Pirelli_in_Figures_2Q_2011 by hedongchenchen

VIEWS: 3 PAGES: 27

									                    PIRELLI IN FIGURES 1H 2011
    Agenda
1   Highlights by quarter   10   NET DEBT BY BUSINESS   19   TYRE EBIT BRIDGE
2   Highlights FY           11   Key Ratio              20   TYRE DEBT
3   P&C Guidance            12   Equity 2011            21   TYRE Markets
4   Income Statement FY     13   Capex                  22   Raw Material
5   Balance Sheet FY        14   R&D                    23   Industrial Plants
6   Balance Sheet YTD       15   TYRE MIX               24   Financial Calendar
7   Cash Flow FY            16   Tyre quarterly data    25   Contacts
8   Cash Flow 1H            17   Tyre YTD
9   DEBT                    18   Revenues driver
PIRELLI & C. HIGHLIGHTS DATA BY QUARTER
(euro mln)

                                                                           2008           1Q09            2Q09            3Q09       4Q09       2009      1Q09    2Q09        3Q09         4Q09       2009       1Q10       2Q10      3Q10      4Q10      2010      1Q11       2Q11
                                                                                                                                                                       restated*                     restated*
Profit and Loss
Net sales                                                                    4,660        1,043.0         1,094.6         1,169.8    1,154.8    4,462.2   947.5   1,006.4     1,058.5      1,055.1    4,067.5    1,134.4    1,234.6   1,249.7   1,229.7   4,848.4   1,400.9    1,388.4
Ebitda before restructuring cost                                               396          101.7           124.4           135.1     146.9      508.1     99.5    126.0           132.1    150.2       507.8     141.9      163.3     174.9     173.6     653.7     203.4      207.5
% on sales                                                                    8.5%           9.8%           11.4%           11.5%     12.7%      11.4%    10.5%    12.5%           12.5%    14.2%       12.5%     12.5%      13.2%     14.0%     14.1%     13.5%     14.5%      14.9%
Ebit before restructoring costs                                                187           50.3            72.0            82.8      91.9      297.0     50.0     75.8            81.8     97.3       304.9      90.2      109.6     119.9     112.8     432.5     146.5      151.3
% on sales                                                                    4.0%           4.8%            6.6%            7.1%      8.0%       6.7%     5.3%     7.5%            7.7%     9.2%        7.5%      8.0%       8.9%      9.6%      9.2%      8.9%     10.5%      10.9%
Ebit                                                                            43           46.8            54.3            62.7      53.6      217.4     46.5     69.6            63.4     70.2       249.7      87.6      104.3     115.4     100.5     407.8     143.3      146.8
% on sales                                                                   0.93%           4.5%            5.0%            5.4%      4.6%       4.9%     4.9%     6.9%           6.0%      6.7%        6.1%      7.7%       8.4%      9.2%      8.2%      8.4%     10.2%      10.6%
Ebit incl. income from equity participations                                  (323)          47.6             24.9           53.4       34.8     160.7     59.8     49.3           69.2      59.8       238.1      84.7      103.2     137.4     105.9     431.2     144.1      146.9
Net income before discontinued operation                                      (476)            1.1           (13.5)            3.7     (13.9)    (22.6)    14.9     11.3           20.3      31.1        77.6      36.7       40.3      83.3      67.7     228.0      81.4       77.4
Net income                                                                    (413)            1.1           (13.5)            3.7     (13.9)    (22.6)                                                 (22.6)                                                4.2     81.4       77.4
Attributable Net income                                                       (348)            9.5            (3.2)          11.9        4.5      22.7                                                   22.7                                               21.7      82.8       78.9


Balance Sheet
Fixed assets                                                                 3,665          3,557           3,582           3,490     3,596      3,596                                                  3,596                                              3,164
Net working capital                                                            418            731             627             511       222        222                                                    222                                                117
Net invested capital                                                         4,083          4,288           4,210           4,001     3,818      3,818                                                  3,818                                              3,281
Equity                                                                       2,374          2,302           2,370           2,571     2,495      2,495                                                  2,495                                              2,028
Provisions                                                                     681            707             732             739       794        794                                                    795                                                797
Net financial (liquidity)/debt position                                      1,028          1,279           1,108             691       529        529                                                    529                                                456
 Pirelli & C. attributable Equity                                            2,172          2,129           2,202           2,245     2,175      2,175                                                  2,175                                              1,991
 Pirelli & C. attributable Equity (in euro)**                                 4.45           4.37            4.51            4.60      4.46       4.46                                                   4.46                                               4.08

Cash Flow
Operating cash flow                                                        (129.6)          (204.0)         183.7           187.5     388.9      556.1                                                             (51.5)    120.3      65.4     176.1     310.3     (207.0)      88.4
Net operating cash flow                                                    (282.2)          (250.5)         145.3           137.8     340.2      372.8                                                             (99.5)     57.4      11.3     137.9     107.1     (269.7)      18.9
Net cash flow                                                            (1,329.8)          (251.2)         171.3           416.2     162.6      498.9                                                            (149.6)    (18.5)     (8.0)    249.3      73.2     (257.2)     (66.1)

** Tot Pirelli shares post reverse stock split 487,991,493 (of which ordinary shares 475,740,182 and saving shares 12,251,311)




                                                                                                                                                                                                                                                                                          1
PIRELLI & C. HIGHLIGHTS YEARLY DATA
(euro mln)
                                                                                                                                                                   2009
                                                                                                     2005         2006             2007      2008      2009             1   2010
                                                                                                                                                                 restated

Profit and Loss
Net sales*                                                                                            4,546         4,841           4,780     4,660     4,462      4,067     4,848
Ebitda before restructuring cost                                                                        568          614             573       396       508         508      654
% on sales                                                                                            12.5%        12.7%           12.0%      8.5%     11.4%       12.5%    13.5%
Ebit before restructoring costs                                                                         355          401             364       187       297         305      433
% on sales                                                                                             7.8%         8.3%            7.6%      4.0%      6.7%        7.5%     8.9%
Ebit                                                                                                    355          401             364        43       217         250      408
% on sales                                                                                             7.8%          8.3%            7.6%      0.9%      4.9%       6.1%      8.4%
Ebit incl. income from equity participations                                                            622         1,192             513      (323)      161        238       238
Net income**                                                                                            399        (1,049)            324      (413)      (23)       (23)        4
Attributable Net income                                                                                 327        (1,167)            165      (348)       23         23        22
Attributable Net income per share (in euro)                                                           0.062        (0.217)          0.031    (0.065)    0.004      0.047     0.044

Balance Sheet
Fixed assets                                                                                          7,624         6,924           3,815     3,665     3,596      3,596     3,164
Net working capital                                                                                     (48)          463             298       418       222        222       117
Net invested capital                                                                                  7,576         7,387           4,113     4,083     3,818      3,818     3,281
Equity                                                                                                5,614         4,687           3,804     2,374     2,495      2,495     2,028
Provisions                                                                                              785           720             611       681       794        795       797
Net financial (liquidity)/debt position                                                               1,177         1,980            (302)    1,028       529        529       456
Pirelli & C. attributable Equity                                                                      5,205         3,880           2,980     2,172     2,175      2,175     1,991
Pirelli & C. attributable Equity (in euro)****                                                        10.77          7.95            6.11      4.45      4.46       4.46      4.08

Cash Flow
Operating cash flow                                                                                      343          374             299      (130)     556         496      310
Net operating cash flow                                                                                  134          104              27      (282)     373         335      107
Net cash flow                                                                                            389         (802)          2,282    (1,330)     499         499       73

Capex and R&D***
Capex                                                                                                    234          255            287       311       225         225      433
Depreciation                                                                                             197          201             214       199       202        198       217
Capex/Amortization & Depreciation                                                                       1.19         1.27            1.34      1.56      1.12       1.14      2.00
R&D expenses                                                                                             174          171             173       156       137        137       150
% on sales                                                                                             3.8%          3.5%           3.6%      3.3%      3.1%        3.4%     3.1%

