Pirelli was awarded as the “2020 Excellent Supplier” by Chery Jaguar Land Rover (CJLR), standing out from more than 400 suppliers. The award was presented on April 22 by CJLR top management in Pirelli Yanzhou plant. Pirelli provides 100% of tyres for local production of Chery Jaguar Land Rover.
To meet the strict requirements from CJLR, Pirelli collaborates with the automobile manufacturer in research and development, tailoring tyres for each model to maximize the vehicle’s performance.
“From R&D development phase to final delivery, the cooperation with Pirelli goes smoothly,” said Chery Jaguar Land Rover Vice President of Purchasing QU Guofeng. “Pirelli’s endeavor in technology and continuous exploration of the high-end market are in line with the philosophy of Chery Jaguar Land Rover, and I believe that the cooperation between the two companies will definitely bring better quality products.”
“I am delighted to receive the Excellent Supplier Award from Chery Jaguar Land Rover, which is a recognition of Pirelli’s production processes, product quality and business cooperation,” said Giuliano Menassi, CEO of Pirelli Asia Pacific, “Since entering China in 2005, Pirelli has attached great importance to the renovation and upgrading the facilities, and now its Yanzhou plant is one of the most advanced plants in the world, focusing on the production of high-performance tyres. Pirelli’s OE partnership at the local level is based on the high standards of R&D and product quality of both parties, with leading-edge technology to develop products that can deliver the best performance of vehicles. Thanks to the cooperation with automobile manufacturers, Pirelli can widely understand the technological innovation trends and consumer needs in the industry. I believe that in the future, Pirelli meet the needs of Chinese consumers.”
Pirelli provides 100% OE tyres for all local production vehicles of Chery Jaguar Land Rover. Pirelli’s high-performance product P Zero™ was chosen for Jaguar E-PACE and XFL models as original equipment, to meet drivers’ daily needs and performance experience. Scorpion™ Zero All Season was originally fitted to the Land Rover Discovery and Range Rover Evoque, it is a high-performance all-season product designed for SUVs to ensure excellent performance in all-weather conditions.
Photo gallery: CJLR Excellence Supplier Award Celebration taking place in Yanzhou, on 22nd April: in the middle, Chery Jaguar Land Rover Vice President of Purchasing QU Guofeng (left) and Giuliano Menassi, CEO of Pirelli Asia Pacific (right).
- Further strengthening of Premium: volumes grow by 14.2% and revenues represent 64.0% of the Consumer business (61.5% in 2015)
- Improvement of price/mix: +5.0% thanks above all to the sales mix
- Progressive improvement in volumes, growth of 2.1% (+5.1% in fourth quarter)
- Efficiencies of 90.5 million euro: reaching 79% of 4-year 2014-2017 target of 350 million euro
- Profitability growth, with a total Adjusted Ebit margin of 14.8% (14.4% in 2015 on like-for-like basis). Record profitability for the Consumer business with an adjusted Ebit margin of 16.8% for the year (16.2% in 2015 on like-for-like basis)
- Significant improvement of net financial position
- Europe sees increased profitability. Apac and Nafta remain most profitable areas
- Investment in Research & Development of 228.1 million euro, equal to about 4% of total revenues (6% of Premium segment revenues)
- The process of Pirelli’s transformation continues
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As an effect of the acquisition by Marco Polo Industrial Holding S.p.a. of Pirelli and its subsequent merger by incorporation of Marco Polo Industrial Holding S.p.A. into Pirelli, following the Purchase Price Allocation (PPA) conducted on the basis of that which is established in the relevant accounting principles, greater amortizations were booked mainly referable to immaterial assets identified in the context of this operation. The “EBIT adjusted” excludes – beyond non-recurring and restructuring charges – also amortization that refer to intangible assets identified in the PPA.
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The Board of Directors of Pirelli & C. S.p.A. has reviewed and approved the group’s results for the year ended on December 31, 2016. The results for 2016 show growth in the main economic indicators.
Revenues amounted to 6,058.4 million euro, with organic growth of 7% at the annual level (on a like-for-like basis and net of forex effects, which were negative 5.4%) and of 8.7% in the fourth quarter. The revenue trend benefitted from strong growth – both in the Consumer and Industrial businesses – of the price/mix component (+5.0%) in particular thanks to improvement in the sales mix, as well as price increases in emerging markets.
