2
TABLE OF CONTENTS
Letter from the Chairman.....................................................................................................................5
4
Report of the Independent Auditors on the consolidated non-financial statement - Legislative Decree no. 254 of 30 December 2016..............................................................................................................203
Certification of the Consolidated Financial Statements pursuant to Article 154-bis of Legislative Decree 58/98..................................................................................................................................320
5
Letter from the Chairman
2022 was extremely positive for the Piaggio Group, with turnover up by 25%, exceeding 2 billion euro for the first time, despite a complex scenario. During the year, the Group continued its development strategy, with the launch of new models, increasingly advanced in terms of efficiency, performance and safety, the consolidation of its outstanding E-mobility department and the opening of a new plant Indonesian capital, Jakarta, which is the Group's eighth industrial hub.
The event that most marked 2022 was undoubtedly the outbreak of the conflict between Russia and Ukraine, which has had strong geopolitical and economic repercussions, causing a surge in energy and commodity prices and prompting governments, institutions and companies to accelerate the process of transition towards a more sustainable economy that reduces reliance on fossil fuels.
In this context, the Piaggio Group, Europe's leading manufacturer of two-wheeler vehicles and a major global player in this sector, is naturally on the front line. In its research centres - seven of them worldwide - and its E-mobility department, with around 40 engineers specialised in electronics, mechanics and electrical engineering, new, ever more innovative solutions are continually being developed to offer its customers the most advanced and, at the same time, the most environmentally friendly engines.
A pioneer in the study of electric engines since the mid-1970s, the Piaggio Group now has several models of electric scooters and commercial vehicles in its range, including the Vespa Elettrica, which won the Compasso d'Oro (Golden Compass) award for the quality of its design, the Piaggio1, dedicated to younger generations and featuring removable batteries, and the Ape e-city, a zero-emission version of Piaggio's iconic three-wheeler, which is present on Asian markets. In addition, the Aprilia ELECTRICa was unveiled at Eicma 2022, a lightweight, zero-emission motorbike designed for the young motorcyclists.
The Piaggio Group's commitment to ESG issues is reflected by its "AA" rating, for the seventh year running from Morgan Stanley Capital International (MSCI) Research, a leading ESG rating agency that assesses the environmental, social and governance (ESG) performance of major companies worldwide. The MSCI rating, together with the “B” (Climate Change and Water Security) rating obtained from CDP (Carbon Disclosure Project), represent the Group’s worldwide strategy in the mid-term to make a concrete contribution to achieving the UN’s Sustainable Development Goals (SDGs).
In addition to research into environmental-friendly electric and low-emission internal combustion engines, 2022 also marked an important step forward in studying new solutions to ensure ever greater driving safety. The innovative range of ARAS systems developed by Piaggio Fast Forward in Boston made its debut on the new Piaggio MP3 range, offering a level of technology and safety unrivalled in its sector.
The current scenario certainly poses many challenges but, at the same time, I believe it opens up great possibilities for those who will be able to understand the changes taking place and
6
anticipate them, as the Piaggio Group has always been able to do since its inception, thanks to the strength and attractiveness of its brands, its ability to innovate continuously, and its team of extraordinary people.
Roberto Colaninno, Chairman and Chief Executive Officer of the Piaggio Group
9
Health emergency – Covid-19
At the end of 2022, the public health situation had generally improved, with various governments gradually withdrawing the extraordinary measures adopted in the last few years to counteract the spread of the virus.
With regard to the areas of greatest importance for the Group's activities, India completely lifted lockdown in May 2022.
The only area still giving cause for concern is China, where government authorities lifted lockdown measures during the last quarter and cases of infection are on the rise again.
The Group is closely monitoring developments in the situation and will take all possible precautions to guarantee employees’ health at its sites and its commitments made with the sales network and with customers.
The pandemic has made the need for safe personal transport increasingly important among the population – to the detriment of public transport, which is seen as a potential vector of transmission.
The Group will continue to work to seize the opportunities presented by potential growth in demand, offering products that guarantee safe travel with low or no environmental impact.
In relation to the Russia-Ukraine conflict, the Piaggio Group is carefully following the evolution of the crisis, which has begun to generate increases in the costs of raw materials and energy, with significant repercussions on the world economy and on renewed inflation, which Western central banks are attempting to control by increasing interest rates. The extreme geographical diversification of the Group's sales and purchases means that it has essentially no exposure in the conflict area. Regarding the indirect effects of the conflict, the Group was affected by the increase in the cost of energy – mainly in European plants – and of raw materials, partially mitigated by agreements reached with suppliers.
10
Main economic, financial and management data
2022
2021
In millions of Euros
Operating highlights
Net revenues
2,087.4
1,668.7
Gross industrial margin
554.9
462.5
Operating income
158.7
112.6
Profit before tax
127.2
93.7
Net profit
84.9
60.1
.Non-controlling interests
.Group
84.9
60.1
Financial highlights
Net capital employed (NCE)
786.0
784.4
Consolidated net debt1
(368.2)
(380.3)
Shareholders’ equity
417.8
404.1
Balance sheet figures and financial ratios
Gross margin as a percentage of net revenues (%)
26.6%
27.7%
Net profit as a percentage of net revenues (%)
4.1%
3.6%
ROS (Operating income/net revenues)
7.6%
6.7%
ROE (Net profit/shareholders' equity)
20.3%
14.9%
ROI (Operating income/NCE)
20.2%
14.4%
EBITDA1
298.1
240.6
EBITDA/net revenues (%)
14.3%
14.4%
Other information
Sales volumes (unit/000)
625.5
536.0
Investments in property, plant and equipment and intangible assets
151.7
154.1
Employees at the end of the period (number)
5,838
5,702
Social indicators
Carbon Disclosure Project Score Climate Change
B
B
Carbon Disclosure Project Score Water Security
B
B
MSCI ESG Research
AA
AA
1 For a definition of the parameter, see the section "Alternative non-gaap performance indicators".
11
Results by operating segments
EMEA and AMERICAS
INDIA
ASIA PACIFIC 2W
TOTAL
2022
279.7
148.8
197.0
625.5
Sales volumes
2021
262.2
138.4
135.4
536.0
(units/000)
Change
17.5
10.3
61.7
89.5
Change %
6.7%
7.5%
45.6%
16.7%
2022
1,240.5
323.6
523.4
2,087.4
Turnover
2021
1,104.4
231.2
333.1
1,668.7
(million Euros)
Change
136.1
92.4
190.3
418.8
Change %
12.3%
40.0%
57.1%
25.1%
2022
3,752.9
1,501.3
1,133.4
6,387.6
Average number of staff
2021
3,646.7
1,492.8
1,019.7
6,159.2
(no.)
Change
106.2
8.5
113.7
228.4
Change %
2.9%
0.6%
11.2%
3.7%
2022
94.1
20.7
36.9
151.7
2021
117.4
14.0
22.8
154.1
Investment in property, plant and equipment and intangible assets
Change
(23.3)
6.8
14.1
(2.5)
(million Euros)
Change %
-19.9%
48.4%
61.8%
-1.6%
12
Revenues by geographic segment
Sales volumes by geographic segment - 2022
1240,5
1104,4
323,6
231,2
523,4
333,1
0,0
500,0
1000,0
1500,0
2000,0
2500,0
2022
2021
Asia Pacific 2W
India
EMEA and Americas
Euro/ML
45%
24%
31%
EMEA and Americas
India
Asia Pacific 2W
14
Group profile
The Piaggio Group, based in Pontedera (Pisa, Italy) is Europe's largest manufacturer of two-wheeler motor vehicles and an international leader in its field. Today it has three distinct areas of activity:
•2-wheelers, scooters and motorbikes from 50cc to 1100cc;
•light commercial vehicles, 3- and 4-wheelers;
•the robotics division with Piaggio Fast Forward, the Group's research centre on the mobility of the future based in Boston.
We are dedicated to the mobility of people and things through high-value products and services that redesign and improve our lifestyles.
We are committed to broadening the horizons of our brands and products by constantly promoting technological innovation, uniqueness of design, attention to quality and safety, respecting communities and the environment.
We are customer-driven. The customer’s satisfaction, safety, pleasure and emotions come first. We develop products to customer requirements, accompanying the changes in the ecosystem within which customers move.
We believe in people as our fundamental heritage, in their skills and genius, and we do so consistently with our deepest values, such as integrity, transparency, equal opportunities, respect for individual dignity and diversity.
For these reasons, we are not just vehicle manufacturers.
Through technological and social progress, we champion global mobility, in a responsible and sustainable way. Our aim is to make the quality of our life and that of future generations better.
16
Company Boards
Board of Directors
Chairman and Chief Executive Officer
Roberto Colaninno (1), (2)
Executive Deputy Chairman
Matteo Colaninno (2)
Directors
Michele Colaninno (2)
Graziano Gianmichele Visentin (3), (4), (5), (6), (7)
Rita Ciccone (4), (5), (6), (7)
Patrizia Albano
Federica Savasi
Micaela Vescia (4), (6)
Andrea Formica (5), (7)
Board of Statutory Auditors
Chairman
Piera Vitali
Statutory Auditors
Giovanni Barbara
Massimo Giaconia
Alternate Auditors
Fabrizio Piercarlo Bonelli
Gianmarco Losi
Supervisory Body
Antonino Parisi
Giovanni Barbara
Fabio Grimaldi
Chief Financial Officer and Executive in Charge
of financial reporting
Alessandra Simonotto
Independent Auditors
Deloitte & Touche S.p.A.
Board Committees
Appointment Proposal Committee
Remuneration Committee
Audit, Risk and Sustainability Committee
Related-Party Transactions Committee
(1) Director responsible for the internal control system and risk management
(2) Executive Director
(3) Lead Independent Director
(4) Member of the Appointment Proposal Committee
(1) Director in charge of internal audit
(5) Member of the Remuneration Committee
(2) Lead Independent Director
(6) Member of the Audit, Risk and Sustainability Committee
(3) Member of the Appointment Proposal Committee
(7) Member of the Related-Party Transactions Committee
All information on the powers reserved for the Board of Directors, the authority granted to the Chairman and CEO, as well as the functions of the various Committees of the Board of Directors, can be found in the Governance section of the Issuer's website www.piaggiogroup.com.
(5) Member of the Audit and Risk Committee
12.5%
32.5%
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Organisational structure
As of 31 December 2022, the structure of Piaggio’s organisation was based on the following Front-line functions:
•Finance Department: this department is responsible for administration, finance, planning and control and information technology, and for the coordination and reporting of sustainability activities.
•Legal & Tax: this department is responsible for support activities in the areas of law, providing assistance in contractual matters, managing the Group's litigation issues, ensuring the global protection of the Group's brands, guaranteeing the management of corporate law obligations, as well as those relating to tax, fiscal, customs and intercompany issues.
•Human Resources Department: this department is responsible for recruiting, managing and developing human resources, as well as managing industrial relations.
•Marketing and Communications Department: this department is responsible for managing and coordinating at a global level sales communication, digital marketing and customer experience activities, as well as monitoring brand image and awareness of the Group's brands and managing the Museums and historical archives of Group brands. This department also manages and coordinates communication activities and relations with the media and end consumers and guarantees the management and coordination of relations with product and racing media at a global level.
•Product Development and Marketing Division: this division is responsible for identifying market/customer needs and opportunities arising from technological innovation and developments in laws and standards, in order to assist the definition of vehicle concepts, as part of product range development, and is also responsible for design activities at a global level for the Group's brands.
•Racing: this function is responsible for racing activities.
•R&D Two-Wheeler Department: this department is responsible for activities focussing on technological innovation, engineering, reliability, quality for scooters, motorcycles and two-wheeler engines, and for protecting industrial property relative to the Group's technical patents and models.
•Three-, Four-wheeler Product Development: this department is responsible for activities concerning design, engineering, reliability and quality relative to three- and four-wheeler commercial vehicles and engines.
•Product Manufacturing Department: this department is responsible for ensuring the production and quality of products, managing production technologies, infrastructure and facilities, ensuring after-sales activities, spare parts sales and the distribution of spare parts and accessories, and guaranteeing the achievement of turnover.
•Purchasing: this function is responsible for purchasing and supplier management, including in-bound logistics activities.
•Materials Management: this function is responsible for managing vehicle distribution logistics and optimising commercial and production planning processes.
•Market Management Italy, Two-Wheeler EMEA and America,
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•Three-, Four-Wheeler EMEA Market and Emerging Markets: each department, for the area and products in its management, is responsible for achieving sales targets, defining price policies for single markets and identifying appropriate actions to develop the sales network, through the coordination of sales companies in Europe, and for managing corporate sales to major clients and the central public administration sector at a European level.
•Asia Pacific 2 Wheeler: this function is responsible for coordinating the companies Piaggio Vietnam, Piaggio Asia Pacific, Piaggio Group Japan and Piaggio Indonesia, to guarantee business and industrial profitability, turnover, market share and customer satisfaction for the Group's two-wheeler vehicles, by managing production and sales on reference markets.
•China: this function is responsible for monitoring operations in the area, coordinating the Company Foshan Piaggio Vehicles Technology Research & Development.
•Piaggio Vehicles Private Limited: this function is responsible for guaranteeing business and industrial profitability, turnover, market share and customer satisfaction for the Group's commercial vehicles and scooters in India, by managing production and sales on reference markets.
•Division & Merchandising Division: this division is responsible for organising processes and scheduling activities related to the accessories and merchandising business.
•Internal Audit: this function is responsible for developing all activities concerning and functional to internal auditing, in order to improve the effectiveness and efficiency of the internal control system and evaluate its operation.
•Corporate Press Office: this function oversees media management and coordination for Corporate activities, inviting the press to attend institutional events, preparing notices and issuing press releases.
•Investor Relations: this function is responsible for promoting Piaggio shares and engaging with the national and international financial community.
•Regulatory Affairs: this function is responsible for monitoring regulatory developments worldwide, ensuring consistency at Group level.
The Board of Directors gave Michele Colaninno powers to operate in the context of the development of Group operations and product and marketing strategies. Moreover, the Board of Directors gave powers to Matteo Colaninno as regards institutional relations at national and international level.
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Strategy and areas of development
Business strategy
The Piaggio Group aims to create value by adopting a strategy which:
•strengthens its leadership position in the European two-wheeler and Indian light commercial vehicle markets, also with a view to climate change connected to the transition process towards the use of renewable energy sources;
•increases its presence on international markets, with particular reference to the Asian area;
•increases the operating efficiency of all company processes, with a focus on industrial productivity.
EMEA and Americas
Europe Two-wheeler – lever market recovery, consolidating a leadership position in the scooter segment. Focus on the Aprilia and Moto Guzzi brands to improve sales and profitability in the motorcycle segment. Expand the range of electric vehicles, targeting its technological and design leadership, and the distribution network.
America Two-Wheeler – growth, with the introduction of the premium products Aprilia and Moto Guzzi and consolidation of the sales network.
Europe Commercial Vehicles - maintain growth based on eco-sustainable solutions, with a product range featuring new engines with zero or low environmental impact and lower emissions.
India
Two-wheelers - consolidate the scooter market position through expansion of the Vespa and Aprilia brand ranges.
Commercial vehicles - growth in volumes and profitability, through the consolidation of a strong competitive position on the local three-wheeler market and a focus on the export of vehicles to Africa and Latin America.
Asia Pacific 2W
Development: the aim is to increase scooter sales in the entire area (Vietnam, Indonesia, Thailand, Malaysia and Taiwan), exploring opportunities for motorcycles with a medium capacity engine, consolidating penetration in the premium segment of the Chinese market.
Key Assets
The Group will aim to consolidate its business position by levering and investing in the potential of its key assets:
•distinctive brands, recognised worldwide;
•an extensive sales network on reference markets;
•competency in research and development, focussed on innovation, safety and the environment.
•a strong international presence, with local operations for all core company processes, from marketing to research and development, production and purchasing.
Sustainability strategy
The Group's Corporate Social Responsibility (CSR) strategic objectives – which are largely integrated with
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and connected to the development of the long-term plan – are based on the following areas:
•Economic: timely, correct, in-depth information to stakeholders.
Creation of value while respecting business ethics.
•Product: technological investments to meet the need for sustainable mobility - innovation to develop products that are environmentally friendly, safe and cost-effective.
•Environmental: decreasing energy consumption, reducing CO2 emissions and emissions of other pollutants - conserving natural resources - waste management.
•Social: developing, training and promoting human resources so that everyone's expectations and aspirations are met. Engaging with customers in order to establish relations based on transparency and trust - developing Company Advocacy in partnership with the dealer network – selling products that are environmentally friendly, reliable, safe and cost-effective. Engaging and cooperating with suppliers through shared development projects - respecting human rights. Fighting against corruption. Engaging and supporting local communities through social, cultural and educational initiatives.
These goals are consistent with the 17 Sustainable Development Goals (SDGs).
Piaggio believes that the SDGs represent an opportunity for and an approach to steer the Group's future development. Piaggio knows its activities can contribute to achieving the following SDGs:
3. Good health and well-being
5. Gender equality
8. Decent work and economic growth
9. Industry, innovation and infrastructure
11. Sustainable cities and communities
12. Responsible consumption and production
13. Acting for the climate
The Group’s objectives include creating value for all shareholders, while complying with ethical business principles and adopting a number of key social values.
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Specifically, the Group’s industrial strategy is founded upon technological innovation, which in turn is focused on environmentally friendly mobility. In this context, the Group considers research into cutting-edge solutions as a critical factor for successful investment choices and industrial and commercial initiatives. Innovation is geared to cutting pollutant emissions and consumption, as well as increasing vehicle safety.
Furthermore, Piaggio Group strongly believes that stakeholder engagement is one of the fundamental elements in the development of Piaggio and the communities where it operates, both in terms of economic success and social wellbeing.
Safeguarding the environment while carrying out all company operations is essential for humankind, technology and nature to coexist peacefully. The Group therefore makes sustainable products, which must be manufactured using production facilities with minimal environmental impact. Production systems are made sustainable through optimising process efficiency and converting facilities that are no longer competitive.
In particular, the environmental strategy for the Group's production sites is designed to promote a more rational use of natural resources, and to minimise harmful emissions and waste from production.
People are fundamental for Piaggio. They are vital to creating added value in the long term. The Group has defined objectives for the growth, promotion and training of human resources, ensuring that each person is rewarded for the contributions they make and that their expectations and goals are met.
In order to achieve the objective of sustainable development, growth must go beyond the boundaries of the company. It must go further afield to reach suppliers and dealers, with whom Piaggio wants to cooperate being a reliable partner, forging a common ground to work and grow together, to create value for the end customer. The success of a company over time is closely linked to customer confidence and satisfaction: customers must be listened to, informed and respected, establishing relations based on transparency and trust.
22
Piaggio and financial markets
Investor Relations
Piaggio considers financial disclosure to be of vital importance in building a relationship of trust with the financial market.
In particular the Investor Relations function engages institutional and individual investors as well as financial analysts in an ongoing dialogue, producing transparent, timely and accurate information to promote a correct perception of the Group's value.
During 2022, despite the continuing difficulties related to the spread of Covid-19, numerous opportunities for engagement with the financial community were promoted, through participation in roadshows and conferences held almost exclusively online, in order to limit the chance of contagion and minimise the environmental impact of Investor Relations activities.
Initiatives also included conference calls, managed daily by the IR function, and institutional communication events concerning quarterly results.
To ensure adequate reporting and compliance with Borsa Italiana and Consob regulations, the Company's website is promptly and continually updated with all information concerning the Group and key corporate documents, published in both Italian and English.
In particular, press releases disclosed to the market, the Company's periodic financial reports, data on business and financial performance, material used in meetings with the financial community, the Piaggio share consensus, as well as corporate governance documents (articles of association, insider trading and material concerning shareholders' meetings) are all published online.
Contacts Investor Relations Department
Raffaele Lupotto – Executive Vice President, Head of Investor Relations
Email: investorrelations@piaggio.com Tel: +39 0587 272286
Fax: +39 0587 276093
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Shareholding structure
As of 31 December 2022, share capital comprised 358,153,644 ordinary shares. On the same date, the shareholding structure, according to the results of the shareholders' register supplemented by the communications received pursuant to Article 120 of Legislative Decree 58/1998 and other information available, was as follows:
Share performance
Piaggio & C. SpA has been listed on the Milan Stock Exchange since 11 July 2006. The Piaggio share closed the year substantially in line with the end of 2021, with a performance markedly superior to that of the main benchmarks.
Immsi 50,07%
Diego Della Valle & C S.r.l. 5,54%
Treasury share 0,98%
Others 43,41%
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Main share indicators
2022
2021
Official share price on the last day of trading (euro)
2.804
2.874
Number of shares (no.)
358,153,644
358,153,644
Treasury shares (no.)
3,521,595
1,045,818
Earnings per share (euro)
Basic earnings
0.239
0.168
Diluted earnings
0.239
0.168
Shareholders' equity by share (euro)
1.17
1.13
Market capitalisation (millions of Euros)*
1,004.3
1,029.3
* Source Borsa Italiana.
Group ratings
31/12/2022
31/12/2021
Standard & Poor’s
Corporate
BB-
BB-
Outlook
Stable
Stable
Moody’s
Corporate
Ba3
Ba3
Outlook
Stable
Stable
MSCI ESG Research
AA
AA
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Dividends
Since 2019, Piaggio has adopted a new policy to distribute dividends with the distribution of an interim dividend during the year (rather than a single distribution), to align with other international companies in the two-wheeler sector, also with the aim of optimising cash flow management, considering the seasonal nature of the business.
Summary of dividends paid by Piaggio & C. S.p.A.
Dividend paid in the year
Total
Per share
2022
2021
2020
2022
2021
2020
€/000
€/000
€/000
€
€
€
Of the previous year's result
23,203
9,285
19,642
0.065
0.026
0.055
Interim dividend for current year's result
30,200
30,354
13,214
0.085
0.085
0.037
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Significant events during the year
20 January 2022 - The Piaggio Group presented the results of a new study that explores and analyses the value of the Vespa brand, identifying it as a key asset in its portfolio. The study conducted by Interbrand, a global leader in brand consultancy, indicates Vespa as "a unique and globally recognised brand, thanks to its perfect combination of design, lifestyle and Italian tradition" and attests to the economic value of the Vespa brand of €906 million.
7 February 2022 - The placement with European and Asian banks of a loan on the Schuldschein market for a total of €115 million was completed. The transaction launched in October 2021 for an initial amount of €50 million was increased in relation to the amount of orders collected. This was an important transaction for Piaggio on the Schuldschein market, both for the uptake and the qualifying structure of the 3, 5 and 7 year maturities. The financing will be used to refinance maturing debt by contributing to the diversification of lenders as well as strengthening the solid liquidity profile thanks to a longer average duration of debt.
10 March 2022 - The Piaggio Group and Santander Consumer Finance (Santander) signed a long-term global collaboration agreement, for the development of financial retail services to support the Piaggio Group's sales structure and distribution network on local markets.
25 March 2022 - During celebrations to mark the 30th anniversary party of the National Territorial Emergency Services, the Piaggio MP3 Life Support three-wheeler scooter was presented to the Italian Red Cross (CRI). The Piaggio MP3 Life Support is already used by the national territorial emergency services in several countries, including the United Kingdom, France, Australia, and Israel which, with more than 650 vehicles available, has made this vehicle the leading light of its Emergency Response fleet.
3 April 2022 -Aprilia triumphed in the Argentine Grand Prix, with Aleix Espargarò taking the first victory in the MotoGP class. For the Noale manufacturer, one of the most successful brands in the history of motorcycling, this was the 295th victory in the World Championship, the first in the new four-stroke era of top two-wheeler competition after the countless successes in the 125 and 250cc classes.
20 April 2022 - Pre-booking of the exclusive Vespa Sprint designed by international pop star Justin Bieber was launched. The JUSTIN BIEBER X VESPA is available in 50, 125 and 150cc engine versions.
15 June 2022 - Michele Colaninno, Chief Executive of global strategy, product, marketing and innovation of the Piaggio Group, was appointed President of ACEM (Association des Constructeurs Européens de Motocycles), the European motorcycle industry based in Brussels, whose members today include all the world’s leading motorcycle and scooter groups.
20 June 2022 - Piaggio signed an agreement with a syndicate of banks to extend and increase the revolving loan facility of €187.5 million, formalised in 2018. The amount was raised to €200 million and subscribed by Bank of America Merrill Lynch, Banca Nazionale del Lavoro, HSBC, Intesa Sanpaolo, ING Bank and Unicredit. The operation is mainly aimed at extending the revolving loan facility expiring in July
27
2022 by two and a half years and will make it possible to improve the qualitative profile of the Piaggio Group's financial debt, increasing its financial flexibility and residual average life.
28 June 2022 - The new Piaggio MP3 models were presented to the international press in Paris. The vehicle, an icon of metropolitan mobility, has a new, lighter and higher performance range, and has been totally redesigned in every technical aspect. The scooters, equipped with the new radar systems developed by Piaggio Fast Forward to offer a safer riding experience, are fitted with the modern 400 and 530 hpe engines.
From 8 to 11 September 2022 – The Moto Guzzi World Days took place, bringing over 60,000 enthusiasts to Mandello del Lario. ”Guzzisti” came from all over the world for four days of parties, events, music and love for the Italian motorbike.
21 September 2022 - The Moto Guzzi V100 Mandello Aviazione Navale, a special limited and numbered edition of the manufacturer's latest model celebrating the very close bond between Moto Guzzi and the Italian Navy, was unveiled at a world premiere in the spectacular setting of the flight deck of the Cavour aircraft carrier.
8 November 2022 - During EICMA in Milan, the Piaggio Group presented several new products. The main ones include: the Aprilia Elettrica project, the Aprilia RS 660 Extrema, the special versions of the Moto Guzzi V7 and V9, the new Vespa GTS and GTV, the Piaggio 1 model year 2023 electric scooter, the Vespa 946 10th anniversary and the related limited edition project designed for the lunar calendar.
23 November 2022 - The Piaggio Group's new production plant was inaugurated in Jakarta, capital of Indonesia, a market of growing importance for the Group. Developed on a building area of 55,000 square metres, the new factory is located in the Cikarang district, West Java.
29 November 2022 - The Piaggio Group and Foton Motor Group signed a preliminary agreement to develop a new range of four-wheeler light commercial electric vehicles. The agreement consolidates the partnership between the two Groups that began in September 2017 for the joint development of innovative solutions for the light commercial vehicles market.
28 December 2022 - The European Investment Bank (EIB) and the Piaggio Group signed a €60 million loan agreement, with a duration of nine years from disbursement, to support Research and Development activities in applied electric vehicle technologies for the period 2022-2025.
28
Financial position and performance of the Group
2022
2021
Change
In millions of
Euros
Accounting for a %
In millions of
Euros
Accounting for a %
In millions of Euros
%
Consolidated income statement (reclassified)
Net revenues
2,087.4
100.0%
1,668.7
100.0%
418.8
25.1%
Cost to sell2
1,532.5
73.4%
1,206.2
72.3%
326.3
27.1%
Gross Industrial Margin2
554.9
26.6%
462.5
27.7%
92.4
20.0%
Operating expenses
396.2
19.0%
350.0
21.0%
46.2
13.2%
Operating income
158.7
7.6%
112.6
6.7%
46.2
41.0%
Result of financial items
(31.5)
-1.5%
(18.9)
-1.1%
(12.6)
66.8%
Profit before tax
127.2
6.1%
93.7
5.6%
33.5
35.8%
Taxes
42.3
2.0%
33.6
2.0%
8.7
25.9%
Net profit
84.9
4.1%
60.1
3.6%
24.8
41.4%
Operating income
158.7
7.6%
112.6
6.7%
46.2
41.0%
Amortisation/depreciation and impairment costs
139.4
6.7%
128.0
7.7%
11.4
8.9%
EBITDA2
298.1
14.3%
240.6
14.4%
57.5
23.9%
Net revenues
2022
2021
Change
In millions of Euros
EMEA and Americas
1,240.5
1,104.4
136.1
India
323.6
231.2
92.4
Asia Pacific 2W
523.4
333.1
190.3
Total
2,087.4
1,668.7
418.8
Two-wheelers
1,683.8
1,369.0
314.8
Commercial Vehicles
403.7
299.7
104.0
Total
2,087.4
1,668.7
418.8
In terms of consolidated turnover, the Group closed 2022 with net revenues up compared to 2021 (+25.1%).
All markets performed positively, with Asia Pacific doing particularly well (+57.1%; +44.7% at constant exchange rates) along with India (+40.0%; +31.3% at constant exchange rates).
Growth was significant for both types of products sold (Commercial Vehicles +34.7% Two-Wheelers +23%). The percentage of Two-wheelers accounting for overall turnover dropped from 82.0% in 2021 to the current figure of 80.7%; vice versa, the percentage of Commercial Vehicles rose from 18.0% in 2021 to the current figure of 19.3%.
The gross industrial margin of the Group increased compared to the previous year (+€92.4 million) and was equal to 26.6% (27.7% in 2021).
2 For a definition of the parameter, see the “Economic Glossary”.
29
Amortisation/depreciation included in the gross industrial margin was equal to €40.0 million (€35.6 million in 2021).
Operating expenses incurred during 2022 stood at €396.2 million (€350.0 million in 2021). The increase is closely linked to the growth in turnover and vehicles sold.
This performance resulted in a consolidated EBITDA which was higher than the previous year, and equal to €298.1 million (€240.6 million in 2021). In relation to turnover, EBITDA was equal to 14.3% (14.4% in 2021).
Operating income (EBIT) which amounted to €158.7 million, recorded strong growth compared to 2021 (+€46.2 million); in relation to turnover, EBIT was equal to 7.6% (6.7% in 2021).
The result of financing activities (worsened) compared to the previous year by €12.6 million, with net expenses amounting to €31.5 million (€18.9 million in 2021). The poorer performance compared to the corresponding period of the previous year is essentially due to foreign-exchange losses, affected by the exceptional volatility of forex markets and the result of equity investments. Net interest income rose modestly due to the impact of the rate hike limited to the fourth quarter.
Taxes for the period were equal to €42.3 million, while they amounted to €33.6 million in 2021. In 2022 the impact of taxes on profit before tax was equal to 33.3% (35.9% in 2021). The decrease is mainly related to the growth of income generated in Vietnam.
Adjusted net profit stood at €84.9 million (4.1% of turnover), up on the figure for the previous year of €60.1 million (3.6% of turnover).
30
Operating data
Vehicles sold
2022
2021
Change
In thousands of units
EMEA and Americas
279.7
262.2
17.5
India
148.8
138.4
10.3
Asia Pacific 2W
197.0
135.4
61.7
Total
625.5
536.0
89.5
Two-wheelers
516.2
449.7
66.6
Commercial Vehicles
109.3
86.3
22.9
Total
625.5
536.0
89.5
During 2022, the Piaggio Group sold 625,500 vehicles worldwide, registering a growth of approximately 16.7% in volume over the previous year, when 536,000 units were sold. Sales increased in all geographic segments.
As regards product type, sales of Two-Wheeler vehicles grew (+14.8%), as well as sales of Commercial Vehicles (+26.6%).
For a more detailed analysis of market trends and results, see relative sections.
31
Consolidated statement of financial position3
As of 31 December 2022
As of 31 December 2021
Change
In millions of Euros
Statement of financial position
Net working capital
(224.8)
(196.0)
(28.8)
Property, plant and equipment
291.4
283.0
8.3
Intangible assets
729.5
720.2
9.3
Rights of use
36.9
30.7
6.1
Financial assets
10.0
11.2
(1.3)
Provisions
(56.9)
(64.8)
7.9
Net capital employed
786.0
784.4
1.6
Net financial debt
368.2
380.3
(12.1)
Shareholders’ equity
417.8
404.1
13.7
Sources of financing
786.0
784.4
1.6
Non-controlling interests
(0.2)
(0.1)
(0.0)
Net working capital as of 31 December 2022 was negative (€224.8 million), generating a cash flow of approximately €28.8 million during 2022.
Property, plant and equipment amounted to €291.4 million, registering an increase of approximately €8.3 million compared to 31 December 2021. This increase is mainly due to investments for the period, the value of which exceeded depreciation by approximately €11.9 million. These increases offset the effect related to the devaluation of the Indian rupee and Vietnamese dong against the euro (approximately €3.5 million) and divestments of €0.1 million.
Intangible assets totalled €729.5 million, up by approximately €9.3 million compared to 31 December 2021. This growth is mainly due to investments for the period, which exceeded amortisation by approximately €12.4 million, offsetting the effect of the devaluation of the Indian rupee and Vietnamese dong against the euro (approximately €1.1 million), and disposals and write-downs totalling approximately €2.0 million.
Rights of use, equal to €36.9 million, increased by approximately €6.1 million compared to figures as of 31 December 2021.
Financial assets which totalled €10.0 million, decreased compared to figures for the previous year (€1.3 million).
Provisions totalled €56.9 million, down compared to 31 December 2021 (€64.8 million).
As fully described in the next section on the “Consolidated Statement of Cash Flows”, net financial debt as of 31 December 2022 was equal to €368.2 million, compared to €380.3 million as of 31 December 2021, down by approximately €12.1 million.
Shareholders' equity as of 31 December 2022 amounted to €417.8 million, up by approximately €13.7 million compared to 31 December 2021.
3 For a definition of individual items, see the “Economic Glossary”.
32
The Consolidated Statement of Cash Flows, prepared in accordance with international accounting standards, is presented in the Consolidated Financial Statements and Notes as of 31 December 2022; the following is a comment relating to the summary statement shown.
2022
2021
Change
In millions of Euros
Change in Consolidated Net Debt
Opening Consolidated Net Debt
(380.3)
(423.6)
43.3
Cash Flow from Operating Activities
207.3
180.0
27.3
(Increase)/Reduction in Working Capital
28.8
49.4
(20.7)
Net Investments
(151.7)
(154.1)
2.5
Other changes
(1.1)
(4.0)
2.9
Change in Shareholders' Equity
(71.2)
(28.0)
(43.2)
Total Change
12.1
43.3
(31.2)
Closing Consolidated Net Debt
(368.2)
(380.3)
12.1
During 2022, the Piaggio Group generated financial resources amounting to €12.1 million.
Cash flow from operating activities, defined as net profit, minus non-monetary costs and income, was equal to €207.3 million.
Working capital generated a cash flow of approximately €28.8 million; in detail:
•the collection of trade receivables4 generated cash flows for a total of €3.7 million;
•stock management absorbed financial flows for a total of €101.1 million;
•supplier payment trends generated cash flows of €116.6 million;
•the movement of other non-trade assets and liabilities had a positive impact on financial flows by approximately €9.6 million.
Investing activities used financial resources for a total of €151.7 million, of which €41.1 million in capitalised development costs and €110.6 million in property, plant and equipment and intangible assets.
Dividends paid in the year came €53.4 million and included the interim dividend paid in September 2022.
Other changes mainly include other movements in assets and assets for rights of use.
As a result of the above financial dynamics, which generated a cash flow of €12.1 million, the net debt of the Piaggio Group amounted to €368.2 million.
4 Net of customer advances.
33
Alternative non-GAAP performance measures
In accordance with Consob Communication DEM/6064293 of 28 July 2006 as amended (Consob Communication 0092543 of 3 December 2015 that enacts ESMA/2015/1415 guidelines on alternative performance measures), Piaggio, in its Report on Operations, refers to some alternative performance measures, in addition to IFRS financial measures (Non-GAAP Measures).
These are presented in order to measure the trend of the Group's operations to a better extent and should not be considered as an alternative to IFRS measures.
In particular the following alternative performance measures have been used:
•EBITDA: defined as “Operating income” before the amortisation/depreciation and impairment costs of intangible assets, property, plant and equipment and rights of use, as resulting from the consolidated income statement;
•Gross industrial margin: defined as the difference between net revenues and the cost to sell;
•Cost to sell: this includes costs for materials (direct and consumables), accessory purchase costs (transport of incoming material, customs, warehousing), employee costs for direct and indirect manpower and related expenses, work carried out by third parties, energy costs, depreciation of property, plant, machinery and industrial equipment, maintenance and cleaning costs net of sundry cost recovery recharged to suppliers;
•Consolidated net debt: this consists of gross financial debt, including payables for rights of use, minus cash on hand and other cash and cash equivalents, as well as other current financial receivables. Consolidated net debt does not include other financial assets and liabilities arising from the fair value measurement of financial derivatives used as hedging and otherwise, and the fair value adjustment of related hedged items and associated deferrals. The notes to the Consolidated Financial Statements include a table indicating the statement of financial position items used to determine the measure.
34
Background
Global economic activity experienced a more pronounced and widespread slowdown than expected. The rising cost of living and harsher financial conditions in most regions severely affected growth prospects. The IMF’s estimate for global GDP in 2022 is 3.2% growth; the energy shock resulting from the war in Ukraine has led to much higher debt ratios than expected, in a situation where governments are faced with new budgetary priorities: from defence spending to climate change-related energy transition, with interest rates that are currently very high.
GDP in the Eurozone grew by 3.4 %, while the forecast for 2023 is +0.3%.
The consequences of the war in Ukraine have been a heavy blow to an economy still struggling with the repercussions of the pandemic crisis. The EU has been among the economies most exposed to rising inflation under pressure from the prices of energy, food and other commodities, due to its geographical proximity to the war and its heavy reliance on imported fossil fuels. Although rampant inflation had already dented a part of the post-war recovery before the war, real GDP growth in the first half of the year exceeded expectations. The expansion continued in the third quarter, albeit at a weaker pace. The sharp erosion of household spending power has radically changed consumer sentiment and consequently confidence has also plummeted in the corporate sector due to high production costs, supply-side “bottlenecks”, tighter financing conditions and increased uncertainty.
The US economy grew by 2.0%, with an expected contraction close to 0.8% in 2023. Growth in the third quarter was revised upwards, according to the third and latest estimate released by the Department of Commerce, compared to the first two quarters of the year. With the easing of containment measures, there has been a considerable and steady increase in the consumption of ancillary goods and services related to the service sector. Demand in the manufacturing industry and real estate-related activities have fallen off, while there has been a strong mismatch between labour supply and demand. The “core” rate, i.e. the consumer price index used by the FED, showed a 5% increase in inflation compared to 2021.
Estimates for Japan predict a GDP growth of 1.1%, +0.9% for 2023. This figure is related to the increase in government spending and the rise in net trade, with exports growing faster than first estimated; private consumption slowed down after an increase in the second quarter, influenced by another wave of Covid in August and despite the government's efforts to increase household support. Business investment expenditure also dropped significantly.
China's economy grew by 3.0% in 2022, recording its worst performance in the last 40 years, mainly due to the effects of strict lockdown policies, the collapse of the real estate sector and a weakened foreign demand. The Office for National Statistics has identified three main causes for the decline in growth: fundamentals remain strong, driven by expansion in the tech and green sectors, but the current fall in demand, coupled with supply shocks and uncertainty surrounding recovery expectations, have negatively impacted the country's macroeconomic performance. Forecasts for 2023 expect GDP growth of 5%.
India has recovered from the lows of the pandemic, driven by strong exports, a build-up in consumer demand and investment spending. The growth of the Indian economy reached 6.8%, although key factors weakened in the last quarter. Export volumes of high-tech products started to slow down from August, while most of the goods consumed by households were imported and not domestically produced. In the
35
aftermath of the pandemic period, India increased high-skill exports, such as IT services, smartphones, drugs and specialised pharmaceutical machinery. The rise of digital start-ups has also contributed substantially to the growth in capex and employment.
Italy's economic activity grew mainly in the second half of the year, contrary to experts' estimates. GDP increased by 3.8%, driven once again by the domestic market, with private consumer spending up 2.5% quarter-on-quarter and investments up for the ninth consecutive quarter (now +20% compared to pre-pandemic levels). The services sector also made a significant contribution, and especially the travel industry; the strong influx of foreigners, in fact, combined with an increase in domestic tourism, has led to a considerable improvement in the balance of payments. The manufacturing sector also held up relatively well, supported by generous tax credit concessions, although rising energy costs especially for companies in energy-intensive sectors has put a strain on local production. The labour market consolidated, with record employment levels reached in October. Inflation is at its highest level in more than 40 years and, while energy pressures are expected to ease, prices of primary goods are estimated to rise again. As a result, the income-related purchasing power of households fell by 5.4%. The forecast for 2023 is a very low growth rate of approximately +0.3%. A key role will be played by domestic demand, the resolution of energy supply issues and public spending on investments in infrastructure and sustainability.
36
Market scenario
Two-wheelers
Currently available figures for monitored markets, and specifically the performance of the two-wheeler segment (scooters and motorcycles) are reported below.
India, the most important two-wheeler market, reported an increase in 2022, closing with just over 15.6 million vehicles sold, up by 7.4% compared to 2021.
The People's Republic of China reported a significant drop (-16.5%), closing at just over 5.2 million units sold, due to the strict pandemic-related lockdown measures that remained in place in large cities for long periods of the year.
The Asian area, termed Asean 5, reported an increase in 2022 (+10.7% compared to 2021) ending the period with nearly 12.3 million units sold. This performance was due to:
•Indonesia, the largest market in this region (+3.2% compared to 2021 and sales of more than 5.2 million units);
•Thailand (+12.2% compared to 2021 and 1.8 million units sold);
•Malaysia (+36.9% compared to the previous and over 680,000 units sold);
•Vietnam (+20.5% compared to 2021 and over 3 million units sold);
•the Philippines (+9.0% compared to 2021 and approximately 1.6 million units sold).
Volumes of other Asian area countries (Singapore, Hong Kong, South Korea, Japan, Taiwan, New Zealand and Australia) decreased in overall terms, compared to the previous year, with over 1.3 million units sold (-11.4%). In particular, the Taiwanese market continued last year's negative trend, decreasing to around 679,000 units sold (-15.2% compared to 2021). Japan also slowed down to around 405,000 units sold (-2.5% compared to 2021).
The North American market reported a decrease (-4.1%) compared to 2021 (603,348 vehicles sold in 2022).
Europe, the reference area for Piaggio group activities, was stable in 2022, with total sales aligned with 2021 (-1.6% for the motorcycle segment and +1.7% for scooters), ending the period with approximately 1,512,685 units sold.
37
The scooter market
Europe
The European scooter market in 2022 accounted for 749,452 registered vehicles, with sales up by 1.7% compared to 2021. The electric scooter segment reported steady growth (+33.4% over 2021), reaching 129,277 units in 2022 and accounting for 17.2% of the total market.
Market
Vehicle registrations
Change
Change %
2022
2021
Overall
≤ 50 cc
> 50 cc
Italy
160,369
165,793
(5,424)
-3.3%
12.7%
-4.8%
of which electric
15,670
10,260
5,410
52.7%
France
130,712
143,198
(12,486)
-8.7%
-17.2%
2.8%
Spain
112,391
102,943
9,448
9.2%
-12.8%
12.7%
Holland
64,481
75,451
(10,970)
-14.5%
-15.3%
7.3%
Germany
83,764
71,341
12,423
17.4%
21.7%
15.2%
Greece
49,084
38,475
10,609
27.6%
94.6%
23.4%
United Kingdom
32,177
31,582
595
1.9%
-4.6%
3.2%
Europe
749,452
737,121
12,331
1.7%
-6.3%
6.1%
of which electric
129,277
96,907
32,370
33.4%
North America
In 2022 the North American market reported an increase of 5.0% and 31,097 units sold:
Market
Vehicle registrations
Change
Change %
2022
2021
Overall
≤ 50 cc
> 50 cc
USA
27,768
26,266
1,502
5.7%
-20.3%
26.8%
Canada
3,329
3,340
(11)
-0.3%
-2.2%
7.2%
North America
31,097
29,606
1,491
5.0%
-16.9%
25.9%
Asia
The main scooter market in the Asean 5 area is Indonesia, with over 4.9 million items sold, reporting an increase of 3.5% compared to 2021. The automatic scooter segment reported a growth in 2022 (+3.7% compared to 2021, with just over 4.6 million units sold). The gearbox (cub) segment increased slightly in 2022, closing with +1.8% and over 324 thousand units sold.
The automatic scooter market, after the slight recovery last year, reported a more substantial increase (+14.6% in 2022), closing at over 5 million units.
The 125cc segment was the best performer, with over 4.7 million units sold in 2022 (+11.4%), accounting for 94.0% of the total automatic scooter market. The 150cc cylinder capacity segment reported a decrease
38
(-20.9%), now solely tied to the Vespa, which closed at 2,149 units (-20.9% compared to 2021). The 50 cc scooter segment is not operative in India.
The motorcycle market
Europe
With 763,233 units registered, the motorcycle market ended 2022 down 1.6%. The 50cc segment performed well (+11.6%) closing with 44,754 units sold. Conversely, the over 50cc segment reported a decline, with 718,479 units sold (-2.3%).
Market
Vehicle registrations
Change
Change %
2022
2021
Overall
≤ 50 cc
> 50 cc
France
152,161
161,425
(9,264)
-5.7%
24.5%
-9.4%
Germany
143,252
150,211
(6,959)
-4.6%
-4.6%
Italy
131,578
123,530
8,048
6.5%
10.2%
6.4%
United Kingdom
83,920
82,326
1,594
1.9%
-1.9%
2.0%
Spain
81,345
82,358
(1,013)
-1.2%
-7.9%
-1.0%
Europe
763,233
775,635
(12,402)
-1.6%
11.6%
-2.3%
The motorcycle market in North America (USA and Canada) recorded a decrease in 2022 of 4.6%, closing the period with 572,251 units sold compared to 599,701 the previous year.
Market
Vehicle registrations
Change
Change %
2022
2021
Overall
≤ 50 cc
> 50 cc
USA
509,448
530,681
(21,233)
-4.0%
-13.2%
-3.6%
Canada
62,803
69,020
(6,217)
-9.0%
-27.4%
-8.0%
North America
572,251
599,701
(27,450)
-4.6%
-15.3%
-4.1%
Asia
The most important motorcycle market in Asia is India, which continued the previous year’s growth trend in 2022, with over 10.1 million items sold, and an increase of 5.3%.
The motorcycle market in the Asean 5 area is far less important than the scooter sector: sales of motorcycles in Vietnam were not significant. In other countries, the highest sales were recorded in Indonesia with just over 305 thousand units sold and a decrease of 1.3% compared to the previous year.
39
Commercial Vehicles
Europe
In 2022, the European market (including the UK) for light commercial vehicles (gross vehicle weight less than or equal to 3.5 tons), in which the Piaggio Group operates, declined by 18.6% compared to 2021, with 1,560,648 units sold (source: ACEA data). In detail, the trends of main European reference markets are as follows: France (-19.5%), UK (-20.6%), Germany (-13.0%), Italy (-12.3%) and Spain (-21.3%).
India
The Indian three-wheeler market, in which Piaggio Vehicles Privates Limited, controlled by Piaggio & C. S.p.A., operates, reported the following trends:
Market
Vehicle registrations
Change
Change %
2022
2021
Cargo
92,512
82,950
9,562
11.5%
Passengers
305,453
174,531
130,922
75.0%
Electric
20,376
7,277
13,099
180.0%
Total 3W India
418,341
264,758
153,583
58.0%
40
The regulatory framework
European Union
Emissions
European institutions reached an agreement on new CO2 emission limits for cars and light commercial vehicles (LCVs) for the post-2020 period with the revision of Regulation (EU) 2019/631 in October 2022. However, the agreed on text still allows smaller manufacturers producing less than 22,000 units a year to request an extension until 2030. The deadline for the production of internal combustion engines set by the Regulation for 2035 will be subject to a review clause in 2026.
“EURO7” proposal
The European Commission presented a Proposal for new EURO7 emission limits in November 2022. In the text, the entry into force of EURO 7 is set for 2025 but, for smaller manufacturers producing less than 22,000 units per year, there would be a postponement to 2030. In the proposal, the new limits will be stricter than the previous EURO6 step and will include the monitoring of new substances such as ammonia. In addition, emissions from braking systems and tyres, including those of electric vehicles, will also be measured. The European Commission's proposal will be negotiated with the European Parliament and the Council.
Battery regulations
In January 2023, European institutions reached an agreement on the final wording text of the new regulation that will govern batteries and battery waste in Europe. The Regulation aims to modernise the existing legislative framework, to encourage the production of more sustainable batteries over their entire life cycle, introducing a new classification by use and specific targets to ensure their recycling and reuse. There will be an obligation to use responsibly sourced materials and a restriction on the use of hazardous substances. At the same time, minimum recycled content, carbon footprint, efficiency, durability, labelling, as well as compliance with collection and recycling targets will become essential constraints for the development of a more sustainable and competitive battery industry.
Publication is expected in June 2023 with entry into force by the end of the year. The Regulation classifies batteries under 25 kg used in all means of transport as “Light Means of Transport (LMT)”. Batteries in transport vehicles above 25 kg are referred to as “Electric vehicles batteries (EV)”, while batteries that provide energy for starting, lighting and injection are considered “Starting, Lighting and Ignition Batteries (SLI)”. The wording of the proposal sets battery waste collection targets for producers and introduces a specific target (51% by the end of 2028 and 61% by the end of 2031) for the collection of “LMT” battery waste. Finally, there will be labelling and consumer information requirements from 2024 onwards for EV batteries, as well as an electronic “Battery Passport” to monitor reuse and a QR code on each battery.
41
Swappable Batteries Motorcycle Consortium - SBMC
Piaggio, together with Honda, Yamaha and KTM has created the Swappable Batteries Motorcycle Consortium (SBMC) with the aim of developing an international standard for swappable batteries. This technology aims to improve the sustainability of the battery lifecycle, reduce costs and cut recharging times, meeting key consumer needs. More than 30 companies have joined the initiative by becoming members of the consortium, which today counts global players in the automotive, infrastructure network and battery manufacturing sectors, ready to pool their know-how for the definition of a common open standard for the benefit of the consumer.
Cybersecurity
From 2024 onwards, Light Commercial Vehicles (Category N1), like passenger cars, will have to comply with the requirements of the two international UNECE regulations R155 and R156 on cybersecurity.
The two regulations, which refer to the ISO 21434 and ISO 24089 standards, aim to protect new vehicles from the risk of cyber attacks. In addition, manufacturers will have to implement a Computer Security Management System (CSMS) that will cover all processes of the entire vehicle life cycle, from design to post-production monitoring and finally disposal.
As part of the “Cyber Resilience Act”, the European Commission is holding a discussion about a potential extension of cybersecurity to two/three-wheeler Category L vehicles, for which these two regulations do not apply at present.
End of life of vehicles - ELV
The European Commission is working on a new legislative proposal to revise existing regulations on End of Life Vehicles (ELV). The Commission's idea is to extend the scope to Category L vehicles. Manufacturers of two-wheelers, such as cars and vans, will also be required to meet specific material recyclability and reuse targets, comply with vehicle design obligations to facilitate component recovery, publish a dismantling manual, and fulfil their responsibility to take back and dispose of end-of-life vehicles. The Proposal will be presented in 2023.
UKCA marking for the UK
Following Brexit, the UK introduced new certification for products introduced to the UK market. The entry into force of the UKCA marking, which will replace CE marking valid within the European Union, has been postponed until the end of 2024. Until 31 December 2024, CE marking may continue to be used. Whereas from 1 January 2025 and until 31 December 2027, the UKCA marking may be affixed to the product by means of a sticker or accompanying document.
New EU Packaging RegulationThe European Commission presented a proposal to revise the European Packaging and Packaging Waste Regulation in December 2022. The Proposal suggests reusable, recyclable packaging solutions to reduce waste. The text of the Proposal sets a target for 2040 to reduce packaging waste per capita per Member State by 15% compared to 2018. The measures are aimed at making the packaging of certain product
42
categories fully recyclable by 2030. The Proposal will be negotiated with the European Parliament and the Council.
Emission trading
The fourth phase of the quota trading system (EU-ETS) started in Europe in 2021, during which emission permits will be issued free of charge, using emission factors defined at European level and specific for each industrial sector. For the Pontedera industrial plant, the only site of the Group that falls within the scope of the "Emissions Trading" Directive (Directive 2003/87/EC), a generally lower number of emission permits will be assigned compared to the emissions recorded in the reference year, and it will be necessary to purchase quotas in order to achieve compliance on the emissions market.
Italy
Refinancing electric vehicle incentives - Category L
With the Prime Minister's Decree of 6 April 2022, the Italian government refinanced incentives for the purchase of non-polluting vehicles, allocation 650 million euro for each year, for 2022, 2023 and 2024. The state incentives also apply to Category L vehicles. For electric vehicles, the subsidy, for consumers who purchase a brand new electric or hybrid vehicle from category L1e, L2e, L3e, L4e, L5e, L6e or L7e, is calculated on the percentage of the list price: 30% for purchases up to €3,000 without an old vehicle being scrapped, and 40% for purchases up to €4,000 with an old vehicle (vehicles up to EURO3) being scrapped.
India
Onboard Diagnostics (OBD-II)
For all category L5N and L5M internal combustion engine vehicles, the two-stage implementation of the OBD-II Regulation for Bharat Stage VI (BS VI) vehicles has been planned from 1 April 2023 for new products, and from April 2025 for existing products.
20% ethanol mix in petrol
The Indian government (Ministry of Oil and Natural Gas) has announced that from 1 April 2023, the percentage of ethanol in petrol will rise to 20%. The timeline outlined above is valid for metropolitan and first-tier cities. For the rest of India, the legislation will come into force in April 2025.
Electric Vehicle Safety Regulation (AIS-156)
The Electric Vehicle and Battery Safety Regulation will come into force in two stages:
•1 December 2022 for certain requirements (traceability, additional safety fuse, regenerative braking protection, cell spacing);
•1 April 2023 for the remaining requirements of the regulation (battery charger for earth leakage detection, thermal propagation test, audio-visual signalling in the case of a thermal event, 4 temperature sensors of the battery charge monitoring system (BMS)).
43
“FAME” scheme - incentives
The Indian government recently announced its intention to promote the electrification of three/four-wheelers and two-wheelers with the aim of 30% of new registrations consisting of electric vehicles by 2025. FAME (Faster Adoption of Electrical Mobility), the scheme adopted by the Indian government in 2015 is part of this strategy, and aims to provide incentives for the purchase of 2, 3 and 4-wheeler electric and hybrid vehicles. In April 2019, the move to the second phase of the programme was officially announced with new funds allocated totalling $1.4 billion (USD) and targeted incentives for the purchase of electric vehicles and the development of charging infrastructure. The scheme got a further boost in June 2021 with the increase in the subsidy structure under FAME II for two-wheelers.
Some local governments have declared their intention to issue new regulations to promote the adoption of electric vehicles.
Vietnam
Emissions
Since 1 January 2017, the National Technical Regulation on the Third Level of Emission of Gaseous Pollutants No. 77 issued by the Ministry of Transport in 2014 ("QCVN 77: 2014 / BGTVT") has been in force in Vietnam for new assembled, manufactured and imported two-wheeler motorcycles. This level is equivalent to the EURO3 standard specified in European Community technical regulations on vehicle gas emissions. The Vietnamese government is considering a switch to the EURO4 standard in the next few years.
The law on environmental protection which came into force on 1 January 2022 (“New Law on Environmental Protection”), requires all transport vehicles to be certified to Vietnamese environmental regulations. However, from 1 January 2022, only newly registered cars produced in Vietnam or imported must comply with EURO5 emission limits. In an attempt to reduce environmental pollution, the Vietnamese government also wants to apply gas emission limits to two-wheelers. Local governments in some large cities have worked with authorities and industry associations to test gas emissions of vehicles on the road, to be proposed to the government as a procedure to test and enforce gas emission limitation standards on vehicles.
In 2021 at the Climate Change Conference (“COP26”), the Vietnamese Prime Minister committed Vietnam to achieving zero emissions by 2050. Actions to achieve this will have to be discussed. In addition, Government Decree 48/NQ-CP of 5 April 2022 also required five large cities (Hanoi HCMC, Danang, Can Tho, Hai Phong) to study and construct a scheme for restricting the movement of 2-wheelers by 2030, consistent with infrastructure and public transport conditions, in order to reduce air pollution in major cities.
In order to reduce environmental pollution and ensure buyers are aware and informed, the government has introduced energy labelling for motorbikes. With Circular 59/2018/TT-BGTVT, the Ministry of Transport has regulated energy labelling for manufactured, assembled and imported motorbikes and mopeds. The energy label must be affixed to the motorbike by the manufacturer/importer/retailer and kept on the vehicle until it is delivered to the final customer.
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Recycling/End-of-Life
Currently in Vietnam, the take-back and treatment of discarded products (batteries, tyres, end-of-life vehicles) is governed by Circular 34/2017/TT-BTNMT issued by the Ministry of Natural Resources and Environment ("MONRE").
According to this legislation, manufacturers, sellers and service providers are responsible for taking back and treating these discarded products by recycling them, or final disposal.
The new Environmental Protection Act, which came into force on 1 January 2022, requires manufacturers and importers to recycle discarded products according to mandatory percentages and methods, leaving them the choice of either handling the recycling themselves or paying the Environment Fund to do so on their behalf. The new decree requires manufacturers and importers to recycle accumulators, batteries, lubricating oil, inner tubes and tyres from 1 January 2024 and motorcycles scrapped from 1 January 2027. Producers and importers will also be required to register for the annual recycling plan and submit a recycling report for the previous year to MONRE by 31 March each year at the latest, unless the producers and importers choose to pay the Environment Fund. The mandatory recycling rate (including the recovery and recycling of waste motorcycles) is 0.5% of the annual sales volume.
In addition, MONRE is responsible for the development in Vietnam of an extended producer responsibility strategy (“EPR”), which is an approach whereby producer responsibility for a product extends to the disposal phase. The National EPR Council was officially recognised by Decree 08/2022/ND-CP under the Environment Act and has the task of defining the aforementioned strategy.
Emission Trading
According to Vietnam's Law on the Environment and Decree 06/2022/NĐ-CP on Greenhouse Gas (GHG) Emission Mitigation and Ozone Layer Protection, entities subject to the Greenhouse Gas Emission Directive, including Piaggio Vietnam, are required to monitor and reduce GHGs, receive GHG emission allowances and have the right to trade these allowances on the domestic carbon market.
Organisations and individuals not on this list are encouraged to reduce greenhouse gas emissions according to their conditions and activities.
An action plan for the establishment of a greenhouse gas emission allowance and carbon credit trading market has been prepared and will start in 2023 with the reporting and accounting of operational data and greenhouse gas emissions of the previous year from production facilities. Allowance trading is scheduled to start in 2026. Organisations and individuals will participate in the carbon market on a voluntary basis. GHG emission allowances and carbon credits will be traded on the “carbon trade exchange” and the domestic carbon market. Organisations will be able to auction, transfer, borrow, surrender greenhouse gas emission allowances, and use carbon credits to offset greenhouse gas emissions. Organisations wishing to obtain certification of traded carbon credits or greenhouse gas emission allowances will have to apply to the Ministry of Natural Resources and Environment (MONRE).
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Results by type of product
The Piaggio Group is comprised of and operates by geographic segments (EMEA and the Americas, India and Asia Pacific) to develop, manufacture and distribute two-wheeler and commercial vehicles.
Each Geographic Segment has production sites and a sales network dedicated to customers in that geographic segment. In particular:
•EMEA and the Americas have production sites and deal with the distribution and sale of two-wheeler and commercial vehicles;
•India has production sites and deals with the distribution and sale of two-wheeler and commercial vehicles;
•Asia Pacific 2W has production sites and deals with the distribution and sale of two-wheeler vehicles.
For details of results and final capital invested by each operating segment, reference is made to the Notes to the Consolidated Financial Statements.
The volumes and turnover in the three geographic segments, also by product type, are analysed below.
2022
2021
Change %
Change
Volumes
Volumes
Sell-in
Turnover
Sell-in
Turnover
Two-wheelers
(units/000)
(million Euros)
(units/000)
(million Euros)
Volumes
Turnover
Volumes
Turnover
EMEA and Americas
265.9
1,097.9
244.0
969.9
9.0%
13.2%
22.0
128.0
of which EMEA
242.3
973.0
225.1
882.4
7.6%
10.3%
17.1
90.6
(of which Italy)
53.8
226.4
51.9
222.7
3.7%
1.6%
1.9
3.6
of which America
23.7
124.9
18.9
87.5
25.5%
42.7%
4.8
37.3
India
53.3
62.5
70.3
66.0
-24.3%
-5.3%
(17.1)
(3.5)
Asia Pacific 2W
197.0
523.4
135.4
333.1
45.6%
57.1%
61.7
190.3
TOTAL
516.2
1,683.8
449.7
1,369.0
14.8%
23.0%
66.6
314.8
Scooters
466.0
1,153.3
407.6
938.6
14.3%
22.9%
58.4
214.7
Mechanical Scooters
455.0
1,125.4
401.7
922.5
13.3%
22.0%
53.3
202.9
Electric Scooters
10.9
27.9
5.8
16.1
87.9%
73.3%
5.1
11.8
Motorcycles
50.1
373.3
41.9
289.4
19.7%
29.0%
8.2
84.0
Other vehicles
0.1
0.1
0.2
0.0
-35.2%
859.8%
(0.1)
0.1
Scooters
0.1
0.0
0.3
0.1
-67.2%
-69.6%
(0.2)
(0.1)
Wi Bike
0.0
0.0
(0.1)
(0.1)
-155.8%
-131.9%
0.1
0.2
Spare Parts and Accessories
155.5
139.4
11.6%
16.2
Other
1.6
1.7
-6.0%
0.0
(0.1)
Gita
0.3
0.1
160.4%
0.0
0.2
Other
1.2
1.5
-20.4%
0.0
(0.3)
TOTAL
516.2
1,683.8
449.7
1,369.0
14.8%
23.0%
66.6
314.8
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Revenues of Two-wheeler vehicles (figures in millions of Euros)
Two-wheeler vehicles can mainly be grouped into two product segments: scooters and motorcycles. in addition to the related spare parts and accessories business, the sale of engines to third parties, involvement in main two-wheeler sports championships and technical service.
The world two-wheeler market comprises two macro areas, which clearly differ in terms of characteristics and scale of demand: economically advanced countries (Europe, United States, Japan) and emerging nations (Asia Pacific, China, India, Latin America).
In the first macro area, which is a minority segment in terms of volumes, the Piaggio Group has a historical presence, with scooters meeting the need for mobility in urban areas and motorcycles for recreational purposes.
In the second macro area, which in terms of sales, accounts for most of the world market and is the Group's target for expanding operations, two-wheeler vehicles are the primary mode of transport.
Main results
During 2022, the Piaggio Group sold a total of 516,200 two-wheeler vehicles worldwide, accounting for a net turnover equal to approximately €1,683.8 million, including spare parts and accessories (€155.5 million, +11.6%).
1.097,9
62,5
523,4
969,9
66,0
333,1
-
200,0
400,0
600,0
800,0
1.000,0
1.200,0
EMEA and Americas
India
Asia Pacific 2W
2022
2021
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Market positioning5
On the European market,6 the Piaggio Group held a 13.3% in 2022, compared to 13.1% in 2021, confirming its leadership position in the scooter segment (22.9% compared to 22.7% in 2021).
In Italy, the Piaggio Group achieved a share of 17.5% (18.0% in 2021). The share of the scooter segment also decreased, to 27.0% (27.5% in 2021).
The Group, with its own sites in India and Vietnam, also operates in the "premium" segment of the Indian market and in Asia Pacific countries. In particular, Piaggio is one of the leading segment operators in Vietnam, which is the Group's main market in the Asian area.
On the North American market, Piaggio consolidated its position, from 35.0% in 2021 to 35.4% in 2022. Sell-out volumes in the motorcycle segment remain largely unchanged (from 0.8% in 2021 to 1.0% in 2022).
The distribution network
EMEA
In EMEA, the Piaggio Group has a direct sales presence in main European countries. On other European markets and in the Middle East and Africa, it operates through distributors.
In December 2022, the Group's sales network comprised 939 partners managing nearly 3,000 sales agency agreements for various brands. 53% of these dealers sell only Group brands (one or more), without handling competitors' products.
At present, the Piaggio Group is active in 70 countries in the area and in 2022 further consolidated its sales activities.
Actions targeting the distribution network followed market trends in the area, focussing on a better qualitative/quantitative balance for the sales network.
In addition, new sales and after-sales quality standards continued to be distributed, geared to offering end customers a better experience throughout the customer journey.
Guidelines on the distribution network cover the following areas:
1.improving customer experience at the sales outlet, consolidating the project to implement the new retail format which is consistent with the premium positioning of Piaggio Group products;
2.consolidating local coverage, through a quality-based selection of the network, with the objective of increasing the weight of exclusive Group dealers;
3.consolidating retail channel activities through a gradual increase in the importance of the primary network;
4.improving dealers' financial performance by expanding areas of expertise and offering them the chance to sell products and services attributable to the Piaggio Group;
5.raising the level of service to dealers through appropriate support tools.
5Market shares are calculated based on “sell out” volumes, i.e. sales by the distribution network to end purchasers. Market shares for 2021 might differ from figures published the previous year, due to final vehicle registration data, which some countries publish with a few months' delay, being updated.
6 Italy, France, Spain, Germany, United Kingdom, Belgium, Holland, Greece, Croatia, Portugal, Switzerland, Austria, Finland, Sweden, Norway, Denmark, Czech Republic, Hungary and Slovenia.
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Americas
In the Americas, the Piaggio Group is directly present in the United States and Canada, while in Latin America it operates through a network of importers. At the end of 2022, the Group had 209 partners, of which 159 in the United States, 30 in Canada and a network of 20 importers in Central and South America.
In 2022, the process to streamline and consolidate the distribution network continued, through the replacement and appointment of new partners to support the growth of Piaggio brands with a special focus on the motorcycle segment and on increasing market shares.
Asia Pacific
In Asia Pacific, the Piaggio Group is directly present in Vietnam, Indonesia, China and Japan, while on other markets it operates through importers.
The distribution network is developed on an ongoing basis, in line with the Group's strategic objectives that plan to expand operations in the region.
Past and future actions in the Asia Pacific area include:
•an increase in sales outlets, and consolidation of the sales service and other services;
•consolidation of a local presence, with a more focussed, detailed geo-marketing study;
•growth in the size of the sales and after-sales area;
•the gradual channelling of the Corporate Identity towards a Motoplex concept, which is therefore increasingly widespread and uniform in all countries.
In Vietnam, the lead nation of the entire Asia Pacific area, the Group had 103 sales outlets throughout the country by the end of 2022, of which 97 Motoplex. In Indonesia, Japan and China, Piaggio has a network of 51 (47 Motoplex), 54 (20 Motoplex) and 79 (79 Motoplex) sales outlets respectively.
In other areas of Asia Pacific, the number of sales outlets totalled 299 at the end of 2022, with major changes to the current network focussed on the Motoplex concept (236), with 12 distributors operating in 11 nations - Thailand, Singapore, Taiwan, Australia, Malaysia, South Korea, New Zealand, Cambodia, Hong Kong, the Philippines and Macau. In 2022, 6 new Motoplex stores were inaugurated operating with the 4 brands, Piaggio-Vespa-Aprilia-Moto Guzzi, on the following markets: 1 in Malaysia, 4 in Indonesia and 1 in Thailand.
India
In India, Piaggio Vehicles Private Limited had 254 dealers as of 31 December 2022. At present, the network covers main areas throughout the country.
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Investments
Investments mainly targeted the following areas:
•developing new products, including sustainable mobility and face-lifting of existing products;
•constructing a new two-wheeler assembly plant for CKDs in Indonesia;
•improving and modernising current production capacity.
As regards product investments in particular, considerable resources were allocated to developing new products to market on both European and Asian (Vietnamese and Indian) markets.
Industrial investments were also made, targeting safety, quality and the productivity of production processes.
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Commercial Vehicles
2022
2021
Change %
Change
Volumes
Volumes
Sell-in
Turnover
Sell-in
Turnover
Commercial Vehicles
(units/000)
(million Euros)
(units/000)
(million Euros)
Volumes
Turnover
Volumes
Turnover
EMEA and Americas
13.7
142.6
18.2
134.5
-24.5%
6.0%
(4.5)
8.1
of which EMEA
8.9
132.6
13.8
127.1
-35.5%
4.3%
(4.9)
5.5
(of which Italy)
5.2
85.9
5.2
76.2
-0.2%
12.7%
0.0
9.7
of which America
4.8
10.0
4.4
7.4
10.4%
35.4%
0.5
2.6
India
95.5
261.1
68.1
165.2
40.2%
58.1%
27.4
95.9
TOTAL
109.3
403.7
86.3
299.7
26.6%
34.7%
22.9
104.0
Ape
102.5
230.5
79.9
155.5
28.4%
48.2%
22.7
75.0
of which the Ape Elettrica
10.1
40.8
4.1
15.1
147.8%
170.9%
6.0
25.8
Porter
6.7
109.2
6.4
94.4
4.1%
15.6%
0.3
14.7
of which the Electric Porter
0.0
0.0
0.1
1.1
-100.0%
-100.0%
(0.1)
(1.1)
Spare Parts and Accessories
64.0
49.7
28.7%
14.3
TOTAL
109.3
403.7
86.3
299.7
26.6%
34.7%
22.9
104.0
Revenues of commercial vehicles (figures in millions of Euros)
The Commercial Vehicles category includes three- and four-wheelers with a maximum mass below 3.5 tons (category N1 in Europe) designed for commercial and private use, and related spare parts and accessories.
Main results
In 2022, the Commercial Vehicles business generated a turnover of approximately €403.7 million, up by 34.7% compared to the previous year.
The EMEA and Americas markets showed contrasting trends in volume. The downturn in the European markets (-35.5%) was partially mitigated by the growth in the Americas (+10.4%), while sales in Italy were basically stable. Turnover, on the other hand, recorded an overall increase of 6.0% due to the different product mix.
142,6
261,1
134,5
165,2
0,0
50,0
100,0
150,0
200,0
250,0
300,0
EMEA and Americas
India
2022
2021
51
Strong growth was recorded in the Indian region thanks to the end of the pandemic in the second half of the year. In fact, the Indian subsidiary Piaggio Vehicles Private Limited (PVPL) recorded an increase in both volumes (+40.2%) and turnover (+58.1%; +48.0% at constant exchange rates). The same company sold 71,898 units (51,166 in 2021) on the Indian three-wheeler market and also exported 23,605 three-wheelers (16,939 in 2021).
Market positioning7
The Piaggio Group operates in Europe and India on the light commercial vehicles market, with vehicles designed for short-range mobility in urban areas (European range) and suburban areas (the product range for India).
In Europe, the Group acts as operator on these markets in a niche segment (urban mobility), thanks to its range of low environmental impact products.
On the Indian three-wheeler market, Piaggio has a 18.0% market share (19.5% in 2021). Detailed analysis of the market shows that Piaggio lost its leadership position – albeit narrowly – in the goods transport segment (cargo segment) with a share of 32.9% (34.6% in 2021). In the Passenger segment, its share instead was 14.6%, the same as 2021.
The distribution network
Europe and Overseas
In 2022, the reorganisation process of Piaggio Commercial's distribution network, which had started in 2021, was completed, with the aim of creating a new network of partners specialised in the LCV segment, meeting the highest financial, organisational, service and territorial coverage standards, fully capable of seizing the growth opportunities provided by the launch of the new Porter NP6.
At present, Piaggio Commercial's European dealer network is made up of high-level operators dedicated essentially to the Porter NP6 range and long-established dealers operating exclusively in the three-wheeler (Ape) business.
In numerical terms, the former account for 340 first-tier sales outlets in directly served markets (Italy, France, Germany, Spain, Benelux and Greece), going up to 397 when including second-tier operators. If we also consider service centres, this figure comes to around 500 service points. The three-wheeler network comprises 150 operators.
As far as indirect markets are concerned, 2022 saw the development of sales volumes in Europe thanks to the start of sell-outs in the larger markets (e.g. Poland), served by 14 importers (including three new ones in Guyana, Martinique and Estonia) and around 90 sales and service points.
On non-European markets, the perimeter managed by Piaggio & C. was redefined in 2022, with the marketing of the Indian range on African markets being transferred to the subsidiary PVPL.
7Market shares are calculated based on “sell out” volumes, i.e. sales by the distribution network to end purchasers. Market shares for 2021 might differ from figures published the previous year, due to final vehicle registration data, which some countries publish with a few months' delay, being updated.
52
Network quality immediately proved to be high on the domestic market, where the brand's long-established reputation helped guarantee expected sell-out results. On other direct markets, a new scouting phase was required, to ensure widespread coverage of the territory, with dealers who would, on the one hand, promote the brand to develop the necessary penetration and, on the other hand, adopt a proactive sales strategy which is key to success in a highly technical B2B sector.
India
In India, Piaggio Vehicles Private Limited had 488 dealers as of 31 December 2022 (361 ICE8 and 127 EV9). The number of dealers specialising in electric vehicles increased. At present, the network covers main areas throughout the country.
Investments
Investments mainly targeted the following areas:
•the study of engines with low consumption and reduced polluting emissions;
•the use of alternative fuels across the product range;
•the development of electric vehicles.
In 2022, Piaggio continued studies aimed at developing a version of the Porter NP6 with an electric motor and at adapting vehicles to the new cyber-security regulations that will come into force in 2024.
Industrial investments were also made, targeting safety, quality and the productivity of production processes.
8 ICE Internal Combustion Engine.
9 EV Electric Vehicles.
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Risks and uncertainties
Due to the nature of its business, the Group is exposed to different types of risks. To mitigate exposure to these risks, the Group has adopted a structured and integrated system to identify, measure and manage company risks, in line with industry best practices (i.e. CoSO ERM Framework). Scenarios applicable to Group operations are mapped, involving all organisational units, and are updated on an annual basis. These scenarios are grouped referring to external, strategic, financial or operational risk, also considering sustainability issues and in particular "ESG" ("Environmental, Social, Governance related") risks, i.e. which are related to environmental aspects, personnel, social matters, human rights and the fight against active and passive corruption. For details, see the Consolidated Non-Financial Statement.
Risks related to the macroeconomic and geopolitical context
The Piaggio Group is exposed to risks arising from the characteristics and changing dynamics of the economic cycle and the national and international political context. To mitigate any negative effects arising from the macroeconomic and geopolitical context, the Piaggio Group continued its strategic vision, diversifying operations at international level - in particular in Asia where growth rates of economies are still high, and consolidating the competitive positioning of its products.
The conflict between Russia and Ukraine has had important consequences worldwide due to the economic effects on global markets, especially in terms of increased transport costs, and commodity and energy prices. The geographical diversification of the Group's sales and purchases means that it has essentially no exposure in the conflict area. The indirect impacts of the conflict mainly concerned an increase in energy costs, above all at European plants, and higher commodity costs, partially mitigated by agreements with suppliers.
Risks connected to consumer trends
Piaggio's success depends on its ability to manufacture products that cater for consumer's tastes and can meet their needs for mobility. Levering customer expectations and emerging needs, with reference to its product range and customer experience, is essential for the Group to maintain a competitive edge.
Through market analysis, focus groups, concept and product testing, investments in research and development and sharing a roadmap with suppliers and partners, Piaggio can seize emerging market trends to renew its own product range.
Customer feedback enables Piaggio to evaluate customer satisfaction levels and fine tune its own sales and after-sales service model.
Risks related to a high level of market competition
The Group is exposed to the actions of competitors that, through technological innovation or replacement products, could obtain products with better quality standards and streamline costs, offering products at more competitive prices.
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Piaggio has tried to tackle this risk, which could have a negative impact on the financial position and performance of the Group, by manufacturing high quality products that are innovative, cost-effective, reliable and safe, and by consolidating its presence in the geographic segments where it operates.
Risk relative to the regulatory and legal framework
Numerous national and international laws and regulations on safety, noise levels, consumption and the emission of pollutant gases apply to Piaggio products. Strict regulations on atmospheric emissions, waste disposal, the drainage and disposal of water and other pollutants and sustainability reporting obligations also apply to the Group's production sites.
Unfavourable changes in the regulatory and/or legal framework at a local, national and international level could mean that products can no longer be sold on the market, forcing manufacturers to invest to renew their product ranges and/or renovate/upgrade production plants.
To deal with these risks, the Group has invested in research and development into innovative products, anticipating any restrictions on current regulations. Moreover, the Group is not only a member of Confindustria, but also of important national and international associations in the automotive sector, such as ACEM (chaired by Michele Colaninno), ANFIA and ANCMA, which represent and protect the economic, technical and regulatory interests of the automotive sector in institutional and political dimensions, and with the authorities, bodies and associations responsible, at national and international level, for industrial policy and the individual and collective mobility of persons and goods.
As one of the sector's leading manufacturers, Piaggio is often requested to participate, through its representatives, in parliamentary committees appointed to discuss and formulate new laws.
Risks connected with natural events
In assessing climate change-related risks, the Piaggio Group has not currently identified as relevant risks related to the inability to achieve strategic objectives due to changes in the external context (also taking into account possible impacts on the supply chain) and to an inadequate management of atmospheric emissions.
The process of identifying these risks, as well as the assessments of their relevance and significance, took place based on the internal context and on the dynamics of the reference market, and current regulations.
However, it should be noted that the Group has not yet set specific quantitative targets for the reduction of both direct and indirect greenhouse gas emissions. At a strategic level, the Group intends pursuing, in any case, the integration of sustainable development principles with its vision and business model, in an increasingly precise and consistent manner.
In this context, it should be noted that the Group operates through industrial plants located in Italy, India, Vietnam and Indonesia. These sites could be affected by natural events, such as earthquakes, typhoons, flooding and other catastrophes that may damage sites and also slow down/interrupt production and sales.
From this perspective, the Piaggio Group carried out a climate risk analysis for the Pontedera (Italy) and Baramati (India) plants in 2022, with the support of a leading consulting firm. This analysis did not reveal any critical issues related to climatic factors for both production sites.
Potential impacts related to the physical risks associated with climate change are managed by the Group through the continuous renovation of facilities, as well as by taking out specific insurance coverage for the various sites, based on their relative importance.
55
The outcome of the above assessments on the relevance of climate change risks was also duly taken into account in the process of defining the assumptions adopted to prepare the Business Plan , as better described in the notes to the consolidated financial statements in the section on goodwill.
Risks connected with the pandemic
If a pandemic spreads and emergency measures are adopted by governments to contain the virus, the Group could be negatively affected as regards:
•the procurement chain: suppliers might no longer be able to produce/deliver the components necessary to supply production sites;
•production activities: the Group might no longer be able to use a part of the workforce, following the issue of government regulations limiting personal movement, or it might be impossible for the company to guarantee a healthy, protected work environment;
•the distribution of products: measures to contain the spread of the virus may require the closure of Group sales outlets. In addition, logistics difficulties caused by delays and/or slowdowns in the transport of products could hinder commercial network restocking activities.
Piaggio has tried and is trying to deal with this risk, which could negatively affect the Group's financial position and performance following a possible decrease in revenues, profitability and cash flows, thanks to a global sourcing policy, a production capacity distributed in various geographic segments and a sales network present in over 100 nations.
The Group is closely monitoring developments in the health situation and will take all precautionary measures to guarantee employees’ health and safety at its sites, and its commitments made with the sales network and with customers.
Risk connected with the use of new technologies
Piaggio is exposed to the risk deriving from the Group's difficulty in keeping up with technological developments, both regarding the product and processes. To deal with this risk, on the one hand, as regards products, the R&D centres in Pontedera, Noale and the PADc (Piaggio Advance Design Center) in Pasadena carry out research, development and testing of new technological solutions, such as those dedicated to electric vehicles. Piaggio Fast Forward in Boston is also studying innovative solutions to anticipate and respond to the mobility needs of the future.
As regards the production process, Piaggio has operational areas dedicated to the study and implementation of new solutions to improve the performance of production facilities, with particular attention paid to sustainability and energy efficiency aspects.
Risks connected with the sales network
The Group's business is closely linked to the commercial network's ability to guarantee customers in its main markets high levels of sales and after-sales service quality, in order to create a long-lasting relationship of trust. Piaggio deals with this risk by defining compliance with certain technical/professional standards in contracts, and implementing periodic controls, reinforced by new IT systems designed to improve network monitoring activities and therefore the level of customer service.
56
Strategic risks
Reputational and Corporate Social Responsibility risks
In carrying out its operations, the Group could be exposed to stakeholders' perception of the Group and its reputation and their loyalty changing for the worse because of the release of detrimental information or due to sustainability requirements in the Non-Financial Statement not being met, as regards economic, environmental, social and product-related aspects.
Risks connected with the definition of strategies
In defining its strategic objectives, the Group could make errors of judgement with a consequent impact on its image and financial performance.
Risks connected with the adoption of strategies
In carrying out its operations, the Group could be exposed to risks from the wrong or incomplete adoption of strategies, with a consequent negative impact on achieving the Group's strategic objectives.
Risks connected with exchange rate trends
The Piaggio Group undertakes operations in currencies other than the euro and this exposes it to the risk of fluctuating exchange rates of different currencies.
Exposure to business risk consists of envisaged payables and receivables in foreign currency, taken from the budget for sales and purchases reclassified by currency and accrued on a monthly basis.
The Group's policy is to hedge at least 66% of the exposure of each reference month.
Exposure to the settlement risk consists of receivables and payables in foreign currency acquired in the accounting system at any moment. The hedge must at all times be equal to 100% of the import, export or net settlement exposure for each currency.
During the year, currency exposure was managed based on a policy that aims to neutralise the possible negative effects of exchange rate variations on company cash flow. This was achieved by hedging economic risk, which refers to changes in company profitability compared to the planned annual economic budget, based on a reference change (the "budget change"), and transaction risk, which refers to differences between the exchange rate at which receivables and payables are recognised in currency in the financial statements and the exchange rate at which the relative amount received or paid is recognised.
The Group has assets and liabilities which are sensitive to changes in interest rates and are necessary to manage liquidity and financial requirements. These assets and liabilities are subject to an interest rate risk and are hedged by derivatives or by specific fixed-rate loan agreements.
For a further description, please refer to section 43 of the Notes to the Consolidated Financial Statements.
Risks connected with insufficient cash flows and access to the credit market
The Group is exposed to the risk arising from the production of cash flows that are not sufficient to guarantee Group payments due, or adequate profitability and growth to achieve its strategic objectives. Moreover, this risk is connected with the difficulty the Group may have in obtaining loans or a worsening in conditions of loans necessary to support Group operations in appropriate time frames.
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To deal with these risks, cash flows and the Group’s credit line needs are monitored or managed centrally under the control of the Group’s Treasury in order to guarantee an effective and efficient management of financial resources as well as optimise the debt maturity standpoint.
The Group also has undrawn credit lines, sufficient to enable it to manage with any unforeseen cash requirements.
In addition, the Parent Company finances the temporary cash requirements of Group companies by providing direct short-term loans regulated in market conditions or guarantees.
Risks connected with credit quality of counterparties
This risk is connected with any downgrading of the credit rating of customers and consequent possibility of late payments, or the insolvency of customers and consequent failure to receive payments.
To balance this risk, the Parent Company evaluates the financial reliability of its business partners and stipulates agreements with primary factoring companies in Italy and other countries for the sale of trade receivables without recourse.
Risks connected with deleverage
This risk is connected with compliance with covenants and targets to reduce loans, to maintain a sustainable debt/equity balance.
To offset this risk, the measurement of financial covenants and other contract commitments is monitored by the Group on an ongoing basis.
Risks relative to the product
The "Product" category includes all risks concerning faults due to a nonconforming quality and safety and consequent recall campaigns that could expose the Group to: the costs of managing campaigns, replacing vehicles, claims for compensation and if faults are not managed correctly and/or are recurrent, damage to its reputation. A product nonconformity may be due to potential errors and/or omissions of suppliers, or internal processes (i.e. during product development, production, quality control).
To mitigate these risks, Piaggio has established a Quality Control system, it tests products during various stages of the production process and carefully sources its suppliers based on technical/professional standards. The Group has also defined plans to manage recall events and has taken out insurance to protect the Group against events attributable to product defects.
Risks connected with the production process/business continuity
The Group is exposed to risk connected with possible interruptions to company production, due to the unavailability of raw materials or components, skilled labour, systems or other resources.
To deal with these risks, the Group has necessary maintenance plans, invests in upgrading machinery, has a flexible production capacity and sources from several suppliers of components, to prevent the unavailability of one supplier affecting company production. Moreover, the operating risks related to industrial sites in Italy and other countries are managed through specific insurance cover assigned to sites based on their relative importance.
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Risks connected with the supply chain
In carrying out its operations, the Group sources raw materials, semi-finished products and components from a number of suppliers. Group operations are conditioned by the ability of its suppliers to guarantee the quality standards and specifications requested for products, as well as relative delivery times. To mitigate these risks, the Group qualifies and periodically evaluates its suppliers based on professional/technical/financial criteria in line with international standards.
Risks connected with the environment and with health and safety
The Group has production sites, research and development centres and sales offices in different nations and so is exposed to the risk of not being able to guarantee a safe working environment, with the risk of causing potential harm to property, the environment or people and exposing the Group to legal sanctions, lawsuits brought by employees, costs for compensation payments and reputational harm.
To mitigate these risks, Piaggio adopts a development model that is based on environmental sustainability, in terms of safeguarding natural resources and the possibility that the ecosystem might absorb the direct and indirect impact of production activities. Specifically, Piaggio seeks to minimise the environmental impact of its industrial activities through careful definition of the technological transformation cycle and using the best technologies and most modern methods of production.
The risks related to accidents/injuries sustained by personnel are mitigated by aligning processes, procedures and structures with applicable Occupational Safety laws, as well as best international standards.
These commitments, set out in the Code of Ethics10 and confirmed by top management in the Group's "environmental policy" which is the basis for environmental certification (ISO 14001) and health and safety certification (ISO 45001) already awarded and maintained at production sites, is a mandatory benchmark for all company sites.
