CABLES AND
SYSTEMS
CABLES AND
CABLES AND
SYSTEMS
SYSTEMS
MARKET TRENDS
1998-1999
MARKET TRENDS
1998-1999
CABLES
CABLES
ENERGY
ENERGY
COMMUNICATIONS
COMMUNICATIONS
Stable volume Europe and S. America: continuous price erosion Stable volume Europe and S. America: continuous price erosion N. America: growing volume and price erosion
Europe: volume
increase, price shock N. America: growing volume and price erosion
Europe: volume
increase, price shock End of monopolies Markets opening End of monopolies Markets opening
INDUSTRY
RESTRUCTURING
INDUSTRY
RESTRUCTURING
NORTH AMERICA NORTH AMERICA SOUTH AMERICA SOUTH AMERICA AUSTRALIA AUSTRALIA EUROPE EUROPETURNOVER 1999 (EXCLUDING NKF-BICC)
TURNOVER 1999 (EXCLUDING NKF-BICC)
Total Sales: 3,9
Total Sales: 3,9
21
21
Euro Mln
Euro Mln
GEOGRAPHICAL
BREAKDOWN
GEOGRAPHICAL
BREAKDOWN
PRODUCTS
PRODUCTS
Italy
Italy
Rest
Rest
of Europe
of Europe
21%
21%
15%
15%
Australia,
Australia,
Asia, Africa
Asia, Africa
43%
43%
11%
11%
10%
10%
Central and
Central and
South America
South America
North America
North America
Enamelled, building
Enamelled, building
wires and special
wires and special
cables
cables
Telecom
Telecom
cables & systems
cables & systems
Energy
Energy
cables
cables
Installation services,
Installation services,
accessories and other
accessories and other
Products
Products
29%
29%
31%
31%
26%
26%
14%
14%
1999 SALES (Euro Bln)
1999 SALES (Euro Bln)
GENERAL MKT
Pirelli Cables and Systems
COMMUNICATION
ENERGY
UTILITIES + ACC. SPECIAL CABLES + ENAMELLED SUBMARINE & HV + INSTALL.- Strengthening competitive position through:
- Technology innovation
- Cost leadership
- Global leadership in the industry restructuring
PIRELLI ENERGY STRATEGY
POWER CABLES INNOVATION
AFUMEX COMPACT
AIR BAG
ABERDARE ABERDARE ABERDARE CAVIMAR CAVIMAR CAVIMAR BARCELONA BARCELONA BARCELONA GIOVINAZZO GIOVINAZZO GIOVINAZZO MUDANYA MUDANYA MUDANYA SLATINA SLATINA SLATINA BALASSAGYARMAT BUDAPEST KISTELEK BALASSAGYARMAT BALASSAGYARMAT BUDAPEST BUDAPEST KISTELEK KISTELEK BRATISLAVA BRATISLAVA BRATISLAVA DELFT DELFT SCHWERIN BERLINO SCHWERIN SCHWERIN BERLINO BERLINO AMFREVILLE AMFREVILLE AMFREVILLE PARON PARON PARON LAON LAON LAON CHARVIEU CHARVIEU CHARVIEU INVEX LIVORNO F. BICOCCA MILANO ACS ALFACAVI INVEX INVEX LIVORNO F. LIVORNO F. BICOCCA BICOCCA MILANO MILANO ACS ACS ALFACAVI ALFACAVI ARCO F. BATTIPAGLIA F.O.S. ARCO F. ARCO F. BATTIPAGLIA BATTIPAGLIA F.O.S. F.O.S. LIVORNO LIVORNO LIVORNO EASTLEIGH EASTLEIGH EASTLEIGH B’STOKE B’STOKE B’STOKE NEWPORT NEWPORT
NEWPORT HARLOWHARLOWHARLOW
SOUTHAMPTON SOUTHAMPTON SOUTHAMPTON SVFO SVFO SVFO ANGY ANGY ANGY GRON GRON GRON VOLOGNE VOLOGNE VOLOGNE XOULCES XOULCES XOULCES CHAVANOZ CHAVANOZ CHAVANOZ ESMAR ESMAR ESMAR CAVIGEL CAVIGEL CAVIGEL DESCO DESCO DESCO NEUSTADT NEUSTADT NEUSTADT WUPPERTAL WUPPERTAL WUPPERTAL PIKKALA PIKKALA MERLIN O MERLIN MERLIN O O PIGNATARO MARE PIGNATARO MARE PIGNATARO MARE LEIGH LEIGH PRESCOTT PRESCOTT WREXHAM WREXHAM ERITH ERITH SETTIMO T. SETTIMO T. ASCOLI P. ASCOLI P.
