Pirelli & C — Earnings Release 2019

Mar 2, 2020

FY 2019 RESULTS

Milan, March 2nd, 2020

DISCLAIMER

In General. This disclaimer applies to this document and any oral comments of any person presenting it. This document, taken together with any such oral comments, is referred to herein as the "Presentation". This document has been prepared by Pirelli & C. S.p.A. ("Pirelli" or the "Company" and, together with its subsidiaries the "Group"). The Presentation is being furnished to you for information purposes only and for use in presentations of the results and strategies of the Group.

No distribution of this Presentation. This Presentation is being furnished to you solely for your information and may not be reproduced, in whole or in part, or redistributed to any other individual or legal entity. Forward-looking statement. "Forward-looking statements" (which expression shall include opinions, predictions or expectations about any future event) that may be contained in the Presentation are based on a variety of estimates and assumptions by the Group, including, among others, estimates of future operating results, the value of assets and market conditions. These estimates and assumptions are inherently uncertain and are subject to numerous business, industry, market, regulatory, geo-political, competitive and financial risks that are outside of the Group's control. There can be no assurance that the assumptions made in connection with the forward-looking statements will prove accurate, and actual results may differ materially. The inclusion of the forward-looking statements herein should not be regarded as an indication that the Group considers the forward-looking statements to be a reliable prediction of future events and the forward-looking statements should not be relied upon as such. Neither the Group nor any of its representatives has made or makes any representation to any person regarding the forward-looking statements and none of them intends to update or otherwise revise the forward-looking statements to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the forward-looking statements are later shown to be in error.

No update. The information and opinions in this Presentation is provided to you as of the dates indicated and the Group does not undertake to update the information contained in this Presentation and/or any opinions expressed relating thereto after its presentation, even in the event that the information becomes materially inaccurate, except as otherwise required by applicable laws.

Verbal explanation. This Presentation has to be accompanied by a verbal explanation. A simple reading of this Presentation without the appropriate verbal explanation could give rise to a partial or incorrect understanding.

No offer to purchase or sell securities. The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful (the "Other Countries"), and there will be no public offer of any such securities in the United States. This Presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States or the Other Countries.

Rounding. Due to rounding, numbers presented throughout this Presentation may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

The data contained in this presentation are preliminary in nature and refer to the date hereof and, therefore, may be subject to further variations. Please note that these preliminary data are subject to review by the independent auditors that still have to complete their necessary analysis in order to release their report. The 2019 final results will be approved by the Board of Directors scheduled on the 2 nd of March 2020 and will be disclosed to the market according to, and in the terms set for by, the applicable laws and regulations.

Neither the Company nor any member of the Group nor any of its or their respective representatives, directors, employees or agents accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it.

Francesco Tanzi, the manager in charge of preparing the corporate accounting documents, declares that, pursuant to art. 154-bis, paragraph 2, of the Legislative Decree no. 58 of February 24, 1998, the accounting information contained herein correspond to document results, books and accounting records. ****

Non-IFRS and Other Performance Measures

This Presentation contains certain items as part of the financial disclosure which are not defined under IFRS. Accordingly, these items do not have standardized meanings and may not be directly comparable to similarly-titled items adopted by other entities.

Pirelli management has identified a number of "Alternative Performance Indicators" ("APIs"). These APIs (i) are derived from historical results of Pirelli & C. S.p.A. and are not intended to be indicative of future performance, (ii) are non-IFRS financial measures and, although derived from the Financial Statements, are unaudited and (iii) are not an alternative to financial measures prepared in accordance with IFRS. The APIs presented herein include EBIT, EBIT margin, EBITDA, EBITDA margin.

In addition, this Presentation includes certain measures that have been adjusted by us to present operating and financial performance net of any non-recurring events and non-core events. The adjusted indicators are EBITDA adjusted, EBITDA margin adjusted, EBITDA adjusted without start-up costs, EBITDA margin adjusted without start-up costs, EBIT adjusted, EBIT margin adjusted, EBIT adjusted without start-up costs, EBIT margin adjusted without start-up costs.

In order to facilitate the understanding of our financial position and financial performance, this Presentation contains other performance measures, such as CapEx (Capital Expenditures) or Investments in property, plant & equipment, Operating working capital related to continuing operations, Net Financial (liquidity) / debt Position, Net financial (liquidity)/debt position without IFRS 16, Operating net cash flow, Net cash flow and Net cash flow before dividends.

These measures are not indicative of our historical operating results, nor are they meant to be predictive of future results.

These measures are used by our management to monitor the underlying performance of our business and operations. Similarly entitled non-IFRS financial measures reported by other companies may not be calculated in an identical manner, consequently our measures may not be consistent with similar measures used by other companies. Therefore, investors should not place undue reliance on this data.

