Pirelli Industrial Strategies
During the last Industrial Plan presented in London, Pirelli declared its aim to achieve world leadership in the Premium segment in 2015, confirming the industrial strategies already underway.
In order to achieve this objective, Pirelli will:
- focus increasingly on technological innovation, which will create an unprecedented increase in the product range able to satisfy both ever-more sophisticated demands of a mature market such as Europe and the increasing demand for Premium products in rapidly developing markets;
- optimise its production capacity and geographical presence with new plants localised in countries with not only increasing demand but also favourable industrial costs;
- support innovative marketing strategies, helped by the strength of the brand, aimed both at the consumer and trade, facilitating segmentation, market enlargement and creation of brand loyalty in the client base.
In pursuing these strategies Pirelli will invest € 2.2 billion between the years 2011 and 2015, primarily addressed to increased Premium capacity.
In 2015, Pirelli will have a total production capacity of 74 million pieces on the Consumer segment to which 10 million pieces envisaged from the Russia project must be added. The Industrial segment will have a capacity of 6.8 million pieces.
In the period 2012-2014 an Efficiency Plan equivalent to a total of 250 million, of which 120 million in 2012, which is twice the figure envisaged in the previous plan, and the remaining 130 million distributed over the period 2013 - 2014.
Amongst Pirelli's key projects:
- the plan for the construction of a factory in Indonesia, Pirelli's first in the country, for the production of motorcycle tyres destined for the markets of the Asean and Export markets;
- entry in the Russian market through the agreement with Russian Technologies.
These strategies and the planned measures will enable Pirelli to achieve an average annual increase in revenues of 10% over the period 2011-2014 and a progressive increase in profitability with an EBIT margin in 2014 between 15% and 16%.
Internal efficiency will permit compensation of inflation and costs, while a careful pricing policy will compensate for the increased impact of raw materials and the impact of fluctuation in monetary exchange rates.
Despite increased investment costs, the planned distribution of a total of 800 million Euro in dividends and the investment in the Russia project, these increased results will produce a net Debt/EBITDA ratio of 0.4 in 2015, which is one of the best in the sector.