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November 19, 2017 12:00 AM

Pirelli premium strategy drives 10% earnings growth

Patrick Raleigh
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    Milan – Pirelli & C. SpA’s strategy to focus on high value, premium tires has paid off with a 9.7% year-on-year increase in earnings (EBIT adjusted before non-recurring items, restructuring and start-up costs) for the first nine months of 2017 at €681.2 million.

    The Milan-based tire maker attributed the increase to price/mix, volumes and efficiencies, which it said “more than offset” higher raw-materials costs.

    The Italian company, which now solely manufactures passenger car and light vehicle tires, said its revenues increased by 9% to €4.0 billion for the period, compared to the first nine months of 2016.

    The high-value segment, which Pirelli has shifted its focus on since relaunching itself as a ‘consumer tire manufacturer’, witnessed a 13% increase in both volumes and sales.

    The segment, posted sales of €2.34 billion, representing 58% of the company’s total sales, up from 56% of total sales a year ago.

    Volumes of new premium car tires, above 18 inches, grew by 15%, some 4% above market trend, Pirelli said.

    Standard tire sales stood at €1.7 billion, up 4% compared to the same period last year, despite a 5% drop in volumes. Volumes were down particularly in Russia, Latin America, the Middle East and Europe.

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