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Without safety interventions, the World Health Organization estimates 2 million deaths on the road in 2020.  Economic impact of road accidents in some countries between 1% and 3% of GDP. Awareness of the quality and maintenance of tyres is essential for prevention.

To improve the safety of its products, for the benefit of people and the environment, each year Pirelli invests 7% of revenues from the Premium segment in R&D, one of the highest levels in the tyre sector

Pirelli’s plan for the containment of environmental impact entails a commitment to reduce  CO2 specific emissions by 15% and water specific withdrawal by over 50% by 2015

Marco Tronchetti Provera:  the technologies needed to be “sustainable”, a particular patrimony of European industry, represent a competitive advantage and an opportunity to spread a new model for growth

Jeremy Rifkin: the “prosumer”, the producer-consumer, is the new protagonist of “distributed capitalism”

Ethical Corporation Study: for almost 90% of interviewees, attention to consumer safety is an essential element of social responsibility and an area of opportunity and innovation

During its “Sustainability Day”, Pirelli today signed a voluntary agreement with the Ministry for the Environment and Land and SeaProtection to reduce the climate impact deriving from the activities relative to the production and use of its tyres. The agreement was signed by Minister Corrado Clini and Pirelli Chairman  Marco Tronchetti Provera during the “Driving Sustainability: a safe road to the future” international conference. The agreement underscores the commitment of the company which through its own technology develops production systems and products which guarantee the reduction of environmental impact, quality and consumer safety. All elements which allow Pirelli to constantly increase its efficiency, also with significant economic benefits, and avail of an additional competitive lever on international markets, above all in those where these features are called for by law and appreciated by the consumer.

“To speak of sustainability today, said Pirelli’s Chairman, “means first of all to speak of technologies which permit the constant improvement of our quality of life. The “old” Europe cannot compete with emerging countries from the point of view of production costs and internal demand, but something which can ensure our future, without doubt, is being more advanced in our search for sustainable models of industrial growth. In this sense, Italy and Europe have developed points of excellence which they export to the rest of the world”.

The conference addressed the theme of sustainabilityunderstood not as a cost but as an indispensable condition for a company’s future, which thanks to avantgarde technologies is able to develop more sustainable and efficient models of growth.

The debate also encompassed the theme of the consumer’s role within an economic system which in recent decades has seen profound changes in the models of development and market dynamics.

For the economist Jeremy Rifkin, the “prosumer”, the new producer-consumer, is the figure who will become ever more prevalent thanks to “distributed” capitalism, a complex figure who incarnates different and apparently conflicting interests with which companies must more frequently engage. Reconciling these interests will be a stimulus for companies to identify new models of more sustainable growth.

For Pirelli, growth also means responsibility towards the consumer, both through the protection of the environment and the development of ever safer products. Safety was, in fact, one of the conference’s central themes, with contributions from senior institutional, association, academic and corporate officials. As well as Marco Tronchetti Provera and Minister Corrado Clini, the participants included Antonio Tajani, vice president of the European Commission, responsible for Industry and Entrepreneurship, Peter Bakker, president of the World Business Council for Sustainable Development (WBCSD), Nikhil Chandavarkar, Chief of Communication and Outreach, Division of Sustainable Development, United Nations Department of Economic and Social Affairs, Carlo Fidanza, member of the Transport and Tourism Committee of the European Parliament, Francesco Gori, COO of Pirelli, Toby Webb, founder and president of the Ethical Corporation and Jeremy Rifkin, president of the Foundation on Economic Trends. The debate was moderated by Oscar Giannino.

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The renewal is the execution of commitments made by Pirelli & C. in 2010 with banks financing Pirelli RE (today Prelios Spa) for the purpose of obtaining the necessary authorizations on the part of the same to launch the operation of separation of Pirelli RE from the Pirelli Group, as stated with a press release of May 4^th, 2010 and included in documents made available to the public on the occasion of an extraordinary shareholders’ meeting on July 15^th, 2010.

The operation was unanimously approved by the Board of Directors, following the favourable opinion, also unanimous, of the Committee for Operations with Related Parties composed entirely by independent members. The financing is to be qualified as an operation with a related party (because of the existing relationship between Pirelli and Prelios through Camfin which, in accordance with Consob’s Regulation no. 17221 on March 12^th, 2010, exercised a “notable influence” on Prelios and the “major relevance”, in that it exceeded the threshold identified in article 4, paragraph 1, letter a) of the cited Consob Regulation.

The conditions and terms of the financing are reported in the informational documents regarding the operation which, in accordance with article 5 of the cited Regulation, will be available to the public at the company’s headquarters and Borsa Italiana SpA, as well as being published at the company’s website www.pirelli.com, on 30 December 2011.