PLANT MAP (EUROPE) - 2000
(including BICC)
PLANT MAP (EUROPE) - 2000
(including BICC)
Pirelli
Pirelli
44
44
New
New
acquisition
acquisition
8
8
TOTAL
LA ROSA LA ROSA SOROCABA SOROCABA ST. ANDRE’ ST. ANDRE’ ST. JEAN ST. JEAN SICABLE SICABLE VEREENGING VEREENGING MINTO MINTO LIVERPOOL LIVERPOOL CLAYTON CLAYTON COLUSA COLUSA SOLAC SOLAC CERQUILHO CERQUILHO QUILMES QUILMES BAOYING BAOYING DEE WHY DEE WHY WUXI TONGLING WUXI TONGLING MOZAMBICO MOZAMBICO ZIMBABWE ZIMBABWE MALAYSIA MALAYSIA
Pirelli
Pirelli
65
65
New acquisition
New acquisition
13
13
TOTAL
TOTAL
78
78
SURREY SURREY TIANJIN TIANJINPLANT MAP (WORLD) - 2000
(including BICC)
PLANT MAP (WORLD) - 2000
(including BICC)
ABBEVILLE ABBEVILLE PRESCOTT PRESCOTT LEXINGTON LEXINGTON JAKARTA JAKARTA ANGOLA ANGOLA1999 SALES (Euro Bln)
1999 SALES (Euro Bln)
OPTICAL FIBRE
Pirelli Cables and Systems
COMMUNICATION
ENERGY
TLC
CABLES COMPONENTSOPTICAL
TERRESTRIAL OPTICAL SYSTEMS SUBMARINE OPTICAL SYSTEMS
90% 90% 90% 90% 10% 10% 10%10% 100% 100% TERRESTRIAL OPT. SYSTEMS TERRESTRIAL TERRESTRIAL OPT. SYSTEMS OPT. SYSTEMS SUBMARINE OPTICAL SYSTEMS SUBMARINE SUBMARINE OPTICAL SYSTEMS OPTICAL SYSTEMS OPTICAL COMPONENTS OPTICAL OPTICAL COMPONENTS COMPONENTS STRATEGIC STRATEGIC ALLIANCE ALLIANCE
CISCO TRANSACTION OVERVIEW
TRANSACTION STRUCTURE AND RESULTING OWNERSHIP
CISCO TRANSACTION OVERVIEW
TRANSACTION STRUCTURE AND RESULTING OWNERSHIP
OPTICAL CABLES OPTICAL
OPTICAL
CABLES
CABLES FIBER OPTICSFIBER OPTICSFIBER OPTICS
100%
LiNbO
LiNbO
33Technology
Technology
GaAs
GaAs
Technology
Technology
Fiber Gratings
Fiber Gratings
Device
Device
packaging
packaging
Modulators…
Modulators…
Pump laser…
Pump laser…
Filters
Filters
Packaging of all
Packaging of all
devices
devices
PHOTONIC TECHNOLOGIES OWNED BY PIRELLI
(after Cisco deal)
Thermal Diffusion
Thermal Diffusion
Oven
Oven
Wafer Cleaning Machine
Wafer Cleaning Machine
6x6 Polarization
6x6 Polarization
Indep
Indep
. Switch
. Switch
LITHIUM NIOBATE TECHNOLOGY: LABS
Clean room for
Clean room for
device fabrication
device fabrication
MBE chamber
MBE chamber
for material growth
for material growth
Material
Material
characterization
characterization
lab
lab
GaAs TECHNOLOGY - LABS
FIBER GRATING TECHNOLOGY - LABS
FIBER GRATING TECHNOLOGY - LABS
?
?
Grating writing set
Grating writing set
-
-
up
up
?
?
Grating recoating
Grating recoating
?
?
Chromatic Dispersion
Chromatic Dispersion
?
