• DISTRIBUTION OF 0.27 EURO DIVIDEND PER ORDINARY SHARE AND 0.34 EURO PER SAVINGS SHARE DECIDED

• BOARD MEMBERS MANUELA SOFFIENTINI AND GIUSEPPE VITA NOMINATED

• NEW AUDIT COMMITTEE NAMED

• REMUNERATION POLICY APPROVED

• MANAGEMENT LTI INCENTIVE PLAN APPROVED

• ‘PIRELLI SHAREHOLDERS CLUB’ LAUNCHED FOR INDIVIDUAL INVESTORS

The shareholders of Pirelli & C. SpA met today in ordinary session and approved full-year results for 2011 which ended with a consolidated net profit of 440.7 million euro and parent company net profit of 272.5 million euro. They decided the on the distribution of a dividend of 0.27 euro per ordinary share and 0.34 euro per savings share with payment on 24 May 2012 (ex-dividend 21 May 2012).

Shareholders nominated board members Manuela Soffientini (independent) and Giuseppe Vita, both already coopted.

Shareholders also nominated, via list vote, the new Audit Committee for the years 2012, 2013 and 2014. The committee is thus composed of Francesco Fallacara (who shareholders named as chairman), Antonella Carù and Enrico Laghi, as standing auditors, and Umile Sebastiano Iacovino and Andrea Lorenzatti as alternate auditors. The chairman of the new audit committee and the alternate auditor Andrea Lorenzatti were chosen from the minority list (voted for by about 22% of the capital represented at the shareholders meeting) presented by a group of fund managers and financial intermediaries, while the other nominations were chosen from the majority list (voted for by circa 78% of the capital represented at the shareholders meeting) presented by Camfin, Mediobanca, Edizione, Fondiaria-Sai, Allianz, Assicurazioni Generali, Intesa Sanpaolo, Sinpar and Massimo Moratti, members of the Pirelli & C. SpA shareholder agreement. The compensation for the standing auditors was established at 50,000 euro and for the Committee chairman at 75,000 euro.

The curricula of the new auditors are available at the company’s website (www.pirelli.com).

Shareholders also expressed themselves in favour of the Company and Group remuneration policy, as well as approving the 3-year LTI incentive plan (Long Term Incentive), decided by the Board of Directors in March following its proposal by the Remunerations Committee and destined for management. The new plan is linked to the achievement of the targets of the 2012-2014 group industrial plan, to TSR (Total Shareholders Return) and Pirelli’s position in the key sustainability rankings at the world level.

It should be noted that documentation relative to the 2011 annual results and the information document prepared for the LTI plan are available to the public at the company’s headquarters in Milan (Viale Piero e Alberto Pirelli 25) and at Borsa Italiana S.p.A., as well as being online at the company’s website www.pirelli.com.

The minutes of the shareholders’ meeting will be available to the public via the same channels by 8 June 2012.

’Pirelli Shareholders Club’ for individual investor launched

During today’s shareholders’ meeting, Pirelli also presented the “Pirelli Shareholders Club”, an initiative that is one of a number for individual investors. Through this new project Pirelli, the sixth biggest group in terms of the weight of individual investors with 16% of capital held by 70,000 shareholders, intends to bring investors closer to its world and products. By enrolling in the Club, in fact, shareholders will receive not only all the information needed to know the company, but also gain access to exclusive prizes linked to Pirelli’s world, like sporting, cultural and lifestyle events.

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• REVENUES 1,556.5 MILLION EURO, +11.1% COMPARED WITH 1,400.9 MILLION EURO ON 31 MARCH 2011

• OPERATING RESULT (EBIT) AFTER RESTRUCTURING CHARGES 209.4 MILLIONI  EURO (+46.1% COMPARED WITH 143.3 MILLION EURO ON 31 MARCH 2011)

• EBIT MARGIN ON 31 MARCH 2012 AT 13.5% COMPARED WITH 10.2% FOR THE SAME PERIOD IN 2011

• CONSOLIDATED NET PROFIT 125.3 MILLION EURO, AN INCREASE OF 54% COMPARED WITH 81.4 MILLION EURO AT END MARCH 2011

• ATTRIBUTABLE CONSOLIDATED NET PROFIT 122.9 MILLION EURO, AN INCREASE OF 48.4% COMPARED WITH THE PRIOR 82.8 MILLION EURO

