2018 FINANCIAL OUTLOOK

The forecast data for 2018 confirm the operating profitability indicated on August 7, 2018 thanks to the focus on High Value and the cost reduction plan to address the faster reduction of exposure to the Standard segment, in particular in South America.

For 2018, on the basis of the results of the first nine months, Pirelli forecasts:

  • Revenues of around 5.2 billion euro compared with the prior ~5.4 billion euro mainly as a consequence of the decline in South America;
  • The growth of High Value to 64% of group revenues (≥60% the previous indication);
  • High Value volumes increasing by about +13% (≥13% excluding the slower growth of the segment in South America);
  • Reduction of the exposure to the Standard segment with a fall in volumes of -12% (previous indication -9%) in consideration of the greater weakness of the market in South America;
  • Total volumes down by 2% compared with 2017 (prior indication “flat”) as a consequence of South America;
  • Price/mix at around +6.5% (+6.5% /+7.5% the previous indication, revisited because of unimplemented price increases in Brazil in the third quarter which would have permitted a price/mix improvement of ≥7%);
  • Forex impact -7%/-6.5% from the previous indication of -6%/-5% as a consequence of exchange rate volatility in emerging countries;
  • Profitability confirmed with Adjusted Ebit before start-up costs at above 1 billion euro. The effect deriving from greater forex volatility, lower Standard volumes and the performance of the business in South America is offset by:
    • greater net efficiencies (~+20 million euro the delta between efficiencies and input costs; the prior indication was 0);
    • cost rationalization actions of around 50 million euro (previous indication 20 million euro) predominantly in South America;
    • lower impact of raw materials (-50 million euro, -60 million euro the prior indication).
  • Weight of the High Value segment in Adjusted Ebit before start-up costs at above 83%;
  • Start-up costs confirmed at about 40 million euro;
  • Adjusted Ebit confirmed at about 1 billion euro;
  • Ratio between net financial position and Adjusted Ebitda before start-up costs expected to be about 2.35X, 2.3X excluding the impact of South America);
  • CapEx confirmed at around 460 million euro.


  1. 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;
  2. Before amortization of PPA, non-recurring items, restructuring costs, other adjustments and start-up costs;


Source: 9M 2018 Results Presentation

Latest update: 14/11/2018