Sustainability Channel

PIRELLI & C. SPA SHAREHOLDERS’ MEETING

•  2017 RESULTS APPROVED

•  GIOVANNI LO STORTO NOMINATED NEW BOARD MEMBER, INDEPENDENT BOARD MEMBERS A MAJORITY (8 OUT 15) ON BOARD

•  NEW BOARD OF STATUTORY AUDITORS NOMINATED

•  NEW REMUNERATION POLICY AND LTI PLAN APPROVED

Milan, 15 May 2018 – A meeting of the shareholders of Pirelli & C. SpA took place today and approved the results of 2017, which ended with a consolidated net profit of 175.5 million euro and a parent company net profit of 170.9 million euro, which shareholders decided to carry forward.

The Shareholders’ Meeting then approved raising the number of board members to 15 and nominated a new board member, Giovanni Lo Storto, at the proposal of a group of savings’ management companies and institutional investors. Mr. Lo Storto will sit on the Control, Risks, Sustainability and Corporate Governance committee and on the Remuneration committee, and declared himself to possess the requisites to qualify as independent in accordance with the Consolidated Finance Law (Testo Unico della Finanza) and the Self-Regulation code for listed companies. With this nomination – approved by around 93% of the capital represented at the shareholders’ meeting, with the abstention of the controlling shareholder Marco Polo International Italy S.p.A. – Pirelli’s Board of Directors is composed of a majority (8 out of 15 members) of independent members.  The mandate of the new board member, whose curriculum vitae is available on the Company’s website, will expire – together with the Board of Directors now in place – with the approval of the results for the year ending on December 31, 2019.

The Shareholders’ Meeting, using the slate system, also nominated the Company’s new Board of Statutory Auditors for the years 2018, 2019 and 2020. It is composed of Francesco Fallacara, nominated Chairman, Antonella Carù, Fabio Artoni, Luca Nicodemi and Alberto Villani as standing auditors, and Franca Brusco, Elenio Bidoggia and Giovanna Oddo as alternate auditors. The chairman of the new Board of Statutory Auditors and the alternate auditor Franca Brusco were taken from the minority slate (voted for by around 18% of the capital represented at the shareholders’ meeting) submitted by the above mentioned group of savings’ management companies and institutional investors, while the other nominations came from the majority slates (voted for by around  79% of the capital represented at the shareholders’ meeting) presented by the controlling shareholder Marco Polo International Italy S.p.A. The compensation for standing auditors was set at 50,000 euro and for the chairman of the Board of Statutory Auditors at 75,000 euro. The curricula of the new auditors are available at the Company’s website www.pirelli.com.

The Shareholders’ Meeting also authorized the Board of Directors to execute a new D&O insurance policy and, in addition, expressed its favourable view (with above 81% of the capital attending the shareholders’ meeting) on the Policy with regard to matters of remuneration and approved – for the part relating to Total Shareholder Return (with the favourable vote of around 96% of the capital attending the shareholders’ meeting) – the adoption of a 3-year monetary incentive plan for 2018-2020 for all management and correlated to the targets for the 2018/2020 period contained in the 2017/2020 industrial plan.

It should be noted that the 2017 Annual Report – which also contains Consolidated Statements of a non-Financial Nature ex D.Lgs. 254/2016 (Chapter “Report on the Responsible Management of the Value Chain”) supported by the relative reports from auditing companies and the annual Report on the corporate governance and ownership structure – is available to the public at the company’s headquarters in Milan, at Viale Piero e Alberto Pirelli 25, and at Borsa Italiana S.p.A., as well as being published on the Company’s website www.pirelli.com and the authorized storage mechanism eMarket Storage (emarketstorage.com).

The minutes of the shareholders’ meeting are available to the public through the same above mentioned channels, in accordance with the terms of law.

Published on: 15 May 2018, 14:47 CET

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THE PIRELLI & C. S.P.A. BOARD OF DIRECTORS APPROVES THE 31 MARCH 2018 RESULTS

-       Revenues in organic growth of 5.7% to 1,310.3 million euro (1,339.3 million euro in first quarter 2017), the overall variation -2.2% after exchange rate impact of -7.3%

-       Marked growth in High Value segment: organic growth of revenues +13.4%, with a percentage on turnover of 63.6% (57.9% in first quarter 2017). High Value volumes growing by 12.8%

-       Price/mix strong improvement: +7.2% in first quarter 2018 (+5.5% in first quarter 2017)

-       Adjusted Ebit before start-up costs: +4.5% to 229.4 million euro (219.5 million euro in first quarter 2017), with a margin on revenues increasing to 17.5% (16.4% in first quarter 2017)

-       Net income from continuing operations: +86.7% to 92.4 million euro (49.5 million euro in first quarter 2017)

-       Net financial position at 3,938.9 million euro (5,525.2 million euro in first quarter 2017)

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2018 FORECASTS

-       Profitability targets confirmed (Adjusted Ebit before start-up costs >1 billion euro and Adjusted Ebit at ~1  billion euro)  and Net Financial Position (~2.3x ratio of NFP/Ebitda Adjusted before start-up costs)

