Pirelli

Pirelli & C. S.p.A.
Società per azioni
Traded as Delisted (November 2015)[1]
Industry Automotive
Founded Milan, Italy (1872 (1872))
Founder Giovanni Battista Pirelli
Headquarters Milan, Italy
Area served
 Worldwide
Key people
 Ren Jianxin (Chairman)
Marco Tronchetti Provera (Executive Deputy Chairman and CEO)
Products Car, Moto, Industrial Tyres
Revenue Increase€6.315 billion (2015)[2][3]
Increase€906.0 million (2015)[2]
Profit Increase€436.0 million (2015)[2]
Total assets Increase€7.673 billion (2015)[2]
Total equity Increase€2.665 billion (2015)[2]
Owner ChemChina (65%)[4]
Rosneft (13%)[4]
Number of employees
 37,979 (2015)[2]
Subsidiaries Pirelli Tyre S.p.A
Website pirelli.com/corporate

Pirelli & C. SpA is a multinational company based in Milan, Italy, formerly listed on the Milan Stock Exchange since 1922.[5] It was acquired in 2015 by ChemChina. The company, the world's fifth-largest tyre manufacturer behind Bridgestone, Michelin, Continental and Goodyear, is present in over 160 countries, has 19 manufacturing sites[6] around the world and a network of around 10,000 distributors and retailers.[7][8]

Pirelli has been sponsoring sport competitions since 1907 and is the exclusive tyre supplier for the Formula One Championship for 2011-2016[9] and for the FIM World Superbike Championship.[10]

While tyre manufacturing represents 99% of Pirelli's revenue,[11][12] the company has also launched fashion project PZero, a high-tech sportswear brand,[13] and operates in renewable energy and sustainable mobility through Pirelli Prodotti e Servizi per l’Ambiente.

Pirelli has published its Pirelli Calendar since 1964, which has featured the contribution of famous photographers over the years. The 2013 edition was commissioned to war photographer Steve McCurry.[14]

Pirelli's headquarters are located in Milan's Bicocca district, an area that is home to the rapidly growing Italian University, Università degli studi di Milano-Bicocca, and cultural locations such as the Teatro degli Arcimboldi and Hangar Bicocca, an exhibition centre for contemporary art that Pirelli founded.

History

Pirelli headquarters

Founded in Milan in 1872 by Giovanni Battista Pirelli, the company initially specialised in rubber and derivative processes and also made scuba diving rebreathers.[15] Thereafter, Pirelli's activities were primarily focused on the production of tyres and cables (for energy and telecommunications). In 2005, Pirelli sold its cable division to Goldman Sachs, which changed the new group's name to Prysmian.

In the 1950s, Alberto Pirelli commissioned the building of a famous Milanese skyscraper in the same area that housed the very first Pirelli factory during the 19th century: see Pirelli Tower.[16]

In 1974, Pirelli invented the "wide radial tyre", upon a request from the Lancia rally racing team for a tyre strong enough to withstand the power of the new Lancia Stratos. At that time, racing tyres were either slick tyres made with the cross ply technique (very wide tyres with a reduced sidewall height), or radial tyres, which were too narrow to withstand the Stratos' power and did not provide enough grip. Both were unusable for the Lancia Stratos, as the radials were destroyed within 10 km, and the slicks too stiff. Lancia asked Pirelli for a solution, and in 1975 Pirelli created a wide tyre with a reduced sidewall height like a slick, but with a radial structure.

Subsequently, Porsche started using the same tyres with the award-winning Porsche 911 Turbo.

In 1988, Pirelli acquired the Armstrong Rubber Company, which was headquartered in New Haven, Connecticut, for $190 million.[17]

In 2002 the company started a range of Pirelli branded clothing, watches and eyewear.[18]

In March 2015, it was announced that Pirelli shareholders has accepted a €7.1 billion bid from ChemChina for the company.[19] The transaction was completed and the company was delisted in November 2015.[1]

Corporate affairs

Major shareholders

The list of Pirelli main shareholders[20][21]

Shareholder Stake %
ChemChina 65.00%
RosNeft 13.00%
Mediobanca S.p.A. 4.61%
Edizione Srl 4.61%
Harbor International Fund 3.49%
Ruane, Cunniff & Goldfarb 1.99%
Other foreign Institutional Investors 37.29%
Retail Investors 10.12%
Italian Institutional Investors 4.26%

