The company recalls that on February 12, 2015 it released to the market preliminary data for 2014. The present communique as well as reporting the same economic indicators already announced in February, includes new elements, such as net profit and dividends, approved by today’s meeting of the Board of Directors.
- TOTAL NET PROFIT: +8.6% TO 332.8 MILLION EURO (306.5 MILLION EURO IN 2013) AFTER VENZUELA IMPACT OF 72 MILLION EURO AND ADJUSTMENT OF THE VALUE OF FINANCIAL SHAREHOLDINGS
- THE BOARD TO PROPOSE TO SHAREHOLDERS’ MEETING THE DISTRIBUTION OF A DIVIDEND OF 0.367 EURO PER ORDINARY SHARE (0.32 PRIOR YEAR) AND 0.431EURO PER SAVINGS SHARE (0.39 EURO PRIOR YEAR)
- EBIT: +6.8% TO €837.9 MILLION (€784.7 MILLION IN 2013), IN LINE WITH 2014 TARGET OF APPROX. €840 MILLION
- EBIT MARGIN BEFORE RESTRUCTURING COSTS AT 14.4% (13.4% IN 2013); EBIT MARGIN AFTER RESTRUCTURING COSTS AT13.9% (12.9% IN 2013)
- REVENUES: €6,018 MILLION, IN LINE WITH THE TARGET OF >€6.0/<6.1 BILLION, WITH ORGANIC GROWTH OF 5.9%; -0.7% COMPARED WITH €6,061 MILLION IN 2013 INCLUDING FOREX EFFECT (-6.6%)
- NET FINANCIAL POSITION NEGATIVE €979.6 MILLION EURO;
EXCLUDING STEELCORD DISPOSAL THE FIGURE IS €1,167.5 MILLION BETTER THAN 2014 TARGET OF ~€1,200 MILLION (€1,322.4 MILLION AT END 2013 AND €2,003.9 MILLION ON 30 SEPTEMBER 2014)
- EBIT: +4.5% TO €852.6 MILLION (€815.7 MILLION IN 2013)
- EBIT MARGINE BEFORE RESTRUCTURING COSTS AT 14.7% (13.9% IN 2013), EBIT MARGIN AFTER RESTRUCTURING COSTS AT 14.2% (13.5% IN 2013)
- TOTAL VOLUMES +2.0% , CONSUMER VOLUMES +5.0% AND PREMIUM VOLUMES +17.8%, INDUSTRIAL VOLUMES -6.5% DUE TO THE SLOWDOWN OF SOUTH AMERICAN MARKET
- PREMIUM REVENUES: €2,536,0 MILLION, WITH ORGANIC GROWTH OF 13.2%; +11.5% INCLUDING FOREX EFFECT (-1.7%). PREMIUM EQUAL TO 55% OF CONSUMER REVENUES (+4.2 PERCENTAGE POINTS COMPARED TO 2013)
- REVENUES: €6,007.5 MILLION, WITH ORGANIC GROWTH OF 6.2%; – 0.4% COMPARED WITH €6,030.6 MILLION IN 2013 INCLUDING FOREX EFFECT (-6.6%)
- CONSUMER EBIT MARGIN BEFORE RESTRUCTURING COSTS AT 15.1% (13.7% IN 2013); EBIT MARGIN AFTER RESTRUCTURING COSTS AT 14.7% (13.3% IN 2013)
- INDUSTRIAL EBIT MARGIN BEFORE RESTRUCTURING COSTS AT 13.1% (14.6% AT END 2013); EBIT MARGIN AFTER RESTRUCTURING COSTS AT 12.6% (14.1% AT END 2013). THE INDUSTRIAL ANNUAL PROFITABILITY TREND REFLECTS THE 6.5% FALL IN VOLUMES MAINLY IN EMERGING MARKETS
2015 TARGETS CONFIRMED
- CONSOLIDATED EBIT ~930 MILLION EURO AFTER RESTRUCTURING CHARGES OF APPROX. 40 MILLION EURO
• TOTAL REVENUES FORECAST TO GROW BY +6%/+6.5% TO APPROX. 6.4 BILLION EURO DERIVING FROM:
- VOLUME GROWTH EXPECTED AT EQUAL TO OR ABOVE+3%. PREMIUM WILL BE THE DEVELOPMENT DRIVER WITH A RATE OF VOLUME GROWTH EQUAL TO OR ABOVE +10%
- PRICE/MIX GROWTH AT EQUAL TO OR ABOVE +4%
- FOREX IMPACT AT ABOUT -1%
- INVESTMENT BELOW 400 MILLION EURO
• CASH GENERATION BEFORE DIVIDENDS OVER 300 MILLION EURO BEFORE STEELCORD DISPOSAL
- 2015 TARGETS REFLECT ADJUSTMENT OF VENEZUELAN EXCHANGE RATE TO 20 BOLIVAR PER US DOLLAR
CAMFIN – CHEMCHINA OPERATION
With regard to the operation announced by Camfin and ChemChina – without prejudice to the valuations which, on the basis of the applicable laws, the independent directors and board of directors will be called upon to make regarding the public tender offer when it is launched – the Board of Directors takes note of the friendly nature of the operation, the characteristics of which – on the basis of that which has been made public – are consistent with the strategy in the Industrial sector which already foresaw paths of growth and aggregation in geographically strategic areas like Asia.
