Ladies and gentlemen, welcome to Pirelli's conference call in which Pirelli's top management will present the company's first half 2025 results. A live webcast of the event and the presentation slides are available in the Investor Relations section of the Pirelli website. [Operator Instructions] Now I would like to introduce Mr. Marco Tronchetti Provera. Please go ahead, sir.

Thank you, and good evening. Ladies and gentlemen, the results for the first half of 2025 once again confirm the resilience of our business model, which continues to generate value in a complex and challenging external environment. We closed the semester with strong results expected higher than our peers. We stand out for organic growth of 4.4%, driven by solid commercial performance, improved profitability, thanks to the effectiveness of internal levers, which more than offset the negative impact of the external environment. Solid cash generation supported by the operational performance and disciplined working capital management. And finally, significant progress in sustainability, a core element of our strategy. Geopolitical and trade tensions continue to weigh on the outlook for 2025. Recent estimates point to a slowdown in global economic growth, which is even more pronounced in the United States. In addition, global inflation of 3.2% and 2.7% in the United States. High volatility is expected in exchange rates. Concerns about U.S. economic outlook, uncertainties about Fed policies and high U.S. public debt have pushed the dollar to its lowest level against the euro in 4 years. This trend continues to be uncertain and the relation between the dollar and the different currencies remain volatile. We see now that there has been a revaluation of the dollars lately. Agreement on tariffs between EU and U.S., which is going to be ratified in the coming days, on the one hand, reduces uncertainty and prevents a trade escalation; while on the other hand imposes significant costs on export and is expected to fuel inflationary pressures. In this context, the ability to react is crucial. As Mr. Casaluci will illustrate, we are taking concrete measures to manage risks and seize opportunities. We are continuing with our commercial strategy, focused on strengthening the High Value segment which is proving its resilience with expected mid-single-digit growth also for the second half of the year. The continuous improvement in price/mix will allow us to offset the higher negative impact of exchange rates on profitability, while our tariff mitigation plan has already delivered positive results in the second quarter and we expect further benefits in the second half of the year. Based on our results achieved in the first half and considering the high volatility of the external scenario, we have updated our expectations for the year confirming our targets. Profitability with an adjusted EBIT margin around 16% and cash -- net cash flow before dividends of approximately EUR 550 million. And now I give the floor to Mr. Casaluci, please.

Thank you, Mr. Tronchetti, and good evening, everyone. Pirelli closes the first half of 2025 with results among the best in the industry. Revenues of approximately EUR 3.5 billion, plus 4.4% excluding ForEx due to the success of the commercial strategy. Profitability at 16%, up year-on-year, supported by the effectiveness of internal levers, with the tariff mitigation plan already in place from the second quarter. Net profit significantly improved to 14%, thanks to lower financial expenses. The deleveraging process is progressing with a year- on-year reduction in debt of EUR 300 million. Solid cash generation before dividends in the second quarter, EUR 193 million, stable year-on-year when we exclude the impact of the sale of Däckia to CTS. Significant progress was also achieved in sustainability. The accident rate was reduced by 3% compared to the end of 2024, thanks to actions on prevent accidents and raise awareness about safety at work. The decarbonization plan continues in line with the net zero target for 2040. Energy efficiency and machinery electrification projects have led to a reduction in our absolute emission of 16.5% year-on-year. The reduction of Scope 3 emissions is in line with 2025 target. In cooperation with Jaguar Land Rover, we developed the first tire with over 70% bio-based and recycled materials. Finally, still on the environmental front, we reduced water withdrawal at group level by 7.2% compared to the end of 2024. These results confirm our global leadership in the sector as recognized by the most important indices like Standard & Poor's Global Sustainability Yearbook 2025, where we are the only tire maker ranking in the top 1%. Let us now take a closer look at our performance. As we will see in the next few slides, we strengthened our position in the High Value segment. We consolidated the technological leadership, especially by introducing new products, enlarging the homologations portfolio and accelerating the Cyber Tyre development. At the same time, we continued with operational efficiency programs to support profitability, which is confirmed to be the highest in the industry among Tier 1. The first half of 2025 confirm the effectiveness of our commercial strategy with growth in car 18 inches up exceeding that of the market. We gained market share in both channels

