Thank you. Good evening, ladies and gentlemen.

The first half results confirm Pirelli's ability to generate value in an uncertain environment marked by growing geopolitical tensions. We have further consolidated our leadership in the high value segment by leveraging on the strength of our brand, technological innovation, and a distinctive product portfolio.

The resilience of our business model and the implementation of strategic priorities allowed us to maintain a profitability among the best in the industry, offsetting the negative effects of tension in the Middle East, US tariffs, and exchange rate volatility. Cash flow generation remains in line with the seasonality of the business and with the expectations for the full year, reflecting the group's financial discipline.

In the second half of the year, the macroeconomic and geopolitical picture is expected to remain volatile. The resumed conflicts in the Middle East has put further pressure on energy costs with Brent price back at above $90 per barrel and the TTF gas approaching €60 per megawatt hour.

Furthermore, there are persistent signs of weak demand, especially in car manufacturing and the standard segment, while demand in the high value replacement is proving resilient with a mid-single-digit growth rate. Despite the challenging external environment that I described, based on the quality of our first half results, we are confirming our full year targets for revenue growth, profitability, and cash generation.

Now I give the floor to Mr. Casaluci.

Thank you, Mr. Tronchetti, and good evening.

Pirelli has reported solid results for the first half of the year in line with our expectations. Revenues reached approximately €3.5 billion with organic growth of 2.5%, driven by stronger high value accounting now for 82% of group's sales and price mix improvement.

Adjusted EBIT amounted to €558 million with a margin of 16%, which remained stable compared with last year thanks to the effectiveness of internal levers that offset the impact of the external scenario. Net profit rose by 13% year-on-year, benefiting from lower financial expenses linked to debt reduction and a greater profit contribution from equity participations in the first quarter of the year.

The net financial position is of approximately €1.9 billion and includes the debt consolidation of the Chinese joint venture, Xushen Tire, amounting to approximately €210 million, as well as the payment of approximately €47 million relating to the exercise of the call option, which increased Pirelli's stake to 70%. Finally, in the second quarter, the net cash flow before dividends and M&A transactions was positive at €148 million, in line with the level recorded in the same period last year.

Our long-term strategy for value creation and development continues to benefit from progress in sustainability. Over the past six months, we achieved tangible results in all areas.

In health and safety, the prevention and awareness raising programs contributed to a significant reduction of the accident at work frequency index, reducing the index by 54% compared with the first half of 2025. The decarbonization plan continues in line with the 2040 net zero target.

Energy efficiency and machinery electrification projects led to a 13.5% decrease of our emissions compared to last year. The reduction of emissions by our suppliers is also in line with our 2027 target.

Furthermore, we made significant progress in developing circular supply chains for the recovery and integration of sustainable materials into production processes as we will see in the next slide. Finally, energy and water efficiency programs allowed for a 6.7% year-on-year reduction of water consumption for production purposes.

We started three partnerships on key raw materials, namely carbon black, steel, and synthetic rubber. Our target is accelerating the transition to materials circularity from increasingly sustainable and traceable supply chains.

More specifically, in the United States, we started a collaboration with Bolder Industries, a company specialized in retrieving carbon black from end-of-life tires. This raw material is then recycled and used for new tires.

This project received the Value Chain Collaboration award from the Tire Recycling Foundation. In China, together with our strategic partner, Shinda, we gave a remarkable contribution to the development of a pilot project to include recycled steel among the materials certified under ISCC PLUS, the major international standard for the certification of recycled and bio-based materials traceability across the supply chain.

In Europe, we developed an integrated chain with Pyrum, BASF, and Synthos to turn end-of-life products into circular ISCC PLUS certified materials, including synthetic rubber to be reused in large-scale production processes by guaranteeing high quality performance and traceability standards. Through these partnerships, we will strengthen our strategy on circular materials with the target of bringing products made from over 80% bio-based and recycled materials to the market by 2030.

Let's now analyze our first half operating performance. In line with our strategic priorities, we gained share in the high value segment in the major geographic areas and business lines by leveraging on technological innovation and sizing market opportunities.

Innovation represents a distinct factor in our strategy. In the first six months of the year, we expanded our homologation portfolio and widened the product range.

We also consolidated our position in the segments of higher value. In the Cyber Tyre, the latest test confirmed the competitive edge of our technology.

We proved that connectivity applied to tires through a physical sensor can be translated into tangible benefits for both safety and driving experience. The efficiency plan proceeds according to schedule.

In the first six months, the efficiency plan generated gross benefits of €81 million that is approximately 54% of the full year target. Let's start from the commercial performance in the first six months.

We gained market share in the high value segment, recording a volume growth of 3.5% and strengthened our position in the car and moto segments. We also continued our selectivity process in the standard segment, -8% on volumes, by reducing our exposure to segments with lower profitability, mainly in South America.

