Pirelli cuts 2019 forecasts as markets decline

Milan, Italy – Pirelli & C. SpA has revised down its financial outlook for 2019, on continuing weakness in the OE market and competitive pressures on prices in the ‘standard’ tires segment.

In its quarterly financial statement issued 1 Aug, the Italian consumer tire producer said it expected the market to fall by 1.2%, versus a previous estimate of flat growth.

The company now expects the standard products segment to decline -2%, while new premium tires (rim sizes of 18” and above) is anticipated to grow by 6%, below the previous forecast of 7%.

Revenues are on track to grow by between 1.5% and 2.5% year-on-year, against previous indication of between +3% and +4%, the company added.

Total volumes are expected to decline by between 2.5% and 2%, as opposed to an earlier estimate of -1%, due to “more cautious expectations” regarding OE demand and the standard segment in South America.

Pirelli anticipates high-value volumes to grow by between 7.5% and 8%, below the previously announced 9%. Standard volumes are expected to fall by between 12% and 11.5%, compared to a previous estimate of 11%.

The price/mix is expected to improve by between 4.5% and 5%, down from previous indication of +5% and +5.5%. This, Pirelli said, is due mainly to competitive pricing pressure in the standard segment and low-tech high value tires.

Investments will top out at around €380 million for the year, against the previous indication €400 million, the Italian group further stated.