Slide 1: 9M 2010 Results
PIRELLI 9M 2010 RESULTS
Slide 2: 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
Slide 3: Agenda
AGENDA Pirelli & C Financial Review Pirelli Tyre Appendix 2
Slide 4: Key Financial Results
PIRELLI KEY FINANCIAL RESULTS €/mln 9M’09 3Q’09 9M’10 D YoY 3Q’10 D YoY 3Q results key drivers restated* restated* Revenues 3,703.4 3,114.7 +18.9% 1,276.9 1,088.5 +17.3% Double digit growth driven Organic growth (**) +15.6% +13.3% by Tyre business EBITDA before Restruct. Costs 483.1 361.2 +33.7% 17
Slide 5: EBIT Trend
PIRELLI EBIT TREND €/mln Organic EBIT: 38.7 13.9 116.2 10.4 27.2 0.5 0.6 2010 63.6 3Q3Q2010 Eco Broadband Other Restruct. 3Q’09 Tyre Tech access activities Costs 3Q’10 Organic EBIT: 111.5 2.5 15.7 309.6 105.9 3.7 (0.6) 182.4 9M2010 Eco Broadband Other Restruct. 9M’09 Tyre Tech access activities
Slide 6: Net Income from Continuing Operations 9M'10 vs 9M'09
PIRELLI NET INCOME FROM CONTINUING OPERATIONS 9M’10 VS 9M’09 127.2 19.2 1.2 164.1 (33.5) 50 EBIT Results financial taxes 9M’09 9M’10 from particip. income/charges 5
Slide 7: 9M'10 Net Financial Position
PIRELLI 9M’10 NET FINANCIAL POSITION €/mln 617 Net of Pirelli RE EBIT before restr. costs 201.3 Dep/Am: 105.8 Capex: (135.5) D NWC & others: (116.0) 85.1 696.9 26.5 704.9 54.9 7.4 (17.4) 20.5 44.4 108.6 (34.9) (63.4) 528.8 EBIT before restr. costs 120.7 Dep/Am: 55.3 Capex: (91.8) (55.6) D NWC & othe
Slide 8: Debt Structure as of September 30, 2010
PIRELLI DEBT STRUCTURE AS OF SEPTEMBER 30, 2010 Net Financial Position net of Pirelli RE Gross Debt Maturity €/mln 266 1,207 590 90 551 Committed Line 405 Drawdown 405 617 146 135 Other Borrowings 802 165 Gross Fin. Net Fin. Debt Assets* position Gross Debt maturity as of Sep. 30, 2010 13.7% 11.2% 4
Slide 9: Agenda
AGENDA Pirelli & C Financial Review Pirelli Tyre Appendix 8
Slide 10: Tyre Performance
PIRELLI TYRE PERFORMANCE 1Q’10 YoY% 2Q’10 YoY% 3Q’10 YoY% 9M’10 YoY% €/mln Revenues 1,110.0 +19.8% 1,215.3 +22.9% 1,233.8 +18.3% 3,559.1 +20.3% High value operating EBITDA (before 146.4 +35.8% 177.5 +33.5% 173.0 +21.8% 496.9 +29.8% performance: restruct. costs) margin 13.2% +1.6 p.p. 14.6% +1.2 p.
