Piaggio Group: The Board of Directors approves the 2009 Annual Report

  •  Industrial gross margin € 467.1 million (468.8 million in 2008) growing in comparison to turnover (from 29.9% to 31.4%)
  •  Ebitda € 200.8 million (+6.2% in comparison to 2008) with Ebitda margin rising from 12% in 2008 to 13.5% in 2009
  •  Pre-tax result € 74.1 million (+24.3% in comparison to 2008)
  •  Net profit € 47.4 million (+9.4% in comparison to 2008)
  •  Net debt € 352.0 million (-7.7 million in comparison to 2008)
  •  Revenues € 1,486.9 million (-5.3% in comparison to 2008)
  •  Increased market share in Europe in the 2-wheel business
  •  Increased total turnover in the commercial vehicle business
  •  Sharp increase in Asian markets, both for 2-wheelers and for the commercial vehicle business
  •  Piaggio & C. S.p.A.: net profit € 46.1 million (+53.6% in comparison to 2008)
  •  Suggested dividend of € 0.07 per share (0.06 in 2008)
  •  Suggested annulment of 24,247,007 own shares in the Company’s portfolio
  •  Maurizio Roman appointed General Manager for Product Development and Strategies


Milan, 26 February 2010 – The Board of Directors of Piaggio & C. S.p.A. met today in Milan. The meeting, chaired by Roberto Colaninno, examined and approved the 2009 Annual Report.

In 2009, the Group’s operating management and profitability improved significantly, despite the exceptional difficulties of the macroeconomic scenario and the substantial fall in demand in the 2-wheel and commercial vehicle business.

The strengthening of the Piaggio Group’s direct (industrial and commercial) presence in the main Asian markets allowed it to achieve much better results in this area that made up for the fall in traditional markets such as Europe and North America.

Moreover, on an international level, the strength of the brands and the Group’s technological innovations – focused on developing low fuel consumption motors with a low environmental impact – allowed it to increase its market share in the most important markets it refers to.

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In 2009, the Piaggio Group sold a total 607,700 vehicles all over the world (scooters, motorbikes and 3-4 wheel commercial vehicles), of which 410,300 in the 2-wheel business and 197,400 in the commercial vehicle business.

In 2009, the Group’s consolidated net revenues amounted to € 1,486.9 million, falling by 5.3% in comparison to € 1,570.1 million in 2008.

In particular, the sales in the 2-wheel vehicle business – with a turnover of € 1,065.4 million in 2009 in comparison to a turnover of 1,180.7 million in 2008 – fell by 9.8%. This loss was partially offset by the Group’s 8.2% increase in the commercial vehicle business, with a turnover of € 421.5 million in comparison to 389.4 million in 2008.

The Group’s performance in the 2-wheel business was marked by a particularly difficult market situation, with a 17% fall in market figures in Europe. The Italian market itself – which benefited in 2009 from the Government’s eco-incentives, especially on registered scooters – concluded the year with a 4% fall in sales.

Despite this scenario, the Group increased its market share in the EMEA region: in 2009, it reached a total 20% in Europe, in comparison to 18% in 2008.

The Group’s operations also increased in the 2-wheel business in Asia, with a € 83.9 million turnover in comparison to 45.2 million in 2008, thus +85.9%. This performance, which was concentrated in the second half of the year, was essentially due to the Group’s successful, industrial and commercial operations in Vietnam.

As for the commercial vehicle business – which registered in Europe a punctual growth of the Group’s market shares and a positive trend in Italy, unlike other companies – the Group achieved excellent results in India, where its turnover increased by 17.5%, rising to € 286.8 million in comparison to 244 million in 2008. According to exchange rate parity in respect of the Indian rupee, the Group’s turnover increase in 2009 would have been +24% in comparison to 2008.

The Group’s consolidated turnover in 2009 was affected overall by the fluctuations of the Euro exchange rates vs. the US Dollar, the Indian rupee and the sterling, determining a negative impact on the turnover of some € 17.5 million in comparison to 2008.

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In 2009, the industrial gross margin was € 467.1 million, thus in line with the 468.8 million margin of 2008, though with a sharp increase in comparison to the turnover (the incidence rising to 31.4% in comparison to 29.9% in 2008 - +1.5 percentage points) thanks especially to the Group’s strategy of containing product costs.

In 2009, the consolidated Ebitda was € 200.8 million, thus growing significantly in comparison to 189.1 million in 2008. The increased impact of Ebitda on revenues was significant, going from 12.0% in 2008 to 13.5% in 2009. The Ebitda margin in 2009 was the highest recorded in the Group’s recent years, since the taking over by Gruppo Immssi of the control of Piaggio & C. S.p.A..