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The operation is covered by agreements relative to the relationship between Pirelli and Camfin as shareholders of Pirelli & C. Ambiente SpA and Pirelli & C. Eco Technology SpA, which expire in June 2012, and include the Camfin Group’s right to sell (and the correlated obligation on the part of Pirelli to acquire) the two shareholdings in the event that one of the two parties decides not to proceed with the industrial collaboration.

The total outlay for the acquisition of the two shareholdings was approximately 7 million euros. In execution of the agreements, the valuation of the two participations took place – with the assistance of primary merchant banks – on the basis of the 2012-2014 Industrial Plans approved by the participants.

The operation is qualified as an operation with related parties (as a consequence of the existing relationship between Pirelli and Camfin which, in accordance with Consob’s regulation no.17221 of 12 March 2010, exercises a “notable influence” on the former) and of “minor relevance” in that it does not exceed the threshold identified in article 4, paragraph 1, letter a) of the cited regulation. At the same time, the Committee for Operations with Related Parties (which it should be noted is entirely composed of independent members and not connected in relation to the two operations) had already expressed a favourable opinion regarding the interests of the Company in the disposal of the two shareholdings, as well as regarding the convenience and substantial correctness of the relative conditions, as called for in the cited regulation.

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The meeting will be called upon to decide on the nomination and compensation for the common representative of the possessors of savings shares for the 3-year period 2012/2014, as well as regarding the constitution of a fund for the expenses necessary for the safeguarding of the common interests of savings shareholders and the relative reporting, as called for by the prevailing norms.

The report of the common representative of the holders of savings shares, on all the points of the order of the day, 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.

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Pirelli wishes to thank Mr. Cucchiani for his valuable contribution to the company. He had been a member of the Board since July of 2007.

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Pirelli wishes to thank Mr. Profumo, an independent Board member and member of the Strategies Committee, for his valuable contribution.

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UPDATED INDUSTRIAL PLAN AND VISION TO 2015

WITH NEW TARGETS FOR 2012-2014

INNOVATIVE MARKETING, STRENGTH OF BRAND, NEW PRODUCTS, LEADING EDGE TECHNOLOGY, OPTIMISATION OF PRODUCTION AND EFFICIENT GEOGRAPHICAL LOCATION AS DRIVERS FOR GROWTH

INCREASING INVESTMENT UP TO A VALUE OF 2.2 BILLION EURO FOR THE PERIOD 2011 AND 2015 (2.4 BILLION EURO INCLUDING INDUSTRIAL INVESTMENTS IN RUSSIA) COMPARED WITH 1.9 BILLION EURO FOR THE PREVIOUS PLAN

IN 2015, A CONSOLIDATED EBIT MARGIN GREATER THAN 16% (COMPARED WITH 8.4% FOR 2010) DUE TO FOCUS ON THE PREMIUM SEGMENT, USE OF PRICE/MIX COMPONENT AND GROWTH OF THE CONSUMER SEGMENT AND REPLACEMENT CHANNEL

PROFITABILITY WILL INCREASE IN ALL REGIONS, EQUALLY BALANCED BETWEEN EMERGING AND MATURE MARKETS, WITH THE BIGGEST CONTRIBUTION FROM EUROPE, AS THE BIGGEST PREMIUM MARKET WORLDWIDE

IN EUROPE IN 2015, 80% OF CONSUMER REVENUES WILL COME FROM PREMIUM SEGMENT

STRENGTHENING OF PRESENCE IN RAPIDLY DEVELOPING ECONOMIES: AFTER RUSSIA AND ARGENTINA, NEW MOTO PROJECT IN INDONESIA

IN THE CAR SEGMENT IN 2015, 64% OF PREMIUM CAPACITY WILL BE LOCATED IN NEW PLANTS

INCREASED CASH GENERATION COMPARED WITH THE PREVIOUS PLAN: DESPITE FURTHER INVESTMENTS, THE NET DEBT/EBITDA RATIO IN 2015 WILL BE OF APPROX. 0.4, ONE OF THE BEST OF THE SECTOR

ESTIMATED EFFICIENCIES FOR A TOTAL 250 MILLION BETWEEN 2012 AND 2014

‘CONTINGENCY PLAN’ READY IF THE 2012 SLOWDOWN EVOLVES INTO A CRISIS IN DEMAND

THE PIRELLI BRAND VALUED AT 2.27 BILLION EURO, WILL SUSTAIN GROWTH IN THE PREMIUM SEGMENT

The Board of Directors of Pirelli & C. has approved the Industrial Plan and vision to 2015 and the updated targets for 2012-2014. The plan was presented today to the financial community by the Chairman and CEO of Pirelli & C., Marco Tronchetti Provera, the Coo, Francesco Gori, Director of Research and Development, Maurizio Boiocchi, and the Director for Planning & Management Control, Maurizio Sala.

