Pirelli & C — Investor Presentation 2020

Feb 19, 2020

DISCLAIMER (1/2)

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.

DISCLAIMER (2/2)

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 2nd 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.

PIRELLI 2020-22 INDUSTRIAL PLAN, 2025 VISION - AGENDA

TIME	TOPIC	SPEAKER
MORNING SESSION
	1. Pirelli Evolution to date & Strategic Direction	M. Tronchetti Provera, Executive V. Chairman & CEO
11:30 – 13:00	2. 2020-2022 Scenario	A. Casaluci, General Manager Operations
	3. Pirelli Strategy deployment: Pillar 1 - Cost Competitiveness	A. Casaluci, General Manager Operations
13:00 – 13:20	Q&A
AFTERNOON SESSION
	4. Pirelli Strategy deployment: Pillar 2 - Commercial Development	M. Bussacchini, SVP Commercial Operations
14:30 – 15:40	5. Pirelli Strategy deployment: Pillar 3 – Technology-based Innovation	P. Misani, SVP Research & Development
	6. 2019 Financial review and 2020-2022 Targets in detail	M. Sala, EVP - Chief Planning & Controlling Officer
15:40 – 16:10	Q&A
16:10 – 16:15	Closing Remarks	M. Tronchetti Provera, Executive V. Chairman & CEO

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

PIRELLI STRATEGY DEPLOYMENT: PILLAR 1 – COST COMPETITIVENESS

2020-2022 SCENARIO

PIRELLI STRATEGY DEPLOYMENT: PILLAR 2 - COMMERCIAL DEVELOPMENT

PIRELLI STRATEGY DEPLOYMENT: PILLAR 3 – TECHNOLOGY-BASED INNOVATION

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

APPENDIX

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

EVOLUTION TO DATE 1

• IMPLICATIONS FROM 2020-2022 SCENARIO 2
• STRATEGIC GUIDELINES & KEY 2020-2022 PROGRAMS 3
• 2020-2022 TARGETS AND ENABLERS 4
• 2025 VISION 5

PIRELLI HAS SUCCESSFULLY PURSUED A UNIQUE CONSUMER POSITIONING AND BUSINESS MODEL FOCUSED ON HIGH VALUE

1. source German Product List (Pricat) @ Jan 2020; 2. Car Dealer, Tier 1 Wholesalers, Pirelli Retail, channels over which we exercise a greater control ²

PIRELLI FORECASTS AND VOLUME PERFORMANCES IN ≥18'' PROVED CORRECT

1. Evolution to Date

…WHILE RAPID DECREASE ON ≤17'' WAS NOT FULLY FORESEEN

STANDARD		UNFORESEEN EVENTS
STANDARD CAR PRODUCTION (mln	2019 IPO1 2019A cars)	2018 South America economic crisis resulting in severe > Standard Tyre demand contraction since 2H (-12% Repl.
	~ 86 ~ 77	Car ≤17'' market in 2H2018; -5.8% in 1H2019) EMEA and Russia more radical reduction with respect to > the IPO plan (second brands and lower rim-sizes pruning) 2019
≤17 CAR TYRE MARKET (mln cars)		Weaker Synergic car production caused unsaturation > and competitive pressure
	-100 (o/w 62% OE)	PIRELLI COUNTERMEASURES
	~ 1,400 ~ 1,300	> Footprint rationalization (Brazil)
≤17 CAR TYRE VOLUMES (mln	tyres)
	44 34	Faster standard volume reduction than previously > planned, especially in EU, keeping a socially responsible approach; footprint conversion (Italy)
	-10 o/w -1 mln on Specialties ≤17''	Short-Term cost-cutting actions, leading to more > structural savings in 2020-22 plan

Short-Term cost-cutting actions, leading to more structural savings in 2020-22 plan

MORE GENERALLY, GAP IN STANDARD VOLUMES EXPLAINING KEY VARIANCE WITH IPO PLAN

IPO¹ VS ACTUAL

PIRELLI ESG LEADERSHIP ACKNOWLEDGED BY THE MARKET

1. e.g. ISO 20400, ISO 26000, AA1000, ISO 37001, etc ⁶

EVOLUTION TO DATE SUM UP

1. Evolution to Date

PURSUE HIGH VALUE APPROACH…

…WITH A HIGHER OE/HOMOLOGATION SELECTIVITY

KEEP PRUNING LOW RIM STANDARD

ACCELERATE STRUCTURAL COST COMPETITIVENESS PROGRAM

LOWER CAPEX INTENSITY IN NEW PLAN AS HV CAPACITY ALREADY IN PLACE

LEVERAGE ON SUSTAINABLE APPROACH TO GAIN COMPETITIVE ADVANTAGE BY ANTICIPATING FUTURE CHALLENGES

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

1 EVOLUTION TO DATE
------------------------

IMPLICATIONS FROM 2020-2022 SCENARIO 2

• STRATEGIC GUIDELINES & KEY 2020-2022 PROGRAMS 3
• 2020-2022 TARGETS AND ENABLERS 4
• 2025 VISION 5

NO MAJOR DISCONTINUITY IN «HIGH-END» MOBILITY IN THE NEXT 36 MONTHS

2. Implications from 2020-2022 scenario

^1. Category includes Car Sharing, Ride-Hailing, Rental Fleets, Private and Company

Leasing Cars; 2. EVs include BEV (Battery Electric Vehciles) and PHEV (Plug-in Electric

MILES DRIVEN GROWING CONSTANTLY PRIVATE CAR STILL DOMINANT

«HIGH-END» CONSUMERS GROWING ELECTRIC CARS GROWING SHARE (PREMIUM)

Vehicles)

Source: Company elaborations based on third party and associations of tyre producers car market data; minor restatements on past data may occur

HIGH VALUE OVERCAPACITY IN 2019 WILL PERSIST, UNLESS PLAYERS POSTPONE PROGRAMS

≥18" NOMINAL CAPACITY VS. MARKET DEMAND (2018-2019-2022) - ESTIMATES

11

SEVERAL RESTRUCTURING PROGRAMS ALREADY ANNOUNCED AND MORE LIKELY TO COME, BUT FOCUSED ON STANDARD

Source: Company elaborations based on third party and associations of tyre producers for car market data; Company elaborations and estimates based on public announcements and third party data for Car Capacity data; for 2019-2022 period assuming all new capacity installed is ≥18" and deployment according to latest available public announcements (possible slowdowns in capacity deployment not included in figures)