In 2009, the operating result reached € 104.4 million –  +10.5% in comparison to 94.5 million in 2008 after depreciations for € 96.4 million (+1.9% in comparison to 2008), amounting to 7.0% of the turnover.

The pre-tax result in 2009 was € 74.1 million, thus +24.3% in comparison to 2008, and the net profit 2009 was 47.4 million, thus +9,4% in comparison to 2008, after deducting taxes for € 26.7 million.

The net financial charges amounted to €30.3 million, thus falling when compared to 34.9 million in 2008, thanks also to lower interest rates.

In 2009, the Piaggio Group made investments for € 93.8 million (102.9 million in 2008).

The consolidated net debt went from € 359.7 million as of 31 December 2008 to 352.0 million as of 31 December 2009. The € 7.7 million reduction in the Group’s debt was related to the positive trend of its operating cash flow that allowed for coverage of the Group’s investment plan, for the distribution of dividends  for € 22.5 million and for the purchase of own shares for € 1.2 million.

In 2009, the Group strengthened the profile of its own sources of funding whilst reducing its costs, thanks – inter alia – to BEI’s € 150 million loan, to the € 90 million loan syndicated, and– in December 2009 – to the successful issue of the €150 million debenture loan for 7 years, having positive effects both on the average cost of the loans and on the average length of the debt.

The net equity as of 31 December 2009 was € 423.8 million in comparison to 398.2 million as of 31 December 2008.

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Events occurred after 31 December 2009

On 22 January 2010,the Piaggio Group entered into an agreement with Enel for the study on the mobility and electric charging needs of the corporate fleet and hybrid scooters through the implementation of joint pilot projects in different Italian cities.


Development of management

In 2010, the Piaggio Group will focus on increasing its competitiveness in all the fields/markets it works in.
Quality, product cost and productivity will be the ‘drivers’ of management also for 2010, through actions aimed at increasing the sales of 3-4 wheel commercial vehicles in India and Europe. Special attention will also be paid to the growth of the Group’s motorcycle brands in Europe, and to consolidating its leadership in the scooter business in Europe and America, as well as to the development of sales of Vespa scooters in Vietnam – which officially started at the end of June 2009 – also by enlarging the range of scooters offered.
In 2010, the Piaggio Group will concentrate on future development and new investments; the most important of which include the industrialization of the new Diesel engines with the beginning of production at the new site in India, designed for their manufacturing.


Piaggio & C. S.p.A.

In 2009, the Parent company’s turnover was € 1,125.8 million, with an Ebitda of € 124.7 million, an operating result of € 38.8 million and a post-tax net profit of € 46.1 million.

 

Suggested cancellation of shares of the Company

The Board of Directors of Piaggio & C. S.p.A. has decided to submit to the General Shareholders Meeting’s approval the proposal to modify the Stock Option plan for 2007-2009, devoting thereto up to 3,300,000 shares of the Company in portfolio (amounting to 0.83% of the share capital), and to cancel 24.247.007 shares of the Company in its portfolio (amounting to 6.12 % of the share capital), after deleting the nominal value of circulating ordinary shares and without reducing the numeral amount of the share capital. It has also been decided to submit to the General Shareholders Meeting’s approval the proposal to provide for a dividend, upon payment, for up to nominal Euro 2,891,410.20, other than Euro 6,673,309.80 as share premium and excluding the pre-emption right as under section 2441 (5) and (8) Italian Civil Code and 134 Legislative Decree no. 58/1998, by issuing up to 5,220,000 ordinary shares for subscription by the beneficiaries of the Stock Option Plan of 2007-2009.


Suggested dividend of € 7 cents

The Board of Directors will suggest to the General Assembly to pay a dividend of € 7 cents per share (in comparison to the €6 cent dividend of 2008), including the quota for own shares under art. 2357-ter Italian Civil Code, for a total value of € 25,794,573.07 million.
The ex dividend date is 17/05/2010, while payment will take place on 20/05/2010.


Appointment of General Manager for Product Development and Strategies
 
During the same meeting, the Board of Directors appointed Maurizio Roman, who joined the Group on 1 January 2010, as General Manager for Product Development and Strategies.

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The manager in charge of drafting accounting-corporate documents, Ms. Alessandra Simonotto, certifies (art. 154 bis (2) Leg. Decree  58/1998 (T.U.F.)) that the accounting information contained in this release matches the documentary results, the records and books of the company.

Please refer to the attached pdf file for economics relating INCOME STATEMENT, CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES, NET EQUITY AND LIABILITIES, INCOME STATEMENT Parent Company Piaggio & C, STATEMENT OF ASSETS AND LIABILITIES Parent company Piaggio & C.