MILAN, Italy — Pirelli & C. S.p.A. reported double-digit increases in fiscal year operating income and sales based largely on improvements in the price/mix component, but the company is expecting little to no growth for 2023 based on forecasts of a general economic slowdown.
Adjusted pre-tax earnings (EBIT) rose nearly 20% to $1.03 billion as improvements in the price/mix and efficiencies more than offset impact of raw materials and inflation, Pirelli said.
Revenue grew 24% to nearly $7 billion, driven by a strengthening replacement market in North America and improved OE performance for higher value-added tires, giving an operating ratio of 14.8%.
Pirelli said the results confirm the "resilience" of its business model and reflect the implementation of the key programs of the "Industrial Plan 2021/22-2025."
In particular, Pirelli said deliveries of higher value-added larger rim-diameter tires (18 inches and larger) were up nearly 8% last year, while sales of lower rim-diameter tires fell by over 9%.
The company said it picked up 300 new homologations with vehicle makers, roughly 40% of which were for premium electric vehicles.
Pirelli did not at this time disclose its performance by region. At the three-quarter mark of fiscal 2022, Pirelli's figures showed sales in North America were up 21% over 2021, putting the company's sales in North America at roughly $1.6 billion for the year.
Last year Pirelli disclosed a $113 million, two-year investment commitment for its Silao, Mexico, factory primarily to boost capacity for larger-rim diameter tires and tires for electric vehicles that will be sold in the U.S.
For 2023, Pirelli is projecting sales will be flat to up 1% compared with 2022, with an improved price/mix providing most of the growth. The operating ratio likely will decline slightly, Pirelli said, to 14% to 14.5%.
In formulating its forecast for 2023, Pirelli said it took into account a general slowing of economic growth weighed down by geopolitical tensions and persisting inflation of production factors (raw materials, energy, and logistics).
Global GDP is expected to grow by 2% with more limited growth in the U.S. — 0.7% versus 2.1% in 2022 — and Europe while expectations are more positive for China where GDP should grow by 5.2%,
Pirelli Tire North America raised prices Jan. 15 on passenger and light truck tires sold in the U.S. by as much as 10%, depending on line and tire size. That marked the tire maker's fourth price increase since the beginning of 2022.