Pirelli & C Spa Azioni

Ladies and gentlemen, welcome to Pirelli's conference call in which Pirelli Top Management will present companies' full year 2025 preliminary results. A live webcast of the event and the presentation slides are available in the investor relations section of 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.

Good evening, ladies and gentlemen. 2025 results mark another milestone in our journey of growth and value creation. In a highly volatile external environment, the group closed the year with outstanding results. We fought to improve our positioning in high value, Profitability is confirmed as the highest among Tier 1. Cash generation was above expectations, enabling us to accelerate the leveraging process. At the same time, we strengthened our commitment to sustainability, the result that reinforced our leadership. Pirelli is the only company in the global tire and auto component sector to be included in the top 1% of the Standard & Poor's Global Sustainability Yearbook. The scenario that we see for 2026 remains challenging, with geopolitical uncertainties and high microeconomic volatility. In this complex landscape, we see real opportunities for growth that we are ready to capture through a business model that is increasingly data-driven. We aim to consolidate our leadership, improve profitability, deliver a sound cash generation, and ensure a solid shareholder remuneration. And I'll give the floor to Mr. Casalucci, please.

Thank you, Mr. Tronchetti, and good evening. Revenues amounted to 6.8 billion euro, with an organic growth of 4.2%, driven by the strengthening of high value, which now accounts for 79% of group sales, plus 3 percentage points year on year. Profitability reached 16%, supported by internal levers that more than offset the negative impact of the external headwinds, for around €320 million between exchange rates, tariffs and input cost inflation. Net income stood at €531 million, up 5.9% year-on-year. benefiting from solid operating performance and lower financial expenses. The deleveraging process was completed, thanks to cash generation before dividends of approximately 1.1 billion euro, resulting from improved operating profit, rigorous working capital management and the successful conversion of the equity-linked bond. In 2025, we strengthened our commitment to sustainability, a strategic lever for innovation, growth and competitiveness. The results achieved are fully in line with our objectives and long-term strategy. Accident frequency rate was reduced by 14% year-on-year as a result of prevention and training programs. In decarbonization, we achieved important results. We reduced absolute CO2 emissions by 63% in our factories compared to 2018 through the electrification of curing processes. And we intensified the efforts with our suppliers who decreased emissions by 27.5% compared to 2018. These results are fully consistent with the carbon neutrality target for 2030 and net zero for 2040, validated by science-based targets initiatives. As for products, we increased the percentage of bio-based and recycled materials, which in the P0 developed for JLR accounted for more than 70%. This is an important achievement that places us at the forefront of the industry and also offers interesting business opportunities and makes improvement. Finally, to protect biodiversity, we have further reduced water consumptions by 54.3% across all the gross production sites compared to 2015. Let us now move on the detailed analysis of 2025 operating performance. The implementation of our strategic programs enabled us to strengthen the positioning in the high value segment, gaining market share in both replacement and OE. To consolidate the technological leadership with new products that stood out in comparative tests, and to improve the competitiveness with the automation and digitalization of our processes. Let us now take a closer look to each program. We fully captured the growth of car 18 inches up, outperforming the market, plus 7% in Fulia 2025, compared to plus 6% of the market. and plus 11% in the fourth quarter versus the plus 8% of the market. The gaining market share concerned both channels. In regional equipment, we benefited from strengthened partnerships with local carmakers in North America and Asia-Pacific and a favorable year-on-year comparison. In replacement, our performance was positive in all regions, driven by pull-through and continuous product innovation, which enabled us to size opportunities in specific segments, for instance all season in Europe and all terrain in the United States. During the year, we continued to reduce our exposure to standard, particularly in South America, where we revised our commercial and distribution policy to focus on more profitable products and channels. Let us now move on the innovation program. In 2025, we fought and consolidated our technological leadership in the high-end segments. We obtained approximately 320 new homologations, mainly in 19 inches and above, specialties and electric vehicles. Our homologation portfolio is much wider than that of our peers, more than three times in 19 inches up. This strengthened our partnerships with premium and prestigious EMs in various regions. In Europe, we confirm our role as a leading technology partner, contributing to the evolution of iconic models such as the Ferrari 849 Testarossa. In North America, we are consolidating our leadership in high-performance vehicles such as Ford Mustang. In Asia Pacific, we have a closer partnership with the most important new premium electric vehicles producers. And finally, in South America, we are supporting the technological evolution of car park, with a stronger presence on multi-purpose vehicles such as the Ram Rampage. Our high-value offering was announced with nine new car products. 2025 was a record year in terms of awards and recognitions for Pirelli products. In summer, P Zero E won Compasso d'Oro, a prestigious international industrial design award. In addition, the fifth generation of P Zero was voted best ultra-high performance summer tire by Tire Reviews and Auto Express. The P Zero Winter II ranked first in tests conducted by the historic Swedish magazine and Tire Reviews. Finally, in the All-Season category, Cinturato All-Season SF3 scored 12 victories, while Scorpion All-Season SF3 stood out in the German AVD comparison, taking first place. Important results were also achieved in the world of two-wheelers. In motorcycles, we introduced two new products and worn motorrad and PS Magazine test. Finally, in cycling, we further expanded our range with four new products. Pirelli's CyberTire technology also received several global awards. In the United States, it was voted the most innovative technology for the future of smart mobility by the AutoTech Breakthrough Awards. And Forsen Sullivan named Pirelli Company of the Year. In Europe, the significant level of innovation was also recognized by Autobest and by the automobile awards in the safety category. Finally, let's analyze the results of the operations programs, which generated gross efficiency of 158 million euro, offsetting the negative impact of inflation. More specifically, the greatest benefits drive from the product cost project, thanks to innovative design reducing the cost of materials, and the manufacturing project, through factory automation and electrification of the curing phase, allowing a more efficient use of energy. In the SG&A and organization projects, we continued developing the planned programs, generating efficiencies through the rationalization of the supply chain and the optimization of logistics, and the digitalization of internal processes and personal upskilling. I now give the floor to Mr. Bocchi.