Slide 1: FY 2019 Results
FY 2019 RESULTS Milan, March 2nd, 2020 FY 2019 RESULTS Milan, March 2nd, 2020
Slide 2: 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
Slide 3: Agenda
AGENDA 1 2019 FINANCIAL REVIEW 2 APPENDIX FY 2019 RESULTS 2 Milan, March 2nd, 2020
Slide 4: FY 2019 Results in Line with Guidance
FY 2019 RESULTS IN LINE WITH GUIDANCE 2018 A 2019 E 2019 A (guid. Oct. 2019) Net Sales €5,195 mln ≥€5.3 bln €5,323 mln High Value weight ~ 64% ~ 67% 67% Adjusted EBIT €955 mln €917 mln Adjusted EBIT margin 18.4% >17% ÷ 17.5% 17.2% High Value weight on adj. EBIT1 ~ 83% ~ 85% 84% Start-up costs €48 ml
Slide 5: Net Sales Bridge
FY 2019 NET SALES BRIDGE € million o/w Organic -2.0% +4.2% +0.3% +2.5% +2.2% 5,323 14 5,194 216 -101 O.E. +4.9% +6.4% Repl. +10.5% +8.0% -9.7% Net Sales Volumes Price/Mix FX Net Sales FY’18 FY’19 High Value Standard Car ≥18” mainly negative O.E. +15.3% +7.8% +1.5% -0.7% +0.5% channel mix -0.6% +1.4%
Slide 6: Price/Mix Drivers and Dynamics in 2019 and 2020
PRICE/MIX DRIVERS AND DYNAMICS IN 2019 AND 2020 6.4% 4.2% ~3% 2.0% 1H’19 A 2H’19 A FY’19 A 1H’20 E 2H’20 E FY’20 E Channel Mix ++ - + = + + stronger Repl. sales stronger O.E. sales still impacted by O.E. channels (Car ≥18" Repl. (Car ≥18" Repl. +8% sales (rollover of rebalance +13% vs. -3% O.E.) vs.
Slide 7: Operating Performance
FY 2019 OPERATING PERFORMANCE € million internal levers ∑ +104 external levers ∑ -142 6 (25) 70 (26) (67) Adj. Ebit 955 123 ▬ cost-cutting +50 (77) (45) ▬ unabsorbed fixed costs -20 917 2 ▬ other3 -56 2018 Volume Price/mix Efficiencies Start-up D&A2 Other Raw Mat. Other FX 2019 costs1 input costs ma
Slide 8: Net Income Bridge
FY 2019 NET INCOME BRIDGE € million 87 -112 442 -6 458 40 6 of which: ▬ -24 of IFRS 16 impact ▬ +111 of Brazil tax credit Net Income Δ EBIT Δ Net income / Δ Financial Δ Taxes Δ Discontinued Net Income FY’18 loss from equity income / charges Operations FY’19 participations % on Sales 8.5% 8.6% FY’18
Slide 9: Dividend Proposal
DIVIDEND PROPOSAL € million Dividend Proposal to be filed with Pirelli & C. Annual General Meeting (June 18th, 2020) 2019 dividend Dividend Payment Schedule ▬ Coupon Detachment: June 22nd, 2020 Net Income Reported (€ million) 458 ▬ Dividend Payment: June 24th, 2020, record date June 23rd payout (% o
Slide 10: Cash Flow and Net Financial Position
FY 2019 CASH FLOW AND NET FINANCIAL POSITION € million NCF bef. dividends & IFRS 16 impact: +333 (+978 in 4Q’19) 3,507 Op. CF: +772 (+383 in FY’18) -11 3,180 494 3,024 177 105 142 -1,221 193 58 391 ▬ non-recurring 12 ▬ restructuring 40 ▬ equity transactions 17 ▬ FX / other 36 Net Cash Flow: +156 (+9
Slide 11: Current Capital Structure (December 2019)
CURRENT CAPITAL STRUCTURE (DECEMBER 2019) € million Net Financial Position Gross Debt maturity 5,411 (1,904) 1,743 can be Cash & Cash extended to 2024** 1,811 Loan (1,648) equivalents 252 can be Bond extended to 2022** 1,450 2,917 3,507 (256) 452 1,145 IFRS 16 125 Other Fin. receivables 200 1,743 1,
Slide 12: Key Figures & Achievements 2019
KEY FIGURES & ACHIEVEMENTS 2019 KPIs1 2019 PIRELLI ESG LEADERSHIP ACKNOWLEDGED BY THE MARKET Eco-Safety Performance revenues2 55.8% 63.3% on H.V.3 Top-of-the-industry ESG ratings Pirelli distinctive factors Car tyres avg. rolling resistance reduction -18% Comprehensive corporate Global Sector Leader
