Slide 1: Pirelli 9M 2011 Results
PIRELLI 9M 2011 RESULTS 9M11 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 2011 TARGETS UPDATE APPENDIX 9M11 RESULTS 2
Slide 4: Key Financial Results
PIRELLI KEY FINANCIAL RESULTS €/mln 9M11 9M10* YoY 3Q11 3Q10* YoY 3Q results key drivers Revenues 4,265.8 3,618.7 +17.9% 1,476.5 1,249.7 +18.1% Value strategy pays off: Organic growth** +19.3% +20.8% record price/mix EBITDA before Restr. Costs 631.1 480.1 +31.5% 220.2 174.9 +25.9% improvemen
Slide 5: Net Income 9M11 vs 9M10
PIRELLI NET INCOME 9M11 VS 9M10 €/mln 143.9 251.3 (15.1) (9.5) (28.3) 9M11 160.3 Banca Leonardo disposal 0.9 GP Energia S.r.l. sale 1.6 Others 0.5 9M10 Oclaro sale 18.4 Others -0.3 Net Income Adjusted EBIT Results Financial Taxes Net Income (income before discontinued from particip. income/ch
Slide 6: 9M'11 Net Financial Position
PIRELLI 9M’11 NET FINANCIAL POSITION €/mln EBIT before restr. costs 163.3 Dep/Am: 15% China JV stake increase 28.0 56.9 Investments*: Investments (Pirelli Ambiente) 19.9 (162.1) NWC & others: Other -3.6 (100.6) EBIT before restr. costs 297.8 Dep/Am: 113.1 44.3 938.3 Investments*: (234.1) 70.7 1.9
Slide 7: Debt Structure as of Sep 30, 2011
PIRELLI DEBT STRUCTURE AS OF SEP 30, 2011 Net Financial Position Gross Debt Maturity €/mln 1,758.1 819.8 Committed Line 159 Drawdown 370 500 486.7 Bond 500 938.3 370 116.7 Other Borrowings 888.1 127.9 89 207.6 187.9 Gross Fin. Net Fin. 10.7% 11.8% 5.1% 7.3% 27.7% 37.4% Debt Assets* position 2016 & 2
Slide 8: Agenda
AGENDA PIRELLI & C FINANCIAL REVIEW PIRELLI TYRE 2011 TARGETS UPDATE APPENDIX 9M11 RESULTS 7
Slide 9: Tyre Key Results
PIRELLI TYRE KEY RESULTS 1Q11 YoY% 2Q11 YoY% 3Q11 YoY% 9M11 YoY% €/mln Value strategy Revenues 1,384.5 +24.7% 1,376.4 +13.3% 1,464.8 +18.7% 4,225.7 +18.7% momentum: EBITDA (before 209.5 +43.1% 218.4 +23.0% 228.4 +32% 656.3 +32.1% F1 and Pzero restruct. costs) underpin Premium margin 15.1% +1.9p.p
Slide 10: Rebalancing Profitability Among Regions
REBALANCING PROFITABILITY AMONG REGIONS Sales by region Ebit % by Region Actions YoY 9M 2011 growth 9M 2010 9M 2011 Europe 41% +22% Increasing Premium weight also due Mid single digit Double digit to strong winter season; efficiency gains in Romanian plant MEA 9% +7% Double digit Slight increase
Slide 11: Tyre 9M11 Operating Performance
