MILAN, Italy (March 14, 2006) – After achieving double-digit sales and earnings growth last year, Pirelli S.p.A. is forecasting further earnings improvements this year based on its focus on higher value-added business segments and continued improvements in product mix.
For 2005 Pirelli reported 14.6-percent higher sales, 32-percent better operating earnings and 31.3-percent higher net profits.
Pirelli Tire also reported double-digit gains in pre-tax and net earnings, hitting its 2006 goal of a 9-percent net return on sales a year early, thanks in part to increased selling prices and despite higher raw material costs.
Pirelli Tire's sales jumped 14.3 percent to $4.54 billion, while pre-tax earnings grew 14.3 percent to $647.5 million and net income rose 18.6 percent to $247.5 million.
Pirelli said the tire unit “reinforced the growth trend of 2004, reaching a higher rate of growth than the reference market in which it operates in terms of profitability. The excellent performance of 2005 was the result of a continued focus on the product mix, price increases and volume increases, which more than offset higher energy and raw material costs in the context of less-than-brilliant market demand.”
In the consumer segment, Pirelli's sales volume and sales revenue grew, particularly in North America, and there were improvements in all geographical areas for premium products and for winter products in Europe.
There also was growth in the commercial segment, especially in original equipment, and from the launch of truck radial production in Yanzhou, China, which will serve China, Southeast Asia and Australia.