For 2018, based on first half results, Pirelli anticipates:

  • Revenues of around 5.4 billion euro with organic growth of around 7% thanks to the strengthening of High Value which will represent over 60% of revenues;
  • Growth in High Value Volumes (≥+13%) confirmed, while the reduction in exposure to the Standard segment continued, with an acceleration in the exit from smaller rim sizes and reduced profitability (approximately -9% the trend in standard volumes, -6%/-5% the previous indication). Total expected volumes unchanged compared to 2017;
  • Price/mix improvement confirmed (+6.5%/+7.5%);
  • Foreign exchange expectations revised: from -5%/-4.5% to -6%/-5% due to higher exchange rate volatility in emerging countries;
  • Profitability forecasts are confirmed, with an Adjusted Ebit before start-up costs expected to exceed 1 billion euro. The effect deriving from the greater exchange rate volatility and lower volumes, due to the progressive further reduction on Standard, is offset by:
    • a greater price/mix contribution (~+15 million euro compared to the previous indication);
    • a lesser impact deriving from the costs of raw materials (expected positive impact of around 17 million euro);
    • lower costs of around 20 million euro related to the rationalization of Standard volumes, mainly in South America;
  • The impact of the High Value segment on Adjusted Ebit before start-up costs is expected to be higher than 83%;
  • Start-up costs at around 40 million euro confirmed;
  • Adjusted Ebit expected at around 1 billion euro confirmed;
  • Relationship between net financial position and Adjusted Ebitda before start-up costs equal to approximately 2.3 times confirmed;
  • CapEx amounting to around 460 million euro, in line with previous indications.

  1. Before amortization of PPA, non-recurring items, restructuring costs, other adjustments and start-up costs;
  2. In accordance with IFRS 15 (starting from January 1st, 2018), some costs for variable considerations paid or payable to indirect customers and mainly linked to achieving sale targets are recognized as a reduction of revenues.

Source: 1H 2018 Results Presentation

Latest update: 09/08/2018