Thanks to the efficiency plan and cost reduction, Pirelli limits the impact of the pandemic on accounts and closes 2020 with a profit of 42,7 million euros, which compares with 457,7 million in 2019. Instead, they go down the revenues, to €4,3 billion (-14,1% on an organic basis and -19,2% with exchange rate effect). On the profitability side, theAdjusted EBIT it stands at 501,2 million, from 917,3 million in 2019. These are the preliminary results approved by the group's board of directors.
The numbers are in line with the targets and with the consensus of analysts. Cash flow before dividends is positive for €248,8 million (from +344,1 million in 2019), a figure that drops to +207,6 million if we exclude the positive impact of the convertible bond issued in December.
As at 31 December 2020 the net financial position of Pirelli is negative for 3,25 billion, an improvement compared to 3,5 billion at the end of 2019.
In the wake of the recovery expected for the auto sector in 2021, the group expects this year an increase in revenues of approximately 4,7-4,8 billion euros and an adjusted ebit margin in a range between "over 14% ” and around 15%, compared to 11,6% in 2020. Net cash flow before dividends is expected to be around 300-340 million after investments, equal to around 7% of sales.
In 2020 volume trends recorded an overall decrease of 15,3%, and therefore better than the estimate of -17% and -18% made in November, with -9% in the "high value" segment and -21,4% in the standard segment. Volumes in original equipment saw Pirelli post a better performance than the market (-6,3% compared to -13,2%) while in the spare parts channel, against a contracting market of 6,9%, Pirelli reported a decline by 8,9%.
On the front of Costs, the benefit deriving from the cost competitiveness plan and the Covid-19 plan was in line with what was announced in May, with an impact of 142 million euros net of inflation and slowdown and 270 million at a gross level.
Pirelli expects the global tire market to return to 2019 levels in 2023.