Slide 11: Tyre 9M'10 Operating Performance
PIRELLI TYRE 9M’10 OPERATING PERFORMANCE €/mln 5.2 107.3 2.7 121.5 14.4 94.3 (91.1) (11.3) 3Q 2010 Raw materials: (76.4) Labour / energy / other: (14.7) EBIT 3Q’09 Price Volume Cost of Efficiencies Depreciation/ Exchange EBIT 3Q’10 mix inputs other costs rate (before (before restr. costs) restr.co
Slide 12: Tyre NFP Evolution
PIRELLI TYRE NFP EVOLUTION €/mln EBIT (before restr. costs): 225.2 EBIT (before restr. costs): 121.5 Investments: (132.1) Investments: (88.1) Depreciation: 98.7 Depreciation: 51.5 Δ NWC & others: (95.2) Δ NWC & others: (9.9) 156.0 1,212.9 9.3 1,205.0 (11.6) 50.8 7.0 30.5 1,027.3 107.3 (75.0)
Slide 13: Consumer Business: Key Market Trends
CONSUMER BUSINESS: KEY MARKET TRENDS Car tyre shipments. % (yoy) 3Q‘09 4Q‘09 1Q’10 2Q’10 3Q’10 9M’10 +37% +12% +11% +15% Europe* OE -2% -12% +12% +10% +11% +6% +9% +1% Replacement +73% +74% +54% +26% North America +2% OE -22% +3% +8% +8% +8% +5% Replacement +0% +44% +25% +12% +11% +15% Mercosur OE -
Slide 14: Consumer Business: Pirelli Performance
CONSUMER BUSINESS: PIRELLI PERFORMANCE €/mln 2Q’10 YoY% 3Q’10 YoY% 9M’10 YoY% 1Q’10 YoY% Revenues 780.9 +16.5% 835.8 +19.1% 847.1 +15.1% 2,463.8 +16.9% EBITDA (before 106.0 +37.0% 122.4 +35.4% 118.9 +18.5% 347.3 +29.5% restruct. costs) Targeted value margin 13.6% +2.1 p.p. 14.6% +1.7 p.p. 14.0% +0.
Slide 15: Industrial Business: Key Market Trends
INDUSTRIAL BUSINESS: KEY MARKET TRENDS Car tyre shipments, 3Q‘09 4Q‘09 1Q‘10 2Q‘09 3Q’10 9M’10 +84% +67% +46% +1% Europe* OE -66% -50% +38% +19% +15% +22% +12% Replacement -14% +65% +61% +58% +49% Mercosur +3% OE -32% +23% +26% +19% +23% +23% Replacement -10% * Turkey and Russia included Sources: ma
Slide 16: Industrial Business: Pirelli Performance
INDUSTRIAL BUSINESS: PIRELLI PERFORMANCE €/mln 1Q’10 YoY% 2Q’10 YoY% 3Q’10 YoY% 9M’10 YoY% Revenues 329.1 +28.4% 379.5 +32.0% 386.7 +26.1% 1,095.3 +28.8% Sales growth in the more profitable EBITDA (before 40.4 +32.9% 55.1 +29.3% 54.1 +29.7% 149.6 +30.4% restruct. costs) markets margin 12.3% +0.4 p.
Slide 17: Agenda
AGENDA Pirelli & C Financial Review Pirelli Tyre Appendix 16
Slide 18: Group – 9M'10 Results
PIRELLI GROUP – 9M’10 RESULTS* Profit & Loss and Net Financial Position by Business Unit €/mln Pirelli Pirelli Tyre Eco Technology Broadband Access Others Pirelli & C. Cons. 9M’10 9M’09 9M’10 9M 9M’09 ’09 9M’10 9M 9M’09 ’09 9M’10 9M’09 9M’10 9M’09 (restated) (restated) Sales 3,559.1 2,958.6 46.6 38.