• NET FINANCIAL POSITION NEGATIVE 1,305 MILLION EURO, AN INCREASE FROM NEGATIVE 737.1 MILLION EURO AT END DECEMBER 2011

TYRE BUSINESS

• REVENUES 1,542.6 MILLION EURO, +11.4% COMPARED  WITH 1,384.5 MILLION EURO ON 31 MARCH 2011

• PREMIUM REVENUES 584.4 MILLION EURO, +29.2% FROM 31 MARCH 2011

• OPERATING RESULT (EBIT) AFTER RESTRUCTURING CHARGES 215.2 MILLION EURO, +41.2% COMPARED WITH 152.4 MILLION EURO ON 31 MARCH 2011

• EBIT MARGIN ON 31 MARCH 2012 GREW TO RECORD LEVEL OF 14% COMPARED WITH 11% IN THE SAME PERIOD OF 2011

2012 TARGETS

•        REVENUE TARGET REVISED TO APPROXIMATELY 6.45 BILLION EURO, AN INCREASE OF 14% COMPARED WITH 2011 (PREVIOUS TARGET: ~6.6 BILLION EURO, UP 17%)

•        EBIT FORECAST: AT LEAST 800 MILLION EURO, MARGIN ABOVE 12% (PREVIOUS ESTIMATE: MARGIN ABOVE OR EQUAL TO 12%)

•        INVESTMENT TARGET LOWERED TO APPROXIMATELY 500 MILLION EURO (PREVIOUS ESTIMATE: APPROXIMATELY 560 MILLION EURO)

•        NET FINANCIAL POSITION TARGET CONFIRMED NEGATIVE AT BELOW 1 BILLION EURO BEFORE DIVIDENDS

***

ORGANIZATIONAL MODEL RE-DEFINED. INTRODUCES ROLES OF CTO (CHIEF TECHNICAL OFFICER) AND CCO (CHIEF COMMERCIAL OFFICER) REPORTING TO THE CHAIRMAN AND CEO

***

The Board of Directors of Pirelli & C. SpA today reviewed and approved intermediate results for the 3 months ended 31 March 2012.

The continual strengthening of production in rapidly growing economies and the focus on the Premium segment, which as well as being the most profitable segment is also the tyre market’s fastest growing, enabled Pirelli to end the first quarter of 2012 with further improvements in key economic indicators and profitability, notwithstanding the persistent macro-economic slowdown, particularly in Western economies.

Consolidated revenues on 31 March 2012 totaled 1,556.5 million euro, an increase of 11.1% compared with 1,400.9 million euro in first quarter 2011. The consolidated operating result after restructuring charges was 209.4 million euro, with an increase of 46.1% compared with 143.3 million euro in first quarter 2011 and saw the margin on revenues rise by over three percentage points to 13.5% compared with 10.2% in the same period of 2011. The net result was 125.3 million euro, an increase of 54% from 81.4 million euro in first quarter 2011.

The consolidated net financial position was negative 1,305.0 million euro compared with 737.1 million at end 2011 (negative 712.8 million euro on 31 March 2011), reflecting a normal seasonal variation in the business working capital, as well as payment, of 154.5 million euro, for the acquisition of the Russian plants in Kirov and Voronezh.

For the Tyre activities, which represent almost all (99%) group sales, the quarter registered a further increase in sales (+11.4% to 1,542.6 million euro) and a further increase in profitability which reached the record level of 14% compared with 11% in the same period of 2011. In a market context discounting the global economic slowdown, these results were achieved thanks to the continual improvement of the sales mix – increasingly focused on Premium products – and the ability to use the price lever to offset increases in the cost of raw materials, which in the quarter had an impact of approximately 85 million euro, as well as constant improvement in efficiencies, which totaled 26 million euro in the period.

