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Pirelli & C Investor Presentation 2024
4052_ip_2024-08-01_c2f0efba-3e46-40f6-9267-055ddb32cf17.pdf
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March 6th, 2024
1H 2024 Financial Results
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
FY 2023 Financial Results Milan August 1st, 2024
| 2 PIRELLI & C. – 1H 2024 RESULTS |
||
|---|---|---|
| ---------------------------------------- | -- | -- |
| 3 | FY 2024 OUTLOOK AND TARGETS |
|---|---|
| --- | ----------------------------- |
| 4 | APPENDIX |
|---|---|
| --- | ---------- |
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
KEY MESSAGES
1H'24 Results in line with FY targets and confirming the effectiveness of our strategy
- Market share gain in ≥18'' both in OE and Replacement
- Strong price/mix (+2.8% yoy in 1H, +3.3% in 2Q) due to product and region mix enhancement
- Profitability improvement driven by internal levers, with efficiencies fully covering inflation
- Better net cash flow before dividends thanks to sound operating performance
FY 2024 market outlook and targets
- Global economic outlook broadly unchanged
- High Value growth confirmed, while a weaker Standard weighs on Total Car Tyre Market (flat yoy vs previous ~+1%)
- Adj. EBIT margin upgrade to the upper end of the guidance, supported by better-than-expected price/mix trend
- Industrial plan delivery on track and all other targets confirmed
1H 2024 results highlights: Pirelli's strategy is paying off with solid performance
Net Income Net Financial Position
Sustainability Plan: update on key initiatives development
| Area | Focus | KPIs | 2023A | 2025E | 2030E | 1H'24 PROGRESS | |
|---|---|---|---|---|---|---|---|
| PEOPLE | Towards zero accidents at work |
Accident Frequency Index (calculated X 1.000.000 hours worked) |
1 .69(5) If calculated x 200,000 hours worked data is: 0,34 |
~1(5) If calculated x 200,000 hours worked data is: ~0,2 |
<1(5) If calculated x 200,000 hours worked data is: <0,2 |
• Accident Frequency Index reduction: -35% vs 1H'23 • Skills development core of Pirelli Manufacturing Excellence (PME) initiative launched |
|
| 2030: Carbon Neutrality Scope 1+2 | |||||||
| CO2 Scope 1+2 (plants) |
-45%(4) | -60% | -80% | • Progress in line with best expectations: |
|||
| TOWARDS NET ZERO |
Reduce CO 2 footprint |
vs 2018 | CO2 Scope 3 (suppliers) |
-25%(4) | -27% | -30% | (2) − CO emissions scopes 1+2: -18% vs 1H'23 2 − Suppliers representing 60% of Scope 3 raw materials |
| 2040 | Renewable electricity | 80.4%(3) | 100% | 2040: NET ZERO |
CO emission provided Life Cycle Assessment 2 |
||
| ≥-90% vs 2018 Scope 1+2+3 |
− Procured Renewable Electricity: up to 90% by 2024 |
||||||
| Improve Rolling Resistance with no |
Target scope: new products |
RR(1) = A/B |
55% | >70% | • NEW PZero Winter2 for BMW 7 series: the first winter car tyre "class A" in rolling resistance |
||
| compromise on safety |
(all new labelled IPCodes) |
WG(1) = A/B |
98% | >90% | |||
| TYRE | • Pirelli Tyres with FSC® Certified Natural Rubber(7) |
||||||
| ECO & SAFETY PERFORMANCE |
Increase the % of renewable & recycled materials |
Target scope: selected products |
Biobased & Recycled | (6) 55.5% |
>70% | >80% | − Pirelli & JLR signed supply agreement − PZero TLR RS: first ever bicycle tyre with FSC-certified natural rubber |
| while reducing fossils |
Target scope: all production |
Biobased & Recycled | 23% | >27% | >40% | − All F1 Tyres with certified natural rubber |
|
| NATURE | Freshwater preservation |
vs 2015 | Specific water withdrawal | -45% | -43% | -60% Previous Plan Target @2025 outperformed in 2023 |
1H'23(2) • Water withdrawal: -15% vs |
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
(1) RR: Rolling Resistance, WG: Wet Grip, focus on new labelled IPcode; (2) 12-months rolling basis; (3) Internal assessment based on data from the International Energy Agency (IEA) taking into account the geographical distribution of Pirelli ; (4) 2023 data calculated in accordance with new SBTI submission rules; 5. Accident Frequency Index: ∑(Fatalities + Serious lost time injuries + Lost time injuries ) x 1.000.000 worked hours; if calculated x 200.000 worked hours: 2023 data is 0,34, 2025 target is ~0,2 and 2030 target is <0,2; (6). PZeroE IPcode 4286500 - 235/45R18; (7) FSC® N003618. Complete Plan areas and Targets are available at Pirelli |2023 Results and Industrial Plan Update 2024-2025
