Pirelli & C — Investor Presentation 2022

Feb 23, 2022

FY 2021 preliminary unaudited results

February 23rd, 2022

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 subsidiary 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.

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The forward-looking statements does not take into account any additional negative effects that may arise from impacts on the global market in which Pirelli operates and more generally on the macroeconomic scenario, also following (i) any further governmental measures related to the eventual new waves of spreading of the virus COVID-19 (SARS-CoV-2) and (i) the worsening of the crisis in Ukraine and the consequent conflict between NATO and Russia.

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.

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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.

Miscellanea. This Presentation has been prepared on a voluntary basis. Pirelli is therefore not bound to prepare similar presentations in the future, unless where provided by law.

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 n order to release their report. The 2021 final results will be approved by the Board of Directors scheduled on the 17th of March 2022 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.

Giorgio Luca Bruno, 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 unaudited non-IFRS financial measures derived from the Financial Statements, and (iii) are not an alternative to financial measures prepared in accordance with IFRS.

The APIs presented herein are EBIT, EBIT margin, EBITDA, EBITDA margin, net income and net income 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, EBIT adjusted and net income adjusted. In order to facilitate the understanding of our financial position and financial performance, this Presentation contains other performance measures, such as Net Financial Position, Operating Cash Flow, Net Cash Flow before Dividends and extraordinary Operations, Net Cash Flow before Dividends, Net Cash Flow, CapEx (Capital Expenditure), Liquidity Margin and ROIC (Return On Invested Capital).

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.

Agenda

Key Messages

> FY 2021 Results supported by:

• Strong commercial performance (market share gain on ≥18", Top Industry price/mix)
• Competitiveness plan delivery
• Efficient working capital management

> 2022 scenario impacted by high volatility

• Sound GDP growth with some downside risks:
• Inflation and supply shortages
• Geopolitical tension may have impact on input costs (e.g. energy and oil)
• Demand for Car Tyre ≥18" growing high-single-digit in both channels, ~4x vs. ≤17"
• Positive pricing environment to mitigate increasing raw mat. and inflation

> Pirelli strategy & 2022 targets

• Strategy implementation in line with Industrial Plan, seizing market opportunities (e.g. ≥19" and EV)
• Quickly reacting to the external scenario:
• efficiencies and price/mix will more than cover raw mat, inflation and FX
• dynamic contingency planning on Russia-Ukraine crisis
• Targeting top line increase, margin expansion and deleverage through a solid NCF

FY'21 results above company targets …

€ billion	2021 E (target Mar-21)	2021 E (guidance Nov-21)	2021 A
Net Sales H.V. volumes Price/mix	~4.7 ÷ ~4.8 ~+15% ÷ +17% ~+2.5% ÷ +3%	~5.1 ÷ ~5.15 ~+17% ÷ +18% ~+7%	5.33 +20.2% +9.1%
adj. EBIT margin	>14% ÷	~15% ÷	15.3%
Δ YoY	~15%	~15.5%	+3.7pp
CapEx	~0.33	~0.33	0.35
% of Sales	~7%	~6.5%	6.5%
Net Cash Flow bef. Dividends	~0.30 ÷	~0.39 ÷	0.43
% of Sales	~0.34	~0.41	8.1%
Net Financial Position	~3.0	<3.0	2.91
NFP / adj. EBITDA	~2.7x	≤2.6x	2.40x
ROIC1 post taxes	~16%	≥16%	17.6%

… thanks to the full commitment of all our teams …

… and our strong focus on Sustainability

Science Based Target Initiative in line with "2° scenario"

2021 MAIN ACHIEVEMENTS

• 100% of electricity sourced in Europe is renewable
• FIA's 3 star Environmental Accreditation obtained – first and only tyre maker
• First ever FSC⁴ certified tyre produced
• Three-year Partnership with BMW and BirdLife International to protect Biodiversity and Communities in natural rubber production areas (Indonesia)

LEADING POSITIONS IN ESG INDEXES & INITIATIVES

5 FY 2021 prel. unaudited results 1. RR: Rolling Resistance, WG: Wet Grip, focus on new labelled IPcode; 2. IP codes: Identification Product Codes, extra EU labelling scales are converted to EU labelling grades; 3. reference tyre: 235/45R18 98W XL P7-CNT (VOL) IP29146, in 2020 the total % of renewable & recycled (incl. metals) raw materials used by the group was respectively 19% and 4%; 4. reference tyre: 285/45R21 113W XL S-ZERO(MO1) IP 28143, in 2021 the total % of renewable & recycled (incl. metals) raw materials used by the group was respectively 22% and 4%; 5. official target 3% excl. Metals; 6. figure including both share from direct procurement and national electric grid mix based on IEA data; 7. target approved by the Science Based Target Initiative in line with "well below 2° scenario"; 8. Target approved by the

requested to SBTi

Agenda

FY / 4Q 2021 Car tyre market and Pirelli performance

Pirelli outperforming H.V. market in FY'21 & 4Q, while rebalancing Standard exposure in 4Q

