ERJ staff report (DS)
Milan, Italy -- Pirelli said its tyre unit reported sales of Euro 4162 million for the 12 months ended 31 December 2007. This was an increase of 6.5 percent (excluding exchange rate effects) over the Euro 3949 million reported a year earlier. Profit (EBITDA) grew by 2.8 percent to Euro 548.6 million, which represents a margin of 13.2 percent of sales. Net income as of 31 December 2007 amounted to 210.5 million euros, up 5.6% compared with 199.3 million euros in 2006.
Pirelli said the prospects for the coming year Pirelli Tyre, forecasts slightly improved results compared with 2007, despite difficulties in the world economy and in the sector, continuing increases in prices of production factors, and strengthening of the euro. Overall, however, the company predicted flat results. In addition, Pirelli said it would not make public its three-year business plan, due to market volatility. Pirelli said it expected to reveal details by the end of October.
In the Consumer business (Car/Light Truck tyres and Motorcycle tyres), 2007 revenues amounted to about 2,862 million euros (+4.6%), while operating income from ordinary business amounted to 252.5 million euros (+4.9%), with a ROS of 8.8%.
In the Car/Light Truck segment, Pirelli grew in North America, in a context of stable demand in replacement tyres and falling demand in original equipment, and benefited from an increase in demand in South America. In Europe volume growth occurred in original equipment and in premium segments, with the exception of winter tyres. There was also a significant improvement in Asia, Africa and the Pacific, coherent with the investments underway in those areas. In the car segment, in addition, the year was characterized by the previously mentioned investment in the new manufacturing unit in Yanzhou (China) and by the launch on the world market of PZero The Hero, the new high-performance tyre for "supercars".
In the Motorcycle segment, 2007 sales rose at a rate higher than the market average, which in any case represented an increase over 2006. In original equipment, the sales trend was positive particularly in South America and in Europe, while in the replacement segment the most significant growth occurred in the Americas, in Europe and in Japan.
In the Industrial business (tyres for Industrial Vehicles and Steelcord), revenues were equal to about 1,300 million euros (+7.1%) while operating income from ordinary business amounted to 105.6 million euros (+3.8%). The ROS stood at 8.1%, slightly down (-0.3%) compared with 2006 mainly due to an increase in costs of natural rubber and of steel, not totally compensated by the price/mix trend.
In the segment tyres for Industrial Vehicles there was growth in European markets, in particular in original equipment and in premium lines, driven in part by development of Eastern European countries. Growth was even more significant in South America and China.
In the Steelcord segment, sales volumes grew 4% compared with 2006.
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Press release from Pirelli