As a consequence of the underwriting of the agreement to sell 100% of the steelcord activities, that business has been classified as a “discontinued operation” and the reclassified results are in the accounts under the heading “results of disposed operating activities”. The economic indicators relative to 31 December 2014 thus refer to the activities in function and the comparative data of 31 December 2013 have been restated. The 2014 targets – previously indicated using a like-for-like perimeter – have been rectified, excluding the steelcord contribution and are now >€6.0/<6.1 billion for revenues and c. €840 million for EBIT.
The Board of Directors of Pirelli & C. SpA met today to review and approve results for the year ended December 31st, 2014. The year’s performance, which saw growth in the main economic indicators, was characterised in particular by:
- growth above expectations of the Premium segment, with volumes increasing 17.8% (above the 2014 target of >16%), and the consequent strengthening of Pirelli’s positioning in all main geographical areas, in particular Apac. Premium revenues accounted for 55% of Consumer revenues, an increase from 50.8% in 2013;
- the price/mix component at +4.2% (in line with the 2014 target of about +4%/~+5%) thanks to the performance of Premium, the greater weight of sales in the replacement channel and price increases in emerging markets to compensate for currency devaluations;
- organic growth in revenues +5.9% (-0.7% net of the negative forex variation of 6.6%). As well as the already mentioned price/mix, higher volumes (+2%) also contributed. The 5% volume growth in the Consumer business, in particular, offset the 6.5% decline in volumes of the Industrial business which discounts the unfavourable economic context of the Latam market, in particular in Original Equipment;
- the achievement of internal efficiencies of €92.4 million (in line with the annual target of approximately €90 million of the approximately €350 million four-year efficiencies plan for 2014-2017);
- the marked improvement in profitability, with EBIT growth of 6.8% to €837.9 million (in line with the target of circa €840 million) and an EBIT margin of 13.9% – with growth of one percentage point compared with 12.9% at the end of 2013 – thanks to the Premium strategy, price increases in emerging markets, and the efficiencies which more than offset the negative forex impact and inflation in production factors.
- forex volatility only partially influenced the operating results at the group level thanks to Pirelli’s ever more balanced presence in the various geographic regions and to the production policy of our factories which are approximately 80% dedicated to supplying demand from local markets.
- the positive performances in the Apac, Europa and Nafta areas, with respective revenue growth of 17.5% (Apac) and approximately 5% in Europe and Nafta and an improvement in profitability which attenuated the effects of the slowdown in the South American market;
- the turnaround of the business in Russia, characterised by a marked improvement in the product mix and positive “mid-single-digit” profitability from “negative” in 2013, and improvement in the MEAI area;
- net profit of 332.8 million euro, an increase of 8.6% after the impact of the devaluation of the Venezuela exchange rate (72 million euro) and the adjustment of shareholdings (-87 million euro);
- cash generation before dividends and the steelcord disposal above expectations at approximately €311.6 million (above the 2014 target of >€250 million). Taking receipts from the steelcord disposal into account, cash generation before dividends was approximately €499.5 million;
- the improvement in the net financial position which as at 31 December 2014 was €979.6 million after the disposal of steelcord or, excluding the disposal of the steelcord activities, €1.167.5 billion, better than the 2014 target of approximately €1.2 billion. In the fourth quarter, in particular, the net financial position saw an improvement of over €1 billion, mainly thanks to the operating result, the positive performance of working capital and the impact of the disposal of the steelcord business;
- Investments in research and development of 205.5 million euro, equal to 3.4% of sales, of which 174.5 million euro for activities linked to Premium products, equal to 6.9% of the segment’s sales;
- significant steps towards the achievement of the group’s sustainability goals. In 2014 the Green Performance tyres represented about 46% of total sales for Pirelli which has reduced the specific drawing of water by 19%, energy consumption by 3% and CO2 emissions by 2%. This commitment is evidenced by the company’s inclusion in the most important sustainability indices at the world level, such as the Dow Jones Sustainability Index, where the group has lead the ATX Auto Components sector eight consecutive years; the FTSE4Good Index where Pirelli earned a score of 100/100 and the Carbon Disclosure Leadership Index, where it beat all competitors.