in Original Equipment, particularly in Asia Pacific and North America, due to the strengthening of partnership with local carmakers; in Replacement, we outperformed the market in all regions, leveraging the effectiveness of our pull-through strategy and product innovation. In car 17 inches and below, we continue to reduce our exposure, in particular in South America, where we accelerated our exit from less profitable distribution channels. Let's now move to the innovation programs that helped boost our technological leadership. In the first 6 months of this year, we got around 110 new technical homologations focused on 19 inches and above specialties and EVs. These were obtained from leading premium and prestige OEMs like Ferrari, Porsche, BMW and Aston Martin and pure electric vehicle carmakers, such as Tesla, Zeekr, Nio, [indiscernible] and Lucid. We have the broadest portfolio of market homologations, around 1,300 in car 19 inches and above, more than 3x the average of our peers. These results lay the foundations for future growth in High Value Replacement due to a loyalty rate that remains around 80%. Let's move on product innovation on Slide #9. At the beginning of May, we presented the fifth generation of the P Zero, a brand in brand that in the last 40 years has been synonymous of ultrahigh performance. Developed from our experience in motor sport, P Zero has always been able to anticipate the needs of the premium and prestige segments. The market has already responded positively. Over 150 homologations have already been obtained, more than 380 blended, and the product has been chosen by the most important premium and prestige car manufacturers. The most advanced artificial intelligence and virtual design techniques were used to develop the fifth generation. This allowed us to test every single detail of the product well in advance, optimize development times and improve grip, braking and handling, both on dry and wet roads. Tyre Reviews awarded the new P Zero best ultra performance tire as it offers the highest level of performance and safety. Furthermore, as testimony of Pirelli's ongoing commitment to sustainability, the version of P Zero developed for Jaguar Land Rover is made from more than 70% natural and recycled materials. In the 2 wheels business, our offering expanded with the launch of 2 motorcycle tires and 4 dedicated to cycling. For motorcycles, where Pirelli is the leader in the High Value segment, we expanded our range with Diablo Powercruiser and Scorpio MX32, both the results of our experience in racing where we keep the best teams. In cycling, innovation continues with the launch of Cinturato EVO TLR, P Zero Race TLR NERO and 2 new versions of the Scorpion XC. Here, too, the driver for innovation comes from the world of racing where we collaborate with the best professional teams like Trek and Alpecin. And the success of Pirelli products is proven by recent wins in the most prestigious competitions such as Paris Roubaix, Milano-Sanremo and several legs of the Tour de France. Finally, we accelerated the development of Cyber Tyre by implementing several projects. The partnership, which Bosch started in 2024, was renewed and technological cooperation strengthened. Our Cyber Tyre is already integrated in premium and prestige vehicles and at the same time further projects are being assessed. In addition, agreements and contracts were signed for infrastructure monitoring. The first agreement was signed by -- with Movyon, a company of the Autostrade per l’'Italia group for the mapping of motorway sections managed by us. An agreement has been signed with the Puglia region to implement an innovative monitoring system for the regional road network. This system will combine data collection from tires processed by Pirelli Cyber Tyre hardware and software system, visual data collected with universities technology using onboard cameras and sensor fusion software and algorithm that will provide integrated mapping of asphalt and road signs, creating a detailed map of roads and their state of repair. In addition to innovation, our brand is one of the key factors driving the choice of high-value customers. Through new strategic partnerships with major international sporting competitions, we are aiming to further increase the visibility of our brand. Formula 1 plays a key role in these with a strong growth globally and especially in the United States. 