“In its relations with all classes of shareholders, with institutional and private investors, financial analysts, market operators and, in general, with the financial community, the Pirelli Group is fully transparent, complies with the requirements of accuracy, timeliness, and equal access, and aims to ensure that a proper valuation of Group assets can be made.”
(Values and Ethical Code – Shareholders, Investors and the Financial Community)
Pirelli attributes great strategic importance to financial communication, considering it a key tool for building a trust-based relationship with the markets. Accuracy, timeliness, equality and transparency are the basic rules that Pirelli applies to its financial disclosures.
Through top management and the Investor Relations Function, Pirelli maintains an open and transparent dialogue with analysts and institutional and individual investors to assure that its assets are fairly valued.
Beyond the constant promotion of the Pirelli equity story throughout the year, financial communication activity focused on the presentation of the new Industrial Plan 2013-2017 to the financial community, which includes sustainability targets to 2020.
The new plan represents the strategic evolution of the transformation process that since 2010 has led to Pirelli to focus on value segments and double its profitability.
The evolution of this process is a renewed approach to business management, focused on the generation of cash and guaranteeing a high return on investments.
The plan content presented to the financial community in London on November 6, 2013, is reported in a dedicated section in Chapter 1 of this report, to which reference is made.
Financial communication in 2013 was characterised by reinforcing dialogue with the Group’s principal stakeholders: from institutional investors – who now represent 47.5% of the share capital (36.3% in 2012) – including SRI (Socially Responsible Investing) investors, individual shareholders (10% of the share capital), bond holders and financial analysts through roadshows and dedicated meetings.
The roadshow and meeting activities, together with growing investor interest in the specific details of the Pirelli equity story in the Tyre Business, has led to the growing internationalisation of the shareholder base. At December 31, 2013 foreign institutional investors represented 43% of ordinary share capital (36% in November 2013, 27% at December 31, 2011).
The presentation of the Industrial Plan 2013-2017 in London on November 6, 2013 represented an important opportunity to meet with the international financial community. The visibility of business drivers and geographic areas where Pirelli works, and its openness to dialogue with management were particularly appreciated. The participation of Pirelli in Formula 1 competition as the sole supplier of tyres also represented a major opportunity for acquaiting the financial community with the company business. In 2013, at the time of the main Grand Prix (MonteCarlo, Monza, Austin Texas, etc.) Pirelli organised meetings with financial analysts and leading local investors, with detailed sections dedicated to technology, the product, the brand and distribution.
In 2013 the Company proceeded with its dialogue with ethical investors, the incidence of which is gradually increasing, making Pirelli one of the key protagonists in the sector. This result is also the fruit of communication activity, which management has organised on an ad hoc basis for analysts and SRI investors. In March 2013, as part of the joint UNPRI-UN Global Compact project (an initiative sponsored by the United Nations and aimed at improving the communication between companies and investors on ESG related issues), the top management of Pirelli held an investor briefing (webcast conference), presenting the ESG Guidelines and responding to questions by SRI investors and analysts. For the second year in a row, Pirelli also took part – as sponsor – in the Annual Conference and General Meeting of ICGN (International Corporate Governance Network) held in New York from June 26 to 28, an important occasion for dialogue with international investors and leading companies on the issue of Corporate Governance. Confirming the importance that corporate governance issues have for the company, at the beginning of 2013 Pirelli was announced as having the “Best Corporate Governance in Italy” for the third year in a row by the Word Finance Corporate Governance Award 2013.
During 2013, Pirelli also continued its dialogue with bondholders, an important category of stakeholders in the Company, at targeted roadshows in the leading financial centres of London, Frankfurt, Paris and Milan.
The attention of the financial community on the Company is confirmed by the fact that 24 brokers at leading Italian and especially international investment banks cover its financial instruments, and represent more than half of the coverage (52% of global institutions).
The stock market trend in 2013, shown in the following chart, confirms that Pirelli is among the best stocks in the European Auto & Parts sector with growth of +45.3%, significantly outperforming the Italian Blue Chip index (+ +28.7 percentage points vs the MIB FTSE index) and the European sector index (+8 percentage points vs Stoxx auto).
PIRELLI & C. STOCK PRICE PERFORMANCE VS FITSE MIB, EUROPE STOXX AUTO
For more information reference is made to the Investors section of the Pirelli website, which offers a comprehensive and constantly updated source of information on matters of interest to shareholders and the financial community.