consuming energy and using
materials, as well as of the emissions, discharges and waste released into the environment over the life of
the product concerned.
EPHESTUS
The Prysmian Group has participated as a partner in the European EPHESTUS project for the
development and installation of a thermionic and thermoelectric solar unit for the combined production of
heat and electricity, working at temperatures far in excess of currently installed systems (800-1000°C). In
particular, the conversion module is based on direct transformers of thermionic energy and thermoelectric
energy, combined thermally in series to increase their efficiency. The thermal recovery system has been
designed to recover all heat losses for re-use in district heating, the heating of individual buildings,
production processes etc. This recovery of heat is the key to significant savings with respect to fossil fuels
with, therefore, considerable economic advantages.
Prysmian has supplied a hybrid cable for the combined transportation of electricity and fluids, capable of
working at high temperatures. Use of a single, hybrid cable has resulted in a more compact, lighter and
more efficient system.
INTELLIGENT CABLES AND SMART GRIDS
The Group has, for many years, shown keen interest in and commitment to the development of Intelligent
Networks. These go beyond the traditional concept of cables, and their installation and functioning, by
seeking to meet the needs of new networks in terms of renewable energy, efficiency and reduced
environmental impact.
These developments have resulted in the following initiatives:
1. the project to “Reduce voltage drop in cables” has established new rules for the dimensions of
three-core AC submarine cables, reducing the voltage drop by around 25% with respect to
current best standards. This means that a cable with a nominal section of 1,200 mm2
can reduce
CO2 emissions into the atmosphere by about 3,000 t/km over 20 years;
2. a project financed by FP7 EM-Safety is establishing cable designs and layouts for vehicles,
especially with regard to the connections between battery and engine, so that the exposure of
driver and passengers to the magnetic field generated is drastically reduced;
3. PRYCAM is a new technology that greatly facilitates the measurement of partial discharges from
functioning networks, identifying the points where these phenomena occur. This helps to avoid
breakdowns due to breaches of the insulation and reduce the energy lost through partial
discharges;
4. the Ocean Lider project is developing offshore cables resistant to considerable dynamic excitation
for use with systems that convert the energy generated by water, wind and marine waves. This
makes installation in the open sea a possibility that was previously not available;
5. as part of the development of 'Intelligent Cables', Prysmian has introduced a new type of MV
cable known as IQ-Protolon, used in mining and for container cranes. This combines a smart
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cable with a suite of hardware and software to produce an advanced SCADA system that is ready
for immediate use by customers.
The innovation presented by IQ-Protolon with respect to traditional cables lies in the inclusion of sensors
within the power cables. These sensors, which may be distributed or in fixed locations, allow the condition
of cables to be monitored and considerably improve their reliability in use. The data obtained from
different sensors is processed and managed in real time by a specially-developed system for monitoring
mechanical deformations and the temperature: everything that might damage the cables. The system
also highlights any malfunctioning of the machines connected to the "intelligent" cable.
The data gathered by the sensors, interpreted and translated in real time for immediate interpretation,
allows malfunctions to be automatically identified at an early stage. This can prevent operating outside of
established parameters and facilitate the use of preventive maintenance to target individual problems.
Prysmian has always sought to offer customers innovative solutions that provide competitive advantages.
The DTS instruments and RTTR system are positioned in order to make a contribution in this regard.
A DTS (Distributed Temperature Sensing) instrument is able to sense temperature using fibres placed in
proximity to HV cables. The measure provides a complete description of the temperature along the whole
length of the cable monitored, since several fibres can be connected to the same instrument.
The RTTR (Real Time Thermal Rating) system is one of the advanced asset management solutions
proposed by Prysmian. This system processes the data gathered by the DTS instrument and checks the
state and condition of the HV and UHV cables monitored, with reference to both current and previous
temperatures.
For all power transmission links with an RTTR system attached, the real-time information available
includes the maximum temperature of the cables and accessories (joints, terminals etc.), the power that
can be transmitted safely, both continuously and in bursts of any duration.
This real-time monitoring, combined with forecast thermal behaviour in current and future conditions,
makes it possible to employ safety procedures that, via automated advance warnings, highlight the risk of
overheating and instability with thermal run-out.
Various utilities currently use RTTR systems supplied by Prysmian. They have determined that these
systems allow an increase of up to 9% in the loads transmitted via underground cables, without any loss
of safety. Considering medium-term operational overloads, the possible increase rises to 12-15%.
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SMART GRIDS, NEW CHALLENGES FOR THE DISTRIBUTION OF ENERGY
During the year, the Prysmian Group consolidated its support for the development of new intelligent
networks by joining the Energy Lab Foundation's Smart Grids laboratory. This organisation promotes
research and innovation in all areas of the energy sector, working with six laboratories focused on such
topics as renewable energies, smart grids, energy efficiency and access to energy in developing
countries.
The objective of this partnership is to further intensify the Group's already strong commitment to the
development of intelligent solutions related to cables, network components and value-added services.
The Group actively partners with utilities on the world's largest projects for the production and distribution
of energy. In this context, a complete range of cables and advanced solutions has been developed, with a
view to making smart grids more reliable and efficient, ensuring that they function properly in all
circumstances, and preventing black-outs, breakdowns and damage to network components. With the
introduction of high-tech products and solutions for utilities in the areas of risk prevention, smart
maintenance, load management and environmental impact, Prysmian has taken a further important step
towards the future of the energy sector.
Intellectual property
Protecting the portfolio of patents and trademarks is a key part of the Group's business, particularly in
relation to its strategy of growth in high-tech market segments. In particular, intensive activity at the
Group's various R&D centres, both in the Energy and Telecom areas, has resulted in further growth in the
number of patents held by the Group, especially in high-tech and high value-added segments. These
justify the major investment made in these areas by the Company in recent years, and protect its current
and future business activities.
As of 31 December 2012, the Prysmian Group holds 5,644 patents and patent applications throughout
the world, covering 914 inventions (of which 237 in the Energy sector and 656 in the Telecom sector).
Thirty patent applications were filed during 2012, of which 15 relating to the Energy sector and 15 to the
Telecom sector. Following examination, 194 patents were granted during the year, 36 by the European
Patent Office (EPO) and 49 in the United States. The most important products, typically involving specific
characteristics or production processes, are protected by trademarks that allow them to be identified and
guarantee their uniqueness. At the end of 2012, the Prysmian Group also owns more than 3,000
trademarks covering its companies, activities, products and product lines in the countries where it is
active.
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OPERATIONS
The Prysmian Group's manufacturing operations are highly decentralised, with 91 factories in 33
countries. This wide geographical distribution is a strategic asset, allowing the Group to respond relatively
quickly to different market requirements. Once again during 2012 the Prysmian Group continued to
implement an industrial strategy based on: (i) focus on higher value-added products, while maintaining a
well-diversified geographical presence to minimise distribution costs; (ii) concentration of high-tech
product manufacture at a limited number of factories to leverage the economies of scale, increase
manufacturing efficiency and reduce net capital employed.
The purchase of Draka in 2011 has enabled Prysmian to achieve recognised world leadership and further
diversify the product/customer portfolio, principally in the Telecom, Industrial and T&I segments, while
also increasing the capacity of the Group and the number of production locations. The process of
integrating Draka's industrial activities started in 2011 and has continued throughout the year, with the
gradual extension of the Prysmian Group's organisational models and systems of control to the acquired
production facilities. At the same time, significant strategic investment has continued in relation to
submarine cables, HV cables, optical cables and optical fibres.
