Board of Pirelli & C. S.p.A. reviewed preliminary results to 31 December 2018
PIRELLI ACHIEVED 2018 OPERATING TARGETS
REVENUES AT 5.2 BILLION EURO (TARGET ABOUT 5.2 BILLION), ORGANIC GROWTH OF 3.7%
ADJUSTED EBIT BEFORE START-UP COSTS AT 1,003 MILLION EURO (ABOVE 1 BILLION THE TARGET). +8.2% COMPARED WITH 2017. EBIT MARGIN ADJUSTED BEFORE START-UP COSTS GREW TO 19.3%
ADJUSTED EBIT AT 955 MILLION EURO (TARGET APPROX. 1 BILLION EURO), +9% COMPARED WITH 2017, EBIT MARGIN ADJUSTED GREW TO 18.4%
Results for the 12 months ended 31 December 2018
- Revenues at 5,194.5 million euro, +3.7% at the organic level
- High Value Revenues: +10.3% at organic level thanks to strengthening in all Regions. Weight on total sales rises to 63.7% from 57.5% on 31 December 2017
- High Value Volumes: +11%, with volumes of ‘New Premium’ Car (≥18 inches) +14.3%
- Price/mix: +6.8% underpinned by the growing weight of High Value and improved product and channel mix (price/mix +8.1% in fourth quarter)
- Adjusted Ebit before start-up costs: +8.2% to 1,002.7 million euro, with a Ebit margin adjusted before start-up costs at 19.3% (17.3% in 2017), thanks to High Value which reached a weight of over 83%
- Adjusted Ebit: +9% at 955 million euro (876.4 million euro on 31 December 2017), with a Ebit margin adjusted of 18.4% (16.4% on 31 December 2017, 20.1% in fourth quarter 2018)
- Net financial position: negative 3,180.1 million euro, an improvement compared 4,038.3 million euro on 30 September 2018 and 3,218.5 million on 31 December 2017. The Net Financial Position at the end of 2018 includes approximately 140 million euro consisting of advances on financial investments in the JV in China and the slowdown/restructuring in Brazil to be recouped between now and 2020. Consequently the Net Financial Position/Adjusted Ebitda before start-up costs reached 2.49x (2.7x in 2017, 2.35x the 2018 target)
- Investments of 463.4 million euro (489.4 million euro in 2017) mainly destined to the growth of High Value and the improvement of mix and quality
- Research & Development expenditure: 219 million euro in 2018 (4.2% of sales), of which 202.9 million euro for High Value activities (6.1% of revenues in the segment)
***
Outlook
Revenues in 2019 expected to grow by between 4% and 6% with the weight of High Value at around 67% (around 64% in 2018)
Profitability expected to improve, with the 2019 adjusted Ebit margin at about 19% (18.4% in 2018). High Value as a percentage of Adjusted Ebit before start-up costs at around 85% (around 83% in 2018)
Expected 2019 investments of 430 million euro
Ratio between net financial position and adjusted Ebitda before start-up costs at end of 2019 estimated at about 2.1x (2.49x in 2018)
Confirmed target of NFP to adjusted Ebitda ratio lower than 2x in 2020