Financial Highlights

The present table shows alternative performance indicators* related to the historical financial data of the Consumer Business, for the fiscal year closed at 31 December 2014, 2015 and 2016

XLS
€ million 2014
FY
2015
FY
2016
FY
CAGR
'14-’16
Adjusted** revenues from sales and services 4,480 4,785 4,976 5.4%
EBITDA 956 1,053 1,029
EBITDA margin 21.3% 22.0% 20.7%
EBITDA adjusted** 890 1,021 1,082 10.3%
EBITDA margin adjusted** 19.9% 21.3% 21.7%
EBIT 694 772 686
EBIT margin 15.5% 16.1% 13.8%
EBIT adjusted** 654 769 844 13.6%
EBIT margin adjusted** 14.6% 16.1% 17.0%
Net Income adjusted** 281 388 297
Net Income margin adjusted** 6.3% 8.1% 6.0%

EBITDA adjusted** - Investments 592 672 742
Cash conversion ratio** 67% 66% 69%
Research & development costs 181 187 209
Research & development costs / adjusted** revenues from sales & services 3.9% 3.7% 4.2%

Adjusted** revenues trend
Adjusted** EBIT trend
(*) To facilitate an understanding of our financial and operating performance, our directors have identified certain alternative performance measures (“APMs”). For a correct interpretation of the APMs, the following should be noted:
  • APMs are built on our historical data and are not indicative of our future performance. Specifically, they are extracted from the 2016 Carve-Out Financial Statements, the 2015-2014 Carve-Out Financial Statements and the Interim Carve-Out Financial Statements; where applicable, they are presented in accordance with the recommendations contained in ESMA document no. 1415 of 2015, as implemented by CONSOB Communication no. 0092543 of December 3, 2015.
  • The calculation of APMs is not governed by the IFRS and, while they are derived from the 2016 Carve-Out Financial Statements, the 2015-2014 Carve-Out Financial Statements and the Interim Carve-Out Financial Statements, they have not been audited.
  • APMs should not be considered as substitutes for the indicators provided for in the IFRS.
  • APMs should be read in conjunction with our financial information taken from the 2016 Carve-Out Financial Statements, the 2015-2014 Carve-Out Financial Statements and the Interim Carve-Out Financial Statements.
  • As APMs are not taken from the reference accounting standards, the definitions of the APMs used by us may differ from those adopted by other groups and therefore may not be comparable.
  • APMs used by us were defined and presented consistently for all the periods for which financial information is included in the Documento di Registrazione, downloadable from the Pirelli website, in the “IPO” section.
(**) For more information on how all the adjustments are calculated, please refer to pages 55-57 of the Documento di Registrazione dell’Emittente. Otherwise, set forth below are the non-IFRS financial measures used:
  • Adjusted revenues from sales and services: calculated by subtracting the contribution to the consolidated financial statements made by Pirelli Venezuela C.A. (to account for the deconsolidation of such company) from Revenues from sales and services.
  • Operating profit (EBIT): refers to earnings before interest and tax.
  • Adjusted EBIT: calculating by adjusting Operating profit (EBIT) for amortization of intangible assets included in PPA, non-recurring and restructuring expenses, the contribution to the consolidated financial statements made by Pirelli Venezuela C.A. and the contribution to the consolidated financial statements made by the Steelcord activities.
  • Adjusted EBIT Margin: calculated by dividing Adjusted EBIT by Adjusted revenues from sales and services.
  • EBITDA: calculated by adjusting Operating (EBIT) for amortization, depreciation and impairment.
  • Adjusted EBITDA: calculated by adjusting EBITDA for non-recurring and restructuring expenses, the contribution to the consolidated financial statements made by Pirelli Venezuela C.A. and the contribution to the consolidated financial statements made by the Steelcord activities.
  • Adjusted EBITDA Margin: calculated by dividing Adjusted EBITDA by Adjusted revenues from sales and services.
  • Net income adjusted: calculated by adjusting Total net income (loss) for EBIT adjustments, the Venezuela deconsolidation, Net financial expenses and Tax.
  • Net income Margin adjusted: calculated by dividing Net income adjusted by Adjusted revenues from sales and services.
  • Adjusted EBITDA-Investments: calculated by subtracting Investments from Adjusted EBITDA.
  • Cash conversion ratio: calculated by dividing Adjusted EBITDA-Investments by Adjusted EBITDA.
(***) High Value and Standard % on total revenues adjusted and total adjusted EBIT

The present table shows alternative performance indicators* related to the historical financial data of the Consumer Business, for the period closed at 30 June 2016 and 2017

