Pirelli & C. S.p.a. · MIL:PIRC
Pirelli & C — Corporate Update (April 2020)
17 slides from Pirelli & C's corporate update, Apr 3, 2020
Slide 1: Pirelli Measures Against COVID-19 and 2020 Guidance Update
PIRELLI MEASURES AGAINST COVID-19 AND 2020 GUIDANCE UPDATE 03 april 2020
Slide 2: Disclaimer
DISCLAIMER In General. This document, 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
Slide 3: Agenda
AGENDA 1 PIRELLI MEASURES AGAINST COVID-19 2 EXTERNAL SCENARIO EVOLUTION 3 2020 GUIDANCE UPDATE 2
Slide 4: Measures to Protect Human Capital
MEASURES MEASURES TO PROTECT HUMAN CAPITAL AGAINST COVID PIRELLI PREVENTION MEASURES PREVENTION • Company task force in contact with all the Institutions’ crisis units in each country • HSE globally co-ordinating actions based on risk assessment • Policy with 4 risk scenarios for measures to be take
Slide 5: Support to Contrast COVID-19 Emergency
MEASURES SUPPORT TO CONTRAST COVID-19 EMERGENCY AGAINST COVID SOME EXAMPLES CHINA ITALY • 5 Million RMB donated to Coronavirus Relief Efforts • €750,000 for Milan’s L.Sacco Hospital, founded by Pirelli’s through the Yanzhou Charity Federation of Jining city, employees (~€220,000, an amount doubled b
Slide 6: Operations at Manufacturing Facilities
MEASURES OPERATIONS AT MANUFACTURING FACILITIES AGAINST COVID PIRELLI MANUFACTURING FOOTPRINT IN CHINA > Production halted in 2 plants for ~1 month between February and March, now fully operational Velo > Output gradually returning to normal levels IN ALL OTHER REGIONS Moto > Since the Covid outbrea
Slide 7: Pirelli Solid Balance Sheet Confirmed
MEASURES PIRELLI SOLID BALANCE SHEET CONFIRMED AGAINST COVID € million GROSS DEBT MATURITY @ 31.12.2019 GROSS DEBT MATURITY – PRO FORMA @ 31.03.2020 1,811 1,743 can be 1,811 1,743 can be extended to 2024 252 can be 1,450 extended to 2024 252 can be extended to 2022 1,251 extended to 2022 1,145 1,145
Slide 8: Agenda
AGENDA 1 PIRELLI MEASURES AGAINST COVID-19 2 EXTERNAL SCENARIO EVOLUTION 3 2020 GUIDANCE UPDATE 7
Slide 9: Market View on the COVID Outbreak Impact
MARKET VIEW ON THE COVID OUTBREAK IMPACT SCENARIO GLOBAL FY2020E YoY PIRELLI 2020 PLAN CURRENT SCENARIO (19 Feb 2020) (03 Apr. 2020) 2.7% GDP1 -2.8% Car OE -2.4% Tyre market2 ~-21% 0.5% Car Replacement Tyre market2 ~-18% 1. IHS 30th March 2. Pirelli estimates 8
Slide 10: Agenda
AGENDA 1 PIRELLI MEASURES AGAINST COVID-19 2 EXTERNAL SCENARIO EVOLUTION 3 2020 GUIDANCE UPDATE 9
Slide 11: Quarterly Assumptions for New Guidance
QUARTERLY ASSUMPTIONS FOR NEW GUIDANCE GUIDANCE UPDATE QUARTERLY DYNAMICS PIRELLI CAR EXP. VOLUMES • APAC: February and March strongly impacted by Covid (Vol ~–38%), Negative YoY Positive YoY with February ~-80% in China confirmed and ~-50% in March 1Q • EU: market slowdown in Feb, march affected by
Slide 12: 2020 Costs: Additional Cost Measures to Protect Margin
2020 COSTS: ON TOP OF 2020-2022 COMPETITIVENESS PROGRAM GUIDANCE UPDATE ACTIVATED ADDITIONAL COST MEASURES TO PROTECT MARGIN COMPETITIVENESS PROGRAM FULLY ON TRACK NEW ACTIONS TO CONTAIN COSTS - Quick operations slowdown anticipating sales contraction to > limit costs and contain stock > - Review of
Slide 13: 2019 Dividends: No Payment, Right to Evaluate in 2H
2019 DIVIDENDS: NO PAYMENT IN 1H 2019, RIGHT TO EVALUATE GUIDANCE UPDATE IN 2H 2019 In the light of the spread of the pandemic and its potential duration and given the uncertainty surrounding its geographical extent, as well as the slowdown that it could cause on the demand, on the car market and on
Slide 14: Management Compensation: 2020 Actions
MANAGEMENT COMPENSATION: 2020 ACTIONS GUIDANCE UPDATE Short Term Incentives [STI] Compensation Reduction • Executive Vice Chairman & CEO: 50% reduction for 3 months of Gross Annual Fixed Component of remuneration and Board of Directors and Committee’s related fees • 2020 Short Term Incentives cancel
Slide 15: 2020E Deleverage Confirmed Thanks to Solid Cash Flow
2020E DELEVERAGE CONFIRMED THANKS TO A SOLID CASH FLOW GUIDANCE UPDATE AND DIVIDEND WITHDRAW: €230/260 MLN OF NET DEBT REDUCTION Eur / mln ~ 220 ~ 230 / 260 Δ Net Debt ’20 Dividends CapEx Taxes EBITDA Δ NWC Δ Net Debt ’20 Feb guidance withdraw Apr guidance > Investment project reduction in line with
Slide 16: 2020 Targets Update
2020 TARGETS UPDATE @ FEB 19 @ APR 03 GUIDANCE UPDATE € billion 2019 A 2020 E 2020 E Net Sales 5.3 ~ 5.4 ~ 4.3 – 4.4 Tot. Vol.: ~-18% / -20% • High Value: ~-14% • Standard: ~-26% adj. EBIT 0.9 ~ flat YoY margin 17.2% 14.0% – 15.0% CapEx 0.39 ~ 0.3 ~ 0.13 Net Cash Flow bef. Dividends 0.33 ~ 0.4 ~ 0.2
Slide 17: Slide 17