Key Financial Ratio
Net income/Equity - ROE                                                                             7.38%       (20.37%)            7.63% (13.35%) (93.00%)      (0.93%)     0.19%
Ebit/Net invested capital - ROI                                                                     5.02%          5.36%            6.33%    1.05%    5.50%        6.32%    11.49%
Net financial position / Equity - Gearing                                                              0.21         0.42             n.s.     0.43     0.21         0.21      0.22
Sales* per employee (in thousands of euro)                                                              173          172              155      148      151          138       160

Employees (at 31/12)                                                                                 26,827       28,617           30,823    31,056    29,570     29,570    29,573
of which Tyre                                                                                         23,673       25,169          27,224    28,601    27,481      27,481   28,865
(1) Pirelli RE and PBS as discontinued operations
 * Excluding net sales for deconsolidation DGAG real estate assets in 2007 for €1296mln
 ** 2006 loss was due to the Olimpia writedown
 *** R&D expenses fully included in P&L
**** Tot Pirelli shares post reverse stock split 487,991,493 (of which ordinary shares 475,740,182 and savings share 12,251,311)


                                                                                                                                                                                     2
Pirelli 2011 targets update
   €/bln
                                         2011 Targets    2011 Targets
                                         (May 4, 2011)      Update


                   Revenues                 >5.85         Confirmed
                         Tyre               >5.80         Confirmed
                             Volumes        >+6%            > +5%
                             Price/mix      ~+15%           > +16%


                   EBIT %                8.5% ÷ 9.5%      9.5% ÷ 10%
                         Tyre              9% ÷ 10%       10% ÷ 11%

                         Raw Material
                         Headwind            580             540


                   Tax rate                 <37%          Confirmed
                   Capex                     >0.5         Confirmed

                   NFP                       ~0.7 *       Confirmed

*Not including Russian JV1
PIRELLI & C INCOME STATEMENT YEARLY DATA
(€ milion)                                                               2005                           2006                        2007                         2008                         2009                           2009                         2010
                                                                                                                                                                                                                           restated
                                                                                 of which related              of which related             of which related             of which related             of which related              of which related              of which related
                                                                                          parties                       parties                      parties                      parties                      parties                       parties                       parties
Revenues from sales and services                                       4,546               405       4,841               371      6,505               299      4,660               138      4,462               155       4,067                  1      4,848                  6
Other income                                                             284               118         293               104        286                73        176                          175                           147                           154                  2
- of which non-recurring events                                           21                                                          3                           17                            6                             6
Change in inventories of work in process, semi-finished and finished       13                             7                           30                          115                         (117)                         (109)                           34
Raw materials and consumables (net of change in inventories)           (1,640)                       (1,773)                      (3,037)                      (1,833)                      (1,399)                       (1,373)                       (1,905)
Personnel expenses                                                     (1,030)               (8)     (1,076)               (5)    (1,156)              (15)    (1,175)               (3)    (1,054)              (13)       (949)              (13)     (1,064)               (5)
- of which non-recurring events                                                                                                       5                          (132)                         (59)                          (51)                          (18)
Amortization, depreciation and impairments                              (216)                         (215)                        (219)                        (219)                        (231)                         (219)                         (229)
- of which non-recurring events                                                                                                                                    (7)                          (8)                           (8)                           (7)
Other expenses                                                         (1,613)            (106)      (1,684)            (111)     (2,049)            (117)     (1,688)              (43)    (1,621)              (37)     (1,317)              (16)     (1,443)              (23)
- of which non-recurring events                                           (21)                          (13)                                                       (5)                         (19)                           (1)                             -
Increase in property, plant and equipment from internal work              11                             9                            7                             5                            3                             3                           11
Operating income                                                         355                           401                          367                            43                         217                           250                           408
Net income from equity investments                                       188                           114                          133                          (366)                         (57)                          (12)                          23
   - share of net income of associates and joint ventures                251                           104                          119                         (176)             (176)       (61)               (61)          0                 0          0                  0
   - gains on equity investments                                                                                                                                   56                          33                  0         18                            24
   - losses on equity investments                                        (90)                           (56)                        (20)                        (282)                         (37)                          (37)                           (6)
   - dividends                                                            27                             66                          34                            35                            8                             7                            6
Financial income                                                         248                 13         876                17       340                 31        525                34       373                 30        345                           298                  1
Financial expenses                                                      (314)                (0)       (343)               (0)     (416)                (4)      (605)               (0)     (458)               (11)      (415)                         (363)                  -
Net income before income taxes                                           478                          1,049                         424                          (403)                          75                          168                           365
Income taxes                                                            (128)                          (128)                       (134)                          (73)                         (98)                          (90)                        (137)
Net income from continuing operations                                    349                            921                         291                          (476)                         (23)                           78                          228
Net income from discontinued operations                                   50                         (1,970)                         33                            63                            -                         (100)                         (224)
Net income for the period                                                399                         (1,049)                        324                          (413)                         (23)                          (23)                           4
Attributable to:
Equity holders of the parent company                                     327                         (1,167)                        165                         (348)                           23                            23                            22
Minority interests                                                        72                            119                         159                          (65)                          (45)                          (45)                          (18)

Earnings/(losses) per share (euro per thousand shares)
basic earnings per share
- continuing operations                                                                              150.24                       24.47                        (70.65)                       4.24                         161.39                        479.66
- discontinued operations                                                                           (368.87)                       6.12                          5.74                           -                        (114.73)                      (435.04)
                                                                                                    (218.63)                       30.59                       (64.91)                        4.24                         46.66                         44.62




                                                                                                                                                                                                                                                                                     7
PIRELLI & C BALANCE SHEET YEARLY DATA
(€ milion)                                                  2005                      2006                   2007                   2008                   2009                  2010
                                                                     of which                 of which               of which               of which              of which              of which

Assets                                                           related parties         related parties        related parties         related parties       related parties       related parties

Property, plant and equipment                              1,572                     1,575                  1,650                  1,598                   1,727                 1,977
Intangible assets                                            477                       516                    673                  1,046                   1,047                   849
Investments in associates and joint ventures               4,543                     3,826                    534                    515                     593                   153
Other financial assets                                     1,032                     1,007                    958                    527                     228                   185
Deferred tax assets                                           82                        64                     59                     72                      91                    70
Other receivables                                            539         262           706       334          673        521         702         565         557    395            316
Tax receivables                                                9                        11                     12                     10                      10                    11
Financial instruments                                        -                           -                      4                      3                       -                     -
Investments properties                                           5                       -                      -                      -                       -                     -

NON-CURRENT ASSETS                                        8,259.4                   7,704.8                4,563.0                4,474.2                 4,254.2               3,560.0

Inventories                                                681.1                     715.5                   776.5                 921.1                   679.0                 692.3
Trade receivables                                          943.4        190          999.7       168       1,098.9      122        788.0         77        735.8     91          676.7   8
Other receivables                                          325.0          1          356.2        12         241.5       22        240.0         24        197.1     19          175.0 150
Securities held for trading                                179.6                     119.2                   114.0                 115.8                   161.0                 209.8
Cash and cash equivalents                                  300.3                     269.6                 2,057.7                 253.9                   632.1                 244.7
Tax receivables                                             58.2                      33.4                    43.3                  46.2                    41.5                  25.2
Financial instruments                                       67.1                      29.1                    58.3                  94.0                    26.6                  35.2

CURRENT ASSETS                                            2,554.7                   2,522.7                4,390.2                2,459.0                 2,473.1               2,058.8
TOTAL ASSETS                                             10,814.2                  10,227.5                8,953.2                6,933.2                 6,727.3               5,618.8

Equity and Liabilities

Attributable to the equity holders of the company:        5,204.9                   3,879.6                2,980.2                2,171.8                 2,175.0               1,990.8
         Share capital                                    2,762.7                   2,790.0                1,555.9                1,554.3                 1,554.3               1,375.7
         Other reserves                                   2,010.7                   1,971.0                1,259.7                  965.0                   598.0                 593.3
         Retained earnings                                  104.0                     286.1                    0.0                      -                       -                     -
         Income (loss) for the year                         327.4                  -1,167.4                  164.6                 -347.5                    22.7                  21.8
Attributable to the minority interest:                      408.9                     807.0                  823.8                  202.6                   319.6                  37.2
         Reserves                                           337.4                     688.4                  664.8                  267.6                   365.0                  54.7
         Income for the year                                 71.5                     118.6                  159.0                  -65.0                   -45.3                 -17.5