Slide 19: Group – 9M'10 Results
PIRELLI GROUP – 9M’10 RESULTS* Profit & Loss and Net Financial Position by Business Unit Pirelli Ambiente PZero Other Total Others 9M’09 9M’09 9M’09 9M’09 9M’09 9M’10 9M’09 9M’09 9M’10 9M’09 9M’10 (restated) (restated) 9M’10 (restated) (restated) Sales 4.3 2.7 6.5 4.4 1.8 7.1 12.6 14.2 ∆% 59.3% 47.7
Slide 20: Group – 3Q'10 Results
3Q’09 3Q’09 (restated) (restated) PIRELLI GROUP – 3Q’10 RESULTS* Profit & Loss and Net Financial Position by Business Unit €/mln Pirelli Pirelli Tyre Eco Technology Broadband Access Others Pirelli & C. Cons. 3Q’10 9M 3Q’09 3Q’09 3Q’10 3Q’09 3Q’09 ’09 9M’09 3Q’10 3Q’09 3Q’10 (restated) 3Q’10 (restate
Slide 21: Group – 3Q'10 Results
PIRELLI GROUP – 3Q’10 RESULTS* Profit & Loss and Net Financial Position by Business Unit €/mln PZero Pirelli Ambiente Other Total Others 9M’09 9M’09 3Q’09 3Q’09 9M 3Q’100.73Q’09 ’09 9M 3Q’103.0 2.23Q’09 ’09 3Q’10 0.6 2.1(restated) (restated) 3Q’10 4.3 5.0 (restated) (restated) Sales 0.7 0.7 3.0 2.2
Slide 22: Balance Sheet
PIRELLI BALANCE SHEET 9M’09 (restated) €/mln 9M’10 0.6 2.1 FY’09 0.6 2.1 % Net Invested Capital Fixed Assets 2,986.2 2,938.9 9M ‘10 FY’09 Net Working Capital 107.7 106.9 Net Invested Capital continuing operations 3,093.9 3,045.8 P.Tyre 76.7% 65.6% Net Invested capital Pirelli Real Estate 587.6 772.2
Slide 23: Group Cash Flow
PIRELLI GROUP CASH FLOW €/mln 1Q’10 2Q’10 3Q’10 9M’10 EBIT before restructuring costs 90.4 110.9 120.7 322.0 Depreciation 51.8 54.0 55.3 161.1 Net investments (50.1) (85.4) (91.8) (227.3) Working capital/other variations (156.7) 40.7 (20.8) (136.8) OPERATING CASH FLOW (64.6) 120.2 63.4 119.0 Financi
Slide 24: Group: Net Financial Position 9M'10 by Business
PIRELLI GROUP: NET FINANCIAL POSITION 9M’10 BY BUSINESS €/mln Tyre Other business Other Pirelli Group Sep. 10 Jun. 10 Dec. 09 Sep. 10 Jun. 10 Dec. 09 Sep. 10 Jun. 10 Dec. 09 Sep. 10 Jun. 10 Dec. 09 Gross Debt 1,650 1,779 1,553 83 101 101 138 277 276 1,207 1,299 1,407 to Corporate 565 738 411 75 65 7
Slide 25: 9M'10 Pirelli Tyre Mix
9M’10 PIRELLI TYRE MIX SALES BY BUSINESS SALES BY SEGMENT Car Consumer 61% 70% Motorbike 9% Steelcord & others Industrial 30% Truck 2% 28% SALES BY CHANNEL SALES BY REGION Replacement North America 75% Latin 9% Asia Pacific America 6% 35% MEA 10% OE Europe 25% 40% 24
Slide 26: 9M'10 Pirelli Tyre People
9M’10 PIRELLI TYRE PEOPLE HEADCOUNT PEOPLE BY REGION 29,118 North America Latin America 1% 27,481 43% Asia Pacific 8% MEA 11% Europe Dec . ‘09 Sep. ‘10 37% PEOPLE BY CONTRACT PEOPLE BY CLUSTER Permanent 90% Workers 82% Employees 17% Temps & Agency Management 10% 1% 25
Slide 27: Raw Materials
RAW MATERIALS 3Q 2010 MIX RAW MATERIALS PRICE TREND (Based on purchasing cost) 220 Synth. Rubber 200 25% Natural Rubber (+3pp yoy) 180 30% 160 (+6pp yoy) Carbon black 140 12% (-2pp yoy) 120 100 Chemicals 80 Steelcord 15% 60 8% (-3pp yoy) Textiles 40 (flat yoy) 10% QI/07 QII/07 QIII/07QIV/07 QI/08 QI
Slide 28: Tyre: Industrial Plants in Countries (as of Sep. 2010)
PIRELLI TYRE: 19 INDUSTRIAL PLANTS IN 11 COUNTRIES (AS OF SEP. 2010) Italy Bollate (MI) Car Settimo Torinese Car/Truck Germany U.K. Figline Valdarno Steelcord Breuberg Car/Moto Merzig Steelcord Burton Car Carlisle Car Turkey Izmit Car/Truck Steelcord U.S.A Rome Car Romania Slatina Car/Steelcord Vene