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PIRELLI & C. SPA SHAREHOLDERS’ MEETING

  • APPROVES DISTRIBUTION OF DIVIDEND OF 0.32 EURO PER ORDINARY SHARE AND 0.39 EURO PER SAVINGS SHARE

  • NEW BOARD OF DIRECTORS NOMINATED

  • VOTE IN FAVOUR OF REMUNERATION POLICY AND NEW LTI PLAN

  • AUTHORIZATION FOR THE ACQUISITION AND DISPOSITION OF OWN SHARES APPROVED

***

PIRELLI & C. SPA BOARD OF DIRECTORS MEET:

  • MARCO TRONCHETTI PROVERA CHAIRMAN AND CHIEF EXECUTIVE OFFICER

ALBERTO PIRELLI DEPUTY CHAIRMAN

Milan, 12 June 2014 – The shareholders of Pirelli & C. SpA met today in ordinary session and approved financial results for 2013, which ended with a consolidated net profit of 306.5 million euro and a parent company net profit of 191.9 million euro, as well as deciding upon the distribution of a dividend of 0.32 euro per ordinary share and 0.39 euro per savings share. The dividend payment date is June 19, 2014 (ex-dividend date June 16, 2014 and record date June 18, 2014).

Shareholders then established that the duration of the entire Board of Directors will be three years (until the approval of results for the year ending December 31, 2016) and determined that board members will number 15, of which 8 independent. The annual retribution for the entire Board of Directors was set at 1.5 million euro.

On the basis of the slates presented, the following individuals have been nominated as members of the Board of Directors of Pirelli & C. SpA:

Marco Tronchetti Provera

Alberto Pirelli

Anna Maria Artoni (independent)

Luigi Piergiuseppe Ferdinando Roth (independent)

Paolo Fiorentino

Gaetano Micciché

Claudio Sposito

Riccardo Bruno

Piero Alonzo (independent)

Emiliano Nitti (independent)

Luciano Gobbi (independent)

Enrico Parazzini

taken from the slate of the majority (voted for by circa 62.14% of the capital represented at the Shareholders’ Meeting) presented by Camfin SpA, also in name and on behalf of Cam Partecipazioni SpA and Cam 2012 SpA;

Elisabetta Magistretti (independent)

Manuela Soffientini (independent)

Paolo Pietrogrande (independent)

taken from the slate of the minority (voted for by circa 26.48% of the capital represented at the shareholders’ meeting) presented by a group of savings management companies and financial intermediaries.

The curricula of the board members can be seen online at www.pirelli.com.

Shareholders also approved the authorization for the Board of Directors to buy and dispose of own shares for up to 10% of Company Capital and for a maximum period of 18 months, thus renewing the previous authorization deliberated on May 13, 2013.

Shareholders expressed themselves in favour of, with 97% of the voting capital, the Company’s Remuneration Policy and approved – for the part linked to Total Shareholder Return – with  72.79% of the voting capital – the adoption of the 3-year incentive plan 2014-2016 LTI (Long Term Incentive) already announced to the market on February 28 and correlated to the targets of the 2013-2017 industrial plan.

***

At the conclusion of the Shareholders’ Meeting, the Board of Directors of Pirelli & C. SpA met and nominated Marco Tronchetti Provera as Chairman and Chief Executive Officer, and Alberto Pirelli as Deputy Chairman.

The Board of Directors also verified, on the basis of the available information and the statements made by the interested parties, the existence of the requisites of independence (both in accordance with legislative decree 58/1998 and the Code of Self-regulation for listed companies) with regard to all eight independent board members (Anna Maria Artoni, Luigi Roth, Piero Alonzo, Emiliano Nitti, Luciano Gobbi, Elisabetta Magistretti, Manuela Soffientini and Paolo Pietrogrande).

Francesco Tanzi, the group’s Chief Financial Officer, was confirmed as the manager with responsibility for the preparation of the company’s financial documents.

In closing, the Board of Directors postponed to the next meeting, to be called at the designation of the lead independent director, the renewal of board committees and the 231 vigilance body, which expired together with the board that had nominated them.