-       Strengthening of High Value (≥60% weight on revenues, ≥83% weight on Adjusted Ebit before start-up costs)

-       Organic revenue growth expected at equal or above +9% (~+4% including forex effect and the application of new IFRS 15 accounting principle)

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As a consequence of the assignment in March 2017 by Pirelli & C. S.p.A. to the parent company Marco Polo International Holding Italy S.p.A. of the shares of TP Industrial Holding S.p.A., the company into which almost all of Pirelli’s Industrial assets were conferred, in continuity with the 2017 financial year, some residual activities in China and Argentina relative to the Industrial business are qualified as a “discontinued operation”. The separation process is expected to be completed during the financial year.

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Milan, 14 May 2018 - The Board of Directors of Pirelli & C. S.p.A. reviewed and approved the 31 March 2018 results, which are in line with the programme of focus on High Value, and highlight growth of the key economic indicators. In particular:

  •   the organic growth of revenues thanks to Pirelli’s strengthening in High Value in all Regions, with the progressive reduction of its exposure to the standard segment;
  •   the improvement of the price/mix component;
  •   the improvement of profitability by 1.1 percentage points to 17.5%;
  •   the further reinforcement of partnerships with Prestige and Premium car makers;
  •   the expansion of High Value production capacity, mainly in Europe and Nafta;
  •   the extension of the distribution network coverage in Europe, Nafta, Apac and LatAm;
  •   the continual development of business programmes that intercept the new needs of the end customer (such as Cyber and Velo). These are accompanied by the plans for the company’s digital transformation and the reconversion of Aelous brand production to the Pirelli brand in the Jiaozuo Aeolus Car plant.

Published on: 14 May 2018, 17:43 CET

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PIRELLI SUPPLIER AWARDS 2017: SUPPLIERS OF PRIMARY MATERIALS IN THE SPOTLIGHT

INNOVATION, QUALITY, EFFICIENCY AND SUSTAINABILITY: THE KEY FACTORS BEHIND THE CHOICE OF THE WINNERS

SPECIALISTS IN LOGISTICS, CYBER SECURITY, MACHINERY, MOULDS, AND EVENTS ALSO REWARDED

Milan, September 8, 2017 – The quality of any product always begins with the choice and characteristics of its primary materials: all the more so when we are talking about a tyre made up of many different ingredients, all which have a crucial impact on safety and performance. This was the key consideration that guided Pirelli’s cross-departmental team when it came to deciding the winners of this year’s Supplier Awards. In this, the sixth year of the annual awards, it is the suppliers of primary materials who have been the most successful, scooping four prizes of the nine available. This emphasis is justified by the numbers: 46% of Pirelli’s total expenditure (equivalent to 1.54 billion euros in 2016) goes towards primary materials.

Handing out the prizes to the suppliers who have shone throughout last year, delivering on-time quality to the supply chain or end product, was Pirelli’s Executive Vice Chairman and CEO Marco Tronchetti Provera, as well as Pirelli’s Head of Purchasing Pier Luigi de Cancellis, in a ceremony that took place at the Italian firm’s headquarters in Milan. The recipients of the awards, as well as primary materials suppliers, included producers of machinery and moulds, cyber security experts, logistics firms, and event management companies. The winners came from three continents – Europe, Asia and America – and six countries (China, Italy, Germany, Japan, Romania, the United States, and Thailand).

These are the companies who won the 2017 Supplier Awards:

Jiangsu Xingda Steel Tyre Cord Co Ltd (China): one of the premier producers of metallic reinforcements; Cabot Corporation: an American group which is a leader in carbon black production; Zeon Corporation: a Japanese company that supplies synthetic rubber; Thai Eastern Innovation: an important producer and exporter of natural rubber headquartered in Chonburi; Karl Eugen Fischer GmbH: a German supplier of tyre production machinery; Himile Mechanical Science and Technology: the world’s most important producer and supplier of tyre moulds; Com Divers Logistic Srl (Romania): a key player in the logistics sector; Reply: an Italian firm specialising in cyber security and IT services, and finally Newtonlab: an events company from Italy.

De Cancellis commented: “Pirelli’s corporate strategy, focused principally on the top of the range, is shared with all our suppliers, whom we consider to be genuine partners working towards common goals in terms of innovation, transparency, quality, flexibility and sustainability. To maintain the high standards that have always characterised our brand, it’s essential for us to have primary materials, services, and production systems that are at the very highest level, while complying with the stringent sustainability regulations we have set ourselves. With these objectives always in mind, Pirelli is constantly looking all over the world for the very best suppliers, which are continually verified.”

Pirelli’s purchasing department is made up of around 175 worldwide specialists. They manage more than 9500 global suppliers who are specially selected according to criteria such as capacity for innovation, quality of goods and services, sustainability, and efficiency within the supply chain. Pirelli’s constant analysis does not just stop at the suppliers themselves but also considers the suppliers of the suppliers.

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