Pirelli & C. S.p.a. · MIL:PIRC
Pirelli & C — Pirelli & C Spa Azioni — Q1 2024 Earnings Presentation
31 slides from Pirelli & C's earnings presentation, May 9, 2024
Slide 1: Pirelli 1Q 2024 Financial Results
1Q 2024 Milan Financial Results May 9, 2024 FY 2023 Financial Results PIRELLI 1Q 2024 RESULTS Thursday, 9 May, 2024 March 6th, 2024
Slide 2: Agenda
Agenda 1 1Q 2024 KEY MESSAGES 2 PIRELLI & C. – 1Q 2024 RESULTS 3 FY 2024 OUTLOOK AND TARGETS 4 APPENDIX PIRELLI 1Q 2024 RESULTS 1 Thursday, 9 May, 2024
Slide 3: Key Messages
KEY MESSAGES 1Q’24 results consistent with FY targets and confirming the strength of our strategy ▪ Organic growth (+4.6% yoy) driven by solid commercial performance: • market share gain in ≥18” Replacement across regions • sound price/mix (+2.3% yoy) supported by product and channel mix enhancement
Slide 4: 1Q 2024 results highlights
1Q 2024 results highlights Solid results, in line with FY targets and supported by operating performance Net Sales Adjusted EBIT1 € million € million +6% -0.2% 248 263 1,700 +4.6% 1,696 STD organic growth H.V. 75% 77% 1Q’23 1Q’24 1Q’23 1Q’24 margin 14.6% 15.5% Net Income Net Financial Position € mil
Slide 5: Agenda
Agenda 1 1Q 2024 KEY MESSAGES 2 PIRELLI & C. – 1Q 2024 RESULTS 3 FY 2024 OUTLOOK AND TARGETS 4 APPENDIX PIRELLI 1Q 2024 RESULTS 4 Thursday, 9 May, 2024
Slide 6: Strategic programs implementation: delivery in line with targets
1Q 2024 Strategic programs implementation: delivery in line with targets Car ≥18’’ Replacement +11% vs +10% Mkt COMMERCIAL Seizing regional HV growth opportunities Specialties ~60% of Group Sales (~ +2pp YoY) ~80 new car homologations (~85% ≥19’’, ~60% EV) with Widening our OE portfolio EV portfolio
Slide 7: Commercial Program
1Q 2024 Commercial Program Solid outperformance in Car, driven by HV Replacement. Selective strategy in OE, and STD exposure further reduced Market TOTAL CAR ≥18” 1Q Highlights Pirelli 1Q24 1Q24 Further reduced exposure to Car +2,7% ≤17’’ (-3.8% in 1Q’24 vs Mkt +0.8%) TOTAL +2,1% +6,5% +6,8% HV OE r
Slide 8: Innovation program: ~80 new Car homologations ≥18”
1Q 2024 Innovation program Strengthening our undisputed leadership in HV homologations ~ 80 new Car homologations ≥18” Homologations highlights ~85% Higher rim sizes (≥19”) Focused on High Value Regions, reaching a total Portfolio of ~2700 homologations in ≥19’’ Further pushing on Specialties portfo
Slide 9: Innovation program: two new products launched
1Q 2024 Innovation program Two new products launched with Eco, Safety and Performance at the core CAR: Pirelli Cinturato All Season SF3 MOTO:SCORPION Trail III launched worldwide ‘A’ rating on the European tyre label for The perfect union between road wet grip. Snow control guaranteed sportiness and
Slide 10: Efficiency program
1Q 2024 Efficiency program Efficiencies in line with the expectations and seasonality, fully offsetting inflation impact Focusing on: FY 2024 GUI 1Q 2024 ACT Modularity Product Cost ~50% of FY Design speed and virtualization Energy consumption & electrification ~5% of FY, in line with Manufacturing
