PIRELLI & C. SPA BOARD APPROVES CONSOLIDATED RESULT FOR NINE MONTHS ENDED 30 SEPTEMBER 2012
• PROFITABILITY GROWS BECAUSE OF SOLID PREMIUM PERFORMANCE, STABLE PRICING POLICY, EFFICIENCIES DUE TO CAPACITY EXPANSION IN RAPIDLY DEVELOPING ECONOMIES AND GREATER REDUCTION OF FIXED COSTS
• FURTHER ACCELERATION IN THE REDUCTION OF NON-PREMIUM TYRE PRODUCTION IN FAVOUR OF HIGH AND ULTRA-HIGH PERFORMANCE ONES
• INVESTMENT IN FIRST NINE MONTHS OF 2012 OVER 320 MILLION EURO TO INCREASE PREMIUM CAPACITY IN RAPIDLY DEVELOPING COUNTRIES
PIRELLI & C. SPA
• EBIT: +31% TO 592.8 MILLION EURO (451.2 MILLION ON 30 SEPTEMBER 2011)
• EBIT MARGIN GROWS TO 13.0% FROM 10.6% ON 30 SEPTEMBER 2011
• NET PROFIT: +22.7% AT 308.3 MILLION EURO (251.3 MILLION ON 30 SEPTEMBER 2011)
• REVENUES: +7.2% AT 4,574.1 MILLION EURO (4,265.8 MILLION ON 30 SEPTEMBER 2011)
• PREMIUM SEGMENT CONTINUES TO GROW: REVENUES +23.5% AT 1,612.3 MILLION EURO ON 30 SEPTEMBER 2012 AND VOLUME INCREASE +13.5%
• NET FINANCIAL POSITION NEGATIVE 1,868.8 MILLION EURO (1,702.7 MILLION ON 30 JUNE 2012)
TYRE ACTIVITIES
• EBIT: +26.4% AT 612.3 MILLION EURO (484.4 MILLION EURO ON 30 SEPTEMBER 2011)
• EBIT MARGIN GROWS TO 13.5% FROM 11.5% ON 30 SEPTEMBER 2011
• CONSUMER BUSINESS EBIT MARGIN AT 14.5% (12.5% ON 30 SEPTEMBER 2011)
• INDUSTRIAL BUSINESS EBIT MARGIN AT 10.5% (9.1% ON 30 SEPTEMBER 2011)
• REVENUES: +7.5% AT 4,542.9 MILLION EURO (4,225.7 MILLION ON 30 SEPTEMBER 2011)
2012 TARGETS
• EVEN WITH AN ACCELERATED REDUCTION OF NON-PREMIUM PRODUCTION, EBIT OF APPROX. 800 MILLIONI EURO THANKS TO:
- SUSTAINED GROWTH OF PREMIUM IN RAPIDLY DEVELOPING ECONOMIES
- STABLE PRICING POLICY,
- EFFICIENCY PLAN INCREASED TO 155 MILLION EURO (FROM150 MILLION EURO)
- REDUCED IMPACT OF COSTS, IN PARTICULAR FOR RAW MATERIALS
• EBIT MARGIN INCREASES FROM >12% TO APPROX. 13%
• EXPECTED REVENUES APPROX 6.15 BILLION EURO (PRIOR TARGET APPROX 6.4 BILLION EURO) TAKING INTO ACCOUNT:
- TOTAL VOLUME REDUCTION OF -5%/5.5% (FROM PRIOR TARGET -3%/-4% ); PREMIUM GROWTH REVISED FROM +20% TO +17%/+18% IMPACTED BY THE SLOWDOWN IN THE EUROPEAN ECONOMIC CONTEXT; PRICE/MIX SEEN AT ABOVE +11% (PREVIOUS TARGET +11/12%)
- REDUCTION OF NON-PREMIUM PRODUCTION BY THE RUSSIAN JOINT VENTURE
- NEGATIVE EXCHANGE RATE IMPACT (-1% COMPARED WITH 2011)
• NET FINANCIAL POSITION EQUAL TO OR ABOVE 1.2 BILLION EURO AFTER THE PAYMENT OF DIVIDENDS (PREVIOUS TARGET BELOW 1.1 BILLION EURO AFTER DIVIDEND PAYMENTS) IN CONSIDERATION OF THE LEVEL OF SALES AND OPERATIONAL ACTIVITIES IN EUROPE WHICH BY THE FIRST QUARTER OF 2013 WILL BRING INVENTORY TO OPTIMAL LEVELS
• INVESTMENT CONFIRMED AT UNDER 500 MILLION EURO
• BOARD CO-OPTS MARIO GRECO
The Board of Directors of Pirelli & C. SpA met today to review and approve results for the nine months which ended on 30 September 2012.
The Pirelli group’s results for the first nine months saw key economic indicators grow, in particular profitability compared with the same period of 2011, notwithstanding the slowdown of the macro-economic scenario which intensified in the third quarter. The negative impact of the crisis on sales’ volumes was in fact offset by the group thanks to the positive performance of Pirelli’s Premium range, as well as the reinforcement of the productive and commercial presence in rapidly developing economies and with a more favourable demand dynamic, factors which resulted in a significant increase in profitability.
At the consolidated level, revenues in the first nine months amounted to 4,574.1 million euro, an increase of 7.2% compared with 4,265.8 million euro in September 2011 and the operating result (Ebit) amounted to 592.8 million euro (higher than the total for full-year 2011), with an increase of 31% compared with 451.2 million euro of the prior year and profitability (Ebit margin) grew to 13.0% (+2.4 percentage points compared with the number on 30 September 2011). The net result was 308.3 million euro, an increase of 22.7% compared with 251.3 million euro on 30 September 2011. In the third quarter of 2012, in particular, Pirelli had sales of 1,552.3 million euro, an increase of 5.1%, and an operating result of 192.1 million euro (+19.2% in the same period of 2011), with profitability rising by 1.5 percentage points to 12.4%.
The positive results’ performance was particularly significant considering the overall reduction of sales’ volumes in tyre activities, which fell 6.8% during the first nine months of the year because of the persistent difficulties of the global macro-economic scenario, in particular in the countries of southern Europe. The results confirm the effectiveness of the strategic focus on the Premium segment.
In this segment, in which Pirelli aims to achieve global leadership in 2015, volume performance in the third quarter (+12.5%) was in line with the preceding quarter and leads to a progressive growth in Premium volumes during the first nine months of 13.5%, with sales growing 23.5% to 1,612.3 million euro.
The effectiveness of Pirelli’s Premium strategy in contrasting the overall slowdown in demand can be seen in particular in the growth of profitability in the Consumer business, which in the first nine months increased by 2 percentage points to 14.5%. The profitability performance of the Industrial business was also positive, even if more greatly impacted by the effects of the crisis because more exposed to economic cycles, shows profitability growing in the first nine months by 1.4 percentage points to 10.5%, thanks to efficiencies and lower raw material costs.
In line with the industrial plan – which calls for an increase in Premium capacity, further expansion in rapidly developing countries and with a more favourable demand dynamic and a reinforcement of the international commercial presence – in the first nine months Pirelli made investments of 327.4 million euro, on top of 277.1 million euro in financial investments for the acquisition of the Russian factories in Kirov and Voronezh (170.9 million euro) and two distribution chains in Brazil and Sweden (106.2 million euro). These factors, together with dividend payments to shareholders of 132.3 million euro and the overall performance of working capital, resulted in a net financial position at the end of September 2012 of negative 1,868.8 million euro, compared with -1,702.7 million euro in June of June 2012 and -737.1 million euro in December of 2011.
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