to our shareholders by Valeria Leone

our performance, our shares, our pathway

in the foreground Pirelli guarantees an entertaining Formula

in short

No.1NewsletterApril 2011IN Pirelli Investors Newsletter

IPirelli Investor Relations

Our purpose is to be able to talk to the over 70 thou-sand retail investors who have believed in our in-

dustrial project for years. 70 thousand people who have made Pirelli one of their key investment choices and cur-rently account for 35% of our floating capital. Pirelli ranks seventh amongst Milan Stock Exchange Blue Chips in terms of retail. Through this newsletter, we wish to regularly update our readers on our challenges, projects and results. Let us start from the latter. 2010 turned out to be a very important year for Pirelli: the Com-pany went through a radical set of changes, due to the separation of the real estate business and the dismissal of non strategic assets and participations. Currently, Pirelli is a Tyre Com-pany that can easily stand up to its global competitors. This change together with the accomplishment of its 2009-2011 Industrial Plan one year earlier were acknowledged by the financial market which rewarded Pirelli as one of the best securities both in Italy and in the Tyre business abroad.In 2010, the Stock Exchange value cre-ation was worth 700 million euro, almost 1 billion euro if we include dividends and the distribution of 58% of Pirelli RE to its partners, following its separation from the Group. Yet, this is not all. Last November, an even more ambitious Plan was introduced with investments worth 1.9 billion euro for the 2011-2015 period. This is a commitment which will make Pirelli almost double its

production capacity, focusing on high-growth markets such as China, Latin America, Middle East and Africa, as well as on innovation with its new Settimo Torinese technological hub and the “Pre-mium” segment, the highly technological products that are the benchmark for the main car makers, from Ferrari to Lambo-rghini and Porsche, from Audi to BMW and Mercedes, to mention but a few.In the 2011-2013 period, through this Plan, Pirelli aims at significantly im-

proving its profitability, with a 2013 operating margin of

10.5%/11.5% with over 8% revenues growth, and at generating enough resources to cover its investments and ensure a sound remuneration to its shareholders, i.e.

approximately 40% of the net cumulated

profit bewteen 2011 and 2013. Indebtedness is due to

remain at more than sustainable levels, at about 1x the Ebitda up to 2013 and amongst the lowest in the industry.New challenges are right ahead of us as Pirelli went back to Formula 1 car racing after 20 years. And this time as the exclusive official Tyre supplier. A challenge we all have taken up, from the people in charge of Pirelli laborato-ries to the engineers in the Izmit plant in Turkey, where Formula 1 tyres are produced, to our colleagues in Milan, as well as those in Sao Paolo or Jinin in China.With this Newsletter and our Website, we shall keep you always updated on the many success stories that make Pirelli one of the most significant actors in the Tyre industry, an Italian brand selling in over 160 countries.

The Shareholder’S Cal

20 april (firST Call), 21 april (SeCond Call)

Annual General meeting to approve 2010 financial statements

4 May

Board of Directors meeting to review the interim financial report at 31 March 2011

27 July

Board of Directors meeting to review the half year financial report at 30 June 2011

3 noveMber

Board of Directors meeting to review the interim financial report at 30 September 2011

* MrS. valeria leone Pirelli Investor Relations Director

Degree in Economics in 1985 and chartered ac-countant since 1987. From 2001, Member of the Italian Financial Analyst Association. Mrs. Leone started her professional career at Deloitte & Tou-che. She than spent some time as a freelance professional,specializing in business assessment. She worked at IRI and followed the whole reor-ganization and privatization process in the Italian Telecommunications Industry. In 1997, Mrs. Leone joined Telecom Italia Group as head of TIM Busi-ness Planning and was later appointed head of TIM Investor Relations and then head of Telecom Italia IR. In 2008, she joined Pirelli as director of Investor Relations. She was nominated best Inves-tor Relations Professional in the Telecommunica-tions Industry several times. In June 2010, Mrs. Leone received the Country Award for Italy from Europe Magazine and in April this year, she was third “Best IR Professional” in the Auto & Parts Industry in the European classification issued by Institutional Investor Research Group, one of the most authoritative sources in the financial market.

