Slide 1: Pirelli 9M 2013 Results
PIRELLI 9M 2013 RESULTS MILANO – NOVEMBER 5, 2013
Slide 2: Agenda
AGENDA 9M 2013 RESULTS TYRE BUSINESS 9M 2013 OVERVIEW 2013 OUTLOOK & TARGETS APPENDIX 9M13 RESULTS 1
Slide 3: Pirelli Key Financial Results
PIRELLI KEY FINANCIAL RESULTS 9M13 9M12* Δ yoy 3Q13 3Q12* Δ yoy 3Q HIGHLIGHTS Revenues 4,649.9 4,574.1 +1.7% 1,518.8 1,552.3 -2.2% • Solid organic growth sustained Organic growth** +8.3% +7.7% by the strong premium performance (+19% volumes) EBITDA before Restr. Costs 813.4 817.9 -0.6% 279.9 267.6 +
Slide 4: 9M 2013 Performance by Region
9M 2013 PERFORMANCE BY REGION TYRE SALES CONSUMER SALES O/W Premium INDUSTRIAL SALES TYRE EBIT MARGIN €/Mln 4,625.8 +1.8% yoy 3,378.6 +1% yoy 1,675.3 +3.9% yoy 1,247.2 +4.3% yoy 13.0% (-0.7 pp) Double-digit Europe 33% -5% 39% -5% Europe (Improving in Q3 51% -2% yoy and QoQ) 15% -6% Mature Markets Mi
Slide 5: Net Income 9M 2013 vs 9M 2012
PIRELLI NET INCOME 9M 2013 VS 9M 2012 Financial charges (18.0) One – off FX impact (17.0) Prelios financial Income (10.3) 303.3 (19.1) 15.7 258.1 3.5 (45.3) Net Income Δ EBIT Δ Results Financial ΔTaxes Net Income 9M 12 from particip. Income / Charges 9M 13 9M13 RESULTS 4
Slide 6: Debt Structure as of September 30, 2013
PIRELLI DEBT STRUCTURE AS OF SEPTEMBER 30, 2013 NET FINANCIAL POSITION GROSS DEBT MATURITY €/Mln 2,525.2 554.3 Fin. Receivables 388 Committed 135.7 152 Line 630.0 418.6 Drawdown 840 236 614 Debt Capital 1,970.9 Market 766.1 Cash & Cash 782 575 Equivalent 226 630 Other 152 1,129.1 Borrowings 154 361
Slide 7: 9M 2013 Net Financial Position
PIRELLI 9M 2013 NET FINANCIAL POSITION €/Mln EBIT before restr. costs 208.8 Dep / Am: 71.1 EBIT before restr. costs 388.1 Investments*: (74.3) Dep / Am: 145.4 NWC & other: (160.3) Investments*: (164.0) NWC & other: (498.0) 192.9 1,970.9 1,732.6 94.4 4.2 1,756.7 21.3 159.8 12.7 20.1 (45.3) (29.2)
Slide 8: Tyre Business 9M 2013 Overview
AGENDA 9M 2013 RESULTS TYRE BUSINESS 9M 2013 OVERVIEW 2013 OUTLOOK & TARGETS APPENDIX 9M13 RESULTS 7
Slide 9: Key Tyre Results
KEY TYRE RESULTS 1Q’13 yoy% 2Q’13 yoy% 3Q’13 yoy% 9M’13 yoy% €/Mln Revenues 1,526.7 -1.0% 1,587.3 +8.9% 1,511.8 -2.0% 4,625.8 +1.8% EBITDA before Restr. Costs 260.1 -8.3% 282.7 +2.0% 284.7 +4.3% 827.5 -0.7% Margin 17.0% -1.4 p.p. 17.8% -1.2 p.p. 18.8% +1.1 p.p. 17.9% -0.5 p.p. EBIT before Restr. Cos
Slide 10: Tyre Operating Performance
PIRELLI TYRE OPERATING PERFORMANCE Settimo torinese transformation -3.5 Depreciation -8.4 Start-up cost -0.7 Others -13.7 42.2 29.6 25.7 15.1 202.1 (39.3) (11.1) (4.2) (8.2) 207.0 (22.2) (3.9) (18.8) EBIT 3Q ‘12* Volume Price / Mix Raw Other Input Efficiencies Slowdown Other Marketing Depreciation R
Slide 11: Consumer Business: Pirelli Performance
