2001 preliminary and unaudited consolidated results

Milano, 8 February 2002 - The Board of Directors has today examined the Group's consolidated financial statements, which are still preliminary and unaudited, for the year ended 31 December 2001.
Consolidated sales revenues have risen slightly from 7,477 million in 2000 to over 7,500 million in 2001.

The gross operating profit has shifted from 820 million in 2000 (11% of sales) to roughly 665 million (8.8% of sales). This result was conditioned by the considerable worsening of the economy in general during the second half of the year and the telecom cables and systems market in particular. The smaller contribution from the supply agreement with Cisco, equal to 59 million compared to 83 million in 2000, played its part too. These factors also conditioned the operating profit before interest and tax, which has moved from 437 million in 2000 (5.9% of sales) to approximately 295 million (3.9% of sales).

The Pirelli S.p.A. Group's indebtedness at the end of December 2001 is about 1,070 million, in line with previous announcements; this compares with a positive net financial position of 2,225 million at 30 June 2001 and 3,495 million at end 2000. The variation versus 30 June 2001 is primarily connected to the investment in Olimpia S.p.A. ( 3,120 million). Olimpia S.p.A., which owns 28.7% of Olivetti S.p.A., has 5.2 billion Equity and a non-recourse indebtedness of 3.5 billion.

In detail, 2001 performance by sector of activity shows:

• Tyre Sector sales revenues and operating profit practically stable, thanks also to the increasing focus on the high performance market segment;
  
• a growth of 11.7% in the Energy Cables and Systems Sector's sales revenues, with a progressive improvement of the operating profit during the course of the year;
  
• a 10.6% drop in the sales revenues of the Telecom Cables and Systems Sector; a limited drop, all things considered, in comparison with the general trend of the industry.
  
  Forecasts for the first quarter of the current year remain prudent, even if it is better than last quarter 2001, due to the weakness of the market as a whole and with particular reference to the trend of demand in the Telecom Cables and Systems sector.
  
  The Board of Directors moreover approved the issue, if any, of a bond loan on the part of Pirelli Finance (Luxembourg) S.A., the Group's international treasury company, guaranteed by a Pirelli S.p.A. surety, the amount of which shall be defined within the range of 500 million and 1 billion, for a term of not less than 5 and not more than 7 years, reimbursable in full on expiry and at an interest rate to be determined on the date of issue.
  The objective of such loan is to optimize the Group's financial position, from both the interest rates and expiry dates viewpoints. Subject to the Banca d'Italia's approval and compatibly with the general trend of the European capital market, the bond loan may be issued within the year 2002.
  
  Furthermore, the Board of Directors appointed Valerio Battista General Manager of the Energy Cables and Systems Sector and Fernando Gonzalez Deputy General Manager of the same Sector.
  
  The final Pirelli SpA and Group's consolidated financial statements for the year 2001 will be submitted for the approval of the Board of Directors of the Company on 27 March 2002. Finally, the 2002 calendar of main corporate events and financial announcements is set out below:
  
  PIRELLI S.p.A: 2002 CALENDAR OF MAIN CORPORATE EVENTS (Pdf file, 5Kb)