The positive operating performance was underpinned by the core tyre business which accounts for 98.4% of Group sales. Pirelli Tyre registered sales growth of 19.5% (+16.2% net of exchange rate effects) sustained in particular by price/mix effectiveness (8.9%) and volume growth (+7.3%).

Pricing actions compensated for increased production costs, in particular raw material costs. The progressive and strategic shift of the mix towards Premium products, increased volumes and constant attention to improving company efficiency all contributed to the significant increase in Pirelli Tyre’s profitability: in 2010 Ebit before restructuring charges reached 10% of sales for the first time (8.7% in 2009), while Ebit after restructuring charges rose to 9.5% of sales from 7.7% in 2009. The Consumer division contributed to the result with a post-restructuring-charges margin of 9.6% (7.4% in 2009) while the Industrial division’s was 9.2% (8.5% in 2009).

With reference to group targets, where the activities of Pirelli Re and Pirelli Broadband Solutions are considered discontinued operations and contribute only to the net result (2009 data were reclassified to enable like-for-like comparison):

• revenue: 4,848.4 million euros (+19.2% from 2009) compared with “approximately 4.8 billion euro” target. Of this, 37% stemmed from “green” activities (25% at end 2009) compared with a 36% target
• Ebit margin after restructuring charges: 8.4% compared with “over 7.5%” target
• Net financial position: negative 455.6 million euros, significantly better than “under 700 million euro” target

Pirelli Tyre, ended the year with:

• Revenues of 4,772 million euros (+19.5% from 2009) compared with “above 4.7 billion euro” target
• Ebit margin after restructuring charges: 9.5% (7.7% in 2009), compared with a “greater than 8.5%” target

The focus on core tyre sector industrial activities and the transformation of Pirelli into a pure tyre company was completed during the year with the separation of Pirelli RE from the Pirelli & C. group (finalized on 25 October 2010 with the attribution of Pirelli RE shares to Pirelli shareholders and the voluntary reduction of company capital) and the disposal of Pirelli Broadband Solutions. Despite the negative 223.8 million euro impact of these discontinued operations, the total consolidated net profit on 31 December 2010 was 4.2 million euros compared with a loss of 22.6 million euros in 2009, while the net attributable result was a positive 21.7 million euros, substantially in line with 22.7 million euros of 2009. The net consolidated result excluding discontinued operations was a positive 228 million euros, almost three times the 2009 result of 77.6 million euros.

The consolidated operating result, after restructuring charges of 24.7 million euros compared with 55.2 million euro in 2009, was 407.8 million euros compared with 249.7 million euro in 2009, equal to 8.4% of revenues compared with 6.1% in 2009. Revenues in 2010 were 4,848.4 million euros, an increase of 16.0% on a like-for-like basis and net of exchange rate effects (4,067.5 million euros in 2009).

The consolidated net financial position on 31 December 2010 was negative 455.6 million euros (after dividend payments of 81 million euros) compared with negative 528.8 million euros on 31 December 2009, thanks to inflows from the disposal of non-strategic assets and, above all, the positive contribution of net operations inflows from Pirelli Tyre, a positive 167.7 million euros (395.4 million euros in 2009), notwithstanding investment that nearly doubled from 2009 (405.0 million euros in 2010 compared with 217.4 million euros), particularly aimed at the increase of production capacity.

It is with noting that in 2010, the value of investments in research and development remained at around 3% of sales, one of the highest levels in the sector. This enables the company to continually enrich its patents’ portfolio (today numbering over 4,500) and renew its offering of Premium products, as well as continually innovating material-mixing and tyre-building processes in all product segments, and developing alternative materials with lower costs and lower environmental impact…

PDF Version (90 KB)

Tema della sesta edizione, ‘Viruses: the Invisibile Enemy’. Scienziati di fama internazionale hanno raccontato come i virus si sono evoluti e come gli esseri umani hanno imparato nel tempo a debellarli. Hanno indicato come scienza e tecnologia possono affrontare le nuove minacce virali sviluppando nuovi vaccini preventivi e terapie mirate, basate sulle conoscenze più avanzate della biologia molecolare. Presenti all’evento, tra gli altri, Marco Tronchetti Provera, presidente di Pirelli, Umberto Veronesi, Direttore Scientifico dell’Istituto Europeo di Oncologia, Giovanni Batoli presidente della Fondazione Giorgio Cini, il sindaco di Venezia Giorgio Orsoni, Ferruccio Fazio, Ministro della Salute, Luc Montagnier, Premio Nobel della medicina 2008.

