Pirelli & C. Spa board approves results for six months ended 30 June 2012
• STRONG PROFITABILITY GROWTH ON SOLID PREMIUM PERFORMANCE, STABLE PRICING POLICIES, EFFICIENCIES FOR EXPANSION IN COUNTRIES WITH LOW PRODUCTION COSTS
• ACCELERATED REDUCTION OF STANDARD PRODUCTION IN FAVOUR OF MORE PROFITABLE HIGH AND ULTRA-HIGH PERFORMANCE TYRES
• 2012 PROFITABILITY AND NET FINANCIAL POSITION TARGETS CONFIRMED
PIRELLI & C. GROUP
• EBIT: +38.1% TO 400.7 MILLION EURO (290.1 MILLION EURO ON 30 JUNE 2011)
• EBIT MARGIN GROWS TO 13.3% FROM 10.4% ON 30 JUNE 2011
• NET PROFIT: +39.6% TO 221.7 MILLION EURO (158.8 MILLION EURO ON 30 JUNE 2011)
• REVENUES: +8.3% TO 3,021.8 MILLION EURO (2,789.3 MILLION EURO ON 30 JUNE 2011)
• PREMIUM REVENUES: +26% TO 1,086.9 MILLION EURO IN FIRST HALF. IN THE CAR BUSINESS PREMIUM REVENUES REPRESENT 50.5% OF TOTAL (45.9% ON 30 JUNE 2011)
• NET FINANCIAL POSITION NEGATIVE 1,702.7 MILLION EURO (NEGATIVE 1,305.0 MILLION AT END MARCH 2012), AFTER DIVIDEND PAYMENTS OF 132.3 MILLION EURO, THE PURCHASE OF TWO RETAIL CHAINS FOR 106.2 MILLION EURO AND INVESTMENTS OF 114.8 MILLION EURO
TYRE ACTIVITIES
• EBIT: +32.4% AT 413.6 MILLION EURO (312.5 MILLION ON 30 JUNE 2011)
• EBIT MARGIN ROSE TO 13.8% FROM 11.3% ON 30 JUNE 2011
• CONSUMER BUSINESS EBIT MARGIN AT 15.0% (12.4% ON 30 JUNE 2011)
• INDUSTRIAL BUSINESS EBIT MARGIN 10.2% (8.7% ON 30 JUNE 2011)
• REVENUES: +8.7% AT 3,000.3 MILLION EURO (2,760.9 ON 30 JUNE 2011)
2012 TARGETS
• EBIT CONFIRMED AT LEAST 800 MILLION EURO THANKS TO CONTINUED PREMIUM GROWTH, A STABLE PRICING POLICY AND EFFICIENCIES RAISED TO APPROX. 150 MILLION EURO (FROM 120 MILLION EURO)
• EBIT MARGIN CONFIRMED AT ABOVE 12%
• NET FINANCIAL POSITION CONFIRMED NEGATIVE FOR AN AMOUNT BELOW 1.1 BILLION EURO AFTER DIVIDEND PAYMENTS.
• REVENUE TARGET FORESEEN AT APPROX. 6.4 BILLION EURO (PREVIOUS TARGET APPROX. 6.45 BILLION EURO) DUE TO TOTAL VOLUME REDUCTION OF -3/-4% LINKED TO A MORE RAPID EXIT FROM LESS PROFITABLE STANDARD PRODUCTS (PREVIOUS VOLUME TARGET -1/-2%). PREMIUM VOLUME GROWTH CONFIRMED AT APPROX. +20%, PRICE/MIX CONFIRMED AT +11/+12%
• BOARD COOPTS CARLO SALVATORI
The Board of Directors of Pirelli & C. SpA today reviewed and approved results for the six months which ended on 30 June 2012.
The first half of 2012 saw growth in key economic and profit indicators compared with the same period in 2011, despite the slowdown of the macro-economic scenario which worsened in the second quarter. The strategic focus on the Premium segment, the growth of which was confirmed, the reinforcement of production and commercial presence in rapidly growing economies and a more favourable demand dynamic, offset the negative impact on sales’ volumes, resulting in a further increase in profitability.
As a part of this strategy, Pirelli signed an agreement with PT Astra Otoparts for the construction in Indonesia of a conventional motorcycle tyre factory, launched production in Mexico – where in the second quarter the Silao plant was inaugurated to serve the entire Nafta area – and in the second quarter acquired retail distribution chains in Brazil and Sweden.
Consolidated revenues on 30 June 2012 totaled 3,021.8 million euro, an increase of 8.3% compared with 2,789.3 million euro in the first half of 2011. The operating result (Ebit) after consolidated restructuring charges was 400.7 million euro, with an increase of 38.1% compared with 290.1 million euro in the first half of 2011 and was equal to 13.3% of revenues (Ebit margin), an improvement from 10.4% in the first half of 2011. The net result was 221.7 million euro, an increase of 39.6% from 158.8 million euro in the first half of 2011.
The consolidated net financial position was negative 1,702.7 million euro (negative 1,305.0 million euro at end March 2012) and reflects, among other things, the payment of dividends of 132.3 million by the parent company, the acquisition for a total of 106.2 million euro of the Campneus retail chain in Brazil and the Däckia retail chain in Sweden and investments of 114.8 million euro.
The Tyre activities, which at 99% of sales represent the group’s core business, saw growth in economic results thanks to Pirelli’s strategic focus in the Consumer business in the Premium segment which as well as presenting higher profit margins confirmed its resilience as a sector even in areas hit hardest by the macro-economic crisis. This strategy effectively offsets the overall slowdown in demand linked to the deterioration of the macro-economic scenario, the repercussions of which in terms of volumes are particularly noticeable in the Industrial business with its greater exposure to economic cycles. The effectiveness of the strategy is evident as profitability in both business segments increased in the first half of 2012: in particular, profitability in the consumer business (Ebit margin) rose to 15.0% from 12.4% on 30 June 2011, while profitability in the Industrial segment rose to 10.2% (8.7% on 30 June 2011), regardless of the fall in revenues.
With regard to the Premium segment, in particular, revenues in the first half grew by 26% to 1,086.9 million euro. In the Car business alone, Premium revenues in the half accounted for 50.5% of the total, an increase of approximately 4.5 percentage points compared with 45.9% in the same period in 2011.
With regard to Premium products, in the first half Pirelli launched the Cinturato P7 Blue, the first tyre ever to receive the European double “A” label thanks to its reduced braking distances in the wet and low rolling resistance. The P7 Blue – aimed exclusively at the replacement channel – enriches the range of Pirelli Premium products. With regard to winter tyres, Pirelli launched the Scorpion Winter, a product developed for SUVs and Crossover vehicles, thanks to innovative solutions and technologies.
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