Risks connected with processes and procedures adopted
The Group is exposed to the risk of shortcomings in planning its company processes or errors and deficiencies in carrying out operations.
To deal with this risk, the Group has established a system of directives comprising organisational notices and Manuals/Policies, Management Procedures, Operating Procedures and Work Instructions. All documents relative to Group processes and procedures are part of the single Group Document Information System, with access that is regulated and managed on the company intranet.
Risks relative to human resources
The main risks concerning human resources management include the ability to recruit expertise, professionalism and experience necessary to achieve objectives. To offset these risks, the Group has established specific policies for recruitment, career development, training, remuneration and talent management, which are adopted in all countries where the Group operates according to the same principles of merit, fairness and transparency, and focussing on aspects that are relevant for the local culture.
10 Code of Ethics
Article 9: "Without prejudice to compliance with the specific applicable regulation, the Company pays attention to environmental issues in its decisions, also adopting - where operationally and economically feasible and compatible - environmentally friendly production technologies and methods, with the aim of reducing the environmental impact of its activities".
Article 10: "[The principles of health and safety] shall be used by the undertaking to take the necessary measures for the protection of the safety and health of workers, including occupational risk prevention, information and training activities, as well as the preparation of an organisation and the necessary means."
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In Europe, the Piaggio Group operates in an industrial context with a strong trade union presence and is potentially exposed to the risk of strikes and interruptions to production activities. In the recent past there have been no significant production stoppages due to strikes. To avoid the risk of interruptions to production activities, as far as possible, the Group bases its relations with trade union organisations on dialogue.
Legal risks
The Piaggio Group legally protects its products and brands throughout the world. In some countries where the Group operates, laws do not offer certain standards of protection for intellectual property rights. This circumstance could render the measures adopted by the Group to protect itself from the unlawful use of these rights by third parties inadequate.
Within the framework of its operations, the Group is involved in legal and tax proceedings. As regards some of the proceedings, the Group could be in a position where it is not able to effectively quantify potential liabilities that could arise. A detailed analysis of the main disputes is provided in the specific paragraph in the Notes to the Consolidated Financial Statements.
Risks relative to internal offences
The Group is exposed to risks of its employees committing offences, such as fraud, active and passive corruption, acts of vandalism or damage that could have negative effects on its business results in the year, and also harm the image and integrity of the Company and its reputation. To prevent these risks, the Group has adopted a Model pursuant to Legislative Decree 231/2001 and a Code of Ethics which sets out the principles and values the entire organisation takes inspiration from.
Risks relative to reporting
The Group is exposed to the risk of possible inadequacies in its procedures that are intended to ensure compliance with Italian and relevant foreign regulations applicable to financial disclosure, running the risk of fines and other sanctions. In particular there is a risk that financial reporting for Group stakeholders is not accurate and reliable due to significant errors or the omission of material facts and that the Group provides disclosure required by applicable laws in a manner which is inadequate, inaccurate or untimely.
To deal with these risks, the financial statements are audited by Independent Auditors. Furthermore, it should be noted that the control activity envisaged by Law 262/2005 is also extended to the most important subsidiaries, Piaggio Vehicles Pvt. Ltd, Piaggio Vietnam Co Ltd, Piaggio Group Americas Inc and Foshan Piaggio Vehicles Technologies Co Ltd.
Risks related to ICT systems
With reference to this category, the main risk factors that could compromise the availability of the Group's ICT systems include cyber-attacks, which could cause the possible interruption of production and sales support activities or compromise the confidentiality, integrity and availability of personal data managed by the Group. To mitigate the occurrence of these risks, Piaggio has adopted a centralised system of controls to improve the Group's IT security.
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Operating outlook
2022 ended with better than expected results on both European and Asian markets, confirming the Group's ability to respond to the various uncertainties that have characterised the performance of the world economy.
Thanks to a portfolio of globally unique brands, Piaggio will continue to grow in 2023, confirming the investments planned in new products and new plants, and strengthening its commitment to ESG factors, despite the current international geopolitical tensions and a volatile macro-economic context.
In this general framework, Piaggio will continue to work as always to meet its commitments and objectives, maintaining a constant focus on the efficient management of its economic and financial structure, to respond promptly and immediately to the challenges and uncertainties of 2023.
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Transactions with related parties
Revenues, costs, payables and receivables as of 31 December 2022 involving parent companies, subsidiaries and affiliated companies refer to the sale of goods or services which are a part of normal operations of the Group.
Transactions are carried out at normal market values, depending on the characteristics of the goods and services provided.
Information on transactions with related parties, including information required by Consob in its communication of 28 July 2006 DEM/6064293, is given in the notes to the Consolidated Financial Statements and notes to the separate Financial Statements of the Parent Company.
The procedure for transactions with related parties, pursuant to Article 4 of Consob Regulation no. 17221 of 12 March 2010 as amended, approved by the Board on 30 September 2010, is published on the institutional site of the Issuer www.piaggiogroup.com, in the section “Governance”.
It should be noted that the Chairman and Chief Executive Officer Roberto Colaninno holds 250,000 shares of the Parent Company Piaggio & C. S.p.A.
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Corporate Governance
Profile
The Company is organised in accordance with the traditional administration and control model mentioned in Articles 2380-bis and following of the Italian Civil Code, with the Shareholders' Meeting, the Board of Directors and the Board of Statutory Auditors.
The Chairman and Chief Executive Officer of the Company is Roberto Colaninno, the Executive Deputy Chairman is Matteo Colaninno. During 2022, the Board of Directors gave powers to Matteo Colaninno as regards institutional relations at national and international level. During 2021, the Board of Directors had given the Director Michele Colaninno powers to operate in the context of the development of Group operations and product and marketing strategies.
Since 1 January 2021, the Company has endorsed the new edition of the Corporate Governance Code, available on the website of Borsa Italiana S.p.A. (www.borsaitaliana.it).
The Company is subject to the management and coordination of IMMSI S.p.A. pursuant to Article 2497 and following of the Italian Civil Code.
Board of Directors
The Company's Board of Directors in office at the date of this Report consisted of nine members, appointed by the Ordinary Shareholders' Meeting held on 14 April 2021 on the basis of lists submitted by shareholders in accordance with the law and the Articles of Association. In particular, (i) Roberto Colaninno, Matteo Colaninno, Michele Colaninno, Graziano Gianmichele Visentin (independent director), Rita Ciccone (independent director), Patrizia Albano (independent director) and Federica Savasi were taken from the majority list presented by IMMSI S.p.A.; (ii) Micaela Vescia (independent director) was appointed on the basis of the proposal submitted by IMMSI S.p.A.; (iii) Andrea Formica (independent director) was taken from the minority list presented by a group of investors representing a total of 2.74826% of the share capital.
The Board of Directors will remain in office until the date of the Ordinary General Meeting of Shareholders called for approval of the Financial Statements for the financial year ending 31 December 2023.
The majority of the Board of Directors are non-executive, independent directors, and their number and authority are such that they ensure that their opinion has a significant weight in the Issuer’s Board decisions. Non-executive directors and independent directors bring their specific competencies to Board discussions, contributing to the making of decisions that conform to corporate interests.
Committees
The Appointment Proposal Committee, the Remuneration Committee, the Audit, Risk and Sustainability Committee and the Related Parties Transactions Committee have been established within the Board.
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Internal control and risk management system
The internal control and risk management system requires the Board, with the support of the Audit, Risk and Sustainability Committee, to be responsible for defining the guidelines of the internal control and risk management system in line with the Company's strategies, intended as a set of rules, procedures and organisational structures aimed at the effective and efficient identification, measurement, management and monitoring of main risks, in order to contribute to the sustainable success of the Company (an objective that guides the action of the Board of Directors and involves the creation of long-term value for shareholders, taking into account the interests of other stakeholders relevant to the Company).
In this context, the Board of Directors is assisted, in particular, by the Chief Executive Officer (in charge of establishing and maintaining the internal control and risk management system), as well as an Audit, Risk and Sustainability Committee.
The Board of Directors, on the proposal of the Chief Executive Officer (formerly the Director in charge of the internal control and risk management system) and after hearing the opinion of the Audit, Risk and Sustainability Committee and the Board of Statutory Auditors, appointed the head of internal audit, who is responsible for verifying that the internal control and risk management system is operational, adequate and consistent with the guidelines defined by the Board of Directors, ensuring that it has adequate resources to carry out its tasks, including in terms of its operational structure and internal organisational procedures for access to the information necessary for its duties.
Board of Statutory Auditors
The Board of Statutory Auditors in office at the date of this Report was appointed by the Ordinary Shareholders' Meeting held on 14 April 2021, on the basis of lists submitted by shareholders in accordance with the law and the Articles of Association. In particular, the following were appointed (i) Statutory Auditors: Piera Vitali (Chair), taken from the minority list presented by the aforementioned group of investors representing a total of 2.74826% of the share capital; as well as Giovanni Barbara and Massimo Giaconia, taken from the majority list presented by IMMSI S.p.A.; (ii) Alternate Auditors: Gianmarco Losi, taken from the majority list submitted by IMMSI SpA and Fabrizio Piercarlo Bonelli, taken from the minority list.
The Board of Statutory Auditors will remain in office until the date of the Shareholders' Meeting called to approve the financial statements for the year ended 31 December 2023.
Corporate Governance Report
The Company produces an annual Report on Corporate Governance and Corporate Ownership, describing the corporate governance system adopted by the Issuer, and containing information on corporate ownership and the internal control and risk management system. The entire report is available on the website of the Issuer www.piaggiogroup.com, in the section “Governance”.
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Other information
Personal data processing – Legislative Decree 196 of 30 June 2003 – Regulation (EU) 679 of 27 April 2016 (GDPR – General Data Protection Regulation)
Following the entry into force of Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data (GDPR), the Company has completed the process to align with regulations.
The Company is responsible, in accordance with law and in its capacity as "Controller", for all personal data processing it carries out and in view of this responsibility, adopts adequate security measures in relation to risks for the rights and freedoms of natural persons. To guarantee effective data processing, the Board of Directors has appointed an officer from its members who, in the name and on behalf of the Company, independently takes decisions as to the purposes and procedures of personal data processing and instruments used, including the adoption and monitoring of security measures and their adequacy, and supervises all personal data processing activities carried out by the Company.
The company has also appointed a Data Protection Officer (DPO), as provided for by Articles 37-39 of the GDPR, who acts as consultant to company functions on privacy, and inspects personal data management activities, acting as the reference point within the Company for all matters concerning personal data processing and as the interface with the Italian Data Protection Authority, also assisting the Company in guaranteeing compliance with the GDPR.
Article 36 of the Consob Regulation on Markets (adopted with Consob resolution 16191/2007 as amended): conditions for listing companies controlling companies established and governed according to laws of non-EU Member States on the stock exchange
As regards regulatory requirements on conditions for listing companies controlling companies established and governed according to laws of non-EU Member States on the stock exchange and material importance for the purposes of consolidated financial statements, the following is reported:
•as of 31 December 2022, the regulatory requirements of Article 36 of the Regulation on Markets apply to the subsidiaries: Piaggio Vehicles Private Limited, Piaggio Vietnam Co Ltd, Piaggio Group Americas Inc, Zongshen Piaggio Foshan Motorcycle Co. Ltd, Foshan Piaggio Vehicles Technology R&D Co Ltd, Piaggio Advanced Design Center Corporation, Piaggio Fast Forward Inc., Piaggio Group Japan, PT Piaggio Indonesia, Piaggio China Co. LTD, Piaggio Asia Pacific PTE Ltd, Piaggio Limited;
•adequate procedures for ensuring full compliance with the above regulation have been adopted.
Article 37 of the Consob Regulation on Markets: Conditions preventing the listing of shares of subsidiaries subject to the management and coordination of another company
Pursuant to Article 2.6.2, section 13 of the Regulation of Stock Markets organised and managed by Borsa Italiana S.p.A., the conditions as of Article 37 of Consob regulation 16191/2007 exist.
The information required by Article 2428, paragraphs 1, 2, 3 and 6, is included in the Report on Operations. Information on financial instruments, objectives and policies of the Group concerning financial risk
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management is given in section F of the Notes to the Consolidated Financial Statements and in section E of the Parent Company's Financial Statements. Information about secondary sites of the Parent Company is given in section A of the Parent Company's Financial Statements.
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Statement of reconciliation between shareholders' equity and net profit for the period of the Parent Company and consolidated companies
In thousands of Euros
Shareholders’ equity 31/12/2021
2022 Result
Other movements
Shareholders’ equity 31/12/2022
Piaggio & C. SpA
333,527
75,057
(61,717)
346,867
Net profit and shareholders' equity of subsidiaries
180,091
98,483
(55,160)
223,414
Elimination of the carrying amount of investments
(102,190)
(83,649)
46,076
(139,763)
Elimination of the effects of intergroup transactions
(7,342)
(5,002)
(363)
(12,707)
Piaggio Group
404,086
84,889
(71,164)
417,811
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Economic glossary
Net working capital: defined as the net sum of: Trade receivables, Other current and non-current receivables, Inventories, Trade payables, Other current and non-current payables, Current and non-current tax receivables, Deferred tax assets, Current and non-current tax payables and Deferred tax liabilities.
Property, plant and equipment: consist of property, plant, machinery and industrial equipment, net of accumulated depreciation, investment property and assets held for sale.
Intangible assets: consist of capitalised development costs, costs for patents and know-how and goodwill arising from acquisition/merger operations carried out by the Group.
Rights of use: refer to the discounted value of lease payments due, as provided for by IFRS 16.
Financial assets: defined by the Directors as the sum of investments, other non-current financial assets and the fair value of financial liabilities.
Provisions: consist of retirement funds and employee benefits, other long-term provisions and the current portion of other long-term provisions.
Gross industrial margin: defined as the difference between Revenues and the corresponding Cost to sell of the period.
Cost to sell: include the cost for materials (direct and consumables), accessory purchase costs (transport of incoming material, customs, movements and warehousing), employee costs for direct and indirect manpower and related expenses, work carried out by third parties, energy costs, depreciation of property, plant, equipment and industrial equipment, external maintenance and cleaning costs net of sundry cost recovery recharged to suppliers.
Operating expenses: consist of employee costs, costs for services, leases and rentals, and additional operational expenditure net of operating income not included in the gross industrial margin. Operating expenses also include amortisation and depreciation not included in the calculation of the gross industrial margin.
Consolidated EBITDA: defined as “Operating income” before the Amortisation/depreciation and impairment costs of intangible assets, property, plant and equipment and rights of use, as resulting from the Consolidated Income Statement.
Net capital employed: determined as the algebraic sum of Net fixed assets, Net working capital and Provisions.
In some cases, data could be affected by rounding off defects due to the fact that figures are represented in millions; changes and percentages are calculated from figures in thousands and not from rounded off figures in millions.
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Methodology
This Non-Financial Statement (hereinafter also "NFS" or statement) is published by Piaggio & C. S.p.A. (hereinafter “Piaggio” or the “Group”) in compliance with Legislative Decree no. 254/2016 (Implementation of Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups). This Non-Financial Statement is subject to a limited assurance engagement by Deloitte & Touche S.p.A., in accordance with the criteria in ISAE 3000 Revised.
Reporting period
2022 Financial year (from 1 January to 31 December 2022). Data relative to 2021 are presented for comparison.
Date of publication
This document was published on 27 March 2023.
The 2021 DNF was published on 18 March 2022.
Reporting perimeter
The scope of the information and financial data is the same as that of the Piaggio Group Consolidated Financial Statements. The scope of environmental and social information and data contained in the NFS comprises the companies consolidated on a line-by-line basis in the Consolidated Financial Statements of the Piaggio Group. It should be noted that environmental (consumption, emissions, water, waste), purchasing and health and safety data include the production plants only, since the data of the sales companies, research centres and offices in Rome and Milan are not significant on the whole and, as far as the environmental data are concerned, in some cases impossible to collect since they sometimes operate in buildings shared with third parties.
For further details on the scope of consolidation for various topics addressed, see the table in the section "Materiality Analysis".
It should be noted that with regard to contributions and initiatives to support the community, information on the Piaggio Foundation – an entity not included in the Group's scope of consolidation – is also included. This information refers to qualitative aspects useful for understanding its focus on the social fabric, even though this information is not included in the scope of consolidation of quantitative information of the NFS.
The report duly indicates when aggregate data derive from estimates; any restatements of data from previous years with respect to published figures, due to improvements in the collection and reporting process, are clearly indicated as such. In some cases, data could be affected by rounding off defects due to the fact that figures are represented in thousands/millions; changes and percentages are calculated based on specific data.
Content
The contents of the NFS were chosen on the basis of the materiality process according to the GRI Standards, as well as focusing on the non-financial issues referred to in Legislative Decree 254/2016.
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Information pursuant to Regulation (EU) 2020/852 and related Delegated Regulations (so-called "EU taxonomy")
Piaggio & C. S.p.A. has an obligation to include in the document, published on or after 1 January 2022, the disclosure required by the regulations in question regarding the Group's eco-sustainable activities, in relation to which reference is made to the paragraph "European Taxonomy".
This disclosure for the 2022 financial year concerns the proportion, compared to the total, of the Group's turnover, investments and operating costs (as defined by Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021) relating to activities eligible for and aligned with the Taxonomy with reference to the objectives of mitigation and adaptation to climate change, as covered by the annexes to Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021, as well as certain qualitative information.
In this regard, it should be noted that the limited review of this Consolidated Non-Financial Statement carried out by the independent auditors Deloitte & Touche S.p.A. does not extend to this disclosure.
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De/scription of the process to identify material issues for Non-Financial Statement purposes
As mentioned above, for the purposes of sustainability reporting, Piaggio applies the Standards published by the Global Reporting Initiative, which call for a materiality analysis process to identify the topics considered most relevant and which, therefore, must form the backbone of the information provided by the Group.
Piaggio updates its materiality analysis every year in order to capture economic, environmental and social impacts for the Group or that can substantially influence stakeholders' assessments and decisions.
According to the GRI Standard methodology, a sustainability topic is material (impact materiality) if it is related to negative or positive, actual or potential impacts on the economy, environment, and people, including impacts on their human rights, caused by the organisation's activities and investments, its products and/or services or its value chain, in the short, medium and long term. The materiality of impacts is measured by considering their severity as well as the likelihood of occurrence.
The Group's materiality analysis process was coordinated by the CSR Manager (Finance Department) with the support of the Group's Consolidated Reporting and Sustainability Function. This process, consistent with GRI 3 Material topics 2021, was carried out in the following steps:
1.Understanding and assessing the context (business, environment, social/political) in which the Group operates, as well as identifying relevant stakeholders;
2.Based on this context, identification of the positive and negative, actual and potential impacts that the Group’s activities could generate on the economy, the environment and people, including those on their human rights, in the context of the organisation's activities and business relations;
3.Evaluation of impacts through the involvement of top management and a category of stakeholders (suppliers);
4.Prioritisation of impacts and aggregation into material themes.
The Group's top managers were asked to assess, through the completion of a questionnaire, the severity and likelihood of occurrence of the previously identified positive and negative impacts that the Group's business could cause.
The result of this analysis was compared with the opinion given by some suppliers. After the assessments were collected, impacts were prioritised and those found to be material were aggregated into material themes.
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The issues that were found to be material as a result of the materiality analysis are summarised in the following table:
Material topic
Impact
Group involvement
Boundary
Monitoring and mitigation actions
Wealth creation for shareholders, suppliers, lenders and employees
Creation of economic value
Possible inability to pay suppliers and lenders and/or unsatisfactory shareholder remuneration due to failure to achieve set growth targets
Caused by the Group
All Group companies
- Externally audited mandatory financial information - Group management is subject to an ongoing skills training programme
Meeting the need for sustainable mobility
Pollution due to low recyclability/recoverability of end-of-life vehicles
Caused by the Group
All Group companies
- The technologies and materials used in the design and construction of the Group's vehicles are intended to be environmentally friendly and allowing effective end-of-life disposal
Innovation of product and sustainable mobility
CO2 emissions from the production of vehicles with obsolete engines
Caused by the Group
All Group companies
- Significant investment in research and development
CO2 emissions from suppliers' production activities
Related to the Group through its business relations
Suppliers of production companies
- Suppliers must sign Piaggio's Code of Ethics or general terms and conditions of supply, which require an explicit commitment to the pursuit of sustainable development while respecting the environment and environmental regulations
CO2 emissions from transport of components from suppliers
Related to the Group through its business relations
Suppliers of production companies
- Suppliers must sign Piaggio's Code of Ethics or general terms and conditions of supply, which require an explicit commitment to the pursuit of sustainable development while respecting the environment and environmental regulations
CO2 emissions from transport of vehicles and spare parts to the sales network
To which the Group contributes indirectly and related to the Group through its business relations
Manufacturing and trading companies, logistics service providers and sales network
- The vehicles and equipment used by logistics operators must meet the quality standards required by Piaggio and are subject to inspections by Piaggio
-Environmental certification ISO 14001
- Continuous infrastructure improvements aimed at rationalising energy use
CO2 emissions from production activities at group plants
Caused by the Group
Manufacturing companies
- Plans to audit and monitor energy consumption
CO2 emissions from vehicle use by customers
To which the Group contributes indirectly and related to the Group through its business relations
All Group companies and customers
- Development of alternative powertrains (i.e. hybrid/electric) - Heavy investment in research and development
- Environmental certification ISO 14001
Potential pollution in the case of uncontrolled emissions of Volatile Organic Compounds (i.e. paint solvents)
Caused by the Group
Manufacturing companies
- Continuous infrastructure improvements and rigorous maintenance plans
Climate change
Potential pollution in the event of higher vehicle emissions in actual use than declared
Caused by the Group
All Group companies
- Rigorous quality control system
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Material topic
Impact
Group involvement
Boundary
Monitoring and mitigation actions
Possible customer dissatisfaction with inefficiencies or problems in the sales/after-sales network (e.g. long diagnostic/delivery times, use of non-original spare parts etc.)
Caused by the Group and related to the Group through its business relations
All Group companies and sales network
- Customer satisfaction analyses and development of action plans in the event of identification of improvement points with reference to the service provided by the network - New IT systems to improve monitoring of the sales/after-sales network and the level of customer care
Possible customer dissatisfaction in the event of insufficient sales network coverage/after-sales service
Caused by the Group and related to the Group through its business relations
All Group companies and sales network
- Geo-marketing system for optimal geographical coverage via the network
Customer Satisfaction
Possible customer dissatisfaction in the case of a product range offered that is not in line with market requirements or product characteristics communicated
Caused by the Group
Manufacturing companies and suppliers of manufacturing companies
- Huge investments in Research and Development
Supporting on local communities
Supporting charity initiatives and organising cultural events
Potential customer injuries or unavailability of the vehicle due to product defects attributable to errors/omissions by suppliers
To which the Group contributes indirectly and related to the Group through its business relations
Manufacturing companies
- Huge investments in Research and Development - Development of ARAS devices, motorbike airbags and electronic controls
- Intensive scouting and inspection of suppliers
Product safety and reliability
Potential customer injuries or unavailability of the vehicle due to product defects attributable to errors/omissions in quality control, product development, production
Caused by the Group
Manufacturing companies
- ISO 9001:2015 certification - Strict quality control system during product development, the production process and before shipment to the customer
- Huge investments in Research and Development
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11 External workers include external companies operating at Piaggio's Italian production plants.
Material topic
Impact
Group involvement
Boundary
Monitoring and mitigation actions
Potential employee dissatisfaction due to the company's inability to provide a motivating and satisfying work environment
Caused by the Group
All Group companies
-Piaggio adopts personnel selection, development and remuneration systems that recognise and reward merit and performance
- The centrality of human resources and the development of core competencies for the development of the business are at the heart of the relationship with people and are reflected in the various company policies
- Internal communication tools
- The Group's human resources development policies focus on building, maintaining and developing factors that are instrumental for competing in international contexts which are continually evolving
- Development Paths/Career Paths
- Transparency of the evaluation system
Potential employee dissatisfaction due to lack of a training and professional development plan
Caused by the Group
All Group companies
- Training Plan
Developing human resources
Potential tensions in the company's relations with trade union representatives
Caused by the Group
All Group companies
-The Piaggio Group acknowledges the role of trade union organisations and workers' representatives and is committed to establishing relations with them focused on attention, engagement and a common understanding
Responsible management and respect for human rights in the supply chain
Possible non-compliance with human rights and ESG principles by suppliers
To which the Group contributes indirectly and related to the Group through its business relations
Manufacturing companies and suppliers of manufacturing companies
- Piaggio requires its suppliers to sign general supply conditions that specifically refer to the Group's Code of Ethics or require an explicit commitment to comply with laws on the environment, pollution, health and safety and respect for workers' rights, so as to ensure compliance with its ethical values throughout the production and sales cycle of its products
Potential injuries to workers, outbreaks of occupational diseases and risk of contagion if the company fails to provide a safe and healthy workplace
Caused by the Group
All Group companies and external workers11
- ISO 45001 certification - Periodic occupational health and safety training
- Personal protective equipment and operating instructions
Health and Safety
Potential damage/injury when using materials/substances harmful to persons
Caused by the Group
Manufacturing companies
Product compliance with Reg. 1907/2006 REACH and EU Directive 2000/53/EC End Of Life
Business integrity
Any conduct in violation of laws and regulations and unlawful acts of collusion/corruption by employees
Caused by the Group
All Group companies
- Adoption of the Group Code of Ethics - Use of instruments, including organisational tools, to ensure respect for the principles in the Group Code of Ethics
Waste handling
Waste generation and potential pollution in the case of non-classification / characterisation of waste
Caused by the Group
Manufacturing companies
- Environmental certification ISO 14001
Conserving water resources
Possible reduction of available water resources in water-stressed areas
Caused by the Group
Manufacturing companies
- Piaggio is careful to choose technologies that minimise the use of water resources, monitors water usage and partly reuses the water withdrawals
Diversity and equal opportunity
Incidents of discrimination or exclusion of employees for reasons related for example to age, culture, ethnic origin, religion, political opinion, civil status, gender, physical ability, sexual orientation
Caused by the Group
All Group companies
- The Group's focus on diversity management is demonstrated by the adoption of the Code of Ethics, compliance with international equal opportunity legislation and the issuance of policies that protect the forms of diversity already present in the organisation, such as the Sexual Harassment policy in place in the Indian affiliate
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Compared to last year, there were no significant changes in the topics identified; as in previous years, only the topic of biodiversity did not cross the threshold of materiality. Piaggio's production sites are not located in protected areas or areas with high levels of biodiversity. The sole exception is the Scorzè site, which although located in an industrial zone, conveys its waste water into the drainage basin of the Venetian Lagoon. As such, the production site is subject to restrictions imposed by specific laws.
The 2022 materiality analysis was reviewed by the Audit, Risk and Sustainability Committee in its meeting of 20 February 2023 and approved by the Board of Directors of Piaggio & C. S.p.A. on 24 February 2023.
The Piaggio Group has always paid considerable attention to engaging with stakeholders, i.e. all entities inside and outside the organisation whose activities have an impact on company operations. In fact stakeholders are defined as having an interest in or various expectations (social, economic, professional, human) of the Company.
Based on this definition, the Group has identified categories of stakeholders in relation to its operations.
Map of Piaggio Group stakeholders
Customers and dealers
Engagement methods:
•Contact centre
•Customer satisfaction surveys
•Communication outlets (websites, social media)
•Events (travelling tests, trade fairs)
•Dealer website
•Dealer support services/Help desk
•Motoplex (new sales format)
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Stakeholder expectations
Our actions
Quality, safety and reliability of products.
Investment in ever safer and more reliable products.
Obtaining quality certification.
Low/zero consumption and emissions.
Study of innovative engines with low/zero consumption and emissions.
Rapid response and problem solving.
Effort to improve professionalism, timeliness and courtesy of the contact centre personnel and dealers.
Sales support.
Development of a dedicated website and a new sales format.
Suppliers
Engagement methods:
•Daily relations
•Supplier portal
•Impact assessment questionnaire
Stakeholder expectations
Our actions
Continuity of supplies.
Implementation of the Supplier Portal, also used for the automated management of supply orders.
Collaboration and sharing of best practices.
Vendor rating campaigns.
Appropriate conduct guidelines to prevent incidents of corruption.
Local Communities
Engagement methods:
•Meetings, exhibitions and events
•Rallies
•Charity activities
Stakeholder expectations
Our actions
Contributions to support charity initiatives.
Support for numerous charity initiatives.
Organisation of rallies and events for connoisseurs.
The Group historically organises rallies and races for its customers.
Development of local communities.
The Piaggio Foundation and the Piaggio Museum are a meeting place and cultural reference for the territory.
Respecting the environment.
Attainment of environmental certification for production sites.
Institutions and the public administration
Engagement methods:
•Ongoing dialogue on legal developments
•Periodic ad hoc meetings
•Participation in parliamentary committees appointed to discuss and formulate new regulations
•Meetings and presentations
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Stakeholder expectations
Our actions
Compliance with laws and regulations.
Appropriate conduct guidelines to prevent incidents of corruption.
Being open and receptive to environmental and social themes.
Investments in the R&D of innovative products that are abreast of any restrictions of current regulations.
Support on specific technical themes.
Proactive participation in parliamentary committees appointed to discuss and formulate new regulations.
Pursuing common objectives.
Participating in trade associations.
Media
Engagement methods:
•Press releases
•Events and company communication initiatives
•Press product launches
•Product test rides
•Wide Piaggio Group Magazine
•Websites
Stakeholder expectations
Our actions
Availability, transparency and timeliness of information on the company and its products.
Abiding by the governance code of business communications.
Strengthening relations with the media in the different countries where the Group is active.
Shareholders and lenders
Engagement methods:
•Conference calls/Road Shows
•Piaggio Analyst and Investor Meetings
•Corporate website
Stakeholder expectations
Our actions
Clear and timely information.
Promotion of ongoing dialogue with analysts and lenders.
Remuneration and asset value of investments.
Treasury share buying policy and dividend policy.
Human resources
Engagement methods:
•Company Intranet
•Piaggio InfoPoint
•Piaggio Net International
•Web Mail
•Evaluation Management System
•Wide Piaggio Group Magazine
•Meetings with trade unions
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Stakeholder expectations
Our actions
Clear and timely company communication.
Promotion of ongoing, constructive dialogue with employees.
Safe and healthy work environment.
Attainment of health and safety certification for Group sites.
Opportunity for professional development and training.
Preparation of professional and managerial career paths for young talents.
Transparent reward policies.
Remuneration policy characterised by meritocracy and equal opportunities.
Respecting human rights and diversity.
Abiding by a code of ethics that explicitly prohibits any form of discrimination or forced labour.
Open and constructive dialogue.
Promoting ongoing, constructive dialogue with trade unions.
Universities and Research Centres
Engagement methods:
•Cooperation in research projects
•Teaching/internship activities
Stakeholder expectations
Our actions
Cooperation on common projects.
Collaboration with universities and research institutes on research projects.
Training.
Promotion of internships for college undergraduates and graduates.
Teaching carried out by Piaggio personnel at some faculties.
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The business model
The Piaggio Group today has three distinct core segments:
•2-wheelers, scooters and motorbikes from 50cc to 1,100cc;
•light commercial vehicles, 3- and 4-wheelers;
•the robotics division with Piaggio Fast Forward, the Group's research centre on the mobility of the future based in Boston.
There were no significant changes in either the corporate structure or the chain of control or supply chain in the financial year 2022.
The Piaggio Group pursues the creation of value and growth over the long term through a responsible management of all available resources.
To this end, the Group uses the following capital:
Financial capital
Financial resources from internal and external funding.
Production capital
Own and third-party property, plant and machinery, available to carry out activities.
Intellectual capital
Intangible assets and knowledge that represent a competitive advantage for the Group.
Human capital
The expertise, abilities and knowledge of people working at Piaggio.
Relational capital
The intangible resources relative to relations with key stakeholders (suppliers, sales and assistance network, etc.).
Natural capital
The environmental resources used in Group activities.
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Our resources
FINANCIAL CAPITAL
Shareholders, bondholders and banks ensure that Piaggio has the financial resources it needs, on condition that their expected return on invested capital is met.
PRODUCTION CAPITAL
The Piaggio Group operates on a global scale, with production sites in:
•Pontedera (Pisa), the main technical headquarters of the Group, which manufactures Piaggio, Vespa and Gilera brand two-wheeler vehicles, light transport vehicles for the European market and engines for scooters, motorcycles and Ape vehicles;
•Noale (Venice), the technical centre for the development of motorcycles for the entire Group, and the headquarters of Aprilia Racing;
•Scorzè (Venice), a factory for the production of Aprilia brand two-wheeler vehicles;
•Mandello del Lario (Lecco), a factory which produces Moto Guzzi vehicles and engines;
•Baramati (India, in the state of Maharashtra), with plants dedicated to the manufacture of three-wheeler commercial vehicles, Vespa and Aprilia brand scooters and engines;
•Vinh Phuc (Vietnam) where Vespa and Piaggio scooters and engines are produced;
•Jakarta (Indonesia) for the assembly of Vespa scooters (operational from November 2022).
The Piaggio Group also operates via a joint venture company in China (Zongshen Piaggio Foshan Motorcycles, in Foshan, in the province of Guangdong), which is 45% owned by Piaggio (and therefore not included in the line-by-line consolidation of the Group).
The Piaggio Group is aware of the great value of innovation and research and believes in the importance of sharing knowledge and ideas and in the stimulus that it can give to improving technologies, processes and products. For this reason, the Piaggio Group has always been engaged on many fronts to consolidate the synergy between its research and development centres, the world of research and its industrial sector.
Moreover, since 2015, with the establishment of the Piaggio Fast Forward company, the Piaggio Group has developed a new way of doing research, to interpret the signs of change and find intelligent solutions to problems and new needs that will arise.
Piaggio Fast Forward aims to help the Piaggio Group, in cooperation with its Research and Development Centres around the world, to develop increasingly technological and innovative products that meet the changing needs of consumers.
Every year, the Group’s intensive research and development activities lead to patents being filed in the countries where it works.
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HUMAN CAPITAL
Human resources, and the skills, abilities and dedication offered by individuals, represent a key factor in Piaggio's competitiveness and growth at a global level. Everything we do as individuals or as a team is shaped by our strategic vision, result-driven approach, constant commitment to customer satisfaction, desire for innovation and awareness of the future needs of the market, to generate value for each and every stakeholder. People are the key element that enables us to meet challenges in an increasingly dynamic and competitive international scenario. It is for these reasons that Piaggio places such central importance on people in the organisation, assuring them our respect and protection in all Group companies.
The Piaggio Group has a direct sales presence in main countries in Europe, the USA, Canada, India, Vietnam, Indonesia, China and Japan, while it operates through importers in other markets of the Middle East, Africa, Central and Latin America and Asia Pacific.
How we build our strategic advantage
ORGANISATIONAL STRUCTURE
The Piaggio Group is structured into and operates within geographic segments (EMEA and Americas, India and Asia Pacific), for the development, manufacture and distribution of two-wheeler and commercial vehicles, as well as new mobility solutions.
Each geographic segment is equipped with production facilities and a sales network specifically dedicated to customers in this region.
The Group boasts an agile and flexible production capacity, enabling it to adapt quickly to the needs of the market.
A UNIQUE BRAND PORTFOLIO
The Piaggio Group sells two-wheeler vehicles under the brands Piaggio, Vespa, Aprilia, Moto Guzzi, and commercial vehicles under the brands Ape and Porter. Some of the Piaggio Group brands are the most prestigious and historic in the world of motorcycle racing. Moto Guzzi celebrated its centenary in 2021. One hundred years of stunning motorcycles, of victories, of adventures, of extraordinary characters who have created the myth of the “Brand of the Eagle”. Aprilia has made a name for itself as one of the world's most successful manufacturers participating in the World Speed and Superbike Championships. In the scooter sector, the legendary Vespa brand has been synonymous with two-wheel mobility since 1946, and with over 19 million units produced to date, it represents a commercial success story of incredible longevity, as well as being one of the most recognisable icons of Italian style and technology in the world.
DISTRIBUTION AND SERVICE NETWORK
Piaggio, which distributes its products in more than 100 countries, has an extensive distribution and sales network made up of qualified, reliable partners.
Since the right location is essential in order to enable each brand to express its values, for a number of years Piaggio has been using a new distribution format called “Motoplex”, joined by about 1,000 2W sales points around the world. The Motoplex concept is based on the idea of showcasing "brand islands", giving the customer the real experience of the brand represented.
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PRODUCT RANGE
The main objective of the Piaggio Group is to meet the most progressive needs for mobility, through a deep understanding of people and their habits, reducing the environmental impact and fuel consumption of its vehicles, ensuring customers excellent levels of performance. In its effort to ensure the sustainability of its products, the Piaggio Group takes into account the entire life cycle, which comprises the design, procurement of raw materials, production proper, use of the product by customers and, finally, decommissioning, which consists in disassembly at the end of service life and in the disposal and/or recycling of the components and raw materials.
The Piaggio Group's product range includes scooters and motorbikes with combustion engines from 50 to 1,100cc and electric motors, three and four-wheeled light commercial vehicles and an electric scooter distributed under the Aprilia brand. Moreover, the American affiliate Piaggio Fast Forward has been selling the GITA since November 2019, only in the USA. This smart robot is powered by electric motors and equipped with sensors and cameras, to follow people and avoid obstacles, and can transport up to 40 pounds.
In a society which is increasingly aware of the issue of sustainability, creating products with low environmental impact, in factories that are safe, non-polluting and do not waste resources, is becoming vital for survival.
Constant focus is placed on research into vehicles that are at the cutting edge in terms of:
•Ecology and ability to contribute to the mitigation of Climate Change: products able to avoid or in any case reduce emissions of polluting gases and greenhouse gases (CO2) both in urban-area and extra-urban use; this is achieved by introducing electric engines and further developing traditional engine technologies (increasingly sophisticated internal combustion engines), as well as the Group making more use of renewable, sustainable energy sources;
•Reliability and safety: vehicles that allow a growing number of people to get about town easily, while contributing to ease traffic congestion and ensuring high levels of active, passive and preventive safety;
•Recyclability: products that reduce the environmental impact at the end of their life cycle to a minimum;
•Cost-effectiveness: vehicles with lower running and maintenance costs.
QUALITY CONTROL
Piaggio has a comprehensive quality management system to monitor product quality levels in the various stages of the production process and prior to dispatch to the customer. The standard procedures adopted at all Piaggio Group sites enable the constant monitoring of the quality of all vehicles produced, ensuring product standards that fully meet both regulatory and type approval specifications and the expectations of the end customer.
SUPPLY CHAIN
Some components are purchased externally in line with a global sourcing model that guarantees the quality and economy of the products supplied.
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Piaggio requires its suppliers to sign general supply conditions that specifically refer to the Group's Code of Ethics or require an explicit commitment to comply with laws on the environment, pollution, health and safety and respect for workers' rights, so as to ensure compliance with its ethical values throughout the production and sales cycle of its products.
ENVIRONMENTAL SUSTAINABILITY
Piaggio aims to adopt a model of sustainable development that not only meets the expectations of stakeholders (investors, shareholders, staff, suppliers, community, public administration) by guaranteeing economic and social sustainability, but also roots its actions in environmental sustainability, meaning the ability to contribute to mitigating climate change, and safeguarding natural resources and the possibility for the ecosystem to absorb direct and indirect impacts generated by production activities. Specifically, Piaggio seeks to minimise the environmental impact of its industrial activities by carefully defining the manufacturing technological cycle and by using the best technology and the most modern production methods. The pursuit of these environmental sustainability goals is blazing a trail of ongoing improvement in environmental performance.
Results
REMUNERATION TO LENDERS
During 2022, dividends for €53,403,194.83 were distributed.
The Piaggio share closed the year 2022 at €2.804 substantially in line with the end of 2021, with a performance markedly superior to that of the main benchmarks.
EMPLOYEES
In 2022, the Piaggio Group employed 6,388 people (annual average figures), providing them and their family members with a health scheme. In the same period, accident statistics stayed at the minimum physiological level, at all sites. Moreover, 97,251 hours of training were delivered.
During 2022, none of the Piaggio Group companies were affected by episodes concerning employee discrimination or the breach of employee rights.
CERTIFICATIONS
The Piaggio Group possesses excellent environmental, quality and occupational management systems at all its production sites.
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Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati-Engine Plant
Baramati-Two-Wheeler Plant
Baramati-Commercial Vehicles Plant
Vinh Phuc
ISO 9001 - Quality Management Systems
● since 1995
● since 2006
● since 2010
since 2018
● since 2013
since 2018
● since 2009
ISO 14001 - Environmental management systems
● since 2008
● since 2008
● since 2010
● since 2015
● since 2013
● since 2015
● since 2011
BS OHSAS 18001- Occupational Health and Safety Management Systems
● from 2007 to 2018
● from 2007 to 2018
● from 2010 to 2018
● from 2015
to 2020
● from 2013
to 2020
● from 2015
to 2020
● from 2013 to 2018
Certification
ISO 45001 - Occupational health and safety management systems
● since 2019
● since 2019
● since 2019
● since 2021
● since 2021
● since 2021
● since 2019
All of the Group's plants have held certification for several years for Quality (ISO 9001), Environment (ISO 14001) and Health and Safety (ISO 45001 or BS OHSAS 18001).
The Indian sites switched from BS OHSAS 18001 to ISO 45001 certification starting from April 2021.
In November 2022, the Certification Company Det Norske Veritas (DNV)12 conducted audits to maintain Quality certification (ISO 9001), Environmental certification (ISO 14001) and Health and Safety certification (ISO 45001) for Italian sites (including the commercial site in Milan). The audits were successful.
Annual audits by the certification body demonstrate the Company's commitment to its Quality, Health and Safety and Environmental policies established by Top Management and are proof of the reliability of the Management Systems which are applied with the contribution of managers from all functions and the individuals who work in them.
12 DNV: Det Norske Veritas is one of the world's leading certification bodies.
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VEHICLES PRODUCED
EMEA AND AMERICAS
INDIA
Asia Pacific 2W
2W Vehicles
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati 2W
Vinh Phuc
Jakarta
Total
2022
135,734
26,913
18,066
69,374
245,682
2,080
497,849
2021
135,737
21,391
16,191
84,023
180,313
0
437,655
Delta 2022-2021
0.0%
25.8%
11.6%
-17.4%
36.3%
100%
13.8%
EMEA AND AMERICAS
INDIA
Commercial Vehicles
Pontedera
Baramati 3-4W
Total
2022
9,487
104,091
113,578
2021
8,993
76,005
84,998
Delta 2022-2021
5.5%
37.0%
33.6%
EMEA AND AMERICAS
INDIA
Asia Pacific 2W
Engines
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Total
2022
103,962
24,448
18,316
127,897
250,187
524,810
2021
111,781
16,272
16,594
125,964
171,790
442,401
Delta 2022-2021
-7.0%
50.2%
10.4%
1.5%
45.6%
18.6%
R&D
In 2022, the Piaggio Group continued its policy of retaining technological leadership in the sector, allocating total resources of €64.7 million to research and development, of which €41.1 million capitalised under intangible assets as development costs.
The Piaggio Group is convinced of the importance of exchanging knowledge and ideas, and of the resulting encouragement that can lead to improvements in technologies, methodologies and products. For this reason the Piaggio Group has always been engaged on many fronts to consolidate the synergy between the world of research and its industrial sector.
The Group has continual exchange and research initiatives with universities and research centres. The objective of these partnerships has been to support continuing innovation over the last few years through:
-partnerships in research and development projects;
-participation in European Projects;
-experimental research dissertations.
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2022
2021
Capitalised
Expenses
Total
Capitalised
Expenses
Total
In millions of Euros
Two-wheelers
29.0
19.8
48.8
20.8
17.7
38.5
Commercial Vehicles
12.1
3.7
15.9
21.1
4.1
25.2
Total
41.1
23.6
64.7
41.9
21.8
63.7
EMEA and Americas
29.4
19.1
48.5
31.1
17.2
48.3
India
7.3
2.0
9.3
6.3
2.4
8.7
Asia Pacific 2W
4.5
2.5
6.9
4.5
2.2
6.7
Total
41.1
23.6
64.7
41.9
21.8
63.7
*The figures shown do not include research, development and prototyping costs incurred by Piaggio Fast Forward.
Patents are registered in countries where Piaggio operates on a continual basis, thanks to intense research and development carried out by the Group at its research centres.
ESG INDICES
Some economic studies point to a link between sustainability and long-term value creation. The economists Porter and Kramer, in their well-known 2011 article 'The big idea: Creating shared value', identified the concept of shared value as the ability of corporate policies and practices to create value that simultaneously generates greater competitiveness for the company and responses to the needs of the communities and challenges of the society in which the company operates.
In recent years, the European Union has enacted provisions to facilitate the financing of sustainable economic activities.
Investors are increasingly interested in investing in sustainable companies as they are considered less risky and more profitable in the long term.
Analysts and international rating agencies constantly monitor Piaggio's ESG performance.
Below are the scores obtained by the international body Carbon Disclosure Project, which assesses CO2 emissions and water use, and the MSCI ESG Research rating agency, which measures the performance of companies based on ESG factors.
CDP Score Climate Change
CDP Score Water Security
MSCI ESG Research
2022
B
B
AA
2021
B
B
AA
As of 2022, Piaggio & C S.p.A has received an MSCI ESG Rating of AA
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Research, Development and Innovation Guidelines
Mobility and Innovation
The Piaggio Group has been involved in mobility since its foundation in 1884, always with an innovative focus. As early as the beginning of the 20th century, Rinaldo Piaggio aimed to expand the company into the aeronautical sector, when this also symbolically represented the cutting edge of technology.
In over 110 years of activity, Piaggio has designed and built every means of transport: aircraft (single, twin and four-engine), seaplanes, engines for their own planes, trains, trucks, buses, trailers, cable cars, funiculars, speedboats, outboard motors, small cars; and, of course, perhaps the most innovative product in its history: the Vespa.
The Piaggio Group is therefore traditionally structured to respond to changes in the technical and social environment and ready for those in the near future. It pioneered both electric (1970s) and hybrid mobility (2009) and is ready for the challenges of the present and the future.
Now more than ever, mobility is strongly directed by regulations, for example through the limits on CO2 and other polluting gases (HC, NOx, etc.) that regulate the type approval of new models and limit the usage of vehicles already on the road (e.g. access to urban areas).
But at the same time there is also a constant change in customer preferences, as they are increasingly inclined towards the personal use of electric vehicles rather than those powered by combustion engines, and also more open to new solutions, such as sharing.
The Group sees the ability to combine industry-specific knowledge, robotics and software as key to improving future mobility systems in cities and, through its capabilities in the production of electric vehicles and the management of related infrastructure, intends to confirm its leadership in the revolution which is taking place.
Technical trends in mobility are described internationally with the acronym ACES, whose letters stand for Autonomous, Connected, Electrified and Smart (Mobility). These designations also describe the Piaggio Group's research priorities, in the continuous study of technologically advanced solutions conducted in Research Centres around the world. Added to these is the fifth letter, Decarbonisation, which is reducing CO2 emissions from both product and process.
ACES for Two-Wheelers (PTWs)
: technology for autonomous vehicles
These are automated systems with sensors, computing power and analytical capabilities that can react according to the data they collect. In the field of two-wheelers, the use of these systems has to be fine-tuned in order to be effective due to their particularly dynamic behaviour. In addition to technical capabilities, this requires the vast experience that the Piaggio Group has acquired in over 75 years in the industry. Leveraging the expertise of its subsidiary Piaggio Fast Forward (PFF) in Boston13, which specialises in robotics, Piaggio has equipped some of its models14 with radar systems capable of automatically detecting objects (vehicles, pedestrians, infrastructures) and determining their distance and possibility of
13 The system dedicated to Piaggio Group motorbikes is developed, built and supplied by Piaggio Fast Forward in close cooperation with Piaggio R&D. The PFF modules use Vayyar's Radar-on-Chip (RoC) mmWave 4D imaging sensor that provides multiple ARAS functions, such as Blind Spot Detection (BSD), Lane Change Assist (LCA) and Forward Collision Warning (FCW), with a single sensor covering a range of about 100 meters, equipped with an extremely wide field of vision.
14 Piaggio Mp3 530; Moto Guzzi V100 Mandello.
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collision, providing a warning to the driver. It has also experimented with 'By Wire' systems for clutches and gearboxes, implementing particular designs on the flagships of his motorbike brands15. It also has 'By Wire' braking systems in its portfolio, which at the moment are not seen as strategic given the high quality of the ABS in use.
Driving assistance software aimed at reducing emissions and fuel consumption has also been developed for both ICE16 and electric vehicles, while driving style analysis systems are being looked at with the aim of increasing dynamic safety by raising the driver's awareness.
: technologies for connected vehicles
The debut of Connectivity on a Piaggio vehicle came with the Beverly scooter in 2012, the first product to adopt the Mia system that allows a smartphone to be integrated into the vehicle's electronic system. Since then, development has been rapid, involving Piaggio Fast Forward in the development of the dedicated app. It is in fact a bi-directional V2I connectivity, responding both to the customer's needs (maps, weather, places of interest, display of more vehicle parameters, music, telephone, etc.) and for a data exchange with the parent company and for possible distress calls (iCall).
Added to this is the possibility, on some models, to have alerts for attempted theft, battery charging etc., up to and including fleet management. Obviously, the connectivity of vehicles, as well as of any device, requires a high level of focus on cybersecurity, for which a 'cyber secure by design' methodology must be adopted.
Mia is also an open door for eCommerce, which will grow in importance and value in the coming years.
: electrification technologies
Although in the ACES acronym Electrification is the third factor, in reality the effort to make Mobility sustainable is the most challenging. As 2030 approaches, Piaggio has decided to embark on a path based mainly on electric technology17, pursuing its idea of Sustainable Mobility even more strongly.
"To achieve this goal, the large-scale adoption of electric vehicles, such as motorbikes, scooters and light commercial vehicles equipped with battery swap or plug-in technology, must be promoted, fostering a more sustainable battery life cycle management and greater environmental friendliness."18.
The strategy starts in Pontedera, where Piaggio set up its new eMobility department in 2021, dedicated to the development of two-, three- and four-wheeler vehicles and components for Electric Mobility19.
The Piaggio Electric Product Range is evolving rapidly, not only for the EMEA market but for the whole world. It already includes the Group's flagship product, the Vespa Elettrica (moped and motorbike), with other versions dedicated to various markets set to be produced; in addition to this, the Piaggio 1 was also a great sales success in both the moped and the scooter versions. Ape Elettrica, specifically designed for the Indian market, also enjoys commercial success and perfectly represents how an iconic and evergreen vehicle can be electrified.
The near future will see more models for other segments, all equipped with lithium-ion batteries (LIB) with BMS and remote control, with a focus on standardisation and end-of-life recovery. Prominent among these
15 Aprilia RSV4 and Tuono V4; Aprilia RS660 and Tuono 660; Moto Guzzi V100.
16 ICE: Internal Combustion Engine.
17 Statement by Roberto Colaninno, Chairman and CEO of the Piaggio Group, at the presentation of the Moto Guzzi V100 (September 2021, adnkronos).
18 Statement by Michele Colaninno, Chief of Strategy and Product of the Piaggio Group (October 2021).
19 Obviously, the success of Electric Mobility requires a step change in the development of infrastructure, primarily for charging vehicles.
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projects is the Porter Electric, the zero-emission version of the classic but very modern four-wheeler for transport. Other projects will arise from the agreement signed in 2022 between the Piaggio Group and the Chinese giant Foton Motor Group “for the development of a new range of four-wheel light commercial electric vehicles”20.
Moreover, Piaggio has never stopped researching hybrid propulsion, the system that combines the advantages of electric motors and ICEs to improve performance and fuel consumption. Building on the experience gained since 2009 with the Piaggio Mp3 Hybrid, the world's first Parallel Hybrid scooter, the Group continues its research in the field of Mild Hybrids. In addition to the main research strand of eMobility, Piaggio is also keeping a close eye on alternative energy vectors, such as Hydrogen with Fuel Cells (HEV), which has already been tested in the past21 and other renewable fuels, which could bring classic ICEs up to date in applications where they are difficult to replace.
: Smart, intelligent mobility solutions
In this field, Piaggio remains committed to ensuring that its vehicles are ready to be part of the intelligent mobility chain. This means being electric, connected, remotely manageable, easy to use, and equipped with exchangeable batteries: all qualities that Piaggio electric vehicles have and will have.
As mentioned above, in addition to ACES, the other fundamental theme for research at Piaggio is the
: decarbonisation
This process that involves the entire production chain of the Group22, but even limiting the observation to R&D alone, it translates into concrete actions: new design philosophy23, choice of materials and, in general, the rise of the culture of “circularity”. The Group's medium-term objective is to be able to reduce the demand for raw materials, especially those that are scarce or have a polluting production cycle (e.g. energy-intensive, high CO2 emissions), helping:
Recycling: through the use of recyclable materials, the foundations are laid for a Product suitable for being part of the Circular Economy24.
Reuse: one example of possible (direct) reuse is batteries. Usually, lithium batteries have a longer life than the vehicle; therefore they can be reused, provided they can be easily separated and standardised25: Piaggio 1's batteries are already designed with this in mind, as they are removable and will also be a standard for future Piaggio electric vehicles in the same range.
20 Press release of 29.11.22: The Chairman and CEO of Piaggio & C. S.p.A. (PIA.MI), Roberto Colaninno, and the Deputy General Manager of Foton Motor Group, Wang Shuhai, have signed a preliminary agreement in Mantova to develop a new range of four-wheeler light commercial electric vehicles. The agreement consolidates the partnership between the two Groups that began in September 2017 for the joint development of innovative solutions for the light commercial vehicles market.
21 Piaggio has built a prototype Maxi Scooter HEV (Hydrogen Electric Vehicle), i.e. powered by hydrogen gas converted into electricity via Fuel Cell.
22 The Piaggio Group to adhere to REACH and ELV - N1.
23 Example: Design aimed at reducing the number of parts in a vehicle. The elimination of a body part, through its integration with an adjacent one, generates a cascade of benefits: reduction of moulds to be made and consequently savings in materials and energy throughout their production process; elimination of material waste; reduction of moulding energy; reduction in the number of packages; reduction of energy required for transport; reduction of time and energy for assembly of the finished product; streamlining of warehouse management and spare parts management. All this without having changed the content of the Product, but only having addressed the design.
24 ELV survey conducted on Mp3 being updated with Vespa GTS (UniFi), by January.
25 Piaggio Group, HONDA Motor Co., Ltd., KTM F&E GmbH, and YAMAHA Motor Co, Ltd. established the Swappable Batteries Motorcycle Consortium (SBMC), in order to promote the widespread use of light electric vehicles such as motorised mopeds, scooters, motorbikes, tricycles and quadricycles, and to encourage more sustainable management of the life cycle of batteries, in keeping with international climate policies.
S
D
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Saving: Another example of attention paid to the use of resources is the elimination of rare-earth elements from electric engines and other precious and poorly reusable materials from electronic components.
Alternative fuels: decarbonisation also and above all concerns Products 26, and is the main driver for research in Sustainable Mobility. The Piaggio Group is pursuing the road to electrification with conviction, but believes that this alone cannot solve all problems. Other approaches to decarbonisation exist, and are needed: for example, the use of alternative, non-fossil fuels27 in internal combustion engines, alongside the direct electrification of vehicles.
The Piaggio Group's attention is also focused on synthetic and biofuels, which will solve problems of autonomy and architecture, which are typical of electric engines in the motorcycle sector28. The use of these fuels will make it possible to reuse a large part of existing ICE vehicles, making them Zero Emission Vehicles by changing the fuel and associated technology.
This is one of the reasons why the Piaggio Group is also continuing research into conventional engines, in order to make them increasingly efficient. The strong technical and economic effort being made to adapt production to the Euro5+ standard, which is stricter than the previous one, will also have a positive impact on the future use of synthetic and biofuels. Green hydrogen comes under this category and is used for electric vehicles with FC (HEV)29, as it is not cost-effective for internal combustion engines.
26 It is important to remember that the two-wheeler sector accounts for 1.3% of CO2 emissions in transport, which in turn accounts for 20% of global emissions; so the two-wheeler sector accounts for less than 1% of the total (source: European Environment Agency 2022); this cannot limit our Group's commitment, but it is necessary to put the problem into perspective.
27 Synthetic and biological fuels, as well as electricity, must be produced from and with renewable energy to truly have no carbon footprint.
28 Aside from city or intercity scooters, there is an important market segment of two-wheelers, whose physical and functional characteristics do not allow for their electrification; these products could be safeguarded, on the same level as decarbonisation, through the use of synthetic and biofuels.
29 HEV stands for Hydrogen Electric Vehicle, while BEV stands for Battery Electric Vehicle; FC stands for Fuel Cells. Hydrogen stored in a cylinder plus a FC that converts it into electrical energy is the equivalent of a charged battery.
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European Taxonomy
The European Union, in line with the contents of the 2015 Paris Climate Agreement and the 17 Sustainable Development Goals of the United Nations 2030 Agenda, has developed an ambitious strategy towards more sustainable economic models to achieve the 2050 climate neutrality goal. To achieve these targets, the EU intends to promote investment in sustainable assets and activities through the use of public and private resources.
In this context, as part of the action plan on sustainable finance adopted in 2018 by the European Commission, the classification system or "taxonomy" of sustainable activities was established, set out in Regulation (EU) 2020/852 (hereinafter "the Regulation"), in which the criteria are defined to determine whether an economic activity can be considered as eco-sustainable, thus reducing the risk of greenwashing and guaranteeing financial institutions and investors a greater compatibility as regards the degree of eco-sustainability of an investment associated with it. In particular, the Regulation classifies the economic activities that can potentially be aligned with the 6 environmental objectives defined by the European Union:
▪Climate change mitigation
▪Adaptation to climate change
▪Sustainable use and protection of waters and marine resources
▪Transition to a circular economy
▪Prevention and reduction of pollution
▪Protection and restoration of biodiversity and ecosystems
At present, the EU Commission has defined, through the Commission Delegated Regulation (EU) 2021/2139 ("Climate Regulation"), the list of eligible activities and the related technical screening criteria for the first two objectives only, and it is for these that financial and non-financial companies falling within the scope of the Regulation are required to align with.
Article 8 of Regulation (EU) 2020/852 defines the taxonomy reporting obligations, which to date are applicable to non-financial companies subject to the Non-Financial Reporting Directive. In July 2021, Regulation (EU) 2021/2178 further supplemented the content of the Regulation, to clarify how the taxonomy disclosure should be calculated and presented.
From 1 January 2022 onwards, with regard to data from the 2021 financial year, companies have reported the information necessary to meet the requirements of the Regulation in their non-financial statement. In particular, the information that the Taxonomy requires non-financial undertakings to report, refers to the following indicators:
a)the proportion of turnover from products or services associated with economic activities considered by the Taxonomy;
b)the proportion of capital expenditure and the proportion of operating expenditure related to activities or processes associated with economic activities considered by the Taxonomy.
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Following the first-time adoption of the Regulation for the 2021 financial year, non-financial companies were requested to report on their proportion of own turnover, investments (Capex) and operating costs (Opex) (as defined by Commission Delegated Regulation (EU) 2021/2178) related to eligible economic activities, within the meaning of the Taxonomy. Starting from 1 January 2023, in relation to data for the 2022 financial year, non-financial companies are required to report the above parameters relating not only to the share of "Eligible" activities, but also to environmentally sustainable activities (so-called "Aligned” activities). In order to understand whether own 'Eligible' activities can also be considered as “Aligned”, compliance with two types of criteria must be met:
•the technical screening criteria described in the Delegated Acts, that ascertain whether the activities considered make a substantial contribution to climate change adaptation and mitigation;
•the 'DNSH' - Do No Significant Harm criteria, which ascertain that the activities considered do not cause significant harm to any of the other environmental objectives.
In addition to these specific technical requirements related to environmental objectives, the Regulation also requires compliance with Minimum Social Safeguards. In this case, the organisation has to prove through its implemented procedures that it adheres to the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight core conventions identified in the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights.
In order to meet the requirements of the regulations, in 2022 the Piaggio Group continued to analyse its activities already identified as "Eligible" for the purposes of 2021 reporting, in order to assess their actual contribution to the aforementioned objectives and to understand if and which of them could also be considered as "Aligned". To do this, it ensured compliance with the technical screening criteria, the “DNSH” criteria and the “Minimum Social Safeguards”, with reference to the climate change mitigation objective, as this was predominantly identified as the most suitable given the type of economic activities carried out by the Group.
Technical Screening and DNSH Criteria
In the disclosure of the 2021 Non-Financial Statement, the following activities related to the Piaggio Group's core business were identified as Taxonomy-Eligible:
•3.3 “Manufacture of low carbon technologies for transport”, concerning the production and marketing of vehicles;
•6.4 “Operation of personal mobility devices, cycle logistics”, in connection with the sale of Scooters and WiBikes;
•9.1 “Close market research, development and innovation” with reference to capitalised R&D costs.
In this context, it should be noted that, following the clarifications and interpretations of legislation provided by the EU Commission in the form of a Q&A in December 202230, the costs and investments in research and development activities, being an integral part of an economic activity covered by the annexes to the Climate Regulation, have been counted directly for the purposes of the relevant economic activity. Consequently, the Group has proceeded with the allocation of research and development costs, previously
30 “Draft Commission Notice” of 19 December 2022
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classified as inherent to activity 9.1, to the economic activity to which such research (as carried out for the purpose of product technological innovation) is directed, i.e. activity 3.3 inherent to the manufacture of vehicles. As a result, asset 9.1 was no longer included among the Group's “eligible” assets, for the purposes of 2022 financial year reporting.
Therefore, in order to verify the alignment of the only two eligible activities carried out by the Group (3.3 and 6.4), the specific technical screening criteria related to the target of Climate Change Mitigation were analysed and only vehicles with zero tailpipe CO2 emissions were identified as potentially eligible for alignment.
In addition, in order to analyse the DNSH criteria, an analysis was conducted for the plants at Pontedera (Italy) and Baramati (India), which are the only sites where the production of the identified vehicle types takes place. For each eligible economic activity (3.3, 6.4) to reach the Climate Change Mitigation target, the DNSH criteria identified by the Commission Delegated Regulation were analysed and the activities carried out with the owners for the two sites were mapped, resulting in the following findings:
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Objective 2
Objective 3
Objective 4
Objective 5
Objective 6
Objectives
Adaptation to climate change
Sustainable use and
protection of water and marine resources
Transition to
a circular economy
Prevention and
reduction of
pollution
Protection and restoration
of biodiversity and ecosystems
Baramati
•Climate Risk Self Assessment activities were carried out for the assessment of climate-related physical risks
•Compliance with MPCB environmental regulations31
•No water discharges
•Water resource treatment for reuse and certification according to quality standards
•Adoption of circular economy practices where possible, prioritising recycling and design to ensure durability standards
•Compliance with local and European hazardous waste regulations
•The activity does not involve the manufacture, placing on the market or use of certain substances (mercury)
•Pollution risk assessment of research projects
•The plant is not located in an area characterised by biodiversity
Pontedera
•Climate Risk Self Assessment activities were carried out for the assessment of climate-related physical risks
•Achievement of the AIA32 for certification of the environmental protection plan
•Construction of a new sewer network of industrial painting waste
•Management that prioritises recycling and design to ensure durability standards
•Compliance with REACH
•COBAT membership
•90% recyclable products
•The activity does not involve the manufacture, placing on the market or use of certain substances (mercury)
•Research and use of BAT33
•EIA34 carried out and compliance with environmental regulations
•Arpat analysis carried out
31 Maharashtra government Pollution control board
32 Integrated Environmental Authorisation
33 Best Available Technologies
34 Environmental Impact Assessment
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At the end of these analyses, it was found that the activities identified by the Piaggio Group as "eligible" are carried out, with reference to the plants in which the production of eligible vehicles takes place, in full compliance with technical screening criteria for substantial contribution and with DNSH criteria.
Minimum Social Safeguards
The above activities were carried out in parallel with assessing compliance with Minimum Safeguards in the areas of human rights, corruption, fair competition and taxation, as defined in the EU Taxonomy Regulation, also with reference to the suggestions put forward in the Platform on Sustainable Finance's “Final Report on Minimum Safeguards” published in October 2022. In this context, we have seen how the Code of Ethics and, in general, the policies and practices adopted by the Piaggio Group in conducting its business, establish the principles and standards applicable to the protection of human rights, fundamental rights and, in general, the rules of fair and ethical conduct in business, and require all stakeholders to whom they are addressed (employees, external staff, suppliers, distributors and other business partners) to comply with them. Moreover, there were no final convictions against the Piaggio Group, also with reference to the other areas covered by the Minimum Social Safeguards; however tax disputes are still pending, but their economic and reputational impact risk assessment is no greater than "low", as the Piaggio Group is not reasonably expected to lose the case.
For more on human rights, corruption, fair competition and taxation, please refer to the chapter 'Sustainability Governance' in this Non-Financial Statement.
Methodological Approach to KPI Calculation
Identification of “eligible” (Taxonomy-Eligible) and “environmentally sustainable” (Taxonomy-Aligned) activities
The first stage of the process made it possible to identify, through an analysis of the activities included in the Taxonomy, those applicable to the Piaggio Group's business, considering the description given in the annexes to the Regulation and the potentially applicable NACE codes.
On the basis of the above analysis, the following activities of the Piaggio Group can contribute to achieving the Climate Change Mitigation objective:
Description of the Taxonomy-Eligible Activity
applicable
KPI
Reference consolidated financial statement item
Turnover
Net Sales Revenue – Sale of 2-, 3- and 4-wheeler motor vehicles and Gita robots
CapEx
Property, Plant and Equipment - Tangible Assets, Intangible Assets and Rights of Use
3.3
Manufacture of low carbon technologies for transport
OpEx
External maintenance and cleaning costs
6.4
Operation of personal mobility devices, cycle logistics
Turnover
Net sales revenue - Sale of scooters
The results of these assessments are summarised in full in the tables in the Appendix, which follow the templates provided by Annex II to Regulation (EU) 2021/2178.
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The analyses were carried out on the basis of the interpretations of the Taxonomy, available to date, and taking into account, where possible, the clarifications officially provided by the EU Commission regarding the practical application of the regulation, as well as the preparation of relevant disclosures. In this context, consistent with change in interpretations and regulatory requirements, the information presented in this chapter may be subject to further updates and revisions.
Definition of the scope
On the basis of the requirements in the Regulation, the percentages of eligible and aligned activities were calculated for 2022 and include all Piaggio Group companies consolidated on a line-by-line basis.
Calculation of KPIs
On the basis of the Group's Consolidated Financial Statements as of 31.12.2022 (the "Financial Statements"), the percentage of turnover, capital expenditure (CapEx) and operating expenditure (OpEx) in relation to respective total values was calculated for each eligible and aligned activity identified.
Calculation of the proportion of turnover
As established by the Regulation, the “aligned” proportion of turnover represents the portion of net revenues derived from services or products, including intangible ones, that originate from economic activities aligned with the taxonomy, divided by the total net revenues.35 In the 2022 financial year, the Piaggio Group carried out the following activities for the production of goods or services considered to be Taxonomy-aligned:
▪activity "3.3 Manufacture of low carbon technologies for transport" with specific reference to the sale of 2-, 3- and 4-wheeler motor vehicles and GITA robots;
▪activity "6.4 Operation of personal mobility devices, cycle logistics" with specific reference to the sale of scooters and personal mobility devices.
Starting from the Net Sales Revenue, in order to identify the proportion considered Taxonomy-eligible, the proportion of revenue relating to "Spare Parts and Accessories" and “Other” was subtracted, with the exception of the proportion related to Piaggio Fast Forward, as this was evaluated as not being applicable for eligibility purposes. The Taxonomy-Aligned percentage of 3.31% was identified by relating the turnover achieved from the sale of zero-CO2-emitting vehicles to the total turnover achieved.
Calculation of capital expenditure (CapEx)
The CapEx KPI was calculated by dividing the value that includes "aligned" capital expenditure by the value at the denominator that constitutes total capital expenditure. Specifically, the numerator for the calculation of CapEx is represented by additions to property, plant and equipment and intangible assets and "aligned" rights of use during the year, before amortisation and depreciation, any revaluations and excluding fair value changes.
The denominator, on the other hand, comprises total capital expenditure and increases in rights of use, before amortisation and depreciation, any revaluations and excluding fair value changes.
35 Assonime Circular No. 1 of 19 January 2022
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For the 2022 financial year, the Piaggio Group incurred the following capitalised costs considered to be taxonomy-aligned:
▪activity "3.3 Manufacture of low carbon technologies for transport" at all the Group's production sites, with specific reference to investments concerning the design and manufacture of zero-emission vehicles (with the sole exception of racing activities).
Furthermore, as stated in Annex I to Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021, point 1.2.2.3. "Breakdown of KPIs", in cases where the detail by vehicle type was not available, in order to determine the Taxonomy-Aligned capital expenditure, the allocation of capital expenditure related to the production of electric vehicles, was based on the units of zero-emission vehicles sold in the 2022 financial year. Specifically, in order to identify Taxonomy-Aligned CapEx, a non-financial metric was identified, calculated by comparing the units of zero-emission vehicles sold compared to total units sold for all vehicles, with both internal combustion and electric engines, which yielded a percentage of 3.386%.
Calculation of the proportion of operating expenses (OpEx)
The OpEx KPI was calculated by dividing the value comprising the portion of "aligned" operating expenditure by the denominator value comprising total operating expenditure. Specifically, the numerator for the calculation of OpEx is represented by the total value of indirect uncapitalised research and development expenditure and any other direct expenses related to the maintenance and ordinary repair of real estate, plant and equipment necessary to ensure the continuous and effective operation of said. The denominator, on the other hand, is the total value of these costs.
For the 2022 financial year, the Piaggio Group incurred the following operating expenditure considered to be taxonomy-eligible:
▪activity "3.3 Manufacture of low carbon technologies for transport" with specific reference to maintenance and repair costs, both of buildings and of plants and equipment, related to production plants where zero-emission vehicles are manufactured.
In addition, as indicated in the section “Calculation of the proportion of capital expenditure (CapEx)”, the same procedure was applied to determine taxonomy-aligned operating expenditure.
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Table according to Regulation (EU) 2020/852
Proportion of turnover derived from products and services associated with economic activities aligned with the taxonomy - Disclosure for the year 2022
Criteria for substantial contribution
Criteria for 'do no significant harm'
Economic activities (1)
Code(s) (2)
Absolute turnover (3)
Proportion of expenses invoiced (4)
Climate change mitigation (5)
Adaptation to climate change (6)
Marine Waters and Resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and ecosystems (10)
Climate change mitigation (11)
Adaptation to climate change (12)
Water and marine resources (13)
Circular Economy (14)
Pollution (15)
Biodiversity and ecosystems (16)
Minimum Safeguards (17)
Proportion of turnover aligned with the taxonomy, Year N (18)
Proportion of turnover aligned with the taxonomy, Year N-1 (19)
Category (enabling activity) (20)
Category (transitional activity) (21)
€ million
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percentage
Percentage
A
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
Activity 1:
Manufacture of low carbon technologies for transport
3.3
69.05
3.308%
100 %
0.00%
0.00%
0.00%
0.00%
0.00%
Y
Y
Y
Y
Y
Y
3.308%
N/A
A
Activity 2:
Operation of personal mobility devices, cycle logistics
6.4
0.08
0.004%
100%
0.00%
0.00%
0.00%
0.00%
0.00%
Y
N/A
Y
N/A
N/A
Y
0.004%
Turnover of environmentally sustainable activities (taxonomy-aligned) (A.1)
69.13
3.312%
100%
0.00%
0.00%
0.00%
0.00%
0.00%
3.312%
A.2 Taxonomy-eligible activities but which are not environmentally sustainable (activities not taxonomy-aligned)
Activity 1:
Manufacture of low carbon technologies for transport
3.3
1,797.52
86.11%
Activity 2:
Operation of personal mobility devices, cycle logistics
6.4
0
0.00%
Turnover from taxonomy-eligible activities but which are not environmentally sustainable (activities not taxonomy-aligned) (A.2)
1,797.52
86.11%
Total (A.1 + A.2)
1,866.65
89.423%
100%
0%
3.312%
3.312%
B. ACTIVITIES NOT TAXONOMY-ELIGIBLE
Turnover from activities not taxonomy-eligible (B)
220.79
10.577%
Total (A + B)
2,087.44
100%
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Proportion of capital expenditure from products and services associated with taxonomy-aligned economic activities - Disclosure for the year 2022
Criteria for substantial contribution
Criteria for 'do no significant harm'
Economic activities (1)
Code(s) (2)
Absolute capital expenditure (3)
Proportion of capital expenditure (4)
Climate change mitigation (5)
Adaptation to climate change (6)
Marine Waters and Resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and ecosystems (10)
Climate change mitigation (11)
Adaptation to climate change (12)
Water and marine resources (13)
Circular Economy (14)
Pollution (15)
Biodiversity and ecosystems (16)
Minimum Safeguards (17)
Proportion of taxonomy-aligned capital expenditure, Year N (18)
Proportion of taxonomy-aligned capital expenditure, Year N-1 (19)
Category (enabling activity) (20)
Category (transitional activity) (21)
€ million
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percentage
Percentage
A
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
Activity 1:
Manufacture of low carbon technologies for transport
3.3
15.8
9.41%
100%
0.00%
0.00%
0.00%
0.00%
0.00%
Y
Y
Y
Y
Y
Y
9.41%
N/A
A
Capital expenditures of environmentally sustainable activities (taxonomy-aligned) (A.1)
15.8
9.41%
100%
0.00%
0.00%
0.00%
0.00%
0.00%
9.41%
A.2 Taxonomy-eligible activities but which are not environmentally sustainable (activities not taxonomy-aligned)
Activity 1:
Manufacture of low carbon technologies for transport
3.3
94.8
56.31%
Capital expenditures of taxonomy-eligible activities but which are not environmentally sustainable (activities not taxonomy-aligned) (A.2)
94.8
56.31%
Total (A.1 + A.2)
110.6
65.72
100%
0.00%
9.41%
9.41%
B. ACTIVITIES NOT TAXONOMY-ELIGIBLE
Capital Expenditure of activities not taxonomy-eligible (B)
57.7
34.28%
Total (A + B)
168.3
100%
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Proportion of operating expenses from products and services associated with taxonomy-aligned economic activities - Disclosure for the year 2022
Criteria for substantial contribution
Criteria for 'do no significant harm'
Economic activities (1)
Code(s) (2)
Absolute operating expenses (3)
Proportion of operating expenses (4)
Climate change mitigation (5)
Adaptation to climate change (6)
Marine Waters and Resources (7)
Circular economy (8)
Pollution (9)
Biodiversity and ecosystems (10)
Climate change mitigation (11)
Adaptation to climate change (12)
Water and marine resources (13)
Circular Economy (14)
Pollution (15)
Biodiversity and ecosystems (16)
Minimum Safeguards (17)
Proportion of taxonomy-aligned operational expenditure, Year N (18)
Proportion of taxonomy-aligned operating expenditure, Year N-1 (19)
Category (enabling activity) (20)
Category (transitional activity) (21)
€ million
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percentage
Percentage
A
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (taxonomy-aligned)
Activity 1:
Manufacture of low carbon technologies for transport
3.3
1.12
3.34%
100%
0.00%
0.00%
0.00%
0.00%
0.00%
Y
Y
Y
Y
Y
Y
3.34%
N/A
A
Operating expenses of environmentally sustainable activities (taxonomy-aligned) (A.1)
1.12
3.34%
100%
0.00%
0.00%
0.00%
0.00%
0.00%
3.34%
A.2 Taxonomy-eligible activities but which are not environmentally sustainable (activities not taxonomy-aligned)
Activity 1:
Manufacture of low carbon technologies for transport
3.3
31.91
95.39%
Opex of eligible activities for Taxonomy but not environmentally sustainable (activities not taxonomy-aligned) (A.2)
31.91
95.39%
TOTAL (A.1+A.2)
33.03
98.73%
100%
0.00%
3.34%
3.34%
B. ACTIVITIES NOT TAXONOMY-ELIGIBLE
Operating expenses of activities not taxonomy-eligible (B)
0.42
1.27%
Total (A+B)
33.45
100%
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Risk Management
The Piaggio Group started an Enterprise Risk Management (ERM) project to define and implement a structured, integrated system to identify, measure and manage company risks in line with applicable best practices. During 2022, the campaign to update the Group's risk profile, involving company managers across the Group, identified 197 risk scenarios, comprising 25 categories which were grouped into 4 level-one macro-categories (External, Operational, Financial, Strategic Risks). In this context, issues concerning environmental and social aspects, human resources, human rights and the fight against corruption were all analysed, as detailed below.
Environment
The analysis refers to the actual and potential effects of the Group's operations on the environment, considering, for example, energy consumption, atmospheric emissions, the impact of noise, discharge and waste disposal processes, using and safeguarding natural resources and protecting biodiversity, as well as environmental compliance aspects in a national and international dimension.
Greenhouse gases (mainly CO2) and Volatile Organic Compounds (VOCs) released by solvents used in painting, are some of the most hazardous substances for air pollution generated by automotive operators. Structural actions on the Group's production plants, carried out over time, guarantee limited pollutant emissions.
Although the structure of Piaggio's production sites has been designed to run on energy from fossil fuels, the Group optimises the management of existing plants to achieve reductions in consumption, which is monitored on a daily basis both inside the production sites and in the offices, of all subsidiaries.
In the past, operations to clean up sites were necessary due to historical site contamination: the pollutants removed had not been used for several decades by the sites, proving the historical nature of this contamination. Other cases of ground contamination have never concerned the Group's operations: the classification, management and transport of waste produced comply with sector regulations.
The volume of water used in the production process is monitored monthly, to safeguard its conservation; a part of this water is re-used.
Lastly, Piaggio sites in Italy, India and Vietnam have ISO 14001 environmental certification and investments are made each year to reduce the environmental impact of production sites.
Despite a considerable risk level, in line with other industry operators, control measures adopted significantly reduce environmental risks.
With reference to the risk of climate change, aspects related to the transition of market demand towards vehicles with a lower impact in terms of greenhouse gas emissions hold particular relevance for the Group; in this context, the short-term introduction of stricter laws and regulations on vehicle emissions consequently represents a significant risk for the entire automotive industry. Any tightening of regulations in this field, in addition to having a considerable influence on customer behaviour, could require a significant increase in investments and current expenses necessary to adapt and technologically update the Group's product range. In this regard, Piaggio has been a pioneer in the study of electric and hybrid
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engines. The Group already sells a number of electric vehicles (both two-wheelers and commercial vehicles) and plans to expand its range of zero-emission vehicles. Therefore, any increase in demand for electric vehicles could represent a development opportunity for Piaggio.
In regards to the risk of suffering physical damage due to extreme climate events, it has been found that Group sites could be affected by natural events, such as earthquakes, typhoons, flooding and other catastrophes that may damage sites and also slow down/interrupt production and sales. During 2022, the Piaggio Group, with the support of a leading consulting firm, carried out a climate risk analysis for the plants in Pontedera (Italy) and Baramati (India). This analysis did not reveal any critical issues related to climatic factors for both production sites. The Group manages this risk through continually updating its facilities and taking out specific insurance cover divided between the various sites on the basis of their relative importance.
Employees
This area covers numerous aspects, such as the management of human capital, including career development, the remuneration and training system, the promotion of diversity and inclusion, as well as aspects relative to occupational health and safety and trade union relations.
Piaggio operates globally with employees in Europe, the Americas and Asia. It promotes diversity in age, culture, ethnics, religion, political opinion, civil status, gender, physical ability, sexual orientation, encouraging different ways to achieve and reach the highest levels of performance within a single and broader-ranging organisational set-up of the Group. The integration of disabled people into the workforce is also made possible in practice by the accessibility of company facilities and the existence of a relative company procedure.
Piaggio adopts a system of recruitment, development and salary packages for personnel which recognises and rewards merit and performance. Development tools are used to build on and continually improve skills, while empowering potential, recognising and rewarding outstanding performance. Reward policies remunerate people and their contribution based on principles of meritocracy and transparency. The above mechanisms reduce potential risks related to these aspects to a residual level which is not significant.
The Piaggio Group acknowledges the role of trade union organisations and worker representatives and is committed to establishing relationships with them that are characterised by attention, dialogue and a common understanding; in fact, assessment and continual engagement are considered essential for identifying the best solutions for the company's specific needs. For these reasons and despite the high number of employees with trade union membership, strikes are infrequent.
As regards occupational health and safety, testing motorcycles with a medium and large engine capacity entails the highest risk levels. Generally, the risk of accidents/injuries to personnel is mitigated by aligning processes, procedures and structures to applicable occupational safety laws and international best standards, and promoting responsible behaviour, through targeted training.
Social sphere
The social sphere includes aspects concerning Piaggio's relations with consumers, as well as the effects of the business on the community.
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In the first case, product quality and reliability are essential and key to obtaining and guaranteeing customer satisfaction and safety. In the “Product – Operational Risk" category, risk scenarios relating to potential product defects have been mapped. To mitigate these risks, Piaggio has established a Quality Control system, it tests products during various stages of the production process and carefully sources its suppliers based on technical/professional standards. The Group is also committed to being awarded and maintaining certification of its quality management systems at global level (ISO 9001).
In addition, Piaggio faces risks associated with a level of service quality that is not in line with customer needs, due to causes attributable to the sales/after-sales service network. To mitigate these risks, the Group has contractually defined compliance with technical and professional standards and put in place periodic performance monitoring measures.
The Group undertakes to redistribute economic value generated to support social solidarity initiatives and promote local areas. In 2022, the collaboration between the Piaggio Group and (RED) - an association founded in 2006 by Bono and Bobby Shriver - continued. Thanks to the help of partners and supporters, the association has allocated over $700 million to the fight against AIDS and COVID-19.
In Italy, funds were donated to support health research. Numerous cultural, scientific and artistic events were held, through the Piaggio Foundation and Piaggio Museum (exhibitions, conferences, etc.).
The Vietnamese subsidiary was involved in projects supporting local associations that help families in need and provide education for children.
The Indian subsidiary has focused its commitment on social projects generally to support more vulnerable children, education, women's empowerment, chosen on the basis of preliminary research carried out internally on the needs of the area surrounding the Baramati plant.
Human rights
As set out in the Code of Ethics, adopted in 2004 and updated during 2017, Piaggio specifically prohibits any form of discrimination or forced labour. This Code has been distributed to all subsidiaries and clearly states the principles and values the entire organisation takes inspiration from.
To maintain the highest standards of ethical, moral and legal conduct, Piaggio encourages its employees to report any suspected misconduct.
The Whistle-blowing Policy, developed for the Group's Indian company, aims to provide a safe means for employees and other parties concerned to report violations that come to their knowledge in the context of their work activities. For this purpose, in compliance with Law 179/2017, an entirely new section with regulations on whistle-blowing designed to protect workers that report unlawful activities and irregularities that come to their knowledge during their work was added to the last revision of the Organisational, Management and Control Model pursuant to Legislative Decree no. 231/2001.
Based on the significant and specific nature of the Indian market, the Indian affiliate has put in place: a Code of Business Conduct & Ethic, a Whistle-Blower Policy and Policy on Prevention of Sexual Harassment of women at the workplace to prevent episodes of sexual harassment within the plant.
Based on prevention and control measures established in the Code of Ethics and adopted by all Group subsidiaries, the potential risks related to these aspects are residual and minor.
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Fighting corruption
The fight against both active and passive corruption comes under the risk categories "Internal/external offences" of the Group's risk model. In its Code of Ethics, Piaggio strictly prohibits any practice of corruption, request for and/or provision of preferential treatment, of any collusive behaviour, solicitation, whether direct/indirect and/or through third parties, of personal benefits of any kind for oneself and/or for others, of material benefits and/or any other advantage of any extent in favour of third parties.
Moreover, to protect against possible administrative liability deriving from the commission of offences pursuant to Legislative Decree 231/2001, Piaggio has adopted a Compliance Programme (its Organisational, Management and Control Model) in accordance with current legislation and ensures it is updated and provides relevant training pursuant to Legislative Decree 231/2001.
A number of processes, procedures, roles and responsibilities have been defined to achieve the above objective, as regards business negotiations/relations with the public administration sector and with private entities.
The controls briefly described above decrease residual risk relative to episodes of active/passive corruption to a negligible level.