Industrial Plan delivery well on track in 2021 with strong commercial performance

	Industrial Plan Targets 2021	FY MAIN ACHIEVEMENTS	Δ vs. Ind. Plan
Commercial	Capture H.V. rebound & gain share: • Pirelli Car ≥18" +18% YoY, +4pp vs. market Growing exposure to higher rims and technologies: • ≥19" weight = 64% • Elect volumes ~4X vs. FY 20	• Car ≥18" Vol. +23% (+8 pp vs. market) weight = 66% (+3pp YoY)1 • ≥19" ; • Elect volumes ~6x vs. FY'20 levels
Innovation	Homologations in ≥19" : ~85% Speeding-up product pipeline, with focus on 6 Regional lines	• ~85% homologations ≥19" • 6 new lines to meet different regional consumer needs + 2 product uplift
Competitiveness	Wave 2 program: €155M gross savings in FY'21 (4% of '20 baseline), €80M net	• €155M gross savings • €70M net, due to inflation upsurge	~ Higher inflation
Operations	Completion of footprint rationalization Volumes ramp-up to full saturation (~90%)	• Restructuring manufacturing footprint completed • Capacity utilization confirmed at 90%

1. Weight on Car ≥18";

2021 Commercial program delivery

Overperformance vs. market, driven by ≥19" and Specialties

2021 Innovation program delivery (1/2)

Strengthening our High Value positioning …

310 New Homologations

Homologation portfolio further improved with Premium and Prestige brands and extended to new EV players (Lucid, Rivian, Tesla, Rimac)

Securing future pull-through H.V. volumes Gaining share in Replacement market

6 Product launches

2021 Innovation program delivery (2/2)

…while enhancing our product sustainability

New labelled products are strongly focused on top grade of energy efficiency and safety (A/B¹ ) >

	2020	2021	2025E
Rolling Resistance	39%	49%	>70%
Wet Grip	87%	87%	>90%

Avg. RR on total car product range: -1pp vs. 2020, -10.3% vs. 2015

Eco & Safety Performance Revenues²

Focusing on Eco & Safety Performance Eco is also : Strengthening materials innovation

Concept tyres (supplied for the Volvo Recharging Concept) maximizing the use of renewable and recycling materials:

achieving 94% of non fossil materials as RHA silica, bio-resin, recycled carbon black. >

Renewable Materials: adoption of rice husk ash silica (RHA silica)

> replacing silica from quartz-sand in several plants and products, reducing CO² emission (over 90% vs. traditional silica)

Eco is also : Leading on safety while reducing Wear Particles

• proactive engagement with the tyre industry, Institutions and stakeholders to characterize the topic >
• acceleration on virtualization, investments & measurements in real driving conditions to quickly advance on Pirelli performances >
• new Pirelli product lines launched in 2021 already featuring a wear rate improvement up to 30% vs previous generation >

11 FY 2021 prel. unaudited results 1. extra EU labelling scales are converted to EU labelling grades; 2. Car tyres which fall exclusively into classes A, B, C for rolling resistance and wet grip, standardized according to the European labelling parameters;

Competitiveness program progress

FY'21 gross efficiencies fully on track with Industrial Plan; higher inflation vs. Mar-21 forecasts

	Wave 1	Wave 2
	FY'20 A	focusing on:	FY'21 Ind. Plan	FY'21 A
Product Cost		 Modularity  Design speed and virtualization
Manufacturing		 Footprint optimization  Industrial IOT and flexible factory
SG&A		 Logistics network redesign and service differentiation  Procurement rationalization
Organization		 Digital Processes and Organization transformation
Total Gross Impact	~€160M		~€155M	 ~€155M
as % of baseline	~3.5% of baseline '19		~4.0% of baseline '20	~4.0% of baseline '20
Inflation	-€50M		~-€70M	-€85M	+€10M vs. Plan, mainly on
Total Net Impact as % of baseline	~€110M ~2.5% of baseline '19		~€80M ~2.1% of baseline '20	~ ~€70M ~1.8% of baseline '20	Logistics & Energy (~50% each)

12 FY 2021 prel. unaudited results

2021 Operations program delivery

Completion of footprint rationalization and volumes ramp-up to full saturation

Manufacturing footprints highlights

> Rationalization completed in 2021:

• Bollate (IT) converted into Cycling plant
• Burton (UK) reorganized (semi-finished prod.)
• Closure of Gravatai (BR) and shift of Moto production to Campinas

