Pirelli & C. (PIRC) Q2 2024 earnings summary

Executive summary

• H1 2024 results confirmed strategic effectiveness, with High Value segment now 77% of revenues and strong market share gains in ≥18” tyres for both OE and Replacement.

• Profitability improved, with adjusted EBIT margin at 15.6%, driven by price/mix and internal efficiencies offsetting inflation.

• Net sales reached €3,447.5M (+0.3% YoY), with organic growth of 4.6%.

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

• Net cash flow before dividends improved to -€519.2M, reflecting robust operating performance.

Financial highlights

• Adjusted EBIT was €539.1M (+4.2% YoY), with a 15.6% margin, up 0.5 percentage points.

• Adjusted EBITDA reached €768.3M (22.3% margin), up 4.0% YoY.

• Net financial position at €2,978M as of June 2024, improved from €3,088M in June 2023.

• Cash absorption before dividends was -€519.2M, improved YoY.

• Liquidity margin at €2,390.7M, covering maturities until Q1 2027.

Outlook and guidance

• 2024 revenue target confirmed at €6.6–6.8B, with volumes expected to grow +1.5% to +2.5%.

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

• Net cash generation before dividends forecasted at €500–520M; net financial position targeted at ~-€1.95B, leverage at 1.32x–1.26x.

• High Value segment expected to grow mid-single digit, Standard segment to decline.

• ROIC post-tax expected at ~21% for 2024.