2025 also saw the renewal and expansion of our partnerships in the world of sport such as the 2026 Winter Olympics and Paralympics in Milano Cortina; MotoGP, where Pirelli will be the sole tire supplier from 2027; Luna Rossa, where we are continuing our collaboration as a sponsor and technical partner; and the Australian Open tennis championship. All this contributes to making the Pirelli brand increasingly distinctive, internationally recognized as synonymous of performance, sport and high technology. Let now move to the operations programs that have contributed to improving our profitability. In the first half of the year, they generated gross efficiency of EUR 70 million, 45% of the full year target. The greatest benefits come from the manufacturing product cost programs through increasing automation in factories, reduced energy consumption and innovation in product design. Both programs are set to accelerate further in the coming months, in line with projects development, and will be the main sources of efficiencies gains in the second half of the year. The SG&A and organization projects are also making a positive contribution with benefits deriving from the rationalization of the supply chain and optimization of logistics and the digitization of processes and upskilling of personnel. Let's focus on the manufacturing program which will continue to play a key role in future efficiency programs. We are paving the way for the factory of the future making our plans increasingly competitive, efficient and sustainable. Automation, digitization and electrification will enable us to optimize production processes, reduce operating costs and improve the group's profitability in the medium term. The transformation of our factories develops along 4 strategic axis. First, the manufactures -- smart manufacturing which through the virtualization and digitization of control systems will enable real-time monitoring of the plant KPI, the optimization of processes and the development of innovative solutions in a very short time. Second, energy efficiency through the ongoing electrification of the curing phase and the adoption of continuous monitoring systems for intelligent consumption control. Third, process innovation through advanced technologies such as the tire defect detection system which uses AI and computer vision to identify and analyze defects with greater precision. And finally automation, which we are adopting in the handling of products in the factory with benefits in terms of efficiency, traceability, but also safety. Last but not least, we are still working on making our supply chain even more resilient. We are developing an integrated planning system that goes from the raw material suppliers to the end consumer to ensure the faster response time. Our footprint is now 86% local-for-local, which helps us reduce logistics risks and response time. The U.S. remain the only area with a low local-for-local supply. We are promoting the transition to a sustainable value chain with the aim of reducing environmental impact and increasing transparency throughout the supply chain in line with our 2014 net zero targets. And finally, logistics excellence. We already guaranteed 98% coverage of all requests within 24 hours, and we will continue to optimize flows to improve customer service and keep operating costs down. I will now hand over to Mr. Bocchio.

