Pirelli aims to build on ‘above target’ 2022 results

Milan, Italy – Pirelli & C. SpA has delivered “above-target” results for 2022, strongly buoyed by its high-value, larger rim-sized tires and the positive price/mix effects.

Overall sales were up 24% year-on-year at €6.6 billion, driven by a strengthening replacement market in North America and improved OE performance for high-value tires, Pirelli said 22 Feb.

The Italian tire maker linked the growth in sales to favourable price/mix as well as a 5.4% positive impact of exchange rate.

Adjusted earnings (EBITDA) rose 16.3% to €1.4 billion, while adjusted EBIT rose nearly 20% to €978 million, up from a target of €960 million announced last November.

Here, Pirelli said internal levers such as price/mix (€890 million) and efficiencies (€136 million) more than offset negative factors, such as higher raw materials costs (€491 million) and inflation (€327.5 million).

The Milan-based company also noted a €30-million positive impact of foreign exchange on its earnings.

In 2022, volumes were down 1.0%, reflecting weakness of demand in the last quarter of the year.

Overall, the high-value segment delivered growth in volumes  of 4.7%, while in the standard 17-inch and smaller segment, the tire maker reported a decline of 6.3%.

For 2023, Pirelli said it will continue to reinforce its positioning in high-value, particularly in rim sizes above 19’’, specialities and electric vehicles and will aim to maintain “solid price discipline.”

Pirelli will also implement the third phase of an efficiencies plan, which is expected to deliver benefits of around €100 million, partly through the digitalisation of “all company processes.”

During this year, Pirelli expects 'macro uncertainties' to continue due to geopolitical tensions amid recession risks in the EU and US. In China, on the other hand, the tire maker foresees a “rebound”.

While inflationary pressures on input costs such as raw materials, energy, labour and logistics costs look set to persist, Pirelli expects efficiencies and price/mix measures to offset those effects.

The manufacturer aims to increase capacity saturation at its plants to above 90% for the high-value segment, mitigating lower utilisation of standard tires production lines in Russia.

Furthermore, Pirelli will continue to progress high-value expansion projects in Romania and North America, with “full deployment by 2025” – in-line with the company’s ‘local-for-local’ strategy.