Pirelli & C. S.p.a. · MIL:PIRC
Pirelli & C — Q1 2011 Earnings Presentation
30 slides from Pirelli & C's earnings presentation, 2011
Slide 1: 1Q 2011 Results
PIRELLI 1Q 2011 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 KEY MESSAGES PIRELLI & C FINANCIAL REVIEW PIRELLI TYRE APPENDIX 2
Slide 4: Key Messages
KEY MESSAGES TYRE INDUSTRY PARADIGM IS WORKING WELL World demand continuing high + Pretty tight global capacity + Low inventories = Excellent pricing momentum for the industry PIRELLI IN THIS SCENARIO Is implementing a rigorous pricing discipline in each country where it is present Has a strong focu
Slide 5: Pirelli in F1: The Value Formula
PIRELLI IN F1: THE VALUE FORMULA WHAT CHANGED A more entertaining show: Pirelli successfully matched the F1 organization requests for a more exciting and unpredictable race Tyres become a determinant in the drivers’ strategy: MORE MORE A MORE HIGHER PIT STOPS OVERTAKINGS EVENTFUL COMPETITION AUDIE
Slide 6: 2011 Targets Update
PIRELLI 2011 TARGETS UPDATE €/bln 2011 Targets 2011 Targets (March 8, 2010) 2nd Update Revenues >5.55 >5.85 Tyre >5.50 >5.80 Volumes ≥+6% >+6% Price/mix ~+12% ~+15% EBIT % 8.5% ÷ 9.5% confirmed Tyre 9% ÷ 10% confirmed Tax rate ≤38% <37% Capex >0.5 confirmed NFP ~0.7 confirmed 5
Slide 7: Agenda
AGENDA KEY MESSAGES PIRELLI & C FINANCIAL REVIEW PIRELLI TYRE APPENDIX 6
Slide 8: Key Financial Results
PIRELLI KEY FINANCIAL RESULTS 1Q11 1Q10* ∆ YoY 1Q 1Qresults keydrivers results key drivers €/mln Revenues 1,400.9 1,135.0 +23.4% Successful value strategy Organic growth** +20.7% driving tyre revenues EBITDA before Restruct. Costs 203.4 141.9 +43.3% growth Margin 14.5% 12.5% EBIT before Restruct. C
Slide 9: Net Income 1Q11 vs 1Q10
PIRELLI NET INCOME 1Q11 VS 1Q10 3.7 2.8 55.7 81.4 (17.5) (2.2) 38.9 Net Income ∆EBIT ∆ Results ∆ Financial ∆ Taxes Discontinued Net Income 1Q10 from particip. income/charges operations 1Q11 8
Slide 10: 1Q11 Net Financial Position
PIRELLI 1Q11 NET FINANCIAL POSITION €/mln EBIT before restr. costs 146.5 Dep/Am: 56.9 Investments*: (96.9) ∆ NWC & others: (313.5) 62.7 2.8 712.8 207.0 (15.3) 455.6 Disposal of Cyoptics 17.5 Disposal of Banca Leonardo 6.0 Exch. Rate & Others (8.2) FY10 Operating Fin. Inc./Expen. Cash out Others 1Q11
Slide 11: Debt Structure as of March 31, 2011
PIRELLI DEBT STRUCTURE AS OF MARCH 31, 2011 Net Financial Position Gross Debt Maturity €/mln 1,334 30 621 130 Committed Line Drawdown Bond 500 500 713 30 47 103 New 5 year bond 126 Other Borrowings 804 146 252 18.9% 10.9% 9.5% 3.5% 10.0% 47.2% Gross Fin. Net Fin. Debt Assets* position 2016 & 2011 20
Slide 12: Agenda
AGENDA KEY MESSAGES PIRELLI & C FINANCIAL REVIEW PIRELLI TYRE APPENDIX 11
Slide 13: Tyre Performance
PIRELLI TYRE PERFORMANCE €/mln 1Q10 YoY% 1Q11 YoY% Revenues 1,110.0 +19.8% 1,384.5 +24.7% Sharp revenues growth in both Consumer and Industrial EBITDA (before 146.4 +35.8% 209.5 +43.1% restruct. costs) segments margin 13.2% +1.6 p.p. 15.1% +1.9p.p. EBIT (before restruct.costs) 98.1 +60.8% 155.6 +58
Slide 14: Tyre by Region