2. Implications from 2020-2022 scenario

TECHNOLOGY & BRAND CAN LIMIT PRICE PRESSURE IN HIGH VALUE

TECHNOLOGIES (E.G. RUNFLAT, PNCS, SEAL INSIDE) WITH HIGHER ADDED VALUE

€ Sell-out price for tyre, same Product Line, Specialty vs. non-Specialty

Specialty Non-Specialty

PREMIUM CONSUMERS MAINLY LOOK FOR PRODUCT PERFORMANCE, BRAND AND SAFETY

Product choice factor analysis 2019, Premium target (EU) % replies "important" and "very important" (scale 1-5)

Source: Pirelli Survey on CRM contacts (2019)

TECHNOLOGY FOR EVs ANOTHER KEY COMPETITIVE BARRIER

Source: Company elaborations based on third party and associations of tyre producers car market data; minor restatements on past data may occur

MARKET DEMAND CONTINUOUSLY REPOSITIONING TOWARDS HIGH END SEGMENTS

Source: Company elaborations based on third party and associations of tyre producers car market data; minor restatements on past data may occur

2. Implications from 2020-2022 scenario

• Pursue High value approach…
• …With a higher OE/homologation selectivity
• Keep pruning low-rim Standard
• Accelerate structural Cost Competitiveness Program
• HV capacity already in place: low capex-intensity in New Plan
• Leverage on Sustainable approach to gain DOUBLE-DIGIT REPLACEMENT PROFITABILITY competitive advantage

EVOLUTION TO DATE 2020-2022 SCENARIO IMPLICATIONS

RESILIENT HIGH VALUE DEMAND

• OVERCAPACITY/PRICE PRESSURE >
• >

INNOVATION AND BRAND LEADERS CAN LIMIT COMPETITIVE PRESSURE

STANDARD 17" IS A GROWING MARKET WITH

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

STRATEGIC GUIDELINES 2020-2022

3. Strategic guidelines & key 2020-2022 programs

HIGH VALUE IS PIRELLI'S "TRUE NORTH"

RAISE COMPETITIVE BARRIERS FASTER:

• ─ Sustainability-driven innovation
• ─ Brand
• ─ Structural cost competitiveness
• ─ Speedy capture of opportunities through data-rich insights

REPOSITION IN STANDARD, WITH LOW-COST SOURCES IN LATAM & RUSSIA

BUSINESS MODEL STRENGTHENED THROUGH 3 KEY MAJOR PROGRAMS, BACKED BY A MORE CONTAINED INVESTMENT

HIGHER FREE CASH FLOW GENERATION

01. COST COMPETITIVENESS: 2 WAVES, REACHING ~510M€ EFFICIENCY IMPROVEMENT GROSS OF INFLATION

3. Strategic guidelines & key 2020-2022 programs

02. COMMERCIAL DEVELOPMENT

3. Strategic guidelines & key 2020-2022 programs

03. TECHNOLOGY-BASED INNOVATION: ACCELERATING PRODUCT INNOVATION

PRODUCT	Fast-pace product renewal • HV homologated product families renewed, with Specialties available in most of the new Product Lines • 15 push-through lines, regionalized	~+40% New Product Lines in '20-'22 vs. '17-'19
DEVELOPMENT & ENGINEERING	New Development & Engineering approach, derived from F1 & Motorsport data driven experience • Reduced time-to-market • Modularity & Commonality Virtualization in Design & Testing	-30% development time
NEW TECHNOLOGIES	Working in parallel on Medium-term opportunities • ELECT EV "Marked" portfolio • Entering the second stage of Cyber Innovation	>1/3 2020-2022 homologations projects on EVs

Product roadmap led by an eco & safe design approach from cradle to grave

• Significant increase in the use of renewable and recycled materials, and decrease of fossils
• Max technological trade-off between low environmental impact and safety performances
• Consumer portfolio accompanying the transition towards smart and micro-mobility
• Supply chain co-operating in the development of high added value solutions, resilient in ESG risk management

APPROACH

HIGH TECH AND ECO-EFFICIENT MANUFACTURING FOOTPRINT

PIRELLI MANUFACTURING FOOTPRINT: HIGH-TECH & ECO-EFFICIENT

> 9 Car Fully High Value, of which 6 new / robotized > Bollate Plant converted to Premium Velo 2 Production Hubs in Low Cost Countries serving closer High Value markets: Latam for N. America and Russia for Europe > IN 2022 18 PLANTS (~82% LOW COST COUNTRY) > 100% renewable electricity worldwide by 2025 > Group Carbon Neutrality by 2030 > Commitment to the Science Based Target initiative, in alignment with our CO² emissions reduced strategy AN INDUSTRIAL ENVIRONMENTAL FOOTPRINT SUBSTANTIALLY REDUCING

• > Excellence in water management
• > Zero waste to landfill

ALREADY REACHED OPTIMAL CAPACITY IN HIGH VALUE, LEADING TO A CONTAINED INVESTMENT PLAN

HIGH VALUE CAPACITY CONSISTENT WITH DEMAND

• HV Capacity already increased strongly in 2017-2019 (Europe, China and Mexico)
• 2020-2022 further HV Capacity mainly from Conversion

STANDARD CAPACITY REDUCTION: -11m pcs in 6 years mainly in Emea & LatAm. Saturation ~90% in 2022 (70% in 2019)

2020-2022 INVESTMENT PROJECTS HIGHLIGHTS

- Focus on Specialties and mix/quality improvement

3. Strategic guidelines & key 2020-2022 programs

REINFORCING OUR ICONIC BRAND FOR PREMIUM CONSUMERS

3. Strategic guidelines & key 2020-2022 programs

ALWAYS IN TOP 3 POSITIONS IN KEY MARKETS

2019 Pirelli Brand Tracking Premium Consumers¹ Pirelli Global Brand Investments in Consumer

MOVING EFFORTS DOWN THE CONSUMER JOURNEY

Journey funnel, 2019 and 2022

BRAND INITIATIVES RELEVANT FOR PREMIUM CONSUMERS

Sponsorships

1. Considering several parameters: Top-of-Mind Brand, Brand Awareness, Brand Consideration and Brand Conversion (Top Choice)

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

2020-2022 TARGETS

€ billion	2019 A	2020 E	2022 E
Net Sales	5.3	~5.4	~5.8
adj. EBIT margin	0.9 17.2%	~ flat YoY	18% ÷ 19%
CapEx	0.39	~0.3	cum. '20-'22 ~0.9	vs. cum '17-'19 ~1.3
Net Cash Flow bef. Dividends	0.33	~0.4	cum. '20-'22	o/w ~0.5 in '21
			~1.5	~0.6 in '22
Net Financial Position (IFRS 16)1	3.5	~3.3	~2.5

PIRELLI REMUNERATION SYSTEM ALLIGNED WITH INDUSTRIAL PLAN

4. 2020-2022 Targets and Enablers

REMUNERATION STRUCTURE to be approved by the Shareholders' Meeting (June 18, 2020)

