Sustainability Channel

Sustainability Channel is the communication channel towards our stakeholders interested in Sustainable approach to the business.

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-       Pirelli “Pure Consumer Tyre Player”

-       Revenues increased 13.4% to 1,339.3 million euro (1,180.9 million on March 31, 2016)

-       Further strengthening of Premium: volumes grew 15.3% and revenues increased 16%. As a percentage of total revenues, rose to 67.8% (66.2% on March 31, 2016)

-       Improvement of price/mix: +5.5% – top in the industry – thanks above all to the sales’ mix

-       Ebitda 270.3 million euro (261.5 million on March 31, 2016)

-       Adjusted Ebit 205.0 million euro (203.6 million on March 31, 2016)

-       Adjusted Ebit Margin impacted by launch of new projects and increased raw material costs

-       Investments 98.3 million euro (70 million on March 31, 2016)

-       Net income before discontinued operations : +49.5 million euro (-30.4 million on March 31, 2016)

-       Apac and Nafta confirmed as most profitable areas


As an effect of the assignment by Pirelli & C. S.p.A. to Marco Polo International Italy S.r.l. of the shares of TP Industrial Holding, the company into which Pirelli’s Industrial activities had been conferred, the Industrial business is qualified as a “discontinued operation”. The result for the year of the discontinued operation has been reclassified in the income statement under the heading “results of disposed operating activities”. The comparable economic data for 2016 have been thus restated.


The Board of Directors of Pirelli & C. S.p.A. reviewed and approved group results for the quarter ending on March 31, 2017, which reflect the launch of Pirelli as a “Pure Consumer Tyre Player”, with the implementation of new projects aimed at strengthening its positioning in high-value segments with higher profitability and the development of new activities to take advantage of new trends in mobility.

The results for the first quarter of 2017 were characterized by the following elements:

Revenues totaled 1,339.3 million euro, an increase of 13.4% compared with 1,180.9 million euro in the same period of 2016 once again driven by the focus on the Premium segment and its positive performance. Organic growth was 8.4% and excluding forex impacts (+4%) and the consolidation of the car activities of Jiaozou Aeolus Car (+1%), whose reconversion to the Pirelli brand began in the last quarter of 2016, with the aim of accelerating development in China, the area which will be the Premium segment’s growth driver at the world level. The revenue trend benefitted from the strong growth of the price/mix component (+5.5%, the highest level among peers) due in particular to the improved sales’ mix, thanks to the success of high end products, and price increases in emerging markets.

Premium revenues rose 16% to 907.4 million euro, compared with 782.2 million euro in the same period of 2016. As a percentage of total revenues, Premium revenues grew further and reached 67.8%, compared with 66.2% in the first quarter of 2016.

Volumes in the Premium segment saw significant growth of 15.3% – which involved all Regions reaching levels above the market trend (+11%) – which underpinned the trend of total volumes, which increased 2.9% over the period. The progressive reduction of exposure to segments of lower profitability, in particular in Russia and Latam, brought, on the other hand, a reduction of 9.1% in non-Premium volumes.

Ebitda before non-recurring items and restructuring costs was 270.3 million euro at  March 31, 2017, an increase of 3.4% compared with 261.5 million euro in the same period of 2016.

Adjusted Ebit (operating income before non-recurring items and restructuring costs and amortization of intangible fixed assets included in the PPA) amounted to 205 million euro, an increase of 1.4 million euro compared with 203.6 million euro recorded for the corresponding period of 2016. The improved result was linked to the effect of internal levers such as price/mix, volumes and efficiencies, which more than compensated for the increased cost of raw materials, costs inflation (particularly in emerging markets), higher amortization and depreciation and other costs related to business development.