4
| 2 | PIRELLI & C. – 1H 2024 RESULTS |
|---|---|
| --- | ----------------------------------- |
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
| 3 | FY 2024 OUTLOOK AND TARGETS |
|---|---|
| --- | ----------------------------- |
| 4 | APPENDIX |
|---|---|
| --- | ---------- |
1H 2024 Strategic programs: delivery in line with targets
| COMMERCIAL | Seizing regional HV growth opportunities | Car ≥18'' Total +7% vs +6% Mkt, Repl. +10% vs +9% Mkt Car ≥19" Total +9% vs +8% Mkt Repl. +12% vs +11% Mkt |
|---|---|---|
| INNOVATION | Widening our OE portfolio New products launched |
~150 new car homologations (~90% ≥19'', ~60% EV) with EV portfolio reaching ~700 homologations worldwide 6 new Car products launched, 1 global and 5 regional |
| OPERATIONS | Increasing efficiencies Enhancing Value Chain resilience |
€71M gross savings fully offsetting inflation Mitigating Red Sea crisis impact Getting ready for EUDR |
Commercial Program: Keep gaining market share in ≥18", while further reducing exposure to ≤17''
Innovation Program: Advancing on Eco-Safety Design Products and Sustainable Materials
New P Zero Winter 2
- First Winter Tyre with "A class" EU labelling for Rolling Resistance with BMW Fitment
-
50% of bio-based & recycled materials on Elect range
Extended battery range of BMW i7 up to 50km Uncompromised comfort
Outstanding performance in winter conditions
Pirelli's unique FSC strategy
FSC® certification confirms that forest-based products are managed preserving biological diversity, while benefiting the lives of local people and workers
Pirelli tyres with FSC®-certified natural rubber
Innovation Program: Cyber Tyre, getting into a new level
The sensors, connected via Bluetooth to the ECU1 , supply useful data so that the car can select the optimal driving mode to match the tyres, acting on:
Traction control
ABS2
ESP3
Lateral Dynamics
This dialogue between the car and tyres is made possible thanks to Pirelli's proprietary software, which works directly with the car's electronic 'brain'.
Efficiency program: offsetting inflation and in line with the expectations and seasonality
| Focusing on: | FY 2024 GUI | 1H 2024 ACT | |
|---|---|---|---|
| Product Cost | Modularity Design speed and virtualization |
~65% of FY | |
| Manufacturing | Energy consumption & electrification Automation, industrial IoT & flexible factory Waste reduction |
~20% of FY, in line with expected seasonality |
|
| SG&A | Logistics & Go-to-Market G&A belt tightening Procurement rationalization |
~70% of FY | |
| Organization | Process digitalization Organization transformation |
~55% of FY | |
| Total Gross Impact | ~€140M | ~€71M ~50% of FY |
1H 2024 Sales: solid organic growth supported by the strong commercial performance
1H 2024 Adjusted EBIT: profitability improvement driven by commercial performance & efficiencies
1H 2024 Net Income: earnings discounting non-cash impact in 1Q, already normalizing in 2Q
€ million
- 1H'24 Financial Income and Expenses for a total -€176M including -€69M non-cash impact linked to forex and hyperinflation
- Taxes: lower than 1H'23 due also to Patent Box benefits (not included in 1H'23)
1H'24 Net Financial Position: Better Net Cash Flow before div. thanks to sound operating performance
- Inventory at ~ 21%, unchanged vs 1Q'24 and discounting Red Sea impact
- Receivables (14% of net sales) and Payables (23% of net sales) in line with business seasonality
- Hevea-tec acquisition closed at the beginning of January 2024
Gross Debt structure as of June 30th 2024
Pirelli upgraded to BBB (stable outlook) by Fitch; S&P confirmed rating at BBB-, improving outlook to positive. Liquidity margin covers debt maturities until 1Q'27 (1Q'28 considering July bond issuance). € million
| 3 | FY 2024 OUTLOOK AND TARGETS |
|---|---|
| 4 APPENDIX |
|---|
| --------------- |
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
Car Tyre demand outlook update
Mid-single digit growth confirmed for ≥18'', while demand for ≤17'' weakening in key Standard regions
- O.E. ≥18": mid single-digit growth, mainly driven by APAC
- Repl. ≥18'': mid/high single digit growth, driven by all High Value regions
- Car ≤17": Softer demand year over year, with a weaker OE market and a slightly lower Replacement in major Standard Regions
Pirelli volume guidance confirmed: we expect to outgrow the Car ≥18'' market, while keeping on reducing our exposure in Standard.