PIRELLI TYRE 9M11 OPERATING PERFORMANCE €/mln 13.9 177.4 17.3 2.3 171.9 (146.7) 117.0 (5.1) 3Q 2011 (4.2) Raw materials: (135.2) Labour / energy / other: (11.5) EBIT 3Q10 Price mix Volume Cost of Efficiencies Restructuring Depreciation/ Exchange EBIT 3Q11 inputs Costs other costs rate 51.4 459.8
Slide 12: Tyre 9M11 Net Financial Position
PIRELLI TYRE 9M11 NET FINANCIAL POSITION €/mln 122.4 149.0 7.5 15% China JV stake increase 28.0 Other (8.4) 87.5 (12.4) 1,109.9 1,095.0 78.3 1.6 19.6 963.9 31.6 EBIT before restr. costs 320.2 (500.0) Dep/Am: 107.7 Investments*: (228.3) EBIT before restr. costs 174.1 (287.1) Dep/Am: 54.3 NWC & othe
Slide 13: Consumer Business: Key Market Trends
CONSUMER BUSINESS: KEY MARKET TRENDS % YoY 3Q10 4Q10 1Q11 2Q11 3Q11 9M11 +5% +7% Europe +0% +3% +4% OE* -2% +6% +7% +7% +6% +5% +1% Replacement** +26% +15% North America +8% +8% +6% +2% OE +7% +0% +1% Replacement -5% -2% 0% +11% +6% +8% +7% +6% +3% Mercosur OE +10% +4% +3% 0% Replacement*** -1% -2%
Slide 14: Consumer Business: Pirelli Performance
CONSUMER BUSINESS: PIRELLI PERFORMANCE 1Q11 YoY% 2Q11 YoY% 3Q11 YoY% 9M11 YoY% €/mln Revenues 983.3 +25.9% 958.9 +14.7% 1024.3 +20.9% 2,966.5 +20.4% Strong winter season (+80% in 9M) EBITDA (before 160.6 +51.5% 169.7 +38.6% 172.2 +44.8% 502.5 +44.7% combined with growing restruct. costs) Premium s
Slide 15: Industrial Business: Key Market Trends
INDUSTRIAL BUSINESS: KEY MARKET TRENDS % YoY 3Q10 4Q10 1Q11 2Q11 3Q11 9M11 +84% +90% +77% +42% +24% +45% OE Europe* +15% +16% +11% +5% Replacement +9% -9% +49% +22% Mercosur +16% OE +2% +4% +8% +23% +22% +10% +3% -6% +2% Replacement** (*)Turkey included and Russia excluded (**)Non-pool members’impor
Slide 16: Industrial Business: Pirelli Performance
INDUSTRIAL BUSINESS: PIRELLI PERFORMANCE 1Q11 YoY% 2Q11 YoY% 3Q11 YoY% 9M11 YoY% €/mln Revenues growth Revenues 401.2 +21.9% 417.5 +10.0% 440.5 +13.9% 1,259.2 +15% sustained by a firm EBITDA (before 48.9 +21.0% 48.7 -11.6% 56.2 +3.9% 153.8 +2.8% price discipline restruct. costs) margin 12.2% -0.1p
Slide 17: Agenda
AGENDA PIRELLI & C FINANCIAL REVIEW PIRELLI TYRE 2011 TARGETS UPDATE APPENDIX 9M11 RESULTS 16
Slide 18: 2011 Targets Update
PIRELLI 2011 TARGETS UPDATE €/bln 2011 Targets 2011 Targets Update (July 27, 2011) (Nov 8, 2011) Revenues >5.85 <5.8 Tyre >5.80 ~5.7 Volumes >+5% ~+3% o/w Premium +23% Price/mix >16% ~+18% EBIT % 9.5% ÷ 10% ~10% Tyre 10% ÷ 11% ~11% Raw Material Headwind 540 510 Tax rate <37% Confirmed Capex >0.5 <0.
