Pirelli

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PIRELLI TYRE 2009-2011 MANAGEMENT PLAN
Francesco Gori
CEO & Managing Director Pirelli Tyre

Agenda

2008 Tyre Results

Industrial Business

Consumer Business

2009-2011 Tyre Targets

| 1

In 2008 Pirelli Tyre performance was adversely impacted by

unforeseeable market conditions
Million €, Percent

Key Facts 2008 yoy Q1

Q2
31

Q3
76

Q4
74

∆ Price/Mix

+7.3%

Profit & Loss
Revenues EBITDA (before restructuring costs) %

∆ Exchange Rate -2.8%

FY '07 4,162 549 13.2 358 8.6 358

FY '08 4,100 443 10.8 250 6.1 150

∆% -1.5 -19.2

∆ Volume

-6.0%

Impact of raw materials

14 103

88 41 18

EBIT (before restructuring costs) % EBIT (after restructuring costs)

-30.2

EBIT

+191 ∆ Commercial ∆ Efficiencies -4 ∆ Unit costs & other -295

A dramatic increase in all input costs (raw materials, energy, etc.) A collapse of the OE market, driving sales down by 10.2% in Q4 (5% organic) The decision to provision in 2008 results restructuring initiatives and costs worth 100 ml €
Note: unaudited results, pre-closing

| 2

Pirelli Tyre 2008 operating and financial performance
Million €

Raw materials: Labour / energy / other: (72)

-195 -73

EBIT bridge
(before restructuring costs)

358

263

(268) (268)

(5)

(15)

(11)

250
EBIT 2008

EBIT 2007

Price & mix

Volume

Cost of inputs

Efficiencies

Exchange rate

Depreciation / other

NFP evolution
* of which stock: -212

PBIT: Investments & Depreciation: ∆ NWC: Other variations: Financial / fiscal charges:

+250 -106 -156* +8 -172 ( ) (175)

14

1,266

560

(452)

(93)

NFP 2007

Minorities repurchase and debt restructuring

Dividends

Net Cash Flow before dividends

Other variations

NFP 2008

| 3

Pirelli Tyre restructuring program

100

million



have

been

committed to…...

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