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Material topic
Risk
Controls
Climate Change
- Air pollution attributable to:- uncontrolled greenhouse gas emissions - uncontrolled emissions of Volatile Organic Compounds (i.e. paint/varnish solvents) - lower number of infrastructure works/initiatives to reduce energy consumption/needs- decrease in vehicle emission levels
- ISO 14001 environmental certification- Infrastructure improvements aimed at a rational use of energy - Energy consumption monitoring plans- Development of alternative engines (i.e. hybrid/electric)
Waste handling
Soil/water pollution attributable to:- No waste classification/characterisation- Uncontrolled spills and discharges into the sewage system
- ISO 14001 environmental certification- Water waste treatment
Conserving water resources
- Uncontrolled use of water resources
- ISO 14001 environmental certification- Water use monitoring - Reuse of water for production activities
Developing human resources
- Lack of competencies and professional expertise necessary to implement strategic/business objectives- Loss of key personnel- Tensions in relations the company has with trade unions
- Mapping key competencies/professional expertise and defining adequate retention plans- Performance review systems- Training courses and continuing professional development- Relations with trade union organisations based on attention, dialogue and a common understanding
Health and Safety
- Worker accidents/onset of occupational diseases
- ISO 45001 certification
- Periodic occupational health and safety training
- Personal protective equipment and operating instructions
Innovation of product and sustainable mobility
- Reduced level of technological innovation in the product range
- Reduced recyclability/recoverability of end-of-life vehicles- Use of materials/substances harmful to the environment- Regulatory measures to restrict the circulation of internal combustion vehicles in order to reduce the level of emissions
- Considerable investments in research and development- Development of alternative engines (i.e. hybrid/electric) - Product conformity to the REACH Regulation 1907/2006 and End of Life Directive 2000/53/EC - Use of environmentally friendly, recyclable materials
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Risk
Controls
Product safety and reliability
Faulty products for reasons attributable to:- Errors/omissions of suppliers - Errors/omissions during the product development stage- Errors/omissions during the production/assembly stage- Errors/omissions during the quality control stage
- Supplier audits- Product testing during various stages of the production process - ISO 9001 quality certification
Customer Satisfaction
- Service quality level not in line with customer requirements, for reasons attributable to: - Sales network/after-sales service (e.g. long diagnostic/delivery times, use of non-original spare parts etc.)- Reduced extension of the sales/after-sales network- Range of products offered not in line with market requirements
- Customer satisfaction analyses and development of action plans, if points for improvement are identified, with reference to the service provided by the network
- New computerisation systems to improve control of the sales network/after-sales serviceand the level of customer service offered- Geo-marketing system for optimal coverage of the territory through the network
Responsible management and respect for human rights in the supply chain
- Suppliers that do not comply with environmental sustainability principles (e.g. with reference to energy consumption, atmospheric emissions, waste management, protection of water resources, protection of biodiversity, etc.)- Suppliers that do not comply with the principles of social sustainability (e.g. with reference to the development of human resources, freedom of association and collective bargaining, child labour, forced labour, industrial relations, health and safety at work, support for local communities, charity activities, etc.)- Violation of the Group's Code of Ethics by suppliers
- ISO 14001 certification ensures higher scores in supply audits- Piaggio requires its suppliers to sign general supply conditions that specifically refer to the Group's Code of Ethics or require an explicit commitment to comply with laws on the environment, pollution, health and safety and respect for workers' rights, in order to guarantee compliance with its ethical values throughout the production and sales cycle of its products
Supporting on local communities
Reduced number of initiatives aimed at developing the area where the Group operates and promoting social inclusion values (e.g. partnerships with non-profit/non-government, volunteer associations, etc.)
- Organisation of events at the Piaggio Museum - Piaggio Foundation cultural project- Charity and sponsorship activities- Support for hospitals during the COVID-19 health emergency period
Diversity and equal opportunity
- Incidents of discrimination or exclusion of employees for reasons related for example to age, culture, ethnic origin, religion, political opinion, civil status, gender, physical ability, sexual orientation
- Prohibition of any type of discrimination, harm to personal dignity in the Code of Ethics- Use of instruments, including organisational tools, to ensure respect for human rights and the principles in the Group Code of Ethics
Business integrity
- Unlawful collusion/corruption by employees
- Signing the Group Code of Ethics- Use of instruments, including organisational tools, to ensure respect for the principles in the Group Code of Ethics
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Material topic
Risk
Controls
Business integrity
- Information in mandatory financial disclosure (e.g. the annual report, interim report, interim report on operations/the non-financial statement) which is untruthful
- Non-disclosure/ delayed disclosure of relevant information to the market
- Externally audited mandatory financial information- Externally audited Non-Financial Statement
- Formal commitment declared by all corporate functions to achieve set sustainability targets and provide annual reporting of any gaps with respect to results actually achieved
- Constant and timely updating of the website with information concerning the Group and the most important corporate documents
Creation of economic value
- Failure to achieve established growth objectives for reasons attributable to:- competitive dynamics- sales network- political/macroeconomic instability of countries where the Group operates
- Brand positioning initiatives and expansion of the product range- Rationalisation of the sales network based on current and future expectations- Creation of a new retail model being developed worldwide- Diversification of markets
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Sustainability governance
For more in-depth, specific analysis of the Corporate Governance system of Piaggio & C., please see the Report on Corporate Governance and Corporate Ownership for the year ending 31 December 2022, available online at www.piaggiogroup.com in the section “Governance”.
The provisions of the Parent Company’s Articles of Association governing the composition and appointment of the Board (Article 12) were most recently amended by a resolution of the Board of Directors on 28 January 2021, drafted by public deed and adopted pursuant to the provisions of Article 2365 of the Italian Civil Code and Article 17 of the Articles of Association, in order to align them with the rules on gender balance as regards the composition of the Board of Directors pursuant to Article 147-ter, paragraph 1-ter of the Consolidated Law on Finance, as most recently amended by Law 160/2019, as well as the new text of Article 144-undecies 1 of the Issuers' Regulations.
The Board of Directors currently in office is composed of 9 members, of whom 4 are women (44%). 33% of the members are aged between 30 and 50 years old, the rest are over 50.
As indicated in the Corporate Governance Code adopted by the Company, under Recommendation 13 letter a), the Management Board has also appointed a Lead Independent Director, since the Chairman also holds the position of Chief Executive Officer of the Company.
Piaggio has a specific governance system inspired by international best practices, which covers all company, decision-making and operational processes, along the entire value chain.
•The Board of Directors examines and approves strategic, industrial and financial plans, including the annual budget and Group's Business Plan, supplementing main guidelines to promote a sustainable business model and lay the foundations for creating long-term value. The Board defines the sustainability strategy, the Sustainability Plan and Non-Financial Statement (NFS) pursuant to Legislative Decree 254/16.
•The Audit, Risk and Sustainability Committee, in addition to supporting the Board of Directors' assessments and decisions on the internal control and risk management system, has an advisory function with the Board of Directors on sustainability issues such as:
oexamining and assessing sustainability issues related to business operations and the dynamics of interaction with stakeholders;
oexamining and assessing the system for collecting and consolidating data for the "Consolidated non-financial statement" pursuant to Legislative Decree 254/2016;
oexamining in advance the "Consolidated Non-Financial Statement" pursuant to Legislative Decree 254/2016, formulating an opinion for approval by the Board of Directors;
omonitoring the Company's positioning on sustainability issues, with particular reference to the Company's position in ethical sustainability indices;
oproviding opinions on any additional sustainability issues, on the request of the Board of Directors.
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•The Executive in charge of financial reporting prepares the Non-Financial Statement, assisted by the CSR Manager. The Statement is presented to the Ethics Committee and the Audit, Risk and Sustainability Committee and then submitted to the Board of Directors for approval.
•As delegated by the Executive in charge of financial reporting, the CSR Manager manages all activities related to sustainability, through the "Consolidated Financial and Sustainability Reporting" Function: defining the sustainability strategies and monitoring progress, the preparation of reporting, relations with international organisations.
•The Ethics Committee develops rules and organisational behaviour in line with international best practices in the field of Corporate Social Responsibility.
The Committee's duties include the following:
omonitoring instruments, conduct and relations between management and company personnel and all stakeholders;
ooptimising relations with local communities and stakeholders;
omeasuring ethical standards, which are an integral part of the good governance of a company;
opreliminary analysis of the “Consolidated non-financial statement” pursuant to Legislative Decree 254/2016;
oimplementing the provisions in the Code of Ethics, including receiving and managing reports of fraud that may involve employees, managers and partners of Piaggio & C. and Group companies.
All operations concerning relations between the Piaggio Group and the external world are analysed and revised by the Committee, with the aim of guaranteeing to all stakeholders that the information cycle is managed transparently. Starting from the assumption that transparency best describes the purpose of corporate social responsibility today, the Committee acts as a "guarantor" for investors, consumers and opinion leaders, to make sure company conduct is based on conformity to laws at all times, on fairness and on the truthfulness of disclosure to the public.
In 2022, there were no specific sustainability training or induction initiatives for the Board of Directors or the Audit, Risk and Sustainability Committee.
The Piaggio Group has also adopted a NFS Manual, which is available on the corporate intranet. Within the structures involved in the reporting process, the individuals responsible for gathering, verifying and processing the relevant KPIs have been identified. The CSR Manager, assigned the coordination of the entire process of gathering and processing quantitative indicators by the Executive in charge of financial reporting, and of preparing the Non-Financial Statement of the Group, is responsible for consolidating results. The NFS is submitted to the Audit, Risk and Sustainability Committee and the Ethics Committee for analysis and evaluation. The document is then approved by the Board of Directors and finally presented at the General Shareholders' Meeting at the same time as the Group's Consolidated Financial Statements.
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Remuneration policy, and remuneration of the highest governing body
The Remuneration Policy of the Company - and, in particular, the policy on variable remuneration components - contributes to corporate strategy and to the Company achieving its long-term interests and sustainability. The main individuals and bodies involved in the preparation, approval and review of the Remuneration Policy are the Shareholders' Meeting, the Board of Directors, the Remuneration Committee and the Board of Statutory Auditors. The Board of Directors is responsible for implementing the Remuneration Policy. The Remuneration Committee, composed of non-executive and independent directors, makes proposals and general recommendations to the Board of Directors on remuneration. The Shareholders' Meeting is required to cast a binding vote on the Remuneration Policy.
The remuneration of directors, general managers and key executives, where identified, is defined in such a way as to ensure an overall remuneration structure capable of recognising the professional value of the persons involved and to allow for an adequate balance of fixed and variable components, with the aim of creating sustainable value in the medium and long term and ensuring a direct link between remuneration and specific performance targets.
It should be noted that the variable component of executive directors' remuneration is determined with reference to sustainability targets and results (10%).
For more details on how the remuneration (fixed and variable parts) of Directors and Key Managers is determined, please refer to Section II of the Report on the Remuneration Policy and Remuneration Paid, published pursuant to Article 123-ter of TUF, on the Company's website www.piaggiogroup.com in the section "Governance - Management".
The ratio of the annual total remuneration of the person receiving the highest remuneration to the median of the annual total remuneration of all Group employees excluding the aforementioned person is 60.7.
Compared to 2021, as there was no change in the remuneration of the highest paid individual, the rate between the percentage increase in the annual total remuneration of the highest paid individual and the percentage increase of the median of the annual total compensation of all Group employees, excluding the aforementioned individual, is equal to zero.
In achieving its mission, the Group has adopted tools and organisational instruments in order to respect environmental and social values.
Piaggio & C. has adopted a Code of Ethics since 2004 for the Organisational Model pursuant to Italian Legislative Decree 231/2001.
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The Code of Ethics was last updated and approved by the Board of Directors in 2017, with the introduction of an article on safeguarding human rights, aimed in particular at preventing "modern slavery".
Through this article, the company expresses its commitment to recognising and ensuring the utmost respect for the principles that protect human rights, as shared at international level and articulated in a number of international conventions. In particular, respect for personal dignity, for the individual and the prohibition of any type of discrimination.
These principles, already embraced by the company as they are implicit in its code of ethics, have been described more specifically, in order to align the code with the ethical and social values that inspire the Piaggio Group's activities.
The company also issues a Modern Slavery Statement annually, designed to ensure that the Group's activities comply with the regulatory provisions set out under the Modern Slavery Act 2015, as issued by the British Parliament and which all companies operating in the UK must observe.
The Code of Ethics, available online at www.piaggiogroup.com/Governance, is in force at all Group companies and clearly and transparently sets out the principles and values which the entire company organisation takes inspiration from:
•complying with the laws of countries where Piaggio operates;
•dismissing and condemning unlawful and improper behaviour;
•preventing breaches of lawfulness, constantly achieving transparency and openness in managing the business;
•seeking excellence and market competitiveness;
•respecting, protecting and valuing human resources;
•pursuing sustainable development while respecting the environment and the rights of future generations.
The Group's Code of Ethics sets out the social and ethical responsibilities of each member of the company's organisation. In particular the ethical and social responsibilities of senior management, middle management, employees and suppliers are defined, in order to prevent any party, acting in the name of and on behalf of Group companies, from adopting a conduct which is irresponsible or unlawful.
The articles of the Code of Ethics also set forth an important principle on how to manage relations with policy-makers: “The Company does not make contributions or offer advantages and/or benefits to political parties and trade unions or to their representatives or candidates without prejudice to compliance with applicable law".
All employees are required to sign and comply with the Code of Ethics. In addition, Piaggio requires its suppliers to sign general supply conditions that specifically refer to the Group's Code of Ethics or require an explicit commitment to comply with laws on the environment, pollution, health and safety and respect for workers' rights, so as to ensure compliance with its ethical values throughout the production and sales cycle of its products.
Based on the specific nature and significance of India, the following have been prepared and in effect for some years now at the Indian affiliate:
•the Code of Business Conduct & Ethics;
•the Whistle-Blower Policy, specifically designed to protect and guarantee whistle-blowers of alleged breaches of the Code, and protect the Code's effectiveness;
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•a Policy on the Prevention of Sexual Harassment of women in the workplace.
The internal control and risk management system of Piaggio & C. includes the Organisational, Management and Control Model for the prevention of corporate offences pursuant to Legislative Decree 231/2001 (“Model pursuant to Legislative Decree 231/2001”), which Piaggio & C. adopted in 2004, which was updated by the Board of Directors of the Company on 27 July 2020, with the introduction of the predicate crimes contemplated in Article 25 quinqiuesdecies of Legislative Decree 231/2001 (tax crimes) and subsequently revised and approved in the Board meeting of 21 February 2022.
In particular, the last update considered the following offences:
•Article 25 Legislative Decree 231/2001: fraud in public procurement (Article 356 of the Criminal Code); embezzlement (limited to the first paragraph) (Article 314 of the Criminal Code); embezzlement by profiting from the error of others (Article 316 of the Criminal Code); abuse of office (Article 323 of the Criminal Code).
•Article 25-octies of Legislative Decree No. 231/2001, insofar as it has extended the punishability of the offences referred to in Articles 648, 648bis, 648ter.1 and 648ter of the Criminal Code to proceeds also derived from culpable offences and misdemeanours.
•Article 25-octies.1, Legislative Decree 231/2001: misuse and falsification of non-cash payment instruments (Article 493b of the Criminal Code); computer fraud (Article 640b of the Criminal Code).
•Excluded offences include: possession and dissemination of computer equipment, devices or programmes intended for the commission of offences concerning non-cash payment instruments (Article 493 quater of the Criminal Code); fraud against the European Agricultural Guarantee Fund and the European Agricultural Fund for Rural Development (Article 2 Law 898/1986).
The Model starts with the Code of Ethics, followed by general principles of internal control and guidelines for conduct, and is divided into two parts.
The first part is general, and includes an overview of the legal framework, followed by an introduction to the Model's function and operation within the Company; sections are also included on the disciplinary system, as well as a description of the role, composition, functioning and duties of the Supervisory Body.
In compliance with Law 179/2017, an entirely new section was introduced in 2018 with regulations on whistle-blowing (this policy had already been introduced in India in 2016), designed to protect workers that report unlawful activities and irregularities that come to their knowledge during their work.
To guarantee the confidentiality of the identity of the person reporting the information in question, the Company, in compliance with applicable legislation, believes that the management of reported information must involve the Supervisory Body appointed pursuant to Legislative Decree no. 231/2001. The system to protect whistle-blowers, introduced by Law 179/2017 and implemented by Article 6 of Legislative Decree 231/2001, indirectly assigns the Supervisory Body the task of receiving and managing information reported on alleged offences and breaches of the Model or Code. The Company has therefore set up the following communication channels:
• a dedicated mailbox: organismodivigilanza@piaggio.com
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• a physical mail channel, by sending an envelope with the words "private and confidential" addressed directly to the Supervisory Body at the registered office of the Company, Viale Rinaldo Piaggio, 25, 56025 Pontedera (PI) – Italy
• Internet points have been set up in plant areas, where workers and other employees who do not have, for work reasons, access to a computer, can report information.
The second section (“special”) of the Model formalises specific decision-making protocols for "sensitive processes" guiding company activities in compliance with indications in the model, in relation to the individual categories of offences the section refers to.
The Model pursuant to Legislative Decree 231/2001 – widely distributed by email to all Piaggio Group employees in Italy, and also published on the company Intranet – is constantly monitored and periodically updated. The Group also holds e-learning training programmes for all employees except blue collar workers.
Piaggio & C. has also established a “Fraud Policy” with information channels for receiving, analysing and processing reported fraud that may involve employees, directors and partners of Piaggio and Group Companies. The Policy is another instrument that the Piaggio Group has adopted to prevent infringement of the principles of lawfulness, transparency, fairness and loyalty which the Model pursuant to Legislative Decree no. 231/2001 takes inspiration from.
The Model is available on the corporate web site (www.piaggiogroup.com) in the section “Governance/Governance System”.
The Piaggio Group has a system of Policies aimed at guaranteeing compliance with principles of fairness, transparency, honesty and integrity in line with international standards on responsible business management.
The Group operates in diverse geographic, legal and cultural contexts. As such, its policies and guidelines are put in place by each company, through their own operating procedures and practices.
As stated in the Code of Ethics, in pursuing its mission the Group ensures, through appropriate tools, including organisational means, compliance with the absolute prohibition of any practice of corruption, request for and/or provision of preferential treatment, of any collusive behaviour, solicitation, whether direct/indirect and/or through third parties, of personal benefits of any kind for oneself and/or for others, of material benefits and/or any other advantage of any extent in favour of third parties, whether they be private or public entities or government representatives, both Italian and foreign.
When participating in public tenders or competitions called by the Public Administration as well as in any negotiations or contracts entered into with both Public Administration and private entities, all those involved must behave in good faith and in accordance with the law, correct commercial practice and current regulations, as well as with the corresponding company procedures, avoiding any situation from which violation of laws and/or principles of fairness and transparency in the conduct of negotiations may
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arise. Such negotiations must be conducted only by those previously and expressly authorised to do so, respecting roles and in accordance with corporate procedures. Adequate mechanisms for the traceability of information flows towards the contracting party must also be put in place. Any request for advantages, any intimidating and/or constrictive or oppressive behaviour on the part of Public Administration officials or third contracting parties or which come to the knowledge of operators must be immediately reported.
Function managers who liaise with the Public Administration must:
•provide their partners with guidelines regarding the operative conduct to follow in formal and informal contacts with various public subjects, according to the characteristics of each individual area of activity, sharing their knowledge of regulations and their awareness of situations liable to crime;
•provide for adequate tracing mechanisms as regards official information channels with the Public Administration;
•maintain and request on the part of those having relations with the Public Administration a conduct characterised by fairness, transparency, traceability and good faith, respecting the roles and responsibilities attributed; strictly observe and enforce, also with specific reference to relations with the Public Administration, company procedures aimed at abstractly identifying and tracing the functions and positions responsible and appointed for relations with the Public Administration, in compliance with corporate roles;
•make clear, truthful, complete and traceable statements to public authorities and exhibit complete, truthful and unaltered documents and data;
•maintain a correct and clear conduct such as to avoid inducing the counterparty into even potential error. All consultants, suppliers, customers, and whoever is related to the Group, are committed to complying with laws and regulations in force in all countries where the Group operates.
No relation will be initiated or continued with those who do not intend to comply with such principles.
When appointing these subjects to operate as representatives and/or in the interest of the Group towards the Public Administration, the appointment must be in writing, with a specific binding clause requiring compliance with the principles of ethics and conduct adopted by the Group.
Conduct guidelines which are identical to those for relations with the Public Administration must also be adopted with regard to relations with any private third party, such as suppliers, customers, competitors, partners and/or any contractual counterparty. In this regard, the section on corporate offences in the Model 231 was updated with the following introduction, implementing Legislative Decree no. 38 of 15 March 2017 (implementing Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector), as well as with measures introduced by article 2635 of the Italian Civil Code on the offence of "corruption between private individuals", and with the introduction of the new offence "instigating corruption between private individuals", whereby corruption is a punishable offence even if the offer is not accepted (Article 2635 bis of the Italian Civil Code).
When contributions, grants or financial support are requested from the State, the public corporations or the European Union, all employees involved in such procedures must:
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•be correct and truthful when using and presenting documents and declarations that are complete and pertinent to the activities for which such benefits can be legitimately requested and obtained;
•once the requested outpayment has been obtained, the sum should be employed for the goals for which it was originally requested and obtained. People in charge of administrative/accounting functions must verify that each operation and transaction is: legitimate, consistent, congruous, authorised, verifiable; correctly and adequately registered, so that decision, authorisation and implementation process can be verified; supported by correct, authentic and appropriate documentation, so that careful inspections can be carried out at any time regarding the characteristics and the motivations of the operation, and the identification of those who have authorised, carried out, registered and verified the operation itself.
No incidents of corruption occurred in the reporting year.
Group companies must comply with local laws and regulations and must conduct their activities in line with the Code of Ethics and its core values of honesty, integrity and respect for people. The Code of Ethics underpins Piaggio’s commitment to behave in a responsible and respectful manner, and helps staff and contractors to make informed, ethical and legal decisions. Suppliers all over the world who wish to do business with Piaggio must sign the Group’s general supply conditions for acceptance, which include the Code of Ethics, thereby assuming their contractual obligation to comply with its principles and requirements, including in terms of respect for human rights and the protection of lawfulness in their activities.
During 2022, none of the Piaggio Group companies were affected by episodes concerning employee discrimination or breaches of human rights. Moreover, no infringement procedures have been filed against the Piaggio Group for the breach of anti-competitive or anti-trust laws.
As of 31 December 2022, there were no incidents of non-compliance with regulations and/or voluntary codes concerning marketing communications, including advertising, promotions and sponsorship.
For a detailed description of outstanding disputes related to non-compliance with laws or regulations, please refer to the specific section 50 of the Notes to the Consolidated Financial Statements. This section analyses significant litigation for the Group. Considering that any lawsuits deemed to be specious are excluded a priori and, in any case, lawsuits with potential damages of less than €200,000, disclosure is provided concerning lawsuits considered significant as a result of the application of a dual quantitative criterion (€1.5 million threshold) and qualitative criterion (insurance coverage, risk of losing the case, subject-matter of the dispute, serial nature of the dispute, etc.), so that even cases with a value below the quantitative threshold might be reported in light of their specific aspects, and cases with a value above the quantitative threshold might not be reported if the risk of losing the case is remote and/or covered by an insurance policy.
Lastly, it should be noted that two new lawsuits were started in 2022; one relating to the termination of a business relationship with a dealer and the other for an alleged breach of a lease agreement. During the year, payments of €/000 1,522 were made for disputes, closed or still pending, all relating to reporting periods prior to 2022.
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Guidelines for respecting human rights
The Piaggio Group conforms to the Guiding Principles on Business and Human Rights adopted by the United Nations in 2011 and the ILO Declaration on Fundamental Principles and Rights at Work adopted in 1998.
It recognises the importance of its role in condemning any violation of human rights and to this end improves and continually aligns its policies and controls, to prevent any potential violation that could affect the Group or its procurement chain.
Group companies comply with national and international laws and regulations and conduct their activities in compliance with the Code of Ethics. The Code of Ethics was supplemented in 2017 with an article specifically dedicated to human rights. Suppliers all over the world who wish to do business with Piaggio must sign the Group’s general supply conditions, which include the Code of Ethics and observe its values.
To maintain the highest standards of ethical, moral and legal conduct, Piaggio encourages its employees to report any allegedly nonconforming conduct, guaranteeing they will not be affected by harmful consequences.
The Whistle Blower Policy, initially developed for the Group's Indian company, aims to provide a safe means for employees and other parties concerned to report violations that come to their knowledge in the context of their work activities. For this purpose, in compliance with Law 179/2017, an entirely new section with regulations on whistle-blowing designed to protect workers that report unlawful activities and irregularities that come to their knowledge during their work was added to the last revision of the Organisational, Management and Control Model pursuant to Legislative Decree no. 231/2001.
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The Environmental Dimension
Piaggio has organised its processes and activities through a management system which focuses on Quality, the Environment and the Health and Safety of Workers, with a view to providing a model of sustainable development that not only guarantees lasting success, but also ensures that the expectations of stakeholders are met (including investors, shareholders, partners, suppliers, the social community and public administration).
Environmental sustainability - understood as the ability to protect and safeguard natural resources, combined with the capacity of the ecosystem to absorb the direct and indirect impacts generated by manufacturing activities - is among the key focal points of Group Policy, as expressed by the company's senior management team. This concept provides the basis for the environmental certification (ISO 14001) process that has already been launched (or is being continued) at the various production sites and is an essential point of reference for every Group company, wherever they may operate.
Specifically, Piaggio is committed to minimising the environmental impact of its industrial activities by carefully defining the product design, the manufacturing technological cycle and by using the best technology and the most modern production methods. Pursuing these objectives generates continual improvement in environmental performance, not only in production but also throughout the product life cycle.
The phases of the life cycle of a vehicle that determine the greatest environmental impacts can be summarised as follows:
During the procurement of raw materials/components, the main impact derives from the relative production and distribution that involves direct and indirect emissions of CO2, the consumption of water and the production of waste. Although these impacts are difficult for the Group to monitor, Piaggio has calculated Scope 3 emissions from purchased goods and services using the expenditure-based method.
During production, the main impacts are related to the consumption of electricity and natural gas which results in direct and indirect CO2 emissions, water consumption mainly related to painting and the amount of waste produced. All these impacts are monitored and reported in the next few pages.
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During distribution, the impact is from the fuel consumption of vehicles used to transport finished products, spare parts and accessories. Piaggio is considering how to estimate these impacts, which are currently not monitored due to the difficulty in identifying them.
During use by the customer, the impact is from the fuel consumption of vehicles and any disposal of consumables and worn components. Although these impacts are difficult for the Group to monitor, Piaggio has made estimates to calculate Scope 3 emissions from the use of sold products. Piaggio promotes safe and responsible driving and studies vehicles that are increasingly environmentally friendly.
Finally, during disposal, the impact is from the dismantling of various components for their recovery or disposal. All vehicles are designed for their effective disposal at the end of their life. The Group's vehicles have a particularly long life. The Vespa maintains a high second-hand value and is a collector item for many enthusiasts.
Quantitative data on the mitigation of the environmental impact resulting from the Group's operations are reported on in the sections below.
With these objectives in mind, initiatives and goals for the future focus on the following areas:
•maintaining environmental certification awarded to all production sites;
•reducing energy consumption;
•reducing emissions of CO2 and other pollutants;
•conserving water resources;
•waste handling and recovery;
•absence of soil contamination;
•environmental spending and investments.
The data in this chapter refer only to production plants. The Group also operates through commercial companies (distributors and selling agencies) and research centres located on various reference markets. The consumption of natural resources at these sites cannot always be detected, as they sometimes refer
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to properties that are not owned where services are shared with other tenants and in any case are to be considered marginal and therefore irrelevant.
The Piaggio Group has defined a specific organisational structure to achieve the environmental sustainability objectives of its production sites.
The responsibilities and roles of the Environmental Management System (EMS) with Organisational Units/Functions involved are reported in the Quality, Environmental and Occupational Health and Safety Management Manuals, for sites in Italy.
Environmental organisational structure of Italian sites of the Piaggio Group
Environmental Management System
Management Representative
Quality System Manager
Management System Manager
General Systems Manager
Coordination
and control
Environmental Manager
Audits
Process Auditor (Internal Auditor)
The head of the Environmental Management System reports to the representative of the Processes Quality & Cost Engineering Department on the performance of the Management System and about any need for improvement. The Environmental Management System manager, a position held by the General Plants manager, has power of attorney to perform his duties and responsibilities, while Environmental Managers are appointed by the Environmental Management System manager after obtaining approval of their affiliated Manager.
The subsidiaries in Vietnam and India (PVPL) have EHS (Environment Health and Safety) teams which work full-time on environmental, health and safety issues, with clearly defined roles and responsibilities. Piaggio Vietnam's EHS team is led by the Technology and Maintenance Manager who reports to the Director of Operations while a full-time employee is responsible for the management of environmental issues. The environmental team at PVPL, consisting of senior management, engineers and operators, is part of the Maintenance Department and reports to the Director of Operations.
For several years now, the Piaggio Group has implemented an environmental management system in its facilities in compliance with the international standard UNI EN ISO 14001.
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Energy consumption
Although the structure of the Group's production sites has been designed to run on fossil fuels, Piaggio is engaged in optimising the management of existing sites to cut consumption. The aim of the Group is to optimise plant management and minimise energy waste. Having an extensive monitoring network of main energy carriers is important for achieving noticeable results, especially in more complex activities. Since 2016, the Pontedera site has adopted measures to reduce energy waste, with a smart metering system that can use, observe and compare in real time (with a delay of 3 hours) the consumption recorded by over 90 meters at the site. When reconfiguring or restructuring plants, the Technology functions carry out evaluations and analysis with a view to introducing machinery and methods that minimise environmental impact.
With this in mind, a photovoltaic power plant was built at the Indian production site in 2022 to meet part of the energy needs of the Commercial Vehicles and 2-Wheeler plants.
The start-up of the new Indonesian 2-wheeler plant for CKD assembly36 in November 2022 had no significant impact on the Group's consumption.
Energy consumption of Piaggio Group plants37
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh
Phuc
Jakarta
Total
Renewable 2022
373
3
376
Non-Renewable 202238
31,373
4,227
896
17,931
19,817
283
74,528
Total 2022
31,373
4,227
896
18,304
19,820
283
74,904
2021
34,091
4,168
836
16,123
16,313
71,531
Electricity (Thousand KWh)
Delta 2022-2021
-8.0%
1.4%
7.2%
13.5%
21.5%
100.0%
4.7%
2022
4,523,727
341,944
192,274
5,057,945
2021
5,488,105
416,967
202,153
6,107,225
Methane/Natural Gas (Sm3)
Delta 2022-2021
-17.6%
-18.0%
-4.9%
-17.2%
2022
1,135
40
1,176
2021
921
30
951
LPG (Ton)
Delta 2022-2021
23.3%
34.0%
23.6%
2022
1,824
395
120
14,994
912,243
929,576
2021
2,490
90
12
12,340
752,435
767,367
Diesel fuel (Litres)
Delta 2022-2021
-26.7%
338.9%
900.0%
21.5%
21.2%
21.1%
36 CKD Completely Knocked Down.
37 Some values are based on estimates. The Group did not purchase energy from renewable sources certified through guarantees of origin.
38 Renewable electricity comes from proprietary photovoltaic systems that are dedicated exclusively to self-consumption. All the energy produced is self-consumed and there is no sale of electricity to the grid.
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GJ39
Electricity
Methane/Natural gas
LPG
Diesel fuel
Total
2022
269,653
178,733
53,915
33,610
535,910
2021
257,510
215,396
43,622
27,635
544,163
Sites
Delta 2022-2021
4.7%
-17.0%
23.6%
21.6%
-1.5%
Use of fuels for company cars and testing vehicles40
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Jakarta
Total
2022
127,346
148,475
40,251
155,489
144,658
1,450
617,669
2021
146,835
127,671
51,048
153,320
125,036
603,910
Petrol (litres)
Delta 2022-2021
-13.3%
16.3%
-21.2%
1.4%
15.7%
100%
2.3%
2022
71
71
2021
660
660
Methane/Natural Gas (Sm3)
Delta 2022-2021
-89.2%
-89.2%
2022
0
0
0
2021
1
5
7
LPG (Ton)
Delta 2022-2021
-100.0%
-95.1%
-96.1%
2022
127,495
46,226
4,785
66,380
244,886
2021
137,871
50,992
6,683
77,844
273,389
Diesel fuel (Litres)
Delta 2022-2021
-7.5%
-9.3%
-28.4%
-14.7%
-10.4%
2022
2
2
2021
5
5
CGN (Ton)
Delta 2022-2021
-70.7%
-70.7%
39 The data relating to energy and fuel consumption expressed in GJ are calculated using the conversion standards set out in the standard parameter table published by ISPRA and by the Italian Ministry of the Environment and Energy Security (MASE) for the year 2022. For electricity, the standard coefficient of 1 kWh = 0.0036 GJ was used.
40 Some values are based on estimates.
124
GJ40
Petrol
Methane/Natural gas
LPG
Diesel fuel
CNG
Total
2022
19,837
3
12
8,854
71
28,778
2021
19,534
23
85
9,846
240
29,728
Company vehicles
Delta 2022-2021
1.6%
-89.2%
-85.3%
-10.1%
-70.4%
-3.2%
In 2022, the Group's total consumption was 564,688 GJ, of which 1,354 GJ was from renewable sources, compared to 573,891 GJ the previous year.
The reduction in overall consumption (-1.6%) despite a 17% increase in vehicles produced was achieved thanks to the decommissioning of the 3R pre-treatment and cataphoresis plant at Pontedera in March 2021 and the implementation of numerous measures at the Group's various plants.
Emissions of CO2 and other pollutants
Greenhouse gases (mainly CO2) and Volatile Organic Compounds (VOCs) released by solvents used in painting, are some of the most hazardous substances for air pollution generated by automotive operators.
The increases recorded in 2022 in CO2 emissions are due to the growth in production volumes and inclusion of the new Indonesian site in the reporting perimeter. Structural works (the replacement of boilers and restructuring of distribution networks), carried out over time and already described in previous financial statements, show that changes made have been appropriate.
CO2 emissions deriving from the combustion of methane, natural gas, diesel fuel and LPG used at plants are reported below.
Direct41CO2eq emissions of Piaggio Group production sites
Ton
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Jakarta
Total
2022
9,198
682
383
3,378
2,580
0
16,221
2021
11,049
827
401
2,742
2,164
0
17,183
Delta 2022-2021
-16.8%
-17.6%
-4.4%
23.2%
19.2%
0
-5.6%
The greenhouse gases deriving from the use of diesel, fuel oil and methane at Italian plants, were determined using the calculation factors provided for in the ETS regulation referred to in the "Emission Trading" Directive (Directive 2003/87/EC).
41 To calculate Scope 1 emissions, the following were considered: (i) for Italian plants, the emission factors published by ISPRA in the document National Standard Parameters; (ii) for foreign plants, Department for Environmental Food & Rural Affairs (DEFRA) emission factors. It should be noted that the emissions calculated with the emission factors published by ISPRA are indicated in tonnes of CO2; however, the percentage of methane and nitrous oxide has a negligible effect on total greenhouse gas emissions (CO2eq), as can be inferred from the relevant technical literature.
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With reference to CO2 emissions, the industrial plant at Pontedera comes under the scope of the “Emission Trading” directive (Directive 2003/87/EC) which implements the Kyoto Protocol. The site is classed as a “Group A” site, relative to plants releasing the lowest amount of CO2 indicated in the Directive.
CO2 emissions are almost entirely derived from the combustion of methane, marginally from the combustion of diesel fuel in back-up power generators and small amounts from the combustion of VOCs in the painting post-combuster.
The monitoring and reporting of CO2 emissions from the Pontedera plant are governed by a specific Group procedure, which is periodically audited in-company and annually audited by a certification body.
Direct CO2 emissions deriving from the combustion of fuels at Piaggio's Pontedera site are certified by a certification body accredited by the National Competent Authority in March of each year.
Below are the CO2eq emissions deriving from the leakage of F-gas from the plants.
CO2eq [t]
Pontedera
Noale and Scorzè
Baramati
Total
2022
253.4
105.8
151.3
510.5
2021
440.0
68.4
508.4
F-gas
Delta 2022-2021
-42.4%
54.6%
100.0%
0.4%
The next table shows the CO2eq emissions from the use of company cars and from testing and development activities.
Ton
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Jakarta
Total
2022
640
472
107
511
313
3
2,046
2021
720
438
138
562
274
0
2,132
Delta 2022-2021
-11.1%
7.9%
-22.5%
-9.1%
14.0%
100%
-4.0%
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Indirect scope 2 CO2 emissions42 of Piaggio Group production sites
Location based
Ton
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Jakarta
Total
2022
8,151
1,098
233
12,749
15,935
227
38,392
2021
8,857
1,083
217
13,221
13,795
0
37,173
Delta 2022-2021
-8.0%
1.4%
7.2%
-3.6%
15.5%
100%
3.3%
Market based
Ton
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Jakarta
Total
2022
14,324
1,930
409
12,749
15,935
227
45,574
2021
15,633
1,911
383
13,221
13,795
0
44,943
Delta 2022-2021
-8.4%
1.0%
6.7%
-3.6%
15.5%
100%
1.4%
For the location-based method, average emission factors related to national energy generation, published by national governing bodies, were used for the various countries where operations are carried out. In particular: for Italian plants, reference was made to the ISPRA publication "Emission factors for electricity production and consumption in Italy"; the emission data of Indian plants were determined by applying the coefficients established by The Central Electricity Authority "CO2 Baseline Database for the Indian power sector"; the data relating to the plants in Vietnam were calculated using the coefficients established by the "Department of Meteorology, Hydrology and Climate change – Ministry of Natural resource and Environment Vietnam".
For the market-based method, the factor reported in the document Residual Mix Results, Association of issuing bodies (AIB), was used for the Italian plants. For the remaining countries, the same factors were applied as for the location-based method, due to the impossibility of obtaining market-based emission factors.
Indirect scope 3 CO2eq emissions
In order to improve reporting, the Group has started a process, from this year, for estimating other indirect greenhouse gas emissions. Out of the possible categories of indirect emissions, the Group has identified the “purchased goods and services' and the “use of sold products” categories as making the most significant contribution.
For the "purchased goods and services" category, relative emissions were estimated considering the final costs in the Piaggio Group's consolidated financial statements (please refer to the Cost of materials and
127
Cost of services tables in the Notes to the Consolidated Financial Statements) using the Scope 3 Quantis evaluation tool "Scope 3 Evaluator", issued by GHG Protocol in partnership with Quantis.
For the “use of sold products” category, the relative emissions were estimated on the basis of an average figure constructed from the specific emission factors of the best-selling models and the estimated annual kilometres travelled. This figure was then multiplied by the number of vehicles sold in the reporting year and the average life cycle of those vehicles, to obtain the total emissions of vehicles sold in the year43.
tCO2eq
2022
2021
Use of sold products
3,758,050
2,691,458
Purchase of goods and services
1,384,935
1,078,500
Total
5,142,985
3,769,958
As previously commented, in 2022 the Group improved the efficiency of its production processes. The table below provides evidence of the results achieved:
Emission intensity (Scope 1 + Scope 2 location-based)
Scope 1+ Scope 2 emissions44
Sales revenue
Vehicles produced
Emissions/Revenue
Emissions/Vehicles produced
Ton CO2eq
million Euros
(units/000)
Ton CO2eq /Million Euros
Ton CO2eq /Unit/000
2022
55,123
2,087
611
26
90
2021
54,358
1,669
523
33
104
Delta
765
419
89
(6)
(14)
Delta %
1.4%
25.1%
17.0%
-18.9%
-13.3%
43 Some best-selling models were taken as a sample and their annual mileage was estimated. For each model, the emissions per km travelled were multiplied by the estimated annual mileage and the number of vehicles sold. The annual emissions thus obtained were divided by the number of vehicles sold in the models sampled, resulting in an average of weighted annual emissions per vehicle. This average figure was multiplied by the total number of vehicles sold in 2022, including those not sampled, resulting in the total annual emissions of vehicles sold. Finally, the total annual emissions thus obtained were multiplied by the average vehicle life years, in accordance with the calculation methodology of the 'Technical Guidance for Calculating Scope 3 Emissions'. The emissions per km travelled were taken from the product data sheets, while the useful life of the vehicles and the average vehicle mileage are estimates.
44 Emissions from company cars and testing activities are excluded.
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The emission intensity considering indirect scope 3 emissions (“purchased goods and services” and “use of sold products” categories):
Emission intensity (Scope 3)
Scope 3 emissions
Sales revenue
Vehicles sold
Emissions/Revenue
Emissions/Vehicles sold
Ton CO2eq
million Euros
(units/000)
Ton CO2eq /Million Euros
Ton CO2eq /Unit/000
2022
5,142,985
2,087
625
2,464
8,222
2021
3,769,958
1,669
536
2,259
7,034
Delta
1,373,027
419
89
205
1,189
Delta %
36.4%
25.1%
16.7%
9.1%
16.9%
Total Piaggio Group emissions were 5,207,336, including indirect scope 2 emissions calculated using the market-based method.
Other significant emissions at the production sites of the Piaggio Group45
Pontedera
Baramati
Vinh Phuc
Total
2022
29.2
407.1
0.3
436.6
2021
26.2
218.1
0.7
245.1
VOC (Ton)
Delta 2022-2021
11.4%
86.6%
-58.3%
78.2%
Overall VOC emissions went up in 2022, compared to 2021. This increase is mainly attributable to the Indian plant, which internalised the painting process of some vehicle parts in 2022.
45 The reported data were processed considering the emission of VOCs in terms of hourly mass flow, based on periodic monitoring, and the number of hours of operation of the plants in the reporting year.
The indicator only considers VOC (volatile organic compounds) released by solvents used in painting.
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Conserving water resources
Water consumption is one of Piaggio’s main areas of focus and it has taken concrete action to implement its Policy of trying to reduce the consumption of energy and natural resources. Piaggio has consistently worked on this, analysing the water consumption of the Pontedera plant, which in a decade has more than halved its m³ consumption of well water. This reduction was made possible by plant upgrades (e.g. inverters on well pumps) and in more recent times by replacing less efficient systems with latest generation technologies (e.g. new 2R painting and new cataphoresis).
The Baramati and Vinh Phuc plants reuse part of the water withdrawn as part of the effort to reduce consumption.
The Pontedera, Baramati and Vinh Phuc plants are located in areas with high water stress (Source: Aqueduct Water Risk Atlas).
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Water withdrawals
Megalitres
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Jakarta
Total
Of which water stress areas
2022
Groundwater (total)
126
7
4
0
0
0
137
126
Freshwater (≤1,000 mg/L Total Dissolved Solids)
0
0
Other types of water
126
7
4
137
126
Third-party water (total)
62
14
1
268
126
0
472
456
Freshwater (≤1,000 mg/L Total Dissolved Solids)
268
126
0
394
394
Other types of water
62
14
1
78
62
Total
188
22
6
268
126
0
609
581
2021
Groundwater (total)
164
7
1
172
164
Freshwater (≤1,000 mg/L Total Dissolved Solids)
Other types of water
164
7
1
172
164
Third-party water (total)
61
15
1
207
111
395
379
Freshwater (≤1,000 mg/L Total Dissolved Solids)
207
111
318
318
Other types of water
61
15
1
78
61
Total
225
22
2
207
111
567
543
Change
Groundwater (total)
(38)
0
3
0
0
0
(35)
(38)
Freshwater (≤1,000 mg/L Total Dissolved Solids)
0
0
Other types of water
(38)
0
3
(35)
(38)
Third-party water (total)
1
(1)
0
61
15
0
76
77
Freshwater (≤1,000 mg/L Total Dissolved Solids)
0
0
0
61
15
0
76
76
Other types of water
1
(1)
0
0
0
0
0
1
Total
(38)
(1)
4
61
15
0
41
38
Change %
-16.6%
-2.3%
172.8%
29.5%
13.4%
7.3%
7.1%
The increase in offtake volumes was lower than the increase in business volumes, thanks to the Group's commitment to minimising the use of resources and the beneficial effect of decommissioning the 3R pre-treatment and cataphoresis plant at Pontedera in March 2021.
The opening of the new Indonesian plant, as an assembly site only, did not generate significant impacts in terms of water use.
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Water discharges46
Megalitres
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Jakarta
Total
Of which water stress areas
2022
Third-party water
Freshwater (≤1,000 mg/L Total Dissolved Solids)
100
0
100
100
Other types of water
188
22
6
215
188
Total
188
22
6
0
100
0
316
288
2021
Third-party water
Freshwater (≤1,000 mg/L Total Dissolved Solids)
89
89
89
Other types of water
225
22
2
250
225
Total
225
22
2
89
338
314
Change
Third-party water
Freshwater (≤1,000 mg/L Total Dissolved Solids)
12
0
12
12
Other types of water
(38)
(1)
4
(34)
(38)
Total
(38)
(1)
4
0
12
0
(23)
(26)
Change %
-16.6%
-2.3%
172.8%
13.4%
-6.7%
-8.2%
As regards waste water, environmental respect is ensured with processes to treat and purify waste water. The minimum standards for the quality of water discharges correspond to the standards imposed by applicable regulations of countries where Piaggio operates and by the specific environmental authorisations of each plant.
With reference to discharges, a summary of their destination by production site is provided below:
•Pontedera: the plant's drains are divided into two separate networks:
-one that collects "industrial" waste, originating from the painting plants, the wastewater preparation plant and the temporary waste storage areas, which could lead to the discharge of potentially polluted rainwater runoff;
-the other collects "non-industrial" waste (from the toilets, canteens and unpolluted rainwater).
The two networks are separate and both deliver to a purification hub outside the plant, where the wastewater undergoes chemical/physical treatment and is then discharged into an open riverbed. A small part of the discharges, originating from the toilets of two areas of the plant, flows directly into the public sewage network which is directly connected to the biological system of the integrated water supply. From the tables above, it is assumed that all the water collected is
46 The water discharges of the Vietnamese plant are estimated to be 80% of water withdrawals.
132
discharged into the sewers, a part in the industrial network (about 100,000 m3) and the rest into the non-industrial network);
•Noale: all buildings are connected to the public sewer system; the waste water is of a non-industrial origin only (from toilets and the site canteen);
•Scorzè: the plant is not served by the public sewer system, so waste water is biologically purified at the site and then conveyed to the local Rio Desolino canal;
•Mandello del Lario: the plant discharges a part of waste water directly into the public sewer system (non-industrial waste water, canteen waste water, etc.), while waters used in the cooling plants are discharged into the Torrente Valletta stream;
•Baramati: waste water is treated and reused for internal purposes and irrigation;
•Vinh Phuc: the site has a chemical/physical purification plant for waste from painting pre-treatment operations before it is conveyed to the public sewer systems, where all other site waste (non-industrial waste) is sent. The final destination is in the public sewer system. A part of this water is re-used. In 2022 the recovery of waste water amounted to 20,007 m³, equal to 15.9% of the water withdrawn;
•Jakarta: the plant is connected to the public sewage system; the waste water is of a non-industrial origin only (from toilets and the site canteen);
•Commercial companies: water use, which is only for toilet facilities and comes from the mains, coincides with waste water. The water use of these sites cannot always be recorded, as the sites are sometimes located at property which is not owned, where communal services are shared with other occupants.
Water consumption
Megalitres
Pontedera
Noale and Scorzè
Mandello Del Lario
Baramati
Vinh Phuc
Jakarta
Total
Of which water stress areas
2022
268
25
293
293
2021
207
22
229
229
Change
61
3
64
64
Change %
29.5%
13.4%
28.0%
28.0%
For all Italian plants and the Indonesian plant, consumption is estimated to be zero as the water withdrawn is returned to the environment after use.
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Waste handling and recovering
The Company's desire to minimise the environmental impact of its industrial activities through careful calibration of the technological processing cycle and the use of the best technologies and most up-to-date production methods, as set out in its Policy, is also (and above all) expressed through waste management and recovery. Within the Management System based on the ISO 14001 standard, each plant has specific procedures that regulate waste management, guaranteeing above all the necessary compliance with the regulations, but above all the continuous improvement of performance aimed at reducing the quantity of waste produced and ensuring it is recycled.
The management activities consist of separate collection of the different types of waste, their correct categorisation through product classification or chemical analysis, internal handling without the possibility of accidental spillage, their storage in suitable temporary storage areas, the definition of contracts with companies specialised in recovery/disposal, and the management of all formalities, including paperwork, to ensure traceability of the waste until it reaches the final recipient.
In 2022, there was an increase of 6.5% in waste produced, which is to be correlated with the growth in production volumes (+17.0% increase in vehicles produced).
At Italian plants, the percentage of waste sent for recovery improved, exceeding 95% of the waste produced.
The separation of hazardous from non-hazardous waste and the possibility of recovering waste is affected by local regulations.
Finally, it should be noted that a new two-wheeler assembly plant in Indonesia has been in operation since November 2022. The data for this plant are aggregated in the following tables together with those for Vietnam under the column “Asia Pacific”.
Italy
India
Asia Pacific
Total
Ton
Disposal
Recycling
Total
Disposal
Recycling
Total
Disposal
Recycling
Total
Disposal
Recycling
Total
2022
Hazardous
368
489
857
26
164
190
1,524
-
1,524
1,917
654
2,571
Non-hazardous
51
7,963
8,013
315
1,610
1,925
814
369
1,184
1,181
9,942
11,122
Total
419
8,452
8,871
341
1,774
2,115
2,338
369
2,707
3,098
10,596
13,694
2021
Hazardous
260
504
764
71
115
186
1,281
-
1,281
1,613
619
2,232
Non-hazardous
298
7,863
8,161
97
1,797
1,893
160
412
572
555
10,071
10,626
Total
558
8,367
8,925
168
1,912
2,080
1,442
412
1,854
2,168
10,690
12,858
Delta 2022-2021
Hazardous
108
(15)
93
(46)
50
4
242
0
242
304
35
339
Non-hazardous
(247)
100
(148)
218
(187)
32
654
(43)
611
626
(129)
496
Total
(139)
85
(51)
173
(137)
36
896
(43)
854
930
(94)
835
134
Year 2022
ITALY
INDIA
ASIA PACIFIC
TOTAL
Ton
Disposal
Recycling
Total
Disposal
Recycling
Total
Disposal
Recycling
Total
Disposal
Recycling
Total
Inorganic waste from chemical processes
3
-
3
-
-
-
-
-
-
3
-
3
Paints, varnishes and glazing, enamels, adhesives, sealants and inks
13
1
14
95
69
163
1,056
-
1,056
1,164
69
1,233
Waste from chemical surface treatment and coating of metals and other
3
-
3
25
-
25
-
-
-
28
-
28
Waste from the shaping and physical and mechanical surface treatment of metals and plastics
7
701
708
0
98
99
101
-
101
109
799
908
Oil and liquid fuel waste
1
11
11
-
6
6
0
-
0
1
17
17
Waste from organic solvents, refrigerants and propellants
207
-
207
-
-
-
-
-
-
207
-
207
Waste from packaging, absorbent material, wiping cloth, filtering and protective material not otherwise specified
141
6,740
6,882
-
1,240
1,240
172
307
479
314
8,287
8,601
Other waste not otherwise specified
23
423
446
0
92
92
16
11
26
39
525
564
Construction and demolition waste
1
520
521
220
66
287
-
10
10
221
597
817
Waste from health care
0
-
0
-
-
-
0
-
0
0
-
0
Waste from waste management facilities, off-site treatment plants and preparation of water intended for human consumption and water for industrial use
-
-
-
-
-
-
328
-
328
328
-
328
Municipal waste
20
58
78
-
203
203
665
42
707
685
303
988
Total
419
8,452
8,871
341
1,774
2,115
2,338
369
2,707
3,098
10,596
13,694
135
2021
Italy
India
Asia Pacific
Total
Ton
Disposal
Recycling
Total
Disposal
Recycling
Total
Disposal
Recycling
Total
Disposal
Recycling
Total
Paints, varnishes and glazing, enamels, adhesives, sealants and inks
65
1
66
97
41
138
862
-
862
1,024
42
1,066
Waste from chemical surface treatment and coating of metals and other
3
-
3
66
-
66
-
-
-
69
-
69
Waste from the shaping and physical and mechanical surface treatment of metals and plastics
4
697
701
-
106
106
85
-
85
90
803
893
Oil and liquid fuel waste
1
6
8
1
14
16
-
-
-
3
21
24
Waste from organic solvents, refrigerants and propellants
103
54
158
-
-
-
-
-
-
103
54
158
Waste from packaging, absorbent material, wiping cloth, filtering and protective material not otherwise specified
101
6,211
6,312
-
1,154
1,154
50
322
373
152
7,687
7,838
Other waste not otherwise specified
34
476
510
2
74
76
7
14
21
43
565
608
Construction and demolition waste
18
800
818
2
365
368
-
7
7
20
1,172
1,192
Waste from waste management facilities, off-site treatment plants and preparation of water intended for human consumption and water for industrial use
-
-
-
-
-
-
323
-
323
323
-
323
Municipal waste
228
120
349
-
157
157
114
69
183
342
346
688
Total
558
8,367
8,925
168
1,912
2,080
1,442
412
1,854
2,168
10,690
12,858
The analysis by type of waste produced shows that packaging waste (cardboard, wood, etc.) and construction and demolition waste are predominant.
In 2022, as in previous years, no spills or polluting events of significance occurred at any of Piaggio's sites.
At the Mandello and Pontedera, decontamination initiatives are under way due to historic contaminations. These situations emerged during demolition work in Mandello and during environmental monitoring campaigns in Pontedera. In both cases, the pollutants found have not been used in the production sites for several decades, providing the historical nature of their origin. In accordance with legal obligations, the two situations have been reported to the relevant authorities and are managed according to their instructions.
Piaggio's passion for the environment is channelled into its commitment to guaranteeing the environmental compatibility of its vehicles, from the design stage until the end of their working life.
136
2-Wheelers
Although no legislation on recyclability for two-wheelers is currently in force or is planned, the Piaggio Group has taken steps in this direction. The technologies and materials used for the design and construction of the Group's scooters and motorcycles have targeted environmental compatibility and their effective end-of-life disposal since the introduction of the Sfera 50 model (1990). As from 2008, Piaggio has also changed the title blocks of drawings and information in its bills of materials so that materials used in constructing vehicles can be checked and disassembly can be optimised for easier disposal.
Through a partnership with UniFi, the characteristics of recyclability of the MP3 125 Hybrid in accordance with ISO 22628 were analysed. This was achieved by taking apart a real vehicle and registering all of its components. The recyclability rate was 88%, far higher than the limit of 85% set for the automotive industry for category N1 and M1 vehicles.
4-Wheelers
In the four-wheeler sector, the regulatory panorama is similar to that of cars.
With the introduction of the European Regulation REACH (Registration, Evaluation, Authorisation and Restriction of Chemical Substances) in 2007, automotive manufacturers are required to follow AIG (Automotive Industries Guidelines) which include monitoring the use of hazardous/prohibited substances, and checking the recyclability and recoverability rates of materials used.
Over the years, Piaggio has embarked on a challenging path to ensure a high level of recyclability of its vehicles, culminating in the production of a manual for end-of-life vehicle dismantling.
Piaggio constantly monitors the recyclability and recoverability rates of its vehicles according to an internal procedure that complies with the requirements of Directive 2000/53/EC, and these two indicators are always above permitted thresholds.
The indicators are calculated and supplied to Approval Bodies in an ISO 22628 format, according to the tables of the European Commission. Starting from the production list of the complete vehicle, it is possible to trace the datasheet of each kit of components, with an indication of the relative materials with their codes and the recycling and recoverability percentages.
The survey also paved the way for a database, which updates vehicle material compositions and their recyclability and recoverability rates, from the design stage onwards.
The Recyclability and Recoverability values of the new Porter NP6 (calculated for the heaviest variant) are presented below.
New Porter NP6 SW LPG SR 2.12t
Recyclability (Rcyc)
89.5%
Recoverability (RCOV)
98.9%
137
Logistics
The Group has consolidated its logistics model aimed at benefiting from the synergies among various distribution centres in Europe and identifying opportunities for optimisation, paying particular attention to service quality aspects.
To optimise distribution, the model provides for the following:
•the targeted management of departures and itineraries to be covered;
•the storage of vehicles produced in Italy at the distribution hub adjacent to the production site, of vehicles imported from abroad at the distribution hub corresponding to the type of product.
The procedure also regulates:
•the resources and equipment used by logistics operators, which are checked by Piaggio to ensure they meet the required quality standards;
•the replacement of vehicles for internal shuttle services with other vehicles equipped with systems to cut CO2 emissions;
•the collection of packaging from dealers and related disposal in accordance with local regulations in force;
•the disposal with separate collection of waste materials and replacement of packaging;
•printing only documents which are necessary.
Thanks to the centralised management of all logistics centres (Pontedera, Scorzè, Mandello):
•the number of trips needed to transfer stock between centres has been optimised;
•the use of electronic archives for storing shipment documents has been consolidated and paper copies have been reduced;
•printing of shipping documents to be sent to end customers has been minimised, and electronic documents are used whenever possible.
The Parent Company, through planning transport to directly managed markets, placed the utmost attention on distribution operations. Unfortunately, the critical issues caused by the COVID-19 pandemic, as well as the difficulties related to Brexit, did not allow for maximum efficiency.
Despite these contingencies, in 2022 there was an improvement in distribution operations per vehicle of 1.71% for two-wheelers, while for commercial vehicles there was an inefficiency of -1.83%, compared to the previous year.
As part of activities to streamline the distribution warehouses at the Pontedera production hub, the crating process, with vehicles only being crated during the dispatch stage, made it possible to optimise vehicle stock. This meant that for scooters from Asia (excluding those from India) transit necessary for transport to Europe was optimised.
Activities have started to have paperless transport documents as far as possible, so that hard copy documents can be phased out, where feasible.
The production centres in India and Vietnam also set up procedures aimed at minimising the number of trips for shipping produced vehicles and consumption of packing materials.
138
The Social Dimension
Human resources, with their skills, capacities and dedication, are a key factor in Piaggio's competitiveness and growth.
Everything we do as individuals or as a team is shaped by our strategic vision, our results-driven approach, our constant commitment to customer satisfaction, our desire for innovation and our awareness of future market scenarios, to generate value for each and every stakeholder. People are the key element that enables us to meet challenges in an increasingly dynamic and competitive international scenario.
It is for these reasons that Piaggio places such central importance on people in the organisation, assuring them our respect and protection in all Group companies.
Over the years, the Group has always focused on aligning its organisation with international best practices. In 2022, also considering the gradual changes in the impacts of the COVID-19 emergency, Piaggio adopted organisational initiatives to support commercial, innovation and new product development objectives, while maintaining efficiency and productivity targets.
As of 31 December 2022, Group employees totalled 5,838, an overall increase of 2.4% compared to 31 December 2021.
Company employees by geographic segment as of 31 December
Employee/staff numbers
2022
2021
2020
EMEA and Americas
3,260
3,295
3,331
of which Italy
2,989
3,026
3,057
India
1,369
1,328
1,550
Asia Pacific 2W
1,209
1,079
975
Total
5,838
5,702
5,856
Average number of company employees by professional category
Employee/staff numbers
2022
2021
2020
Senior management
111.3
108.9
106.3
Middle management
675.0
672.0
663.6
White collars
1,607.3
1,615.9
1,673.0
Blue collars
3,993.9
3,762.4
3,791.5
Total
6,387.6
6,159.2
6,234.4
139
An entry turnover rate of 6.4% and leaving turnover rate of 7.3% were recorded in Italy in 2022 (excluding staff on a fixed-term contract).
Group employee turnover as of 31 December 2022
New recruits
Employee/staff numbers
< 30
30-50
> 50
Total
% Turnover
M
W
Total
M
W
Total
M
W
Total
M
W
Total
M
W
Total
EMEA and Americas
42
15
57
50
13
63
2
-
2
94
28
122
4.2%
2.8%
3.7%
India
54
5
59
110
6
116
5
1
6
169
12
181
12.6%
36.4%
13.2%
Asia Pacific 2W
32
5
37
25
6
31
-
-
-
57
11
68
5.7%
5.1%
5.6%
Total
128
25
153
185
25
210
7
1
8
320
51
371
% Turnover
18.3%
22.9%
18.9%
7.3%
3.3%
6.4%
0.5%
0.2%
0.5%
7.0%
4.0%
6.4%
Leavers
Employee/staff numbers
< 30
30-50
> 50
Total
% Turnover
M
W
Total
M
W
Total
M
W
Total
M
W
Total
M
W
Total
EMEA and Americas
18
4
22
44
25
69
79
19
98
141
48
189
6.3%
4.7%
5.8%
India
33
5
38
147
2
149
6
1
7
186
8
194
13.9%
24.2%
14.2%
Asia Pacific 2W
8
3
11
22
8
30
1
1
2
31
12
43
3.1%
5.6%
3.6%
Total
59
12
71
213
35
248
86
21
107
358
68
426
% Turnover
8.4%
11.0%
8.8%
8.4%
4.7%
7.5%
6.4%
5.2%
6.1%
7.8%
5.4%
7.3%
The use of external workers within the Group is essentially limited to the Indian and Vietnamese plants and is related to the need to cope with temporary peaks in demand, so external workers are recruited during these periods.
In addition, internships and external collaborations are used for the gradual inclusion of new graduates in the company, to complete training activities and taking into account the specific aspects and local regulations of each country. The number of external workers at 31 December 2022 was 996.
External workers at 31 December
66
569
415
1050
32
492
472
996
EMEA and Americas
India
Asia Pacific 2W
Total
2021
2022
140
Piaggio adopts a system of recruitment, development and salary packages for personnel which recognises and rewards merit and performance. Any type of discrimination is specifically forbidden by the Code of Ethics.
The primary focus on human resources and the development of core competencies for business development are the cornerstone of relationships with people and are reflected in the following corporate policies:
•Competitive organisation
The Group pursues an innovative organisational approach as a way to create a competitive edge and support a multicultural, multinational, lean organisation focused on the customer and on generating value.
In its relations with staff and regardless of the work they carry out, Piaggio respects the principles set forth by the Group's Code of Ethics in all circumstances, as well as the laws in force in the geographic areas where it operates.
Piaggio does not resort to child labour according to the age limits in force in the various countries or to forced labour and adheres to main international laws, such as the UN Convention on the Rights of the Child (UNCRC) and the 1998 Human Rights Act.
•Recruitment and internal mobility
Scouting and recruitment, in keeping with the previous year, focused on innovative activities and skills in the fields of electric mobility, environmental issues and digitisation.
Professionals from the most advanced companies in the automotive sector have been recruited with a particular focus on specialised skills in passive vehicle safety, cyber security and digital connectivity.
Another area highly impacted by recruiting was Quality, regarding both Products and Manufacturing, to pursue an ever higher level of global quality standards.
For the selection of specialised external resources, direct recruitment was used for positions with a high or medium-high level of specialisation.
In parallel, internal resources were selected with a view to job rotation.
•Career development
Development and career paths at Piaggio are mainly based on the assessment of managerial and technical skills, behaviour, performance and potential, with the aim of creating a pool of highly motivated individuals to fill key positions.
141
The development of the core skills necessary to remain in step with evolving markets and business is a priority. This is why the Group's human resources development policies focus on building, maintaining and developing factors that are instrumental for competing in international contexts which are continually evolving.
The Group's managerial and professional competencies model
Piaggio has identified a managerial skills model, which constitutes the set of behaviours to be put into practice each day, in order to ensure the success of the manager in question and the Group as a whole at global level.
At the same time, Piaggio has developed a reference model regarding the various professional skills required, which represent the shared assets of professionalism and expertise that constitute the true foundation of the company and serve as the only real guarantee of continuity and quality of results.
In 2022, detailed periodic gap analysis was conducted, in order to set up training and continual professional development plans.
The Group's managerial competencies model
142
Development paths
The goal of the development tools is to build and improve the managerial and professional skills required by the respective models, while realising potential and assessing and rewarding excellent performance, as well as safeguarding specific technical know-how. Specifically, the tools used by Piaggio include:
- development plans, which identify the actions to be taken for employee development;
- job rotation and participation in strategic or international projects;
- management and professional training (see "training" section);
- the talent management programme for younger employees (see the "talent management" section).
Career paths
Resources are encouraged to follow a career path focused on continual improvement through training and development of their expertise, so they can successfully tackle the changes and challenges of the near future.
Performance appraisal processes for succession planning are created to develop the technical expertise and managerial skills of resources, in order to consolidate the Group's leadership role. Expatriation and job rotation, plus Talent Development programmes are key to encouraging the growth of resources and laying the foundations for shaping the managers of tomorrow.
In line with market best practices, Piaggio deploys a number of tools for the supervision and management of succession plans with regard to key Group positions, and in 2022, the Group used the global IT platform to test the methodology implemented, which also takes into account the skills and performances recorded each year.
•Evaluation
The Group places great importance on using transparent criteria and methods for reviewing employees with respect to:
−performance,
−managerial and professional competencies and language skills,
−international mobility,
−potential,
−professional aspirations and goals,
as regards their specific role and company needs.
Both the evaluator and the person being evaluated are given the opportunity to share the result of the performance and skills assessment, and to add to this with suggestions for the establishment of the individual development and training path, to be implemented in accordance with a clearly defined time scale through the dedicated SAP SuccessFactors IT platform.
Employees are evaluated by comparing their competencies against the company model for their specific role, as evidenced by concrete and observable behavioural indicators relative to their everyday work. The review process is managed in an integrated way through a dedicated IT platform and provides the
143
information necessary for the processes of succession planning, management reviews and a gap analysis of professional competencies, which are conducted across the Group.
Percentage of employees who received performance and career development reviews in 2021 and in 202247
EMEA&Americas
of which Italy
Asia Pacific 2W
India
Senior management
100%
100%
100%
100%
Middle management
100%
100%
100%
100%
White collars
100%
100%
100%
100%
Blue collars
-
-
100%
-
Talent Management: The talent development programme
Programmes to manage young talent are one of the main tools used for development, attraction and retention. The programmes are aimed at employees around the world who show high potential, great enthusiasm for their work and the courage to undertake new directions, in order to identify and ensure a growth path for the most deserving resources.
In general, these programmes allow talented employees to access customised development plans, which comprise:
-coaching and personalised training;
-strategic and international projects;
-job rotation.
The programmes also include Piaggio Way, which involves employees under 35 years of age, from all geographic areas of the Group. At present 29 employees are involved, in addition to a community of 58 students who have completed their development plan and who still remain active in the programme.
The geographic breakdown of active participants is as follows: 45% EMEA, 21% India, 34% Asia Pacific.
Access to the programme is on a meritocratic basis and includes an assessment by a third party to guarantee the impartiality and objectivity of the evaluation.
A structured Talent Review process is conducted each year to verify programme participation.
47 The company population and work performance during an appraisal period of at least 6 months is considered.
144
Geographic distribution of talent and breakdown by gender as of 31 December 2022
Training is one of the tools used to consolidate and develop the competences of resources and strengthen their motivation. In particular, the Piaggio Group's training system is based on four main clusters: managerial, vocational/technical, linguistic and Health & Safety (H&S).
Training activities are managed with the support of an IT tool that includes the following steps:
•annual analysis of training needs with line Managers, HR Managers and H&S (for safety aspects) taking into account gaps emerging from performance appraisals, development and career plans and specific business projects;
•planning of training activities in line with the Piaggio competency model;
•planning and delivery of courses with the identification of participants’ level of satisfaction.
The analysis of occupational health and safety training needs is carried out together with the Health & Safety department, with the aim of meeting legal obligations, observing company procedures introduced to strengthen awareness and enhance knowledge of specific risks and respond to any particular needs.
In 2022, thanks to the gradual changes in limitations due to anti-COVID measures, classroom-based training activities were gradually reintroduced, and digital tools for training (e-learning courses and synchronous training in virtual classrooms) on particular subject areas such as language and technical training were still used.
“Catalogue” management training has been renewed, introducing 10 new courses putting the “person at the centre”, with the aim of encouraging the best expression of individual potential through the acquisition of behaviour and skills consistent with the objectives and changes required by the organisation.
Technical and vocational training focused considerably on the development of skills in Automotive Cyber Security, Vehicle Design and Project Management.
More than 4,000 hours of training/awareness-raising were provided to Indian employees on the Code of Ethics and for the prevention of sexual harassment crimes.
45%
21%
34%
EMEA
India
Asia Pacific 2W
83%
17%
Men
Women
145
Training hours* by area of intervention and geographic segment
2022
2021
Managerial training
3,223
24,384
3,905
31,512
2,161
16,484
1,013
19,658
Technical – professional training
5,172
9,762
2,367
17,301
7,802
28,290
2,875
38,967
Language training
8,265
774
995
10,034
2,795
157
1
2,953
Health and safety training
20,589
10,755
7,061
38,405
11,272
9,379
4,020
24,671
Total
37,249
45,675
14,328
97,251
24,030
54,310
7,909
86,249
* The figure does not include hours of on-the-job training.
In 2022, there was a marked increase in training hours in EMEA and Americas, driven in particular by training in Italy. Both the compulsory refresher training for workers carried out at all Italian sites, with a significant uptake, and specific initiatives (e.g. training for testers, for electrical risks, etc.) contributed to this figure.
Training hours by gender
2022
2021
Thematic area
Men
Women
Total
Men
Women
Total
Managerial training
28,903
2,609
31,512
18,286
1,373
19,658
Technical – professional training
15,210
2,091
17,301
35,215
3,752
38,967
Language training
6,791
3,244
10,034
1,728
1,225
2,953
Health and safety training
31,274
7,130
38,405
21,813
2,857
24,671
Total
82,178
15,073
97,251
77,042
9,207
86,249
146
Total training hours by professional category
2022
2021
Hours
Men
Women
Total
Men
Women
Total
Senior management
665
45
710
816
61
877
Middle management
17,586
1,212
18,798
14,806
627
15,432
White collars
27,368
5,851
33,219
22,221
4,598
26,819
Blue collars
30,557
7,041
37,598
33,193
3,275
36,468
Other workers48
6,002
925
6,927
6,006
647
6,653
Total
82,178
15,073
97,251
77,042
9,207
86,249
2022
2021
Hours per capita
Men
Women
Total
Men
Women
Total
Senior management
6.1
6.4
6.1
8.2
7.6
8.1
Middle management
29.6
13.0
27.3
25.0
7.7
22.9
White collars
23.6
13.4
20.8
19.2
10.4
16.8
Blue collars
11.3
9.7
10.9
12.8
4.5
11.0
Total
16.7
11.2
15.5
16.0
6.8
14.0
•Rewards
Reward policies are designed to reward individuals and recognise their contribution to the company, according to the criteria of competitiveness, fairness and meritocracy, which are openly shared throughout the evaluation processes, in order to motivate and retain those individuals who make significant contributions to the achievement of business results.
The Group reward system is differentiated for the various professional groups in the company and consists of a fixed salary component and variable objective- and benefits-based incentive systems.
In Italy, in 2021 Piaggio employees were able to use a digital platform to manage welfare services, through which they can exercise the choice options provided for in their national employment contracts and supplementary company agreements.
Salary packages
Piaggio offers to new recruits and all its employees a salary package in line with best market practices. Accordingly, Piaggio has adopted a structured salary review process based on:
- comparing salaries with market benchmarks, considering the market positioning of the company as a whole and the review of individual organisational roles, which is periodically revised. Comparisons are conducted using internationally recognised methods, with the support of specialist consultants;
- setting out guidelines for the salary review process that take into account company results and focus on criteria of meritocracy, competitiveness, internal fairness and sustainability;
48 This category includes agency workers and interns.
147
- the timely identification of fixed and variable remuneration actions, consistent with defined guidelines, with meritocratic logics and the retention needs of strategic resources for the business, also with a view to the development of roles defined through the succession planning process.
An analysis performed on a single country basis did not reveal any significant differences between the basic salary and remuneration of men compared to women with the same category, experience and assigned duties.
Piaggio complies with labour laws in the various countries where it operates, adopting collective bargaining agreements where applicable.
YEAR 2022 - Ratio of average basic salaries for women to average basic salaries for men of the same professional category 49 (including bonuses)
49In individual geographical areas, the categories not represented do not have female employees or their small number would make the calculation insignificant.
0,95
0,90
0,87
0,93
0,88
0,85
0,96
1,05
0,88
0,98
0,87
0,00
0,20
0,40
0,60
0,80
1,00
1,20
Italy
Rest of EMEA and AMERICA
Asia Pacific 2W
India
Blue collars
White collars
Middle management
Senior management
148
YEAR 2022 - Ratio of average basic salaries for women to average basic salaries for men of the same professional category50
Objective-based incentive systems
The achievement of excellent results in terms of objectives set by the company is rewarded through variable incentive systems, focused on business-related qualitative and quantitative objectives as well as on the internal efficiency of each area of responsibility.
The full process of setting objectives and reviewing results is conducted with employees, using objective criteria.
Benefits
Piaggio offers a benefits package in line with best local market practices, which is structured on an organisational basis. Benefits include, by way of example:
-company car;
-private health insurance;
-company medical centre at various production sites;
-agreements with local groups and facilities of interest for employees.
Benefits are provided to full-time as well as to part-time employees without differentiation.
50In individual geographical areas, the categories not represented do not have female employees or their small number would make the calculation insignificant.
0,95
0,90
0,87
0,94
0,90
0,85
0,97
1,03
0,87
0,99
0,86
0,00
0,20
0,40
0,60
0,80
1,00
1,20
Italy
Rest of EMEA and AMERICA
Asia Pacific 2W
India
Blue collars
White collars
Middle management
Senior management
149
•Diversity and equal opportunities
Piaggio operates globally with a diversity of employees, in terms of age and gender, in Europe, America, India, Asia and China. Staff diversity represents values and opportunities arising from various different ways of pursuing and achieving the highest levels of performance within a single, broader Group organisational design.
For Piaggio, managing diversity means acknowledging and respecting differences as part of the shared substratum of company culture. The Group therefore rejects any form of discrimination on the basis of gender, age, nationality, ethnic background, ideology or religion. It operates in strict compliance with law and with contractual requirements, and in keeping with the customs, practices and usages of each country in which the Group operates.
The Group's concrete commitment to embracing diversity is reflected by its adoption of a Code of Ethics, conformity to international laws on equal opportunities and use of policies that protect forms of diversity already found within the company.
The Group seeks to spread its culture and values throughout the world through shared digital platforms (company Intranet and tools supporting the work of HR such as the Success Factor, Piaggio Global Training), with a view to creating the conditions for fostering an international mindset and a building a truly multinational organisation, in which all employees can benefit from equal opportunities.
Human resources management processes are conducted applying the same principles of merit, fairness and transparency in all the countries in which the Group operates, with the accent placed on aspects of relevance for the local culture.
Piaggio selects and hires its staff based solely on the candidates’ characteristics and experiences and the requirements of the position. As shown in the graph below51, Piaggio promotes and supports the recruitment of candidates from many parts of the world, to contribute to the international mindset that is a key value for the Group.
51 Figures include senior managers, first- and second-level executives reporting to top management at Piaggio & C SpA, and the first- and second-level executives of subsidiaries. The term local refers to the national level and local senior managers means senior managers with nationality the same as the country where they work.
150
Percentage of senior managers of local nationality divided by geographic segment as of 31 December
In order to promote and sustain intercultural exchange and diversity management, the Group encourages the international mobility of its people, enabling the reciprocal secondment of employees between Group companies.
Female employment
Female employees at Piaggio play a fundamental role at all levels of the organisational structure. Females make up 22% of the workforce, in line with the previous year in all professional categories.
It is worth mentioning that the Indian subsidiary has adopted initiatives to facilitate women joining the company, for both corporate and production activities. For this purpose, there have been specific recruitment drives at technical training institutes, awareness-raising training activities and the redesign of workplaces and some assembly lines (e.g. Ape Electric).
Company employees by gender and geographic segment as of 31 December
2022
2021
Men
Women
Men
Women
nr
%
nr
%
nr
%
nr
%
EMEA and Americas
2,244
68.8%
1,016
31.2%
2,268
68.8%
1,027
31.2%
of which Italy
2,032
68.0%
957
32.0%
2,059
68.0%
967
32.0%
India
1,336
97.6%
33
2.4%
1,297
97.7%
31
2.3%
Asia Pacific 2W
995
82.3%
214
17.7%
882
81.7%
197
18.3%
Total
4,575
78.4%
1,263
21.6%
4,447
78.0%
1,255
22.0%
96%
79%
47%
75%
97%
77%
44%
85%
0%
20%
40%
60%
80%
100%
120%
Italy
Rest of Emea and Americas
Asia Pacific 2W
India
2022
2021
151
Number of women employees as of 31 December 
Company employees by contract type, gender and geographic segment as of 31 December 2022
Fixed-term contract
Open-ended contact
Employee/staff numbers
Men
Women
Total
Men
Women
Total
EMEA and Americas
6
1
7
2,238
1,015
3,253
of which Italy
6
1
7
2,026
956
2,982
India
204
7
211
1,132
26
1,158
Asia Pacific 2W
370
75
445
625
139
764
Total
580
83
663
3,995
1,180
5,175
Equal opportunities are offered to employees of both genders, with concrete initiatives in place to help people strike a balance between work and domestic life. Such initiatives include alternatives to full-time work.
Company employees by profession, gender and geographic segment as of 31 December 2022
Full time
Part time
Employee/staff numbers
Men
Women
Total
Men
Women
Total
EMEA and Americas
2,228
844
3,072
16
172
188
of which Italy
2,017
788
2,805
15
169
184
India
1,336
33
1,369
0
0
0
Asia Pacific 2W
995
214
1,209
0
0
0
Total
4,559
1,091
5,650
16
172
188
6,0%
13,5%
27,4%
21,1%
6,5%
12,0%
27,6%
21,9%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
Senior management
Middle management
White collar
Blue collar
2022
2021
152
Part-time employment in Italy as of 31 December 2022
Within the Group, the largest population is in the 30-50 age group. At the same time, there was a significant growth in the under-30 population compared to the previous year.
The generational mix is essential for more experienced workers, who can set an example and pass on skills and abilities learned over time, to impart their knowledge to younger employees.
Company employees by professional category and age bracket as of 31 December
Employee/staff numbers
< 30
30-50
> 50
Total
Senior management
0
44
72
116
Middle management
4
456
228
688
White collars
209
985
402
1,596
Blue collars
596
1,800
1,042
3,438
Total
809
3,285
1,744
5,838
2022
%
14%
56%
30%
100%
Senior management
0
42
66
108
Middle management
1
463
209
673
White collars
174
1,019
407
1,600
Blue collars
494
1,809
1,018
3,321
2021
Total
669
3,333
1,700
5,702
%
12%
58%
30%
100%
93,84%
6,16%
Full time
Part time
153
Company employees up to 30 years of age by geographic segment at 31 December 2022
Parental/maternity leave
Our companies apply laws passed by pertinent national legislation.
The Group does not discriminate in any way against women who take maternity leave. Indeed, to support work-child care balance, a horizontal part-time contract has been granted to 183 employees in Italy. In addition, as further support for work-life balance, employees at the Pontedera site can benefit from an agreement for childcare support (see the Industrial Relations section). As demonstration of the above, the following information has been provided for the companies where the phenomenon is more numerically significant52.
EMEA & AMERICAS
India
Asia Pacific 2W
Men
Women
Total
Men
Women
Total
Men
Women
Total
Total number of employees entitled to parental leave in 2022
2,244
1,016
3,260
555
33
588
995
214
1,209
Employees on maternity/paternity leave during 2022
28
15
43
0
0
0
64
24
88
Employees returning in 2022 after maternity/paternity leave
28
7
35
0
1
1
64
22
86
Employees returning in 2021 after maternity/paternity leave
25
10
35
0
0
0
102
20
122
Employees returning to work and on the payroll 12 months after returning from maternity/paternity leave
24
8
32
0
0
0
96
20
116
% Return to work Rate
100.00%
58.33%
87.50%
0.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Retention rate (%)
96.00%
80.00%
91.43%
0.00%
0.00%
100.00%
94.12%
100.00%
95.08%
52 The figures refer only to parental leave requested up to the child's first birthday.
18%
31%
51%
EMEA and Americas
India
Asia Pacific 2W
154
In Italy, all employees who are parents of a child53 up to 12 years of age are entitled to an additional period of absence from work. In Vietnam, this opportunity is guaranteed up to 7 years of age.
•Engagement and dialogue with staff
The Piaggio Group’s internal communication guidelines are designed to keep employees informed with regard to business performance and prospects, bringing them closer to top management strategies.
The system is based on the conviction that sharing strategic objectives with every employee is a key factor to success.
Piaggio uses communication and information tools which respect and empower the social and cultural realities within the Group.
In particular, in Italy there is an active national Intranet portal, “PiaggioNet”, which provides information on the Group, with company news and the latest on the product ranges of the various brands, as well as a range of staff services (e.g. transfer management, manuals/internal procedures, Piaggio Global Training platform and direct access to the online company publication Wide Piaggio Group Magazine, which is also published on the Group’s websites, updated on a continual basis and available in Italian and English versions).
In order to facilitate communication with employees and workers and dematerialise the payroll distribution process, a specific portal accessible to employees has been set up.
Similar information is made available to the employees of foreign subsidiaries through the dedicated Intranet portal "PiaggioNet International", whose contents are published in English.
Additional specific initiatives are provided for employees of premises in Vietnam and India.
The Piaggio Group acknowledges the role of trade union organisations and workers' representatives and is committed to establishing relations with them focused on attention, engagement and a common understanding; in fact ongoing dialogue is considered as fundamental for finding the best solutions to specific company needs.
The Group’s approach lies in involving workers and their representatives in the pursuit of company objectives, establishing a continuous dialogue with them. The solutions and conduct adopted in various countries where the Group operates are in line with the social and institutional context, but are always consistent with the fundamental principles and overall needs of the Group.
Piaggio complies with the labour legislation of countries where it operates.
All employees working at the Group's production companies have 100% salary and welfare cover, in accordance with law and collective bargaining agreements.
53 Natural, adopted or in foster care.
155
Italy
During 2022, dialogue and discussion with trade unions and workers' representatives continued with the aim of seeking shared solutions in an international scenario characterised by new international geopolitical tensions and interlinked unpredictable factors such as soaring gas and oil prices, economic sanctions against belligerent countries and blockades imposed by supplier countries to counter new pandemic outbreaks with negative consequences on the supply of production systems in terms of rising costs and the unavailability of raw materials.
Nevertheless, the positive performance of the reference markets led to the signing of a trade union agreement at the end of November 2021, which initiated a fixed-term recruitment plan to strengthen the workforce of the Group's plants in Pontedera (Pisa), Mandello del Lario (Lecco) and Scorzè (Venice) as early on as the first quarter of 2022.
The “provisional” agreements signed in 2021 with the trade unions for the Pontedera and Mandello del Lario sites led to workers who have already had experience at Piaggio over the last few years to being hired, to avoid wasting skills acquired and at the same time allow for a more effective response to changing market trends. Under the agreements, some 50 people had their contracts changed to a permanent status for the Pontedera site in March 2022, and vertical part-timers and a part of staff leasing staff 54 for the Mandello del Lario production site were stabilised.
In keeping with actions taken at the end of 2021 and with the need to take all useful measures to increase the company's competitiveness and at the same time respond to temporary market needs, in December 2022, the Company signed “provisional” trade union agreements at the three Italian production sites of Pontedera (Pisa), Mandello del Lario (Lecco) and Scorzè (Venice), that will allow, within the scope of the recruitment plan planned for 2023, to waive the constraints of current legislation on flexible forms of work.
As far as the COVID-19 health crisis is concerned, shared monitoring continued with the trade union representatives and workers’ representatives (RLS), within the framework of the company’s Control Committees, set up at individual sites, to verify the application of rules to combat and contain the spread of the COVID-19 virus in the workplace.
These Committees were attended by the company trade union representatives and workers' safety representatives (RLS).
With reference to collective bargaining, the National Collective Bargaining Agreement (CCNL) for workers in the private metalworking and plant installation sectors was confirmed as valid throughout Italy.
For the Scorzè site, it was necessary to resort to the Ordinary Temporary Layoff Benefits Fund (Cassa Integrazione Guadagni Ordinaria) mainly in the period from September 2022 to December 2022.
54 Staff leasing means provision for an indefinite period.
156
The number of hours lost due to strikes in 2022 shows a trend in line with the previous year between hours lost due to company micro-conflicts and hours lost due to general/category strikes.
However, It should be noted that micro-conflicts do not account for significant values in absolute terms and are limited exclusively to initiatives by a minority of trade union representatives.
All corporate micro-conflict events referred to the Pontedera site.
The table below provides a summary of the hours lost due to strikes in the last three years at the company's sites in Italy:
2022
2021
2020
general/category
7,571
9,919
1,596
company
14,825
12,920
15,816
No. of hours lost due to strikes
Total
22,396
22,839
17,412
general/category
0.14%
0.35%
0.06%
company
0.28%
0.46%
0.75%
% hours lost compared to hours worked*
Total
0.43%
0.81%
0.83%
general/category
946
1,240
200
company
1,853
1,615
1,977
No. of days lost due to strikes
Total
2,799
2,855
2,177
*For the calculation of the %, only the hours of production staff were considered.
A structured company welfare system has been established in Italy, with services that aim to increase the well-being of employees and their families, in economic and social terms.
In general, a supplementary health care fund (Métasalute) for the engineering sector has been in place since the end of 2011, based on a national trade union agreement. Membership of the plan has been automatic for all Group employees since October 2017.
The scheme also includes health benefits/services for employees:
•at Pontedera, the company medical centre for employees has specialists (an optician, an orthopaedic specialist, a lung specialist, a dermatologist and an ENT specialist) for consultations;
•at Noale/Scorzè and Mandello del Lario, all employees are entitled to paid time off for specialist consultations outside the company, and there is also permanent healthcare oversight at the plants.
•All sites also offer employees flu vaccinations free of charge.
157
India
In India, trade unions have a two-tier structure: one at company level and the other at local/area level; this structure is also replicated at the Indian subsidiary, where the trade union system comprises a company trade union committee with Piaggio worker representatives, and a central trade union committee, which is the highest hierarchical level, with members selected by the trade union. The company union committee consists of 5 members elected annually by the workers.
At the Indian subsidiary, following bilateral discussions with trade union representatives, a new collective company agreement was signed on 21 December 2022, which will enter into force on 1 January 2023 and will be valid for four years.
In 2022, a considerable effort was required to adapt production to the complex and changing scenario with a view to production flexibility, also taking into account the gradual changes made to anti-Covid measures. This effort was facilitated by constructive dialogue with trade union representatives. In this regard, there were no strikes in 2022.
In 2022, further initiatives were taken to ensure, in addition to full compliance with labour legislation, ongoing collaboration with workers and trade unions and the involvement of workers, with a view to improving employee satisfaction and consequently their motivation. In line with this approach, Piaggio has carried out numerous activities including: the distribution of the anti-COVID vaccine, various initiatives for disease control and prevention, awareness-raising on health and safety issues, the purchase of books and uniforms for employees' children.