With regard to the Premium segment, in particular, in the first quarter of 2012 revenues grew 29.2% compared with the same period a year earlier in 2011 to 584.4 million euro, and in the Car business represented 52.6% of the total, with an increase of over five percentage points compared with 47.4% in the same period of 2011.

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The company expresses its appreciation to Francesco Gori for the significant contribution to the Group’s results and development made in 33 of service.

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EXPECTED 2014 CONVENTIONAL MOTO TYRE PRODUCTION 2 MILLION PIECES, GROWING TO 7 MILLION IN 2016

AT FULL OPERATION THE FACTORY WILL ACCOUNT FOR AROUND 25% OF PIRELLI’S TOTAL WORLDWIDE MOTO PRODUCTION

Pirelli has signed an agreement with Astra Otoparts, the  leading Indonesian automotive components maker, for the construction of a new factory in Indonesia, Pirelli’s first in the country, for the production of conventional motorcycle tyres.

The agreement was signed – on the occasion of a mission to Asia by the Italian Foreign Affairs Minister Giulio Terzi di Sant’Agata – by the Senior Vice President of Pirelli’s Moto Business Unit Uberto Thun and the CEO of Astra Otoparts, Siswanto Prawiroatmodjo. The signing was presided over by Terzi di Sant’Agata, the Indonesian Industry Minister M. S. Hidayat, the Minister for Trade and Investment Gita Wirjawan and the Italian ambassador in Jakarta Federico Failla.

The accord entails the creation of a joint venture in which Pirelli will hold the majority position with 60% of the capital and Astra will hold the remaining 40%. The joint venture will invest a total of 120 million dollars between 2012 and 2014 for the construction of a new factory.

Construction of the new factory, located a short distance from Jakarta, is expected to begin in the fourth quarter of 2012. The site will cover 25 hectares and when fully operated, in 2016, will employ 750 people.

The new factory is expected to become operational from the second half of 2013, with an estimated production of around 2 million conventional moto tyres in 2014 which when fully operational, in 2016, could reach 7 million pieces total. Of these, 3 million will be sold as Astra brands, while the remaining 4 million – equal to about 25% of all Pirelli’s moto production in the world – will carry Pirelli brands (Pirelli or Metzeler). In the context of the group’s ‘local for local’ strategy, 20-25% of the Pirelli brand production made in the Indonesian plant will serve the original equipment and replacement markets of the Asia Pacific area, where the moto market is forecast to grow at an average annual rate of 3.5% from 2011 to 2014. The remaining output will serve all the markets in which Pirelli operates with the exception of South America.

The new facility will allow Pirelli to not only strengthen its moto production capacity – which according to the forecasts of the industrial plan will grow to 16 million pieces in 2015 from 13 million pieces in 2011 – but also to have a direct presence in the Asean area’s biggest economy, which with a circulating pool of 250 million motorcycles is the biggest motorcycle market in the world.  Of this total, 68 million are in Indonesia whose moto market is growing by more than 10% a year. The in-country production capacity will also be free of export duties to Asean markets and reduce the cost of raw material supply thanks to the strong local presence of natural rubber producers.

Pirelli

Founded in 1872, Pirelli is the fifth tyre maker in the world by sales. Present in over 160 countries, at the end of 2011 it counted 21 production facilities on four continents and employed around 34,000 people. Pirelli is a leading producer in the high and ultra-high segments, thanks to its commitment to research and development, an area in which it invests about 3% of total revenues (5.6 billion euro in 2011) or 7% of Premium segment revenues, one of the highest levels in the tyre segment, with the goal of a constant improvement of products in terms of performance, safety and containment of environmental impact. Active in automotive sports since 1907, Pirelli is the exclusive supplier of the Superbike world championship and prestigious mono-brand championships, but above all it is the sole supplier for the Formula 1 championship for the 3-year period 2011-2013.