COMPENSATION MIX FOR KEY MANAGEMENT

FIXED COMPONENT

27

• No more than 50% of Total Annual Direct Compensation on reaching all objectives at target level

SHORT-TERM INCENTIVE (1/3 of total variable compensation)

• Cash incentive based on key Financial objectives (Group Adj. Ebit, Net Income, Net Cash Flow before dividends) and Sustainability (Eco-Safety Performance¹ Revenues)
• On/off condition: Group Net Cash Flow before dividends
• 25% deferred to the next year

LONG-TERM INCENTIVE PLAN 2020-22 (2/3 of total variable compensation)

• Cash plan based on 3 key objectives: Relative TSR vs. Tier1 peers; 2020-22 Cumulated Group Net Cash Flow before dividends; on-going inclusion in Sustainability Indices (Dow Jones Sustainability World Index ATX Auto Component sector, CDP scoring)
• Rolling plan: every year starting a new 3-year period
• Payment in 2023 and at the end of each 3-year vesting period

1. 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

ALL VARIABLE COMPONENTS ARE CAPPED

NON-COMPETITIVE AGREEMENT

CLAW-BACK CLAUSES KEY MANAGEMENT IN BOTH MBO AND LTI PLANS

GOVERNANCE CONFIRMED BY RENEWED SHAREHOLDERS' AGREEMENT

Pirelli By-Laws shall be inspired by international best practices

Pirelli Technological know-how never be transferred unless approved by 90% of Pirelli shareholders

Pirelli headquarters shall remain in Milan (Italy) unless approved by 90% of Pirelli

One-fifth of the Board shall be appointed by minority shareholders

Focus on Diversity value: gender, age, seniority, nationality, educational background and

Board made of highly qualified Members with a suitable mix of

Independent directors shall be the majority of the Board

work-experience

skills.

shareholders Transactions with related parties to be governed by best International practices with a key role of the Committee for

Related Parties Transactions

The partnership acknowledges: (i) Pirelli is a company specialised in high quality and technology products, (ii) loyalty, professional skills and expertise of the management, key factor for the Company success and business growth

Pivotal role of the top management to maintain quality standards, to preserve and value Pirelli industrial legacy

Pirelli Chief Executive Officer to lead top management and ensure Pirelli business culture continuity

Pirelli Recruiting, Career Plans and incentive schemes to match management and shareholders interests. Incentive plan targets consistent with Pirelli Strategic Plan, and in line with the best practices for listed Companies (e.g.: TSR, sustainability)

Leading role of Marco Tronchetti Provera in the designation of his successor

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

KEY DYNAMICS IN 2025

2015 11.5 2018 2020 2022 2025 9.6 10.7 12.2 13.3 +4% +4% +3% +3% Car Global Miles Driven (Bln) MILES DRIVEN KEEP GROWING CONSTANTLY

«HIGH-END» CONSUMERS KEEP GROWING

Global # of Households with > \$75k annual Income

1. Category includes Car Sharing, Ride-Hailing, Rental Fleets, Private and Company

Leasing Cars; 2. EVs include BEV (Battery Electric Vehciles) and PHEV (Plug-in Electric Vehicles) 30

SHARED & SERVICES GETTING RELEVANT

Car Global Miles Driven (Bln) by ownership model			13.3
Shared & Services1	9.6 7%	10.7 9%	11.5 11%	12.2 15%	>20%
Private Ownership	93%	91%	89%	85%	<80%
	2015	2018	2020	2022	2025

ELECTRIC CARS RELEVANT ALSO IN REPLACEMENT

% EV² Penetration on Global Premium & Prestige production

CAR TRENDS '2020-'2025: SOLUTIONS FOR ELECTRIC & CONNECTED

Note: "Connected" refers to cars with mobile data connection (e.g. 2G, 3G, LTE), which might be provided by either embedded car systems or car hardware paired with external devices (e.g. smartphone), "Electric" refers to BEV / PHEV

Source: company analysis on consulting and investment banks research reports

CORONAVIRUS DISEASE (COVID-19) – PREVENTION AND READINESS

GROUP MEASURES FOCUS CHINA

• Travels to and from China are blocked and all travels to APAC are discouraged.
• APAC expatriates were returned to their homeland together with their families.
• All personnel coming back from China cannot return to workplace before 15 days after the day of arrival.
• A 24/7 hotline with specialized medical support is available.
• Continuous monitoring of the disease evolution in direct connection with national and international Organizations.
• Availability of prevention and emergency kits (e.g. masks, hand sanitizer dispensers, increased cleaning frequency of workplaces).

• Sanitizing and disease prevention training for all employees.

• Body temperature checks applied to all people entering Pirelli facilities.

• In addition, employees are checked twice during their shift.
• All employees must wear approved masks (provided by Pirelli).
• All incoming trucks are disinfected before entering the factories.
• The workplaces are disinfected every 3 hours.
• First aid rescue team linked with authorized hospitals has been established.
• All employees receive regular pay.
• Smart-working is encouraged.

ALL OTHER COUNTRIES

• Adopt all Group measures.
• Availability of prevention and emergency kits.

• Continuous monitoring of specific Country's disease evolution.

• 5 Million RMB donated to Coronavirus Relief Efforts through the Yanzhou Charity Federation of Jining city, Shandong Province.

• 90,000 N95 masks, 350,000 general medical masks, 500 thermometers, and 86,000 gloves sent directly to China from Italy, Germany, Mexico, Argentina.

SUPPORT TO CHINA PREVENTION CONSTANT MONITORING

CORONAVIRUS DISEASE (COVID-19) – PRELIMINARY SENSITIVITY ANALYSIS

PIRELLI IN CHINA

Full High Value Capacity High Value/ Standard Capacity

2019 Total Capacity: ~14 mln car pcs, 1.4 mln Moto pcs % of Export: ~25% mainly within Apac

CHINA CONTRIBUTION:

• ~12% Group Sales
• High teens weight on Group Adj EBIT

CURRENT SITUATION

• Temporary closure of 2 plants; Yanzhou is running at low capacity utilization
• Shanghai office (APAC HQ) closed. Region managed by Tokyo and Singapore offices.
• No delays in export and flows guaranteed today. Alternative flows identified and available. No problems world wide for Chinese components and Raw Material with alternative sources already activated.