TOTAL EQUITY                                              5,613.8                   4,686.6                3,804.1                2,374.4                 2,494.7               2,028.0
Borrowings from banks and other financial institutions    1,550.5                   1,377.4                  905.3                1,375.7                 1,505.8                 894.7
Other payables                                               61.8                     132.9                   23.3                   48.5                    34.0                  41.7
Provisions for other liabilities and charges                170.6                     145.1                  146.3                  141.2                   167.8                 165.7
Deferred tax liabilities                                     54.6                      42.9                   44.6                   38.4                    44.0                  33.7
Employee benefit obligations                                510.8                     415.9                  349.1                  366.5                   451.9                 481.7
Tax payables                                                  2.7                       9.7                   11.2                    9.7                    10.0                   5.5
Financial instruments                                         2.0                       4.8                    6.8                    2.1                       -                     -

NON-CURRENT LIABILITIES                                   2,352.9                   2,128.7                1,486.7                1,982.2                 2,213.5               1,623.1

Borrowings from banks and other financial institutions      600.4                   1,562.3        0         754.7        3         695.6         5        289.3      2           247.5 77
Trade payables                                            1,018.3        27         1,102.5       25       1,323.6       29       1,108.6        24        987.9     24         1,066.4   5
Other payables                                              838.3         0           536.9        3       1,394.7       22         482.4         8        491.0     11           403.4   1
Provisions for other liabilities and charges                 54.0                     116.5                   71.3                  135.7        49        130.8      3           116.0 -
Tax payables                                                 42.2                      48.8         1         45.7                   44.0         1         43.9      1            64.6 -
Financial instruments                                       294.3                      45.4                   72.5                  110.5                   76.2                   69.9

CURRENT LIABILITIES                                       2,847.4                   3,412.3                3,662.5                2,576.7                 2,019.1               1,967.7

TOTAL EQUITY AND LIABILITIES                             10,814.2                  10,227.5                8,953.2                6,933.2                 6,727.3               5,618.8


                                                                                                                                                                                                      9
PIRELLI & C BALANCE SHEET YTD
                                                                1Q 08       1H 08           9M 08           1Q 09           1H 09             9M 09         FY 09         1Q 10         1H 10         9M 10         FY 10       1Q 11          1H 11
(€ milion)

Assets
Property, plant and equipment                                     1,570       1,629           1,648           1,599           1,618             1,612          1,727        1,777         1,867         1,820         1,977        1,973         2,040
Intangible assets                                                 1,130       1,048           1,043           1,044           1,038             1,035          1,047        1,047           850           849           849          847           848
Investments in associates and joint ventures                       490          570             635            509              530               523            593          595           132           134           153          137           136
Other financial assets                                             787          663             583            404              396               319            228          235           173           183           185          185           178
Deferred tax assets                                                 60           62              61             73               78                80               91         97            72            72            70           66            61
Other receivables                                                  667          711             779            750              660               641            557          559           162           157           316          323           337
Tax receivables                                                     12           13              12             11                  9                 9             10         10            11            10            11           10            11
Financial instruments                                                   5           4               5               6                 -                 -             -             -             -             -         -                -             -

NON-CURRENT ASSETS                                              4721.3      4700.6           4765.6         4397.3          4329.7             4219.8        4254.2        4319.6        3267.9        3226.4        3560.0     3541.652        3611.3


Inventories                                                      791.8       840.7            902.2          824.4           759.7              673.4         679.0         710.7         669.8         635.0         692.3        747.0         844.3
Trade receivables                                               1225.4      1008.4           1045.9          886.4           828.6              923.0         735.8         922.8         791.1         858.9         676.7        953.6         887.1
Other receivables                                                251.0       236.7            255.4          254.1           204.1              204.9         197.1         213.5         254.0         271.8         175.0        214.9         255.6
Securities held for trading                                      100.8       105.2            143.9          119.5           104.7              135.0         161.0         142.7         136.4         247.9         209.8        205.3         224.8
Cash and cash equivalents                                        981.5       333.9            218.6          242.4           237.8              413.1         632.1         436.8         334.5         141.3         244.7        163.3         135.8
Tax receivables                                                   47.8        40.8             43.2           42.3            41.5               38.9          41.5          46.8          43.4          45.4          25.2         26.0          30.0
Financial instruments                                             76.8        34.4             59.0           40.2            32.4               27.6          26.6          45.2          71.2          60.9          35.2         58.0          42.1
Owned asset for the distribution to shareholders                                                                                                                                         1232.9        1211.8


CURRENT ASSETS                                                  3475.0      2600.1           2668.1         2409.1          2208.7             2415.9        2473.1        2518.4        3533.4        3473.0        2058.8       2368.0        2419.6

Assets held for sale                                        -                 35.6      -               -               -                 -                          -            -             -             -             -           -              -

TOTAL ASSETS                                                    8196.3      7336.3           7433.8         6806.4          6538.5             6635.7        6727.3        6838.0        6801.3        6699.5        5618.8       5909.7        6030.9


Equity and Liabilities
Attributable to the equity holders of the company:              2772.5      2608.1           2499.6         2129.0          2202.1             2244.9        2175.0        2271.8        2004.9        1823.2        1,990.8      2034.7        2013.6
         Share capital                                          1554.6      1554.6           1554.6         1554.3          1554.3             1554.3        1554.3        1554.3        1554.3        1375.7        1,375.7      1375.7        1343.3
         Other reserves                                         1184.1      1089.7            996.3          565.2           641.5              672.5         598.0         678.3         616.1         534.4         593.3        576.1         508.6
         Income (loss) for the year                               33.8        (36.2)          (51.3)           9.6              6.3              18.2          22.7          39.2        (165.5)        (90.0)         21.8         82.8         161.7
Attributable to the minority interest:                           415.0       394.3            309.3          173.4           167.5              325.8         319.6         324.2         311.4         309.1          37.2         37.3          33.6
         Reserves                                                386.3       367.5            294.3          181.8           186.2              352.7         365.0         324.5         321.5         323.6          54.7         38.7          36.6
         Income for the year                                      28.6        26.7             15.0           (8.4)           (18.7)            (26.9)         (45.3)        (0.4)        (10.1)        (14.5)         (17.5)       (1.4)         (3.0)


TOTAL EQUITY                                                    3187.5      3002.4           2809.0         2302.4          2369.6             2570.7        2494.7        2596.0        2316.3        2132.3        2028.0       2072.0        2047.2


Borrowings from banks and other financial institutions           801.3       537.7            545.2         1354.8          1287.3             1355.0        1505.8        1433.4        1012.8        1033.6         894.7        977.9        1054.9
Other payables                                                    21.6        38.5             58.5           38.4            23.3               24.9          34.0          37.7          37.4          37.6          41.7         47.5          43.1
Provisions for other liabilities and charges                     143.4       151.6            141.9          147.1           155.6              163.9         167.8         171.9         159.6         153.4         165.7        162.1         164.6
Deferred tax liabilities                                          42.1        43.2             39.5           39.2            42.5               42.7          44.0          44.0          42.3          38.5          33.7         25.8          28.7
Employee benefit obligations                                     324.6       418.1            413.1          360.2           390.5              374.2         451.9         438.6         484.1         474.3         481.7        471.0         474.8
Tax payables                                                      10.1          9.2            10.0           10.1              9.6               9.9          10.0          10.6          16.8           5.5           5.5          5.0           5.4
Financial instruments                                              6.5          8.2             5.0            2.3      -                 -                           -             -             -             -         -                -             -


NON-CURRENT LIABILITIES                                         1349.6      1206.5           1213.2         1952.1          1908.7             1970.6        2213.5        2136.1        1753.0        1742.8        1623.1       1689.3        1771.5