La Fondazione Silvio Tronchetti Provera è nata nel 2001 per promuovere la ricerca nei settori dell’economia, delle scienze, delle tecnologie e del management e in altre aree di interesse per lo sviluppo industriale. La fondazione punta, in particolare, a promuovere la formazione di giovani talenti in queste discipline. In nove anni di attività ha favorito il rientro di giovani e brillanti ricercatori e finanziato importanti ricerche nei settori delle nanotecnologie, delle energie rinnovabili (green technologies), dell’infomobilità, della fotonica, e delle biotecnologie. La Fondazione, inoltre, opera a stretto contatto con le principali università italiane e straniere e si avvale della collaborazione di aziende come Microsoft, Pirelli, STMicroeletrics, e Value Partners e di istituzioni pubbliche quale il CNR e l’ l’ Agenzia per la diffusione delle tecnologie per l’innovazione.

www.thefutureofscience.org/

www.fondazionetronchetti.it

Revenues in Turkey seen at 500 million euros in 2010, an increase of over 25% from 2009

140 million euros invested in Izmit facility in the last 10 years, new investment of 30 million euros planned for 2011

With 8 million units produced a year, Izmit is Pirelli’s biggest plant

50,000 tyres will be produced for F1 in 2011

Pirelli, present since 1960, celebrates 50 years’ activity in Turkey

Istanbul, 23 September 2010 – Pirelli today inaugurated the “Factory of Champions” at Izmit, the plant where the group will produce tyres for all the Formula One teams for the 3-year period 2011-2013. The Izmit facility, which this year celebrates 50 years’ activity, has housed the Motorsport tyre production line since 2007 and, in synergy with the Research and Development centre in Milan, will become the heart of Pirelli’s Formula One activities.

Producing 8 million tyres for cars, trucks and motorsport each year, Izmit is the Pirelli factory with the greatest unit output of all. The group has invested 140 million euros there over the last 10 years and plans to invest a further 30 million euros in 2011 to support expansion in Turkey and nearby emerging markets.

The Formula One tyre division was inaugurated with a press conference at the plant with the participation of Nihat Ergun, Turkey’s Minister for Industry and Commerce, Gianpaolo Scarante, Ambassador of Italy in Turkey, Marco Tronchetti Provera, Chairman and CEO of the Pirelli Group, Francesco Gori, CEO of Pirelli Tyre, Andrea Pirondini, CEO of Turk Pirelli Lastikleri and Metin Ar, Chairman of Turk Pirelli Lastikleri.

Pirelli in Turkey

Inaugurated in 1960, the Izmit facility produces tyres for the car and industrial segments, as well as Motorsport. It supplies key European markets (including Turkey, ltaly, Germany, France, Spain, Greece, Switzerland, Austria, United Kingdom) and the Middle East, as well as car makers such as Mercedes, Jaguar, Fiat and Renault. The facility, which also houses a steel cord factory in its 25th year of activity, covers an area of 340,000 square metres and employs 1,800 people.

Pirelli expects 2010 revenue in Turkey of over 500 million euros, an increase of over 25% compared with 2009, and will strengthen its position further with new investments of 30 million euros in 2011, having already invested 140 million euros in the last 10 years.

Turkey and Formula One

With the launch of the Formula One division, Pirelli has broadened its offering of automobile sports tyres. In 2011, the Company will produce a total of 200,000 competition tyres, 50,000 of these for Formula One and 70,000 for the GP2 and GP3 championships, for which Pirelli is the sole supplier. The remainder will go to the 60 international automobile road and track competitions for which the Milan-based tyre maker is the exclusive supplier, as well as prestigious single brand championships such as the Ferrari Challenge, Lamborghini Super Trofeo and Trofeo Maserati. In total, Pirelli’s automotive sports range counts 200 types of racing tyres, including rally tyres.

