Sustainability Channel

PIRELLI & C. SPA BOARD OF DIRECTORS APPROVES 2011 RESULTS INCLUDING THE SUSTAINABILITY REPORT

Today, Pirelli & C. SpA Board of Directors reviewed and approved results for the year ended December 31, 2011, which showed significant growth in all key economic indicators. Beginning from the third quarter, the improvement was achieved notwithstanding the slowdown of the general macro-economic scenario, especially in Western economies, and proved the effectiveness of Pirelli’s strategy with its focus on the Premium segment and the strengthening of its manufacturing presence in rapidly growing economies.

Consolidated revenues on December 31, 2011 totaled 5,654.8 million Euro, an increase of 16.6% (4,848.4 million Euro in 2010). The consolidated operating income after restructuring charges was 581.9 million Euro compared with 407.8 million Euro in 2010, and with a 10.3% margin compared with the target of “around 10%” announced last November and almost two percentage points higher than the 8.4% of 2010. The net result from continuing operations was 312.6 million Euro, an increase of 37.1% compared with 228 million Euro in 2010, while the total net result was 440.7 million Euro, taking into account a positive non-recurring impact of 128.1 million Euro linked to benefits from loss carryovers, following a change in the fiscal law regarding past losses which allows for their carryover without time limit.

The growth of production capacity, linked to the strategic focus on the Premium segment at global level outlined in the Industrial Plan, resulted in an increase of investment of 43% to 626 million Euro, which is reflected in the consolidated Net Financial Position which, on December 31, 2011 was negative 737.1 million Euro(negative 455.6 million Euro on December 31, 2010) compared with a target of “about 750 million” announced last November. This figure includes the payment of 83.5 million Euro in dividends and the first part of the payment for the acquisition of plants in Russia worth 55 million Euro.

At the end of this fiscal year, the Tyre Business, which accounts for 99% of consolidated revenues showed a significant growth of its economic indicators and profitability. Data confirm the effectiveness of Pirelli’s strategy: our focus on Premium in the Consumer Business the location of the Industrial Business predominantly in areas of rapid growth, and our ability to use pricing to offset the increase in raw materials’ costs, which had a negative impact over the year of about 512 million Euro. On December 31, 2011 Pirelli Tyre reported an increase ofsales worth 17.4% (+19% net of the effect of exchange rate) to 5,601.6 million Euro, supported by the good price/mix performance (+17.6%). The Premium revenues grew by 27% in 2011, reaching 1,844 million Euro and in the Car Business alone they reached 50% of total. The operating result after restructuring charges totaled 643.9 million Euro, an increase of 42.1% from 453.1 million Euro in 2010, with profitability of 11.5% compared with a target of “about 11%” and an increase of two percentage points from 9.5% in 2010. These results also reflect the significant efficiencies achieved during the year, which amounted to 93.9 million Euro in total compared with a target of about 80 million Euro.

In line with the actions foreseen in the Industrial Plan to increase production capacity and further strengthen the Group’s industrial presence internationally, in 2011, we continued the construction of the Settimo Torinese industrial hub – the Group’s most technologically advanced facility – and the strengthening of our presence in Romania, where the Slatina industrial hub was extended. In Argentina, plans were made for the construction of a new radial truck tyre manufacturing plant. The construction of the new site in Mexico, to serve Nafta markets, was close to completion and production is expected to begin in the first quarter of 2012, while in Russia, together with partner Russian Technologies, the acquisition of two production facilities, Kirov and Voronezh, was completed (the latter after the end of 2011), which will enable Pirelli to begin its own production in a highly strategic market.

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Pirelli receives Slatina award for social work

On Monday (5 March) Pirelli Tyres Romania received an award in Slatina for its commitment to social activities on behalf of the city’s community.

The excellence award was offered by the local press as part of the Merit deci Exist event.

Slatina television and newspapers presented awards to the city’s people and companies that have contributed to its development.

Pirelli’s award was for being the most active company in the social field during 2011.

For more than five years, Pirelli Romania has developed numerous social and cultural activities, from its partnership with the universities on matters such as technological innovation; a project for the diffusion of the Italian culture in Slatina; its support for the collaboration between the Milan Niguarda and Slatina hospitals; and the InterCampus project in conjunction with FC Internazionale of Milan for children who come from various social environments.

BOARD CO-OPTS MANUELA SOFFIENTINI AND GIUSEPPE VITA. CHANGE TO COMPANY CALENDAR: BOARD TO REVIEW 2011 RESULTS 12 MARCH

The Board of Directors of Pirelli & C. met today and co-opted Giuseppe Vita, in place of Mr. Enrico Tommaso Cucchiani, who resigned from the board on 16 December 2011, and Manuela Soffientini, in place of Professor Francesco Profumo, who resigned from the board on 16 November 2011.

The two were co-opted at the proposal of the Committee for Nominations and Succession which had opportunely consulted Assogestioni, the association of the Italian investment management industry,  for the selection of the candidates to propose to the Board,  considering that Mr.  Profumo had been chosen from a minority list presented by institutional investors under the aegis of Assogestioni.  In line with Pirelli’s commitment to constantly keeping its system aligned with national and international best practice, the Committee for Nominations and Succession proposed Manuela Soffientini: which also enhances the female component of the Board bringing it to 20% and thus already in line with the requirements set out in the new law ( no. 120 of 12 July 2011), applicable to the Pirelli Board of Directors from the renewal scheduled with the shareholder meeting to approve results on 31 December 2013.

The Board of Directors also decided, on the basis of available information and statements from the person concerned, that the requisites of independence have been met (both in terms of legislative decree 58/1998 and the code of self-regulation for listed companies) with regard to board member Soffientini.

The curricula of Soffientini and Vita can be seen at www.pirelli.com.

Pirelli & C. SpA also announces that the Board of Directors will meet to review the results for 2011 on Monday 12 March 2012 and no longer on Thursday 8 March as previously announced.

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