The Adjusted Ebit margin was 15.3% compared with 17.2% on March 31, 2016 and predominantly reflects new programs that will deliver value in the medium term, as well as the effect of increased raw material costs. In particular:

-       the above mentioned consolidation of the car activities of Jiaozou Aeolus Car in China;

-       the strengthening of Premium segment positioning along the entire value chain,

-       the effort to accelerate the reduction of exposure to segments with low profitability;

-       the launch of new activities which meet new end-customer needs such as connectivity and the return to the bicycle business through the Velo project;

-       one-off costs attributable to the separation of the Industrial business;

-       The time lag between price increases which were effective as of  April 1, 2017 for all products and the increase in the cost of raw materials

The operating result (Ebit) amounted to 168.7 million euro (166.1 million euro in the corresponding period of the previous financial year) and was impacted by:

non-recurring and restructuring charges of 10.1 million euro due to rationalization processes, costs relating to the reorganization activities of the Industrial segment and 26.2 million euro relative to amortization of intangible assets identified in the context of PPA deriving from the acquisition of Pirelli assets by Marco Polo.

The result from equity investments was negative in the amount of 3.1 million euro (-42.5 million euro at  March 31, 2016) and was mainly related to the pro-quota result of the Indonesian Joint Venture PT Evoluzione Tyres.

The net income before discontinued operations on March 31, 2017 amounted to 49.5 million euro compared with a loss of 30.4 million euro in the first quarter of 2016. Other than the improvement in the operating income and net income from equity investments, the result also reflects the reduction in net financial expenses of , 56.7 million euro (77.0 million euro for first quarter 2017 compared with 133.7 million euro for first quarter 2016, impacted by 25.4 million euro linked to the extinction of the US Private Placement bond loan). The reduction of net financial expenses was mainly attributable to the lower cost of debt (5.42% for the first quarter 2017 compared with 5.98% for the first quarter 2016).

The operating cash flow on March 31, 2017 was negative 720.1 million euro (-592.3 million in the same period of 2016). The figure reflects, among other things, growth of investments – 98.3 million euro compared with 70 million euro at March 31, 2016 – mainly aimed at increasing Premium segment capacity in Europe and Nafta and at the continuous improvement of the mix and quality.

Net cash flow before dividends and extraordinary operations was negative in the amount of 881.7 million euro compared with a negative result of 838.3 million euro recorded for 2016. The total cash flow was negative in the amount of 612.4 million euro (negative in the amount of 779.0 million euro in 2016) and includes the positive effect of 269.3 million euro resulting from the finalization of the Industrial business reorganization.

The net financial position on March 31, 2017 was negative in the amount of 5,525.2 million euro (-4,912.8 million euro at December 31, 2016).

At the geographical level, Apac registered, along with Nafta, the highest profitability among all the macro-areas, staying at the twenties levels. Revenues in the Apac area, above all thanks to the performance of Premium, increased by 26.6% compared with the same period of 2016. Excluding the positive effects of forex (+0.7%) and variation in the perimeter deriving from the consolidation of Aeolus Car (+3.2%) organic revenue growth was +22.7%. Nafta registered an Ebit margin in the twenties levels, with organic growth in revenues of 16.5% (+13.7% excluding the positive forex effect) thanks to the good performance of Premium and SuperPremium. Europe registered profitability in the mid-teens level, with revenue growing by 7.8% (+8.9% excluding the negative forex effect), underpinned by the positive performance of Premium. Meai registered profitability in the mid-teens level, with total revenue growth of 2.4%.

The decline in profitability in South America (Ebit margin mid-single-digit) was mainly due to a fall in sales in the Argentine market and continuing actions to improve and reconvert the mix. In the course of the quarter, revenues grew by 18.8% (-3.2% at the organic level excluding forex and perimeter variations).

This performance reflects the ongoing focus on the mix, with the progressive reduction of sales in the non-premium segment, the destination of part of the production for exports to North America in consideration of the growing demand for Pirelli Premium products and the shrinking of the car market in Argentina. Russia registered growth in profitability (Ebit margin high single digit compared with a negative margin in the first quarter of 2016). Total revenues grew by 14.3%: excluding the positive impact of forex, revenues fell 16.9%. This dynamic reflects the strategic focus on more profitable segments, with the progressive reduction in the production and sales of products of brands other than Pirelli.