Thank you, Mr. Casaluci. Let's now turn to the dynamics that shaped our performance in the first half of 2025 compared to the same period of last year. Solid commercial performance resulted into an organic growth of 4.4%. Volumes were positive plus 0.5% with growth in the High Value segment more than offsetting the reduction in exposure to Standard. High Value now accounts for approximately 80% of total sales, up 3 percentage points compared to previous year. The price/mix improved. It was plus 3.9%, mainly supported by the product and region mix and marginally by the price component. The latter reflects the indexation of Original Equipment prices to raw material costs and the first commercial renegotiations in response to U.S. tariffs. On the other hand, the impact of exchange rates was negative 2.9%, affected by the sharp depreciation of the U.S. dollar and the volatility of emerging market currencies against the euro. As shown in Slide 17, in the first half, profitability improved by 0.4 percentage points year-on-year, reaching 16%. In the first half of 2025, adjusted EBIT was EUR 558 million, up 3.6% due to the effectiveness of internal levers. More specifically, the positive contribution of price/mix for EUR 94 million more than offset the increase in the cost of raw materials for EUR 51 million; and the negative impact of exchange rates for EUR 19 million due to the dynamics already described. The balance between efficiencies and inflation was positive, thanks to the acceleration of competitiveness programs in the second quarter. Finally, the contribution of volumes for EUR 6 million, limited the impact of depreciation and amortization, which were negative for EUR 15 million and other costs, negative for EUR 4 million. It should be noted that on May 3 came into force the U.S. tariffs of 25% on imports of car tires from Europe and Brazil as well as universal tariffs on motorcycle and cycling tires with different percentages depending on the country of production. The overall impact of these tariffs in the first half of the year was EUR 15 million. But thanks to the mitigation measures in place, the net impact was negative by EUR 6 million. This figure is included in the bridge in this slide under the item Other. Let's now review the performance of net profit, which was EUR 264 million, up from EUR 231 million in the first half of 2024. This trend reflects the improvement in operating performance of EUR 19 million whose dynamics I've just described, a slight increase in nonrecurring cost of EUR 6 million due to higher layoff and write-off charges and the reduction in net financial expenses of EUR 53 million, mainly attributable to a lower nonmonetary impact related to hyperinflation accounting. Finally, the increase in taxes of EUR 34 million compared to the first half of 2024 is due to an unfavorable year-on-year comparison as the value for the first half of 2024 included the benefits of the Patent Box and the impact of the positive settlement of tax disputes. Pirelli closed the first half of 2025 with a negative net financial position of approximately EUR 2.68 billion. Operating net cash flow was minus EUR 217 million, in line with the seasonality of the business and improving by EUR 62 million, compared to the first half of 2024. This was mainly supported by the operating performance commented in the previous slides and lower working capital absorption due to the efficient inventory management and to the usual seasonality of trade receivable and trade payables which accounted respectively, 13% and 23% of revenues. Net cash flow before dividends at minus EUR 504 million was affected by the impact of tariffs and currency devaluation as well as extraordinary transactions completed during the first 6 months of the year, plus EUR 43 million from the sales of Däckia minus EUR 19 million related to other transactions, the main one being the capital contribution payment to the joint venture with the Public Investment Fund of Saudi Arabia. Net cash flow before dividends in the second quarter of 2025 was positive at EUR 193 million. Excluding the aforementioned positive effect related to the sale of Däckia to CTS, it was essentially in line with the figure for the second quarter of 2024, which was EUR 154 million. Let's now move to Slide #20. Okay. As of June 30, 2025, the gross debt of the group was approximately EUR 3.87 billion. Considering financial assets of approximately EUR 1.19 billion, the net financial position was therefore approximately EUR 2.68 billion. The liquidity margin is at EUR 2.4 billion of which EUR 1.5 billion in committed credit lines not drawn. This margin covers debt maturities for approximately 3.5 years that is until Q4 2028. The cost of debt calculated over the last 12 months stood at 4.88%, down from 5.06% at the end of last year. The reduction is attributable to the decline in interest rates in the Eurozone. Finally, at the end of last June, sustainable finance continues to account for approximately 70% of the group's gross debt or 84.4%, if we consider the holding company's debt, in line with the 100% target announced for the end of 2025. And I hand back over to Mr. Casaluci.