As of July 2014

Board of directors

The list of Pirelli Board of Directors:[22]

Position Name
Chairman Ren Jianxin
Executive Deputy Chairman and CEO Marco Tronchetti Provera
Director Alberto Pirelli
Director Bai XinPing
Director Ze'ev Goldberg
Independent Director Andrey Kostin
Independent Director Elisabetta Magistretti
Independent Director Paolo Pietrogrande
Independent Director Luigi Roth
Director Igor Sechin
Independent Director Manuela Soffientini
Independent Director Tao Haisu
Director Wang Dan
Director Yang Xingqiang
Independent Director Zhang Junfang

As of October 2015.

Financial information

Financial Data [23] 2013

(million €)

 2012

(million €)

 2011

(million €)

 2010

(million €)

 2009

(million €)

Net Sales 6,146 6,072 5,655 4,848 4,067
Gross Operating Profit 1,080 1,064 (restated) 807 629 453
EBIT 791 792 (restated) 582 408 250
Net Income 306 398 441 4 (23)
Net Invested Capital 4,455 4,427 3,727 3,281 3,818
Equity 2,437 2,389 2,192 2,028 2,495
Employees 37,979 37,338 34,259 29,573 29,570

Marketing

The Pirelli Calendar is published annually, and regularly features famous actresses and fashion models. The calendar also features the work of many of the most respected fashion photographers in the world, including Herb Ritz, Richard Avedon, Mert & Marcus, Peter Lindbergh, Annie Leibovitz, and Patrick Demarchelier.

The Pirelli Internetional Award is given annually for the best international multimedia involving the communication of science and technology conducted entirely on the Internet.

"Power is nothing without control" is the well known slogan of Pirelli Tyre Company, and is featured in numerous television and print advertisements.

Pirelli is the long-serving main sponsor of Italian football club F.C. Internazionale Milano, having sponsored the Italian team since the 1995–96 season.

Sponsorship

Football

Pirelli has a history of sponsoring football teams. Pirelli is well known for its long term primary sponsorship of the Italian football team Internazionale. Pirelli previously appeared as a sponsor on the shirts of the Maltese football club Valletta for a short time.

Pirelli's sponsorship of football teams is not limited to Europe, South America is a key market and as a result successful clubs have also been sponsored by the tyre company. The Brazilian team Palmeiras, Uruguayan team Peñarol and Argentinian side Vélez Sársfield all had Pirelli as a shirt sponsor.

When English Football League One side Burton Albion Football Club built their new stadium in 2005, Pirelli became the title sponsor of the new ground. This was because the new stadium, named Pirelli Stadium lies next to the Pirelli factory in Burton-upon-Trent, Staffordshire, England.

In 2009 Pirelli became the title sponsor of the Chinese Super League (CSL), China's top tier football league.

In 2012, the company become a major sponsor of the Russian Cup.

Formula One

Pirelli is currently the event title sponsor of the 2014 Spanish and Hungarian Grand Prix.

Rally

Pirelli also supports rally with their Pirelli Star Driver program as an initiative to support young rally drivers, organised by Pirelli and the Fédération Internationale de l'Automobile (FIA).

Motorsport

Pirelli is the only allowed tyre brand in the FIM World Superbike Championship since 2007 (along with its support classes, such as the Supersport World Championship). Pirelli has also been awarded the contract for the control tyre supply in the British Superbike Championship from 2008 until at least 2010.[24] Pirelli were also the official tyre supplier of the World Rally Championship from 2008 to 2010, until the company withdrew to focus on its Formula 1 commitments. Pirelli returned to the championship in 2014, however they only supply tyres for a few private teams as Michelin is the major tyre supplier. Pirelli was also supplied Grand-Am Rolex Sports Car Series from 2008 until at least 2010 before replaced by Continental AG in 2011.

Pirelli is the sole tyre supplier in Formula One, following Bridgestone's decision to withdraw from the role at the end of 2010.[25][26][27] Pirelli previously competed in Formula One from 1950–1958, 1981–1986 and 1989–1991.