In the second quarter, the volume trend, -1.5% at group level, reflects a greater reduction in the exposure to the standard segment, volumes -11% versus a -4% in Q1, outcome of a strategy based on value and protection of profitability in an extremely competitive environment. While the high value trend, +3%, reflect a lower growth of the moto segment after a strong performance in the first quarter, and a more limited growth in the car original equipment due to demand slowdown.

In the second half of the year, we expect high value performance to strengthen, supported by a solid replacement demand in Europe as well as the gradual improvement of the North American market. In the standard segment, we expect a gradual trend normalization.

Let's now move to product innovation, which is one of the key drivers of differentiation in future growth. In the first half of 2026, we obtained approximately 200 new homologations, mainly concentrated in higher rim size specialties and electric vehicles.

These results confirm our role reference technology partner for both premium and prestige carmakers. Examples of these include partnerships on the most advanced electric cars like Ferrari Luce and Rivian R2S, as well as premium SUVs like Audi Q7 and Q9.

Innovation also means constant renewal of the product portfolio. In the car segment, in North America, we launched the new Scorpion All Season 4, developed with an increasingly virtual approach, which led to an improvement in mileage, comfort, and driving control.

The value of our technological solutions is also confirmed by comparative tests. In the first half, we obtained eight victories from leading European specialist magazines, which awarded several products in the Cinturato, P Zero, and Scorpion lines.

Also in the two-wheels business, we continue to incorporate the racing experience into our products. In the moto segment, we launched Metzeler Sportec 01 RS, developed from the racing know-how to offer top performance on the road.

While in the cycling segment, we introduced two new Cinturato lines designed for gravel riding, a rapidly growing segment. Within product innovation, Cyber Tyre is one of the most distinctive solutions in the industry.

Through sensors integrated into the tire and our own algorithms, cyber solutions can turn a tire from a passive car component into a smart sensor that can exchange data with the vehicle in real time and provide accurate information about the tire and road condition. All these data allow the electronic systems of vehicle, from ABS to stability control and traction, to be able to react more effectively and accurately, thus improving safety, control, and driving experience.

Recent test carried out on our Vizzola testing track, also attended by international trade press, positively proved the value of this technology under particularly challenging conditions. Tests showed tangible advantages in terms of safety and control of the vehicle.

In emergency braking test from 100 km/h, the system allowed for a reduction of braking space of approximately 5 meters. On wet surface, vehicle stability and grip improved.

In the event of aquaplaning, a better control of the vehicle was achieved in circumstances where without Cyber Tyre support, the behavior of the car would have been much more critical. These results prove that immediate and real data availability from the tire allows the vehicle to fully exploit the potential of safety equipment on board with actual benefits for the driver.

Interest by car manufacturers and media confirms the role of Cyber Tyre as an enabling technology for connected mobility as well as further development of ADAS systems and autonomous driving. Cyber Tyre is a unique solution in the industry, strengthening Pirelli's leadership in integrating tire, vehicle, and digital platforms.

It provides new opportunities for growth and value creation along the entire mobility ecosystem. Beside innovation, brand is one of our Pirelli's distinctive assets.

During the first half of the year, we further strengthened this positioning with targeted actions in strategic markets. In the United States, we started a multiyear partnership with Miami Open, one of the most prestigious international tennis events, giving even more visibility to the brand in a country which is crucial for our future growth.

In Europe, we consolidated the presence at iconic events such as the Goodwood Festival of Speed and the 24 Hours of Spa, occasions that highlight Pirelli's association with innovation, performance, and technological excellence. Finally, the partnership agreement with Formula 1 was renewed until 2028, confirming Pirelli's role at the pinnacle of motorsport.

These activities contribute to enhance our brand's global relevance and strengthen Pirelli's high-end positioning, supporting our ability to continue growing in the high value and most profitable segments. I would like to conclude these sections by mentioning transformative efficiency, a fundamental pillar in terms of competitiveness roadmap.

This transformation involves the whole value chain, from product design to manufacturing. We are making full use of simulation, virtualization, and modularity, which means standardization of materials and semi-finished products.

The aim is to reduce complexity in the factories while maintaining best of the industry quality and performance and accelerating time to market. An example of this is the Virtual Compounder, our own platform based on artificial intelligence, which allows to virtually develop and optimize compounds, identifying the most promising solutions before physical validation.

Results are already tangible: we reduced prototypes by 20%, development time was cut by 30%, and in parallel, we are speeding up the introduction of bio-based and recycled materials into our products. Furthermore, we continue investing in digitization, automation, and electrification to increase productivity, quality, and manufacturing flexibility.

Now I give the floor to Mr. Bocchio.

Thank you.

Thank you, Mr. Casaluci.

Let's see now in more detail the dynamics that have characterized the performance of first half of 2026 compared to the same period last year. As already pointed out, revenues was approximately €3.5 billion with a 2.5% organic growth.

Volume trend in the semester was stable, reflecting a share gain in high value original equipment and replacement in both quarters. The reduction of exposure to standard continues, more specifically in the second quarter, to protect profitability in a highly competitive environment.

