Pirelli Targets Return to Pre-Pandemic Level as Soon as 2022

Italian tire maker Pirelli SpA is targeting a return to pre-pandemic levels as soon as next year, as the company set new medium-term goals and targeted increased investment in high-value products.

Pirelli, whose biggest investor is China National Chemical Corp Ltd, or ChemChina, said on Wednesday that it sees 2022 revenue at about 5.1 billion euros ($6 billion) to 5.3 billion euros, higher than a Bloomberg consensus estimate of 5.05 billion euros. The tire maker posted 4.3 billion euros in revenue in 2020.

The company also forecasts margin for adjusted earnings before interest and taxes rising from about 17% next year to up to 20% in 2025.

The new plan “remains centered on high value,” with the goal of strengthening the company’s positioning in China and its market share in original equipment for electric vehicles.

‘High Value’

Pirelli is also targeting bringing the incidence of so-called car high value -- tires for luxury carmakers, which generate higher margins -- on total original equipment volumes to 70% in 2025 from approximately 60% in 2019.

Pirelli, which makes tires for luxury brands including Ferrari NV, Porsche and Bentley, last year generated 74% of sales from high-value lines.

Chief Executive Officer Marco Tronchetti Provera sees demand picking up in China and the U.S..

“We see a very strong market in China, in the U.S. it is recovering quite strongly in some areas,” Tronchetti said in an interview with Bloomberg TV. “Europe is obviously under the effect of lockdowns, but there are some signs of a return to a positive consumers’ attitude. I’m confident that in a couple of months the environment will change,” he said.

Earlier this month Tronchetti nominated Giorgio Luca Bruno as deputy CEO, to begin after the June 15 shareholders meeting.

©2021 Bloomberg L.P.

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