Economic dimension

Pirelli Group companies are committed to contributing to the economic well-being and growth of the community in which they operate, by providing efficient and technologically advanced services. (Article 5 of the Ethical Code - Community).

Added value

Added value means the wealth created over a given reporting period, calculated as the difference between the revenues generated and the external costs sustained in the period. The distribution of added value between stakeholders enables the expression, in monetary terms, of the existing relations between Pirelli and the major stakeholders, thus shifting attention to the socio-economic system in which the Group operates (as shown in the diagram below).

Added value diagram

The added value created by Pirelli & C. Group in 2008, 2007 and 2006 is broken down as follows:

added value (in thousands of Euro)

2008

2007

2006*

GROSS OVERALL ADDED VALUE

1,169,029

 

1,871,969

 

1,996,516

 

Remuneration of personnel

(1,210,440)

103.5%

(1,156,170)

61.8%

(1,075,819)

53.9%

Remuneration of Public Administration

(78,335)

6.7%

(133,503)

7.1%

(127,849)

6.4%

Return on credit capital

(76,087)

6.5%

(36,288)

1.9%

(126,976)

6.4%

Return on venture capital

-

0.0%

(169,503)

9.1%

(78,299)

3.9%

Remuneration of the company

(200,866)

-17.2%

(368,132)

19.7%

(579,535)

29.0%

External donations

(5,033)

0.4%

(8,373)

0.4%

(8,038)

0.4%

* The gross overall added value for 2006 does not take into account non-recurring operations recorded in the period. Specifically, the disposal to third parties of 38.9% of Pirelli Tyre SpA and the entire holding in Capitalia (631 million Euro); the costs sustained for the IPO (13 million Euro) and the write-down of the affiliate company Olimpia (2,110 million Euro).

The changes in the items comprising gross overall added value as indicated above are adequately explained in the Directors Report, before the beginning of this chapter. Reference is made to that report for further details.

The table below shows the contributions and donations made by Pirelli & C. Group in the three-year period 2008, 2007 and 2006, broken down by category:

area of intervention (in thousands of Euro)

 

2008

2007

2006

Education

1,322

1,035

1,246

Culture

2,076

5,774

5,188

Sport

137

287

244

Research

615

483

339

Solidarity

880

656

739

Other

3

138

282

TOTAL

5,033

8,373

8,038

The current complexity associated with the economic situation has led to revaluation of what has been allocated to the different areas of intervention. The changes for 2008 shown in the table are indicative in this sense, which shows a significant reduction in the total amount of contributions and donations although, when the individual items are observed, there has been a substantial increase in resources allocated to research, training and solidarity, which are of fundamental social importance during hard economic times.

Consequently, the social responsibility of Pirelli is demonstrably sustainable and adequate.

Reference is made to the Social Dimension section for a detailed description of the principal actions associated with these contributions and donations.

Finally, Group companies “do not contribute or confer advantages or other benefits upon political parties and trade union organisations or their representatives and candidates, without prejudice to compliance with the relevant prevailing legislation.” (from Article 5 of the Ethical Code - Community).