Price mix was positive, +2.5% in the first half and +2.9% in the second quarter, guided by the continuous improvement of the product mix and regional mix, while the price increases announced in the second quarter will be visible in the second part of this year. The forex impact is negative, -2.1%, mainly due to the US dollar depreciation versus the first six months of 2025.

The exchange rate trend was positive in the second quarter, +0.4%, due to the US dollar trend improvement and the strengthening of some currencies such as the Chinese renminbi and Brazilian real. Finally, the perimeter change, -0.5%, is linked to the deconsolidation of the Däckia business in the second quarter of 2025.

We closed the first semester with an adjusted EBIT of €558 million and a 16% margin in line with last year, thanks to the effectiveness of the internal levers which compensated the negative impact of external factors such as the impact of exchange rate volatility, the Middle East crisis, as well as US duties. More specifically, the positive price mix contribution equal to €50 million and of the efficiencies for €81 million have more than compensated the negative impact from the exchange rates, -€44 million, and inflation of input costs, -€65 million, which increased in the second quarter following the Middle East crisis.

Raw materials provided a positive contribution for €32 million. Finally, negative impact of depreciation and amortization equal to -€12 million and increase in other costs for €43 million, mainly connected with the impact of the US tariffs as well as the rigorous management of finished product inventories due to the highly volatile environment.

Profitability remained stable at 16% also in the second quarter. The contribution from price mix for €29 million and efficiencies for €38 million more than offset inflationary pressures, including higher energy and logistic costs stemming from the Gulf crisis, the impact of US tariffs recorded under other costs, and the negative foreign exchange effect mainly related to the appreciation of the Mexican peso.

Raw material impact was positive. We expect this tailwind to reverse in the second half of the year, reflecting the increase in oil prices that started at the end of February.

Let's now analyze the trend in net income equal to €299 million, up 13% compared to the €264 million recorded in the first half of 2025. This trend reflects the reduction of amortization included in the purchase price allocation worth €11 million; lower net financial expenses of €29 million, mainly related to the reduced gross debt as well as to a lighter financial debt in countries with higher interest rates; greater contribution from the results of equity participation for €13 million, mainly connected to the revaluation at fair value of the 49% stake in the JV Xushen Tire, which occurred in the first quarter; higher tax charges of €19 million with tax rate at 30%, an increase, as expected, from the 29.2% in the first half of last year, but benefiting from positive impacts from non-taxable income and one-offs.

Let's now move to the net financial position. At the end of June, our net financial position is negative for approximately €1.92 billion.

This reflects, on the one hand, a net cash flow before dividends and extraordinary operations of -€557 million, substantially in line with the first half of 2025 which had recorded -€547 million net of the positive impact from the divestment of Däckia, while on the other hand includes the negative impact of €257 million related to the consolidation of the debts and the increased stake to 70% into Xushen Tire. The operating net cash flow in the first half of 2026 is negative of €416 million.

It was €217 million in the same period last year, and mainly discounts increased investments and greater cash absorption due to trade payables dynamics. More specifically, CapEx reached €177 million compared to the €128 million in the first six months of 2025, and were mainly dedicated to high value development, technology upgrades, and industrial automation.

Working capital trend, negative for €1 billion compared to €810 million of the first six months of 2025, reflects the reduction of trade payables related to the payment of the investment concentrated between the fourth quarter of 2025 and the first quarter of 2026. Receivables followed the usual business seasonality with a limited negative impact due to the Middle East situation.

Inventories on sales over the last 12 months stood at 22.4% compared with 21.2% for the same period in 2025, a figure that reflects the rigorous control of finished products volume, as the increase is mainly attributable to the rise in the cost of raw materials and the buildup of raw material safety stock to support business continuity in a context characterized by tensions in the Gulf region. Net cash flow before dividends in the second quarter 2026 is positive for €148 million, in line with the result of the second quarter 2025, which was €150 million, excluding the already mentioned positive impact from the divestment of Däckia.

As of June 30th, Pirelli had a gross debt of approximately €3.1 billion, financial assets worth €1.2 billion, and therefore its net financial position is of approximately €1.9 billion. The cost of debt over the last 12 months was 3.89%, down by more than 50 basis points compared to 4.40% at the end of 2025.

This decrease is attributable to the reduction of the level of debt as well as optimization of the mix due to the lower financial debts in countries with higher interest rates. The liquidity margin is approximately €2.6 billion and allows for the hedging of maturities for over 3 years until the third quarter of 2029.

In January 2026, the group signed a contract for a new multicurrency banking line worth €2.1 billion with a group of leading domestic and international banks. This new line, linked to decarbonization targets of the group for Scope 1, 2, and 3, consists of a term loan worth €600 million and revolving lines for a total amount of €1.5 billion.

The contract allows for the possibility to agree between the company and all the financial institutions to extend the expiration date with the same terms for a maximum period of another 2 years, that is until 2033. This transaction has also allowed for refinancing of the whole amount of the debt due in 2027.

Now I give the floor back to Mr. Casaluci.

Thank you.

