Pirelli & C. Spa Board Reviews Consolidated Results to 31 March 2024

PIRELLI: REVENUES STABLE IN THE QUARTER, ADJUSTED EBIT MARGIN RISES TO 15.5% AND NET PROFIT AT 100.4 MILLION EURO

NET CASH FLOW IMPROVES AGAINST FIRST QUARTER 2023

Revenues: 1,695.5 million euro, substantially stable compared with 1,699.7 million euro in first quarter 2023 (organic variation +4.6% excluding forex effect of -4.8%)

- Price/Mix: +2.3% thanks to improved product and channel mix

- Further strengthening in High Value: market share grows in Replacement channel

- Adjusted Ebit: 262.6 million euro, growth of +5.8% compared with first quarter 2023 thanks to solid commercial performance (volumes and price/mix) and efficiencies

- Adjusted Ebit margin 15.5% (14.6% in first quarter 2023)

- Net profit 100.4 million euro (115.0 million euro in first quarter 2023) which discounts impacts linked to hyper-inflation, the normalization of which is expected during the course of the year

- Net cash flow before dividends: -673.4 million euro, an improvement compared with -691.4 million euro in first quarter 2023

- Net Financial Position: -2,935.1 million euro (-2,261.7 million on 31 December 2023, -3,244.0 on 31 March 2023)

2024 TARGETS

- 2024 targets announced to the market on 6 March confirmed

The Board of Directors of Pirelli & C. Spa met today and approved results to 31 March 2024 which show a solid operating performance, thanks to the implementation of the “key programs” of the Industrial Plan.

In particular:

-       Commercial Program

The first quarter of 2024 saw a further strengthening in High Value with a particular focus on Car ≥ 19’’ and Specialties. In Car ≥18”, Pirelli recorded volume growth of 6.8% (market +6.5%), in particular earning market share in the Replacement channel (Pirelli volumes +11.4% compared with market’s +10.1%). In Original Equipment Car ≥18” (Pirelli volumes +0.9% compared with market’s +1.5%). Pirelli continued with its strategic focus on bigger rim sizes (weight of ≥19” volumes grew around 3 percentage representing around 85% of those of Original Equipment ≥18”) and Specialties (weight of Specialties +1 percentage points, now equal to 82% of volumes Original Equipment ≥18”). Further reduction of exposure to Standard (volumes of Pirelli Car ≤17” -3.8% compared with market’s +0.8%).

The different dynamics of High Value and Standard led to a growth of Car volumes of +2.7% (market +2.1%)

-       Innovation Program

In the first quarter of 2024 Pirelli obtained 84 new technical homologations with the main Prestige and Premium car makers, mainly focused on rim sizes ≥19” and Specialties. In electric, Pirelli counts a portfolio of around 550 homologations at the global level with a market share in Premium Original Equipment of 30%. In addition, the homologations continue with the main Premium and Prestige car makers and with Chinese Premium electric vehicle producers. In terms of product innovation, in the Car All-Season segment, positioning has been reinforced with the launch in Europe of the Cinturato AS SF3 while Moto saw the launch at the global level of the Pirelli Scorpion Trail III.

-       Operations Program

In the first quarter of 2024, the group registered gross efficiencies of 32 million euro (23% of the annual target), in line with the expectations and the timing of project development. Actions were also taken to mitigate the impact of the crisis in the Red Sea with the aim of reinforcing the resilience of the value chain. At the industrial level, factory saturation stood at around 89% (97% in High Value) and the plant decarbonization program continued, through the use of renewable energy sources and energy efficiency program, as well as the definition of a road map for the development of a platform to support emissions’ reduction and the digitalization of sustainability processes. The company, in conclusion, continued to cover its main factories with Industrial Internet of Things technology (IioT) to improve the efficiency of production processes.