The following factory closures were completed during the year: Derby in the United Kingdom, Hickory in
the USA, Eschweiler in Germany, Livorno Ferraris in Italy, Sant Vicenç dels Horts in Spain and
Singapore. The related machinery was transferred to other factories within the Group. This focus on the
concentration of production was designed to optimise the cost structure within each country and
rationalise manufacturing activities, in line with the plan for the release of synergies announced to the
financial community during 2011.
Gross capital investment amounted to Euro 152 million in 2012, just slightly lower than in the prior year
(Euro 159 million). This reflects optimisation of the use of capital following a transitional phase after the
acquisition of Draka.
Investment in additional production capacity accounted for 58% of the total. Production capacity was
mainly increased in relation to the Utilities and Industrial businesses and the Optical Cables segment. In
particular, investment in additional capacity commenced during the year at the Arco Felice (Naples)
factory, in preparation for work on the HVDC Western Link. This guarantees additional flexibility in view of
the increased backlog of orders. There was also significant investment at Sorocaba (Brazil), Durango
(Mexico) and Liverpool (Australia) to meet the growth in local demand from, respectively, the energy
distribution, automotive and mining segments. At the same time, investment has continued in the
production of HV cables in Rybinsk (Russia), DC submarine cables in Pikkala (Finland) and HVDC
terrestrial cables in Gron (France).
In the Telecom business, work to increase optical fibre and cable production capacity has continued at
the Sorocaba factories in Brazil, in order to satisfy the growing demand for optical cables in South
America. In view of Australia's massive nationwide investment in broadband, further investment has been
made in the local production of cables using ribbon technology. Lastly, investment has continued at the
European optical fibre plants in Battipaglia (Italy) and Douvrin (France), with a view to reducing fibre
manufacturing costs.
Capital investment to maintain capacity or enhance worker safety amounted to about 14% of the total.
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Substantial investment - around 12% of the total - was also dedicated to R&D and the constant
improvement of IT systems. In particular, investment on implementation of the "SAP Consolidation"
project continued throughout the year. This is designed to harmonise IT systems across the Group in the
coming years. Additionally, the new ERP system was extended to Estonia, Finland, Germany and the
Slovak Republic during 2012. Lastly, 16% of investment was dedicated to achieving efficiency
improvements and reductions in fixed and variable costs, especially in relation to the use of materials and
the design of products.
PROCUREMENT AND LOGISTICS
The Prysmian Group works with more than 4,000 suppliers of direct materials around the world. The
principal raw materials used in the Group's production processes are copper, aluminium and various
petroleum derivatives, such as PVC and polyethylene. Certain products also use lead and other metals.
Among all suppliers, those considered most significant in terms of their impact on the environment, local
communities and product safety are:
- suppliers dependent in petroleum-based products;
- suppliers dependent on mining and extraction activities, and the use and transformation of natural
resources;
- suppliers that are heavy energy users.
In terms of sourcing, the Group is committed to applying its Code of Ethics when selecting suppliers,
trying where possible to verify the origin of materials and how they are processed. When joining the List
of Suppliers, each supplier must accept and sign the Group's Code of Ethics, in full awareness of the
related rights and obligations.
With regard to the packaging of products, special importance is attached to the drums used to wind and
transport cables. Small diameter drums are made from plastic/plywood, wood is used up to 3 metres in
diameter, while larger drums are made from steel. In general, the drum material selected depends on the
diameter and length of the cable, criteria for the optimisation of logistics in order to reduce the carbon
footprint, specific requests from the customer and regulatory aspects in the destination country.
The Prysmian Group is heavily committed to maximising the re-utilisation of drums and lowering their
environmental impact. For example, this involves using wood from replanted forests and implementing
lagging solutions that reduce the recourse made to quality materials, while continuing to use recyclable
materials.
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With reference to product packaging, Prysmian’s actions in the areas of packaging and storage promote
the use of environmentally-friendly materials and their subsequent recycling. In particular, a recycling
system continued to operate during 2012 for wooden drums used by customers in the Electrical Utilities
sector. The dual aim is to reduce the environmental impact and cut the costs of disposal.
The wooden drums are collected, repaired and then returned for reuse; this programme is being
conducted in collaboration with both the Group's suppliers of wooden drums and its principal customers in
the sector.
The Group's focus on respect for the environment and sustainability is translated into positive action in
many areas. For example, ecological materials are used and packaging products are recycled. Used
drums and pallets are also gathered up and re-used.
In particular, during 2012 Prysmian implemented a new drum recovery system – “Where is my drum” – for
optimising drum consumption and cutting the relevant logistic costs. Besides reducing the environmental
impact along the entire supply chain, this tool allows for recovering and reusing the drums in the
production process, and setting up an online drum warehouse. Thanks to the latter, users can check
availability and submit specific queries to access information on the drum features and localisation, so as
to arrange transport in an efficient manner.
As regards transport, Prysmian not only gives preference to local suppliers but is also committed to
optimising the carriage of goods by air and by sea, as well as to selecting road hauliers that seek to
implement sustainable policies and actions.
In recent years, the Group has increased efforts to minimise the adverse effects of transportation on the
environment.
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The Logistics function manages all the Group's intercompany flows, both at budgetary and everyday
operational level, with the aim of satisfying demand in all markets that do not have a local production
source. This function also manages short and medium-term production allocations and planning through
the Sales & Operations Planning (SOP) process. This covers the entire supply chain, from the forecasting
of demand (Sales) to the sourcing of raw materials and semi-finished products (Procurement).
In 2012 the Group continued the policy adopted in recent years of prioritising customer service, with the
ultimate objective of improving flexibility, reliability and time to market.
The new concept of "Factory Reliability", introduced in 2010, has improved the reliability of production
planning and performance in terms of both mix and volume, with ever faster response times and stricter
control of every type of inventory: raw materials, semi-finished items and finished products. In addition,
following the acquisition of Draka in 2011, action has also been taken to release the synergies available
within the Draka and Prysmian distribution networks, including the related warehouses and distribution
centres.
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SOCIAL RESPONSIBILITY
Within the social dimension of its business, the Prysmian Group recognises its commitment and
responsibility towards the persons who work as part of the Organisation, as well as those who form the
local communities in the territories in which the Group is active. Accordingly, consistent with its values,
Prysmian constantly seeks to ensure the personal and professional satisfaction of its human resources,
and to communicate with and involve local populations, in order to generate value for these important
categories of stakeholder.
Following the acquisition of the Draka group, the consequent organisational restructuring of the new
Group focused, in particular, on those countries where both Prysmian and Draka are present.
The need for rapid and effective integration of the separate realities, Prysmian and Draka, resulted in an
essential re-design of the human resources strategy, in order to improve business performance. The new
HR strategy launched towards the end of 2011, comprises four key processes:
Leadership Alignment, with a view to aligning the organisation and management within a common
model during the integration process;
People Development, in order to recruit, development and make effective use of individuals, so
that the necessary talent, skills and motivation are available to grow the business;
Organizational Development, to ensure that the organisation is constantly aligned with the needs
of the business;
Social and Internal Relations, for the management of industrial relations and internal
communications in line with the Group's values and policies.
I The key HR processes fully express the Group's system of values that guide the actions and behaviour
of management and employees towards customers, partners, suppliers, shareholders and the wider
community.
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PERSONNEL AND ORGANISATIONAL STRUCTURE
The Prysmian Group employs 19,896 persons as of 31 December 2012, comprising 5,150
management/white-collar staff and 14,746 blue-collar workers.
Work to optimise and integrate resources continued in 2012 following the acquisition of the Draka group.
At the same time, the first group of "Graduates" (30 persons) was introduced to the business and 13 IT
persons were added internally. In addition, Global Marine Ltd, a British installer of submarine cables and
systems, was acquired in December.
The optimisation of resources in 2012 following the Draka integration is discussed further in the section
on "Industrial Relations".