Vietnam
In Vietnam, trade union representatives at a company level (selected by a company trade union committee) are tasked with protecting employees, helping them to understand aspects concerning labour regulations and company policies, and providing economic support for some company initiatives benefiting employees.
In particular, the current Trade Union Committee, elected in February 2019 and comprising 15 members, made an excellent contribution in 2022, having sponsored and assisted the company in a number of initiatives to bolster employee motivation.
In the first part of 2022, considering the changing state of the COVID-19 pandemic, initiatives focused on prevention and reducing contagion, while in the second half of the year, events were also started up again to support employee motivation (e.g. the misentobene-piaggiolympics2022 event to raise awareness of the importance of physical health).
No strikes took place in 2022.
158
Occupational health and safety
For the Piaggio Group, Health and Safety in the workplace is a corporate value and striving for continuous improvement in this area is an integral part of its business. This activity represents a clear strategic commitment to the Group's broader objectives. This principle is valid and applied in all countries where the Piaggio Group operates. In particular, Piaggio continually pursues concrete actions aimed at:
•a continual and systematic evolution towards ever higher safety standards, which considers the assessment of occupational safety and related tools, starting from the definition of new activities, or when reviewing existing ones;
•a safer conduct through the education, information, training and awareness of all workers, to enable them to perform their duties safely and with awareness and have a central role and be accountable for occupational health and safety aspects.
All employees guarantee and work together to put in place effective occupational health and safety programmes, to safeguard their own safety and that of others, based on interdependence.
Prevention and protection activities to safeguard the health of workers in a complex industrial context like the Piaggio Group, both in Italy and abroad, can only be achieved effectively through an adequately structured organisation which specifically aims to foster a “culture” of safety within the company. This includes behavioural training initiatives (the principles of which were also introduced in the most recent training updates) and initiatives to develop a “Culture of Safety”, that strategies for current and near future actions will also be based on. The belief that prevention must steer behaviour and daily activities, at all levels, has led the Piaggio Group to adopt very similar safety management standards in all the countries where it operates, regardless of any regulatory constraints that are less stringent than the Group's standards. From this perspective, the plants in Italy, Vietnam and India have an Occupational Health and Safety management system certified by a certification body accredited according to ISO 45001 standard (Occupational Health and Safety Management System). The ISO 45001 certified management system applies to 83% of all Piaggio Group employees worldwide. Audits are conducted annually and were successfully completed in 2022.
Production processes or company support processes are subject to a risk assessment, conducted according to a systematic process, and with the support of external specialised technical resources where necessary, with registration in specific Risk Assessment Reports.
The Occupational Health and Safety Management System that has been implemented at Piaggio envisages a rather extensive document system which, starting from the H&S Policy issued by Management, is set out in the Manual and actually implemented in the Management Procedures (which involve the entire company organisation), in the Operating Procedures (which instead involve only some company structures) and in the Work Instructions, which specify the correct methods for performing individual operations.
159
Specific procedures are in place for change management, both with a view to risk prevention and to identify opportunities for improvement (ergonomics, plant safety, etc.).
In addition, a consolidated system of immediate reporting and analysis of accidents, dressings and near misses is in place, with standardised methods and defined working groups, in order to identify the root causes of these events and prevent the occurrence of accidents or recurrence. Another example of the applied prevention approach is the computerised “risk condition report”, available on the company intranet. Through these methods, company managers, as well as individual workers through specific officers, can identify and report any risk conditions present, initiating a system of assigning and evaluating preventive actions and monitoring their effectiveness, so as to guarantee a complete and accurate management of actions to improve safety at work. The management of so-called “near misses” is a key element in preventing the occurrence of dangerous situations, which can even lead to serious accidents.
Great importance is attached to emergency management. A plan has been prepared for each site, as required by current legislation, which includes an analysis of the main risks, the definition of the operating procedures to be adopted during the various types of emergency, the roles and actions to be implemented by designated, trained personnel and the communication protocols. Obviously, the efficiency of this organisational system is tested through numerous drills involving Piaggio's sites.
All workers, consultants and suppliers who enter the Group's sites are required to comply with this management system which provides for internal and external audits on compliance with procedures adopted.
In 2022, initiatives were further developed to mitigate occupational health and safety impacts within the commercial network. A specific training initiative was launched for the risks of electric vehicles, in view of the increasing use of this technology, which is particularly important for service network personnel.
Promoting health is another important aspect for Piaggio, and this is achieved based on two main areas of action: free testing and information campaigns on healthy lifestyles. Each Group site has a health unit for prevention, surveillance and first aid, manned by specialist medical and paramedical staff.
During 2022, also in view of the gradual updates to regulatory guidance, Piaggio kept the measures to guarantee criteria for the prevention of COVID-19 infection in place (e.g. social distancing, sanitisation of workstations and communal areas, distribution of masks, temperature detection at the entrance, etc.).
160
Italy
In Italy, in line with applicable current laws, Piaggio has put in place a structured organisation, based on six Employers corresponding to the different company areas, and consequently managers and supervisors who oversee the various organisational units and sites, with the support of Safety Department Managers and Competent Doctors. In addition, the presence of Workers' Safety Representatives at all company sites is widespread and timely.
Response to the health emergency caused by the spread of the COVID-19 pandemic has shifted during 2022, however organisational, procedural and technical measures to prevent contagion in the workplace have remained in place, as per the company protocol signed with the company trade union representatives for each site and in line with the "Shared regulation protocol for measures to combat and contain the spread of the COVID-19 virus in the workplace" between the Government and social partners.
Specific strategies to contain the virus were defined in collaboration with competent doctors for people who tested positive or were suspected to be positive (nasal/throat swabs, etc.).
In 2022, a post-COVID medical evaluation and support service, set up in 2021, operated for employees who had contracted the virus, with specialist follow-up visits, in addition to clinics already running, that employees can access free of charge for specialist visits at the Pontedera Company Medical Centre.
As part of the strategy to continuously strengthen a corporate Culture of Safety, particular emphasis was placed on the creation of an international, interdisciplinary team of “Safety Ambassadors”: i.e. the development of skills and capabilities for people who, within their own operational/management area, become reference points for the application of health and safety systems, for continuous improvement and for the involvement and awareness of colleagues, etc. In fact, 8 employees, evenly distributed among company sites and functions, completed the technical training for ASPP55, and will work alongside the 3 people already trained.
2022 also saw the consolidation of the H&S Network both at international level, continuing the process started in 2021, and at Italian level, with a considerable extension and intensification of activities resulting from the training of the new “Safety Ambassadors”.
Significant impetus compared to the previous two-year period (affected by the difficulties in conducting in-person activities due to the Covid Emergency) was given to H&S training, which saw a marked increase in the number of hours provided, especially in Italy, and a considerable focus on behavioural aspects and staff involvement.
161
Occupational accidents at Italian plants56
Pontedera
Noale and Scorzè
Mandello
Year 2022
Hours worked
4,041,218
871,545
307,575
No. of fatalities from occupational accidents
0
0
0
Fatality rate
0
0
0
No. of recordable occupational accidents
31
6
7
Rate of recordable occupational accidents
7.7
6.9
22.8
No. of occupational accidents with serious consequences
1
0
0
Rate of occupational accidents with serious consequences
0.25
0
0
2021
Hours worked
4,206,574
767,712
255,760
No. of fatalities from occupational accidents
0
0
0
Fatality rate
0
0
0
No. of recordable occupational accidents
57
6
1
Rate of recordable occupational accidents
13.6
7.8
3.9
No. of occupational accidents with serious consequences
0
0
0
Rate of occupational accidents with serious consequences
0
0
0
Accidents that occurred at Italian sites in 2022 refer solely to Group employees and mainly involved bruising and wounds. A single injury lasted longer than 6 months.
Accidents at country level (Italy) decreased significantly both as an absolute number and as a frequency index. Bucking the general trend was the Mandello del Lario plant, which has had a prevention plan in place since the end of 2022, based on specific technical and training actions.
Accidents are mainly attributable to conduct, such as distractions, inadequate behaviour, failure to comply with procedures.
As for external companies operating at Piaggio's Italian production sites, one accident was recorded in 2022, while no accidents were recorded in 2021.
There were no fatal accidents in Italy in 2022, as was the case in 2021 and 2020.
56 Accident rates, for all geographic segments, are calculated taking into account the hours worked by employees during the reporting year and the multiplication factor of 1,000,000.
162
India
In 2022, as in the previous year, health and safety was one of the main priorities for the company, especially with a view to the pandemic.
In order to guarantee the best occupational health and safety standards, the Indian subsidiary has an organisational structure that operatively involves the “Occupier” (employer), a single person across various production sites who has responsibility for the health, safety and well-being of all employees in the workplace, Factory Managers and a Safety Committee comprising 20 members that includes executives, managers and office workers.
The Safety Committee meets at regular intervals to plan, revise and discuss action plans necessary to establish and disseminate an awareness and safety culture among employees in the workplace. The presence of a Health & Safety team guarantees that the entire system may operate effectively.
To deal with the pandemic and ensure the effective adoption of anti-COVID protocols and preventive measures, a Safety Committee was set up in which members of all company functions participate and audits were carried out on a daily/weekly basis to ensure that this Committee can promptly adopt specific corrective actions.
Numerous surveys and situation assessments were carried out with the effective implementation of health and safety protocols across the organisation.
A priority for the Company was the strict compliance with central and local government regulations relating to the prevention of the spread of COVID-19.
To this end, the Company began to work with a primary hospital in Pune, for the preparation and assessment of health protocols and a consultation service by a specialist doctor was made available to employees at the Pune office.
All employees participated in e-learning/information activities on the anti-COVID measures followed, which are binding for entry to the company, and frequent awareness sessions were held on the conduct to adopt.
Specific prevention measures were adopted for workers at higher risk of infection (e.g. frail workers and the over 60s).
Employees were given the chance to take out additional medical insurance for any medical/hospital expenses incurred due to COVID-19.
To facilitate the management of potential symptoms of anxiety and depression related to the situation arising from the COVID-19 emergency, a virtual counselling service was also made available for employees and their families provided by a company specialised in compliance with privacy regulations.
Comprehensive risk assessments were carried out to help identify and mitigate occupational risks related to mental health.
In line with the Group's approach, a great deal has been invested in training over the last few years as a key driver to increase employee accountability in relation to safety and, consequently, to promote a proactive approach to and engagement with safety issues.
163
Occupational accidents in India
Commercial Vehicles Plant
Two-wheeler plant
Engine plant
Year 2022
Hours worked
2,537,453
588,873
741,476
No. of fatalities from occupational accidents
0
0
0
Fatality rate
0
0
0
No. of recordable occupational accidents
0
2
0
Rate of recordable occupational accidents
0
3.4
0
No. of occupational accidents with serious consequences
0
0
0
Rate of occupational accidents with serious consequences
0
0
0
2021
Hours worked
1,986,376
771,123
723,510
No. of fatalities from occupational accidents
0
0
0
Fatality rate
0
0
0
No. of recordable occupational accidents
2
1
1
Rate of recordable occupational accidents
1.0
1.3
1.4
No. of occupational accidents with serious consequences
0
0
0
Rate of occupational accidents with serious consequences
0
0
0
164
Vietnam
A Safety Committee is active in Piaggio Vietnam, involving all members of the corporate functions, and is chaired by the Head of Operations. Committee members are responsible for dealing with any safety problems in their area of operation and for taking necessary corrective actions. They must also carry out periodic follow-up audits of the entire site and report any relevant safety issues or opportunities to the committee, in order for immediate corrective/preventive actions to be taken.
To effectively implement general health and safety regulations, an H&S programme is defined each year, based on operating plans, that are updated on an ongoing basis.
In the first quarter of 2022, the COVID situation called for a high level of attention. The company focused on adopting all necessary preventive measures to ensure the health of its employees during production activities. These measures included: wearing face masks, safe distancing, hand washing, sanitisation, rotation of shifts in parallel with screening tests to isolate positive cases. At the same time, third-dose vaccinations were stepped up for all employees in February 2022. In addition, all positive cases received active support.
From the second quarter of the year onwards, with the reduced COVID alert, the company redefined its activities, through networks of OHS coordinators, with OHS surveillance focused on safe behaviour. Many on-site improvement opportunities have been undertaken and completed.
In the third quarter, a six-monthly campaign was launched to improve the health of employees with a number of activities also dedicated to wellness and mental health (Health news, Healthy Friday, Health Corner, Run for Dream Challenge, PIAGGIOLYMPIC). This project has involved numerous online and offline activities of employees, through which they were able to learn and have fun in order to improve their health.
The local H&S plan was fully implemented, resulting in the achievement of the H&S objectives and 2022 targets. The recertification audit was implemented regularly, successfully renewing ISO 45001 certification, valid until 2025.
165
Occupational accidents in Vietnam
Vietnam
Year 2022
2,545,753
Hours worked
No. of fatalities from occupational accidents
0
Fatality rate
0
No. of recordable occupational accidents
0
Rate of recordable occupational accidents
0
No. of occupational accidents with serious consequences
0
Rate of occupational accidents with serious consequences
0
2021
Hours worked
2,160,537
No. of fatalities from occupational accidents
0
Fatality rate
0
No. of recordable occupational accidents
1
Rate of recordable occupational accidents
0.5
No. of occupational accidents with serious consequences
0
Rate of occupational accidents with serious consequences
0
Indonesia
At the end of 2022, activities started at the Indonesian plant, which also involved significant occupational health and safety initiatives. The local H&S organisation was defined to support project and operational activities. The greatest efforts initially went into the design of working environments and utilities, including fire-fighting systems. Particular care was taken in the design of workflows, to ensure maximum separation between operational, logistics and test areas and thus minimise risks to personnel. Consequently, H&S activities focused on the education and training of personnel and the coordination of the local organisation with the central H&S service, in order to consolidate a constant and effective functional network. No accidents occurred.
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Responsible management of the supply chain
Piaggio Group produces vehicles that are sold under its brand on the various markets around the world. The only exception regards vehicles purchased by the Chinese subsidiary Zongshen Piaggio Foshan and scooters purchased by third parties (24,043 units in 2022, equivalent to 3.8% of vehicles sold).
Piaggio is a leader in engine technology and produces engines at its plans both for internal production and to meet the demand of other manufacturers.
All the other components that constitute a vehicle are purchased externally and assembled in-company.
Purchases of production sites related to goods and spare parts are indicated below. Purchases of commercial companies and research centres are not considered, as they are residual and not relevant.
Italian plants
In 2022, Italian plants purchased merchandise and spare parts for an overall value of €663 million (excluding complete vehicles) from 620 suppliers.
The first ten suppliers made up 21.5% of the total purchases.
Geographic localisation of the suppliers of Italian plants57
Geographic segment
2022
2021
Italy
48.1%
49.3%
Europe
8.4%
7.9%
China+Taiwan
28.2%
28.8%
Vietnam
9.3%
7.8%
India
4.9%
4.9%
Japan
0.5%
0.7%
Others
0.6%
0.6%
Indian plants
In 2022, plants in India purchased raw materials, merchandise and spare parts for an overall value of €278 million from around 545 suppliers.
The first ten suppliers made up 31.5% of the total purchases.
Geographic location of the suppliers of Indian plants
Geographic segment
2022
2021
India
98.0%
95.9%
Other
2.0%
4.1%
57For the calculation of the percentages, the value of incoming goods - open orders was taken into consideration.
167
Vietnamese plants
In 2022, plants in Vietnam purchased merchandise and spare parts for an overall value of €386 million from 304 suppliers.
The first ten suppliers made up 32% of the total purchases.
Geographic localisation of the suppliers of Vietnamese plants
Geographic segment
2022
2021
Vietnam
63.8%
57.2%
China+Taiwan
15.8%
16.6%
EMEA
15.1%
22.1%
India
2.1%
0.9%
Others
3.2%
3.2%
Indonesian plant
The main supplier of the Indonesian plant is the subsidiary Piaggio Vietnam, from which it receives Vespa components to be assembled. In 2022, components, goods and spare parts with a total value of €103 million were purchased from 22 suppliers.
The first ten suppliers made up 99% of the total purchases.
Geographic localisation of the suppliers of Indonesian plant
Geographic segment
2022
Indonesia
1.2%
Vietnam
98.8%
Group relations with suppliers are based on loyalty, impartiality and respect of equal opportunities of all parties concerned.
The Group requires its suppliers to sign the Group's general terms and conditions of supply, which include the “Code of Ethics and Business Conduct”. In India, until 2022, the general conditions of supply did not refer to the Code of Ethics, but to an explicit commitment to comply with environmental, pollution, health and safety laws and respect for workers' rights. As of December 2022, the Code of Ethics is an integral part of the General Terms and Conditions of Supply in India.
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Supply verification/audits
The quality of Piaggio products also depends on the quality of its supplies. The Piaggio Group is very much involved in scouting and audits, in order to select new suppliers, constantly monitor quality levels and approve processes for the development of new components. Piaggio's auditors carry out these activities through scheduled supplier audits.
New suppliers only become part of Piaggio’s “base” after a detailed and positive assessment of their production processes, the products that derive from them and certification of the functions, dimensions and materials described in the project specifications.
Audits, which are requested by the Purchasing Department, evaluate a potential supplier's quality system and capacity to develop the product in question.
Suppliers successfully evaluated and included as qualified suppliers may also be subject to process audits in the event of:
•the development of new products;
•the resolution of problems identified during mass production;
•problems reported during the vehicle warranty period.
Audits for new products are scheduled to evaluate the supplier's capacity to manage the processes necessary to manufacture the new product and provide technical support in defining and controlling these processes as and when deemed necessary or as requested.
Audits for consolidated products are performed to solve specific problems identified during production, verify the supplier’s capacity to control processes involved in product manufacturing and periodically monitor improvement in services in terms of output/complaints58, to resolve problems identified under warranty and, finally, to verify the effectiveness of corrective actions taken by suppliers to prevent these problems reoccurring.
In line with the Group’s guidelines, every year the Purchasing Unit seeks to improve the procurement process by promoting the technical skills of buyers and focusing on the management of the various goods categories.
Over the last few years, Piaggio Group Management has started a process of common development with its suppliers by setting up a specific department called "Vendor Assessment" as well as assigning the "Finance" Function to define and monitor activities of possible risks areas involving financial and corporate issues, guaranteeing the complete independence between corporate areas involved in the procurement processes, as well as meeting the needs of all stakeholders.
58 Returns, reprocessed, selected, material accepted as an exception.
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Corporate Finance Area
Responsibility for activities relating to the monitoring of the financial and corporate reliability of Strategic Suppliers rests with the Finance Area.
In 2022, Piaggio & C. SpA Supplier analysis and monitoring continued, as did the mapping of controlling partners/shareholders (identified as “Beneficial Owners”) of strategic partners. Furthermore, on the subject of compliance, controls of any politically exposed persons and/or subjects included on anti-terrorist lists (or in any case on lists of possible offences that could harm the company's reputation) among Suppliers continued, in order to mitigate “reputation risk”. All possible corporate and financial variations that may affect perceived risk are presented to a Suppliers’ Committee (comprising the Purchasing Manager, the Manager of 3/4W Product Development, the Manager of 2W R&D, the Manager of Administration, the Finance Manager and the Chief Financial Officer) during periodic meetings in order to identify possible corrective and improvement actions, whenever critical issues are identified. The supply chain was also monitored in terms of financial sustainability following COVID-19 and critical aspects related to higher energy costs.
In 2020, a new company procedure was published to assess Suppliers, in terms of their being legal entities and members of groups, identifying possible risks in the control chain.
The Financial Assessment of Aprilia Racing Strategic Suppliers continued in 2022, along with an analysis of the financial and corporate reliability of the main Sponsor Companies of the Team, including the monitoring of possible reputation risk.
With the strategic objective of creating a network of lasting and mutually satisfactory partnerships with highly qualified associates, the Vendor Assessment function, in addition to managing the Supplier Qualification Process, assesses supplier performance through Vendor Rating campaigns.
Supplier relations are defined by specific company processes comprising two fundamental stages: new supplier qualification and periodic supplier monitoring.
New supplier qualification is an interfunctional process based on specific standards that lead to a potential supplier being included in the Supplier List, for its chosen goods' category; after an initial documentary evaluation stage, a multidisciplinary, supplier qualification team is involved, with specific positions giving a technical, economic/financial and corporate rating on goods’ categories.
Periodic supplier assessment is conducted at the Italian, Indian and Vietnamese plants through six-monthly Vendor Rating campaigns, in which supplies relating to the period are examined, based on the quality of the product supplied, technical/scientific collaboration, and compliance with delivery plans. Over 1,000 suppliers are involved, representing nearly all supplies. This provides a reference framework for procurement strategies and actions concerning suppliers.
The process involves:
170
•assignment of a Vendor Rating Index, which measures the performance of the vendor using a weighted average of the assessments made by corporate functions (for direct materials, the relevant functions are R&D, Quality, Manufacturing and Spare Parts);
•assignment of a Criticality Rating that takes into account the Quality function’s assessment, to decide whether a supplier is “critical” for the purposes of granting them new supply agreements.
Supplier Portal
To ensure the effective and efficient management of supplier relationships, the Supplier Portal, based on the SRM-SAP system, is available in Italy, India and Vietnam.
The “SRM – Suppliers Portal” system is a computer tool to exchange information and documents on purchasing materials, components, equipment and services in real time between all company functions and suppliers, so as to guarantee the proper and transparent management of all purchasing process stages: purchase requests to purchase orders, price lists and supply programmes, incoming goods, invoices and information on payments.
In particular, the Portal ensures the achievement of the following objectives:
-greater collaboration with suppliers, through self-service, document and information sharing tools;
-greater efficiency of purchasing processes, through the implementation of automated tools, and greater compliance with purchasing procedures;
-minimisation of manual activities;
-quality and accuracy of information;
-reducing business processes and communication times;
-low use of paper (including through the use of the digital signature);
-reducing billing anomalies;
-visibility of the entire authorisation process, from purchase requests to orders.
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Meeting customer requirements
The Group's vehicles are sold in over 100 nations. Piaggio has its own sales network on main European markets, in America, India and Asia Pacific, while it operates through importers in other areas of EMEA and Africa.
Dealers and their staff represent the main communication channel for managing customers and for conveying the corporate image, assisted by the activities of the Group’s Customer Service department. Product quality and the services provided to the customer in general are the company's top priorities.
Our customers are the testimonials of the quality of our vehicles and together with our brands and know how, are the cornerstones of our business.
Piaggio markets its vehicles mainly by participating in the MotoGP Championships and other competitions, by taking part in industry trade fairs worldwide, and organising test rides and events/rallies promoting the Group's various brands.
To continually improve the quality of its vehicles and perceived comfort, Piaggio has put in place a product development process that is detailed, precise, robust and binding, an outgoing quality audit process that is customer-driven and an effective product and constantly monitors data from the service network on customer issues.
The Group also has dedicated functions, which test the reliability and safety of all products that are new and already on the market, from initial design to marketing. Tests are not limited to laboratory testing, but also to dynamic road testing based on different purposing profiles, based on the actual use of vehicles by customers.
Reports of product quality problems from the Market/Customers should be channelled to Technical Support, which will immediately inform the Product Development Department and, if necessary, Legal and Corporate Affairs.
The Product Development Department will carry out and coordinate a preliminary analysis and, if the reported quality problem raises concrete and relevant risks, will immediately convene the Committee to identify a timely action plan.
In other cases, quality problems that prove to be well-founded will be investigated and presented at the monthly Committee meeting.
To ensure the sales network carries out maintenance work in a safe environment, Piaggio publishes on the portal dedicated to dealers and in individual manuals (one per model), along with the technical instructions for carrying out maintenance operations, the general rules of conduct which service network staff must observe during maintenance work.
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Quality systems certification
Achieving and maintaining quality management system certification at global level (ISO 9001:2015) is part of the company's shared culture and belongs to all Group employees. The results obtained in terms of product reliability, improving process performance, increasing customer satisfaction (internal and external customers) stem from the fact that all employees pursue quality, customer focus, continual improvement and excellence as part of their everyday activities.
Economic value generated represents the wealth produced by Piaggio which, net of the value retained by the Group, is distributed to the various stakeholders in various forms.
The distributed economic value is distributed among the different stakeholders as follows: remuneration to suppliers (reclassified operating costs), remuneration to human resources (direct remuneration comprising salaries, wages and termination benefits and indirect remuneration comprising social security contributions), remuneration to lenders (borrowing costs), remuneration to shareholders (dividends distributed), remuneration to the Public Administration sector (total taxes paid), external donations and donations to the community. The value retained by the Group is represented by profits retained as reserves and non-monetary items (depreciation, amortisation, write-downs, provisions and deferred taxes).
Determination of the economic value generated and distributed
2022
2021
Economic value generated by the Group
2,337,040
1,909,899
Remuneration to suppliers
1,775,095
1,421,291
Staff remuneration
264,614
238,721
Remuneration to lenders
26,725
24,897
Shareholder remuneration
53,403
39,639
Remuneration to the Public Administration sector
43,615
40,343
Communities
1,562
1,768
Economic value distributed by the Group
2,165,014
1,766,659
Economic value retained by the Group
172,026
143,240
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Economic value distributed by the Group - 2022
The economic value distributed by Piaggio in 2022 amounted to approximately €2,165,014 thousand, or 93% of the economic value generated. Most of this amount refers to the remuneration of suppliers (82.0%), followed by remuneration to human resources (12.2%), shareholders (2.5%) and the Public Administration sector (2.0%), lenders (1.2%) and the community (0.1%). Compared to 2021, the Economic value distributed increased by 23%.
In 2022, the Piaggio Group benefited from government aid and public funding amounting to a total of €9,618 thousand.
Piaggio & C. obtained research grants, totalling €272 thousand, for research projects. The contents and results of these are commented on in the chapter on the product dimension, as well as funding for training equal to €165 thousand.
Piaggio Vehicles Private Limited (India) obtained a grant for exports, the amount of which (€1,469 thousand) was calculated as a percentage of the FOB value of the exports.
Grants received (collected)*
In thousands of Euros
2022
2021
Grants
272
70
Export grants
1,469
1,351
Total
1,741
1,421
*Values in currencies other than the Euro have been translated using the annual average exchange rate.
82,0%
12,2%
1,2%
2,5%
2,0%
0,1%
Remuneration to suppliers
Remuneration to human resources
Remuneration to lenders
Shareholder remuneration
Remuneration to the Pubblic Administration sector
Community
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Tax benefits of Euro €7,877 thousand, on the other hand, were obtained by Piaggio & C. S.p.A., Aprilia Racing S.r.l. and Piaggio France S.A.S.
In particular:
•Piaggio & C. accrued tax credits during the 2022 financial year to partially offset the higher charges incurred during the same year for the purchase of electricity and natural gas, as introduced by Decree Law 4 of 27 January 2022 and subsequently confirmed for the entire financial year by numerous legislative measures, most recently by Decree Law 176 of 18 November 2022, for a total amount of €3,239 thousand. In addition, it accrued a tax credit for investments made during the 2020 financial year in capital goods 4.0 pursuant to Article 1 of Law 160 of 27 December 2019, for €1,286 thousand, and a credit for investments in research and development activities made during the 2021 financial year, pursuant to Law 160 of 27 December 2019, as amended, for a total of €2,687 thousand;
•Aprilia Racing obtained the recognition of a tax credit for investments in research and development activities carried out during the 2021 financial year, pursuant to Law 160 of 27 December 2019 as amended, for a total amount of €602 thousand and a tax credit for investments in capital goods pursuant to Article 1 of Law 178 of 30 December 2020, amounting to €44 thousand;
•Piaggio France benefited from a tax credit of €19 thousand. This credit is equal to 50% the expenditure incurred in financing the creation and management of a nursery or other forms of childcare for the children of company employees under 3 years of age.
Tax relief
In thousands of Euros
2022
2021
Tax credit
Piaggio & C.
7,212
2,429
Aprilia Racing
646
411
Piaggio France
19
24
Total
7,877
2,864
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Taxes
The Piaggio Group operates in many countries through its subsidiaries, with production, distribution, sales and research and development functions.
Approach to taxation
All Group companies operate mainly in the country and market in which they are located, paying taxes on profits generated there, on the income of employees directly employed in these activities, as well as consumption taxes and other local taxes imposed by the various regulations in force.
Subsidiaries are not located in countries that are “non-cooperative” for tax purposes or in countries considered by Italian tax law to have a so-called privileged tax status, unless this is required by unavoidable industrial or commercial needs. Where this is the case, the Parent Company adopts and complies with the tax regime envisaged by Italian legislation on “Controlled Foreign Companies” (i.e. the so-called CFC rules).
The Group adopts an approach based on principles of rigour, prudence and correctness in its financial decisions and rejects the use of “aggressive tax planning” schemes through the creation of artificial corporate structures aimed at evading its tax obligations and obtaining undue tax advantages.
All tax incentives and benefits are used in full compliance with the rationale that drives individual countries to adopt them and in any case according to a transparent approach. The tax variable is used exclusively to support industrial and commercial plans and objectives and is never the main or prevailing cause.
In order to eliminate or contain economic and legal double taxation, the Group, where permitted, applies the “International Conventions against double taxation on income and capital and for the prevention of tax evasion and avoidance” as interpreted by the OECD.
Intra-group transactions are settled based on the arm's length principle, as interpreted by the OECD in its guidelines (i.e. the “Transfer Pricing Guidelines”). In this regard, the Group also adopts instruments aimed at avoiding or reducing the risk of disputes with the tax authorities and any tax disputes, such as so-called APA - “Advance Pricing Agreements”.
Finally, it should be noted that the Parent Company fulfils all the documentary requirements necessary for the disapplication of penalties for misstatement pursuant to Article 1, paragraph 2 of Legislative Decree 471/1997, in the event of adjustment of the normal value of transfer prices charged as part of transactions pursuant to Article 110, paragraph 7 of the Consolidated Income Tax Act, by preparing the so-called "Masterfile", which contains information about the multinational group and its overall transfer pricing policy, and the “country file”, which contains more specific information about the Parent Company, pursuant to Article 26 of Decree Law 78/2010, converted, with amendments, into Law 122/2010.
176
Tax governance and risk management
In recognition of the importance that tax policy has for the individual countries in which it operates and of the potential economic and reputational risks associated with incorrect management of taxation, the Group has set up a specific tax department at the Parent Company which, under the supervision of the Board of Directors, operates as an effective control point for identifying, managing and containing the risks of violation or abuse of tax regulations, which is also responsible for support, direction and strategic coordination of subsidiaries.
Since 2014, the Parent Company has set up an optional system for identifying, monitoring and mitigating tax risk, known as the "Tax Control Framework" which has made it possible to:
1.map the areas of activity considered most critical;
2.create and share appropriate procedures and instructions with a clear assignment of roles and responsibilities within the overall system of internal controls;
3.carry out analysis, information and training activities on the contents of the Tax Control Framework for the main corporate functions;
4.and, finally, adopt a monitoring and updating system aimed at ensuring the effective implementation of the Tax Risk Management System through periodic internal and external audits of the operation of the Tax Control Framework.
This has promoted a process of centralisation for the Tax Entity and a greater comparison between said and all main corporate bodies. The current organisation is more likely to guarantee the identification of the most relevant tax risks, an the assessment of the consequences and the adoption of necessary solutions or corrective tools. All of this also helps to ensure correct performance of all tax compliance activities and the settlement of taxes due, reducing the risk of formal and/or substantial violations.
For its analyses and activities, the Group also avails of leading professional firms or, if necessary and permitted, it consults the competent Tax Authorities in advance.
Stakeholder engagement
Relations with the Financial Authorities are based on transparency, good faith and honest cooperation, to enable continuous dialogue and, if possible, preventive engagement with all the relevant institutions.
Reporting
Piaggio recognises the social role of tax issues and the importance they play in promoting sustainable development.
To ensure full transparency and in compliance with GRI Standard 207-Tax, the following is a breakdown of consolidated data required by the above standard by tax jurisdiction.
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section refers to the year ended 31 December 2021, as this period refers to the consolidated financial statements immediately preceding the most recent consolidated financial statements.
The following should be noted:
•the data presented refer to the 2021 financial year;
•the workforce is that indicated at 31 December 2021;
•revenues from third parties also include other revenues;
•revenues from the Group exclude those between companies operating in the same tax jurisdiction;
•pre-tax profit (loss) and property, plant and equipment are presented on an aggregate basis, without taking into account eliminations on consolidation;
•Pre-tax Profit (Loss) includes income from investments related to other Group entities;
•regarding any differences between the income tax accrued on profits and the tax due (GRI 207-4-b-x), please refer to Note 14 of the Consolidated Financial Statements as of 31 December 2022 of the Piaggio Group. It should also be noted that both the income taxes accrued and those paid on a cash basis in various countries are affected by the significant presence of dividends received from Group entities, which are included in the pre-tax profit (loss). As is the case in most countries, these jurisdictions also have exemption tax regimes for dividends, as they are the expression of a profit already taxed from the investee company.
178
2021
Country
Name
Activities
No. of employees
Revenues from third parties
Revenues from the Group
Profit before tax
Property, plant and equipment
Taxes paid
Accrued taxes
In millions of Euros
Piaggio & C. S.p.A.
Production and sale of vehicles
Aprilia Racing S.r.l.
Research and development
Piaggio Concept Store Mantova S.r.l.
Commercial distributor
Italy
Total Italy
3,026
1,110
184
74
182
11
23
Croatia
Piaggio Hrvatska Doo
Commercial distributor
9
4
0
0
0
0
0
France
Piaggio France SAS
Selling agency
42
0
7
1
0
3
0
Germany
Piaggio Deutschland GMBH
Selling agency
31
0
4
1
0
0
0
Greece
Piaggio Hellas S.A.
Commercial distributor
19
34
0
1
1
0
0
Holland
Piaggio Vespa B.V.
Holding company and selling agency
18
0
4
32
0
0
0
Piaggio Espana S.L.
Selling agency
Nacional Motor S.A.
Inactive
Spain
Total Spain
31
0
4
1
0
0
0
UK
Piaggio Limited
Selling agency
16
0
2
0
0
0
0
Piaggio Group Americas Inc.
Commercial distributor
Piaggio Advanced Design Center Corp.
Research and development
Piaggio Fast Forward Inc.
Research and development
USA
Total USA
103
94
3
(10)
2
0
0
India
Piaggio Vehicles Pvt Ltd
Production and sale of vehicles
1,328
242
27
(5)
64
0
0
Vietnam
Piaggio Vietnam Co. Ltd.
Production and sale of vehicles
940
187
201
62
31
12
13
Indonesia
Pt. Piaggio Indonesia
Selling agency
36
58
0
1
5
0
1
Singapore
Piaggio Asia Pacific Ltd
Selling agency
14
0
3
1
0
0
0
Japan
Piaggio Group Japan
Selling agency
10
11
0
0
0
0
0
Piaggio China Co Ltd.
Holding
Foshan Piaggio Vehicles Tech.Dev. Co.Ltd.
Research and development
China
Total China
79
80
4
5
0
1
1
AWS do Brasil
Inactive
Aprilia Brasil
Inactive
Brazil
Total Brazil
Grand total
444
164
286
40
Consolidation entries
(443)
(70)
(3)
0
Total consolidated
5,702
1,820
1
94
283
28
40
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Supporting local communities
FONDAZIONE PIAGGIO59
After two years severely affected by the COVID-19 pandemic, all the scientific, historical and cultural activities that have always characterised the Piaggio Foundation resumed at their normal pace in 2022. All events were held in attendance in our Auditorium or in our halls, with a reduced capacity, and, during the summer, were hosted outdoors, on the stage set up in Piazzale Corradino D'Ascanio. The main exhibitions were mainly dedicated to the environment and the link between the Vespa and art.
The musical events organised and hosted as part of the Pontedera Music Festival were also particularly important in 2022, with over 30 concerts featuring internationally renowned artists. The autumn also saw the organisation and hosting of the Vespa Chi Legge literary festival, which featured important names from the contemporary Italian literary scene.
The Piaggio Museum has also been the venue for numerous events focussed on the themes of science, history and customs. These include the Mille Miglia race, the world launch of the Lego Vespa and the National Police Rally.
In 2022, study activities and historical and documentary support for Piaggio activities and the projects of authorised third parties (Universities, scholars, Publishers etc.) continued.
PIAGGIO MUSEUM
Starting in March, the Piaggio Museum reopened its doors to the public, from Tuesday to Saturday and on the first and fourth Sunday of each month, as it did before the pandemic. As a precautionary measure, however, the system of visits by appointment only was confirmed, at fixed time slots and with the number of visitors that was gradually increased over the course of the year. Guided tours and all educational and social activities also resumed. In-person visits were complemented by virtual tours, that allowed fans from all over the world to immerse themselves in our exhibition halls and admire our temporary exhibitions.
The resumption of activities led to around 45,000 visitors coming to the museum during the year, in addition to around 12,000 virtual visits. Some 3,000 people attended outdoor events again this year. These figures must be considered satisfactory, in view of activities only starting in March, the slow recovery of tourist flows from Asian countries, the limitations we placed on the number of visitors and the caution with which school visits and organised tours resumed.
The museum exhibition rooms have been further improved and the collections on display have been added to, with new and valuable Vespa models being showcased.
59 Information on the Piaggio Foundation, which is not included in the scope of consolidation of the Group, refers to qualitative aspects useful for understanding its focus on the social fabric, even though this information is not included in the scope of consolidation.
180
PIAGGIO HISTORICAL ARCHIVE
During 2022, the Piaggio Historical Archive made an important contribution to the company's communication activities, especially for the editorial activities of Vespa Magazine, with it continuously providing inspiration for themes and support in iconographic research. The same inspiration has provided the Vespa brand with new advertising campaigns. Traditional support for licensing took the form of iconographic research to support the Lego Creator Vespa project (and its launch at the Piaggio Museum), as well as technical consultancy for the creation of scale models and ride-ons for children.
As part of the activities of the Piaggio Museum and Foundation, the archive has spent time on the conception, iconographic research and drafting of texts for the “Vespa sounds cool” exhibition, which will be discussed in more detail, and its “virtual” version. As for Moto Guzzi’s documentary heritage, the work of digitising and indexing the archive material collected from Mandello in October 2020 (in particular the photographic material on racing, factories, events and rallies, military and product supplies, communication material, press clippings and a selection of technical documentation, as well as brochures and magazines of a historical nature) was transferred to the dedicated digital portal - developed by Promemoria Group - after careful, extensive filing work (almost 2000 files for a total of more than 4800 published media items). At the same time, digitisation and filing work continued on the digital portal of the Piaggio Historical Archive (almost 1500 files for more than 2000 published media items). The Aprilia portal is also being developed, with the first 500 files.
The Archive also provided research support - in-person and remotely - for students, scholars and journalists in their work to write term papers, dissertations and publications. It contributed with its own iconographic and documentary material to the exhibition (and catalogue) “Donne in equilibrio 1955-1965” [Women in balance 1955-1965] (Florence, Museo Salvatore Ferragamo, 20 May 2022-18 April 2023). Finally, images from the Moto Guzzi archive were added to the permanent “Made in Polimi” exhibition space at Milan Polytechnic.
CULTURAL PROJECT
The Piaggio Foundation's Cultural Project was again a great success in 2022, making an important contribution to bringing the public back to the Museum and attracting many new visitors, also thanks to the new features in the programme.
EVENTS AND CONFERENCES ORGANISED AT THE MUSEUM
Organised by the
Fondazione Piaggio
Organised in cooperation with Third Parties
Organised by Third Parties
Year 2022
18
53
23
181
SOCIAL MEDIA
Even though in-person visits at the Museum resumed after its long, forced closure (and the subsequent restriction of visitor numbers), with considerable peaks in the summer period, the new use of social and virtual visits has become customary and has in any case become a part of the daily routines of the Museum's fans. So the virtual tour continued to be an alternative and complementary way to follow the Museum’s activities.
As mentioned before, virtual visits to the Museum's permanent collections and temporary exhibitions totalled about 12,000 in the year.
A social editorial programme (PED) shared with relevant Piaggio functions (Brand and Digital) was also defined during 2022, to ensure consistency with the corporate communication plan. The Museum's social programming - which includes news about cultural events, posts dedicated to iconic archive images, and information about the permanent collection - pays special attention to the publication of content created to promote current exhibitions.
In particular, the column dedicated to the flagship exhibition #VespaSoundsCool, from 23 April to 8 September 2022, with 10 posts, reached out to 40,188 people, with a total of 1,116 reactions, comments and shares.
The PED dedicated to the Lego Vespa was a particular success story: with four posts on Facebook and four on Instagram, a total coverage of 108,270 was reached with a maximum of 1,115 likes for the last post on 14 August 2022.
Greater alignment with the corporate communication plan and improved synergy with Piaggio's Brand and Digital functions led to 1,076 more likes for the Museum's Facebook page, with followers going up from 29,728 to 30,804, and from 5,205 to 6,756 for the Instagram page.
On the Facebook page, a total of 115 posts were made during 2022, of which 32 about the images archive, 22 about theme-related features, 31 about events and 30 about news and images from the Museum's collection.
On the Instagram page, 70 posts were published during the year, under regular features and stock images.
Vespa World Club
In 2006, on the initiative of the Piaggio Group and the Piaggio Foundation, the Vespa World Club, a non-profit association, was founded; this organisation is a way for Piaggio to directly follow the management of Vespa Clubs in order to preserve the fleet of vintage Vespas still in circulation, to support collectors in researching and restoring these vintage vehicles and to continue to organise tourist rallies and exciting races in Europe and around the world, guaranteeing Vespa fans a high quality event.
The Vespa World Club has the following mission:
•promote initiatives and coordinate social, tourist, sports and competitive events;
•establishes bodies which represent National Vespa Clubs in dealings with all national and international organisations;
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•hold trophy events, rallies, competitions, shows, exhibitions, congresses, conferences and meetings;
•deal with and act in the interests of members;
•promotes and provides training on road safety and awareness;
•promote studies and historical research work on relations between Vespa and the community;
•provide a channel for the Company to reach fans.
In 2022, the number of official Vespa Clubs in Italy had reached 600, with over 85,000 members, despite the curbs of the pandemic. Worldwide, the number of Vespa fans exceeds 110,000.
Among the events organised during the year just ended, the most significant include:
•Vespa Days, Pontedera 23-24 April. Celebrating the Birthday of the Vespa born in 1946. A thousand Vespa fans invaded the small Tuscan town during the two-day event celebrating the Vespa (International Gathering);
•Vespa World Days Bali, 9-12 June. A Vespa World Event with 37,700 Vespa fans from 17 countries;
•European Vespa Days, Guimaraes Portugal 30 June - 3 July. During the important Portuguese stage, attended by 6,800 Vespa fans representing 30 nations, the Ordinary General Meeting of Vespa Clubs was held, chaired by the newly elected president Mauro Calestrini of Vespa Club Italia;
•Vespa Trophy: the European Vespa Days event was complemented by the famous touring trophy for all event participants. A fun game, with the Piaggio Network as the check point on the road and Vespa fans as competitors battling it out to take home the coveted trophy. VC Verona was victorious for the third time in twelve years, proving it can tirelessly burn up the kilometres with all its members;
•Vespa in the World, 12 November at the San Rocco Auditorium in Carpi (Modena). A conference promoted by the Vespa World Club with the participation, as host, of the President Mauro Calestrini and guests Roberto Leardi, President of Vespa Club d'Italia, Lorenzo Boscarelli (AISA) and Luigi Frisinghelli, Curator of the Vespa Historical Register.
Moto Guzzi World Club
The Moto Guzzi World Club was established in 2002 with a view to:
•promoting interest, awareness and the historic value of the Moto Guzzi brand and motorcycles;
•creating and developing bonds between the owners of Moto Guzzi motorcycles;
•organising events, meeting, conferences and competitions;
•promoting national and international motorcycle tourism and rediscovering and promoting local touring opportunities thanks to club activities and the exchange of information between members;
•creating and developing ties with non-profit organisations and other charities and sports and non-sports associations with a social, humanitarian or environmental mission, etc., which can benefit from the initiatives promoted by the Club in the motorcycling world and other sectors;
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•promoting relations with the parent company and coordinating its own activities and those of its members with the work of other national and international brand-related clubs.
Today, after 20 years of activity, and in addition to its direct members and 82 recognised clubs in Italy, the Moto Guzzi World Club also boasts:
•6 clubs recognised in America, Asia and Australia, representing approximately 7,500 members;
•20 clubs recognised in Europe, representing approximately 5,000 members.
After activities were forced stop to stop because of the pandemic emergency, the “Mondo Moto Guzzi” rally was organised once again (May/Genoa), and on 17 December, in Leuca (Lecce), the General Assembly was held to re-appoint the Executive Board, where the Piaggio Group is represented by 4 members.
Moto Guzzi Fast Endurance Trophy
The fourth Moto Guzzi Fast Endurance Trophy took place from May to October 2022.
The event, organised by FMI, was dedicated to the Moto Guzzi V7 III (750cc and 850cc), fitted out with a special kit created by Guareschi Moto, the long-established dealer considered a specialist in fitting out racing vehicles. The kit featured the windshield, side number plates, handlebar halves, raised floorboards, front mudguard, underpan, front suspensions, rear suspensions, control unit, brake pads and single seat.
The event had 6 races held at Italy’s main motorcycle racing circuits, held over 4 separate weekends.
Teams of two riders compete, taking turns at the wheel every 15 minutes, with the duration of the races ranging from 60 to 90 minutes depending on the circuit.
36 teams were involved, from Italy, France and Spain.
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Charity and sponsorship activities
The Piaggio Group consists of 23 companies, 19 of which are operational. The latter are located in 15 countries. In four of these countries, the Group launched charity projects for approximately €1.6 million in 2022.
The percentage of involvement of local communities is calculated as follows: 4 / 15 = 26.7%.
The funded projects are analysed below.
In 2022, the partnership between the Piaggio Group and (RED) - an association founded in 2006 by Bono and Bobby Shriver - continued, which, thanks to the help of partners and supporters, has allocated more than USD 700 million to the fight against AIDS and COVID-19. (RED) aid to the Global Fund has impacted more than 220 million lives through prevention, treatment, counselling, HIV testing and support services. Since the beginning of its collaboration with (RED), Piaggio has donated $1.7 million.
This year the partnership has been extended with the introduction of the new model (VESPA ELETTRICA)RED which will be marketed from Spring 2022.
The Piaggio Group's interest in research and progress in the health sector led it to donate €250,000 to the IEO CCM Foundation (European Institute of Oncology).
In the field of international cooperation, €40,000 was also donated to ISPI (Institute for International Political Studies) and €10,000 to AIICP (Italy-India Association for Cooperation between the two countries), as well as €3,000 to IJBG (the Italy-Japan Association).
A Piaggio 1 was donated to the Mantova Oncological Institute, a Vespa JB to support the San Patrignano Community through an auction organised by Charity Stars, a Vespa JB to the Laureus Italia Onlus Foundation, a My Moover to the social promotion association Il Sogno di Tommi.
Lastly, for some years now, for the end of year festive season, the Piaggio Group, together with the entire Immsi Group, has been fostering educational and rehabilitative activities for disabled children affected by brain damage by making a donation to the “Casa del Sole Onlus” association, in the name of all the employees of the Immsi and Piaggio Groups. This year the Piaggio Group contributed €20,000. In forty years of activities, the non-profit-making organisation Casa del Sole Onlus has assisted over five thousand children affected by brain damage and been a valuable source of help for their families.
The Indian and Vietnamese subsidiaries have also been active in the social field, supporting and promoting charitable initiatives, despite the impossibility of organising events due to the pandemic.
In particular, Piaggio Vietnam organised charity activities for children in schools, hospitals and orphanages, and distributed 100 gift kits to the most needy in Vinh Phuc Province on the occasion of the Tet holiday.
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Particular mention should go to the Indian subsidiary.
The Company Act of 2013 enacted by the Government of India in 2013 stipulated that large companies operating in India must spend in each financial year, at least two percent of the average net profits of the last three years, in accordance with the Company's Corporate Social Responsibility Policy and favouring local areas adjacent to the production site. Schedule VII of the Companies Act 2013 lists the CSR activities that can be undertaken by companies in compliance with the Company's Corporate Social Responsibility Policy: (i) eradicating hunger and extreme poverty; (ii) promoting training; (iii) promoting gender equality and women's empowerment; (iv) reducing infant mortality and improving maternal health; (v) combating HIV, malaria and other diseases; (vi) ensuring environmental sustainability; (vii) promoting employment and the improvement of professional skills; (viii) social entrepreneurial projects; (ix) contribution to the Prime Minister's National Relief Fund or any other fund created by central government or local governments for socio-economic development.
Piaggio Vehicles Private Limited (PVPL) has focused its commitment on social projects generally in the areas of water and sanitation, education, women's empowerment, chosen on the basis of preliminary research carried out internally on the needs of the area surrounding the plant.
The following projects were developed by the Indian subsidiary during 2022:
As a result of the pandemic, in many Indian cities the situation of extremely vulnerable, street children has worsened. PVPL has worked to dignify these children through a project that aims to give them a legal identity so that they can more easily access their legitimate benefits and rights, particularly through the variety of government programmes. Furthermore, students are expected to have the opportunity to develop the right skills, but also to live responsibly as citizens of society. The project involved around 8,000 children.
•Feeding kits for tuberculosis patients
PVPL encourages meeting the Indian government's requirement to contribute to the needs of tuberculosis patients. So the organisation supports the cause with 150 food kits that include 3kg of wheat flour, 1kg of peanut oil, 1kg of mung beans and 500g of peanuts.
•Scholarships for children of 3-wheeler taxi drivers
A scholarship programme was launched to support the children of 3-wheeler taxi drivers who are studying for a diploma, bachelor's degree or at upper secondary school. The market demands more technically qualified workers and through this scholarship programme, PVPL is offering young people the chance to acquire the skills to find a job and support their families.
Thanks to the project, 549 students received a scholarship to continue their higher education after school.
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Only 25% of students opt for higher education. Studies have shown that 57% of students drop out of education because they cannot afford it.
•Menstrual hygiene management
A report by the NGO Dasra, published in 2019, pointed out that 23 million girls drop out of school each year due to a lack of proper facilities for menstrual hygiene management. Millions of girls in India are absent from school due to cycle stigma and lack of sanitation. In line with this, PVPL has adopted school girls from Zilla Parishad and provided them with free sanitary towels for one year, to reduce the gradual drop-out rate of female students from the education system.
187
Table of correspondence Legislative Decree no. 254/2016 and material topics – GRI Standards
Topic as of Legislative Decree no. 254/2016
Material topic
Risks identified
Policies adopted
Topic specific standard/disclosure
Reference chapter / paragraph
GRI 3-3 (2021): Management of material topics
Materiality analysis
Research, Development and Innovation Guidelines
The Environmental Dimension
Innovation of product and sustainable mobility
Risk related to an inadequate level of innovation that could result in reduced recyclability/recoverability of end-of-life vehicles and the production of vehicles with obsolete engines
Practised policy of technological leadership in the sector and substantial investment in R&D activities
GRI 305-3 (2016): Other indirect (Scope 3) GHG Emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
GRI 3-3 (2021): Management of material topics
Materiality analysis
The Environmental Dimension - Emissions of CO2 and other pollutants - Energy consumption
GRI 302-1 (2016): Energy consumption within the organisation
The Environmental Dimension - Emissions of CO2 and other pollutants
GRI 305-1 (2016): Direct (Scope 1) GHG emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
GRI 305-2 (2016): Energy indirect (Scope 2) GHG emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
GRI 305-3 (2016):Other indirect (Scope 3) GHG Emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
GRI 305-4 (2016): GHG emissions intensity
The Environmental Dimension - Emissions of CO2 and other pollutants
Environment
Climate change
Risk of environmental damage attributable to the direct responsibility of the Group and indirectly through the supply chain
Environmental policy - for a description of the policies practised see the chapter The Environmental Dimension - ISO 14001
Suppliers sign the Code of Ethics or general terms and conditions of supply
GRI 305-7 (2016): Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
188
Topic as of Legislative Decree no. 254/2016
Material topic
Risks identified
Policies adopted
Topic specific standard/disclosure
Reference chapter / paragraph
GRI 3-3 (2021): Management of material topics
Materiality analysis
The Environmental Dimension - Waste handling and recovering
GRI 306-1 (2020): Waste generation and significant waste related impacts
The Environmental Dimension - Certifications - Waste handling and recovering - Materiality analysis
GRI 306-2 (2020): Management of significant waste related impacts
The Environmental Dimension - Waste handling and recovering
Waste handling
Risk of environmental damage attributable to the Group’s responsibility, with a potential impact on the surrounding community
Environmental Policy - for a description of the policies practised see the chapter The Environmental Dimension - ISO 14001
GRI 306-3 (2020): Waste generated
The Environmental Dimension - Waste handling and recovering
GRI 3-3 (2021): Management of material topics
Materiality analysis
The Environmental Dimension - Conserving water resources
GRI 303-1 (2018): Interactions with water as a shared resource
GRI 303-2 (2018): Management of water discharge-related impacts
GRI 303-3 (2018): Water withdrawal
Conserving water resources
Environmental Policy - for a description of the policies practised see the chapter The Environmental Dimension - ISO 14001
GRI 303-4 (2018): Water discharge
Environment
Risk of environmental damage attributable to the Group's responsibility with potential impact on the surrounding community due to uncontrolled use of the resource
GRI 303-5 (2018): Water consumption
The Environmental Dimension - Conserving water resources
189
Topic as of Legislative Decree no. 254/2016
Material topic
Risks identified
Policies adopted
Topic specific standard/disclosure
Reference chapter / paragraph
GRI 3-3 (2021): Management of material topics
Materiality analysis
Research, Development and Innovation Guidelines
Product safety and reliability
Risk associated with (real or presumed) product defects due to errors/omissions attributable to supplier activity, the product development phase, the production/assembly phase and the quality control phase
Policy adopted to produce vehicles that guarantee a high level of active, passive and preventive safety. The adoption of this policy is demonstrated by the Group’s commitment to maintaining certification of its quality management systems (ISO 9001)
GRI 416-1 (2016): Assessment of the health and safety impacts of product and service categories
Research, Development and Innovation Guidelines
GRI 3-3 (2021): Management of material topics
Materiality analysis
Sustainability governance
Customer Satisfaction
Service quality level not in line with customer requirements and expectations
Quality audits, market analysis, focus groups, concept and product tests, investments in research and development activities
Sales and service network control activities
Widespread diffusion of the network
GRI 417-3 (2016): Incidents of non-compliance concerning marketing communications
Sustainability governance - The system for responsible business management
GRI 3-3 (2021): Management of material topics
Materiality analysis
The Social Dimension
Supporting on local communities
Reduced number of initiatives aimed at developing the area where the Group operates and promoting social inclusion values (e.g. partnerships with non-profit/non-government, volunteer associations, etc.)
Policies adopted to establish roots in the area and increase value for the community. The Fondazione Piaggio is an example of the Group's focus on the community
GRI 413-1 (2016): Operations with local community engagement, impact assessment, and development programs
The Social Dimension - Supporting Local Communities, Charity activities and sponsorships
GRI 3-3 (2021): Management of material topics
Materiality analysis
The Social Dimension
GRI 201-1 (2016): Direct economic value generated and distributed
The European Taxonomy
- The Social Dimension - Determination and distribution of the economic value generated
GRI 203-1 (2016): Infrastructure investments and services supported
The Social Dimension - Charity and sponsorships
Creation of economic value
Risk of possible inadequacy of corporate strategies and possible insolvency with suppliers and lenders and/or unsatisfactory shareholder remuneration due to failure to achieve set growth targets
Externally audited mandatory financial information Group management is subject to an ongoing skills training programme
GRI 204-1 (2016): Proportion of spending on local suppliers
The Social Dimension - Responsible management of the supply chain
190
Topic as of Legislative Decree no. 254/2016
Material topic
Risks identified
Policies adopted
Topic specific standard/disclosure
Reference chapter / paragraph
GRI 3-3 (2021): Management of material topics
Materiality analysis
The Social Dimension
GRI 401-1 (2016): New employee hires and employee turnover
The Social Dimension - Personnel management policies - Staff
GRI 401-2 (2016): Benefits provided to full-time employees that are not provided to temporary or part-time employees
The Social Dimension - Personnel management policies - Benefits
GRI 401-3 (2016): Parental leave
The Social Dimension - Diversity and equal opportunity
GRI 404-1 (2016): Average hours of training per year per employee
The Social Dimension - Training
GRI 404-2 (2016): Programs for upgrading employee skills and transition assistance programs
The Social Dimension - Personnel management policies - Development and careers
Employees
Developing human resources
Risk arising from employee dissatisfaction, a lack of skills, professionalism and experience of company resources, the inadequate sizing of the structure and trade union tensions
Policies adopted to manage personnel (e.g. recruitment and internal mobility, development and careers, training, industrial relations, internal communication systems)
GRI 404-3 (2016): Percentage of employees receiving regular performance and career development reviews
The Social Dimension - Personnel management policies - Evaluation
191
Topic as of Legislative Decree no. 254/2016
Material topic
Risks identified
Policies adopted
Topic specific standard/disclosure
Reference chapter / paragraph
GRI 3-3 (2021): Management of material topics
Materiality analysis
The Social Dimension - Occupational health and safety
GRI 403-1 (2018): Occupational health and safety management system
GRI 403-2 (2018): Hazard identification, risk assessment, and incident investigation
GRI 403-3 (2018): Occupational health services
GRI 403-4 (2018): Worker participation, consultation, and communication on occupational health and safety
GRI 403-5 (2018): Worker training on occupational health and safety
GRI 403-6 (2018): Promotion of worker health
GRI 403-7 (2018): Prevention and mitigation of occupational health and safety impacts directly linked by business relationships
GRI 403-8 (2018): Workers covered by an occupational health and safety management system
Employees
Health and Safety
Risk of injuries/accidents sustained by personnel of the Group's offices / sites
Occupational health and safety (ISO 45001)
Compliance of products with current regulations (Reach, End of life)
GRI 403-9 (2018): Work-related injuries
The Social Dimension - Occupational health and safety
192
Topic as of Legislative Decree no. 254/2016
Material topic
Risks identified
Policies adopted
Topic specific standard/disclosure
Reference chapter / paragraph
GRI 3-3 (2021): Management of material topics
Materiality analysis
Sustainability governance
GRI 407-1 (2016): Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk
GRI 408-1 (2016): Operations and suppliers at significant risk for incidents of child labour
Responsible management and respect for human rights in the supply chain
Risk related to suppliers' non-compliance with human rights and ESG principles
Policy to ensure that all suppliers sign the Group Code of Ethics or the General Terms and Conditions of Supply
GRI 409-1 (2016): Operations and suppliers at significant risk for incidents of forced or compulsory labour
Sustainability Governance - Social and environmental-oriented policies and guidelines - Risk management
GRI 3-3 (2021): Management of material topics
Materiality analysis
Sustainability governance - The system for responsible business management
The Social Dimension - Personnel management policies
GRI 202-2 (2016): Proportion of senior management hired from the local community
The Social Dimension - Developing human resources - Diversity and equal opportunity
Diversity and equal opportunity
GRI 405-1 (2016): Diversity of governance bodies and employees
The Social Dimension - Diversity and equal opportunity
Sustainability governance
Respecting human rights
Risk arising from acts of discrimination or exclusion committed by employees
Policies for personnel management - Diversity and equal opportunities
GRI 405-2 (2016): Ratio of basic salary and remuneration of women to men
The Social Dimension - Personnel management policies
GRI 406-1 (2016): Incidents of discrimination and corrective actions taken
Sustainability Governance - Guidelines for compliance with laws and regulations
193
Topic as of Legislative Decree no. 254/2016
Material topic
Risks identified
Policies adopted
Topic specific standard/disclosure
Reference chapter / paragraph
GRI 3-3 (2021): Management of material topics
Materiality analysis
Sustainability Governance - Anti-Corruption - The Social Dimension
GRI 205-3 (2016): Confirmed incidents of corruption and actions taken
GRI 206-1 (2016): Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices
Sustainability governance - The system for responsible business management - Guidelines for compliance with laws and regulations
GRI 207-1 (2019): Approach to tax
GRI 207-2 (2019): Tax governance, control, and risk management
GRI 207-3 (2019): Stakeholder engagement and management of concerns related to tax
Fighting corruption
Business integrity
Risk from unlawful activities carried out by employees
Code of Ethics
GRI 207-4 (2019): Country-by-country reporting
The Social Dimension - Taxes
194
GRI Content Index
Statement of use:
Piaggio & C. reported in accordance with GRI Standards for the period from 01.01.2022 to 31.12.2022
GRI 1 used:
GRI 1: Foundation 2021
Applicable GRI Sectors standard:
Not applicable
GRI Standard
Disclosure
Location
Omissions
Requirement(s) omitted
Reason
Explanation
GRI 2: GENERAL DISCLOSURES 2021
2-1
Organisational detail
Methodology -Report on operations – Generation of Sustainable Value – Corporate structure
2-2
Entities included in the organisation’s sustainability reporting
Methodology - Report on operations - Corporate Structure
2-3
Reporting period, frequency and contact point
Methodology - Report on operations - Piaggio and the financial markets
2-4
Restatements of information
Methodology
2-5
External assurance
Independent Auditors’ Report
2-6
Activities, value chain, and other business relationships
The Business Model - Generation of Sustainable Value
The Social Dimension - Responsible Management of the Supply Chain - Meeting Customer Needs
2-7
Employees
The Social Dimension - Diversity and equal opportunity
2-8
Workers who are not employees
The Social Dimension - Staff
2-9
Governance structure and composition
Sustainability Governance - Corporate Governance Report 2022
2-10
Nomination and selection of the highest governance body
Corporate Governance Report 2022 - Board of Directors
2-11
Chair of the highest governance body
Sustainability Governance - Corporate Governance Report 2022 - Composition
2-12
Role of the highest governance body in overseeing the management of impacts
Sustainability Governance - The Materiality Analysis
195
GRI Standard
Disclosure
Location
Omissions
Requirement(s) omitted
Reason
Explanation
2-13
Delegation of responsibility for managing impacts
Sustainability Governance - The Materiality Analysis
2-14
Role of the highest governance body in sustainability reporting
Materiality analysis
2-15
Conflicts of interest
Corporate Governance Report 2022 - Directors' Interests and Related Party Transactions - Role of the Board of Directors - Related Party Procedure - Code of Ethics
2-16
Communication of critical concerns
Corporate Governance Report 2022 - Internal Control and Risk Management System - Risk manager and compliance officer
2-17
Collective knowledge of the highest governance body
Corporate Governance Report 2022 - Appointment and Replacement of Directors
2-18
Evaluation of the performance of the highest governance body
Corporate Governance Report 2022 - Director self-evaluation and succession
2-19
Remuneration policies
Remuneration Report (Section 1 paragraphs 2-3-4)
2-20
Process to determine remuneration
Remuneration Report (Section 1 paragraph 1)
2-21
Annual total compensation ratio
Sustainability governance
2-22
Statement on sustainable development strategy
Report on operations (Chairman's Letter)
2-23
Policy commitments
Sustainability Governance
2-24
Embedding policy commitments
Sustainability Governance
196
GRI Standard
Disclosure
Location
Omissions
Requirement(s) omitted
Reason
Explanation
2-25
Processes to remediate negative impacts
The Materiality Analysis (Materiality Table) - Sustainability Governance - Compliance Programme; Guidelines for respecting human rights - Meeting Customer Needs
2-26
Mechanisms for seeking advice and raising concerns
Sustainability Governance - Compliance Programme; Guidelines for respecting human rights
2-27
Compliance with laws and regulations
Sustainability Governance - Guidelines for compliance with laws and regulations
2-28
Membership associations
Report on Operations - Risks and uncertainties; Risk relative to the regulatory and legal framework
2-29
Approach to stakeholder engagement
Expectations and ways of involving stakeholders
2-30
Collective bargaining agreements
Industrial Relations
MATERIAL TOPICS
GRI 3: MATERIAL TOPICS 2021
3-1 (2021)
Process to determine material topics
Description of the process to identify material issues for Non-Financial Statement purposes
Materiality analysis
3-2 (2021)
List of material topics
Methodology
197
GRI Standard
Disclosure
Location
Omissions
Requirement(s) omitted
Reason
Explanation
CREATION OF ECONOMIC VALUE
3-3 (2021)
Management of material topics
Materiality analysis
The Social Dimension
201-1 (2016)
Direct economic value generated and distributed
The Social Dimension - Determination and distribution of the economic value generated
203-1 (2016)
Infrastructure investments and services supported
The Social Dimension - Charity and sponsorship
204-1 (2016)
Proportion of spending on local suppliers
The Social Dimension - Responsible management of the supply chain
INNOVATION OF PRODUCT AND SUSTAINABLE MOBILITY
3-3 (2021)
Management of material topics
Materiality AnalysisThe Environmental Dimension
Research, Development and Innovation Guidelines
305-3 (2016)
Other indirect (Scope 3) GHG Emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
CLIMATE CHANGE
3-3 (2021)
Management of material topics
Materiality analysis
The Environmental Dimension - Energy consumption - Emissions of CO2 and other pollutants
302-1 (2016)
Energy consumption within the organisation
The Environmental Dimension - Energy consumption
305-1 (2016)
Direct (Scope 1) GHG emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
305-2 (2016)
Energy indirect (Scope 2) GHG emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
305-3 (2016)
Other indirect (Scope 3) GHG Emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
305-4 (2016)
GHG emissions intensity
The Environmental Dimension - Emissions of CO2 and other pollutants
305-7 (2016)
Nitrogen oxides (NOX), sulphur oxides (SOX), and other significant air emissions
The Environmental Dimension - Emissions of CO2 and other pollutants
198
GRI Standard
Disclosure
Location
Omissions
Requirement(s) omitted
Reason
Explanation
CUSTOMER SATISFACTION
3-3 (2021)
Management of material topics
Materiality analysis
Sustainability governance
417-3 (2016)
Incidents of non-compliance concerning marketing communications
Sustainability governance - The system for responsible business management
SUPPORTING ON LOCAL COMMUNITIES
3-3 (2021)
Management of material topics
Materiality analysis
The Social Dimension
413-1 (2016)
Operational with local community engagement, impact assessments, and development programs
The Social Dimension - Support to local communities - Charity and sponsorship activities
PRODUCT SAFETY AND RELIABILITY
3-3 (2021)
Management of material topics
Materiality AnalysisResearch, Development and Innovation Guidelines
416-1 (2016)
Assessment of the health and safety impacts of product and service categories
Research, Development and Innovation Guidelines
DEVELOPING HUMAN RESOURCES
3-3 (2021)
Management of material topics
Materiality analysis
The Social Dimension
401-1 (2016)
New employee hires and employee turnover
The Social Dimension - Staff
401-2 (2016)
Benefits provided to full-time employees that are not provided to temporary or part-time employees
The Social Dimension - Personnel management policies - Benefits
401-3 (2016)
Parental leave
The Social Dimension - Diversity and equal opportunity
404-1 (2016)
Average hours of training per year per employee
The Social Dimension - Training
404-2 (2016)
Programs for upgrading employee skills and transition assistance programs
The Social Dimension - Personnel management policies - Development and careers
404-3 (2016)
Percentage of employees receiving regular performance and career development reviews
The Social Dimension - Personnel management policies - Evaluation
199
GRI Standard
Disclosure
Location
Omissions
Requirement(s) omitted
Reason
Explanation
RESPONSIBLE MANAGEMENT AND RESPECT FOR HUMAN RIGHTS IN THE SUPPLY CHAIN
3-3 (2021)
Management of material topics
Materiality analysis
Sustainability governance
Sustainability governance – Social and environmental-oriented policies and guidelines
407-1 (2016)
Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk
Risk management
Sustainability governance – Social and environmental-oriented policies and guidelines
408-1 (2016)
Operations and suppliers at significant risk for incidents of child labour
Risk management
Sustainability governance – Social and environmental-oriented policies and guidelines
409-1 (2016)
Operations and suppliers at significant risk for incidents of forced or compulsory labour
Risk management
HEALTH AND SAFETY
3-3 (2021)
Management of material topics
Materiality analysis
403-1 (2018)
Occupational health and safety management system
The Social Dimension - Occupational health and safety
403-2 (2018)
Hazard identification, risk assessment, and incident investigation
The Social Dimension - Occupational health and safety
403-3 (2018)
Occupational health services
The Social Dimension - Occupational health and safety
403-4 (2018)
Worker participation, consultation, and communication on occupational health and safety
The Social Dimension - Occupational health and safety
403-5 (2018)
Worker training on occupational health and safety
The Social Dimension - Occupational health and safety
403-6 (2018)
Promotion of worker health
The Social Dimension - Occupational health and safety
403-7 (2018)
Prevention and mitigation of occupational health and safety impacts directly linked by business relationships
The Social Dimension - Occupational health and safety
403-8 (2018)
Workers covered by an occupational health and safety management system
The Social Dimension - Occupational health and safety
403-9 (2018)
Work-related injuries
The Social Dimension - Occupational health and safety
200
GRI Standard
Disclosure
Location
Omissions
Requirement(s) omitted
Reason
Explanation
BUSINESS INTEGRITY
3-3 (2021)
Management of material topics
Materiality AnalysisSustainability governance - The Social Dimension
205-3 (2016)
Confirmed incidents of corruption and actions taken
Governance of sustainability - The system for responsible business management - Anti-corruption
206-1 (2016)
Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices
Sustainability governance - The system for responsible business management - Guidelines for compliance with laws and regulations
207-1 (2019)
Approach to tax
The Social Dimension - Taxes
207-2 (2019)
Tax governance, control, and risk management
The Social Dimension - Taxes
207-3 (2019)
Stakeholder engagement and management of concerns related to tax
The Social Dimension - Taxes
207-4 (2019)
Country-by-country reporting
The Social Dimension - Taxes
WASTE HANDLING
3-3 (2021)
Management of material topics
Materiality AnalysisThe Environmental Dimension - Waste handling and recovering
The Environmental Dimension - Environmental Certifications - Waste handling and recovering -
Materiality analysis
306-1 (2020)
Waste generation and significant waste-related impacts
Management of significant waste related
306-2 (2020)
impacts
The Environmental Dimension - Waste handling and recovering
306-3 (2020)
Waste generated
The Environmental Dimension - Waste handling and recovering
201
GRI Standard
Disclosure
Location
Omissions
Requirement(s) omitted
Reason
Explanation
CONSERVING WATER RESOURCES
3-3 (2021)
Management of material topics
Materiality AnalysisThe Environmental Dimension - Conserving water resources
303-1 (2018)
Interactions with water as a shared resource
The Environmental Dimension - Conserving water resources
303-2 (2018)
Management of water discharge-related impacts
The Environmental Dimension - Conserving water resources
303-3 (2018)
Water withdrawal
The Environmental Dimension - Conserving water resources
303-4 (2018)
Water discharge
The Environmental Dimension - Conserving water resources
303-5 (2018)
Water consumption
The Environmental Dimension - Conserving water resources
DIVERSITY AND EQUAL OPPORTUNITY
Materiality AnalysisThe Social Dimension - Personnel management policy
3-3 (2021)
Management of material topics
Sustainability governance - The system for responsible business management
202-2 (2016)
Proportion of senior management hired from the local community
The Social Dimension - Developing human resources - Diversity and equal opportunity
The Social Dimension - Diversity and equal opportunity
405-1 (2016)
Diversity of governance bodies and employees
Sustainability governance
405-2 (2016)
Ratio of basic salary and remuneration of women to men
The Social Dimension - Personnel management policies
406-1 (2016)
Incidents of discrimination and corrective actions taken
Sustainability governance - Guidelines for compliance with laws and regulations
203
Report of the Independent Auditors on the consolidated non-financial statement - Legislative Decree no. 254 of 30 December 2016
204
205
206
208
Consolidated Income Statement2,087,443 1,668,689 25 1,352,460 38,069 1,057,855 31,331 294,993 1,277 257,902 1,558 264,614 238,721 51,131 45,173 78,272 74,656 9,999 8,205 150,763 419 152,237 500 25,574 129 24,330 9 158,740 112,574 642 644 1,536 802 26,725 80 24,897 107 4,557 127,219 93,678 42,330 33,624 84,889 60,054 84,889 60,054 84,889 60,054 0.239 0.168 0.239 0.168
2022
2021
Total
of which related parties
Total
of which related parties
In thousands of Euros
Notes
Net revenues
4
Cost for materials
5
Cost for services and leases and rentals
6
Employee costs
7
Depreciation and impairment costs of property, plant and equipment
8
Amortisation and impairment costs of intangible assets
8
Depreciation of rights of use
8
Other operating income
9
Net reversals (impairment) of trade and other receivables
10
(2,423 )
(1,510 )
Other operating costs
11
Operating income
Income/(loss) from investments
12
(892 )
(907 )
Financial income
13
Borrowing costs
13
Net exchange gains/(losses)
13
(5,440 )
Profit before tax
Taxes for the period
14
(4,793 )
(3,817 )
Profit from continuing operations
Assets held for sale:
Profits or losses arising from assets held for sale
15
Net Profit (loss) for the period
Attributable to:
Owners of the Parent
Non-controlling interests
0
Earnings per share (figures in €)
16
Diluted earnings per share (figures in €)
16
209
Consolidated Statement of Comprehensive Income 84,889 60,054 3,925 3,925 6,172 1,259 5,802 13,233 11,712 72,797 71,766 72,814 71,768
2022
2021
In thousands of Euros
Notes
Net Profit (loss) for the period (A)
Items that will not be reclassified in the income statement
Remeasurements of defined benefit plans
45
(1,521 )
Total
(1,521 )
Items that may be reclassified in the income statement
Profit (loss) deriving from the translation of financial statements of foreign companies denominated in foreign currency
45
(12,251 )
Share of Other Comprehensive Income of subsidiaries/associates valued with the equity method
45
(228 )
Total profits (losses) on cash flow hedges
45
(3,538 )
Total
(16,017 )
Other comprehensive income (B)*
(12,092 )
Total Profit (loss) for the period (A + B)
* Other Profits (and losses) take account of related tax effects
Attributable to:
Owners of the Parent
Non-controlling interests
(17 )
(2 )
210
Consolidated Statement of Financial Position729,524 720,209 291,366 283,041 36,861 30,727 9,913 11,047 16 16 8,820 8,904 71,611 72,479 20,021 23,628 67 1,168,132 1,150,051 67,143 468 71,225 610 56,118 26,293 57,273 20,018 45,101 17,542 379,678 278,538 59 176 242,616 260,868 790,715 685,622 1,958,847 1,835,673
As of 31 December 2022
As of 31 December
2021
Total
of which related parties
Total
of which related parties
In thousands of Euros
Notes
ACTIVITIES
Non-current assets
Intangible assets
17
Property, plant and equipment
18
Rights of use
19
Investments
38
Other financial assets
39
Tax receivables
24
Deferred tax assets
20
Trade receivables
22
Other receivables
23
Total non-current assets
Assets held for sale
28
Current assets
Trade receivables
22
Other receivables
23
Tax receivables
24
Inventories
21
Other financial assets
39
Cash and cash equivalents
40
Total current assets
Total assets
211
As of 31 December 2022
As of 31 December 2021
Total
of which related parties
Total
of which related parties
In thousands of Euros
Notes
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders’ equity
Share capital and reserves attributable to the owners of the Parent
44
Share capital and reserves attributable to non-controlling interests
44
(166 )
(149 )
Total shareholders’ equity
Non-current liabilities
Financial liabilities
41
Financial liabilities for rights of use
41
Trade payables
29
Other long-term provisions
30
Deferred tax liabilities
31
Retirement funds and employee benefits
32
Tax payables
33
Other payables
34
Total non-current liabilities
Current liabilities
Financial liabilities
41
Financial liabilities for rights of use
41
Trade payables
29
Tax payables
33
Other payables
34
Current portion of other long-term provisions
30
Total current liabilities
Total Shareholders' Equity and Liabilities
212
Consolidated Statement of Cash Flows84,889 60,054 42,330 33,624 51,131 44,998 76,282 73,382 9,999 8,205 24,029 23,903 4,383 2,960 24 26,725 24,897 907 3,379 142 3,072 116,268 133,600 11,059 33,055 11,413 18,775 10,979 294,670 276,283 239,495 226,502 316 5,326 0 63 1,741 1,421 15 19 1,078 546 73,401 204,873 21,355 260,856 228,906 10,595
This statement shows the factors behind changes in cash and cash equivalents, net of short-term bank overdrafts, as required by IAS 7.
2022
2021
Total
of which related parties
Total
of which related parties
In thousands of Euros
Notes
Operating activities
Net Profit (loss) for the period
Taxes for the period
14
Depreciation of property, plant and equipment
8
Amortisation of intangible assets
8
Depreciation of rights of use
8
Provisions for risks and retirement funds and employee
benefits
Write-downs/(Reinstatements)
Losses/(Gains) on the disposal of property, plant and equipment
(216 )
(323 )
Losses/(Gains) on the disposal of intangible assets
Financial income
13
(1,536 )
(802 )
Dividend income
(15 )
(19 )
Borrowing costs
13
Income from public grants
(10,402 )
(4,488 )
Portion of earnings of associates
12
(642 )
Change in working capital:
(Increase)/Decrease in trade receivables
22
(3,831 )
(187 )
(Increase)/Decrease in other receivables
23
(6,208 )
(10,613 )
(3,730 )
(Increase)/Decrease in inventories
21
(101,140 )
(88,674 )
Increase/(Decrease) in trade payables
29
(6,971 )
Increase/(Decrease) in other payables
34
Increase/(Decrease) in provisions for risks
30
(15,642 )
(15,277 )
Increase/(Decrease) in retirement funds and employee benefits
32
(11,818 )
(11,743 )
Other changes
(41,034 )
(11,703 )
Cash generated from operating activities
Interest paid
(21,891 )
(21,377 )
Taxes paid
(33,284 )
(28,404 )
Cash flow from operating activities (A)
Investment activities
Investment in property, plant and equipment
18
(63,043 )
(56,887 )
Sale price, or repayment value, of property, plant
and machinery
Investment in intangible assets
17
(88,632 )
(97,261 )
Sale price, or repayment value, of intangible assets
Public grants collected
Dividends cashed
Collected interests
Cash flow from investment activities (B)
(148,525 )
(146,773 )
Financing activities
Purchase of treasury shares
44
(5,669 )
(53 )
Outflow for dividends paid
44
(53,403 )
(39,639 )
Loans received
41
Outflow for repayment of loans
41
(111,744 )
(213,909 )
Lease payments for rights of use
41
(10,263 )
(9,646 )
Cash flow from financing activities (C)
(107,678 )
(58,374 )
Increase/(Decrease) in cash and cash equivalents (A+B+C)
(16,708 )
Opening balance
Exchange differences
(1,596 )
213
Closing balance
Movements from 1 January 2022 / 31 December 2022
Transactions with shareholders
As of 1 January 2022
Earnings for the period
Other comprehensive income
Total profit (loss) for the period
Allocation of profits
Distribution of dividends
Purchase of treasury shares
Interim dividend
As of 31 December 2022
In thousands of Euros
Notes
45
44
44
44
44
Share capital
Share premium reserve
Legal reserve
Reserve for measurement of financial instruments
(3,538 )
(3,538 )
IAS transition reserve
(15,525 )
(15,525 )
Group translation reserve
(31,026 )
(12,462 )
(12,462 )
(43,488 )
Treasury shares
(2,019 )
(5,669 )
(7,688 )
Earnings reserve
(4,994 )
Earnings for the period
(11,491 )
(18,209 )
(30,200 )
Consolidated Group shareholders’ equity
(12,075 )
(23,203 )
(5,669 )
(30,200 )
Share capital and reserves attributable to non-controlling interests
(149 )
(17 )
(17 )
(166 )
TOTAL SHAREHOLDERS’ EQUITY
(12,092 )
(23,203 )
(5,669 )
(30,200 )
Movements from 1 January 2021 / 31 December 2021
Transactions with shareholders
As of 1 January 2021
Earnings for the period
Other comprehensive income
Total profit (loss) for the period
Allocation of profits
Distribution of dividends
Purchase of treasury shares
Interim dividend
As of 31 December 2021
In thousands of Euros
Notes
45
44
44
44
44
Share capital
Share premium reserve
Legal reserve
Reserve for measurement of financial instruments
IAS transition reserve
(15,525 )
(15,525 )
Group translation reserve
(38,459 )
(31,026 )
Treasury shares
(1,966 )
(53 )
(2,019 )
Earnings reserve
(1,521 )
(1,521 )
(5,717 )
Earnings for the period
(14,540 )
(3,568 )
(30,354 )
Consolidated Group shareholders’ equity
(9,285 )
(53 )
(30,354 )
Share capital and reserves attributable to non-controlling interests
(147 )
(2 )
(2 )
(149 )
214
TOTAL SHAREHOLDERS’ EQUITY
(9,285 )
(53 )
(30,354 )
215
A) GENERAL ASPECTS
Piaggio & C. S.p.A. (the Company) is a joint-stock company established in Italy at the Register of Companies of Pisa. The address of the registered office is Viale Rinaldo Piaggio 25 - Pontedera (Pisa). The Group's main activity is the manufacture and sale of vehicles.
These Financial Statements are expressed in Euros (€) since this is the currency in which most of the Group’s transactions take place. Foreign operations are included in the consolidated financial statements according to the standards indicated in the notes below.
Scope of consolidation
As of 31 December 2022, the structure of the Piaggio Group was as indicated in the Report on Operations and is the structure referred to herein.
The scope of consolidation has not changed compared to the Consolidated Financial Statements as of 31 December 2021.
Compliance with international accounting standards
The Consolidated Financial Statements of the Piaggio Group as of 31 December 2022 have been prepared in compliance with the International Accounting Standards (IAS/IFRS) in force at the date, issued by the International Accounting Standards Board and approved by the European Commission, as well as in compliance with the provisions issued in implementation of Article 9 of Legislative Decree 38/2005 (Consob Resolution 15519 of 27/7/06 on "Provisions on financial statements", Consob Resolution 15520 of 27/7/06 on "Amendments and additions to the Issuers' Regulation adopted by Resolution 11971/99"), Consob Communication 6064293 of 28/7/06 concerning "Corporate reporting required under Article 114, paragraph 5, of Legislative Decree 58/98"). The interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”), previously the Standing Interpretations Committee (“SIC”), were also taken into account.
Moreover, international accounting standards have been uniformly adopted for all Group companies.
The financial statements of subsidiaries, used for consolidation and for the joint venture consolidated using the equity method, have been appropriately modified and reclassified, where necessary, to bring them in line with the international accounting standards and classification criteria used by the Group on a consistent basis.
216
For the effects of the COVID-19 pandemic, please refer to the chapter “Health emergency - COVID-19” in the report.
Other information
A specific paragraph in this Report provides information on any significant events occurring after the end of the period and on the operating outlook.
1. Form and content of the financial statements
Form of the consolidated financial statements
The Group has chosen to highlight all changes generated by transactions with non-shareholders within two statements reporting trends of the period, respectively named the "Consolidated Income Statement" and "Consolidated Statement of Comprehensive Income". The Financial Statements are therefore composed of the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Consolidated Shareholders’ Equity, and these notes.
Consolidated Income Statement
The Consolidated Income Statement is presented with the items classified by nature. The overall Operating Income is shown, which includes all income and cost items, irrespective of their repetition or fact of falling outside normal operations, except for the items of financial operations included under Operating Income and Profit before tax. In addition, the income and cost items arising from assets that are held for sale or to be discontinued, including any capital gains or losses net of the tax element, are recorded in a specific item preceding profit attributable to the owners of the parent and to non-controlling interests.
Consolidated Statement of Comprehensive Income
The Consolidated Statement of Comprehensive Income is presented in accordance with the revised version of IAS 1. Components presented in 'Other comprehensive income' are grouped according to whether or not they can be reclassified subsequently to profit or loss.
Consolidated Statement of Financial Position
The Consolidated Statement of Financial Position is presented in opposite sections with separate indication of assets, liabilities and shareholders’ equity.
217
Consolidated Statement of Cash Flows
The Consolidated Statement of Cash Flows is divided into cash-flow generating areas. The Statement of Cash Flows model adopted by the Piaggio Group has been prepared using the indirect method. The cash and cash equivalents recorded in the Consolidated Statement of Cash Flows include the Consolidated Statement of Financial Position balances for this item at the reporting date. Cash flows in foreign currency have been converted at the average exchange rate for the period. Interest expense paid as well as taxes paid are included in the cash flows generated by operations. Interest received and dividends received are included in cash flows generated by investing activities. Finally, dividends paid are included in financing activities.
The opening balance and closing balance of cash and cash equivalents are presented net of short-term bank holdings, as required by IAS No. 7.
Statement of Changes in Consolidated Shareholders' Equity
The Statement of Changes in Consolidated Shareholders' Equity is presented as provided for in IAS 1 revised.
The Consolidated Financial Statements of the Piaggio Group include the Financial Statements of the Parent Company Piaggio & C. S.p.A. and Italian and foreign companies in which it has direct or indirect control, which are listed in the attachments.
As of 31 December 2022 subsidiaries and associates of Piaggio & C. S.p.A. were as follows:
Subsidiaries
Associates
Total
Italy
Abroad
Total
Italy
Abroad
Total
Companies:
- consolidated on a line-by-line basis
2
20
22
22
- consolidated with the equity method
2
3
5
5
Total companies
2
20
22
2
3
5
27
218
2. Consolidation principles and measurement criteria
2.1 Principles of consolidation
Assets and liabilities, and income and costs, of consolidated companies are recognised on a global integration basis, eliminating the carrying amount of consolidated investments in relation to the relative shareholders' equity at the time of purchase or underwriting. The carrying amount of investments has been eliminated against the shareholders' equity of subsidiaries/associates, assigning to non-controlling interests under specific items the relative portion of shareholders' equity and relative net profit due for the period, in the case of subsidiaries consolidated on a line-by-line basis.