TO OUR SHAREHOLDERSPIRELLI InvESTORS nEWSLETTER

“70 thousand people who hold

35% of our free float and make Pirelli the 7th

Blue Chip company in Milan Stock

Exchange”

Why a newsletter for our retail shareholders? — valeria leone*

IIPirelli Investor Relations

2010: a sound sPRIngboaRd foR the futuRe Strong growth and results definitely higher than its original targets

OUR PERFORMAnCE

revenues Tyre

~ 4.8> 4.7

4.854.77

+ 19.2%+ 19.5%

ebiT* ~ 0.38 0.41 + 63.3%

Margin > 7.5% 8.4% + 2.3 p.p.

Tyre ~ 0.42 0.45 + 46.8%

Margin > 8.5% 9.5% + 1.8 p.p.

Capex > 0.35 0.4 + 95%

nfp < 0.7 0.45 - 14%

* Ebit and Ebit margin are after continuous restructuring ** Pirelli RE and Pirelli Broadband as discontinued operations

fy’10 reviSedTargeTS

(nov. ’10)**

fy’10 reSulTS ∆ yoy

∆ priCe/MiX + 11.3% + 8.9%

∆ voluMe + 3.4% + 7.3%

∆ rev. (before exch. rate impact) + 14.7% + 16.2%

∆ eXCh. raTe + 2.6% + 3.3%

4Q’10 fy10

PIRELLI InvESTORS nEWSLETTER

For Pirelli, 2010 was a year of strong growth, definitely higher than its original targets, which

were achieved and raised many a time over the course of the year.Revenues top the charts with a growth of over 19% due to the solid performance of the Tyre business, which accounts for 98% of the Group’s sales. Such growth mainly comes from emerging markets (Latin Amer-ica, Asia, and the Middle East), accounting for 50% of sales, and from mature markets, such as Europe (due to higher sales of winter tyres) and North America, where Pirelli is aiming at improv-ing its positioning.Pirelli is increasingly acknowl-edged as a “premium brand”, as evidenced by its price mix com-ponent, up 9% in 2010 (+11.3% in the last quarter of last year), the highest amongst Tyre com-petitors all over the world. Pirelli Tyre high profitability means an Ebit margin close to 10%, a remarkable result given the impact of raw material cost (270 million euro, of which 46% over the last quarter) fully compensated by both price increase and mix im-provement. Volume growth as well as 50 million euro efficiencies have

contributed to a +47% increase in operating results vs. 2009 (+39% in the fourth quarter).In 2010, in spite of the negative accounting impact produced by the separation of its Real Estate business, Pirelli made a 22 million euro net attributable profit, while its parent company made a 98 million euro net profit. Based on this outcome, the Board of Direc-tors will submit the distribution of dividends worth 0.165 euro for ordinary shares and 0.229 euro for savings shares to the Share-holders’ Meeting’s approval. This means a yield of 3% and 4% com-pared with the 2% of the global Tyre industry1.Pirelli solid operating perfor-mance as well as the effective management of working capital contributed to an actual improve-ment of its debt both vs. targets and 2009, 456 million euro vs. an approximate target of 700 million euro and -73 million euro, respec-tively. Cash generation entirely offset major investments (439 million euro) almost doubled vs. 2009, as well as dividends distri-bution worth 85 million euro.

1 Dividend yield is calculated on Stock Exchange average listings between January, 3rd, and April, 15th, 2011. Average dividends distributed by Michelin, Bridgestone, Nokian.

Tyre SaleS by region

revenue driverS

latIN amerIca

europe

mea North amerIca

asIa pacIfIc

40%34%

10%6%10%

€/bln

10% ebiT Margin Tyre

IIIPirelli Investor Relations

on ouR way to 2015 “An ever more competitive Pirelli, increasingly focused on the Premium segment, that continues to innovate and grow in new markets” — Marco Tronchetti Provera

markets, the “Premium” segment does not only mean performance and luxury, but it is increasingly taken as the index for sustainability and safety, where Pire-lli’s background, skills and forefront technologies are particularly strong.

inveSTMenTS Between 2011 and 2015, 1.9 billion euro (1.2 billion euro between 2011

These are the goals of the 2011-2013 Business Plan, with our vision to 2015, as described by the Chairman

and CEO before an international floor of financial analysts, investors and journal-ists, gathered at the Bicocca conference hall in Milan on November 4th, 2010.