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Board of directors meeting: the process of reorganization of Pirelli industrial continues






The Board of Directors of Pirelli & C. S.p.A. met today and was updated on the activities under way with regard to the proposed integration of Pirelli Industrial and Aeolus, acknowledging with favour its progress.

The Board then analyzed the guidelines of the industrial plan for the Industrial segment.

The Board, further, approved the industrial plan 2016-2018, with vision to 2020, for Pirelli Consumer, the sole global player entirely focused on the Consumer business. The strategy calls for:

  1. 1. strengthened leadership in the high profitability Prestige and Premium segments;
  2. 2. a business model always more focused on the end consumer (‘Consumer Centric Approach’)
  3. 3. oversight of new business opportunities offered by new and sustainable mobility (Cyber Tyre and Vélo);
  4. 4. total digitization of industrial, commercial and management processes, more efficient and based on predictive models made possible thanks to the deployment of big data and analytics.

To support this course, the Board adopted an organizational model which calls for:

- the constitution of General Management Pirelli Digital, entrusted to Luigi Staccoli, supervising all activities aimed at the digitization of the company;

- the aggregation of all technical structures (R&D, homologations, technologies, manufacturing, quality, motorsport) and sales to Original Equipment under the responsibility of General Manager Technology, Maurizio Boiocchi;

- the attribution of the management of all commercial structures (marketing, supply chain,  aftermarket sales) and the Business Unit Moto to the Chief Commercial Officer Consumer, Roberto Righi, in support of the ‘Consumer Centric Approach’;

- the General Management Operations will be superseded from January 1, 2017. Gregorio Borgo, who has announced his decision to leave the company to pursue a new important professional path, will remain with the company until December 31, 2016 to support the  Ceo, Marco Tronchetti Provera, with the implementation of the new organizational model;

- the nomination of Paolo Dal Pino, currently Ceo of the Latin America region, as Chief Executive Officer of Pirelli Industrial;

- attribution of responsibility for Human Resources Management given to Gustavo Bracco with the role of Chief Human Resources Officer.

The Company extends to Gregorio Borgo its appreciation for the important contribution made to the growth of Pirelli through his 24 years of service.

On the basis of these assumptions, the Board shared the desire to accelerate the course to the company’s listing, immediately launching all the necessary actions. It is foreseen that the preliminary phases for the preparation of the IPO (Initial Public Offering) can be completed during the first half of 2017, with the objective of proceeding, in accordance with the best opportunities offered by the market, with the launch of the IPO by the first half of 2018 on the Milan stock exchange or, however, on one of the leading stocks exchanges at the international level.

Among the elements underpinning the success of the listing, the Board identified:

- the alignment of governance to international best practice, through a Board of Directors and board committees composed of a suitable number of independent directors;

- a shareholder structure that, although beginning with a concentrated shareholder structure, which emerged during the Public Tender Offer, foresees an evolution which ensures a suitable free-float level and one able to satisfy the expectations of international investors;

- a system of incentives that guarantees the alignment of the interests of management with those of all shareholders.

The Board further took note with favour of the decision of the board of Marco Polo International Italy (‘Marco Polo’), which also met today, to share and approve the course decided by Pirelli and the elements underpinning the success of its listing. The Board of Marco Polo confirmed its desire to accelerate the implementation of the shareholders’ agreements signed on March 22, 2015, which have as their basis the creation of value by Pirelli and its relisting.

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September 16th 2016 – Today is the first day of the European Mobility Week, promoted by the European Union in support of smart and sustainable mobility.

In occasion of the Mobility Week, Pirelli decided to join “Bike Challenge Milano 2016”, competition between companies in the Milan area that will award companies and individual employees collecting more kilometers by bike between September 16th and October 31st.

The Bike Challenge organized by LoveToRide and FIAB sees the participation of more than 100 companies interested in sustainable mobility and aware that the use of bicycles while going to work is  good both for the environment and the well-being of employees.

Click here for more details on Pirelli’s MobilityAction.