The results of Pirelli Tire on 30 June 2006 show double digit growth in sales & a significant improvement in ordinary activities compared with the first six months of 2005, notwithstanding the increase in raw material costs which penalized the entire sector.

Net sales were 2,018.4 million euros, with an increase of 12.4% from 1,795.8 million in first half 2005 (+7.4% net of exchange rates, 4.3% from volume growth & 3.1% from the price/mix component).

EBITDA was 292.6 million euros (+4.6% compared with first half 2005 & equal to 14.5% of sales), including non-recurring costs of 6 million euros linked to the planned flotation. EBITDA from ordinary operations amounted to 299 million euros (14.8% of sales), with an increase of 7% compared with 279.6 million euros in first half 2005.

EBIT amounted to 194.6 million euros (+4.1% compared with first half 2005 & ROS was 9.6%), including non-recurring costs of approximately 6 million euros linked to the planned flotation. The operating income from ordinary operations was 201.1 million euros, an increase of 7.5% from 187 million euros on 30 June 2005, with a ROS of 10% (10.4% in first half 2005). The result's growth was linked to the positive impact of the sales increase & greater efficiency, which more than offset increases in production costs. The reduction in the profitability percentage was mainly due to an increase in raw material costs & the start-up effect of the new factory in China.

Net income totalled 118.3 million euros (after financial charges of 24.2 million & tax of 52.1 million euros), compared with 116.2 million euros (after financial charges of 15.7 million euros & tax of 55.1 million euros) in first half 2005.

Net debt was 739.6 million euros compared with 719.9 million on 31 March 2006.

At the end of June 2006, the headcount stood at 25,214 (of which 3,957 temporary), compared with 23,673 (of which 2,958 temporary) on 31 December 2005, due to the development of activities in China & Romania.

In the Consumer business, the first half saw overall growth in revenues & profitability compared with the same period of 2005, due to greater volumes & a better price/mix. In particular, revenues amounted to 1,403 million euros (+11% compared with first half 2005) & the operating income from ordinary operations was 140.7 million euros (+18%), with ROS at 10%. In the Car segment, overall demand was negative in North & South America, while it rose in Europe, led by high value-added segments such as high-performance, ultra-high performance & SUV. In the Motorcycle segment demand increased in all major markets, in particular in South & North America, where Pirelli & Metzeler have strengthened their market share.

In the Industrial business the first half closed with revenues of 616 million euros, an increase of 16% compared with the same period in 2005. The operating income from ordinary operations was 60.4 million euros, a decrease of 10% from first half 2005 due to higher than expected increases in cost factors, in particular natural rubber & energy. ROS was 9.8%. Overall market demand was positive in Europe, while it decreased in South America.