Thank you, Fabio. Let's now talk about the update on this year's outlook.

This macroeconomic environment continues to be characterized by high uncertainty with the Middle East tensions remaining the major risk factor when it comes to growth, inflation, and raw material costs. Recent hostilities between the US and Iran have indeed caused a new increase in energy prices and commodities and caused an interruption in the normalization process observed in the weeks following the Strait of Hormuz agreement in June '26.

Based on the last estimates, the worsening of the scenario is confirmed compared to our assumption in the first quarter of this year. In 2026, global GDP growth is now expected to be 2.3%.

The slowdown is more marked in Europe, given its strong energy dependency, while the United States continue to show a good resilience, supported by the investment connected with AI. China is confirmed at +4.5% expansion, although its domestic demand is still weak.

Inflation is expected to increase at 3.8% versus the previous 3.7%, and continues to be an element of scrutiny for the major central banks. Regarding the commodities, the scenario remains very volatile, and the reduction of prices is expected in the third quarter as well as a normalization of the flows through the Strait of Hormuz.

Based on this new environment, we updated our market outlook for 2026. The car tire demand is now expected to be between -3% and -1% versus -2% and flat indicated in May.

The estimates review involved the two most cyclical segments: the standard, now expected to be negative mid-single-digit versus a negative low-single-digit in May, and original equipment demand, -3% compared to -2% in May, in line with the car production trend. Regarding the high value segment, expectations are now for a low-to-mid-single-digit demand growth, given the more cautious outlook in original equipment following the weak market performance in first half, -2.5%, especially in China, due to the end of government incentives that supported demand last year.

In the replacement high value segment, we expect a mid-single-digit growth with an improving trend in the second half of the year, driven by Europe and Asia Pacific, also thanks to a better EV penetration, and above all, improving demand in North America following a weak for a weak for first quarter sorry, first half. In light of the quality of the results in the first half of the year, we confirm the 2026 guidance and update some of the drivers based on the current external scenario.

Revenues are expected to be between €6.75 and €6.95 billion with volumes between stable and +1%, slowing down compared to a +1% and +2% indicated in May due to the original equipment and standard market demand slowdown. Price mix improvement is confirmed between +2.5% and 3%.

Exchange rates impact has been slightly revised based on expectations of a smaller US dollar depreciation. Forex is now expected to range between -2.5% and -1.5% versus a previous -4% and -2%.

Profitability is expected to be approximately 16% with an adjusted EBIT in absolute value at €1,080 million in the midpoint. Investments confirmed at €450 million.

Net cash generation before dividends and impact of the exercise of the call option for the Xushen Tire joint venture confirmed at €500 million. Net financial position confirmed at €1.2 billion, including the impact of the call option exercise.

I now leave the floor to Mr. Tronchetti for the final remarks.

Thank you, Mr. Casaluci.

The results of the first half of the year confirmed the strength of Pirelli's business model and the effectiveness of the strategic decision taken in recent years. In an environment characterized by high volatility and growing geopolitical uncertainties, we continued to deliver strong results, maintaining a profitability that ranks among the best in industry and confirming the group's ability to react rapidly to changes in the external scenario.

We continue to stand out thanks to a combination of unique assets: the strength of the brand, our technological leadership, and an increasingly efficient and sustainable industrial platform. Innovation remains a key element of our differentiation.

Cyber Tyre is a clear example, a unique technology in the industry that reinforces Pirelli's role in the evolution of connected mobility. It confirms our ability to anticipate demand trends in the automotive industry.

The quality of these assets combined with disciplined execution and the flexibility of our operating model allows us to look forward to the second half of the year with confidence and to confirm our 2026 targets for revenue, profitability, and cash generation. We will continue investing on our areas of strength to further improve Pirelli's competitive positioning and create sustainable value over the long term.

This concludes our presentation. We may now open the Q&A session.

Good evening everyone, and thanks for taking my questions. Actually, I have four questions.

The first one is on the market share at the country level. At the country level, where did the group find the most relevant market share gains in the second quarter?

If I remember well, in the first quarter, it was in USA. Is still the case for the second quarter?

The second question is on the replacement channel trend in China, which keeps positive also in the second half. Can you confirm that you expect to get market share in China in the replacement channel on the back of the EV tires replacement cycle?

If you can share with us what is the loyalty rate of a Chinese consumer toward Pirelli brand? The third question is on the price mix.

Please correct me if I'm wrong, but I think that the 2.9% price mix in the second quarter was mostly product and regions, mostly mix. For the second half, we should also add the pricing effect.

If you can confirm this and tell us what will be the drop-through by year-end. Finally, on the Cyber Tyres, I was wondering if you can share with us some indication on the multiyear investment plan, what is the time horizon, and I'm curious to know if you get further homologation in Cyber Tyres since the beginning of the year.

Thank you very much. Oh,

thank you for your questions. I will start from the gain of market share in the second quarter.

