|Pirelli Shares||Results 2012||Strategy and Targets||About Pirelli Careers|
- At group level, Pirelli recorded 2012 revenues of 6,071.5 million euro (+7.4% vs FY 2011) and profitability (Ebit) of 780.8 million euro (+34.2%) equal to 12.9% of revenues (+2.6 percentage points vs 2011). Net income was 398.2 million euro, +27.4% vs FY 2011.
- 54% of 2012 revenues came from rapidly developing markets such as South America, Asia-Pacific, Middle East-Africa and Russia. Strong growth increase in these areas, with combined sales up 16% versus 2011, together with the solid development of North America (sales up +23%), more than offset the contraction of Europe (sales -7%), hit by a severe consumption crisis.
The geographic breakdown of Pirelli’s 2012 revenues is as follows: 34% of total comes from Europe, 34% from South America, 12% from Nafta, 9% from MEA, 7% from APAC and 4% from Russia.
- Before the impact of foreign exchange (-1%), 2012 revenues were up 8.7% yoy; the negative impact of volumes (down 5.6% at constant consolidation perimeter) was more than compensated by growth in price/mix (+10.2%), reflecting a stable price policy and increased focus on the Premium segment, volumes of which were up 12.6%. Newly acquired assets in Russia and the Swedish retail network added 4.1% to the topline.
- Premium revenues – at 2,075.4 million euro, +20.9% vs FY 2011 – contributed significantly to topline growth making up 47% of total Consumer sales in 2012 (43.7% in 2011). Europe is still the largest Premium market, notwithstanding a limited revenue increase in 2012 (+4%) due to the consumption crisis in the area, whereas Premium sales in North America grew very rapidly (+35%). Emerging markets accounted for 22% of total Premium sales in 2012 and posted an impressive 69% growth rate as compared with FY 2011.
- The Industrial Business (27% of tyre revenues) reported 2012 revenues of 1,611.5 million euro, stable as compared with 2011 before the impact of foreign exchange (-3.6%). Operating profitability (Ebit) was at 178.1 million euro (+16.2% vs 2011) or 11.1% of revenues (+2 percentage points vs 2011).
The improvement in profitability stems mainly from a better price/mix (+6.2%) and lower raw material costs, factors which more than compensated the volume decline (-6.5%) due to slower demand.
- 2012 operating income – 809.1 million euro, +25.7% vs 2011 – benefited from the positive contribution of commercial levers, price/mix in particular (positive contribution of 363.1 million euro in 2012) thanks also to the increased focus on the Premium segment. This mitigated the overall contraction in volumes connected with the difficult macro-economic environment.
Additionally, efficiencies amounted to 158 million euro and were mainly related to an increased industrial presence in countries with a competitive cost base and the ongoing rationalization of fixed costs as well as general and administrative costs.
Over the course of 2012, raw material cost had a negative impact worth 50.5 million euro in profitability, whereas restructuring costs totaled 39.1 million euro. Restructuring activities included the conversion process of Settimo Torinese plant into the highly profitable Premium segment as well as continued actions to improve the overall efficiency of European plants.
- In 2012, raw material cost was equal to 38% of revenues. The increased cost as compared with 2011 – about 50 million euro - was largely dependent on the unfavorable impact of foreign exchange rates which, together with the rise in oil prices, more than compensated the positive impact of lower rubber prices - natural and synthetic – which were lower than in 2011.
- As of December 31 2012, average cost of debt was 5.79%.
- Pirelli’s gross debt as of December 31 2012 was 2,455.5 million euro, of which 25% with a floating rate. More than 70% of gross debt is due beyond 2014, with an average maturity of 2.9 years.
- Pirelli’s Net Financial position as of the 31st of December 2012 was 1,205.2 million euro (737.1 million euro at year-end 2011).
Over the course of 2012, operating cash flow was a positive 262.7 million euro (including investments for 471 million euro), whereas net cash flow was negative for 468.1 million euro. This figure includes, besides operating cash flow, payments related to acquisitions for 277.1 million euro, of which 170.9 million euro for our JV in Russia and 106.2 million euro for the acquisitions of two retail chains in Brazil and Sweden. Additionally, in 2012 Pirelli distributed dividends worth 132.3 million euro.
- Pirelli’s tax rate in 2012 was 33.5%.
- Research and development costs at group level, entirely reflected in the profit and loss statement, were equal to 178.9 million euro, or 2.9% of sales. Out of this figure, 142 million euro were dedicated to Premium products, equal to 6.8% of sales.
- Pirelli’s investments totaled 471 million euro in 2012. Investment activity was mainly directed at growing Premium capacity in Italy, Romania, China and Mexico as well as mix improvement in Germany. Additionally, investment projects involved the recently acquired assets in Russia where production facilities are being upgraded to be in line with Pirelli’s quality standards. In 2012 we started producing car tyres in our Mexico plant as well as motorcycle radial tyres in China.
- Pirelli’s production capacity at year-end 2012 was equal to 68 million pieces in the Consumer segment – 40% of which Premium – and 6.3 million pieces in the Industrial segment.
Pirelli has 22 production facilities mainly located in countries with competitive production costs (77% of Consumer production, 97% of Industrial production) such as Romania, Turkey, China, Egypt, South America, Russia and Mexico.
- At year-end 2012 Pirelli had 37,388 employees distributed as follows: 42% in Europe, 37% in South America, 9% in Asia Pacific, 9% in MEA and 3% in Nafta.
Last Revised: 10 Jun 2013