The new Plan guidelines set forth: — Greater focus on the Premium

segment – high-performance tyres for top makes like Ferrari, Maserati, Audi, BMW, etc. – where Pirelli is al-ready a leader;

— Re-balancing of production amongst mature markets (Eu-rope and North America), Rapid Development Economies (RDE), and Latin America, where each of the three Regions is to contribute 1/3 of the Group profitability by 2015;

— Technological upgrade of produc-tion sites and equipment, which will make Pirelli increasingly efficient. By

PIRELLI InvESTORS nEWSLETTER

pIrellI segmeNt share

#1

“2- dIgIts mkt share”

“low 1- dIgIts mkt share”

2015, 60% of productivity will be gen-erated by less than 10-year-old plants.

MarKeT opporTuniTieSOver the next five years, the Tyre mar-ket is expected to grow at a 7% annual rate. RDEs will drive the growth of the car fleet (+3.1%), but for the Premium segment the growth rate is expected to be even higher (+5,2%). In the mature

OUR PATHWAy

IVPirelli Investor Relations

PIRELLI InvESTORS nEWSLETTER

and 2013) are going to be invested to support growth and premium capacity increase (+ 26 million tyres by 2015).

On a regional basis, 17% of invest-ments will be allocated to improv-ing our product mix and efficiencies in mature markets, whereas 83% to production capacity in Latin America and RDEs like China, Romania, MEA (Middle East Africa).

Amongst Pirelli’s key projects:— A new manufacturing plant in Mex-

ico producing tyres for the NAFTA region;

— The Settimo Torinese technology hub; and

— Entry in the Russian market through the Russian Technologies and Sibur agreement currently being negotiated.

eConoMiC and finanCial obJeCTiveS In the 2011-2013 period, Pirelli strategy and the actions it planned for will trans-late into an average yearly growth of 8% and a progressively higher profitability, with an Ebit margin between 10.5% and 11.5% in 2013.

Debt is under control and lower than 1 billion euro in 2013 and higher than 0.7 billion euro in 2015, notwithstanding the investment plan mentioned above and a robust remuneration for share-holders, amounting to approximately 40% of the consolidated net profits in the three-year period.

new TargeTS for 2011The favourable trend of the Tyre busi-ness in the last quarter of 2010 and the better demand perspective for the rest

ToTal revenueS Cagr 10-13

> 5.15 > 6.05> 8%

% green performance on revenues 39% 47%

ebiTda% after continuous restructuring 13% ÷ 14% 15% ÷ 16%

ebiT% after continuous restructuring 8.5% ÷ 9,5% 10.5% ÷ 11,5%

€/bln

2011 2013

of this year, together with the price in-crease, making up for the significant rise in raw materials, led Pirelli management to upgrade the Company sales targets for 2011 and confirm its profitability targets (Ebit margin).

In this new scenario Pirelli envisages that this year will close with consoli-date revenues higher than 5.55 billion euro as against the target of “revenues higher than 5.15 billion euro” indi-cated in November 2010, and confirms the target of profitability, with an Ebit margin of 8.5% - 9.5%

For the Tyre business, sales are expect-ed to be higher than 5.5 billion euro as against the previous target of “higher than 5.1 billion euro” volumes by over 6% and price mix by approximately 12%. The guidance on profitability has been con-firmed, with a 9% - 10% margin.

Net debt is expected to amount to ap-proximately 700 million euro, after in-vestments of over 500 million euro and 81 million euro dividend distribution.