Formula One tyres will be produced exclusively at the Izmit plant on the basis of simulation models, compounds and structures developed by Pirelli Research and Development, which counts over 1,000 engineers and technicians. The Formula One line, which covers an area of 15,000 square metres, will run the most advanced sports tyre production machinery.

The Izmit facility, in synergy with Pirelli’s centre for the preparation of sports tyres in Burton on Trent (United Kingdom), will also be the centre of all Formula One logistics activities.

First tests

The new PZero Formula One tyres, developed on the basis of Pirelli’s extensive experience in road and track automobile competitions, have been tested, beginning in mid-August, with success on tracks in Mugello (Italy), Le Castellet (France) and Jerez (Spain) and have recently undergone new tests on the Monza (Italy) circuit. In Mugello and Le Castellet, structures and profiles were tested to guarantee maximum adaptability, continuity and homogeneity of tyre performance. In Jerez and Monza, testing focused on optimization of the compounds, of which there will be six: four “slicks” for dry conditions, one rain tyre and one intermediate for light rain.

Track testing was done on a Toyota TF 109, used in last season’s Grand Prix, driven in Jerez by Germany’s Nick Heidfeld. Final testing is expected to take place in Abu Dhabi in November after the Grand Prix.

“The tests went beyond my own expectations and I believe Pirelli is at a good point in the development of the tyres,” said Heidfeld. “The Pirelli team, to whom I think I gave some useful advice, has from the beginning been on the right track in terms of supplying all Teams with reliable and safe tyres to ensure a great show and enable each driver to express their own driving style”.

Formula One and sustainability

In line with the Pirelli Group’s Green Performance strategy, aimed at developing products and solutions that combine maximum performance and safety with respect for the environment, Formula One production was also inspired by criteria of environmental sustainability. In particular, as in all Pirelli competition tyres, the compounds for the PZero are free of highly aromatic oils. Further, the processes used in Izmit are based on energy and water efficiency and the reduction of dangerous emissions like carbon dioxide. Special attention has been given to the re-utilization of production remnants and used tyres. The waste handling protocol calls for the recycling of used F1 tyres for either the generation of new primary material or energy production. Pirelli’s attention to the issue of sustainability is also shown by its recent confirmation in the Dow Jones Sustainability STOXX and Dow Jones Sustainability World indices, where the Company has been the leading company in the “Autoparts and Tires” sector for four consecutive years.

Pirelli’s 50 years in Turkey

The inauguration of the Formula One division coincides with celebrations for the 50^th anniversary of Turk Pirelli’s activities which will include, among other things, a photographic exhibition which opened yesterday at Istanbul’s Ciragan Palace. The collection of images recounts the history of the Company’s industrial presence in Turkey and its technological evolution. The official opening was attended by local authorities and leading exponents of Turkey’s business and cultural communities, including the director Ferzan Ozpetek and singer Sezene Aksu

PDF Version (37KB)

It is to them that the photography exhibit ‘Workers’ is dedicated. The exhibit was organised by the Pirelli Foundation and depicts the entrepreneurial and technological soul of Pirelli’s Settimo Torinese facilities through the faces of the men and women who work there. Seventy faces will be on display from 12 September to 10 October at La Giardinera, Settimo Torinese, faces that show intelligence, energy and skill, as well as pride in the good work they do for Pirelli.

Workers
The history and future of Pirelli in Settimo Torinese in the faces of those who make it
A Pirelli Foundation project
Photos by Carlo Furgeri Gilbert

La Giardinera, via Italia, 90 bis – Settimo Torinese
Thursday & Friday, 3pm to 7pm
Saturday & Sunday, 10am to 12 noon / 3pm to 7pm
Admission is free
www.fondazionepirelli.org

Pirelli Tyre. Both revenues and investment are on the rise. ‘Pirelli World’ reports on the group’s strategies for success in the global marketplace.

Horacio Pagani visits the University of Milan. On the eve of the new course record at the Nürburgring set by Pagani Zonda R on Pirelli P Zero Slick tyres, ‘Pirelli World’ has asked Horacio Pagani, founder and president of Pagani Automobili (a Pirelli partner since 2005), to talk about this prestigious car manufacturer and the secret to its success.