Borrowings from banks and other financial institutions           909.8      1354.8           1581.5          974.3           721.8              448.7         289.3         301.2         267.3         167.6          247.5       348.5         342.4
Trade payables                                                  1194.6      1089.1           1111.3          840.8           802.8              833.4         987.9        1026.8         994.6         961.8        1,066.4      1087.4        1140.8
Other payables                                                  1338.7       481.8            506.2          448.2           465.4              513.4         491.0         461.3         379.1         617.0          403.4       425.5         484.0
Provisions for other liabilities and charges                      72.8        88.0             91.4          160.4           143.4              158.2         130.8         149.3         117.1         117.8          116.0       115.1         111.3
Tax payables                                                      56.6        52.5             57.6           57.8            40.3               55.5          43.9          62.5          65.3          86.3           64.6        98.1          71.1
Financial instruments                                             86.7        45.2             63.5           70.4            86.4               85.2          76.2         104.8         111.2         101.5           69.9        73.9          62.6
Liabilities related to asset held for the distribution to
shareholder                                                                                                                                                                               797.4         772.4


CURRENT LIABILITIES                                             3659.2      3111.4           3411.6         2551.9          2260.1             2094.3        2019.1        2105.9        2732.0        2824.4        1967.7       2148.4        2212.2

Liabilities associated with assets held for sale                        -     16.0                  -               -               -                 -              -            -             -             -             -           -              -

TOTAL EQUITY AND LIABILITIES                                    8196.3      7336.3           7433.8         6806.4          6538.5             6635.7        6727.3        6838.0        6801.3        6699.5        5618.8       5909.7        6030.9
                                                                                                                                                                                                                                                             8
   PIRELLI & C STATEMENT OF CASH FLOWS
  (€ milion)                                                                             2009                  2010
                                                                                                   of which              of which
                                                                                                    related               related
                                                                                                    parties               parties



  Income from continuing operations before taxes                                           168                   365
  Amortization, depreciation / impairment (losses) reversals of intangible assets and
  property, plant and equipment                                                            219                   229
  Reversal of Financial income                                                             415                   363
  Reversal of Financial expenses                                                          (345)                 (298)
  Reversal of Dividends                                                                     (7)                   (6)
  Earnings (losses) from partecipations                                                     19                   (17)
  Share of earnings (losses) of associates and joint ventures (net of dividends
  received)                                                                                  0                    (0)
  Income taxes                                                                             (90)                 (137)
  Change in inventories                                                                    245                  (110)
  Change in trade receivables/payables                                                    (102)                  128
  Change in other receivables/payables                                                       6                    51
  Change in employee benefit obligations and other provisions                               68                    42
  Other changes                                                                            (64)                   18

A Net cash flows provided by (used for) operating activities                            532.4                 628.1

  Investments in property, plant and equipment                                           (223.2)               (433.1)
  Disposals of property, plant and equipment                                               37.3                  18.0
  Investments in intangible assets                                                         (4.6)                 (4.8)
  Disposals of intangible assets                                                           10.1                   2.8
  Acquisitions of investments in associates and joint ventures                            (13.8)                (16.9)
  Acquisitions of other financial assets                                                   (1.5)                (23.5)          (1)
  Disposal of other financial assets                                                      223.8                      -
  Acquisitions of minorities shares                                                        (4.2)                     -
  Dividends received                                                                        6.9                   5.8

B Net cash flows provided by (used for) investing activities                             30.9                 (451.7)

  Change in share capital                                                                      -                  4.8
  Change in financial payables                                                            (95.8)               (186.4)
  Change in financial receivables                                                          (6.1)               (235.4)
  Change in financial payables/receivables for acquisitions                               (70.1)                (65.8)
  Dividends paid                                                                           (2.3)                (85.1)         (21)


C Net cash flows provided by (used for) financing activities                            (174.3)               (567.9)

  Net cash flows provided by (used for) operating activities                               (8.8)               (8.0)
  Net cash flows provided by (used for) investing activities                                5.2                (1.0)
  Net cash flows provided by (used for) financing activities                                1.2                11.3

   Total cash flows provided by (used for) discontinued operations                        (2.5)                  2.2

D Total cash flows provided by (used for) during the year (A+B+C)                       386.5                 (389.3)

E Net cash and cash equivalents, at beginning of the year                               227.1                 610.8
F Exchange differences on translation of cash and cash equivalents                         (2.4)                  5.3

G Net cash and cash equivalents, at end of the year ( D+E+F) (°)                        611.2                 226.8

  (°) of which:
      cash                                                                               632.1                 244.7
      bank overdrafts                                                                    (21.3)                (18.0)

                                                                                                                              11
   PIRELLI & C STATEMENT OF CASH FLOWS
   (€ milion)                                                                        1H 2009                         1H 2010                      1H 2011
                                                                                                  of which                         of which                     of which
                                                                                               related parties                  related parties              related parties


   Income from continuing operations before taxes                                       73                              151                          246
   Amortization, depreciation / impairment (losses) reversals of intangible assets
   and property, plant and equipment                                                    100                             106                          113
   Reversal of financial expenses                                                       253                             211                          273
   Reversal of financial income                                                        (215)                           (173)                        (228)
   Reversal of dividends                                                                 (7)                             (3)                          (0)
   Valuation of financial assets                                                         12                               4                           (1)
   Share of earnings (losses) of associates and joint ventures (net of dividends
   received)                                                                              2                                3                           0
   Income taxes                                                                         (43)                             (70)                        (87)
   Change in inventories                                                                181                              (87)                       (177)
   Change in trade receivables/payables                                                (391)                             (58)                       (136)
   Change in other receivables/payables                                                  22                               (1)                         (9)
   Change in employee benefit obligations and other provisions                            6                               40                           1
   Other changes                                                                         (7)                              (3)                         18

A Net cash flows provided by (used for) operating activities                         (11.4)                          119.8                         13.0

   Investments in property, plant and equipment                                       (71.6)                          (137.8)                      (232.7)
   Disposals of property, plant and equipment including gain/loss                      12.4                             10.2                         11.0
   Investments in intangible assets                                                    (1.3)                            (1.1)                        (1.4)
   Disposals of intangible assets including gain/loss                                   0.1                      -
   (Acquisitions)/Disposals of investments in associates and joint ventures            (6.3)                            (2.1)                       17.5
   Acquisitions of other financial assets                                              (1.4)                            (1.5)
   Disposal of other financial assets                                                 111.6                      -                                    6.1
   Dividends received                                                                   6.8                              2.9                          0.4

B Net cash flows provided by (used for) investing activities                          50.3                           (129.4)                      (199.1)

   Increase/Decrease in share capital by non controlling interest                                                                                    4.4
   Change in financial payables                                                      (107.4)                           (36.7)                      253.4
   Change in financial receivables                                                     80.3                            (80.1)                      (39.1)
   Financial income/expenses                                                          (38.4)                           (38.0)                      (44.8)
   Dividends paid                                                                      (2.3)                           (85.1)            (21)      (83.5)

C Net cash flows provided by (used for) financing activities                         (67.8)                          (240.0)                       90.5

   Net cash flows provided by (used for) operating activities                          (4.8)                           (5.8)
   Net cash flows provided by (used for) investing activities                         (20.7)                            2.3
   Net cash flows provided by (used for) financing activities                          48.4                            (5.3)
   Total cash flows provided by (used for) discontinued
   operations                                                                         23.0                             (8.8)                         0.0

  Total cash flows provided by (used for) during the year
E (A+B+C+D)                                                                           (5.9)                          (258.3)                       (95.6)

F Net cash and cash equivalents, at beginning of the year                            227.1                           610.8
G Exchange differences on translation of cash and cash equivalents                      0.2                            (17.7)

H Net cash and cash equivalents, at end of the year (°)                              221.4                           334.8                         (95.6)

   (°)    of which:
          cash                                                                        237.8                           358.9                         (95.6)
          bank overdrafts                                                             (16.4)                          (24.1)


                                                                                                                                                                               10
PIRELLI DEBT STRUCTURE AS OF JUNE 30, 2011
                       Net Financial Position                                        Gross Debt Maturity