1 2019 FINANCIAL REVIEW

2 APPENDIX

FY 2019 RESULTS IN LINE WITH GUIDANCE

	2018 A	2019 E (guid. Oct. 2019)	2019 A
Net Sales	€5,195 mln	≥€5.3 bln	€5,323 mln
High Value weight	~ 64%	~ 67%	67%
Adjusted EBIT	€955 mln		€917 mln
Adjusted EBIT margin	18.4%	>17% ÷ 17.5%	17.2%
High Value weight on adj. EBIT1	~ 83%	~ 85%	84%
Start-up costs	€48 mln	~ €40 mln	€41 mln
CapEx	€463 mln	~ €380 mln	€391 mln
Net Cash Flow bef. dividends	€38 mln	~ €330 ÷ ~ €350 mln	€333 mln
Net Financial Position	€3,180 mln		€3,024 mln €3,507 mln incl. IFRS 16
Net Financial Position / adj. EBITDA1	2.49x	~ 2.42x ÷ ~ 2.36x +0.17x incl. IFRS 16	2.42x 2.59x incl. IFRS 16

FY 2019 NET SALES BRIDGE

PRICE/MIX DRIVERS AND DYNAMICS IN 2019 AND 2020

FY 2019 OPERATING PERFORMANCE

€ million

margin 18.4% 17.2%

FY 2019 NET INCOME BRIDGE

^{442 458 40} 87 Δ Net income / loss from equity participations Net Income Δ EBIT FY'18 -6 Δ Financial Δ Taxes income / charges -112 6 Δ Discontinued Operations Net Income FY'19 € million % on Sales 8.5% 8.6% Non recurring / restr. costs / other adj. +137 +60 Ad. Net Income from Cont. Oper. 576 514 PPA amortization +115 +115 One-off financial income +2 -107 Net Income 442 458 FY'18 FY'19 Taxes impact -127 -11 of which: ▬ -24 of IFRS 16 impact ▬ +111 of Brazil tax credit Δ YoY mainly related to the Argentina hyper-inflation accounting Net Income from cont. oper. 449 458 Discontinued operations +6 -

Milan, March 2nd, 2020 7 1. wash down fee BCC financing; 2. mainly related to gains from re-pricing of unsecured facilities

DIVIDEND PROPOSAL

€ million

Dividend Proposal to be filed with Pirelli & C. Annual General Meeting (June 18th, 2020)

2019 dividend

Net Income Reported (€ million)	458
payout (% of net income reported)	40.0%
DPS (€)	0.183
# of shares (million)	1,000.0
dividends (€ million)	183

Dividend Payment Schedule

• ▬ Coupon Detachment: June 22nd, 2020
• ▬ Dividend Payment: June 24th, 2020, record date June 23rd

FY 2019 CASH FLOW AND NET FINANCIAL POSITION

€ million

Main working capital dynamics in 2019

• ▬ Inventories back to normalized level: 20.5% on sales (21.7% in 2018); Inventory volume reduction -7% YoY (-23% on Standard and +5% on High Value, to ensure the high service level)
• ▬ Trade receivables: 12% on sales (stable YoY)
• ▬ Trade payables: 30% on Sales (~-1pp YoY)

CURRENT CAPITAL STRUCTURE (DECEMBER 2019)

€ million

2.95% Dec-18 Dec-19 2.83% Net Financial Position Gross Debt maturity 721 195 1,743 598 452 2024 200 2020 2021 78 82 66 56 2022 125 970 48 2023 41 1,145 2025 & beyond 1,450 150 1,811 639 215 740 3,507 483 2,917 1,271 Gross Debt (1,648) Net Fin. Position 5,411 (256) Fin. Assets Liquidity profile Liquidity position Total committed lines not drawn Liquidity margin 1,610 700 2,348* % on total Gross Debt Fin. receivables & other 27% 33% 21% 4% Cost of Debt (last 12 months) 3% (1,904) 12% 252 can be extended to 2022** 1,743 can be Cash & Cash extended to 2024** equivalents Loan Bond Other IFRS 16 w/o IFRS 16 impact 4,928 3,024 Break-down by currency EUR 84.9% other 2.3% RUB 1.2% CNY 1.2% BRL 10.3% Assets at FV through P&L 38 Considering extension option 22% 3% 6% 21% 44% 4%

Milan, March 2nd, 2020 10 *Liquidity Margin is Covering ~2.2 years of forthcoming maturities (~ 3.7 years considering the Committed Bank lines extension option**)

KEY FIGURES & ACHIEVEMENTS 2019

KPIs¹

Eco-Safety Performance revenues2
Car tyres avg. rolling resistance reduction
Accident frequency index reduction
Average training days per capita
Specific energy consumption reduction
Electricity from renewable sources4
Specific CO2 emissions reduction
Specific water withdrawal reduction
Waste recovered

