Presented during the BCG's European Insurance/ FS COO-CIO Roundtable 2017 - “Using artificial intelligence to step-change your digital transformation”

1. Digital Transformation at Pirelli
The development of the Connesso platform
Milan, September 22th 2017

2. 2
A brief introduction
Marcelo De Santis - Chief Information Officer Pirelli
Marcelo is a digital leader with 20+ years of global experience on
transforming businesses at the intersection of data, technology
and people.
Over the years, he has learned the business of a wide range of
industries - consulting, mobile communications, financial services,
pharma & CPG - in major companies like Kraft Food and
Mondelez, while working and experiencing the cultures of North
America, Asia Pacific, Europe and Latin America.
He strongly believes in the power of cultivating a collaborative,
inclusive team culture focused on business results: profitable
revenue, satisfied customers, engaged employees & partners.
Specialties: Digital business transformation, agile operating
models, digital product development, e-commerce, change
management, shared services & digital marketing strategies.

3. 3

4. 4
Digital is at the core of Pirelli's strategy
≥+9%
63%
18.5% -
19.5%
1.0%
<2.0 X
Pure
consumer tyre
company
focused
on high value
products
Strategic
positioning in
more
technologicall
y advanced
segments,
high growth &
profitability
Leadership
position in the
higher value
markets
Digital transformation with radical innovation of inter-
functional business processes, using data & digital
technologies
Average annual growth in
revenues 2016-2020
Percentage of High Value
revenues of total in 2020
Adjusted EBIT margin at the
end of 2020
of revenues efficiency plan
by 2020
Net financial position /
Adjusted EBITDA
Our 2020 targets Our strategic directions
Source: Pirelli Press Release, September 2017

5. 5
Digital will reshape our company in four ways
h
Pirelli’s
Digital
Strategy
1. Digitize the core value chain
to enable cross-functional effectiveness and increase efficiency
2. Enhance consumer centricity through Digital products
to improve consumer experience and insights
3. Support Pirelli's data-driven culture
to increase enterprise–wide accuracy of decision-making
4. Enable digital workplace
to enhance workforce collaboration, agility and effectiveness

6. 6
Our task is to preserve our business model without surrendering it to an internet
player. Otherwise we will end up as the Foxconn for a company like Apple,
delivering only the metal bodies for them.
A computer on wheels will
change the players in the
market
Shift from internal
combustion to electric
driven by regulations
Releases 5 years of a
person’s life spent
commuting
Shift from human driven to
self driven
Car is now in the cloud
and in your pocket
Shift from car ownership to
transportation as a service
“
“
- Klaus Froehlich, BMW
Disruption is changing the automotive world
Source: Pirelli, BCG DV

7. 7
ca 65%
ca 54%
ca 40%
ca 27%
ca 18%
ca 13%
ca 7%
ca 4%ca 2%ca 2%ca 1%ca 1%
2018E
2020E
2019E
2011
2010
2013
2014
2012
2015
2016
2017E
+46% CAGR
2009
Connected cars are gaining importance in the market
Connected car adoption rate (as a % of new car sales)
Source: Gartner, Statista, IHS, BCG analysis

8. 8
…apart from information about their tires
Connected car consumers have all types of info

9. 9
Today let's focus on the Connesso platform
Source: Pirelli, BCG DV

11. 11
The Connesso architecture
4. Data Lake & Algorithms
System for collecting and
processing data gathered
1. Pirelli Smart Tyre
Pirelli Tyres with
embedded sensor
3. Consumer App
App providing services
and information on the
Smart Tyre
5. Dealer Apps
App allowing the
dealer to
configure and
pair the system
2. Control Unit
Bluetooth/GPS device that provides
accurate data to calculate wearing and
enables communication with the sensors,
the smartphone
Source: Pirelli, BCG DV

12. 12
Key features of the Connesso app
Homepage Club Concierge Tyre dashboard

13. Many business opportunities from Connesso system
​Selling and fitting ​Consumer
assistance
​Operations
​improvement
​Third
​parties
​Proactive
​replacement
​Cross and
​up-selling
Service Data
Source: Pirelli, BCG DV

14. 14
Key challenges of a true
Digital Transformation
1. Articulate vision & business value
2. Onboard right talent
3. Nurture a culture of experimentation
4. Embrace Technology & Data as a business driver

15. Thank you