Gori leaves Pirelli following 1Q results

May 13, 2012

On the heels of what the company calls "improved" results, Pirelli & Cie SpA's Francesco Gori is leaving as managing director of Tyre & Parts. He also was general manager of the Pirelli Tyre business sector.

Gori, who joined the company in 1978, is bound by a three-year non-competition agreement.

"The company expresses its appreciation to Francesco Gori for the significant contribution to the (Pirelli) Group’s results and development made in 33 years of service," says Pirelli.

On the same day as Gori's departure, Pirelli recorded net income of 125.3 million euros on net sales of 1.5565 billion euros for the first quarter ended March 31, 2012. That compares to revenue of 81.4 million euros on sales of 1.4 billion for the same period last year.

Based on the exchange rate on March 31, 2012, Pirelli posted net income of $167.1 million on net sales of nearly $2.1 billion for 1Q 2012. Its income-to-sales ratio was 8%.

The tire division, which represents nearly 99% of the company's sales, recorded a 41.2% increase in net income and an 11.4% increase in sales for the first quarter of 2012 compared to 1Q 2011. Sales of "premium" tires increase 29.2% to 584.4 million euros ($779.5 million).

In the Consumer Tyre segment (which includes motorcycle tires), revenues totaled more than 1.1 billion euros, an increase of 17.1% compared with 983.3 million euros in the first quarter of 2011.

Original equipment tire sales in the NAFTA region and replacement tire sales in South America were singled out for their growth. (On April 16, 2012, Pirelli signed an agreement with the Faria da Silva family for the acquisition of 60% of the capital of Campneus, one of the major tire distribution chains in Brazil. The cost was approximately 22.5 million euros.)

2012 Outlook

"Faced with a general slowdown in the demand for tires as a reflection of the present macro-economic crisis, predominantly in southern Europe, Pirelli has revised its 2012 total volume outlook."

Total revenues for 2012 are expected to be approximately 6.45 billion euros, down from close to 6.6 billion euros but up from 5.65 billion euros in 2011.

The EBIT margin is expected to be above 12% (the previous target was equal to or above 12%), with an operating result of at least 800 million euros.

Pirelli also continues  to change its organizational model.

"In a market that is ever more competitive and selective on the product side, while continuing to expand geographically, Pirelli has decided to reinforce its technological and commercial organization, linked to the various businesses, and thus complete the re-definition of the organizational model which began in October 2011. The decision making chain, therefore, will be further shortened in order to accelerate implementation of action plans linked to the premium strategy."

The "new strategy" replaces the ''Executive Office" with two new roles reporting directly to Chairman and CEO Marco Tronchetti Provera. They are chief technical officer (CTO) and chief commercial officer (CCO), positions to be held by Maurizio Boiocchi and Andrea Pirondini, respectively.

Gori out

Born in Florence on May 15, 1952, Gori graduated magna cum laude with a degree in economics from Università degli Studi in Florence.

After two years of working in a software house, he joined the Pirelli Group in 1978.

His first years were spent in sales departments for the Italian market and export markets. He was then appointed product manager in the Motorcycle Tyre division in 1982, and later country manager for northern European markets in 1986. He also covered the Middle East and Far East export markets from 1988.

His other appointments were:

* business manager of car tires, 1990;

* director of product planning and strategy for the Tyre Sector, 1991;

* tire marketing director, 1993;

* director of business development, 1997;

* sales and marketing director, 1999;

* general manager of Pirelli Tyre Sector, 2001.

He was named CEO of Pirelli Tyre on July 1, 2006, and added general manager of Tyre & Parts for the parent company to his duties in September 2009.

From October 2006 to October 2011, he was president of the European Tyre & Rubber Manufacturers Association.