Pirelli & C.

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Outlook for the current year

For the Tyre business ongoing growth is expected with an approach differentiated between Consumer and Industrial, further improvement of competitiveness on costs and an acceleration of investments, in order to increase manufacturing capacity in particular in emerging markets that present higher growth rates and lower industrial costs. During the year investments of more than 300 million euro are planned, with a ratio of investments to depreciation of 1.6 (up from 1.1 in 2009). On the cost front the continuation of the efficiency plan already launched in the previous year has the aim of achieving savings in 2010 of more than 60 million euro (before the effect of raw material price increases). The signs of market recovery, above all in the Consumer segment, enable us to forecast an increase in revenues of between 6% and 8% and an EBIT margin roughly in line with that of 2009, taking into account the impact of increases in the prices of raw materials, especially natural rubber.