Dear Stakeholder,
The speed with which we were able to adapt our business model to the external scenario enabled us to close 2019, which was more challenging than expected, with positive results. The further focus of High Value, a more marked reduction of Standard and an operation to contain costs allowed us to protect profitability, with an adjusted Ebit margin of 17.2% and to increase cash generation (332.9 million euro compared with 38.4 million euro in 2018) and total net profit (around 458 million euro, an increase of 3.5% compared with 2018).
With equal speed – to protect employees, the wider community and our business – we are also reacting to the unforeseeable Covid-19 emergency that is certain to effect the current year very deeply. We have worked, and continue to do so, to adapt the company to a world that will undoubtedly be different after the emergency, simplifying products and structures, reducing costs and maintaining technological leadership and cash generation as the priorities. We will during the year reinforce and supplement these actions, which had already been identified at the beginning of 2020 as the basis of our industrial plan, to enable us to face and move beyond the emergency, mitigating impacts at the economic-financial level.
As well as already having enacted a series of measures in response to the emergency and adjusted our targets to a scenario that has changed so profoundly and fast, Pirelli has the tools to manage this particularly difficult moment well at the global level. We have cutting-edge technology and a distinctive position in High Value that have made us a leader in the Premium and Prestige segments, distinguishing us from our competitors. We can count on products and production processes that are innovative thanks to the constant and valuable done every day by our Research & Development. Our advanced system of data analytics, in addition, enables us to cross-reference that data from our Original Equipment partners, replacement distributors and a number of external sources to reach both our existing clients and potential ones. We are leaders in sustainability and we aim to enhance that position by sourcing 100% of our electricity from renewable sources by 2025 and achieving Carbon Neutrality in our factories in 2030.
The Pirelli brand is admired throughout the world. Pirelli, in fact, is everywhere synonymous with safety, technology, reliability, as well as competition, aesthetics, and entrepreneurial culture. These are elements that are strengthened through our leading role in numerous sporting competitions, like Formula 1, Superbike, the America’s Cup, and through the valuable work of identity enhancement done by the Fondazione Pirelli and Pirelli HangarBicocca that keep us in touch with contemporary culture.
The courage, awareness, knowhow and passion of the women and men of Pirelli, who work every day to make or company more competitive, will enable us to meet the great and difficult challenges ahead. The future of Pirelli, which has been one of the symbols of Italian industrial excellence for 150 years, depends on our work and commitment.
Everything is based on our people, our capacity for teamwork, our commitment and our passion. Above all, on the trust of our stakeholders, you, who I thank once again.
Marco Tronchetti Provera
