Pirelli posts double-digit growth in revenue, earnings

Milan, Italy – Pirelli & C. SpA has reported double-digit growth in both third-quarter and nine-month results, primarily driven by favourable price/mix and the group’s ongoing efficiency programme.

Over the three months to end of September, Pirelli reported a 22.8% increase in adjusted EBIT (adjusted earnings) to €272 million, on nearly 30% higher year-on-year sales of €1.83 billion.

Overall, third quarter volumes grew 1.8%, reflecting an increase of 8.2% in the ‘high-value’ large rim-sized tires and a decline of 5.7% in standard tires, Pirelli announced 3 Nov.

The price/mix helped earnings in the third quarter to increase 19.4% – slightly lower than in the preceding quarters, with a greater contribution from the price component.

Currency exchange rates helped push up results by 8.6% during the quarter, as the euro weakened against the dollar, China's renminbi, Brazilian real and Russian ruble.

Over the first nine months of the year, Pirelli said sales were up 26.5% at just over €5 billion, helped by a 6.5% – €27.7 million – forex effect.

Total volumes remained unchanged due to a 7.6% fall in standard tires, while the ‘high value’ segment continued to strengthen with a 6.6% increase.

Over the nine-month period, Pirelli saw a 20% positive impact of €677 million from price/mix, helping it achieve a nearly 26% year-on-year increase in adjusted earnings to €753 million.

Pirelli also linked the strong growth in adjusted earnings (EBIT) to its efficiency programme, which delivered €85.6 million in savings.

Together, Pirelli said, these factors more than offset the impact of an extra €365-million on raw materials costs and €227-million inflation in production costs.

Commenting on the group’s ongoing competitive programme, Pirelli said it achieved gross benefits of €85.6 million, equal to 60% of the full-year target of €140 million.

The full-year target, Pirelli said, has been revised down from the original €150 million because of “the new volume expectations and resulting production levels.”

In terms of operations, plant 'saturation' was estimated at around 90% during the first nine months of the year.

Here, Pirelli said that it had implemented a “mitigation plan” to ensure the continuation of production activities, “in the face of volatility triggered by the Ukraine, semi-conductor and energy crises.”