2019			PIRELLI ESG LEADERSHIP ACKNOWLEDGED BY THE MARKET
55.8% 63.3% on H.V.3	Top-of-the-industry ESG ratings		Pirelli distinctive factors
-18% (vs. 2009) -83%		Global Sector Leader in the S&P Dow Jones Sustainability Indices5	Comprehensive corporate > positioning on key global sustainability challenges, beyond
(vs. 2009) >7 days		Awarded sector Gold Class 2020 in S&P Sustainability Yearbook	materiality Management model complying > with most demanding ESG standards6
-13.1% (vs. 2009)		A-List in CDP Climate Change 2019	> ESG targets are: • Group wide • Tangible
> 41% -10.8%		Sector top rating	• Challenging and realistic • Set to be reached within competitive deadlines
(vs. 2009) -70%		Global Compact LEAD company 2019	Complete and transparent > Reporting
(vs. 2009) 97%	Pirelli also included in:

Comprehensive corporate positioning on key global sustainability challenges, beyond materiality Management model complying with most demanding ESG standards⁶ ESG targets are: • Group wide • Tangible • Challenging and realistic • Set to be reached within competitive deadlines Complete and transparent Reporting

Milan, March 2nd, 2020 11 1. Preliminary unaudited data; 2. Figure is obtained by weighing the value of sales of Eco-Safety Performance car tyres on the total value of sales of Group car tyres; Eco-Safety Performance products, previously named "Green Performance Products", identify car tyres that Pirelli produces throughout the world and that fall only under rolling resistance and wet grip classes A, B, C according to the labeling parameters set by European legislation; 3. Focus on HIGH VALUE products including RIM18+ and «specialties» (Run-Flat, PNCS, Seal Inside with rim ≤17"); 4. Internal assessment based on data from the International Energy Agency (IEA) taking into account the Pirelli geographical distribution;

5. Score 2019: 85 vs sector average of 36; 6. e.g. ISO 20400, ISO 26000, AA1000, ISO 37001, etc.

1 2019 FINANCIAL REVIEW

2 APPENDIX

2019 RESULTS HIGHLIGHTS BY QUARTER

€ million

	1Q'18	1Q'19	Δ YoY	2Q'18	2Q'19	Δ YoY	3Q'18	3Q'19	Δ YoY	4Q'18	4Q'19	Δ YoY	FY'18	FY'19	Δ YoY
Revenues	1,310	1,314	+0.3%	1,320	1,341	+1.6%	1,295	1,382	+6.7%	1,269	1,287	+1.4%	5,195	5,323	+2.5%
Organic Growth1			+1.2%			+1.6%			+4.1%			+2.0%			+2.2%
High Value Revenues	834	895	+7.3%	850	893	+5.0%	846	932	+10.2%	780	820	+5.1%	3,310	3,540	+6.9%
% on total Revenues	63.6%	68.1%	+4.5 pp	64.4%	66.6%	+2.2 pp	65.3%	67.5%	+2.4 pp	61.5%	63.7%	+2.2 pp	63.7%	66.5%	+2.8 pp
EBITDA adj. w/o start-up costs2	298	3275	+9.7%	310	3315	+6.5%	328	3505	+6.7%	343	3435	+0.1%	1,279	1,3515	+5.6%
Margin	22.7%	24.9%	+2.2 pp	23.5%	24.6%	+1.1 pp	25.3%	25.3%	0.0 pp	27.0%	26.7%	-0.3 pp	24.6%	25.4%	+0.8 pp
EBITDA adjusted3	288	3165	+9.5%	300	3215	+6.9%	320	3425	+7.1%	327	3325	+1.4%	1,235	1,3105	+6.1%
Margin	22.0%	24.0%	+2.0 pp	22.7%	23.9%	+1.2 pp	24.7%	24.8%	+0.1 pp	25.8%	25.8%	0.0 pp	23.8%	24.6%	+0.8 pp
EBIT adj. w/o start-up costs2	229	231	+0.6%	244	232	-5.0%	259	252	-2.6%	271	244	-9.8%	1,003	959	-4.4%
Margin	17.5%	17.6%	+0.1 pp	18.5%	17.3%	-1.2 pp	20.0%	18.2%	-1.8 pp	21.3%	19.0%	-2.3 pp	19.3%	18.0%	-1.3 pp
EBIT adjusted4	218	219	+0.4%	232	221	-4.5%	250	245	-2.2%	255	232	-8.9%	955	917	-3.9%
Margin	16.7%	16.7%	0.0 pp	17.6%	16.5%	-1.1 pp	19.3%	17.7%	-1.6 pp	20.1%	18.1%	-2.0pp	18.4%	17.2%	-1.2 pp
EBIT	184	183	-0.5%	194	242	+24.9%	214	173	-19.1%	112	145	+29.6%	703	743	+5.6%
Margin	14.0%	13.9%	-0.1 pp	14.7%	18.0%	+3.3 pp	16.5%	12.5%	-4.0 pp	8.8%	11.3%	+2.5 pp	13.5%	14.0%	+0.5 pp
Results from Equity Investments	1	2		-5	0		-3	-1		3	-12		-5	-11
Financial Income (Charges)	-55	-48		-63	38		-21	-65		-58	-34		-196	-109
EBT	130	137		126	280		190	107		57	98		502	622
Tax Rate	28.7%	26.0%		28.7%	26.6%		n.m.	26.4%		n.m.	26.7%		10.6%	26.5%
Net Income	89	101		88	206		194	79		71	72		442	458

