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Pirelli’s New Biz Plan Targets Bigger Operating Profit Margin

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Pirelli SpA announced a new business plan that targets a bigger operating profit margin and aims to sell 150 million euros ($202.5 million) in financial assets by 2017 as it adapts to shifts in global car markets.

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According to the plan, Pirelli will shift further into the premium tire segment, which the tiremaker expects to grow from the current 38% to 44% of sales by 2016. The company also said it is targeting tire revenues of 7.5 billion euros ($10.1 billion) in 2016, up from some 6.2 billion euros this year, and that it will seek a partner for its pollution filters business while holding onto its fashion brand PZero, according to reports in Bloomberg and Reuters.

The tiremaker said the asset disposals, in addition to gross cash generation of 3 billion euros in the period, will finance 1.6 billion euros in investments and a dividend payout of 40% of net income, according to the reports.

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