  €/mln                          1,400.5
                                      90          621.6                                                                 130
          Committed Line
             Drawdown

                       Bond          500                                                                                500
                                                                                                            202.8
                                                            778.9
                                                                                                117         112.8
                                                                                                                     New 5 year
                                                                                                                       bond
                                                                                         85.9
     Other Borrowings               810.5
                                                                               145.8

                                                                       219

                                    Gross          Fin.     Net Fin.   15.6%   10.4%     6.1%   8.4%        14.5%      45.0%
                                    Debt          Assets*   position
                                                                                                                      2016 &
                                                                       2011    2012      2013   2014         2015
                 Gross Debt maturity as of Jun. 30, 2011                                                              beyond



                                                                                                     New revolving facility
                                                             1H11                                           1,110

          Total Committed                                   Total        -       -         -     -
          Lines Not Drawn                                   1,110



(*)Financial receivables, cash and cash equivalents




                                                                                                                                  12
                PIRELLI GROUP: 1H11 NET FINANCIAL
                      POSITION BY BUSINESS
   €/mln


                                  Tyre             Other businesses       Corporate           Pirelli Group

                            Jun. 11   Dec. 10      Jun. 11   Dec. 10   Jun. 11    Dec. 10   Jun. 11   Dec. 10


Gross Debt                  1,391.3      1,613.6    91.9      83.3       708.4     123.0    1,400.5   1,147.0
 to Corporate                696.1        589.6     83.2      83.3

                                                                       (646)                             488
Financial receivables       (114.7)       (98.3)    (5.1)     (4.8)     (932.3)   (806.7)   (261.0)    (236.9)
 to Prelios                                                             (150.0)   (140.4)   (150.0)    (140.4)


Cash and cash equivalents   (312.7)      (405.4)    (3.6)     (6.6)      (44.3)    (42.5)   (360.6)    (454.5)



Net Financial Position       963.9    1,109.9       83.2      71.9     (268.2)    (726.2)    778.9     455.6
PIRELLI & C: FINANCIAL RATIOS
                                                                                                                                                  2009
                                                                           2005         2006         2007          2008          2009                         2010
                                                                                                                                               restated***

Redditivity Ratio

EBITDA / NET SALES*                                                          12.5%        12.7%        12.0%          5.4%          9.6%             11.1%      13.0%

EBIT / NET SALES* - ROS                                                       7.8%         8.3%         7.6%          0.9%          4.9%              6.1%       8.4%

NET INCOME / NET EQUITY** - ROE                                               7.4%       -20.37%        7.6%         -13.4%        -0.9%             -0.9%       0.2%

EBIT / NET INVESTED CAPITAL** - ROI                                          5.02%        5.36%         6.3%          1.1%          5.5%              6.3%      11.5%

Indebtness Ratio

NET FINANCIAL DEBT / NET EQUITY - Gearing                                     21%           42%             n.m        43%          21%               21%        22%

Operating Ratio

CAPITAL EXPENDITURE / DEPRECIATION                                            1.19          1.27            1.34          1.49          1.12           1.14          2.00

R&D EXPENDITURE / NET SALES*                                                  3.8%         3.5%         3.6%          3.4%          3.1%              3.4%       3.1%

NET SALES* PER EMPLOYEE (in thousand of Euros)                                    173          172          155           148           151            138           160

* On net sales excluding DGAG
**Average Values
***Pirelli RE and Pirelli Broadband Solutions as discontinued operations




                                                                                                                                                                            15
Dividends

 2010 Shareholder Remuneration
 Dividend approved by Pirelli & C. AGM (21 April 2011)


                                                                           DPS (€)                             N° of Shares**               Dividends (€/mln)


                                                                   2010                 2009*                       mln                         2010    Δ % yoy
              Ordinary shares                                    0.1650             0.1595                          475                         78.4

               Savings shares                                    0.2290         0.4466                               12                         2.7
                                                                       (of which 0.2233 for the
                                                                         financial year 2008)
                                                                                                                                                81.1       stable
  *Net of treasury shares: 0.4 mln ordinary shares and 0.4mln savings shares.                                                               93% of parent company
 Coupon Detachment: 23 May, 2011; Dividend Payment: starting from 26 May, 2011


Dividend Trend
               ord. shares         sav. Shares                            DPS ord.         DPS sav.       Total Dividend   Parent company net
                                                     tot. Shares (mln)                                                                           Pay Out        Ex-date
                  (mln)               (mln)                                 (€)              (€)                (€)            inc. (€/mln)

  2010                   475.4               11.8                  487          0.165             0.229               81                  87           93%          23-May-11

  2009                    475.4               11.8                 487          0.1595           0.4466               81                112.6          72%          24-May-10
                                                                                         No dividend distribution
  2008

  2007                    475.5               11.8                 487           0.176           0.8008               93                100.7          93%          19-May-08
                                                                                        No dividend distribution
  2006

  2005                    470.9               12.3                 483           0.231           0.4004              114                139.8          81%          22-May-06

  2004                    470.7               12.3                 483           0.231           0.4004              114                149.6          76%          23-May-05

  2003                    302.2               12.3                 314           0.341           0.4554              109                137.8          79%          24-May-04

  2002                     56.2                3.1                   59           0.88           0.9944               53                 60.2          87%           9-Jun-03

DPS: Dividend per share
PIRELLI & C: EQUITY                                                                                 (€ milion)
                                                                                       Minority
                                                                          Group                     Total
                                                                                      Interests

Equity at December 31, 2009                                                2,175.0        319.7     2,494.7

Equity at December 31, 2010                                                1,990.8         37.2     2,028.0

Translation differences                                                      (63.4)         (3.0)     (66.4)
Income (loss) for the period                                                 161.7          (2.9)     158.8
Change in fair value of available-for-sale financial assets/derivatives        7.1             -        7.1
Other changes in continuing operations attributable to net equity             (0.8)            -       (0.8)
Net actuarial gain (loss) on employee benefits                                (9.7)            -       (9.7)
Dividends paid                                                               (81.1)         (2.4)     (83.5)
Venezuela inflation effect                                                     9.2           0.4        9.6
Capital increase                                                                             4.4        4.4

Other changes                                                                 (0.2)         (0.1)       (0.3)

Total changes                                                                22.8           (3.6)      19.2
Equity at June 30, 2011                                                    2,013.6         33.6     2,047.2




                                                                                                                 16
PIRELLI & C: CAPEX
                                                                  2005            2006               2007           2008                   2009          2010
(€ milion)
Pirelli Group
. Capex                                                                    234             255              287              311                  225            433
. Capex/ depreciation                                                      1.2             1.3              1.3              1.6                  1.1                2.0

Pirelli Tyre
. Capex                                                                    208             224              262              285                  217                402
. Capex/depreciation                                                        1.1             1.2              1.4              1.5                  1.1                1.9




                                                    INVESTMENTS                                    INVESTMENT ALLOCATION

                                          Capex           Year End Capacity
                                                                                     Mature       LATAM & RDE*      Mature          LATAM & RDE*
                                          (€/bln)             (mln pcs)


                                  2010        2011         2010          2011                     2010                              2011

                  CONSUMER          0.3             0.4     56            62        36%            42%       78%    18%             55%           73%

                          yoy                              +10%          +11%

                   INDUSTRIAL       0.1         >0.1        5.8           6.3        4%            18%       22%    3%              24%           27%

                          yoy                              +14%          +9%


                        TOTAL                                                        40%            60%      100%    21%             79%          100%
                                  0.4         >0.5



                                Settimo Torinese high tech plant operational from 4Q, 2010
                                +23% capacity increase in Premium tyres in China and Romania
                                New plant in Mexico, first tyre in 2012




                                                                                                                                                                17
R&D: PIRELLI TYRE vs MAIN PEERS
                                  2005         2006         2007         2008         2009         2010
(€ milion)


Pirelli Tyre
. R&D expenses                           146          147          148          145          133          146

. R&D expenses / Net sales           4.0%         3.7%         3.6%         3.5%         3.3%         3.1%