ESTIMATED IMPACT

• In 1Q lower business seasonality (New Chinese Year);
• Current February Sales Volume -80% vs normal business activity; March projection in recovery to -30% vs normal business activity.
• Impact of ~ -€30 million on 1Q adj. EBIT, expected to be offset during the year (easing raw mat and pricing pressure with lower overseas supply)
• Should the emergency be extended to 2Q, an update will be provided with 1Q results in May, on both impacts and additional countermeasures

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

PIRELLI STRATEGY DEPLOYMENT: PILLAR 1 – COST COMPETITIVENESS

2020-2022 SCENARIO

PIRELLI STRATEGY DEPLOYMENT: PILLAR 2 - COMMERCIAL DEVELOPMENT

PIRELLI STRATEGY DEPLOYMENT: PILLAR 3 – TECHNOLOGY-BASED INNOVATION

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

APPENDIX

BUSINESS MODEL STRENGTHENED THROUGH 3 KEY PROGRAMS, BACKED BY A MORE CONTAINED INVESTMENT

HIGHER FREE CASH FLOW GENERATION

01. COST COMPETITIVENESS: 2 WAVES, REACHING ~510 M€ EFFICIENCY IMPROVEMENT GROSS OF INFLATION

				WAVE 1 - 2020		WAVE 2 – 2021-2022
		Gross impact		focusing on:	Gross impact	focusing also on:	Gross impact
Product Cost		~ 160 M€	>	• Product range management • Specification optimization • Purchasing cost optimization	~ 50 M€	• Modularity • Design speed	~ 110 M€
Manufacturing		~ 160 M€	>	• Smart Manufacturing • Quality enhancement	~ 40 M€	• Footprint optimization • Flexible factory	~ 120 M€
SG&A		~ 100 M€	>	• Belt-tightening on spending • Marketing effort optimization	~ 40 M€	• Logistic optimization	~ 60 M€
Organization		~ 90 M€	>	• Organization streamlining • Pay for performance • New Skills development	~ 50 M€	• Digital Processes and Organization transformation	~ 40 M€
Total Gross Impact		~ 510 M€			~ 180 M€		~ 330 M€
as % of 2019 cost baseline		~ 11.5 %			~ 4.0 %		~ 7.5 %
Total Net Impact 1		~ 290 M€			~ 110 M€		~ 180 M€
as % of 2019 cost baseline		~ 6.5 %			~ 2.5 %		~ 4.0 %

PRODUCT COST PILLARS – PLAN 2020-2022

MANUFACTURING PILLARS – PLAN 2020-2022

SG&A PILLARS – PLAN 2020-2022

ORGANIZATION PILLARS – PLAN 2020-2022

ORGANIZATION BENEFITS BY WAVE

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

PIRELLI STRATEGY DEPLOYMENT: PILLAR 1 – COST COMPETITIVENESS

2020-2022 SCENARIO

PIRELLI STRATEGY DEPLOYMENT: PILLAR 2 - COMMERCIAL DEVELOPMENT

PIRELLI STRATEGY DEPLOYMENT: PILLAR 3 – TECHNOLOGY-BASED INNOVATION

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

APPENDIX

CAR SALES IN DOWNTURN CYCLE, HOWEVER CARS FITTING ≥18" TYRES GROWING AT HIGHER RATE

WORLD CAR PRODUCTION WORLD OE TYRE MARKET

mln vehicles mln tyres

HIGH VALUE REPLACEMENT TYRE MARKET: RESILIENT ALSO IN A MORE DIFFICULT SCENARIO

¹⁵³ 161 4 176 130 1,269 4 3 1,148 1,305 1,281 1,426 1,469 1,555 1,374 4 3.6% 2.9% mln vehicles mln tyres CAGR 16A-19A CAGR 19A-22A Synergic Premium Prestige ≥18 ≤17 +5.7% +3.4% ~+4.9% ~+2.5% 2016A 2019A 2020E 2022E 2016A 2019A 2020E 2022E

WORLD REPLACEMENT TYRE MARKET

Source: IHS november 2019, Company elaborations based on third party and associations of tyre producers market data

42

WORLD CAR PARC

KEY DRIVERS OF GLOBAL HIGH VALUE MARKET GROWTH

DRIVER 1: PENETRATION OF PREMIUM & PRESTIGE CARS AND PREMIUMIZATION OF SYNERGIC

PREMIUM/PRESTIGE PENETRATION ON TOTAL CAR PARC

KEEP LEADERSHIP IN PREMIUM/PRESTIGE AND EXPAND OFFER ON «PREMIUMIZED» SYNERGIC

Source: IHS and Company elaborations based on third party and associations of tyre producers car market data, restated vs. Nov.17 estimates (wider perimeter), minor restatements on past data may occur;

DRIVER 2: INCREASING NUMBER OF CAR MODELS PER BRAND

ADDING ELECTRIC PLATFORM TO EXISTING ONES…

Number of Models by OEM¹

12 14 17 5 15 24 25 5 21 27 31 6 19 29 29 9 27 30 30 10 1 4 1 1 2 5 2 10 3 10 5 2010 2015 2018 2020 2022 BEV models 2010 2015 2018 2020 2022 ICE models

…AT THE SAME TIME EXPLOITING PLATFORM MODULARITY AND TYRE HOMOLOGATION SYNERGIES

SELECTED HOMOLOGATION PORTFOLIO TARGETING NEW TRENDS

Source: IHS Markit @ July 2019 & Pirelli Alternative Propulsion @ June 2019, Company elaborations based on third party data relative o car market and on data of local associations of tyre producers;

Note: If a car model has both the tradition and BEV version, it is counted as double

DRIVER 3: GROWING DEMAND FOR SPECIALTIES

REINFORCING LEADERSHIP ON SPECIALTIES ADDRESSING SPECIFIC CUSTOMER SEGMENTS

DRIVER 4: RISING SUV AND CUV PENETRATION

5 NEW SUV LINE LAUNCHED IN 2016-2019, 10 FORESEEN IN 2020-2022

Source: IHS Markit January 2020; analyzed the last two X3 and 3-Series programs

DRIVER 5: ELECTRIC AND CONNECTED CARS THE KEY TRENDS

1. Figures refers to autonomous driving levels 4, 5

Note: Connected" refers to cars with mobile data connection (e.g. 2G, 3G, LTE), which might be provided by either embedded car systems or car hardware paired with external devices (e.g. smartphone), "Electric" refers to BEV / PHEV

All data refers to Prestige & Premium cars;

Source: company analysis on consulting and investment banks research reports

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

PIRELLI STRATEGY DEPLOYMENT: PILLAR 1 – COST COMPETITIVENESS

2020-2022 SCENARIO

PIRELLI STRATEGY DEPLOYMENT: PILLAR 2 - COMMERCIAL DEVELOPMENT

PIRELLI STRATEGY DEPLOYMENT: PILLAR 3 – TECHNOLOGY-BASED INNOVATION

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

APPENDIX

2020-2022 HIGH-VALUE SCENARIO: PIRELLI EXPECTED TO OUTPERFORM MARKET GROWTH BY ~3PP

Source: Company elaborations based on third party and associations of tyre producers car market data

