Price/mix trend buoys Pirelli earnings amid rising costs

Milan, Italy – Pirelli & C. SpA has reported 2.5% year-on-year growth in annual earnings, helped by price/mix effects as well as an ongoing efficiency programme across the group.

The Milan-based tire maker posted a marginal growth in sales, up 0.5% year-on-year to €6.6 million, including a 6.3% negative foreign exchange effect.

The currency impact of €193.5 million was linked largely to 'hyperinflation' in Argentina, and a negative forex development in Turkey, Pirelli reported 6 March.

Adjusted earnings (EBIT), meanwhile, grew 2.5% to €1.0 billion, helped by an 8.6% – €486 million – positive impact of price/mix improvement.

Combined with a €92-million positive effect of ongoing efficiencies programme, the price/mix improvement “more than offset” a €246-million increase in 'cost-of-input'.

In 2023, volumes fell 1.8% year-on-year, in part reflecting the Italian group’s strategy of reducing exposure to ‘standard’ smaller tires.

The ‘high value’ larger-rim-sized segment, meanwhile, saw 5% growth in volumes, representing growth of 4% in the replacement market and 6% in the OE market.

Lower volumes represented a negative €51.4-million effect on earnings, which noted Pirelli was also offset by improved price/mix.