PT Astra Otoparts Tbk

PT Astra Otoparts Tbk (Astra Otoparts) is Indonesia’s foremost automotive component Company producing components both for Original Equipment (OEM) and Replacement Market (REM). The company counts most major car and motorcycle makers of the world among its clients and has become synonymous with high-quality automotive spare parts. These both satisfy growing local demand and are exported to 49 countries in the Middle East, Asia Oceania, Africa, Europe, and the Americas. The company has established three representative offices in Singapore, Dubai, and Australia. It employs circa 33,000 people and has been listed on the Indonesia Stock Exchange since 1998. Its consolidated revenues in 2011 were 7.36 trillion rupiah (626 million euro).

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The candidates are:

Section 1 – standing auditors
1.         Fallacara Francesco

Section 2 – alternate auditors
1.         Lorenzatti Andrea

The documentation required by the applicable laws, presented together with the list, will be available to the public at the company’s headquarters and at Borsa Italiana SpA, as well as being published online at www.pirelli.com today.

The second list follows the one already announced and deposited by Camfin, Mediobanca, Edizione, Fondiaria-Sai, Allianz, Assicurazioni Generali, Intesa Sanpaolo, Sinpar and Massimo Moratti, members of the Pirelli & C. SpA shareholder agreement.

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The candidates are:

Section 1 – standing auditors

1.         Enrico Laghi
2.         Antonella Carù
3.         Paolo Domenico Sfameni

Section 2 – alternate auditors

1.         Umile Sebastiano Iacovino
2.         Luigi Guerra

The shareholders meeting will also formulate the proposal to establish the sum of 50,000 euro as the gross annual compensation for the standing auditors and 75,000 euro as the gross annual compensation for the chairman for the audit committee.

The documentation required by the applicable laws, presented together with the list, will be available to the public at the company’s headquarters and at Borsa Italian SpA, as well as being published online at  www.pirelli.com today.

Pirelli also states that as a single list was presented, in accordance with the applicable laws, the deadline for the presentation of lists for the nomination of the Audit Committee has been extended to April 19th, 2012 and the minimum threshold for participation required for the presentation of lists has been reduced to 0.75% of ordinary shares.

Shareholders intending to deposit lists by the above indicated deadline must present, together with the documentation required in the bylaws and applicable laws, also regulatory, a declaration attesting to the absence of relationships with the presenters of the already presented list.

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In line with the 2012-2014 industrial plan presented in London last November, with this operation Pirelli intends to strengthen its leadership in the Brazilian market both in retail and wholesale distribution, focusing on the higher growth Premium segment and increasing the number of Pirelli owned (Pirelli Pneuac) points of sale from the present 48 to 102.

The 54 Campneus points of sale included in the agreement are already part of Pirelli’s distribution network in Brazil, which counts over 600 points of sale in total. The Campneus stores, which will continue under the same brand even after the closing of the operation, are located in the states of São Paulo, Minas Gerais, Paraná, Mato Grosso do Sul, Santa Catarina and Rio Grande do Sul. They sell the complete range of Pirelli tyres for cars, light-trucks, trucks, buses and agricultural machinery, as well as for earth moving and off road equipment.

The agreement is subject to approval by CADE, the Conselho Administrativo de Defesa Econômica brasiliano, and finalization is expected at the end of the first half of 2012.

CAMPNEUS

The first Campneus point of sale was opened in the Brazilian city of Campinas on September 19th, 1975 and the following year extended to three resellers in the sates of São Paulo and Minas Gerais. At present, the company employs around 600 people in seven Brazilian states.

PIRELLI IN BRAZIL

With over 80 years’ commercial presence in Brazil, Pirelli has five tyre production factories in the country: in Gravataí (RS), Campinas (SP), Santo André (SP), Sumaré (SP) and Feira de Santana (BA). The company employs around 9,000 people in its Brazilian plants and has its own testing grounds in Sumaré city for its R & D activities. As well as official Pirelli resellers, the commercial structure in Brazil includes the Pirelli owned Pneuac chain with 48 points of sale in 14 states.

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The Directors’ reports and proposals regarding all points of order, as well as the annual financial report, internal and external auditor’s reports, the annual report on company governance and ownership structure, the Sustainability Report and the information document regarding the LTI Plan are available at the company’s headquarters – in Milano, Viale Piero e Alberto Pirelli 25 – and at Borsa Italiana S.p.A., and are also published on the company’s website www.pirelli.com in a dedicated section.