Subsidiaries
Subsidiaries are companies in which the Group exercises control. This control exists when the Group is exposed, or is entitled to receive, variable returns from its involvement in the company and has the capacity to influence such variable returns through its power over the controlled company. The acquisition of subsidiaries is recognised according to the acquisition method. The cost of acquisition is determined by the sum of present values at the date control of the given assets was obtained, liabilities borne or undertaken and financial instruments issued by the Group in exchange for control of the acquired company.
In the case of acquisitions of companies, acquired and identifiable assets, liabilities and potential liabilities are recognised at the present value at the date of acquisition. The positive difference between the acquisition cost and the share of the Group at the fair value of said assets and liabilities is classified as goodwill and recognised in the financial statements as an intangible asset. Any negative difference (“negative goodwill”) is recognised instead in profit or loss at the date of acquisition.
The financial statements of subsidiaries are included in the Consolidated Financial Statements starting from the date when control is acquired until control ceases.
The portions of shareholders' equity and income attributable to non-controlling interests are separately indicated in the Consolidated Statement of Financial Position and Consolidated Income Statement respectively.
Associates and joint arrangements
Associates are companies in which the Group has considerable influence but not control of financial and operational policies.
The Group adopts IFRS 11 for all joint arrangements. According to IFRS 11, investments in joint arrangements are classified as joint operations or joint ventures depending on the contractual obligations and rights of each investor. The Group has classified the only joint arrangement agreement in place as being a joint venture.
219
Transactions eliminated during the consolidation process
Transactions in foreign currency
Consolidation of foreign companies
The separate financial statements of each company belonging to the Group are prepared in the currency of the primary economic environment in which they operate (the functional currency). For the purposes of the Consolidated Financial Statements, the financial statements of each foreign entity are in euro, which is the functional currency of the Group and the presentation currency of the Consolidated Financial Statements.
220
The exchange rates used to translate the financial statements of companies included in the scope of consolidation into Euros are shown in the table below.
Spot exchange rate 31 December 2022
Average exchange rate 2022
Spot exchange rate 31 December 2021
Average exchange rate 2021
Currency
US Dollar
1.0666
1.05305
1.1326
1.18274
Pounds Sterling
0.88693
0.852761
0.84028
0.859604
Indian Rupee
88.1710
82.68639
84.2292
87.43916
Singapore Dollars
1.43
1.45116
1.5279
1.58910
Chinese Yuan
7.3582
7.07880
7.1947
7.62823
Croatian Kuna
7.5345
7.53487
7.5156
7.52841
Japanese Yen
140.66
138.02739
130.38
129.87671
Vietnamese Dong
25,183.00
24,630.01167
25,137.39
26,372.96376
Indonesian Rupiah
16,519.82
15,625.25113
16,166.73
16,914.56136
Brazilian Real
5.6386
5.43990
6.3101
6.37789
2.2 Accounting policies
The most significant accounting policies adopted to prepare the Consolidated Financial Statements as of 31 December 2022 are outlined below.
Intangible assets
As provided for in IAS 38 - Intangible Assets, an intangible asset which is purchased or internally generated, is recognised as an asset only if it is identifiable, controllable and future economic benefits are expected and its cost may be measured reliably.
Intangible assets with a definite useful life are measured at acquisition cost or production cost net of amortisation and accumulated impairment losses. Borrowing costs related to the acquisition, construction or production of certain assets that require a significant period of time before they are ready for use or sale (qualifying assets), are capitalised along with the asset.
Goodwill
In the case of acquisitions of companies, acquired and identifiable assets, liabilities and potential liabilities are recognised at the present value at the date of acquisition. The positive difference between the acquisition cost and the share of the Group at the fair value of said assets and liabilities is classified as goodwill and recognised in the financial statements as an intangible asset. Any negative difference (“negative goodwill”) is recognised instead in profit or loss at the date of acquisition.
After initial recognition, goodwill is recognised at cost net of any accumulated impairment losses.
221
Development costs
Development costs of projects for the manufacture of vehicles and engines are recognised as assets only if all of the following conditions are met: the costs can be reliably measured and the technical feasibility of the product, the volumes and expected prices indicate that costs incurred during development will generate future economic benefits. Capitalised development costs include only costs incurred that may be directly attributed to the development process.
Capitalised development costs are amortised on a systematic criterion basis, starting from the beginning of production through the estimated life of the product.
Other intangible assets
As provided for in IAS 38 – Intangible Assets, other intangible assets which are purchased or internally generated are recognised as assets if it is probable that use of the asset will generate future economic benefits and the cost of the asset can be reliably measured.
These assets are recognised at acquisition or production cost and are amortised on a straight line basis over their estimated useful life, if they have a definite useful life.
Other intangible assets recognised following the acquisition of a company are accounted for separately from goodwill, if their fair value may be reliably measured.
The amortisation period for an intangible asset with a useful life is revised at least at the end of each reporting period. If the expected useful life of the asset differs from estimates previously made, the amortisation period is changed accordingly.
The amortisation periods of intangible assets are shown below:
Development costs
3-5 years
Industrial Patent and Intellectual Property Rights
3-5 years
Other
5 years
Trademarks
20 years
Licences
10 years
Environmental certification
Not depreciated
Other intangible assets also include environmental certificates.
Environmental certification
The Pontedera plant in Italy falls within the scope of the "Emissions Trading" Directive (Directive 2003/87/EC), which assigns a generally lower number of emission permits compared to the emissions recorded in the reference year, with the Parent Company having to purchase quotas in order to achieve compliance on the emissions market.
For the purpose of recognising the expenses arising from regulatory obligations relating to ETS certificates, the Group applies the so-called 'net liability approach'.
This accounting treatment requires the certificates obtained free of charge from the authority be recognised at nominal value under intangible assets (null).
222
In addition, expenses for the purchase, against payment, of certificates required to meet the obligation of the reporting period, i.e. purchased in excess of the amount required to meet regulatory obligations, are capitalised and recognised as intangible assets.
These intangible assets:
-are classified as assets with an indefinite useful life and are not amortised;
-after initial recognition they are kept at cost;
-they are recognised under Profit and Loss in the period when they are accrued, under sundry operating costs, for the necessary quantification to meet the regulatory obligation for the reference period.
Any provision for the estimated expenses to be incurred for the purchase, against payment, of certificates required to meet the obligation of the reporting period, will generate a cost to be recognised in the period when it is accrued, under sundry operating expenses, with a contra-entry in the provision for risks.
If the cost of the certificates to be redelivered to the Authority differs from the estimate made at the end of the reporting period, any difference, if negative (higher cost), is recognised in profit or loss under sundry operating expenses, as a contingent liability in the year when the recognition was made. In the case of a positive difference (lower cost), the differential will generate a contingent asset.
Property, plant and equipment
The Piaggio Group opted for the cost method when first preparing its IAS/IFRS financial statements, as allowed by IFRS 1. For the measurement of property, plant and equipment, it was therefore decided not to use the fair value method. Property, plant and equipment were booked at the purchase or production cost and were not revalued. Borrowing costs related to the acquisition, construction or production of certain assets that require a significant period of time before they are ready for use or sale (qualifying assets), are capitalised along with the asset.
Costs incurred after acquisition are capitalised only if they increase the future economic benefits of the asset they refer to. All other costs are recognised in profit or loss when they are incurred. Property, plant and equipment under construction are measured at cost and depreciated starting from the period in which they are put into operation.
Depreciation is determined, on a straight line basis, on the cost of the assets net of their relative residual values, based on their estimated useful life.
The depreciation periods of Plant, property and equipment are summarised below:
Land
Land is not depreciated
Buildings
33-60 years
Plant and machinery
5 -15 years
Equipment
4-20 years
Other assets
3-10 years
Profits and losses arising from the sale or disposal of assets are measured as the difference between the sale revenue and net carrying amount of the asset and are recognised in profit or loss for the
223
period.When the conditions that gave rise to an impairment loss no longer exist, the carrying amount of the asset (or of a cash generating unit), except for goodwill, is increased to the new value arising from an estimate of its recoverable amount, up to the net carrying amount applicable to the asset if no impairment loss had been recognised. The reversal of the impairment loss is immediately
Lease agreements as lessor
Lease agreements for property, plant and machinery entered into as lessor require the recognition of an asset representing the right of use of the leased asset, and a financial liability for the obligation to undertake contract payments. In particular, the lease liability is initially recognised as being equal to the present value of future payments to make, adopting a discount rate equal to the implicit interest rate of the lease, of if this cannot easily be determined, by using the incremental financing rate of the lessor. After initial recognition, the lease liability is recognised at amortised cost using the effective interest rate and is redetermined following contract renegotiation, changes in rates, or changes in the recognition of any contract options.
If the contract provides for a renewal option in favour of the lessee, the Group also includes the rentals for the renewal period if it is considered highly probable in the calculation of the right of use.
The right of use is initially recorded at cost and then adjusted to take into account recognised depreciation charges, any impairment losses and effects related to any redetermination of lease liabilities.
The Group has opted for some simplifications, allowed by the Standard, excluding agreements of less than 12 months (short term, calculated on the residual duration, on first-time adoption), and of a value below 5 thousand euros (low value).
The Group has its own production plants even in countries where ownership rights are not allowed. Rental paid in advance, to obtain the availability of land where own production sites are located, is recognised as a right of use.
Impairment
At the end of the reporting period, the Group reviews the carrying amount of its tangible and intangible assets and rights of use to determine whether there is any indication that these assets may be impaired (impairment test). If there is an indication that an asset may be impaired, the asset's recoverable amount is estimated to determine the amount of the write-down. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the asset's cash generating unit.
The recoverable amount is the higher of an asset's fair value less costs to sell (if available) and its value in use. In measuring the value in use, estimated future cash flows are discounted at their fair value, using a rate which reflects current market changes in the fair value of money and specific risks of the asset.
If the recoverable amount of an asset (or of a cash generating unit) is estimated to be lower than the relative carrying amount, the carrying amount of the asset is reduced to the lower recoverable value. An impairment loss is immediately recognised in profit or loss, unless the asset concerns land or property other than investment property recognised at revalued values. In said case, the loss is recorded in the relative revaluation reserve.
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Transactions with affiliates and related parties
Transactions with affiliates and related parties are indicated in specific sections of the Report on Operations and Notes, referred to herein.
Non-current assets held for sale
Non-current assets (or disposal groups) that are classified as held for sale are measured at the lower of the carrying amount and fair value less costs to sell.
Non-current assets (and disposal groups) are classified as held for sale when it is expected that their carrying amount will be recovered through a sale rather than through their use in company operations. This condition is only met when the sale is highly probable, the asset (or disposal group) is available for immediate sale and management is committed to a plan to sell, which should take place within 12 months from the date in which this item was classified as held for sale.
Financial assets
IFRS 9 adopts a single approach to analysing and classifying all financial assets, including those containing embedded derivatives. Classification and measurement consider the business model of the financial asset and the contractual characteristics of cash flows that may be obtained from the asset. Depending on the characteristics of the instrument and business model adopted, the following three categories are determined:
(i) financial assets measured at amortised cost; (ii) financial assets measured at fair value, with the effects recognised in other comprehensive income (OCI); (iii) financial assets measured at fair value, with the effects recognised in profit or loss.
The financial asset is measured at amortised cost if both the following conditions are met:
- the business model holds the financial asset only to collect the relative cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that only represent the return on the financial asset.
According to the amortised cost method, the value of initial recognition is subsequently adjusted to take into account repayments of principal, any impairment and amortisation of the difference between the repayment value and value of initial recognition.
Amortisation is based on the internal effective interest rate that represents the rate which, at the time of initial recognition, makes the present value of expected cash flows equal to the value of initial recognition.
Receivables and other financial assets measured at amortised cost are presented in the statement of financial position net of the relative provision for write-downs.
Financial assets representing debt instruments whose business model covers the possibility of collecting contractual cash flows and realising capital gains from sale (the hold to collect and sell business model), are measured at fair value, recognising the effects in OCI.
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A financial asset representing a debt instrument that has not been measured at amortised cost or at FVTOCI is measured at fair value with the effects recognised in profit or loss.
Inventories
Inventories are recognised as the lower of the purchase or production cost, determined by assigning to products the costs directly incurred in addition to the portion of indirect costs reasonably attributable to the performance of production activities in normal production capacity conditions and the market value at the end of the reporting period.
The purchase or production cost is determined based on the weighted average cost method.
As regards raw materials and work in progress, the market value is represented by the estimated net realisable value of corresponding finished products minus completion costs. As regards finished products, the market value is represented by the estimated net realisable value (price lists minus the costs to sell and distribution costs).
The lower measurement based on market trends is eliminated in subsequent years, if the trends no longer exist.
Receivables
Trade receivables and other receivables are initially recognised at fair value and subsequently recognised based on the amortised cost method, net of the provisions for write-downs.
IFRS 9 establishes a new model for the impairment/write-down of these assets, with the aim of providing useful information for financial statement users on relative expected losses. According to this model, the Group measures receivables on an expected loss basis, replacing the provisions in IAS 39 which typically measure receivables on an incurred loss basis. For trade receivables, the Group adopts a simplified approach which does not require the recognition of periodic changes in credit risk, but instead the recognition of an expected credit loss (ECL) calculated over the ECL lifetime. In particular, the policy adopted by the Group involves the stratification of trade receivables in categories based on past due days, defining the allocation based on the historical experience of credit losses, adjusted to take into account specific forecasts referred to creditors and the economic environment.
Trade receivables are wholly written down in the absence of a reasonable expectation of their recovery, or in the case of inactive counterparties.
The carrying amount of the asset is reduced through the use of a provision for write-downs and the amount of the loss is recognised in the income statement.
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FactoringTreasury shares are recognised as a reduction of shareholders' equity. The original cost of treasury shares and revenues arising from subsequent sales are recognised as movements of shareholders' equity.
The Group sells a significant part of its trade receivables through factoring and in particular, sells trade receivables without recourse. Following these sales with the total and unconditional transfer to the transferee of the risks and benefits transferred, the receivables are eliminated from the financial statements.
In the case of transfers in which the risks and benefits are not transferred, the relative receivables remain in the statement of financial position until the transferred sum has been paid. In this case any advance payments collected by the factor are recognised under payables as amounts due to other lenders.
Interest and fees paid under contractual terms are recognised based on their nature.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, current bank accounts, deposits payable on demand and other high liquidity short term financial investments, which are readily convertible into cash and not affected by any major risk of a change in value. This item does not include bank overdrafts payable on demand.
Treasury shares
Financial liabilities
Financial liabilities include financial payables, including amounts payable for advances on the sale of receivables, as well as other financial liabilities, including financial derivatives and liabilities for assets recognised regarding finance lease agreements.
Pursuant to IFRS 9, they include trade and other payables.
Financial liabilities are recognised at fair value net of additional transaction costs. After
initial recognition, loans are measured at amortised cost, calculated using the effective interest rate. With the introduction of IFRS 9, in the event of the renegotiation of a financial liability that does not qualify as "extinction of the original debt", the difference between i) the carrying amount value of the pre-change liability and ii) the present value of the cash flows of the revised debt, discounted at the original rate (IRR), is accounted for in the income statement.
Financial liabilities hedged by derivatives are recognised at present value, according to procedures established for hedge accounting: gains and losses arising from subsequent measurements at present value are recognised in profit or loss and are offset by the effective portion of the loss and again arising from subsequent measurements at present value of the hedging instrument. On initial recognition, a liability may be designated at fair value recognised in profit or loss when this eliminates or considerably reduces a lack of uniformity in the measurement or recognition (sometimes defined as "asymmetric accounting") that would otherwise arise from the measurement of an asset or liability or recognition of relative profit and loss on different bases. This fair value designation is exclusively applied to some financial liabilities in currency subject to exchange risk hedging.
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Derivatives and measurement of hedging transactions
Group assets are primarily exposed to financial risks from changes in exchange and interest rates. The Group uses derivatives to hedge risks arising from changes in foreign currency and interest rates in particular irrevocable commitments and planned future transactions. The use of these instruments is regulated by written procedures on the use of derivatives, in line with risk management policies of the Group.
In compliance with IFRS 9, derivatives are initially recognised at fair value, represented by the initial amount and aligned with the fair value at subsequent ends of reporting periods. Financial derivatives are used solely for hedging purposes, in order to reduce exchange risk, interest rate risk and the risk of changes in the market price. Financial derivatives may qualify for hedge accounting, only when the hedging instrument is formally designated and documented, is expected to be highly effective and this effectiveness can be reliably measured and is highly effective throughout the reporting periods for which it is designated. When financial instruments may be measured by hedge accounting, the following accounting treatment is adopted:
•Fair value hedge: if a financial derivative is designated as a hedge of the exposure to changes in present value of a recognised asset or liability, attributable to a particular risk and could affect profit or loss, the gain or loss from the subsequent change in present value of the hedging instrument is recognised in profit or loss. The gain or loss on the hedged item, attributable to the hedged risk, changes the carrying amount of the hedged item and is recognised in profit or loss;
•Cash flow hedge: if an instrument is designated as a hedge of the exposure to variability in cash flows of a recognised asset or liability or of a highly probable forecast transaction which could affect profit or loss, the effective portion of the gain or loss on the financial instrument is recognised in the Statement of Comprehensive Income. Accumulated gain or loss is reversed from the Statement of Comprehensive Income and recognised in profit or loss in the same period as the hedging transaction. The gain or loss associated with hedging or the part of hedging which is ineffective, is immediately recognised in profit or loss. If the hedging instrument or hedging ceases, but the transaction covered by hedging is not yet realised, profits and losses, recognised in equity, are instead recognised in profit or loss when the transaction takes place. If the transaction to be hedged is deemed no longer probable, gains or losses deferred in the Statement of Comprehensive Income are recognised immediately in profit or loss.
If hedge accounting cannot be applied, gains or losses from measurement at present value of the financial derivative are immediately recognised in profit or loss.
Long-term provisions
The Group recognises provisions for risks and charges when it has a legal or implicit obligation to third parties and it is likely that Group resources will have to be used to meet the obligation and when the amount of the obligation itself can be reliably estimated.
Changes in estimates are recognised in profit or loss when the change takes place.
If the effect is considerable, provisions are calculated discounting future cash flows estimated at a discount rate gross of taxes, to reflect current market changes in the fair value of money and
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specifics risks of the liability.Payables are recognised at fair value and then measured based on the amortised cost method.
Retirement funds and employee benefits
Liabilities relative to employee benefits paid on or after termination of employment for defined benefit plans are determined separately for each plan, based on actuarial hypotheses estimating the amount of future benefits that employees will accrue at the reporting date (the "projected unit credit method”). Liabilities, recognised in the financial statements net of any assets serving the plan, are entered for the period when the right accrues. Liabilities are measured by independent actuaries.
The cost components of defined benefits are recognised as follows:
•the costs relative to services are recognised in the Income Statement under employee costs;
•net borrowing costs of liabilities or assets with defined benefits are recognised in the Income Statement as financial income/(borrowing costs), and are determined by multiplying the value of the net liability/(asset) by the rate used to discount the obligations, taking account of the payment of contributions and benefits during the period;
•the remeasurement components of net liabilities, which include actual gain and losses, the return on assets (excluding interest income recognised in the Income Statement) and any change in the limit of the assets, are immediately recognised as "Other comprehensive income (expense)”. These components must not be reclassified to the Income Statement in a subsequent period.
Termination benefits
Termination benefits are recognised at the closest of the following dates: i) when the Group can no longer withdraw the offer of such benefits and ii) when the Group recognises the costs of restructuring.
Tax assets and liabilities
Deferred taxes are determined based on the temporary differences between the value of the asset and liability and their tax value. Deferred tax assets are measured only to the extent to which it is likely that adequate future taxable sums exist against which the deferred taxes can be used. The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent to which it is no longer likely that sufficient taxable income exists allowing for all or a portion of said assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, considering the rates in effect or which are known to come into effect. Deferred taxes are directly recognised in profit or loss, except for items directly recognised in the statement of comprehensive income, in which case relative deferred taxes are also recognised in the statement of comprehensive income.
In the case of reserves of undistributed profits of subsidiaries and since the Group is able to control distribution times, deferred taxes are allocated for the reserves when distribution is expected in the future.
Deferred tax assets and liabilities are recognised at their net value when applied by the tax authorities and when they may be lawfully offset in the same tax jurisdiction.
Payables
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Reverse factoring
To guarantee suppliers easier credit conditions, the Group has established factoring agreements, and typically supply chain financing or reverse factoring agreements. Based on the agreements, suppliers may, at their discretion, transfer receivables due from the Group to a lender and collect amounts before maturity.
In some cases, payment terms are extended further in agreements between the supplier and the Group; these extensions may be interest or non-interest bearing.
The Group has established a specific policy to assess the nature of reverse factoring operations. Based on the content of agreements, which differs by area of origin, the Finance function, at a central level, analyses the clauses of agreements in qualitative terms, as well as legal aspects in order to assess regulatory references and the type of transaction assignment (as provided for by IAS 9 B3 3.1). In some cases, as payment terms have been extended, quantitative analysis is carried out to verify the materiality of changes in contract terms, based on quantitative tests as required by IAS 9 B3.3.6.
According to IAS 1 paragraph 54, trade and other payables must be shown separately from financial payables.
In this context, relations, for which a primary obligation with the supplier is maintained and any deferment, if granted, does not significantly change payment terms, are still classified as trade liabilities.
Revenue recognition
Based on the five-step model introduced by IFRS 15, the Group measures revenues after identifying the contracts with its customers and relative performance to provide (transfer of goods and/or services), after determining the transaction price it considers due in exchange for performance, and evaluating the procedure for satisfying the performance (performance at a given time versus performance over time).
In particular, the Group measures revenues only if the following requirements have been met (requirements to identify the "contract" with the customer):
(a) the parties to the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and are committed to perform their respective obligations; an agreement therefore exists between the parties that establishes the rights and obligations to be met, regardless of the form by which the agreement is made;
b) the Group can identify each party’s rights in relation to the goods or services to be transferred;
c) the Group can identify the payment terms for the goods or services to be transferred;
d) the contract has commercial substance; and
e) it is probable that the Group will receive the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer.
If the above requirements are not met, the relative revenues are recognised when: (i) the Group has already transferred control of the goods and/or provided the services to the customer and all or nearly all of the consideration from the customer has been received and cannot be reimbursed; or
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If the above requirements are instead met, the Group adopts the following rules for recognition.
Revenues for the sale of vehicles and spare parts are recognised when control of the good is transferred to the purchaser, or when the customer can use in full the good or substantially benefit from it.
Set-up grants are recognised in the financial statements when their payment is certain and are recognised in profit or loss based on the useful life of the asset for which the grants have been provided.
Operating grants are recognised in the financial statements, when their payment is certain and are recognised in profit or loss in relation to costs for which the grants have been provided.
Recognition of costs
The Group has chosen to adopt a scheme based on the classification of costs and expenses by nature.
Financial income
Financial income is recognised on an accrual basis and includes interest payable on invested funds, exchange differences receivable and income from financial instruments, when not offset in hedging transactions. Interest receivable is recognised in profit or loss when it matures, considering the actual return.
Borrowing costs
Dividends
Dividends recognised in profit or loss, from non-controlling interests, are recognised on an accrual basis, and therefore at the time when, following the resolution to distribute dividends by the subsidiary, the relative right to payment arises.
Income tax
Taxes represent the sum of current and deferred tax assets and liabilities.
Taxes allocated under accounting circumstances of individual companies included in the scope of consolidation are recognised in the consolidated financial statements, based on taxable income estimated in compliance with national laws in force at the end of the reporting period, considering applicable exemptions and tax receivables owing. Income taxes are recognised in the income statement, with the exception of those taxes relative to items directly deducted from or charged to
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Taxes are recorded under “Tax payables” net of advances and withheld taxes. Taxes due in the event of the distribution of reserves as withheld taxes recognised in the financial statements of individual Group companies are not allocated, as their distribution is not planned.
In 2022, for a further three years, the Parent Company signed up to the National Consolidated Tax Convention pursuant to Articles 117 to 129 of the Consolidated Income Tax Act (TUIR) of which IMMSI S.p.A. is the consolidating company, and to whom other IMMSI Group companies report. The consolidating company determines a single global income equal to the algebraic sum of taxable amounts (income or loss) realised by individual companies that opt for this type of group taxation.
The consolidating company recognises a receivable from the consolidated company which is equal to the corporate tax to be paid on the taxable income transferred by the latter. Whereas, in the case of companies reporting tax losses, the consolidating company recognises a payable related to corporate tax on the portion of loss actually used to determine global overall income, or calculated as a decrease of overall income for subsequent tax periods, according to the procedures in Article 84, based on the criterion established by the consolidation agreement.
Earnings per share
Basic earnings per share are calculated dividing the profit or loss attributable to shareholders of the Parent Company by the weighted average of ordinary shares in circulation during the period. Diluted earnings per share are calculated dividing the profit or loss attributable to shareholders of the Parent Company by the weighted average of ordinary shares in circulation adjusted to take account of the effects of all potential ordinary shares with a dilutive effect. Any shares related to the stock option plan are considered as shares that may be potentially issued. The adjustment to make to the number of stock options to calculate the number of adjusted shares is determined by multiplying the number of stock options by the subscription cost and dividing it by the share market price.
Use of estimates
The preparation of the financial statements and notes in compliance with IFRS requires management to make estimates and assumptions which have an impact on the values of assets and liabilities and on disclosure regarding contingent assets and liabilities at the end of the reporting period. Actual results could differ from estimates. Estimates are used to measure intangible assets tested for impairment (see § Impairment losses) and to identify provisions for bad debts, for obsolete inventories, amortisation and depreciation, impairment of assets, employee benefits, taxes, restructuring provisions and other allocations and funds. Estimates and assumptions are periodically revised and the effects of any change are immediately recognised in profit or loss.
In the current situation of global economic and financial instability, assumptions made as to future trends are marked by a considerable degree of uncertainty. Therefore the possibility in the next reporting period of results that differ from estimates cannot be ruled out, and these could require even significant adjustments which at present cannot be predicted or estimated.
The critical measurement processes and key assumptions used by the Group in adopting IFRS and that may have a significant impact on figures in the Consolidated Financial Statements or for which a risk exists that significant differences in value may arise in relation to the carrying amount of assets and liabilities in the future are summarised below.
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•Recoverable value of non-current assets
Non-current assets include Property, Plant and Equipment, Goodwill, Other Intangible Assets, Investment Property, Investments and Other Financial Assets. The Group periodically revises the carrying amount of non-current assets held and used and of assets held for sale, when facts and circumstances make this necessary. This analysis is carried out at least annually for Goodwill, and whenever facts and circumstances make it necessary. Analysis of the recoverability of the carrying amount of Goodwill is generally based on estimates of expected cash flows from the use or sale of the asset and adequate discount rates to calculate the fair value. When the carrying amount of a non-current asset is impaired, the Group recognises a write-down equal to the excess between the carrying amount of the asset and its recoverable value through use or sale, determined with reference to cash flows of the most recent company plans.
•Recoverability of deferred tax assets
The Group has deferred tax assets from deductible temporary differences and theoretical tax benefits from losses to be carried forward. In estimating recoverable value, the Group considered the results of the company plan in line with the results used for impairment testing. Net deferred tax assets allocated on this basis refer to temporary differences and tax losses which, to a significant extent, may be recovered over an indefinite period, longer than the time frame of the above-mentioned estimates. As regards Piaggio & C. SpA, which is party to the IMMSI Group National Consolidated Tax Convention, the recovery of deferred tax assets is related to results forecast for the company, and also to the taxable amounts of companies which are part of the IMMSI Group National Consolidated Tax Convention.
•Pension schemes and other termination benefits
Provisions for employee benefits and net borrowing costs are measured using an actuarial method that requires the use of estimates and assumptions to determine the net value of the obligation. The actuarial method considers financial parameters such as the discount rate and growth rates of salaries and considers the likelihood of potential future events occurring on the basis of demographic parameters such as relative mortality rates and employee resignations or retirements. The assumptions used for the measurement are explained in section 32 “Retirement funds and employee benefits”.
•Provisions for bad debts
The provision for bad debts reflects management's estimate of expected losses related to receivables. The Group adopts the simplified approach of IFRS 9 and recognises expected losses for all trade receivables based on the residual duration, defining the allocation based on the historical experience of credit losses, adjusted to take into account specific forecasts referred to creditors and the economic environment (Expected Credit Loss – ECL concept).
•Provision for obsolete inventories
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•Provision for product warranties
At the time of a product's sale, the Group makes provisions relative to estimated costs for the product warranty. This provision is estimated based on historical information about the nature, frequency and average cost of warranty jobs.
•Potential liabilities
The Group recognises a liability for ongoing legal disputes when it considers a financial outflow likely and when the amount of the losses arising therefrom may be reasonably estimated. If a financial outflow is possible, but the amount cannot be determined, it is recorded in the notes to the Financial Statements. The Group is subject to legal and tax proceedings concerning complex and difficult legal issues, of varying degrees of uncertainty, including facts and circumstances relative to each case, jurisdiction and different applicable laws. Given the uncertainties concerning these issues, it is hard to predict with certainty the outflow arising from these disputes and it is therefore possible that the value of provisions for legal proceedings and disputes of the Group may vary as a result of future developments in proceedings underway.
•Amortisation/Depreciation
The cost of assets is amortised/depreciated on a straight line basis over their estimated useful life, which for rights of use coincides with the assumed contract duration. The economic useful life of Group assets is determined by Directors at the time of purchase; the calculation is based on historical experience gained in years of operations and on knowledge of technological innovations that may make the asset obsolete and no longer economical.
The Group periodically evaluates technological and segment changes, in order to update the remaining useful life. This periodic updating could change the amortisation/depreciation period and therefore amortisation/depreciation charges of future years.
•Income tax
The Group is subject to different income tax laws in various jurisdictions. Group tax liabilities are determined based on management valuations referred to transactions of which the tax effect is not certain at the end of the reporting period. The Group recognises the liabilities that could arise from future inspections of tax authorities based on an estimate of taxes that will be due. If the outcome of inspections differs from management's estimates, significant effects on current and deferred taxes could arise.
Rounding off
All amounts in the tables and in these notes have been rounded off to thousands of Euros.
Climate Change Information
In a regulatory context in which the European Union has developed a strategy aimed at more sustainable economic models, all aimed at achieving the 2050 climate neutrality target, the Piaggio Group has initiated a process aimed at:
- the identification and analysis of risks and opportunities arising from climate change in line with
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the Paris Agreement (as more fully described in the 'Risks and Uncertainties' section of the Management Report and the Consolidated Non-Financial Statement), which could affect the adoption of applicable accounting standards;
- the assessment of potential impacts on financial statement valuations.
2.3 New accounting standards, amendments and interpretations applied as from 1 January 2022
The following IFRS accounting standards, amendments and interpretations were applied for the first time by the Group as of 1 January 2022:
•On 14 May 2020, the IASB published the following amendments entitled:
oAmendments to IFRS 3 Business Combinations: The amendments are intended to update the reference in IFRS 3 to the revised Conceptual Framework, without resulting in any changes to the requirements of the standard.
oAmendments to IAS 16 Property, Plant and Equipment: the purpose of the amendments is to disallow the deduction from the cost of property, plant and equipment of the amount received from the sale of goods produced in the test phase of the asset. These sales revenues and the related costs will therefore be recognised in the income statement.
oAmendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: the amendment clarifies that all costs directly attributable to the contract should be taken into account when estimating whether a contract is onerous. Accordingly, the assessment of whether a contract is burdensome includes not only incremental costs (e.g. the cost of direct material used in the work), but also all costs that the enterprise cannot avoid because it has entered into the contract (e.g. the portion of depreciation of machinery used to perform the contract).
oAnnual Improvements 2018-2020: amendments were made to IFRS 1 First-time Adoption of International Financial Reporting Standards, to IFRS 9 Financial Instruments, to IAS 41 Agriculture and to the Illustrative Examples of IFRS 16 Leases.
The application of the new amendments did not have a significant impact on values or on the financial statements.
2.4 Accounting standards, amendments and IFRS interpretations approved by the European Union that are not yet compulsory applicable and have not been adopted in advance by the Group as of 31 December 2022
•On 18 May 2017, the IASB published IFRS 17 - Insurance Contracts, which is intended to replace IFRS 4 - Insurance Contracts. The standard applies from 1 January 2023 but early
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•On 12 February 2021, the IASB published two amendments entitled “Disclosure of Accounting Policies—Amendments to IAS 1 and IFRS Practice Statement 2” and “Definition of Accounting Estimates—Amendments to IAS 8”. The amendments are intended to improve the disclosure on accounting policy so as to provide more useful information to investors and other primary users of financial statements as well as to help companies distinguish changes in accounting estimates from changes in accounting policy. The amendments will apply from 1 January 2023, but early application is permitted.
Directors do not expect a significant effect on the Group's consolidated financial statements from the adoption of these amendments.
•On 7 May 2021, the IASB published its “Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction”. The document clarifies how deferred taxes should be accounted for on certain transactions that may generate assets and liabilities of equal amounts, such as leases and decommissioning obligations. The amendments will apply from 1 January 2023, but early application is permitted.
2.5 Accounting standards amendments and interpretations not yet applicable
As of the date of this document, the competent bodies of the European Union have not yet completed the endorsement process necessary for the adoption of the amendments and principles described below.
•On 23 January 2020, the IASB published its “Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current'’ and on 31 October 2022 published its “Amendments to IAS 1 Presentation of Financial Statements: Non-Current Liabilities with Covenants”. The documents aim to clarify
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how to classify payables and other short- or long-term liabilities. The amendments enter into force on 1 January 2024; although earlier application is permitted.
•On 7 May 2021, the IASB published its “Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction”. The document clarifies how deferred taxes should be accounted for on certain transactions that may generate assets and liabilities of equal amounts, such as leases and decommissioning obligations. The amendments will apply from 1 January 2023, but early application is permitted.
•On 9 December 2021, the IASB published an amendment called “Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information”. The amendment is a transition option relating to comparative information about financial assets presented at the date of initial application of IFRS 17. The amendment is intended to avoid temporary accounting mismatches between financial assets and insurance contract liabilities, and thus to improve the usefulness of comparative information for readers of financial statements. The amendments will apply from 1 January 2023, together with the application of IFRS 17.
•On 22 September 2022, the IASB published its "Amendments to IFRS 16 Insurance contracts: Lease Liability in a Sale and Leaseback”. The document requires the seller-lessee to measure the lease liability arising from a sale & leaseback transaction so as not to recognise income or loss that relates to the retained right of use. The amendments will apply from 1 January 2024, but early application is permitted.
The Group will adopt these new standards, amendments and interpretations, based on the application date indicated, and will evaluate potential impact, when the standards, amendments and interpretations are endorsed by the European Union.
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B) SEGMENT REPORTINGCentral structures and development activities currently dealt with by EMEA and Americas, are handled by individual segments.
3. Operating segment reporting
The organisational structure of the Group is based on 3 Geographic Segments, involved in the production and sale of vehicles, spare parts and assistance in areas under their responsibility: EMEA and Americas, India and Asia Pacific 2W. Operating segments are identified by management, in line with the management and control model used.
In particular, the structure of disclosure corresponds to the structure of periodic reporting analysed by the Chairman and Chief Executive Officer for business management purposes.
Each Geographic Segment has production sites and a sales network dedicated to customers in that geographic segment. In particular:
•EMEA and the Americas have production sites and deal with the distribution and sale of two-wheeler and commercial vehicles;
•India has production sites and deals with the distribution and sale of two-wheeler and commercial vehicles;
•Asia Pacific 2W has production sites and deals with the distribution and sale of two-wheeler vehicles.
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INCOME STATEMENT/ NET CAPITAL EMPLOYED BY OPERATING SEGMENT
EMEA and Americas
India
Asia Pacific 2W
Total
2022
279.7
148.8
197.0
625.5
2021
262.2
138.4
135.4
536.0
Change
17.5
10.3
61.7
89.5
Sales volumes (unit/000)
Change %
6.7%
7.5%
45.6%
16.7%
2022
1,240.5
323.6
523.4
2,087.4
2021
1,104.4
231.2
333.1
1,668.7
Change
136.1
92.4
190.3
418.8
Turnover (in millions of Euros)
Change %
12.3%
40.0%
57.1%
25.1%
2022
925.1
278.9
328.6
1,532.5
2021
795.5
192.7
217.9
1,206.2
Cost to sell
Change
129.5
86.1
110.7
326.3
(million Euros)
Change %
16.3%
44.7%
50.8%
27.1%
2022
315.4
44.7
194.8
554.9
2021
308.9
38.4
115.2
462.5
Change
6.5
6.3
79.6
92.4
Gross margin (millions of Euros)
Change %
2.1%
16.3%
69.1%
20.0%
2022
298.1
2021
240.6
Change
57.5
EBITDA (millions of Euros)
Change %
23.9%
2022
158.7
2021
112.6
Change
46.2
EBIT (millions of Euros)
Change %
41.0%
2022
84.9
2021
60.1
Change
24.8
Net profit (millions of Euros)
Change %
41.4%
2022
426.2
145.7
214.1
786.0
2021
448.1
145.2
191.1
784.4
Change
(21.9)
0.5
23.0
1.6
Capital employed (millions of Euros)
Change %
-4.9%
0.3%
12.0%
0.2%
2022
1,072.8
287.2
351.4
1,711.4
2021
1,018.1
278.0
273.5
1,569.6
Change
54.7
9.2
77.9
141.8
Of which receivable (millions of Euros)
Change %
5.4%
3.3%
28.5%
9.0%
2022
646.6
141.5
137.3
925.4
2021
570.0
132.8
82.4
785.2
Change
76.6
8.7
54.9
140.2
Of which payable (millions of Euros)
Change %
13.4%
6.6%
66.6%
17.9%
239
C) INFORMATION ON THE CONSOLIDATED INCOME STATEMENT The item includes €/000 38,069 (€/000 31,331 in 2021) for purchases of two-wheelers from the Chinese subsidiary Zongshen Piaggio Foshan Motorcycle Co. Ltd., that are sold on European and Asian markets.
4. Net revenues
€/000 2,087,443
Group revenues mainly consist of income from the sale of 2-wheelers, light commercial 3- and 4-wheelers, and related spare parts and accessories.
Revenues are shown net of premiums recognised to customers (dealers).
This item does not include transport costs, which are recharged to customers (€/000 42,009) and invoiced advertising cost recoveries (€/000 5,680), which are posted under other operating income.
The revenues for disposals of Group core business assets essentially refer to the marketing of vehicles and spare parts on European and non-European markets.
Revenues by geographic segment
The breakdown of revenues by geographic segment is shown in the following table:
2022
2021
Changes
Amount
%
Amount
%
Amount
%
In thousands of Euros
EMEA and Americas
1,240,485
59.4
1,104,422
66.2
136,063
12.3
India
323,559
15.5
231,159
13.8
92,400
40.0
Asia Pacific 2W
523,399
25.1
333,108
20.0
190,291
57.1
Total
2,087,443
100.0
1,668,689
100.0
418,754
25.1
In 2022, net sales revenue increased by 25.1% compared to the previous year. For a more detailed analysis of trends in individual geographic segments, see comments in the Report on Operations.
5. Costs for materials
€/000 1,352,460
240
2022
2021
Change
In thousands of Euros
Raw, ancillary materials, consumables and goods
1,456,090
1,140,827
315,263
Change in inventories of raw, ancillary materials, consumables and goods
(30,853)
(53,202)
22,349
Change in work in progress of semifinished and finished products
(72,777)
(29,770)
(43,007)
Total
1,352,460
1,057,855
294,605
6. Costs for services and leases and rental costs
€/000 294,993
Below is a breakdown of this item:
2022
2021
Change
In thousands of Euros
Employee costs
13,935
10,653
3,282
External maintenance and cleaning costs
9,852
10,808
(956)
Energy and telephone costs
27,657
12,294
15,363
Postal expenses
998
1,082
(84)
Commissions payable
1,390
519
871
Advertising and promotion
44,307
53,257
(8,950)
Technical, legal and tax consultancy and services
27,990
22,432
5,558
Company boards operating costs
3,312
2,704
608
Insurance
5,173
4,580
593
Insurance from related parties
63
53
10
Outsourced manufacturing
30,908
26,921
3,987
Outsourced services
18,112
16,435
1,677
Transport costs (vehicles and spare parts)
58,112
48,423
9,689
Sundry commercial expenses
8,293
7,341
952
Expenses for public relations
3,730
2,737
993
Product warranty costs
1,476
1,241
235
Bank costs and factoring charges
6,553
5,662
891
Other services
12,666
12,800
(134)
Services by related parties
1,127
1,467
(340)
Lease and rental costs
15,981
10,650
5,331
Costs for leases and rentals of related parties
87
38
49
Total costs for services, leases and rental costs
294,993
257,902
37,091
Costs for services, lease and rental showed a growth of 14.4% compared to the previous year, consistent with the increase in sales volumes and substantially lower than the growth in revenues.
The item includes costs for temporary work of €/000 2,637.
241
7. Employee costs
€/000 264,614
Employee costs include €/000 2,106 relating to costs for redundancy plans mainly for the Pontedera and Noale production sites.
2022
2021
Change
In thousands of Euros
Salaries and wages
203,596
181,761
21,835
Social security contributions
49,001
46,322
2,679
Termination benefits
8,958
8,109
849
Other costs
3,059
2,529
530
Total
264,614
238,721
25,893
Average number
2022
2021
Change
Level
Senior management
111.3
108.9
2.4
Middle management
675.0
672.0
3.0
White collars
1,607.3
1,615.9
(8.6)
Blue collars
3,993.9
3,762.4
231.5
Total
6,387.6
6,159.2
228.4
Number as of
31 December 2022
31 December 2021
Change
Level
Senior management
116
108
8
Middle management
688
673
15
White collars
1,596
1,600
(4)
Blue collars
3,438
3,321
117
Total
5,838
5,702
136
As of 31 December 2022, Group employees totalled 5,838, 60up overall by 2.4% compared to 31 December 2021.
60 of which 663 on fixed-term contracts.
242
Changes in employee numbers in the two periods are compared below:
As of 31.12.21
Incoming
Leavers
Relocations
As of 31.12.22
Level
Senior management
108
5
(6)
9
116
Middle management
673
69
(96)
42
688
White collars
1,600
268
(224)
(48)
1,596
Blue collars
3,321
2,074
(1,954)
(3)
3,438
Total
5,702
2,416
(2,280)
0
5,838
Distribution of the workforce by geographic segment as of 31 December 2022
56%
23%
21%
EMEA and Americas
India
Asia Pacific 2W
243
8. Amortisation/depreciation and impairment costs
€/000 139,402
Amortisation and depreciation for the period, divided by category, is shown below:
2022
2021
Change
In thousands of Euros
Property, plant and equipment:
Buildings
5,159
4,910
249
Plant and machinery
23,076
21,887
1,189
Industrial and commercial equipment
15,143
11,538
3,605
Other assets
7,753
6,663
1,090
Total depreciation of property, plant and equipment
51,131
44,998
6,133
Impairment costs of property, plant and equipment
175
(175)
Total depreciation of property, plant and equipment and impairment costs
51,131
45,173
5,958
2022
2021
Change
In thousands of Euros
Intangible assets:
Development costs
32,068
31,504
564
Industrial Patent and Intellectual Property Rights
44,030
41,616
2,414
Concessions, licences, trademarks and similar rights
66
61
5
Other
118
201
(83)
Total amortisation of intangible assets
76,282
73,382
2,900
Impairment costs of intangible assets
1,990
1,274
716
Total amortisation of intangible assets and impairment costs
78,272
74,656
3,616
2022
2021
Change
In thousands of Euros
Rights of use:
Land
194
180
14
Buildings
6,525
5,197
1,328
Plant and equipment
856
857
(1)
Equipment
318
318
Other assets
2,106
1,971
135
Total depreciation of rights of use
9,999
8,205
1,794
As indicated in more detail in the section on intangible assets, impairment testing of goodwill confirmed the full recoverability of values indicated in the financial statements.
Impairment costs of intangible assets refer to development projects for two new vehicles, for which production plans were reviewed in the context of the Group's Business Plan.
244
9. Other operating income
€/000 150,763
This item consists of:
2022
2021
Change
In thousands of Euros
Operating grants
10,402
4,488
5,914
Rent receipt
8
5,634
(5,626)
Capital gains on the disposal of assets
216
352
(136)
Sale of miscellaneous materials
1,567
1,302
265
Recovery of transport costs
42,009
33,997
8,012
Recovery of advertising costs
5,680
5,109
571
Recovery of sundry costs
4,531
3,919
612
Compensation
911
1,188
(277)
Compensation for quality-related events
407
8,726
(8,319)
Licence rights and know-how
4,088
2,534
1,554
Sponsorship
5,364
2,749
2,615
Other income
15,926
24,360
(8,434)
Other Group income
419
500
(81)
Total
150,763
152,237
(1,474)
•€/000 3,349 of tax credits recognised mainly for electricity and gas consumption;
•€/000 1,587 for public and EU grants to support research projects and government grants related to Research and Development, Technological Innovation and Design and Aesthetic Creation activities. These are recognised in profit or loss, with reference to the amortisation and depreciation of capitalised costs for which the grants were received;
•€/000 1,721 in export grants received by the Indian subsidiary;
•€/000 2,994 in grants to participate in MotoGP races paid by the organisers;
•€/000 416 of funding for professional training provided by trade associations;
•€/000 335 in grants for plant recognised on investments in tangible assets and Industry 4.0.
The reduction in the item Fee Income is related to the Group's decision to participate directly in the MotoGP Championship in 2022 and no longer outsource management to external teams.
Revenues include €/000 3,727 in subsidies from the Indian government given to the affiliate Piaggio Vehicles Private Limited for investments made in during previous years and recognised in the income statement in proportion to the depreciation and amortisation of assets for which the grant was given. The recognition of these amounts is supported by appropriate documentation received from the Government of India, certifying that the entitlement has been recognised and therefore that collection is reasonably certain.
245
10. Net reversals (impairment) of trade and other receivables
€/000 (2,423)
This item consists of:
2022
2021
Change
In thousands of Euros
Reversals
384
(384)
Losses on receivables
(30)
(383)
353
Write-downs of receivables in working capital
(2,393)
(1,511)
(882)
Total
(2,423)
(1,510)
(913)
11. Other operating costs
€/000 25,574
This item consists of:
2022
2021
Change
In thousands of Euros
Provision for future risks
3,171
4,303
(1,132)
Provisions for product warranties
11,374
10,837
537
Duties and taxes not on income
5,586
4,986
600
Various subscriptions
1,312
1,171
141
Capital losses from disposal of assets
24
29
(5)
Miscellaneous expenses
3,564
3,004
560
Costs for ETS certificates
543
543
Total sundry operating costs
11,029
9,190
1,839
Total
25,574
24,330
1,244
The increase is partly due to expenses related to the purchase of ETS certificates. In fact, the Pontedera plant in Italy falls within the scope of the "Emissions Trading" Directive (Directive 2003/87/EC), which assigns a generally lower number of emission permits compared to the emissions recorded in the reference year, with the Parent Company having to purchase quotas in order to achieve compliance on the emissions market.
12. Income/(loss) from investments
€/000 (892)
Net income from investments comprises the following:
•€/000 (925) relative to the portion of loss attributable to the Group from the Zongshen Piaggio Foshan Motorcycle Co. Ltd. joint venture, valued at equity;
•€/000 18 relative to the portion of income attributable to the Group of the associated company Pontech valued at equity;
•€/000 15 dividends received from the minority interest in Ecofor Service Pontedera.
246
13. Net financial income (borrowing costs)
€/000 (30,629)
Below is the breakdown of borrowing costs and income:
2022
2021
Change
In thousands of Euros
Income:
- Interest receivable from clients
308
14
294
- Bank and post office interest payable
1,215
546
669
- Interest payable on financial receivables
-
201
(201)
- Income from fair value measurements
13
-
13
- Other
-
41
(41)
Total financial income
1,536
802
734
Expenses:
- Interest payable on bank accounts
2,536
2,688
(152)
- Interest payable on debenture loans
10,682
11,437
(755)
- Interest payable on bank loans
6,904
5,598
1,306
- Interest payable to other lenders
4,080
2,619
1,461
- Interest to suppliers
1,257
569
688
- Cash discounts to clients
537
801
(264)
- Bank charges on loans
986
1,408
(422)
- Income from fair value measurements
17
(17)
- Borrowing costs from discounting back termination and
termination benefits
522
53
469
- Interest on rights of use (finance leases)
98
93
5
- Interest on rights of use (operating leases)
1,294
764
530
- Interest to parent companies on rights of use
80
107
(27)
- Other
40
24
16
Total borrowing costs
29,016
26,178
2,838
Costs capitalised on property, plant and equipment
(644)
(250)
(394)
Costs capitalised on intangible assets
(1,647)
(1,031)
(616)
Total Capitalised Costs
(2,291)
(1,281)
(1,010)
Total net borrowing costs
26,725
24,897
1,828
Exchange gains
55,350
26,324
29,026
Exchange losses
(60,790)
(21,767)
(39,023)
Total net exchange gains/(losses)
(5,440)
4,557
(9,997)
247
Net financial income (borrowing costs)
(30,629)
(19,538)
(11,091)
The balance of financial income (expenses) for 2022 was negative by €/000 30,629. The poorer performance compared to the corresponding period of the previous year (€/000 19,538) is essentially due to foreign-exchange losses, affected by the exceptional volatility of forex markets. Net interest income rose modestly due to the impact of the rate hike limited to the fourth quarter.
During 2022, borrowing costs for €/000 2,291 were capitalised (in the previous year, borrowing costs for €/000 1,281 had been capitalised).
The item "Income taxes" is detailed below:
2022
2021
Change
In thousands of Euros
Current taxes
43,615
40,343
3,272
Deferred tax assets/liabilities
(1,285)
(6,719)
5,434
Total
42,330
33,624
8,706
In 2022 the impact of taxes on profit before tax was estimated as equal to 33.3% (35.9% in 2021).
The decrease is mainly related to the growth of income generated in Vietnam.
The item current taxes includes net income from the Consolidated Tax Convention of €/000 4,793.
248
2022
2021
In thousands of Euros
Profit before tax
127,219
93,678
Theoretical rate
24.00%
24.00%
Theoretical income taxes
30,533
22,483
Effect arising from tax differences and the difference between foreign tax rates and the theoretical rate
(2,354)
(520)
Tax effect arising from losses for the year not offset
8,311
5,514
Tax effect arising from deferred taxes
(1,285)
(6,719)
Taxes on income generated abroad
5,817
6,282
Expenses/(income) from the Consolidated Tax Convention
(4,793)
(3,817)
Regional production tax and other local taxes
3,484
2,892
Other differences
2,617
7,509
Income taxes recognised in the financial statements
42,330
33,624
Theoretical tax rates were determined applying the corporate tax rate in effect in Italy (24.0%) to profit before tax. The effect arising from the rate of regional production tax and other taxes paid abroad was determined separately, as these taxes are not calculated on the basis of profit before tax.
15. Gain/(loss) from assets held for disposal or sale
€/000 0
At the end of the reporting period, there were no gains or losses from assets held for disposal or sale.
16. Earnings per share
Earnings per share are calculated as follows:
2022
2021
Net profit
€/000
84,889
60,054
Earnings attributable to ordinary shares
€/000
84,889
60,054
Average number of ordinary shares in circulation
355,911,520
357,114,186
Earnings per ordinary share
€
0.239
0.168
Adjusted average number of ordinary shares
355,911,520
357,114,186
Diluted earnings per ordinary share
€
0.239
0.168
249
D) INFORMATION ON FINANCIAL ASSETS AND LIABILITIES
17. Intangible assets
€/000 729,524
Intangible assets went up overall by €/000 9,315 mainly due to investments for the period which were only partially balanced by amortisation for the period.
Increases mainly refer to the capitalisation of development costs for new products and new engines, as well as the purchase of software.
During 2022, borrowing costs for €/000 1,647 were capitalised.
The table below shows the breakdown of intangible assets as of 31 December 2022 and 31 December 2021, as well as movements during the period.
In thousands of Euros
Situation at 31.12.2020
Movements for the period
Situation at 31.12.2021
Net value
Investments
Transitions in the period
Amortisation
Disposals
Write-downs
Exchange differences
Other
Net value
Development costs
91,623
41,906
0
(31,504)
0
(717)
1,960
(6)
103,262
In service
49,908
18,630
42,303
(31,504)
(717)
1,533
0
80,153
Assets under development and advances
41,715
23,276
(42,303)
0
427
(6)
23,109
Patent rights
127,251
55,136
0
(41,616)
(39)
(557)
42
12
140,229
In service
55,373
24,654
65,436
(41,616)
(37)
(557)
38
12
103,303
Assets under development and advances
71,878
30,482
(65,436)
(2)
0
4
0
36,926
Trademarks
29,539
0
0
(61)
0
0
0
0
29,478
In service
29,539
(61)
29,478
Goodwill
446,940
0
0
0
0
0
0
0
446,940
In service
446,940
446,940
Other
293
219
0
(201)
(24)
0
13
0
300
In service
293
141
28
(201)
(24)
10
247
Assets under development and advances
0
78
(28)
0
3
53
Total
695,646
97,261
0
(73,382)
(63)
(1,274)
2,015
6
720,209
In service
582,053
43,425
107,767
(73,382)
(61)
(1,274)
1,581
12
660,121
Assets under development and advances
113,593
53,836
(107,767)
0
(2)
0
434
(6)
60,088
250
In thousands of Euros
Situation at 31.12.2021
Movements for the period
Situation at 31.12.2022
Net value
Investments
Transitions in the period
Amortisation
Disposals
Write-downs
Exchange differences
Other
Net value
Development costs
103,262
41,145
0
(32,068)
0
(1,990)
(1,027)
0
109,322
In service
80,153
16,525
17,075
(32,068)
0
(1,708)
(684)
0
79,293
Assets under development and advances
23,109
24,620
(17,075)
0
0
(282)
(343)
0
30,029
Patent rights
140,229
46,246
0
(44,030)
(24)
0
(47)
3
142,377
In service
103,303
19,195
22,912
(44,030)
(24)
0
(26)
0
101,330
Assets under development and advances
36,926
27,051
(22,912)
0
0
0
(21)
3
41,047
Trademarks
29,478
0
0
(66)
0
0
0
0
29,412
In service
29,478
0
0
(66)
0
0
0
0
29,412
Goodwill
446,940
0
0
0
0
0
0
0
446,940
In service
446,940
0
0
0
0
0
0
0
446,940
Other
300
1,241
0
(118)
0
0
(20)
70
1,473
In service
247
53
18
(118)
0
0
2
70
272
Assets under development and advances
53
1,188
(18)
0
0
0
(22)
0
1,201
Total
720,209
88,632
0
(76,282)
(24)
(1,990)
(1,094)
73
729,524
In service
660,121
35,773
40,005
(76,282)
(24)
(1,708)
(708)
70
657,247
Assets under development and advances
60,088
52,859
(40,005)
0
0
(282)
(386)
3
72,277
Development costs
€/000 109,322
Development costs include costs for products and engines referable to projects for which, as regards the period of the useful life of the asset, revenues are expected that allow for at least the costs incurred to be recovered. This item also includes assets under development for €/000 30,029 that represent costs for which the conditions for capitalisation exist, but in relation to products that will go into production in future years.
With regard to development expenses, new projects capitalised in 2022 refer to the study of new vehicles and new engines, which are the flagship products of the 2022-2024 range.
Borrowing costs attributable to the development of products which require a considerable period of time to be realised are capitalised as a part of the cost of the actual assets. Development costs included under this item are amortised on a straight line basis over a period of 3 to 5 years (lead products), in consideration of their remaining useful life.
Industrial patent rights and know-how
€/000 142,377
This item includes assets under construction for €/000 41,047.
Know-how costs mainly refer to new techniques and methods of calculation, design and production developed by the Group.
The costs of industrial patent rights are mainly developed internally.
251
Write-downs concern projects for which production plans were revised as part of the update to the Business Plan.
Trademarks, concessions and licences
€/000 29,412
The item Concessions, Licences, Trademarks and similar rights, is broken down as follows:
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Guzzi trademark
9,750
9,750
0
Aprilia trademark
19,158
19,158
0
Minor trademarks
10
15
(5)
Foton licence
494
555
(61)
Total
29,412
29,478
(66)
The Moto Guzzi and Aprilia brands, as they have an indefinite useful life as from 2021, are no longer amortised, but are tested at least annually for impairment, in accordance with IAS 36 “Impairment of Assets” as part of the impairment test described in more detail in the section “Goodwill”.
The Foton licence is amortised over a 10-year period expiring in 2031.
Goodwill
€/000 446,940
Goodwill derives from the greater value paid compared to the corresponding portion of the subsidiaries shareholders’ equity at the time of purchase, less the related accumulated amortisation until 31 December 2003.
Goodwill was attributed to cash generating units.
EMEA and AMERICAS
INDIA
ASIA PACIFIC 2W
TOTAL
In thousands of Euros
31 12 2022
305,311
109,695
31,934
446,940
31 12 2021
305,311
109,695
31,934
446,940
The organisational structure of the Group is based on 3 Geographic Segments (CGUs), involved in the production and sale of vehicles, relative spare parts and assistance in areas under their responsibility: EMEA and Americas, India and Asia Pacific 2W. Each Geographic Segment has production sites and a sales network dedicated to customers in that geographic segment. Central structures and development activities currently dealt with by EMEA and Americas, are handled by individual CGUs.
As specified in the section on accounting standards, from 1 January 2004 goodwill is no longer amortised, but is tested annually or more frequently for impairment if specific events or changed circumstances indicate the possibility of it having been impaired, in accordance with the provisions of IAS 36 Impairment of Assets (impairment test).
252
The recoverability of goodwill is verified at least once per year (as of 31 December), even in the absence of indicators of impairment losses.
The main assumptions used by the Group to determine future cash flows, relative to a four-year period, and the consequent recoverable value (value in use) refer to:
a. a hypothesis of estimated cash flows over a four-year period, inferred from budget data for 2023, approved by the Board of Directors of Piaggio & C. S.p.A. on 26 January 2023, supplemented by forecast data for the period 2024-2026, approved by the Board of Directors of Piaggio & C. S.p.A. on 24 February 2023, along with an impairment test;
b. the WACC discount rate;
c. in addition to the period, a growth rate (g rate) has been estimated.
In particular, for discounting cash flows, the Group has adopted a discount rate (WACC) which differs based on different cash generating units. This reflects market valuations of the fair value of money and takes account of specific risks of activities and the geographic segment in which the cash generating unit operates.
In the future cash flows discounting model, a terminal value is entered at the end of the cash flow projection period, to reflect the residual value each cash-generating unit should produce. The terminal value represents the current value, at the last year of the projection, of all subsequent cash flows calculated as perpetual income, and was determined using a growth rate (g rate) which differed by CGU, to reflect the different growth potentials of each CGU.
EMEA and Americas
Asia Pacific 2W
India
2022
WACC
7.3%
8.3%
10.6%
G
1.0%
2.0%
2.0%
Growth rate during the Plan period
3.5%
5.1%
21.9%
2021
WACC
5.2%
7.4%
10.1%
G
1.0%
2.0%
2.0%
Growth rate during the Plan period
4.4%
6.5%
22.9%
253
The medium-/long-term growth rate (g rate) for determining the Terminal Value of each CGU was considered as reasonable and prudent, in the light of:
• analysts' expectations for the Piaggio Group (source: most recent Analyst Reports);
• the long-term real GDP growth trend expected for main countries where the Group operates (source: Economist Intelligence Unit – EIU).
The WACC was determined in continuity with the previous year, and showed growth for all CGUs, in line with the changed reference scenarios.
The growth rate over the Plan period was determined using the expected trend of the sector as a reference, and for India, the Group forecast an increase in the market share currently held in the light commercial vehicles segment.
Analyses did not identify any impairment losses. Therefore no impairment was reflected in consolidated data as of 31 December 2022.
In addition, and on the basis of information in the document produced jointly by the Bank of Italy, Consob and Isvap no. 2 of 6 February 2009, the Group conducted sensitivity analysis of test results in relation to changes in basic assumptions (use of the growth rate in producing the terminal value and discount rate) which affect the value in use of cash generating units. In the case of a positive or negative change of 0.5% of the WACC and G used, analyses would not identify impairment losses.
In all cases, the value in use of the Group was higher than the net carrying amount tested.
In addition, with reference to the Indian CGU, which began to show signs of recovery during the second half of the year, the Group performed an additional sensitivity analysis considering certain scenarios characterised by the continuing effects of the pandemic. The assumed scenarios envisage a reduction in volumes throughout the plan period (2023-2026) compared to the baseline scenario.
In particular, the following alternative hypotheses were considered:
•a reduction of about 16% throughout the entire plan period (2023-2026);
•a decrease from 25% in 2023 to about 12% in 2026.
In both scenarios analysed, despite a strong penalisation, the value in use exceeds the net carrying amount for the Indian CGU, even though the surplus is close to breakeven, with the value in use and the carrying amount balancing out.
In addition, as explained further in the Annual Report and the Non-Financial Statement, the Group has carried out an analysis, and assessed the risks and short- and medium/long-term opportunities related to climate change and the reduction of polluting emissions.
In this regard, it should be noted that although the Piaggio Group has not set specific quantitative targets in terms of reducing greenhouse gas emissions at present, it has considered the impact on investments, costs and cash flows in the process of preparing accounting estimates.
Therefore, in preparing the 2023 budget and the 2024-2026 plan, management took the following aspects into account:
254
•Research into new technologies with a view to future mobility in the context of a new urbanisation;
•A significant increase in investments in electric vehicles (2-3-4 wheelers);
•Investments in the active and passive safety of all vehicles;
•Inclusion of energy transition costs.
The analyses conducted during impairment testing did not identify aspects making write-downs of assets necessary.
Given that the recoverable value was determined based on estimates, the Group cannot ensure that there will be no impairment losses of goodwill in future financial periods.
Given the current market uncertainty, the various factors used in processing estimates could require revision; the Piaggio Group will constantly monitor these factors as well as the existence of impairment losses.
The increase in this item compared to the previous year is related to the capitalisation of expenses for updating the SAP management programme.
255
18. Property, plant and equipment
€/000 291,366
Property, plant and equipment mainly refer to Group production facilities in Pontedera (Pisa), Noale and Scorzè (Venice), Mandello del Lario (Lecco), Baramati (India), Vinh Phuc (Vietnam) and Jakarta (Indonesia).
During the period, the item showed an increase of €/000 8,325 mainly due to investments in the period and the effects of the devaluation of the rupee and the dong, which more than offset depreciation.
The increases mainly relate to the construction of a new CKD vehicle assembly factory61 in Indonesia and moulds for new vehicles launched during the period.
Borrowing costs attributable to the construction of assets which require a considerable period of time to be ready for use are capitalised as a part of the cost of the actual assets. During 2022, borrowing costs for €/000 644 were capitalised.
The table below shows the breakdown of property, plant and equipment as of 31 December 2022 and 31 December 2021, as well as movements during the period.
In thousands of Euros
Situation at 31.12.2020
Movements for the period
Situation at 31.12.2021
Net value
Investments
Transitions in the period
Depreciation
Disposals
Write-downs
Exchange differences
Other
Net value
Land
27,640
3,737
0
0
0
0
173
0
31,550
In service
27,640
3,737
173
31,550
Buildings
84,614
4,578
0
(4,910)
0
0
1,645
5
85,932
In service
82,646
674
1,046
(4,910)
1,525
3
80,984
Assets under construction and advances
1,968
3,904
(1,046)
120
2
4,948
Plant and machinery
108,991
19,811
0
(21,887)
(72)
0
5,044
4
111,891
In service
86,436
6,206
28,530
(21,887)
(48)
4,535
0
103,772
Assets under construction and advances
22,555
13,605
(28,530)
(24)
509
4
8,119
Equipment
34,270
18,566
0
(11,538)
(70)
(175)
4
771
41,828
In service
18,220
11,903
15,324
(11,538)
(70)
(175)
0
771
34,435
Assets under construction and advances
16,050
6,663
(15,324)
4
7,393
Other assets
9,101
10,195
0
(6,663)
(261)
0
239
(771)
11,840
In service
7,610
7,224
1,297
(6,663)
(201)
233
9,500
Assets under construction and advances
1,491
2,971
(1,297)
(60)
6
(771)
2,340
Total
264,616
56,887
0
(44,998)
(403)
(175)
7,105
9
283,041
In service
222,552
29,744
46,197
(44,998)
(319)
(175)
6,466
774
260,241
Assets under construction and advances
42,064
27,143
(46,197)
0
(84)
0
639
(765)
22,800
61 CKD Completely Knocked Down.
256
In thousands of Euros
Situation at 31.12.2021
Movements for the period
Situation at 31.12.2022
Net value
Investments
Transitions in the period
Depreciation
Disposals
Write-downs
Exchange differences
Other
Net value
Land
31,550
6,075
0
0
0
0
(412)
0
37,213
In service
31,550
6,075
0
0
0
(412)
0
37,213
Buildings
85,932
11,738
0
(5,159)
(3)
0
(878)
(1,800)
89,830
In service
80,984
1,887
9,575
(5,159)
0
(910)
0
86,377
Assets under construction and advances
4,948
9,851
(9,575)
0
(3)
32
(1,800)
3,453
Plant and machinery
111,891
21,198
0
(23,076)
(77)
0
(2,163)
1,201
108,974
In service
103,772
4,169
11,008
(23,076)
(22)
(1,834)
1,204
95,221
Assets under construction and advances
8,119
17,029
(11,008)
0
(55)
(329)
(3)
13,753
Equipment
41,828
14,530
0
(15,143)
0
0
(88)
618
41,745
In service
34,435
10,895
7,646
(15,143)
0
(69)
618
38,382
Assets under construction and advances
7,393
3,635
(7,646)
0
0
(19)
0
3,363
Other assets
11,840
9,502
0
(7,753)
(20)
0
58
(23)
13,604
In service
9,500
7,961
689
(7,753)
(5)
57
(23)
10,426
Assets under construction and advances
2,340
1,541
(689)
0
(15)
1
0
3,178
Total
283,041
63,043
0
(51,131)
(100)
0
(3,483)
(4)
291,366
In service
260,241
30,987
28,918
(51,131)
(27)
(3,168)
1,799
267,619
Assets under construction and advances
22,800
32,056
(28,918)
0
(73)
(315)
(1,803)
23,747
Land
€/000 37,213
Land is not depreciated.
Land mainly refers to Group production facilities in Pontedera (Pisa), Noale and Scorzè (Venice) and Mandello del Lario (Lecco) and Jakarta (Indonesia). The item also includes land in Pisa, with a warehouse. The increase compared to the previous year is related to the land on which a new 2-wheeler CKD assembly plant in Indonesia was built.
Buildings
€/000 89,830
The item Buildings, net of accumulated depreciation, comprises:
As of 31 December
2022
As of 31 December 2021
Change
In thousands of Euros
Industrial buildings
85,292
79,844
5,448
Ancillary buildings
240
245
(5)
Light constructions
845
895
(50)
Assets under construction
3,453
4,948
(1,495)
Total
89,830
85,932
3,898
Industrial buildings refer to Group production facilities in Pontedera (Pisa), Noale and Scorzè (Venice), Mandello del Lario (Lecco), Baramati (India), Vinh Phuc (Vietnam) and Jakarta (Indonesia). The item also includes a building at Pisa used as a warehouse.
Buildings are depreciated on a straight-line basis using rates considered suitable to represent their useful life.
257
Plant and machinery
€/000 108,974
The item Plant and machinery, net of accumulated depreciation, consists of:
As of 31 December
2022
As of 31 December 2021
Change
In thousands of Euros
General plants
64,370
73,397
(9,027)
Automatic machinery
8,529
8,914
(385)
Furnaces and sundry equipment
621
631
(10)
Other
21,701
20,830
871
Assets under construction
13,753
8,119
5,634
Total
108,974
111,891
(2,917)
Plant and machinery refer to Group production facilities in Pontedera (Pisa), Noale and Scorzè (Venice), Mandello del Lario (Lecco), Baramati (India), Vinh Phuc (Vietnam) and Jakarta (Indonesia).
The “Other” item mainly includes non-automatic machinery and robotic centres.
Equipment
€/000 41,745
The item Equipment mainly refers to production equipment at Pontedera (Pisa), Noale and Scorzè (Venice), Mandello del Lario (Lecco), Baramati (India), Vinh Phuc (Vietnam) and Jakarta (Indonesia). Main investments in equipment concerned moulds for new vehicles launched during the year or scheduled to be launched in the first half of next year, moulds for new engines and specific equipment for assembly lines, including the lines of the new plant in Indonesia.
As of 31 December
2022
As of 31 December 2021
Change
In thousands of Euros
Industrial equipment
37,929
34,429
3,500
Commercial equipment
453
6
447
Assets under construction
3,363
7,393
(4,030)
Total
41,745
41,828
(83)
Other plant, property and equipment
€/000 13,604
The item Other assets comprises:
As of 31 December
2022
As of 31 December 2021
Change
In thousands of Euros
EDP systems
2,316
2,405
(89)
Office furniture and equipment
2,545
2,367
178
Vehicles
1,557
1,359
198
Others
4,008
3,369
639
Assets under construction
3,178
2,340
838
Total
13,604
11,840
1,764
258
Warranties
As of 31 December 2022, the Group had no buildings with mortgages.
19. Rights of use
This note provides information regarding leases as a lessee. The Group has no existing lease agreements as lessor.
Assets for rights of use
€/000 36,861
The item “Rights of use" includes operating lease agreements, finance lease agreements and lease instalments paid in advance for the use of property.
The Group has stipulated rental/hire contracts for offices, plants, warehouses, company accommodation, cars and forklift trucks. The rental/lease agreements are typically for a fixed duration, but extension options are possible.
These agreements may also include service components. The Group opted to include only the component relative to the rental/hire payment in the recognition of rights of use.
The rental/hire agreements do not have any covenants to be met, nor require guarantees to be provided in favour of the lessor.
As of 31 December 2022
As of 31 December 2021
Operating leases
Finance leases
Rental/hire payments made in advance
Total
Operating leases
Finance leases
Rental/hire payments made in advance
Total
Change
In thousands of Euros
Land
7,049
7,049
7,212
7,212
(163)
Buildings
18,513
146
18,659
12,970
241
13,211
5,448
Plant and machinery
7,275
7,275
8,131
8,131
(856)
Equipment
1,661
1,661
0
1,661
Other assets
2,195
22
2,217
2,123
50
2,173
44
Total
22,369
7,297
7,195
36,861
15,093
8,181
7,453
30,727
6,134
Land
Buildings
Plant and machinery
Equipment
Other assets
Total
In thousands of Euros
As of 31 12 2021
7,212
13,211
8,131
0
2,173
30,727
Increases
134
12,309
1,979
2,258
16,680
Amortisation/Depreciation
(194)
(6,525)
(856)
(318)
(2,106)
(9,999)
Decreases
(248)
(101)
(349)
Exchange differences
(103)
(88)
(7)
(198)
Other changes
0
Movements in 2022
(163)
5,448
(856)
1,661
44
6,134
As of 31 12 2022
7,049
18,659
7,275
1,661
2,217
36,861
259
Financial liabilities for rights of use
€/000 28,905
The composition of and changes in financial liabilities for rights of use are illustrated in Note 41 “Financial liabilities and liabilities for rights of use“, to which reference should be made.
Amounts recognised in the income statement
The Income Statement includes the following amounts relating to lease agreements:
Note
2022
2021
Change
In thousands of Euros
Depreciation of rights of use
8
9,999
8,205
1,794
Financial charges for rights of use
13
1,472
964
508
Rental payments (not IFRS 16)
6
16,068
10,688
5,380
In 2022, leasing agreements subject to IFRS 16 resulted in a cash outflow of €/000 10,263.
Deferred tax assets and liabilities are recognised at their net value when they may be offset in the same tax jurisdiction.
Their breakdown was as follows:
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Deferred tax assets
79,909
80,651
(742)
Deferred tax liabilities
(8,298)
(8,172)
(126)
Total
71,611
72,479
(868)
The main effects recognised in the year are attributable to changes in temporary differences and tax losses.
As part of measurements to define deferred tax assets, the Group mainly considered the following:
•tax regulations of countries where it operates, the impact of regulations in terms of temporary differences and any tax benefits arising from the use of previous tax losses;
•taxable income expected in the medium term for each single company and the economic and tax impact. In this framework, the plans from the reprocessing of the Piaggio Group plan were approved by the Board of Directors on 24 February 2023. As regards Piaggio & C. SpA, which is part of the National Consolidated Tax Convention of the IMMSI Group, the recovery of deferred tax assets is related to and confirmed by company forecasts and by taxable amounts of companies that are part of the above convention, as indicated in the long-term plans approved by their respective Boards;
260
•the tax rate in effect in the year when temporary differences occur.
Based on a prudential approach, it was decided to not wholly recognise the tax benefits arising from losses that can be carried over and from temporary differences.
261
Amount of temporary differences
Tax rate
Tax effect
In thousands of Euros
7,722
24%/27.9%
2,152
2,459
27.90%
686
Provisions for risks
10,181
2,838
14,326
27.90%
3,997
1,330
24.38%
324
563
22.00%
124
483
25.00%
121
406
33.58%
136
156
22.00%
34
Provision for product warranties
17,264
4,736
16,537
24.00%
3,969
1,575
22.00%
346
145
24.00%
35
124
24.38%
30
15
33.58%
5
Provisions for bad debts
18,396
4,385
21,177
27.90%
5,908
3,059
20.00%
612
1,242
24.38%
303
466
22.00%
103
262
25.00%
66
119
33.58%
40
40
27.90%
11
31
22.00%
7
Provisions for obsolete stock
26,396
7,050
37,752
24%/27.9%
10,438
25,646
20.00%
5,129
14,189
24%/27.9%
3,414
10,923
25.00%
2,731
10,477
24.384%
2,555
692
22.00%
152
400
33.58%
134
394
27.90%
110
374
25.17%
94
326
17.00%
55
203
25.00%
51
207
22%/24%
47
217
18.00%
39
63
31.16%
20
26
30.00%
8
34
15.00%
5
Offsetting of Deferred Tax Liabilities
(22,153)
10%/27.9%
(8,298)
Other changes
79,770
16,684
Total for provisions and other changes
152,007
35,693
Deferred tax assets already recognised
35,638
Deferred tax assets not recognised
55
Piaggio & C. S.p.A.
131,802
24.00%
31,633
Piaggio Fast Forward Inc.
96,225
27.32%
26,289
Nacional Motor S.A.
35,436
25.00%
8,859
Piaggio Group Americas Inc.
10,367
24.38%
2,528
Piaggio Concept Store Mantova S.r.l.
3,209
24.00%
770
Piaggio Group Japan
1,873
33.58%
629
Aprilia Racing S.r.l.
2,494
24.00%
599
Piaggio Vespa BV
959
15.00%
144
Total out of tax losses
282,365
71,451
Deferred tax assets already recognised
35,973
Deferred tax assets not recognised
35,478
262
21. Inventories
€/000 379,678
This item comprises:
As of 31 December
2022
As of 31 December 2021
Change
In thousands of Euros
Raw materials and consumables
202,223
167,349
34,874
Provision for write-down
(11,532)
(12,425)
893
Net value
190,691
154,924
35,767
Work in progress and semi-finished products
31,993
22,934
9,059
Provision for write-down
(852)
(852)
0
Net value
31,141
22,082
9,059
Finished products and goods
176,632
118,555
58,077
Provision for write-down
(19,754)
(18,067)
(1,687)
Net value
156,878
100,488
56,390
Advances
968
1,044
(76)
Total
379,678
278,538
101,140
Against an international background featuring critical issues in the procurement of some components and in transport logistics, the Group has decided to protect itself by increasing the level of inventories, in order to guarantee production and sales in the coming months.
22. Trade receivables (current and non-current)
€/000 67,143
As of 31 December, no non-current trade payables were recorded for the periods compared.
Current trade receivables are broken down as follows:
As of 31 December
2022
As of 31 December 2021
Change
In thousands of Euros
Trade receivables due from customers
66,675
70,615
(3,940)
Trade receivables due from JV
459
590
(131)
Trade receivables due from parent companies
9
20
(11)
Total
67,143
71,225
(4,082)
Receivables due from joint ventures refer to amounts due from Zongshen Piaggio Foshan Motorcycles Co. Ltd. Receivables due from parent companies regard amounts due from Immsi.
The item Trade receivables comprises receivables referring to normal sale transactions, recorded net of a provision for bad debts of €/000 30,573.
263
In thousands of Euros
Opening balance as of 1 January 2022
29,235
Increases for allocations
703
Decreases for use
(668)
Other changes
1,303
Closing balance as of 31 December 2022
30,573
The Group sells, on a rotating basis, a large part of its trade receivables with and without recourse. Piaggio has signed contracts with some of the most important Italian and foreign factoring companies as a move to optimise, monitor and manage its trade receivables, besides offering its customers an instrument for funding their own inventories and, as regards factoring without recourse, the substantial transfer of risks and benefits. As of 31 December 2022, trade receivables still due, sold without recourse, totalled €/000 168,249. Of these amounts, Piaggio received payment prior to natural expiry of €/000 167,027.
As of 31 December 2022, advance payments received from factoring companies and banks for trade receivables sold with recourse totalled €/000 12,040 with a counter entry recorded in current liabilities.
23. Other receivables (current and non-current)
€/000 76,139
They consist of:
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
Receivables due from parent companies
25,721
25,721
19,098
19,098
6,623
0
6,623
Receivables due from joint ventures
544
544
900
900
(356)
0
(356)
Receivables due from affiliated companies
28
28
20
67
87
8
(67)
(59)
Accrued income
1,390
1,390
2,267
2,267
(877)
0
(877)
Deferred charges
11,331
10,771
22,102
8,014
14,948
22,962
3,317
(4,177)
(860)
Advance payments to suppliers
1,095
1
1,096
1,850
1
1,851
(755)
0
(755)
Advances to employees
513
24
537
688
26
714
(175)
(2)
(177)
Security deposits
299
1,125
1,424
278
1,122
1,400
21
3
24
Receivables due from others
9,667
7,518
17,185
15,832
7,464
23,296
(6,165)
54
(6,111)
Total
56,118
20,021
76,139
57,273
23,628
80,901
(1,155)
(3,607)
(4,762)
Receivables due from affiliated companies are amounts due from Immsi Audit.
264
Receivables due from others include €/000 3,480 (€/000 5,419 as of 31 December 2021) relating to the recognition by the Indian affiliate of a receivable for the subsidy received from the Indian Government on investments made in previous years. This receivable is recognised in the income statement in proportion to the depreciation of the assets on which the grant was made. The recognition of these amounts is supported by appropriate documentation received from the Government of India, certifying that the entitlement has been recognised and therefore that collection is reasonably certain. During 2022, the Indian company collected receivables related to these subsidies worth €/000 5,520.
For more details, see Note 9 “Other operating income”.
Other receivables are recognised net of a write-down provision of €/000 6,537.
Movements of write-down provision were as follows:
In thousands of Euros
Opening balance as of 1 January 2022
6,609
Increases for allocations
1,690
Decreases for use
(209)
Other changes
(1,553)
Closing balance as of 31 December 2022
6,537
24. Tax receivables (current and non-current)
€/000 53,921
Tax receivables consist of:
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
VAT
33,828
741
34,569
11,619
543
12,162
22,209
198
22,407
Income tax
2,949
6,270
9,219
2,114
7,333
9,447
835
(1,063)
(228)
Others
8,324
1,809
10,133
3,809
1,028
4,837
4,515
781
5,296
Total
45,101
8,820
53,921
17,542
8,904
26,446
27,559
(84)
27,475
265
25. Breakdown of operating receivables by measurement method
The table below shows the breakdown of operating receivables by measurement method:
As of 31 December 2022
Assets measured at FVPL
Assets measured at FVOCI
Financial derivatives
Assets at amortised cost
Total
In thousands of Euros
Non-current
Tax receivables
8,820
8,820
Other receivables
582
19,439
20,021
Total non-current operating receivables
582
28,259
28,841
Current
Trade receivables
67,143
67,143
Tax receivables
45,101
45,101
Other receivables
5,530
50,588
56,118
Total current operating receivables
5,530
162,832
168,362
Total operating receivables
6,112
191,091
197,203
As of 31 December 2021
Assets measured at FVPL
Assets measured at FVOCI
Financial derivatives
Assets at amortised cost
Total
In thousands of Euros
Non-current
Tax receivables
8,904
8,904
Other receivables
23,628
23,628
Total non-current operating receivables
32,532
32,532
Current
Trade receivables
71,225
71,225
Tax receivables
17,542
17,542
Other receivables
8,326
48,947
57,273
Total current operating receivables
8,326
137,714
146,040
Total operating receivables
8,326
170,246
178,572
26. Receivables due after 5 years
€/000 0
At the end of the reporting period, there were no receivables with a maturity of more than 5 years.
27. Breakdown of assets by geographic segment
As regards the breakdown of assets by geographic segment, reference is made to the section on segment reporting.
266
28. Assets held for sale
€/000 0
29. Trade payables (current and non-current)
€/000 739,832
As of 31 December 2022 and as of 31 December 2021, no trade payables were recorded under non-current liabilities. Trade payables recorded as current liabilities are broken down as follows:
As of 31 December
2022
As of 31 December
2021
Change
In thousands of Euros
Amounts due to suppliers
729,974
606,735
123,239
Trade payables to JV
9,518
16,622
(7,104)
Amounts due to affiliates
26
117
(91)
Amounts due to parent companies
314
90
224
Total
739,832
623,564
116,268
Of which indirect factoring
297,231
258,667
38,563
To facilitate credit conditions for its suppliers, the Group has used factoring agreements since 2012, mainly supply chain financing and reverse factoring agreements, as described in more detail in “Accounting policies and measurement criteria applied by the Group”, to which reference is made. These operations did not change the primary obligation, nor substantially changed payment terms, so their nature is the same and they are still classified as trade liabilities.
As of 31 December 2022, the value of trade payables covered by reverse factoring or supply chain financing agreements was equal to €/000 297,231 (€/000 258,667 as of 31 December 2021).
30. Provisions (current and non-current portion)
€/000 31,211
The breakdown and changes in provisions for risks during the period were as follows:
Balance as of 31 December 2021
Alloca
tions
Uses
Exchange differences
Balance as of 31 December 2022
In thousands of Euros
Provision for product warranties
20,373
11,374
(10,650)
(40)
21,057
Provision for contractual risks
8,043
3,000
(4,123)
54
6,974
Risk provision for legal disputes
1,971
48
(91)
5
1,933
Provision for ETS certificates
513
513
Other provisions for risks
1,333
176
(778)
3
734
Total
31,720
15,111
(15,642)
22
31,211
The breakdown between the current and non-current portion of long-term provisions is as follows:
267
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
Provision for product warranties
13,042
8,015
21,057
12,416
7,957
20,373
626
58
684
Provision for contractual risks
974
6,000
6,974
920
7,123
8,043
54
(1,123)
(1,069)
Risk provision for legal disputes
212
1,721
1,933
250
1,721
1,971
(38)
0
(38)
Provision for ETS certificates
513
-
513
-
-
-
513
0
513
Other provisions for risks and charges
316
418
734
770
563
1,333
(454)
(145)
(599)
Total
15,057
16,154
31,211
14,356
17,364
31,720
701
(1,210)
(509)
The product warranty provision relates to allocations for technical assistance on products covered by customer service which are estimated to be provided over the contractually envisaged warranty period. This period varies according to the type of goods sold and the sales market and is also determined by customer take-up to commit to a scheduled maintenance plan.
The provision increased during the period by €/000 11,374 and €/000 10,650 was used in relation to costs incurred during the period.
The provision for litigation concerns labour litigation and other legal proceedings.
The provision for ETS certificates refers to the provision made by the Parent Company for the costs it will have to bear for the purchase of ETS certificates to be returned to the Authority by next 30 April. For more details on the Emission Trading Directive (Directive 2003/87/EC), that established the ETS certificate trading system, see Note 11 Other Operating Costs.
The deferred tax liability is mainly attributable to taxable temporary differences between the carrying amount and tax value of tangible and intangible assets held by subsidiaries located in India and Vietnam.
32. Retirement funds and employee benefits
€/000 25,714
As of 31 December
2022
As of 31 December
2021
Change
In thousands of Euros
Retirement funds
771
811
(40)
Termination benefits provision
24,943
32,259
(7,316)
Total
25,714
33,070
(7,356)
268
The item “Termination benefits provision”, comprising severance pay of employees of Italian companies, includes termination benefits indicated in defined benefit plans. Their breakdown was as follows:
In thousands of Euros
Opening balance as of 1 January 2022
32,259
Cost for the period
8,958
Actuarial losses recognised in Equity
(4,978)
Interest cost
522
Uses and transfers of retirement funds
(11,818)
Closing balance as of 31 December 2022
24,943
The economic/technical assumptions used by Group companies operating in Italy to discount the value are shown in the table below:
•Technical annual discount rate 3.63%
•Annual inflation rate 2.30%
•Annual rate of increase in termination benefit 3.225%
As regards the discount rate, the Group uses the iBoxx Corporates AA rating with a 7-10 duration as the valuation reference. If the iBoxx Corporates A rating with a 7-10 duration had been used, the value of actuarial losses and the provision as of 31 December 2022 would have been lower by €/000 1,001.