Targets update: a better mix will lead to the upper end of the profitability guidance range
| 2023 A | 2024 E | ||||
|---|---|---|---|---|---|
| € billion | (March 2024 Guidance) | (August 2024 Guidance) | |||
| Net Sales | 6.65 | 6.6 ÷ 6.8 |
confirmed | Volumes: +1.5% ÷ +2.5% (confirmed) P / Mix: +2.0% ÷ +2.5% (old ~+2.0%) |
|
| adj. EBIT margin | 15.1% | >15% ÷ 15.5% |
~ 15.5% | FX: -4.0% ÷ -3.0% (confirmed) |
|
| CapEx | 0.41 | ~0.40 | confirmed | ||
| % of Sales | 6.1% | ~6% | |||
| Net Cash Flow bef. Dividends |
0.51 | 0.50 ÷ 0.52 |
confirmed | ||
| Net Financial Position | 2.26 | ~1.95 | confirmed | ||
| NFP / adj. EBITDA | 1.56x | 1.32x ÷ 1.26x |
|||
| ROIC1 after taxes |
20.3% | ~21% | confirmed |
| 3 | FY 2024 OUTLOOK AND TARGETS |
|---|---|
| 4 APPENDIX |
|
|---|---|
| --------------- | -- |
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
Key Car Market Trends: Europe
Key Car Market Trends: North America
Source: Pirelli tyre market estimates based on main data provider for the Region; historical market data may be subject to restatement due to realignment of sources 1. N. America Replacement includes imports
Key Car Market Trends: Asia Pacific
-4
0
-2
Key Car Market Trends: Russia, MEAI / South America
Source: Pirelli tyre market estimates based on main data provider for the Region; historical market data may be subject to restatement due to realignment of sources 1. South America Replacement restated to include Brazilian imports
Economic results summary
| EMARKE SDIR |
|---|
| CERTIFIED |
| € million | 2Q 2024 | 2Q 2023 | ∆ YoY | 1H 2024 | 1H 2023 | ∆ YoY |
|---|---|---|---|---|---|---|
| Net Sales | 1,752.0 | 1,737.8 | +0.8% | 3,447.5 | 3,437.5 | +0.3% |
| Organic variation | +4.5% | +4.6% | ||||
| EBITDA1 adjusted |
392.0 | 379.4 | +3.3% | 768.3 | 739.1 | +4.0% |
| % of net sales | 22.4% | 21.8% | +0.6 p.p. |
22.3% | 21.5% | +0.8 p.p. |
| reported EBITDA | 384.1 | 367.9 | +4.4% | 752.7 | 718.6 | +4.7% |
| % of net sales | 21.9% | 21.2% | +0.7 p.p. | 21.8% | 20.9% | +0.9 p.p. |
| EBIT1 adjusted |
276.5 | 269.3 | +2.7% | 539.1 | 517.4 | +4.2% |
| % of net sales |
15.8% | 15.5% | +0.3 p.p. | 15.6% | 15.1% | +0.5 p.p. |
| reported EBIT | 240.1 | 229.3 | +4.7% | 466.6 | 440.0 | 6.0% |
| % of net sales | 13.7% | 13.2% | +0.5 p.p. | 13.5% | 12.8% | +0.7 p.p. |
| Net income / (loss) from equity investments |
9.9 | 3.9 | n.m. | 15.9 | 6.2 | n.m. |
| Financial income / (expenses) |
(66.0) | (54.7) | +20.7% | (176.1) | (106.9) | +64.7% |
| EBT | 184.0 | 178.5 | +3.1% | 306.4 | 339.3 | -9.7% |
| Taxes | (53.1) | (50.9) | +4.3% | (75.1) | (96.7) | -22.3% |
| Tax rate % | -28.9% | -28.5% | -24.5% | -28.5% | ||
| Net Income / (loss) | 130.9 | 127.6 | +2.6% | 231.3 | 242.6 | -4.7% |
| Earnings / (loss) per share (€ per share) |
0.13 | 0.12 | 0.22 | 0.23 | ||
| Net income / (loss) adjusted | 156.8 | 156.4 | 283.0 | 298.3 |
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
1 Adjustments refers to one-off, non recurring and restructuring expenses to the amount of €15.6M (€20.5M in 1H 2023). With reference only to EBIT, amortization of intangible assets recognized as a 24 consequence of Business Combinations amounting to €56.9M (€56.9M in 1H 2023).