1. Excl. FX; 2. Velo, Cyber / digital transformation; 3. before non-recurring items & restructuring costs;

4. before amortization of PPA, non-recurring items & restructuring costs; 5. including the application

Milan, March 2nd, 2020 13 of the new IFRS 16 on adjusted EBITDA: in FY'19 +€104 million, in 4Q'19 +€26 million, in 3Q'19 +€26 million, in 2Q'19 +€27 million, in 1Q'19 +€25 million

FY 2019 PIRELLI BALANCE SHEET

€ million	31-Dec-2018	31-Dec-2019
Fixed assets related to continuing operations (before IFRS 16)	9,018	9,007
Right of use IFRS 16	n.a.	463
Fixed assets related to continuing operations (incl. IFRS 16)	n.a.	9,470
Inventories	1,129	1,094
Trade receivables	628	649
Trade payables	(1,605)	(1,612)
Operating net working capital related to continuing operations	152	132
Other receivables / payables	(40)	81
Net Working Capital related to continuing operations	112	213
Net invested capital held for sale	11	-
Total net invested capital	9,141	9,683
Equity	4,551	4,827
Provisions	1,410	1,349
Net Financial Position (excl. IFRS 16)	3,180	3,024
Lease Obligations (IFRS 16)	n.a.	483
Net Financial Position (incl. IFRS 16)	n.a.	3,507
Total financing and shareholders' equity	9,141	9,683

FY 2019 PIRELLI GROUP CASH FLOW

€ million

Please note that 2019 figures are including IFRS 16 impact, applicabale as Jan 1st 2019	4Q '18	4Q '19	FY '18	FY '19
Adjusted EBIT1	255	232	955	917
Depreciation & Amortization (excl. PPA amortization)	72	99	280	393
Capital expenditures	(167)	(148)	(463)	(391)
Rights of use (IFRS 16)	n.a.	(26)	n.a.	(51)
Change in working capital / other	857	902	(388)	(61)
Operating Cash Flow	1,017	1,060	383	808
Financial income / (expenses)	(58)	(41)	(196)	(217)
Taxes paid	(18)	(29)	(119)	(142)
Cash-out for non recurring items and restructuring costs	(17)	(11)	(72)	(52)
Exchange rates difference / other	15	(6)	(18)	(35)
Net cash flow before dividends & extraordinary operations	939	973	(22)	362
Industrial reorganization	(15)	-	(10)	-
Financial asset disposals / (acquisitions)	(67)	-	70	(17)
Net cash flow before dividends	858	973	38	344
Net cash flow before dividends & IFRS 16 impact	-	978	-	333
Dividends paid	-	-	-	(177)
Net cash flow	858	973	38	156
Net cash flow before IFRS 16 impact	-	978	-	167

KEY CAR MARKET TRENDS: EMEA

Milan, March 2nd, 2020 16 Source: Pirelli tyre market estimates based on main data provider for the Region; historical market data may be subject to restatement

KEY CAR MARKET TRENDS: NORTH AMERICA

Milan, March 2nd, 2020 17 Source: Pirelli tyre market estimates based on main data provider for the Region; historical market data may be subject to restatement; 1. N. America Replacement includes imports

KEY CAR MARKET TRENDS: ASIA PACIFIC

Milan, March 2nd, 2020 18 Source: Pirelli tyre market estimates based on main data provider for the Region; historical market data may be subject to restatement

KEY MARKET TRENDS: RUSSIA & NORDICS / SOUTH AMERICA

Milan, March 2nd, 2020 19 Source: Pirelli tyre market estimates based on main data provider for the Region; historical market data may be subject to restatement; 1. South America Replacement restated to include Brazilian imports

RAW MATERIAL COSTS TREND AND MIX

Main raw materials price trend

FY 2019 mix (based on purchasing cost)

MANUFACTURING FOOTPRINT AS OF DECEMBER 31ST , 2019