PEERS & MARKETS

Major European stock markets were up in the week from 15 to 19 October 2012 (Milan +2.3%, London +1.8%, Frankfurt +2.0%, Paris +3.4%, +3.4% Madrid) thanks to U.S. better-than-expected macroeconomic data on retail sales and industrial production in September (+1.1% and +0.4%, respectively). The resulting better sentiment helped to ease tensions on the European sovereign debt with a yield on Spanish bonos  hitting six months low.

European Tyre stocks were impacted by concerns on the 4Q 2012-1H 2013 demand: market data for the month of September have confirmed the negative trend in volumes in Europe (-15% the Replacement, -12% the OE), while the short-term outlook remains uncertain, as evidenced by some operators.

Pirelli ended the week at € 8,405 (-3.3%) with an average daily trading volume of about 5 million.

The double A makes its truck debut

It’s time for new arrivals from Pirelli Truck.

The ST:01™ Neverending™ Energy™, our tyre developed specifically to equip trailers and semi-trailers, has taken its place in the European market.

A debut that has already attracted its first success, given that it is the first Pirelli range to acquire the double class A of the European Label for its rolling resistance, and wet grip.

Generating fewer emissions, the ST:01™ Neverending™ Energy™ line combines safety with energy saving, while maintaining optimum performance in terms of mileage and wear rate, which are typical of a truck tyre.

These are the strong points of the ST:01™ Neverending™ Energy™:
- An innovative tread pattern
- A bi-strata technology tread compound with a high silica content, which reduces heat generation and, therefore, rolling resistance as well as ensuring greater resistance to cuts and provides a higher mileage.
- The tyre’s profile, geometry of its sidewalls and beads are new.

By the end of 2012, the first size of the new ST:01™ Neverending™ Energy™ (385/65 R 22.5) will go on sale and the 385/55 R 22.5 will become available in January.

An extremely important result, which is in line with Pirelli’s key strategy of providing ever greater driving safety together with high quality and innovation.

PEERS & MARKETS

Main European Stock Exchanges were mixed in the week from 17 to 21 September 2012 (Milan -3.8%, London -1.1%, Frankfurt +0.5%, -1.4% Paris, Madrid +0.9%). Market Performances were affected by fears of a slowdown in the global economy following weak macroeconomic data: PMI Manufacturing index resulted worse than expected in Europe (42.6 vs. 46.4E) and forecast in decline in China, US jobless claims in September higher than expected.

The Auto & Parts sector was down due to negative car registrations figures in Europe (-8.5% in August) and worsening of tensions between China and Japan. Among the major downside: Fiat Auto (-7.6%), Peugeot (-7.7%) BMW (-3.6%).

Pirelli closed at € 8,945, down by 4.5% with an average daily trading volume of 2.5 million units. Peers trend was mixed with Nokian and Michelin down by 7.6% and 1.2% respectively while Continental was flat as regards inclusion in the blue chip index Dax. The outperformance of Pirelli in the last months (+37.5% YTD) led CITI to take a more cautious view on the stock (Neutral from Buy, TP € 10.5 to € 10): according to the broker, space of upside for the stock is limited since market expectations are already including company’s targets.