Milan – The Board of Directors of Pirelli & C. SpA, which met, reviewed and approved the half-year financial statements as of 30 June 2010.
The half showed a significant improvement in operating results compared with the corresponding period of the previous year, thanks in particular to growth in sales volumes of Pirelli Tyre, already observed starting from the last months of 2009, and to the continuous benefits deriving from operating efficiency actions started in 2008 and continued in the years that followed.
Overall, the group closed the half with revenues of 2,426.5 million euros, up 19.8% compared with the corresponding period of 2009, and operating income post restructuring charges of 193.4 million euros, with an increase of 62.8%. The EBIT margin improved to 8% from 5.9% in the first half of 2009. In the first half, the net result not including businesses classified as ‘discontinued operations’ more than doubled to 80.8 million euros compared with 30.3 million euros in the corresponding period of 2009.
The continued growth in volumes and the price/mix component, which more than compensated the rise in the cost of raw materials, allowed Pirelli Tyre to register a significant improvement in operating results. In the second quarter in particular Pirelli Tyre reported the best quarterly operating result in its history, amounting to 121.8 million euros (+54% compared with the same period in 2009), or 10% of sales (8% in the 2009 period), with revenues up 22.9% to 1,215.3 million euros. In the first half, EBIT post restructuring charges reached 217.3 million euros, up 59% compared with 136.8 million euros in the first half of 2009, with a margin of 9.3% (7.1% in the first half of 2009) on sales of 2,325.3 million euros (+21.4% compared with the first half of 2009).
On 23 June Pirelli was selected as sole Formula 1 tyre supplier for the 2011-2013 three-year period. Formula 1 will become an important driver to bring out further value from the Pirelli brand and for its commercial and industrial growth, without bringing about changes to the financial plans of the company. For the 2011-2013 period Pirelli also won exclusive supply of the GP2 World Championship Series, which, in addition to the GP3 Series Pirelli supplies already this year, makes Pirelli the official supplier of the most prestigious single-seater world championship competitions.
Within the context of the process of focusing on core industrial activities in the tyre sector, the Board of Directors of Pirelli & C. resolved upon, during the first half, a plan for separation of Pirelli RE, approved by the extraordinary shareholders’ meeting of 15 July 2010.
The transaction will improve the equity structure and the financial structure of the Pirelli group, will simplify the corporate structure of Pirelli & C., and will allow for a more immediate reading of the industrial strategy and of financial data of the Pirelli group by the market. As per IFRS principles, the ‘discontinued operations’ accounted for in the first half, in addition to the net result of Pirelli RE (a loss of 20.4 million euros in the first half) also include the accounting effects of the separation, referring to alignment to market value as of 30 June 2010 of the assets of Pirelli RE. The accounting effects deriving from that impact, negative for a total of 256.4 million euros, determine a consolidated net result for Pirelli & C. that is negative for 175.6 million euros, compared to a loss of 12.4 million euros in the first half of 2009. The attributable net loss was 165.5 million euros, compared with attributable net profit of 6.3 million euros in the same period of 2009.
In the first half, the net consolidated cash flow from operations was positive for 55.6 million euros (negative for 18.5 million euros in the first half of 2009), despite investments that nearly doubled compared with the same period in 2009 (135.5 million euros, compared with 65.4 million euros), particularly within the context of projects for increasing manufacturing capacity. The net financial position of the group as of 30 June 2010 was negative for 696.9 million euros, compared with -528.8 million euros at the end of December 2009 (-678.4 million euros as of 31 March 2010), with a difference essentially attributable to the cash out for restructuring (44.4 million euros) and dividends distributed (85.1 million euros).
Source: http://www.pirelli.com/press/2010/07/29/the-board-of-directors-approves-the-finacial-statements-as-of-30-june-2010/