Consolidated Balance Sheet
| EMARKET SDIR |
|---|
| CERTIFIED |
| € million | 30/06/2024 | 31/12/2023 | 30/06/2023 |
|---|---|---|---|
| Fixed assets | 8,748.0 | 8,812.1 | 8,821.7 |
| Inventories | 1,417.7 | 1,371.4 | 1,418.7 |
| Trade receivables |
937.3 | 649.4 | 895.1 |
| Trade payables | (1,499.1) | (1,999.4) | (1,405.1) |
| Operating net working capital |
855.9 | 21.4 | 908.7 |
| % of net sales* | 12.9% | 0.3% | 13.3% |
| Other receivables / payables |
114.6 | 45.8 | (101.7) |
| Net working capital | 970.5 | 67.2 | 807.0 |
| % of net sales* | 14.6% | 1.0% | 11.8% |
| Total net invested capital | 9,718.5 | 8,879.3 | 9,628.7 |
| Equity | 5,713.3 | 5,619.6 | 5,455.6 |
| Provisions | 1,027.2 | 998.0 | 1,085.6 |
| Net financial position | 2,978.0 | 2,261.7 | 3,087.5 |
| Total financing and shareholders' equity | 9,718.5 | 8,879.3 | 9,628.7 |
| Attributable net equity | 5,572.1 | 5,494.4 | 5,335.4 |
| Total net financial debt1 | 3.098,6 | 2,387.4 | 3,226.8 |
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
1, Total net financial debt = net financial position excluding non-current financial receivables and non-current derivative financial instruments
Net Cash Flow
| € million | 2Q 2024 | 2Q 2023 | 1H 2024 | 1H 2023 |
|---|---|---|---|---|
| Adjusted Operating income (EBIT) | 276.5 | 269.3 | 539.1 | 517.4 |
| Amortiz. & depreciations (excl. PPA amortiz.) |
115.5 | 110.1 | 229.2 | 221.7 |
| Investments in tangible and intangible assets (Capex) |
(90.2) | (70.3) | (143.6) | (123.5) |
| Increase in right of use | (26.1) | (26.5) | (41.4) | (41.6) |
| Change in working capital/other |
(16.9) | (6.8) | (862.7) | (875.6) |
| Operating Cash Flow |
258.8 | 275.8 | (279.4) | (301.6) |
| Interests paid | (45.7) | (58.1) | (108.9) | (118.3) |
| Taxes paid |
(44.8) | (32.3) | (69.5) | (61.3) |
| Cash -out for non recurring items and restructuring costs / other |
(9.5) | (10.2) | (29.9) | (22.8) |
| Dividend paid to minorities | (5.2) | (3.9) | (6.5) | (3.9) |
| Exchange rates difference/other | 0.1 | (14.8) | (2.5) | (27.0) |
| Net Cash Flow before extr. oper. / equity transactions / divid |
153.7 | 156.5 | (496.7) | (534.9) |
| Extraordinary operations | 0.5 | - | (22.5) | - |
| Net Cash Flow before dividends | 154.2 | 156.5 | (519.2) | (534.9) |
| Dividends paid by Parent |
(197.1) | - | (197.1) | - |
| Net Cash Flow | (42.9) | 156.5 | (716.3) | (534.9) |
Net Financial Position Detail
| € million | 30/06/2024 | 31/12/2023 |
|---|---|---|
| Current borrowings from banks and other financial institutions | 1,185.6 | 789.5 |
| - of which lease liabilities |
102.7 | 99.1 |
| Current derivative financial instruments | 11.5 | 18.2 |
| Non-current borrowings from banks and other financial institutions | 2,963.7 | 3,174.7 |
| - of which lease liabilities |
365.5 | 383.4 |
| Non-current derivative financial instruments | - | - |
| Total gross debt | 4,160.8 | 3,982.4 |
| Cash and cash equivalents | (716.2) | (1,252.8) |
| Other financial assets at fair value through income statement |
(174.5) | (228.8) |
| Current financial receivables | (127.8) | (106.1) |
| Current derivative financial instruments | (43.7) | (7.3) |
| Total net financial debt | 3,098.6 | 2,387.4 |
| Non-current derivative financial instruments | (14.6) | (12.9) |
| Non-current financial receivables | (106.0) | (112.8) |
| Total net financial position | 2,978.0 | 2,261.7 |
Net Income Adjusted detail
| EMARKET SDIR |
|---|
| CERTIFIED |
| € million | 2Q 2024 | 2Q 2023 | 1H 2024 |
1H 2023 |
|---|---|---|---|---|
| Net income | 130.9 | 127.6 | 231.3 | 242.6 |
| Amortization from PPA |
28.5 | 28.5 | 56.9 | 56.9 |
