Pirelli closes the first quarter of 2022 with strong growth in revenues and profit despite the volatility of the external scenario (rising inflation, supply chain difficulties and lockdown in China), accentuated by the Russian-Ukrainian conflict. Factors that led Pirelli's management to review i financial targets for 2022, compared to the data communicated to the market when the 2021 financial statements were released. At the end of the day, the tire group's stock is among the best in the Ftse Mib and gains 3,91%.
Pirelli quarterly: adjusted ebit also increased (+35,4%)
Pirelli finished the first quarter of the year with revenues for over 1,52 billion euros, an increase of 22,2% compared to the 1,25 billion obtained in the first three months of 2021. The organic growth in revenues was equal to 19% (+3,2% the impact resulting from exchange). High Value revenues amounted to 74% of the total (compared to 73% in Q2021 2). The consensus of analysts updated to May 2022, 1,44, indicated a turnover of 217 billion euros with an adjusted ebit of 103 million and a net result of XNUMX million.
Also on the rise adjusted EBITDA, which grew from 266,5 million to 333,1 million euro (+25%), the margin rose from 21,4% to 21,9%. The consensus of analysts indicated an adjusted ebitda of 323 million euros and a margin of 22,3%. The adjusted ebit rose from 168,8 million to 228,5 million euro (+35,4%), with an adjusted ebit margin of 15%, thanks to the improvement of the internal levers (volumes, price/mix, efficiencies ) which more than offset the negative external scenario (raw materials, inflation).
Pirelli closed the first three months of 2022 with a Net income (excluding minority interests) of 107,5 million euros, compared to the 39 million euros recognized in the first quarter of 2021. Analysts indicated a positive net result of 103 million euros.
At the end of March 2022 the debt netto of Pirelli had risen to 3,58 billion euros, compared to 2,91 billion at the beginning of the year, while analysts were expecting debt of 3,63 billion euros. Pirelli highlighted that the liquidity margin of 1,94 billion euros guarantees coverage of maturities on debt to banks and other lenders until at least February 2024.
In the full quarter, Pirelli's operating activities absorbed cash of 672,9 million euros (-635,5 million in the first quarter of 2021), while tangible and intangible investments (Capex) amounted to 48,6 million euros .
Revised the 2022 outlook
Geopolitical tensions and falling demand in China for lockdown measures are holding back global economic growth prospects. Global GDP growth of 2022% is forecast for 3,2 (4,4% last February's forecast) and inflation of 6,6% (4,1% in February). These estimates incorporate forecasts of monetary tightening in the US and Europe, as well as the impact of inflation on consumer and production prices.
The new scenario results in more cautious estimates also for the auto sector, with global production expected to be stable compared to 2021 (+6% the previous estimate). Global demand for car tires is expected to grow by around 0,5% (the previous indication was around 3%) which reflects both the aforementioned levels of car production and the decline in car tire demand in China.
In detail, the top management expect revenues of between 5,9 and 6 billion euro, while the adjusted ebit margin is estimated to be around 15%. Net cash flow before dividends is expected to be around €450 million, after investments of around €390 million. At the end of 2022, net debt should instead fall to 2,6 billion euros.