THE PIRELLI PLAN IN BRIEF

“Pirelli aims to become world leader in the Premium segment in 2015, confirming the focused strategy presented in last year’s industrial plan.

In order to achieve these objectives, Pirelli aims to focus on: further drive on technological innovation which will create an unprecedented increase in the product range able to satisfy both ever-more sophisticated demands of a mature market such as Europe and the increasing demand for Premium products in rapidly developing markets. The launch of 18 products is planned for the Car segment by 2015, taking this business unit to 57% of all sales generated from new projects. As well as products and technology, Pirelli aims to optimise its production capacity and geographical presence with always newer plants (64% of Premium car capacity will be allocated to new plants) localised in countries with not only increasing demand but also favourable industrial costs. The new on-going projects in Russia (car), Mexico (car), Argentina (truck) and the new plant to be opened in Indonesia (moto) are also included in this strategy. The Moto business unit aims to consolidate its leadership position in the Premium segment, especially in Europe, confirming its role as a technological innovator while maintaining high levels of profitability. The Industrial business unit aims to achieve leadership based on technology aimed at the key markets with a focus on rapidly developing economies.

The brand value, estimated at 2.27 billion Euro, will also support innovative marketing strategies aimed both at the consumer and trade, facilitating segmentation, market enlargement and creation of brand loyalty in the client base.

Due to a focus on the Premium segment, the use of price/mix component, growth of the Consumer and Auto Parts channels which are more profitable and less cyclical, Pirelli foresees an increase in revenues and profitability for 2015. The EBIT margin for 2015 will be greater than 16%, almost double the 2010 figure of 8.4% and one of the best in the industry. Profitability will increase in all regions with a balance between mature and emerging markets. In all regions, the impact of the premium segment will increase, especially in Europe. Indeed, in 2015, this region will generate 80% of Consumer revenues for this segment.

The strong cash generation foreseen from today to 2015 (3.2 billion Euro compared with 2.1 billion in the previous Industrial Plan) will consent not only to sustain a significant and increasing investment plan (up to 2.4 billion Euro compared with 1.9 billion Euro of the previous Industrial Plan), but also to further improve the already solid financial position by reducing the Debt/EBITDA ratio to 0.4 in 2015 (compared with 0.7% in 2010). Further contribution will come from an efficiency plan of 250 million Euro between 2012 and 2014.

In a market showing signs of deceleration, even though not at crisis levels, Pirelli has also prepared a ‘Contingency Plan’ to guarantee optimal flexibility in managing any worsening of the negative trend”.

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]]> /corporate/en/press/2011/11/09/industrial-plan/feed/ http://www.pirelli.com/corporate/en/press/2011/11/08/pirelli-the-board-of-directors-approves-consolidated-financial-statements-as-of-30-september-2011/ /corporate/en/press/2011/11/08/pirelli-the-board-of-directors-approves-consolidated-financial-statements-as-of-30-september-2011/#comments Tue, 08 Nov 2011 20:35:17 +0000 by Pirelli /corporate/en/press/?p=9868 PIRELLI & C. SPA BOARD APPROVES CONSOLIDATED RESULTS FOR 9 MONTHS TO 30 SEPT 2011:

ALL ECONOMIC INDICATORS IMPROVE DESPITE A MACROECONOMIC CONTEXT SHOWING SIGNS OF SLOWDOWN

INDUSTRIAL PLAN WITH VISION TO 2015 AND UPDATE 2012-2014 TARGETS APPROVED, TO BE PRESENTED TO THE FINANCIAL COMMUNITY TOMORROW IN LONDON

BOARD AUTHORIZES BOND ISSUE OF UP TO 800 MILLION EUROS TO BE LAUNCHED BY THE END OF 2012 ALSO IN SEVERAL TRANCHES, TO TAKE ADVANTAGE OF FINANCING OPPORTUNITIES ON THE MARKET IN SUPPORT OF THE BUSINESS

PIRELLI & C. SPA

• • REVENUES 4,265.8 MILLION EUROS, +17.9% COMPARED WITH 3,618.7 MILLION EUROS ON 30 SEPT 2010

• • OPERATING RESULT (EBIT) AFTER RESTRUCTURING CHARGES OF 451.2 MILLION EUROS (+46.8% COMPARED WITH 307.3 MILLION EUROS ON 30 SEPT 2010), WITH PROFITABILITY (EBIT/SALES) RISING TO 10.6% FROM 8.5%

