Pirelli & C. S.p.a. · MIL:PIRC
Pirelli & C — H1 2004 Earnings Presentation
18 slides from Pirelli & C's earnings presentation, Sep 13, 2004
Slide 1: Pirelli Group 1H 2004 Results
Pirelli Group 1H 2004 Results 13.09.04 Marco Tronchetti Provera - Chairman Giovanni Ferrario - Managing Director Carlo Puri Negri – Chairman Pirelli RE Conference Call with the Financial Community
Slide 2: 1H 2004 Group Achievements
1H 2004 GROUP ACHIEVEMENTS • Group Operating Result +34% • R&D : 106m€ expenditures (3.2% of industrial sales) • Energy Cables & Systems: YoY EBIT doubled • Telecom Cables & Systems: 1H 2004 BBA revenues 28m€ (27m€ FY 03 revenues) • Tyres: ROS 9.4% • Positive Result from Olimpia • Pirelli RE results
Slide 3: The Structure
THE STRUCTURE* Camfin 26.9% Ass. Generali Group 4.9% Fondiaria – SAI 4.2% Pirelli & C. SpA Edizione Holding 4% Chairman M. Tronchetti Provera R.A.S. 4% Mediobanca 4% PLabs M. Tronchetti Provera 100% - Material Innovation Finance & - Optical Innovation Administration C. Buora 52.6% 50.4% Industrial O
Slide 4: 1H 2004 Results
1H 2004 RESULTS Industrial Pirelli Others Total Businesses Real Estate 1H 04 1H 03 1H 04 1H 03 1H 04 1H 03 1H 04 1H 03 ∆ Net Sales 3,299 3,049 291 281 (17) (32) 3,573 3,298 + 8.3% EBITDA 338 287 37 37 (11) (2) 364 322 EBITDA margin 10.2% 9.4% - - - - 10.2% 9.8% 193 135 26 29 (29) (22) EBIT 190 142 +
Slide 5: 1H 2004 Results: Olimpia
1H 2004 RESULTS Olimpia Results 1H 2004 Revenues from TI Dividends 182 Pirelli Results from Olimpia Equity Financial Expenses (76) Participation 52 Euro/Mln in 1H 2004 (-45 Euro/Mln in 1H 2003) Net Results 106 Euro/Mln Euro/Mln 182 Dividend received 173 172 Financial Charges 170 2002 2003 2004E 4
Slide 6: 1H 2003 - 1H 2004 Group EBIT Variation
1H 2003 - 1H 2004 GROUP EBIT VARIATION Euro/Mln + 58 Of which in 2003 + 30 10 €/Mln CIENA SETTLEMENT -3 190 +5 + 28 -7 Pirelli RE EBIT including 142 results from Equity Participation: +13 €/Mln -5 EBIT DELTA Energy TLC Tyres INDUSTRIAL Pirelli RE CORPORATE EBIT June 2003 Exchange EBIT EBIT EBIT Aggr
Slide 7: 1H 2003 - 1H 2004: Group NFP Variation
1H 2003 - 1H 2004: GROUP NFP VARIATION Euro/Mln “SEASONALITY EFFECT“ 33 2,047 110 214 1,959 132 1,745 (187) NFP NET CASH FLOW NFP NET CASH FLOW DIVIDENDS TELECOM EUROSTAZIONI NFP @ from @ from ITALIA @ 31.12.2003 OPERATING 31.03.2004 OPERATING ACTIVITIES PUT 30.06.04 ACTIVITIES 2nd QUARTER 1st QUART
Slide 8: Group Industrial Commitments
GROUP INDUSTRIAL COMMITMENTS - Growing in high-end segments Building - Moving from products to systems international Industrial - Developing new markets leadership in businesses - Continuing the global reshaping of innovative business models products and services - Focus on R&D 7
Slide 9: Industrial Aggregate: 1H 2004 Results
INDUSTRIAL AGGREGATE: 1H 2004 RESULTS Euro/Mln INDUSTRIAL AGGREGATE 1H 2004 1H 2003 Sales 3,299 3,049 ∆ 8.2% Organic Sales (*) 3,299 3,152 ∆ 4.7% EBITDA 338 287 EBITDA Margin 10.2% 9.4% EBIT 193 135 EBIT Margin 5.9% 4.4% Free Cash Flow 89 75 (*) Exchange Rates/Metal Price 8
