Sustainability Channel

Shareholders approves 2010 results and nominate new board of directors

MEETING OF PIRELLI & C. SPA SHAREHOLDERS:

• 2010 RESULTS APPROVED

• DIVIDENDS APPROVED: 0.165 EURO PER ORDINARY SHARE, 0.229 EURO PER SAVINGS SHARE

• NEW BOARD OF DIRECTORS NOMINATED

• NEW GENERAL REMUNERATIONS POLICY VOTED IN

• MODIFICATIONS TO BYLAWS AND CANCELLATION OF ASSIGNMENT RESERVE APPROVED

PIRELLI & C. SPA BOARD OF DIRECTORS MEETING:

• MARCO TRONCHETTI PROVERA CHAIRMAN AND CHIEF EXECUTIVE OFFICER; VITTORIO MALACALZA AND ALBERTO PIRELLI DEPUTY CHAIRMEN

• GOVERNANCE FURTHER STRENGTHENED THROUGH THE INSTITUTION OF STRATEGIES COMMITTEE, AND NOMINATIONS AND SUCCESSIONS COMMITTEE

• CARLO SECCHI CONFIRMED AS LEAD INDEPENDENT DIRECTOR

BOARD MEETING TO REVIEW RESULTS FOR THE 3 MONTHS TO 31 MARCH BROUGHT FORWARD TO 4 MAY

The Shareholders of Pirelli & C. SpA met today in ordinary and extraordinary session.

In the ordinary session, Shareholders approved results for the year 2010, which closed with a consolidated net profit of 4.2 million euros and a Parent Company net profit of 87.4 million euros, and the distribution of dividends of 0.165 euros per ordinary share and 0.229 euros per savings share. The payment date is 26 May 2011 (ex-dividend date 23 May 2011).

Shareholders then established that the duration of the entire Board of Directors will be three years (until the approval of results to 31 December 2013) and determined that the number of board members will be 20, of whom 11 independent. The annual gross compensation for the entire Board is set at 1.7 million euros.
On the basis of the lists presented, the following people were nominated directors of Pirelli & C. SpA:

Marco Tronchetti Provera
Vittorio Malacalza
Alberto Pirelli
Carlo Acutis (independent)
Anna Maria Artoni (independent)
Gilberto Benetton
Alberto Bombassei (independent)
Luigi Campiglio (independent)
Enrico Tommaso Cucchiani
Paolo Ferro Luzzi (independent)
Giulia Maria Ligresti
Massimo Moratti
Renato Pagliaro
Giovanni Perissinotto
Luigi Roth (independent)
Carlo Secchi (independent)

The above were chosen from the majority list (voted by about 84,0% of the capital represented at the shareholders’ meeting) presented by Camfin, Mediobanca, Edizione, Fondiaria-Sai, Allianz, Assicurazioni Generali, Intesa Sanpaolo, Sinpar and Massimo Moratti, belonging to the shareholder syndicate of Pirelli & C. SpA

Franco Bruni (independent)
Elisabetta Magistretti (independent)
Francesco Profumo (independent)
Pietro Guindani (independent)

The above were chosen from the minority list (voted by about 15.6% of the capital represented at the shareholders’ meeting) presented by a group of fund manager companies and international institutional investors.

The curricula of the directors can be seen online at www.pirelli.com.

Shareholders also voted in favour of the Group’s General Policy of Remuneration, containing the guidelines for the definition of the remuneration of executive directors and management in general.
The Board decided that the remuneration structure will be submitted to shareholders for review one year earlier than required by law.

In the extraordinary session, in conclusion, Shareholders decided to modify the company’s bylaws in order to introduce into them some powers foreseen by the legislature when Italy adopted European community directives regarding the rights of shareholders in listed companies (shareholders’ rights directives). Also during the extraordinary session, shareholders approved the voluntary reduction of company capital by 32,498,345.12 euros, in accordance with article 2445 of the civil code to attribute to net assets. This reduction is aimed at the completion of the operation of assignment of Prelios SpA shares (formerly Pirelli RE SpA) carried out during 2010 and does not entail any reduction of company capital, the amount of the reduction being destined to net assets cancelling the negative reserve generated at the conclusion of the operation of assignment. It is expected that the reduction will be finalized by August 2011, once the terms called for by law are met.

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Pirelli and an enthusiasm for energy

Energy efficiency means consuming less without waste as well as better consumption, selecting the most suitable way to obtain the best result from the energy available.

 At Pirelli production sites, people devoted to the management of energy consumption and specialised groups work to consolidate this approach, developing action plans aimed at optimising consumption and making employees aware of the subjects of energy and the environment.

 The studies and actions being carried out concern the consumption of primary energy, but they do not neglect that of water and atmospheric emissions.

The carefully planned activities are aimed at:

• eliminating waste;
• increasing the energy yield of plants and processes;
• reducing overall expenditure to guarantee efficiency and savings.

An effective contribution is requested of all the participant working groups. Among the impressions gathered from those groups emerge objectives such as making people aware of the need for energy saving, useful for consolidating the initiatives being carried out and realising new ones, and the diffusion of data inherent to consumption and costs.

 The expectations are substantial, from increasing personal awareness to the possibility of broadening the extent of work and obtaining starting points or ideas from a number of production sites.

 Last but not least is an opportunity that must not be lost to replace old generation components with new ones, able to save energy by optimising consumption.

 But the factories are not just starting to talk of these subjects now: as a result of contributions from experts in energy consumption and saving, Pirelli’s sustainable development has put down its roots for the task with the competence, culture and enthusiasm of its employees.

MAKE WAY FOR THE ENERGY OF THE CINTURATO P1

In a world in which resources are always more and more scarce and the population is increasingly numerous, the common objective must be sustainable growth. And the Sustainable Energy Week is an opportunity of making people aware of the responsible use of energy. Along those lines, the European Union has organised the conventions, debates and forums currently taking place on the subject. The need for sustainable growth is why many companies like Pirelli design and develop innovative solutions and products to enable people to use energy correctly, all with the kind of characteristics able to make a tangible reduction in their impact on the environment.

Cinturato P1: a top saver

The most recent example of a leading innovative product from the sustainable use-of-energy point of view is the brand new Cinturato P1, launched by Pirelli last month.

This is a premium tyre for small and medium cars that broadens and improves the historic Cinturato family.

Once more, it confirms the company’s strategy of green performance, which means focusing a great deal of attention on environmental characteristics without ever sacrificing performance and safety.

In its first official tests, the Cinturato P1 immediately beat all its competitors in terms of fuel saving and reduced acoustic emissions. As a result of a 15% reduction in its weight and innovative technological choices, the new tyre has an up to 25% less rolling resistance which, in terms of consumption and pollutant emissions, means a saving of up to 5%.

The launch of this tyre is pursuant to Pirelli’s strategy, aimed at increasing the impact of green performance products on our turnover from 37% in 2010 to over 45% by the end of 2013.