OUR PATHWAy

VPirelli Investor Relations

OUR SHARESPIRELLI InvESTORS nEWSLETTER

DEC 2009

JAN 2010

MAR 2010

FEB 2010

APR 2010

MAY 2010

JUL 2010

JUN 2010

AUG 2010

SEP 2010

NOV 2010

OCT 2010

DEC 2010

JAN 2011

MAR 2011

FEB 2011

JAN - APR 20112010

ShareholderS’ breaKdown: foReIgn anD RetaIl InvestoRs go stRong

foreign and reTail

inveSTorS go STrong

shareholders agreemeNt

camfIN* retaIl INstItutIoNal INvestors

other

46%

6%

17%

29%

2%

A successful placement was made with international institutional investors of an Eurobond loan worth a par value of 500 million euro. Investors have posi-tively received such placement, bid-ding for over 4.5 billion euro or over 9 times its original amount. More than 93% of the loan was placed with fo-reign investors.

inSTiTuTional inveSTorS 29.0% of Share CapiTal

uk 6.3%

italy 7.3%

Continental euRoPe 8.6%

us & Canada 5.8%

Rest of the WoRld 0.8%

SToCK perforManCe 1 Jan 2010 – 15 apr 2011

Share Trend

PIRELLI +49.4%MICHELIn +17.2%FTSE Mib –6.1%

2010 1 JAn15 APR 2011

PIRELLI +39.5% +7.1%

The new eurobond: an inTernaTional hiT

bond CharaCTeriSTiCS

iSSuer: Pirelli & C S.p.A. guaranTor: Pirelli Tyre S.p.A. SeTTleMenT daTe: 22 Febbraio 2011 MaTuriTy daTe: 22 Febbraio 2016 Coupon: 5.125% iSSue priCe: 99.626% redeMpTion priCe: 100% MiniMuM denoMinaTion: € 100,000 additional multiples of € 1,000SToCK eXChange: Luxembourg

pirelli: ShareS To buy

ShareS To buy

sell buyhold

4%

14%

82%

Here below the breakdown of the recommendations from the 22 brokers covering Pirelli (45% are global)

Average Target Price: 7.6 € - min.: 6.1 € max: 9.0 €

all abouT pirelli ShareS

ordinary Share: 475,740,182SavingS ShareS: 12,251,311SToCK eXChange: Milan SegMenT: MTA1SeCTor: Auto & PartsSyMbol: ReuteRs: oRd. peci.Mi saV. pecin.Mi BlooMBeRG: oRd. pc iM saV. pcp.iMMarKeT CapiTalizaTion (15 apr 2011): 3,155.4 mln €

pirelli & C. iS inCluded in MaJor inTerna-Tional indiCeS: DJ Stoxx Auto & Parts, DJ Stoxx 600, S&P Euro 350, S&P Euro 350 Ind., S&P Euro 350 Auto & comp., S&P Global 1200

aS a leader in SuSTainable developMenT, pirelli & C. iS parT of The following indiCeS: Dow Jones Sustainability World e Dow Jones Sustainability, Stoxx, FTSE Global e Euro-pean Stoxx, The ASPI Index, ASPI Euro-zone, ECPI Ethical Index EMU.

PIRellI In the stock exchange

After a 2010 bullish trend (+39.5% in the Stock Ex-change, +52.7 percentage points compared with the

Italian Blue Chips Index, +35.8 per-centage points compared with Miche-lin) Pirelli has lost some ground in the months of January and February 2011 (with the rise of raw material price and geopolitical tension in North Africa and the Middle East) to bounce back shortly after.The sound results achieved in 2010, well above the analysts’ expectations,

and the improvement of the perspec-tive for 2011 have, indeed, contrib-uted to raise the market sentiment in the Tyre Industry and especially for Pirelli stock, that in April went back to its highest peaks of the last three years, touching 6.5 euro.After 2010 results were published and 2011 targets revised upwards, many analysts upgraded Pirelli stock. The pre-vailing recommendation is “buy” (82% of the 22 brokers covering Pirelli stock), whereas the objective price according to general consensus is 7.6 euro.

* Stake not conferred to Shareholders Agreement. Camfin totally owns 26.2% of ordinary share capital.

