Respect for the environment is one of the major musts that have characterised Pirelli in the past and will continue to do so in our times.
In line with this objective and as part of its Zero Impact® project, Lifegate has assigned to Pirelli Tyre 5,657 square metres of forest growing in the Parco Rio Vallone and 5,829 square metres of woodland in Costa Rica, both of which are able to compensate 100% for the total CO2 emissions generated in 2010 by the Vizzola tyre test facility.
An initiative of notable importance, which will be part of Lifegate’s Zero Impact®, the first Italian project to consolidate the intentions of the Kyoto Agreement, quantifying the environmental impact of activities, companies, products and people and helping to reduce and compensate for their CO2 emissions with the creation and protection of new forests in Italy and other parts of the world.
The Board of Directors of Pirelli & C. has approved the Industrial Plan and vision to 2015 and the updated targets for 2012-2014. The plan was presented today to the financial community by the Chairman and CEO of Pirelli & C., Marco Tronchetti Provera, the Coo, Francesco Gori, Director of Research and Development, Maurizio Boiocchi, and the Director for Planning & Management Control, Maurizio Sala.
Focus on SUSTAINABILITY & GOVERNANCE PLANS (excerpt from press release page 15)
In the period 2012-14 Pirelli will intensify its environmental, social and economic sustainabilityplan, launched in 2011. The main goals of the new plan are process and product innovation, bothoriented to the reduction of consumption and of harmful impacts on the environment, the dissemination of the sustainability Management Model of Pirelli to the new industrial realities entering company scope, the engagement in turning end users’ road safety education into a “road safety culture”, the valorization of employees and a huge investment in their training and education.
In production processes, Pirelli is committed to using systems which by 2015 will deliver a 70%reduction in the specific drawing of water and a 15% reduction of specific CO2 emissionscompared with 2009. In 2011, these values were already reduced by respectively 29% and 5%.
Regarding products, over the next three years the group aims to intensify the useof raw materialsof low environmental impact and to further improve the safety and eco-sustainable features of thegreen performance tyres, extending the benefits to the LatAm, China, US and Mexico markets.
Regarding social responsibility, particular attention is paid to the safety in the workplace through prevention plans and on-site training, with the challenging goal of reducing workplace accidentsby 60% from 2009 levels. In 2011, the first effects of this plan were already evident with a reduction of 26% from 2009. Further, ethics, diversity, leadership and dialogue and welfare will be at the center of programs of personnel enrichment and with a view to developing individual attitudes and skills, following an investment in training which aims to grow and reach an averageof 7 days per employee (from the 6.3 in 2011). The activity of monitoring socialand environmental sustainability of the supply chain will continue, also thanks to the new system of ITmanagement.
The company management and sustainable development model will be at the center of theintegration of the new production realities in Mexico, Russia and Indonesia.
In the context of the relations with local and international communities, cooperation withgovernmental and non-governmental authorities will be strengthened so as to share initiatives aimed at the dissemination of sustainability culture and, in particularregarding road safety.
Thanks to the quality of its sustainable management, Pirelli was recognized in 2011 for the fifth year running as the worldsustainability leader in the ‘Auto Parts and Tyre’ sector within the Dow Jones Sustainability Stoxxand Dow Jones Sustainability World Indices.
Pirelli’s corporate governance is founded on fourfactors: the centrality of the Board of Directors in the definition of strategic direction and the supervision of management; the management remuneration policy linked to the creation of value; a succession process that guarantees the maximum transparency in the implementation of group strategy, an effective risk management process.
In particular, to ensure the autonomy of the Board of Directors in the carrying out of its functions, Pirelli governance requires that 90% of itscomponents be independent and that all shareholders, minority and majority, be represented.
Furthermore, the board is supported by an Audit, Risk and Corporate Governance committee anda Remuneration committee, both composed exclusively of independent board members. Fromthis year, Pirelli governance requires two new bodies: the Strategy Committee and the Committeefor Nominations and Succession. The latter body has the purpose of monitoring internal human resources and verifying their attitude in assuming roles of primary responsibility, as well as defining the characteristics needed to cover these roles for the purposes of eventual external searches in case of “emergency changes”.
Pirelli implemented one year ahead of the requireddeadline a regulation which requires approval by shareholders for matters pertaining to thecompany’s remuneration policy. Pirelli defines its system of incentives in such a manner as toalign the interests of the management with those of the shareholders, through the institution of astrong link between retribution and performance at the individual and group level. As aconsequence of this system, over 35% of the retribution of group managers is variable and ofthis, over 70% is linked to the achievement of the financial targets of the industrial plan.
