Sustainability Channel

PIRELLI & C. SPA BOARD APPROVES CONSOLIDATED RESULT FOR NINE MONTHS ENDED 30 SEPTEMBER 2012

• PROFITABILITY GROWS BECAUSE OF SOLID PREMIUM PERFORMANCE, STABLE PRICING POLICY, EFFICIENCIES DUE TO CAPACITY EXPANSION IN RAPIDLY DEVELOPING ECONOMIES AND GREATER REDUCTION OF FIXED COSTS

• FURTHER ACCELERATION IN THE REDUCTION OF NON-PREMIUM TYRE PRODUCTION IN FAVOUR OF HIGH AND ULTRA-HIGH PERFORMANCE ONES

• INVESTMENT IN FIRST NINE MONTHS OF 2012 OVER 320 MILLION EURO TO INCREASE PREMIUM CAPACITY IN RAPIDLY DEVELOPING COUNTRIES

PIRELLI & C. SPA

• EBIT: +31% TO 592.8 MILLION EURO (451.2 MILLION ON 30 SEPTEMBER 2011)

• EBIT MARGIN GROWS TO 13.0% FROM 10.6% ON 30 SEPTEMBER 2011

• NET PROFIT: +22.7% AT 308.3 MILLION EURO (251.3 MILLION ON 30 SEPTEMBER 2011)

• REVENUES: +7.2% AT 4,574.1 MILLION EURO (4,265.8 MILLION ON 30 SEPTEMBER 2011)

• PREMIUM SEGMENT CONTINUES TO GROW: REVENUES +23.5% AT 1,612.3 MILLION EURO ON 30 SEPTEMBER 2012 AND VOLUME INCREASE +13.5%

• NET FINANCIAL POSITION NEGATIVE 1,868.8 MILLION EURO (1,702.7 MILLION ON 30 JUNE 2012)

TYRE ACTIVITIES

• EBIT: +26.4% AT 612.3 MILLION EURO (484.4 MILLION EURO ON 30 SEPTEMBER 2011)

• EBIT MARGIN GROWS TO 13.5% FROM 11.5% ON 30 SEPTEMBER 2011

• CONSUMER BUSINESS EBIT MARGIN AT 14.5% (12.5% ON 30 SEPTEMBER 2011)

• INDUSTRIAL BUSINESS EBIT MARGIN AT 10.5% (9.1% ON 30 SEPTEMBER 2011)

• REVENUES: +7.5% AT 4,542.9 MILLION EURO (4,225.7 MILLION ON 30 SEPTEMBER 2011)

2012 TARGETS

• EVEN WITH AN ACCELERATED REDUCTION OF NON-PREMIUM PRODUCTION, EBIT OF APPROX. 800 MILLIONI EURO THANKS TO:

- SUSTAINED GROWTH OF PREMIUM IN RAPIDLY DEVELOPING ECONOMIES

- STABLE PRICING POLICY,

- EFFICIENCY PLAN INCREASED TO 155 MILLION EURO (FROM150 MILLION EURO)

- REDUCED IMPACT OF COSTS, IN PARTICULAR FOR RAW MATERIALS

• EBIT MARGIN INCREASES FROM >12% TO APPROX. 13%

• EXPECTED REVENUES APPROX 6.15 BILLION EURO (PRIOR TARGET APPROX 6.4 BILLION EURO) TAKING INTO ACCOUNT:

- TOTAL VOLUME REDUCTION OF -5%/5.5% (FROM PRIOR TARGET -3%/-4% ); PREMIUM GROWTH REVISED FROM +20% TO +17%/+18% IMPACTED BY THE SLOWDOWN IN THE EUROPEAN ECONOMIC CONTEXT; PRICE/MIX SEEN AT ABOVE +11% (PREVIOUS TARGET +11/12%)

- REDUCTION OF NON-PREMIUM PRODUCTION BY THE RUSSIAN JOINT VENTURE

- NEGATIVE EXCHANGE RATE IMPACT (-1% COMPARED WITH 2011)