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At Group level, employee turnover for personal reasons fell to 5% of the workforce, compared with 5.8%
in 2011.
The work to implement a matrix organisation that began in July 2011 continued in 2012, focusing on
those countries that still had duplicated organisations and processes associated with pre-existing Draka
and Prysmian units. The analysis and consequent actions were designed to standardise processes,
enhance organisational efficiency and release synergies from the integration, resulting in a clear
improvement in the ability to exercise management control.
Following an assessment of the implementation status and the effectiveness of the new organisational
structure, involving around 200 managers, 8 working parties comprising 70 senior managers were
activated in 2012. These teams were tasked with identifying immediate initiatives designed to improve key
business processes and facilitate full awareness of the new boundaries of the Group and its
organisational dynamics.
Projects to communicate the new organisational structure launched in 2012 (e.g. the "Climbing the Matrix"
project) will continue in 2013. These represent both a tool for identifying successful practices and an
opportunity for interaction between persons from different business realities around the world. These
initiatives will be further supported by specific training on the systems implemented within the matrix
structure adopted by the Group. A global job catalogue will be established in 2013. Defining the various
roles within the organisation, this system will lay the foundations for creating integrated, global systems
for the management of careers and remuneration packages.
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INVESTING IN PEOPLE
The personnel development programme established by the Prysmian Group during 2012 involves four
main initiatives: Graduate Program, Prysmian Group Academy, Talent and Succession Management and
Performance Management.
Graduate Program, launched in 2012, is an international programme for the recruitment and induction of
new graduates. The objective is to contribute to the development of future managers and professionals
via the placement of young graduates, with high-potential profiles, in various functions and geographical
areas. Following initial induction and training at the Group's headquarters, the programme envisages job
rotation over a period of 12 months in the individual's home country, followed by a further 24 months at a
foreign location. After this three-year period, the graduate may be assigned to a junior management role
in Italy or abroad, having regard for business requirements at the time and the individual's performance,
personal characteristics and results achieved. A key role within this programme is played by the mentor
assigned to each graduate. This senior manager provides a point of reference and follows the individual
throughout the entire training process.
Prysmian Group Academy, also launched in 2012, is an initiative designed to create within the Group
an international school for managers and professionals, comprising two principal areas of action: a
School of Management intended to strengthen leadership and managerial skills, established in
partnership with SDA Bocconi, and a Professional School intended to develop and consolidated technical
skills and know-how, guaranteeing the transfer of knowledge from senior experts to more junior
colleagues. Prysmian Group Academy trained around 200 employees in 2012 and this number is
expected to rise to about 500 in 2013 (approximately 10% of all management and clerical staff).
The School of Management offers various management training programmes, developed together with
SDA Bocconi, that can count towards earning an MBA. These programmes address different types of
recipient:
Post Graduate Program: a specific programme for new graduates that have just joined the
Prysmian Group, introducing them to the fundamentals of business, products, processes and
customers, and associating this investment with a period abroad lasting at least 2 years;
International Leadership Program: a complete and intensive programme for talents with 5-7 years
of experience, preparing them to take leadership positions within the Prysmian Group at an
international level.
Advanced Leadership Program: an ad-hoc programme for middle and senior managers intended
to assess and develop their managerial skills and ability, in preparation for rapid career
advancement within the Group.
The Professional School has been established to sustain the development and transfer of the technical
knowledge and skills that underpin the Group's market leadership. Activities focus on four areas:
Research and Development: this training programme, delivered by Group experts, seeks to
develop technical skills in the areas of innovation and product development;
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Operations and Production management: this programme develops individuals from industrial
sectors who wish to take managerial roles, with a focus on building skills in the areas of
production and logistics;
Business Control: these highly specialised courses develop skills in the areas of Business
Control, Finance and Sales;
Sales and Marketing: these courses consolidate and develop technical-commercial skills relating
to the various business segments.
Talent and Succession Management is a process designed to improve the management of key people.
The specific objective is to identify, develop and retain talent in order to sustain the growth of the
business over the long term, and develop and protect critical know-how. This comprises the essential
knowledge and skills of individuals needed to assure the constant improvement of product quality, the
expansion of markets, the management of customers and the acquisition of new business. In particular,
the following actions and processes have been put in place:
assessment of performance and management potential;
succession management, a process designed to establish a series of special measures that
ensure smooth leadership succession for the Company;
talent scouting, an internal process initiated with the aim of promoting young talent.
Performance Management, a programme leading to the gradual introduction of performance appraisals.
A pilot project for implementation of the new performance appraisal system, known as Prysmian People
Performance (P3), was launched during the year. Full roll-out will take place during 2013. The new
process, backed by a specific on-line system, is intended to disseminate a Group culture based on the
importance of constructive feedback, two-way communications with immediate superiors, the
development of individuals and the recognition of merit based on objective criteria. In addition, P3 may be
an important motivational tool, as the appraisal process identifies improved performance. P3 was
launched in 2012 in relation to a representative sample of 300 employees in five countries, two business
units and the corporate headquarters. Extension to all countries in 2013 is expected to involve a selected
group of about 1,300 employees.
International mobility
The Group's programme of international mobility has involved about 100 individuals up to now, providing
them with an opportunity for professional growth in an international context. This programme, open to
both professionals and young talents, is based on a structured and effective process that identifies
specific requirements for managerial know-how or highly specialised knowledge, which the Group
satisfies via the international transfer of resources. Prysmian believes that the development of individuals
by giving them international experience also results in better performance and achievements.
The Group uses various methods to select the best candidates for the programme, such as the mapping
of talents and critical know-how, as well as succession tables. The analysis of profiles identifies those
resources with the characteristics needed to fill open positions. The Group is also introducing a
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performance appraisal system designed to monitor at all times the progress made by individuals posted
abroad.
The profile of an expatriate is that of a professional who knows how to fit in with colleagues, transferring
to them the experience, skills, knowledge and leadership needed to overcome organisational difficulties,
such as those associated with business issues, new projects, new production requirements or adaptation
to new operating conditions.
As part of an integrated approach to global mobility, the Prysmian Group has recently introduced a
programme of cultural orientation, designed to assist persons sent to a foreign country. The local HR
Manager is responsible for providing multicultural training to the transferred employee, in preparation for
tackling the new scenario with greater "cultural awareness". The purpose of this type of training, as part of
a training process that is organised and managed centrally, is to enable transferees to manage
multicultural situations.
The number of opportunities is expected to expand in 2013 and in future years, with constant attention
dedicated to the provision of support for expatriate personnel.
Remuneration policies
During 2012, the Group continued to develop remuneration policies that reflect business objectives,
consistent with the expectations of investors and adopting performance considerations based on time
horizons that are sufficient to guarantee sustainability and the creation of long-term value. In this regard,
the three-year, long-term incentive plan presented in September 2011 has been fully implemented, with
an excellent response from recipients and a high degree of retention.
These remuneration policies are designed to attract and retain talented individuals equipped with the
skills necessary to achieve objectives, to motivate management to pursue improved performance, to align
remuneration dynamics with the responsibilities accepted, not least by providing a proper mix of fixed and
variable remuneration over the short and long terms.
HR Evolution
Implementation of the new HR database will be completed during 2013. This contains the information
about personnel management and payroll costs needed to improve the Group's decision-making
processes. As a result, it will be possible to query the entire business population applying various filters.
Both actual and planned data will be available for analysis, while KPIs will be calculated automatically for
economic parameters, in comparison with inter-functional and country benchmarks. Operational reports
will be available both locally and centrally and local HR personnel will be trained in the use and potential
of the new system.