Slide 10: Industrial Aggregate: 1H 2003 – 1H 2004 EBIT Variation
INDUSTRIAL AGGREGATE: 1H 2003 – 1H 2004 EBIT VARIATION Euro/Mln 37 193 66 4 135 (27) (5) (17) EBIT DELTA PRICE VOLUMES UNITARY EFFICIENCIES DEPRECIATION/ EBIT 2003 Exchange and MIX PRODUCTION OTHER 2004 Rates COST 9
Slide 11: Energy Cables & Systems: 1H 2004 Results
Energy Cables & Systems: 1H 2004 Results Scenario Achievements - Selected limited growth of market volume - Strong project business with positive outlook for 2H - Price reduction in power distribution businesses - Mix efficiencies recovery - Strong reduction in European wind farms - Focus on cash ge
Slide 12: Telecom Cables & Systems: 1H 2004 Results
Telecom Cables & Systems: 1H 2004 Results Scenario Achievements - Optical cable: positive volume growth in - Secured increased volumes US at the end of 1 Half - Strongly positioned in major bids - Continuous pressure on prices - Continuous cost reduction - Interesting ADSL copper demand - Sales incr
Slide 13: Tyres: 1H 2004 Results
Tyres: 1H 2004 Results Scenario Achievements - Volume growth in Performance and Industrial - Successful product launches: Sottozero, Diablo segments Strada, Amaranto - Price/Mix improvements in South and North - Growing Run Flat OE homologations with Mirs America as well as in the Industrial segment
Slide 14: Pirelli RE – 1H 2004 Key Financial Data
PIRELLI RE – 1H 2004 KEY FINANCIAL DATA Actual Actual YoY June 2004 June 2003 Growth % Aggregate Production Value (net of acquisitions) 910.7 693 31% Consolidated Production Value 257.8 282.2 EBIT 26.2 29.5 Income from Equity Participations 40 23.7 EBIT incl. Income from Equity Participations 66.2 5
Slide 15: Pirelli RE: 1H 2004 Key Achievements
PIRELLI RE: 1H 2004 KEY ACHIEVEMENTS • Successful placement of 2 Funds: Tecla Fondo Uffici and Cloe Fondo Uffici for a total market value of Euro1.8bn. Another fund in pipeline before end of 2004. • Signed agreement with Morgan Stanley in the NPLs business. The joint venture will take a leadership p
Slide 16: PRE - Asset Allocation as of June 2004
PRE - Asset Allocation as of June 2004 Asset Under Management €10.0 Bn (*) AUM by Product AUM by Area Residential NPL 25% 2% (*) Commercial Greater Land 70% Milan 3% 38% Other 19% Turin Rome 18% LONG 30% 5% Florence Fund Cloe Naples Fund Tecla 9% 3% 9% 5% 82% OPPORTUNISTIC (*) NPL valued at Net Book
Slide 17: Pirelli RE – Net Asset Value
PIRELLI RE – NET ASSET VALUE Book Value Book Value Market Value Market Value NAV Value 100% Pro- quota 100% Pro- quota June 2003 RESIDENTIAL 1,681.1 619.9 2,432.8 902.3 282.4 COMMERCIAL 5,261.9 958.4 6,967.2 1,311.3 352.9 270.8 106.2 337.1 123..1 16.8 LAND NPL (GBV) 810.1(*) 311 810.1 311 - NPL (NBV
Slide 18: Closing Remarks
CLOSING REMARKS Energy Cables TLC & Systems Cables & Systems Pirelli confirms group expectations for 2004: A considerable improvement of both operating and net results in all sectors 17