© Reuters. FILE PHOTO: Formula One F1 – United States Grand Prix – Circuit of the Americas, Austin, Texas, U.S. – October 20, 2022 Pirelli staff working in pits ahead of the United States Grand Prix REUTERS/Ricardo Arduengo
By Federico Maccioni
MILAN (Reuters) -Italian tyremaker Pirelli on Thursday lifted its 2022 sales guidance while forecasting volatile market conditions next year.
The manufacturer of tyres for Formula One and high-end carmakers such as BMW and Audi has been wrestling like peers with rising costs due to the fallout of the Ukraine war, new COVID-19 lockdowns in China and global supply bottlenecks.
“The scenario for 2023 is uncertain and (even) more volatile,” Pirelli CEO Marco Tronchetti Provera told analysts, citing demand trends, rising input and raw materials costs as major source of uncertainty.
However, he expressed confidence in Pirelli’s focus on high-value tyres used in popular sport utility vehicles and the group’s business model.
He said that 80% of the tyremaker’s sales were “local for locals”, reducing its exposure to maritime costs compared with peers.
After third-quarter figures came in above expectations, the group forecast revenues of around 6.5 billion euros ($6.3 billion) this year, up from a previous guidance range of between 6.2-6.3 billion euros.
The improved guidance stemmed from the implementation of price increases and the impact of a better product mix in the first nine months of the year, which offset higher raw material costs and the hit from inflation.
Pirelli, which confirmed its full-year adjusted operating profit margin forecasts of around 15%, posted better-than-expected third-quarter results.
Adjusted operating profits rose 22.8% to 271.9 million euros in the July-to-September period, beating a company-provided analyst consensus of 259 million euros. Revenues jumped almost 30% to 1.84 billion euros. ($1 = 1.0262 euros)