***

The Company also announces that Professor Enrico Laghi has resigned from the position of standing statutory auditor for the Company because his numerous professional commitments prevent him from carrying out his responsibilities in Pirelli with the due dedication. The Board of Directors and Audit Committee wish to express their sincere thanks to Professor Laghi for his contribution over the years.

As a consequence of this resignation and in accordance with the bylaws, the role will be filled by the alternate statutory auditor Sebastiano Umile Iacovino who is from the same slate as the person resigning.

Mr. Iacovino’s Curriculum Vitae can be seen online at www.pirelli.com.

***

It should be noted that the documentation relative to the Annual Report for 2013 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 online at www.pirelli.com.

The minutes of the Shareholders’ Meeting will be available to the public in the same manner as indicated above, as well as through the authorized storage mechanism, from July 11, 2014.

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PIRELLI & C. SPA BOARD APPROVES RESULTS FOR 3 MONTHS ENDED 31 MARCH 2014

GROWTH OF MAIN ECONOMIC INDICATORS

NET PROFIT +26.1% TO 90.4 MILLION EURO

RESULTS DRIVEN BY EUROPE RECOVERY (REVENUES +10.2%), CONTINUING PRICE/MIX IMPROVEMENT (+4.6%) AND FURTHER STRENGTHENING OF PREMIUM (VOLUMES +22.2%)

PREMIUM REVENUES GREW TO REPRESENT 56.7% OF CONSUMER SALES (50.8% IN THE FIRST QUARTER OF 2013)

EFFICIENCIES 27.6 MILLION EURO, EQUAL TO 31% OF FULL-YEAR TARGET

PROFITABILITY (EBIT MARGIN BEFORE RESTRUCTUING CHARGES) GROWS TO 14% FROM 12% OF FIRST QUARTER 2013

SIGNIFICANT IMPROVEMENT IN RUSSIA PROFITABILITY

(EBIT MARGIN HIGH SINGLE DIGIT)

PIRELLI CONSOLIDATED RESULTS

  • EBIT: +12.6% AT 201.0 MILLION EURO (178.5 MILLION EURO ON 31 MARCH 2013)
  • EBIT MARGIN AT 13.6% (11.8% ON 31 MARCH 2013), EBIT MARGIN BEFORE RESTRUCTURING CHARGES AT 14% (12% ON 31 MARCH 2013)

  • NET PROFIT: +26.1% TO 90.4 MILLION EURO (71.7 MILLION EURO ON 31 MARCH 2013)
  • TOTAL VOLUMES +3.8%, WITH PREMIUM VOLUMES GROWING BY 22.2%
  • REVENUES: 1,473.2 MILLION EURO, WITH ORGANIC GROWTH OF 8.0%; -2.7% FROM 1,514.6 MILLION EURO ON 31 MARCH 2013 INCLUDING THE EXCHANGE RATE EFFECT (-10.7%)
  • PREMIUM REVENUES 639.9 MILLION EURO, WITH ORGANIC GROWTH OF 16.4%; +12.9% INCLUDING EXCHANGE RATE EFFECT (-3.5%)

  • NET FINANCIAL POSITION NEGATIVE 1,965.6 MILLION EURO (1,680.2 MILLION EURO ON 31 MARCH 2013 AND 1,322.4 MILLION ON 31 DECEMBER 2013)

TYRE ACTIVITIES

  • EBIT: +11.2% TO 204.9 MILLION EURO (184.3 MILLION EURO ON 31 MARCH 2013)

  • EBIT MARGIN AT 13.9% (12.2% ON 31 MARCH 2013), EBIT MARGIN BEFORE RESTRUCTURING CHARGES AT 14.3% (12.5% ON 31 MARCH 2013)
  • CONSUMER BUSINESS EBIT MARGIN AT 14.1% (12.2% ON 31 MARCH 2013)

