Marco Tronchetti Provera - Industrial Plan

1. CREATING SUSTAINABLE VALUE
Marco Tronchetti Provera
Chairman and CEO

2. CORPORATE SUSTAINABILITY IS A CORE PIRELLI
LONG TERM STRATEGY
Pirelli’s sustainable approach includes:
 the whole corporate value chain
 all stakeholders’ interests and expectations
to preserve and enhance the value of all Group assets
Shareholders,
Investors, Financial
Community
Employees
Customers
Suppliers
Environment
Public
Authorities
Local
Communities
Competitors
Social
dimension
Economic
dimension
Environmental
dimension
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3. INTERNATIONAL ACCOMPLISHMENTS
 At the forefront in the development of products combining performance and
sustainability (“green performance”)
International Awards
2008 2009 2010
36%25%19%
% Green revenues
of total Pirelli sales
Cinturato P7: Max rating from Autobild
for the perfect balance among:
 energy efficiency
 performance
 safety
Industry
Leadership
Green
Performance
products
 For the 4th consecutive year, global sustainability leader
in the Auto Parts and Tyre Industry
 Well ahead of industry peers in several key
sustainability dimensions:
 Corporate Governance
 Code of conduct/compliance
 Quality in the work place
 Supply chain sustainability
 Human capital development
 Widely present in Social Responsible Investors
portfolio
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4. CORPORATE GOVERNANCE: THREE PILLARS
Key management role and accountability of
the Board of Directors1
Effective risk management process2
Long term value creation among the
drivers of Top Management remuneration
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5. BOARD OF DIRECTORS
Vast majority of the 20 Board members are non-executive
and independent Directors
2 “Governing” Board committees composed exclusively
of independent Directors
Board’s key role:
Addressing strategic guidelines (industrial and financial plans)
Monitoring management performance
Overseeing risk management processes
Managing conflicts of interest
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6. NEW RISK MANAGEMENT PROCESS
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2
Value driven
Focus on risks threatening strategic targets and assets
 Fully integrated
Horizontal to the organization in the industrial and financial
planning processes
 Proactive and responsive
Leading to recovery plans and mitigation actions supporting
the annual management plan
“Top down” approach
Enabling the Board of Directors and Top Management to
oversee, assess and manage risk in all key business decisions

7. Alignment of executive remuneration to shareholders’ value creation
More than 70% of Management’s variable compensation linked to the financial
targets of the 2011-2013 industrial plan
Incentive scheme applied to the entire management team
Introduction of innovative retention mechanisms
Part of the annual variable compensation retained in a “Bonus bank” to boost
commitment to long term results
LONG TERM INCENTIVE SYSTEMS
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8. THE 2011-13 SUSTAINABILITY PLAN INTEGRATES
THE INDUSTRIAL PLAN IN THREE KEY AREAS
Sustainability Plan
2011-13 Architecture
Social
dimensio
n
Economic
dimension
Environment
al
dimension
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9. SOCIAL DIMENSION
Launch of a yearly revised safety program for all plants worldwide
Push Pirelli’s Total Quality approach through:
sustainable joint development partnerships
extensive third-party independent audits on suppliers’ compliance
Pro-active membership, dialogue and cooperation with:
Public Authorities and NGOs*
High level institutional bodies
for shared local and international economic, social and
environmental development
......... .........
Health & Safety
HR and organization
development
Supply chain
management
Local
communities &
international
partnerships
* Non Governmental Organizations
Focus on employees’ welfare
Increase diversity in management
Pursuing a shared growth
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10. ENVIRONMENTAL DIMENSION
Product
Further and aggressive reduction of consumption / emissions
Process
Settimo Torinese Plant opening in 2011:Plants
Towards
carbon &
water
footprint
Green procurement rules
Greener & performance across all market segments
- 35%- 35% - 15%- 15% ~ -15%~ -15%
Water specific consumption Energy specific consumption CO2 specific emissions
2009 2015 2009 2015 2009 2015
17.6 14.1 1.07
m3
/ton of finished product GJ/ton of finished product ton/ton of finished product
Taking care of the planet
Biomaterials
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2010 2011 2013
47%39%36%
% Green revenues
of total Pirelli sales
2015
~60%

11. Green product revenues
Green cost optimization
Lower cost of capital from
de-risking programs
Main Value Leverage
ECONOMIC DIMENSION
Employer of choice
Brand equity increase
Trust from society
Main Intangible Assets
Gaining from Sustainability
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Sustainability Plan
2011-13
Industrial Plan
2011-13

12. DISCLAIMER
This presentation contains statements that constitute forward-looking statements based on Pirelli & C SpA’s
current expectations and projections about future events and does not constitute an offer or solicitation for the
sale, purchase or acquisition of securities of any of the companies mentioned and is directed to professionals of
the financial community.
These statements appear in a number of places in this presentation and include statements regarding the intent,
belief or current expectations of the customer base, estimates regarding future growth in the different business
lines and the global business, market share, financial results and other aspects of the activities and situation
relating to the Company.
Such forward looking statements are not guarantees of future performance and involve risks and uncertainties,
and actual results may differ materially from those expressed in or implied by these forward looking statements as
a result of various factors, many of which are beyond the ability of Pirelli & C SpA to control or estimate precisely.
Consequently it is recommended that they be viewed as indicative only.
Analysts are cautioned not to place undue reliance on those forward looking statements, which speak only as of
the date of this presentation.
Pirelli & C. SpA undertakes no obligation to release publicly the results of any revisions to these forward looking
statements which may be made to reflect events and circumstances after the date of this presentation, including,
without limitation, changes in Pirelli & C. SpA business or acquisition strategy or to reflect the occurrence of
unanticipated events.
The Manager mandated to draft corporate accounting documents of Pirelli & C. SpA. Francesco Tanzi, attests –
as per art.154-bis. comma 2 of the Testo Unico della Finanza (D.Lgs. 58/1998) – that all the accounting
information contained in this presentation correspond to the documented results, books and accounting of the
Company.
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