Slide 11: Sustainability: working on Plan deployment
Sustainability: working on Plan deployment We are acting on 4 main pillars 2025 2030 Plant decarbonization renewable electricity & CO2 absolute -60% -80% CARBON energy efficiency projects emissions Scope 1+21 vs 2018 vs 2018 NEUTRALITY NET CLIMATE ZERO suppliers engagement & -27% Supplier decarboniz
Slide 12: Sales bridge
1Q 2024 Sales bridge Top line flat YoY with a solid organic growth, in line with FY’24 target. € million +2.3% +2.3% +4.6% -4.8% -0.2% 1,700 1,778 1,696 40 38 (82) STD H.V. 75% 77% 1Q’23 Δ Volumes Δ Price/mix Organic Growth Δ Forex 1Q’24 4Q’23 +2.1% +2.7% +4.8% -10.6% -5.8% 1Q’23 -3.1% +15.1% +12.0%
Slide 13: Adjusted EBIT bridge
1Q 2024 Adjusted EBIT bridge Solid Profitability improvement driven by internal levers € million Net impact +21 Net impact +18 Net impact +3 29 (39) 32 (29) 263 248 27 (7) (14) 15 Commodities +35 R&D / mktg. Exp. -7 Forex -6 Stock & Others -7 margin 14.6% 15.5% 1Q’23 Volume Price/mix Raw Mat. FX Eff
Slide 14: Net Income bridge
1Q 2024 Net Income bridge Earnings discounting non-recurring items (hyperinflation impact and one-off tax benefits) expected to normalize by year end o/w ~-49M€ non-cash impact (forex + hyperinflation) € million 4 115 1 14 (58) 100 24 Net Income Δ adj. EBIT Δ non recurr. / Δ Net Income / Δ Financial
Slide 15: Net Financial Position
1Q 2024 Net Financial Position Net Cash Flow stable YoY and in line with seasonality despite including Hevea-Tec closing (€ 23M) € million Net Cash Flow (before dividends): -673 (-691 in 1Q’23) Operating Cash Flow: -538 (-577 in 1Q’23) 2,935 63 25 47 2,262 846 Includes: (376) 15 - Hevea Tec ~ -23M 5
Slide 16: Gross Debt structure as of March 31st 2024
Gross Debt structure as of March 31st 2024 New Eur 600 mln ESG Term Loan indexed to the new more challenging ESG targets. ESG finance on gross debt ~ 68% Sound liquidity margin covering maturities for the next 3 years € million Net Financial Position Gross Debt maturity 4,175 (1,240) Liquidity posit
Slide 17: Agenda
Agenda 1 1Q 2024 KEY MESSAGES 2 PIRELLI & C. – 1Q 2024 RESULTS 3 FY 2024 OUTLOOK AND TARGETS 4 APPENDIX PIRELLI 1Q 2024 RESULTS 16 Thursday, 9 May, 2024
Slide 18: Tyre demand outlook confirmed
Tyre demand outlook confirmed High Value market confirms its outperformance, while Standard weakness weighs on Total Market Global car tyre market flat ~+1% Mln tyres mid-single ~+6%~+5% digit ≥18" +6pp +6pp ≤17" ~-1% -1%÷~flat 2023 A 2024 E (May Guidance) O.E. ≥18”: mid single-digit growth, driven
Slide 19: FY 2024 Targets confirmed
FY 2024 Targets confirmed 2023 A 2024 E € billion (March 2024 Guidance) (May 2024 Guidance) Volumes +1.5% ÷ +2.5% Net Sales 6.65 6.6 ÷ 6.8 Price / Mix ~ +2.0% confirmed FX -4.0% ÷ -3.0% adj. EBIT margin 15.1% >15% ÷ 15.5% confirmed CapEx 0.41 ~0.40 confirmed % of Sales 6.1% ~6% Net Cash Flow 0.51 0.
