Business Outlook in 2012
In response to the general slowdown in tyre demand reflecting the current macroeconomic crisis, in 2012 Pirelli will further intensify efforts to improve the mix in both in the car business and truck business beyond what was forecast last November upon presentation of the 2012-2014 Business Plan.
In the car business, premium volumes are estimated to rise by at least +20%, with volumes in the non-premium segment falling by 8% - 10% versus 2011. The aggregate estimate for car volumes in 2012 is reduced from the +3%, announced in November 2011 on presentation of the Business Plan, to +1% - 0%. In the truck business, which has been hit harder by the crisis, the aggregate volumes forecast for 2012 are expected to fall 2% - 4% in consequence of a cut in low mix volumes (conventional product -20% versus 2011), in contrast with a slightly positive change for higher value products (the forecast for radial tyres has changed from +3% last November to +2% - 0% now).
Consequently, the target of total volumes is reduced from +2% last November to -1% - 0%, while additional improvement in the mix towards higher value products boosts the price/mix target from +8% last November to +11% - +12%.
Aggregate revenue in 2012 is expected to be about euro 6.6 billion, up 17% from the euro 5.7 billion of 2011, with the sales target for Russia being confirmed at about euro 300 million.
In 2012 EBIT is forecast to rise by 12% or more, as compared with the previous target of 11%-12%.
At December 31, 2012 the negative net financial (liquidity)/debt position is expected to be less than euro 1 billion before dividends.
DATAHIGHLIGHTS
| (in millions of euro) |
|||||
| 2011 | 2010 | 2009 : | 2008 | 2007 | |
|---|---|---|---|---|---|
| GROUP INCOME STATEMENT | |||||
| Net sales | 5,655 | 4,848 | 4,067 | 4,660 | 6,076 |
| Net sales (excluding DGAG - PRE) * | 4,660 | 4,780 | |||
| Gross operating profit | 807 | 629 | 453 | 252 | 573 |
| % of net sales | 14.3% | 13.0% | 11.1% | 5.4% | 9.4% |
| Operating income | 582 | 408 | 250 | 43 | 364 |
| % of net sales - ROS | 10.3% | 8.4% | 6.1% | 0.9% | 6.0% |
| Net income (loss) from continuing operations | 313 | 228 | 77 | ||
| Net income (loss) from discontinued operations | - | (224) | (100) | ||
| Prior period deferred tax assets - Italy | 128 | - | - | ||
| Total net income (loss) | 441 | 4 | (23) | (413) | 324 |
| Net income attributable to owners of Pirelli & C. S.p.A. | 452 | 22 | 23 | (348) | 165 |
| Total net earnings (losses) per share attributable to owners of Pirelli & C. S.p.A. (in euro) | 0.926 | 0.045 | 0.047 °° | (0.065) | 0.031 |
| TYRE INCOME STATEMENT | |||||
| Net sales | 5,602 | 4,772 | 3,993 | 4,100 | 4,162 |
| Gross operating profit | 858 | 661 | 501 | 341 | 549 |
| % of net sales | 15.3% | 13.9% | 12.5% | 8.3% | 13.2% |
| Operating income | 644 | 453 | 309 | 151 | 358 |
| % of net sales - ROS | 11.5% | 9.5% | 7.7% | 3.7% | 8.6% |
| GROUP BAlANCE SHEET | |||||
| Non-current assets | 3,558 | 3,164 | 3,596 | 3,665 | 3,815 |
| Net working capital | 399 | 303 | 427 | 600 | 551 |
| % of net sales | 7.1% | 6.2% | 10.5% | 12.9% | 11.5% |
| Total net working capital | 155 | 117 | 222 | 418 | 298 |
| % of net sales | 2.7% | 2.4% | 5.5% | 9.0% | 6.2% |
| Net invested capital | 3,713 | 3,281 | 3,818 | 4,083 | 4,113 |
| Equity | 2,192 | 2,028 | 2,495 | 2,374 | 3,804 |
| Provisions | 784 | 797 | 795 | 681 | 611 |
| Net financial (liquidity)/debt position | 737 | 456 | 529 | 1,028 | (302) |
| Equity attributable to owners of Pirelli & C. S.p.A. | 2,146 | 1,991 | 2,175 | 2,172 | 2,980 |
| Equity per share attributable to owners of Pirelli & C. S.p.A. (in euro) | 4.40 | 4.08 | 4.46°° | 0.40 | 0.56 |
| OTHER GROUP INFORMATION | |||||
| Net operating cash flow | 156 | 310 | 496 | (147) | 299 |
| Depreciation and amortization | 221 | 217 | 198 | 199 | 214 |
| Capital expenditure - tangible | 618 | 433 | 225 | 311 | 287 |
| Capital expenditure/depreciation | 2.80 | 2.00 | 1.14 | 1.56 | 1.34 |
| Research and development expenses | 170 | 150 | 137 | 156 | 173 |
| % of net sales | 3.0% | 3.1% | 3.4% | 3.3% | 3.6% |
| Headcount (at 12/31) | 34,259 | 29,573 | 29,570 | 31,056 | 30,823 |
| of whom temporary workers | 2,649 | 2,426 | 2,245 | 2,913 | 3,642 |
| Sales * per employee (in thousands of euro) | 181 | 160 | 138 | 148 | 155 |
| Operating income/Net invested capital ** - ROI | 16.64% | 11.49% | 6.33% | 1.05% | 6.33% |
| Net income (loss)/Equity ** - ROE | 20.89% | 0.18% | (0.94%) | (13.37%) | 7.63% |
| Net financial position/Equity - Gearing | 0.34 | 0.22 | 0.21 | 0.43 | n.s. |