VIPirelli Investor Relations

Tyres taken to the extreme and plenty of entertainment for Formula 1 World Champi-onship exclusively equipped

with Pirelli tyres. Pirelli developed tyres for its comeback as sole supplier to the Formula 1 World Championship from 2011 to 2013 and immediately proved to be up to this new adventure. «I con-gratulate Pirelli» stated Sebastian Vettel, German pilot of Red Bull, incumbent World Champion and winner of the first two Grand Prix of Melbourne, in Australia, and Kuala Lampur in Malaysia. The show went on in Shanghai, China on Sunday April, 17, with many overtakings, as many as 63 on the track and in the pit, and du-els up to last loop, be-tween champions such as Michael Schumacher (Mercedes) and Fernan-do Alonso (Ferrari) and be-tween young talents, such as Sergio Péres and Kobayashi, both on a Sauber.The long preparation for Pirelli in For-mula 1 has been started on August 19, last year. Pirelli carried out nine private tests on Toyota TF109, driven by Nick Heidfeld, Romain Grosjean and Pe-dro De La Rosa, who tested the new tyres in all weather conditions on ma-jor European tracks and others. For

example in Abu Dhabi, last November, on brightly lit Yas Marina track, Pirelli poured 17,000 litres of water for an un-precedented two-night test. During the development program, Pirelli engineers successfully tested all specifications re-quired by FIA regulations for the next races. The Federation asked the Milan-based tyre manufacturer for a spectacu-lar show and Pirelli was not caught un-prepared, as remarked by Mr Maurizio Boiocchi, R&D Director: «Our new

tyres bring to light the pilots’ skills, that appeared to be

levelled so far. Those who will be able to

make to most of our tyres will be better off. By the same token, each car will respond differently to

the various com-pounds, which will

indeed make the dif-ference. Above all, in a

Formula 1 with no overtak-ing, we give teams the chance of chang-ing the race from the pit». And indeed that was the case, as shown by the dif-ferent strategies and numerous overtak-ings, in the first three GPs of the season.Pedro De La Rosa, previously Pirelli of-ficial tester and currently third McLar-en pilot, also commented on the show: «Working with Pirelli means dealing

with highly skilled people and above all working at high speed and very high lev-els of professional standards. There is no doubt that Pirelli tyres will contribute to make the show even more spectacular».After a start with honours in Australia, an excellent performance in Sepang, Malaysia, and the third thrilling race in Shanghai, Pirelli keeps on working on PZero tyres in view of the next race in Istanbul, Turkey, on May, 8.

“Our new tyres bring to light the pilots’ skills, that appeared to

be levelled so far. Those who will be able to make to most of our tyres will

be better off”

grand priX Calendar

austRalia – MarCh, 27 MelbourneMalaysia – april, 10 Kuala Lumpur

China – april, 17 ShangaituRkey – May, 8 Istanbul

sPain – May, 22 CataluñaMonaCo – May, 29 Monte Carlo

Canada – June, 12 MontrealeuRoPe – June, 26 Valencia

united kinGdoM – July, 17 SilverstoneGeRMany – July, 24 Nurburgring

hunGaRy – July, 31 BudapestBelGiuM – auguST, 28 Spa-Francorchamps

italy – SepTeMber, 11 MonzasinGaPoRe – SepTeMber, 25 Singapore

JaPan – oCTober, 9 SuzukakoRea – oCTober, 16 Yeongam)india – oCTober, 30 New Delhi

aBu dhaBi – noveMber, 13 Yas Marina CircuitBRazil – noveMber, 27 San Paolo

PIRellI guaRantees an enteRtaInIng foRmula

racing tyres

In THE FOREGROUnDPIRELLI InvESTORS nEWSLETTER

VIIPirelli Investor Relations

The infrequent traveller to China is the one perhaps best placed to fully appre-ciate the unbeatable rhythm

with which the country is growing and evolving. Only a few years ago, the occa-sional tourist would have seen thousan-ds of bicycle riders on the roads of Bei-jing, an almost endless parade, making their way along the city’s wide boule-vards. If the same visitor were to return today, they would see that bicycles have largely been replaced by cars, many of which are luxury automobiles, such as Audi, BMW and Mercedes fitted with Premium tyres.

In 2010 the car market in China grew by 32%, touching almost 14 million ve-hicles and becoming the largest market and place of production in the world for the second year in a row.

