Business Industrial

In the Industrial market, net sales amount to Euros 1,299 million, in line with 2007 (Euros 1,300 million), whereas the operating profit from ordinary operations reached Euros 112 million, with a ROS of 8.6%, compared to Euros 106 million in 2007, when ROS was 8.1%.

Despite the fact that, in the industrial market too, the scenario was negative, especially in the last part of the year, Pirelli Tyre’s positive strategic positioning with 87% of overall production in the Low Cost area and 75% of sales in emerging markets favored the achievement of positive results.

The Industrial segment is generally the most cyclical segment of all, since it is directly affected by the general trend of the whole economy and by certain sectors, such as public works, large-scale construction sites, etc.. As a result, the general sustained contraction of volumes in the industrial segment in the last quarter (Original Equipment in Europe -13%, Mercosur -9%, Replacements in Europe -27%, Mercosur -17%, China overall -23%) is a result directly connected with the general slowdown of the economy and the reduced need for the industrial transport of goods.

In 2008 as a whole, the European market fell by 1% in the Original Equipment segment and by 12% in the Replacements segment, whereas Mercosur reported a positive sales trend of 18% in Original Equipment and 7% in the Replacements segment.

Overall, sales volumes of Pirelli Tyre were 6.6% less than in the prior year, with a positive price/mix variation of 9.1%, bringing overall organic growth to a positive figure of 2.6%. The negative exchange rate effect of 2.7% does not seem to have affected sales to any great degree.