• NET FINANCIAL POSITION EQUAL TO OR ABOVE 1.2 BILLION EURO AFTER THE PAYMENT OF DIVIDENDS (PREVIOUS TARGET BELOW 1.1 BILLION EURO AFTER DIVIDEND PAYMENTS) IN CONSIDERATION OF THE LEVEL OF SALES AND OPERATIONAL ACTIVITIES IN EUROPE WHICH BY THE FIRST QUARTER OF 2013 WILL BRING INVENTORY TO OPTIMAL LEVELS

• INVESTMENT CONFIRMED AT UNDER 500 MILLION EURO

• BOARD CO-OPTS MARIO GRECO

The Board of Directors of Pirelli & C. SpA met today to review and approve results for the nine months which ended on 30 September 2012.

The Pirelli group’s results for the first nine months saw key economic indicators grow, in particular profitability compared with the same period of 2011, notwithstanding the slowdown of the macro-economic scenario which intensified in the third quarter. The negative impact of the crisis on sales’ volumes was in fact offset by the group thanks to the positive performance of Pirelli’s Premium range, as well as the reinforcement of the productive and commercial presence in rapidly developing economies and with a more favourable demand dynamic, factors which resulted in a significant increase in profitability.

At the consolidated level, revenues in the first nine months amounted to 4,574.1 million euro, an increase of 7.2% compared with 4,265.8 million euro in September 2011 and the operating result (Ebit) amounted to 592.8 million euro (higher than the total for full-year 2011), with an increase of 31% compared with 451.2 million euro of the prior year and profitability (Ebit margin) grew to 13.0% (+2.4 percentage points compared with the number on 30 September 2011). The net result was 308.3 million euro, an increase of 22.7% compared with 251.3 million euro on 30 September 2011. In the third quarter of 2012, in particular, Pirelli had sales of 1,552.3 million euro, an increase of 5.1%, and an operating result of 192.1 million euro (+19.2% in the same period of 2011), with profitability rising by 1.5 percentage points to 12.4%.

The positive results’ performance was particularly significant considering the overall reduction of sales’ volumes in tyre activities, which fell 6.8% during the first nine months of the year because of the persistent difficulties of the global macro-economic scenario, in particular in the countries of southern Europe. The results confirm the effectiveness of the strategic focus on the Premium segment.

In this segment, in which Pirelli aims to achieve global leadership in 2015, volume performance in the third quarter (+12.5%) was in line with the preceding quarter and leads to a progressive growth in Premium volumes during the first nine months of 13.5%, with sales growing 23.5% to 1,612.3 million euro.

The effectiveness of Pirelli’s Premium strategy in contrasting the overall slowdown in demand can be seen in particular in the growth of profitability in the Consumer business, which in the first nine months increased by 2 percentage points to 14.5%. The profitability performance of the Industrial business was also positive, even if more greatly impacted by the effects of the crisis because more exposed to economic cycles, shows profitability growing in the first nine months by 1.4 percentage points to 10.5%, thanks to efficiencies and lower raw material costs.

In line with the industrial plan – which calls for an increase in Premium capacity, further expansion in rapidly developing countries and with a more favourable demand dynamic and a reinforcement of the international commercial presence – in the first nine months Pirelli made investments of 327.4 million euro, on top of 277.1 million euro in financial investments  for the acquisition of the Russian factories in Kirov and Voronezh (170.9 million euro) and two distribution chains in Brazil and Sweden (106.2 million euro). These factors, together with dividend payments to shareholders of 132.3 million euro and the overall performance of working capital, resulted in a net financial position at the end of September 2012  of negative 1,868.8 million euro, compared with -1,702.7 million euro in June of June 2012 and -737.1 million euro in December of 2011.

PDF Version (100 KB)

Supplementary welfare: we’re in the foreground

The 10^th, 11^th and 12^th of May. Three days devoted to an interactive exhibition on supplementary welfare at the Italian Stock Exchange under the patronage of the Presidency of the Republic of Italy. Taking place as part of the National Day of Welfare, the exhibition focuses on those systems of social protection introduced by companies involved in that area every day.

