Sustainability Channel

SUPPLIER AWARDS 2016: PIRELLI RECOGNIZES THE PERFORMANCE OF ITS SUPPLIERS

Global presence, innovation, quality, speed, sustainability and level of service the evaluation criteria

Global presence, innovation, quality, speed, sustainability and level of service. This were the evaluation criteria Pirelli used to select the 9 companies that have received the “Supplier Awards 2016”.

This fifth edition of the “Supplier Awards” took place in Milan, where the CEO and Executive Vice Chairman Marco Tronchetti Provera, along  with the Director of the Milan’ company’s Procurement Department, Pierluigi de Cancellis, presented the awards to nine companies operating in various sectors: from ones that organize events to others supplying strategic IT solutions and from those specialised in logistics to raw-material producers.

The successful suppliers also come from different countries – from India to Germany, China and Italy, in keeping with Pirelli’s renowned international flavour and global competitiveness.

The following companies are the protagonists of the 2016 Pirelli Supplier Awards:
Glanzstoff Sicrem, an Italian manufacturer of textile reinforcement materials; Trinseo, an American group specialised in synthetic rubber; Wuxi Quechen Silicon Chemical, a Chinese supplier of silicon; Birla, an Indian supplier of carbon black; Prashida Aneka Niaga Tbk, an Indonesian supplier of natural rubber; Hewlett Packard Enterprise, a leading US IT company; Alpha Technologies, an American company producing laboratory instruments for R&D; Fandango, an Italian event organizer; and, lastly, DHL Express, a German logistics group.

Pirelli focuses strongly on its collaboration with suppliers, considered key business partners for the success of its corporate strategy. To this regard, the Director of the Procurement Department, Pierluigi de Cancellis, said : “The Pirelli focus is increasingly on the Premium segment, sharing with its suppliers a business approach in which flexibility, speed, transparency and commitment to ongoing and sustainable innovation form the bases of the supply relationship. This is why the relationship can be described as a true partnership, centred on shared growth and looking to the future.
As well as raw-material suppliers, this year we have rewarded companies operating in logistics and IT tools, a demonstration that multiple and diversified skills, combined with those of our Group, help further Pirelli’s success thanks to innovative contributions driven by know-how and experience.”

Pirelli & C. Spa board approves results for 6 months ended 30 June 2016

-      Further growth of Premium with revenues at 65.1% of the Consumer business

-      Improved overall price/mix: +6% thanks to price increases and improved sales mix

-      Efficiencies of 51.3 million euros (45.8 million in first half 2015), 68% of 2014-2017 plan’s 350 million euros target achieved

-      Improved profitability with an EBIT (before charges) of 14.5% (14.2% in the same period of 2015 and same perimeter)

-      Profitability of Consumer business at 16.4% (15.7% in first half of 2015 with same perimeter)

-      Industrial Business impacted by persisting weakness in South America

-      Profitability increases in Europe and NAFTA. Apac confirmed as area of greatest profitability

-      Successful conclusion of debt refinancing

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Comments on the economic data for the six months ended on 30 June 2016 – if not otherwise indicated – refer to comparisons with economic data for the six months ended 30 June 2015 for only the Pirelli Group and applying the same perimeter.

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The Board of Directors of Pirelli & C. SpA today reviewed and approved the group’s results for the six months ended on 30 June 2016. The semester was characterized by following key elements:

-       Revenues of 2,968.6 million euro, with organic growth (with the same perimeter and net of negative forex effect of 8.8%) of 5.9%, thanks to great improvement in the price/mix component (+6.0%) because of price increases in emerging markets, higher sales in the Replacement channel and different geographic and product mixes. The increase in revenues at the organic level was underpinned by the performance of the Consumer business (+7.4% organic growth) thanks to the performance of the Premium segment and mature markets, while the Industrial segment (+0.4% organic growth) was impacted by the weakness of the tyre market in South America and other emerging markets. Overall volumes were stable, with different dynamics in Consumer (+1.9%) and Industrial (-7.3%);

-       Further reinforcement of Premium, with volume growth of 13.4% (+15% solely in the second quarter after +11.7% in the first quarter) above the global Premium market trend (+9.4%). The Premium’s organic revenues increased by 11.3% to 1,607.2 million euro, growing to 65.1% of total Consumer revenues from 61.5% in the same period of 2015 (with the same perimeter);

-       Improved profitability thanks to the effect of internal levers of price/mix and efficiencies achieved to contrast forex volatility and the decline of some markets mainly in the Industrial business;

-       EBITDA margin before non-recurring and restructuring charges improved to 19.5% compared with 19.2% in the same period of 2015 and the same perimeter. EBITDA before non-recurring and restructuring charges was 578.7 million euro (588.0 million euro in the same period of 2015 and the same perimeter);

-       EBIT margin before non-recurring and restructuring charges grew to 14.5% compared with 14.2% in the first half of 2015 and the same perimeter. This results benefits, among other things, from the achievement of efficiencies of 51.3 million euro (45.8 million euro in the first half of 2015). Since 2014 total efficiencies of 238.1 million euro have been achieved, equal to 68% of the target set in the 2014-2017 4-year plan of 350 million euro. EBIT before non-recurring and restructuring charges of 429.1 million euro (434.8 million in the first half of 2015 and the same perimeter);

-       At the geographic level profitability improved in Europe and NAFTA thanks to strong growth of the Premium segment. APac was confirmed as the most profitable area with an EBIT margin above 20%.

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PIRELLI GERMANY SIGNS CHARTER ON COMPATIBILITY OF WORK AND CARE

On July 16^th, Elvira Jung, human resources manager of Pirelli Deutschland GmbH, signed the Charter on the Compatibility of Work and Care, confirming Pirelli Germany commitment to give active support to its employees taking responsibility for relatives needing care.

By signing the Charter, the company is encouraging a culture of respect and appreciation of those taking responsibility for relatives who need care, recognizing their important social role.

During the ceremony at the Hesse House of Commerce, Minister of State Stefan Grüttner praised the new signatories of the charter: “Companies which face up to the impact of demographic change, and which commit themselves to making work and care compatible, will be undertaking a social responsibility”.