The principal indicators gathered in 2012 concerning the breakdown of personnel are detailed in the
Attachments. This information relates to the countries included in the database, for which detailed
analytical data is therefore available.
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INDUSTRIAL RELATIONS
The Group maintains relations with the trade unions and workers' representatives based on reciprocal
recognition, dialogue and constructive discussion. With due respect for the different roles, relations with
the unions must be founded on a strong sense of mutual responsibility and constructive dialogue, with a
view to safeguarding common interests.
All trade unions operate freely, without restrictions, and the Group makes adequate facilities available for
the conduct of union activities.
The industrial restructuring consequent to the acquisition of Draka commenced during the year. This
involved closing six factories around the world, and the concentration and reduction of offices and other
sites in various countries. These operations were conducted in compliance with local legislation and in
agreement with the social partners concerned, making recourse to tools for the placement of excess
personnel. For example, when closing the Livorno Ferraris factory (in Italy), the Group implemented
active policies for the placement of the persons concerned with agreement from the local administrations
and the trade unions. As a result of these efforts, many individuals were employed by other factories
within the Group and by other firms.
In addition, agreements were reached with the two separate European Works Councils of Prysmian and
Draka (supra-national bodies representing the workers, as envisaged by EU legislation) for their
unification as one European Works Council for the Group, having regard for the recent Italian law
adopting EC Directive 38/2009 on Works Councils.
INTERNAL COMMUNICATIONS AND INVOLVEMENT
Internal communications are very important, not only to promote a sense of belonging among employees,
but also to highlight and share with personnel the goals reached and the successes obtained.
Communications are fundamental for creating a pro-active working environment, motivated to achieve
common objectives. This tool draws employees closer to the strategic direction of the business, informing
them about the events taking place elsewhere in the Group. Appropriate systems of communication help
to create transparent relations based on mutual trust.
Internal communications are playing a key role in supporting and facilitating integration within Prysmian,
by creating shared values and informing personnel about corporate strategies and policies, as well as
about the most significant events that have taken place. The most important tools employed to guarantee
communications in 50 countries are:
"INSIDE" (the Group intranet), Video and the “ONE” Newsletter, all electronic tools designed to
create a global community that will help to establish a common identity within the Group;
Community Survey, a listening tool for the gathering of feedback;
“CONNECTED”, a magazine issued every four months, whose graphics and content were
updated during 2012. In addition to being a key tool for the better integration of resources, this
magazine is a preferred channel for linking all Prysmian locations around the world. Connected is
translated into more than 20 languages and distributed down to grassroots level in each location,
in order to reach the broadest possible population. The objective of the magazine is to keep
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employees of the Prysmian Group regularly informed about production activities, innovations and
business areas, as well as to present the passion and skills of colleagues engaged on special
projects.
This focus on individuals is confirmed by the Group's commitment to investing in the development of
employee-company relations, via numerous initiatives designed to encourage involvement. The Group
also signs agreements with external partners for the supply of products-services on attractive terms to
employees, such as discounts on theatre tickets, gym subscriptions, magazines and products purchased
in shops.
Action to encourage involvement, intended to address better the needs of different cultures within the
Group, is promoted by HR departments at both central and local level. For example, in this context,
during 2012 the Brazilian company organised "open days" at each production unit so that employees and
their families (“Minha familia na Prysmian”) could spend a day taking part in recreational and cultural
activities, while improving their knowledge of the business. As another example, all employees in Milan
have access to doctors at specialist medical facilities, and their children can obtain grants for advanced
secondary education and for their university studies in Italy.
HEALTH AND SAFETY
The Prysmian Group is as committed as ever to the health, safety and well-being of its employees at all
places of work and business units in every country in which the Group operates. The corporate HSE
function organises its activities based on this principle, which is embodied in the Group's health, safety
and environmental policy, and issues operational guidelines requesting all departments - at both
corporate and operating unit level - to work constantly to prevent accidents and professional illnesses.
Most accident-prevention activities are carried out using tools (e.g. procedures, instructions, notes and
other forms of support) provided by corporate HSE for the management of safety. The objective is to
prevent accidents, improve working conditions and avoid professional illnesses. Internal audits also
highlight any risks to be addressed in order to prevent accidents and safeguard the health of employees.
In 2012, the senior management of Prysmian established an improvement objective applicable to all
operating units throughout the Group. This objective, designed to reduce the frequency of accidents that
involve the loss of work, is quantified using the OHSA “LTA” (Lost Time Accident)1, which is set at 3.1.
HSE monitors performance monthly, communicating the results to the various organisational levels.
Particular attention is dedicated to serious accidents. A detailed survey has been carried out and the
resulting “HSE Safety lessons learned” reports were distributed throughout the Group, in order to avoid
the repetition of similar situations. Compared with the above objective, OHSA LTA 3.1, the Group
achieved 3.6 at the end of 2012. The same objective (OHSA LTA 3.1) will therefore be retained for 2013
as well. Performance will also measured in terms of the seriousness of the accidents, considering the
number of days absent from work.
1 OSHA LTA indicator: (Total number of accidents with loss of work * 200,000)/Hours worked
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Analysis of the reasons for accidents and near-accidents, initially carried out locally and subsequently at
central level based on the information gathered from all operating units, shows that the majority of
accidents with loss of time worked relate to cuts or injuries to fingers linked, respectively, to the
movement of drums and to the cutting and stripping of cables at the machine set-up stage. Based on the
results identified in 2012, corporate HSE will intensify its monitoring, analysis and communications
activities during 2013, promoting the exchange of knowledge and experience about safety at work within
the Group at all levels of the organisation.
Lastly, action to implement and improve systems for the management of health and safety will continue,
with a view to extending further the certifications awarded under OHSAS 18001. At the end of 2012,
these covered 42% of the Group's operating units.
SAFETY FIRST: FACTORIES WITH ZERO "LOST-TIME" ACCIDENTS
Two Prysmian Group factories greatly improved their safety performance in 2012, celebrating a full year
without 'lost-time" accidents i.e. accidents that cause employees to lose working time.
At Livorno Mare in Italy, the lost-time rate dropped to zero from 12 in 2007. The reasons behind this
achievement do not simply relate to the automation of machinery, the replacement of old equipment and
the installation of safety doors on fork-lift trucks. In fact, above all, they can be found in the attention paid
by management to safety performance and the commitment made to improve the safety culture. In
particular, training sessions were held to increase awareness about dangers and risks in the workplace.
The factory in Auckland (New Zealand) also celebrated a full twelve months without lost-time accidents.
In addition, with assistance from the regional HSE department for Australia and New Zealand, the
Auckland location completed implementation of the HSE management system at the start of the year, in
accordance with Prysmian Group requirements. Subsequently, SGS certified the unit compliant with
AS/NZS ISO 14001, AS/NZS 4801 and OHSAS 18001.
COMMITMENT TO THE COMMUNITY
Relations with local communities represent the starting point for the creation of value around the
business. These communities are the source of numerous competitive advantages, which motivate the
Group to cultivate an active role in relations with them, and to participate closely in projects and initiatives
carried out in the public interest.
During 2012, the Prysmian Group pursued its commitment to be a socially responsible business by
supporting, via specific initiatives, the economic, social and cultural development of the areas in which it
is present.
In Italy, for example, the Group collaborated with Confindustria and Cgil – Cisl – Uil in the collection of
funds following the terrible earthquake that struck Emilia in May 2012. The resources collected were
allocated to reconstruction of the long-established and thriving system of production in Emilia, which was
sorely challenged by the quake.
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Activities in the social field in Italy included the donation of low-voltage cables for completion of the
electrical installations at the Centre for the Study of Rare Hereditary Diseases, supported by Milan's
Gregorio Mendel Charity. These cable were installed at the Niguarda Hospital in Milan.
