The just published 2019 Annual Report is part of a 10 year tradition and was entrusted to the talent of two great writers, Emanuele Carrére with his testimonial “Everyone sees noon at his door” and John Seabrook with his non-fiction work “The Zoom Brigata”. As well, there are eight panels by the visual artist Selman Hoşgör with a vision of “The Road Ahead,” that is the road and the changes awaiting the company and all of us.
The unexpected weakness of the automotive sector at the global level in 2019 was a challenge to the entire tyre sector that Pirelli was able to manage through its consolidated business model and thanks to the counter measures implemented by management. However, new challenges are already appearing. As I address you, in fact, the Covid-19 health emergency is causing an unprecedented deterioration of the global economy. Together, we have already taken steps to contain its effects and I am sure we will overcome this particularly complicated moment, capitalizing on the experience that enabled us to overcome the difficulties in China. I would also like to thank the Board of Directors, whose mandate ends with the approval of this annual report, for the manner in which they have dealt with the Covid-19 emergency, as well as the ability displayed in its management of the company during its mandate.
Through teamwork, Pirelli has in recent years achieved goals that are fundamental to how it will face the future: its transformation into the sole tyre producer focused on the Consumer segment, the consolidation of its technological leadership, the strengthening of its brand. The company, in fact, boasts one of the highest levels of investment in Research & Development sector and is at the cutting edge of technology, for example, in the area of connected tyres. These factors have helped to make Pirelli an exemplar in the area of environmental responsibility and sustainability, as evidenced by the many acknowledgements received during the year. We will further enhance this role through the strategy underlying the sustainability plan that augments the guidelines of the group’s industrial plan for 2020-2022 and supports the United Nations 2030 goals for sustainable development.
The strategies announced, which take into account the actions launched to mitigate the economic impacts stemming from the health emergency, will enable Pirelli to embark on a path to continued competitiveness at the global level, as happened last year. This is thanks to the company’s lean and flexible structure and governance, inspired by international best practices, and the central role of the board committees and independent board members.
We will continue to meet the coming challenges with professionalism, strategic vision, creativity and enthusiasm. I extend my personal thanks to you dear Stakeholders for the contributions you make every day.
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.
"Everyone sees noon at his door." Translation: just as our perception of time varies depending on where we are, so our perception of things varies depending on our personal situation.Read more
A regular virtual meet-up that beagan with the pandemic, and I hope will continue when it ends. Each of us was telling stories about life in our separate places of self-imposed isoloation.Read more
is a London-based multidisciplinary visual artist. He completed his undergraduate degree in graphic design ad Kadir Has University in Instanbul. He attended Central Saint Martins In London where he completed a course in illustration ad typography.Read more