PIRELLI: POSITIVE IMPACT OF AROUND 107 MILLION EURO IN FIRST HALF 2019 DUE TO THE RECOGNITION OF TAX CREDITS IN BRAZIL
Milan, April 1, 2019 - Pirelli was today informed that a judicial decision by the Federal Regional Court of the First Region (T.R.F.-1, with seat in Brasilia), which recognized the right of its Brazilian subsidiary, Pirelli Pneus Ltda., to exclude the ICMS tax (State Tax on Operations levied on the delivery of goods and interstate and inter-municipal transport and communication services) from the calculation basis of the PIS and COFINS social contributions for the period 2003-2014, is no longer subject to appeal and will formally become final (res judicata).
This will generate an expected positive income impact in the first half of 2019, net of due income taxes, of approximately 107 million euro, broken down as:
- positive impact on the Operating Result (EBIT) of around 80 million euro
- positive impact on Financial Income of about 82 million euro
- negative fiscal impact of around -55 million euro
As these positive non-recurring impacts only effect the above mentioned items in the income statement, there are no changes to the 2019 forecast figures (adjusted Ebit margin* ~19%, revenues +4%/+6%), as announced to the market on 14 February. The benefits in terms of group cash flow are expected to arrive in the 5-year period 2020-2024.
*adjusted EBIT margin: is calculated by dividing the EBIT adjusted by revenues from sales and services (net sales). This measure is used to evaluate operational efficiency, and excludes from the operating result (EBIT) the amortisation of intangible assets relative to assets recognised as a consequence of Business Combinations, the operating costs attributable to non-recurring and restructuring expenses and the expenses relative to the retention plan approved by the Board of Directors on February 26, 2018.