Results as of September 30th, 2015

The results for the first 9 months of 2015 highlight sales and profitability growth, backed by strengthening on the Premium segment, improvement of the price/mix component and efficiencies.

Main results:

  • Strengthening at the high end range, with Premium volumes growing 11% and equal to 60% of Consumer revenues (56% in first 9 months 2014)
  • Improvement of price/mix component (+4.8% in first 9 months of year, +7.0% in third quarter); which was above the target of ~+4% forecast for 2015, thanks to greater sales in the Replacement channel and the different geographic mix (higher sales in Europe, NAFTA and APac)
  • Overall volume reduction in the first 9 months of the year of 1.4% (-3.3% in the third quarter) which reflects the different demand dynamics between mature markets (+4.5% in the first 9 months, +7.3% in the third quarter) and emerging ones (-4% in the first 9 months, -8.4% in the third quarter) which were impacted by the deteriorating macro-economic contexts of Russia and South America, as well as the slowdown in the Chinese market
  • Forex volatility (+0.7% impact on revenues in the first 9 months of the year) was particularly accentuated in the third quarter (-4.2%) because of the devaluation of the Brazilian Real and the Ruble
  • Organic consolidated revenue growth (excluding forex impact) of +3.3% in the first 9 months (+3.7% in the third quarter), underpinned by the good performance of the Consumer business (+5.9% in first 9 months, +6.4% in the third quarter) which offset the decline of Industrial (-5.1% in first 9 months, -4.9% in the third quarter). If the forex impact is included, consolidated revenues posted growth of +4% in the first 9 months (-0.5% in the third quarter)
  • The achievement of efficiencies worth €72.6 million (81% of the full-year target of €90 million) as part of the 4-year €350 million plan (2014-2017) announced in November 2013 (efficiencies of €92 million in 2014)
  • Profitability improvement, with EBIT of €648.1 million, an increase of +2.9% compared with the first 9 months of 2014 and a substantially stable margin of 13.8% compared with 13.9% in the first 9 months of 2014 (13.1% in the third quarter, unchanged compared with the same period a year earlier)
  • A slight decline in the net result for continuing operations to €291.2 million (-€6.2 million compared with the same period in 2014) which reflects the greater fiscal charges linked to the devaluation of the Venezuelan Bolivar and the interest rate increases in the emerging markets where Pirelli operates;
  • A net financial position of negative €1,685.5 million compared with -€2,003.9 million on 30 September 2014 and -€979.6 million on 31 December 2014, because of the usual seasonality of working capital

The outlook for 2015 reflects the worsening of the macro-economic framework in emerging economies, in particular Russia and Brazil beginning in August. In this context, the trend in the tyre market is expected to worsen.
To mitigate the impact on results, Pirelli used its internal levers, further improving the price/mix and acting to achieve greater efficiencies.
For 2015, Pirelli therefore forecasts the following results:

  • Revenue growth of ~+4% to >~€6.25 billion
  • EBIT at ~€870 million after non-recurring and restructuring charges of ~€55 million
  • Investment below €400 million
  • Cash generation before dividends ≥€300 million before the disposal of steelcord
  • Net financial position at the end of 2015 at ~€850 million

2015 Targets

Last revised: 12 Nov 2015