We have been able to gain market share in all the high value markets, but the better performance also in the second quarter is coming mainly from United States, where we have been able to gain market share both in the original equipment and in the replacement. This is the result of our growth strategy based on the introduction of new products fully dedicated for US market, the enlargement of the customer base where we grow market share with all the most iconic vehicle for the United States in the last years like the Ford F-150, all the Dodge Ram, all the Teslas, most popular models, but also the growing popularity of our brand and the enlargement of the customer base.

In the second quarter, we also gained quite significantly market share in China in the replacement channel, and this is mainly driven by the pull-through effect starting in the electric vehicle, as you correctly said. We are taking advantage of the original equipment growth in the last years.

Price mix, you are also right. In the second quarter, the performance roughly 3% has been mainly driven by product mix including the region mix with still a slightly negative channel mix, where we had a grow of the original equipment faster than the replacement.

What we do expect in the second half is a slight reduction of the mix effect, mainly due to a lower reduction of the standard volumes, where we do expect a normalization of the volume performance also thanks to a more profitable comparison versus last year in South America. While the price will start to be meaningful because the price increase that we announced during the months of May and June will be effective starting from the second half.

You can expect another 3% roughly of price mix performance, but in this case, half driven by price and half by product mix. It's improving the drop-through in the second half.

We do expect 80% more or less of drop-through in the second half. Cyber, we keep on growing in penetration.

Considering the high interest of the most important premium and prestige carmakers in Europe and in China and also in United States, we do expect to finalize agreements also in the premium segment. That we are already delivering in the prestige segment the Cyber Tyre technology.

We do expect to scale up into the premium, and we are confident some good news will come already in the last quarter of this year. Thank you.

Thank you very much. Thank you.

Thank you. Good evening, everybody.

The first question is on net working capital considering the additional absorption you saw in the first half and considering the raw materials price increase. Isn't it a risk for your free cash flow guidance?

If I remember correctly, you are always using factoring in the region of €200 million at year-end. This is my first question.

The second is on the standard profitability because volumes are heavily down. Just to have an idea if it remains profitable this year.

Maybe this is too rude to say, but is it easy to pass price increases also in this segment? Referring to price increase, any pre-buy that you saw in the second quarter?

Thank you.

I will start from the first question related to the net working capital. Obviously, we confirm our guidance of the cash generation for the full year.

We don't expect to have difficulties. Everything is on plan.

As you saw in the first semester, stock management made us arrive at an incidence on net sales of about 22.4%, which is a little bit higher than March and last year. This was due not from the volume of the stock, but from the value of the finished products and the raw material, given the fact that, obviously, the commodity has grown up quite a lot since the end of February.

We expect a little bit this effect to slow down during the last part of the year. We expect for December to have an incidence of inventories on net sales over the last 12 months at about 22%.

Consider even that in June, actually, we were building up a little bit of safety stock on raw materials in order to avoid any kind of disruption in our factories. On the receivables side, we achieved 14 14.5% in June, which was in line with March.

For the remaining part of the year, by year-end, we expect this number to arrive at about 9% on sales. On the payables, again, we had a negative impact in June related to the fact that there was this accumulation of CapEx between Q4 '25 and the beginning of '26, with a cash out during quarter three, but then we expect a normalization given that our CapEx at €450 million will be respected.

By the end of the year, we are expecting payables to be in the range of 30%, not dissimilar to what we had in the previous years. We use factoring to balance the cash flow of the company on one side and to balance the risk of our account receivable, and we are in line with the usual trend.

In some quarters, it's a bit higher; in some quarter, a little bit lower. In June, for example, it was lower than the average of the previous quarter, but no major differences compared to the past.

Thank you. Now I will move to the following questions.

The standard profitability in 2026 is expected to be in between 7% and 8%, 7%-8%, a high-single-digit. We still target the double-digit, and we are confident we will arrive there.

Nevertheless, it's a more volatile segment. It's not really a question of price increase, but a volatility of the demand.

It's down at 18% of our total sales. It will be reduced even more.

Let's consider that in the high value regions, Europe, US, and Asia Pacific, with the weight on sales is already in the ballpark of 10%-12%, and in these regions, we are very close to the double-digit profitability. Last point, the pre-buying.

No, we haven't seen pre-buying effects. The stock level in the trade is well normalized so far.

Thank you.

Thank you.

Good evening. Thank you for taking my questions.

I'd like to start on the US investment plan, please. I know it's not yet fully approved by the board, but the size that you have indicated in the press release of $1 to $1.2 billion, very back-of-the-envelope, I can get to up to a 10% capacity addition from that.

Could you comment on if there is a need then to cut elsewhere, say in South America or Europe, the capacity? If there essentially is now a bit of a change in strategy, should it be approved from basically growing through mix improvement now actually chasing volume a bit?

Then the last one on that one would be, is it in the short term limiting cash return potential if you should approve the US investment plan and actually follow through with it? Then just a second block on volumes into H2.

You mentioned that high value added volumes should improve in the second half. At the same time, obviously, you have raised prices.

Is there any indication that volume or demand has changed as a result of the price hikes, or is it pretty stable and resilient as you see it right now? Thank you.

