Annual financial report | Pirelli Annual Report 2013

CHAIRMAN’S LETTER

“Piece by piece, we have laid the basis for the Pirelli of the future... ”

Chairman and CEO Marco Tronchetti Provera

Significant events 2013

January

Agreement with the Ministry of Environment to reduce the climate impact of activities related to tyre manufacturing and use

January

Presented the new versions of Formula 1 tyres, the third in three years, at the opening Motorsport 2013 season

January

Pirelli and Russian Technologies announced the start-up of a new production line at the Voronezh factory, in southwest Russia to produce Premium tyre compounds

March

The offer of Premium products expanded its range with Winter Sottozero 3, an ultra-high performance tyre, developed for medium-large engine cars in the premium segment that can enhance the sporty performance of such vehicles

April

Presented the Angel GT tyre, the new motorcycle tyre certified as number one for mileage in the Sport Touring segment

April

Pirelli and Rosneft signed the Memorandum of Understanding for the first Pirelli premium flagship store in Russia, in Sochi

August

Pirelli, confirming the strategic importance of the Russian market, increases its own participation in the joint venture with Russian Technologies and GHP

September

The Operations Management Department was formed, assigned to Gregorio Borgo, reporting to the President together with the Chief Technical Officer and staff functions

October

The Block Syndicate participants agreed to dissolve the shareholders' agreement prematurely, before its expiry on April 15, 2014

November

Presented the Business Plan 2013-2017 in London

November

Signed a Memorandum of Understanding with Rosneft and Rostec (Russian Technologies) to carry out joint research and development activities on materials to be used in tyre production

December

Pirelli, Rosneft and Oil Techno signed a Memorandum of Understanding for joint research and development in the synthetic rubber field in Armenia

2013 RESULTS & 2014 TARGETS

We are in line with the objectives and we confirm the 2014 targets.

RESULTS IN LINE WITH THE TARGETS target 2014

Profitability 13%
Ebit after restructuring expenses
790 MLN euro

Revenue 6,146.2 MLN euro

Revenue +8.4% excluding exchange
rate impact (amounting to -7.2%)

Revenue of which Premium 2,210.0 MLN euro + 6.5%

ROI 20% *

Volumes + 5.7%

Volumes of which Premium +15.3% more than 13%
the target

Net cash generation
232.4 MLN euro
> 200 MLN euro the target **

Investments 413.1 MLN euro

R&S 199.2 MLN euro 3.2% of the Tyre revenue

R&S of which Premium 163.3 MLN euro 7.4% of the revenue

* excluding financial investments and before restructuring charges
** before Prelios impact and distribution of dividends

CONFIRMED TARGETS 2014

EBIT CONFIRMED
around 850 MLN euro

CONSOLIDATED SALES
AROUND 6.2 BLN EURO (FROM 6.6)
essentially because of worsening exchange rate effect -9%/-10% (-2%/-3% indicated last November)

INVESTMENTS CONFIRMED
AT UP TO 400 MLN EURO

CASH GENERATION CONFIRMED
AT ABOVE 250 MLN EURO

AND NET FINANCIAL POSITION APPROXIMATELY
NEGATIVE 1.2 BLN EURO

PLANTS IN THE WORLD

Our global presence.

AUGMENTED REALITY - EXPERIENCE IT ON REPORT 2013

The 2013 Pirelli Annual Report is available in digital version

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