Slide 13: Agenda
AGENDA 1 2019 FINANCIAL REVIEW 2 APPENDIX FY 2019 RESULTS 12 Milan, March 2nd, 2020
Slide 14: 2019 Results Highlights by Quarter
2019 RESULTS HIGHLIGHTS BY QUARTER € million 1Q’18 1Q’19 Δ YoY 2Q’18 2Q’19 Δ YoY 3Q’18 3Q’19 Δ YoY 4Q’18 4Q’19 Δ YoY FY’18 FY’19 Δ YoY Revenues 1,310 1,314 +0.3% 1,320 1,341 +1.6% 1,295 1,382 +6.7% 1,269 1,287 +1.4% 5,195 5,323 +2.5% Organic Growth1 +1.2% +1.6% +4.1% +2.0% +2.2% High Value Revenues
Slide 15: Pirelli Balance Sheet
FY 2019 PIRELLI BALANCE SHEET € million 31-Dec-2018 31-Dec-2019 Fixed assets related to continuing operations (before IFRS 16) 9,018 9,007 Right of use IFRS 16 n.a. 463 Fixed assets related to continuing operations (incl. IFRS 16) n.a. 9,470 Inventories 1,129 1,094 Trade receivables 628 649 Trade pa
Slide 16: Pirelli Group Cash Flow
FY 2019 PIRELLI GROUP CASH FLOW € million Please note that 2019 figures are including IFRS 16 impact, applicabale as Jan 1st 2019 4Q ‘18 4Q ‘19 FY ‘18 FY ‘19 Adjusted EBIT1 255 232 955 917 Depreciation & Amortization (excl. PPA amortization) 72 99 280 393 Capital expenditures (167) (148) (463) (391)
Slide 17: Key Car Market Trends: EMEA
KEY CAR MARKET TRENDS: EMEA Market trend 4Q’18 FY’18 1Q’19 2Q’19 3Q’19 4Q'19 FY’19 ∆% YoY O.E. Total Car market -3 -3 -6 -7 -11 -9 -10 Replacement 3 1 -2 -2 -1 -1 -1 Total (O.E.+Repl.) 0 -1 -3 -1 -2 -3 -4 ≥18” 5 3 ≤17" O.E. 0 -1 of which ≥18” & ≤17” -5 -4 0 -6 -6 -7 -9 -13 -11 -12 17 12 11 11 12 11
Slide 18: Key Car Market Trends: North America
KEY CAR MARKET TRENDS: NORTH AMERICA Market trend 4Q’18 FY’18 1Q’19 2Q’19 3Q’19 4Q'19 FY’19 ∆% YoY 2 O.E. Total Car market -1 -4 -3 -1 -4 -9 7 6 Replacement 4 2 1 1 -2 6 4 3 1 0 Total (O.E.+Repl.) 0 -3 ≥18” 5 6 4 5 ≤17" O.E. 2 of which ≥18” & ≤17” -1 0 -2 -5 -7 -9 -7 -9 13 13 -16 11 9 11 8 10 6 4 Re
Slide 19: Key Car Market Trends: Asia Pacific
KEY CAR MARKET TRENDS: ASIA PACIFIC Market trend 4Q’18 FY’18 1Q’19 2Q’19 3Q’19 4Q'19 FY’19 ∆% YoY O.E. Total Car market -8 -1 -6 -6 -4 -7 -11 Replacement 1 1 3 5 5 1 3 Total (O.E.+Repl.) 0 1 -3 -1 -2 -1 -1 ≥18” 14 17 ≤17" 3 O.E. 3 1 of which ≥18” & ≤17” -5 -1 -8 -4 -7 -5 -8 -11 -12 9 11 10 11 14 9 1
Slide 20: Key Market Trends: Russia & Nordics / South America
KEY MARKET TRENDS: RUSSIA & NORDICS / SOUTH AMERICA Market trend 4Q’18 FY’18 1Q’19 2Q’19 3Q’19 4Q'19 FY’19 ∆% YoY 16 12 8 7 6 3 O.E. Russia & Nordics -9 8 7 Replacement 1 -2 -5 -4 -10 9 8 Total (O.E.+Repl.) 1 -1 -6 -3 -8 6 O.E. -1 South America -3 -4 -4 -3 -3 4 Replacement1 -7 -8 -3 -6 -3 -14 Total
Slide 21: Raw Material Costs Trend and Mix
RAW MATERIAL COSTS TREND AND MIX Main raw materials price trend 45.0 ; -16% YoY 54.8 ; +22% YoY 71.5 ; +31% YoY 64.2 ; -10% YoY 1.378 ; +1% YoY 1.651 ; +20% YoY 1.365 ; -17% YoY 1.406 ; +3% YoY $ / kg Brent Oil (in $ / barrel) $ / barrel 2.25 85 Natural Rubber (in $ / kg) 2.00 75 yearly avg. ; Δ YoY
Slide 22: Manufacturing Footprint as of December 31st, 2019
MANUFACTURING FOOTPRINT AS OF DECEMBER 31ST, 2019 U.K. Germany Romania Russia U.S. ▬ Burton – Car ▬ Breuberg – ▬ Slatina – Car ▬ Kirov – Car ▬ Carlisle – Car Car / Moto ▬ Rome – Car ▬ Voronezh – Car Mexico ▬ Silao – Car Italy ▬ Bollate – Car China ▬ Settimo – Car ▬ Yanzhou – Car / Moto ▬ Jiaozuo – C
Slide 23: FY 2019 Results
FY 2019 RESULTS Milan, March 2nd, 2020