Pirelli went to China in 2005 with its first plant in the Shandong province,

manufacturing radial truck tyres. In 2007, the Company built its second factory for the production of high-performance car tyres. In 2009, a con-tract was entered into with the Hixih Group for the construction of a plant where anti particulate filters are going to be produced. And this year, a ste-elcord production site was opened. In 2010, during a great event, Pi-relli has also launched the new Chinese logo that evokes the historical ‘Plunga’.

In the next few year, new challen-ges await Pirelli: in the 2011-2013 pe-riod, the Company will sharpen its focus on the Premium seg-ment of the Chinese market with an investment plan aimed at expanding production to meet the growing local demand. By 2013, the capacity of the Car segment will dou-ble and that of the Truck segment will increase by 40%. The Chinese facili-ties, which will be producing the entire range of high-end products for cars, bikes, trucks and steelcord, will beco-me the hub for exports to Asia Pacific, Middle-East Africa and Nafta. Pirelli is very well placed to expand in China

and in the Asia Pacific region, where the Company expects its revenues to grow by 20% per year on average and its Ebit margin to go from the ‘single digit’ range to ‘double digit’ by 2013.

Pirelli Top Management has illustrated the Company outlook during the recent roadshow in Asia. During three very in-

tense days, the Company dele-gation met personalities of

the banking industry and financial community.

Responses were po-sitive. Pirelli is not only perceived as a significant indu-strial presence in the

country, but also as a company with a high

standing due to its econo-mic and financial robustness,

its positioning and its geographic diversification, with an enviable position in the fastest growing markets.

PIRELLI SPEAKS CHINESE: launched in June 2010

the Chinese logo that evokes the historical ‘Plunga’

In THE FOREGROUnDPIRELLI InvESTORS nEWSLETTER

PIRellI makes new connectIons In chIna

“By 2013, the capacity of the Car segment will double and that of the

Truck segment will increase by 40%”

VIIIPirelli Investor Relations

Pirelli PZero spring / summer collection in the shops The thread running through the spring sum-mer 2011 collection is thermoregulation and customisation. Pirelli PZero project evolves with the single individual, developing solu-tions that go as far as customising the inner temperature of garments. Light, breathing, waterproof materials, like those of the Tube Jacket, the new coat made of technical cor-dura which can keep the wearer’s body temperature through a lining with a breath-ing microcellular structure 97% of which is made of air. Another new feature is the Cuts. Trousers and trench’s sleeves can be cut to fit the wearer’s size through a rubber film that prevents fraying. All Cut models are sold with a pair of scissors, “official partners” of this new way of interacting with style. Knitwear is also ultralight: vests, cardigans, sweaters and V necks made of 100% Light fleece, garment dyed, with “fading” colours.

looking for an alternative rubber Through articles published by two prestigious financial newspapers, the Il Sole 24 Ore and the Brazilian Valor Economico, Pirelli Tyre Manag-ing Director, Mr Francesco Gori, announced the agreement with the Danish company Genan, the leader in industrial raw material recycling. “Looking for alternative sources is today more than even a “must” - points out Mr Gori – “on both savings and sustainability grounds”. Mr Gori, furthermore, said that Pirelli intends to decrease natural rubber consumption for production purposes with an immediate economic benefit: “being able to reduce by 10% our dependence on the natu-ral rubber production cycle would bring about considerable savings”. Moreover Mr Gori further stated in the Brazilian article that being in Latin America is a strategic and fundamental investment for Pirelli.

Pirelli, operational in 2012 in mexico Summit in Mexico: the design of the first Pirelli plant in the country was illustrated by Marco Tronchetti Provera, Chairman of Pirelli, and Francesco Gori, MD of Pirelli Tyre, who met the President of the Mexican Republic, Felipe Calderon, in his residence of Mexico City, on March 30th. According to the development plan, a plant is being built at Guanajuato for the production of High-Performance and Ul-tra-High Performance tyres for cars and light commercial vehicles for the domestic market and especially for export to Nafta (North Amer-ica Free Trade Area) countries. The plant, which will be operational in 2012, requires an initial investment of approximately 210 million USD and will have a production capacity of around 5 million tyres in 2015, and generate approximately 1000 jobs, direct and indirect.