Controversy surrounded Pirelli's Formula 1 tyres as at the 2013 British Grand Prix seven Pirelli tyres failed: Pérez twice, Alonso, Hamilton, Gutierrez, Vergne, and Massa. Following a safety car period drivers were instructed to stay off the kerbs that were later found to be "razor sharp" and may have been the cause, but the president of the British Racing Drivers' Club rejected the idea that the kerbs could be at fault, saying that "These kerbs have been in since 2009 and we have had thousands and thousands of cars go over these kerbs and they have been absolutely fine".[28] The incidents were described as "unacceptable" by F1 drivers.[29] It was later suggested that the cause of the tyre failures could be the teams putting them on the wrong side of the car. Pirelli stressed that the tyres are of an asymmetrical construction and are not interchangeable, and that if they are used correctly, they do not pose a threat to safety.[30] However, the fault was ultimately found to be in Pirelli's design of the tyres so Pirelli changed the construction of the tyres to prevent further incidents.

Pirelli suffered further tyre problems at the 2013 Belgian Grand Prix. During the second practice two tyres failed: Vettel and Alonso. One senior figure at Pirelli described the failures as a "big concern", whilst Pirelli's motorsport director Paul Hembery admitted the tyre failures were "a worry for the sport".[31] Following these issues, just one day later Michelin announced that they could replace Pirelli as the tyre supplier for 2014. In October 2013 Fernando Alonso complained that "the quality of the tyres is very on the limit", and that they "will not do 5km". Pirelli motorsport director Paul Hembery said: "Of course Alonso is one of the great F1 drivers, so to hear such comments is disappointing and below the standards you would expect from such a champion.[32] In the Korean Grand Prix Pérez locked a front tyre heavily and then suffered a dramatic failure on the subsequent long straight.[33] Pirelli hit controversy at the Indian Grand Prix where they requested the teams run the tyres a limited number of laps due to their fragility. One senior engineer at a top team said this was the worst blistering ever experienced.[34]

In pre-season testing for the 2014 season the tyre on Rosberg's car failed, sending Rosberg into a 200 mph (322 km/h) spin.[35] The incident prompted considerable alarm, and Pirelli stated that the tyre "will not be proposed again".[36] In January 2014, it was revealed that Pirelli had signed a contract with the FIA to supply tyres to Formula One for the 2014, 2015 and 2016 seasons.[37] The Pirelli 2014 wet tyre was criticised by Adrian Sutil as "the worst I have driven" and Jenson Button "twitchy" and "they take away that grip that they gave you".[38] Later in 2014 Lewis Hamilton described the Pirelli wet weather tyres as "They're not great tyres. That's no secret".[39]

Pirelli suffered further tyre problems at the 2015 Belgian Grand Prix. During practice, Rosberg suffered a dangerous tyre delamination at 200 mph (322 km/h). Rosberg said the incident was "quite a shock". During the subsequent drivers briefing double world champion Lewis Hamilton, raised concerns in a drivers' briefing about tyre safety following the high-speed blow-out suffered by team-mate Nico Rosberg at the Belgian Grand Prix. Concerns were also brought up by four-time world champion Vettel, and double world champion Alonso. Pirelli relied on race director, Charlie Whiting, to defend Pirelli's record in the meeting.[40] During the race a tyre on Vettel's car suffered from a blowout at 200 mph (322 km/h). The four time world champion described the failure an "unacceptable", and added that Pirelli's tendency to blame failures either on debris on track or a driver going over a kerb for tyre failures was incorrect, confirming that "I didn't go off the track and out of the blue the tyre explodes".[41] Following the race Rosberg was critical of the poor quality of Pirelli tyres, saying "Vettel exploding his tyre is really poor. It shouldn't happen and that it keeps on happening, in other categories as well and today with us, and with me on Friday both of us were just so lucky".[42] The Grand Prix Drivers' Association chairman said: "We need to stop the sudden explosions."[43] Immediately after the race Pirelli claimed that excessive wear caused the blowout, blaming Ferrari for running the tyre too long. However, following a more detailed analysis Pirelli said that in fact wear was not to blame, but instead a cut had caused the tyre failure.[44] To counteract further problems at the next Grand Prix, Monza, Pirelli wanted to insist that teams run the tyres at high pressure, beyond their design parameters. However, double world champion Lewis Hamilton described these rules as a "disaster" and double world champion Fernando Alonso described them as "strange" so Pirelli was forced to backtrack on their proposal.[45] After these comments, Pirelli attempted to censor the drivers by asking them to not criticise the tyres in public in the future.[46]

