Pirelli Ups 2010 Targets
A review of preliminary financial data for the nine months ended September 30, 2010 has led the Pirelli & C. SpA Board of Directors to upwardly revise 2010 targets. The Board’s October 14 review of the preliminary data was made in view of the company’s new 2011-2013 three-year plan, and Pirelli says that the “positive performance of Pirelli Tyre in the first nine months of the year and the present market context permit a further upward revision of 2010 targets.” Targets had previously been raised when the first quarter and first half results were announced.
For the Pirelli & C. Group, revenue about 4.9 billion euros is now targeted, and EBIT margin has been raised from the prior estimate of approximately seven per cent to above 7.5 per cent. The target for EBIT itself is now about 380 million euros. The company’s net financial debt, which was earlier forecast to be at around 700 million euros for 2010, is now expected to be below the 700 million figure. The Pirelli Tyre business unit’s strong performance can be seen in Pirelli’s revenue target of 4.7 billion euros. The company is aiming for an EBIT margin of more than 8.5 per cent with an EBIT of approximately 420 million euros, compared with the previous forecast of 360 million euros.
Pirelli says the first nine months of 2010 “confirm the positive trend seen in the first half of the year” and show a marked improvement in operating results compared with the same period a year earlier. In the first nine months of the year, the Pirelli group registered revenue at the consolidated level of approximately 3.7 billion euros, an increase of 19 per cent compared with 3.1 million earned at the same period in 2009. The operating result after restructuring charges was over 300 million euros, an increase of over 65 per cent from 30 September 2009. The EBIT margin rose to over 8 per cent from 5.9 per cent in the first nine months of 2009.
For Pirelli Tyre, volume growth and a positive price/mix contribution, combined with internal efficiencies, is reported to have more than compensated for the impact of higher raw material costs and other production factors, with a consequent improvement in the operating results. In the first nine months of 2010, Pirelli Tyre’s operating result, after restructuring charges, climbed to more than 330 million euros, an increase of approximately 50 per cent from 222.7 million euros on 30 September 2009, and equal to 9.4 per cent of the approximately 3.5 billion euro revenue (an increase of 20 on the 2,958.6 million euros as of 30 September 2009).
The group’s net financial debt on 30 September 2010 was approximately 700 million euros compared with 696.9 million euros on 30 June 2010 and 528.8 million euros at end December 2009.
In other news, the Pirelli Board of Directors also proceeded to nominate Vittorio Malacalza as the company’s vice president, already co-opted during the Board meeting on July 29. Additionally, Pirelli will present its new three-year plan for the period 2011-2013, with its vision of the scenario to 2015, to the financial community on 4 November 2010.