XLS
€ million 2016
1H
2017
1H
∆ YoY
'16-’17
Adjusted** revenues from sales and services 2,427 2,685 10.6%
EBITDA 510 501
EBITDA margin 21.0% 18.6%
EBITDA adjusted** 530 546 3.1%
EBITDA margin adjusted** 21.8% 20.3%
EBIT 341 318
EBIT margin 14.1% 11.8%
EBIT adjusted** 413 416 0.7%
EBIT margin adjusted** 17.0% 15.5%
EBIT adjusted** without start-up costs**** 413 443
EBIT margin adjusted** without start-up costs**** 17.0% 16.5%
Net Income adjusted** 65 159
Net Income margin adjusted** 2.7% 5.9%

EBITDA adjusted** - Investments 382 331
Cash conversion ratio** 72% 61%
Research & development costs 104 111
Research & development costs / adjusted** revenues from sales & services 4.3% 4.2%

Revenues trend
(*) To facilitate an understanding of our financial and operating performance, our directors have identified certain alternative performance measures (“APMs”). For a correct interpretation of the APMs, the following should be noted:
  • APMs are built on our historical data and are not indicative of our future performance. Specifically, they are extracted from the 2016 Carve-Out Financial Statements, the 2015-2014 Carve-Out Financial Statements and the Interim Carve-Out Financial Statements; where applicable, they are presented in accordance with the recommendations contained in ESMA document no. 1415 of 2015, as implemented by CONSOB Communication no. 0092543 of December 3, 2015.
  • The calculation of APMs is not governed by the IFRS and, while they are derived from the 2016 Carve-Out Financial Statements, the 2015-2014 Carve-Out Financial Statements and the Interim Carve-Out Financial Statements, they have not been audited.
  • APMs should not be considered as substitutes for the indicators provided for in the IFRS.
  • APMs should be read in conjunction with our financial information taken from the 2016 Carve-Out Financial Statements, the 2015-2014 Carve-Out Financial Statements and the Interim Carve-Out Financial Statements.
  • As APMs are not taken from the reference accounting standards, the definitions of the APMs used by us may differ from those adopted by other groups and therefore may not be comparable.
  • APMs used by us were defined and presented consistently for all the periods for which financial information is included in the Documento di Registrazione, downloadable from the Pirelli website, in the “IPO” section.
(**) For more information on how all the adjustments are calculated, please refer to pages 55-57 of the Documento di Registrazione dell’Emittente. Otherwise, set forth below are the non-IFRS financial measures used:
  • Adjusted revenues from sales and services: calculated by subtracting the contribution to the consolidated financial statements made by Pirelli Venezuela C.A. (to account for the deconsolidation of such company) from Revenues from sales and services.
  • Operating profit (EBIT): refers to earnings before interest and tax.
  • Adjusted EBIT: calculating by adjusting Operating profit (EBIT) for amortization of intangible assets included in PPA, non-recurring and restructuring expenses, the contribution to the consolidated financial statements made by Pirelli Venezuela C.A. and the contribution to the consolidated financial statements made by the Steelcord activities.
  • Adjusted EBIT Margin: calculated by dividing Adjusted EBIT by Adjusted revenues from sales and services.
  • EBITDA: calculated by adjusting Operating (EBIT) for amortization, depreciation and impairment.
  • Adjusted EBITDA: calculated by adjusting EBITDA for non-recurring and restructuring expenses, the contribution to the consolidated financial statements made by Pirelli Venezuela C.A. and the contribution to the consolidated financial statements made by the Steelcord activities.
  • Adjusted EBITDA Margin: calculated by dividing Adjusted EBITDA by Adjusted revenues from sales and services.
  • Net income adjusted: calculated by adjusting Total net income (loss) for EBIT adjustments, the Venezuela deconsolidation, Net financial expenses and Tax.
  • Net income Margin adjusted: calculated by dividing Net income adjusted by Adjusted revenues from sales and services.
  • Adjusted EBITDA-Investments: calculated by subtracting Investments from Adjusted EBITDA.
  • Cash conversion ratio: calculated by dividing Adjusted EBITDA-Investments by Adjusted EBITDA.
  • (***) High Value and Standard % on total revenues adjusted and total adjusted EBIT
    (****) Start-up costs are related to (i) the start-up phase of programs addressing new customer requirements such as connectivity (cyber assets) and our return to the bicycles business (the Velo project), (ii) activities addressing the digital transformation of society, and (iii) work on the conversion of the Aeolus car factory acquired on October 1, 2016, from the production of Aeolus-brand products to Pirelli-brand products.
    (*****) change in scope of consolidation

Latest update: 04/10/2017