Pirelli Group 1H 2004 Results

Transcription

1 Pirelli Group 1H 2004 Results Marco Tronchetti Provera Chairman Giovanni Ferrario Managing Director Carlo Puri Negri Chairman Pirelli RE Conference Call with the Financial Community

2 1H 2004 GROUP ACHIEVEMENTS Group Operating Result +34% R&D : 106m expenditures (3.2% of industrial sales) Energy Cables & Systems: YoY doubled Telecom Cables & Systems: 1H 2004 BBA revenues 28m (27m FY 03 revenues) Tyres: ROS 9.4% Positive Result from Olimpia Pirelli RE results in line with 3 Year Plan: including income from equity participations +24% 1

3 THE STRUCTURE* Pirelli & C. SpA Chairman M. Tronchetti Provera Camfin Ass. Generali Group Fondiaria SAI Edizione Holding R.A.S. Mediobanca 26.9% 4.9% 4.2% 4% 4% 4% PLabs M. Tronchetti Provera Material Innovation Optical Innovation 100% Finance & Administration C. Buora Industrial Businesses G. Ferrario C. A. Puri Negri 52.6% 50.4% Olimpia M.Tronchetti Provera 100% Tyres 100% Energy Cables & Systems 100% TLC Cables & Systems Fund Management Asset Management Service Provider Distribution Network 17% ENERGY Cables & Systems * As of September 9th

4 1H 2004 RESULTS Industrial Businesses 1H 04 1H 03 Pirelli Real Estate Others Total 1H 04 1H 03 1H 04 1H 03 1H 04 1H 03 Net Sales 3,299 3, (17) (32) 3,573 3, % DA DA margin % % (11) (2) % % (29) (22) % margin 5.9% 4.4% 5.3% 4.3% Results from Equity Part. (1) (15) Olimpia 52 (45) 52 (45) Op. Result incl. Equity Part (67) Financial Expenses (40) (49) 2 0 (17) (25) (55) (74) Extraordinary Items (2) 18 (5) 0 0 (20) (7) (2) EBT (9) (112) Income Taxes (66) (48) (13) (13) 5 (4) (74) (65) Net Income (loss) (4) (116) 131 (21) Attributable 112 (36) NFP 2,047 1,598 3

5 1H 2004 RESULTS Olimpia Results 1H 2004 Revenues from TI Dividends Financial Expenses Net Results Euro/Mln 182 (76) 106 Pirelli Results from Olimpia Equity Participation 52 Euro/Mln in 1H 2004 (45 Euro/Mln in 1H 2003) Euro/Mln Dividend received Financial Charges E 4

6 1H H 2004 GROUP VARIATION Euro/Mln Of which in /Mln CIENA SETTLEMENT Pirelli RE including results from Equity Participation: +13 /Mln 7 5 June 2003 DELTA Exchange Rates Industrial Aggregate Energy Variation TLC variation Tyres Variation INDUSTRIAL Aggregate Variation Pirelli RE Variation CORPORATE Variation June

7 1H H 2004: GROUP NFP VARIATION Euro/Mln SEASONALITY EFFECT 214 1, ,047 1,745 (187) NET CASH FLOW from OPERATING ACTIVITIES 1st QUARTER NET CASH FLOW from OPERATING ACTIVITIES 2nd QUARTER DIVIDENDS TELECOM ITALIA CALL EUROSTAZIONI

8 GROUP INDUSTRIAL COMMITMENTS Industrial businesses Growing in highend segments Moving from products to systems Developing new markets Continuing the global reshaping of business models Focus on R&D Building international leadership in innovative products and services 7

9 INDUSTRIAL AGGREGATE: 1H 2004 RESULTS Euro/Mln INDUSTRIAL AGGREGATE 1H H 2003 Sales 3,299 3, % Organic Sales (*) 3,299 3, % DA DA Margin 10.2% 9.4% Margin 5.9% 4.4% Free Cash Flow (*) Exchange Rates/Metal Price 8

10 INDUSTRIAL AGGREGATE: 1H H 2004 VARIATION Euro/Mln (5) (27) (17) 2003 DELTA Exchange Rates PRICE and MIX VOLUMES UNITARY PRODUCTION COST EFFICIENCIES DEPRECIATION/ OTHER

11 Energy Cables & Systems: 1H 2004 Results Scenario Achievements Selected limited growth of market volume Price reduction in power distribution businesses Strong reduction in European wind farms investments due to change in governamental incentives Strong project business with positive outlook for 2H Mix efficiencies recovery Focus on cash generation, offsetted copper price impact on working capital Installed first 100 km of Basslink Mln Net Sales DA H , H , Variation +10.4% +34% Price/mix: 1.3% Volumes: +1.4% Actual Variation: +0.1% Exch. Rates : 1.3% Metal Price: % Total: +10.4% 10 DA margin margin 6.5% % 5.3% % 100% Price/mix (except metals): 3m Volumes: +17m Exch. Rates: 1m Unit Cost Production 6m Efficiencies: +14m Ammortization/Other: +6m