TOP LINE GROWTH KEY DRIVERS

PULLTHROUGH IS PIRELLI'S CONSOLIDATED BUSINESS MODEL

• Keep the leadership in the Premium segment focusing on technologically advanced products: Marked tyres, Specialties, EV tyres
• Leverage on geo-localized analytical coverage to further improve Pull-Through rate on cars fitting Pirelli tyres (~80% today)
• Exploit market data analytics to enable salesforce transformation towards a customer consultancy approach

PAST HOMOLOGATIONS ARE GENERATING A GROWING POTENTIAL IN THE PLAN HORIZON

3

1

PIRELLI HAS AN UNDISPUTED LEADERSHIP ON PREMIUM AND PRESTIGE MARKED TYRES IN THE ≥18'' ARENA

PRESTIGE PREMIUM ≥ 18" OF WHICH SOLE SUPPLIER

3

1

2 4

Number of marked IP codes vs. premium competitors Source: German Product List (Pricat) @ January 2020

STRONG RELATIONSHIP WITH OES ALLOWS TO ENHANCE GO-TO-MARKET EFFECTIVENESS, THROUGH BIG DATA AND ADVANCED ANALYTICS

TAKE "PULL-THROUGH STRATEGY" TO A NEW "PRECISION LEVEL"

3

1

2 4

Premium car parc: 160 mln cars

EXPANDING HIGH VALUE BOUNDARIES USING BIG DATA TO IDENTIFY HIGH-END SYNERGIC CONSUMER NEEDS

3

1

THROUGH A DEDICATED PRODUCTS PORTFOLIO WITH EXPECTED DOUBLE-DIGIT PROFITABILITY

THE DISTRIBUTION NETWORK WILL COHERENTLY SUPPORT THE REPLACEMENT REGIONAL STRATEGY

Sources: Pirelli Trade Marketing (February 2020)

59

homologations

with Fleets

• Redesign presence on major Tier 1 distributors • Long-standing agreements

Top 5 Tier 1 players in US • Established share in tyre manufacturers JVs

through leadership in homologations • Established retail network in Tier 1 cities, expanding in Tier 2 cities • Exploiting e-commerce channel

3

1

2020-22 ORIGINAL EQUIPMENT: FOLLOWING OUR CUSTOMERS GLOBALLY, EXPANDING THE CUSTOMER BASE

3

1

AS A RESULT, PIRELLI'S LEADERSHIP POSITION STRENGTHENS

HOMOLOGATIONS

STANDARD: CAR TYRE REDUCTION PLAN CONTINUES, AT A LOWER PACE

HV REGIONS

STANDARD REGIONS

% of Volume by Region Cluster

Other Regions

LANDING POINT @ 2022

% of Standard on Total
	2016	2019	2022
Volume	68%	53%	43%
Net Sales	48%	35%	30%

3

1

THREE KEY LEVERS TO MAXIMIZE VALUE

EBIT MARGIN FROM SINGLE TO DOUBLE > DIGIT

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

PIRELLI STRATEGY DEPLOYMENT: PILLAR 1 – COST COMPETITIVENESS

2020-2022 SCENARIO

PIRELLI STRATEGY DEPLOYMENT: PILLAR 2 - COMMERCIAL DEVELOPMENT

PIRELLI STRATEGY DEPLOYMENT: PILLAR 3 – TECHNOLOGY-BASED INNOVATION

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

APPENDIX

INNOVATION AND PRODUCT DEVELOPMENT STRATEGIC PILLARS

1. Accelerated product innovation

ACCELERATED PRODUCT ROADMAP IN 2020-2022, WITH 20 NEW LINES

5 PULL LINES 2020-2022 PRODUCT ROADMAP 15 PUSH LINES • Strengthen OE leadership (~2x homologation vs. best competitor) • Focus on High Mix for Selective OE • Wide and deep product range • Specialties • Growing all-season lines • Support regional lines (5 USA, 3 APAC) • Focus on Safety & Mileage (USA) • Focus on Safety & Comfort (APAC) • Focus Safety & Eco Labels (EU) >

14 lines 2017 - 2019 20 lines 2020 - 2022 >40% acceleration 4 9 12 14 Higher Rim Focus (>19") INNOVATION SPEED SELECTIVE OE APPROACH SPECIALTIES >

1. Accelerated product innovation

PRODUCTS LAUNCHED IN PLAN WILL BE "SUSTAINABILITY-DRIVEN"

1. Accelerated product innovation

• Weight reduction
• CO² footprint reduction

PRODUCT COST COMPETITIVENESS BASED ON NEW DESIGN PRINCIPLES

2. Cost Competitiveness

PRODUCT COST COMPETITIVENESS BASED ON NEW DESIGN PRINCIPLES

2. Cost Competitiveness

MODULARITY WILL POSITIVELY REDUCE PLANT-LEVEL COMPLEXITY COSTS

FULL VIRTUAL PRODUCT DEVELOPMENT TO IMPROVE TIME-TO-MARKET AND REDUCE COSTS

2. Cost Competitiveness

DESIGN FOR SUSTAINABILITY: ACCELERATING THE INTRODUCTION OF NEW AND INNOVATIVE "GREEN INGREDIENTS"

3. Innovation focus on sustainable mobility

TARGET ON NEW PRODUCT LINES

*Science Based Target Initiative commitment

TECHNOLOGY INNOVATION: SPECIFIC TECHNOLOGIES DEVELOPED TO MEET NEW "EV" REQUIREMENTS

PLAN 2020-2022

• Battery Range Extension
• Higher Vehicle Mass
• Higher Torque
• Higher Comfort
• Ultra Low Rolling Resistance
• High Load Capacity

>

• Braking & Traction Grip with Improved Wear Rate
• Low Air born and Solid born Rolling Noise
• 10% reduced RR 2% Extended Battery Range (WLTP Cycle = Only Straight Running)
  • Improve RR in Real Driving Conditions (RR in Cornering up to 5 times higher)
    • Specific tyre shape to optimize aerodynamic Interaction with Vehicle

CYBER ENTERING NEW PHASE

IN A CONNECTED FUTURE, TYRE INTELLIGENCE IS THE ONLY ONE SOURCED DIRECTLY FROM ROAD SURFACE

TECHNOLOGICAL DEVELOPMENT

• Technology stabilization
• Tested in F2 and Motorsport
• ² Joint-Development prospects with Prestige OE

2 ND PHASE:

INDUSTRIALISATION IN AN "OPEN'' PARTNERSHIP

• Scaling up with Global Partners
  • Semiconductors
  • Production and Supply Chain
• Developing solutions with large-scale Premium OE
• Creating Connected ecosystem with other Tyre Makers