Pirelli Manufacturing System (PMS). The outcome of the ‘Managing to Lea(r)n’ project, which Pirelli launched in 2010 with the help of the SDA Bocconi School of Business, Milan. The project seeks to insert lean procedures and tools into the production process and has already seen the participation of 130 employees from all of the group’s tyre facilities. 

In the latest issue, ‘Pirelli World’ goes to Egypt to tell the story of more than ten years of growth with Karim Gaddas, CEO of Pirelli Egypt, in conjunction with the inauguration of the new area of the Alexandria truck facilities.

The Pirelli Foundation now operational. Established with the goal of developing and promoting Pirelli’s history and entrepreneurial culture, the Foundation publishes periodicals, photos, video, sketches and other mementos that depict the 138 years of the company’s history and culture. ‘Pirelli World’ gives us a taste of this immense heritage.

All this and more in the latest issue of  ‘Pirelli World’

JUNE 2010:

• FIRST HALF OPERATING RESULTS SIGNIFICANTLY IMPROVED OVER THE SAME PERIOD OF 2009

• IN THE SECOND QUARTER PIRELLI TYRE REPORTS RECORD QUARTERLY OPERATING PROFIT 

• 2010 TARGETS OF PIRELLI GROUP AND PIRELLI TYRE RAISED AGAIN:

PIRELLI GROUP: 2010 REVENUE TARGET IMPROVED (EXCLUDING PIRELLI RE) TO 4.8-4.9 BILLION EUROS, COMPARED WITH  4.6-4.7 BILLION EUROS ESTIMATED IN MAY, WITH EBIT OF ABOUT 7% (IN MAY TARGET WAS AT LEAST 6.5%); INVESTMENTS  RISING TO MORE THAN 350 MILLION EUROS FROM MORE THAN 300 MILLION EUROS, WITH CONFIRMATION OF THE TARGET FOR A NET FINANCIAL POSITION OF – 700 MILLION EUROS 

PIRELLI TYRE: 2010 REVENUE TARGET RAISED, REVENUES EXPECTED TO RISE ORGANICALLY UP TO 15%, COMPARED WITH A TARGET OF MORE THAN 10% ORGANIC GROWTH ESTIMATED IN MAY; EBIT IN ABSOLUTE VALUE EQUAL TO AT LEAST 360 MILLION EUROS COMPARED WITH 320- 330 MILLION EUROS ESTIMATED IN MAY

• BOND ISSUE APPROVED, TO TAKE PLACE WITHIN 12 MONTHS, POSSIBLY IN MORE THAN ONE INSTALLMENT, OF UP TO 800 MILLION EUROS TO OPTIMIZE THE DEBT STRUCTURE 

• CARLO PURI NEGRI RESIGNS. VITTORIO MALACALZA COOPTED TO THE BOARD OF DIRECTORS 

PIRELLI & C. GROUP

• REVENUES: +19.8% TO 2,426.5 MILLION EUROS (2,026.2 MILLION EUROS AS OF 30 JUNE 2009)

• EBIT: +62.8% TO 193.4 MILLION EUROS (118.8 MILLION EUROS AS OF 30 JUNE 2009)

• NET INCOME OF CONTINUING OPERATIONS 80.8 MILLION EUROS, MORE THAN DOUBLE COMPARED WITH 30.3 MILLION EUROS IN THE FIRST HALF OF 2009 

• TOTAL CONSOLIDATED NET RESULT NEGATIVE FOR 175.6 MILLION EUROS DUE TO ACCOUNTING EFFECT OF THE SEPARATION OF PIRELLI RE (NEGATIVE FOR 256.4 MILLION EUROS)

• OPERATING CASH FLOW POSITIVE FOR 55.6 MILLION EUROS (-18.5 MILLION EUROS IN THE FIRST HALF OF 2009); INVESTMENTS UP TO 135.5 MILLION EUROS (65.4 MILLION EUROS IN THE FIRST HALF OF 2009); NET FINANCIAL POSITION NEGATIVE FOR 696.9 MILLION EUROS (- 528.8 MILLION EUROS AS OF 31 DECEMBER 2009)