The event comprised 80 stands, three conferences on the subjects of welfare, the young and women plus a packed programme of conventions and seminars. Visitors had the opportunity to personally confront the main public and private welfare organisations to be updated on the spot on their pension situation.

Pirelli decided to be an active protagonist at this exhibition, which wound its way between the past, present and future: from a pioneering past with its first formulae for workers’ welfare assistance, to working people of the future and welfare that also extends ever more towards the families.

The Pirelli Foundation made historic and archive material available for the occasion, necessary to testify to our commitment to a working reality which is increasingly made to measure for people.

http://www.giornatanazionaledellaprevidenza.it/parterre-gnp2012

Meeting of Pirelli & C. SpA Shareholders

• 2011 RESULTS APPROVED

• DISTRIBUTION OF 0.27 EURO DIVIDEND PER ORDINARY SHARE AND 0.34 EURO PER SAVINGS SHARE DECIDED

• BOARD MEMBERS MANUELA SOFFIENTINI AND GIUSEPPE VITA NOMINATED

• NEW AUDIT COMMITTEE NAMED

• REMUNERATION POLICY APPROVED

• MANAGEMENT LTI INCENTIVE PLAN APPROVED

• ‘PIRELLI SHAREHOLDERS CLUB’ LAUNCHED FOR INDIVIDUAL INVESTORS

The shareholders of Pirelli & C. SpA met today in ordinary session and approved full-year results for 2011 which ended with a consolidated net profit of 440.7 million euro and parent company net profit of 272.5 million euro. They decided the on the distribution of a dividend of 0.27 euro per ordinary share and 0.34 euro per savings share with payment on 24 May 2012 (ex-dividend 21 May 2012).

Shareholders nominated board members Manuela Soffientini (independent) and Giuseppe Vita, both already coopted.

Shareholders also nominated, via list vote, the new Audit Committee for the years 2012, 2013 and 2014. The committee is thus composed of Francesco Fallacara (who shareholders named as chairman), Antonella Carù and Enrico Laghi, as standing auditors, and Umile Sebastiano Iacovino and Andrea Lorenzatti as alternate auditors. The chairman of the new audit committee and the alternate auditor Andrea Lorenzatti were chosen from the minority list (voted for by about 22% of the capital represented at the shareholders meeting) presented by a group of fund managers and financial intermediaries, while the other nominations were chosen from the majority list (voted for by circa 78% of the capital represented at the shareholders meeting) presented by Camfin, Mediobanca, Edizione, Fondiaria-Sai, Allianz, Assicurazioni Generali, Intesa Sanpaolo, Sinpar and Massimo Moratti, members of the Pirelli & C. SpA shareholder agreement. The compensation for the standing auditors was established at 50,000 euro and for the Committee chairman at 75,000 euro.

The curricula of the new auditors are available at the company’s website (www.pirelli.com).

Shareholders also expressed themselves in favour of the Company and Group remuneration policy, as well as approving the 3-year LTI incentive plan (Long Term Incentive), decided by the Board of Directors in March following its proposal by the Remunerations Committee and destined for management. The new plan is linked to the achievement of the targets of the 2012-2014 group industrial plan, to TSR (Total Shareholders Return) and Pirelli’s position in the key sustainability rankings at the world level.

It should be noted that documentation relative to the 2011 annual results and the information document prepared for the LTI plan are available to the public at the company’s headquarters in Milan (Viale Piero e Alberto Pirelli 25) and at Borsa Italiana S.p.A., as well as being online at the company’s website www.pirelli.com.

The minutes of the shareholders’ meeting will be available to the public via the same channels by 8 June 2012.

’Pirelli Shareholders Club’ for individual investor launched

During today’s shareholders’ meeting, Pirelli also presented the “Pirelli Shareholders Club”, an initiative that is one of a number for individual investors. Through this new project Pirelli, the sixth biggest group in terms of the weight of individual investors with 16% of capital held by 70,000 shareholders, intends to bring investors closer to its world and products. By enrolling in the Club, in fact, shareholders will receive not only all the information needed to know the company, but also gain access to exclusive prizes linked to Pirelli’s world, like sporting, cultural and lifestyle events.

PDF Version (44 KB)