Pirelli & C. S.p.a. · MIL:PIRC
Pirelli & C — Pirelli & C Spa Azioni — Q3 2024 Earnings Presentation
29 slides from Pirelli & C's earnings presentation, Nov 7, 2024
Slide 1: Pirelli 9M 2024 Financial Results
9M 2024 Milan Financial Results November 7th, 2024 FY 2023 Financial Results PIRELLI 9M 2024 RESULTS Thursday, 7 November, 2024 March 6th, 2024
Slide 2: Agenda
Agenda 1 9M 2024 KEY MESSAGES 2 PIRELLI & C. – 9M 2024 RESULTS 3 FY 2024 OUTLOOK AND TARGETS 4 APPENDIX PIRELLI 9M 2024 RESULTS 1 Thursday, 7 November, 2024
Slide 3: Key Messages
KEY MESSAGES Solid 9M Results in line with FY targets, proving the strength of our business model ▪ High Value outperformance confirmed in both OE and Replacement ▪ Strong Price/mix (+2.7% in 9M) driven by product mix enhancement ▪ Profitability improvement supported by internal levers ▪ Positive ca
Slide 4: Agenda
Agenda 1 9M 2024 KEY MESSAGES 2 PIRELLI & C. – 9M 2024 RESULTS 3 FY 2024 OUTLOOK AND TARGETS 4 APPENDIX PIRELLI 9M 2024 RESULTS 3 Thursday, 7 November, 2024
Slide 5: 9M 2024 results: confirming the strength of our strategy
9M 2024 results: confirming the strength of our strategy Net Sales Adjusted EBIT1 € million € million +0.5% +4.3% 5,160 5,185 783 816 +4.9% STD organic growth H.V. 74% 76% 9M’23 9M’24 9M’23 9M’24 margin 15.2% 15.7% Net Income Net Financial Position € million € million incl. +40M€ 2020-22 Patent box
Slide 6: 9M 2024 Strategic programs: delivery in line with targets
9M 2024 Strategic programs: delivery in line with targets Car ≥18’’ (OE+Repl): +7% in 9M vs +5% Mkt +7% in 3Q vs +3% Mkt COMMERCIAL Seizing regional HV growth opportunities Securing HV leadership in China, through a balanced exposure to Chinese and International Premium OEMs ~230 new car homologatio
Slide 7: Commercial Program: Pirelli outperforming market, driven by HV
Commercial Program: Pirelli outperforming market, driven by HV TOTAL CAR ≥18” 3Q HIGHLIGHTS Market Pirelli 3Q24 9M24 3Q24 9M24 2% 7% 7% MARKET TOTAL 2% 5% 1% 3% ▪ Softer trend due a general weak OE demand (-3% 0% in 3Q, -1% in 9M) and lower Std. (total -1% in 3Q’24, flat in 9M) ▪ HV overperformance
Slide 8: Commercial Program: Pirelli is securing its leadership in HV in China
Commercial Program: Pirelli is securing its leadership in HV in China We balanced our HV exposure to Chinese Premium EV carmakers … …with a differentiated strategy % on Pirelli China OE volumes (100% HV) Leading Chinese Premium Exploiting market growth opportunities (especially EV carmakers in ≥ 20’
Slide 9: Innovation Program: product range renewal in 3Q 2024
Innovation Program: product range renewal in 3Q 2024 Continuous upgrade of our Regional product lines to meet local customers' needs The smart choice for everyday mobility • The All-Season Tyre for Premium and Prestige SUVs High quality standards for Safety & Comfort • High Mileage and Comfort Sipes
Slide 10: Innovation Program: JDA Pirelli – Bosch bringing tyres in the data era