CYBER IS AN ACTIVE ELEMENT OF CONNECTIVITY IT WILL ENHANCE DRIVER SAFETY, VEHICLE CONTROL, LIFECYCLE EMISSION REDUCTION

3. Innovation focus on sustainable mobility

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

PIRELLI STRATEGY DEPLOYMENT: PILLAR 1 – COST COMPETITIVENESS

2020-2022 SCENARIO

PIRELLI STRATEGY DEPLOYMENT: PILLAR 2 - COMMERCIAL DEVELOPMENT

PIRELLI STRATEGY DEPLOYMENT: PILLAR 3 – TECHNOLOGY-BASED INNOVATION

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

APPENDIX

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

2019 FINANCIAL REVIEW 1

2020-22 TARGETS IN DETAILS 2

FY 2019 RESULTS IN LINE WITH GUIDANCE

1. 2019 financial review

	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 Start-up costs	~ 83% €48 mln	~ 85% ~ €40 mln	84% €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

PRICE/MIX DRIVERS AND DYNAMICS IN 2019 AND 2020

Channel Mix Segment Mix Micro-mix Price -8.8% +10.2% + 3.0% 1H'19 A 2H'19 A 2.0% FY'19 A 6.4% 1H'20 E 2H'20 E FY'20 E 4.2% +3.9% Standard Volumes Δ YoY -13.9% low single-digit volume reduction ++ ++ ++ +6.4% -9.7% ++ - + = + + + ~+8% ~-6% High Value Volumes Δ YoY High Value growing high single-digit + + ~slightly negative, with pressure from the O.E. channel + + + + = - - - - - • O.E. price renegotiation • Repl: on Standard & on 18'' non specialties stronger Repl. sales (Car ≥18" Repl. +13% vs. -3% O.E.) stronger O.E. sales (Car ≥18" Repl. +8% vs. +14% O.E.) still impacted by O.E. sales (rollover of new contracts) channels rebalance + (H.V. vs. Standard)

1. 2019 financial review

FY2019 ADJUSTED EBIT PERFORMANCE

1. 2019 financial review

€ million

1. Digital transformation, Cyber; velo 2. net of FX impact; 3. other costs related to High Value development ⁸⁰

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

2019 FINANCIAL REVIEW 1

2020-22 TARGETS IN DETAILS 2

OUR 2020-2022 TARGETS …

€ billion	2019 A	2020 E	2022 E
Net Sales	5.3	~5.4	~5.8
Adjusted EBIT margin	0.9 17.2%	~ flat YoY	18% ÷ 19%
CapEx	0.39	~0.3	cum. '20-'22 ~0.9	vs. cum '17-'19 ~1.3
Net Cash Flow bef. dividends	0.33	~0.4	cum. '20-'22 ~1.5	o/w ~0.5 in '21 ~0.6 in '22
Net Financial Position (IFRS 16)1	3.5	~3.3	~2.5

1. assuming average 40% dividend pay-out on consolidated net income in the 2020-

1. 2019 financial review

22 Industrial Plan ⁸³

2020-2022 REVENUES TREND

2020-2022 PROFITABILITY TREND

€ million

1. other costs for the High Value development ⁸⁵

2. 2020-22 targets in details

FINANCIAL AND FISCAL MANAGEMENT

€ million

86

FINANCIAL INCOME & EXPENSES¹

2020-2022E TAX RATE

1. Operating Cash Flow: adj. EBITDA – CapEx – Δ working capital; 2. (EBITDA – CapEx) / EBITDA 3. assuming average 40% dividend pay-out on consolidated net income in the 2020-22 Industrial Plan

2020E-2022E RAW MATERIAL GUIDANCE

€ million

Commodities – avg. Quotation

Commodities – avg. cost of goods sold

	2019 A	2020 E	2021 E 2021 E	2022 E 2022 E		2019 A	2020 E	2021 E	2022 E
Natural Rubber TSR20 (\$ / tonne)	1,407	~1,480 ~1,480	~1,495 ~1,495	~1,565 ~1,565		1,381	~1,430	~1,500	~1,545
Brent Oil (\$ / barrel)	64.0	~64 ~64	~64 ~64	~64 ~64		67.0	~63	~64	~64
Butadiene Europe (€ / tonne)	824	~860 ~860	~880 ~880	~920 ~920	Adj. EBIT impact	937	~820	~885	~910
					Raw Mat.1	+18	~flat	~-30	~-30
					FX only	-85	~-65	~-15	~-10

TOTAL

2. 2020-22 targets in details

~-40

~-65

~-45

-67

2020E-2022E FOREX GUIDANCE

2. 2020-22 targets in details

Main average exchange rates

		2019 A	2020 E	∆ YoY (vs. EUR)	2021 E	∆ YoY (vs. EUR)	2022 E	∆ YoY (vs. EUR)
EUR / USD	/	1.12	1.12	0%	1.14	+2%	1.18	+4%
USD / CNY	/	6.9	7.05	+2%	7.06	+2%	6.95	+2%
USD / BRL	/	3.95	4.07	+3%	4.21	+5%	4.26	+5%
EUR / RUB	/	72.4	73.0	+1%	75.0	+3%	77.0	+3%
EUR / GBP	/	0.88	0.90	+3%	0.88	-3%	0.86	-2%
TOT. IMPACT ON SALES				~-2%		~-2%		~-2%

PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION

PIRELLI STRATEGY DEPLOYMENT: PILLAR 1 – COST COMPETITIVENESS

2020-2022 SCENARIO

PIRELLI STRATEGY DEPLOYMENT: PILLAR 2 - COMMERCIAL DEVELOPMENT

PIRELLI STRATEGY DEPLOYMENT: PILLAR 3 – TECHNOLOGY-BASED INNOVATION

2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL

APPENDIX

APPENDIX

GOVERNANCE 1

• SUSTAINABILITY STRATEGY & TARGETS 2
• FINANCIALS 3

GOVERNANCE CONFIRMED BY RENEWED SHAREHOLDERS' AGREEMENT

Pirelli By-Laws shall be inspired by international best practices

Pirelli Technological know-how never be transferred unless approved by 90% of Pirelli shareholders

Pirelli headquarters shall remain in Milan (Italy) unless approved by 90% of Pirelli

One-fifth of the Board shall be appointed by minority shareholders

Focus on Diversity value: gender, age, seniority, nationality, educational background and

Board made of highly qualified Members with a suitable mix of

Independent directors shall be the majority of the Board

work-experience

skills.

shareholders Transactions with related parties to be governed by best International practices with a key role of the Committee for Related Parties Transactions

BY-LAWS BOARD OF DIRECTORS SHAREHOLDERS AGREEMENT

The partnership acknowledges: (i) Pirelli is a company specialised in high quality and technology products, (ii) loyalty, professional skills and expertise of the management, key factor for the Company success and business growth