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One of the world’s most famous drivers, known all over the globe for his extreme and spectacular style, a snowy stage in Igora Park, a Ford WRC and Pirelli’s studded competition tyres. This was the unforgettable line-up that Pirelli and Ken Block put together on snow at Igora, close to St Petersburg in Russia. The objective was to demonstrate how the right tyre can make the difference in terms of performance and safety on some of the world’s most treacherous surfaces, without compromising on the amazing spectacle that is always guaranteed by the American driver.

Over a rally stage and driving test road, Ken Block put Pirelli’s latest studded Winter Sottozero tyres through their paces: the same family of tyres that successfully equipped World Rally Cars on snow when Pirelli was the exclusive official supplier to the World Rally Championship from 2008-2010.

Ken Block has taken part in many different championships and he is well known by fans for his spectacular driving style, such as his dramatic skids and slides. On the snow of Igora Park, as a guest of Pirelli, he gave a brilliant demonstration of his spectacular driving style and his absolute control of his car, making the most of the performance of Pirelli’s Winter Sottozero tyres.

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Consolidated revenues on December 31, 2011 totaled 5,654.8 million Euro, an increase of 16.6% (4,848.4 million Euro in 2010). The consolidated operating income after restructuring charges was 581.9 million Euro compared with 407.8 million Euro in 2010, and with a 10.3% margin compared with the target of “around 10%” announced last November and almost two percentage points higher than the 8.4% of 2010. The net result from continuing operations was 312.6 million Euro, an increase of 37.1% compared with 228 million Euro in 2010, while the total net result was 440.7 million Euro, taking into account a positive non-recurring impact of 128.1 million Euro linked to benefits from loss carryovers, following a change in the fiscal law regarding past losses which allows for their carryover without time limit.

The growth of production capacity, linked to the strategic focus on the Premium segment at global level outlined in the Industrial Plan, resulted in an increase of investment of 43% to 626 million Euro, which is reflected in the consolidated Net Financial Position which, on December 31, 2011 was negative 737.1 million Euro (negative 455.6 million Euro on December 31, 2010) compared with a target of “about 750 million” announced last November. This figure includes the payment of 83.5 million Euro in dividends and the first part of the payment for the acquisition of plants in Russia worth 55 million Euro.

At the end of this fiscal year, the Tyre Business, which accounts for 99% of consolidated revenues showed a significant growth of its economic indicators and profitability. Data confirm the effectiveness of Pirelli’s strategy: our focus on Premium in the Consumer Business the location of the Industrial Business predominantly in areas of rapid growth, and our ability to use pricing to offset the increase in raw materials’ costs, which had a negative impact over the year of about 512 million Euro. On December 31, 2011 Pirelli Tyre reported an increase of sales worth 17.4% (+19% net of the effect of exchange rate) to 5,601.6 million Euro, supported by the good price/mix performance (+17.6%). The Premium revenues grew by 27% in 2011, reaching 1,844 million Euro and in the Car Business alone they reached 50% of total. The operating result after restructuring charges totaled 643.9 million Euro, an increase of 42.1% from 453.1 million Euro in 2010, with profitability of 11.5% compared with a target of “about 11%” and an increase of two percentage points from 9.5% in 2010. These results also reflect the significant efficiencies achieved during the year, which amounted to 93.9 million Euro in total compared with a target of about 80 million Euro.

In line with the actions foreseen in the Industrial Plan to increase production capacity and further strengthen the Group’s industrial presence internationally, in 2011, we continued the construction of the Settimo Torinese industrial hub – the Group’s most technologically advanced facility – and the strengthening of our presence in Romania, where the Slatina industrial hub was extended. In Argentina, plans were made for the construction of a new radial truck tyre manufacturing plant. The construction of the new site in Mexico, to serve Nafta markets, was close to completion and production is expected to begin in the first quarter of 2012, while in Russia, together with partner Russian Technologies, the acquisition of two production facilities, Kirov and Voronezh, was completed (the latter after the end of 2011), which will enable Pirelli to begin its own production in a highly strategic market.

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