The Pirelli Board of Directors approved the 2018 results, proposing to the shareholders' meeting the distribution of a dividend of 0,177 euros per share, equal to total dividends of 177 million euros. The year highlights operating trends in line with the targets thanks to the business model focused on High Value, whose performance is confirmed to be higher than that of the market.
In Piazza Affari, the stock fluctuates and, after a downward suspension, marks a drop of 3,8%. Weighting the shares is the rumor published this morning by Bloomberg relating to the intention of China National Chemical Corp to reduce its stake in the group as part of a review of its overseas investment strategy aimed at reducing debt after the Syngenta operation.
Turning to the accounts, the 2018 financial year, in particular, was characterized by:
• the organic growth of revenues, equal to +3,7%, to 5,19 billion thanks to the strengthening recorded in all geographical areas in the High Value segment, which today represents 63,7% of total revenues (+6,2 percentage points compared to 57,5% in 2017). High Value volumes recorded a growth of 11% with an improvement in the market shares of the Car New Premium (+14,3% Pirelli sales volumes of the Car ≥ 18” compared to a market growing by +10%) ;
• the improvement of the price/mix, equal to +6,8% in 2018 (+6,5% the target), due to the growing weight of the high-end products, the progressive improvement of the product and channel mix and the increases prices in emerging countries to counter exchange rate volatility;
• the reduction of exposure to the Standard, with a 14% drop in volumes due to the acceleration in the exit from smaller-sized and less profitable products in a context of general slowdown in the Standard market;
• the acceleration of the efficiencies program starting from the third quarter (70 million euros in the whole of 2018, 1,3% of revenues) which more than offset the cost inflation (-48 million euros);
• the rapid implementation of cost recovery actions (approximately 50 million euro) in response to the worsening market trends on the Standard in emerging countries, particularly in South America;
• a further increase in profitability of 2 percentage points to 18,4% (Adjusted Ebit margin on revenues).
The net financial position remains negative by 3,1 billion, but an improvement compared to the 4 billion euro as at 30 September 2018 and the 3,2 billion as at 31 December 2017. The net financial position at the end of 2018 includes approximately 140 million, including investment advances in the JV in China and slowdown/restructuring in Brazil, recovering between now and 2020. Consequently, the ratio Net Financial Position/Adjusted Ebitda before start-up costs stands at 2,49x (2,7x in 2017, 2,35x the target 2018).
Finally, in the analysis conducted by Institutional Investor, which asked 1.900 of the main analysts and investors to indicate the best companies by evaluating the transparency and quality of financial communication, Pirelli ranks first in Europe among the mid caps of the sector auto & parts, followed by Brembo and the German Plastic Omnium.
(Last update: 11.23 pm on 27 February).