Once again in 2012, the Group supported the activities of Don Rigoldi's New Community (a non-profit
association that helps the needy and assists young people) via donations and support for projects to
rescue and support young addicts, minors and foreigners. It also continued aid for AVSI in Haiti, following
the earthquake there in January 2010.
In addition, the Group began support for the "Villa Santa Maria" Centre for Paediatric Neuropsychiatry in
December 2012. This health centre in Lombardy is dedicated to the looking after and rehabilitating babies
and children afflicted by paediatric autism, multiple disabilities and various degrees of mental disorder.
During the year, the Group also agreed to collaborate with the “Save the Children” Fund on a project to
reduce still births, infant and maternal mortality in Ethiopia. Further details are provided in the side panel.
Prysmian also sponsors the Uman Foundation, an association that pursues innovation, social equity and
development by promoting modern and organised philanthropy in Italy, with the idea of establishing a
culture of giving among Italians. The Uman Foundation seeks to promote socially-responsible financial
activities, connect Italian philanthropy with the major international foundations and contribute to social
development. Among the various activities, a social investment fund has been established within the
Global Impact Investment Network (GIIN) launched by the Rockfeller Foundation, which has already
started-up about 150 funds around the world. The fund is managed with reference to profitability criteria
and is based on investment in profitable firms with a significant social impact, both in developing countries
and in Italy.
The Group also promotes socially-responsible initiatives and activities in the other countries in which it
operates. In Spain, the Prysmian Group has made grants and donated cables and other accessories to
the “Fundación de los Ferrocarriles Españoles”, for the restoration of historic railway carriages and
engines, as well as for the improvement of the public facilities available to the Vilanova Railway Museum.
Additionally, the Group provides catalogues and technical documentation to the Spanish Ministry of
Education and Science for the preparation of training courses for young engineers and students.
In Russia, Prysmian offers work to certain prisoners with the possibility of obtaining a job once they are
released. Furthermore, collaboration commenced with a number of language centres during 2012, in
order to encourage the local population to learn a foreign language. In this way, the Group demonstrates
its commitment to support the education and training of young people. This includes the "Grant" project,
whereby the children of employees can obtain study grants and cash prizes as support for their schooling.
During the 2011/2012 school year, study grants were awarded to 29 students. These ranged from 5 to 40
thousand roubles, depending on the academic results obtained.
In the Netherlands, Finland and Turkey, the Group has made cash and non-monetary donations to
organisations working in the education and research fields. In particular, employees in the Netherlands
pay a small proportion of their monthly salary to support philanthropic activities and provide solidarity for
the needy.
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In Brazil, numerous initiatives have assisted the local community at Vila Velha, where the Group has a
factory. These initiatives have helped support and develop courses and lessons on preventive health and
computer use for the benefit of the most needy communities. They have also included the donation of
food and clothing to children in those communities.
THREE MEDICAL FACILITIES TO BE BUILT IN ETHIOPIA THANKS TO THE GROUP’S SUPPORT
In 2012 the Prysmian Group started a project in support of Save the Children, the largest independent
international organisation for the protection of children around the world, in order to improve infant life
expectancy in Ethiopia. This initiative is part of a wider three-year project involving the SNNPR area
(Southern Nations, Nationalities and People’s Region), one of the world’s worst in terms of infant mortality.
The goal of Save the Children is to contribute to a reduction in maternal and infant mortality in an area
where the health system suffers from under-staffing and a lack of essential equipment and supplies,
resulting in extremely limited access to treatment. Save the Children aims to reopen ten medical outposts
and build five new ones, implementing emergency protocols and providing logistical assistance, drugs and
equipment.
Three of the new facilities will be built thanks to the Prysmian Group, which has contributed to the project
with a direct donation and by involving management in every country, backed by a strong campaign of
internal communications to gather additional funds via donations from employees. The collection of funds
will end in early 2013.
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ENVIRONMENTAL RESPONSIBILITY
HSE STRATEGY AND POLICY
During 2012, the Prysmian Group's senior management renewed and intensified its long-standing
commitment to health, safety and the environment, in the awareness that the proper management of
these aspects does not stop with improving the performance of the Group. Rather, HSE adds value for all
parties concerned, both in terms of business success and with regard to Prysmian's responsibilities
towards its employees and the local communities.
In addition to safeguarding the environment, conservig natural resources and protecting employees, all
established commitments, the Group has also accepted the new challenge of creating even safer
products with a reduced environmental footprint. The first step is to gradually add environmental
performance, health and safety criteria to the sector-specific requirements and those relating to quality
and the optimisation of materials and costs at all stages in the product life cycle, from design to marketing
to final utilisation.
This will be a challenging process, requiring not only specific skills in relation to the environment, health
and safety, but also - and more in general - the acceptance of responsibility by the various functions
within the organisation, and collaboration between them.
Once again, a number of important projects were launched in 2012 under the guidance of the Health,
Safety and Environment (HSE) function, working together with R&D, Procurement, Human Resources,
Production and Logistics. This provides concrete evidence of the Group's new commitment to finding
innovative solutions that meet business needs and, at the same time, environmental performance and
social criteria.
In order to make further progress, the principal actions have been to expand awareness and knowledge
within the Group about HSE matters, and about their increasing contribution to the performance of
products and processes. This work will enable all functions to embrace HSE considerations as part of
their strategic drivers.
Externally, the same elements will be used by stakeholders to evaluate the Prysmian Group in
sustainability terms.
In order present a transparent report on the results achieved, the HSE function has gathered and
processed meaningful information and data about the Prysmian Group's activities. These details are
included in this Report as indicators that highlight the importance of each aspect.
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HSE STRUCTURE AND ACTIVITIES
HSE policy and constant improvement of the system for managing health, safety and the environment at
Group level are an integral part of Prysmian's values.
In this context, the corporate HSE function coordinates and checks all systems, activities and
programmes designed to guarantee the health, safety and well-being of employees, as well as respect for
the environment. This function also assists senior management in the analysis and assessment of the
HSE Management System, and in the definition of HSE objectives for improvements at Group level. In
addition, the HSE function helps local organisations to implement their programmes of improvement and
investment, having regard for the specific nature of each manufacturing sector and geographical area.
In addition, HSE coordinates the audit of HSE management systems at Group level, manages the system
for collecting, aggregating and reporting HSE data and helps with the delivery of HSE training. It also
helps with the preparation of tools and documentation to be used at local level, including those supplied
to the Group's internal auditors.
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In carrying out its duties, HSE works with other corporate and local HSE functions on managing
communications with external stakeholders on environmental, health and safety matters.
At the time of purchasing or selling manufacturing activities, HSE coordinates the due diligence regarding
HSE matters to identify any organisational and/or technical gaps with respect to Prysmian standards. The
environmental problems founded are evaluated to determined their effect on asset values.
Corporate HSE started or completed the following activities and initiatives during 2012:
update and distribution of the Group's HSE documentation, including a series of internal technical
standards that are currently being adopted by all operating units. Audit work is carried out by
HSE or external auditors to check on implementation;
IT enhancements to facilitate the collection and reporting of HSE data and information, so that the
HSE matters deemed significant at Group level can be monitored and reported in this document;
communication of the “Golden Safety Rules”, in a document signed by both the CEO and the
CFO of Prysmian that summarises the principal rules of operation. The objective is to focus
attention on a fundamental principle of Group policy, namely the protection of the environment
and of health and safety in the workplace;
performance of audits to check on the proper application of procedures at operating units that
have recently joined the Group, and the coordination and conduct of more than 100 supervisory
audits of established management systems by the HSE function and experienced Group
auditors;
training of HSE managers at factory, country or regional level on specific topics, both directly
during scheduled visits and via "Webex", a system that combines teleconference facilities with
the multimedia sharing of electronic documents;
performance of HSE due diligence as part of the process of purchasing GME, and provision of
decision-making support to management.
