14MB - Pirelli

EXTRAORDINARY SESSION CONSOLIDATED FINANCIAL STATEMENT SUSTAINABILITY REPORT DIRECTORS' REPORT PRELIMINARY INFORMATION
Business Consumer
Revenues of the Consumer line total Euros 2,801 million (-2.1
percent compared to 2007), whereas the Operating Profit from ordinary
operations is Euros 139 million, with a ROS of 5 percent,
compared to Euros 253 million in 2007, with a ROS of 8.8 percent.
In the Original Equipment channel, the marked reduction in demand
in the automotive market began in the second half of the
year, whereas the first half was positive in terms of production
in Europe and very positive in South America and in the emerging
markets, although a negative trend had already been posted in
the U.S.A.. This reduction of demand was concentrated in the last
quarter, forcing vehicle manufacturers to slow down production
considerably in order to reduce stock levels, resulting in a lower
demand for tyres (in the fourth quarter, the tyre market was -23%
in Europe, - 26% in North America, -26% in Mercosur, with an annual
total of -5% in Europe, - 17% in North America and + 8% in
Mercosur).
In the Replacement channel, in the fourth quarter, in the presence
of a far from brilliant sell-out demand and a delayed start to
the winter in Europe, the general financial situation encouraged
dealers to reduce their inventories (market in the fourth quarter,
-9% in Europe, -17% in North America and -6% in Mercosur).
Over the year as a whole, the trend of the market registered a reduction
of 5% in Europe, 9% in North America and growth of 4%
in Mercosur.
While these market scenarios generated an overall reduction in
volumes of 5.8%, Pirelli Tyre focused on the price/mix change,
which was a positive figure of 6.5%, confirming organic growth in
sales of 0.7%. The negative exchange rate effect of 2.8% generated
an overall change in revenues of -2.1%.
In the auto Motorsports segment, in 2008, Pirelli Tyre began
to be the exclusive supplier of the prestigious American Grand-
Am Rolex Sports Car series and the WRC (World Rally Championship).
As far as car racing is concerned, Pirelli made a great
contribution to the Grand Am series, which reported improved
performances compared to those of the previous supplier. In the
international FIA GT championship, Pirelli came second among
the teams in the GT2 class (with BMS-Scuderia Italia). The PZero
made a name for itself with the Saleen S7-R in Argentina on the
new San Luis circuit and excelled in the GT2 class with the Ferrari
430 GTC at the Spa 24 Hours endurance race for the third consecutive
year. What’s more, Pirelli was the official racing tyre supplier
at the Italian, European and American Ferrari Challenge, at the
GT Asian SuperCar Challenge, the French FFSA GT Championship
and the Italian GT Championship.
As far as rallies are concerned, the WRC was a showcase for the
new exclusive products PZero, Scorpion and Sottozero, made according
to specifications established by the FIA and the constructors.
On all types of terrain, they demonstrated an excellent level
of performance, duration, resistance to punctures and level of integrity,
attracting only positive comments from all the drivers par-
50 PIRELLI & C. S.p.A. MILAN