Pivotal role of the top management to maintain quality standards, to preserve and value Pirelli industrial legacy

Pirelli Chief Executive Officer to lead top management and ensure Pirelli business culture continuity

Pirelli Recruiting, Career Plans and incentive schemes to match management and shareholders interests. Incentive plan targets consistent with Pirelli Strategic Plan, and in line with the best practices for listed Companies (e.g.: TSR, sustainability)

Leading role of Marco Tronchetti Provera in the designation of his successor

PIRELLI SHAREHOLDER STRUCTURE

INSTITUTIONAL INVESTORS BREAKDOWN

Source: NASDAQ, Libro soci Pirelli at December 2019

1. On September 2019 Camfin SpA has underwritten, with primary financial institutions, financial instruments denominated "Call Spread", maturing on September 2022, with 48,9 million Pirelli shares underlying equal to approximately 5% of the Pirelli's share capital. By virtue of the acquisition of these financial instruments, Camfin has the right to buy Pirelli shares at a predetermined price and increase its stake in Pirelli's share capital from 10.1% up to approximately 15%

2. Tacticum Investment S.A (formerly Long-Term Investments Luxembourg S.A.): stake transferred to a third party, subject to a "Repurchase Agreement". Such third party committed to transfer back to LTI, when due, the ownership of the same number of Pirelli stocks and to do everything is in its power to exercise the right to vote, subject to the transaction, according to the voting instructions given by LTI each time.

PIRELLI REMUNERATION SYSTEM ALLIGNED WITH INDUSTRIAL PLAN

REMUNERATION STRUCTURE to be approved by the Shareholders' Meeting (June 18, 2020)

COMPENSATION MIX FOR KEY MANAGEMENT

FIXED COMPONENT

94

• No more than 50% of Total Annual Direct Compensation on reaching all objectives at target level

SHORT-TERM INCENTIVE (1/3 of total variable compensation)

• Cash incentive based on key Financial objectives (Group Adj. Ebit, Net Income, Net Cash Flow before dividends) and Sustainability (Eco-Safety Performance¹ Revenues)
• On/off condition: Group Net Cash Flow before dividends
• 25% deferred to the next year

LONG-TERM INCENTIVE PLAN 2020-22 (2/3 of total variable compensation)

• Cash plan based on 3 key objectives: Relative TSR vs. Tier1 peers; 2020-22 Cumulated Group Net Cash Flow before dividends; on-going inclusion in Sustainability Indices (Dow Jones Sustainability World Index ATX Auto Component sector, CDP scoring)
• Rolling plan: every year starting a new 3-year period
• Payment in 2023 and at the end of each 3-year vesting period

1. 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

ALL VARIABLE COMPONENTS ARE CAPPED

NON-COMPETITIVE AGREEMENT

CLAW-BACK CLAUSES KEY MANAGEMENT IN BOTH MBO AND LTI PLANS

SHORT TERM INCENTIVE PLAN OBJECTIVES

>

>

On/off condition: Group Net Cash Flow before dividends

OBJECTIVE	WEIGHT
Group Adjusted EBIT	40%
Group Net Cash Flow1	30%
Net Income	20%
Green performance Revenues	10%

>

Bonus at target level defined as percentage of base salary; pay-out cap is 2,5x bonus at target level, entry level pay-out is 0.75x bonus at target level.

25% of the bonus deferred to the next year and relevant payment subject to the achieving of the STI objectives of the following years, with a reward mechanism in case of achievement of the objectives at least at the target level.

2020-2022 LONG-TERM INCENTIVE PLAN HIGHLIGHTS

> Cash, long-term incentive plan aligned with the 2020-2022 Industrial Plan

> Rolling plan, with 3 objectives with different weights

OBJECTIVE	WEIGHT	VALUE AT TARGET
Relative TSR	40%	Pirelli performance aligned to the average of the peers' performance – Tier 1 (Nokian, Michelin, Continental, Good Year, Bridgestone).
Group Cash Flow1	40%	2020-2022 cumulated Pirelli Cash Flow consistent with the Industrial Plan
Sustainability Index	20%	• Pirelli ranking in Dow Jones Sustainability World Index ATX Auto Component sector (weight 10%); • Pirelli ranking in CDP ranking /weight 10%)

>

>

Bonus at target level defined as percentage of base salary; pay-out cap is 2,6-2,9 bonus at target level, entry level pay-out is 0.75x bonus at target level.

GOVERNANCE 1

• SUSTAINABILITY STRATEGY & TARGETS 2
• FINANCIALS 3

PIRELLI INTEGRATED MODEL

		1
		MULTI-STAKEHOLDER APPROACH
Governance	Management systems	Planning	Reporting2
Board of Directors Board Committee	Quality ISO 9001	Return on capital	Group integrated Annual Report
	IATF 16949 ISO/IEC 17025 Labour and Social		Governance Environmental performance
Sustainability Steering	OHSAS 18001/ISO45001 Standard SA8000® (Reference Std)	Growth Opportunities Productivity Risk Governance
Committee	Environment		Strategy
Group Sustainability and Future Mobility	ISO 14001 ISO 14040 ISO 14064
	Anti-Bribery
	ISO 37001	Competitive scenario analysis: Economic - Environmental
Country Sustainability Managers (CEOs)	Purchasing	Social - Governance	Social Economic
	ISO 204001		performance performance

1. Attested by third party. 2. Using Global Reporting Initiative (GRI –Standards), Comprehensive option; principles of integrated reporting contained in the Framework of the International Integrated Reporting Council (IIRC),

Assurance Engagements, ISAE 3000 – Assurance Engagement on GHG ISAE 3000;

KEY FIGURES & ACHIEVEMENTS 2019

2019

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.

99

PIRELLI ESG LEADERSHIP ACKNOWLEDGED BY THE MARKET

GLOBAL SCENARIOS @2025-2030

OPPORTUNITIES & CHALLENGES MUST MATCH THE GLOBAL JOURNEY TOWARDS UN SDGS

INDUSTRIAL PLAN SUSTAINABILITY LEVERS

STRATEGY & TARGETS @2022-2025-2030:

> Are embedded into Pirelli High Value & Pure Consumer strategy

> Replace previous 2017-2020 Sustainability Plan with selected targets to 2025

> Impact on 11 UN Sustainable Development Goals

PRODUCT SUSTAINABILITY STRATEGY 2022/2025/2030

CIRCULAR ECONOMY (closed loop)

PRODUCT ECO-SAFETY DESIGN

1. Major scope 3 emissions in product LCA (excl. use phase); 2. Renewable Natural Resources are natural resources that, after exploitation, can return to their previous stock levels by natural processes of growth or replenishment. (source: OECD glossary definition at https://stats.oecd.org/glossary/detail.asp?ID=2290 );

3. Excluding recycled metals.

MATERIALS INNOVATION

Anticipating the impact of regulation through actions on Materials associated with Health concerns in cooperation with R&D, HSE, Procurement, Quality and Suppliers.

