Profits and revenues up for Pirelli in the first nine months of 2012. However, the group cuts its 2012 turnover targets even if it confirms profitability, improving the margin target to 13%. 22,7% to 308,3 million euros and 7,2% in revenues to 4,57 billion. Operating profit, 592,8 million, is already above what was recorded in full year 2011. Looking at the data for the third quarter, sales increased by 5,1% to 1,55 billion and profit rose by 19,2% to 192,2 million. "The negative impacts of the crisis on volumes (-6,8%) were offset by the positive performance of the Premium range as well as by the strengthening of the production and commercial presence in rapidly developing economies and with more favorable demand dynamics", Pirelli states in a note.
In the Premium segment, where Pirelli aims for global leadership in 2015, the trend in volumes in the third quarter (+12,5%) was in line with the previous quarters and leads to progressive growth in Premium volumes over the first nine months equal to 13,5%, with a turnover growing by 23,5% to 1.612,3 million euros. And the focus on Premium products, together with the stable pricing policy, the efficiency plan (to 155 million euro from 150 million) and the reduction of costs (in particular of raw materials), will make it possible to achieve a target throughout 2012 of profitability of 800 million euro “despite the accelerated reduction of non-Premium production and the deterioration of the macroeconomic scenario, particularly in Europe”. These actions make it possible to increase the margin target to 13% compared to the previous "above 12%". Volume decline is expanded to 5-5,5% from the previous drop of 3-4% with a Premium volume target revised to +17-18% from the previous +20%. Furthermore, a reduction of standard production in Russia is foreseen, and a consequent reduction in sales, to approximately 200 million euros (250 million the previous target).
To face the economic crisis, "we accelerate our plan to focus on the Premium segment, which demonstrates resilience and 3 times higher growth, and we rapidly abandon the standard segment", said the president Marco Tronchetti Provera to analysts, adding that: The advantages will be seen over the next two years while 2012 discounts the costs of the plan.
The BoD then authorized bond issues up to a maximum of 1 billion euro (or the same value in other currencies) by 2013, even in several tranches on international markets. The issue is part of a twenty-year plan of the Euro medium-term note program (Emtn) for a maximum amount of 2 billion approved by the board to "timely seize the best funding opportunities to continuously support business growth". Finally, the board also co-opted Mario Greco, CEO of Generali, to replace Giovanni Perissinotto who had resigned on 23 July last