• • TOTAL CONSOLIDATED NET PROFIT 251.3 MILLION EUROS, +56.8% COMPARED WITH 160.3 MILLION EUROS ON 30 SEPT 2010 (BEFORE DISCONTINUED OPERATIONS); ATTRIBUTABLE CONSOLIDATED NET PROFIT 255.3 MILLION EUROS (COMPARED WITH NEGATIVE 87.0 MILLION EUROS ON 30 SEPT 2010)

• • INVESTIMENT STOOD AT 396.2 MILLION EUROS ON 30 SEPT 2011 (226.9 MILLION EUROS ON 30 SEPT, 2010), OF WHICH 162.1 MILLION EUROS IN THE THIRD QUARTER (91.5 MILLION EUROS IN THIRD QUARTER 2010)

• • NET FINANCIAL POSITION NEGATIVE 938.3 MILLION EUROS (704.9 MILLION EUROS ON 30 SEPT 2010)

PIRELLI TYRE

• • REVENUES 4,225.7 MILLLION EUROS, +18.7% COMPARED WITH 3,559.1 MILLION EUROS ON 30 SEPT 2010

• • OPERATING RESULT (EBIT) AFTER RESTRUCTURING COSTS 484.4 MILLION EUROS, +44.9%COMPARED WITH 334.3 MILLION EUROS ON 30 SEPT 2010;

PROFITABILITY (EBIT/SALES) AT RECORD LEVEL OF 11.5% (9.4% ON 30 SEPT 2010)

2011 TARGETS

• • PROFITABILITY EXPECTED AT HIGHER END OF TARGETS ANNOUNCED IN JULY: EBIT MARGIN AFTER RESTRUCTURING CHARGES APPROXIMATELY 10% (TARGET BETWEEN 9.5% AND 10.0%) AT CONSOLIDATED LEVEL AND APPROXIMATELY 11% (TARGET BETWEEN 10% AND 11%)  FOR PIRELLI TYRE, THANKS TO THE POSITIVE EFFECTS OF THE FOCUS ON THE PREMIUM SEGMENT

• • SALES TARGET REVISED TO BELOW 5.8 BILLION EUROS (FROM “ABOVE 5.85 BILLION EUROS”) AT CONSOLIDATED LEVEL; PIRELLI TYRE REVENUE TARGETS REVISED TO APPROXIMATELY 5.7 BILLION EUROS (FROM “ABOVE 5.8 BILLION EUROS”). THIS RESULT WAS IMPACTED BY:
  

  - THE NEGATIVE EFFECT OF EXCHANGE RATES ON SALES 1.2% HIGHER (AROUND 70 MILLION EURO) COMPARED WITH PREVIOUS FORECAST

  - VOLUME REDUCTIONS TO APPROX. +3% (PREVIOUS TARGET: “ABOVE +5%”) AS A CONSEQUENCE OF: GREATER PREMIUM GROWTH IN THE PREMIUM SECTOR (+23%) AND REDUCTION OF SALES OF LOWER PROFIT PRODUCTS; THE SLOWDOWN IN TRUCK DEMAND IN THE EMEA REGION

  - PRICE/MIX TARGET IMPROVED FROM 16% TO 18% AS A RESULT OF THE GREATER FOCUS ON PREMIUM

• • CONSOLIDATED NET FINANCIAL POSITION TARGET CONFIRMED, EXPECTED AT AROUND NEGATIVE 700 MILLION EUROS ESCLUDING RUSSIA INVESTMENT

A meeting of the Board of Directors of Pirelli & C. SpA today reviewed and approved the results of operations for the nine months ended September 30, 2011.

The Pirelli Group saw all economic indicators improve over the period, with revenues growing in the first nine month by 17.9% to 4,265.8 million euros and profitability – understood as the ratio of the operating result to sales – at 10.6%, with an increase of over two percentage points from the 8.5% of the first nine months of 2010. The total consolidated net result for the first nine months was a positive 251.3 million euros, an increase of 56.8% compared with 160.3 million euros, on a like-for-like basis (before discontinued operations) compared with the first nine months of 2010.

For Pirelli Tyre, which represents almost the totality of group sales (99%), the first nine months of 2011 saw a significant increase in sales (+18.7% to 4,225.7 million euros) and a further increase in profitability, with the Ebit margin reaching 11.5% compared with 9.4% in the first nine months of 2010.

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