Thank you for your questions. First, there is no change in strategy.

The investment in US is just related to the growth we are having in the United States, as has been told you a few minutes ago. We grew in the first quarter.

We grew in the second quarter. We continue to grow.

We are underrepresented in United States compared to our market share in the other main regions. What we are doing is in line with our strategy.

Now I leave the floor to Mr. Casaluci.

Yes. Thank you.

No, let's consider that, as we commented in other occasions, if we do consider 100 what we sell in United States, today, 5% is more or less 5% is already produced locally, 55% is coming from Mexico, and 40% 45% 40% is imported by Europe and South America. The capacity we will install in US will be, of course, 100% high value and will support, as Mr.

Tronchetti said, the local growth plus, eventually, a reduction of import from Europe and South America. The free capacity in these regions will be used to support the local growth.

We don't plan any kind of reduction of the high value capacity of the group. While the major changes on the demand on the second half, it's mainly linked to the different expectation of the market.

First, we have to remind that the change in the outlook of the market is mainly driven by the result of the first half, where we saw a worsening of replacement demand in United States and original equipment demand in China compared to our previous guidance. What we do expect in the second half is an improvement in these two area, also driven by a better comparison year-over-year on the two regions.

All in all, we keep on growing in the high value, overperforming the market, and we have a more positive outlook of the second half compared to the first half, mainly driven by lower reduction of the original equipment in China and a start growing environment in United States replacement. While Europe is expected to maintain its high double-digit growth in the replacement high value, as has been showed in the first half.

Thank you.

Hi, yeah. Good evening, everyone.

Thanks for taking my questions. The first one actually is a follow-up about the outlook for US volume growth in the market in the second half.

What gives the confidence that that will get better? It looks like the first half of the year has really been driven by the weak consumer.

I appreciate the June data maybe was a little bit better. Is it an extrapolation of that, or do you have any other information for us that can help on why that market will get better?

The second question, I wanted to ask about the USMCA renegotiation. What are you hearing?

We've seen some headlines that the US is pushing for increased US content within cars, but is there anything else that you've heard or we need to think about for that Mexico-to-US business? Then finally, I wanted to ask about your capabilities in digital twin and software.

How high a proportion of original equipment fitments today are requiring some level of digital integration with the R&D and design phase? How differentiating is Pirelli's software in this field, and helping to win those market share gains?

Thank you.

Thank you for your questions. Mexico, USMCA, the fact is that the the agreement should be renewed for 10 years, renegotiable every year.

As far as we can see, considering the the importance of the Mexican supply to the American market, to the North American market, we don't do not expect impact on our operations in Mexico. We we feel comfortable on that side.

Now I leave the floor to Mr. Casaluci.

Yes. Thank you.

The US volume, we are optimistic on the second half mainly in the replacement. Because we come from six months in a row of negative markets, which is something that is preparing a restart of the demand in our view, and also because more favorable comparison versus last year, which is also helping.

We target to overperform the market. We have already a long-term agreement with our partners in distribution.

The orders are already on our hands with a clear view at least for the following three, four months. We are very positive on the outlook of US, both driven by an expectation of a better market and also our order collection.

Digital twin, yes, you are fully right. This is one of the most important innovation that we have been able to introduce in our research and development processes.

The competitive advantage that we see are for two sets of reasons. We are becoming much faster in the development of new products, which is fitting the needs and requirements of the OEMs, above all, the Chinese one.

That's one of the major reasons why we have a competitive advantage in this arena. It's also allowing us to reduce the number of prototypes, and so with a positive impact on cost, and is helping us to accelerate the introduction of recycled and bio-based materials because with the Virtual Compounder, the simulation on the development of a new compounds, we can make a tests on laboratory without losing a lot of time for the physical test.

That's also a good competitive advantage. The second reasons is linked to our Cyber Tyre technology.

The digital twin of a tires, a mathematical model mirroring the real performance of a tire, is part of the Cyber Tyre technology that is integrating data collection from sensors into the tires into a way to use these data applied to the digital twin of a tire, thanks to the new computing capacity of the cars, to elaborate on the best possible instruction to give to the control unit of the car, using the same logic that we use when we develop virtually a tire, but applied with a completely different conditions. Thank you.

Yes. Good evening.

Thanks for taking my questions. I have three questions.

The first one is on raw mat. They're going to turn negative in H2 based on your latest assumptions.

Can you please give us an indication of what do you anticipate in terms of headwind for H2? The second question is regarding the efficiency gains.

If I'm not mistaken, when we are doing the math, you are anticipating around €70 million of efficiency gains in H2. Given the global cost inflation, should we expect those efficiency gains to more than offset cost inflation just like in H1?

The last question is regarding the tax rate. Again, if I'm not mistaken, you were anticipating a slightly higher tax rate in 2026.

In H1, you are at only 30%. Should we expect any tax rate increase in H2, and what are the reasons for that?

Thank you.

Thank you. I will take the question.