Michelin
. R&D expenses                           565          591          571          499          506          545

. R&D expenses / Net sales           3.6%         3.6%         3.4%         3.0%         3.4%         3.0%


Continental (Rubber Group)
. R&D expenses                                                                  222          212          223

. R&D expenses / Net sales                                                  2.4%         2.6%         2.2%




                                                                                                                18
                        1H11 PIRELLI TYRE MIX

     SALES BY BUSINESS                    SALES BY SEGMENT

                                        Car
Consumer                                61%
  70%
                                                                          Motorbike
                                                                            9%

                                                                      Steelcord
                                                    Truck             & others
               Industrial 30%                        28%                 2%


     SALES BY CHANNEL                          SALES BY REGION

                                                             Nafta
 Replacement                          Latin                  10%
                                                                     Asia Pacific
     74%                             America                             6%
                                      33%
                                                                          MEA
                                                                           9%



                 OE                                 Europe
                 26%                                 42%
PIRELLI TYRE P&L DATA BY QUARTER
                                          2008   1Q 09   2Q 09   3Q 09   4Q 09   2009    1Q 10   2Q 10   3Q 10   4Q 10   2010    1Q 11   2Q 11   1H 11
(€ milion)

. Net sales                              4100     927     989    1043    1034    3993    1110    1215    1234    1213    4772    1349    1412    2761
    Consumer                             2801     671     702     736     720    2828     781     836     847     837    3300     983     959    1942
    Industrial                           1299     256     288     307     315    1165     329     380     387     376    1472     401     418     819
. Ebitda before restructoring costs       441     108     133     142     155     538     146     178     173     187     684     210     218     428
. % on net sales                         10.8%   11.6%   13.4%   13.6%   15.0%   13.5%   13.2%   14.6%   14.0%   15.5%   14.3%   15.5%   15.5%   15.5%
    Consumer                              282     77      90      100     112     380     106     122     119     141     488     161     170     330
    % on net sales                       10.1%   11.5%   12.9%   13.6%   15.5%   13.4%   13.6%   14.6%   14.0%   16.9%   14.8%   16.3%   17.7%   17.0%
    Industrial                            159     30      43      42      44      158     40      55      54      46      196     49      49      98
    % on net sales                       12.2%   11.9%   14.8%   13.6%   13.9%   13.6%   12.3%   14.5%   14.0%   12.3%   13.3%   12.2%   11.7%   11.9%
. Ebit before restruct. Costs             251     61      86      94      105     346     98      127     122     130     476     156     165     320
. % on net sales                         6.1%    6.6%    8.6%    9.0%    10.1%   8.7%    8.8%    10.5%   9.8%    10.7%   10.0%   11.5%   11.7%   11.6%
    Consumer                              139     42      55      64      73      234     70      85      81      100     335     120     129     248
    % on net sales                       5.0%    6.2%    7.8%    8.7%    10.2%   8.3%    8.9%    10.1%   9.5%    11.9%   10.1%   12.2%   13.4%   12.8%
    Industrial                            112     19      31      30      32      112     29      42      41      30      142     36      36      72
    % on net sales                       8.6%    7.4%    10.8%   9.8%    10.0%   9.6%    8.7%    11.2%   10.6%   7.9%    9.6%    8.9%    8.6%    8.8%
. Restructuring expenses                 -100     -3.5    -6.2    -8.4   -18.9    -37     -2.6    -5.3    -4.5   -10.8   -23.2    -3.2    -4.5    -8
Ebit                                      151     58      79      86      86      309     96      122     117     119     453     152     160     313
. % on net sales                         3.7%    6.2%    8.0%    8.2%    8.3%    7.7%    8.6%    10.0%   9.5%    9.8%    9.5%    11.3%   11.3%   11.3%


Consumer: Passenger Car and Moto tyres
Industrial : Truck and Agro Tyres




                                                                                                                                                   21
PIRELLI TYRE YEARLY DATA
                                                            1Q 08   1H 08   9M 08     2008     1Q 09   1H 09   9M 09    2009     1Q 10   1H 10   9M 10   2010     1Q 11        1H 11
(€ milion)
Profit & Loss

. Net sales                                                 1077    2166    3229      4100      927    1916    2959     3993     1110    2325    3559    4772     1349         2761
    Consumer                                                 748    1494    2208      2801      671    1372    2108     2828      781    1617    2464    3300      983         1942
    Industrial                                               329     672    1021      1299      256     544     851     1165      329     709    1095    1472      401          819
. Ebitda before restructoring costs                          151     287     378      441       108     241     383      538      146     324     497     684      210          428
. % on net sales                                            14.0%   13.2%   11.7%    10.8%     11.6%   12.6%   12.9%    13.5%    13.2%   13.9%   14.0%   14.3%    15.5%        15.5%
    Consumer                                                 109     198     249      282       77      168     268      380      106     228     347     488      161          330
    % on net sales                                          14.5%   13.3%   11.3%    10.1%     11.5%   12.2%   12.7%    13.4%    13.6%   14.1%   14.1%   14.8%    16.3%        17.0%
    Industrial                                               42      88      129      159       30      73      115      158      40      96      150     196      49           98
    % on net sales                                          12.9%   13.2%   12.7%    12.2%     11.9%   13.4%   13.5%    13.6%    12.3%   13.5%   13.7%   13.3%    12.2%        11.9%
. Ebit before restruct. Costs                                103     191     232      251       61      147     241      346      98      225     347     476      156          320
. % on net sales                                            9.5%    8.8%    7.2%     6.1%      6.6%    7.6%    8.1%     8.7%     8.8%    9.7%    9.7%    10.0%    11.5%        11.6%
    Consumer                                                 73      127     139      139       42      97      161      234      70      154     235     335      120          248
    % on net sales                                          9.7%    8.5%    6.3%     5.0%      6.2%    7.0%    7.6%     8.3%     8.9%    9.5%    9.5%    10.1%    12.2%        12.8%
    Industrial                                               30      64      93       112       19      50      80       112      29      71      112     142      36           72
    % on net sales                                          9.2%    9.6%    9.1%     8.6%      7.4%    9.2%    9.4%     9.6%     8.7%    10.0%   10.2%   9.6%     8.9%         8.8%
. Restructuring expenses                                    (2.5)   (5.0)   (31.7)   (100.0)   (3.5)   (9.7)   (18.1)   (37.0)    -2.6    -7.9   -12.4   (23.2)   (3.2)         -8
Ebit                                                         100     186     200      151       58      137     223      309      96      217     334     453      152          313
. % on net sales                                            9.3%    8.6%    6.2%     3.7%      6.2%    7.1%    7.5%     7.7%     8.6%    9.3%    9.4%    9.5%     11.3%        11.3%
. Earnings (losses) from investments                          0       0      28        28        4       4       4        4        0       0       0       0        0           -1
. Operating profit (loss) incl. earnings from investments    100     186     228      179       61      141     227      313      96      218     334     453      152          312
. Financial income (expenses)                                -15     -30     -43      -83       -23     -43     -60      -76      -16     -39     -53     -66      -17          -47
. EBT                                                        85      157     185       96       38      98      167      237      79      179     282     387      136          265
. Income taxes                                               -28     -55     -76      -70       -23     -43     -76      -90      -29     -69    -105    -134      -47         -102
. Tax rate                                                  32%     35%     41%       73%      61%     44%     46%      38%      37%     38%     37%     35%      35%          39%
. Net Income (loss)                                          58      102     108       26       15      54      91       147      50      110     177     253      89           163

Cash Flow
. Operating cash flow                                                                  -8                                562                              369
. Net operating cash flow                                                            (161)                              396                              168

Capex and R&D*
. Capex                                                                               285                                217                              405
. Capex/Amort. & Depreciation                                                        1.50                               1.13                             1.95
. R&D expenses                                                                        145                                133                              146
. R&D expenses / Net sales                                                            4%                                 3%                               3%
Employees and Factories

. Employees (number at period-end)                          27334   28583   29151    28601     27304   27241   27283    27481                            28865
. Factories                                                  24      24      24        23       23      23      23       20                               19
Consumer: Passenger Car and Moto tyres
Industrial : Truck and Agro Tyres