PIRELLI TYRE

• REVENUES: +21.4% TO 2,325.3 MILLION EUROS (1,915.9 MILLION EUROS IN THE FIRST HALF OF 2009); OPERATING INCOME: +59% TO 217.3 MILLION EUROS (136.8 MILLION EUROS IN THE FIRST HALF OF 2009), WITH EBIT MARGIN RISING TO 9.3% FROM 7.1%

• REVENUES IN THE SECOND QUARTER: +22.9% TO 1,215.3 MILLION EUROS (989.0 MILLION EUROS IN THE SECOND QUARTER OF 2009); OPERATING INCOME: +54% TO 121.8 MILLION EUROS (79.3 MILLION EUROS IN THE SECOND QUARTER OF 2009), WITH EBIT MARGIN RISING TO 10% FROM 8%

With the ‘Millions of Smiles’ tournament, the second edition of the InterCampus Romania series came to an end at Slatina recently. The special project was launched in July 2008 in collaboration with F.C. Internazionale Milano, Pirelli and Comunità Nuova.

For three days, over 250 children played in football matches that took place on pitch two of the 1^st May Stadium, plus recreational activities organised in parallel with them. Fun was assured for the smallest children, who enjoyed karaoke competitions, a puppet theatre, cartoons, clowns and face paint.

‘Millions of Smiles’, made possible by the work of volunteers from various Italian associations, the trainers of F.C. Internazio nale Milano, representatives of Comunità Nuova of Milan, the William Tyrell Foundation of Slatina and employees of Pirelli Tyres Romania, is the event with which InterCampus Romania celebrated a year of sports-recreational activities organised for more than 80 children from various social environments. For more than two years, the children have learnt to work as a team and integrate themselves into an organisational system through football, as well as gaining experience in social values like collaboration, friendship, loyalty and other important qualities.

“The ‘Millions of Smiles’ tournament is the concluding event of the second season, during which over 80 children have been involved in football and relating to each other”, said Luca de Vecchi, a Comunità Nuova representative. “To see their high spirits, the will to play together, to get to know each other without prejudice, makes us believe that the substantial objective we set ourselves with Pirelli and InterCampus of integration through sport is also possible in Slatina”.

“The InterCampus staff has experienced these three days with great satisfaction, establishing that not only the children have made tremendous improvements on the pitch in this sports season, the greatest pleasure was to see how much they enjoyed themselves, thanks also to the activity of animation”, declared Annalisa Novembre for InterCampus. “We would like to thank Pirelli, which has supported this event, the NIP volunteers and Comunità Nuova, Bambini in Romania and the William Tyrell Foundation, who allowed the hundreds of children to enjoy a unique experience and give us thousands of smiles”.

A spokesperson for the volunteers of the Bambini in Romania association said, “For us, the importance of the event was the collaboration between the various Italian and Romanian associations more than anything else, having the mutual objective of creating a joint moment of festivity and integration in the Slatina area. We have seen great potential in the event, which we hope can be exploited and increased in the years to come”.

Fourteen teams from sports clubs in the Olt region and InterCampus competed in this year’s football championship in the various age categories for children born in 1997-1998; 1999; 2000-2001.

The Pirelli technology will initially be used in the Latrobe Valley in Victoria, Australia, as part of the program ‘Towards Zero Waste Policy’ introduced by the local government for containment of waste, with the aim of converting the 600,000 tons of MSW produced annually by the city of Melbourne into fuel. In particular, the exchange of technology will stimulate an investment by Bosco International to develop an HQ-SRF plant in Australia, once authorizations are obtained from local authorities.

The Pirelli HQ-SRF is obtained by adding other components with a high calorific power ( plastic from D.C. and rubber) to dry solid urban waste. It can be used to partially replace fossil fuels in already existing, non-dedicated, plants, such as cement works and thermal power plants and it yields significant environmental benefits for the population, both in terms of lower emissions in particular of CO2, NOX and SO2 from fossil fuels, and in economic terms (lower waste disposal costs).