The table below shows the effects, in absolute terms, as of 31 December 2022, which would have occurred following changes in reasonably possible actuarial assumptions:
Termination benefits provision
In thousands of Euros
Turnover rate +2%
25,179
Turnover rate -2%
24,665
Inflation rate +0.25%
25,266
Inflation rate - 0.25%
24,624
Discount rate +0.50%
23,960
Discount rate -0.50%
25,988
The average financial duration of the bond ranges from 9 to 25 years.
269
Year
Future amounts
In thousands of Euros
1
2,706
2
1,134
3
1,210
4
1,552
5
741
The affiliates operating in Germany and Indonesia have provisions for employees identified as defined benefit plans. As of 31 December 2022, these provisions amounted to €/000 77 and €/000 334 respectively. The amount of profits/(losses) recognised in the statement of comprehensive income related to foreign companies amounted to €/000 -40.
33. Tax payables (current and non-current)
€/000 19,022
Their breakdown was as follows:
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
Due for income tax
11,651
11,651
9,011
1,387
10,398
2,640
(1,387)
1,253
Due for non-income tax
193
193
154
154
39
0
39
Tax payables for:
. VAT
1,120
1,120
1,007
1,007
113
0
113
. Tax withheld at source
5,532
5,532
5,032
5,032
500
0
500
. Others
526
526
1,772
1,772
(1,246)
0
(1,246)
Total
7,178
-
7,178
7,811
-
7,811
(633)
0
(633)
Total
19,022
0
19,022
16,976
1,387
18,363
2,046
(1,387)
659
The item includes tax payables recorded in the financial statements of individual consolidated companies, set aside in relation to tax charges for the individual companies on the basis of applicable national laws.
Payables for withheld taxes made refer mainly to withheld taxes on employees’ earnings, on employment termination payments and on self-employed earnings.
270
34. Other payables (current and non-current)
€/000 109,240
This item comprises:
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
To employees
28,377
48
28,425
19,056
543
19,599
9,321
(495)
8,826
Guarantee deposits
4,087
4,087
4,048
4,048
-
39
39
Accrued expenses
4,696
4,696
4,559
4,559
137
-
137
Deferred income
4,233
11,318
15,551
3,798
8,065
11,863
435
3,253
3,688
Amounts due to social security institutions
9,037
9,037
8,718
8,718
319
-
319
Fair value of derivatives
3,062
3,062
217
34
251
2,845
(34)
2,811
To associates
114
114
118
118
(4)
-
(4)
To parent companies
26,336
26,336
14,919
14,919
11,417
-
11,417
Others
17,855
77
17,932
12,040
70
12,110
5,815
7
5,822
Total
93,710
15,530
109,240
63,425
12,760
76,185
30,285
2,770
33,055
Amounts due to employees include the amount for holidays accrued but not taken of €/000 12,282 and other payments to be made for €/000 16,143.
Payables due to associates refer to various amounts due to the Fondazione Piaggio (Foundation).
Payables to parent companies consist of payables to Immsi.
The item Fair Value of derivative instruments consists of hedging transactions recognised in accordance with the cash flow hedge principle and broken down as follows: fair value of exchange rate risk hedging transactions on forecast transactions (€/000 1,610 current portion); fair value of hedging transactions on commodities (€/000 1,102) and the fair value of a forex hedging transaction not recognised according to the cash flow hedge principle (€/000 350 current portion).
The item Accrued liabilities includes €/000 164 for interest on hedging derivatives and relative hedged items measured at fair value.
Deferred income includes €/000 5,711 (€/000 5,993 as of 31 December 2021) for the recognition by the Indian affiliate related to a deferred subsidy from the local Government for investments made in previous years, for the part not yet amortised. For more details, see Note 9 “Other operating income”.
271
35. Breakdown of operating payables by measurement method
The table below shows the breakdown of operating payables by measurement method:
As of 31 December 2022
Liabilities measured at FVPL
Financial derivatives
Liabilities at amortised cost
Total
In thousands of Euros
Non-current
Tax payables
Other payables
15,530
15,530
Total non-current operating payables
15,530
15,530
Current
Trade payables
739,832
739,832
Tax payables
19,022
19,022
Other payables
3,062
90,648
93,710
Total current operating payables
3,062
849,502
852,564
Total operating payables
3,062
865,032
868,094
As of 31 December 2021
Liabilities measured at FVPL
Financial derivatives
Liabilities at amortised cost
Total
In thousands of Euros
Non-current
Tax payables
1,387
1,387
Other payables
34
12,726
12,760
Total non-current operating payables
34
14,113
14,147
Current
Trade payables
623,564
623,564
Tax payables
16,976
16,976
Other payables
217
63,208
63,425
Total current operating payables
217
703,748
703,965
Total operating payables
251
717,861
718,112
36. Payables due after 5 years
The Group has loans due after 5 years, which are referred to in detail in Note 41 “Financial Liabilities and financial liabilities for rights of use”.
With the exception of the above payables, no other long-term payables due after five years exist.
37. Breakdown of liabilities by geographic segment
As regards the breakdown of liabilities by geographic segment, reference is made to the section on segment reporting.
272
E) INFORMATION ON FINANCIAL ASSETS AND LIABILITIES
This section provides information on the carrying amount of financial assets and liabilities held, and in particular:
•specifically describes the type of financial assets and liabilities;
•the accounting standards adopted;
•describes how fair value is determined, how measurements and estimates are made, and the uncertainties involved.
The Group holds the following financial assets and liabilities:
Financial assets as of 31 December 2022
Assets measured at FVPL
Assets measured at FVOCI
Financial derivatives
Assets at amortised cost
Total
In thousands of Euros
Non-current
Other financial assets
16
16
Total non-current financial assets
16
-
-
-
16
Current
Other financial assets
59
59
Cash and cash equivalents
242,616
242,616
Total current financial assets
-
-
59
242,616
242,675
Total financial assets
16
-
59
242,616
242,691
Financial assets as of 31 December 2021
Assets measured at FVPL
Assets measured at FVOCI
Financial derivatives
Assets at amortised cost
Total
In thousands of Euros
Non-current
Other financial assets
16
16
Total non-current financial assets
16
-
-
-
16
Current
Other financial assets
176
176
Cash and cash equivalents
260,868
260,868
Total current financial assets
-
-
176
260,868
261,044
Total financial assets
16
-
176
260,868
261,060
273
Financial liabilities as of 31 December 2022
Liabilities measured at FVPL
Fair value adjustment
Financial derivatives
Liabilities at amortised cost
Total
In thousands of Euros
Non-current
Bank loans
264,878
264,878
Bonds
245,736
245,736
Other loans
176
176
Liabilities for rights of use
17,713
17,713
Total non-current financial liabilities
-
-
-
528,503
528,503
Current
Bank loans
59,038
59,038
Bonds
-
Other loans
12,111
12,111
Liabilities for rights of use
11,192
11,192
Total current financial liabilities
-
-
-
82,341
82,341
Total financial liabilities
-
-
-
610,844
610,844
Financial liabilities as of 31 December 2021
Liabilities measured at FVPL
Fair value adjustment
Financial derivatives
Liabilities at amortised cost
Total
In thousands of Euros
Non-current
Bank loans
287,816
287,816
Bonds
244,150
244,150
Other loans
247
247
Liabilities for rights of use
14,536
14,536
Total non-current financial liabilities
-
-
-
546,749
546,749
Current
Bank loans
76,956
76,956
Bonds
-
Other loans
9,884
9,884
Liabilities for rights of use
7,601
7,601
Total current financial liabilities
-
-
-
94,441
94,441
Total financial liabilities
-
-
-
641,190
641,190
274
38. Investments
€/000 9,913
The investments heading comprises:
As of 31 December
2022
As of 31 December 2021
Change
In thousands of Euros
Interests in joint ventures
9,697
10,850
(1,153)
Investments in associates
216
197
19
Total
9,913
11,047
(1,134)
The item Investments in joint ventures relates to the investment in Zongshen Piaggio Foshan Motorcycles Co. Ltd, of which the Group holds 45% (of which 12.5% through the direct subsidiary Piaggio China Company Ltd). The investment was classified under the item “joint ventures” in relation to agreements made in the contract signed on 15 April 2004 between Piaggio & C. S.p.A. and its historical partner Foshan Motorcycle Plant, and the Chinese company Zongshen Industrial Group Company Limited.
The carrying amount of the investment refers to shareholders' equity pro-quota adjusted to take into account the measurement criteria adopted by the Group.
The table below summarises main financial data of the joint venture:
Zongshen Piaggio Foshan Motorcycle Co. Ltd
Accounts
As of 31 December 2022
Accounts
As of 31 December 2021
In thousands of Euros
45% *
45% *
Working capital
13,014
5,856
16,651
7,493
Financial debt
0
0
0
0
Total assets
12,946
5,826
13,918
6,263
Net capital employed
25,960
11,682
30,569
13,756
Provisions
441
198
592
267
Financial debt
1,309
589
2,513
1,131
Shareholders’ equity
24,210
10,895
27,464
12,359
Total sources of financing
25,960
11,682
30,569
13,756
* Group ownership
Shareholders’ equity attributable to the Group
10,895
12,359
Elimination of margins on internal transactions
(1,198)
(1,509)
Value of the investment
9,697
10,850
Reconciliation of Shareholders’ Equity
In thousands of Euros
Opening balance as of 1 January 2022
10,850
Profit (Loss) for the period
(1,236)
Statement of Comprehensive Income
(228)
Elimination of margins on internal transactions
311
Closing balance as of 31 December 2022
9,697
275
Investments in associates
€/000 216
This item comprises:
Carrying amount as of 31 December 2021
Adjustment
Carrying amount as of 31 December
2022
In thousands of Euros
Associates
Immsi Audit S.c.a.r.l.
10
10
S.A.T. S.A. – Tunisia
0
0
Depuradora D'Aigues de Martorelles
27
1
28
Pontedera & Tecnologia S.c.a r.l.
160
18
178
Total associates
197
19
216
The value of investments in associates was adjusted during the year to the corresponding value of shareholders' equity.
39. Other financial assets (current and non-current)
€/000 75
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
Fair Value of hedging derivatives
59
59
176
176
(117)
0
(117)
Investments in other companies
16
16
16
16
0
0
0
Total
59
16
75
176
16
192
(117)
0
(117)
The item Fair Value of derivative instruments relates to hedging transactions on intercompany flows in foreign currencies.
The breakdown of the item “Investments in other companies" is shown in the table below:
As of 31 December
2022
As of 31 December 2021
In thousands of Euros
Other companies:
A.N.C.M.A. – Rome
2
2
ECOFOR SERVICE S.p.A. – Pontedera
2
2
Consorzio Fiat Media Center – Turin
3
3
S.C.P.S.T.V.
0
0
IVM
9
9
Total other companies
16
16
276
40. Cash and cash equivalents
€/000 242,616
This item mainly includes short-term or on demand bank deposits.
As of 31 December
2022
As of 31 December
2021
Change
In thousands of Euros
Bank and postal deposits
242,569
260,829
(18,260)
Cash on hand
47
39
8
Total
242,616
260,868
(18,252)
Reconciliation of cash and cash equivalents recognised in the statement of financial position as assets with cash and cash equivalents recognised in the Statement of Cash Flows
The table below reconciles the amount of cash and cash equivalents above with cash and cash equivalents recognised in the Statement of Cash Flows.
As of 31 December
2022
As of 31 December 2021
Change
In thousands of Euros
Liquidity
242,616
260,868
(18,252)
Current account overdrafts
(64)
(12)
(52)
Closing balance
242,552
260,856
(18,304)
41. Financial liabilities and financial liabilities for rights of use (current and non-current)
€/000 610,844
During 2022, the Group's total debt decreased by €/000 30,346. Excluding the change in financial liabilities for rights of use, the Group's total financial debt decreased by €/000 37,114 as of 31 December 2022.
Financial liabilities as of 31 December 2022
Financial liabilities as of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
Financial liabilities
71,149
510,790
581,939
86,840
532,213
619,053
(15,691)
(21,423)
(37,114)
Financial liabilities for rights of use
11,192
17,713
28,905
7,601
14,536
22,137
3,591
3,177
6,768
Total
82,341
528,503
610,844
94,441
546,749
641,190
(12,100)
(18,246)
(30,346)
Net financial debt of the Group amounted to €/000 368,228 as of 31 December 2022 compared to €/000 380,322 as of 31 December 2021.
The composition of "Net financial debt" as of 31 December 2022, prepared in accordance with paragraph 175 and following of ESMA Recommendations 2021/32/382/1138, is set out below.
277
Consolidated net financial position (or Consolidated net financial debt)62
As of 31 December
2022
As of 31 December
2021
Change
In thousands of Euros
A
Cash and cash equivalents
242,616
260,868
(18,252)
B
Cash equivalents
0
C
Other current financial assets
0
D
Liquidity (A + B + C)
242,616
260,868
(18,252)
E
Current financial debt (including debt instruments, but excluding the current portion of non-current financial debt)
(33,739)
(37,861)
4,122
Payables due to banks
(10,436)
(20,376)
9,940
Debenture loan
0
Amounts due to factoring companies
(12,040)
(9,813)
(2,227)
Financial liabilities for rights of use
(11,192)
(7,601)
(3,591)
.of which finance leases
(1,190)
(1,201)
11
.of which operating leases
(10,002)
(6,400)
(3,602)
Current portion of payables due to other lenders
(71)
(71)
0
F
Current portion of non-current financial debt
(48,602)
(56,580)
7,978
G
Current financial debt (E + F)
(82,341)
(94,441)
12,100
H
Net current financial debt (G - D)
160,275
166,427
(6,152)
I
Non-current financial debt (excluding current portion and debt instruments)
(282,767)
(302,599)
19,832
Medium-/long-term bank loans
(264,878)
(287,816)
22,938
Financial liabilities for rights of use
(17,713)
(14,536)
(3,177)
.of which finance leases
(3,286)
(4,479)
1,193
.of which operating leases
(14,427)
(10,057)
(4,370)
Amounts due to other lenders
(176)
(247)
71
J
Debt instruments
(245,736)
(244,150)
(1,586)
K
Trade payables and other non-current payables
0
L
Non-current financial debt (I + J + K)
(528,503)
(546,749)
18,246
M
Total financial debt (H + L)
(368,228)
(380,322)
12,094
As regards indirect factoring, please refer to the comment in Note 29 "Trade payables".
62 The indicator does not include financial assets and liabilities arising from the fair value measurement of financial derivatives for hedging and otherwise, the fair value adjustment of relative hedged items equal in any case to €/000 0 as of 31 December 2022 and 2021, and relative accruals.
278
The following table summarises the changes in the last two years.
Cash flows
Balance as of 31.12.2020
Movements
Repayments
New issues
Reclassifications
Exchange delta
Other changes
Balance as of 31.12.2021
In thousands of Euros
A
Cash and cash equivalents
230,093
20,180
10,595
260,868
B
Cash equivalents
0
0
C
Other current financial assets
0
0
D
Liquidity (A + B + C)
230,093
20,180
0
0
0
10,595
0
260,868
E
Current financial debt (including debt instruments, but excluding the current portion of non-current financial debt)
(59,202)
0
84,729
(23,885)
(38,735)
0
(768)
(37,861)
Current account overdrafts
(1,187)
1,187
(12)
(12)
Current account payables
(29,191)
23,642
(14,060)
(755)
(20,364)
Total current bank loans
(30,378)
0
24,829
(14,072)
0
0
(755)
(20,376)
Debenture loan
(11,038)
41,050
(30,000)
(12)
0
Amounts due to factoring companies
(9,133)
9,133
(9,813)
(9,813)
Financial liabilities for rights of use
(8,582)
9,646
(8,664)
0
(1)
(7,601)
.of which finance leases
(1,182)
1,184
(1,202)
(1)
(1,201)
.of which operating leases
(7,400)
8,462
(7,462)
(6,400)
Current portion of payables due to other lenders
(71)
71
(71)
(71)
F
Current portion of non-current financial debt
(110,738)
140,013
(85,703)
(152)
(56,580)
G
Current financial debt
(E + F)
(169,940)
0
224,742
(23,885)
(124,438)
0
(920)
(94,441)
H
Net current financial debt (G - D)
60,153
20,180
224,742
(23,885)
(124,438)
10,595
(920)
166,427
I
Non-current financial debt (excluding current portion and debt instruments)
(211,191)
0
0
(181,000)
94,438
(647)
(4,199)
(302,599)
Medium-/long-term bank loans
(192,879)
(181,000)
85,703
360
(287,816)
Liabilities for rights of use
(17,994)
0
8,664
(647)
(4,559)
(14,536)
.of which finance leases
(5,681)
1,202
(4,479)
.of which operating leases
(12,313)
7,462
(647)
(4,559)
(10,057)
Amounts due to other lenders
(318)
71
(247)
J
Debt instruments
(272,579)
30,000
(1,571)
(244,150)
K
Trade payables and other non-current payables
L
Non-current financial debt (I + J + K)
(483,770)
0
0
(181,000)
124,438
(647)
(5,770)
(546,749)
M
Total financial debt (H + L)
(423,617)
20,180
224,742
(204,885)
0
9,948
(6,690)
(380,322)
279
Cash flows
Balance as of 31.12.2021
Movements
Repayments
New issues
Reclassifications
Exchange delta
Other changes
Balance as of 31.12.2022
In thousands of Euros
A
Cash and cash equivalents
260,868
(16,656)
(1,596)
242,616
B
Cash equivalents
0
C
Other current financial assets
0
D
Liquidity (A + B + C)
260,868
(16,656)
0
0
0
(1,596)
0
242,616
E
Current financial debt (including debt instruments, but excluding the current portion of non-current financial debt)
(37,861)
0
38,682
(20,965)
(13,923)
330
(2)
(33,739)
Current account overdrafts
(12)
12
(64)
(64)
Current account payables
(20,364)
18,523
(8,861)
330
(10,372)
Total current bank loans
(20,376)
0
18,535
(8,925)
0
330
0
(10,436)
Debenture loan
0
Amounts due to factoring companies
(9,813)
9,813
(12,040)
(12,040)
Financial liabilities for rights of use
(7,601)
10,263
(13,852)
0
(2)
(11,192)
.of which finance leases
(1,201)
1,200
(1,189)
(1,190)
.of which operating leases
(6,400)
9,063
(12,663)
(2)
(10,002)
Current portion of payables due to other lenders
(71)
71
(71)
(71)
F
Current portion of non-current financial debt
(56,580)
83,337
(75,195)
(164)
(48,602)
G
Current financial debt
(E + F)
(94,441)
0
122,019
(20,965)
(89,118)
330
(166)
(82,341)
H
Net current financial debt (G - D)
166,427
(16,656)
122,019
(20,965)
(89,118)
(1,266)
(166)
160,275
I
Non-current financial debt (excluding current portion and debt instruments)
(302,599)
0
0
(52,500)
89,118
111
(16,897)
(282,767)
Medium-/long-term bank loans
(287,816)
(52,500)
75,195
243
(264,878)
Liabilities for rights of use
(14,536)
0
13,852
111
(17,140)
(17,713)
.of which finance leases
(4,479)
1,189
4
(3,286)
.of which operating leases
(10,057)
12,663
111
(17,144)
(14,427)
Amounts due to other lenders
(247)
71
(176)
J
Debt instruments
(244,150)
(1,586)
(245,736)
K
Trade payables and other non-current payables
L
Non-current financial debt (I + J + K)
(546,749)
0
0
(52,500)
89,118
111
(18,483)
(528,503)
M
Total financial debt (H + L)
(380,322)
(16,656)
122,019
(73,465)
0
(1,155)
(18,649)
(368,228)
280
Financial liabilities
€/000 581,939
Financial liabilities are broken down as follows:
Balance at
Nominal value at
31.12.2022
31.12.2021
31.12.2022
31.12.2021
In thousands of Euros
Bank loans
323,916
364,772
325,266
366,043
Bonds
245,736
244,150
250,000
250,000
Other loans
12,287
10,131
12,287
10,131
Total
581,939
619,053
587,553
626,174
Carrying amount as of 31.12.2022
Carrying amount as of 31.12.2021
Change
In thousands of Euros
Current financial debt
71,149
86,840
(15,691)
Non-current financial debt
510,790
532,213
(21,423)
Financial debt
581,939
619,053
(37,114)
Gross debt, fixed rate
397,506
425,224
(27,718)
Gross debt, variable rate
184,433
193,829
(9,396)
Financial debt
581,939
619,053
(37,114)
The table below shows the repayment schedule as of 31 December 2022:
Nominal value as of 31.12.2022
Amounts falling due within 12 months
Amounts falling due after 12 months
Amounts falling due in
2024
2025
2026
2027
After
In thousands of Euros
Bank loans
325,266
59,121
266,145
68,700
38,715
87,563
36,167
35,000
- of which opening of credit lines and bank overdrafts
10,436
10,436
0
- of which medium/long-term bank loans
314,830
48,685
266,145
68,700
38,715
87,563
36,167
35,000
Bonds
250,000
0
250,000
250,000
Other loans
12,287
12,111
176
71
71
34
0
Total
587,553
71,232
516,321
68,771
288,786
87,597
36,167
35,000
The following table analyses financial debt by currency.
Accounting balance
Accounting balance
Nominal value
as of 31.12.2021
as of 31.12.2022
In thousands of Euros
Euros
603,689
571,568
577,182
Indian Rupee
81
81
Vietnamese Dong
13,523
7,873
7,873
Japanese Yen
1,841
2,417
2,417
Total currencies other than euro
15,364
10,371
10,371
Total
619,053
581,939
281
Medium and long-term bank debt amounts to €/000 313,480 (of which €/000 264,878 non-current and €/000 48,602 current) and consists of the following loans:
•a €/000 9,986 medium-term loan (nominal value of €/000 10,000) from the European Investment Bank to finance Research & Development investments planned for the 2016-2018 period. The loan is divided into two disbursements with a final maturity in February and December 2023 and a repayment schedule of 7 annual fixed-rate instalments. Contract terms require covenants (described below);
•a €/000 58,274 (nominal value €/000 58,333) medium-term loan granted by the European Investment Bank to support Research and Development projects of investment plans, scheduled for the Piaggio Group's Italian sites in the 2019-2021 period. The loan will mature in February 2027 and has a repayment schedule of 6 fixed-rate annual instalments. Contract terms require covenants (described below);
•a €/000 30,000 medium-term loan granted by the European Investment Bank to support Research and Development projects of investment plans, scheduled for the Piaggio Group's Italian sites in the 2019-2021 period. The loan will mature in March 2028 and has a repayment schedule of 6 fixed-rate annual instalments. Contract terms require covenants (described below);
•€/000 1,662 (with a nominal value of €/000 2,000) use of the syndicated revolving credit line for a total of €/000 200,000 maturing on 5 January 2024 (with one year’s extension at the discretion of the borrower). Contract terms require covenants (described below);
•a €/000 114,272 (nominal value of €/000 115,000) "Schuldschein" loan issued between October 2021 and February 2022 and subscribed by leading market participants. It consists of 7 tranches with maturities of 3, 5 and 7 years at fixed and variable rates;
•a €/000 22,404 medium-term loan (nominal value of €/000 22,500) granted by Banca Popolare Emilia Romagna. The loan will fall due on 31 December 2027 and has a repayment schedule of six-monthly instalments;
•a €/000 19,938 loan (nominal value of €/000 20,000) granted by Banco BPM with a repayment schedule of six-monthly instalments and final settlement in July 2025. An Interest Rate Swap has been taken out on this loan to hedge the interest rate risk. Contract terms require covenants (described below);
•€/000 26,667 medium-term loan granted by Cassa Depositi e Prestiti to support international growth in India and Indonesia. The loan has a duration of 5 years expiring on 30 August 2026. It entails a repayment plan with six-monthly instalments and a 12-month grace period. Contract terms require covenants (described below);
•a €/000 3,486 medium-term loan (nominal value of €/000 3,500) granted by Banca Popolare di Sondrio, maturing on 1 June 2026 and with a quarterly repayment schedule;
•a €/000 6,990 medium-term loan (nominal value of €/000 7,000) granted by Cassa di Risparmio di Bolzano, maturing on 30 June 2026 and with a quarterly repayment schedule;
•a €/000 4,825 medium-term loan (nominal value of €/000 4,830) granted by Banca Carige, maturing on 31 December 2026 and with a quarterly repayment schedule;
282
•a €/000 14,976 (with a nominal value of €/000 15,000) medium-term loan granted by Oldenburgische Landensbank Aktiengesellschaft maturing on 30 September 2027.
The Parent Company also has the following revolving credit lines and loans unused at 31 December 2022:
•a €/000 20,000 revolving credit line granted by Banca Intesa San Paolo maturing on 31 January 2024;
•a €/000 10,000 revolving credit line granted by Banca del Mezzogiorno maturing on 1 July 2026;
•a €/000 12,500 revolving credit line granted by Banca Popolare Emilia Romagna maturing on 2 August 2026;
•a €/000 60,000 Loan granted by the European Investment Bank with maturity 9 years from disbursement.
All the above financial liabilities are unsecured.
The item “Bonds” amounted to €/000 245,736 (nominal value of €/000 250,000) related to a high-yield debenture loan issued on 30 April 2018 for a nominal amount of €/000 250,000, maturing on 30 April 2025 and with a semi-annual coupon with fixed annual nominal rate of 3.625%. Standard & Poor’s and Moody’s assigned a BB- rating with a stable outlook and a Ba3 rating with a stable outlook respectively.
It should be noted that the Company may repay in advance all or part of the High Yield bond issued on 30 April 2018 on the terms specified in the indenture. The value of prepayment options was not deducted from the original contract, as these are considered as being closely related to the host instrument, as provided for by IFRS 9 b4.3.5.
Financial advances received from factoring companies and banks, on the sale of trade receivables with recourse, totalled €/000 12,040.
Medium-/long-term payables to other lenders equal to €/000 247 of which €/000 176 maturing after the year and €/000 71 as the current portion refer to a loan from the Region of Tuscany, pursuant to regulations on incentives for investments in research and development.
Covenants
In line with market practices for borrowers with a similar credit rating, main loan contracts require compliance with:
1)financial covenants, on the basis of which the company undertakes to comply with certain levels of contractually defined financial indices, with the most significant comprising the ratio of net financial debt/gross operating margin (EBITDA), measured on the consolidated perimeter of the Group, according to definitions agreed on with lenders;
283
2)negative pledges according to which the company may not establish collaterals or other constraints on company assets;
3)"pari passu" clauses, on the basis of which the loans will have the same repayment priority as other financial liabilities, and change of control clauses, which are effective if the majority shareholder loses control of the company;
4)limitations on the extraordinary operations the company may carry out.
The measurement of financial covenants and other contract commitments is monitored by the Group on an ongoing basis.
The high-yield debenture loan issued by the company in April 2018 provide for compliance with covenants which are typical of international practice on the high yield market. In particular, the company must observe the EBITDA/Net borrowing costs index, based on the threshold established in the Prospectus, to increase financial debt defined during issue. In addition, the Prospectus includes some obligations for the issuer, which limit, inter alia, the capacity to:
1)pay dividends or distribute capital;
2)make some payments;
3)grant collaterals for loans;
4)merge with or establish some companies;
5)sell or transfer own assets.
Failure to comply with the covenants and other contract commitments of the loan and debenture loan, if not remedied in agreed times, may give rise to an obligation for the early repayment of the outstanding amount of the loan.
As of 31 December 2022, all covenants had been met in full.
Amortised Cost and Fair Value Measurement
All financial liabilities are measured in accordance with accounting standards and based on the amortised cost method (except for liabilities with hedging derivatives measured at Fair Value Through Profit & Loss, for which the same measurement criteria used for the derivative are applied). According to this criterion, the nominal amount of the liability is decreased by the amount of relative costs of issue and/or stipulation, in addition to any costs relating to refinancing of previous liabilities. The amortisation of these costs is determined on an effective interest rate basis, and namely the rate which discounts the future flows of interest payable and reimbursements of principle at the net carrying amount of the financial liability.
284
•level 1 – quoted prices in active markets for assets or liabilities measured;
•level 2 – inputs other than quoted prices included within Level 1 that are observable directly (prices) or indirectly (derived from prices) on the market;
•level 3 – inputs not based on observable market data.
The table below shows the fair value of payables measured using the amortised cost method as of 31 December 2022:
Nominal value
Carrying amount
Fair Value *
In thousands of Euros
High yield debenture loan
250,000
245,736
247,230
EIB RDI
58,333
58,274
53,670
EIB RDI step-up
30,000
30,000
27,009
Loan from B. Pop. Emilia Romagna
22,500
22,404
21,612
Loan from CDP
26,667
26,667
24,994
Loan from Banco BPM
20,000
19,938
19,196
Loan from Banca CARIGE
4,830
4,825
5,137
Loan from BPop Sondrio
3,500
3,486
3,386
Loan from CariBolzano
7,000
6,990
6,657
Loan from OLB
15,000
14,976
16,223
SSD loans
115,000
114,272
101,920
*The value deducts DVA related to the issuer, i.e. it includes the risk of insolvency of Piaggio.
For liabilities due within 18 months, the carrying amount is basically considered the same as the fair value.
285
FAIR VALUE HIERARCHY
The table below shows the assets and liabilities measured and recognised at fair value as of 31 December 2022, by hierarchical level of fair value measurement.
LEVEL 1
LEVEL 2
LEVEL 3
In thousands of Euros
ASSETS MEASURED AT FAIR VALUE
Financial derivatives:
-of which financial assets
-of which other receivables
6,112
Investments in other companies
16
Total assets
6,112
16
LIABILITIES MEASURED AT FAIR VALUE
Financial derivatives
-of which financial liabilities
-of which other payables
(3,063)
Financial liabilities at fair value recognised through profit or loss
Total liabilities
(3,063)
General total
3,049
16
The following tables show Level 2 and Level 3 changes during 2022:
LEVEL 2
LEVEL 3
In thousands of Euros
Balance as of 31 December 2021
8,075
16
Gain (loss) recognised in profit or loss
(350)
Gain (loss) recognised in the statement of comprehensive income
(4,676)
Increases/(Decreases)
Balance as of 31 December 2022
3,049
16
286
Financial liabilities for rights of use
€/000 28,905
As required by IFRS 16, financial liabilities for rights of use include financial lease liabilities as well as payments due on operating lease agreements.
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
Operating leases
10,002
14,427
24,429
6,400
10,057
16,457
3,602
4,370
7,972
Finance leases
1,190
3,286
4,476
1,201
4,479
5,680
(11)
(1,193)
(1,204)
Total
11,192
17,713
28,905
7,601
14,536
22,137
3,591
3,177
6,768
Operating lease liabilities include payables to the parent companies Immsi and Omniaholding for €/000 2,296 (€/000 1,000 non-current portion).
Payables for finance leases amounted to €/000 4,476 (nominal value of €/000 4,480) and break down as follows:
•a Sale&Lease back agreement for €/000 4,426 (nominal value of €/000 4,430) granted by Albaleasing on a production plant of the Parent Company. The agreement is for ten years, with quarterly repayments (non-current portion equal to €/000 3,246);
•a finance lease for €/000 50 granted by VFS Servizi Finanziari to the company Aprilia Racing for the use of vehicles (non-current portion equal to €/000 40).
The table below shows the repayment schedule as of 31 December 2022:
Carrying amount as of 31.12.2022
Amounts falling due within 12 months
Amounts falling due after 12 months
Amounts falling due in
2024
2025
2026
2027
After
In thousands of Euros
Rights of use
- of which operating leases
24,429
10,002
14,427
5,141
3,025
1,542
920
3,799
- of which finance leases
4,476
1,190
3,286
1,261
1,258
767
Total
28,905
11,192
17,713
6,402
4,283
2,309
920
3,799
287
F) MANAGEMENT OF FINANCIAL RISK
This section describes all financial risks to which the Group is exposed and how these risks could affect future results.
42. Credit risk
The Group considers that its exposure to credit risk is as follows:
As of 31 December
2022
As of 31 December
2021
In thousands of Euros
Liquid assets
242,569
260,829
Financial receivables
75
192
Other receivables
76,139
80,901
Tax receivables
53,921
26,446
Trade receivables
67,143
71,225
Total
439,847
439,593
The Group monitors and manages credit centrally by using established policies and guidelines. The portfolio of trade receivables shows no signs of concentrated credit risk in light of the broad distribution of our licensee or distributor network. In addition, most trade receivables are short-term. In order to optimise credit management, the Group has established revolving programmes with some primary factoring companies for selling its trade receivables without recourse in Europe and the United States.
43. Financial risks
The financial risks the Group is exposed to are liquidity risk, exchange risk, interest rate risk and credit risk and to a lesser extent commodities risk.
The management of these risks, in order to reduce management costs and dedicated resources, is centralised and treasury operations take place in accordance with formal policies and guidelines which are applicable to all Group companies.
Liquidity risk and capitals management
The liquidity risk arises from the possibility that available financial resources are not sufficient to cover, in due times and procedures, future payments arising from financial and/or commercial obligations. To deal with these risks, cash flows and the Group’s credit line needs are monitored or managed centrally under the control of the Group’s Treasury in order to guarantee an effective and efficient management of the financial resources as well as optimise the debt’s maturity standpoint.
In addition, the Parent Company finances the temporary cash requirements of Group companies by providing direct short-term loans regulated in market conditions or guarantees. A cash pooling zero balance system is used between the Parent Company and European companies to reset the receivable and payable balances of subsidiaries on a daily basis, for a more effective and efficient management of liquidity in the Eurozone.
288
•a debenture loan of €/000 250,000 maturing in April 2025;
•a Schuldschein loan of €/000 115,000, with final settlement in February 2029;
•a revolving credit line from €/000 200,000 maturing in January 2024 and a loan of €/000 22,500 maturing in December 2027;
•Revolving credit facilities for a total of €/000 42,500, with final settlement in August 2026;
•loans for a total of €/000 257,830, with final settlement in March 2028.
Other Group companies also have irrevocable loans totalling €/000 14,063 with final settlement in December 2023.
As of 31 December 2022, the Group had a liquidity of €/000 242,616, €/000 314,563 of undrawn credit lines irrevocable to maturity and €/000 193,418 of revocable credit lines, as detailed below:
As of 31 December 2022
As of 31 December
2021
In thousands of Euros
Variable rate with maturity within one year - irrevocable until maturity
14,063
195,500
Variable rate with maturity after one year - irrevocable until maturity
300,500
20,000
Variable rate with maturity within one year - cash revocable
184,418
226,844
Variable rate with maturity within one year - with revocation for self-liquidating typologies
9,000
11,000
Total undrawn credit lines
507,981
453,344
The table below shows the timing of future payments in relation to trade payables:
Within 30 days
Between 31 and 60 days
Between 61 and 90 days
Over 90 days
Total as of 31 December 2022
In thousands of Euros
Trade payables
350,697
223,127
98,422
67,586
739,832
289
Exchange Risk
The Group operates in an international context where transactions are conducted in currencies different from the Euro. This exposes the Group to risks arising from exchange-rate fluctuations. For this purpose, the Group has an exchange rate risk management policy which aims to neutralise the possible negative effects of the changes in exchange rates on company cash flows.
This policy analyses:
-the transaction exchange risk: the policy wholly covers this risk which arises from differences between the recognition exchange rate of receivables or payables in foreign currency in the financial statements and the recognition exchange rate of actual collection or payment. To cover this type of exchange risk, the exposure is naturally offset in the first place (netting between sales and purchases in the same currency) and if necessary, by signing currency future derivatives, as well as advances of receivables denominated in currency;
-the translation exchange risk: arises from the translation into Euro of the financial statements of subsidiaries prepared in currencies other than the Euro during consolidation. The policy adopted by the Group does not require this type of exposure to be covered;
-the economic exchange risk: arises from changes in company profitability in relation to annual figures planned in the economic budget on the basis of a reference change (the "budget exchange rate") and is covered by derivatives. The items of these hedging operations are therefore represented by foreign costs and revenues forecast by the sales and purchases budget. The total of forecast costs and revenues is processed monthly and associated hedging is positioned exactly on the average weighted date of the economic event, recalculated based on historical criteria. The economic occurrence of future receivables and payables will occur during the budget year.
290
As of 31 December 2022, the Group had undertaken the following futures transactions (recognised based on the regulation date) relative to payables and receivables already recognised to hedge the transaction exchange risk:
Company
Operation
Currency
Amount in currency
Value in local currency
(forward exchange rate)
Average maturity
In thousands
In thousands
Piaggio & C.
Purchase
CNY
182,000
25,166
02/02/2023
Piaggio & C.
Purchase
JPY
480,000
3,354
10/02/2023
Piaggio & C.
Purchase
SEK
14,000
1,285
29/01/2023
Piaggio & C.
Purchase
USD
31,550
30,506
15/02/2023
Piaggio & C.
Sale
CAD
650
467
07/02/2023
Piaggio & C.
Sale
CNY
65,000
8,837
01/03/2023
Piaggio & C.
Sale
USD
65,410
61,289
23/04/2023
Piaggio Vietnam
Purchase
EUR
2,218
57,902,983
16/01/2023
Piaggio Vietnam
Sale
JPY
171,831
29,786,732
20/02/2023
Piaggio Vietnam
Sale
USD
17,532
422,892,203
14/02/2023
Piaggio Vespa BV
Sale
USD
29,464
27,535
24/04/2023
Piaggio Indonesia
Sale
USD
14,610
229,073,941
27/02/2023
Piaggio Vehicles Private Limited
Sale
USD
6,100
505,613
17/02/2023
As of 31 December 2022, the Group had undertaken the following transactions to hedge the business exchange risk:
Company
Operation
Currency
Amount in currency
Value in local currency (forward exchange rate)
Average maturity
In thousands
In thousands
Piaggio & C.
Purchase
CNY
1,420,000
193,515
24/11/2023
Piaggio & C.
Purchase
USD
20,000
18,681
04/03/2023
Piaggio & C.
Sale
USD
90,000
88,404
26/08/2023
To hedge the economic exchange risk alone, cash flow hedging is adopted with the effective portion of profits and losses recognised in a specific shareholders' equity reserve. Fair value is determined based on market quotations provided by main traders.
291
The net balance of cash flows during 2022 is shown below, divided by main currency:
Cash Flow 2022
In millions of Euros
Canadian Dollar
17.5
Pound Sterling
34.8
Swedish Krone
(1.6)
Japanese Yen
(1.9)
US Dollar
133.7
Indian Rupee
(68.6)
Chinese Yuan*
(121.1)
Vietnamese Dong
(205.2)
Singapore Dollar
(3.1)
Indonesian Rupiah
91.7
Total cash flow in foreign currency
(123.8)
Interest rate risk
This risk arises from fluctuating interest rates and the impact this may have on future cash flows arising from variable rate financial assets and liabilities. The Group regularly measures and controls its exposure to the risk of interest rate changes, as established by its management policies, in order to reduce fluctuating borrowing costs, and limit the risk of a potential increase in interest rates. This objective is achieved through an adequate mix of fixed and variable rate exposure, and the use of derivatives, mainly interest rate swaps and cross currency swaps.
As of 31 December 2022, the following hedging derivatives were in use:
Cash flow hedging
An Interest Rate Swap to hedge the variable-rate loan for a nominal amount of €/000 26,667 from Banco BPM. The purpose of this instrument is to manage and mitigate exposure to interest rate risk; in accounting terms, the instrument is recognised on a cash flow hedge basis, with profits/losses arising from the fair value measurement allocated to a specific reserve in Shareholders' equity; as of 31 December 2022, the fair value of the instrument was positive by €/000 873; sensitivity analysis of the instrument, assuming a 1% increase and decrease in the shift of the variable rates curve, showed a potential impact on equity, net of the related tax effect, of €/000 137 and €/000 -140 respectively.
292
Commodities price risk
This risk arises from the possibility of changes in company profitability due to fluctuations in metal and energy prices (specifically platinum, palladium, aluminium and gas). The Group's objective is therefore to neutralise such possible adverse changes deriving from highly probable future transactions by compensating them with opposite variations related to the hedging instrument.
Cash flow hedging is adopted with this type of hedging, with the effective portion of profits and losses recognised in a specific shareholders' equity reserve. Fair value is determined based on market quotations provided by main traders.
As of 31 December 2022, the total fair value of hedging instruments for commodity price risk recognised on a hedge accounting basis was negative by €/000 671. During 2022, profit was recognised under Other Comprehensive Income amounting to €/000 671 and losses from Other Comprehensive Income were reclassified under profit/loss for the period amounting to €/000 184.
FAIR VALUE
In thousands of Euros
Piaggio & C. S.p.A.
Interest Rate Swap
Commodities hedges
873
(671)
293
G) INFORMATION ON SHAREHOLDERS' EQUITY
44. Share capital and reserves
€/000 417,811
During the period, the nominal share capital of Piaggio & C. did not change.
The structure of Piaggio & C's share capital, equal to €207,613,944.37, fully subscribed and paid up, is indicated in the next table:
Structure of share capital as of 31 December 2022
No. of shares
% compared to the share capital
Market listing
Rights and obligations
Ordinary shares
358,153,644
100%
MTA
Right to vote in the Ordinary and Extraordinary Shareholders' Meetings of the Company
The Share of the Company are without par value, are indivisible, registered and issued on a dematerialisation basis, in the centralised management system of Monte Titoli S.p.A..
At the date of these financial statements, no other financial instruments with the right to subscribe to new issue shares had been issued, nor were there share-based incentive plans in place involving increases, also without a consideration, in share capital.
During the period, 2,475,777 treasury shares were acquired. Therefore, as of 31 December 2022, Piaggio & C. held 3,521,595 treasury shares, equal to 0.9833% of shares issued.
Shares in circulation and treasury shares
2022
2021
no. of shares
Situation as of 1 January
Shares issued
358,153,644
358,153,644
Treasury portfolio shares
1,045,818
1,028,818
Shares in circulation
357,107,826
357,124,826
Movements for the period
Purchase of treasury shares
2,475,777
17,000
Situation as of 31 December
Shares issued
358,153,644
358,153,644
Treasury portfolio shares
3,521,595
1,045,818
Shares in circulation
354,632,049
357,107,826
294
The share premium reserve as of 31 December 2022 had not changed.
Legal reserve
€/000 28,954
The legal reserve as of 31 December 2022 had increased by €/000 2,902 as a result of the allocation of earnings for the previous year.
Financial instruments’ fair value reserve
€/000 2,545
The financial instruments’ fair value reserve relates to the effects of cash flow hedge accounting implemented on foreign currencies, interest and specific commercial transactions. These transactions are described in full in the note on financial instruments.
Dividends approved
The Ordinary Shareholders' Meeting of Piaggio & C. S.p.A. held on 11 April 2022 resolved to distribute a final dividend of 6.5 euro cents, including taxes, for each ordinary share entitled (in addition to the interim dividend of 8.5 euro cents paid on 22 September 2021, ex-dividend date 20 September 2021), for a total dividend for the 2021 financial year of 15.0 euro cents, equal to €53,566,173.9 (valid for €5,002,537.15 on the “New earnings” reserve and for €48,563,636.75 on the 2021 profit remaining after the above allocations). Coupon no. 18 was detached on 19 April 2022, with record date on 20 April 2022 and payment date on 21 April 2022.
At its meeting on 28 July 2022, the Board of Directors also resolved to distribute an interim ordinary dividend for the financial year 2022 in the amount of 8.5 euro cents, before tax, for each entitled ordinary share (a similar resolution was made for the interim ordinary dividend for the financial year 2021). A total of €30,200,086.39 was paid to this end on 21.09.2022 (ex-dividend date no. 19, 19.09.2022 and record date 20.09.2022).
Dividend paid in the year
Total
Per share
2022
2021
2022
2021
€/000
€/000
€
€
Of the previous year's result
23,203
9,285
0.065
0.026
Interim dividend for current year's result
30,200
30,354
0.085
0.085
295
The Board of Directors of Piaggio & C S.p.A. proposes allocating the profit for 2022 amounting to €75,057,500.48 as follows:
- €3,752,875.02 to the legal reserve;
- €5,641,334.17 to the "Retained Earnings" reserve;
-€65,663,291.29 to shareholders by way of dividend, of which €30,200,086.39 by way of interim dividend already paid.
As resolved by the Board of Directors on 28 July 2022, the Company already paid an interim dividend per share of €0.085 on 21 September 2022 with an ex-dividend date of 19 September 2022; the Board of Directors is therefore requested to propose to the Shareholders' Meeting to pay, in settlement of the interim dividend already paid, a dividend equal to €0.10 for each ordinary share entitled, for a total maximum amount of €35,463,204.90 to be taken from the available profit for the year of €35,463,204.90, with ex-dividend date no. 20 on 24 April 2023, record date coinciding with 25 April 2023 and payment date on 26 April 2023.
Earnings reserve
€/000 183,705
Capital and reserves of non-controlling interest
€/000 (166)
The end of period figures refer to non-controlling interests in Aprilia Brasil Industria de Motociclos S.A.
296
45. Other Comprehensive Income
€/000 (12,092)
The figure is broken down as follows:
Reserve for measurement of financial instruments
Group translation reserve
Earnings reserve
Group total
Share capital and reserves attributable to non-controlling interests
Total other comprehensive income
In thousands of Euros
As of 31 December 2022
Items that will not be reclassified in the income statement
Remeasurements of defined benefit plans
3,925
3,925
3,925
Total
0
0
3,925
3,925
0
3,925
Items that may be reclassified in the income statement
Total translation gains (losses)
(12,234)
(12,234)
(17)
(12,251)
Share of Other Comprehensive Income of subsidiaries/associates valued with the equity method
(228)
(228)
(228)
Total profits (losses) on cash flow hedges
(3,538)
(3,538)
(3,538)
Total
(3,538)
(12,462)
0
(16,000)
(17)
(16,017)
Other Comprehensive Income
(3,538)
(12,462)
3,925
(12,075)
(17)
(12,092)
As of 31 December 2021
Items that will not be reclassified in the income statement
Remeasurements of defined benefit plans
(1,521)
(1,521)
(1,521)
Total
0
0
(1,521)
(1,521)
0
(1,521)
Items that may be reclassified in the income statement
Total translation gains (losses)
6,174
6,174
(2)
6,172
Share of Other Comprehensive Income of subsidiaries/associates valued with the equity method
1,259
1,259
1,259
Total profits (losses) on cash flow hedges
5,802
5,802
5,802
Total
5,802
7,433
0
13,235
(2)
13,233
Other Comprehensive Income
5,802
7,433
(1,521)
11,714
(2)
11,712
The tax effect related to Other Comprehensive Income is broken down as follows:
As of 31 December 2022
As of 31 December 2021
Gross value
Tax (expense) / benefit
Net value
Gross value
Tax (expense) / benefit
Net value
In thousands of Euros
Remeasurements of defined benefit plans
5,131
(1,206)
3,925
(1,949)
428
(1,521)
Total translation gains (losses)
(12,251)
(12,251)
6,172
6,172
Share of Other Comprehensive Income of subsidiaries/associates valued with the equity method
(228)
(228)
1,259
1,259
Total profits (losses) on cash flow hedges
(4,655)
1,117
(3,538)
7,634
(1,832)
5,802
Other Comprehensive Income
(12,003)
(89)
(12,092)
13,116
(1,404)
11,712
297
H) OTHER INFORMATION The procedure for transactions with related parties, pursuant to Article 4 of Consob Regulation no. 17221 of 12 March 2010 as amended, approved by the Board on 30 September 2010, is published on the institutional site of the Issuer www.piaggiogroup.com, in the section “Governance ”.
46. Share-based incentive plans
As of 31 December 2022, there were no incentive plans based on financial instruments.
47. Fees for Directors, Statutory Auditors and Key Managers
For a complete description and analysis of fees of Directors and Statutory Auditors, reference is made to the remuneration report available from the registered office, and on the Company's website in the section “Governance”. At present, the Company has not identified any Key Senior Managers.
2022
In thousands of Euros
Directors
2,788
Statutory auditors
155
Total fees
2,943
48. Information on related parties
Revenues, costs, payables and receivables as of 31 December 2022 involving parent companies, subsidiaries and affiliated companies refer to the sale of goods or services which are a part of normal operations of the Group.
Transactions are carried out at normal market values, depending on the characteristics of the goods and services provided.
Information on transactions with related parties, including information required by Consob in its communication of 28 July 2006 no. DEM/6064293, is reported below.
Relations with Parent Companies
Piaggio & C. S.p.A. is controlled by the following companies:
Piaggio & C. S.p.A. is subject to the management and coordination of IMMSI S.p.A. pursuant to Article 2497 and subsequent of the Italian Civil Code. During the period, management and coordination comprised the following activities:
298
•as regards mandatory financial disclosure, and in particular the financial statements and reports on operations relating to Group companies, IMMSI has produced a group manual containing the accounting standards adopted and options chosen for implementation, in order to give a consistent and fair view of the consolidated financial statements.
•IMMSI has defined procedures and times for preparing the budget and in general the business plan of Group companies, as well as final management analysis to support management control activities.
•IMMSI has also provided services for the development and management of assets, with a view to optimising resources within the Group, and provided property consultancy services and other administrative services.
•IMMSI has provided consultancy services and assistance concerning extraordinary financing operations, organisation, strategy and coordination, as well as services intended to optimise the financial structure of the Group.
In 2022, for a further three years, the Parent Company63 signed up to the National Consolidated Tax Mechanism pursuant to Articles 117 to 129 of the Consolidated Income Tax Act (T.U.I.R.) of which IMMSI S.p.A. is the consolidating company, and to whom other IMMSI Group companies report. The consolidating company determines a single global income equal to the algebraic sum of taxable amounts (income or loss) realised by individual companies that opt for this type of group taxation.
The consolidating company recognises a receivable from the consolidated company which is equal to the corporate tax to be paid on the taxable income transferred by the latter. Whereas, in the case of companies reporting tax losses, the consolidating company recognises a payable related to corporate tax on the portion of loss actually used to determine global overall income, or calculated as a decrease of overall income for subsequent tax periods, according to the procedures in Article 84, based on the criterion established by the consolidation agreement.
Under the National Consolidated Tax Mechanism, companies may, pursuant to article 96 of Presidential Decree no. 917/86, allocate the excess of interest payable which is not deductible to one of the companies so that, up to the excess of Gross Operating Income produced in the same tax period by other subjects party to the consolidation, the amount may be used to reduce the total income of the Group.
63 Aprilia Racing and Piaggio Concept Store Mantova were also party to the national consolidated tax convention, of which IMMSI S.p.A. is the consolidating company.
299
Piaggio Concept Store Mantova Srl has a lease contract for its sales premises and workshop with Omniaholding S.p.A.. This agreement was signed in normal market conditions.
Pursuant to Article 2.6.2, section 13 of the Regulation of Stock Markets organised and managed by Borsa Italiana S.p.A., the conditions as of Article 37 of Consob regulation 16191/2007 exist.
Transactions with Piaggio Group companies
The main relations with subsidiaries, eliminated in the consolidation process, refer to the following transactions:
Piaggio & C. S.p.A.
osells vehicles, spare parts and accessories to sell on respective markets, to:
•Piaggio Hrvatska
•Piaggio Hellas
•Piaggio Group Americas
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
•Piaggio Concept Store Mantova
•Foshan Piaggio Vehicles Technology R&D
osells components to:
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
•Aprilia Racing
oIt provides promotional material to:
•Piaggio France
•Piaggio Indonesia
•Piaggio España
•Piaggio Limited
ogrants licences for rights to use the brand and technological know-how to:
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
•Aprilia Racing
oprovides support services for scooter and engine industrialisation to:
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
oleases a part of the owned property to:
300
•Aprilia Racing
osubleases a part of the rented property to:
•Piaggio Concept Store Mantova
ohas cash pooling agreements with:
•Piaggio France
•Piaggio Deutschland
•Piaggio España
•Piaggio Vespa
•Aprilia Racing
•Piaggio Concept Store Mantova
ohas loan agreements with:
•Piaggio Fast Forward
•Aprilia Racing
•Nacional Motor
oprovides support services for staff functions to other Group companies;
oissues guarantees for the Group's subsidiaries, for medium-term loans.
Piaggio Vietnam sells vehicles, spare parts and accessories, which it has manufactured in some cases, for sale on respective markets, to:
oPiaggio Indonesia
oPiaggio Group Japan
oPiaggio & C. S.p.A.
oFoshan Piaggio Vehicles Technology R&D
Piaggio Vehicles Private Limited sells vehicles, spare parts and accessories, for sale on respective markets, and components and engines to use in manufacturing, to Piaggio & C. S.p.A.
Piaggio Vehicles Private Limited and Piaggio Vietnam reciprocally exchange materials and components to use in their manufacturing activities.
Piaggio Hrvatska, Piaggio Hellas, Piaggio Group Americas, Piaggio Vietnam and Foshan Piaggio Vehicles Technology R&D
odistribute vehicles, spare parts and accessories purchased by Piaggio & C. S.p.A. on their respective markets.
Piaggio Indonesia and Piaggio Group Japan
oprovide a vehicle, spare part and accessory distribution service to Piaggio Vietnam for their respective markets.
Piaggio France, Piaggio Deutschland, Piaggio Limited, Piaggio España and Piaggio Vespa
oprovide a sales promotion service and after-sales services to Piaggio & C. S.p.A. for their respective markets.
Piaggio Asia Pacific
oprovides a sales promotion service and after-sales services to Piaggio Vietnam in the Asia Pacific region.
301
Foshan Piaggio Vehicles Technology R&D provides to:
•Piaggio & C. S.p.A.:
ocomponent and vehicle design/development service;
oscouting of local suppliers to Piaggio & C S.p.A.;
•Piaggio Vehicles Private Limited:
oscouting of local suppliers to Piaggio & C S.p.A.;
•Piaggio Vietnam:
oscouting of local suppliers to Piaggio & C S.p.A.;
oa distribution service for vehicles, spare parts and accessories on its own market.
Piaggio Advanced Design Center
oprovides a vehicle and component research/design/development service to Piaggio & C. S.p.A.
Piaggio Fast Forward provides Piaggio & C. S.p.A.:
oa research/design/development service;
osells Piaggio & C. S.p.A. some components.
Aprilia Racing provides Piaggio & C. S.p.A:
oa racing team management service;
ovehicle design service.
owith an administrative/accounting service.
302
Relations between Piaggio Group companies and JV Zongshen Piaggio Foshan Motorcycle Co. Ltd
Main intercompany relations between subsidiaries and JV Zongshen Piaggio Foshan Motorcycle Co. Ltd, refer to the following transactions:
Piaggio & C. S.p.A.
•grants licences for rights to use the brand and technological know-how to Zongshen Piaggio Foshan Motorcycle Co. Ltd..
Foshan Piaggio Vehicles Technology R&D
•provides advisory services to Zongshen Piaggio Foshan Motorcycle Co. Ltd.
Zongshen Piaggio Foshan Motorcycle Co. Ltd
•sells vehicles, spare parts and accessories, which it has manufactured in some cases, to the following companies for sale on their respective markets:
oPiaggio Vietnam
oPiaggio & C. S.p.A.
oPiaggio Vehicles Private Limited
oPiaggio Indonesia
oPiaggio Group Japan
303
The table below summarises relations described above and financial relations with parent companies, subsidiaries and affiliated companies as of 31 December 2022 and relations during the year, as well as their overall impact on financial statement items.
As of 31 December 2022
Fondazione Piaggio
IMMSI
IMMSI Audit
Omnia
Holding
Pontech - Pontedera & Tecnologia
Zongshen Piaggio Foshan
Total
% of accounting item
In thousands of Euros
Income statement
Net revenues
9
(9)
-
0.00%
Cost for materials
38,069
38,069
2.81%
Costs for services, leases and rentals
10
442
711
43
71
1,277
0.43%
Other operating income
52
25
342
419
0.28%
Other operating costs
103
1
6
1
18
129
0.50%
Income/(loss) from investments
18
(925)
(907)
101.68%
Borrowing costs
62
18
80
0.30%
Taxes
(4,793)
(4,793)
n.a.
Financial statements
Current trade receivables
9
459
468
0.70%
Other current receivables
25,721
28
544
26,293
46.85%
Non-current financial liabilities for rights of use > 12 months
645
355
1,000
5.65%
Current financial liabilities for rights of use < 12 months
1,076
220
1,296
11.58%
Current trade payables
26
301
13
9,518
9,858
1.33%
Other current payables
114
26,336
26,450
28.23%
304
49. Contract commitments and guarantees
Contract commitments of the Piaggio Group are summarised based on their expiry.
In 1 year
Between 2 and 5 years
After 5 years
Total
In thousands of Euros
IAS 16 operating leases
804
330
1,134
Other commitments
32,730
12,080
1,322
46,132
Total
33,534
12,410
1,322
47,266
The main guarantees issued by banks on behalf of Piaggio & C. S.p.A in favour of third parties are listed below:
Type
Amount €/000
Guarantee of BCC-Fornacette issued in favour of Motoride Spa to reimburse VAT following the deductible tax surplus
298
Guarantee of Banco di Brescia issued to the local authorities of Scorzè, to guarantee payment of urbanisation and construction charges relative to the Scorzè site
166
Guarantee of Banca Intesa Sanpaolo issued to the Ministry of the Defence of Algeria, to guarantee contract obligations for the supply of vehicles
158
305
50. DisputesDa Lio S.p.A., by means of a complaint received on 15 April 2009, summoned the Company before the Court of Pisa to claim compensation for the alleged damages sustained for various reasons as a result of the termination of supply relationships. The Company appeared in court requesting the rejection of all opposing requests. Da Lio requested and obtained the joinder of the proceedings with the proceedings opposing the injunction issued in favour of Piaggio for the return of the moulds retained by the supplier at the end of the supply agreement. The proceedings were therefore joined and with an order pursuant to Article 186ter of the code of civil procedure dated 7 June 2011, Piaggio was ordered to pay €109,586.60, plus interest, relative to the amounts not contested. During 2012, witness evidence was taken followed by a technical appraisal, requested by Da Lio to quantify the amount of interest claimed by Da Lio and value of stock. The technical appraisal was concluded at the end of 2014. The case was adjourned to 23 September 2016 for specification of the pleadings, with the case held for decision. Subsequently, the Court of Pisa had to reassign the case, and after the interruption, the re-appointed Judge decided to re-examine the proceedings and set a new hearing for closing arguments. The parties submitted their closing arguments again, exchanging relative briefs and rejoinders. In a ruling published on 8 August 2019, the Court of Pisa ordered Piaggio in the first instance to pay a total of approximately €7,600,000 and to publish the ruling in two national newspapers and two specialist journals. Piaggio, assisted by its lawyers providing counsel in the appeal proceedings who had indicated the many reasons for filing an appeal and the grounds of the Company, filed an appeal before the Appeal Court of Florence, requesting the ruling to be revised and its enforcement to be suspended. On 21 October 2020, the Florence Court of Appeal (Third Civil Court section) partially accepted the petition to suspend the enforceability of the ruling made by Piaggio up to the amount of €2,670,210.26, rejecting the rest of the appeal and confirming the enforceability of the ruling for the additional amounts. The Court of Appeal ordered the exchange of written submissions containing the Parties' requests and conclusions in lieu of the first hearing set for 9 June 2021. As a result of the situation related to the COVID-19 pandemic, the case was adjourned to the next hearing on 8 June 2022 for closing arguments. At the end of the hearing on 8 June 2022, the Court held the case for decision, assigning to the parties the deadline for the filing of the final and reply statements on 7 and 27 September 2022, respectively. On 28 November 2022, the Court of Appeal of Florence partially upheld the main (Piaggio's) and incidental (Da Lio's) grounds for appeal and, as a result, (i) reduced Piaggio's sentence to the payment of
Canadian Scooter Corp. (CSC), sole distributor of Piaggio for Canada, summoned Piaggio & C. S.p.A., Piaggio Group Americas Inc. and Nacional Motor S.A to appear before the Court of Toronto (Canada) in August 2009 to obtain compensation for damages sustained due to the alleged infringement of regulations established by Canadian law on franchising (the Arthur Wishart Act). The case is currently suspended due to no action being taken by the other party. Piaggio considered the possibility of filing a petition for an "order to dismiss" the lawsuit due no action being taken by the other party, however it decided not to proceed at that time as the costs outweighed the possible benefits.
306
the lower amount of approximately €3 million as regards the item "default interest and penalties on invoices paid in arrears" compared to the previous amount of approximately €4.3 million (without prejudice to the other items of the sentence); (ii) declared that the sum due by Piaggio for unpaid invoices amounts to approximately €0.36 million and (iii) declared that (only) legal interest is to be calculated on the sums due by Piaggio as a penalty for invoices paid late, starting from the date of the court application rather than the date of the ruling. The time limits for an appeal before the Court of Cassation now run.
In June 2011 Elma Srl, a Piaggio dealer since 1995, brought two separate proceedings against the Company, claiming the payment of approximately €2 million for alleged breach of the sole agency ensured by Piaggio for the Rome area and an additional €5 million as damages for alleged breach and abuse of economic dependence by the Company. Piaggio opposed the proceedings undertaken by Elma, fully disputing its claims and requesting a ruling for Elma to settle outstanding sums owing of approximately €966,000.
During the case, Piaggio requested the enforcement of bank guarantees that ensured against the risk of default by the dealer issued in its favour by three banks. Elma attempted to stop enforcement of the guarantees with preventive proceedings at the Court of Pisa (Pontedera section): the proceedings ended in favour of Piaggio that collected the amounts of the guarantees (over €400,000). Trial proceedings took place and a hearing was held on 24 April 2013 to examine evidence. After reaching a decision at the aforesaid hearing, the Judge rejected requests for preliminary examination of Elma and set the hearing for 17 December 2015 for closing arguments, which was adjourned to 3 March 2016 and was then not held as the judge was transferred. The case was reassigned to a new Judge, who set the hearing for 19 July 2018, which was adjourned to 4 October 2018 and then to 10 January 2019 to discuss arguments. In the latter hearing, although the parties had already filed their closing arguments, the Judge adjourned the case, for closing arguments to be made, to the hearing of 9 April 2019. In ruling no. 1211/2019, published on 25 November 2019, the Court of Pisa ruled in favour of Piaggio. The Judge threw out all claims made by Elma, ruling it to pay Piaggio the sum of €966,787.95 plus interest on arrears, deducting the amount of €419,874.14, already received by Piaggio through enforcing the guarantee. Piaggio has paid Elma (offsetting the amount) the sum of €58,313.42 plus legal interest. On 14 January 2020, Piaggio filed a bankruptcy petition against Elma in relation to the sums to receive, while on 15 January 2020, Elma appealed against the above ruling with the Court of Appeal of Florence. At the first hearing held by way of written hearing on 2 March 2021, with the filing of authorised notes, the Court held the case for decision, assigning the parties legal deadlines for filing their final statements and respective replies, which were filed within the deadlines by both parties.
Following the exchange of closing arguments, as a result of the resignation of the Reporting Judge, the case was adjourned, with a hearing for closing arguments set for 5 April 2022. The parties then submitted their conclusions and filed closing submissions. In a judgement dated 28 February 2023, the Court of Appeal of Florence rejected Elma's appeal in its entirety and upheld the first instance judgment.
307
As regards the matter, Elma has also brought a case against a former senior manager of the Company before the Court of Rome, claiming compensation for damages: Piaggio appeared in the proceedings, requesting, among other things, that the case be moved to the Court of Pisa. At the hearing of 27 January 2014, the Judge ruled on the preliminary exceptions and did not admit preliminary briefs. The hearing for closing arguments set for 21 December 2015 and subsequently adjourned, was not held as the Judge, on petition of Elma, re-opened the preliminary investigation, admitting testimonial evidence and setting the hearing for 25 May 2016. On this date, examination of the witnesses began and the hearing was adjourned to 24 October 2016 to continue the preliminary investigation. On 11 April 2017, the parties made an attempt at conciliation, initiated by the Judge, which was unsuccessful. The Judge admitted an accounting expert requested by Elma, although with a far more limited scope than the petition filed, adjourning the case to the hearing of 9 October 2018 for closing arguments. The expert's appraisal was filed in October 2018. The parties exchanged their closing arguments and respective rejoinders. In a ruling of 31 May 2019 (published on 3 June 2019) the Ordinary Court of Rome, Civil Section XII, rejected the claim made by Elma S.r.l., also ordering it to pay the expert's fees and legal fees. Elma appealed to the Court of Appeal of Rome, summoning Piaggio to a hearing on 15 April 2020, postponed to 31 March 2021 and again postponed to 6 April 2021, and held by written hearing with exchange of authorised notes. At this stage, the Court rejected the request for annulment of the technical appraisal carried out at first instance, formulated by Elma, deeming this decision to be strictly related to the examination of the appeal on merits, and therefore adjourned the case to the hearing of 10 October 2023 for closing arguments.
The company TAIZHOU ZHONGNENG summoned Piaggio before the Court of Turin, requesting the annulment of the Italian part of the 3D trademark registered in Italy protecting the form of the Vespa, as well as a ruling denying the offence of the counterfeiting of the 3D trademark in relation to scooter models seized by the Italian tax police at the 2013 EICMA trade show, based on the petition filed by Piaggio, in addition to compensation for damages. At the first hearing for the parties to appear, set for 4 February 2015, adjourned to 5 February 2015, the Judge arranged for a technical appraisal to establish the validity of the Vespa 3D trademark and the infringement or otherwise of Znen scooter models. At the hearing of 29 May 2015, having appointed the expert, the Judge set 10 January 2016 as the deadline for filing the final appraisal report and 3 February 2016 as the date for the hearing to discuss it. During this hearing, the Judge, considering the preliminary investigation as completed, set the hearing for closing arguments for 26 October 2016. In a ruling of 6 April 2017, the Court of Turin upheld in full the validity of the 3D Vespa mark of Piaggio, and the counterfeiting of said by the “VES” scooter by Znen. The Court of Turin also recognised the protection of Vespa in accordance with copyright, confirming the creative nature and artistic value of its form, declaring that the scooter “VES” by Znen infringes Piaggio copyright. The other party appealed against the sentence at the Appeal Court of Turin, where the first hearing took place on 24 January 2018. The case was adjourned to the hearing of 13 June 2018 for the closing arguments, after which statements and rejoinders and replications were exchanged. The Court of Appeal of Turin rejected the appeal made by Zhongneng in a ruling published on 16 April 2019. The other party appealed to the Court
308
of Cassation, to which Piaggio filed a counter-appeal on 5 September 2019. The Court of Cassation then set a hearing for 22 November 2022, after which it ordered a new hearing, in public sessionon a date to be determined.
In summons dated 27 October 2014, Piaggio summoned PEUGEOT MOTOCYCLES ITALIA S.p.A., MOTORKIT s.a.s. di Turcato Bruno and C., GI.PI to the Companies Court of Milan. MOTOR di Bastianello Attilio and GMR MOTOR s.r.l. before the Court of Milan, to obtain the recall of Peugeot “Metropolis” motorcycles from the market, and to establish the infringement of some European patents and designs owned by Piaggio, as well as a ruling for the compensation for damages for unfair competition, and the publication of the ruling in some newspapers (“Case 1”).
In the hearing for the first appearance of 4 March 2015, the judge set the deadline for filing statements pursuant to Article 183.6 of the Italian Code of Civil Procedure and appointed an expert witness. The witness’s appraisal report was filed on 2 May 2017 andthe Judge adjourned the case to the hearing of 28 February 2018 for closing arguments. At the hearing, the Judge ordered an addition to the expert's appraisal, filed on 20 June 2018 and set the new deadlines for the exchange of final statements. On 27 May 2020, the Court of Milan rejected the claims of infringement of Piaggio patents Nos. EP1363794B1, EP1571016B1, IT1357114 and Community design no. 487723-0001, as well as the claim of unfair competition, ordering Piaggio to pay 3/4 of the costs of the witness appraisal (equal to €22,800) and to pay the defendant €21,387 for the costs of the proceedings ("Judgment 1"), and also ordered the separation of the hearing on the infringement of patent No. EP1561612B1, combining it with the case brought by PEUGEOT MOTOCYCLES SAS for a declaration of erga omnes invalidity ("Case 2").
Piaggio appealed against Judgment 1 before the Court of Appeal of Milan. At the first hearing held on 17 February 2021, the Court verified the admissibility of the notification of the summons to appeal and the parties presented their respective arguments by referring to the filed documents. The Court rejected the objection raised by the Peugeot on the grounds that the appeal was inadmissible, and set the hearing for closing arguments for 10 November 2021, adjourned to 23 March 2022, in which the deadlines for filing closing and reply statements, which were exchanged between the parties. Piaggio also insisted on a date being set for the oral hearing pursuant to Article 352(2) of the Code of Civil Procedure. A hearing was set for 14 September 2022, after which the Court reserved its decision.
PEUGEOT MOTOCYCLES SAS summoned Piaggio to appear before the Court of Milan, claiming that the patent based on which Piaggio filed a claim in Case 1 for counterfeiting would be voidable, due to a previously existing Japanese patent (“Case 2”). Piaggio appeared in court, claiming that the action taken by Peugeot could not proceed further and that the patent application referred to by Peugeot was irrelevant. During the hearing of 20 February 2018, the Judge established the deadlines for filing preliminary briefs and the case was adjourned to the hearing of 22 May 2018, after which an expert’s appraisal was ordered, with the date of 15 January 2019 set for the filing. After the expert's appraisal was filed (confirming the validity of Piaggio's patent), and discussed during the hearing of 29 January 2019, the Judge requested further technical confirmations from the expert,
309
establishing a deadline by which Peugeot must have requested additions to the appraisal. The Judge rejected Peugeot's request for clarification and considered that the case was ready for decision, adjourning the hearing to 15 December 2020 for the definition of the closing arguments of the joined cases (infringement and nullity). The Judge granted the time limits prescribed by law for the filing of closing statements, which were duly exchanged between the parties. At Peugeot's request pursuant to Article 275, paragraph 2 of the Italian Code of Civil Procedure, the Court ordered the discussion of arguments of the case, setting the hearing for 24 June 2021, holding the case for decision. On 20 September 2021, the Court of Milan – Business Section – ruled in favour of Piaggio (i) rejecting the application for invalidity of the EP patent owned by Piaggio, (ii) ascertaining the infringement and inhibiting, limited to Italy, the production, import, export, marketing, advertising, also through the Internet, of the aforementioned motorcycles; (iii) ordering Peugeot Italia to withdraw the counterfeit motorcycles from the market; (iv) establishing a penalty of €6,000 to be paid by each of the defendants for each Metropolis motorcycle marketed after the expiry of the deadline of thirty days from the notification of this ruling and of €10,000 to be paid by Peugeot Italia and Peugeot Motocycles S.A.S. for each day’s delay in implementing order sub 3, after the term of deadline of ninety days from the notification of this ruling; (v) charging Peugeot the costs of litigation and also ordering it to pay legal costs in favour of Piaggio.
Peugeot appealed against the ruling, and against Piaggio, at the same time taking action to suspend the provisional effect of the ruling in the first instance. The latter appeal was dismissed by an Order of 6 December 2021 confirming the provisional effect of the ruling in the first instance against Peugeot Italia. In the appeal judgment, during the first hearing held on 23 March 2022, the parties stated their findings at the request of the Court, which granted the legal deadlines for filing their final statements. The parties exchanged their briefs and Piaggio insisted on a date being set for the oral hearing pursuant to Article 352(2) of the Code of Civil Procedure. A hearing was then scheduled for 14 September 2022, after which the Court reserved its decision.
On 16 January 2023, the Court of Appeal of Milan ruled on case General Register App. 3052/2021 (i.e.: the appeal against the combined cases of infringement and invalidity) and: (i) upheld the first instance judgment with respect to the finding of the validity of EP'612 and the existence of a literal infringement of claims 1, 2 and 5 of the patent by Metropolis (ii) upheld the measures of the injunction and withdrawal from the market ordered by the Court of First Instance but, unlike the Court of First Instance, limited the order of withdrawal from the market only for Peugeot Motocycles Italia Srl in liquidation (iii) also rejected Peugeot's sixth ground of appeal (iv) ordered a general ruling against Peugeot Motocycles Italia Srl in liquidation (v) ordered, by separate ruling, the continuation of the case to determine the amount of compensable that may be awarded.
In a judgement dated 18 January 2023, the same Court of Appeal upheld the first instance judgement in the appeal brought by Piaggio. In particular, it (i) ruled out the existence of the infringement of the three patents, deeming the objections of invalidity of EP'794, EP'016 and IT'114 raised by Peugeot to be absorbed, and (ii) rejected Piaggio's claims of infringement of the Community model and unfair competition, considering that the Court of First Instance was correct in its ruling on this point. The time limits for any appeals to the Court of Cassation now run.
310
Piaggio started a similar legal action against PEUGEOT MOTOCYCLES SAS before the Tribunal de Grande Instance in Paris. As a result of the Piaggio action (”Saisie Contrefaçon”), several documents were obtained by a bailiff and tests carried out to prove the infringement of the Piaggio MP3 motorcycle by the Peugeot “Metropolis” motorcycle. The hearing took place on 8 October 2015 for the appointment of the expert, who will examine the findings of the Saisie Contrefaçon. On 3 February 2016 the hearing took place to discuss the preliminary briefs exchanged between the parties. The hearing to assess preliminary findings, set for 29 September 2016, was adjourned to 9 February 2017 and then to 6 September 2017. In February 2018, a preliminary expert's appraisal was filed defining documents based on which a ruling will be made on the counterfeiting alleged by Piaggio. The hearing was held on 29 January 2019 and proceedings were adjourned to the hearing of 17 October 2019. Subsequently, the term deadline for filing briefs was extended. A hearing was held on 17 September 2020. The parties filed their respective pleadings and at the hearing on 11 March 2021, the case was held for decision. In a sentence of 7 September 2021, the Court of Paris ruled in favour of Piaggio ordering Peugeot Motocycles to pay compensation for damages amounting to €1,500,000, in addition to further fines for infringement and legal costs, ordering a ban on Peugeot Motocycles manufacturing, promoting, marketing, importing, exporting, using and / or possessing in French territory any three-wheeler scooter that uses the control system patented by Piaggio (including the Peugeot Metropolis). The ruling, however, is not provisionally enforceable. Piaggio appealed for the provisional enforceability of the judgment in the first instance with a hearing held on 8 February 2022. The Court rejected the application to grant Piaggio provisional enforceability with a decision on 8 March 2022. At the same time, Peugeot appealed against the ruling in the first instance and Piaggio appeared in the appeal proceedings. On 11 June 2022, Piaggio filed the first defence brief in which it insisted on rejecting the appeal presented by Peugeot. Peugeot therefore requested that a new technical expert's report be ordered; the application was rejected on 10 January 2023. The case will then continue with the final hearing.
On 28 September 2022, Piaggio Fast Forward (PFF) was sued by Hood Park, LLC ("Hood") before the Business Litigation Session of the Superior Court of Massachusetts, located in Suffolk County, in civil lawsuit no.: 2284CV02233 BLS2. Piaggio Group Americas Inc. (“PGA”) also appeared as guarantor.
Hood is the owner of a building for commercial use that PFF had planned to lease as its principal place of business. At Hood's request, PFF forwarded - via its broker - a copy of a page of the signed contract, but pointing out that PFF's acceptance of the entire contract would be subject to prior agreement on the termination clause now mentioned. Nevertheless, Hood asserted that this was now to be considered as signed and, therefore, binding. Hood then sued PFF (as well as PGA as guarantor) demanding payment of the full amount of the lease payments, amounting to USD 24,831,856.49 plus any multiplication, interest and all costs, including legal fees.
On 22 December 2022, the defendants PFF and PGA filed a motion for dismissal. The hearing, originally scheduled for 10 January 2023, was later postponed to 20 March 2023 (but due to a rescheduling request by opposing counsel, it will be further postponed).
311
On 7 December 2022, the French company SCOOTER CENTER S.à.r.l. notified Piaggio and Piaggio France of a writ of summons before the Tribunal de Commerce of Paris, requesting the two companies of the Piaggio group to be ordered to pay compensation for alleged damages caused by the (alleged) brutal termination of the sales concession agreement in place between Piaggio and the same dealer Scooter Center without due notice. These damages were quantified in the court application as €4,150,000 (plus legal costs).
At the first hearing, on 16 February 2023, the judge set the case schedule.
The amounts allocated by the Company for the potential risks deriving from the current disputes appear to be consistent with the predictable outcome of the disputes.
With reference to tax disputes involving the parent company Piaggio & C. SpA (hereinafter also "the Company" or "the Parent Company"), it should be noted that the dispute concerning the notices of assessment for regional production tax and corporate income tax notified to Piaggio & C. S.p.A. on 22 December 2017, both relating to the 2012 tax period and containing findings on transfer pricing, is pending before the Regional Tax Tribunal of Tuscany. In this regard, it should be noted that the Company was successful in the first instance before the Florence Provincial Tax Commission with a ruling filed on 15 January 2020; the Revenue Agency appealed against this decision before the Provincial Tax Commission with a summons issued to Piaggio & C. on 12 October 2020; the Company therefore appeared in court on 2 December 2020.
With reference to the disputes arising from inspections relating to income produced by Piaggio & C. S.p.A. in India in the Indian tax years 2009-2010, 2010-2011, 2011-2012 and 2012-2013, respectively involving claims for approximately €1.4 million, €1.3 million, €1.1 million and €0.9 million, inclusive of interest, the following is reported:
•for all the years concerned, the Parent Company was successful before the Income Tax Appellate Tribunal;
•As regards disputes relative to the 2009-2010, 2010-2011, 2011-2012 and 2012-2013 periods, the Indian tax authorities filed an appeal against the first instance decision before the High Court;
•the dispute relative to the 2009-2010 period can be considered as settled, as no reply was received from the local tax authorities within the deadlines established by local regulations in response to a request for clarifications made over 800 days previously by the ruling body. In this regard, the Indian tax authorities could request a remittal for the reply, but in the opinion of consultants assisting the Company the likelihood of the High Court granting this is remote;
•in relation to the disputes relating to the tax periods 2010-2011, 2011-2012 and 2012-2013, the date of the hearing is pending.
312
The Company has not considered allocating provisions for these disputes, considering the rules in its favour, in the first instance, and the positive opinions expressed by consultants appointed as counsel.
Moreover, the Parent Company received a VAT assessment order from the Indian tax authorities relative to the 2010-2011 tax period, concerning the non-application of VAT to intergroup transactions with Piaggio Vehicles PVT Ltd relative to royalties. A similar order was also notified for the 2011-2012, 2012-2013, 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 tax periods. The amount of the dispute including interest is approximately €0.8 million for each of the disputed tax periods, of which a small part already paid to the Indian tax authorities, in compliance with local law. The Company decided to appeal against the order relative to the 2010-2011 tax period before the High Court, filing its appeal on 17 June 2019; the Departmental Appellate Authority – Joint Commissioner of Sales Tax orders were appealed relating to subsequent tax periods, with appeals filed in July 2020 for the dispute concerning the 2011-2012 tax period and on 21 June 2021 in relation to the dispute concerning the 2012-2013 tax period and on 28 April 2022 for the remaining tax periods.
The main tax disputes of other Group companies concern Piaggio Vehicles PVT Ltd, PT Piaggio Indonesia and Piaggio Hellas S.A.
With reference to the Indian subsidiary, some disputes concerning different tax years from 2003 to 2017 are ongoing related to direct and indirect tax assessments and for a part of which, considering positive opinions expressed by consultants appointed as counsel, provisions have not been made in the financial statements. The Indian company has already partly paid the amounts contested, as required by local laws, that will be paid back when proceedings are successfully concluded in its favour.
With reference to PT Piaggio Indonesia, the company has certain disputes outstanding relating to the 2015, 2017, 2018 and 2019 tax periods.
In particular, in relation to the 2015 tax period, the company appealed against the notices concerning Withholding Taxes and Value Added Tax respectively.
in relation to the dispute concerning Withholding Taxes, on 10 October 2019, the company appealed to the Tax Court, which on 5 March 2021, ruled against one of the findings made by the local tax authorities concerning financial guarantees. The Company appealed against this ruling to the Supreme Court, which, in December 2022, definitively ruled against the Company, only as regards the dispute concerning the financial guarantees. This ruling refers to the periods of March, May and July 2015, while the ruling for the period October 2015 is still pending.
With regard to the dispute on Value Added Tax, the Company filed an appeal on 4 May 2021 with the Tax Court and the first hearing took place on 22 October 2021. It should be noted that the dispute also concerns the month of December 2014. The Tax Court ruled in favour of the Indonesian
313
With respect to the 2017 period, the company filed an appeal with the Tax Court on 8 September 2020 against the transfer pricing and withholding tax notice. The Tax Court expressed an unfavourable opinion regarding the Company, which filed an appeal with the Supreme Court on 13 July.
The total amount currently in question amounts to €0.1 million and where due (i.e. where not offset by the company's past losses) has already been paid in full to the Indonesian tax authorities in accordance with the regulations in force there.
As regards the 2018 tax period, the dispute, relating to transfer pricing, concerns a higher tax of about €0.2 million. On 17 September 2021, the company appealed against filed action against the notice of assessment before the Tax Court and is waiting for the decision.
Finally, in relation to the 2019 tax year, the Indonesian tax authorities have repeated the same transfer pricing allegations made in 2018, as well as the tax claim made in previous years in relation to Withholding taxes. The total amount currently under dispute amounts to approximately €0.9 million. The company filed an appeal against the assessment notice on 15 September 2022 before the Tax Court and is waiting for the date of the hearing to be set.
On 8 April 2015, Piaggio Hellas S.A. received a Tax Report following a general assessment for the 2008 tax period, with findings for approximately €0.5 million, including sanctions. On 12 June 2015, the Greek company appealed against the report with the Tax Center – Dispute Resolution Department. Following the unfavourable outcome of this appeal, the Company appealed before the Administrative Court of Appeal, which ruled in favour of the local tax authorities in a ruling of 27 April 2017. The Company therefore appealed before the Supreme Court. On 18 January 2023, a hearing was held before this body and the ruling is currently pending. The amount in question was paid in full to the Greek tax authorities. Based on positive opinions from professionals appointed as counsel, the Company considers a favourable outcome and subsequent reimbursement of amounts paid as likely.
51. Significant non-recurring events and operations
No significant, non-recurring operations, as defined by Consob Communication DEM/6064293 of 28 July 2006 took place during 2022 and 2021.
52. Transactions arising from atypical and/or unusual transactions
During 2022 and 2021, the Group did not record any significant atypical and/or unusual transactions, as defined by CONSOB Communication DEM/6037577 of 28 April 2006 and DEM/6064293 of 28 July 2006.
314
53. Events occurring after the end of the periodThis document was published on 27 March 2023 authorised by the Chairman and Chief Executive Officer.
After 31 December 2022 and up to the date of approval of these financial statements, no other events occurred that could have a material impact on the reported performance and financial position, as determined by IAS 10 paragraph 9.
54. Authorisation for publication
Mantova, 2 March 2023
for the Board of Directors
Chairman and Chief Executive Officer
Roberto Colaninno
315
317
Piaggio Group companies
Companies and material investments of the Group are listed below.
The list presents the companies divided by type of control and method of consolidation.
The following are also shown for each company: the company name, the registered office, the country of origin and the share capital in the original currency, in addition to the percentage held by Piaggio & C. S.p.A. or by other subsidiaries. It should be noted that the percentage share of ownership corresponds to the percentage share of the voting rights exercised at Ordinary General Meetings of Shareholders.
318
% of the holding
Company name
Registered office
Country
Share capital
Currency
Direct
Indirect
Means
% Total interest
Parent company:
Piaggio & C. S.p.A.
Pontedera (Pisa)
Italy
207,613,944.37
Euros
Subsidiaries:
Aprilia Brasil Industria de Motociclos S.A.
Manaus
Brazil
2,020,000.00
R$
51%
Aprilia World Service Holding do Brasil Ltda
51%
Aprilia Racing S.r.l.
Pontedera (Pisa)
Italy
250,000.00
Euros
100%
100%
Aprilia World Service Holding do Brasil Ltda.
São Paulo
Brazil
2,028,780.00
R$
99.999950709%
Piaggio Group Americas Inc
99.999950709%
Foshan Piaggio Vehicles Technology Research and Development Co Ltd.
Foshan City
China
10,500,000.00
CNY
100%
Piaggio Vespa B.V.
100%
Nacional Motor S.A.
Barcelona
Spain
60,000.00
Euros
100%
100%
Piaggio Advanced Design Center Corp.
Pasadena
USA
100,000.00
USD
100%
100%
Piaggio Asia Pacific PTE Ltd.
Singapore
Singapore
100,000.00
SGD
100%
Piaggio Vespa B.V.
100%
Piaggio China Co. Ltd.
Hong Kong
China
12,500,000 auth. capital (12,166,000 subscribed and paid up)
USD
100%
100%
Piaggio Concept Store Mantova S.r.l.
Mantova
Italy
100,000.00
Euros
100%
100%
Piaggio Deutschland GmbH
Düsseldorf
Germany
250,000.00
Euros
100%
Piaggio Vespa B.V.
100%
Piaggio España S.L.U.
Alcobendas
Spain
426,642.00
Euros
100%
100%
Piaggio Fast Forward Inc.
Boston
USA
15,135.98
USD
83.91%
83.91%
Piaggio France S.A.S.
Clichy Cedex
France
250,000.00
Euros
100%
Piaggio Vespa B.V.
100%
Piaggio Group Americas Inc.
New York
USA
2,000.00
USD
100%
Piaggio Vespa B.V.
100%
Piaggio Group Japan
Tokyo
Japan
99,000,000.00
JPY
100%
Piaggio Vespa B.V.
100%
Piaggio Hellas S.A.
Athens
Greece
1,004,040.00
Euros
100%
Piaggio Vespa B.V.
100%
Piaggio Hrvatska D.o.o.
