Pirelli & C.

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Shareholders, investors and financial community

“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.”

(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 financial markets. Accuracy, timeliness, equality and transparency are the basic rules that Pirelli applies to its financial disclosures.

Through top management and the Investor Relations Department, the Group maintains an open and transparent dialogue with analysts and investors – both individuals and institutional investors – in view of promoting fair valuation of its assets. At the same time, Pirelli believes that constant dialogue with professionals in the financial sector represents a key tool to enhancing the value of Company assets by keeping up to date on changes in business trends affecting the Group and, more generally, macroeconomic trends.

Financial communication activities in 2009 promoted the new Pirelli equity story and highlighted the gradual implementation of the Industrial Plan presented to the financial market in February 2009. The 2009-2011 Business Plan is based on four guidelines:

  • focus on core business (tyres and particulate filters)
  • stimulus for the development of cutting-edge products and solutions in the “green economy”
  • acceleration in reorganisation of Pirelli Real Estate
  • sale of certain non-strategic equity holdings to improve the Group's financial flexibility to support growth in its core business

In 2009 the Group met more frequently with investors on major financial markets (Milan, London, Edinburgh, New York, Boston, Paris, Frankfurt, Zurich, Copenhagen and Stockholm) during dedicated roadshows and participation at industry conferences. Pirelli representatives met with 240 institutions, comprised of both current and prospective investors.

At the same time, coverage of Pirelli stock by investment banks was expanded, especially amongst international investment banks with specialised coverage for the tyre industry. At December 31, 2009 Pirelli stock was covered by 18 brokers who regularly publish on it (+50% from December 31, 2008), including 33% global (25% at December 31, 2008).

Special attention was also dedicated to web-based communication, by upgrading the Investor Relations section with new information services: from "Investor Channel," a Pirelli financial and business news channel, to Peers and Market, a weekly financial newsletter, to Tyre Market Watch, an observatory of tyre market trends in the principal geographical areas where the Group operates. Finally, to promote greater transparency on the financial market, Pirelli regularly publishes a summary of analysts estimates (Consensus) covering Pirelli stock in the Investors section.

Pirelli & C stock market performance in 2009

Pirelli&C: +58.2%, FTSEMib: +16.5% and DJStoxxAuto: +13.3% as on 31 December 2009

For years the Group has also been dedicating special attention to the ratings agencies that specialise in sustainable finance. In January 2010 Pirelli confirmed its leadership in terms of sustainability for the third consecutive year , winning the top rating in the Sustainability Yearbook 2010 (published by SAM Group in collaboration with PricewaterhouseCoopers) as "Sector Leader" and "Gold Class Company" in the "Autoparts and Tyres" sector. Pirelli was also recognised as "Sector Mover" for its continued, significant growth in terms of sustainable performance during the last year.

During the 2009 financial year, Pirelli also confirmed its position in the most prestigious rankings of ethical finance at the global level, with steadily improving scores. This topic has been illustrated extensively in the introductory section of this report, to which reference is made for more details.

In 2010 Financial Communication activity will continue by enhancing the visibility given to steady implementation of the Pirelli Equity Story, through wider contacts with analysts and investors. Special attention will also be dedicated to the Group’s sustainability strategy.

Information on the composition of company shareholders and its share capital is provided in Book One - Corporate Governance Report, to which reference is made for more details. The cited information is also published in the “Governance” section of the company website, www.pirelli.com.

For more details on the topics addressed in this section, reference is made to the “Investors” section of the website www.pirelli.com. It provides a complete information tool for matters of interest to shareholders and the financial community.