Innovation Program: JDA Pirelli – Bosch bringing tyres in the data era First step for a long-term collaboration on Cyber Tyre The cooperation will combine… …with the aim of: INCREASING OPTIMIZING IMPROVING • Cyber Tyre technologies • Vehicle dynamics solutions DRIVER’S + VEHICLE + DRIVING • Algorith
Slide 11: Efficiency program: offsetting inflation
Efficiency program: offsetting inflation and in line with the expectations and seasonality Focusing on: FY 2024 GUI 9M 2024 ACT Modularity Product Cost ~90% of FY Design speed and virtualization Energy consumption & electrification ~50% of FY, in line with Manufacturing Automation, industrial IoT &
Slide 12: Sustainability Plan: SBTi validates Pirelli 2040 Net Zero Target
Sustainability Plan: SBTi validates Pirelli 2040 Net Zero Target Pirelli’s decarbonization plan confirmed as the most challenging in the tyre industry 2030 Carbon Neutrality on SCOPE 3 scope 1+2 emissions; strong SUPPLIER EMISSIONS emission abatement managed in alignment with ISO 14068 SCOPE 1+2 -25
Slide 13: 9M 2024 Sales
9M 2024 Sales Solid organic growth supported by strong volumes and mix improvement € million +2.2% +2.7% +4.9% -4.4% +0.5% 5,160 5,412 5,184 114 139 (228) STD H.V. 74% 76% 9M’23 Δ Volumes Δ Price/mix Organic Growth Δ Forex 9M’24 3Q’24 +3.0% +2.5% +5.5% -4.7% +0.8% 2Q’24 +1.2% +3.3% +4.5% -3.7% +0.8%
Slide 14: 9M/3Q Adjusted EBIT
9M/3Q Adjusted EBIT Margin expansion driven by strong commercial performance. Price/mix & efficiencies offsetting external headwinds € million Net impact +40 Net impact +41 Net impact -1 783 91 20 (71) 108 (109) 816 45 (18) (33) 9M Commodities +53 FX -33 R&D / mktg. Exp. -23 Stock & Others -10 margi
Slide 15: 9M 2024 Net Income
9M 2024 Net Income Earnings trend reflecting different dynamics: non-cash impact in 1Q’24 and Patent-box benefits in 9M’23 € million incl. +40M€ 2020-22 Patent box benefits 411 33 6 14 (75) 371 (18) 9M’23 Δ adj. EBIT Δ non recurr. / Δ Net Income / Δ Financial Δ Taxes 9M’24 restr. costs loss from equ
Slide 16: 9M 2024 Net Financial Position
9M 2024 Net Financial Position Better Net Cash Flow before dividends thanks to sound operating performance Net Cash Flow (before dividends): -357 (-368 in 9M’23) 2,816 Operating Cash Flow: +33 (-31 in 9M’23) 198 118 92 2,262 180 799 Main delta: (1,157) Hevea Tec consolid. ~ 22M 89 Non Recurring / Re
Slide 17: Gross Debt structure as of September 30th 2024
Gross Debt structure as of September 30th 2024 New Eur 600 mln sustainability-linked bond aligned with Pirelli Sustainability Targets validated by SBTi. Liquidity margin covers debt maturities until 4Q’28. € million Net Financial Position Gross Debt maturity 4,024 (1,208) Liquidity position 1,235 Lo
Slide 18: Agenda
Agenda 1 9M 2024 KEY MESSAGES 2 PIRELLI & C. – 9M 2024 RESULTS 3 FY 2024 OUTLOOK AND TARGETS 4 APPENDIX PIRELLI 9M 2024 RESULTS 17 Thursday, 7 November, 2024
Slide 19: Car Tyre demand outlook confirmed
Car Tyre demand outlook confirmed Mid-single digit growth confirmed for ≥18'', while demand for ≤17'' still weak in key Standard regions Global car tyre market ~flat ~+6% mid-single O.E. ≥18”: low single-digit growth, mainly driven by APAC ≥18" digit Repl. ≥18’’: mid-single digit growth, driven by a
