CFO Corner: Prysmian’s Facchini Appreciates Investor Insights

Pier Francesco Facchini has served as the Chief Financial Officer (CFO) of Prysmian since 2007. Prysmian is a company specializing in the production and distribution of power cables for the energy industry and optical fiber cables for the telecom industry. With operations spanning Europe, North America, Latin America, the Middle East, and Asia, Prysmian stands as one of Italy’s largest manufacturers. Prior to his tenure at Prysmian, Facchini held the position of CFO at the Benetton Group for a period of three years.

Global Finance: You have served as a CFO for two decades. How has your role evolved during this time?

Pier Francesco Facchini: As CFOs, we now dedicate a greater portion of our time to strategic activities and less to technical tasks. Many of the traditional operational responsibilities that used to be within the CFO’s domain are now handled by our own teams. Our focus has shifted more towards the boardroom. The role of the CFO has become pivotal in shaping the overall group strategy, analyzing and comparing organic growth and M&A opportunities in terms of sustainable returns and value creation Thanks to the broad view which our role entails, we are well-positioned to identify expansion opportunities and optimize the business portfolio.

GF: Could you point out one aspect of this expanded CFO role that you find particularly rewarding?

Facchini: Prysmian is held by many major long term investment funds, including BlackRock, UBS, T. Rowe, and others. I find the engagement with these investors exceptionally insightful. They frequently possess an industry perspective that we may not have access to, as they dedicate their efforts to making thorough comparisons and analyzing various companies through the entire chain. Their guidance often serves as a precious food for thought and we often take their inputs into account, not solely due to their substantial ownership, but because we genuinely recognize that their insights are extremely valuable and fact-based.

GF: How will AI further transform the role of CFOs?

Facchini: In Prysmian, I also oversee the ITC and Digital function, with the CIO reporting directly to me. I believe this responsibility is significant because the CFO possesses an in-depth understanding of the company and its operations, allowing for a more comprehensive assessment of the risks and opportunities presented by new technologies, especially when they are potentially disruptive as AI. Areas such as pricing, research and development (R&D), and commercial decision making offer ample potential for AI applications. I believe it falls upon the CFO, in close partnership with the business, to identify the specific applications that are most relevant to our company. AI represents a paradigm shift in information technology, necessitating extensive business planning, an area where CFOs excel.

GF: Is the CFO involved in the company’s ESG (Environmental, Social, and Governance) goals, and if so, what specific role do they play?

Facchini:  They can play a crucial role to enhance the rigor and quality of ESG data reporting within a company. CFO bring extensive experience in working with financial data and reporting, with the related processes and internal control systems, and for this reason can apply all this also to ESG data and reporting. As of 2022, Prysmian has been publishing its first Integrated Report that combine both financial and ESG data, reflecting our commitment to transparency and comprehensive reporting.

GF: Prysmian is a substantial multinational corporation with a presence in numerous countries. How does this multinational aspect contribute to the intricacies of your role?

Facchini: This complexity and global presence require a balanced allocation of our own time, both to overarching corporate strategy shaping, which encompasses investments, divestments, M&A and technology, and the more conventional task of supporting day-to-day business operations. Within our organization, we have four major business segments: Renewable Transmission, Power Grid, Electrification and Digital Solutions, with a total of 105 plants worldwide. Our global and widespread footprint allows us to adopt a “glocal” approach, where also the local presence and the proximity to the customers play an important role, due to the very nature of our business. Cables are both heavy and costly to transport, leading us to produce close to our clients. Our role as “sparring partners” for the business is indispensable given these unique circumstances. While I personally allocate approximately two-thirds of my time to corporate tasks at Group level, for the entire CFO functions the time allocation is more evenly split, with half dedicated to corporate and strategic initiatives and the other half focused on day-to-day operations.

GF: What keeps you up at night?

Facchini:  All the factors that are beyond our direct control make me worry, especially in the present context. For instance, the macroeconomic outlook, such as whether Europe or the United States may trend towards a recession or not, or such as the future dynamic of interest rates, fall outside our sphere of influence. Additionally, the geopolitical landscape is a major concern. Presently, there are two active wars, and geopolitical risks have significantly escalated.