* R&D expenses fully included in P&L




                                                                                                                                                                          22
PIRELLI TYRE: REVENUES DRIVERS
                                   2008           1Q 09     2Q 09     3Q 09     4Q 09     2009           1Q 10     2Q 10     3Q 10     4Q 10     2010           1Q 11      2Q 11
(€ milion)

Pirelli Tyre
                      D Volume            -6.0%    -18.1%    -13.3%     -3.3%     15.6%          -5.8%     17.4%      7.5%      1.8%      3.4%          7.3%       6.1%       1.2%

                     D Price/Mix          7.3%       6.9%      5.6%      4.7%     -1.7%          4.2%       1.4%     10.1%     12.3%     11.3%          8.9%      15.9%      15.8%

             D Revenues organic           1.3%     -11.2%     -7.7%     1.4%     13.9%           -1.6%     18.8%     17.6%     14.1%     14.7%      16.2%         22.0%      17.0%

                D Exchange rate           -2.8%     -2.7%     -1.5%     -3.3%     4.8%           -1.0%      1.0%      5.3%      4.2%      2.6%          3.3%       2.7%       -3.7%

                    D% yoy Tot.           -1.5%    -13.9%     -9.2%     -1.9%     18.7%          -2.6%     19.8%     22.9%     18.3%     17.3%          19.5%     24.7%      13.3%

   Consumer

                      D Volume            -5.8%    -14.7%     -9.8%      1.7%     16.4%          -2.7%     14.9%      6.2%      0.8%      4.2%          6.4%       9.0%       2.6%

                     D Price/Mix          6.5%       6.6%      5.1%      3.6%     -0.9%          3.9%       1.2%      8.7%     10.7%      9.3%          7.6%      14.6%      16.2%

             D Revenues organic           0.7%      -8.1%     -4.7%     5.3%     15.5%           1.2%      16.1%     14.9%     11.5%     13.5%      14.0%         23.6%      18.8%

                D Exchange rate           -2.8%     -2.3%     -1.3%     -2.2%     5.7%           -0.3%      0.4%      4.2%      3.6%      2.7%          2.7%       2.3%       -4.1%

                    D% yoy Tot.           -2.1%    -10.4%     -6.0%      3.1%     21.2%          0.9%      16.5%     19.1%     15.1%     16.2%          16.7%     25.9%      14.7%

   Industrial

                      D Volume            -6.6%    -25.7%    -20.9%    -13.4%     14.0%      -12.6%        24.1%     10.4%      4.2%      1.6%          9.4%       -0.7%      -1.9%

                     D Price/Mix          9.1%       7.2%      6.8%      7.0%     -3.5%          5.0%       1.8%     13.7%     16.2%     15.7%          12.3%     19.0%      14.9%

             D Revenues organic           2.6%     -18.5%    -14.1%     -6.4%    10.5%           -7.6%     25.9%     24.1%     20.4%     17.3%      21.7%         18.3%      13.0%

                D Exchange rate           -2.7%     -3.5%     -2.2%     -5.8%     2.9%           -2.7%      2.5%      7.9%      5.7%      2.4%          4.6%       3.6%       -3.0%

                    D% yoy Tot.           -0.1%    -22.0%    -16.3%    -12.2%     13.4%      -10.3%        28.4%     32.0%     26.1%     19.7%          26.3%     21.9%      10.0%




                                                                                                                                                                                   23
PIRELLI TYRE: EBIT BRIDGE
                                  1Q09          2Q09          3Q09          4Q09          FY09          1Q10          2Q10          3Q10          4Q10          FY10          1Q11               2Q11
                                   vs            vs            vs            vs            vs            vs            vs            vs            vs            vs            vs                 vs
(€ milion)                        1Q08          2Q08          3Q08          4Q08          FY08          1Q09          2Q09          3Q09          4Q09          FY09          1Q10               2Q10

Ebit before restructoring cost
                                     102.8         88.2          40.8           18.9         250.7              61        85.5          94.3         104.7         345.5          98.1              127.1
at the beginning of the period

Price mix                                 43           35.6          39.1      -23.3             94.4           6.1          86.6      107.3         131.9         331.9         128.1              154.3

Volume                               -28.7         -46.1         -12.7             30.8      -56.7             50.8          25.2           5.2          19.8          101           28.7                8.8

Cost of inputs                       -53.9             13.8           18           76.7          54.6      -14.1         -74.9         -91.1        -137.7        -317.8         -95.2             -145.5

Efficiencies                             -1.2           4.8          16.7          15.3          35.6           7.6           5.3          14.4          22.8          50.1          15.6               22.1

Depreciation/other costs                 0.6       -12.2             -4.5      -14.1         -30.2             -8.1          -2.8      -11.3         -15.4         -37.6         -22.2                   3.3

Exchange rate                            -1.6           1.4          -3.1           0.4          -2.9          -5.2           2.2           2.7           3.5           3.2           2.5               -5.5

Ebit before restructuring costs
                                          61       85.5          94.3          104.7         345.5         98.1          127.1         121.5         129.6         476.3         155.6              164.6
at the end of the period




                                                                                                                                                                                            24
PIRELLI TYRE: NFP
                                                                 2008          1Q 09          2Q 09         3Q 09          4Q 09       2009       1Q 10       2Q 10          3Q 10          4Q 10       2010       1Q 11               2Q 11
(€ milion)

Operating income (EBIT) before restructuring expenses               250.7             61           85.5          94.3          104.7      345.5        98.1       127.1         121.5           129.6      476.3       155.6               164.6
Total amortizations & depreciation                                  190.5           46.8           47.5          47.7           50.5      192.5        48.3        50.4          51.5            57.8        208        53.9                53.8
Investments in Property, plant and equipment/Intangible assets     -294.2          -36.8          -27.6         -33.2         -119.8     -217.4       -47.6       -84.5         -88.1          -184.8       -405       -94.5              -133.8
Change in working capital/other                                    -165.1         -255.4           77.4         109.6          309.3      240.9      -132.2          37          -9.9           194.3       89.2      -291.6                 4.5

OPERATING CASH FLOW                                                 -18.1         -184.4          182.8         218.4          344.7      561.5       -33.4           130             75        196.9      368.5      -176.6               89.1

Financial expenses/tax expenses                                    -152.9          -46.4              -40       -49.2          -30.5     -166.1       -45.6       -61.7          -50.8          -42.7     -200.8       -63.6               -85.4

NET OPERATING CASH FLOW                                                 -171      -230.8          142.8         169.2          314.2      395.4       -79.0        68.3          24.2           154.2      167.7      -240.2                   3.7

Dividends paid                                                      -93.2              -0.2       -66.3                                   -66.5                    -156                         -70.6     -226.6                          -121.7
Acquisition of Speed S.p.A.                                          -409
Capital Increase                                                                                                                                                                                                                               500
Purchase of minorities in Turkey and asset sales                    -32.3               11                                                   11
Cash out for restructuring expenses                                 -15.3              -39         -8.3             -7.4        -7.7      -62.4       -22.2           -8.3             -7          -2      -39.5           -1.8            -5.7
Exchange differences/others                                          13.6                4        -13.4              6.6       -35.2        -38           6            5.6           -9.3        13.5       15.8           -7.1            18.8

NET CASH FLOW                                                      -707.2           -255           54.8         168.4          271.3      239.5       -95.2       -90.4              7.9         95.1      -82.6      -249.1              395.1


NET FINANCIAL POSITION                                             1266.8         1521.8         1467.0        1298.6         1027.3     1027.3      1122.5      1212.9          1205          1109.9     1109.9       1359               963.9




                                                                                                                                                                                                                                  25
                                                                                                                                              TYRE MARKET WATCH: MARKET VOLUMES TREND

                                                                                                                     PASSENGER CAR & LIGHT TRUCK TYRE MARKET TREND


        D % YoY             FY 09                                                                                                 2010                                                                                                                           2011
                                             1Q             2Q             1H                JUL         AUG          SEP          3Q            9M         OCT         NOV         DEC         4Q         FY         JAN     FEB        MAR         1Q         APR         MAY         JUN         2Q          1H