  • INDUSTRIAL BUSINESS EBIT MARGIN AT 13.5% (12.4% ON 31 MARCH 2013)
  • REVENUES: 1,469.5 MILLION EURO, WITH ORGANIC GROWTH 8.4%; -2.4% COMPARED WITH 1,505.0 MILLION EURO ON 31 MARCH 2013 INCLUDING EXCHANGE RATE EFFECT (-10.8%)

TARGETS

2014 TARGETS ANNOUNCED IN MARCH ARE CONFIRMED

***

As a consequence of the agreement to dispose of 100% of the steelcord activities, this business has been classified as a “discontinued operation” and the result reclassified in the accounts under the heading “results of disposed operating activities”. The economic indicators relative to the first quarter of 2014 thus refer to the functioning activities and the comparable data for 31 March 2013 have been restated.

***

The Board of Directors of Pirelli & C. SpA today reviewed and approved the results for the three months which ended on 31 March 2014.

The results for the first quarter of 2014 show growth in the main economic indicators, which reflects the recovery of demand in Europe, which could already be seen in the last quarter of 2013, and the ever growing positive contribution to results of the Premium segment on which Pirelli is focused. This growth was achieved notwithstanding the impact of exchange rates, linked to the ever stronger euro and the volatility of other currencies.

Consolidated revenues in the quarter saw organic growth of 8% to 1,473.2 million euro, particularly due to the progressive improvement of the price/mix component, which grew during the period by 4.6% (in line with the target of +4%/+5% foreseen for full year 2014). Including the negative 10.7% impact of exchange rates, revenue performance was negative 2.7%.

The recovery of the European market, where revenues registered growth of 10.2%, had positive effects in particular in the Consumer business, while the Industrial business suffered the impact of exchange rates which was heavily concentrated in emerging markets. Thanks to the favourable performance of the Premium segment, the positive contribution from the price/mix component and the ongoing efficiency programme, both segments saw significant improvement in profitability, with the Ebit margin in the Consumer segment up to 14.1% from 12.2% and in the industrial segment to 13.5% from 12.4%. Overall, Ebit after restructuring charges grew by 12.6% to 201.0 million euro, with an Ebit margin which improved to 13.6% from the previous 11.8%. Before restructuring charges, profitability stood at 14%, with an increase of two percentage points compared with the corresponding period of 2013.

Efficiencies, in particular, reached 27.6 million euro in the quarter (31% of the full year target of 90 million euro), the first results of the 4-year (2014-2017) efficiency plan of 350 million euro announced in November 2013; achieved through the “de-complexity” plan and in particular through the rationalization of raw material use.

In the Premium segment revenues totaled 639.9 million euro, an organic increase of 16.4% (+12.9% including exchange rate impact, negative 3.5%) compared with the previous year and representing 56.7% of Consumer sales (50.8% in the first quarter of 2013). This business sector saw sustained growth both in emerging countries (+14.7%) and mature markets (+12.4%) also thanks to the recovery in the Europe area.

Total volumes increased by 3.8%, with Consumer volumes rising by 5.9% and Industrial volumes decreasing by 2.2%. The latter figure also reflects the high level of growth in emerging markets in the corresponding period of the prior year (+15.3%) and the progressive reduction of the conventional business in South America.

It is worth noting the positive performance in Russia, where revenues – excluding exchange rate effects – increased by 5.4% and profitability stood at high single digitlevels.

Pirelli

Consolidated revenues on 31 March 2014 amounted to 1,473.2 million euro, with an organic growth of 8% compared with the corresponding period in 2013, including the 10.7% negative impact linked to exchange rates revenues declined by 2.7% compared with 1,514.6 million euro in the first quarter of 2013.

The gross operating margin (EBITDA) before restructuring costs was 277.3 million euro, an increase of 9.6% compared with 253.0 million euro in the corresponding period of 2013.

The operating result (Ebit) was 201.0 million euro, an increase of 12.6% compared with 178.5 million euro in the corresponding prior period. The improvement in the operating result (+22.5 million euro) reflects:

  • the positive contribution of volumes (+ 24 million euro);
  • the growth brought by the price/mix component (+39.3 million euro) thanks to the improvement in the mix (growth of Premium) and price increases in emerging countries;
  • efficiencies of 27.6 million euro (31% of the full year target);
  • lower raw material costs (+7.9 million euro);
  • improved operating results of minor businesses (+1.9 million euro);

which more than offset:

  • the negative impact of production costs (-29.5 million euro);
  • exchange rate volatility in consolidation (-19.2 million euro impact on Ebit);
  • higher amortization and other costs (-27.2 million euro) and restructuring costs (-2.3 million euro).

