Pirelli to Re-Focus on Core Tyre Business
Pirelli Tyre has reported that its sales revenues fell marginally down 1.5 per cent from 4.162 billion euros in 2007 to 4.1 billion in 2008. However, pre-tax profits fell considerable due to the difficult economic environment and raw material costs. EBITDA stood at 443 million euros, down 19 per cent compared with 548.6 million euros in 2007. And EBIT came in at 250 million euros, 30 per cent down on 2007’s 358 million. As a result, the company reports that it “undertook restructuring actions, accelerated in the fourth quarter against further deterioration of the market, in order to strengthen the competitiveness of the industrial organization in Europe and reduce costs of central structures.”
The company registered revenues of 870 million euros, down 5 per cent on a like-for-like basis, in the fourth quarter of 2008. EBIT of 18 million euros before restructuring charges (which in the fourth quarter alone amounted to 68 million euros) compared with 71.9 million euros the year before.
2009 will be difficult – 1500 jobs will go
Presenting the financial results Pirelli Tyre chief executive, Dr Francesco Gori, was clear that the company (like the market as a whole) was facing a challenging environment. “How do we see the 2009 market? Difficult,” he said at one point, describing the outlook as “tough” on another occasion.
So, for the management decisive action to rebalance the company’s industrial footprint is a real necessity. As a result Pirelli Tyre will be reducing headcount in Western Europe by 1500 people and reshaping its industrial footprint to the tune of “the equivalent” of one production plant. This means each of the remaining factories will focus high value items – namely SUV tyres in the UK and UHP, Winter, run-flats in Germany.