1. Renewable Natural Resources are natural resources that, after exploitation, can return to their previous stock levels by natural processes of growth or replenishment. (source: OECD glossary definition athttps://stats.oecd.org/glossary/detail.asp?ID=2290 ); 2. Excluding recycled metals. 103

ECO-SAFETY PERFORMANCE INNOVATION

CAR- AVG. TOTAL GAMMA (VS. 2015)
	@2022	@2025
Rolling Resistance	-10%	-14%
Weight	-25%	-30%
Wear rate	-12%	-18%
Noise	-4%	-4%
Wet grip	+7%	+9%

	@2022	@2025
Rolling Resistance	-15%	-20%
Wet grip	+21%	+25%
Mileage	+4%	+13%
VELO- AVG. TOTAL TYRES (VS. 2017)
	@2022	@2025
Rolling Resistance	-25%	-25%
Wet grip	+10%	+15%
Braking	+5%	+10%
Less CO2 emissions

Less rolling resistance
Less noise
Better grip
Less weight

Better living environment

Less impact on natural resources

Higher safety

ECO-SAFETY PRODUCT INNOVATION

PIONEERING THE CONSUMER SPECIALTIES BUSINESS

SHORT TERM DEVELOPMENT ROADMAP TO ACCELERATE CONSUMERS TRANSITION TO FUTURE MOBILITY

NEW AND DISRUPTIVE FEATURES ON:

• Rolling resistance
• Noise
• High load capacity
• Grip
• Connectivity
• Recyclability

ENABLED BY NEW SIMULATOR

• From Formula 1 experience
• Development time for new tyres reduced by 30%
• Number of physical prototypes drastically reduced
• Rapid remodeling
• Maximization of co-development efficiency with car manufacturers

ECO-SAFETY PERFORMANCE¹ REVENUES

• Criteria to categorize the Eco-Safety Performance products: Rolling Resistance and Wet Grip that falls only in A, B, C classes

• Figure calculated by applying the EU-label regulation to all car tyres sold worldwide

1. 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. 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;

3. Focus on HIGH VALUE products including RIM18+ and «specialties» (Run-Flat, PNCS, Seal Inside with rim ≤ 17).

ECO-EFFICIENCY: TOWARDS GROUP CARBON NEUTRALITY

1. Targets adopted by companies to reduce greenhouse gas (GHG) emissions are considered "science-based" if they are in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement – to limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C.

ECO-EFFICIENCY: WATER, WASTE

Towards zero waste to landfill vision Excellence in water management:

Single Use Plastic Free

• All Group premises: elimination of Single Use Plastic by 2021
• Production Process: progressive¹ elimination of Single Use Plastic in the respect of production processes quality preservation
• 1. Timing depends on the market offer of the proper alternatives to SUP directly impacting the production process quality. 108

- 43% SPECIFIC WATER WITHDRAWAL BY 2025 VS 2015

Reduce, Reuse, Recover, Recycle, Replenish (5R Principles)

HUMAN CAPITAL

ORGANIZATION PREPAREDNESS TO EMBRACE FUTURE SCENARIOS ENSURING:

1. Science, Technology, Engineering, Mathematics

109

2. Applied to the generality of Group top management and executives.

SUPPLY CHAIN SUSTAINABILITY

Full compliance of Purchasing Model with ISO 20400 provisions attested¹

>

A MORE EFFICIENT AND SUSTAINABLE SUPPLY CHAIN THANKS TO

V

Pirelli advanced digitalized management systems to monitor and manage suppliers' compliance >

>

Supply chain economic, social, environmental and loss prevention risks fully embedded in Pirelli Enterprise Risk Management

Joint Development partnerships with third competence centers for innovative eco & safe materials >

V

Pirelli target to reduce raw material suppliers³ CO2 absolute emissions by 8,6% in 2025 vs 2018 >

1. Third Party Opinion released in February 2018 by SGS Italy S.p.A; 2. ESG: environmental, social, governance; 3. Major scope 3 emissions in product LCA (excl. use phase); 4. Natural Rubber 110

Pirelli 2019-2021 Sustainable Natural Rubber Roadmap: ON-SITE Engagement, risk mapping and mitigation As of the beginning of 2020:

• 100% of Pirelli purchased NR4 volumes come from suppliers trained on Pirelli Sustainable Natural Rubber Policy
• 95% of Pirelli purchased NR⁴ volumes come from suppliers which confidentially have shared information on sourcing areas
• 100% of Pirelli purchased NR⁴ volumes come from suppliers that defined a roadmap in line with Pirelli Sustainable Natural Rubber Policy

SOUND CYBER SECURITY PROGRAM

A BUSINESS ENABLER TO SECURE CORPORATE OPERATIONS AND DELIVERY OF WELL-PROTECTED BUSINESS SERVICES AND QUALITY PRODUCTS TO PIRELLI CUSTOMERS

1.Operational Technology and Internet of Things

ADVOCACY AND COMMITMENT FOR ROAD SAFETY

Pirelli is Donor and Member of the Advisory Board of the United Nations Road Safety Trust Fund

Goal: provide aid to United Nations' Member States to significantly:

• reduce the number of deaths and injuries caused by traffic accidents
• reduce the economic losses resulting from such accidents

Actions: concrete projects within the Global Plan of the Decade of Action for Road Safety, to improve:

• road safety management capacities
• safety of road infrastructures and broader transport networks
• safety of vehicles
• road users' behavior
• post-crash care

Pirelli is Global Partner of the FIA Action for Road Safety Campaign

Goal: educate road users on the importance of respecting key road safety rules

Actions: promotion of the FIA 'Golden Rules' for road safety through all Pirelli networks

GOVERNANCE 1

SUSTAINABILITY STRATEGY & TARGETS 2

FINANCIALS 3

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 adjusted 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 adjusted 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%	-2.0 pp	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

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 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

KEY CAR MARKET TRENDS: EMEA

Source: Pirelli tyre market estimates based on main data provider for the Region; historical market data may be subject to restatement ¹¹⁵

KEY CAR MARKET TRENDS: NORTH AMERICA

historical market data may be subject to restatement; 1. N. America Replacement includes imports

KEY CAR MARKET TRENDS: ASIA PACIFIC

KEY CAR MARKET TRENDS: RUSSIA & NORDICS / SOUTH AMERICA

RAW MATERIAL COSTS TREND AND MIX

Main raw materials price trend