Pirelli & C. S.p.a. · MIL:PIRC
Pirelli & C — FY2019 Earnings Presentation
19 slides from Pirelli & C's earnings presentation, Feb 19, 2020
Slide 1: 2020-2022 Industrial Plan Vision 2025
Eis 2020 - 2022 INDUSTRIAL PLAN VISION 2025
Slide 2: Disclaimer (1/2)
DISCLAIMER (1/2) 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 “C
Slide 3: Disclaimer (2/2)
DISCLAIMER (2/2) Rounding. Due to rounding, numbers presented throughout this Presentation may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. The data contained in this presentation are preliminary in nature and refer to the date hereof an
Slide 4: Agenda
AGENDA PIRELLI EVOLUTION TO DATE & STRATEGIC DIRECTION PIRELLI STRATEGY DEPLOYMENT: PILLAR 1 – COST COMPETITIVENESS 2020-2022 SCENARIO PIRELLI STRATEGY DEPLOYMENT: PILLAR 2 - COMMERCIAL DEVELOPMENT PIRELLI STRATEGY DEPLOYMENT: PILLAR 3 – TECHNOLOGY-BASED INNOVATION 2019 FINANCIAL REVIEW AND 2020-202
Slide 5: 2019 Financial Review and 2020-2022 Targets in Detail
2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL 1 2019 FINANCIAL REVIEW 2 2020-22 TARGETS IN DETAILS 76
Slide 6: FY 2019 Results in Line with Guidance
FY 2019 RESULTS IN LINE WITH GUIDANCE 1. 2019 financial review 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%
Slide 7: FY 2019 Net Sales Bridge
FY 2019 NET SALES BRIDGE 1. 2019 financial review € 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
Slide 8: Price/Mix Drivers and Dynamics in 2019 and 2020
PRICE/MIX DRIVERS AND DYNAMICS IN 2019 AND 2020 1. 2019 financial review 6.4% 4.2% 3.0% 2.0% 1H’19 A 2H’19 A FY’19 A 1H’20 E 2H’20 E FY’20 E Channel Mix ++ stronger Repl. - + = + + stronger O.E. sales still impacted by O.E. channels sales (Car ≥18" Repl. +8% sales (rollover of rebalance (Car ≥18" Re
Slide 9: FY2019 Adjusted EBIT Performance
FY2019 ADJUSTED EBIT PERFORMANCE 1. 2019 financial review € million internal levers ∑ +104 6 (25) external levers ∑ -142 70 (26) (67) 955 123 ▬ cost-cutting +50 (77) (45) ▬ unabsorbed fixed costs -20 917 ▬ other3 -56 2 2018 Volume Price/mix Efficiencies Start-up D&A2 Other Raw Mat. Other FX 2019 cos
Slide 10: FY 2019 Cash Flow and Net Financial Position
FY 2019 CASH FLOW AND NET FINANCIAL POSITION 1. 2019 financial review € million NCF bef. dividends: +333 (+978 in 4Q’19) 3,507 Op. CF: +773 (+383 in FY’18) -17 3,180 500 3,024 177 -1,221 440 57 391 Net Cash Flow: +156 (+978 in 4Q’19) NFP FY’18 EBITDA CapEx ∆ WC & other Other1 Dividends NFP FY’19 Lea
Slide 11: 2019 Financial Review and 2020-2022 Targets in Detail
2019 FINANCIAL REVIEW AND 2020-2022 TARGETS IN DETAIL 1 2019 FINANCIAL REVIEW 2 2020-22 TARGETS IN DETAILS 82
Slide 12: Our 2020-2022 Targets
OUR 2020-2022 TARGETS … 1. 2019 financial review € billion 2019 A 2020 E 2022 E Net Sales 5.3 ~5.4 ~5.8 Adjusted EBIT 0.9 ~ flat YoY margin 17.2% 18% ÷ 19% cum. ’20-’22 vs. cum CapEx 0.39 ~0.3 ‘17-’19 ~1.3 ~0.9 cum. ’20-’22 Net Cash Flow bef. dividends 0.33 ~0.4 o/w ~1.5 ~0.5 in ’21 ~0.6 in ’22 Net
Slide 13: 2020-2022 Revenues Trend
2020-2022 REVENUES TREND 2. 2020-22 targets in details € billion 𝚫’19 -’20 CAGR ‘19-’22 ~5.4 ~ +2% ~5.8 ~ +3% High Value 5.3 ~ +6% 73% ~ +6% 67% 69% Standard ~ -6% ~ -4% 33% 31% 27% 2019 A 2020 E 2022 E CAGR 19-22 Volumes -2.0% ~ 0% ÷ +1% ~ +1.5% ÷ +2% High Value +6.4% ~ +8% ~ +8% Standard -9.7% ~…
Slide 14: 2020-2022 Profitability Trend
2020-2022 PROFITABILITY TREND 2. 2020-22 targets in details € million efficiencies vs. inflation price/mix vs. raw mat. 917 ~flat YoY 2019 Volume Price/mix Raw Mat. Efficiencies Inflation D&A Other FX 2020 EBIT 17.2% margin efficiencies vs. inflation price/mix vs. raw mat. ~flat vs. ‘19 2020 Volume
Slide 15: Financial and Fiscal Management
FINANCIAL AND FISCAL MANAGEMENT 2. 2020-22 targets in details € million FINANCIAL INCOME & EXPENSES1 ~217 > 100% new strategic funding will be Green ~185 on avg. or linked to our Sustainability targets per year > Option to extend the maturity of current credit lines > Reduction of the exposure to hi
Slide 16: 2020-22 Net Cash Flow (Before Dividends) Trend
2020-22 NET CASH FLOW (BEFORE DIVIDENDS) TREND 2. 2020-22 targets in details + Δ restr. / € billion non-rec. ~0.6 MAIN COMPONENTS + Positive + Δ int. / taxes ~0.5 - Negative ▬ Δ restr. / non-rec. ~0.4 + Δ adj. EBITDA 0.3 + Δ adj. 2020-22 N.C.F. EBITDA ~1.5 cum., o/w: + Δ CapEx ▬ Δ W.C. + Δ W.C. ~0.5
Slide 17: 2020E-2022E Raw Material Guidance
2020E-2022E RAW MATERIAL GUIDANCE 2. 2020-22 targets in details € million 13% Natural Rubber 10% Steel Reinf. 17% Textiles Breakdown 27% Synthetic Rubber FY 2019 A based on purch costs 23% Chemicals 10% Carbon Black Raw Materials 33% on Sales Commodities – avg. Quotation Commodities – avg. cost of g
Slide 18: 2020E-2022E Forex Guidance
2020E-2022E FOREX GUIDANCE 2. 2020-22 targets in details 13% other 6% GBP 37% EUR Breakdown 3% RUB. FY 2019 A based on 11% BRL currency 12% CNY 18% USD Main average exchange rates 2019 A 2020 E ∆ YoY 2021 E ∆ YoY 2022 E ∆ YoY (vs. EUR) (vs. EUR) (vs. EUR) EUR / USD / 1.12 1.12 0% 1.14 +2% 1.18 +4% U
Slide 19: Industrial Plan 2020-2022 Vision 2025
90 2020 2022 INDUSTRIAL PLAN | VISION 2025 19" FEBRUARY 2020