HSE OBJECTIVES
Prysmian's senior management periodically reviews the HSE Management System, analysing and
evaluating the results achieved, the changes needed and Group requirements, in order to establish
guidelines for improving the management of matters relating to health, safety and the environment.
At the start of 2012, the Environment and Safety Committee (ESC), which represents Prysmian's senior
management, established the HSE improvement objectives for 2012-2014 and communicated them
internally, involving the HSE functions in each country and at each business unit.
The activities and results achieved in 2012 are summarised below.
Energy efficiency
In order to meet increasing requests – from customers, authorities, investors and rating firms – about the
reporting of greenhouse gases (GHG), an objective has been established to calculate, at central level, the
Group's emissions of CO2 equivalent, identify the areas for improvement and qualify for participation in
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the Carbon Disclosure Project (CDP). The CDP is an international initiative that seeks to pursue the
objectives established in the Kyoto Protocol for the reduction of greenhouse gases at a global level.
In addition to the consumption data already gathered by the HSE IT system, a new process now collects
information about both "direct" emissions (deriving from production) and “indirect” emissions (deriving
from the energy purchased). As a result, from this year, the Group is able to report onthe GHG emissions
deriving from the use of electricity and other sources of energy (see the table below), which means that
Prysmian will be able to participate in the Carbon Disclosure Project (CDP) in 2013.
Scope Emissions of CO2-eq (t)
Scope 1 - Direct emissions deriving from the combustion of fuel 89,657
Scope 2 - Indirect emissions deriving from the purchase of energy,mostly electricity
454,845
Total 544,502
These emissions of CO2 equivalent relate to the scope of reporting specified in the chapter in which the
data is presented.
By participating in the Carbon Disclosure Project (CDP), the Group will identify areas for improving energy
efficiency and reducing GHG emissions, so that guidelines can be established and best practices shared
at all levels.
Some of the work carried out by the Prysmian Group to improve energy efficiency is discussed below.
During 2012, all German factories obtained ISO 50001 certification and reduced their electricity
consumption by 7% with respect to 2011.
Six locations in the Netherlands reported their emissions from energy consumption to a national
database. Five locations in the Netherlands purchased green electricity during 2012.
The consumption of green electricity generated from renewable sources represented about 5% of
the total electricity consumed by the Group as a whole.
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ENERGY MANAGEMENT AS A TOOL FOR IMPROVING PERFORMANCE
The Group's commitment to improving energy performance has been demonstrated in Germany. An
energy management system has been designed and gradually implemented, with a view to obtaining ISO
50001 certification at all operating units there. By the end of 2012, four German factories (Wuppertal,
Berlin, Neustadt, Schwerin) had already obtained ISO 50001 certification.
Based on the experience accumulated at a pilot site (Wuppertal), a number of projects involving multi-
disciplinary working parties were launched in 2012 with regard to energy efficiency and reducing the
emissions of CO2 equivalent. An interesting project is currently in progress at Schwerin, involving the
gradual introduction of biogas from a local farm as fuel for the heating system.
In the Netherlands, a management system activated in 2010 is working on objectives for the reduction of
GHG emissions and publication of the results obtained.
The system was active at three operating units in the Netherlands at the end of 2012. Using the
processes established, these factories now determine and periodically review improvement objectives
covering the optimisation of energy performance and the reduction of indirect CO2 emissions, partly by
purchasing electricity from renewable sources.
Product environmental performance and life cycle assessments
The objective is to establish a working party at corporate level to consider, on a coordinated basis for the
Group, the growing requests for information about products and their environmental performance.
As a first step, a number of Life Cycle Assessments (LCAs) were carried out together with various
functions in relation to specific products (P-Laser, BendBrightXS cables). Interesting results were
obtained with regard to recyclability and the environmental impact of cables over their life cycle.
HSE will carry out additional LCA studies in future, both in response to customer needs and as support
for the environmental benchmarking of similar products. This work will refine the methodologies used to
assess environmental impact at the various stages of a product's life cycle.
Certification of management systems under ISO 14001 and OHSAS 18001
Certification will be extended in a gradual manner. The objectives will be established together with the
CEOs of each area, so that the implementation programmes decided can be sustained and audited.
Following addition of the Auckland factory in New Zealand during 2012, the percentage of Group sites
with ISO 14001 (environmental management) certification has risen to 82%, while 42% have OHSAS
18001 (safety management) certification.
The HSE function has already carried out a number of preliminary audits and provided support for
operating units that seek certification in 2013.
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Reduction of accidents
The improvement objective set for all operating units within the Group is presented in the chapter on
Social Responsibility, together with the performance achieved by the Group at the end of 2012.
Efficient management of materials
The management of raw materials is deemed important by the Group, considering both the high
consumption of valuable metals, such as copper and aluminium, as an essential part of the production
process, and the amount of scrap generated.
The performance indicator selected by Prysmian in order to monitor this aspect is the "efficiency of
materials usage", represented by the quantity of materials actually consumed with respect to the standard
quantity.
The Operations function sets the monthly efficiency objective for each operating unit, in terms of tonnes of
materials saved each month, taking various factors into account including performance in the prior year.
Operations checks performance each month using a dedicated database (ODM), comparing actual
efficiency with the monthly objective and the average for the prior year.
The efficiency of materials usage improved in 2012 by 0.35% in the Energy Sector and, in the Telecom
Sector, by 0.23% in relation to optical fibre consumption and by 0.35% for other materials. In absolute
terms at Group level, 4,500 tonnes of materials were saved compared with 2011.
The efficiency improvement objectives set for 2013 are 0.39% in the Energy Sector, 0.45% in relation to
optical fibres and 0.67% with regard to other materials in the Telecom Sector.
Skills, training and awareness of HSE matters
Prysmian communicates information and delivers training on environmental matters and on health and
safety in the workplace. The objective is to increase awareness, knowledge and skills regarding the
management of HSE matters at all levels of the organisation, from the country and regional HSE
managers to the business functions involved in the operational management of HSE matters, as well as
to all employees.
In 2012, the "Golden Safety Rules” were translated into every official language used by the Group and
distributed to all employees. The purpose was to enhance awareness about the operational management
of HSE risks, while also creating a common shared language.
The HSE function also prepared a number of "toolboxes" and made them available on the intranet. These
are usable by local organisations to obtain information about specific HSE matters and for training
purposes.
The training of HSE managers at factory, country or regional level is provided both directly and via the
Webex School, which organises a schedule of teleconferences on HSE-specific matters of common
interest.
In total, 24 Webex sessions were held in 2012, involving more than 300 participants in about 565 hours of
specific training. The sessions covered the principles and operating procedures applicable at Group level
(analysis of accidents and methods for reporting them, the Golden Safety Rules, operational procedures
for managing hazardous substances), in-depth coverage of important matters, such as the REACH
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regulation and its implementation, and the sharing of selected best practices, such as the “knife-free
project” launched by colleagues in North America.
A meeting held at the Milan R&D laboratories was attended by 45 colleagues from around the world: chief
engineers, technical supervisors and HSE managers from operating units that perform medium and high-
voltage electrical tests.
Accumulated experience and the analysis carried out clearly show the importance of personal behaviour
as a factor in the cause of accidents. Accordingly, the corporate HSE function will intensify training on the
related HSE matters, involving all levels with established HSE roles and responsibilities, including the
managers of operating units, HSE managers, safety managers and other in-charge persons. The
objectives are to strengthen the leadership provided by these functions, promote a culture of safety and
modify the behaviour of all employees.