Slide 19: Agenda
AGENDA PIRELLI & C FINANCIAL REVIEW PIRELLI TYRE 2011 TARGETS UPDATE APPENDIX 9M11 RESULTS 18
Slide 20: Group – 9M11 Results
PIRELLI GROUP – 9M11 RESULTS Profit & Loss and Net Financial Position by Business Unit €/mln Pirelli Tyre Other Pirelli & C. Cons. 9M11 9M10 9M11 9M10 9M11 9M10 Sales 4,225.7 3,559.1 40.1 59.6 4,265.8 3,618.7 ∆% YoY 18.7% 17.9% EBITDA before Restruct Costs 656.3 496.9 (25.2) (16.8) 631.1 480.1 % on
Slide 21: Group – 3Q11 Results
PIRELLI GROUP – 3Q11 RESULTS Profit & Loss and Net Financial Position by Business Unit €/mln Pirelli Tyre Other Pirelli & C. Cons. 3Q11 3Q10 3Q11 3Q10 3Q11 3Q10 Sales 1,464.8 1,233.8 11.7 15.9 1,476.5 1,249.7 ∆% 18.7% 18.1% EBITDA before Restruct Costs 228.4 173.0 (8.2) 1.9 220.2 174.9 % on sales 15
Slide 22: Balance Sheet
PIRELLI BALANCE SHEET €/mln 9M 11 FY10 Fixed Assets 3,258.4 3,164.1 Net Working Capital 499.3 116.7 % Net Invested Capital Net Invested Capital 3,757.7 3,280.8 Total Net Equity 2,049.9 2,028.0 9M11 FY10 Provisions 769.5 797.2 Pirelli Tyre 86.5% 84.7% Net Financial Position 939.3 455.6 Other 13.5% 15
Slide 23: Group Cash Flow
PIRELLI GROUP CASH FLOW €/mln 3Q11 9M11 3Q10 9M10 EBIT before restructuring costs 163.3 461.1 119.9 319.7 Depreciation 56.9 170.0 55.0 160.4 Net investments (162.1) (396.2) (91.5) (226.9) Working capital/other variations (100.6) (396.0) (18) (119.0) OPERATING CASH FLOW (42.5) (161.1) (65.4) 134.2 Fi
Slide 24: Group: 9M11 Net Financial Position by Business
PIRELLI GROUP: 9M11 NET FINANCIAL POSITION BY BUSINESS €/mln Tyre Other businesses Corporate Pirelli Group Sept. June Dec. Sept. June Dec. Sept. June Dec. Sept. June Dec. 11 2011 10 11 2011 10 11 2011 10 11 2011 10 Gross Debt 1,688.0 1,391.3 1,613.6 123.5 91.9 83.3 639.5 708.4 123.0 1,758.1 1,400.5
Slide 25: 9M11 Pirelli Tyre Mix
9M11 PIRELLI TYRE MIX SALES BY BUSINESS SALES BY SEGMENT Car Consumer 62% 70% Motorbike 8% Steelcord & others Truck Industrial 30% 2% 28% SALES BY CHANNEL SALES BY REGION Nafta Replacement South 10% Asia Pacific 74% America 6% 34% MEA 9% OE Europe 26% 41% 9M11 RESULTS 24
Slide 26: September 2011 Pirelli People
SEPTEMBER 2011 PIRELLI PEOPLE HEADCOUNT PEOPLE BY REGION Nafta 31,815 1% 29,573 Europe South 37% America 41% Asia Pacific MEA Dec 2010 Sep 2011 9% 12% PEOPLE BY CONTRACT PEOPLE BY CLUSTER Permanents Workers 89% 81% Staff 18% Temps & Agency Management 11% 1% 9M11 RESULTS 25
Slide 27: Tyre: 19 Manufacturing Plants in 11 Countries
PIRELLI TYRE: 19 MANUFACTURING PLANTS IN 11 COUNTRIES (AS OF SEPTEMBER 2011) Italy Germany U.K. Bollate (MI) Car Breuberg Car/Moto Settimo Torinese Car/Truck Merzig Steelcord Burton Car Figline Valdamo Steelcord Carlisle Car Turkey Izmit Car/Truck Steelcord U.S.A Rome Car Romania Slatina Car/Steelco
Slide 28: Raw Materials
RAW MATERIALS RAW MATERIALS PRICE TREND 5,251 4.671 4.565 Brent Oil (in usd/bbl) 4.254 Natural Rubber (in usd/tons) 123 117 118 3.380 112 96 99 2.513 3.096 3.022 3.148 2.943 105 2.973 2.653 1.837 87 80 2.531 1.523 76 77 80 57 1.330 77 69 63 1.553 45 60 1.801 Natural Rubber: Sicom Brent: www.oilnergy