The situation did not improve at the next Grand Prix at Monza. Here, Pirelli reported a higher than expected number of cuts forming in the tyres.[47] During the race, one of Hamilton's tyres dropped below the regulation pressure dictated by Pirelli, despite the tyre having been prepared by a Pirelli technician.[48] Neither Mercedes nor Hamilton were punished for the infringement.[49]

Year Official test drivers
2010 Germany Nick Heidfeld
Spain Pedro de la Rosa
2011 Spain Pedro de la Rosa
Brazil Lucas di Grassi
2012 Brazil Lucas di Grassi
Spain Jaime Alguersuari
2013

Overseas investment

In April 2012, Pirelli & C. SpA signed joint venture agreement with Indonesian counterpart PT Astra Autoparts a subsidiary of PT Astra International for the construction of a motorcycle tyre plant with a total investment of $120 million. 60 percent shares will be held by Pirelli. Pirelli hoped to strengthen its presence in the largest motorcycle market in the world, the Southeast Asia region which has 250 million motorcycles.[50]

See also

References

  1. 1 2 "PIRELLI Shares - Information for Shareholders". Pirelli. November 2015. Retrieved 6 December 2015.
  2. 1 2 3 4 5 6 "01. ANNUAL FINANCIAL REPORT AT DECEMBER 31, 2013". Pirelli & C. 31 December 2013. Retrieved 6 December 2015.
  3. ↑ "Annual Report 2014" (PDF). Pirelli & C. Retrieved 6 December 2015.
  4. 1 2 "ChemChina and Camfin Signed Share Purchase Agreement with respect to Pirelli". ChemChina. Retrieved 5 January 2016.
  5. ↑ "Pirelli Company Profile" (PDF). Borsa Italiana. Retrieved 21 February 2013.
  6. ↑ "Pirelli at a glance". Retrieved 29 January 2015.
  7. ↑ "Pirelli puts corporate governance plan into action". World Finance. Retrieved 21 February 2013.
  8. ↑ "Pirelli Company Profile". Pirelli. Retrieved 21 February 2013.
  9. ↑ "Pirelli confirms it will stay F1's official tire supplier through 2016". MotorSportsTalks. Retrieved 15 July 2014.
  10. ↑ "Pirelli supply wsbk tyres". Yahoo sport. Retrieved 21 February 2013.
  11. ↑ "Pirelli in 2011: sales up revenue way up". Modern tire dealer. Retrieved 21 February 2013.
  12. ↑ "Pirelli the board of directors approves consolidated financial statements". Pirelli. Retrieved 21 February 2013.
  13. ↑ "The Pirelli PZero project". Motorcycle. Retrieved 21 February 2013.
  14. ↑ Coman, Julian (30 December 2012). "Pirelli calendar turns over a new leaf with war photographer Steve McCurry". London: The Guardian. Retrieved 21 February 2013.
  15. ↑ Coates, JK; Kincaid, TC; Lanphier, EH (1952). "Evaluation of the Pirelli Underwater Oxygen Breathing Equipment for Use in the Naval Service.". Navy Experimental Diving Unit Technical Report. NEDU-RR-2-52. Retrieved 16 March 2009.
  16. ↑ Skyscrapers, Antonino Terranova, White Star Publishers, 2003 (ISBN 8880952307)
  17. ↑ "Armstrong Finds a Niche in the Tire Market". Connecticut Humanities. Retrieved 22 July 2015.
  18. ↑ official website
  19. ↑ "ChemChina makes €7.1bn bid for Pirelli". The Guardian. Reuters. 23 March 2015. Retrieved 23 March 2015.
  20. ↑ "Shareholders Structure". Pirelli. Retrieved 15 July 2014.
  21. ↑ "Borsa Italiana". Pirelli. Retrieved 25 October 2013.
  22. ↑ "Pirelli Board of Directors". Pirelli. Retrieved 29 October 2015.
  23. ↑ "Annual Report 2013" (PDF). Pirelli & C.
