MILAN, Italy — Pirelli & C. S.p.A. expects a "more moderate pace of growth" during 2022 following a strong rebound last year that saw the tire maker exceed its stated revenue target.
Pirellli said in its annual financial report that it expects to generate revenue of $6.15 billion to $6.26 billion, up roughly 5.7% from 2021, which in turn was up 24% over 2020.
The company said it anticipates unit volumes to grow 1.5% to 2.5%, reflecting an increase of 6% to 7% in unit sales of "high value" larger rim-sized tires and a 3% to 4% decline in standard volumes.
Furthermore, Pirelli expects a price/mix improvement by 5.5% to 6.5%, helped by further price increases and a "more favorable mix."
The pre-tax (EBIT) earnings margin is projected at 16% to 16.5%, up from 15.3% last year.
Elaborating on the potential risks in 2022, Pirelli said it expected mature and emerging markets to be impacted by the COVID Omicron variant "at least for the first few quarters of the year."
In addition, higher energy prices and, more generally, the continuation of "a higher and more persistent inflationary scenario" are expected to affect results.
Natural and synthetic rubber as well as oil-related raw materials — particularly chemicals and carbon black — likely will continue to "represent a factor of uncertainty" given the strong volatility recorded in recent years, Pirelli added.
On individual economic levels, Pirelli said a slowdown in China, due to the normalization of the real estate market, as well as geopolitical tensions elsewhere will add to 2022 risks.
"At the date of this document, the outcomes and implications of the Russia-Ukraine crisis remain uncertain," Pirelli said.
According to the tire maker, the tightening of international sanctions is having repercussions on the growth of Russian economy, the currency market and the country's domestic economic and financial system.
These factors, Pirelli said, are "compounded" by the countermeasures that the Russian government is preparing — and in some cases has already implemented — in response to international pressure.
"The current situation is also bringing about rising prices for energy, metal and agricultural commodities, with repercussions on consumer price pressure and growth prospects for the Eurozone," Pirelli noted.
"These elements of uncertainty could lead to an alteration of normal market dynamics and, more generally, of business operating conditions," the company concluded.
In fiscal 2021, Pirelli reported volume growth of 15.7% supported by the larger-rim-sized segment, which was up 20.2%.
