PIRELLI S.p.A. PIRELLI & C. PIRELLI GROUP. Pirelli & C. Real Estate S.p.A % 36.5% (*) 7.8% (**) PIRELLI CAVI e SISTEMI S.p.A.

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1 H RESULTS

2 PIRELLI GROUP SHAREHOLDER STRUCTURE (as of ) Pirelli & C. Real Estate S.p.A % PIRELLI & C. 36.5% (*) PIRELLI S.p.A. Camfin 29.62% Generali Group 6.09% Ed. Holding 5.75% HdP 5.69% SAI 5.38% RAS 5.13% Mediobanca 4.77% BZ Group Holding Limited 7.8% (**) 100% 100% PIRELLI CAVI e SISTEMI S.p.A. PIRELLI TYRE HOLDING N.V. (*) Treasury shares at (8.5% of voting capital). (**) 2.5% of voting rights are exercised according to the will of Mr. Tronchetti Provera

3 PIRELLI GROUP FORESEEABLE SHAREHOLDER STRUCTURE PIRELLI CAVI e SISTEMI S.p.A. PIRELLI TYRE HOLDING N.V. 100% 100% PIRELLI S.p.A. 80% 60% 7.8% (*) BZ Group Holding Limited Olimpia 27% OLIVETTI 54,8% TELECOM ITALIA Subject to EU Antitrust approval expected on 17 or ,1% 61,2% TIM SEAT Pagine Gialle (*) 2.5% of voting rights are exercised according to the will of Mr. Tronchetti Provera

4 PIRELLI GROUP Consolidated Sales at : Euro 3,946 mn (euro 3,598 mn on ) Products Geographical Breakdown 20% Telecom Cables & Systems Rest of Europe 42% Energy Cables 43% & Systems Italy Australia, Africa, Asia 14% 12% 37% Tyres Latin America 16% North America 16%

5 PIRELLI GROUP RESULTS at PIRELLI SPA 1H2001 SALES 3,946 EBIT 243 1H2000 3, var. % +9.7% +14% EBIT Margin 6.2% 5.9% PIRELLI Cables & Systems PIRELLI Telecom Cables & Systems PIRELLI Energy Cables & Systems PIRELLI Tyres 1H2001 1H2000 var. % 1H2001 1H2000 var. % 1H2001 1H2000 var. % SALES 812 EBIT % +41% SALES 1,691 EBIT 20 1, % -0.51% SALES 1,477 EBIT 111 1, ,6% +4% EBIT Margin 10.1% 8.9% EBIT Margin 1.2% 2.7% EBIT Margin 7.5% 7.5% Employees 4,942 Employees 14,450 Employees 20,475 Plants 17 Plants 55 Plants 21

6 CORE BUSINESS INVESTMENT PLAN 1H2001 1H ml Assets 235 ml 1.88 Investments/depreciation ml R&D 105 ml

7 PIRELLI TELECOM ENVIRONMENT Slowdown of USA market, initially in the long-haul segment, now extended to all segments Expected price pressure on fibers in the second half 2001 Increase of Single Mode versus NZD fibers, due to market contraction worsening of product mix PIRELLI ACTIONS Reduction of Corning fiber purchases, increase of own production Scale back of investments: freeze of capacity expansion projects Manufacturing cost reduction through production efficiencies

8 PIRELLI LABS On time No investment reduction 150 employees Optical innovation New optical telecom devices based on nano- technologies Advanced materials New materials to support cable & tyre businesses, such as air bag cables & self repairing cables MIRS manufacturing process

9 PIRELLI ENERGY ENVIRONMENT Low margins Slow recovery of the European market Production capacity still higher than demand Production cost reduction Integration of the former BICC/Siemens plants Focus on industrial special cables Development underground project PIRELLI ACTIONS Target of of 6.2% ROS in in 2004

10 PIRELLI ENERGY THE UNDERGROUND CABLE PROJECT Implementation of marketing in USA, Europe, South America At backlog order of ml euro New environmental constraints urge adoption of underground cables Huge potential of this segment Innovative Air Bag solutions bring cost savings in cable laying

11 PIRELLI TYRES ENVIRONMENT Slowdown of USA market only marginally impacts PTH Slowdown Latin America Expected price pressure in second half 2001 in line with 1H2001 Stable European High End Market Reduction of production costs through industrial efficiency plans Use of production potential in low cost countries (Turkey and Brasil Bahia) Bahia) Scale back of investments on low end, increase investments high end Enhancing MIRS PIRELLI ACTIONS

12 PIRELLI TYRES THE MIRS PROJECT On time Plants in USA and Germany proceed on time No investment reduction Target 2001:150 ml euro First O.E. Homologation with BMW new Mini

13 PIRELLI GROUP CONCLUSIONS Overview on 2nd half 2001 and 2002: Strong slowdown in US economy, crisis in Japan, expected recovery in EU not realised Slowdown in telecom cables market Impact on Group numbers However, results are expected in line with year 2000 s (pre-extraordinaries) extraordinaries) Expected net financial position at end 2001: 1,15 bn debt