Pirelli Tyre S.p.A. Business Report FY2011

Business Highlights

Financial Overview

(in million euros)
  FY2011 FY2010 Rate of
change (%)
Sales 5,654.8 4,848.4 16.6 -
Operating income 581.9 407.8 42.7 -
Sales by business unit
Tire Sector 5,601.6 4,772.0 17.4 1)

-Net sales in 2011 totalled 5,601.6 million euros, up 17.4% from the 4,772.0 million euros reported a year earlier.

-The premium segment confirmed its role as the driving force behind the growth in revenue, with net sales growing over the year by 27.3% to 1,844 million euros.

-Sales were up in both business segments: Consumer with a positive change of 18.9% (including -1.4% translation differences) and Industrial, with a positive change of 13.9% (of which -2.2% translation differences).

-When broken down by sales channels, 74.5% of sales refer to the replacement channel, while original equipment accounts for 25.5%.


-Pirelli Asia Pacific CEO, Giuseppe Cattaneo, revealed on Jan. 14 the company's plan to double its market share in the Asia Pacific region in two to three years. It will double its China plant's production capacity of passenger car tires in 2012 and increase its marketing efforts in order to acquire in an early stage the same level of market shares as in Europe and South America, both taking leads in sales volume. (From an article in the Nikkan Jidosha Shimbun on January 15, 2011)


-In Dec. 2011, the Company announced that it acquired from Camfin Group the remaining 49% of Pirelli & C. Ambiente SpA, a company which focuses on energy and the environment, offering solutions for sustainable development, and of Pirelli & C. Eco Technology SpA, a company which specializes in the production of anti-particulate filters and low environmental impact fuels. The total outlay for the acquisition of the two shareholdings was approximately 7 million euros. (From a press release on December 23, 2011)


R&D Expenditure

(in million euros)
  FY2011 FY2010 FY2009
Overall 169.7 149.7 137.1
% of Sales 3.0% 3.1% 3.4%

Technological Alliance

-In Nov. 2011, the Company and the Milan Polytechnic signed the Joint Labs agreement for research in the tire sector. The agreement, which has a 3-year duration (2011-2014), is focused on the fields including the company's intelligent tire called Cyber Tyre. The tire can supply the driver and car with information on the state of tire as well as road conditions thanks to a chip inserted into the carcass. (From a press release on November 4, 2011)

Investment Activities

Capital Expenditure

(in million euros)
  FY2011 FY2010 FY2009
Tire Sector 626.2 438.6 225.2

Investment Outside Italy

-In Dec. 2011, the Compnay announced that, in line with the agreement signed by Sibur Holding, Pirelli and Russian Technologies on July 25, 2011, the transfer of the tire plant in Kirov, Russia from Sibur to the joint venture between Pirelli and Russian Technologies was finalized. (From a press release on December 14, 2011)

-In July 2011, the Company and Russian Technologies State Corporation announced that they will acquire the Kirov plant (Russia) of Sibur Holding for the joint venture being formed by Pirelli and Russian Technologies. The transaction is expected to be completed by November 2011. Pirelli Tyre S.p.A. and Russian Technologies had announced their plan to form a Russia-based joint venture in November 2010. The Kirov plant has a current production capacity of more than 7 million pieces in the Car and Light Truck sectors, as well as a commitment to transfer further assets that should bring the JV's production to 11 million pieces by 2014. The transfer of all these assets will take place in exchange for a total consideration of 222 million euros. The joint venture's sales are expected to be around 300 million euros in 2012, growing to over 500 million euros in 2014. This will also be the result of investments of 200 million euros, over the 3-year period 2012-2014, in plant upgrade and to increase production capacity. (From a press release on July 25, 2011)

-In Oct. 2011, the Company announced that it will build a new radial truck tire factory in Argentina. The construction of the new factory is expected to start at the beginning in 2012. The project calls for investment from 2012 of approximately 300 million USD for the first phase of development which ends in 2014. A second phase would require additional investment of about 200 million USD. The Argentinian government will facilitate the project by funding part of the investment. The first investment phase aims to deliver an annual production capacity of 700,000 pieces and employ about 700 people. The second phase would enable the plant to reach a potential production capacity of 1.4 million pieces, at full operation, and employ about 1,200 people. In 2011, Pirelli estimates that its revenues in Argentina will reach 500 million USD, an increase of 40% from 2010. (From a press release on October 13, 2011)

-In Aug. 2011, the Company announced that it inaugurated the extension of the tire factory in Slatina, Romania. Between 2005 and 2010, Pirelli invested 300 million euros, which will climb to over 450 million euros by 2014, in the Slatina site which includes a factory for car tires and a factory for the production of steelcord and in Bumbesti Jiu-Gorj where there is a factory for anti-particulate filters for diesel engines. Of the investment, 160 million euros are destined to the planned extension of the tire factory, begun in 2008 and to be concluded in 2013. The extension project received the support of the Romanian government through funding of approximately 28 million euros. Thanks to additional investments, the car tire factory in Slatina will see its annual production rise from the 7 million pieces expected at the end of 2011 to 10 million pieces by the end of the extension project and the extension of its area, initially 100,000 square metres and already today grown to 160,000 square metres, will increase to 175,000 square metres. (From a press release on August 30, 2011)