Pirelli third quarter sales drop despite 'high-value' recovery 

Milan, Italy – Pirelli & C. SpA has seen improvements in the market over the three months to end of September, but the tire maker's results remain below prior-year levels, due to the impact of the Covid-19 pandemic.

“There was a marked improvement in the revenues’ trend in the third quarter,” said Pirelli in its nine-month financial statement 11 Nov, adding that its efficiencies plan and costs reductions mitigated the impact of Covid on results.

Third quarter revenues fell 7.5% to €1.2 billion, affected by negative currency impact. A recovery in demand for high value – premium and high rim-size tires – and price/mix partially offset the currency impact and a 12% decline in standard tire sales, Pirelli said.

Pirelli also noted that the fall in volumes was “more contained” during the quarter, with the high-value segment posting a 3.9% growth. 

In particular, Pirelli said, volumes for higher rim-sized tires rose 4.3% in the OE segment, driven by the performance in Asia-Pacific, particularly China, and North America.

The Milan-based tire maker also said it ‘regained’ market share in the replacement channel for 18-inch and bigger tires, with volumes up 6.1% in the third quarter, compared with a decline of 24% in the first quarter. 

Third quarter adjusted EBIT fell 12% to €214 million, with adjusted EBIT margin at 16.7%, down from 17.7% in the third of 2019.

Total net income was up 6.6% during the third quarter at €83.9 million, Pirelli said.

Over the nine months to end of September, sales fell 23.4% to €3.1 billion, due to a fall in demand particularly in the second quarter and the volatility of exchange rates. 

Over the period, high-value segment saw sales fall 19%, while demand in the standard segment plunged 32.4%.

Over all volumes declined 20.7%, reflecting a decrease of 14.9% in the high-value segment and 26.4% in the standard tires segment.

Adjusted Ebit for the nine months came in at €280.4 million, nearly 60% lower than €685 million reported in 2019. Here, Pirelli said the contribution of efficiencies and cost containment actions limited the impact of the fall in demand and the Covid-induced slowdown.

Profitability over the nine-month period fell to 9.1% compared to 16.7% posted for the same period in 2019.

Net income in the first nine months was in the negative territory at -€17.8 million, down from €386 million reported last year.