Pirelli ended 2024 with results superior Forecasts and has confirmed the guidance for the current year. However, any imposition of duties by the administration Trump forces the tire group to evaluate new strategies for mitigate the risk. “We are evaluating significant investments in the United States to increase production capacity,” said the executive vice president Marco Tronchetti Provera in a conference call with analysts. In the event of new trade barriers, the group will implement a series of measures to protect profitability and debt reduction, as well as protect the lower end of its adjusted EBIT forecasts.
The market has rewarded the accounts: the title is the better than Piazza Affari, with a jump of +3,13%.
Pirelli's 2024 financial results
Pirelli ended 2024 with revenues at 6,77 billion euros, up 1,9% (+4,4% organically, penalized by 2,5 percentage points by unfavorable exchange rates and hyperinflation in Argentina and Turkey). The increase was supported by the improvement in the price/mix (+2,5%) and by the growth of the High Value segment, which now represents 76% of sales. Pirelli outperformed the market (+5% compared to +4% of the global market). TheAdjusted EBIT rose by 5,9% to 1,06 billion euros, thanks to the improvement in the price/mix (+2,5%) and efficiencies of 143 million. TheNet income stood at 501,1 million euros (+1%), while the net cash flow before dividends reached 534 million, above the expected range (500-520 million). The net financial position, dropped to 1,925 billion euros, with a reduction of 335 million compared to 2023.
The proposal of the dividend will be presented to the shareholders' meeting on March 26, with a plan that includes a pay-out of 50% of consolidated net profit.
Outlook for 2025 and the US tariffs issue
For 2025, Pirelli confirms the targets of the industrial plan, with revenues expected between 6,8 and 7 billion of euros and a ebit adjusted margin growing at 16 % (from 15,7% in 2024). The debt is expected in further drop to 1,6 billion euros, while the net cash flow before dividends should swing between 550 and 570 million.
The greatest uncertainty concerns the possible introduction of US duties, which could impact prices and margins. “We do not know if and when duties will be introduced or what their amount will be,” explained the CEO Andrea Casaluci.
The United States is worth more than 20% of Pirelli's revenues, with a strong impact of the High Value segment. More than half of the tires sold in the States come from the plant in Mexico, 40% from Brazil and Europe, while production in Georgia stops at 400 thousand units.
To counteract the impact of possible duties, Pirelli is evaluating increase imports from Brazil, to strengthen the local production e optimize costs. “We can leverage our leadership in technology, innovation and connected tires, as well as in eco-safety products and our iconic brand, also thanks to our participation in Formula 1,” Tronchetti Provera underlined.
According to Citi estimates, any tariffs could reduce revenues by 100 million euros and EBIT by 30 million, but the group is preparing to manage the impact to maintain its growth and profitability targets.