The integrated system promoted by Pirelli Ambiente has been successfully used since late 2002 in the Cuneo Provincial Authority Area, with the Idea Granda project, a public-private partnership owned 49% by Pirelli, and 51% by local utility ACSR, with cement works Buzzi-Unicem of Robilante, which uses HQ-SRF in its main burner substituting more than 40% of coal-petkoke needed. From its beginning, this system has meant energy recovered from waste in the area rose more than 32%, a level greater than the Italian average (7%) and greater than the European average (27%). In addition, according to a study by the University of Milan in Bicocca using the Life Cycle Assessment Method, use of Pirelli HQ-SRF is, respectively, 90 and 72 times more advantageous for the environment than landfills and incinerators.

Pirelli Ambiente
Pirelli Ambiente is the Pirelli Group company focused on renewable energy. In the field of renewable energy sources and, in particular, of energy recovery from MSW (Municipal Solid Waste), Pirelli Ambiente has developed and patented a High-Quality Solid Recovered Fuel (HQ-SRF). In the photovoltaic energy sector, Pirelli Ambiente created Solar Utility SpA, which invests in roof based solar energy systems for production in Italy.

Bosco International
Bosco International Pty Ltd, established in 2006, facilitates services, systems and processes for industry sectors seeking to create a sustainable environment, including saving energy or protecting resources. Bosco works with Australian and international companies, to offer sustainable environmental solutions. It seeks to achieve approvals and introduce new processes and systems for positive environmental results in: Waste management, Recycling, Power Generation, Manufacturing, Soil Remediation, Water treatment, Agribusiness, Natural Resources, Infrastructure, and Mining.

In collaboration with ‘Autostrade per l’Italia’ and Telepass, Pirelli presented in Rome yesterday (16 June) the summer campaign for road safety called “Safe&Go”, under the patronage of the Minister of Infrastructure and Transport, Altero Matteoli.

At the launch of the initiative were the Minister, the chairman of the Pirelli Group, Marco Tronchetti Provera, together with Giovanni Castellucci and Fabio Cerchiai, managing director and president respectively of ‘Autostrade per l’Italia’.

The prevention campaign is aimed at all motorists and has as its objective making the Italians’ holidays safer. It will begin during the weekend 19-20 June and will conclude on that of 28-29 August. During all of these weekends, motorists can meet with Pirelli technicians in one of the 10 mobile workshops set up in motorway service areas that the Società Autostrade makes available and receive a tyre check free of cost.

The check will conclude with the issue of a certificate of control, which will give the state of ‘health’ of the tyres and include the provision of informative material on tyres’ correct maintenance. In addition, each motorist will receive a tread depth gauge, an instrument with which to check the depth of a tyre’s remaining tread, which the law says may not be less than 1.6 mm.

The initiative is accompanied by an incentive campaign totally financed by Pirelli, which comprises a contribution of up to €170 for those who decide to replace their tyres which are worn or do not comply with the law with new Pirelli products by 14 August 2010.

The safety incentive, which continues until 31 May 2011, includes a €100 reduction on a subsequent purchase of a set of new tyres and a bonus of up to €70 in motorway toll charges for those who possess a Telepass Premium.

The Safe&Go campaign will involve about 1,400 tyre dealers in Pirelli workshops, who will play a central part in informing motorists of the fundamental role of tyres and the importance of correct maintenance and prevention.

In particular, after the growth of the green revenue component from 20 to 25% of turnover achieved in 2008 and 2009, the target for the current year is 33%, aimed at achieving the objective of 40% in 2011. Achievements that were also due to new green performance products such as the Cinturato P7 and the Scorpion Verde. He reminded his audience that, for Pirelli, sustainability is not just respecting the environment, but a new management model that is an integral part of the growth strategy for the Group: this is the best way of managing the economic, social and environmental impacts related to processes, products and services inspired by the principles of the United Nations’ Global Compact, respecting shared policy values, according to the most advanced management systems.

Speakers at the event, opened by Angelo Tantazzi, Chairman of Borsa Italiana and by Paul Druckman, Chairman of Access Technology Group – The Prince’s Accounting for Sustainability Project, were also Giuseppe Van Der Helm, Chairman of Eurosif, and Gian Francesco Imperiali, Chairman of ABB.

Video with Marco Tronchetti Provera’s speech