I'll start from the raw materials. In the first two quarters of the year, we benefited from the positive contribution from raw mat against previous year, and overall, we had an impact for about a little more than €30 million.

Now, this trend for the second half will reverse completely because commodity after the end of February has gone up quite a lot. We will see the first impact of this increase in commodity, and that means an increase in our cost of goods sold starting from quarter three, that means starting from now.

What we expect is a sizeable impact for the second semester because if the first half was a positive contribution from raw mat for €30 million, in the second semester, we expect a negative impact for about €70 million. Total different trend between first half and the second half.

Regarding the efficiencies and the inflation, I can confirm that for the full year, we expect efficiency from our projects that are absolutely in line with the expectation for a total amount of €150 million. On top of this €150 million, there will be an additional impact of the cost mitigation plan that will be between €20 to €30 million related to the Middle East crisis in order to try to offset and balance the additional inflation that will come related to the energy cost and inflation on the transportation cost.

Having said that, with this additional mitigation plan, we think that on the overall of the year, the efficiency plan and the mitigation plan will be sufficient to not only offset, but even give a little bit of positive impact to the result of the company. Regard the third point related to the tax rate, tax rate in the first semester was equal to 30%.

I confirm the full year guidance for the tax rate between 32% to 34%, which was as in our original guidance, taking into consideration some one-off positive impact for the full year that has been materialized a little bit earlier than expected, meaning in the first half. That is why we had this 30% in the first half, and it will be a little bit higher on the second semester, but fully in line with the expected tax rate that not only for 2026, but even for the following years we expect to be in this ballpark, 32% to 34%.

Thank you. Very clear.

Thank you very much. Good evening.

I'll try to make it quick. I have three questions, please.

Firstly, your net interest charge to follow up with Mr. Bocchio, it was low in H1.

Should we expect this to continue in H2 and have a benefit versus the previous years or whether as well like for the tax rate, some one-offs helping you on that front? The first question.

The second question, could you remind us broadly or approximately your OE share with Chinese automakers in H1 and as well directionally where you stand in terms of China replacement share in H1 and how it's improved versus H1 '25? Finally, I think you mentioned that you believe you could sign the first Cyber Tyre contracts with a premium automaker eventually in Q4, which is great.

May I please ask you to remind us what are the existing contracts today with prestige automakers, and whether you would expect a contract with a premium automaker to have you being the sole supplier of that car, or whether the Cyber Tyre would be an option for the vehicle that would only be allocated to customers effectively choosing the Pirelli/Cyber Tyre solution? Thank you very much.

I will take the one related to the financial expenses, the net financial expenses. As you correctly pointed out, in the first half, we had a positive impact on financial expenses for about €29 million compared to previous year.

As I was saying, this is related to the lower gross debt and to the mix of debt between countries with a high interest rate and countries with lower interest rate. For the full year, we expect a dynamic in second semester to be a little bit different.

I expect a reduction in financial charges related to the lower debt that will be at the same level for the second part of the year. On the other side, we expect some volatility and some negative impact from non-cash component linked to hyperinflation and FX volatility.

For the full year, the expectation is to arrive to a level that would be in the range €190 to €200 million, let me say similar to the full amount for 2025.

Moving to the second questions, the OE market share we have in the premium segment, it's similar in all the geographies. It means that we target always a market share in the prestige which is 100% concentrated in Europe around 50% in the original equipment, while in the premium in between 20%-22%.

The more we go into the upper end, the more the market share of the product portfolio of the carmakers, the more the market share is growing. That's exactly the market share we are performing in China, but only if we focus on the premium carmakers, namely Li Auto, Xiaomi, AITO Seres, NIO.

These are the kind of newcomers in the EV we are working with. That's the result of a strategy of customer base enlargement and diversification that we started five, six years ago, growing in share premium segment both in United States and in China.

As far as the cyber technology, yes, we are working with some very important prestige carmakers in Europe. As I said before, we are enlarging the partnership and the collaboration with some premium carmakers.

As I said before, the Chinese premium carmakers are very interested not only because of the typical safety performance or driving performance of the prestige segment, but also because of the opportunities related to the autonomous driving. With an autonomous driving solution where the decision if braking or steering it will be in the hands, in brackets, of a software and no more in the let's say the responsibility of a software and no more of a human, to have a very accurate estimation of the grip and the forces between the tire and the road, it will be of paramount importance to take the right decision.

This is the kind of application we are working on with some of the most important premium Chinese carmakers.

Thank you.

Yes. Thank you very much for taking my questions, especially given we've run over slightly.

The first one is just on organic growth. Just noting that year to date, the organic growth for Pirelli is at the low end of the full year guidance corridor at 2.5%.

We're talking a lot about a recovery in the second half on organic growth on price mix and volume. Specifically on Q3, how should we think about organic growth compared to the slightly lower 1.4% that we see in Q2?

Would you expect organic growth to recover back to sort of midpoint of the full year guidance corridor, let's say above 3%, as soon as Q3, or is this more of a Q4 loaded recovery? That's my first question.

