Pirelli improved pricing power results in higher operating profit

The company said it now sees its margin on adjusted earnings before interest and tax (EBIT) at around 15%, versus a previous forecast of around 14.5-15.0%, thanks to improved pricing power.

Pirelli, the sole provider of Formula 1 tyres, also nudged up its cash generation forecast range for this year.

In the third quarter, adjusted EBIT fell 2.5% to 265 million euros ($284 million), slightly topping a company provided consensus of 259 million euros.

While stronger pricing power, efficiencies and lower raw material prices had a positive impact, other factors, including lower volumes, exchange rates and inflation on other costs of production, weighed on the quarterly result, Pirelli said.

The margin on adjusted EBIT however improved in the third quarter to 15.4% from 14.8% a year earlier.

Pirelli also said on Thursday it had decided to postpone to March 2024 an update to its current business plan, initially scheduled for the end of this year, due to the "uncertainties linked to the international environment".

Pirelli returned to F1 in 2011 as the exclusive tyre supplier replacing Bridgestone, and have recently renewed their contract to supply the sport with tyres up to 2027 back in October of 2023.

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Reporting by Giulio Piovaccari, Additional reporting by GrandPrix247

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