PIRELLI TYRE BY REGION Sales by region Actions and Results YoY Europe % on sales 100% 100% growth Market share increase in the Premium segment NAFTA Europe 42% 42% Solid performance driven by market growth and +26% focus on high-end segments in both OE and Replacement NAFTA LatAm 10% 11% +33%
Slide 15: Tyre 1Q11 Operating Performance
PIRELLI TYRE 1Q11 OPERATING PERFORMANCE 28.7 €/mln 128.1 15.6 155.6 2.5 (95.2) (22.2) 98.1 Raw materials: (81.8) Labour / energy / other: (13.4) EBIT 1Q10 Price Volume Cost of Efficiencies Depreciation Exchange EBIT 1Q11 (before mix inputs / other costs rate (before restr.costs) restr.costs) Pire
Slide 16: Tyre 1Q11 Net Financial Position
PIRELLI TYRE 1Q11 NET FINANCIAL POSITION €/mln 1.8 7.1 1,359.0 176.6 63.6 1,109.9 EBIT before restr. costs 155.6 Dep/Am: 53.9 Investments*: (94.5) ∆ NWC & others: (291.6) ∆ NFP: 249.1 FY10 Operating Fin. Inc./Expen. Cash out Others 1Q11 Cash Flow & taxes Restr. Costs Cash absorption due to the seas
Slide 17: Consumer Business: Key Market Trends
CONSUMER BUSINESS: KEY MARKET TRENDS % YoY 1Q10 2Q10 3Q10 4Q10 1Q11 +37% Europe +11% +5% +7% OE* -2% +10% +11% +6% +7% +8% Replacement** +73% +74% North America +26% +16% +6% OE +8% +8% +1% +7% +0% Replacement +25% +12% +11% +8% +6% Mercosur OE +26% +14% +10% +4% Replacement -2% (*)Turkey and Russia
Slide 18: Consumer Business: Pirelli Performance
CONSUMER BUSINESS: PIRELLI PERFORMANCE €/mln 1Q10 YoY% 1Q11 YoY% Revenues 780.9 +16.5% 983.3 +25.9% Fully benefitting from the demand upward trend EBITDA (before 106.0 +37.0% 160.6 +51.5% restruct. costs) margin 13.6% +2.1 p.p. 16.3% +2.7p.p. Share growth in Premium EBIT (before Products 69.5 +65.
Slide 19: Industrial Business: Key Market Trends
INDUSTRIAL BUSINESS: KEY MARKET TRENDS % YoY 1Q10 2Q10 3Q10 4Q10 1Q11 +90% +84% +77% +67% +1% Europe* OE +38% +19% +15% +16% +9% Replacement +65% +61% +49% +22% Mercosur +1% OE +26% +19% +23% +22% +12% Replacement (*)Turkey included and Russia excluded Sources: major external data provider for each
Slide 20: Industrial Business: Pirelli Performance
INDUSTRIAL BUSINESS: PIRELLI PERFORMANCE €/mln 1Q10 YoY% 1Q11 YoY% Revenues 329.1 +28.4% 401.2 +21.9% Double-digit growth with a sound profitability EBITDA (before 40.4 +32.9% 48.9 +21.0% restruct. costs) margin 12.3% +0.4 p.p. 12.2% -0.1p.p. Price/mix improvement fully EBIT (before offsets raw ma
Slide 21: Agenda
AGENDA KEY MESSAGES PIRELLI & C FINANCIAL REVIEW PIRELLI TYRE APPENDIX 20
Slide 22: Group – 1Q11 Results
PIRELLI GROUP – 1Q11 RESULTS Profit & Loss and Net Financial Position by Business Unit €/mln Pirelli Tyre Pirelli & C. Cons. Other 1Q11 1Q10 1Q11 1Q10 1Q11 1Q10 Sales 1,384.5 1,110.0 16.4 25.0 1,400.9 1,135.0 ∆% 24.7% 23.4% EBITDA before Restruct Costs 209.5 146.4 (6.1) (4.5) 203.4 141.9 % on sales
Slide 23: Balance Sheet
PIRELLI BALANCE SHEET €/mln 1Q11 FY10 Fixed Assets 3,142.4 3,164.1 Net Working Capital 416.4 116.7 Net Invested Capital 3,558.8 3,280.8 % Net Invested Capital Total Net Equity 2,072.0 2,028.0 1Q11 FY10 Provisions 774.0 797.2 Pirelli Tyre 86.0% 84.7% Net Financial Position 712.8 455.6 Other 14.0% 15.
