Pirelli & C. (PIRC) Q2 2024 earnings summary

Executive summary

• First half 2024 results confirmed strategic effectiveness, with High Value segment now 77% of revenues and improved profitability among industry leaders.

• Net cash flow before dividends improved due to robust operating performance, with cash trend better than H1 2023.

• Strong price/mix improvement (+2.8% YoY in H1), with internal efficiencies offsetting inflation.

• Market share gains in ≥18" tyres for both OE and Replacement segments, especially in APAC.

• Net profit at €231.3M, impacted by non-cash forex and hyperinflation effects.

Financial highlights

• H1 2024 revenues: €3,447.5M (+0.3% y/y), with organic growth of 4.6% and 1.8% volume increase.

• Adjusted EBIT: €539.1M (+4.2% y/y), margin at 15.6% (up 0.5 p.p. YoY).

• Adjusted EBITDA: €768.3M (+4.0% y/y), margin at 22.3%.

• Net financial position at -€2,978M as of June 2024, improved from June 2023.

• Net cash absorption before dividends was €519M, in line with seasonality and including €23M for Hevea-Tec acquisition.

Outlook and guidance

• 2024 revenue target confirmed at €6.6–6.8B, with volume growth of 1.5–2.5% and High Value segment growing mid-single digit.

• Adjusted EBIT margin expected at upper end of guidance, around 15.5%.

• Net cash generation before dividends forecast at €500–520M; net financial position targeted at ~-€1.95B, leverage at 1.3.

• ROIC after taxes expected at ~21%.

• Investments of €400M planned for 2024 (~6% of revenues), focused on High Value and sustainability.