Pirelli & C Spa Azioni

Ladies and gentlemen, welcome to the Pirelli's conference call in which Pirelli top management will present companies nine months 2025 results. A webcast of the event and the presentation slides are available in the investor relator section for the Pirelli website. I remind you that the Q&A session will follow the presentation. Now, I would like to introduce Mr. Marco Tronchetti-Provera. Please go ahead, sir.

Thank you and good evening, everybody. The result for the first nine months of 2025, I like the resilience of our business model, capable of generating value in challenging external environment marked by geopolitical and trade tensions and high exchange rate volatilities. We closed the first nine months with organic revenue growth of 3.7%, thanks to the effective commercial strategy that has enabled us to gain market share in the high-value segment. Profitability that remains the best among our peers, solid cash generation in Q3, supported by improved operating performance and carefully working capital management. International evolution of the CyberTide and continuous broad innovation have contributed to strengthen our technological leadership. In the U.S., CyberTide was acknowledged to be the most innovative vehicle to everything, technology by tech breakthrough, a leading platform for innovation in the automotive industry. This award confirms the role of CyberTide as a central element for the smart mobility of the future. which includes autonomous driving, connected vehicles and digitalization of infrastructures. We have also signed an agreement with Aston Martin to integrate cyber-type technology into the British manufacturer's upcoming models, introducing advanced features. Finally, our leadership in product innovation was recognized by major European sector magazines, which elected the Cinturato AS SF3 as the best all-season tyre in Europe. This achievement positions us as the reference benchmark for performance and safety, two of the brand's distinctive pillars. The microeconomic environment remains volatile. With limited global economic growth, with it down by the US trade tariffs, the significant weakness of the dollar, input cost inflation. In this scenario, we are continuing with our commercial strategy of strengthening our position in high value, the most resilient market segment, which is expected to grow mid-single digit over the year. We confirm all targets for 2025, driven by solid organic growth and effectiveness of our internal levels. And now I give the floor to Mr. Casalucci.

