Pirelli reports nine-month growth amid currency, tariff headwinds

Milan, Italy – Pirelli & C. SpA has reported growth in the first nine months of the year with both sales and adjusted earnings (EBIT) up compared to the same period last year.

Revenue for the nine months to end of September increased slightly to €5.2 billion, with organic growth of 3.7% offsetting the negative 3.4% impact from currency exchange exchange and deconsolidation of Dackia distribution arm.

Adjusted earnings for the period rose 2.4% to €835 million, helped by the positive price/mix contribution of €140.7 million, said Pirelli 6 Nov.

Price/mix, according to the tire maker, more than compensated for the €4.4 million fall in volumes and a €56 million increase in raw material costs as well as a €53 million negative currency impact.

Efficiencies contributed €117.3 million to earnings growth, offsetting €92.7 million in input cost inflation as well as other expenses.

In the third quarter, revenue decreased 2.3% year-on-year to just under €1.7 billion, but adjusted earnings grew slightly to €277.2 million.

Adjusted earnings margin increased from 15.9% in the third quarter of 2024 to 16.3% this year, according to Pirelli.

The price/mix contribution of €46.8 million offset the €10.6 million fall in third quarter volumes as well as the €5.2 million impact of raw materials and €34.6 million impact of forex.

Efficiency programmes contributed €47.6 million to earnings, more than offsetting the €30.6 million impact of inflation as well as other costs.

Pirelli said it forecasts a “substantially flat car tire market in 2025”, with its ‘more resilient high value segment' seeing a “mid-single digit” growth. The ‘standard segment’ is expected to decline.

On the impact of US trade policies, Pirelli said it roughly exports 40% of its US tire demand from factories in Brazil and Europe, while its local Georgia plant and Mexican operations supplied 60% of the demand.

Pirelli, therefore, said it is exposed to the following tariffs:
- Europe: 15% on imports of car tires from 1 Aug (replacing previous tariffs and the additional 25% tariff applied from 3 May to 31 July);
- Brazil: 25% in addition to pre-existing tariffs on imports of car tires from 3 May;
- UK: 10% in addition to pre-existing tariffs on imports on car tires from 1 July (25% additional tariffs from 3 May to 30 June;
- Mexico: no tariff on imports because Pirelli is a “USMCA-compliant” producer;
- Universal and reciprocal tariffs on moto and bicycle tires from all countries with percentages varying by origin.

Pirelli said its ‘mitigation plan’ had helped contain the impact of the tariffs, as the tire maker revised logistics flows, optimised inventory and continued further cost reduction.

Based on the results of the first nine months and acknowledging the “extremely volatile and challenging external context,” Pirelli confirmed its 2025 targets announced in July. (ERJ report)