PIRELLI BOARD APPROVES RESULTS FOR 9 MONTHS ENDED 30 SEPT. 2015
• REVENUES: 4,711.9 MILLION EURO, AN INCREASE OF 4.0% COMPARED WITH 4,528.7 MILLION ON 30 SEPT. 2014; +3.3% EXCLUDING POSITIVE FOREX EFFECT OF +0.7% • PREMIUM REVENUES: 2,262.5 MILLION EURO, AN INCREASE OF 17.0% COMPARED WITH 1,933.9 MILLION ON SEPT. 30 2014 • PRICE/MIX: +4.8% DUE TO THE GOOD PREMIUM PERFORMANCE, PRICE INCREASES AND GREATER SALES IN THE REPLACEMENT CHANNEL • TOTAL VOLUMES: -1.4% (+0.4% CONSUMER AND -7.1% INDUSTRIAL), IMPACTED BY THE WEAKNESS OF THE SOUTH AMERICAN AND RUSSIAN MARKETS • EBIT: +2.9% TO 648.1 MILLION EURO (629.7 MILLION ON 30 SEPT. 2014) • EBIT MARGIN 13.8% (13.9% ON 30 SEPT. 2014) • NET PROFIT FOR CONTINUING OPERATIONS: 291.2 MILLION EURO (297.4 MILLION EURO ON 30 SEPT. 2014) • NET FINANCIAL POSITION NEGATIVE 1,685.5 MILLION EURO (-2,003.9 MILLION EURO ON 30 SEPT. 2014 AND -979.6 MILLION ON 31 DEC.2014)
2015 TARGETS
• CASH GENERATION BEFORE DIVIDENDS CONFIRMED AT EQUAL TO OR ABOVE 300 MILLION EURO BEFORE DISPOSAL OF STEELCORD • NET FINANCIAL POSITION CONFIRMED AT AROUND 850 MILLION EURO • INVESTMENT CONFIRMED AT BELOW 400 MILLION EURO • PREMIUM GROWTH CONFIRMED AT ABOVE OR EQUAL TO +10%
• PRICE/MIX GROWTH OF APPROXIMATELY ≥5.5% (HIGHER THAN PREVIOUS ESTIMATE OF ~+4%) THANKS TO SALES IN THE REPLACEMENT CHANNEL AND MATURE MARKETS
• VOLUMES ESTIMATED TO FALL BY BETWEEN 0.5% AND 1% AS A RESULT OF RAPIDLY WORSENING ECONOMIC SCENARIO IN BRAZIL AND RUSSIA
• FOREX EFFECT ~-1.5% (PREVIOUS ESTIMATE ~+1%)
• TOTAL REVENUES SEEN GROWING ~+4% TO >6.25 BILLION EURO (PREVIOUS ESTIMATE >6.35 BILLION)
• EBIT BEFORE NON-RECURRING AND RESTRUCTURING CHARGES 925 MILLION EURO (PREVIOUS ESTIMATE 960 MILLION EURO), IMPACTED BY THE WORSENING MACROECONOMIC CONDITIONS, PARTIALLY OFFSET BY PRICE/MIX AND EFFICIENCIES
• EBIT OF APPROXIMATELY 870 MILION EURO AFTER NON-RECURRING AND RESTRUCTURING CHARGES OF 55 MILLION EURO (PREVIOUS ESTIMATE 930 MILLION EURO AFTER CHARGES OF 30 MILLION) LINKED TO RESTRUCTURING ACTIONS AND COSTS RELATING TO THE SEPARATION OF THE INDUSTRIAL BUSINESS UNIT
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As a result of the agreement to sell 100% of the steel-cord activities signed on 28 February 2014, this business has been classified as a “discontinued operation” and as a consequence the results for the first 9 months of 2014 and the first nine months of 2015 have been reclassified in the accounts under the heading “results for disposed continuing operations”. The economic indicators for the first 9 months of 2015, as do the comparative data to 30 September 2014, refer to continuing activities.
The Board of Directors of Pirelli & C. SpA today reviewed and approved the intermediate results for the 9 months ended on 30 September 2015. The results for the first 9 months of 2015 were characterized in particular by:
- Strengthening at the high end range, with Premium volumes growing 11% and equal to 60% of Consumer revenues (56% in first 9 months 2014);
- Improvement of price/mix component (+4.8% in first 9 months of year, +7.0% in third quarter); which was above the target of ~+4% forecast for 2015, thanks to greater sales in the Replacement channel and the different geographic mix (higher sales in Europe, Nafta and Apac);
- Overall volume reduction in the first 9 months of the year of 1.4% (-3.3% in the third quarter) which reflects the different demand dynamics between mature markets (+4.5% in the first 9 months, +7.3% in the third quarter) and emerging ones (-4% in the first 9 months, -8.4% in the third quarter) which were impacted by the deteriorating macro-economic contexts of Russia and South America, as well as the slowdown in the Chinese market;
- Forex volatility (+0.7% impact on revenues in the first 9 months of the year) was particularly accentuated in the third quarter (-4.2%) because of the devaluation of the Brazilian Real and the Ruble;
- Organic consolidated revenue growth (excluding forex impact) of +3.3% in the first 9 months (+3.7% in the third quarter), underpinned by the good performance of the Consumer business (+5.9% in first 9 months, +6.4% in the third quarter) which offset the decline of Industrial (-5.1% in first 9 months, -4.9% in the third quarter). If the forex impact is included, consolidated revenues posted growth of +4% in the first 9 months (-0.5% in the third quarter);
- The achievement of efficiencies worth 72.6 million euro (81% of the full-year target of 90 million euro) as part of the 4-year 350 million euro plan (2014-2017) announced in November 2013 (efficiencies of 92 million euro in 2014);
- Profitability improvement, with Ebit of 648.1 million euro, an increase of +2.9% compared with the first 9 months of 2014 and a substantially stable margin of 13.8% compared with 13.9% in the first 9 months of 2014 (13.1% in the third quarter, unchanged compared with the same period a year earlier);
- A slight decline in the net result for continuing operations to 291.2 million euro (-6.2 million euro compared with the same period in 2014) which reflects the greater fiscal charges linked to the devaluation of the Venezuelan Bolivar and the interest rate increases in the emerging markets where Pirelli operates;
A net financial position of negative 1,685.5 million euro compared with -2,003.9 million euro on 30 September 2014 and -979.6 million euro on 31 December 2014, because of the usual seasonality of working capital.