TELECOM CABLES & FIBERS
NEW CABLES FIBER TO HOMEis leading
INTERNET technology
capability at competitive
costs
INTERNET PROTOCOL “Broadband” services expansionEXISTING OPTICAL NETWORK
• Narrow bandwidth (“last mile”)
• Low transmission speed
IP (Internet) E-Commerce
Broadband Services (voice +video+ data)
END-USER INNOVATIVE
FIBER OPTICS INNOVATION
SMR fibres
APPLICATIONS APPLICATIONS
Long length terrestrial systems
Long length, high optical power terrestrial systems
Long length submarine systems
Metropolitan area (no compensation)
Premises (last mile area)
PAST PRODUCTS PAST PRODUCTS NewLightTM + FreeLightTM DeepLightTM NewLightTM -WideLightTM+ Enhanced FreeLightTM Enhanced DeepLightTM PRESENT
PRESENT -- FUTURE PRODUCTSFUTURE PRODUCTS
MARKET: DRIVING FACTORS
MARKET: DRIVING FACTORS
?
?Internet as the major source of demand for new capacityInternet as the major source of demand for new capacity ?
?Technological continuous improvement: clients want to Technological continuous improvement: clients want to
buy tomorrow’s technology to be able to compete in
buy tomorrow’s technology to be able to compete in
terms of bandwidth costs and availability
terms of bandwidth costs and availability ?
?Time to MarketTime to Market ?
?Integration of terrestrial Integration of terrestrial -- submarine systemsubmarine system ?
?Cost competitivenessCost competitiveness ?
?System System upgradabilityupgradability
Market Value
(Order intake)
Order intake for upgrading on installed systems
Market Value
Market Value
(Order intake)
(Or
Order intake for upgrading on installed systems
Order intake for upgrading on installed systems
SUBMARINE TELECOM SYSTEMS
SUBMARINE TELECOM SYSTEMS
MARKET TREND (Euro Mln)
MARKET TREND (Euro Mln)
1997
2001
1997
1997
2001
2001
3,200
5,900
3,200
3,200
5,900
5,900
1,900
1,900
1,900
7,800
7,800
7,800
SUBMARINE OPTICAL SYSTEMS
FUTURE PROJECT
SUBMARINE OPTICAL SYSTEMS
FUTURE PROJECT
BALTIC CROSSING BALTIC CROSSING MEDCROSSING MEDCROSSING SAFE SAFE SOUTH AFRICASOUTH AFRICA ?? FAR EASTFAR EAST
APCN 2 APCN 2 AUSTRALIA AUSTRALIA ? ? JAPANJAPAN SAC SAC
SOUTH AMERICA CROSSING
SOUTH AMERICA CROSSING
LEVEL 3 LEVEL 3
New York
New York --LondonLondon
AC2 AC2 HIBERNIA HIBERNIA Connectivity Project Connectivity Project Europe
Europe--IrelandIreland--U.S.A.U.S.A.
TAT15 TAT15 CABLE NETWORK CABLE NETWORK FLAG ATLANTIC FLAG ATLANTIC SAT 3 SAT 3
SOUTH ATLANTIC TELEPHONY
SYSTEMS INTEGRATION SYSTEMS SYSTEMS INTEGRATION INTEGRATION MAINTENANCE MAINTENANCE MAINTENANCE INSTALLATION INSTALLATION OPTICAL CABLES OPTICAL CABLES FIBER OPTICS FIBER OPTICS
(CONNECTIVITY DATA CABLES) (CONNECTIVITY DATA CABLES)
OEM OEM OPTICAL OPTICAL COMPONENTS COMPONENTS TLC SUBMARINE TLC SUBMARINE SYSTEMS SYSTEMS
PIRELLI COMMUNICATION
ACCESS NETWORK (F.T.T.H.) ACCESS ACCESS NETWORK NETWORK (F.T.T.H.) (F.T.T.H.) MODULES DEVICESCARRIERS
CARRIERS
E-BUSINESS PROJECT: LOCAL INTERNET SITES
E-Services for Installers & specifiers:
? Online Product Catalogue
? Distributor Locator
? Technical Training / News / Updates/ Software
? Web-enabled Call Center
? On-line Engineering Service & Support
? On-line Interactive Training
? “Push and pull” promotions
? “Frequent Buyer” Program
Web Marketing Plan to support:
technical marketing
customer relationship management (e.g. “Pirelli Club”, etc.)
Web Marketing Plan to support:
technical marketing