Volumes’ performance was positive (+2.1% in 2016, +5.1% in the fourth quarter) thanks to the Consumer business (+3.5% during the year, +4.8% in the fourth quarter). The performance of Industrial volumes, negative at the annual level (-3.8%) as a result of the weakness of the South American market, registered growth in the fourth quarter of 6.5% thanks to the business’s recovery in the region, above all in the Replacement channel.
Premium saw improvement with volume growth of 14.2%, above the Premium market’s global trend (+9.4%). The segment posted organic growth of 12.3% to 3,244.6 million euro, accounting for a total of 64% of Consumer revenues, up from 61.5% in 2015 on a like-for-like basis.
The Adjusted Ebit (operating result before non-recurring and restructuring charges and amortization of intangible assets identified in the context of PPA)was 896.6 million euro (860.5 million in 2015 on a like-for-like basis), with an Adjusted Ebit margin growing to 14.8% compared with 14.4% in 2015 on a like-for-like basis. The improvement can be attributed to internal levers such as volumes’ growth, price/mix and efficiencies achieved to contrast forex volatility, increased raw material costs and inflation in emerging markets. Efficiencies totaled 90.5 million euro, bringing the total of efficiencies achieved since 2014 to 277.3 million euro, equal to 79% of the 4-year 2014-2017 target of 350 million euro.
The operating result (Ebit) was 724.2 million euro (compared with 786.1 million in 2015 on a like-for-like basis) and mainly reflects 66.6 million in non-recurring and restructuring charges linked to rationalization processes and costs related to reorganization activities of the Industrial segment and 105.8 million euro relative to amortizations for intangible assets resulting from the acquisition of Pirelli assets by Marco Polo.
The total net result was 147.6 million euro compared with -383.5 million in 2015. This figure included a loss of 559.5 million for the de-consolidation of Venezuela and a negative impact of 14.6 million euro deriving from the operational activities disposed of. The result from equity investments was negative 20 million euro (-41.4 million euro in the same period of 2015).
The net cash flow from operations shows a net improvement, passing from 701.4 million in 2015 to 882.7 million euro in 2016, thanks to the management of working capital, and after having sustained investments of 372.2 million euro (391.4 million in 2015), mainly earmarked for increases of Premium capacity in Europe, Nafta and China, as well as improvements in the mix.
The total net cash flow – before dividends and the effects deriving from the merger with Marco Polo Industrial Holding and from the re-organization of the industrial activities – was positive for 383.1 million euro (192.1 million euro in 2015) and include approximately 200 million euro of inflows deriving from the sale of some shareholdings (mainly the disposal of the investment held by Eurostazioni S,p.A. in Grandi Stazioni Retail) and real estate assets.
The net financial position on 31 December 2016 was negative 4,912.8 million euro, an improvement of 418.2 million compared with 5,331.0 million euro at the end of 2015. The positive performance stems mainly from the high level of cash generation, as well as an inflow of 266 million euro deriving from the entry, with a stake of 38%, of the Chinese fund Cinda into the capital of Pirelli Industrial in the context of the reorganization project of the industrial business.
Investments in Research & Development totaled 228.1 million euro, equal to about 4% of total sales, of which 191.0 million euro for activities linked to Premium products (about 6% of the segment’s sales).
At the geographic level, Apac registered, together with Nafta, the highest profitability of all the macro-areas, remaining at the twenties level. Revenue performance improved (organic growth +12.1% in 2016 and +25.4% in the fourth quarter) which include the sales of Jiaozou Aeolus Tyre from October 1, 2016. On a like-for-like basis, growth was 9% at the annual level and 17.9% in the fourth quarter, thanks to the positive performance of the Consumer business and the strengthening of the Original Equipment channel thanks to new homologations with European and local brands.
Nafta posted an Ebit margin at the twenties level, in line with 2015, with organic revenue growth of 12.0% in 2016 (+18.6% in the fourth quarter) thanks to the good performance of Premium and Super Premium.