  24. ↑ British Superbikes 2007 Archived 20 March 2008 at the Wayback Machine
  25. ↑ "Bridgestone to Cease Tire Supply to the FIA Formula One World Championship". Bridgestone. 2 November 2009. Retrieved 2 November 2009.
  26. ↑ "World Motor Sport Council: 23 June 2010". fia.com. Fédération Internationale de l'Automobile. 23 June 2010. Retrieved 23 June 2010.
  27. ↑ Collantine, Keith (23 June 2010). "Pirelli return to F1 after 20-year absence". F1 Fanatic (Keith Collantine). Retrieved 23 June 2010.
  28. ↑ Andrew Benson. "BBC Sport - F1 boss Bernie Ecclestone dismisses talk of boycott". BBC Sport. Retrieved 21 April 2015.
  29. ↑ Lawrence Barretto & Andrew Benson. "BBC Sport - British GP: Lewis Hamilton says Pirelli tyre failures dangerous". BBC Sport. Retrieved 21 April 2015.
  30. ↑ "Pirelli, explanation on Silverstone' facts and next races". pirelli.com. Retrieved 21 April 2015.
  31. ↑ Andrew Benson. "BBC Sport - Belgian GP: Drivers demand reassurance Pirelli tyres are safe". BBC Sport. Retrieved 21 April 2015.
  32. ↑ Andrew Benson. "BBC Sport - Fernando Alonso criticises Pirelli tyres after Korean GP qualifying". BBC Sport. Retrieved 21 April 2015.
  33. ↑ "BBC Sport - Korean GP: perfection from Vettel, less so from the tyres". BBC Sport. Retrieved 21 April 2015.
  34. ↑ Andrew Benson. "BBC Sport - Indian GP: Pirelli wants limited tyre running on safety grounds". BBC Sport. Retrieved 21 April 2015.
  35. ↑ Andrew Benson. "BBC Sport - Nico Rosberg suffers tyre failure in Bahrain Pirelli test". BBC Sport. Retrieved 21 April 2015.
  36. ↑ "Pirelli: 'Prototype tyre which failed on Nico Rosberg's car won't be used again'". Sky Sports.
  37. ↑ "Pirelli concludes new Formula 1 tyre supply deal". Autosport. 16 January 2014.
  38. ↑ "BBC Sport - Malaysian GP as it happened". BBC Sport. Retrieved 21 April 2015.
  39. ↑ Andrew Benson. "BBC Sport - Lewis Hamilton & Sebastian Vettel call for better wet-weather tyres". BBC Sport. Retrieved 21 April 2015.
  40. ↑ "Nico Rosberg tyre failure: Hamilton and Alonso raise concerns". BBC Sport. Retrieved 5 February 2016.
  41. ↑ "Sebastian Vettel says Pirelli tyre failure unacceptable". BBC Sport. Retrieved 5 February 2016.
  42. ↑ James Galloway. "Sebastian Vettel & Nico Rosberg round on Pirelli after tyre blowouts". Sky Sports.
  43. ↑ "Belgian Grand Prix: Drivers demand end of blowouts". BBC Sport. Retrieved 5 February 2016.
  44. ↑ Ian Parkes (3 September 2015). "Pirelli reveals F1 tyre investigation findings from Belgian GP". AUTOSPORT.com.
  45. ↑ "Pirelli relaxes tyre limits after Lewis Hamilton & Alonso complaints". BBC Sport. Retrieved 5 February 2016.
  46. ↑ "Italian GP: Drivers told to keep worries over Pirelli tyres private". BBC Sport. Retrieved 5 February 2016.
  47. ↑ Dieter Rencken and Lawrence Barretto (6 September 2015). "Italian GP: Pirelli reports high number of F1 tyre cuts at Monza". AUTOSPORT.com.
  48. ↑ "Lewis Hamilton wins in Italy - reaction - BBC Sport". BBC Sport. Retrieved 5 February 2016.
  49. ↑ "Lewis Hamilton keeps Italian GP win after stewards' investigation". BBC Sport. Retrieved 5 February 2016.
  50. ↑ "Indonesia welcomes Pirelli, Italian touch for local shoes". 25 April 2012.

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