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.