PIRELLI TYRES PIRELLI TYRES Giovanni Giovanni Ferrario Ferrario
PIRELLI TYRESPIRELLI TYRESGiovanni Giovanni FerrarioFerrario
Euro mlnEuro mln
Net SalesNet Sales
EBITEBIT% on Net Sales% on Net Sales
Net DebtNet Debt
Net ResultNet Result
EBITDAEBITDA% on Net Sales% on Net Sales
PIRELLI TYRESPROFIT & LOSS
PIRELLI TYRESPROFIT & LOSS
FULL YEAR RESULTSFULL YEAR RESULTS
2,8802,880
1801806.3%6.3%
748748
(172)(172)
37037012.8%12.8%
20002000
7.2%7.2%
2,5592,559
185185
535535
112112
13.6%13.6%349349
19991999
+12.5%+12.5%
-2.7%-2.7%
n.m.n.m.
+6.2%+6.2%
+39.8%+39.8%
Var.00/99Var.
00/99
Volume and mix
Currency
Prices
Other
Volume and mix
Currency
Prices
Other
TOTALTOTAL
Var. %Var. %Var. %
10.5%
5.7%
-2.6%
-1.1%
10.5%
5.7%
-2.6%
-1.1%
12.5%12.5%
PIRELLI TYRESSALES VARIATIONS – 2000/1999
PIRELLI TYRESSALES VARIATIONS – 2000/1999
PIRELLI TYRESEBIT VARIATIONS – 2000/1999
PIRELLI TYRESEBIT VARIATIONS – 2000/1999
Exchange rate
Price
Volume and mix
Materials
Efficiency
Other
Exchange rate
Price
Volume and mix
Materials
Efficiency
Other
TOTALTOTAL
Euro mnEuro Euro mnmn
+13
(71)
+129
(61)
+26
(41)
+13
(71)
+129
(61)
+26
(41)
(5)(5)
PIRELLI TYRESSECTOR SALES
PIRELLI TYRESSECTOR SALES
+16.5%
15.2%
+12.2%
5.2%
+25.4%
9.4%
-1.8%
1.7%
YoY
ROS
TYRESTYRES
ROS 6,3%
MotoMotoTruckTruckCar / Car /
Light TruckLight TruckOtherOther
2,8802,880YoYYoY +12.5% +12.5%
1981981,6881,688 583583 411411
PIRELLI TYRESENVIRONMENT
PIRELLI TYRESENVIRONMENT
Size is not anymore the only driver for success
Tyre perceived as a critical component: continuousquality enhancement
Innovation through technological transformationmust match customer demand
Web is improving the brand name recognition andis giving a “virtual” globalization to companies
Size is not anymore the only driver for success
Tyre perceived as a critical component: continuousquality enhancement
Innovation through technological transformationmust match customer demand
Web is improving the brand name recognition andis giving a “virtual” globalization to companies
•
•
•
•
•
•
•
•
Car +Car +Light TruckLight Truck
�� Deployment of newDeployment of newplants based on newplants based on newprocesses (MIRS)processes (MIRS)
�� Focus in HP/UHPFocus in HP/UHP
�� Concentration of M/LConcentration of M/Lsegment in low costsegment in low costfactoriesfactories
�� New productsNew productsintroductionintroduction
TruckTruck
�� Allocation ofAllocation ofproduction in lowproduction in lowlabour costlabour costcountriescountries
�� Renewal of productRenewal of productrangerange
�� Fleet managementFleet management
MotoMoto
�� Introduction ofIntroduction ofMIRS processMIRS process
�� LeadershipLeadershipstrengtheningstrengtheningthrough Pirellithrough Pirelliand and MetzelerMetzelerbrandbrandmanagementmanagement
