Pirelli Reaffirms Guidance Despite Rising Raw Material Costs in H2 Outlook

Pirelli & C. S.p.A. reported second-quarter results that aligned with market expectations and reaffirmed its full-year guidance. The company adjusted its outlook for the remainder of the year, however, signaling a significant shift from a raw material cost benefit in the first half to a substantial headwind expected in the second half.

Second-Quarter Performance

The Italian tire maker's second-quarter earnings matched analyst consensus, according to a company report. Revenue came in 1% above market estimates, while operating profit also exceeded expectations by 1%. Despite changing market dynamics, the company maintained its previously stated financial targets for the full 2026 fiscal year.

Shifting Full-Year Outlook

Pirelli's forecast for the second half of the year reflects a more challenging cost environment. The company now anticipates a material shift in raw material expenses, which will become a headwind after benefiting results in the first six months.

• First-Half Impact: Raw material costs provided a €30 million tailwind.
• Second-Half Forecast: Raw material costs are expected to create a €70 million headwind, with the impact beginning in the third quarter.

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The company also adjusted its revenue mix outlook, projecting a 1% benefit from foreign exchange rates that will be offset by a 1% headwind from volumes.

Growth and Cost Management

To counter these pressures, Pirelli highlighted its ongoing efficiency program, which delivered €81 million in savings during the first half. The company expects to generate an additional €69 million in the second half, targeting a full-year total of €150 million in savings, supplemented by another €20 million to €30 million from other mitigation efforts.

Pirelli projects organic growth of around 4% in the second half, comprised of approximately 3% from price and mix and 1% from volume. The company noted it expects a stronger volume performance in the United States, supported by easier year-over-year comparisons and existing orders that provide three to four months of visibility. For the full year, financial expenses are forecast to be between €190 million and €200 million, with the tax rate anticipated at 32% to 34%.