| Non recurring items and restructuring costs |
7.9 | 11.5 | 15.6 | 20.5 |
| Taxes impact | (10.5) | (11.2) | (20.8) | (21.7) |
| Net income adjusted |
156.8 | 156.4 | 283.0 | 298.3 |
Total Gross Debt Structure
| € million | Total gross debt structure at June 30, 2024 |
||||||
|---|---|---|---|---|---|---|---|
| Within 1 year |
Between 1 & 2 years |
Between 2 & 3 years |
Between 3 & 4 years |
Between 4 & 5 years |
Beyond 5 years |
Total | |
| Bilateral borrowing EUR 400 mln. ESG 2021 3y | 399.8 | - | - | - | - | - | 399.8 |
| Club Deal EUR 800 mln. ESG 2020 5y | 399.5 | - | - | - | - | - | 399.5 |
| Schuldshein | - | 20.0 | - | - | - | - | 20.0 |
| Convertible bond | - | 485.1 | - | - | - | - | 485.1 |
| Bilateral borrowing EUR 300 mln. ESG 2023 2.5y | - | 299.6 | - | - | - | - | 299.6 |
| Club Deal EUR 1.6 bln. ESG 2022 5y | - | - | 598.5 | - | - | - | 598.5 |
| Bond SLB EUR 600 mln. 4.25% due 01/28 | - | - | - | 595.3 | - | - | 595.3 |
| Club Deal EUR 600 mln. ESG 2024 4.5y | - | - | - | - | 597.7 | - | 597.7 |
| Bank debt held by subsidiaries | 206.0 | - | 1.7 | - | - | - | 207.7 |
| Other financial indebtedness | 89.3 | 0.1 | - | - | - | - | 89.4 |
| Lease liabilities |
102.7 | 84.4 | 67.6 | 58.5 | 44.8 | 110.2 | 468.2 |
| Total gross debt |
1,197.3 | 889.2 | 667.8 | 653.8 | 642.5 | 110.2 | 4,160.8 |
| % on total gross debt | 28.8% | 21.4% | 16.1% | 15.7% | 15.4% | 2.6% | |
| Non-utilised credit facilities Liquidity position |
1,500.0 716.2 |
||||||
| Other fin. assets at fair value through inc. statem. |
174.5 | ||||||
| Liquidity margin | 2,390.7 |
2024-2025 targets
| Financial targets | 2023 A | 2024 E (August '24 update) |
2025 E |
|---|---|---|---|
| Billion € | |||
| Revenues | 6.65 | 6.6 ÷ 6.8 |
6.8 ÷ 7.0 |
| Adj. EBIT margin % revenue |
~15.1% | ~15.5% (old target: >15.0% ÷ ~15.5%) |
~16% |
| Net Cash Flow bef. Dividends |
0.51 | 0.50 ÷ 0.52 |
0.55 ÷ 0.57 |
| Net Financial Position NFP / adj. EBITDA |
2.26 1.56x |
~1.95 1.32x ÷ 1.26x |
~1.6 ~1.0x |
| 2025 Dividend Policy: 50% payout ratio (vs 40% in 2021 Industrial Plan) | |||
| Sustainability targets | |||
| People Safety1 Accident frequency index |
1.7 | ~1 | |
| Scope 1+2 emissions2 vs 2018 |
-45% | -60% | |
| Scope 3 emissions2 vs 2018 |
-25% | -27% | |
| Bio-based and Recycled Materials on best product |
55% | >70% |
30
ESG Indices: a globally acknowledged sustainability leadership
| Major rankings | Last update | Score | Positioning in the reference sector |
|---|---|---|---|
| 2024 | 82 | Top score ATX - Auto Components and Automotive |
|
| 2024 | TOP 1% ESG | The only tyre maker in Top1% |
|
| 2023 | A | A LIST – Max score |
|
| 2024 | A | A LIST– Max score Supplier Engagement Leaders |
|
| 2024 | B | Prime status and Top score Auto Components |
|
| 2024 | AA | ESG Leader Category | |
| SUSTAINALYTICS | 2024 | 9.9 | Negligible risk; Awarded both Industry and Region Top Rating |
| 2023 | Platinum | Top 1% |
PIRELLI 1H 2024 RESULTS Thursday, 1 August, 2024
Raw material costs trend and mix
Main raw materials price trend
Pirelli H1 2024 mix based on purchasing cost
raw mat. Costs on sales
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.
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 forwardlooking statements are later shown to be in error.
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 the worsening of the crisis in Ukraine and in the Gaza Region.
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.
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.
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.
Fabio Bocchio, 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.