PIRELLI & C. SPA BOARD APPROVES CONSOLIDATED RESULTS FOR 9 MONTHS TO 30 SEPT 2011:
ALL ECONOMIC INDICATORS IMPROVE DESPITE A MACROECONOMIC CONTEXT SHOWING SIGNS OF SLOWDOWN
INDUSTRIAL PLAN WITH VISION TO 2015 AND UPDATE 2012-2014 TARGETS APPROVED, TO BE PRESENTED TO THE FINANCIAL COMMUNITY TOMORROW IN LONDON
BOARD AUTHORIZES BOND ISSUE OF UP TO 800 MILLION EUROS TO BE LAUNCHED BY THE END OF 2012 ALSO IN SEVERAL TRANCHES, TO TAKE ADVANTAGE OF FINANCING OPPORTUNITIES ON THE MARKET IN SUPPORT OF THE BUSINESS
PIRELLI & C. SPA
• REVENUES 4,265.8 MILLION EUROS, +17.9% COMPARED WITH 3,618.7 MILLION EUROS ON 30 SEPT 2010
• OPERATING RESULT (EBIT) AFTER RESTRUCTURING CHARGES OF 451.2 MILLION EUROS (+46.8% COMPARED WITH 307.3 MILLION EUROS ON 30 SEPT 2010), WITH PROFITABILITY (EBIT/SALES) RISING TO 10.6% FROM 8.5%
• TOTAL CONSOLIDATED NET PROFIT 251.3 MILLION EUROS, +56.8% COMPARED WITH 160.3 MILLION EUROS ON 30 SEPT 2010 (BEFORE DISCONTINUED OPERATIONS); ATTRIBUTABLE CONSOLIDATED NET PROFIT 255.3 MILLION EUROS (COMPARED WITH NEGATIVE 87.0 MILLION EUROS ON 30 SEPT 2010)
• INVESTIMENT STOOD AT 396.2 MILLION EUROS ON 30 SEPT 2011 (226.9 MILLION EUROS ON 30 SEPT, 2010), OF WHICH 162.1 MILLION EUROS IN THE THIRD QUARTER (91.5 MILLION EUROS IN THIRD QUARTER 2010)
• NET FINANCIAL POSITION NEGATIVE 938.3 MILLION EUROS (704.9 MILLION EUROS ON 30 SEPT 2010)
• REVENUES 4,225.7 MILLLION EUROS, +18.7% COMPARED WITH 3,559.1 MILLION EUROS ON 30 SEPT 2010
• OPERATING RESULT (EBIT) AFTER RESTRUCTURING COSTS 484.4 MILLION EUROS, +44.9%COMPARED WITH 334.3 MILLION EUROS ON 30 SEPT 2010;
PROFITABILITY (EBIT/SALES) AT RECORD LEVEL OF 11.5% (9.4% ON 30 SEPT 2010)
• PROFITABILITY EXPECTED AT HIGHER END OF TARGETS ANNOUNCED IN JULY: EBIT MARGIN AFTER RESTRUCTURING CHARGES APPROXIMATELY 10% (TARGET BETWEEN 9.5% AND 10.0%) AT CONSOLIDATED LEVEL AND APPROXIMATELY 11% (TARGET BETWEEN 10% AND 11%) FOR PIRELLI TYRE, THANKS TO THE POSITIVE EFFECTS OF THE FOCUS ON THE PREMIUM SEGMENT
• SALES TARGET REVISED TO BELOW 5.8 BILLION EUROS (FROM “ABOVE 5.85 BILLION EUROS”) AT CONSOLIDATED LEVEL; PIRELLI TYRE REVENUE TARGETS REVISED TO APPROXIMATELY 5.7 BILLION EUROS (FROM “ABOVE 5.8 BILLION EUROS”). THIS RESULT WAS IMPACTED BY:
- THE NEGATIVE EFFECT OF EXCHANGE RATES ON SALES 1.2% HIGHER (AROUND 70 MILLION EURO) COMPARED WITH PREVIOUS FORECAST
- VOLUME REDUCTIONS TO APPROX. +3% (PREVIOUS TARGET: “ABOVE +5%”) AS A CONSEQUENCE OF: GREATER PREMIUM GROWTH IN THE PREMIUM SECTOR (+23%) AND REDUCTION OF SALES OF LOWER PROFIT PRODUCTS; THE SLOWDOWN IN TRUCK DEMAND IN THE EMEA REGION
- PRICE/MIX TARGET IMPROVED FROM 16% TO 18% AS A RESULT OF THE GREATER FOCUS ON PREMIUM
• CONSOLIDATED NET FINANCIAL POSITION TARGET CONFIRMED, EXPECTED AT AROUND NEGATIVE 700 MILLION EUROS ESCLUDING RUSSIA INVESTMENT
A meeting of the Board of Directors of Pirelli & C. SpA today reviewed and approved the results of operations for the nine months ended September 30, 2011.
The Pirelli Group saw all economic indicators improve over the period, with revenues growing in the first nine month by 17.9% to 4,265.8 million euros and profitability – understood as the ratio of the operating result to sales – at 10.6%, with an increase of over two percentage points from the 8.5% of the first nine months of 2010. The total consolidated net result for the first nine months was a positive 251.3 million euros, an increase of 56.8% compared with 160.3 million euros, on a like-for-like basis (before discontinued operations) compared with the first nine months of 2010.
For Pirelli Tyre, which represents almost the totality of group sales (99%), the first nine months of 2011 saw a significant increase in sales (+18.7% to 4,225.7 million euros) and a further increase in profitability, with the Ebit margin reaching 11.5% compared with 9.4% in the first nine months of 2010.