Pirelli Q1 results show rewards of strategic focus on premium segment
Pirelli has announced growth in revenues to €1.34 billion ($1.50 billion) in its quarterly results for the period ending March 31, 2017, a 13.4% increase on the corresponding 2016 period, reflecting positive performance and a focus on the premium market segment.
Profits (EBITDA) for Q1 2017 were €270.3 million, compared to €261.5 million in Q1 2016 – an increase of 3.4%. The company has recently positioned itself as a supplier in high-value and higher margin segments, as a “pure consumer tyre player.” The revenue trend was in part attributed to the strong growth of the price/mix component, at 5.5%, thanks to the company’s success in high-end products, as well as price increases in emerging markets. Premium made up 67.8% of revenues in Q1 2017, moving from 66.2% in the corresponding 2016 quarter.
By volume, the premium segment saw growth above the market trend of 11%, achieving 15.3% growth in Q1 2017. At the same time, Pirelli saw a decline in non-premium volumes of 9.1% – reflecting the company’s conscious decision to reduce exposure in segments of lower profitability, particularly in Russia and Latin America.