> 15 Car plants (17 in 2019) with a clear mission:

• 75% High Value
• 20% Standard (Russia, Brazil, China) and
• > High Local for Local supply: avg. ~85% of regional sales
• Sustainable industrial footprint: >
• 100% renewable electricity¹ in EU in 2021, consistent with longterm targets (100% WW by 2025; carbon neutrality by 2030)

Car capacity & saturation trend

FY'21 Sales supported by strong commercial performance

Record 4Q price/mix, driven by price increases and solid mix improvement

FY / 4Q 2021 adjusted EBIT bridge Profitability: Internal levers more than offsetting increasing external headwinds

FY 2021 Net Income bridge

Earnings driven mainly by improving operating performance

FY'21 Net Financial Position

Cash flow trend supported by a sound operating performance and Working Capital Management

€ million

Total Gross Debt structure as of December 31st 2021

Cost of debt trend in line with Plan assumption and discounting COVID outbreak. On 21-Feb-22, signed a new €1.6B 5Y ESG bank loan to refinance June 2022 maturities and replace expiring Committed Lines not drawn

Agenda

Macro Outlook 2022 assumption

Sound GDP growth with some downside risks: Inflation, supply shortages and geopolitical tension

20 FY 2021 prel. unaudited results Source: Pirelli Insight GDP and inflation growth estimates based on third party data (World GDP at purchasing power parities)

2022 Global Car Tyre market outlook

High Value market well above Industrial Plan assumptions and growing ~4X the Standard market

Main highlights

>

• > O.E. ≥18": ~+9% YoY in 2022; pent up demand is driven by progressive normalization of chip supply
• Repl. ≥18": ~+7% YoY in 2022, driven by car parc "premiumization" with positive impact of car parc moving towards higher rims and progressive restocking along the supply chain

> Car ≤17" in 2022:

• O.E. ~+5% YoY, still affected by semi-conductor shortage, as OEMs prioritize high-end models
• Repl. ~+1.5% YoY, discounting a weaker demand due to car parc "premiumization"

2022 Global Car High Value Tyre market outlook

≥19" and EV growing above Ind. Plan expectations, reflecting a better Car production / parc mix

22 FY 2021 prel. unaudited results Source: Company estimates based on third party and associations of tyre producers market data; 1. 100% BEV only vehicle

Pirelli Strategy implementation in 2022

In line with Industrial Plan, but quickly reacting to the external scenario: seizing opportunities and offsetting headwinds

main programs	on-going in line with Mar-21 Ind. Plan	new / strengthened initiatives
Commercial	Focus on the growing and more resilient H.V. market > > Lowering exposure to Standard Expanding distribution network, consistently with > Replacement strategy	More selective approach on O.E. >
Innovation	Expanding homologation portfolio > > Product renewal (+10 new Regional lines)	Increasing weight in ≥19" (~90%), Specialties > (~50%) mainly EV > Increasing local for local supply
Competitiveness	> Progressing on Wave 2 efficiencies plan (€150M gross efficiencies)	> Inflation on the rise (>2X vs. Ind. Plan HP) to be offset by efficiencies and price increases
Operations	> Increasing High Value capacity (+2M pcs @ 53M pcs, ~72% of total capacity) > Further improving capacity saturation (>90%)

Pirelli FY 2022 targets

	2021 A	2022 E
€ billion
Net Sales	5.33	~5.6 ÷ ~5.7	• Volumes ~+1.5% ÷ ~+2.5% High Value ~+6%÷~+7% 
adj. EBIT margin	15.3%	~16% ÷ ~16.5%	 Standard ~-4%÷~-3% • Price/mix ~+5.5% ÷ ~+6.5% • Forex ~-2% ÷ ~-1.5%
CapEx (% of Sales)	0.35 (6.5%)	~0.39 (~7%)
Net Cash Flow bef. Dividends	0.43	~0.45 ÷ ~0.48
Net Financial Position NFP / adj. EBITDA	2.91 2.40x	~2.6 ≤2.0x
ROIC1 Post taxes	17.6%	≥19%

Russian-Ukraine crisis preliminary sensitivity: reaching guidance floor assuming Oil and Energy at current peak² for next 3 quarters and direct impact on local operations

Agenda

Pirelli leading position in Sustainability rankings & initiatives

Major ratings (Feb-22)
		last update	score	positioning in the reference sector = leading the ranking or initiative
		2021	77	ATX Auto Components
		2022	Gold class	Max score
		2021	A	Max score
		2021	AA	6% of the Auto comp. companies in AA
		2021	4.5 / 5	Auto & Parts / Tyres
		2021	LEAD	Max score
		2021	10.4	Auto Components
		2021	Platinum	n.a.
		2021	69	Auto Components (PI #1 / 78)