Profitability in Europe improved to mid-teens level thanks to the 10.0% Premium revenue growth, supported by the good performance of sales both in the Original Equipment and Replacement channels. Organic revenues grew by 5.1%.
Meai registered stable profitability at the high-teens level, with organic revenues growth of 7.2%.
The reduction of profitability in South America (mid-single-digit) was mainly due to the performance of the Industrial business which discounted the market’s weakness, while profitability in the Consumer segment was confirmed at the high single-digit level. During the year, revenues at the organic level registered progress of 6.0% (-6.6% including forex effect of -12.6%). There was a marked improvement in performance in the fourth quarter with revenues growing 12%, in particular in the industrial business, with a volume increase above the market’s.
Forex volatility and the weakness of the market had a negative impact on the results in Russia (revenues down 1.0% net of forex) with profitability at break-even level, an improvement compared with the first nine months of 2016 thanks to a marked recovery in the fourth quarter (organic revenue growth of 9.6%, underpinned above all by the good performance of price/mix and a forex effect of +6.5%.
- Further growth of Premium with revenues at 65.1% of the Consumer business
- Improved overall price/mix: +6% thanks to price increases and improved sales mix
- Efficiencies of 51.3 million euros (45.8 million in first half 2015), 68% of 2014-2017 plan’s 350 million euros target achieved
- Improved profitability with an EBIT (before charges) of 14.5% (14.2% in the same period of 2015 and same perimeter)
- Profitability of Consumer business at 16.4% (15.7% in first half of 2015 with same perimeter)
- Industrial Business impacted by persisting weakness in South America
- Profitability increases in Europe and NAFTA. Apac confirmed as area of greatest profitability
- Successful conclusion of debt refinancing
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Comments on the economic data for the six months ended on 30 June 2016 – if not otherwise indicated – refer to comparisons with economic data for the six months ended 30 June 2015 for only the Pirelli Group and applying the same perimeter.
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The Board of Directors of Pirelli & C. SpA today reviewed and approved the group’s results for the six months ended on 30 June 2016. The semester was characterized by following key elements:
- Revenues of 2,968.6 million euro, with organic growth (with the same perimeter and net of negative forex effect of 8.8%) of 5.9%, thanks to great improvement in the price/mix component (+6.0%) because of price increases in emerging markets, higher sales in the Replacement channel and different geographic and product mixes. The increase in revenues at the organic level was underpinned by the performance of the Consumer business (+7.4% organic growth) thanks to the performance of the Premium segment and mature markets, while the Industrial segment (+0.4% organic growth) was impacted by the weakness of the tyre market in South America and other emerging markets. Overall volumes were stable, with different dynamics in Consumer (+1.9%) and Industrial (-7.3%);
- Further reinforcement of Premium, with volume growth of 13.4% (+15% solely in the second quarter after +11.7% in the first quarter) above the global Premium market trend (+9.4%). The Premium’s organic revenues increased by 11.3% to 1,607.2 million euro, growing to 65.1% of total Consumer revenues from 61.5% in the same period of 2015 (with the same perimeter);
- Improved profitability thanks to the effect of internal levers of price/mix and efficiencies achieved to contrast forex volatility and the decline of some markets mainly in the Industrial business;
- EBITDA margin before non-recurring and restructuring charges improved to 19.5% compared with 19.2% in the same period of 2015 and the same perimeter. EBITDA before non-recurring and restructuring charges was 578.7 million euro (588.0 million euro in the same period of 2015 and the same perimeter);
- EBIT margin before non-recurring and restructuring charges grew to 14.5% compared with 14.2% in the first half of 2015 and the same perimeter. This results benefits, among other things, from the achievement of efficiencies of 51.3 million euro (45.8 million euro in the first half of 2015). Since 2014 total efficiencies of 238.1 million euro have been achieved, equal to 68% of the target set in the 2014-2017 4-year plan of 350 million euro. EBIT before non-recurring and restructuring charges of 429.1 million euro (434.8 million in the first half of 2015 and the same perimeter);
- At the geographic level profitability improved in Europe and NAFTA thanks to strong growth of the Premium segment. APac was confirmed as the most profitable area with an EBIT margin above 20%.
