Pirelli & C. S.p.a. · MIL:PIRC
Pirelli & C — FY2004 Earnings Presentation
26 slides from Pirelli & C's earnings presentation, Mar 22, 2005
Slide 1: FY 2004 Group Results
FY 2004 Group Results 22 March 2005
Slide 2: Pirelli Achievements 2004
2004 PIRELLI ACHIEVEMENTS Main Actions Results • Pirelli & C. and Olimpia Capital Increases • Pirelli capital increase fully subscribed: 1,062 proposal mn Euros • Olimpia will maintain approximately 18% stake Group • New By-laws with the introduction of slate on TI/TIM group after the merger vote an
Slide 3: Corporate Governance
CORPORATE GOVERNANCE • Resignation of the entire Board of Directors before the expiration term (scheduled in April 2006) • Immediate application of the list voting for the appointment of a new Board, in the next General Shareholders’ Meeting (April 27, 28 2005) • Minorities will be able to appoint o
Slide 4: Pirelli Group Structure
PIRELLI GROUP STRUCTURE Main Shareholders* Camfin 25.39% Fondiaria – SAI 4.32% Pirelli & C. SpA Assicurazioni Generali 4.30% Edizione Holding 4.30% Mediobanca 4.30% R.A.S. SpA 4.30% 100% Pirelli Labs 100% 100% 100% 100% 51% 52% 57.7% Pirelli Pirelli Pirelli Pirelli Pirelli Pirelli Energy Telecom Bro
Slide 5: Energy and Telecom Cables and Systems Deal Update
ENERGY and TELECOM CABLES and SYSTEMS DEAL UPDATE • Selected a short list of private equity funds • Final binding offers by the end of April • Closing date envisaged to happen 45/60 days after the signature of the purchase agreement, upon the approval of the anti-trust authorities 4
Slide 6: Pirelli & C. and Olimpia Capital Increases Results
PIRELLI & C. and OLIMPIA CAPITAL INCREASES RESULTS • Pirelli & C. capital increase overall amount: 1,062 million Euros • Offered in option 1,517,672,178 Pirelli & C. ordinary shares • Shares fully subscribed • Olimpia capital increase overall amount: 2 billion Euros • Shares fully subscribed • Proce
Slide 7: 2004 Group Results
2004 GROUP RESULTS €/mn Industrial Pirelli RE Others Total Aggregate 2004 2003 2004 2003 2004 2003 2004 2003 Var.% Net Sales (as reported) 6,573 6,034 570 645 (29) (8) 7,114 6,671 6.6% NetNet Sales Sales (as reported) (organic) 6,573 6,255 570 645 (29) (8) 7,114 6,892 3.2% EBITDA 662 567 83 79 (21)
Slide 8: Group Net Financial Position
2004 GROUP NET FINANCIAL POSITION (2000) (1,745) (132) 175 (110) 93 (33) (33) 119 (1,469) (32) (1500) 229 (1000) (500) 0 ds s es 03 ts lia ) h. er ni 04 n (* en ar os io rc io 20 Ita th 20 ow sh rs id pu az C O FY m FP ve Fl iv st g l& E e o D rin R on es ash o ak N FP ec sa ur lli tu C St el N .E p
Slide 9: Olimpia Main Figures
2004 OLIMPIA MAIN FIGURES €/mn Assets 2004 2003 • Olimpia posted 16 mn Euros of Net Result in TI Shares & Bonds 9,135 9,135 2004 (following dividends received) 20% Holinvest 311 311 • New revolving credit line of 2.4 bn Euros to Other 145 156 re-finance the existing facilities with longer Total 9,59
Slide 10: Statutory Accounts
STATUTORY ACCOUNTS Pirelli & C. S.p.A. Net Profit 150 m € Dividend Proposed Ordinary Shares 0.0210 € Savings Shares 0.0314 € • Pirelli confirms its policy of dividend distribution with 113 mn Euros (109 mn Euros in 2003) 9
Slide 11: Industrial Aggregate Results
2004 INDUSTRIAL AGGREGATE RESULTS €/mn INDUSTRIAL AGGREGATE 2004 2003 Variation% Net Sales (as reported) 6,573 6,034 +8.9% Net Sales (organic) 6,573 6,255 +5.1% EBITDA 662 567 +16.8% EBITDA margin 10.1% 9.4% EBIT 380 264 +43.9% EBIT margin 5.8% 4.4% Net Result 229 112 Operating Free Cash 508 538 Flo
Slide 12: Pirelli Cost Control and Profitability Path
PIRELLI COST CONTROL AND PROFITABILITY PATH Efficiencies B.E.P. Operating ROI % Sales per (€/mn) F.C.F (€/mn) Employee (€/000) 2002-2004* ∆ %Vs 2001 2002-2004* 2002 2004 2004 ∆ % vs 2002 Energy 229 -25% 569 4.3% 12.9% 268 +21.3% Telecom 148 -40% 29 -11.1% -5.1% 205 +56.5% Tyre 65 20% 912 154 +9.2% 1
Slide 13: Energy Sector Results
2004 ENERGY SECTOR RESULTS €/mn €/mn ∆Price/mix: -0.1% 2004 2003 Variation ∆Volumes: -0.5% ∆Actual Variation: -0.6% Net 2,888 2,637 +9.5% ∆Exch. Rates: -1.2% Sales ∆Metal Price: +11.8% EBITDA 199 169 18% ∆Perimeter (Brazil): -0.5% ∆Total: +9.5% EBITDA margin 6.9% 6.4% ∆ Commercial Variations: €29mn