Slide 24: Group Cash Flow
PIRELLI GROUP CASH FLOW €/mln 1Q10 2Q10 3Q10 4Q10 1Q11 EBIT before restructuring costs 90.2 109.6 119.9 112.8 146.5 Depreciation 51.7 53.7 55.0 60.8 56.9 Net investments (50.2) (84.9) (91.5) (212.0) (96.9) Working capital/other variations (143.2) 41.9 (18.0) 214.5 (313.5) OPERATING CASH FLOW (51.5)
Slide 25: Group: 1Q11 Net Financial Position by Business
PIRELLI GROUP: 1Q11 NET FINANCIAL POSITION BY BUSINESS €/mln Tyre Other businesses Corporate Pirelli Group Mar. 11 Dec. 10 Mar. 11 Dec. 10 Mar. 11 Dec. 10 Mar. 11 Dec. 10 Gross Debt 1,786.8 1,613.6 95.4 83.3 620.0 123.0 1,331.8 1,147.0 to Corporate 1,070.5 589.6 87.7 83.3 Financial receivables (101.
Slide 26: Price Increase 2010-2011
PIRELLI PRICE INCREASE 2010-2011 North America Europe June 2011 June 2011 6% - 9% Consumer 6% summer - 12% winter April 2011 Consumer & Industrial 5% Consumer (+3% Moto) March 1st, 2011 December 2010 +3% Car/SUV/Moto Up to 7% Consumer +7% Industrial July 2010 4Q 2010 +4% Consumer +4% Consumer (oct.1
Slide 27: 1Q11 Pirelli Tyre Mix
1Q11 PIRELLI TYRE MIX SALES BY BUSINESS SALES BY SEGMENT Car Consumer 62% 72% Motorbike 10% Steelcord Truck & others Industrial 28% 26% 2% SALES BY CHANNEL SALES BY REGION Nafta Replacement Latin 11% Asia Pacific 75% America 6% 33% MEA 8% OE Europe 25% 42% 26
Slide 28: 1Q11 Pirelli Tyre People
1Q11 PIRELLI TYRE PEOPLE HEADCOUNT PEOPLE BY REGION 29,651 Nafta 28,865 1% Europe 36% Latin America (w/o Mexico) 44% Asia Pacific MEA Dec 2010 March 2011 8% 11% PEOPLE BY CONTRACT PEOPLE BY CLUSTER Permanents Blue Collars 91% 82% Temps & White Collars Agency 17% 9% Management 1% 27
Slide 29: Tyre: Manufacturing Plants in 11 Countries
PIRELLI TYRE: 19 MANUFACTURING PLANTS IN 11 COUNTRIES (AS OF MAR. 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/Steelcord Ve
Slide 30: Raw Materials
RAW MATERIALS RAW MATERIALS PRICE TREND 5,251 Brent Oil (in usd/bbl) 4,254 Natural Rubber (in usd/tons) 123 117 3,380 99 105 96 2,973 2,513 3,148 2,943 2,531 3,096 3,022 87 69 76 80 2,653 57 60 63 1,330 77 80 77 1,837 1,801 1,553 1,523 45 Natural Rubber: Sicom Brent: www.oilnergy.com In Italic Year