Thank you, Mr. Bocchio. Let's now turn to the market outlook for 2025. We confirm a substantially flat car tire market, minus 1%, plus 1%. High Value remains the most resilient segment with mid-single-digit growth expected in line with the first half. In car 17 inches and below, demand for the year is expected to decline by low single digit. In this scenario, Pirelli confirms its strategy of strengthening the car 18 inches and above segment with market share gain in both channels. In the second half in Original Equipment, we will benefit from the reinforced partnerships with premium local manufacturers, both in Asia Pacific and North America. In Replacement 18 inches and up, we target to outperform market in all regions. Finally, in car 17 inches and below, we continue to reduce the exposure to the less profitable products and channels. The tariff scenario is still evolving. An agreement was reached between Europe and the United States administration on July 27. Meanwhile, regarding Brazil, Pirelli is analyzing the measure concerning the tariffs announced on July 30, yesterday, to verify its application to the various product segments. Based on current regulations, the U.S. tariff scenario is as follows

25% on car tire imports from Europe from May 3 to July 31; and 15% from August 1, subject to ratification; 25% from May 3 on imports from Brazil. The measure announced yesterday by the U.S. administration is currently under analysis. From a preliminary internal analysis, it appears that car tires continue to be subject to a 25% tariff while motorcycles are subject to 50%. No tariffs on imports from Mexico as our products are USMCA compliant. Finally, universal tariffs on imports of motorcycle and bicycle tires from all countries with different percentage depending on the source. In this context, in light of the uncertainties on Brazil we confirm the gross impact of EUR 60 million for the year and EUR 30 million following the mitigation plan implementation already launched in the second quarter, so EUR 30 million net impact. Let us now move to our targets. Despite the worsening of the ForEx scenario compared with May expectations, we confirm our targets for profitability and cash flow due to the solid organic growth and the effectiveness of the mitigation plan. For the full year 2025, we forecast revenues between EUR 6.7 billion and EUR 6.8 billion. Volumes growing by approximately 1%. Price/mix improving between 3% and 3.5% compared to the plus 2% to plus 3% previously indicated. And negative exchange rate impact now expected at minus 4.5% to minus 0.4%, compared to the previous minus 2.5% to minus 1.5%. Profitability is expected to be 16% with improved price/mix and the mitigation plan helping to reduce the impact of tariffs and the more negative exchange rates. The guidance implies an adjusted EBIT of approximately EUR 1,080 million at the midpoint, in line with the figure indicated in May in case of tariffs application for the rest of the year. Investments are confirmed at EUR 420 million, roughly 6% on revenue and cash generation of approximately EUR 550 million is confirmed as well as the resulting deleverage target. I'll now give the floor to Mr. Tronchetti for the final remarks.

Thank you, Mr. Casaluci, The first half results confirm the effectiveness of our strategy which has produced solid results despite the difficult external context. We have faced the challenges from the environment with determination, reacting quickly and in a coordinated manner. This confirms our adaptability and the strength of our business model. Thanks to a clear vision, strong execution capabilities and the derisking actions we are implementing, we look to the future with confidence. We are ready to face the external complexities and to outperform our peers, both in terms of profitability and cash generation. This will allow us to achieve our deleverage target by year-end ensuring greater flexibility and laying solid foundation for growth in the coming years. And this ends our presentation. So we may open the Q&A session. Thank you.

[Operator Instructions] The first question is from of Akshat Kacker of JPMorgan.

Akshat from JPMorgan. I have 3 questions, please. The first one is a clarification on tariffs. So if I understand you correctly, you have reiterated the gross and net impact from tariffs for this year despite mentioning that we have lower tariffs from Europe to the U.S., down from 25% to 15% and that your initial assessment on Brazil is that it stays at 25%. So could you just tell me how is the total or the gross of a net impact the same as your previous assessment? That's the first question. The second one is on pricing. We have clearly seen an improvement on the profit bridge in the second quarter. Could you talk about the general inventory situation in Europe and North America as you see it today? And what is your pricing or commercial strategy as you go into the second half, please? And the last one is on the Standard business. Could you just generally talk about the changing market dynamics in the South American market, particularly the Brazilian market, and what that means for your Standard business going forward and the margins?

Mr. Casaluci.

Yes. Thank you for your questions. So tariff impact based on our estimation done in May, where we were expecting a 25% from Europe import, moving from 25% to 15%, which is anyhow something that is still to be finally confirmed by executive orders, will improve of course the situation on the second half from August on, not the entire second half, but not significantly. Because we already paid the 25% starting from May until the end of July, and we already have stocks partially covering the demand of the following months. So of course, there is an improvement but not meaningful and partially compensated by the worsening scenario of the duties from Brazil. So all in all, we are confirming the expectation then in 20 -- sorry, in May. Clearly, we welcome the news of the reducing from 25% to 15% also because this will benefit on the next year impact if things will remain as of today. But there is a high level of volatility. Pricing-wise, we -- in our price/mix of the first half, we have a slightly positive impact mainly driven by the Original Equipment [ indexation ] because of the raw material negative trend of the previous months. All in all, we see a price discipline all around. Clearly, in the United States, the duties on import considering that the total demand of the country is around 300 million tires on a yearly base and the installed capacity is around 170 million tires, it is logic to imagine an inflationary environment. But it's too early to arrive at any kind of conclusion on that. So we will -- we are monitoring carefully. As far as Standard is concerned, we are accelerating our exit strategy of the Standard in the lowest -- in the less profitable channel in South America, both in Brazil and Argentina, I would say, mainly in Argentina because the imported tires from Asia is increasing. And so we face a trade down accelerated in the region and having still opportunity to reduce our exposure to Standard, we are accelerating. This is the main reason why you see a slight, a lower -- a slightly lower performance in terms of volume compared to our previous guidance.