Split
Croatia
400,000.00
HRK
100%
Piaggio Vespa B.V.
100%
Piaggio Limited
Orpington
United Kingdom
250,000.00
GBP
0.0004%
100%
99.9996%
Piaggio Vespa B.V.
Piaggio Vehicles Private Limited
Maharashtra
India
340,000,000.00
INR
99.9999971%
100%
0.0000029%
Piaggio Vespa B.V.
Piaggio Vespa B.V.
Breda
Holland
91,000.00
Euros
100%
100%
Piaggio Vietnam Co Ltd.
Hanoi
Vietnam
64,751,000,000.00
VND
63.50%
100%
36.50%
Piaggio Vespa B.V.
PT Piaggio Indonesia
Jakarta
Indonesia
10,254,550,000.00
IDR
29.285714286%
100%
70.714285714%
Piaggio Vespa B.V.
319
List of companies included in the scope of consolidation with the equity method as of 31 December 2022
% of the holding
Company name
Registered office
Country
Share capital
Currency
Direct
Indirect
Means
% total interest
Zongshen Piaggio Foshan Motorcycle Co. Ltd
Foshan City
China
255,942,515.00
CNY
32.50%
45%
12.50%
Piaggio China Co. LTD
List of investments in affiliated companies as of 31 December 2022
% of the holding
Company name
Registered office
Country
Share capital
Currency
Direct
Indirect
Means
% total interest
Barcelona
Spain
60,101.21
Euros
22%
Nacional Motor S.A.
22%
Immsi Audit S.c.a r.l.
Mantova
Italy
40,000.00
Euros
25%
25%
Pontedera & Tecnologia S.c.a r.l.
Pontedera (Pisa)
Italy
469,069.00
Euros
22.23%
22.23%
S.A.T. Societé d’Automobiles et Triporteurs S.A.
Tunis
Tunisia
210,000.00
TND
20%
Piaggio Vespa B.V.
20%
320
Information pursuant to Article 149-duodiecies of the Consob Regulation on Issuers
Pursuant to Article 149-duodecies of the Consob Regulation on Issuers, the following table indicates the fees for 2022 paid for auditing services and services other than auditing services provided by the independent auditors and entities of its network.
Subject providing the service
Recipient
Fees for 2022
In Euros
Auditing services
Deloitte
Parent Company Piaggio & C
370,972
Deloitte
Subsidiaries
474,370
Other auditors
Subsidiaries
42,469
Limited assurance engagement for the NFS
Deloitte
Parent Company Piaggio & C
41,518
Certification services
Deloitte
Parent Company Piaggio & C
29,000
Deloitte
Subsidiaries
53,088
Other services
Deloitte
Parent Company Piaggio & C
15,670
Total
1,027,087
N.B.: Sums of subsidiaries operating in currencies other than the euro and agreed on in a local currency have
been converted to the average exchange rate of 2022.
* * *
321
Certification of the Consolidated Financial Statements pursuant to Article 154-bis of Legislative Decree 58/98
1. The undersigned Roberto Colaninno (Chairman and Chief Executive Officer) and Alessandra Simonotto (Executive in charge of financial reporting) of Piaggio & C. S.p.A. hereby certify, also in consideration of article 154-bis, sections 3 and 4, of Legislative Decree no. 58 of 24 February 1998:
•the appropriateness with regard to the company’s characteristics and
•the actual application of administrative and accounting procedures for the formation of the Consolidated Financial Statements as of 31 December 2022.
2. With regard to the above, no relevant aspects are to be reported.
3. Moreover
3.1 The Consolidated Financial Statements:
a) have been prepared in compliance with the international accounting standards endorsed by the European Community pursuant to regulation (EC) no. 1606/2002 of the European Parliament and Council of 19 July 2002;
b) correspond to accounting records;
c) give a true and fair view of the consolidated statement of financial position and results of operations of the Issuer and of all companies included in the scope of consolidation;
3.2 The Report on Operations includes reliable analysis of the trend of operations and operating results, as well as the situation of the Issuer and companies included in the scope of consolidation, as well as a description of main risks and uncertainties to which they are exposed.
Date: 2 March 2023
Chairman and Chief Executive Officer
Roberto Colaninno
Executive in charge of financial reporting
Alessandra Simonotto
323
324
325
326
327
328
329
331
Income Statement
As of 31 December 2022
As of 31 December 2021
Total
of which related parties
Total
of which related parties
In thousands of Euros
Notes
Net revenues
3
1,284,021
220,630
1,122,951
147,690
Cost for materials
4
836,239
169,580
721,834
132,753
Cost for services and leases and rentals
5
233,812
56,700
198,569
47,726
Employee costs
6
181,708
168,977
21
Depreciation and impairment costs of property, plant and equipment
7
27,403
23,512
Amortisation and impairment costs of intangible assets
7
69,441
66,726
Depreciation of rights of use
7
3,646
3,563
Other operating income
8
161,927
65,201
140,345
47,638
Net reversals (impairment) of trade and other receivables
9
604
315
Other operating costs
10
20,067
498
19,685
693
Operating income
73,028
60,115
Income/(loss) from investments
11
43,445
43,429
34,134
34,136
Financial income
12
3,840
3,626
2,074
2,062
Borrowing costs
12
21,799
110
20,391
104
Net exchange gains/(losses)
12
(1,988)
(1,497)
Profit before tax
96,526
74,435
Taxes for the period
13
21,469
(3,832)
16,403
(3,705)
Profit from continuing operations
75,057
58,032
Assets held for sale:
Profits or losses arising from assets held for sale
14
Net Profit (loss) for the period
75,057
58,032
332
As of 31 December 2022
As of 31 December 2021
In thousands of Euros
Notes
Net Profit (loss) for the period (A)
75,057
58,032
Items that will not be reclassified in the income statement
Remeasurements of defined benefit plans
40
3,635
(1,302)
Portion of components of the Statement of Comprehensive Income of subsidiaries/associates measured with the equity method
40
312
(487)
Total
3,947
(1,789)
Items that may be reclassified in the income statement
Total profits (losses) on cash flow hedges
40
(3,483)
5,802
Portion of components of the Statement of Comprehensive Income of subsidiaries/associates measured with the equity method
40
(3,109)
11,853
Total
(6,592)
17,655
Other comprehensive income (B)*
(2,645)
15,866
Total Profit (loss) for the period (A + B)
72,412
73,898
* Other Profits (and losses) take account of related tax effects
333
Statement of Financial Position
As of 31 December 2022
As of 31 December 2021
Total
of which related parties
Total
of which related parties
In thousands of Euros
Notes
ASSETS
Non-current assets
Intangible assets
15
612,586
608,242
Property, plant and equipment
16
171,563
176,858
Rights of use
17
10,250
12,330
Investments
33
114,662
140,306
Other financial assets
34
16
90
74
Tax receivables
22
2,496
5,242
Deferred tax assets
18
48,475
50,888
Other receivables
21
17,356
20,745
67
Total non-current assets
977,404
1,014,701
Assets held for sale
25
Current assets
Trade receivables
20
65,122
57,958
53,404
34,351
Other receivables
21
159,123
140,073
119,261
96,637
Short-term tax receivables
22
15,248
4,783
Inventories
19
247,427
193,351
Other financial assets
34
25,557
25,557
18,660
18,660
Cash and cash equivalents
35
79,447
122,154
Total current assets
591,924
511,613
TOTAL ASSETS
1,569,328
1,526,314
334
As of 31 December 2022
As of 31 December 2021
Total
of which related parties
Total
of which related parties
In thousands of Euros
Notes
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity
Capital
39
207,614
207,614
Share premium reserve
39
7,171
7,171
Legal reserve
39
28,954
26,052
Other reserves
39
(29,991)
(23,399)
Retained earnings (losses)
39
58,062
58,057
Net Profit (loss) for the period
39
75,057
58,032
Total shareholders’ equity
346,867
333,527
Non-current liabilities
Financial liabilities falling due after one year
36
510,790
532,214
Financial liabilities for rights of use > 12 months
36
4,408
645
6,676
1,724
Other long-term provisions
27
12,408
13,580
Retirement funds and employee benefits
28
24,223
31,338
Tax payables
29
0
1,387
Other payables
30
6,655
3,230
Total non-current liabilities
558,484
588,425
Current liabilities
Financial liabilities falling due within one year
36
61,152
375
75,380
3,904
Financial liabilities for rights of use < 12 months
36
3,303
1,142
3,531
1,168
Trade payables
26
482,418
34,596
439,297
35,286
Tax payables
29
8,909
9,594
Other short-term payables
30
97,569
49,567
66,050
32,390
Current portion of other long-term provisions
27
10,626
10,510
Total current liabilities
663,977
604,362
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
1,569,328
1,526,314
335
Statement of Cash Flows
This statement shows the factors behind changes in cash and cash equivalents, net of short-term bank overdrafts, as required by IAS 7.
2022
Of which related parties
2021
Of which related parties
Change
In thousands of Euros
Notes
Operating activities
Net Profit (loss) for the period
75,057
58,032
17,025
Taxes for the period
13
21,469
16,403
5,066
Depreciation of property, plant and equipment
7
27,403
23,337
4,066
Amortisation of intangible assets
7
67,734
65,452
2,282
Depreciation of rights of use
7
3,646
3,563
83
Provisions for risks and retirement funds and employee benefits
19,843
20,966
(1,123)
Write-downs/(Reinstatements)
(41,120)
(32,352)
(8,768)
Losses / (Gains) on the disposal of property, plant and equipment
(2)
(40)
38
Financial income
12
(3,840)
(2,074)
(1,766)
Dividend income
(15)
(19)
4
Borrowing costs
12
21,799
20,391
1,408
Income from public grants
(5,032)
(1,515)
(3,517)
Change in working capital:
(Increase)/Decrease in trade receivables
20
(12,183)
(23,607)
(13,297)
(10,800)
1,114
(Increase)/Decrease in other receivables
21
(36,609)
(43,369)
(34,519)
(22,180)
(2,090)
(Increase)/Decrease in inventories
19
(54,076)
(62,532)
8,456
Increase/(Decrease) in trade payables
26
43,121
(690)
111,505
10,802
(68,384)
Increase/(Decrease) in other payables
30
34,944
17,177
17,656
15,811
17,288
Increase/(Decrease) in provisions for risks
27
(12,297)
(7,471)
(4,826)
Increase/(Decrease) in retirement funds and employee benefits
28
(11,435)
(11,336)
(99)
Other changes
5,545
(11,457)
14,118
2,608
(8,573)
Cash generated from operating activities
143,952
186,268
(42,316)
Interest paid
(17,812)
(18,443)
631
Taxes paid
(11,191)
(10,738)
(453)
Cash flow from operating activities (A)
114,949
157,087
(42,138)
Investment activities
Investment in property, plant and equipment
16
(22,115)
(30,423)
8,308
Sale price, or repayment value, of property, plant and equipment
10
177
(167)
Investment in intangible assets
15
(73,809)
(85,463)
(11,654)
Sale price, or repayment value, of intangible assets
24
25
(1)
Investment in non-current financial assets
403
(6,514)
6,917
Loans provided
(30,159)
(23,263)
(6,896)
Repayment of loans provided
90
1,636
(1,546)
Grants collected
271
69
202
Collected interests
3,209
1,864
1,345
Dividends from investments
59,744
60,281
(537)
Cash flow from investment activities (B)
(62,332)
(81,611)
19,279
Financing activities
Purchase of treasury shares
39
(5,669)
(53)
(5,616)
Outflow for dividends paid
39
(53,403)
(39,639)
(13,764)
Loans received
36
66,237
202,436
(136,199)
Outflow for repayment of loans
36
(98,246)
(189,517)
91,271
Repayment of liabilities for rights of use
36
(4,223)
(5,242)
1,019
Cash flow from financing activities (C)
(95,304)
(32,015)
(63,289)
Increase / (Decrease) in cash and cash equivalents (A+B+C)
(42,687)
43,461
(86,148)
Opening balance
122,142
78,504
43,638
Exchange differences
(72)
177
(249)
Closing balance
79,383
122,142
(42,759)
336
Movements from 1 January 2022/31 December 2022
Transactions with shareholders
As of 1 January 2022
Earnings for the period
Other comprehensive income
Total profit (loss) for the period
Allocation of profits
Distribution of dividends
Purchase of treasury shares
Interim dividend
As of 31 December 2022
In thousands of Euros
Notes
40
39
39
39
39
Share capital
207,614
207,614
Share premium reserve
7,171
7,171
Legal reserve
26,052
2,902
28,954
Net capital gain from contribution
152
152
Reserve for measurement of financial instruments
6,083
(3,483)
(3,483)
2,600
IAS transition reserve
1,861
1,861
Translation reserve
(31,495)
(3,109)
(3,109)
(34,604)
Treasury shares
(2,019)
(5,669)
(7,688)
Earnings reserve
90,430
3,947
3,947
6,567
(4,994)
95,950
Earnings for the period
27,678
75,057
75,057
(9,469)
(18,209)
(30,200)
44,857
TOTAL SHAREHOLDERS’ EQUITY
333,527
75,057
(2,645)
72,412
0
(23,203)
(5,669)
(30,200)
346,867
Movements from 1 January 2021/31 December 2021
Transactions with shareholders
As of 1 January 2021
Earnings for the period
Other comprehensive income
Total profit (loss) for the period
Allocation of profits
Distribution of dividends
Purchase of treasury shares
Interim dividend
As of 31 December 2021
In thousands of Euros
Notes
40
39
39
39
39
Share capital
207,614
207,614
Share premium reserve
7,171
7,171
Legal reserve
24,215
1,837
26,052
Net capital gain from contribution
152
152
Reserve for measurement of financial instruments
281
5,802
5,802
6,083
IAS transition reserve
1,861
1,861
Translation reserve
(43,348)
11,853
11,853
(31,495)
Treasury shares
(1,966)
(53)
(2,019)
Earnings reserve
79,805
(1,789)
(1,789)
18,131
(5,717)
90,430
Earnings for the period
23,536
58,032
58,032
(19,968)
(3,568)
(30,354)
27,678
TOTAL SHAREHOLDERS’ EQUITY
299,321
58,032
15,866
73,898
0
(9,285)
(53)
(30,354)
333,527
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Notes to the Financial Statements
A) GENERAL ASPECTS
Piaggio & C. S.p.A. (the Company) is a joint-stock company established in Italy at the Register of Companies of Pisa. The address of the registered office is Viale Rinaldo Piaggio 25 - Pontedera (Pisa). The main operations of the Company and its subsidiaries are described in the Report on Operations of the Consolidated Financial Statements.
These Financial Statements are expressed in Euros (€) since this is the currency in which most of the Company’s transactions take place.
Compliance with international accounting standards
The Financial Statements as of 31 December 2022 have been prepared in compliance with the International Accounting Standards (IAS/IFRS) in force at the date, issued by the International Accounting Standards Board and approved by the European Commission, as well as in compliance with the provisions issued in implementation of Article 9 of Legislative Decree 38/2005 (Consob Resolution 15519 of 27/7/06 on "Provisions on financial statements", Consob Resolution 15520 of 27/7/06 on "Amendments and additions to the Issuers' Regulation adopted by Resolution 11971/99"), Consob Communication 6064293 of 28/7/06 concerning "Corporate reporting required under Article 114, paragraph 5, of Legislative Decree 58/98"). The interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”), previously the Standing Interpretations Committee (“SIC”), were also taken into account.
The Financial Statements have been prepared on a historical cost basis, amended as required for the measurement of some financial instruments, and on a going-concern basis. Despite the macroeconomic instability related to the spread of COVID-19, and taking into account the positive results of the impairment tests approved by the Board of Directors on 24.02.2023, the Company considers that there are no significant uncertainties (as defined in paragraph 25 of IAS 1) regarding its ability to continue as a going concern, also because of the actions already identified to adapt to changed levels of demand, as well as the Company's industrial and financial flexibility.
These financial statements have been audited by Deloitte & Touche S.p.A..
Effects of the COVID-19 pandemic
For the effects of the COVID-19 pandemic, please refer to the chapter “Health emergency - COVID-19” in the report.
1. Form and content of the financial statements
Form of the financial statements
The Company has chosen to highlight all changes generated by transactions with non-shareholders in two statements reporting trends of the period, the "Income Statement" and "Statement of Comprehensive Income". The Financial Statements are therefore composed of the Income Statement, Statement of Comprehensive Income, Statement of Financial Position, Statement of Cash Flows, Statement of Changes in Shareholders' Equity and these notes.
338
Income Statement
The Income Statement is presented with items classified by nature. The overall Operating Income is shown, which includes all income and cost items, irrespective of their repetition or fact of falling outside normal operations, except for the items of financial operations included under Operating Income and profit before tax. In addition, income and cost items arising from assets held for sale or to be discontinued, including any capital gains or losses net of the tax element, are recognised in a specific item of the Financial Statements which precede financial performance.
Statement of Comprehensive Income
The Statement of Comprehensive Income is presented in accordance with the revised version of IAS 1. Components presented in 'Other comprehensive income' are grouped according to whether or not they can be reclassified subsequently to profit or loss.
Statement of Financial Position
The Statement of Financial Position is presented in opposite sections with separate indication of assets, liabilities and shareholders’ equity.
In turn, assets and liabilities are reported in the Financial Statements on the basis of their classification as current and non-current.
Statement of Cash Flows
The Statement of Cash Flows is divided into cash-flow generating areas. The Statement of Cash Flows model adopted by Piaggio & C. S.p.A. has been prepared using the indirect method. The cash and cash equivalents recorded in the Consolidated Statement of Cash Flows include the Consolidated Statement of Financial Position balances for this item at the reporting date. Cash flows in foreign currency were converted at the spot rate in force at the end of the reporting period. Interest expense paid as well as taxes paid are included in the cash flows generated by operations. Interest received and dividends received are included in cash flows generated by investing activities. Finally, dividends paid are included in financing activities.
The opening balance and closing balance of cash and cash equivalents are presented net of short-term bank holdings, as required by IAS No. 7.
Statement of Changes in Shareholders' Equity
The Statement of Changes in Shareholders' Equity is presented as provided for in IAS 1 revised.
The Statement includes overall profit (loss) for the period. Reconciliation between the opening and closing balance of each item for the period is presented.
2. Accounting policies adopted by the Company
2.1 Accounting policies
The most significant accounting policies adopted to prepare the Financial Statements as of 31 December 2022 are outlined below.
Intangible assets
As provided for in IAS 38 - Intangible Assets, an intangible asset which is purchased or internally generated is recognised as an asset only if it is identifiable, controllable and future economic benefits are expected and its cost may be measured reliably. Borrowing costs related to the acquisition, construction or production of certain assets that require a significant period of time before they are ready for use or sale (qualifying assets), are capitalised along with the asset.
339
Intangible assets with a definite useful life are measured at acquisition cost or production cost net of amortisation and accumulated impairment losses. Amortisation is referred to the expected useful life and commences when the asset is available for use.
Goodwill
In the case of acquisitions of companies, acquired and identifiable assets, liabilities and potential liabilities are recognised at the present value at the date of acquisition. The positive difference between the acquisition cost and share of the Company at the fair value of said assets and liabilities is classified as goodwill and recognised in the financial statements as an intangible asset. Any negative difference (“negative goodwill”) is recognised instead in profit or loss at the date of acquisition.
Goodwill is not amortised but tested annually for impairment, or more frequently if specific events or changed circumstances indicate that an asset may be impaired, as provided for in IAS 36 - Impairment of Assets. After initial recognition, goodwill is recognised at cost net of any accumulated impairment losses.
At the disposal of part of or an entire company previously acquired from whose acquisition goodwill arose, the corresponding residual value of goodwill is considered when measuring the capital gain or loss of the disposal.
Development costs
Development costs of projects for the manufacture of vehicles and engines are recognised as assets only if all of the following conditions are met: the costs can be reliably measured and the technical feasibility of the product, the volumes and expected prices indicate that costs incurred during development will generate future economic benefits. Capitalised development costs include only costs incurred that may be directly attributed to the development process.
Capitalised development costs are amortised on a systematic criterion basis, starting from the beginning of production through the estimated life of the product.
All other development costs are recognised in profit or loss when they are incurred.
Other intangible assets
As provided for in IAS 38 – Intangible Assets, other intangible assets which are purchased or internally generated are recognised as assets if it is probable that use of the asset will generate future economic benefits and the cost of the asset can be reliably measured.
These assets are recognised at acquisition or production cost and are amortised on a straight line basis over their estimated useful life, if they have a definite useful life.
Other intangible assets recognised following the acquisition of a company are accounted for separately from goodwill, if their fair value may be reliably measured.
The amortisation period for an intangible asset with a useful life is revised at least at the end of each reporting period. If the expected useful life of the asset differs from estimates previously made, the amortisation period is changed accordingly.
The amortisation periods of intangible assets are shown below:
Development costs
3-5 years
Industrial Patent and Intellectual Property Rights
3-5 years
Other
5 years
Trademarks
20 years
Licences
10 years
Environmental certification
Not depreciated
Other intangible assets also include environmental certificates.
340
Environmental certification
The Pontedera plant in Italy falls within the scope of the "Emissions Trading" Directive (Directive 2003/87/EC), which assigns a generally lower number of emission permits compared to the emissions recorded in the reference year, with the Company having to purchase quotas in order to achieve compliance on the emissions market.
For the purposes of recognising expenses arising from regulatory obligations relating to ETS certificates, the Company applies the so-called 'net liability approach'.
This accounting treatment requires the certificates obtained free of charge from the Authority be recognised at nominal value under intangible assets (null).
In addition, expenses for the purchase, against payment, of certificates required to meet the obligation of the reporting period, i.e. purchased in excess of the amount required to meet regulatory obligations, are capitalised and recognised as intangible assets.
These intangible assets:
-are classified as assets with an indefinite useful life and are not amortised;
-after initial recognition they are kept at cost;
-they are recognised under Profit and Loss in the period when they are accrued, under sundry operating costs, for the necessary quantification to meet the regulatory obligation for the reference period.
Any provision for the estimated expenses to be incurred for the purchase, against payment, of certificates required to meet the obligation of the reporting period, will generate a cost to be recognised in the period when it is accrued, under sundry operating expenses, with a contra-entry in the provision for risks.
If the cost of the certificates to be redelivered to the Authority differs from the estimate made at the end of the reporting period, any difference, if negative (higher cost), is recognised in profit or loss under sundry operating expenses, as a contingent liability in the year when the recognition was made. In the case of a positive difference (lower cost), the differential will generate a contingent asset.
Property, plant and equipment
The Company opted for the cost method when first preparing its IAS/IFRS financial statements, as allowed by IFRS 1. For the measurement of property, plant and equipment, it was therefore decided not to use the fair value method. Property, plant and equipment were booked at the purchase or production cost and were not revalued. Borrowing costs related to the acquisition, construction or production of certain assets that require a significant period of time before they are ready for use or sale (qualifying assets), are capitalised along with the asset.
Costs incurred after acquisition are capitalised only if they increase the future economic benefits of the asset they refer to. All other costs are recognised in profit or loss when they are incurred. Property, plant and equipment under construction are measured at cost and depreciated starting from the period in which they are put into operation.
Depreciation is determined, on a straight line basis, on the cost of the assets net of their relative residual values, based on their estimated useful life.
The depreciation periods of Plant, property and equipment are summarised below:
Land
Land is not depreciated
Buildings
33 years
Plant and machinery
From 5 to 15 years
Equipment
Other
From 4 to 5 years
From 5 to 10 years
Other assets
From 5 to 10 years
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Profits and losses arising from the sale or disposal of assets are measured as the difference between the sale revenue and net carrying amount of the asset and are recognised in profit or loss for the period.
Lease contracts
Lease agreements for property, plant and machinery entered into as lessor require the recognition of an asset representing the right of use of the leased asset, and a financial liability for the obligation to undertake contract payments. In particular, the lease liability is initially recognised as being equal to the present value of future payments to make, adopting a discount rate equal to the implicit interest rate of the lease, of if this cannot easily be determined, by using the incremental financing rate of the lessor. After initial recognition, the lease liability is recognised at amortised cost using the effective interest rate and is redetermined following contract renegotiation, changes in rates, or changes in the recognition of any contract options.
If the contract provides for a renewal option in favour of the lessee, the Company also includes the rentals for the renewal period if it is considered highly probable in the calculation of the right of use.
The right of use is initially recorded at cost and then adjusted to take into account recognised depreciation charges, any impairment losses and effects related to any redetermination of lease liabilities.
The Company has opted for some simplifications, allowed by the Standard, excluding agreements of less than 12 months (short term, calculated on the residual duration, on first-time adoption), and of a value below 5 thousand euros (low value).
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures are recognised in the financial statements according to the equity method, as allowed by IAS 27 and as provided for by IAS 28 (Investments in Associates and Joint Ventures).
Subsidiaries, associates and joint venture are included in the financial statements from when control, significant influence or joint control commences until it ceases.
The financial statements of subsidiaries, associates and joint ventures, are appropriately modified and reclassified, where necessary, to bring them in line with the international accounting standards and uniform classification criteria used by the Group.
In adopting the equity method, the investment in a subsidiary, associate or joint venture is initially recognised at cost and the carrying amount is increased or decreased to recognise the portion attributable to the investor of profit or loss of the investee realised after the date of acquisition. The portion of profit (loss) for the period of the investee attributable to the investor is recognised separately in profit or loss. Dividends received from an investee reduce the carrying amount of the investment. Adjustments to the carrying amount of the investment are also due to changes in items of other comprehensive income of the investee (e.g. changes arising from translation differences of items in foreign currency). The portion of these changes, attributable to the investor, is recognised under other components of comprehensive income. If the portion of losses of an entity in a subsidiary, associate or joint venture is equal to or exceeds its interest in the subsidiary, associate or joint venture, the entity discontinues recognising its share of further losses. After the interest is reduced to zero, additional losses are recognised by a provision (liability) only to the extent that the entity has incurred legal or constructive obligations or made payments on behalf of the associate, subsidiary or joint venture. If the subsidiary, associate or joint venture subsequently reports profits, the entity resumes recognising its portion of those profits only after its portion of the profits equals the share of losses not recognised. Profit and losses arising from "upwards" or "downwards" transactions between an entity and a subsidiary, associate or joint venture are recognised in the entity's
342
financial statements only as regards the portion attributable to minority interest in the subsidiary, associate or joint venture. The portion of profit or loss of the subsidiary, associate or joint venture arising from these transactions, attributable to the investor, is eliminated in the income statement under "earnings from investments", with a counter entry of the asset's value, in "upwards" transactions, and of the value of the investment, in "downwards transactions".
If there is objective evidence of an impairment loss, the investment is tested for impairment, as described in the relative section, to which reference is made.
Separate financial statements are prepared in the currency of the primary economic sector in which the subsidiary, associate or joint venture operates (functional currency). For the purposes of adopting the equity method, the financial statements of each foreign entity are in euro, which is the functional currency of Piaggio & C. SpA and the presentation currency of the separate Financial Statements.
All assets and liabilities of foreign companies in a currency other than the euro are translated, using exchange rates in effect at the reporting date (currency exchange rates method). Income and costs are translated at the average exchange rate of the period. Translation differences arising from the application of this method, as well as translation differences arising from a comparison of initial shareholders' equity translated at current exchange rates and the same equity translated at historical rates, are recognised in the statement of comprehensive income and allocated to a specific reserve in shareholders' equity until disposal of the investment.
The exchange rates used to translate the financial statements of subsidiaries, associates and joint ventures into euro are shown in the table below.
Spot exchange rate 31 December 2022
Average exchange rate 2022
Spot exchange rate 31 December 2021
Average exchange rate 2021
Currency
US Dollar
1.0666
1.05305
1.1326
1.18274
Pounds Sterling
0.88693
0.852761
0.84028
0.859604
Indian Rupee
88.1710
82.68639
84.2292
87.43916
Singapore Dollars
1.43
1.45116
1.5279
1.58910
Chinese Yuan
7.3582
7.07880
7.1947
7.62823
Croatian Kuna
7.5345
7.53487
7.5156
7.52841
Japanese Yen
140.66
138.02739
130.38
129.87671
Vietnamese Dong
25,183.00
24,630.01167
25,137.39
26,372.96376
Indonesian Rupiah
16,519.82
15,625.25113
16,166.73
16,914.56136
Brazilian Real
5.6386
5.43990
6.3101
6.37789
Impairment
At the end of the reporting period, the Company reviews the carrying amount of its plant, property and equipment, intangible assets, rights of use and investments, to determine whether there is any indication that these assets may be impaired (impairment test). If there is an indication that an asset may be impaired, the asset's recoverable amount is estimated to determine the amount of the write-down. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the asset's cash generating unit.
The recoverable amount is the greater of the net sale price and value in use. In measuring the value in use, estimated future cash flows are discounted at their fair value, using a rate gross of taxes, which reflects current market changes in the fair value of money and specific risks of the asset.
343
If the recoverable amount of an asset (or of a cash generating unit) is estimated to be lower than the relative carrying amount, the carrying amount of the asset is reduced to the lower recoverable value. An impairment loss is immediately recognised in profit or loss, unless the asset concerns land or property other than investment property recognised at revalued values. In said case, the loss is recorded in the relative revaluation reserve.
When the conditions that gave rise to an impairment loss no longer exist, the carrying amount of the asset (or of a cash generating unit), except for goodwill, is increased to the new value arising from an estimate of its recoverable amount, up to the net carrying amount applicable to the asset if no impairment loss had been recognised. The reversal of the impairment loss is immediately recognised in profit or loss.
An intangible asset with an indefinite useful life is tested annually for impairment, or more frequently if there is an indication that an asset may be impaired.
Transactions with affiliates and related parties
Relations with subsidiaries and related parties are indicated in the specific section of the Notes, to which reference is made.
Non-current assets held for sale
Non-current assets (or disposal groups) that are classified as held for sale are measured at the lower of the carrying amount and fair value less costs to sell.
Non-current assets (and disposal groups) are classified as held for sale when it is expected that their carrying amount will be recovered through a sale rather than through their use in company operations. This condition is only met when the sale is highly probable, the asset (or disposal group) is available for immediate sale and management is committed to a plan to sell, which should take place within 12 months from the date in which this item was classified as held for sale.
Financial assets
IFRS 9 adopts a single approach to analysing and classifying all financial assets, including those containing embedded derivatives. Classification and measurement consider the business model of the financial asset and the contractual characteristics of cash flows that may be obtained from the asset. Depending on the characteristics of the instrument and business model adopted, the following three categories are determined:
(i) financial assets measured at amortised cost; (ii) financial assets measured at fair value, with the effects recognised in other comprehensive income (OCI); (iii) financial assets measured at fair value, with the effects recognised in profit or loss.
The financial asset is measured at amortised cost if both the following conditions are met:
- the business model holds the financial asset only to collect the relative cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that only represent the return on the financial asset.
According to the amortised cost method, the value of initial recognition is subsequently adjusted to take into account repayments of principal, any impairment and amortisation of the difference between the repayment value and value of initial recognition.
Amortisation is based on the internal effective interest rate that represents the rate which, at the time of initial recognition, makes the present value of expected cash flows equal to the value of initial recognition.
Receivables and other financial assets measured at amortised cost are presented in the statement of financial position net of the relative provision for write-downs.
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Financial assets representing debt instruments whose business model covers the possibility of collecting contractual cash flows and realising capital gains from sale (the hold to collect and sell business model), are measured at fair value, recognising the effects in OCI.
In this case, changes in fair value of the instrument are recognised as shareholders' equity in OCI. The total of changes in fair value, recognised in a shareholders' equity reserve that includes OCI, is reversed to profit or loss when the instrument is deleted from the accounts. Interest expense is recognised in profit or loss using the effective interest rate, exchange differences and write-downs.
A financial asset representing a debt instrument that has not been measured at amortised cost or at FVTOCI is measured at fair value with the effects recognised in profit or loss.
Inventories
Inventories are recognised as the lower of the purchase or production cost, determined by assigning to products the costs directly incurred in addition to the portion of indirect costs reasonably attributable to the performance of production activities in normal production capacity conditions and the market value at the end of the reporting period.
The purchase or production cost is determined based on the weighted average cost method.
As regards raw materials and work in progress, the market value is represented by the estimated net realisable value of corresponding finished products minus completion costs. As regards finished products, the market value is represented by the estimated net realisable value (price lists minus the costs to sell and distribution costs).
The lower measurement based on market trends is eliminated in subsequent years, if the trends no longer exist.
Obsolete, slow moving and/or excess inventories are impaired in relation to their possible use or future realisation, in a provision for the write-down of inventories.
Receivables
IFRS 9 establishes a new model for the impairment/write-down of these assets, with the aim of providing useful information for financial statement users on relative expected losses. According to this model, the Company measures receivables on an expected loss basis, replacing the provisions in IAS 39 which typically measure receivables on an incurred loss basis. For trade receivables, the Company adopts a simplified approach which does not require the recognition of periodic changes in credit risk, but instead the recognition of an expected credit loss (ECL) calculated over the ECL lifetime. In particular, the policy adopted by the Company involves the stratification of trade receivables in categories based on past due days, defining the allocation based on the historical experience of credit losses, adjusted to take into account specific forecasts referred to creditors and the economic environment.
Trade receivables are wholly written down in the absence of a reasonable expectation of their recovery, or in the case of inactive counterparties.
The carrying amount of the asset is reduced through the use of a provision for write-downs and the amount of the loss is recognised in the income statement. When payment of amounts due exceeds standard terms of payment granted to clients, the receivable is discounted.
Factoring
The Company sells a significant part of its trade receivables through factoring and in particular, sells trade receivables without recourse. Following these sales with the total and unconditional transfer to the transferee of the risks and benefits transferred, the receivables are eliminated from the financial statements.
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In the case of transfers in which the risks and benefits are not transferred, the relative receivables remain in the statement of financial position until the transferred sum has been paid. In this case any advance payments collected by the factor are recognised under payables as amounts due to other lenders.
Interest and fees paid under contractual terms are recognised based on their nature.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, current bank accounts, deposits payable on demand and other high liquidity short term financial investments, which are readily convertible into cash and not affected by any major risk of a change in value. This item does not include bank overdrafts payable on demand.
Treasury sharesTreasury shares are recognised as a reduction of shareholders' equity. The original cost of treasury shares and revenues arising from subsequent sales are recognised as movements of shareholders' equity.
Financial liabilities
Financial liabilities include financial payables, including amounts payable for advances on the sale of receivables, as well as other financial liabilities, including financial derivatives and liabilities for assets recognised regarding finance lease agreements. Pursuant to IFRS 9, they include trade and other payables.
Financial liabilities are recognised at fair value net of additional transaction costs. After initial recognition, loans are measured at amortised cost and calculated using the effective interest rate. With the introduction of IFRS 9, in the event of the renegotiation of a financial liability that does not qualify as "extinction of the original debt", the difference between i) the carrying amount value of the pre-change liability and ii) the present value of the cash flows of the revised debt, discounted at the original rate (IRR), is accounted for in the income statement.
Financial liabilities hedged by derivatives are recognised at present value, according to procedures established for hedge accounting: gains and losses arising from subsequent measurements at present value are recognised in profit or loss and are offset by the effective portion of the loss and again arising from subsequent measurements at present value of the hedging instrument. On initial recognition, a liability may be designated at fair value recognised in profit or loss when this eliminates or considerably reduces a lack of uniformity in the measurement or recognition (sometimes defined as "asymmetric accounting") that would otherwise arise from the measurement of an asset or liability or recognition of relative profit and loss on different bases. This fair value designation is exclusively applied to some financial liabilities in currency subject to exchange risk hedging.
Derivatives and measurement of hedging transactions
Company assets are primarily exposed to financial risks from changes in exchange and interest rates. The Company uses derivatives to hedge risks arising from changes in foreign currency and interest rates in particular irrevocable commitments and planned future transactions. The use of these instruments is regulated by written procedures on the use of derivatives, in line with risk management policies.
In compliance with IFRS 9, derivatives are initially recognised at fair value, represented by the initial amount and aligned with the fair value at subsequent ends of reporting periods. Financial derivatives are used solely for hedging purposes, in order to reduce exchange risk, interest rate risk and the risk of changes in the market price. Financial derivatives may qualify for hedge accounting, only when the hedging instrument is formally designated and documented, is expected to be highly effective and this effectiveness can be reliably measured and is highly effective throughout the reporting periods for which it is designated.
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When financial instruments may be measured by hedge accounting, the following accounting treatment is adopted:
•Fair value hedge: if a financial derivative is designated as a hedge of the exposure to changes in present value of a recognised asset or liability, attributable to a particular risk and could affect profit or loss, the gain or loss from the subsequent change in present value of the hedging instrument is recognised in profit or loss. The gain or loss on the hedged item, attributable to the hedged risk, changes the carrying amount of the hedged item and is recognised in profit or loss;
•Cash flow hedge: if an instrument is designated as a hedge of the exposure to variability in cash flows of a recognised asset or liability or of a highly probable forecast transaction which could affect profit or loss, the effective portion of the gain or loss on the financial instrument is recognised in the Statement of Comprehensive Income. Accumulated gain or loss is reversed from the Statement of Comprehensive Income and recognised in profit or loss in the same period as the hedging transaction. The gain or loss associated with hedging or the part of hedging which is ineffective, is immediately recognised in profit or loss. If the hedging instrument or hedging ceases, but the transaction covered by hedging is not yet realised, profits and losses, recognised in equity, are instead recognised in profit or loss when the transaction takes place. If the transaction to be hedged is deemed no longer probable, gains or losses deferred in the Statement of Comprehensive Income are recognised immediately in profit or loss.
If hedge accounting cannot be applied, gains or losses from measurement at present value of the financial derivative are immediately recognised in profit or loss.
Long-term provisions
The Company recognises provisions for risks and charges when it has a legal or implicit obligation to third parties and it is likely that Company resources will have to be used to meet the obligation and when the amount of the obligation itself can be reliably estimated.
Changes in estimates are recognised in profit or loss when the change takes place.
If the effect is considerable, provisions are calculated discounting future cash flows estimated at a discount rate gross of taxes, to reflect current market changes in the fair value of money and specifics risks of the liability.
Retirement funds and employee benefits
Liabilities relative to employee benefits paid on or after termination of employment for defined benefit plans are determined separately for each plan, based on actuarial hypotheses estimating the amount of future benefits that employees will accrue at the reporting date (the "projected unit credit method”). Liabilities, recognised in the financial statements net of any assets serving the plan, are entered for the period when the right accrues. Liabilities are measured by independent actuaries.
The cost components of defined benefits are recognised as follows:
•the costs relative to services are recognised in the Income Statement under employee costs;
•net borrowing costs of liabilities or assets with defined benefits are recognised in the Income Statement as financial income/(borrowing costs), and are determined by multiplying the value of the net liability/(asset) by the rate used to discount the obligations, taking account of the payment of contributions and benefits during the period;
•the remeasurement components of net liabilities, which include actual gain and losses, the return on assets (excluding interest income recognised in the Income Statement) and any change in the
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limit of the assets, are immediately recognised as "Other income (expense) into OCI”. These components must not be reclassified to the Income Statement in a subsequent period.
Termination benefits
Termination benefits are recognised at the closest of the following dates: i) when the Company can no longer withdraw the offer of such benefits and ii) when the Company recognises the costs of restructuring.
Tax assets and liabilities
Deferred taxes are determined based on the temporary taxable differences between the value of the asset and liability and their tax value. Deferred tax assets are measured only to the extent to which it is likely that adequate future taxable sums exist against which the deferred taxes can be used. The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent to which it is no longer likely that sufficient taxable income exists allowing for all or a portion of said assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, considering the rates in effect or which are known to come into effect. Deferred taxes are directly recognised in profit or loss, except for items directly recognised in the statement of comprehensive income, in which case relative deferred taxes are also recognised in the statement of comprehensive income.
Deferred tax assets and liabilities are recognised at their net value when applied by the tax authorities and when they may be lawfully offset in the same tax jurisdiction.
Payables
Payables are recognised at fair value and then measured based on the amortised cost method.
Reverse factoring
To guarantee suppliers easier credit conditions, the Company has established factoring agreements, and typically supply chain financing or reverse factoring agreements. Based on the agreements, suppliers may, at their discretion, transfer receivables due from the Company to a lender and collect amounts before the due date.
In some cases, payment terms are extended further in agreements between the supplier and the company; these extensions may be interest or non-interest bearing.
The Company has established a specific policy to assess the nature of reverse factoring operations. Based on the content of agreements, which differs by area of origin, the Finance function, at a central level, analyses the clauses of agreements in qualitative terms, as well as legal aspects in order to assess regulatory references and the type of transaction assignment (as provided for by IAS 9 B3 3.1). In some cases, as payment terms have been extended, quantitative analysis is carried out to verify the materiality of changes in contract terms, based on quantitative tests as required by IAS 9 B3.3.6.
According to IAS 1 paragraph 54, trade and other payables must be shown separately from financial payables.
In this context, relations, for which a primary obligation with the supplier is maintained and any deferment, if granted, does not significantly change payment terms, are still classified as trade liabilities.
Revenues recognition
Based on the five-step model introduced by IFRS 15, the Company measures revenues after identifying the contracts with its customers and relative performance to provide (transfer of goods and/or services), after determining the transaction price it considers due in exchange for performance and evaluating the procedure for satisfying the performance (performance at a given time versus performance over time).
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In particular, the Company measures revenues only if the following requirements have been met (requirements to identify the "contract" with the customer):
a) the contract has been approved by the parties to the contract (in writing, verbally or in compliance with other standard business practices) and the parties undertake to meet their respective obligations; an agreement therefore exists between the parties that establishes the rights and obligations to be met, regardless of the form by which the agreement is made;
b) the Company can identify each party’s rights in relation to the goods or services to be transferred;
c) the Company can identify the payment terms for the goods or services to be transferred;
d) the contract has commercial substance; and
e) it is probable that the Company will receive the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer.
If the above requirements are not met, the relative revenues are recognised when: (i) the Company has already transferred control of the goods and/or provided the service to the customer and all or nearly all of the consideration from the customer has been received and cannot be reimbursed; or (ii) the contract has ended and the consideration received by the Company from the customer cannot be reimbursed.
If the above requirements are instead met, the Company adopts the following rules for recognition.
Revenues for the sale of vehicles and spare parts are recognised when control of the good is transferred to the purchaser, or when the customer can use in full the good or substantially benefit from it. Revenues are represented net of discounts, including, among others, sales incentive programmes and bonuses to customers, as well as taxes directly connected with the sale of the goods.
Revenues from the provision of services are recognised when the services are provided based on their progress. Revenues also include lease payments recognised on a straight line basis for the duration of the contract. Grants
Set-up grants are recognised in the financial statements when their payment is certain and are recognised in profit or loss based on the useful life of the asset for which the grants have been provided.
Operating grants are recognised in the financial statements, when their payment is certain and are recognised in profit or loss in relation to costs for which the grants have been provided.
Recognition of costs
The Company has chosen to adopt a scheme based on the classification of costs and expenses by nature.
Financial income
Financial income is recognised on time accrual basis. includes interest payable on invested funds, exchange differences receivable and income from financial instruments, when not offset in hedging transactions. Interest receivable is recognised in profit or loss when it matures, considering the actual return.
Borrowing costs
Borrowing costs are recognised on an accrual basis. and include interest payable on financial payables calculated using the effective interest rate method, exchange differences payable and losses on derivative financial instruments. The rate of interest payable of finance lease payments is recognised in profit or loss, using the effective interest rate method.
Dividends
Dividends are recognised on an accrual basis, and therefore at the time when, following the resolution to
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distribute dividends by the subsidiary, the relative right to payment arises. In compliance with IAS 27 Revised “Separate Financial Statements", dividends distributed by subsidiaries, associates and joint ventures are recognised minus their investment value.
Income tax
Taxes represent the sum of current and deferred tax assets and liabilities.
Taxes allocated on the basis of estimated taxable income determined in compliance with national laws in force at the year end are recorded, taking account of applicable exemptions and tax receivables due. Income tax is recognised in profit or loss, with the exception of items directly charged or credited to shareholders' equity, in which case the tax effect is directly recognised in shareholders' equity.
Taxes are recorded under “Tax payables” net of advances and withheld taxes.
As from the 2007 reporting period, the Company has been party to the National Consolidated Tax Convention pursuant to Articles 117 to 129 of the Consolidated Income Tax Act (T.U.I.R) of which IMMSI S.p.A. is the consolidating company, and to whom other IMMSI Group companies report. Participation in the agreement was renewed starting from 2022 and will last for three years, up until the tax period ending at 31.12.2024.
Based on the procedure, the consolidating company determines one taxable base for the group of companies that are party to the National Consolidated Tax Convention and may therefore offset taxable income against tax losses in one tax return. Each company which is party to the National Consolidated Tax Convention transfers taxable income (taxable income or loss) to the consolidating company. The latter recognises a receivable from the consolidated company which is equal to the corporate tax to be paid. Whereas, in the case of companies reporting tax losses, the consolidating company recognises a payable related to corporate tax on the portion of loss actually offset at a Group level.
Use of estimates
The preparation of the financial statements and notes in compliance with IFRS requires management to make estimates and assumptions which have an impact on the values of assets and liabilities and on disclosure regarding contingent assets and liabilities at the end of the reporting period. Actual results could differ from estimates. Estimates are used to measure intangible assets tested for impairment (see § Impairment losses) and to identify provisions for bad debts, for obsolete inventories, amortisation and depreciation, impairment of assets, employee benefits, taxes, restructuring provisions and other allocations and funds. Estimates and assumptions are periodically revised and the effects of any change are immediately recognised in profit or loss.
In the current situation of global economic and financial instability, assumptions made as to future trends are marked by a considerable degree of uncertainty. Therefore the possibility in the next reporting period of results that differ from estimates cannot be ruled out and these could require even significant adjustments which at present cannot be predicted or estimated.
The critical measurement processes and key assumptions used by the Company in adopting IFRS and that may have a significant impact on figures in the Financial Statements or for which a risk exists that significant differences in value may arise in relation to the carrying amount of assets and liabilities in the future are summarised below.
•Recoverable value of non-current assets
Non-current assets include Property, Plant and Equipment, Goodwill, Other Intangible Assets, Investment Property, Investments and Other Financial Assets. The Company periodically revises the carrying amount of non-current assets held and used and of assets held for sale, when facts and
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circumstances make this necessary. This analysis is carried out at least annually for Goodwill, and whenever facts and circumstances make it necessary. Analysis of the recoverability of the carrying amount of Goodwill is generally based on estimates of expected cash flows from the use or sale of the asset and adequate discount rates to calculate the fair value. When the carrying amount of a non-current asset is impaired, the Company recognises a write-down equal to the excess between the carrying amount of the asset and its recoverable value through use or sale, determined with reference to cash flows of the most recent company plans.
•Recoverability of deferred tax assets
The Company has deferred tax assets from deductible temporary differences and theoretical tax benefits from losses to be carried forward. In estimating recoverable value, the Company considered the results of the company plan in line with the results used for impairment testing. Net deferred tax assets allocated on this basis refer to temporary differences and tax losses which, to a significant extent, may be recovered over an indefinite period, longer than the time frame of the above-mentioned estimates. As the Company is party to the IMMSI Group National Consolidated Tax Convention, the recovery of deferred tax assets is related to results forecast for the company, and also to the taxable amounts of companies which are part of the IMMSI Group National Consolidated Tax Convention.
•Pension schemes and other termination benefits
Provisions for employee benefits and net borrowing costs are measured using an actuarial method that requires the use of estimates and assumptions to determine the net value of the obligation. The actuarial method considers financial parameters such as the discount rate and growth rates of salaries and considers the likelihood of potential future events occurring on the basis of demographic parameters such as relative mortality rates and employee resignations or retirements.
The assumptions used for the measurement are explained in section 28 “Retirement funds and employee benefits”.
•Provisions for bad debts
The provision for bad debts reflects management's estimate of expected losses related to receivables. The Company adopts the simplified approach of IFRS 9 and recognises expected losses for all trade receivables based on the residual duration, defining the allocation based on the historical experience of credit losses, adjusted to take into account specific forecasts referred to creditors and the economic environment (Expected Credit Loss – ECL concept).
•Provision for obsolete inventories
The provision for obsolete inventories reflects management's estimate of impairment losses expected by the Company, determined based on past experience. Anomalous market price trends could have an effect on future inventory write-downs.
•Provision for product warranties
At the time of a product's sale, the Company makes provisions relative to estimated costs for the product warranty. This provision is estimated based on historical information about the nature, frequency and average cost of warranty jobs.
•Potential liabilities
The Company recognises a liability for ongoing legal disputes when it considers a financial outflow likely and when the amount of the losses arising therefrom may be reasonably estimated. If a financial outflow is possible, but the amount cannot be determined, it is recorded in the notes to the Financial Statements. The Company is subject to legal and tax proceedings concerning complex and difficult
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legal issues, of varying degrees of uncertainty, including facts and circumstances relative to each case, jurisdiction and different applicable laws. Given the uncertainties concerning these issues, it is hard to predict with certainty the outflow arising from these disputes and it is therefore possible that the value of provisions for legal proceedings and disputes of the Company may vary as a result of future developments in proceedings underway.
The Company monitors the status of ongoing proceedings and consults its legal and tax advisers.
•Amortisation/Depreciation
The cost of assets is amortised/depreciated on a straight line basis over their estimated useful life. The economic useful life of Company assets is determined by Directors at the time of purchase; the calculation is based on historical experience gained in years of operations and on knowledge of technological innovations that may make the asset obsolete and no longer economical.
The Company periodically evaluates technological and segment changes, in order to update the remaining useful life. This periodic updating could change the amortisation/depreciation period and therefore amortisation/depreciation charges of future years.
•Income tax
The Company is subject to Italian income tax laws. Tax liabilities are determined based on management valuations referred to transactions of which the tax effect is not certain at the end of the reporting period. The Company recognises the liabilities that could arise from future inspections of tax authorities based on an estimate of taxes that will be due. If the outcome of inspections differs from management's estimates, significant effects on current and deferred taxes could arise.
Rounding off
All amounts in the tables and in these notes have been rounded off to thousands of Euros.
Climate Change Information
In a regulatory context in which the European Union has developed a strategy aimed at more sustainable economic models, all aimed at achieving the 2050 climate neutrality target, the Company has initiated a process aimed at:
- the identification and analysis of risks and opportunities arising from climate change in line with the Paris Agreement (as more fully described in the 'Risks and Uncertainties' section of the Management Report and the Consolidated Non-Financial Statement), which could affect the adoption of applicable accounting standards;
- the assessment of potential impacts on financial statement valuations.
2.2 New accounting standards, amendments and interpretations applied as from 1 January 2022
The following IFRS accounting standards, amendments and interpretations were applied for the first time by the Company as of 1 January 2022:
•On 14 May 2020, the IASB published the following amendments entitled:
oAmendments to IFRS 3 Business Combinations: The amendments are intended to update the reference in IFRS 3 to the revised Conceptual Framework, without resulting in any changes to the requirements of the standard.
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oAmendments to IAS 16 Property, Plant and Equipment: the purpose of the amendments is to disallow the deduction from the cost of property, plant and equipment of the amount received from the sale of goods produced in the test phase of the asset. These sales revenues and the related costs will therefore be recognised in the income statement.
oAmendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: the amendment clarifies that all costs directly attributable to the contract should be taken into account when estimating whether a contract is onerous. Accordingly, the assessment of whether a contract is burdensome includes not only incremental costs (e.g. the cost of direct material used in the work), but also all costs that the enterprise cannot avoid because it has entered into the contract (e.g. the portion of depreciation of machinery used to perform the contract).
oAnnual Improvements 2018-2020: amendments were made to IFRS 1 First-time Adoption of International Financial Reporting Standards, to IFRS 9 Financial Instruments, to IAS 41 Agriculture and to the Illustrative Examples of IFRS 16 Leases.
The application of the new amendments did not have a significant impact on values or on the financial statements.
2.3 Accounting standards, amendments and IFRS interpretations approved by the European Union that are not yet compulsory applicable and have not been adopted in advance by the Company as of 31 December 2022
•On 18 May 2017, the IASB published IFRS 17 - Insurance Contracts, which is intended to replace IFRS 4 - Insurance Contracts. The standard applies from 1 January 2023 but early application is permitted only for entities that apply IFRS 9 - Financial Instruments and IFRS 15 - Revenue from Contracts with Customers.
•On 9 December 2021, the IASB published an amendment called “Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information”. The amendment is a transition option relating to comparative information about financial assets presented at the date of initial application of IFRS 17. The amendment is intended to avoid temporary accounting mismatches between financial assets and insurance contract liabilities, and thus to improve the usefulness of comparative information for readers of financial statements. The amendments will apply from 1 January 2023, together with the application of IFRS 17. The directors do not expect a material effect on the Company's financial statements from the adoption of this amendment.
•On 12 February 2021, the IASB published two amendments entitled “Disclosure of Accounting Policies—Amendments to IAS 1 and IFRS Practice Statement 2” and “Definition of Accounting Estimates—Amendments to IAS 8”. The amendments are intended to improve the disclosure on accounting policy so as to provide more useful information to investors and other primary users of financial statements as well as to help companies distinguish changes in accounting estimates from
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changes in accounting policy. The amendments will apply from 1 January 2023, but early application is permitted.
The directors do not expect a material effect on the Company’s financial statements from the adoption of these amendments.
•On 7 May 2021, the IASB published its ‘Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction’. The document clarifies how deferred taxes should be accounted for on certain transactions that may generate assets and liabilities of equal amounts, such as leases and decommissioning obligations. The amendments will apply from 1 January 2023, but early application is permitted.
The directors do not expect a material effect on the Company’s financial statements from the adoption of these amendments.
2.4 Accounting standards amendments and interpretations not yet applicable
As of the date of this document, the competent bodies of the European Union have not yet completed the endorsement process necessary for the adoption of the amendments and principles described below.
•On 23 January 2020, the IASB published its “Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current'’ and on 31 October 2022 published its ‘Amendments to IAS 1 Presentation of Financial Statements: Non-Current Liabilities with Covenants”. The documents aim to clarify how to classify payables and other short- or long-term liabilities. The amendments enter into force on 1 January 2024; although earlier application is permitted.
•On 7 May 2021, the IASB published its “Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction”. The document clarifies how deferred taxes should be accounted for on certain transactions that may generate assets and liabilities of equal amounts, such as leases and decommissioning obligations. The amendments will apply from 1 January 2023, but early application is permitted.
•On 9 December 2021, the IASB published an amendment called “Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information”. The amendment is a transition option relating to comparative information about financial assets presented at the date of initial application of IFRS 17. The amendment is intended to avoid temporary accounting mismatches between financial assets and insurance contract liabilities, and thus to improve the usefulness of comparative information for readers of financial statements. The amendments will apply from 1 January 2023, together with the application of IFRS 17.
•On 22 September 2022, the IASB published its "Amendments to IFRS 16 Insurance contracts: Lease Liability in a Sale and Leaseback”. The document requires the seller-lessee to measure the lease liability arising from a sale & leaseback transaction so as not to recognise income or loss that relates to the retained right of use. The amendments will apply from 1 January 2024, but early application is permitted.
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The Company will adopt these new standards, amendments and interpretations, based on the application date indicated, and will evaluate potential impact, when the standards, amendments and interpretations are endorsed by the European Union.
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OTHER INFORMATION
Departures pursuant to Article 2423, section 4 of the Italian Civil Code
No exceptional circumstances occurred requiring departures from legal provisions concerning Financial Statements pursuant to Article 2423, section 4 of the Italian Civil Code.
Article 2428 of the Civil Code
The information required by Article 2428, paragraphs 1, 2, 3 and 6, is included in the Report on Operations. Information on financial instruments, objectives and financial risk management policies is given in Section E of these notes. The registered office of the Company is in Viale R. Piaggio 25 56025 Pontedera (Pisa). Other offices of the Company are in Via G. Galilei 1 Noale (Venice) and in via E.V. Parodi 57 Mandello del Lario (Lecco).
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B) INFORMATION ON THE INCOME STATEMENT
3. Net revenues
€/000 1,284,021
Revenues mainly consist of income from the sale of 2-wheelers, light commercial 3- and 4-wheelers, and related spare parts and accessories, on European and non-European markets.
They are recognised net of premiums paid to customers and include sales to Group companies amounting to €/000 220,630.
Revenues by geographic segment
The breakdown of revenues by geographic segment is shown in the following table:
2022
2021
Changes
Amount
%
Amount
%
Amount
%
In thousands of Euros
EMEA and Americas
1,220,815
95.08
1,073,928
95.63
146,887
13.68
India
62,408
4.86
48,049
4.28
14,359
29.88
Asia Pacific
798
0.06
975
0.09
(177)
(18.15)
TOTAL
1,284,021
100.00
1,122,951
100.00
161,070
14.34
Revenues by type of product
The breakdown of revenues by type of product is shown in the following table:
2022
2021
Changes
Amount
%
Amount
%
Amount
%
In thousands of Euros
Two-wheelers
1,141,488
88.90
988,504
88.03
152,984
15.48
Commercial Vehicles
142,533
11.10
134,448
11.97
8,085
6.01
TOTAL
1,284,021
100.00
1,122,951
100.00
161,070
14.34
In 2022, net sales revenues increased by €/000 161,070.
4. Costs for materials
€/000 836,239
The increase in material costs compared to 2021 (+15.8%) is due to the growth in production volumes and the cost of raw materials.
The item includes €/000 169,580 (€/000 132,753 in 2021) for purchases from subsidiaries and associates.
Costs for materials include costs for transport and outsourcing services relative to purchased assets.
The following table details the content of this item:
2022
2021
Change
In thousands of Euros
Raw, ancillary materials, consumables and goods
890,103
784,678
105,425
Change in inventories of raw, ancillary materials, consumables and goods
(24,148)
(53,310)
29,162
Change in work in progress of semifinished and finished products
(29,716)
(9,534)
(20,182)
Total costs for purchases
836,239
721,834
114,405
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5. Costs for services and leases and rental costs
€/000 233,812
This item includes costs from Group companies and other related parties of €/000 56,700 (€/000 47,726 in 2021).
2022
2021
Change
In thousands of Euros
Employee costs
5,675
4,493
1,182
External maintenance and cleaning costs
7,299
8,526
(1,227)
Energy and telephone costs
21,805
7,894
13,911
Postal expenses
749
863
(114)
Commissions payable
21,034
20,464
570
Advertising and promotion
18,904
16,365
2,539
Technical, legal and tax consultancy and services
12,195
10,714
1,481
Company boards operating costs
3,234
2,631
603
Insurance
3,376
2,919
457
Outsourced manufacturing
27,696
24,946
2,750
Outsourced services
10,058
9,301
757
Transport costs (vehicles and spare parts)
35,006
31,763
3,243
Internal shuttle services
434
315
119
Sundry commercial expenses
4,529
4,950
(421)
Public relations
1,754
1,781
(27)
Product warranty costs
1,263
1,160
103
Costs for quality-related events
3,867
7,014
(3,147)
Bank costs and factoring charges
5,351
4,886
465
Misc services provided in the business year
3,823
3,684
139
Other services
32,672
25,252
7,420
Use of provisions to cover costs of services
(153)
(1)
(152)
Lease and rental costs
13,241
8,649
4,592
Total costs for services, leases and rental costs
233,812
198,569
35,243
Costs for services, lease and rental went up by 17.75% compared to the previous year.
Costs for quality-related events were offset by compensation recognised under “Other operating income” for €/000 407, and other amounts recovered from suppliers for €/000 2,000.
Third party work of €/000 27,696 refers to the processing of production components by outsourced suppliers.
Expenses for company boards are shown in the table below:
2022
2021
In thousands of Euros
Directors
2,940
2,337
Statutory auditors
161
161
Supervisory Body
62
62
Internal Control Committee
41
41
Remuneration Committee
30
30
Total fees
3,234
2,631
Directors' remuneration also includes the extraordinary remuneration for the financial year 2021 paid to a director.
Business services include services for the disposal of waste and water treatment amounting to €/000 2,092.
Other services include €/000 25,685 for technical, sports and promotional services for Group brands supplied by the subsidiary Aprilia Racing, €/000 3,744 for technical services supplied by the subsidiaries Foshan Piaggio Vehicles Technology Research and Development Co LTD (€/000 3,256) and Piaggio Advanced Design Center Corp. (€/000 488) and €/000 442 for management services supplied by IMMSI S.p.A..
Insurance costs include €/000 63 paid with related parties.
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6. Employee costs
€/000 181,708
Employee costs are broken down as follows:
2022
2021
Change
In thousands of Euros
Salaries and wages
130,494
119,921
10,573
Social security contributions
40,435
38,954
1,481
Termination benefits
8,593
7,767
826
Other costs
2,186
2,335
(149)
Total
181,708
168,977
12,731
The workforce as of 31 December 2022 totalled 2,926, of which 6 members of staff on a fixed-term contract.
Below is a breakdown of the headcount by actual number and average number:
Average number
2022
2021
Change
Level
Senior management
81
79
2
Middle management
227
235
(8)
White collars
796
810
(14)
Intermediates and blue collars
2,314
2,192
122
Total
3,418
3,316
102
Number as of
31-Dec-22
31-Dec-21
Change
Level
Senior management
84
79
5
Middle management
221
229
(8)
White collars
792
801
(9)
Intermediates and blue collars
1,829
1,855
(26)
Total
2,926
2,964
(38)
Changes in employee numbers in the two periods are compared below:
As of 31.12.21
Incoming
Leavers
Relocations
As of 31.12.22
Level
Senior management
79
4
(5)
6
84
Middle management
229
9
(25)
8
221
White collars
801
55
(50)
(14)
792
Blue collars
1,855
1,059
(1,085)
0
1,829
Total (*)
2,964
1,127
(1,165)
0
2,926
(*) of which fixed-term contracts
15
1,047
(1,056)
6
359
7. Amortisation/depreciation and impairment costs
€/000 100,490
Amortisation and depreciation for the period, divided by category, is shown below:
2022
2021
Change
In thousands of Euros
Property, plant and equipment:
Buildings
4,318
4,252
66
Plant and machinery
7,043
6,532
511
Industrial and commercial equipment
14,915
11,407
3,508
Other assets
1,127
1,146
(19)
Total depreciation of property, plant and equipment
27,403
23,337
4,066
Impairment costs of property, plant and equipment
-
175
(175)
Total depreciation of property, plant and equipment and impairment costs
27,403
23,512
3,891
2022
2021
Change
In thousands of Euros
Intangible assets:
Development costs
24,026
24,128
(102)
Industrial Patent and Intellectual Property Rights
43,641
41,263
2,378
Concessions, licences, trademarks and similar rights
66
61
5
Total amortisation of intangible assets
67,733
65,452
2,281
Write-down of intangible assets
1,708
1,274
434
Total depreciation of intangible assets and impairment costs
69,441
66,726
2,715
2022
2021
Change
In thousands of Euros
Rights of use:
Buildings
1,570
1,420
150
Plant and machinery
856
856
0
Other assets
1,220
1,287
(67)
Total depreciation of rights of use
3,646
3,563
83
Impairment costs of intangible assets refer to the disposal of assets under construction no longer necessary for Company activities.
As indicated in more detail in the section on intangible assets, goodwill was tested for impairment, confirming the full recoverability of values indicated in the financial statements.
Impairment costs of intangible assets refer to development projects for which production plans were reviewed in the context of the Company's Business Plan.
The item “Industrial Patent and Intellectual Property Rights” includes amortisation relative to software equal to €/000 10,143.
360
8. Other operating income
€/000 161,927
This item consists of:
2022
2021
Change
In thousands of Euros
Operating grants
5,032
1,515
3,517
Increases in fixed assets from internal work
38,400
40,127
(1,727)
Expenses recovered in invoices
33,593
29,150
4,443
Fee income
594
410
184
Contingent assets from measurement
44
14
30
Capital gains on the disposal of assets
6
62
(56)
Recovery of transport costs
671
302
369
Recovery of business costs
4,633
4,054
579
Recovery of registration costs
32
31
1
Recovery of advertising costs
52
52
Recovery of stamp duty
950
855
95
Recovery of labour costs
5,771
5,469
302
Recovery of supplier costs
1,552
520
1,032
Recovery of warranty costs
28
30
(2)
Recovery of taxes from customers
367
678
(311)
Recovery of sundry costs
1,535
1,773
(238)
Provision of services to group companies
14,482
11,360
3,122
Licence rights and know-how
43,230
29,180
14,050
Commission receivable
2,158
2,132
26
Compensation from damage to third parties
631
1,040
(409)
Compensation from third parties for quality-related events
407
8,726
(8,319)
Clearance of payables
77
159
(82)
Revenues from surplus funds
4,201
0
4,201
Other income
3,481
2,758
723
Total other operating income
161,927
140,345
21,582
This item includes income from Group companies for a total of €/000 65,201.
Operating grants refer to:
•€/000 199 for public and European grants concerning research projects;
•€/000 397 for funding for professional training provided by trade associations;
•€/000 786 for state contributions related to Research and Development, Technological Innovation and Design and Aesthetic Creation;
•€/000 224 for grants accrued on investments in ordinary tangible and intangible assets;
•€/000 94 for government grants commensurate with the value of advertising investments made during the 2021 financial year;
•€/000 3,239 for tax receivables recognised on electricity and gas consumption.
During the reporting period, internal costs were capitalised on development projects and know-how for €/000 36,816, internal costs related to the construction of software for €/000 672 and internal costs for the construction of tangible assets for €/000 912.
Expenses recovered in invoices refer to costs for preparation, advertising, insurance, transport and packaging charged to clients directly in product sales invoices.
This item also includes charges made to other Group companies amounting to €/000 686 and to third parties for €/000 849 for the recovery of sundry costs.
Licence rights were obtained for €/000 40,238 from the other Group companies (Piaggio Vehicles €/000 12,218, Piaggio Vietnam €/000 27,743, Piaggio Indonesia €/000 104, Aprilia Racing €/000 14, and Zongshen Piaggio Foshan Motorcycle Co. Ltd €/000 159).
361
Income from the recovery of labour costs mainly refers to amounts charged to Group companies for the use of personnel.
The recovery of costs from suppliers refers to amounts charged for the reprocessing of materials and final inspections, and for failure to supply assembly lines with material.
The recovery of tax duties mainly refers to dealers being charged stamp duty on vehicle conformity certificates.
In compliance with paragraph 125 of Law 124/2017 of 4 August 2017, the breakdown by project of the grants received during 2022 is shown in Note 46 "Grants, contributions, paid appointments and economic benefits from the public administration".
9. Net reversals (impairment) of trade and other receivables
€/000 604
This item consists of:
2022
2021
Change
In thousands of Euros
Losses on receivables
2
-
2
Write-downs of receivables in working capital
602
315
287
Total
604
315
289
The write-downs of receivables made during the year concern both trade receivables and other receivables.
10. Other operating costs
€/000 20,067
This item consists of:
2022
2021
Change
In thousands of Euros
Allocation for litigation
0
160
(160)
Provision for future risks
3,000
4,123
(1,123)
Total provisions for risks
3,000
4,283
(1,283)
Provisions for product warranties
7,722
8,228
(506)
Total other provisions
7,722
8,228
(506)
Stamp duty
1,139
1,043
96
Duties and taxes not on income
1,833
1,787
46
Local tax, formerly council tax
1,445
1,445
0
Various subscriptions
1,030
966
64
Social charges
904
719
185
Capital losses from disposal of assets
8
21
(13)
Environmental certification
543
-
543
Miscellaneous expenses
2,443
1,193
1,250
Total sundry operating costs
9,345
7,174
2,171
Total other operating costs
20,067
19,685
382
In total, other operating costs, which include costs from Group companies of €/000 498, increased by €/000 382.
Stamp duty of €/000 1,139 mainly refers to the tax due on vehicle conformity certificates. This cost is charged to Dealers and the recovered amount is entered under “Other operating income”.
362
The item Costs for ETS certificates refers to provisions related to expenses for the purchase of these certificates. In fact, the Pontedera plant in Italy falls within the scope of the "Emissions Trading" Directive (Directive 2003/87/EC), which assigns a generally lower number of emission permits compared to the emissions recorded in the reference year, with the Company having to purchase quotas in order to achieve compliance on the emissions market.
11. Income/(loss) from investments
€/000 43,445
This item consists of:
2022
2021
Change
In thousands of Euros
Positive differences from the equity method valuation in subsidiaries
84,803
60,487
24,316
Positive differences from the equity method valuation in associates
18
398
(380)
Negative differences from the equity method valuation in subsidiaries
(40,698)
(26,749)
(13,949)
Negative differences from the equity method valuation in associates
(693)
0
(693)
Write-down of non-controlling interests
-
(21)
21
Dividends from the investments of non-controlling interests
15
19
(4)
Total
43,445
34,134
9,311
Dividends from investments of non-controlling interests were distributed by the company Ecofor Service Pontedera (€/000 15).
The tables below show the positive and negative differences for investments in subsidiaries and associates, valued using the Equity Method.
2022
2021
Change
In thousands of Euros
Positive differences from the equity method valuation in subsidiaries
Piaggio Vespa B.V.
34,566
29,156
5,410
Piaggio China
-
139
(139)
Piaggio Vietnam
48,827
30,054
18,773
Aprilia Racing
126
176
(50)
Piaggio España
392
588
(196)
Piaggio Indonesia
859
352
507
Piaggio Advanced Design Center Corporation
33
22
11
Total
84,803
60,487
24,316
2022
2021
Change
In thousands of Euros
Positive differences from the equity method valuation in associates
Pontedera & Tecnologia
18
18
-
Zongshen Piaggio Foshan Motorcycle
0
380
(380)
Total
18
398
(380)
2022
2021
Change
In thousands of Euros
Negative differences from the equity method valuation in subsidiaries
Piaggio China
(274)
-
(274)
Piaggio Vehicles Pvt.
(6,951)
(4,091)
(2,860)
Nacional Motor
(77)
(147)
70
Piaggio Fast Forward
(33,194)
(22,155)
(11,039)
Piaggio Concept Store
(202)
(356)
154
Total
(40,698)
(26,749)
(13,949)
363
2022
2021
Change
In thousands of Euros
Negative differences from the equity method valuation in sassociates
ZPFM
(693)
0
(693)
Total
(693)
0
(693)
This item consists of:
2022
2021
Change
In thousands of Euros
Total financial income
3,840
2,074
1,766
Total borrowing costs
(21,799)
(20,391)
(1,408)
Total net exchange gains/(losses)
(1,988)
(1,497)
(491)
Net financial income (borrowing costs)
(19,947)
(19,814)
(133)
The balance of financial income (borrowing costs) in 2022 was negative by €/000 19,947, registering an increase compared to the figure of €/000 19,814 of the previous year. The poorer performance compared to figures from the previous year is essentially due to foreign-exchange losses, affected by the exceptional volatility of forex markets. Net interest income rose modestly due to the impact of the rate hike limited to the fourth quarter.
Below is the breakdown of borrowing costs and income:
2022
2021
Change
In thousands of Euros
Financial income:
- From subsidiaries
3,623
2,057
1,566
- From subsidiaries for operating leases
3
5
(2)
Financial income from third parties:
- Interest receivable from clients
5
5
0
- Bank and post office interest payable
67
2
65
- Interest income on tax receivables
1
(1)
- Other
142
4
138
Total financial income from third parties
214
12
202
Total financial income
3,840
2,074
1,766
The amount of €/000 3,623 recognised as financial income from subsidiaries refers to interest from financing activities relative to the subsidiaries Piaggio Fast Forward (€/000 3,410), Aprilia Racing (€/000 210) and other minor companies (€/000 3).
364
2022
2021
Change
In thousands of Euros
Borrowing costs with Parent Companies:
- Interest expense on loans received from Subsidiaries
45
15
30
Borrowing costs with Parent Companies:
- Interest expense on operating leases with Parent Companies
65
88
(23)
Borrowing costs with Parent Companies:
- Interest payable on a debenture loan
10,682
11,437
(755)
- Interest payable on bank accounts
225
73
152
- Interest payable on bank loans
6,807
5,451
1,356
- Interest to suppliers
1,257
569
688
- Interest payable to other lenders
948
742
206
- Interest payable on sub-discount factor operations
1,251
690
561
- Cash discounts to clients
537
801
(264)
- Income from fair value measurements
17
(17)
- Expense from commodities measurement
205
-
205
- Bank charges on loans
981
1,408
(427)
- Interest on finance lease agreements
96
90
6
- Interest payable on operating lease agreements
95
96
(1)
- Borrowing costs from discounting back termination and termination benefits
504
52
452
- Other
29
8
21
Total borrowing costs with third parties
23,617
21,434
2,183
Total borrowing costs
23,727
21,537
2,190
Costs capitalised on Property, Plant and Equipment
(348)
(186)
(162)
Costs capitalised on Intangible Assets
(1,580)
(960)
(620)
Total Capitalised Costs
(1,928)
(1,146)
(782)
Total borrowing costs
21,799
20,391
1,408
During 2022, borrowing costs for €/000 1,928 were capitalised (€/000 1,146 in 2021). The average rate used for the capitalisation of borrowing costs (because of general loans), was equal to 3.46% (3.1% in 2021).
Interest payable to other lenders mainly refers to interest payable to factoring companies and banks for the sale of trade receivables.
2022
2021
Change
In thousands of Euros
Exchange differences from sale
- Exchange gains
39,250
14,539
24,711
- Exchange losses
(41,148)
(15,050)
(26,098)
Total exchange gains (losses)
(1,898)
(511)
(1,387)
Exchange differences from measurement
- Exchange gains
2,572
764
1,808
- Exchange losses
(2,662)
(1,750)
(912)
Total valuation exchange gains (losses)
(90)
(986)
896
Net exchange gains/(losses)
(1,988)
(1,497)
(491)
13. Taxes
€/000 21,469
The item "Income taxes" is detailed below:
2022
2021
Change
In thousands of Euros
Current taxes
16,862
20,111
(3,249)
Deferred tax assets/liabilities
2,365
(6,532)
8,897
Taxes of previous years
2,242
2,824
(582)
Total taxes
21,469
16,403
5,066
365
During 2022, taxes generated a total income of €/000 21,469
Current taxes generated an expense of €/000 16,862 and comprise:
•€/000 5,430 from taxes on income produced abroad;
•€/000 3,483 from regional production tax on income for the year;
•€/000 11,781 from corporate income tax for the year;
•€/000 (6,469) from income related to transfers within the framework of the Consolidated Tax Convention;
•€/000 2,637 from expenses related to transfers within the framework of the Consolidated Tax Convention.
Deferred tax represents the effects on income generated by the deferred tax assets and liabilities.
As regards deferred tax liabilities, during the year new provisions were made for €/000 1,956 to profit and loss, and provisions from previous years were released for €/000 816.
With regard to deferred tax assets, on the other hand, new provisions amounted to €/000 3,230, while the release of amounts allocated in previous years came to €/000 4,455.
The balance of prior-year taxes was negative at €/000 2,242.
Reconciliation in relation to the theoretical rate is shown below:
In thousands of Euros
2022
2021
REVENUE TAXES ON INCOME
Profit before tax
96,526
74,436
Theoretical rate
24.00%
24.00%
Theoretical tax
23,166
17,865
Effect due to changes in Profit Before Taxes due to the adoption of tax laws
(11,385)
(6,876)
Reversal of deferred corporate tax liabilities allocated in previous years for temporary changes
(801)
(4,298)
Reversal of deferred corporate tax assets allocated in previous years for temporary changes
1,598
1,616
Reversal of deferred tax assets allocated in previous years for tax losses
2,637
1,560
Taxes on income generated abroad
5,430
5,882
Taxes relative to previous years
1,905
2,821
Expenses (income) from the Consolidated Tax Convention
(3,832)
(3,705)
Tax affect arising from deferred corporate tax liabilities for temporary changes
1,876
2,549
Tax affect arising from deferred corporate tax assets for temporary changes
(516)
(3,451)
Tax effect arising from the adjustment of deferred corporate income tax assets allocated
for the tax loss of previous years
(2,637)
0
REGIONAL PRODUCTION TAX (IRAP)
Regional production tax on net revenues for the year
3,483
2,783
Regional production tax referred to previous years
337
4
Reversal of deferred regional production tax liabilities allocated in previous years for temporary changes
(15)
(15)
Reversal of deferred regional production tax assets allocated in previous years for temporary changes
220
107
Tax affect arising from deferred regional production tax liabilities for temporary changes
80
80
Tax affect arising from deferred regional production tax assets for temporary changes
(77)
(519)
Income taxes recognised in the financial statements
21,469
16,403
366
Theoretical tax rates were determined applying the corporate tax rate in effect in Italy (24%) to profit before tax. The impact arising from the regional production tax rate was determined separately, as this tax is not calculated on the basis of profit before tax.
14. Gain/(loss) on assets held for disposal or sale
€/000 0
At the end of the reporting period, there were no gains or losses from assets held for disposal or sale.
367
C) INFORMATION ON OPERATING ASSETS AND LIABILITIES
15. Intangible assets
€/000 612,586
Intangible assets increased by a total of €/000 4,344 as a result of investments net of divestments during the year and amortisation for the period.
Increases mainly refer to the capitalisation of development costs for new products and new engines, as well as the purchase of software.
During 2022 borrowing costs for €/000 1,580 were capitalised, applying an average interest rate of 3.46%.
The table below shows the breakdown of intangible assets as of 31 December 2021 and 31 December 2022, as well as movements during the two years.
In thousands of Euros
Situation at 31.12.2020
Movements for the period
Situation at 31.12.2021
Net value
Investments
Transitions in the period
Amortisation
Disposals
Write-downs
Other
Net value
Development costs
66,694
30,518
0
(24,128)
0
(717)
0
72,367
In service
31,745
18,406
32,320
(24,128)
(717)
57,626
Assets under development and advances
34,949
12,112
(32,320)
14,741
Patent rights
126,410
54,945
0
(41,263)
(25)
(557)
0
139,510
In service
54,580
24,580
65,348
(41,263)
(25)
(557)
102,663
Assets under development and advances
71,830
30,365
(65,348)
36,847
Trademarks
27,875
0
0
(61)
0
0
0
27,814
In service
27,875
(61)
27,814
Assets under development and advances
0
Goodwill
368,551
0
0
0
0
0
0
368,551
In service
368,551
368,551
Assets under development and advances
0
Other
0
0
0
0
0
0
0
0
In service
0
Assets under development and advances
0
Total
589,530
85,463
0
(65,452)
(25)
(1,274)
0
608,242
In service
482,751
42,986
97,668
(65,452)
(25)
(1,274)
0
556,654
Assets under development and advances
106,779
42,477
(97,668)
0
0
0
0
51,588
368
In thousands of Euros
Situation at 31.12.2021
Movements for the period
Situation at 31.12.2022
Net value
Investments
Transitions in the period
Amortisation
Disposals
Write-downs
Other
Net value
Development costs
72,367
28,346
0
(24,026)
0
(1,708)
0
74,979
In service
57,626
16,440
8,671
(24,026)
0
(1,708)
57,003
Assets under development and advances
14,741
11,906
(8,671)
17,976
Patent rights
139,510
45,393
0
(43,641)
(24)
0
0
141,238
In service
102,663
18,973
22,575
(43,641)
(24)
100,546
Assets under development and advances
36,847
26,420
(22,575)
40,692
Trademarks
27,814
0
0
(66)
0
0
0
27,748
In service
27,814
(66)
27,748
Goodwill
368,551
0
0
0
0
0
0
368,551
In service
368,551
368,551
Other
0
70
0
0
0
0
0
70
In service
0
70
70
Assets under development and advances
0
Total
608,242
73,809
0
(67,733)
(24)
(1,708)
0
612,586
In service
556,654
35,483
31,246
(67,733)
(24)
(1,708)
0
553,918
Assets under development and advances
51,588
38,326
(31,246)
0
0
0
0
58,668
Development costs
€/000 74,979
Development costs include costs for products and engines in projects for which there is an expectation, for the period of the useful life of the asset, to see net sales at such a level in order to allow the recovery of the costs incurred.
With regard to development expenses, new projects capitalised in 2022 refer to the study of new vehicles and new engines, which are the flagship products of the 2022-2024 range.
Borrowing costs attributable to the development of products which require a considerable period of time to be realised are capitalised as a part of the cost of the actual assets. Development costs included under this item are amortised on a straight line basis over a period of 3 to 5 years (lead products), in consideration of their remaining useful life.
During 2022, development expenditure amounting to €/000 20,955 was directly recognised in profit or loss.
Pursuant to article 2426, section 5 of the Italian Civil Code, the value of research and development costs still to be amortised equal to €/000 74,979 is unavailable in shareholders' equity.
Industrial Patent and Intellectual Property Rights
€/000 141,238
This item comprises patents for €/000 4,276, know-how for €/000 107,577 and software for €/000 29,385.
As regards software, the increase for the year amounted to €/000 7,722 and mainly refers to the purchase of various licences, as well as the implementation of commercial, production, personnel and administration projects.
Investments in know how amount to €/000 35,919 and mainly refer to new calculation, design and production techniques and methodologies developed by the Company, principally for new products in the 2022-2024 range.
369
As regards patent rights, costs for €/000 1,751 were capitalised.
Costs for industrial patent and intellectual property rights are amortised on a straight line basis over a period of 3 to 5 years, in consideration of their remaining useful life.
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Guzzi trademark
9,750
9,750
0
Aprilia trademark
17,494
17,494
0
Minor trademarks
10
15
(5)
Foton licence
494
555
(61)
Total trademarks
27,748
27,814
(66)
The Moto Guzzi and Aprilia brands, as they have an indefinite useful life as from 2021, are no longer amortised, but are tested at least annually for impairment, in accordance with IAS 36 'Impairment of Assets' as part of the impairment test described in more detail in the section 'Goodwill'.
The Foton licence is amortised over a 10-year period expiring in 2031.
The value of other brands acquired with the Aprilia merger decreased during the year by €/000 5 following amortisation calculated on the basis of the estimated useful life.
As specified in the section on accounting standards, from 1 January 2005 goodwill is no longer amortised, but is tested annually or more frequently for impairment if specific events or changed circumstances indicate the possibility of it having been impaired, in accordance with the provisions of IAS 36 Impairment of Assets (impairment test).
In compliance with IAS 36 the methodology adopted is based on the unlevered version of discounted cash flows.
The main assumptions used by the Company to determine future cash flows, relative to a four-year period, and the consequent recoverable value (value in use) refer to:
a. a hypothesis of estimated cash flows over a four-year period, inferred from budget data for 2023, approved by the Board of Directors of the Company on 26 January 2023, supplemented by forecast data for the period 2024-2026, approved by the Board of Directors of the Company on 24 February 2023, along with an impairment test;
b. the WACC discount rate;
c. in addition to the period, a growth rate (g rate) has been estimated.
370
In particular, for discount cash flows, the Company has adopted a discount rate (WACC) for the relevant cash generating unit, which reflects current market valuations of the fair value of money and takes account of specific risks of activities and the geographic segment in which the cash generating unit operates.
In the future cash flows discounting model, a terminal value is entered at the end of the cash flow projection period, to reflect the residual value the cash-generating unit should produce. The terminal value represents the current value, at the last year of the projection, of all subsequent cash flows calculated as perpetual income, and was determined using a growth rate (g rate) which the CGU belongs to.
EMEA and Americas
Asia Pacific 2W
India
2022
WACC
7.3%
8.3%
10.6%
G
1.0%
2.0%
2.0%
Growth rate during the Plan period
3.5%
5.1%
21.9%
2021
WACC
5.2%
7.4%
10.1%
G
1.0%
2.0%
2.0%
Growth rate during the Plan period
4.4%
6.5%
22.9%
The medium-/long-term growth rate (g rate) for determining the Terminal Value was considered as reasonable and prudent, in the light of:
•analysts' expectations for the Company (source: Analyst Reports);
•the long-term real GDP growth trend expected for main countries where the Group operates (source: Economist Intelligence Unit – EIU).
The growth rate during the period of the Plan was determined using the trend expected for the sector of origin as the benchmark.
Analyses did not identify any impairment losses. Therefore no impairment was reflected in the data of the separate financial statements as of 31 December 2022.
In addition, and on the basis of information in the document produced jointly by the Bank of Italy, Consob and Isvap no. 2 of 6 February 2009, the Company conducted sensitivity analysis of test results in relation to changes in basic assumptions (use of the growth rate in producing the terminal value and discount rate) which affect the value in use of cash generating units. In the case of a positive or negative change of 0.5% of the WACC and G used, analyses would not identify impairment losses.
In all cases, the value in use of the Company was higher than the net carrying amount tested.
Notwithstanding this additional serious penalisation, due to the above considerations the value in use is higher than the net carrying amount.
371
In addition, as explained further in the Annual Report and the Non-Financial Statement, the Company has carried out an analysis, and assessed the risks and short- and medium/long-term opportunities related to climate change and the reduction of polluting emissions.
In this regard, it should be noted that although the Company has not set specific quantitative targets in terms of reducing greenhouse gas emissions at present, it has considered the impact on investments, costs and cash flows in the process of preparing accounting estimates.
Therefore, in preparing the 2023 budget and the 2024-2026 plan, management took the following aspects into account:
•Research into new technologies with a view to future mobility in the context of a new urbanisation;
•A significant increase in investments in electric vehicles (2-3-4 wheelers);
•Investments in the active and passive safety of all vehicles;
•Inclusion of energy transition costs.
Given that the recoverable value was estimated, the Company cannot guarantee the absence of goodwill impairment in future financial periods.
Given the current market uncertainty, the various factors used in processing estimates could require revision; the Company will constantly monitor these factors as well as the existence of impairment losses.
Other intangible assets
€/000 70
This item includes €/000 70 for the purchase of ETS certificates made during the year and still in the portfolio. For more details on the Emission Trading Directive (Directive 2003/87/EC), that established the ETS certificate trading system, see Note 10 Other Operating Costs.
