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Group's consolidates financial statements at March 31, 2000

Milan, May 8, 2000 – The Board of Directors of Pirelli
SpA, which met today before the Annual Shareholder’s Meeting,
examined and approved the Group’s consolidated financial statements
at March 31, 2000

Sales revenues, equal to Euro 1,762 million, show an
increase of 17.8% compared to Euro 1,496 million in the same period
of the previous year. This increase is mainly attributable to
higher sales volumes (+11.3%), to a positive exchange rate (+6.9%),
to the consolidation of the units acquired during the last year
(+2%) and to the opposed effect of the deconsolidation of
Terrestrial Optical Systems (-4.8%), sold to Cisco Systems
according to the terms of the strategic alliance previously
announced.

In the Cables and Systems Sector, sales show an increase of
22.1%, from Euro 863 million to Euro 1,054 million. Noteworthy the
particularly positive trend of the telecom business in North
America, and the growth in the energy business.

The Tyre Sector shows a sales increase of 22.1%, from Euro 632
million to Euro 707 million, with a volume growth of 5% in the Car
segment, of 31% in Light Truck, of 19% in Truck and of 15% in
Motorcycle.

The gross operating profit, increased to
Euro 191 million (10.8% of sales), from Euro 159 million (10.6% of
sales) in the first quarter of 1999.

The operating profit including financial costs and
provisions for taxes, improves from Euro 77 million in the first
quarter of 1999 (5.2% of sales) to Euro 97 million (5.5% of sales),
mainly due to volume increase.

Net financial position is positive for Euro 417 million
compared to a net debt of Euro 1,017 at december 31, 1999, due to
the net effect of extraordinary operations (the above mentioned
sale of Terrestrial Optical Systems to Cisco Systems, and the
acquisition of Draka’s cable activities in Finland and
Netherland).

With regard to the forecast for the full
year
, the net income is expected to show an improvement from
the previous year, to which positive extraordinary items will be
added deriving from the Cisco operation (Euro 1,131 million,
considering the related costs) and ongoing restructuring and
productive rationalisation measures, as announced last March
(direct and indirect restructuring costs of approx. Euro 250
million).

Categories: Institutional