Price/Mix and FX are driving guidance upgrade

1. adjusted for goodwill and PPA intangibles

In light of the solid performance registered in the first nine months and the changed external scenario, Pirelli updates its 2022 targets:

  • Revenues are now expected to be of approximately €6.5 billion, almost 250 million euro more than the previous targets, with a 22% yoy growth as a result of:
    • total volumes expected to be flat with High Value growing approximately +5%. The reduction of the exposure to the Standard segment continues with volumes at a -6%. The lower growth of total volumes compared to the previous guidance (total volumes +0.5%/+1.5%) reflects the slowdown of demand in the Replacement channel;
    • price/mix ≥+17%, over 3pp more than our August target, due to price increases, as well as a better trend in terms of product mix
    • exchange rates increasing by 5% (+2.5% the previous indication), with a cautious forecast of the devaluation of the Argentinian Pesos in the last quarter of the year and, more generally, a higher volatility of the currencies in the emerging countries;
  • CapEx confirmed at around €390 mln (~6% of revenues);
  • Adj. Ebit Margin confirmed at ~15% (in line with previous indication) with improvement in absolute value;
  • Net cash generation before dividends expected at ~€480 mln (previous indications ~€450/~470 mln) thanks to a solid operating performance and efficient management of working capital;
  • Net Financial Position at ~-€2.6 billion, with an improved leverage which is now expected to be approximately ~1.9 times the Adj. Ebitda;
  • ROIC expected at ~19%, in line with the previous indication.

Last revised: 3 Nov 2022