Pirelli reports double-digit gains in revenue, earnings

MILAN—Pirelli & C. SpA has reported double-digit growth in both third-quarter and nine-month results, primarily driven by favorable price/mix and the group's ongoing efficiency program.

Over the three months to end of September, Pirelli reported a 22.8-percent increase in adjusted EBIT to $281 million, on nearly 30-percent higher year-on-year sales of $1.89 billion.

Overall, third quarter volumes grew 1.8 percent, reflecting an increase of 8.2 percent in the high-value, large rim-sized tires and a decline of 5.7 percent in standard tires, Pirelli said in a Nov. 3 announcement.

The price/mix helped earnings in the third quarter to increase 19.4 percent—slightly lower than in the preceding quarters—with a greater contribution from the price component.

Currency exchange rates helped push up results by 8.6 percent during the quarter, as the euro weakened against the dollar, China's renminbi, Brazilian real and Russian ruble.

Over the first nine months of the year, Pirelli said sales were up 26.5 percent at just over 5.17 billion, helped by a 6.5-percent—$28.7 million—forex effect.

Total volumes remained unchanged due to a 7.6-percent fall in standard tires, while the high value segment continued to strengthen with a 6.6-percent increase.

Over the nine-month period, Pirelli saw a 20-percent positive impact of $700 million from price/mix, helping it achieve a nearly 26-percent year-on-year increase in adjusted earnings to $779 million.

Pirelli also linked the strong growth in adjusted earnings to its efficiency program, which delivered $88.6 million in savings.

Together, Pirelli said, these factors more than offset the impact of an extra $378 million on raw materials costs and $235 million inflation in production costs.

Commenting on the group's ongoing competitive program, Pirelli said it achieved gross benefits of $88.6 million, equal to 60 percent of the full-year target of $145 million.

The full-year target, Pirelli said, has been revised down from the original $155 million because of "the new volume expectations and resulting production levels."

In terms of operations, plant "saturation" was estimated at around 90 percent during the first nine months of the year.

Here, Pirelli said that it had implemented a "mitigation plan" to ensure the continuation of production activities, "in the face of volatility triggered by the Ukraine, semi-conductor and energy crises."