Second question, just coming back on the US CapEx to Christoph's question. Obviously, the $1 to $1.2 billion is a big number, but it's over several years.

Could you maybe give us a sense of what that sort of check buys you in terms of capacity, just in terms of units? How should we think about the cost of a US factory, and what that would bring Pirelli in terms of capacity?

Then my final question is just on the EV trends in Europe. Obviously, these are going quite strongly.

You talk about the homologations with EV. I think your definition is BEV plus plug-in hybrid.

Specifically in the BEV segment, how do you feel about your market share versus your competitors on OE? Thank you.

Thank you. On the organic growth, we have performed the 2.5% in the first half and a bit below our expectation because mainly driven by the reduction of volume on standard, higher than expected, and the Chinese original equipment where the demand in China in the local market was negative in the first six months, double-digit negative, more than expected.

While our expectation for the second half is to stay in the ballpark of 4% of organic growth, mainly driven by price mix, 3%, and 1% on volume. We are confident on this growth, and nevertheless, it remains the organic growth of Pirelli the highest in the tire industry.

That's mainly driven by our overexposure to the high value segment, representing now 82% of our sales, and the high value is a growing segment and more resilient. United States capacity, yes, we announced first of all, as you correctly said before, is not fully approved by the board of directors.

This will be included in one of the following board of directors meeting. A rough indication, it is in the ballpark of $1.2, $1.

between $1.2, $1.3 billion investment that is an investment that will target the highest possible level of automation and innovation in the plant. We are upgrading our MIRS technology with a new release.

It will be capital-intensive euro per tire because of the high level of automation that will lead more efficiency, a better quality performance, stability, and flexibility for the plant. The capacity we target to arrive at the end of the process of development in the around 6 million fully high value tires with a high flexible plant.

Let us finalize approval, and then we will be back with all the details of the project. BEV homologations, in our view, the electrification it will be the major technology in the car registration of the future.

In China, we have seen already more than 60% of new car registration being full electric or plug-in hybrid or range extended, but the most important and most relevant technology remains the full electric. In Europe, we have seen more than 20%, 23% of car registration being a new electric vehicle, again, mainly full electric, while in United States the percentage is still below Europe and China, not far from 10%.

We are confident that full electric will be the main technology, but also plug-in hybrid it's growing. From a tire perspective, both powertrains requires the same performance from a tire perspective where you need higher load index, better grip, lower rolling resistance, and better noise control performance.

All in all, for us, it's a great opportunity.

Thank you.

Hello, good evening, and thank you for taking my question. I have a question on anti-dumping measures in Europe.

What's your take on that? Do you think you can have some benefit or not?

Second question is on your penetration with Chinese vehicles, but not in China, I'm referring in Europe. It is too early to measure your market share in the replacement channel with these Chinese vehicles, or can you share some of your achievements in that field?

Thank you.

The anti-dumping measures, we welcome the final decision of Europe because the uncertainty before was creating a bit of confusion in the market. We welcome the final decision because we are confident that will lead into a better stability.

All in all, the dumping on the Chinese imported tires are not affecting our addressable market because are mainly standard tires. Not a direct impact on our sales, but a positive impact because, finally, will create stability and clarity into the market.

Penetration of Chinese OEMs, penetration of Chinese car models is growing in Europe. As a matter of fact, the car registration in Europe of the most important Chinese players like BYD or Geely are growing.

In the premium segment, the penetration of Chinese models is still very limited in Europe. We see the penetration of EV in Europe in the premium and prestige segment still driven by the European carmakers that are now in the process of introducing new car models with a very good performance.

We are confident that the premium segment, and of course the prestige, will remain at least in the short term, two, three years, in the hands of the European carmakers. Nevertheless, the penetration in the strategic market of the Chinese models is growing.

Okay. Thank you.

Thanks very much. I want to go back again, please, to the Xushen Tire joint venture.

If you could please speak a bit more about the rationale of the partnership there and whether we should be expecting any other financial impacts on the net financial position, on the net debt during the year. Thank you.

Thank you for your question. The rationale is that we are now in the position to fully control an asset that is dedicated to the production of high value product and the high content of technology.

For us is, strategically, it has been a positive movement. I leave the floor to Mr.

Bocchio for the impact on the net financial position. Thank you.

For the impact on the net financial position, we already accounted for the consolidation of the debt of these JV at the beginning of the year. In quarter one, there was an impact of €210 million.

Then in quarter two, there was the exercise and effectively, the payment of the call option for an additional €47 million. In the net financial position achieved at the end of half one, it is already accounted for the full amount of the impact for the operation.

Obviously, that plant is now creating value for the group. It is selling with an average contribution that is higher than the average of the group.

Obviously, there is the cash flow generation coming from the operative business of that company. For the remaining part of the year, we don't have any additional impact to take it to account considering the specific operation.

Thank you very much.

Thank you for the attendance to our conference call. This ends our today's program.

Thank you, and I wish you a very good evening.