The next question is from Monica Bosio of Intesa Sanpaolo.

I have 3 questions. The first is, if you can remind me what is your capacity production in Brazil and how much is Standard and how much is High Value, and what will be the strategy from now on? I'm just wondering, as you are exiting the less profitable segment -- distribution segment, are you willing to convert part of the Standard capacity into High Value? Or are there not really -- are you going to restructure some capacity production in Brazil? That's my first question. The second one is on the Original Equipment market in U.S.A. I was wondering if you have seen some pre-buy effect in the first half, also in the second quarter? And what are you expecting for the Original Equipment market in the last part of the year? Because according to most of the providers, the U.S. market should go down in the fourth quarter. And the very last question is on the raw material impact. it was roughly EUR 51 million in the first half. Should we expect a reversal in the second half? So if you can indicate us the total impact for the full year?

Okay. Thank you also for your questions. So Latin America, Brazil, you asked for Brazil. Our total production capacity in Brazil today is around 11 million tires, 50% already converted in High Value, while 50% still remaining in Standard. And of course, our target is to accelerate the conversion of the Standard capacity into High Value. And in the following years, we plan to go basically to zero Standard capacity also in South America, improving the High Value capacity. We don't have restructuring plans in the coming years. I remind you that we already did a restructuring in 2019 in Brazil and we closed 1 factory in Rio Grande do Sul. And today, we have our actual footprint that we do consider the right one, both supporting the conversion into High Value of the local demand, which is already visible in the road map of the carmakers in Brazil and the export into United States. As far as the United States market is concerned, we see a second half of the year with an High Value market remaining mid-single- digit positive, with an Original Equipment improving its performance moving from negative into positive also thanks to a favorable comparison versus last year. You most probably remind that in the last months of 2024, the Original Equipment in the United States lost a lot of volumes because the carmakers decided to reduce the stocking in the trade. And so we see the opportunity of recovery in the Original Equipment. While the Replacement, we do expect it to remain around a mid-single-digit growth in the second half, exactly as it happened in the first half. We haven't seen significant prebuying behavior in the customers, maybe something in April before the application of the duties that started in May, but then with a negative impact on May, June. So all in all, the second quarter, I would say it has been a stable trend. Raw material impact in the second half is expected to be slightly negative. Of course, it's improving compared to first half, where it has been -- sorry, EUR 51 million negative headwind. We do expect a slightly negative impact on the second half.

The next question is from Thomas Besson of Kepler Cheuvreux.

I have a couple of questions, please. Firstly, could you give us an update on the topic of the first half which has been, let's say, your attempt to change the stake of your largest shareholder or your, let's say, the willingness to have them lower the stake to have the possibility to not be eventually seen as controlled by a Chinese investor. Is there anything new on that front? Because unless I missed it, I didn't hear anything on the topic. And my second question is on some of the nonoperating lines of your P&L. Could you just confirm what we should expect for 2025 in terms of net financial charges and tax rates.

Thank you for your question, shareholder structure, control, et cetera. So no news for the time being, the discussions are ongoing. And we expect that at the end, the company could continue without any restriction, its growth in any region. So we are dealing with this and we are in an open dialogue. So -- and until now, there is nothing new. There is nothing urgent and nothing new. There is just certainty that this problem will be solved. Thank you. Then, I leave the floor to Mr. Bocchio.

