There really is not much to Pirelli’s return on the stock market: its CEO Marco Tronchetti Provera has already announced that IPO will be launched in the fourth quarter of 2017, ahead of the initial forecasts targeting 2018.
In view of the IPO, the Bicocca Group has already secured internal restructuring and financing operations capable of floating a completely different company onto the financial markets than the one that left in 2015.
Refinancing of credit lines for € 4.2 billion and a capital increase of 1.2 billion allowed the company to lengthen its debt life and reduce its costs: the company is, therefore, stronger, with a more solid capital base.
ChemChina will reduce its stake to 50%, which will allow the company to float 30%, but the Chinese chemical giant’s basic assumptions are to strengthen Pirelli.
The positive turnover of the last few months means that the company is booming: all economic indicators are growing (revenues up by +13.4%) and, above all, premium revenue (+16%) is rising steadily, i.e. production is focused on the high-end tyres range.
The Business Consumers trend, which has been separated from the Industrial one for a few months, is dramatically climbing due to rising market prices, increased sales on the spare parts channel and a different geographic mix and products. All factors that brought about an improvement in the price/mix component (+5.5%).
The strategy, which, according to quarterly financial statements, is expected to be successful, is to concentrate resources and financing on the profitable Premium segment, which has a margin of more than 20%: Pirelli is a beacon of success in the automotive world that seems to be getting closer and closer to the luxury sector.
It is, therefore, a return to the spotlight for the historic Milanese company but based on new assumptions that bring the company’s symbol of Italian industry to act as a protagonist: its numbers indicate rosy prospects for investors, but we must wait until for the roadshow in September for the price fork to be set.
Latest on Pirelli IPO 2017
Pirelli announced the stock price for its IPO shares, which could eventually be more appealing than Pirelli IPO forecasts from Allied Irish, which initially amounted to $ 3 billion. Banks talk about the largest IPO in Europe this year, and if the price of the shares will be valued as expected by the Irish Times (Pirelli to overtake AIB with the largest European IPO this year) and Global Capital (Pirelli’s IPO could be the largest in EMEA this year), here that investors might face an attractive deal.