MILAN, Italy — Pirelli & C. S.p.A. has adjusted upward its full-year revenue and cash-generation targets as tire sales volumes through the first nine months of fiscal 2021 continue to increase, supported by improvements in the price/mix component.
Pirelli said it expects to report revenue this year of approximately $6 billion, up about 2% from earlier targets reported in August, based in part on expected volume increase of 14% to 15% over 2020 and "marked improvements" in price/mix.
At the same time, Pirelli affirmed its earlier forecast of an adjusted pre-tax operating margin of 15% to 15.5%.
The tire maker said it foresees a 7% increase in global demand for tires for 2021, a decline from the previously indicated 10%, due to the "prolongation of the semi-conductor crisis throughout the entire automotive supply chain."
In particular, in the original equipment channel the market is expected to decline by 1%, compared with the previous indication of 6% growth.
Pirelli, however, expects its growth forecast for the replacement channel to remain at 10% for the full year.
During the three months ended Sept. 30, Pirelli posted a 4% improvement in adjusted EBIT to $261 million, helped by the contribution of internal levers such as restructuring.
Revenue grew 10.7% to $1.67 billion, supported by a 10.9% price/mix contribution. Sales volumes dropped 0.4%, Pirelli said, reflecting the decline in OE demand and for the standard segment.
Volume in the high-value segment, which includes larger-rim diameter tires, grew 1.8%, while the standard segment was down by 2.6%.
Furthermore, the $121 million price/mix effect "more than offset" the $88.5 million impact of higher raw materials costs and the $6 million exchange-rate effect.
For the first nine months of 2021 Pirelli said volumes recorded an increase of 24.7%, with "a steady gain" in market share particularly for the high value segment.
Nine-month sales were up 28.6% to $4.69 billion, helped by higher volumes and improvements in prices and mix.
Year-to-date EBIT was up 114% at $707.5 million, boosted by volumes and a $177 million price/mix effect, which more than offset the €134 million increase in raw-materials costs and a $21.2 million foreign-exchange impact.
Pirelli's sales in North America for the January-September period were 35.9% over the 2020 period to nearly $996 million. Sales in South America during the nine-month period were up 54.8% to $563.8 million.