Pirelli & C. S.p.A. Reports Earnings Results for the First Quarter Ended March 31, 2018; Provides Earnings Guidance for the Year of 2018
For 2018, the company expects Organic revenue growth of equal or above +9% (around +10% the prior indication) as a result of lower expected volume growth following the decision to accelerate the reduction of exposure to the Standard segment. On the other hand, the expected growth of High Value is confirmed. Including the forex effect, the lower volumes for the progressive reduction in the Standard segment, as well as the new IFRS 15 accounting principles (previously not included in the guidance), the total growth of revenues is expected at around +4% (prior indication above or equal to +6%). Growing weight of High Value component confirmed, which will represent equal to or above 60% of total sales at the end of 2018 (prior indication around 60%). Profitability forecast confirmed, with Adjusted Ebit before start-up costs expected at over EUR 1 billion. The effect of greater forex volatility and lower volumes is offset by lower impact of raw material costs (from negative EUR 95 million to about EUR 80 million). Weight of High Value segment on Adjusted Ebit before start-up costs confirmed at equal to or above 83%. Start-up costs confirmed declining to about EUR 40 million. Expected Adjusted Ebit confirmed at about EUR 1 billion. Ratio of net financial position and Adjusted Ebitda before start-up costs confirmed at around 2.3 times. CapEx confirmed at around 8% of revenues.