Thank you for the second question. I will take it. Related to the nonoperative lines below the adjusted EBITDA. We can confirm that the nonrecurring is expected to be in the ballpark between EUR 55 million to EUR 60 million for the full year. Financial charges, we are expecting to be between EUR 220 million to EUR 230 million. And we confirm our original guidance for the tax rate, which would be between 28% to 30% on the full year.

The next question is from Stephen Benhamou of BNP Paribas Exane.

I have 3 questions, if I may. The first one is regarding the efficiency gains. So can you please elaborate on the crash program coming on the top of the efficiency gains and what could be the contribution in H2. The second question is regarding the price/mix. So can you please give us the breakdown between price and mix in Q2. And you revised up your price/mix objective for the full year, so how much of this is structural versus temporary? This is my second question. And the last question is regarding the Cyber Tyres so you did a focus today on these tires. So can you please give us an indication of the contribution of those tires globally and in the U.S. in terms of volumes and revenues.

Thank you. So as far as the efficiency program, we have divided into, as we presented the -- all in all gross efficiency program, which has been already part of our initial plan accounting for EUR 150 million is divided among the different plan presented product cost that is roughly on the full year base -- EUR 60 million, sorry; another EUR 50 million roughly coming from manufacturing, EUR 23 million from organization impact and EUR 33 million roughly from the SG&A. This is the EUR 150 million gross efficiency already part of our plan. On top of that, we have further cost tightening activities all around the world to support us in the mitigation plan. And here, we are talking about cost discipline and cost reduction at 360 degrees in all regions, not necessarily concentrated in the United States because we are asking to all the countries to support the mitigation plan, with positive results so far. So we are on track with this price/mix. The impact in the first half of the price is slightly positive as I said before due to the Original Equipment [ indexation ]. And all in all, the major driver in the first half has been the product mix with roughly 2.5 percentage points out of the 3.9%. And we also had a positive region mix of roughly 1 point, mainly due to the acceleration of the exit strategy in the Standard segment in South America already mentioned. If we target the full year as we presented in our guidance, we do expect a second half, which is the implicit expectation of the second half, between 2% and 2.5% improvement with a stable performance on the product mix. And in this case, we do expect a slightly negative channel mix impact because we do expect the recovery of the Original Equipment, mainly driven by North America and Europe in the second half. Price remains slightly positive with a reduction of the [ indexation ] impact of the Original Equipment because of the well-known trend on raw material. Cyber Tyre, still very -- the numbers -- we don't communicate in detail the numbers. But in terms of impact is still minimum because it's a technology in the introduction phase. We do expect significant growth in terms of penetration in the coming years. We have been working with a lot of carmakers to introduce the technology, and this will be well explained during our next industrial plan.

The next question is from Martino De Ambroggi of Equita.

Again, on the issue for the major shareholder, if I remember correctly, the government had a time limit, it was July, today, so to provide a decision on the Golden Power exercise and so on. Am I wrong?

Thank you for the question. I think that the process is ongoing. And so we believe that being also August starting from tomorrow, a time in which obviously there are a lot of people going on holiday, including us, and so we believe that it will be postponed for another month or 2.

But there is not a precise time limit.

No. There is no specific because it is in the hands of the government, it continues its deep analysis on the Golden Power obviously. Continue the deep analysis and they are listening to many, many different sources. So I think that we will skip August, and we will go to September. That's my view.

Okay. And concerning there are still too many moving parts for tariffs what's the likelihood to see extra CapEx to fix the imbalance in your footprint considering the current definition of tariffs, if any?

There is no extra CapEx in the plan that we presented. We will see the evolution of the investments, which will remain within the framework on the percentage of sales that we had until now. So there are, for the time being, no extraordinary investments. When we talk about new capacity, new investments, these investments are deployed in the next years. So it will be year after year absorbed. And we don't have a different policy of investment now, and we don't need as far as we can see any possible extraordinary investment. Thank you.

And very last on pricing in North America. I don't know if you can provide any additional comment on the pricing environment in this area.