CRITERIA FOR THE SELECTION OF SIGNIFICANT MATTERS
The Prysmian Group evaluates and checks the environmental aspects of its products and processes, in
order to minimise their environmental impact and optimise the consumption of raw materials and energy.
It is recognised that optimal environmental management both reduces costs and creates valued added for
all stakeholders within and outside of the Group.
In this light, the HSE function has selected a number of significant matters from among those common to
all operating units. Not limited to environmental issues, these topics also include responsibilities towards
employees and the local communities as a competitive factor that contributes value to the Group. These
aspects are considered representative and significant in relation to the activities of the Prysmian Group.
This Report presents indicators showing their importance:
energy consumption, obtained as the sum of all energy sources used by Prysmian
to manage its production activities and services;
water consumption, which is significant due to the large volumes needed for cooling in Prysmian's
various production cycles;
hazardous and non-hazardous waste, with a potential impact on various environmental factors
and very important in the assessment of process efficiency;
ozone-depleting substances which, although small in amount, are present in almost every
Prysmian production unit and are carefully controlled to prevent leakages and reduce their
potential atmospheric impact;
emissions of greenhouse gases, primarily linked to the use of sources of energy and, to a very
limited extent, to the use of greenhouse gases at certain stages of production;
efficiency in the use of raw materials, given the intensive use of valuable metals, such as copper
and aluminium, as an essential part of most production processes within the Group, as well as
the amount of scrap generated.
Based on assessments and Prysmian's past experience, HSE does not report on the following
aspects, which are considered to be less significant:
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waste water originating from cooling systems, if not contained within a closed-circuit system and if
not requiring special treatment;
atmospheric emissions generated by production processes, which are not especially significant in
most cases throughout the Group.
PRESENTATION OF ENVIRONMENTAL NUMBERS
This section presents the environmental numbers of operating units, both at Group level and by category
of products.
As exceptions, the data relating to raw materials - presented in terms of the efficiency of materials usage
and the emissions of greenhouse gases - is reported at Group level solely to the extent attributable to the
use of sources of energy.
For the first time since the union of Prysmian and Draka, the information deriving from the factories of the
two parent companies is reported on a combined basis. This has been made possible by full integration,
completed in 2012, of the tools and procedures used to gather data from the two companies.
Consistent with this, the environmental data for 2012 has been collected using the same criteria at all
factories within the Prysmian Group.
A number of methodological clarifications are needed in order to ensure that data is correctly read and
interpreted:
in the absence of historical data for Draka prior to 2011, gathered on the same basis, the trend
analysis for the Group as a whole is limited to just two years (2012 and 2011).
Since each type of production has very specific characteristics, associated with the materials
used and the type of products, the environmental performance indicators have been aggregated
into the major production categories: power cables, accessories, telecom cables and optical fibre,
without considering the further sub-divisions existing within each category (business areas).
No data has been collected for offices or the R&D labs because of their low environmental
impact, or for certain production sites not yet fully equipped to collect data: Haixun, Wuhan,
Zhongyao (China); Pune, Chiplun (India); Grombalia (Tunisia); Brøndby (1).
(1) The environmental data for the production sites not included in this analysis is not thought to be significant, withrespect to the mass of environmental data reported, considering the low number of sites involved (about 7% of the total)and the limited extent of production at those locations.
Underground and submarine cable installation activities, whose environmental aspects and
methods of operation are very different from those of the operating units, require separate
consideration. Environmental data is not yet reported for these types of activities, since set-up
work and projects continue in preparation for the future collection and reporting of representative
indicators using dedicated tools.
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The following table provides an overview of the data presented for each category of product and how it is
presented.
(1) The information for the Power Cable category includes combined data for the Telecom and Energy operating units at the Jakartafactories, and for the Telecom, Energy and Accessories operating units at the Oulu factory, since these factories do not accumulateseparate details for each unit (available information relates to each factory as a whole). The quantities produced in relation to suchinformation have been normalised, so the telecom cables produced by the above operating units are identified in weight terms(rather than in km, as in the "telecom cables" category).
(2) Hazardous and non-hazardous waste: the information for the Power Cables category includes combined data for the Telecomand Energy operating units at the Bishopstoke factory, since this factory does not accumulate separate details for each unit(available information relates to the factory as a whole).
(3) Water consumption and hazardous waste: the information for the Power Cables category includes combined data for theAccessories and Energy operating units at the Gron factory, since this factory does not accumulate separate details for each unit(available information relates to the factory as a whole).
(4) The information is significant at sector level. In fact, the quantity of ozone-depleting substances does not relate to productionactivities and, accordingly, it is reported separately in total for the Energy and Telecom sectors.
(5) For the purpose of normalising the environmental parameters, the volume of “power cables” produced is expressed in tonnes,being the sum of the weights of the cables produced in the years concerned (2011 and 2012) and the related compounds producedby Prysmian, excluding the compounds purchased in the marketplace and simply added to the products. Although the extrudedcompounds are already included in the weight of the cable, the portion produced by Prysmian (and not purchased in themarketplace) contributes to the total values reported for the various environmental parameters considered (consumption of energyand water, quantity of waste disposed).
(6) For the purpose of normalising the environmental parameters, the production in km relates to finished optical fibre, excluding anysemi-finished fibre sold as such by the "optical fibre" factories considered in this Report.
(7) The production of “telecom cables” is expressed in km and obtained by summing the production of cables made from opticalfibre, quantified in fibre km, and with those made from copper, quantified in pair km. The decision to use km rather than tonnes toquantify the total production of telecom cables was taken due to the fact that the unit of measure expressed in length reflects theproduction process (and the related impact of environmental parameters) more closely than the unit of measure of productionexpressed in weight terms. As an example, a change in production mix, with a greater percentage of optical fibre cables and a lowerpercentage of copper cables, would reduce the quantity of production expressed in weight terms, even though output would beincreased in length terms. Accordingly, it is assumed that the production of telecom cables increases if its quantity expressed interms of length (km) increases, and decreases if its length decreases. It does not increase (decrease) if the quantity expressed inweight terms increases (decreases).
(8) Only absolute amounts are reported for Accessories, since normalised units of production are not available for this category.
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ENERGY
The following chart shows the total energy consumed during the two years covered by this Report,
analysed by source in the table below.
The consumption of energy, obtained in various units of measurement, is converted and summed in GJ,
using the coefficients described below.
Charts and related results for each category of product are presented below.
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CHARTS FOR EACH CATEGORY OF PRODUCT
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COMMENTS
Power cables
Increased energy efficiency, as evidenced by lower specific energy consumption per unit of production (-
4.3%), was accompanied by essentially stable total consumption. This was due to the fact that some
energy consumption does not vary with production, but remains fixed.
Among other contributors, one Italian factory reduced the need to heat water for production purposes by
investing to extend the number of lines covered by a mechanism that recovers condensation.
Accessories
Consumption fell by about 10% due to the dynamics of production and, quite simply, to the reduced need
for heating as a result of the warmer winter experienced in 2012.
Telecom Cables
Following a reduction in total consumption by about 2%, there was also a 1% decrease in normalised
consumption per unit of production from 0.0253 to 0.0250 GJ / km.
Optical fibre
Consumption per unit of production fell by about 3%, accompanied by a slight increase in the total
quantity of energy consumed. This reflects the dynamics of production.
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WASTE
The principal 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
European classification system, regardless of the waste's country of origin and disposal. The various
types of waste that do not fall into the categories specified on the reporting forms represent exceptions.
These are reported in the two residual categories: "other hazardous waste" and "other non-hazardous
waste" including, for example, laboratory chemicals. In such cases, waste is classified in one category or
the other depending on local laws and regulations.
