The Board of Directors approves 2010 results

A meeting of the Board of Directors of Pirelli & C. SpA today reviewed and approved the group’s results for 2010, a year which saw significant growth at the operating level and all targets set on 14 October 2009 beaten.

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)

Viruses: the Invisible Enemy

Si è svolta a Venezia, dal 19 al 21 settembre, ‘The Future of Science’, la sesta edizione del ciclo annuale di conferenze rivolto alla comunità scientifica organizzato dalle Fondazioni Silvio Tronchetti Provera, Umberto Veronesi e Giorgio Cini. L’obiettivo del convegno è quello di definire il ruolo della scienza nel terzo millennio e sottolinearne l’importanza per ill miglioramento della qualità della vita.

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

Pirelli inaugurates its “factory of champions” in Turkey

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)