Introduction

Pirelli is the world’s fifth biggest tyre maker, focused on the Premium segment where the company aims to achieve global leadership by 2015.

Smart, Efficient, Profitable, Innovation drivenFounded in 1872, Pirelli produces on four continents and sells its products in over 160
countries worldwide.

It boasts a long industrial tradition, which has always been based on innovation, product
quality and a strong brand. That strength has been supported since 2002 by the PZero
fashion and high tech project and has just been further reinforced by Formula 1, to which
Pirelli Tyre is the exclusive supplier for the three-year period 2011-2013.

In line with its Premium and Green Performance strategy, Pirelli is focused on research
and development while dedicating constant, increasing attention to quality, technology
and low environmental impact products. Group efforts in these areas are supported by
the activities of Pirelli Eco Technology, which focuses on emission control technologies,
and Pirelli Ambiente, which operates in the renewable energy sector. All businesses also
rely on the support of Pirelli Labs, a centre of technological excellence and driver of Pirelli
innovation.

In pursuing its objectives, Pirelli aims to combine economic profitability and social responsibility.
Carrying on the same industrial tradition for over a century, it continues to
invest in international expansion projects while maintaining strong roots in the local communities
where it operates.

PIRELLI corporate structure as at 31/12/2011

PIRELLI corporate structure as at 31/12/2011

* The individual businesses rely on the support of Pirelli Labs (100% Pirelli & C.), the Pirelli centre for technological excellence and driver of innovation.
** The indicated percentages of investment represent only the portion granted to the “Shareholders’ Agreement” at July 2, 2011. Camfin has announced that it directly or indirectly owned another 5.9% of the ordinary capital of Pirelli & C. SpA.


Sales by geographical area

Net sales in 2011 totalled euro 5,654.8 million, up 16.6% from euro 4,848.4 million in 2010. The percentage breakdown of activities shows that 99.1% of sales were generated by the Tyre business (98.4% in 2010).

The following table shows the geographical breakdown of Group sales over the last three years:

(in thousands Euros)
2011 % 2010* % 2009* %
Europe:





-ITALY 479,838 8.49% 485,450 10.00% 443,103 10.89%
-REST OF EUROPE 1,844,080 32.61% 1,503,531 31.00% 1,326,326 32.60%
NAFTA 561,320 9.93% 477,394 9.85% 361,454 8.89%
CENTRAL AND
SOUTH AMERICA
1,915,467 33.87% 1,632,044 33.66% 1,296,285 31.87%
ASIA/PACIFIC 352,815 6.24% 286,992 5.93% 231,237 5.69%
MIDDLE EAST/ AFRICA 501,273 8.86% 463,077 9.55% 409,056 10.06%

5,654,793 100.00% 4,848,418 100.00% 4,067,461 100.00%
* Net sales in 2010 do not include the operations that belonged to Pirelli & C. Real Estate (now Prelios) and Broadband Solutions, which were sold in 2010. The 2009 period has consequently been restated on a comparable basis.

For a complete snapshot of Pirelli ’s economic performance in 2011, please see Volume A – Annual Financial Report at December 31, 2011.

Geographical distribution of employees

The Pirelli headcount at December 31, 2011 was 34,259 employees (29,573 in 2010 and 29,570 in 2009), including the acquisition of 2772 employees at the Kirov, Russia plant in December 2011.
The social and environmental performance of the Kirov plant has not been included in this report since that plant was not included in the Pirelli scope of consolidation for 2011. It will be accounted with the 2012 Sustainability Report. So, all social performance indicators in this report are calculated on a comparable basis with previous years. On a comparable basis, the headcount at December 31, 2011 was 31,487. The following table reflects their distribution on four continents.

2011

TYRE OTHER BUSINESSES* PIRELLI TOTAL
EUROPE 10,981 622 11,603
NAFTA 490 0 490
CENTRAL AND SOUTH AMERICA 13,202 0 13,202
MEA 3,296 0 3,296
ASIA PACIFIC 2,855 41 2,896
TOTAL 30,824 663 31,487
2010

TYRE OTHER BUSINESSES* PIRELLI TOTAL
EUROPE 10,628 673 11,301
NAFTA 285 0 285
CENTRAL AND SOUTH AMERICA 12,522 0 12,522
MEA 2,983 0 2,983
ASIA PACIFIC 2,447 35 2,482
TOTAL 28,865 708 29,573
2009

TYRE OTHER BUSINESSES* PIRELLI TOTAL
EUROPE 10,526 2,085 12,611
NAFTA 287 0 287
CENTRAL AND SOUTH AMERICA 11,711 4 11,715
MEA 2,834 0 2,834
ASIA PACIFIC 2,123 0 2,123
TOTAL 27,481 2,089 29,570
* it includes Corporate, P. Ambiente, PZero, P. Ecotech; for 2009 it includes also the business Real Estate and Broadband Solutions dismissed during 2010 the resources of which weren’t counted anymore in the group employees at 31.12.2010
2011 vs 2010

TYRE OTHER BUSINESSES* PIRELLI TOTAL
EUROPE 353 -51 302
NAFTA 205 0 205
CENTRAL AND SOUTH AMERICA 680 0 680
MEA 313 0 313
ASIA PACIFIC 408 6 414
TOTAL 1,959 -45 1,914
2011 vs 2009**

TYRE OTHER BUSINESSES* PIRELLI TOTAL
EUROPE 455 -1,463 -1,008
NAFTA 203 0 203
CENTRAL AND SOUTH AMERICA 1,491 -4 1,487
MEA 462 0 462
ASIA PACIFIC 732 41 773
TOTAL 3,343 -1,426 1,917
* it includes Corporate, P. Ambiente, PZero, P. Ecotech; for 2009 it includes also the business Real Estate and Broadband Solutions dismissed during 2010 the resources of which weren’t counted anymore in the group employees at 31.12.2010 ** the gap between 2011 and 2009 in the section “Other Businesses” includes the reduction of 1267 units related to the dismissed activities (Real Estate and Broadband Solutions) during 2010

For a complete snapshot of employees, please see the section “Internal Community” in Chapter 4 of this report.