Thank you, Mr. Tronchetti, and good evening, everyone. The results for the first nine months of 2025 are among the best in the industry. The revenues of approximately 5.2 billion euro, up 3.7% net of Forex, due to the strengthening of high value, which accounts now for 79% of the group sales, up 3 percentage points year-on-year. Profitability at 16.1%, up year-on-year. supported by the effectiveness of internal levers that more than offset the impact of exchange rates, tariffs and input cost inflation. Net income improved plus 8% thanks to operating performance and lower financial expenses. Continued the leveraging with a year-on-year reduction in debt of approximately 280 million euros. solid cash generation before dividends in the third quarter, €141 million, also driven by rigorous inventory management. Over the past nine months, we kept to our commitment to sustainability, a strategic lever for innovation growth and competitiveness. we are developing increasingly sustainable products to meet the needs of customers who are keen to combine safety with environmental responsibility. With Jaguar and Rover, we created the first tire in the P0 family with over 70% biobased and recycled materials. In addition, the natural rubber contained in this tire is FSC certified. which we expected to extend to our entire production in Europe in 2026. Demand is growing for our eco-safety products, which fall within classes A and B of European labelling for both safety and energy efficiency. Also in our operations, the results in terms of environmental efficiency are tangible, with effects on plant management, We are continuing to reduce Scope 1 and 2 emissions, aiming at a 60% reduction compared to 2018 by the end of the year. 100% of the electricity purchased for our plants worldwide already comes from renewable sources. By the end of the year, we aim to reduce specific water withdrawal at sites located in high water stress areas by 36% compared to 2015. All this is made possible by the fundamental contribution of our people. First and foremost, we are promoting workplace safety actions with the aim of bringing the accident frequency rate to around 1 by the end of the year. At the same time, we are investing in digital skills and operational excellence, promoting engagement actions to encourage ideas and projects aimed at energy efficiency and continuous improvement. Let us now move on to a detailed analysis of our operating performance. The implementation of our strategic programs, as we will see in the next few slides, has enabled us to strengthen the leadership in three main areas. We gained market share in high value with a plus 5% volume growth rate in the car segment. We consolidated the technological leadership through the expansion of our homologation portfolio, the launch of new products, 7 for cars and 6 for two wheels, and the international development of the CyberTire technology. Finally, we improved our competitiveness with profitability that remains the highest among the T1 players. Let's start with commercial performance. We strengthened the positioning in the car 18 inches up, with steady middle single-digit growth in each quarter, gaining market share in both channels. In original equipment, especially in North America, through the consolidation of partnership with local car manufacturers, in replacement in all regions, leveraging product innovation and the effectiveness of the pull-through strategy. We continued to reduce our exposure to the car below 17 inches tires, especially in South America, where we revised our distribution policy to focus on the most profitable products and channels. In the third quarter, we recorded stable standard sales in absolute terms, compared to the second quarter. while the more significant year-over-year decline, minus 14% in Q3 versus a minus 11% in Q2, reflects an unfavorable comparison basis. Let's move on to the innovation program. We continue to strengthen our technological leadership in the segments with the highest value. In the first nine months of the year, we obtained approximately 210 new homologations, mainly for 19 inches and above specialties and EV cars. These results prove the strength of our partnership with leading manufacturers, including both premium and prestige models, such as Ferrari Testarossa, Porsche 911 and Mercedes GLC, and emerging pure electric models, such as ZEC 9X in China. We can count on a portfolio of homologation that is unique among Tier 1 players. In Europe, approximately 1,250 in Carthage, above 19 inches, more than three times the average of our competitors. Our products have received important awards confirming their technological leadership and ability to innovate. At Expo 2025 in Japan, the P-0E received the Compasso d'Oro International Award, one of the world's most important prizes in the field of industrial design. It is the first time Tire ever to receive this award. It was given for its ability to combine environmental sustainability, high performance, safety, efficiency and comfort in a single product. The Cinturato All Season SF3 ranked first in tests conducted by AutoBuild and TireReview. for its sporty behavior and high safety levels on both dry and wet roads. Finally, we recently presented the new Cinturato Winter 3, a tire for sedans and crossovers, which stands out for its high performance on snow and wet surfaces in tests conducted by Tuv Sud and Decra. These results were also achieved through the virtual development of materials supported by Pirelli's Virtual Compounder, a tool based on generative artificial intelligence that accurately selects the most effective material combinations and optimizes the production processes. An update on CyberTire and global technological and commercial developments. Grelli's CyberTire was named Vehicle to Everything Innovation of the Year at the Auto Tech Breakthrough Awards 2025. This prize certifies the high level of innovation of the technology and consolidates its position in the smart mobility of the future. CyberTire is a key component of software-defined vehicles, providing the cars electronics with detailed information on tire status and road surface conditions, with tangible benefits in terms of safety, performance and efficiency. CyberTire contributes to the development of smart roads and smart cities, where the data collected is essential for urban mobility, planning and infrastructure maintenance. During the third quarter, an important agreement was signed in the OEM world. In Europe, a commercial partnership was launched with Aston Martin, which will be fitting future models with the CyberTire system. Braking space reduction is among the new features introduced. It optimizes ABS performance based on the specific characteristics of the tire. Let us now analyze the results of the operations programs. In the first nine months of 2025, in line with expectations, these programs generated gross efficiency of €117 million, 78% of the annual target. The progression of individual projects varied. The product course project, based on the adoption of innovative design programs such as design modularity and virtualization, achieved 80% of the benefits expected for the year. The SG&A and organization projects almost completed the development of the planned programs, generating efficiencies through the rationalization of the supply chain and the optimization of logistics. the digitization of processes, and the upskilling of personnel. Finally, the manufacturing project. As anticipated, given the seasonal nature of the projects, it achieved approximately 50% of the benefits expected for the year, and will be the main driver of efficiencies in the fourth quarter. And I'll give the floor to Mr. Bocchio. Thank you.