Pirelli lifts full-year sales outlook as volumes grow

Milan, Italy – Pirelli & C. SpA has adjusted its full-year revenue and cash generation targets as volumes continue to increase, supported by improvements in price/mix.

For 2021, the Italian tire maker anticipates sales to come in between €5.1 and €5.15 billion, up from earlier targets of €5.0 and €5.1 billion reported in August.

Pirelli expects volumes to increase 14-15% year-on-year, in line with the August revision, but foresees ‘marked improvement’ in price/mix to 7%, up from August estimate of between 4.5% and 5%.

Adjusted EBIT margin has been confirmed at between 15% and 15.5%, following the upward revision in August, said Pirelli 11 Nov.

The tire maker said it foresees a 7% increase in global demand for tires for 2021, a decline from the previously indicated 10%, due to the “prolongation of the semi-conductor crisis throughout the entire automotive supply chain.”

In particular, in the original equipment channel the market is expected to decline by 1%, compared with the previous indication of 6% growth. 

Pirelli, however, expects its growth forecast for the replacement channel to remain at 10% for the full year.

During the three months to end of September, Pirelli posted a 10.7% growth in sales to €1.4 billion, supported by a 10.9% price/mix contribution.

Third quarter volumes dropped 0.4%, reflecting the decline in OE demand and for the standard segment.

“High value” segment, which includes large rim diameter tires, recorded a growth of 1.8%, while the standard segment was down by 2.6%.

Adjusted EBIT was up 4% year-on-year at €221.4 million, helped by the contribution of internal levers such as restructuring.

Furthermore, the €103-million price/mix effect “more than offset” the €75-million impact of higher raw materials and the €5-million exchange rate effect. 

For the first nine months of 2021 Pirelli said volumes recorded an increase of 24.7%, with “a steady gain” in market share particularly for the high value segment.

Nine-month sales were up 28.6% at just under €4 billion, helped by higher volumes and improvements in prices and mix.

Year-to-date EBIT was up 114% at €600 million, boosted by volumes and a 150-million price/mix effect, which more than offset the €114 million increase in raw materials costs and an €18-million foreign exchange impact.