CONSUMER BUSINESS: PIRELLI PERFORMANCE 1Q’13 yoy% 2Q’13 yoy% 3Q’13 yoy% 9M’13 yoy% 3Q HIGHLIGHTS €/Mln Revenues 1,116.7 -3.0% 1,138.7 +5.6% 1,123.2 +0.6% 3,378.6 +0.9% • Sound operating performance led to a quarter EBITDA before Restr. Costs 194.8 -17.2% 203.5 -5.2% 211.9 +0.9% 610.2 -7.6% on quarte
Slide 12: Industrial Business: Pirelli Performance
INDUSTRIAL BUSINESS: PIRELLI PERFORMANCE 1Q’13 yoy% 2Q’13 yoy% 3Q’13 yoy% 9M’13 yoy% 3Q HIGHLIGHTS €/Mln Revenues 410.0 +4.9% 448.6 +18.2% 388.6 -8.7% 1,247.2 +4.3% • Peak profitability of the year: >14% EBITmargin EBITDA before Restr. Costs 65.3 +35.5% 79.2 +26.7% 72.8 +15.9% 217.3 +25.2% Margin 15
Slide 13: 2013 Outlook & Targets
AGENDA 9M 2013 RESULTS TYRE BUSINESS 9M 2013 OVERVIEW 2013 OUTLOOK & TARGETS APPENDIX 9M13 RESULTS 12
Slide 14: 2013 Outlook by Region
2013 OUTLOOK BY REGION NEW GUIDANCE OLD GUIDANCE New Guidance Highlights HIGHLIGHTS AUGUST'13 NOVEMBER'13 November ‘13 Region Revenue trend EBIT% Revenue trend EBIT% Europe • Slight reduction • High single-digit Confirmed Confirmed Positive sign of demand (lower yoy) recovery Almost flat • Low singl
Slide 15: Russia: Drop in Demand Leads to Guidance Revision
RUSSIA: DROP IN DEMAND LEADS TO GUIDANCE REVISION MARKET UPDATE TYRE REPLACEMENT MARKET yoy yoy Mln pcs* € Mln 38.3 +2% 35.9 -4% 1,943 -0,3% -9,8% 1,763 26% +11% 21% -13% 41% +3% 35% -19% A brand A brand 32% +4% 35% +3% 35% -1% 39% -2% B brand B brand 42% -3% 44% -4% 24% -5% 26% -6% C brand C brand
Slide 16: 2013 Targets Update
PIRELLI 2013 TARGETS UPDATE 2013 TARGETS 2013 TARGETS AUGUST ‘13 yoy% UPDATE yoy% €/Mln Revenues 6.3 / 6.35 > +4% ~6.2 >+2% Volumes ~ +5.5% / ~ +6.5% +6% / +6.5% Emerging markets High single-digit Confirmed Mature markets ~ flat Confirmed Premium >13% Confirmed Price/mix ~ +3.5% / ~ +4% +3% / +3.5%
Slide 17: 2013 Consumer & Industrial Targets
2013 CONSUMER & INDUSTRIAL TARGETS CONSUMER BUSINESS INDUSTRIAL BUSINESS 2013 Targets 2013 Targets 2013 Targets 2013 Targets August ‘13 November ‘13 August ‘13 November ‘13 Revenues ~ 4.6 ~ 4.5 Revenues ~ 1.7 < 1.7 Volumes +4.5% / +5.5% +5% / +5.5% Volumes +9% +9%+9.5% o/w Premium >13% Confirmed Pri
Slide 18: 2013 Raw Materials Guidance
2013 RAW MATERIALS GUIDANCE BREAKDOWN FY 2012 GUIDANCE AUGUST 2013 Update Nov 2013 (based on purchase cost) Average Cost of Δ yoy Δ yoy Goods Sold 2012A 2013 2013 (2013 vs 2012) (2013 vs 2012) €/Mln Natural Rubber TSR20 ($/ton) 3,450 ~ 2,700 +150 ~ 2,700 +150 Synthetic Rubber 31% Brent Oil Natural R
Slide 19: Appendix
AGENDA 9M 2013 RESULTS TYRE BUSINESS 9M 2013 OVERVIEW 2013 OUTLOOK & TARGETS APPENDIX 9M13 RESULTS 18
Slide 20: Group – 9M Results
PIRELLI GROUP – 9M 13 RESULTS Profit & Loss and Net Financial Position by Business Unit PIRELLI TYRE OTHER PIRELLI & C. CONS. 9M 13 9M 12 9M 13 9M 12 9M 13 9M 12 €/Mln SALES 4,625.8 4,542.9 24.1 31.2 4,649.9 4,574.1 EBITDA before Restr. Costs 827.5 833.7 (14.1) (15.8) 813.4 817.9 %on sales 17.9% 18.
