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Pirelli & C SPA (BIT:PIRC) presented its nine-month 2025 results on November 6, showcasing resilient performance despite external challenges. The Italian tire manufacturer reported solid organic growth driven by its strategic focus on high-value segments, which now account for 79% of total sales.
Executive Summary
Pirelli reported net sales of €5,195 million for the first nine months of 2025, representing a modest 0.2% year-over-year increase but a stronger 3.7% organic growth. The company’s adjusted EBIT reached €835 million, up 2.4% from the previous year, with an improved margin of 16.1%. Net income rose 8.0% to €401 million, demonstrating the company’s ability to enhance profitability despite challenging market conditions.
As shown in the following financial overview chart, Pirelli maintained strong profitability metrics while navigating external pressures:
"The results for the first nine months confirmed the effectiveness of our strategy," stated CEO Marco Tronchetti Provera during the earnings call, highlighting the company’s focus on high-value segments as a key differentiator in the market.
Strategic Initiatives
Pirelli’s strategic focus remains on strengthening its position in the high-value tire segment, particularly for vehicles with rim sizes of 18 inches or larger. The company reported gaining market share in this segment, with Pirelli volumes growing 5% compared to market growth of 3% in the third quarter.
The company continues to build on its technological leadership, with innovations such as the Cyber Tyre being recognized as the Vehicle-to-Everything (V2X) Innovation of the Year at the 2025 Autotech Breakthrough awards. A new partnership with Aston Martin and Bosch for future vehicles further solidifies Pirelli’s position at the forefront of tire technology innovation.
Sustainability remains a core focus for Pirelli, with significant progress across product development, operations, and people management. The company is on track to meet its sustainability targets for 2025, including incorporating more bio-based and recycled materials in its products.
The following chart illustrates Pirelli’s sustainability initiatives and progress:
Detailed Financial Analysis
Pirelli’s organic growth of 3.7% was primarily driven by a strong price/mix contribution of €202 million, which offset a slight decline in volumes (-€11 million). However, foreign exchange impacts (-€174 million) and perimeter changes (-€7 million) limited the overall revenue growth to 0.2%.
The adjusted EBIT bridge reveals how Pirelli managed to improve profitability despite headwinds:
Price/mix improvements (+€141 million) and efficiency gains (+€117 million) more than compensated for the negative impacts of raw materials (-€57 million), foreign exchange (-€53 million), and inflation (-€93 million).
The company reported positive net cash flow before dividends of €141 million in Q3, although the nine-month figure remains negative at -€363 million. Pirelli highlighted careful inventory management, with stock decreasing quarter-on-quarter from 22% in Q1 to 20.7% in Q3.
Competitive Industry Position
Pirelli maintains a dominant position in the high-value tire segment, particularly in premium homologations. The company secured approximately 210 new homologations in the first nine months of 2025, with about 90% in higher rim sizes (≥19") and 60% for electric vehicles.
As illustrated in the following slide, Pirelli’s homologation portfolio significantly outpaces its competitors:
This competitive advantage is further reinforced by industry recognition of Pirelli’s products. The Cinturato All Seasons SF3 ranked #1 in Autobild and Tyrereview tests, while the PZero E won the International Compasso d’Oro Prize for combining environmental awareness with high performance.
Forward-Looking Statements
Pirelli confirmed its full-year 2025 guidance despite ongoing external challenges, including a weak US dollar against the euro and volatile consumer demand. The company expects:
The company anticipates the global car tire market to remain challenging, with flat demand for standard tires (≤17") but continued growth of approximately 4% in the high-value segment (≥18").
Pirelli is actively mitigating the impact of US tariffs through operational adjustments, commercial agreement reviews, and cost-cutting measures. The company’s US operations account for more than 20% of group revenues, primarily in the high-value segment.
ESG Performance
Pirelli continues to demonstrate leadership in sustainability, with strong performance across key environmental, social, and governance metrics. The company ranks in the top 1% for ESG ratings and maintains its position as a leader in the Dow Jones Sustainability Index with a score of 86, the top score in the Auto Components sector.
The following chart illustrates Pirelli’s progress toward its sustainability targets:
The company’s ESG leadership is further validated by its inclusion in multiple sustainability indices:
Pirelli’s stock saw a modest increase of 1.36% following the announcement of its nine-month results, reflecting investor confidence in the company’s strategic direction and financial resilience despite challenging market conditions.
As raw material costs continue to impact the industry, Pirelli has effectively managed its supply chain and cost structure:
With a clear focus on high-value segments, technological innovation, and sustainability, Pirelli appears well-positioned to navigate the current market challenges while building long-term competitive advantages.
Full presentation:
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