Parent Highlights
The following table illustrates highlights of the parent’s operating results, earnings and financial position:
(in millions of euro) | ||
12/31/2011 | 12/31/2010 | |
---|---|---|
Operating income/(loss) | (23.8) | (39.6) |
Net financial income and net income from equity investments | 150.8 | 229.5 |
Net income of continuing operations | 144.4 | 191.0 |
Net income/(loss) of discontinued operations | - | (103.6) |
Prior period deferred tax assets - Italy | 128.1 | - |
Net income | 272.5 | 87.4 |
Non-current financial assets | 1,367.4 | 965.2 |
Equity | 1,740.6 | 1,584.6 |
Net financial (liquidity)/debt position | (200.7) | (597.0) |
The operating loss compares favourably with 2010 due to the revision of royalties paid by Pirelli Tyre for use of the company brand, which have risen from 0.7% to 1.3% of net sales, partly in consequence of the enhanced brand value.
Net financial income and net income from equity investments, totalling euro 150.8 million, mainly include the euro 210.8 million dividends received from the subsidiary Pirelli Tyre S.p.A., euro 27.4 million dividends from other subsidiaries, impairment of the equity investment in the subsidiary Pirelli UK Ltd for euro 22.3 million, impairment of the equity investment in the subsidiary Pirelli & C. Eco Technology S.p.A. for euro 35.6 million, impairment of the equity investment in the subsidiary PZero S.r.l. for euro 12.1 million, impairment of the equity investment in RCS MediaGroup S.p.A. for euro 18.0 million (which now has a book value of euro 1.02 per share compared with euro 1.48 in 2010). The negative reserve accumulated for euro 10.3 million against the equity investment in Alitalia S.p.A. (classified as an available-for-sale financial asset) was also transferred to the income statement.
Net income, totalling euro 272.5 million, includes the recognition of deferred tax assets on tax losses carried forward, with a non-recurring benefit of euro 128.1 million, due to changes in Italian tax regulations governing the use of losses. These new regulations now limit the use of losses to 80% of taxable income in any one year, while extending indefinitely the use of losses for this purpose.
The net loss of discontinued operations in 2010 included the negative impact of assignment of former Pirelli & C. Real Estate S.p.A. (now Prelios S.p.A.) shares (euro 119.7 million), which was partly offset by the net gain on disposal of Pirelli Broadband Solutions S.p.A. (euro 16.1 million).
The increase in the value of non-current financial assets mainly includes the capital increase in favour of the subsidiary Pirelli Tyre S.p.A. (euro 500 million), partly set off by the reduction tied to impairment of the equity investments held in RCS MediaGroup S.p.A. (euro 18.0 million), fair value adjustments (negative euro 42.0 million) and disposals of the equity investments in CyOptics Inc. and Gruppo Banca Leonardo S.p.A.
The following table summarises the carrying values of the principal non-current financial assets at December 31, 2011:
(in millions of euro) | |
12/31/2011 | |
---|---|
EQUITY INVESTMENTS IN SUBSIDIARIES | |
PIRELLI Tyre S.p.A. | 1,085.8 |
PIRELLI & C. Eco Technology S.p.A. | - |
PIRELLI Finance (Luxembourg) S.A. - Lussemburgo | 13.8 |
PIRELLI Ltda - Brasile | 9.7 |
PIRELLI & C. Ambiente S.p.A. | 12.2 |
PIRELLI Labs S.p.A. | 4.1 |
PIRELLI UK Ltd | 11.1 |
PIRELLI Group Reinsurance Company S.A. | 6.3 |
PZero S.r.l. | 6.4 |
PIRELLI Servizi Amministrazione e Tesoreria S.p.A. | 3.2 |
Other | 2.9 |
Total equity investments in subsidiaries | 1,155.5 |
EQUITY INVESTMENTS IN ASSOCIATES AND OTHER FINANCIAL ASSETS | |
Mediobanca S.p.A. | 69.4 |
RCS MediaGroup S.p.A. | 39.9 |
Eurostazioni S.p.A. | 52.9 |
Fin. Priv. S.r.l. | 9.7 |
Anastasia - Real Estate Investment Trust | 12.3 |
Alitalia S.p.A. | 9.7 |
Advanced Digital Broadcast Holdings S.A. | 1.5 |
Istituto Europeo di Oncologia S.r.l. | 6.6 |
F.C. Internazionale Milano S.p.A. | 6.0 |
Other | 3.9 |
Total equity investments in associates and other financial assets | 211.9 |
Total non-current financial assets | 1,367.4 |
Equity rose from euro 1,584.6 million at December 31, 2010 to euro 1,740.6 million at December 31, 2011. The change is illustrated as follows:
(in millions of euro) | |
CHANGE IN EQUITY | |
---|---|
Equity at 12/31/2010 | 1,584.6 |
Net income | 272.5 |
Dividends paid | (81.1) |
Gains/(losses) recognised directly in Equity | (35.4) |
Equity at 12/31/2011 | 1,740.6 |
The following table illustrates the breakdown of equity at December 31, 2011 and comparative figures for the year at December 31, 2010:
(in millions of euro) | ||
12/31/2011 | 12/31/2010 | |
---|---|---|
Share capital | 1,343.2 | 1,375.7 |
Share premium reserve | - | 229.4 |
Legal reserve | 104.2 | 99.9 |
Business combinations reserve | 12.4 | 22.5 |
Reserve from assignment of PIRELLI & C. Real Estate S.p.A. (now Prelios S.p.A.) shares | - | (32.5) |
IAS transition reserve | - | (239.4) |
IAS operating reserve | (19.6) | 15.7 |
Retained earnings | 27.9 | 25.9 |
Net income | 272.5 | 87.4 |
The net financial (liquidity)/debt position, which was a positive euro 200.7 million at December 31, 2011 compared with euro 597 million at December 31, 2010, was mainly impacted by the capital increases made in favour of the subsidiaries Pirelli Tyre S.p.A. (euro 500 million) and Pirelli UK Ltd (euro 54.7 million), the pay-out of dividends to shareholders (euro 81.1 million), offset by the collection of dividends from equity investments (euro 238.2 million) and sale of the equity investment in CyOptics Inc. (euro 17.5 million).
- General Information
- Directors' Report
- Macroeconomic and Market Situation
- Significant Events During the Year
- Group Performance and Results
- Business Outlook in 2012
- Operating Performance
- Research and Development Activities
- Highlights of Other Activities
- Parent Highlights
- Risks and Uncertainties
- Significant Events Subsequent to the End of the Year
- Alternative Performance Indicators
- Other Information
- Remuneration Report
- Resolutions
- Consolidated Financial Statements
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. |