In SHORTPIRELLI InvESTORS nEWSLETTER

cinturato P1, “not an ordinary one” Pirelli announces Cinturato P1, a tyre with premium features for the small- and medium-sized car segment, i.e. compact and yet luxury cars. In the first official tests, Cinturato P1 outperformed all competitors in terms of fuel consumption and noise reduction. Due to a 15% reduction in the rubber weight and the innova-tive technologies used, the new tyre is 25% less resis-tant to rolling and produces less noise, ensuring higher comfort and driving pleasure. With the new P1, Pirelli consolidates its green performance strategy: in 2010, 37% of sales came from “green” products. With 27% of global sales, green Cinturato tyres are currently the most important product family and set to grow fur-ther, with the launch of Cinturato P1 in Latin America and Asia. «P1 characteristics place the new tyre at the top of the range in terms of performance, duration and consumption reduction, well in advance of EU regula-tions coming in force in 2012».

IxPirelli Investor Relations

In SHORTPIRELLI InvESTORS nEWSLETTER

london – the best corporate governance award goes to Pirelli Pirelli is the Italian company with the Best Corporate Governance. The prize was received by Mr Francesco Chiappetta, Pirelli Group General Counsel, at the World Finance Award ceremony in London. This acknowledgement underlines the importance of corporate gov-ernance and management of financial activities for Pirelli, essential instruments to create a sustainable value in the long term. A true en-terprise culture, endorsed by all employees at all levels, is fundamental for good corporate management, as Mr Chiappetta has remarked.

“my time for haiti”: schools opened Eight months after the fund raising campaign “My time for Haiti” was launched by Pirelli, the three schools, “Ecole Atenoir Furmin”, “Ecole Congreganiste Marie Jeanne, filles de Marie” of Balladère and “Anse-à-Pitre Liceum” of Anse-à-Pitre are ready. A special donation to the 4,000 children who can now go back to their desks, thanks to the funds raised by Pirelli and its employees. Be-sides the new classrooms and bathrooms, uniforms, desks and the necessary school materials were also distributed.

the top 10 value creators according to bcgPirelli is amongst the first 10 Italian companies to have recorded the largest share returns in 2010. That is the result of a research con-ducted by The Boston Consulting Group (Bcg), an international busi-ness strategy consulting company. The classification was drawn up on the basis of total shareholder return (value created by the company) of over 3,000 companies listed in 40 Countries and belonging to 37 different industries. Unlike 2009, industrialised countries dominated the classification by taking seven of the top 10 positions. The top three positions were in this order: Novo Nordisk (pharmaceuticals), Volk-swagen (cars) and Ecopetrol (oil & gas). The head of the Italian top 10 is Exor with +86% over 2009. Second place went to Tod’s (+62%), followed by Fiat, Saipem and Pirelli. The latter posted +44% over last year. Research also brought to light the fact that the industries with the highest share earnings in 2010 remain unchanged: mining, the oil industry, industrial engineering and car manufacturing.

In the ft sustainability indices for a decade For the tenth year in a row, Pirelli has been confirmed in the Finan-cial Times equity indices of socially responsible investments, FTSE-4GOOD – FTSE Global and FTSE4Good Europe. Pirelli is the only Italian company in the Automobile&Parts industry to be included in the six-month revision of the indices measuring corporate perfor-mance in terms of compliance with the international standards of economic, social and environmental responsibility. In addition, the FTSE Group has rated the 2,400 companies included in the index and Pirelli has scored 97 out of 100. The analysts assessment takes into account the sustainable management of the supply chain, human and labour rights, corporate governance and code of conduct, man-agement of environmental impact and relations with stakeholders.

Pirelli tyre and environmental protection 20,201 kg of CO2 emissions in 2009 from the Pirelli Vizzola Ticino testing ground will entirely be compen-sated. Pirelli Tyre reached an agreement with Lifegate to assess, reduce and compensate track-generated emis-sions. This is part of the Lifegate Zero Impact program, the first Italian project to quantify the environmental footprint by companies, products and people and com-pensating CO2 emissions with new forests worldwide.

Francesco Chiappetta

Group General Counsel Pirelli