Source: third party official rankings

Key Car Market Trends: Europe

Key Car Market Trends: North America

28 FY 2021 prel. unaudited results 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

Key Car Market Trends: Russia, Nordics, MEAI / South America

30 FY 2021 prel. unaudited results 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

Pirelli results highlights by quarter

€ million
	1Q'20	1Q'21	Δ YoY	2Q'20	2Q'21	Δ YoY	3Q'20	3Q'21	Δ YoY	4Q'20	4Q'21	Δ YoY	FY'20	FY'21	Δ YoY
Revenues	1,052	1,245	+18.4%	765	1,320	+72.6%	1,277	1,414	+10.7%	1,208	1,352	+11.9%	4,302	5,331	+23.9%
Organic Growth1			+24.5%			+73.9%			+10.5%			+9.0%			+24.8%
% High Value on Group	69.6%	72.6%	+3.0 pp	72.4%	71.2%	-1.2pp	71.8%	70.5%	-1.3pp	68.4%	69.2%	+0.8pp	70.4%	70.9%	+0.5pp
adj. EBITDA2	244	267	+9.1%	24	307	n.m.	309	320	+3.5%	315	317	+0.4%	893	1,211	+35.6%
Margin	23.2%	21.4%	-1.8 pp	3.1%	23.3%	+20.2pp	24.2%	22.6%	-1.6pp	26.1%	23.4%	-2.7pp	20.7%	22.7%	+2.0pp
adj. EBIT3	141	169	+19.6%	(74)	209	n.m.	214	221	+3.6%	221	217	-1.7%	501	816	+62.8%
Margin	13.4%	13.6%	+0.2 pp	-9.7%	15.8%	+25.5pp	16.7%	15.7%	-1.0pp	18.3%	16.0%	-2.3pp	11.6%	15.3%	+3.7pp
PPA amortization	(29)	(28)		(29)	(28)		(29)	(28)		(29)	(28)		(115)	(114)
Non recur. & restr. costs	(24)	(43)		(42)	(29)		(33)	(15)		(69)	(38)		(168)	(125)
EBIT	88	97		(145)	151		152	178		124	151		219	577
Margin	8.4%	7.8%		-19.0%	11.5%		11.9%	12.6%		10.2%	11.2%		5.1%	10.8%
Results from Equity Inv.	(5)	(0)		1	2		(1)	(0)		1	2		(5)	4
Fin. Income (Charges)	(33)	(40)		(41)	(32)		(40)	(35)		(43)	(37)		(156)	(144)
EBT	51	57		(185)	122		111	142		81	116		57	437
Tax Rate	24.0%	26.4%		n.m.	26.4%		24.2%	26.4%		25.4%	26.3%		25.6%	26.4%
Net Income	39	42		(140)	89		84	105		61	85		43	322
Net Income adjusted3	76	94		(90)	130		129	136		130	109		246	469

31 FY 2021 prel. unaudited results 1. Excl. FX; 2. before non-recurring items & restructuring costs; 3. before amortization of PPA, non-recurring items & restructuring costs; 3. calculated by adjusting Net Income (Loss) for EBIT adjustments, net financial expenses and taxes

Pirelli Group Cash Flow by quarter

€ million

1Q'20	1Q'21	2Q'20	2Q'21	3Q'20	3Q'21	4Q'20	4Q'21	FY'20	FY'21
141	169	(74)	209	214	221	221	217	501	816
103	98	98	99	96	99	95	100	391	395
(57)	(90)	(25)	(63)	(25)	(61)	(34)	(132)	(140)	(346)
(23)	(27)	(24)	(23)	(15)	(10)	(6)	(63)	(69)	(122)
(861)	(717)	132	73	(173)	(62)	810	757	(93)	51
(697)	(567)	107	295	97	188	1,085	878	591	794
(33)	(40)	(41)	(32)	(40)	(35)	(43)	(37)	(156)	(144)
(31)	(37)	(22)	(35)	(16)	(27)	(21)	(27)	(91)	(126)
(21)	(29)	(28)	(40)	(42)	(33)	(28)	(19)	(119)	(122)
28	16	(20)	(15)	15	11	(7)	13	16	25
(754)	(657)	(4)	173	12	104	987	808	241	427
-	4	-	-	-	-	2 8	-	2 8	4
(754)	(654)	(4)	173	12	104	994	808	249	431
-	-	-	(79)	-	(1)	-	-	-	(80)
(754)	(654)	(4)	93	12	104	994	808	249	351

Raw Material costs trend and mix

main raw materials price trend

Pirelli FY 2021 mix (based on purchasing cost)

Pirelli manufacturing footprint

1. 49% Joint Venture with the Hixih Group