No, it's too early to have a clear understanding. The only comment we can do is a general comment based on what I said before, that the total installed capacity in U.S. is around 170 million tires while the total demand of the market on a yearly basis, 300 million. So if the duties will remain, it's logic to imagine an inflationary environment. But until now no major information. Thank you.

And also, you are not moving anything?

We are evaluating the commercial conditions customer by customer, both the Replacement and the Original Equipment because as you can imagine, it's not only a question of price, it's also related to the Incoterms, to the stock level. So we are in a phase of evaluation of everything. But you can imagine it's very early we are in the first stage because the duties with Europe, for example, are even not yet finally confirmed by the U.S. administration. So everything is under development.

The next question is from Christoph Laskawi of Deutsche Bank.

The first one again coming back to the topic of tariffs, assuming that the 15% from Europe into U.S. are confirmed and the 25% from Brazil as well, do you have the ability or would it make sense also with regards to production costs in the 2 regions to shift more volumes from Europe into the U.S. and sort of lower the exports from Brazil? Is this potentially a sizable mitigation opportunity that you have or because of, again, cost imbalances or obviously shipping, et cetera, it doesn't make sense. Would be great if you could comment on that. And then a clarification question on pricing and sorry to come back to that. Did I understand it correctly that you say essentially pricing slight positive in H2 as in H1, despite indexation fading and as a delta of that, obviously, Replacement pricing would be slightly positive. And then last question just on the inventory situation in the U.S. has the tariff had any more significant implications for the inventory there? Or is it basically as you saw before?

Thank you for your questions. Yes, we have a certain degree of flexibility in the allocation among Brazil, Mexico and Europe. And we are trying to optimize the global supply chain for United States. And in case the environment will remain as per today so 15% duties from Europe and the 25% on car tires from Brazil, we will try to optimize the different source of production for United States. Nevertheless, Mexico will remain by far the most important source of production for us representing roughly 55% of the sold volumes in the United States. And I remind that this is so far a duty-free area for the USMCA-compliant product. On price, we don't give disclosure on the second half between price/mix and price and mix. What I can tell you is that the Original Equipment [ indexation ] will be less significant compared to the first half and so is in reduction. So that's logic because it's linked to the trend of the raw material. Inventories in the United States today are, I would say, at a normal level. We don't see major impact of the duties because there has been, as I said before, a slight anticipation on the prebuying approach in April, compensated by a rebalance of the inventories during the months of May and June. Thank you so much.

The next question is from Gianluca Bertuzzo with Intermonte.

I have a couple on tariffs. The first one relates to the spare capacity in Mexico. As you said, it is a duty-free country. What is the level of flexibility you have here to increase exports? And second one relates still on tariffs, but to the competitive environment. Where do you see Pirelli positioned in all this environment? I mean it seems that you maybe have some disadvantage to more localized players. But at the same time you may be at an advantage compared to other players of the market. Can you maybe provide us a description, a framework for that?

Yes. Thank you so much. Mexico today for Pirelli is fully saturated. You can imagine, has been always the case but now even more. So we have 2 activities in place. The first is we can keep on growing in terms of capacity was already in our industrial plan. So we are still investing in production capacity growth in Mexico. And this is a mid, long-term plan. In the short term, we are trying to reduce as much as possible all the production done in Mexico not dedicated to United States. So we are trying to free capacity of production today addressed to markets different than U.S., like Europe or Mexico itself and to reallocate this demand to other plants not being subject to duties. I would say, compared to the other players, I would consider Pirelli more or less on an average situation. There are players able to satisfy their demand with the local capacity in the United States, there are players even more exposed to duties than us. Clearly, for us, it's key the USMCA agreement and to assure that Mexico remains not subject to duties. In this environment, I feel that we are in average situation compared to our competitors.

Mr. Tronchetti Provera, there are no more questions registered at this time.

Thank you. So this ends our presentation. And happy summer to everybody, and I wish you a very good evening. Bye-bye.

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