Pirelli’s 2015 operating performance was in line with targets and characterized by:
- Revenue growth of 4.8% to 6,309.6 million euro, above the 2015 target of “over 6.25 billion” euro, thanks to the great improvement in the price/mix component (+7.1% compared a target of “equal to or above” +5.5%) as a consequence of price increases, greater sales in the Replacement channel, diverse geographic and product mixes. This performance more than offsets the decline in volumes (-1.6%, mainly in emerging markets and the Industrial business) and forex volatility (-0.6%)
- Premium segment performance above all forecasts, with an increase in volumes of +12.7% (target “equal to or above” +10%) and grew as a percentage of Consumer revenues to 60% from 55% at the end of 2014
- EBITDA before non-recurring and restructuring charges grew 6.4% to 1,242.7 million euro (1,168.0 million euro in the same period of 2014)
- EBIT before non-recurring restructuring charges grew by 5.7% to 918.5 million euro (2015 target 925 million euro, 869.2 million euro in 2014), with a margin of 14.6% (14.4% in 2014). This result benefits from the achievement of efficiencies of 94.4 million euro in implementation of the 350 million euro 4-year 2014-2017 plan (92 million euro of efficiencies in 2014)
- At the geographic level, APac is confirmed as the area of greatest growth both in terms of revenue and profitability (revenues +26.4% and EBIT margin above 20%), followed by the NAFTA (revenues +21.7%, EBIT in the low twenties)
- Research and development expenses totaled 214.4 million euro, equal to 3.4% of total sales, of which 176.5 million euro for activities linked to Premium products, approximately 6% of segment sales
- Significant progress towards the Group’s sustainability targets. In 2015, Green Performance tyres accounted for 48% of Tyre sales
In Venezuela, the deterioration of the macro-economic context, growing restrictions on the conversion of foreign currencies and the reduced availability of US dollars today condition the operation of Pirelli de Venezuela C. A. In line with other multi-nationals, Pirelli therefore proceeded – with reference date 31 December 2015 – to the accounting deconsolidation of Pirelli de Venezuela C.A., the value of the stake being booked at fair value (equal to 18.9 million euro). With regard to the 2015 results, the deconsolidation had a negative impact on accounts of 559.5 million euro of which 277.7 million euro related to the Venezuelan company’s positive net financial position. As a consequence of the deconsolidation, the group’s results will no longer include the results of the Venezuelan unit, and therefore will no longer bear the impact of the recurring devaluations which we have seen in recent years, both at the level of results and the net financial position. In addition, no further losses are foreseen linked to new supplies to the country; Pirelli could eventually recoup part of the value which was almost totally devalued on December 31, 2015.
The net result for going concerns on December 31, 2015 was negative 368.9 million euro (positive 315.2 million euro for 2014). This performance takes into account, as well as the deconsolidation of Venezuela, a non-recurring fiscal impact of 107.6 million euro linked to the devaluation of active deferred taxation by the Parent Group as a consequence of Pirelli’s new financial after its merger with Marco Polo Industrial Holding.
The total net result, including the net result for activities disposed of, was negative 383.5 million euro (positive 332.8 million euro for 2014).
Net of non-recurring factors (Venezuela, tax structure and discontinued operations), the adjusted net income was positive 298.2 million euro.
The net financial position on 31 December 2015 was negative 1,199.1 million euro compared with 979.6 million on 31 December 2014. Excluding the impact of the Venezuela deconsolidation, which had a positive net financial position of 277.7 million euro, the figure is 921.4 million euro, an improvement compared with 2014. Compared with the 2015 target of 850 million euro, the net financial position on 31 December 2015 also takes into account the postponement to 2016 of the disposal of some financial shareholdings of approximately 120 million euro which had been factored into the annual target.
The net cash flow from operations in 2015 was positive 701.4 million euro (740.3 million euro in 2014). In the fourth quarter of 2015 the net flow from operations was 927.1 million euro, an increase compared with 881.5 million euro in the same period of 2014. Total investment amounted to 391.4 million euro (378.1 million euro in 2014), mainly destined to the increases of Premium capacity in Europe, Nafta and China and mix improvement.
The total net cash flow in 2015 – before dividends and excluding the impact of the partial disposal of the steelcord activities – was 192.1 million euro (311.6 million euro on December 31, 2014). The partial divestment of financial participations, which had been foreseen as part of the year’s cash flow, was postponed to 2016.