Ebit margin – expressed as a percentage of sales – grew in the first quarter of 2014 to 13.6%, compared with 11.8% registered in the same period of 2013. Ebit margin before restructuring charges at 14% compared with 12% on 31 March 2013.

The result from shareholdings on 31 March 2014 was negative 13.8 million euro (-6.6 million euro in the same period of 2013), almost wholly due to the effects of consolidation using the net equity method of the fourth quarter 2013 results of the affiliate Prelios, announced in April.

The net profit was 90.4 million euro, an increase of 26.1% compared with 71.7 million euro in the corresponding 2013 period, after net financial charges of 43.3 million euro (58.0 million euro in the corresponding 2013 period). The attributable consolidated net profit of Pirelli & C. Spa, including results from discontinued operations, amounted to 89.7 million euro, an increase of 23% compared with 72.9 million euro in the corresponding 2013 period.

Consolidated net assets on 31 March 2014 stood at 2,500.8 million euro compared with 2,436.6 million euro on 31 December 2013. The attributable consolidated net assets of Pirelli & C. SpA amounted to 2,441.6 million euro, compared with 2,376.1 million euro on 31 December 2013.

The consolidated net financial position was negative 1,965.6 million euro, including 50.9 million euro relative to the discontinued steelcord operations, compared with 1,680.2 euro in the corresponding period of 2013 and 1,322.4 million euro on 31 December 2013. Net debt stood at 2,468.0 million euro, substantially unchanged compared with 2,476.6 million euro in the corresponding period of 2013.

The net cash flow from operations management in the first quarter of 2014 was negative 474.6 million euro (-316.8 million euro in the corresponding prior period), essentially due to the usual seasonality of working capital, and after investments of 65.3 million euro (79.7 million euro in the first quarter of 2013). The total net cash flow was negative 643.2 million euro (-475.0 million euro in the first quarter of 2013) of which approximately 50 million euro related to the impact on the net financial position of exchange rate variations – especially in relation to the position in Venezuela.

The Group headcount on 31 March 2014 stood at 38,529 (37,846 on 31 March 2013).

 
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SHAREHOLDERS’ MEETING CALLED FOR 12 JUNE 2014

Pirelli announces that today the ordinary Shareholders’ Meeting of Pirelli & C. S.p.A. was called for Thursday June 12, 2014, in sole call, to be held in Milano at Viale Sarca 214 at 10.30 am.

In addition to deliberating with regard to the financial results for the year 2013, the Shareholders’ Meeting will also address – through slate vote – the renewal of the Board of Directors, which is expiring as its mandated is ending, to set its duration, number of members and relative remuneration.

The Shareholders’ Meeting will also be asked to authorize the acquisition and disposition of Pirelli shares for a period of 18 months and up to 10% of capital. This is the renewal of a similar authorization decided upon on May 13, 2013 and which expires on November 13, 2014.

In conclusion, the Shareholders’ Meeting will also express itself through consultative vote on Policies regarding matters of remuneration, as well as approve, in relation to the part linked to Total Shareholder Return, the adoption of the 3-year incentive plan 2014-2016 LTI (Long Term Incentive) for the company’s management, already announced to the market on February 28, 2014 and correlated to targets in the 2013-2017 Industrial Plan.

The Directors’ report and the decisions regarding all orders of the day of the Shareholders’ Meeting, as well as the Information Document regarding the LTI plan are 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 in the section dedicated to the Shareholders’ Meeting.

It should be noted, further, that the 2013 Annual Financial Report, together with the Audit Committee’s and external auditor’s reports, and the annual report on company Governance and the Sustainability Annual Report are already available to the public.

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Categories: Group Investors Sustainability