The following chart shows the total quantity of waste disposed of by the Group's operating units, analysed
between hazardous and non-hazardous using the criteria indicated above.
Charts and related results for hazardous and non-hazardous waste are presented below.
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HAZARDOUS WASTE
The following chart shows the total quantity of hazardous waste disposed of during the two years covered
by this Report. The table below provides a breakdown by caption.
Charts and related results for each category of product are presented below.
CHARTS FOR EACH CATEGORY OF PRODUCT
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COMMENTS
Power cables
The reduction of almost 5% in the quantity of hazardous waste disposed of per tonne of production was
accompanied by a very slight decrease in the total quantity.
The time interval for the cleaning of machines, which generates waste emulsions and sludge, exceeds
one year in many cases, resulting in a slightly erratic flow of waste disposal. In addition, in certain cases,
the type of production also affects the nature and quantity of waste.
Improvements at a number of factories have contributed to lowering the quantities generated, in
particular:
At one Italian factory, the quantity of sludge from processing was reduced by using a centrifuge to
separate out the dust accumulated in lubricating oil, thus extending its life. In addition,
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improvements made to the seals of the machines concerned resulted in lower oil consumption
and a reduction in the quantities to be eliminated.
A cleansing chamber for solvents was activated in Malaysia, thus extending their useful lives and
lowering the replacement rate and, of course, the quantities to be eliminated. In addition, marking
processes have been optimised via a series of operational improvements.
For example, a system for checking the ageing of oil has been implemented at a factory in the
USA, with a view to reducing the frequency of replacement.
Accessories
There has been a reduction in the disposal of hazardous waste by about 8%, largely due to solving a
problem of losses that arose at a French site during 2011.
Telecom Cables
There was a very substantial reduction, almost 40%, in the quantities eliminated, both in absolute terms
and in relation to kilometres of production.
However, this change was partly due to the time taken to implement the data collection tools in 2011,
following the union with Draka. Given this, it was necessary to revise the data of certain factories included
only recently within the scope of reporting. In addition, the quantity of hazardous waste reported by an
Australian factory has dropped drastically. Checks on the reliability of this data are still in progress.
Improvements have been made at a Brazilian factory by reducing the quantity of solvents used for
cleaning purposes.
Lastly, as mentioned in relation to power cables, the time interval for the cleaning of machines, which
generates waste emulsions and sludge, exceeds one year in many cases, resulting in a slightly erratic
flow of waste disposal.
Optical fibre
The absolute quantity of hazardous waste eliminated has risen by about 8%, while the increase in terms
of units produced was about 2.5%. This is explained by higher production of coloured fibres (which
generate larger quantities of waste solvents) and by the disposal of batteries.
One US factory has implemented a system for recycling solvents, thus considerably reducing the
quantities of waste solvents sent for disposal.
NON-HAZARDOUS WASTE
The following chart shows the total quantity of non-hazardous waste disposed of during the two years
covered by this Report. The table below provides a breakdown by caption.
Di seguito si presentano i grafici ed i rispettivi risultati riferiti alle singole categorie di prodotto.
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Charts and related results for each category of product are presented below.
CHARTS FOR EACH CATEGORY OF PRODUCT
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COMMENTS
Power cables
The quantity of non-hazardous waste disposed of has fallen in absolute terms (-7%) and in relation to the
volume of production (-11%).
In some cases, a temporary accumulation (of non-hazardous packaging, for example) over a period of
months, between one year and another, can raise or lower the amounts reported by certain factories.
This said, various actions have been taken to reduce the quantity of waste. One factory in the Philippines,
for example, has improved the recycling of wooden pallets, while the Indonesian factory has increased
the quantity of scrap returned to the production cycle (and not eliminated as waste). In other cases, the
knowledge and experience of workers and supervisors has been improved in order to reduce the levels of
scrap.
In the case of non-hazardous waste too, certain 2011 values reported last year have been revised
following full implementation of the data gathering and communication tools.
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Accessories
The waste generated by "accessories" factories has fallen by about 10%.
One French factory contributed to the overall reduction by increasing the recycling rate of packaging and
reducing the quantity of production scrap.
Telecom Cables
Quantities increased in absolute and relative terms by about 15%.
This change was, apparently, mostly due to exceptional disposals of materials accumulated over time
(e.g. obsolete cables and materials that are no longer usable), as well as to the use and subsequent
disposal of different types of packaging compared with those used in the prior year.
Optical fibre
The results indicated in the charts highlight a marked reduction in the quantities of non-hazardous waste
eliminated. This was partly due to more careful recording, in the current year, of the urban waste
generated by a number of factories recently included within the scope of reporting.
In addition, here too, the results reflect the slightly erratic disposal of materials no longer in use.
WATER
The following chart shows the total water consumed during the two years covered by this Report,
analysed by source in the pie chart.
Charts and related results for each category of product are presented below.
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CHARTS FOR EACH CATEGORY OF PRODUCT
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COMMENTS
Power cables
Water consumption per tonne of production has declined by 14%, while total consumption fell by 10%.
In addition to basic repairs to pipes, this result was aided by a number of initiatives:
a Chinese factory has renewed its water recycling system, focusing in particular on increasing
pipe diameter so that a larger volume of water can be recycled for production purposes.
a US factory has installed a pump for the recycling of water from one line to another, thereby
reducing overall consumption (previously each line had its own, separate water supply).
starting from the total metered quantity, one factory isolated the part not attributable to the
Prysmian site (given that the meter is shared with other users).
Accessories
Total water consumption has increased by 15%.
Telecom Cables
Water consumption per km of production has declined by 23%, in line with the fall in total consumption.
In addition to the maintenance of pipes, this reduction was also due to the closure of an Italian factory that
previously contributed considerably to total consumption.
Optical fibre
Water consumption per km of production has declined by 3.5%, while total consumption increased by just
1.5%.
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OZONE-DEPLETING SUBSTANCES (*)
CHARTS FOR EACH CATEGORY OF PRODUCT
(*) Most of the ozone-depleting substances reported relate to HCFCs, especially Freon (a.k.a. R-22), which is less problematic thanother families of refrigerant gases already banned by law, such as CFC and Halon.
COMMENTS
The charts show the quantities of ozone-depleting substances held at factories. These amounts do not
reflect the changes and top-ups made during the year, but rather the total quantities contained in cooling
equipment - mostly comprising the refrigerant gases used for industrial and civil purposes. The seals of
such equipment are checked as part of specific preventive maintenance programmes, in order to
minimise any leakages.
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The information for 2012 reflects full implementation of the Group's data gathering tools following the
union of Prysmian and Draka in 2011. In particular, the 2011 total did not reflect the contribution made by
a number of factories that were fully included within the scope of reporting from the current year.
In addition - with regard to the Telecom sector - the majority (about 70%) of ozone-depleting gases are
concentrated at 2 factories, which implement the preventive maintenance programme mentioned above.
BIODIVERSITY
None of the Group's factories are located in protected habitats or areas with a high degree of biodiversity.
The Group works closely with customers when cables have to be installed in or close to sensitive areas.
Prysmian follows the instructions received from customers in compliance with current legislation.
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ATTACHMENTS
The following summary information is provided about employment by the Prysmian Group as of 31
December 2012
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AUDITORS' REPORT
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TABLE OF GRI INDICATORS
The following table of GRI (Global Reporting Initiative) G3.1 indicators includes a brief description of
each, any comments and the level of coverage, which is indicated as follows:
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PRYSMIAN S.P.A.
Viale Sarca 222
20126 Milano
Italia
tel. +39 02 64491
www.prysmiangroup.com
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