Slide 21: Group – Q3 Results
PIRELLI GROUP – Q3 13 RESULTS Profit & Loss and Net Financial Position by Business Unit PIRELLI TYRE OTHER PIRELLI & C. CONS. Q3 13 Q3 12 Q3 13 Q3 12 Q3 13 Q3 12 €/Mln SALES 1,511.8 1,542.6 7.0 9.7 1,518.8 1,552.3 EBITDA before Restr. Costs 284.7 272.9 (4.8) (5.3) 279.9 267.6 %on sales 18.8% 17.7% 1
Slide 22: Balance Sheet
PIRELLI BALANCE SHEET 9M 13 FY12 €/Mln FIXED ASSETS 4,002.5 3,877.2 Inventories 1,052.9 1,102.6 Trade receivables 1,057.3 704.6 Trade payables (1,005.8) (1,268.7) NET OPERATING WORKING CAPITAL 1,104.4 538.5 Other payables/receivables 13.6 11.0 Net Working Capital 1,118.0 549.5 NET INVESTED CAPITAL 5
Slide 23: Group Cash Flow
PIRELLI GROUP CASH FLOW 3Q’12 4Q’12 1Q’13 2Q’13 3Q’13 9M 13 €/Mln EBIT before restructuring costs 199.2 212.6 183.0 205.1 208.8 596.9 Depreciation / Amortization 68.4 72.4 72.3 73.1 71.1 216.5 Net investments (132.5) (143.5) (79.7) (84.3) (74.3) (238.3) Working capital / other variations (197.2) 594
Slide 24: Consumer Business: Key Market Trends
CONSUMER BUSINESS: KEY MARKET TRENDS 3Q’12 4Q’12 1Q’13 2Q’13 3Q’13 9M 13 % yoy +3% 0% Europe OE -9% -11% -9% -2% +3% +5% REPLACEMENT -1% -11% -13% -11% +16% +10% +5% +4% +1% +6% America OE North REPLACEMENT -7% -3% -7% -3% 0% -3% +22% +14% +8% +11% +3% +4% Mercosur OE +17% +11% +11% +5% +6% REPLACEM
Slide 25: Industrial Business: Key Market Trends
INDUSTRIAL BUSINESS: KEY MARKET TRENDS 3Q’12 4Q’12 1Q’13 2Q’13 3Q’13 9M 13 % yoy +2% +7% +1% OE Europe -8% -10% -6% +12% +9% +8% +1% REPLACEMENT -1% -10% +44% +51% +42% +33% OE Mercosur -28% -31% +12% +16% +8% +12% +3% REPLACEMENT 0% +40% China OE -7% -6% -19% (*)Turkey included and Russia excluded
Slide 26: 9M 2013 Pirelli Tyre Mix
9M 2013 PIRELLI TYRE MIX SALES BY BUSINESS SALES BY SEGMENT Consumer Car 73% 66% Motorbike 7% Industrial Truck Steelcord & other 27% 26% 1% SALES BY CHANNEL SALES BY REGION Replacement South America NAFTA 75% 36% 11% Asia Pacific 8% MEA 8% Russia OE Europe 4% 25% 33% 9M13 RESULTS 25
Slide 27: September 2013 Pirelli People
SEPTEMBER 2013 PIRELLI PEOPLE HEADCOUNT PEOPLE BY REGION NAFTA 38.133 South America 3% 37.338 37% Asia Pacific 9% MEAI 10% Russia Europe Dec. 2012 Sept. 2013 9% 32% PEOPLE BY CONTRACT PEOPLE BY CLUSTER Management Temps & Agency 1% 8% Permanents Workers 92% Staff 80% 19% 9M13 RESULTS 26
Slide 28: Plants in the World
PIRELLI PLANTS IN THE WORLD U.S.A. U.K. ITALIA GERMANY RUSSIA Rome Car Burton Car Bollate Car Breuberg Car/Moto Kirov Car Carlisle Car Settimo Torinese Car Merzig Steelcord Voronezh Car Figline Valdarno Steelcord MEXICO ROMANIA Guanajuato Car Slatina Car / Steelcord VENEZUELA CHINA Guacara Car Yanzh
Slide 29: Raw Materials
RAW MATERIALS RAW MATERIAL PRICE TREND Brent Oil (in usd/bbl) Natural Rubber: Sicom Natural Rubber (in usd/tons) Brent: www.oilnergy.com Yearly Average 4,519 3,380 3,156 111.0 108.7 98.5 111.7 2,586 2,531 80.2 75.2 1,801 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q
Slide 30: Disclaimer
DISCLAIMER This presentation contains statements that constitute forward-looking statements based on Pirelli & C SpA’s current expectations and projections about future events and does not constitute an offer or solicitation for the sale, purchase or acquisition of securities of any of the companies