Slide 14: Energy Sector Sales and Market Outlook
2004 ENERGY SECTOR SALES AND MARKET OUTLOOK Sales Breakdown by BU – FY 2004 Market Outlook 2005 Others 10% Industrial Trade and Market Installers • Pirelli awarded a further 25 mn Euros 17% 36% contract for high voltage energy cables and systems in Singapore by power utility SP PowerAssets Ltd. Util
Slide 15: Telecom Sector Results
2004 TELECOM SECTOR RESULTS €/mn ∆Price/mix: -16.7% 2004 2003 Variation ∆Volumes: +16.4% ∆Actual Variation: -0.3% Net 430 427 +0.7% ∆Exch. Rates: -1.6% Sales ∆Metal Price: +2.6% EBITDA 9 (1) n.m. ∆Total: +0.7% EBITDA margin 2.1% n.m. ∆ Commercial Variations: €-34mn EBIT (15) (39) n.m. ∆Efficiencies:
Slide 16: Telecom Sector Sales and Market Outlook
2004 TELECOM SECTOR SALES AND MARKET OUTLOOK Sales Breakdown by BU – FY 2004 Market Outlook 2005 Connectivity And Other 3% Broadband Copper Optical Cables: Access Cables 15% 26% • Volume growth mainly due to Verizon expansion strategy Optical Cables and Fibers • Slight decrease in price pressure 56%
Slide 17: Pirelli Broadband Solutions
2004 PIRELLI BROADBAND SOLUTIONS Pirelli Broadband Solutions SpA Broadband New Access Photonic Systems Products Broadband Access Systems: • Deployment of new products (STB, ADSL 2+) •New PMP technology (Pirelli Management Platform) • Focus on new customers New Photonic Products: • Start-up of produc
Slide 18: Tyres Sector Results
2004 TYRES SECTOR RESULTS €/mn 2004 2003 Variation ∆Price/mix: +3.4% ∆Volumes: +8.1% Net ∆Actual Variation: +11.5% 3,255 2,970 +9.6% Sales ∆Exch. Rates: -1.9% ∆Total: +9.6% EBITDA 454 399 +14% EBITDA margin 13.9% 13.4% ∆ Commercial Variations: €146mn EBIT 276 220 +25% ∆Efficiencies: €21mn ∆Unit Cost
Slide 19: Tyres Sector Sales and Market Outlook
2004 TYRES SECTOR SALES AND MARKET OUTLOOK Sales Breakdown by BU – FY 2004 Market Outlook 2005 Industrial 31% • Further growth coming from increasing market demand of premium products Consumer 69% • Further growth coming from North and South America Sales Geo. Breakdown – FY 2004 positive sales deve
Slide 20: Pirelli RE Achievements at a Glance
2004 PIRELLI RE ACHIEVEMENTS AT A GLANCE • Ebit including income from equity participations grew YoY by 23% to Euro 157.5m and Net profit to Euro 128m (+25% over 2003) • Asset Under Management increased to Euro 10.7 bn at market value from Euro 9.7bn 2003, of which Euro 7.9bn opportunistic assets an
Slide 21: Pirelli RE Consolidated P&L
2004 PIRELLI RE CONSOLIDATED P&L €/mn Actual Actual December December Variation % 2004 2003 Aggregate Production Value Net of Acquisitions 1,973.2 1,525.5 +29 Consolidated Production Value 559.9 649.0 EBIT Incl. Income from Equity Participations 157.5 128.1 +23 Profit before Extraordianry Items 162.
Slide 22: Pirelli RE Consolidated Balance Sheet
2004 PIRELLI RE CONSOLIDATED BALANCE SHEET Actual Actual €/mn December December 2004 2003 Fixed Assets 372.1 313.4 Of which investments in participated companies 225.1 149.7 Net Working Capital 231.6 162.3 Net Invested Capital 603.6 475.7 Shareholders’ Equity 520.0 424.8 Of which minority interests
Slide 23: Pirelli RE Net Asset Value
2004 PIRELLI RE NET ASSET VALUE €/mn NAV Book-Value Book-Value Market Value Market Value December 100% Pro-quota 100% Pro-quota 2004 RESIDENTIAL 1499.8 580.8 2060.5 813.6 232.8 COMMERCIAL 5607.9 865.8 7036.3 1136.8 271.0 LAND 279.3 143.5 364.2 176.5 33.1 NPL 1165.8 213.8 1267.6 235.9 22.0 Total A.U.
Slide 24: Pirelli Group Outlook 2005
PIRELLI GROUP OUTLOOK 2005 • Further improvement in profitability • Olimpia will continue to improve its results thanks to the actions taken (capital increase and TI stake increase) and to TI dividends • In industrial activities the continuous focus on added value segments and high technology will d
Slide 25: Backup
BACKUP FrRecu
Slide 26: Pirelli & C. Share Performance
2004 PIRELLI & C. SHARE PERFORMANCE 130 11/11/04 2004 Nine 125 Months Results Cables Sectors Valorization Project 120 Announcement 115 24/03/04 12/09/04 2003 Full Year 2004 First Half 110 Results Results Pirelli & C. ord. S&P MIB 105 100 95 17/05/04 07/12/04 19/02/04 Pirelli Technology Pirelli & C.