Slide 20: Agenda
Agenda 1 1Q 2024 KEY MESSAGES 2 PIRELLI & C. – 1Q 2024 RESULTS 3 FY 2024 OUTLOOK AND TARGETS 4 APPENDIX PIRELLI 1Q 2024 RESULTS 19 Thursday, 9 May, 2024
Slide 21: Key Car Market Trends: Europe
Key Car Market Trends: Europe Market trend (∆% YoY) FY22 1Q’23 2Q’23 3Q’23 4Q‘23 FY23 1Q’24 Total 19 13 10 4 7 O.E. 2 -3 2 1 Replacement 0 -2 -2 -3 -8 2 3 0 Total (O.E.+Repl.) -2 0 -1 -4 28 ≥18” & ≤17” 12 12 14 11 10 13 4 8 2 1 ≤17" O.E. ≥18” -2 -4 -2 13 13 8 5 1 2 4 Replacement 0 -1 -3 -4 -4 -1 -9
Slide 22: Key Car Market Trends: North America
Key Car Market Trends: North America Market trend (∆% YoY) FY22 1Q’23 2Q’23 3Q’23 4Q‘23 FY23 1Q’24 Total 16 9 10 8 10 O.E. 5 2 11 6 6 0 Replacement -5 -7 -8 7 10 2 5 Total (O.E.+Repl.) -3 -4 -3 20 ≥18” & ≤17” 11 13 11 12 13 5 9 4 3 5 3 O.E. 0 0 ≤17" ≥18” 15 11 12 6 10 2 2 4 Replacement1 -1 -3 -2 -8
Slide 23: Key Car Market Trends: Asia Pacific
Key Car Market Trends: Asia Pacific Market trend (∆% YoY) FY22 1Q’23 2Q’23 3Q’23 4Q‘23 FY23 1Q’24 Total 21 13 10 O.E. 4 2 4 1 12 3 2 1 Replacement 0 -4 -7 16 7 5 1 1 Total (O.E.+Repl.) -3 -1 24 ≥18” & ≤17” 20 12 13 13 10 6 8 8 2 1 2 0 2 ≤17" O.E. ≥18” 16 12 6 7 6 6 Replacement 2 2 0 -1 -4 -2 -7 -6 2
Slide 24: Key Car Market Trends: Russia, MEAI / South America
Key Car Market Trends: Russia, MEAI / South America Market trend (∆% YoY) FY22 1Q’23 2Q’23 3Q’23 4Q‘23 FY23 1Q’24 Russia, MEAI 12 11 7 10 6 O.E. 0 18 -4 5 0 1 Replacement -4 -2 -8 16 7 3 2 Total (O.E.+Repl.) 0 -3 -7 South America 9 5 6 3 1 O.E. -2 -2 6 Replacement1 -2 -4 -4 -2 -1 -6 4 Total (O.E.+Re
Slide 25: Economic results summary
Economic results summary 1Q 2024 1Q 2023 ∆ YoY € million Net Sales 1,695.5 1,699.7 -0.2% Organic variation +4.6% adjusted EBITDA1 376.3 359.7 +4.6% % of net sales 22.2% 21.2% +1.0 p.p. reported EBITDA 368.6 350.7 +5.1% % of net sales 21.7% 20.6% +1.1 p.p. adjusted EBIT1 262.6 248.1 +5.8% % of net sa
Slide 26: Consolidated Balance Sheet
Consolidated Balance Sheet 31/03/2024 31/12/2023 31/03/2023 € million Fixed assets 8,826.3 8,812.1 8,854.9 Inventories 1,420.3 1,371.4 1,458.4 Trade receivables 939.8 649.4 928.5 Trade payables (1,460.5) (1,999.4) (1,367.8) Operating net working capital 899.6 21.4 1,019.1 % of net sales 13.5% 0.3% 1
Slide 27: Net Cash Flow
Net Cash Flow 1Q 2024 1Q 2023 € million Adjusted Operating income (EBIT) 262.6 248.1 Amortiz. & depreciations (excl. PPA amortiz.) 113.7 111.6 Investments in tangible and intangible assets (Capex) (53.4) (53.2) Increase in right of use (15.3) (15.1) Change in working capital/other (845.8) (868.8) Op
Slide 28: 2024-2025 targets
2024-2025 targets Financial targets 2023 A 2024 E 2025 E Billion € Revenues 6.65 6.6 ÷ 6.8 6.8 ÷ 7.0 Adj. EBIT margin % revenue ~15.1% >15% ÷ 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 ~1.0x 2025 D
Slide 29: Main Sustainability Targets
Main Sustainability Targets Area Focus KPIs 2023A 2025E 2030E Towards zero Accident frequency PEOPLE Index6 1.696 ~16 <16 accidents at work CO2 Scope 1+2 (plants) -45%5 -60% -80% Carbon Neutrality TOWARDS NET vs 2018 CO2 Scope 3 2040: NET ZERO Reduce CO2 footprint -25%5 -27% -30% CO2 TOTAL EMISSION
Slide 30: 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 2023 84 and automotive 2024 TOP 1% ESG Max Score 2023 A Max Score 2024 A Max Score Prime status and Top score ATX Auto 2024 B Components a
Slide 31: 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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