Pirelli lays out mitigation plan to address Middle East crisis

Milan, Italy – Pirelli has outlined a mitigation plan to offset the impact of the Middle East crisis, warning that ongoing tensions are placing “great pressure” on energy markets and raw material costs.

In a 16 April statement, the tire maker said the situation in the Middle East remained “uncertain” in both duration and overall economic impact, with rising oil and gas prices driving cost inflation.

“This scenario, if prolonged, will translate into an increase in inflation with potential impacts on the performance of the economy and demand,” the group said.

Pirelli noted that its direct exposure to the region is limited, accounting for around 1% of group revenues.

The company said it had taken immediate steps to “guarantee the safety of its people” in the region, while “reinforcing cooperation with local partners and optimising logistics flows.”

At group level, Pirelli has activated a mitigation plan to limit the impact of the crisis.

Measures include price increases and the “containment of additional costs compared with the existing efficiency plan.”

The group is also reviewing logistics flows and temporarily increasing back-up inventories of critical raw materials to “ensure continuity of production.”

Alongside that, Pirelli said it will ‘attentively manage’ its working capital.

The tire maker said the volatility in input and raw material costs is expected to “progressively normalise in the second half” of the year.

Taking these factors into account, Pirelli confirmed its 2026 targets announced 25 Feb, although it expects adjusted EBIT to come in at the lower end of guidance.

Under the outlook issued in February, Pirelli forecast full-year revenues of €6.7 billion to €6.9 billion, with an adjusted EBIT margin of around 16%.