Business outlook

  • In 2011 the Company will focus more and more on the development of premium products
  • The 2011 target for group sales is now being increased from “over euro 5.15 billion” to “over euro 5.55 billion.”
  • The target ROS is expected to grow from 2010 (8.5%- 9.5% for the Group)
  • Plans forecast euro 500 million in capital expenditure in 2011.

On the basis of the strategic guidelines set out in the 2011-2013 Business Plan and in response to the continued growth in demand, in 2011 the Company will focus more and more on the development of Premium products and expansion of its production capacity, mainly in rapidly developing economies.

In the absence of currently unforeseeable events and considering that raw material prices are rising faster than assumed in the Business Plan presented last November, price increases will be greater than originally assumed. Consequently, the 2011 target for Group sales, 99% of which are accounted for by Pirelli Tyre, is now being increased from “over euro 5.15 billion” to “over euro 5.55 billion.” This reflects expected growth in the volume component of 6% or more (+ 4% was the previous estimate) and about 12% in the price/mix component (+ 4% was the previous estimate).

The target ROS (return on sales = operating income after restructuring expenses/sales) is expected to grow from 2010 as forecast in the Business Plan (8.5%- 9.5% for the Group and 9%-10% for Pirelli Tyre), due to continuation of the cost efficiency recovery programme. Plans forecast euro 500 million in capital expenditure in 2011. Net financial position is expected to rise negative to about euro 700 million.