Investments for 463.4 million destined largely to the growth and improvement of the mix and quality confirm the centrality of this segment. The recent Chinese joint venture is looking at the evolution of the local market and the increasing share of type-approval obtained in the original equipment sector in the China, Japan and Korea.
Pirelli is becoming more High Value. According to preliminary data, the group led by CEO Marco Tronchetti Provera closed 2018 with a turnover of 5.194 billion, registering an organic growth of 3.7% in comparison to 2017. It is estimated an increase between 4 and 6% of revenues for 2019 compared to the financial year just ended. This increase is supported by the strengthening of the High Value segment, which in 2018 weighed 64% on revenues and whose margin is expected to reach 67% in 2019. Investments for 463.4 million destined largely to the growth and improvement of the mix and quality confirm the centrality of this segment. Pirelli thus achieved all operating targets, with adjusted EBITDA up 8.5% to 1.23 billion, while adjusted EBIT rose 9% to 955 million.
Start-up costs are expected to be around 40 million euros (47.7 million euros), to be used for the strengthening of the digital transformation program, the continuous development of Cyber solutions and the launch of the new joint venture in China, in line with the 2018 figure.
Last October, the Bicocca group signed the closing for the purchase of 49% of the joint venture which owns through the company Jining Shenzhou Tyre, a new consumer tire production plant in China. The 65 million euro investment will provide the necessary production flexibility in the high value segment, taking into account the evolution of the Chinese market, the developments expected in the electric car segment and the increasing share of type-approval obtained in the original equipment sector in China, Japan and Korea.
Pirelli intends to speed up on the Chinese and Asian markets. To do so, he did not hide his intention to participate in the Made in China 2025 plan, launched by the Beijing leadership to update and automate the industry, relying on the support of ChemChina, the Chinese chemical giant, which is its majority shareholder. The appointment of Filippo Maria Grasso as CEO of China National Tire&Rubber Corporation last April not only has emphasized the desire for a "common vision and approach" to grow in the local market for added value products, but has also consolidated its position and ties with Beijing. The company is a subsidiary of ChemChina subjected to the activities of the eastern public tire giant, operating in 140 countries and regions.
Speaking of numbers, the net financial position is negative for 3.18 billion but improving compared to the 3.218 billion reached at the end of 2017. In 2019, in addition to the increase in revenues, a surge in profitability is expected, with the adjusted ebitda margin at around 19% (compared to 18.4% in 2018). The planned investments amount to 430 million. The industrial plan up to 2022 will be set up within this year.
(Source:Class Editori)
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