�� WorldwideWorldwideindustrial processindustrial processoptimizationoptimization
PIRELLI TYRES BUSINESS UNITS STRATEGIC GUIDELINES
PIRELLI TYRES BUSINESS UNITS STRATEGIC GUIDELINES
PillarsPillars DriversDrivers
PIRELLI TYRESSTRATEGIC PILLARS PIRELLI TYRES
STRATEGIC PILLARS
�� Technical innovationTechnical innovation�� Tyre as Tyre as a a sensorsensor
�� MIRS MIRS updateupdateInnovationInnovation
�� InternetworkingInternetworking�� StandardisationStandardisation
�� Individual accountabilityIndividual accountabilityEfficiencyEfficiency
�� Business Business UnitsUnits�� Customer CentricityCustomer Centricity�� FocusedFocused Value Value propositionspropositions
FocusFocus
PillarsPillars DriversDrivers
PIRELLI TYRESSTRATEGIC PILLARS PIRELLI TYRES
STRATEGIC PILLARS
�� Technical innovationTechnical innovation�� Tyre as Tyre as a a sensorsensor
�� MIRS MIRS updateupdateInnovationInnovation
�� InternetworkingInternetworking�� StandardisationStandardisation
�� Individual accountabilityIndividual accountabilityEfficiencyEfficiency
�� Business Business UnitsUnits�� Customer CentricityCustomer Centricity�� FocusedFocused Value Value propositionspropositions
FocusFocus
FocusFocus
Truck Moto
Business UnitPerformance
Market Development Unit
Shared services
and competencies
TyreSector
SteelCord
StandardProduction
Unit
Car & Light truck
PIRELLI TYRESBUSINESS UNITS ORGANISATION
PIRELLI TYRESBUSINESS UNITS ORGANISATION
FocusFocus
End userdatabase
Dealer
End-usersEnd-users
e-basede-basedtoolstools
TraditionalTraditionaltoolstools
• Channel management
• Trade marketing
• Specialised salesforce
• Channel management
• Trade marketing
• Specialised salesforce
PIRELLI TYRESCUSTOMER CENTRICITY
PIRELLI TYRESCUSTOMER CENTRICITY
FocusFocus
ProductPortfolio
Efficient promotion • Campaign
• e-CRM promotion
• Fitted Unit Package
• B2B2C
• e-ProcurementValue chain enrichment
• B2B supply chain solutions portfolio
• Stock management
Efficient replenishment
• Assortment Deployment
• Category strategy
Category management
PIRELLI TYRESFOCUSED VALUE PROPOSITION
PIRELLI TYRESFOCUSED VALUE PROPOSITION
FocusFocus
PillarsPillars DriversDrivers
PIRELLI TYRESSTRATEGIC PILLARS PIRELLI TYRES
STRATEGIC PILLARS
�� Business Business UnitsUnits�� Customer CentricityCustomer Centricity
�� FocusedFocused Value Value propositionspropositionsFocusFocus
�� Technical innovationTechnical innovation
�� Tyre as Tyre as a a sensorsensor�� MIRS MIRS updateupdate
EfficiencyEfficiency�� InternetworkingInternetworking
�� StandardisationStandardisation�� Individual accountabilityIndividual accountability
InnovationInnovation
New Tyres
Innovativeprocesses
+ + +Materials and technology
+Integrate systems“Tyre as a sensor”
End usersVehicleDriving Systems
Trends---
Run Flat
Summer
Recreat.
