After the announcement of the postponement of the new industrial plan to the first quarter of 2020, the Pirelli shares fall on the stock exchange. The title of the tire company loses 6% to 5,4 euros per share and leads the declines of the Blue Chips in Piazza Affari.
The group presented its third quarter accounts on Tuesday 29 October with closed markets, with revenues above expectations and profits lower than consensus. Revenues just over €4 billion, up 2,8% compared to the same period last year and by 6,7% in the third quarter alone. The group was affected by the car crisis (-5,9% sales in the period) but High Value revenues rose by 7,5% to 2.719,9 million euro thanks to the strengthening in all geographical areas. Incidence on turnover up to 67,4% from 64,5% at 30 September 2018. The net profit from continuing operations also increased, albeit slightly, by 2% to 385,7 million euro ( 378,1 million euro as at 30 September 2018).
THEAdjusted Ebit drops to 685,0 million euros (700,1 million euro as at 30 September 2018), with an Adjusted Ebit margin of 17,0% (17,8% as at 30 September 2018), also due to higher costs of saturating Standard capacity linked to lower production for reduce stocks. Debt rises by over 1 billion: the Net Financial Position – excluding the impact of IFRS 16 – is negative for 4.002,3 million euro (-4.480,2 million euros including the impact of IFRS 16 equal to 477,9 million euros) compared to 3.180,1 million euros at December 31, 2018 due to the usual seasonality of working capital and the payment of dividends for 177 million of Euro.
As for the 2019 targets, Pirelli confirmed revenues of at least 5,3 billion euros are expected, up by about 2,5% (previous indication between +1,5% and +2,5%, therefore the maximum spread in this case). The adjusted Ebit Margin was reduced between 17% and 17,5% (previous indication between 18% and 19%).
The group has thus decided to postpone the new industrial plan to the first quarter of 2020: a decision explained by the need to immediately prepare significant cost reduction measures that allow a lowering of the break-even point of the accounts already for 2020.
