Pirelli was affected in the first quarter by the coronavirus crisis. The demand for auto tires has indeed registered in the quarter a 20% drop in sales volumes, a decrease which involved both Original Equipment (-22,7%, in line with car production) and Replacement Parts (-19,3% due to the effect of restrictions on mobility). The consequence is that the overall revenues of the Italian group have fallen by 20%, however remaining above one billion euros. Total net profit decreased by more than half the value of a year ago: 38,5 million euros against 101,4 million euros in the first quarter of 2019.
Adjusted Ebit was €141,1 million, with a margin of 13,4% (16,7% in Q2019 753,5), with limited impact from efficiencies and cost cutting. The net cash flow was also suffering (-4.261 million euros), while the net financial position improved: -4.387,3 million euros (-31 million euros as at 2019 March 2,115). Good news also for the liquidity margin, which amounted to €31 billion as at 2020 March XNUMX, thus ensuring the coverage of financial debts for about 3 years.
However “the experience gained in China – explains Pirelli -, where production and commercial activities are returning to normal, has allowed the group to promptly respond to the profound change in the global scenario, defining an action plan and new objectives for 2020, communicated to the market on April 3rd". The targets for 2020, defined a month ago, are therefore confirmed.
Meanwhile Camfin and Longmarch, a vehicle owned by the Chinese Niu family, have finalized the partnership agreement already announced at the beginning of April for private equity initiatives but with governance and voting rights in Pirelli shareholders' meetings held by Camfin itself.