Pax-like
Ultralite& strong
Recreationalvehicle
Hybrid vehicle
+C3 Intelligent
Wheel suspensionC1
C2
NewPolymers
NewFibre
Granular small
componentsPowdered
rubber
MirsTruck
AlternativeCuringMixing
roomMirsMoto
MIRS, I-II-III
PIRELLI TYRESTECHNICAL INNOVATION VISION
PIRELLI TYRESTECHNICAL INNOVATION VISION
InnovationInnovation
Competenciesto preside over
Integration of the offer
Intelligent compoundable to pick up andtransmit conditionvariations
Tyre + Sensors checkingtemperature, pressureand forces
Tyre + Sensors +devices in the rim inorder to modify“running” conditions
Tyre + Sensors +signal collection andprocessing:. Connecting
electronic on board. Driving style
MissionMission
Pirelli tyre centricsolutions for :- OE- AM- Fleets
Pirelli tyre centricsolutions for :- OE- AM- Fleets
Produce revenues inthe short term
Build upcompetencies withdevelopmentpartners
Produce revenues inthe short term
Build upcompetencies withdevelopmentpartners
TargetTarget
PIRELLI TYRESTYRE AS A SENSORPIRELLI TYRESTYRE AS A SENSOR
InnovationInnovation
PillarsPillars DriversDrivers
PIRELLI TYRESSTRATEGIC PILLARS PIRELLI TYRES
STRATEGIC PILLARS
�� Business Business UnitsUnits�� Customer CentricityCustomer Centricity
�� FocusedFocused Value Value propositionspropositionsFocusFocus
�� Technical innovationTechnical innovation
�� Tyre as Tyre as a a sensorsensor�� MIRS MIRS updateupdate
InnovationInnovation
�� InternetworkingInternetworking
�� StandardisationStandardisation�� Individual accountabilityIndividual accountability
EfficiencyEfficiency
. e-Procure- ment MRO. Rubber- network
Buy-sideBuy-side In-side
. Group Portal (e.g. KPI’s)
. Knowledge Management
. Demand Net Integration
Sell-sideSell-side
. B2B Tyres
. B2B2C
. e-CRM
. Salesforce Autom.
Sales,Marketing
and ServiceSuppliers Inbound
LogisticsOperations
1
Procure-ment
OutboundLogistics
Trade
OEMs
End User
Sector infrastructureSector infrastructure
Supply chainSupply chain
Finance, Administration and Control,IT, Human Resources, R&D and Product
PIRELLI TYRESINTERNETWORKING PIRELLI TYRESINTERNETWORKING
EfficiencyEfficiencyEfficiencyEfficiency
PIRELLI TYRESRESULTS ON KEY PROJECTS
PIRELLI TYRESRESULTS ON KEY PROJECTS
Projects Results so far Objectives 2001
B2B Tyres---
10 active markets27% on line transactions2.500 connected customers
---
15 active markets40% on line transactions3.600 connected customers
eProcurement MRO
---
37 active plants across 5 countries 800 orders/week1 Ml Euro/week
-
--
Turkey, Latin America andcommercial unit Europe extension2.500 orders/week2.3 Ml Euro/week
B2B applications:
e-CRM
- 200.000 profiles - 500.000 profiles on uniquedatabase centrally managed
Supply chain/DNI
- Demand planning on 5 Europeancountries
- Europe extension + North andSouth America integrationflows
EfficiencyEfficiencyEfficiencyEfficiency
T U R K E Y
••Standard Associate Brand
•UHP-HP•SUV•Run Flat•MIRS•PAX
-
-
-
Standardisation
Focused workingmodels
Product/processoptimisation
PIRELLI TYRESSTANDARDISATION
FOCUSED MANUFACTURING SYSTEMS
PIRELLI TYRESSTANDARDISATION
FOCUSED MANUFACTURING SYSTEMS EfficiencyEfficiency
Variable compensation: 30% - 60%
KPI : EBIT, FCF, EVA, Fixed costs
Reporting system on-line, on daily basis, to follow the targets
•
•
•
Performance responsibility:by business units/market/
channel/customer
PIRELLI TYRESINDIVIDUAL ACCOUNTABILITY
PIRELLI TYRESINDIVIDUAL ACCOUNTABILITY
EfficiencyEfficiency
MIRS processMIRS process
Summer SummerM+SM+S Perfect HP Perfect HP Sport Sport
PIRELLI TYRESNEW PRODUCTS: CAR PIRELLI TYRES
NEW PRODUCTS: CAR
P zero P zero neronero P6P6 P7P7 WinterWinter
Traditional processTraditional process
FG 85 TG 85
PIRELLI TYRESNEW PRODUCTS: TRUCK
PIRELLI TYRESNEW PRODUCTS: TRUCK
GTS 23 MT 450
Supercorsa Evo 21
PIRELLI TYRESNEW PRODUCTS: MOTO
PIRELLI TYRESNEW PRODUCTS: MOTO
Employeevalue
Share-holdervalue
Customervalue
PIRELLI TYRES2001 KEY MISSION PIRELLI TYRES2001 KEY MISSION
2000:
Growth
2001:
FocusInnovationEfficiency