Europe
 OE                         -19%                  37%            14%            24%                -3%         1%           -3%         -2%           15%         0%          3%          10%        5%         13%     10%     14%            0%         7%          4%          6%          0%          3%         7%

 Replacement*                -4%                  10%            11%            11%                5%          7%           6%           6%           9%          -2%         15%         15%        7%         8%      14%     13%            -1%        8%          -3%         8%          0%          1%         4%


Nafta
 OE                         -32%                  73%            74%            73%                37%         36%          12%         27%           54%         8%          2%          4%         6%         39%     16%     14%            19%        16%         2%          4%          1%          2%         9%

 Replacement                 -3%                  8%              8%            8%                 -4%         3%           0%           0%           5%          -6%         7%          3%         1%         4%      14%         2%         5%         7%          -3%     -10%            -1%        -5%         1%


Mercosur
 OE                          -1%                  25%            12%            18%                7%          14%          11%         11%           15%         -2%         11%         12%        6%         13%     7%      21%            -1%        8%          6%          7%          7%          7%         8%

 Replacement                 7%                   26%            15%            20%                15%         12%          3%          10%           16%         0%          15%         -2%        4%         11%     -6%         2%         0%         -2%         -6%         8%          -5%        -1%         -2%


China
 OE                         47%                   74%            25%            46%                16%         12%          18%         15%           35%         22%         25%         21%        23%        31%     11%         6%         6%         7%          -1%         -3%         4%         -1%         4%


 Replacement                20%                   48%            31%            38%                                                     24%           33%                                            26%        31%                                       35%


Japan
 OE                         -32%                  58%            32%            44%                16%         21%          11%         15%           33%         -9%         -8%         -6%        -8%        20%     -7%     -6%        -57%       -26%        -60%        -31%

 Replacement                 -8%                  9%             12%            11%                5%          7%           5%           6%           9%          8%          12%         6%         9%         9%      16%         9%         3%         8%          22%         44%         7%         23%         15%


 *excluding Russia



                                                                                                                                                             TRUCK TYRE MARKET TREND


        D % YoY             FY 09                                                                                                 2010                                                                                                                           2011
                                             1Q             2Q             1H                JUL         AUG          SEP          3Q            9M         OCT         NOV         DEC         4Q         FY         JAN     FEB        MAR         1Q         APR         MAY         JUN         2Q          1H

Europe
                                   -64%           1%             67%            30%                73%         99%          83%         84%           46%         75%         85%      120%          90%        57%     83%     80%            70%        77%         49%         60%         23%        42%         57%
 OE*
                                   -14%           38%            19%            27%                11%         20%          14%         15%           22%         -3%         13%         25%        9%         18%     17%     29%            7%         16%         13%         20%         2%         11%         14%
 Replacement*

Nafta
                                   -36%           17%            42%            29%                39%         51%          19%         35%           31%         15%         30%         39%        27%        30%     58%     53%            61%        57%         53%         66%         54%        57%         59%
 OE
                                   -13%           18%            21%            20%                11%         20%          10%         14%           17%         14%         23%         23%        20%        18%     15%     32%            24%        23%         2%          -6%         3%          0%         10%
 Replacement

Mercosur
                                   -25%           65%            61%            63%                57%         54%          38%         49%           58%         22%         19%         27%        22%        47%     9%      11%        -12%           1%      -15%            14%         13%         4%         3%
 OE
                                   -9%            27%            20%            23%                22%         27%          21%         23%           23%         13%         25%         26%        22%        23%     11%     18%            7%         12%         -3%         7%          1%          2%         6%
 Replacement

China
                                   28%         121%              60%            85%                25%         12%          10%         15%           57%         30%         53%         40%        42%        53%     21%         1%         11%        11%         1%      -18%        -25%           -13%        1%
 OE
                                                  36%            12%            22%                                                      2%           14%                                            0%         10%                                       2%
 Replacement

Japan
                                   -49%           61%            86%            73%                38%         21%          12%         23%           52%         2%          9%          12%        7%         37%     7%          5%     -53%       -15%        -65%        -24%
 OE
                                   -21%           19%            19%            19%                6%          15%          18%         13%           16%         14%         10%         11%        12%        14%     24%         0%     -18%           21%         15%         16%         10%        14%         17%
 Replacement

 *excluding Russia

Source: Pirelli estimates
Disclaimer:
Market trends are published every month on Pirelli web site for information purposes only.
Market trends do not represent the performance of Pirelli Tyre.
Trends can be revised in line with the updated information.




                                                                                                                                                                                                                                                                                                          27
                                                RAW MATERIALS
RAW MATERIALS PRICE TREND                                                                                                               5,251

                                                                                                                                                    4.671
                                                                Brent Oil (in usd/bbl)                                     4,254
                                                                Natural Rubber (in usd/tons)
                     123
                            117
                                                                                                                                    3,380
                                               99                                                                                                  118
         96                       2,973                                             2,513                              3,148            105
                                                                                                3,096     3,022
                    2,943                  2,531
         2,653                                                          69                                                     87
                                                                                                          80                          80
                                          57                  60                    76        77                      77
                                                                                     63
                                                 45                    1,837       1,801
                                     1,553                   1,523
                                                1,330


 Natural Rubber: Sicom
 Brent: www.oilnergy.com                                                                                                                    In Italic Year Average




1H 2011 MIX (BASED ON PURCHASING COST)
Raw mat. costs on sales: 40%
                                                                                     Synth. Rubber 24%
                                      Natural Rubber
                                                                                         (+2 pp yoy)
                                           37%
                                           (+3 pp yoy)
                                                                                                        Carbon black
                                                                                                            11%
                                                                                                         (0 pp yoy)


                                               Steelcord
                                                  7%                                        Chemicals
                                                                     Textiles 9%              12%
                                               (-2 pp yoy)           (-1 pp yoy)            (-2pp yoy)
Pirelli Tyre: 19 industrial plants in 11 Countries (as of June 2011)
                                                       Italy                   Germany
                         U.K.               Bollate (MI)             Car   Breuberg        Car/Moto
                                            Settimo Torinese   Car/Truck   Merzig          Steelcord
              Burton                  Car   Figline Valdamo    Steelcord
              Carlisle                Car
                                                                                                                       Turkey
                                                                                                               Izmit         Car/Truck
                                                                                                                             Steelcord
         U.S.A
  Rome            Car                                                                                              Romania
                                                                                                               Slatina   Car/Steelcord




     Venezuela
  Guacara              Car
                                                                                                                       China
                                                                                                           Yanzhou          Car/Truck
                 Brazil
    Campinas                        Car
    Feira de Santana          Car/Truck
                                                      Argentina                             Egypt
    Santo André              Truck/Agro
    Gravatai                 Moto/Truck            Merlo           Car                Alexandria       Truck
    Sumaré                    Steelcord
2011 Financial Calendar

Date                      Title

November 8, 2011          Board of Directors meeting to review the interim financial report at 30 September 2011.



November 9, 2011          Presentation of 2012-2014 Industrial Plan




                                                                                                                    34
Contacts - IR Team

Investor Relations Office
Address                V.le Sarca, 222 -20126 Milano

Tel                    +39 02 6442 2949

Fax                    +39 02 6442 4686

Mail

Map


Valeria Leone          Investor Relations Officer      Sonia Bianchini   Investor Relations assistant
Cell                   +39 335 6335111                 Tel               +39 02 6442 2949

Tel                    +39 02 6442 2524                Fax               +39 02 6442 4686

Fax                    +39 02 6442 4686                Mail

Mail




Aldo Perrone           Investor Relations Manager
Cell                   +39 335 6339603

Tel                    +39 02 6442 51525

Fax                    +39 02 6442 4686
Mail



Francesco Brilli       Investor Relations
                       Fin. Analysis - Benchmarking
Tel                    +39 02 6442 57557

Fax                    +39 02 6442 4686

Mail




                                                                                                        35

								
To top