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Pirelli Improves Income-to-Sales Ratio for 1Q 2018

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Pirelli & Cie SpA's first-quarter sales were down compared to last year. However its profits were up.

Pirelli posted net income of 92.4 million euros on net sales of 1.3 billion euros for the first quarter ended March 31, 2018. That compares to income of 49.5 million euros on sales of more than 1.3 billion euros for the same period in fiscal 2017.

Based on the exchange rate on March 31, 2018, Pirelli recorded net income of $74.7 million on net sales of $1 billion for 1Q 2018. Its income-to sales ratio was 7.0%.

The company said the 1.3 billion euros sales figure “represented an organic growth of 5.7% thanks to the strengthening of the leadership position in the high-end products range in all regions.” That included 13.4% organic growth for the high-value tire segment (i.e., 18-inches and larger).

(According to Investopedia, organic growth is “the growth rate a company can achieve by increasing output and enhancing sales internally.")

The NAFTA region, which accounts for 18.6% of Pirelli’s total sales, recorded organic revenue growth of 10%, driven by the high-value tire segment.

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