12 Telecom Cables & Systems: 1H 2004 Results Scenario Achievements Optical cable: positive volume growth in US at the end of 1 Half Continuous pressure on prices Interesting ADSL copper demand Secured increased volumes Strongly positioned in major bids Continuous cost reduction Sales increase in BBA products 1H 2004 = full year 2003 /Mln Net Sales DA H H (2) Variation 10.1% n.m. Price/mix: 10.5% Volumes: +2.0% Actual Variation: 8.5% Exch. Rates : 1.6% Total : 10.1% DA margin margin n.m. n.m. (15) (21) n.m. n.m. n.m. Price/mix: (except metals): +1.8% 25m Volumes: +9.3% +7m Unit Exch. Cost Rates Production : 2.0% +5m Efficiencies: Total +9.1% +13m Ammortization/Other: +6m 11

13 Tyres: 1H 2004 Results Scenario Achievements Volume growth in Performance and Industrial segments Price/Mix improvements in South and North America as well as in the Industrial segment Raw material cost increases higher than planned Successful product launches: Sottozero, Diablo Strada, Amaranto Growing Run Flat OE homologations with Mirs Technology Strong sales growth in North America in line with plans Mln Net Sales DA DA margin margin H , % H , % % 8.5% Variation +9,1% +11,4% +19,4% Price/mix: +1,8% Volumes: +9,3% Actual Variation: +11,1% Exch. Rates : 2,0% Total sales: +9,1% Price/mix: +11m Volumes: +42m Exch. Rates: 4m Unit Cost Production: 26m Efficiencies: +10m Ammortization/Other: 8m 12

14 PIRELLI RE 1H 2004 KEY FINANCIAL DATA Actual June 2004 Actual June 2003 YoY Growth % Aggregate Production Value (net of acquisitions) Consolidated Production Value % Income from Equity Participations incl. Income from Equity Participations % Profit before Extraordinary Items Attributable Net Income % NFP Adjusted NFP Gearing Financial Position not incl. Shareholders Loans (NFP adj)

15 PIRELLI RE: 1H 2004 KEY ACHIEVEMENTS Successful placement of 2 Funds: Tecla Fondo Uffici and Cloe Fondo Uffici for a total market value of Euro1.8bn. Another fund in pipeline before end of Signed agreement with Morgan Stanley in the NPLs business. The joint venture will take a leadership position in the Italian market. Over Euro 500m of acquisitions of real estate assets and another Euro 1bn in pipeline. On going progress of the distribution network with 390 signed contracts (targets 500 contacts by year end). 14

16 PRE Asset Allocation as of June 2004 Asset Under Management 10.0 Bn (*) AUM by Product AUM by Area Land 3% Residential NPL 25% 2% (*) Commercial 70% Other 19% Greater Milan 38% Fund Tecla 9% 18% LONG Fund Cloe 9% Turin 5% Florence 3% Naples 5% Rome 30% 82% OPPORTUNISTIC 15 (*) NPL valued at Net Book Value. The deal with Morgan Stanley is not yet included

17 PIRELLI RE NET ASSET VALUE Book Value Book Value Market Value Market Value NAV Value 100% Pro quota 100% Pro quota June 2003 RESIDENTIAL 1, , COMMERCIAL 5, , , LAND NPL (GBV) 810.1(*) NPL (NBV) TOT. ASSET UNDER MGT. (GBV) 8, , ,547.3 TOT. ASSET UNDER MGT. (NVB) 7, , ,964.8(**) 2, ,5 16 (*)Not Including: Asset Management fees; Fund Management (Pirelli RE SGR) with funds under management, Tecla and Cloe, of Euro 1.8bn (MV) Attr. Shareholders' Equity June Total NAV Pirelli & C. Real Estate* Specialized Services: Pirelli RE Agency, Pirelli RE Property Management, Pirelli RE Project Management and Pirelli RE Credit Servicing; Pirelli RE Franchising (start up), that distribute real estate products and financial services related to the real estate ( 390 contracts signed at 06/30/04) (**) Equal to Euro million as of December 2003 on a like for like basis 1,082.4

18 CLOSING REMARKS Energy Cables & Systems TLC Cables & Systems Pirelli confirms group expectations for 2004: A considerable improvement of both operating and net results in all sectors 17