Pirelli closes the first six months of the year with a loss of 101,7 million euros, against the profit of 307 million recorded in the same period of 2019. The turnover instead, it fell by 31,6%, to 1,816 billion, due to the sharp drop in demand produced by the Covid-19 pandemic.
On the profitability front, the adjusted Ebit it amounts to 66,7 million euros, a sharp drop compared to the 440,5 million of the first half of last year, but still positive thanks to efficiencies and cost containment.
Il cash flow net amounted to -757,5 million euro, compared to -817,4 million in the first half of 2019 (-640,5 excluding the dividends distributed in 2019). The lower investments (capex and financial investments in shareholdings) and the improvement in the management of net working capital mitigated the impact of the lower operating performance.
As of June 30, the net financial position was negative for 4.264,7 million euro (from -3.507,2 million at 31 December 2019 and from -4.261 million at 31 March 2020).
Given the growing volatility of exchange rates and commodities, Pirelli has adjusted its budget targets downwards disclosed to the market on 3 April. For 2020, the group now expects revenues of between approximately 4,15 and 4,25 billion euros (the previous estimate was 4,3-4,4 billion), due to the impact of exchange rates, now estimated at around -4 % (from -2%). The adjusted Ebit margin should settle between 12% and 13% (from 14%-15%), while investments are confirmed at around 130 million euro and the net financial position at -3,3 billion, with a generation of net cash of 190-220 million (from 230-260 million) without distributing dividends.
Instead, the update of the Pirelli plan to 2022 has been postponed. The group makes it known that it needs to better evaluate the evolution of the macroeconomic scenario in light of the Covid-19 emergency before reviewing the targets of the 2020-2022 business plan. The revision will arrive within the first quarter of 2021, and not in the fourth quarter of 2020 as previously anticipated.
“The second quarter of 2020 has put our business under pressure like never before due to the Covid-19 pandemic – said the executive vice president and CEO of Pirelli, Marco Tronchetti Provera – The High Value segment has once again proven its resilience”.
Finally, Angelos Papadimitriou he was co-opted to the Pirelli board of directors to replace the outgoing professor Carlo Secchi. On the proposal of the CEO, the Board set up a general management entrusted to Papadimitriou, who was recently indicated as a potential successor to Tronchetti Provera at the helm of the group.