Slide 20: FY 2024 Targets confirmed
FY 2024 Targets confirmed 2023 A 2024 E € billion (Nov 2024 Guidance) Volumes: ~+2% Net Sales 6.65 ~6.7 (old guid.:+1.5% ÷ +2.5%) P / Mix: ~+2.5% (old guid.:+2.0% ÷ +2.5%) adj. EBIT margin 15.1% ~15.5% FX: -4.0% ÷ -3.5% (old guid.:-4.0% ÷ -3.0%) CapEx 0.41 ~0.40 % of Sales 6.1% ~6% Net Cash Flow 0.5
Slide 21: Agenda
Agenda 1 9M 2024 KEY MESSAGES 2 PIRELLI & C. – 9M 2024 RESULTS 3 FY 2024 OUTLOOK AND TARGETS 4 APPENDIX PIRELLI 9M 2024 RESULTS 20 Thursday, 7 November, 2024
Slide 22: Sustainability Plan: update on key initiatives development
Sustainability Plan: update on key initiatives development Area Focus KPIs 2023A 2025E 2030E Accident Frequency 1.69(5) ~1(5) <1(5) Towards zero Index PEOPLE If calculated x If calculated x If calculated x accidents at work (calculated X 1.000.000 hours 200,000 hours 200,000 hours 200,000 hours work
Slide 23: Economic results summary
Economic results summary 3Q 2024 3Q 2023 ∆ YoY 9M 2024 9M 2023 ∆ YoY € million Net Sales 1,737.0 1,722.7 +0.8% 5,184.5 5,160.2 +0.5% Organic variation +5.5% +4.9% adjusted EBITDA1 388.7 376.7 +3.2% 1,157.0 1,115.8 +3.7% % of net sales 22.4% 21.9% +0.5 p.p. 22.3% 21.6% +0.7 p.p. reported EBITDA 381.5
Slide 24: Consolidated Balance Sheet
Consolidated Balance Sheet 30/09/2024 31/12/2023 30/09/2023 € million Fixed assets 8,664.7 8,812.1 8,804.7 Inventories 1,342.7 1,371.4 1,376.3 Trade receivables 1,032.0 649.4 1,092.7 Trade payables (1,562.8) (1,999.4) (1,484.3) Operating net working capital 811.9 21.4 984.7 % of net sales* 12.2% 0.3
Slide 25: Net Cash Flow
Net Cash Flow € million 3Q 2024 3Q 2023 9M 2024 9M 2023 Adjusted Operating income (EBIT) 276.8 265.1 815.9 782.5 Amortiz. & depreciations (excl. PPA amortiz.) 111.9 111.6 341.1 333.3 Investments in tangible and intangible assets (Capex) (92.1) (77.7) (235.7) (201.2) Increase in right of use (47.8) (
Slide 26: 2024-2025 targets
2024-2025 targets 2023 A 2024 E 2025 E Financial targets (November ’24 update) Billion € Revenues 6.65 6.7 6.8 ÷ 7.0 Adj. EBIT margin % revenue ~15.1% ~15.5% ~16% Net Cash Flow 0.51 0.50 ÷ 0.52 0.55 ÷ 0.57 bef. Dividends Net Financial Position 2.26 ~1.95 ~1.6 NFP / adj. EBITDA 1.56x 1.32x ÷ 1.26x ~1
Slide 27: ESG Indices: a globally acknowledged sustainability leadership
ESG Indices: a globally acknowledged sustainability leadership Major rankings Last update Score Positioning in the reference sector Top score ATX - Auto Components 2024 82 and Automotive 2024 TOP 1% ESG The only tyre maker in Top1% 2023 A A LIST – Max score A LIST– Max score 2024 A Supplier Engageme
Slide 28: Pirelli manufacturing footprint
Pirelli manufacturing footprint U.K. Germany Romania ▬ Burton – Semi-finished ▬ Breuberg – ▬ Slatina – Car ▬ Carlisle – Car Car / Moto U.S. ▬ Rome – Car Russia ▬ Kirov – Car ▬ Voronezh – Car China Mexico ▬ Yanzhou – Car / Moto Italy ▬ Silao – Car ▬ Jiaozuo – Car ▬ Bollate – ▬ Shenzhou – Car (JV)1 Cy
Slide 29: Disclaimer
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
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