Pirelli Tyre S.p.A. Business Report FY ended Dec. 2017
|(in million EUR)|
|FY ended Dec. 31, 2017||FY ended Dec. 31, 2016||Rate of
1) Net Sales
-Group net sales amounted to euro 5,352.3 million, which represented a growth of +7.6%, +7.9% in organic terms, or rather net of the impact of the exchange rate effect (-0.7%), and for the consolidation of the Aeolus Tyre Car business (+0.4%). Organic growth for the fourth quarter was equal
-Aeolus Tyre Co., Ltd. announced that it will establish Jiaozuo Ailuchi Tyre Co., Ltd., a wholly owned subsidiary in Jiaozuo, Henan, by investing CNY 100 billion. After the establishment, Aeolus Tyre plans to transfer its passenger car tire business' assets and liabilities to the new company. This move is part of the company's plan to reorganize its business after China National Chemical Corporation (ChemChina), which is Aeolus Tyre's parent company, acquired Pirelly Tyre Co., Ltd., the Chinese unit of Italy-based Pirelly Tyre. Meanwhile, Pirelly Tyre will also create a subsidiary, and will transfer all the assets of its industrial tire business to the new company. After that, Aeolus Tyre will transfer the assets of its passenger tire business and acquire Pirelly Tyre's industrial tire business through a stock swap between the two new subsidiaries. (From news releases issued by multiple sources on March 23, 2016)
Out look for 2018
- Target of Revenue growth is higher than 6% compared with 5,352.3 million euro in 2017
- Growing weight of the High Value component, which will be equal to about 60% of total revenues at the end of 2018
- Start-up costs declining to about 40 million euro (50 million in 2017)
- CapEx at about 8% of revenues (9.1% in 2017).
|(in million EUR)|
|FY ended Dec. 31, 2017||FY ended Dec. 31, 2016|
|% of Sales||4.1||4.5|
-The company and the Lombardy Regional Government signed a competitiveness agreement which calls for a free grant regional contribution of EUR 1.9 million for the “Total Safety System” R&D project conducted by Pirelli at its research center in Milan, Italy. The project, which is being developed by Pirelli Tyre and will last 24 months, has a total cost of EUR 5.35 million and is part of the activities linked to the development of a new generation of tires based on the concept of “total safety.” (From a press release on February 9, 2016)
CYBER FLEET truck fleet monitoring system
-To supplement the Company’s use of microchips in tires which monitor road conditions, the Company developed the CYBER FLEET monitoring system for truck fleets. CYBER FLEET acts as a central hub and gathers data collected by vehicles utilizing tires with embedded electronics. This allows a fleet manager to monitor the status of deployed vehicles.
Tires made from Guayule tree rubber
-The Company developed high performance tires made from natural rubber of the Guayule tree, the first time that the tree has been used in the production of performance tires. After two years of laboratory testing, the prototype tire was tested on a Maserati Ghibli and recorded the same level of performance as tires made from petroleum sources.
Cinturato All Season tire
-In 2015, the Company launched the new Cinturato All Season tire. The tire can be used in the summer without the typical performance loss of winter tires in heat, and utilizes an internal seal to continue operations in the event of a puncture. The design features a directional tread pattern to improve performance both in wet and snowy conditions, and also reduce noise generated by the tire.
Investment Outside Italy
-Pirelli announced that it is investing EUR 250 million in the modernization of its factories in Latin America over the 2018 to 2020 period with new equipment and data integration. The primary objectives are to adopt industry 4.0 practices that connect manufacturing equipment and plants, increase plant efficiencies, and enable production of more expensive tires for larger wheel sizes. While Pirelli also produces in Argentina and Venezuela, the largest portion of the investment will be in Brazil. Pirelli has been supplying run flat for the Mercedes-Benz GLA assembled in Iracemapolis, Brazil. The company also provides high-performance tires in Brazil for Audi, Fiat, Jeep, Hyundai, Land Rover, Toyota and Volkswagen.
-The company invests around EUR 200 million through 2021 at the Slatina production hub in Romania. By that year, Pirelli’s investment will have reached a total of around EUR 740 million, creating around 500 new jobs and bringing annual production capacity up to 15 million units, from the present 10 million. Overall, the factory’s floor space will be extended to 260,000 square meters from the present 210,000.