16. Property, plant and equipment
€/000 171,563
Property, plant and equipment decreased overall by €/000 5,295.
Investments for the period amount to €/000 22,116 and mainly refer to moulds for new vehicles and engines that will be launched in the subsequent year, to drive shaft processing lines, engine test benches and the experimental workshop at Pontedera.
Borrowing costs attributable to the construction of assets which require a considerable period of time to be ready for use are capitalised as a part of the cost of the actual assets.
During 2022 borrowing costs for €/000 348 were capitalised, applying an average interest rate of 3.46%.
The table below shows the breakdown of property, plant and equipment as of 31 December 2021 and 31 December 2022, as well as movements during the two years.
372
In thousands of Euros
Situation at 31.12.2020
Movements for the period
Situation at 31.12.2021
Net value
Investments
Transitions in the period
Depreciation
Disposals
Write-downs
Other
Net value
Land
27,640
0
0
0
0
0
0
27,640
In service
27,640
27,640
Assets under construction and advances
0
Buildings
67,005
1,934
0
(4,252)
0
0
3
64,690
In service
65,053
565
967
(4,252)
3
62,336
Assets under construction and advances
1,952
1,369
(967)
2,354
Plant and machinery
38,656
7,811
0
(6,532)
(47)
0
0
39,888
In service
23,851
6,042
14,486
(6,532)
(47)
37,800
Assets under construction and advances
14,805
1,769
(14,486)
2,088
Equipment
34,455
17,953
0
(11,407)
(69)
(175)
771
41,528
In service
18,032
11,741
15,324
(11,407)
(69)
(175)
771
34,217
Assets under construction and advances
16,423
6,212
(15,324)
7,311
Other assets
2,699
1,580
0
(1,146)
(21)
0
0
3,112
In service
1,674
1,354
1,025
(1,146)
(21)
2,886
Assets under construction and advances
1,025
226
(1,025)
226
Total
170,455
29,278
0
(23,337)
(137)
(175)
774
176,858
In service
136,250
19,702
31,802
(23,337)
(137)
(175)
774
164,879
Assets under construction and advances
34,205
9,576
(31,802)
0
0
0
0
11,979
In thousands of Euros
Situation at 31.12.2021
Movements for the period
Situation at 31.12.2022
Net value
Investments
Transitions in the period
Depreciation
Disposals
Write-downs
Other
Net value
Land
27,640
0
0
0
0
0
0
27,640
In service
27,640
0
0
0
0
0
0
27,640
Assets under construction and advances
0
Buildings
64,690
3,097
0
(4,318)
0
0
0
63,469
In service
62,336
1,708
1,336
(4,318)
0
0
0
61,062
Assets under construction and advances
2,354
1,389
(1,336)
0
0
0
0
2,407
Plant and machinery
39,888
4,371
0
(7,043)
(8)
0
0
37,208
In service
37,800
3,742
1,521
(7,043)
(8)
36,012
Assets under construction and advances
2,088
629
(1,521)
1,196
Equipment
41,528
13,107
0
(14,915)
0
0
0
39,720
In service
34,217
10,513
6,924
(14,915)
0
36,739
Assets under construction and advances
7,311
2,594
(6,924)
2,981
Other assets
3,112
1,541
0
(1,127)
0
0
0
3,526
In service
2,886
1,099
202
(1,127)
3,060
Assets under construction and advances
226
442
(202)
466
Total
176,858
22,116
0
(27,403)
(8)
0
0
171,563
In service
164,879
17,062
9,983
(27,403)
(8)
0
0
164,513
Assets under construction and advances
11,979
5,054
(9,983)
0
0
0
0
7,050
Land
€/000 27,640
The value of land has not changed compared to the previous year.
373
Buildings
€/000 63,469
Buildings decreased overall by €/000 1,221. The negative imbalance is due to new investments made during the year amounting to €/000 3,097 and to the decrease from depreciation for the period of €/000 4,318.
Investments refer to office buildings and mainly to renovation works at sites at Pontedera, Mandello del Lario, Noale and Scorzè.
During the period, capitalisation for the year amounted to €/000 3,044 of which €/000 1,336 relative to investments made in previous years.
Plant and machinery
€/000 37,208
This item decreased overall by €/000 2,680. The negative imbalance is due to new investments made during the year amounting to €/000 4,371, the decrease generated by depreciation for the period of €/000 7,043 and the disposal of residual costs for €/000 8.
Capitalisation mainly concerned investments for production lines of new vehicles and the purchase of new machinery for mechanical processing.
During the period, capitalisation amounting to €/000 5,263 was recognised, of which €/000 1,521 relative to investments made in previous years.
Equipment
€/000 39,720
This item decreased overall by €/000 1,808. The negative imbalance is due to depreciation for the period amounting to €/000 14,915 and to new investments for €/000 13,107.
Capitalisation concerned moulds for new vehicles launched during the year or scheduled to be launched in the first half of next year, moulds for new engines and specific equipment for assembly lines.
During the period, capitalisation amounting to €/000 17,437 was recognised, of which €/000 6,924 relative to investments made in previous years.
Other plant, property and equipment
€/000 3,526
The item increased overall by €/000 414. The positive difference is due to new investments made during the year for €/000 1,541, partially offset by depreciation for the period for €/000 1,127.
During the period, capitalisation amounting to €/000 1,301 was recognised, of which €/000 202 relative to investments made in previous years.
Warranties
As of 31 December 2022 the Company did not own land and buildings encumbered by mortgage liens or privileges in favour of banks to secure loans obtained in previous years.
374
17. Rights of use
This note provides information regarding leases.
Assets for rights of use
€/000 10,250
The item “Rights of use" includes operating lease agreements and finance lease agreements for the use of property.
The Company has stipulated rental/hire contracts for offices, plants, warehouses, company accommodation, cars and forklift trucks. The rental/lease agreements are typically for a fixed duration, but extension options are possible. These agreements may also include service components.
The Company opted to include only the rent component in the recognition of rights of use.
The rental lease agreements do not have any covenants to be met, nor require guarantees to be provided in favour of the lessor.
The following tables show the breakdown of rights of use as of 31 December 2022, as well as movements during the year.
Land
Buildings
Plant and machinery
Equipment
Other assets
Total
In thousands of Euros
Amount as of 31.12.2021
0
2,959
8,131
0
1,240
12,330
Increases
940
758
1,698
Depreciation
(1,570)
(856)
(1,220)
(3,646)
Decreases
(45)
(87)
(132)
Movements in 2022
0
(675)
(856)
0
(549)
(2,080)
Amount as of 31.12.2022
0
2,284
7,275
0
691
10,250
Financial receivables for rights of use
€/000 74
The Company subleases a part of the rented property to Piaggio Concept Store Mantova.
Financial liabilities for rights of use
€/000 7,711
The composition of and changes in financial liabilities for rights of use are illustrated in Note 37 “Financial liabilities and liabilities for rights of use“, to which reference should be made.
Amounts recognised in the income statement
The Income Statement includes the following amounts relating to lease agreements:
Note
2022
2021
Change
In thousands of Euros
Depreciation of rights of use
7
3,646
3,563
83
Financial charges for rights of use
12
256
274
(18)
Rental payments (not IFRS 16)
5
13,241
8,649
4,592
In 2022, leasing agreements subject to IFRS 16 resulted in a cash outflow of €/000 4,223.
375
18. Deferred tax assets
€/000 48,475
In compliance with IAS 12, the item indicates the net balance of deferred tax assets and liabilities. This net balance is broken down in the table below:
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Deferred tax assets
56,658
58,947
(2,289)
Deferred tax liabilities
(8,183)
(8,059)
(124)
Total
48,475
50,888
(2,413)
Deferred tax assets total €/000 56,658, compared to €/000 58,947 as of 31 December 2021, with a decrease of €/000 2,289.
The balance of deferred tax assets as of 31 December 2022 refers to:
•€/000 25,026 for allocations made for temporary differences;
•€/000 31,632 for allocations made for tax losses generated under the National Consolidated Tax Convention of which IMMSI S.p.A. is the consolidating company.
The negative change of €/000 2,289 is attributable to:
•€/000 (1,818) from the recognition in profit of loss of deferred tax assets recognised in previous years;
•€/000 (1,208) from the recognition in profit of loss of deferred tax assets recognised in previous years;
•€/000 593 from the recognition in profit of loss of new deferred tax assets;
•€/000 144 from the recognition in profit and loss of new deferred tax assets.
Deferred tax assets were recognised in light of forecast results of Piaggio & C. S.p.A., and the foreseeable use of relative tax benefits in future years based on the plan approved by the Board of Directors on 24 February 2023. As Piaggio & C. S.p.A. is part of the National Consolidated Tax Convention of the IMMSI Group, the recovery of these deferred tax assets is related to and confirmed by the taxable amounts of companies that are part of the above convention, as indicated in the long-term plans approved by their respective Boards.
Details of items affected by the allocation of deferred tax assets as well as the amount of deferred tax assets already recognised and not recognised are shown in the table below.
376
Overall, the movement of deferred tax assets can be summarised as follows:
Amount
Tax effect 24%
Tax effect 3.9%
In thousands of Euros
Nacional Motor goodwill
9,948
2,388
387
Derbi trademark
5,225
1,254
204
Provisions for risks
7,720
1,853
299
Provision for product warranties
14,326
3,438
559
Provisions for bad debts
16,537
3,969
Provisions for obsolete stock
21,177
5,082
826
Other changes
16,809
4,034
577
Total for provisions and other changes
91,742
22,018
2,852
2011 tax loss transferred to IMMSI
1,024
246
2012 tax loss transferred to IMMSI
26,625
6,390
2013 tax loss transferred to IMMSI
30,553
7,333
2014 tax loss transferred to IMMSI
18,668
4,480
2015 tax loss transferred to IMMSI
23,167
5,560
2016 tax loss transferred to IMMSI
7,621
1,829
2017 tax loss transferred to IMMSI
17,850
4,284
2018 tax loss transferred to IMMSI
1,892
454
2019 tax loss transferred to IMMSI
4,400
1,056
Total out of tax losses
131,800
31,632
0
Losses from the fair value measurement of financial instruments
156
Deferred tax assets already recognised
56,658
Deferred tax assets not recognised for provisions and other changes
0
Values as of 31 December 2021
Portion to the income statement
Portion to the Statement of Comprehensive Income
Portion to the income statement
Portion to the Statement of Comprehensive Income
Values as of 31 December 2022
In thousands of Euros
Deferred tax assets for:
Temporary changes
27,315
(1,818)
(1,208)
593
144
25,026
Losses generated within the framework of tax consolidation
31,632
31,632
Total
58,947
(1,818)
(1,208)
593
144
56,658
As of 31 December 2022, deferred tax liabilities totalled €/000 8,183 compared to €/000 8,059 as of 31 December 2021, recording an increase of €/000 124.
The item refers to:
•€/000 2,829 for the surplus value recognised by the merged company Aprilia in 2005 for buildings already held through leases, and purchased back by Aprilia Leasing S.p.A.;
•€/000 1,256 for temporary changes in taxable income that will be annulled next year;
•€/000 2,486 for future dividend distributions subject to foreign taxes;
•€/000 1,148 for depreciation charges minus tax-recognised goodwill values;
•€/000 464 for tax-deducted costs, off the accounts, in relation to the application of IAS/IFRS;
377
Deferred tax assets and liabilities were determined applying the tax rate in effect in the year when temporary differences occur.
19. Inventories
€/000 247,427
This item comprises:
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Raw materials and consumables
136,344
116,176
20,168
Provision for write-down
(4,930)
(5,076)
146
Net value
131,414
111,100
20,314
Work in progress and semi-finished products
28,508
21,177
7,331
Provision for write-down
(852)
(852)
-
Net value
27,656
20,325
7,331
Finished products and goods
103,469
75,976
27,493
Provision for write-down
(15,395)
(14,121)
(1,274)
Net value
88,074
61,855
26,219
Advances
283
71
212
TOTAL
247,427
193,351
54,076
As of 31 December 2022, inventories had increased by €/000 54,076.
The provision for write-down is calculated to align the value of inventories with their presumed realisable value, recognising obsolescence and slow rotation where necessary. Movements are summarised in the table below:
As of 31 December 2021
Use
Allocation
As of 31 December 2022
In thousands of Euros
Raw materials
5,076
(1,146)
1,000
4,930
Work in progress and semi-finished products
852
-
-
852
Finished products and goods
14,121
(1,161)
2,435
15,395
TOTAL
20,049
(2,307)
3,435
21,177
378
20. Current trade receivables
€/000 65,122
Current trade receivables increased by €/000 11,718.
No non-current trade receivables were recorded for either period.
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Trade receivables
7,164
19,053
(11,889)
Trade receivables due from subsidiaries
57,497
33,764
23,733
Trade receivables due from affiliated companies
452
567
(115)
Trade receivables due from parent companies
9
20
(11)
Total
65,122
53,404
11,718
Trade receivables are recorded net of a provision for bad debts equal to €/000 22,514.
Trade receivables comprise receivables referred to normal sales operations and include receivables in foreign currency for a total value, at the exchange rate in effect as of 31 December 2022, taking account of exchange risk hedging, of €/000 43,546.
The item "Trade receivables” includes invoices to issue amounting to €/000 710 relative to normal business transactions and credit notes to issue amounting to €/000 21,421 mainly referring to premiums to pay to the sales network in Italy and abroad for having reached targets.
Trade receivables are usually sold to factoring companies and mainly on a without recourse and advance payment collection basis.
The Company sells a large part of its trade receivables with and without recourse. Piaggio has signed contracts with some of the most important Italian and foreign factoring companies as a move to optimise, monitor and manage its trade receivables, besides offering its customers an instrument for funding their own inventories, and, as regards factoring without recourse, the substantial transfer of risks and benefits. As of 31 December 2022, trade receivables still due, sold without recourse, totalled €/000 115,708. Of these amounts, Piaggio received payment prior to natural expiry of €/000 114,485.
As of 31 December 2022, advance payments received from factoring companies and banks for trade receivables sold with recourse totalled €/000 12,040 with a counter entry recorded in current liabilities.
Movements of the provisions for write-down relative to trade receivables were as follows:
In thousands of Euros
Opening balance as of 1 January 2022
22,626
Decreases for use recognised in profit or loss
(577)
Increases for allocations
465
Closing balance as of 31 December 2022
22,514
During the period, the provision for bad trade debts was used to cover losses amounting to €/000 577.
Allocations to the provision were made against risks arising from the valuation of relative receivables as of 31 December 2022.
Trade receivables due from subsidiaries and associates refer to the supply of products undertaken in normal market conditions.
379
21. Other receivables (current and non-current)
€/000 176,479
Their breakdown was as follows:
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Totals
Current
Non-current
Totals
Current
Non-current
Totals
In thousands of Euros
Due to subsidiaries
116,512
116,512
78,402
78,402
38,110
0
38,110
Due to affiliated companies
572
572
920
67
987
(348)
(67)
(415)
Due to parent companies
22,989
22,989
17,315
17,315
5,674
0
5,674
Receivables due from employees
237
2
239
597
597
(360)
2
(358)
Due from social security institutions
117
117
704
704
(587)
0
(587)
Amounts due to suppliers
167
167
116
116
51
0
51
Supplier advances
-
-
-
-
0
0
0
Invoices and credit to issue
2,171
2,171
5,365
5,365
(3,194)
0
(3,194)
Sundry receivables from third parties
813
6,391
7,204
675
6,391
7,066
138
0
138
Fair value of derivatives
5,530
582
5,530
8,326
8,326
(2,796)
582
(2,214)
Other receivables
10,015
10,381
20,396
6,841
14,287
21,128
3,174
(3,906)
(732)
Total
159,123
17,356
176,479
119,261
20,745
140,006
39,862
(3,389)
36,473
Receivables due from social security institutions refer mainly to sums receivable from the Italian National Social Security Institute (INPS).
The item "Other" includes guarantee deposits amounting to €/000 571 and prepaid expenses amounting to €/000 9,798.
Receivables due from employees refer to advances paid for secondments, sick leave, contract advances, cash provisions, etc.
Sundry receivables mainly refer to receivables due from Italian and foreign parties, originating from transactions not related to typical activities.
Other current receivables are recognised net of a write-down provision of €/000 6,536.
Movements of the provision for bad debts relative to sundry receivables were as follows:
In thousands of Euros
Opening balance as of 1 January 2022
6,609
Decreases for use
(209)
Increases for allocations
136
Closing balance as of 31 December 2022
6,536
During the measurement of relative receivables as of 31 December 2022, a further allocation to the provision of €/000 136 was necessary.
22. Tax receivables (current and non-current)
€/000 17,744
Tax receivables are broken down as follows:
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Totals
Current
Non-current
Totals
Current
Non-current
Totals
In thousands of Euros
Tax receivables:
- VAT
8,219
282
8,501
3,222
125
3,347
4,997
157
5,154
- income tax
36
405
441
35
4,226
4,261
1
(3,821)
(3,820)
- other
6,993
1,809
8,802
1,526
891
2,417
5,467
918
6,385
Total
15,248
2,496
17,744
4,783
5,242
10,025
10,465
(2,746)
7,719
380
23. Breakdown of operating receivables by measurement method
The table below shows the breakdown of operating receivables by measurement method:
Operating assets as of 31 December 2022
Assets measured at FVPL
Assets measured at FVOCI
Financial derivatives
Assets at amortised cost
Total
In thousands of Euros
Non-current assets
Tax receivables
2,496
2,496
Other receivables
582
16,774
17,356
Total non-current operating receivables
0
0
582
19,270
19,852
Current assets
Trade receivables
65,035
65,035
Other receivables
5,530
153,593
159,123
Tax receivables
15,248
15,248
Total current operating receivables
0
0
5,530
233,876
239,406
Total
0
0
6,112
253,146
259,258
Operating assets as of 31 December 2021
Assets measured at FVPL
Assets measured at FVOCI
Financial derivatives
Assets at amortised cost
Total
In thousands of Euros
Non-current assets
Tax receivables
5,242
5,242
Other receivables
20,745
20,745
Total non-current operating receivables
0
0
0
25,987
25,987
Current assets
Trade receivables
53,404
53,404
Other receivables
-
8,326
110,935
119,261
Tax receivables
4,783
4,783
Total current operating receivables
0
0
8,326
166,485
174,811
Total
0
0
8,326
192,472
200,798
24. Receivables due after 5 years
€/000 0
As of 31 December 2022, there were no receivables due after 5 years.
25. Assets held for sale
€/000 0
As of 31 December 2022, there were no assets held for sale.
381
26. Trade payables (current)
€/000 482,418
All trade payables are included in current liabilities.
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Current liabilities:
Amounts due to suppliers
447,822
404,011
43,811
Trade payables due to subsidiaries
24,886
19,013
5,873
Trade payables due to associates
9,403
16,102
(6,699)
Trade payables due to parent companies
307
85
222
Trade payables due to other related parties
-
86
(86)
Total
482,418
439,297
43,121
Trade payables arising from the purchase of materials, goods and services for business operations for €/000 430,944 and the purchase of fixed assets for €/000 16,878.
The item includes payables in foreign currency for a total value, at the exchange rate in effect at 31 December 2022, taking account of hedging on exchange risk, of €/000 102,739.
To facilitate credit conditions for its suppliers, the Company has used indirect factoring agreements since 2012, mainly supply chain financing and reverse factoring agreements, as described in more detail in “accounting policies adopted by the Company”, to which reference is made. These operations did not change the primary obligation, nor substantially changed payment terms, so their nature is the same and they are still classified as trade liabilities.
As of 31 December 2022, the value of trade payables covered by reverse factoring or supply chain financing agreements was equal to €/000 238,280 (€/000 200,804 as of 31 December 2021).
27. Provisions (current and non-current portion)
€/000 23,034
Balance as of 31 December 2021
Allocations
Uses
Reclassification
Balance as of 31 December 2022
In thousands of Euros
Provisions for risks
Provision for contractual risks
7,123
3,000
(4,123)
6,000
Risk provision for legal disputes
1,720
1,720
Total provisions for risks
8,843
3,000
(4,123)
0
7,720
Provisions for expenses
Provision for product warranties
14,000
7,722
(7,396)
14,326
Other reserves
710
5
(630)
85
Provision for environmental clean-ups
537
(147)
390
Provision for ETS certificates
0
513
513
Total provisions for expenses
15,247
8,240
(8,173)
0
15,314
Total provisions for risks and charges
24,090
11,240
(12,296)
0
23,034
382
They consist of:
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Totals
Current
Non-current
Totals
Current
Non-current
Totals
In thousands of Euros
Provision for product warranties
10,028
4,298
14,326
9,800
4,200
14,000
228
98
326
Promotional expense fund
6
-
6
76
-
76
(70)
-
(70)
Provision for competition
79
-
79
634
-
634
(555)
-
(555)
Provision for contractual risks
-
6,000
6,000
-
7,123
7,123
-
(1,123)
(1,123)
Risk provision for legal disputes
-
1,720
1,720
-
1,720
1,720
-
-
-
Provision for environmental clean-ups
-
390
390
-
537
537
-
(147)
(147)
Env. certificates fund and emission qt
513
-
513
-
-
-
513
-
513
Total
10,626
12,408
23,034
10,510
13,580
24,090
116
(1,172)
(1,056)
The provision for contract risks refers mainly to charges which could arise from supply contracts.
The provision for litigation concerns labour litigation and other legal proceedings.
The provision for product warranties refers to potential liabilities related to the sale of products. The provision refers to allocations for technical assistance on products covered by customer service which are estimated to be provided over the contractually envisaged warranty period. This period varies according to the type of goods sold to the sales market and to the customer acceptance of a scheduled maintenance plan.
The provision increased during the year by €/000 7,722 for new allocations and was used for €/000 7,396 for expenses sustained referring to sales in previous years.
The provision for ETS certificates refers to the provision made by the Parent Company for the costs it will have to bear for the purchase of ETS certificates to be returned to the Authority by next 30 April. For more details on the Emission Trading Directive (Directive 2003/87/EC), that established the ETS certificate trading system, see Note 10 Other Operating Costs.
28. Retirement funds and employee benefits
€/000 24,223
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Provision for retirement
108
156
(48)
Termination benefits provision
24,115
31,182
(7,067)
Total
24,223
31,338
(7,115)
The provision for retirement mainly consists of provision for supplementary customer allowances, representing the amounts payable to agents if agency agreements are terminated for reasons not attributable to them. During the year, the aforementioned provision was increased by €/000 9 for indemnities accrued during the period, with a partial release of €/000 57.
383
Movements for post-employment benefits provision are as follows:
In thousands of Euros
Opening balance as of 1 January 2022
31,182
Cost for the period
8,593
Actuarial losses recognised as Shareholders' equity
(4,783)
Interest cost
504
Uses and transfers of retirement funds
(11,375)
Other movements
(6)
Closing balance as of 31 December 2022
24,115
Economic/technical assumptions
The economic/technical assumptions used to discount the value are described in the table below:
•Technical annual discount rate 3.63%
•Annual inflation rate 2.30%
•Annual rate of increase in termination benefit 3.225%
As regards the discount rate, the Company uses the iBoxx Corporates AA rating with a 7-10 duration as the valuation benchmark. If the iBoxx Corporates A rating with a 7-10 duration had been used, the value of actuarial losses and the provision as of 31 December 2022 would have been lower by €/000 965.
The table below shows the effects, in absolute terms, as of 31 December 2022, which would have occurred following changes in reasonably possible actuarial assumptions:
Termination benefits provision
In thousands of Euros
Turnover rate +2%
24,342
Turnover rate -2%
23,850
Inflation rate +0.25%
24,426
Inflation rate – 0.25%
23,809
Discount rate +0.50%
23,168
Discount rate -0.50%
25,122
The average financial duration of the bond is 9 years.
Estimated future amounts are equal to:
Year
Future amounts
In thousands of Euros
1
2,632
2
1,093
3
1,095
4
1,516
5
706
384
29. Tax payables (current and non-current)
€/000 8,909
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Totals
Current
Non-current
Totals
Current
Non-current
Totals
In thousands of Euros
Due for income tax
3,488
3,488
4,106
1,387
5,493
(618)
(1,387)
(2,005)
Other tax payables for:
-
0
0
0
- VAT
1,062
1,062
880
880
182
0
182
- Tax withheld at source
4,254
4,254
4,367
4,367
(113)
0
(113)
- Duty and tax records to pay
68
68
48
48
20
0
20
- Stamp duty paid online
37
37
193
193
(156)
0
(156)
Total other tax payables
5,421
-
5,421
5,488
5,488
(67)
0
(67)
TOTAL
8,909
0
8,909
9,594
1,387
10,981
(685)
(1,387)
(2,072)
Income tax payables refer to €/000 1,770 for taxes to be paid abroad on income generated in 2022, mainly for royalties, technical consultancy and other services provided to the subsidiary Piaggio Vietnam, €/000 363 for payable regional production tax and €/000 1,355 for substitute tax on income due for the realignment of tax values of certain fixed assets to civil law values.
Payables for regional production tax are entered offset against relative receivables. Regional production tax due for the year amounted to €/000 3,483.
Payables for withheld taxes paid refer to the income of employee and outsourced work and commission.
30. Other payables (current and non-current)
€/000 104,224
Their breakdown was as follows:
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Totals
Current
Non-current
Totals
Current
Non-current
Totals
In thousands of Euros
Amounts due to subsidiaries
23,303
23,303
17,648
17,648
5,655
0
5,655
Amounts due to affiliated companies
114
114
118
118
(4)
0
(4)
Amounts due to parent companies
26,150
26,150
14,624
14,624
11,526
0
11,526
Payables to employees
18,095
18,095
11,508
11,508
6,587
0
6,587
Amounts due to social security institutions
7,961
7,961
7,640
7,640
321
0
321
Amounts due to company boards
743
743
688
688
55
0
55
Amounts due for temporary funding
318
318
212
212
106
0
106
Amounts due for financial statement assessments
261
261
448
448
(187)
0
(187)
Amounts due to customers
6,511
6,511
2,860
2,860
3,651
0
3,651
Payables from the fair value measurement of financial
instruments
3,062
3,062
217
33
250
2,845
(33)
2,812
Accrued expenses
3,830
3,830
3,731
3,731
99
0
99
Deferred income
2,298
6,585
8,883
2,101
3,127
5,228
197
3,458
3,655
Other payables
4,923
70
4,993
4,255
70
4,325
668
0
668
Total
97,569
6,655
104,224
66,050
3,230
69,280
31,519
3,425
34,944
385
As regards the non-current portion:
•deferred income comprises €/000 4,068 from contributions to recognise in the income statement in relation to amortisation, €/000 75 from royalties for years after 2022, €/000 2,232 from income related to extended warranties on vehicles for years after 2022 and €/000 210 from income related to scheduled maintenance packages, also for years after 2022;
•Other payables refer to €/000 70 for a guarantee deposit.
•amounts due to employees refer to the amount for holidays accrued but not taken of €/000 10,720 and other payments to be made for €/000 7,375;
•grants of €/000 318 refer to funding received for research projects in progress that have not yet been definitively acquired;
•amounts due to clients mainly refer to premiums paid for achieving sales targets that will be paid at the end of the reporting period and to credit notes for returns;
•The item Fair Value of derivative instruments consists of hedging transactions recognised in accordance with the cash flow hedge principle and broken down as follows: fair value of exchange rate risk hedging transactions on forecast transactions (€/000 1,960); fair value of hedging transactions on commodities (€/000 1,102).
•deferred income refers to €/000 1,175 from contributions for research activities to recognise in profit or loss under amortisation, €/000 78 from commissions due in subsequent years, €/000 256 from royalties, €/000 777 from income related to extended warranties on vehicles and €/000 12 from income from scheduled maintenance packages;
•accrued expenses refer to €/000 1,991 relative to interest expense, €/000 1,776 relative to interest on bonds and €/000 35 relative to interest on lease agreements and other minor expenses for €/000 28;
•other payables are composed of €/000 2,841 of advances received.
386
31. Breakdown of operating payables by measurement method
The table below shows the breakdown of operating payables by measurement method:
Operating liabilities as of 31 December 2022
Derivatives at
FVPL
Financial derivatives
Liabilities at amortised cost
Total
In thousands of Euros
Non-current
Tax payables
-
Other payables
-
6,655
6,655
Total non-current liabilities
-
-
6,655
6,655
Current
Trade payables
482,418
482,418
Tax payables
8,909
8,909
Other payables
-
3,062
94,507
97,569
Total current liabilities
-
3,062
585,834
588,896
Total
-
3,062
592,489
595,551
Operating liabilities as of 31 December 2021
Derivatives at FVPL
Financial derivatives
Liabilities at amortised cost
Total
In thousands of Euros
Non-current
Tax payables
-
Other payables
33
3,197
3,230
Total non-current liabilities
-
33
3,197
3,230
Current
Trade payables
439,297
439,297
Tax payables
9,594
9,594
Other payables
-
217
65,833
66,050
Total current liabilities
-
217
514,724
514,941
Total
-
250
517,921
518,171
32. Payables due after 5 years
The Company has loans due after 5 years, which are referred to in detail in Note 36 “Financial Liabilities and financial liabilities for rights of use”. With the exception of the above payables, no other long-term payables due after five years exist.
387
D) INFORMATION ON FINANCIAL ASSETS AND LIABILITIES
This section provides information on the carrying amount of financial assets and liabilities held, and in particular:
•specifically describes the type of financial assets and liabilities;
•the accounting standards adopted;
•describes how fair value is determined, how measurements and estimates are made, and the uncertainties involved.
The Company holds the following financial assets and liabilities:
Financial assets as of 31 December 2022
Assets measured at FVPL
Assets measured at FVOCI
Financial derivatives
Assets at amortised cost
Total
In thousands of Euros
Non-current
Other financial assets
16
0
16
Total non-current assets
16
0
0
0
16
Current
Other financial assets
0
25,557
25,557
Cash and cash equivalents
79,447
79,447
Total current assets
0
0
0
105,004
105,004
Total
16
0
0
105,004
105,020
Financial assets as of 31 December 2021
Assets measured at FVPL
Assets measured at FVOCI
Financial derivatives
Assets at amortised cost
Total
In thousands of Euros
Non-current
Other financial assets
16
74
90
Total non-current assets
16
0
0
74
90
Current
Other financial assets
0
18,660
18,660
Cash and cash equivalents
122,154
122,154
Total current assets
0
0
0
140,814
140,814
Total
16
0
0
140,888
140,904
388
Financial liabilities as of 31 December 2022
Derivatives at FVPL
Fair value adjustment
Financial derivatives
Liabilities at amortised cost
Total
In thousands of Euros
Non-current
Bank loans
264,878
264,878
Bonds
245,736
245,736
Other loans
176
176
Liabilities for rights of use
4,408
4,408
Total non-current liabilities
-
-
-
515,198
515,198
Current
Bank loans
48,666
48,666
Bonds
-
-
-
Other loans
12,486
12,486
Liabilities for rights of use
3,303
3,303
Total current liabilities
-
-
-
64,455
64,455
Total
-
-
-
579,653
579,653
Financial liabilities as of 31 December 2021
Derivatives at FVPL
Fair value adjustment
Financial derivatives
Liabilities at amortised cost
Total
In thousands of Euros
Non-current
Bank loans
287,817
287,817
Bonds
244,150
244,150
Other loans
247
247
Liabilities for rights of use
6,676
6,676
Total non-current liabilities
-
-
-
538,890
538,890
Current
Bank loans
61,592
61,592
Bonds
-
-
-
Other loans
13,788
13,788
Liabilities for rights of use
3,531
3,531
Total current liabilities
-
-
-
78,911
78,911
Total
-
-
-
617,801
617,801
389
€/000 114,662
The investments heading comprises:
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Investments in subsidiaries
107,569
132,373
(24,804)
Investments in associates
7,093
7,933
(840)
Total
114,662
140,306
(25,644)
Movements for the period are shown below:
Company transactions
Carrying amount as of 31/12/2021
2022 Result
Translation reserve
IAS 19 Discounting reserve
Decreases for the distribution of dividends
Capitalisation/Reduction
Carrying amount as of 31/12/2022
In thousands of Euros
Subsidiaries
Piaggio Vespa B.V.
37,287
34,566
(412)
(44,496)
26,945
Piaggio Vehicles Pvt Ltd
67,520
(6,951)
(2,446)
183
58,306
Nacional Motor
3,919
(77)
(3,500)
342
Piaggio Vietnam Co Ltd
14,394
48,827
40
(50,628)
12,633
Piaggio China Ltd
2,987
(274)
(63)
14
2,664
Aprilia Racing S.r.l.
495
126
85
706
Piaggio España SL
3,081
392
(375)
3,098
Piaggio Indonesia
2,112
859
(87)
(20)
(873)
76
2,067
Piaggio Advanced Design Center
383
33
23
439
Piaggio Fast Forward Inc.
0
(33,194)
33,194
0
Piaggio Concept Store Mantova S.r.l.
195
(202)
63
313
369
Total subsidiaries
132,373
44,105
(2,945)
311
(96,372)
30,097
107,569
Associates
Zongshen Piaggio Foshan
7,763
(693)
(165)
6,905
Pontedera & Tecnologia S.c.a r.l.
160
18
178
Immsi Audit S.c.a.r.l.
10
10
Total associates
7,933
(675)
(165)
0
0
0
7,093
Total investments
140,306
43,430
(3,110)
311
(96,372)
30,097
114,662
Investments in subsidiaries
€/000 107,569
The following company transactions concerned investments in subsidiaries during the year:
−Piaggio Vespa B.V., the recognition of dividends for €/000 44,496;
−National Motor, repayment of capital contribution through partial repayment of the loan granted to the parent company €/000 3,500;
−Piaggio Vietnam, the recognition of dividends for €/000 50,628;
−Piaggio España, the recognition of dividends for €/000 375;
−Piaggio Indonesia, the recognition of dividends for €/000 873;
−Piaggio Indonesia, capitalisation of €/000 76;
−Piaggio Fast Forward, the conversion of a financial receivable in a equity reserve for €/000 96,176;
−Piaggio Concept Store Mantova S.r.l., payment to cover the loss for the year 2021 of €/000 313.
390
Investments in associates
€/000 7,093
The value of investments in associates was adjusted during the year to the corresponding value of shareholders' equity.
34. Other financial assets (current and non-current)
€/000 25,573
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Totals
Current
Non-current
Totals
Current
Non-current
Totals
In thousands of Euros
Financial receivables from third parties
-
-
0
0
0
0
0
Financial receivables due from subsidiaries
25,483
-
25,483
18,573
18,573
6,910
0
6,910
Financial receivables due from subsidiaries
for rights of use
74
-
74
87
74
161
(13)
(74)
(87)
Financial receivables from subsidiaries
-
-
0
0
0
0
0
Fair value of hedging derivatives
-
-
0
0
0
0
0
Available-for-sale
government bonds
-
-
0
0
0
0
0
Investments in other companies
-
16
16
16
16
0
0
0
Total
25,557
16
25,573
18,660
90
18,750
6,897
(74)
6,823
The item Other current financial assets includes financial receivables due from the subsidiaries Piaggio Fast Forward for €/000 4,430 and Aprilia Racing for €/000 21,053.
The table below shows the composition of investments in other companies:
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Other companies:
A.N.C.M.A. – Rome
2
2
0
ECOFOR SERVICE S.p.A. – Pontedera
2
2
0
Consorzio Fiat Media Center – Turin
3
3
0
S.C.P.S.T.V.
0
0
0
IVM
9
9
0
Total other companies
16
16
0
35. Cash and cash equivalents
€/000 79,447
This item mainly includes short-term or on demand bank deposits.
Cash and cash equivalents are broken down as follows:
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Bank and postal deposits
79,421
122,135
(42,714)
Cash on hand
26
19
7
Total
79,447
122,154
(42,707)
391
Reconciliation of cash and cash equivalents recognised in the statement of financial position with cash and cash equivalents recognised in the Statement of Cash Flows
The table below reconciles the amount of cash and cash equivalents above with cash and cash equivalents recognised in the Statement of Cash Flows.
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Cash and cash equivalents
79,447
122,154
(42,707)
Current account overdrafts
(64)
(12)
(52)
Closing balance
79,383
122,142
(42,759)
36. Financial liabilities and financial liabilities for rights of use (current and non-current)
€/000 579,653
During 2022, total debt decreased by €/000 38,148. Net of the change in financial liabilities for rights of use, as of 31 December 2022 total financial debt had increased by €/000 35,652.
Financial liabilities as of 31 December 2022
Financial liabilities as of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
Financial liabilities
61,152
510,790
571,942
75,380
532,214
607,594
(14,228)
(21,424)
(35,652)
Financial liabilities for rights of use
3,303
4,408
7,711
3,531
6,676
10,207
(228)
(2,268)
(2,496)
Total
64,455
515,198
579,653
78,911
538,890
617,801
(14,456)
(23,692)
(38,148)
The composition of "Net financial debt" as of 31 December 2022, prepared in accordance with paragraph 175 and following of ESMA Recommendations 2021/32/382/1138, is set out below.
392
net financial position (or Net financial debt) 64
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
A
Cash and cash equivalents
79,447
122,154
(42,707)
B
Cash equivalents
0
C
Other current financial assets
27,195
18,660
8,535
Short-term financial receivables due from subsidiaries
27,121
18,573
8,548
Short-term financial receivables due from subsidiaries for rights of use
74
87
(13)
D
Liquidity (A + B + C)
106,642
140,814
(34,172)
E
Current financial debt (including debt instruments, but excluding the current portion of non-current financial debt)
(15,853)
(22,331)
6,478
Current account overdrafts
(64)
(12)
(52)
Payables due to banks
0
(5,000)
5,000
Amounts due to factoring companies
(12,040)
(9,813)
(2,227)
Financial liabilities for rights of use
(3,303)
(3,531)
228
- of which finance leases
(1,180)
(1,188)
8
- of which operating leases
(2,123)
(2,343)
220
Current portion of payables due to other lenders
(71)
(71)
0
Borrowings from subsidiaries
(375)
(3,904)
3,529
F
Current portion of non-current financial debt
(48,602)
(56,580)
7,978
G
Current financial debt (E + F)
(64,455)
(78,911)
14,456
H
Net current financial debt (G - D)
42,187
61,903
(19,716)
I
Non-current financial debt (excluding current portion and debt instruments)
(269,462)
(294,740)
25,278
Medium-/long-term bank loans
(264,878)
(287,817)
22,939
Financial liabilities for rights of use
(4,408)
(6,676)
2,268
- of which finance leases
(3,246)
(4,424)
1,178
- of which operating leases
(1,162)
(2,252)
1,090
Amounts due to other lenders
(176)
(247)
71
J
Debt instruments
(245,736)
(244,150)
(1,586)
K
Trade payables and other non-current payables
0
L
Non-current financial debt (I + J + K)
(515,198)
(538,890)
23,692
M
Total financial debt (H + L)
(473,011)
(476,987)
3,976
The tables above and below show payables for finance leases, and payables for operating leases, on separate rows, for an easier understanding and greater comparability between data for the two years.
The tables below analyse the movements of the net financial position year on year.
64 The indicator does not include financial assets and liabilities arising from the fair value measurement of financial derivatives for hedging and otherwise, the fair value adjustment of relative hedged items equal in any case to €/000 0 as of 31 December 2022 and 2021, and relative accruals.
393
Cash flows
Balance as of 31.12.2020
Movements
Repayments
New issues
Reclassifications
Exchange delta
Other changes
Balance as of 31.12.2021
In thousands of Euros
A
Cash and cash equivalents
79,690
42,288
176
122,154
B
Cash equivalents
C
Other current financial assets
19,074
0
(1,636)
23,263
80
29
(22,150)
18,660
Short-term financial receivables due from subsidiaries
18,925
(1,489)
23,263
29
(22,155)
18,573
Short-term financial receivables due from subsidiaries for rights of use
149
(147)
80
5
87
D
Liquidity (A + B + C)
98,764
42,288
(1,636)
23,263
80
205
(22,150)
140,814
E
Current financial debt (including debt instruments, but excluding the current portion of non-current financial debt)
(26,092)
0
57,782
(19,825)
(33,993)
0
(203)
(22,331)
Current account overdrafts
(1,186)
1,186
(12)
(12)
Payables due to banks
0
0
(5,000)
(5,000)
Debenture loan
(11,038)
41,050
(30,000)
(12)
(0)
Amounts due to factoring companies
(9,133)
9,133
(9,813)
(9,813)
Financial liabilities for rights of use:
(4,664)
0
5,242
0
(3,922)
0
(187)
(3,531)
of which amounts due under finance leases
(1,169)
1,172
(1,188)
(3)
(1,188)
of which amounts due under operating leases
(1,691)
2,192
(1,580)
(96)
(1,175)
- of which operating leases payable to Parent Companies
(1,804)
1,878
(1,154)
(88)
(1,168)
Amounts due to other lenders
(71)
71
(71)
(71)
Borrowing costs with subsidiaries
0
1,100
(5,000)
(4)
(3,904)
F
Current portion of non-current financial debt
(108,888)
138,163
(85,703)
(152)
(56,580)
G
Current financial debt (E + F)
(134,980)
0
195,945
(19,825)
(119,696)
0
(355)
(78,911)
H
Net current financial debt (G - D)
(36,216)
42,288
194,309
3,438
(119,616)
205
(22,505)
61,903
I
Non-current financial debt (excluding current portion and debt instruments)
(202,919)
0
0
(181,000)
89,696
0
(517)
(294,740)
Medium-/long-term bank loans
(192,879)
(181,000)
85,703
359
(287,817)
Financial liabilities for rights of use:
(9,722)
0
0
3,922
0
(876)
(6,676)
of which amounts due under finance leases
(5,612)
1,188
(4,424)
of which amounts due under operating leases
(1,232)
1,580
(876)
(528)
- of which operating leases payable to Parent Companies
(2,878)
1,154
(1,724)
Amounts due to other lenders
(318)
71
0
(247)
J
Debt instruments
(272,579)
30,000
(1,571)
(244,150)
K
Trade payables and other non-current payables
L
Non-current financial debt (I + J + K)
(475,498)
0
0
(182,623)
119,696
0
(2,088)
(538,890)
M
Total financial debt (H + L)*
(511,714)
42,288
194,309
(177,562)
80
205
(24,593)
(476,987)
394
Cash flows
Balance as of 31.12.2021
Movements
Repayments
New issues
Reclassifi
cations
Exchange
delta
Other changes
Balance as of 31.12.2022
In thousands of Euros
A
Cash and cash equivalents
122,154
(42,635)
(72)
79,447
B
Cash equivalents
C
Other current financial assets
18,660
0
(90)
30,159
74
12,305
(33,913)
27,195
Short-term financial receivables due from third parties
Government securities available for sale
Short-term financial receivables due from subsidiaries
18,573
0
30,159
12,305
(33,916)
27,121
Short-term financial receivables due from subsidiaries for rights of use
87
(90)
74
3
74
Short-term financial receivables due from affiliated companies
D
Liquidity (A + B + C)
140,814
(42,635)
(90)
30,159
74
12,233
(33,913)
106,642
E
Current financial debt (including debt instruments, but excluding the current portion of non-current financial debt)
(22,331)
0
19,144
(12,104)
(3,906)
0
3,344
(15,853)
Current account overdrafts
(12)
12
(64)
(64)
Payables due to banks
(5,000)
5,000
0
0
Debenture loan
(0)
(0)
Amounts due to factoring companies
(9,813)
9,813
(12,040)
(12,040)
Financial liabilities for rights of use:
(3,531)
0
4,223
(3,835)
0
(160)
(3,303)
of which amounts due under finance leases
(1,188)
1,187
(1,180)
1
(1,180)
of which amounts due under operating leases
(1,175)
1,794
(1,504)
(96)
(981)
- of which operating leases payable to Parent Companies
(1,168)
1,242
(1,151)
(65)
(1,142)
Amounts due to other lenders
(71)
71
(71)
(71)
Borrowing costs with subsidiaries
(3,904)
25
3,504
(375)
F
Current portion of non-current financial debt
(56,580)
83,337
(75,195)
(164)
(48,602)
G
Current financial debt (E + F)
(78,911)
0
102,481
(12,104)
(79,101)
0
3,180
(64,455)
H
Net current financial debt (G - D)
61,903
(42,635)
102,391
18,055
(79,027)
12,233
(30,733)
42,187
I
Non-current financial debt (excluding current portion and debt instruments)
(294,740)
0
0
(52,500)
79,101
0
(1,323)
(269,462)
Medium-/long-term bank loans
(287,817)
(52,500)
75,195
244
(264,878)
Financial liabilities for rights of use:
(6,676)
0
0
3,835
0
(1,567)
(4,408)
of which amounts due under finance leases
(4,424)
1,180
(2)
(3,246)
of which amounts due under operating leases
(528)
1,504
(1,493)
(517)
- of which operating leases payable to Parent Companies
(1,724)
1,151
(72)
(645)
Amounts due to other lenders
(247)
71
0
(176)
J
Debt instruments
(244,150)
0
(1,586)
(245,736)
K
Trade payables and other non-current payables
L
Non-current financial debt (I + J + K)
(538,890)
0
0
(52,500)
79,101
0
(2,909)
(515,198)
M
Total financial debt (H + L)*
(476,987)
(42,635)
102,391
(34,445)
74
12,233
(33,642)
(473,011)
395
Financial liabilities
€/000 571,942
Financial liabilities are broken down as follows:
Accounting balance
Accounting balance
Nominal value
Nominal value
as of 31.12.2022
as of 31.12.2021
as of 31.12.2022
as of 31.12.2021
In thousands of Euros
Bank loans
313,544
349,409
314,830
345,667
Bonds
245,736
244,150
250,000
250,000
Other loans
12,662
14,035
12,662
10,131
Total
571,942
607,594
577,492
605,798
Carrying amount as of 31.12.2022
Carrying amount as of 31.12.2021
Change
In thousands of Euros
Current financial debt
61,152
75,380
(14,228)
Non-current financial debt
510,790
532,214
(21,424)
Net Financial debt
571,942
607,594
(35,652)
Gross debt, fixed rate
397,506
425,224
(27,718)
Gross debt, variable rate
174,436
182,370
(7,934)
Net Financial debt
571,942
607,594
(35,652)
The table below shows the repayment schedule as of 31 December 2022:
Nominal value as of 31.12.2022
Amounts falling due within 12 months
Amounts falling due after 12 months
Amounts falling due in
2024
2025
2026
2027
After
In thousands of Euros
Bank loans
314,830
48,685
266,145
68,700
38,715
87,563
36,167
35,000
Bonds
250,000
0
250,000
250,000
Other medium-/long-term loans
12,662
12,111
551
71
71
35
Total
577,492
60,796
516,696
68,771
288,786
87,598
36,167
35,000
Medium and long-term bank debt amounts to €/000 313,480 (of which €/000 264,878 non-current and €/000 48,602 current) and consists of the following loans:
•a €/000 9,986 medium-term loan (nominal value of €/000 10,000) from the European Investment Bank to finance Research & Development investments planned for the 2016-2018 period. The loan is divided into two disbursements with a final maturity in February and December 2023 and a repayment schedule of 7 annual fixed-rate instalments. Contract terms require covenants (described below);
•a €/000 58,274 (nominal value €/000 58,333) medium-term loan granted by the European Investment Bank to support Research and Development projects of investment plans, scheduled for the Piaggio Group's Italian sites in the 2019-2021 period. The loan will mature in February 2027 and has a repayment schedule of 6 fixed-rate annual instalments. Contract terms require covenants (described below);
•a €/000 30,000 medium-term loan granted by the European Investment Bank to support Research and Development projects of investment plans, scheduled for the Piaggio Group's
396
Italian sites in the 2019-2021 period. The loan will mature in March 2028 and has a repayment schedule of 6 fixed-rate annual instalments. Contract terms require covenants (described below);
•€/000 1,662 (with a nominal value of €/000 2,000) use of the syndicated revolving credit line for a total of €/000 200,000 maturing on 5 January 2024 (with one year’s extension at the discretion of the borrower). Contract terms require covenants (described below);
•a €/000 114,272 (nominal value of €/000 115,000) "Schuldschein" loan issued between October 2021 and February 2022 and subscribed by leading market participants. It consists of 7 tranches with maturities of 3, 5 and 7 years at fixed and variable rates;
•a €/000 22,404 medium-term loan (nominal value of €/000 22,500) granted by Banca Popolare Emilia Romagna. The loan will fall due on 31 December 2027 and has a repayment schedule of six-monthly instalments;
•a €/000 19,938 loan (nominal value of €/000 20,000) granted by Banco BPM with a repayment schedule of six-monthly instalments and final settlement in July 2025. An Interest Rate Swap has been taken out on this loan to hedge the interest rate risk. Contract terms require covenants (described below);
•€/000 26,667 medium-term loan granted by Cassa Depositi e Prestiti to support international growth in India and Indonesia. The loan has a duration of 5 years expiring on 30 August 2026. It entails a repayment plan with six-monthly instalments and a 12-month grace period. Contract terms require covenants (described below);
•a €/000 3,486 medium-term loan (nominal value of €/000 3,500) granted by Banca Popolare di Sondrio, maturing on 1 June 2026 and with a quarterly repayment schedule;
•a €/000 6,990 medium-term loan (nominal value of €/000 7,000) granted by Cassa di Risparmio di Bolzano, maturing on 30 June 2026 and with a quarterly repayment schedule;
•a €/000 4,825 medium-term loan (nominal value of €/000 4,830) granted by Banca Carige, maturing on 31 December 2026 and with a quarterly repayment schedule;
•a €/000 14,976 (with a nominal value of €/000 15,000) medium-term loan granted by Oldenburgische Landensbank Aktiengesellschaft maturing on 30 September 2027.
The Company also has the following revolving credit lines and loans undrawn as of 31 December 2022:
•a €/000 20,000 revolving credit line granted by Banca Intesa San Paolo maturing on 31 January 2024;
•a €/000 12,500 revolving credit line granted by Banca Popolare Emilia Romagna maturing on 2 August 2026;
•a €/000 60,000 Loan granted by the European Investment Bank with maturity 9 years from disbursement.
All the above financial liabilities are unsecured.
The item “Bonds” amounted to €/000 245,736 (nominal value of €/000 250,000) related to a high-yield debenture loan issued on 30 April 2018 for a nominal amount of €/000 250,000, maturing on 30 April
397
2025 and with a semi-annual coupon with fixed annual nominal rate of 3.625%. Standard & Poor’s and Moody’s assigned a BB- rating with a stable outlook and a Ba3 rating with a stable outlook respectively.
It should be noted that the Company may repay in advance all or part of the High Yield bond issued on 30 April 2018 on the terms specified in the indenture. The value of prepayment options was not deducted from the original contract, as these are considered as being closely related to the host instrument, as provided for by IFRS 9 b4.3.5.
Financial advances received from factoring companies and banks, on the sale of trade receivables with recourse, totalled €/000 12,040.
Medium-/long-term payables to other lenders equal to €/000 247 of which €/000 176 maturing after the year and €/000 71 as the current portion refer to a loan from the Region of Tuscany, pursuant to regulations on incentives for investments in research and development.
Covenants
In line with market practices for borrowers with a similar credit rating, main loan contracts require compliance with:
1)financial covenants, on the basis of which the company undertakes to comply with certain levels of contractually defined financial indices, with the most significant comprising the ratio of net financial debt/gross operating margin (EBITDA), measured on the consolidated perimeter of the Group, according to definitions agreed on with lenders;
2)negative pledges according to which the company may not establish collaterals or other constraints on company assets;
3)"pari passu" clauses, on the basis of which the loans will have the same repayment priority as other financial liabilities, and change of control clauses, which are effective if the majority shareholder loses control of the company;
4)limitations on the extraordinary operations the company may carry out.
The measurement of financial covenants and other contract commitments is monitored by the Company on an ongoing basis.
The high-yield debenture loan issued by the company in April 2018 provide for compliance with covenants which are typical of international practice on the high yield market. In particular, the company must observe the EBITDA/Net borrowing costs index, based on the threshold established in the Prospectus, to increase financial debt defined during issue. In addition, the Prospectus includes some obligations for the issuer, which limit, inter alia, the capacity to:
1)pay dividends or distribute capital;
2)make some payments;
3)grant collaterals for loans;
4)merge with or establish some companies;
5)sell or transfer own assets.
398
Failure to comply with the covenants and other contract commitments of the loan and debenture loan, if not remedied in agreed times, may give rise to an obligation for the early repayment of the outstanding amount of the loan.
As of 31 December 2022, all covenants had been met in full.
Amortised Cost and Fair Value Measurement
All financial liabilities are measured in accordance with accounting standards and based on the amortised cost method (except for liabilities with hedging derivatives measured at Fair Value Through Profit & Loss, for which the same measurement criteria used for the derivative are applied). According to this criterion, the nominal amount of the liability is decreased by the amount of relative costs of issue and/or stipulation, in addition to any costs relating to refinancing of previous liabilities. The amortisation of these costs is determined on an effective interest rate basis, and namely the rate which discounts the future flows of interest payable and reimbursements of principle at the net carrying amount of the financial liability.
IFRS 13 – Fair Value Measurement defines fair value on the basis of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of an active market or market that does not operate regularly, fair value is measured by valuation techniques. The standard defines a fair value hierarchy:
•level 1 – quoted prices in active markets for assets or liabilities measured;
•level 2 – inputs other than quoted prices included within Level 1 that are observable directly (prices) or indirectly (derived from prices) on the market;
•level 3 – inputs not based on observable market data.
The valuation techniques referred to levels 2 and 3 must take into account adjustment factors that measure the risk of insolvency of both parties. To this end, the standard introduces the concepts of Credit Value Adjustment (CVA) and Debit Value Adjustment (DVA): CVA makes it possible to include the counterparty credit risk in the fair value measurement; DVA reflects the risk of insolvency of the Group.
The table below shows the fair value of payables measured using the amortised cost method as of 31 December 2022:
Nominal value
Carrying amount
Fair Value *
In thousands of Euros
High yield debenture loan
250,000
245,736
247,230
EIB RDI
58,333
58,274
53,670
EIB RDI step-up
30,000
30,000
27,009
Loan from B. Pop. Emilia Romagna
22,500
22,404
21,612
Loan from CDP
26,667
26,667
24,994
Loan from Banco BPM
20,000
19,938
19,196
Loan from Banca CARIGE
4,830
4,825
5,137
Loan from BPop Sondrio
3,500
3,486
3,386
Loan from CariBolzano
7,000
6,990
6,657
Loan from OLB
15,000
14,976
16,223
SSD loans
115,000
114,272
101,920
*The value deducts DVA related to the issuer, i.e. it includes the risk of insolvency of Piaggio.
399
For liabilities due within 18 months, the carrying amount is basically considered the same as the fair value.
FAIR VALUE HIERARCHY
The table below shows the assets and liabilities measured and recognised at fair value as of 31 December 2022, by hierarchical level of fair value measurement.
LEVEL 1
LEVEL 2
LEVEL 3
In thousands of Euros
ASSETS MEASURED AT FAIR VALUE
Financial derivatives:
-of which financial assets
-of which other receivables
6,112
Investments in other companies
16
Total assets
6,112
16
LIABILITIES MEASURED AT FAIR VALUE
Financial derivatives
-of which financial liabilities
-of which other payables
(3,063)
Financial liabilities at fair value recognised through profit or loss
Total liabilities
(3,063)
General total
3,049
16
The following tables show Level 2 and Level 3 changes during 2022:
LEVEL 2
LEVEL 3
In thousands of Euros
Balance as of 31 December 2021
8,075
16
Gain (loss) recognised in profit or loss
(350)
Gain (loss) recognised in the statement of comprehensive income
(4,676)
Increases/(Decreases)
Balance as of 31 December 2022
3,049
16
Financial liabilities for rights of use
€/000 7,711
As required by IFRS 16, financial liabilities for rights of use include financial lease liabilities as well as payments due on operating lease agreements.
As of 31 December 2022
As of 31 December 2021
Change
Current
Non-current
Total
Current
Non-current
Total
Current
Non-current
Total
In thousands of Euros
Operating leases
2,123
1,162
3,285
2,343
2,252
4,595
(220)
(1,090)
(1,310)
Finance leases
1,180
3,246
4,426
1,188
4,424
5,612
(8)
(1,178)
(1,186)
Total
3,303
4,408
7,711
3,531
6,676
10,207
(228)
(2,268)
(2,496)
400
Finance lease payables refer to a Sale&Lease back agreement for €/000 4,426 (nominal value of €/000 4,430) granted by Albaleasing on a production plant of the Company. The agreement is for ten years, with quarterly repayments (non-current portion equal to €/000 3,246);
Payables for rights of use include payables with the parent companies Immsi and Omniaholding for €/000 2,296 (€/000 1,000 non-current portion).
The table below shows the repayment schedule as of 31 December 2022:
Carrying amount as of 31.12.2022
Amounts falling due within 12 months
Amounts falling due after 12 months
Amounts falling due in
2024
2025
2026
2027
After
In thousands of Euros
Rights of use:
- of which operating leases
3,285
2,123
1,162
572
556
35
- of which finance leases
4,426
1,180
3,246
1,218
1,257
771
Total
7,711
3,303
4,408
1,790
1,813
806
-
-
401
E) MANAGEMENT OF FINANCIAL RISK
This section describes all financial risks to which the Company is exposed and how these risks could affect future results.
37. Credit risk
The Company considers that its exposure to credit risk is as follows:
As of 31 December 2022
As of 31 December 2021
In thousands of Euros
Liquid assets
79,447
122,154
Financial receivables
25,573
18,660
Trade receivables
65,122
53,404
Tax receivables
17,744
10,025
Other receivables
176,479
140,006
Total
364,365
344,249
The Company monitors and manages credit centrally by using established policies and guidelines. The portfolio of trade receivables shows no signs of concentrated credit risk in light of the broad distribution of our licensee or distributor network. In addition, most trade receivables are short-term. In order to optimise credit management, the Company has established revolving programmes with some primary factoring companies for selling its trade receivables without recourse.
38. Financial risks
The financial risks the Company is exposed to are liquidity risk, exchange risk, interest rate risk and credit risk.
The management of these risks, in order to reduce management costs and dedicated resources, is centralised and treasury operations take place in accordance with formal policies and guidelines which are applicable to all Group companies.
Liquidity risk and capitals management
The liquidity risk arises from the possibility that available financial resources are not sufficient to cover, in due times and procedures, future payments arising from financial and/or commercial obligations. To deal with this risk, cash flows and the Company’s credit line needs are monitored or managed centrally under the control of the Treasury in order to guarantee an effective and efficient management of financial resources as well as optimise the debt’s maturity standpoint.
In addition, the Company finances the temporary cash requirements of subsidiaries by providing direct short-term loans regulated in market conditions or guarantees. A cash pooling zero balance system is used between the Company and European companies to reset the receivable and payable balances of subsidiaries on a daily basis, for a more effective and efficient management of liquidity in the Eurozone.
As of 31 December 2022, the most important sources of financing irrevocable until maturity granted to the Company were as follows:
•a debenture loan of €/000 250,000 maturing in April 2025;
402
•a Schuldschein loan of €/000 115,000, with final settlement in February 2029;
•a revolving credit line from €/000 200,000 maturing in January 2024 and a loan of €/000 22,500 maturing in December 2027;
•Revolving credit facilities for a total of €/000 42,500, with final settlement in August 2026;
•loans for a total of €/000 257,830, with final settlement in March 2028.
As of 31 December 2022, the Company had a liquidity of €/000 79,447, €/000 300,500 of undrawn credit lines irrevocable to maturity and €/000 98,006 of revocable credit lines, as detailed below:
As of 31 December 2022
As of 31 December 2021
In thousands of Euros
Variable rate with maturity within one year - irrevocable until maturity
195,500
Variable rate with maturity after one year - irrevocable until maturity
300,500
20,000
Variable rate with maturity within one year - cash revocable
89,006
100,485
Variable rate with maturity within one year - with revocation
for self-liquidating typologies
9,000
11,000
Total
398,506
326,985
The table below shows the timing of future payments in relation to trade payables:
As of 31 December 2022
Within 30 days
Between 31 and 60 days
Between 61 and 90 days
Over 90 days
In thousands of Euros
Amounts due to suppliers
447,822
197,559
120,877
71,412
57,974
Amounts due to subsidiaries
24,886
14,108
10,758
20
-
Amounts due to affiliates
9,403
2,589
4,554
823
1,437
Amounts due to parent companies
307
287
20
-
-
Total trade payables
482,418
214,543
136,209
72,255
59,411
Management considers that currently available funds, as well as funds that will be generated from operations and loans, will enable the Company to meets its requirements relative to investments, the management of working capital and repayment of loans on expiry and will ensure an adequate level of operating and strategic flexibility.
Exchange Risk
The company operates in an international context where transactions are conducted in currencies different from the euro. This exposes it to risks arising from exchange rates fluctuations. For this purpose, the Company has an exchange rate risk management policy which aims to neutralise the possible negative effects of the changes in exchange rates on company cash-flows.
This policy analyses:
-the transaction exchange risk: the policy wholly covers this risk which arises from differences between the recognition exchange rate of receivables or payables in foreign currency in the financial statements and the recognition exchange rate of actual collection or payment. To cover this type of
403
exchange risk, the exposure is naturally offset in the first place (netting between sales and purchases in the same currency) and if necessary, by signing currency future derivatives, as well as advances of receivables denominated in currency;
-the economic exchange risk: arises from changes in company profitability in relation to annual figures planned in the economic budget on the basis of a reference change (the "budget exchange rate") and is covered by derivatives. The items of these hedging operations are therefore represented by foreign costs and revenues forecast by the sales and purchases budget. The total of forecast costs and revenues is processed monthly and associated hedging is positioned exactly on the average weighted date of the economic event, recalculated based on historical criteria. The economic occurrence of future receivables and payables will occur during the budget year.
404
At the end of the reporting period, the Company's exposure to exchange risk was as follows:
As of 31 December 2022
USD
GBP
CHF
CNY
DKK
SGD
CAD
SEK
HKD
INR
JPY
RMB
PLZ
VND
Total
In thousands of Euros
Non-current assets
Financial receivables
0
Trade and other receivables
163
163
Long-term tax receivables
370
370
Fair value of derivatives
0
Total non-current assets
0
0
0
163
0
0
0
0
0
370
0
0
0
0
533
Current assets
Trade and other receivables
34,407
(1,061)
11,494
689
1,745
58
3,126
874
55,303
106,635
Fair value of derivatives
0
Other financial assets
6,069
6,069
Bank and postal deposits
2,469
190
1,633
3
40
48
653
5,036
Securities
0
Total current assets
42,945
(871)
0
13,127
0
692
1,785
106
0
3,126
1,527
0
0
55,303
117,740
Total assets
42,945
(871)
0
13,290
0
692
1,785
106
0
3,496
1,527
0
0
55,303
118,273
Non-current liabilities
Bank loans
0
Bonds
0
Other loans
0
Leases
0
Fair value of derivatives
0
Total non-current liabilities
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Current liabilities
Bank loans
0
Trade and other payables
56,497
1,064
21
38,950
2
90
1,331
4
902
4,356
1
103,218
Tax payables
3
1,062
30
20
1,115
Other loans
0
Leases
0
Fair value of derivatives
0
Total current liabilities
56,500
2,126
21
38,980
2
90
0
1,331
4
902
4,356
20
1
0
104,333
Total liabilities
56,500
2,126
21
38,980
2
90
0
1,331
4
902
4,356
20
1
0
104,333
At the end of the reporting period, the company had no financial liabilities in currency subject to exchange risk.
405
Cash flow hedging
As of 31 December 2022, the Group had undertaken the following futures transactions (recognised based on the regulation date) relative to payables and receivables already recognised to hedge the transaction exchange risk:
Company
Operation
Currency
Amount in currency
Value in local currency
(forward exchange rate)
Average maturity
In thousands
In thousands
Piaggio & C.
Purchase
CNY
182,000
25,166
02/02/2023
Piaggio & C.
Purchase
JPY
480,000
3,354
10/02/2023
Piaggio & C.
Purchase
SEK
14,000
1,285
29/01/2023
Piaggio & C.
Purchase
USD
31,550
30,506
15/02/2023
Piaggio & C.
Sale
CAD
650
467
07/02/2023
Piaggio & C.
Sale
CNY
65,000
8,837
01/03/2023
Piaggio & C.
Sale
USD
65,410
61,289
23/04/2023
As of 31 December 2022, the Company had undertaken the following transactions to hedge business exchange risk:
Company
Operation
Currency
Amount in currency
Value in local currency (forward exchange rate)
Average maturity
In thousands
In thousands
Piaggio & C.
Purchase
CNY
1,420,000
193,515
24/11/2023
Piaggio & C.
Purchase
USD
20,000
18,681
04/03/2023
Piaggio & C.
Sale
USD
90,000
88,404
26/08/2023
To hedge the economic exchange risk alone, cash flow hedging is adopted with the effective portion of profits and losses recognised in a specific shareholders' equity reserve. Fair value is determined based on market quotations provided by main traders.
As of 31 December 2022, the total fair value of hedging instruments for the economic exchange risk recognised on a hedge accounting basis was positive by €/000 3,198. During 2022, profit was recognised under Other Comprehensive Income amounting to €/000 3,198 and losses from Other Comprehensive Income were reclassified under profit/loss for the period amounting to €/000 8,305.
406
The net balance of cash flows during 2022 is shown below, divided by main currency:
Cash Flow 2022
In millions of Euros
Pound Sterling
34.5
Canadian Dollar
15.2
Swedish Krone
(1.6)
Japanese Yen
(10.2)
US Dollar
(66.9)
Singapore Dollar
0.5
Chinese Yuan*
(175.6)
Total cash flow in foreign currency
(204.1)
* Cash flow partially in euro.
In view of the above, an assumed appreciation/deprecation of 3% of the euro would have generated potential profits for €/000 5,946 and potential losses for €/000 6,314 respectively.
Interest rate risk
This risk arises from fluctuating interest rates and the impact this may have on future cash flows arising from variable rate financial assets and liabilities. The Group regularly measures and controls its exposure to the risk of interest rate changes, as established by its management policies, in order to reduce fluctuating borrowing costs, and limit the risk of a potential increase in interest rates. This objective is achieved through an adequate mix of fixed and variable rate exposure, and the use of derivatives, mainly interest rate swaps and cross currency swaps.
As of 31 December 2022, the following hedging derivatives were in use:
Cash flow hedging
An Interest Rate Swap to hedge the variable-rate loan for a nominal amount of €/000 26,667 from Banco BPM. The purpose of this instrument is to manage and mitigate exposure to interest rate risk; in accounting terms, the instrument is recognised on a cash flow hedge basis, with profits/losses arising from the fair value measurement allocated to a specific reserve in Shareholders' equity; as of 31 December 2022, the fair value of the instrument was positive by €/000 873; sensitivity analysis of the instrument, assuming a 1% increase and decrease in the shift of the variable rates curve, showed a potential impact on equity, net of the related tax effect, of €/000 137 and €/000 -140 respectively.
407
Commodities price risk
This risk arises from the possibility of changes in company profitability due to fluctuations in metal and energy prices (specifically platinum, palladium, aluminium and gas). The Group's objective is therefore to neutralise such possible adverse changes deriving from highly probable future transactions by compensating them with opposite variations related to the hedging instrument.
Cash flow hedging is adopted with this type of hedging, with the effective portion of profits and losses recognised in a specific shareholders' equity reserve. Fair value is determined based on market quotations provided by main traders.
As of 31 December 2022, the total fair value of hedging instruments for commodity price risk recognised on a hedge accounting basis was negative by €/000 600. During 2022, profit was recognised under Other Comprehensive Income amounting to €/000 600 and losses from Other Comprehensive Income were reclassified under profit/loss for the period amounting to €/000 184.
FAIR VALUE
In thousands of Euros
Piaggio & C. S.p.A.
Interest Rate Swap
Commodities hedges
873
(600)
408
F) INFORMATION ON SHAREHOLDERS' EQUITY
39. Share capital and reserves
€/000 346,867
Share capital
€/000 207,614
During the period, the nominal share capital of Piaggio & C. did not change.
The structure of Piaggio & C's share capital, equal to €207,613,944.37, fully subscribed and paid up, is indicated in the next table:
Structure of share capital as of 31 December 2022
No. of shares
% compared to the share capital
Market listing
Rights and obligations
Ordinary shares
358,153,644
100%
MTA
Right to vote in the Ordinary and Extraordinary Shareholders' Meetings of the Company
The Share of the Company are without par value, are indivisible, registered and issued on a dematerialisation basis, in the centralised management system of Monte Titoli S.p.A..
At the date of these financial statements, no other financial instruments with the right to subscribe to new issue shares had been issued, nor were there share-based incentive plans in place involving increases, also without a consideration, in share capital.
Treasury shares
€/000 (7,688)
During the period, 2,475,777 treasury shares were acquired. Therefore, as of 31 December 2022, Piaggio & C. held 3,521,595 treasury shares, equal to 0.9833% of shares issued.
Shares in circulation and treasury shares
2022
2021
no. of shares
Situation as of 1 January
Shares issued
358,153,644
358,153,644
Treasury portfolio shares
1,045,818
1,028,818
Shares in circulation
357,107,826
357,124,826
Movements for the period
Purchase of treasury shares
2,475,777
17,000
Situation as of 31 December
Shares issued
358,153,644
358,153,644
Treasury portfolio shares
3,521,595
1,045,818
Shares in circulation
354,632,049
357,107,826
409
Share premium reserve
€/000 7,171
The share premium reserve as of 31 December 2022 had not changed.
Legal reserve
€/000 28,954
The legal reserve as of 31 December 2022 had increased by €/000 2,902 as a result of the allocation of earnings for the previous year.
Other reserves
€/000 (29,991)
This item consists of:
As of 31 December 2022
As of 31 December 2021
Change
In thousands of Euros
Net capital gain from contribution
152
152
0
IFRS transition reserve
1,861
1,861
0
Financial instruments’ fair value reserve
2,600
6,083
(3,483)
Translation reserve from the valuation of investments using the equity method
(34,604)
(31,495)
(3,109)
Total other reserves
(29,991)
(23,399)
(6,592)
The financial instruments fair value provision is negative and refers to the effects of cash flow hedge accounting in foreign currencies and interest. These transactions are described in full in the note on financial instruments.
Dividends approved
The Ordinary Shareholders' Meeting of Piaggio & C. S.p.A. held on 11 April 2022 resolved to distribute a final dividend of 6.5 euro cents, including taxes, for each ordinary share entitled (in addition to the interim dividend of 8.5 euro cents paid on 22 September 2021, ex-dividend date 20 September 2021), for a total dividend for the 2021 financial year of 15.0 euro cents, equal to €53,566,173.9 (valid for €5,002,537.15 on the “New earnings” reserve and for €48,563,636.75 on the 2021 profit remaining after the above allocations). Coupon no. 18 was detached on 19 April 2022, with record date on 20 April 2022 and payment date on 21 April 2022.
At its meeting on 28 July 2022, the Board of Directors also resolved to distribute an interim ordinary dividend for the financial year 2022 in the amount of 8.5 euro cents, before tax, for each entitled ordinary share (a similar resolution was made for the interim ordinary dividend for the financial year 2021). A total of €30,200,086.39 was paid to this end on 21.09.2022 (ex-dividend date no. 19, 19.09.2022 and record date 20.09.2022).
410
Dividend paid in the year
Total
Per share
2022
2021
2022
2021
€/000
€/000
€
€
Of the previous year's result
23,203
9,285
0.065
0.026
Interim dividend for current year's result
30,200
30,354
0.085
0.085
Earnings reserve
€/000 140,807
The composition of reserves as of 31 December 2022 was as follows:
As of 31 December 2022
As of 31 December 2021
In thousands of Euros
Earnings reserve from the valuation of investments with the equity method
39,246
41,674
Retained earnings (losses)
53,188
48,876
Stock option reserve
11,195
11,195
Reserve for actuarial gains (losses) relative to termination benefit
(7,679)
(11,315)
Interim dividend
(30,200)
(30,354)
Total retained earnings (losses)
65,750
60,076
Profit (loss) for the period
75,057
58,032
Total earnings reserves
140,807
118,108
Total earnings reserves
140,807
118,108
411
Individual items of Shareholders' equity are analytically presented in the table below, based on origin, availability and use in previous years.
Type/description
Amount
Possible use
Portion available
2014 uses to cover losses
In thousands of Euros
Share capital
207,614
Capital reserves:
Share premium
7,171
A,B,C(*)
7,171
Profit reserves:
Legal reserve
28,954
B
Net capital gain from contribution
152
A,B
152
IAS transition reserve
1,861
A,B
1,861
Financial instruments’ fair value reserve
2,600
Translation reserve from the valuation of investments with the equity method: Translation Difference
(34,604)
Total Reserves
6,134
9,184
Earnings reserve from the valuation of investments with the equity method:
- Discounting the DBO
(1,325)
- Financial gains
40,572
A,B
40,572
Treasury shares
(7,688)
Reserve for actuarial gains (losses) relative to termination benefit
(7,680)
Stock option reserve
11,195
A,B,C
11,195
Retained earnings (losses)
53,188
A,B,C
53,188
1,649
Interim dividend
(30,200)
Total retained earnings (losses)
58,062
Profits (losses) for the period
75,057
Total shareholders’ equity
346,867
114,139
Key:
A: to increase capital
B: to cover losses
C: to allocate to shareholders
(*) wholly available to increase capital and cover losses. For other uses
prior adjustment (also by transfer from the share premium
reserve) of the legal reserve to 20% of the Share Capital is necessary. As of 31 December 2022 this
adjustment would be equal to €/000 12,569.
Pursuant to Article 2426, section 5 of the Italian Civil Code, the value of research and development costs still to be amortised as of 31 December 2022, equal to €/000 74,979, is unavailable in shareholders' equity.
412
40. Other Comprehensive Income
€/000 (2,645)
The value of other components of the Statement of Comprehensive Income is broken down as follows:
Reserve for measurement of financial instruments
Earnings reserve
Total other comprehensive income
In thousands of Euros
As of 31 December 2022
Items that will not be reclassified in the income statement
Remeasurements of defined benefit plans
3,635
3,635
Portion of components of the Statement of Comprehensive Income of subsidiaries/associates measured with the equity method
312
312
Total
0
3,947
3,947
Items that may be reclassified in the income statement
Total income (losses) for the fair value adjustment of financial assets available for sale
0
Total profits (losses) on cash flow hedges
(3,483)
(3,483)
Portion of components of the Statement of Comprehensive Income of subsidiaries/associates measured with the equity method
(3,109)
(3,109)
Total
(3,483)
(3,109)
(6,592)
Other Comprehensive Income
(3,483)
838
(2,645)
As of 31 December 2021
Items that will not be reclassified in the income statement
Remeasurements of defined benefit plans
(1,302)
(1,302)
Portion of components of the Statement of Comprehensive Income of subsidiaries/associates measured with the equity method
(487)
(487)
Total
0
(1,789)
(1,789)
Items that may be reclassified in the income statement
Total income (losses) for the fair value adjustment of financial assets available for sale
0
Total profits (losses) on cash flow hedges
5,802
5,802
Portion of components of the Statement of Comprehensive Income of subsidiaries/associates measured with the equity method
11,853
11,853
Total
5,802
11,853
17,655
Other Comprehensive Income
5,802
10,064
15,866
The tax effect related to Other Comprehensive Income is broken down as follows:
As of 31 December 2022
As of 31 December 2021
Gross value
Tax (expense) / benefit
Net value
Gross value
Tax (expense) / benefit
Net value
In thousands of Euros
Remeasurements of defined benefit plans
4,783
(1,148)
3,635
(1,713)
411
(1,302)
Total profits (losses) on cash flow hedges
(4,583)
1,100
(3,483)
7,634
(1,832)
5,802
Portion of components of the Statement of Comprehensive Income of subsidiaries/associates measured with the equity method
(2,797)
(2,797)
11,366
11,366
413
Other Comprehensive Income
(2,597)
(48)
(2,645)
17,287
(1,421)
15,866
G) OTHER INFORMATION
41. Share-based incentive plans
As of 31 December 2022, there were no incentive plans based on financial instruments.
42. Fees for Directors, Statutory Auditors and Key Managers
For a complete description and analysis of fees of Directors and Statutory Auditors, reference is made to the remuneration report available from the registered office, and on the Company's website in the section “Governance”. At present, the Company has not identified any Key Senior Managers.
2022
2021
In thousands of Euros
Directors
2,788
2,335
Statutory auditors
155
155
Total fees
2,943
2,490
43. Information on related parties
Revenues, costs, payables and receivables as of 31 December 2022 involving parent companies, subsidiaries and affiliated companies refer to the sale of goods or services which are a part of normal operations of the Group.
Transactions are carried out at normal market values, depending on the characteristics of the goods and services provided.
Information on transactions with related parties, including information required by Consob in its communication of 28 July 2006 no. DEM/6064293, is reported below.
The procedure for transactions with related parties, pursuant to Article 4 of Consob Regulation no. 17221 of 12 March 2010 as amended, approved by the Board on 30 September 2010, is published on the institutional site of the Issuer www.piaggiogroup.com, in the section “Governance”.
Relations with Parent Companies
Piaggio & C. S.p.A. is controlled by the following companies:
Name
Registered office
Type
% of ownership
As of 31 December 2022
As of 31
December 2021
Immsi S.p.A.
Mantova - Italy
Direct parent company
50.0703
50.0703
During 2022, transactions on the shares of parent companies were not carried out directly or indirectly.
Piaggio & C. S.p.A. is subject to the management and coordination of IMMSI S.p.A. pursuant to Article 2497 and following of the Italian Civil Code. During the period, this management and coordination concerned the following activities:
414
•as regards mandatory financial disclosure, and in particular the financial statements and reports on operations relating to Group companies, IMMSI has produced a group manual containing the accounting standards adopted and options chosen for implementation, in order to give a consistent and fair view of the consolidated financial statements;
•IMMSI has defined procedures and times for preparing the budget and in general the business plan of Group companies, as well as final management analysis to support management control activities;
•IMMSI has also provided services for the development and management of Company assets, with a view to optimising resources within the Group, and provided property consultancy services and other administrative services;
•IMMSI has provided consultancy services and assistance for the Company and subsidiaries concerning extraordinary financing operations, organisation, strategy and coordination, as well as services intended to optimise the financial structure of the Group.
In 2022, the Company signed up for a further three years to the National Consolidated Tax Convention pursuant to Articles 117 to 129 of the Consolidated Income Tax Act (TUIR) of which IMMSI S.p.A. is the consolidating company, and which other IMMSI Group companies report to. The consolidating company determines a single global income equal to the algebraic sum of taxable amounts (income or loss) realised by individual companies that opt for this type of group taxation.
The consolidating company recognises a receivable from the consolidated company which is equal to the corporate tax to be paid on the taxable income transferred by the latter. Whereas, in the case of companies reporting tax losses, the consolidating company recognises a payable related to corporate tax on the portion of loss actually used to determine global overall income, or calculated as a decrease of overall income for subsequent tax periods, according to the procedures in Article 84, based on the criterion established by the consolidation agreement.
Under the National Consolidated Tax Mechanism, companies may, pursuant to article 96 of Presidential Decree no. 917/86, allocate the excess of interest payable which is not deductible to one of the companies so that, up to the excess of Gross Operating Income produced in the same tax period by other subjects party to the consolidation, the amount may be used to reduce the total income of the Group.
Piaggio & C. S.p.A. has undertaken a rental agreement for offices owned by Omniaholding S.p.A.. This agreement, signed in normal market conditions, was previously approved by the Related Parties Transactions Committee, as provided for by the procedure for transactions with related parties adopted by the Company.
Piaggio & C. S.p.A. has two office lease agreements with IMMSI, one for property in Via Broletto 13 in Milan, and the other for property in Via Abruzzi 25 in Rome. A part of the property in Via Broletto 13 in Milan is sub-leased by Piaggio & C. S.p.A. to Piaggio Concept Store Mantova Srl.
415
Pursuant to Article 2.6.2, section 13 of the Regulation of Stock Markets organised and managed by Borsa Italiana S.p.A., the conditions as of Article 37 of Consob regulation 16191/2007 exist.
Transactions with Piaggio Group companies
The main intercompany relations with subsidiaries refer to the following transactions:
Piaggio & C. S.p.A.
osells vehicles, spare parts and accessories to sell on respective markets, to:
•Piaggio Hrvatska
•Piaggio Hellas
•Piaggio Group Americas
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
•Piaggio Concept Store Mantova
•Foshan Piaggio Vehicles Technology R&D
osells components to:
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
•Aprilia Racing
oIt provides promotional material to:
•Piaggio France
•Piaggio Indonesia
•Piaggio España
•Piaggio Limited
ogrants licences for rights to use the brand and technological know-how to:
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
•Aprilia Racing
oprovides support services for scooter and engine industrialisation to:
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
oleases a part of the owned property to:
•Aprilia Racing
osubleases a part of the rented property to:
•Piaggio Concept Store Mantova
ohas cash pooling agreements with:
•Aprilia Racing
•Piaggio Concept Store Mantova
•Piaggio France
•Piaggio Deutschland
•Piaggio España
•Piaggio Vespa
ohas loan agreements with:
416
•Piaggio Fast Forward
•Aprilia Racing
•Nacional Motor
oprovides support services for staff functions to other Group companies;
oissues guarantees for the Group's subsidiaries, for medium-term loans.
opurchases vehicles, spare parts and accessories from:
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
opurchases components from:
•Piaggio Fast Forward
oreceives a vehicle, spare parts and accessories distribution service on respective markets from:
•Piaggio Hrvatska
•Piaggio Hellas
•Piaggio Group Americas
•Piaggio Vehicles Private Limited
•Piaggio Vietnam
•Foshan Piaggio Vehicles Technology R&D
oreceives a sales promotion service and after-sales services on respective markets from:
•Piaggio France
•Piaggio Deutschland
•Piaggio Limited
•Piaggio España
•Piaggio Vespa
oreceives a components and vehicles design/development service and a local supplier scouting service from Foshan Piaggio Vehicles Technologies R&D;
oreceives a vehicle and component research/design/development service from:
•Piaggio Advanced Design Center
•Piaggio Fast Forward
oreceives a racing team management service and vehicle design service from Aprilia Racing.
Relations between Piaggio & C. S.p.A. and JV Zongshen Piaggio Foshan Motorcycle Co. Ltd
Main intercompany relations between Piaggio & C S.p.A. and JV Zongshen Piaggio Foshan Motorcycle Co. Ltd, refer to the following transactions:
Piaggio & C. S.p.A.
•grants licences for rights to use the brand and technological know-how to Zongshen Piaggio Foshan Motorcycle Co. Ltd..
Zongshen Piaggio Foshan Motorcycle Co. Ltd
417
•sells vehicles, spare parts and accessories, which it has manufactured in some cases, to Piaggio & C. S.p.A. for subsequent sale.
The tables below summarise relations described above and financial relations with parent companies, subsidiaries and affiliated companies as of 31 December 2022 and relations during the year, as well as their overall impact on financial statement items.
In thousands of Euros
Aprilia Racing Srl
Fondazione Piaggio
FPVT
Immsi Audit
IMMSI S.p.A.
Income statement:
Net revenues
1,125
-
25,523
-
9
Cost for materials
159
Cost for services and leases and rentals
25,814
10
3,256
711
442
Other operating income
1,632
-
1,325
25
52
Other operating costs
-
103
-
6
1
Income/(loss) from investments
126
-
-
-
-
Financial income
210
-
-
-
-
Borrowing costs
-
-
-
-
62
Taxes
-
-
-
-
(3,832)
Financial statements:
Trade receivables
311
-
10,953
9
Other receivables < 12 months
664
-
1,466
28
22,989
Other financial assets < 12 months
21,053
-
-
-
-
Financial liabilities for rights of use > 12 months
-
-
-
-
645
Financial liabilities < 12 months
-
-
-
-
-
Financial liabilities for rights of use < 12 months
-
-
-
-
1,076
Trade payables
187
26
919
-
301
Other payables < 12 months
5,170
114
-
-
26,150
418
In thousands of Euros
Is Molas S.p.A.
Nacional Motor S.A.
Omniaholding
PADC
Piaggio Asia Pacific Ltd
Income statement:
Net revenues
-
-
-
-
-
Cost for materials
-
-
-
-
-
Cost for services and leases and rentals
-
-
7
488
-
Other operating income
-
-
-
-
739
Other operating costs
-
-
-
-
-
Income/(loss) from investments
-
(77)
-
33
-
Financial income
-
-
-
-
-
Borrowing costs
-
7
3
-
-
Taxes
Financial statements:
Trade receivables
-
-
-
-
-
Other receivables < 12 months
-
-
-
-
689
Other financial assets < 12 months
-
-
-
-
-
Financial liabilities for rights of use > 12 months
-
-
-
-
-
Financial liabilities < 12 months
-
375
-
-
-
Financial liabilities for rights of use < 12 months
-
-
66
-
-
Trade payables
-
-
6
57
-
Other payables < 12 months
-
-
-
-
138
In thousands of Euros
Piaggio Concept Store Mantova
Piaggio Deutschland
Piaggio España
Piaggio Fast Forward
Piaggio France
Income statement:
Net revenues
2,690
2
22
-
17
Cost for materials
-
-
-
698
-
Cost for services and leases and rentals
75
4,756
4,845
1,208
6,924
Other operating income
189
118
104
7
190
Other operating costs
-
-
3
-
-
Income/(loss) from investments
(202)
-
392
(33,194)
-
Financial income
3
1
-
3,410
2
Borrowing costs
-
1
-
-
-
Taxes
-
-
-
-
-
Financial statements:
Trade receivables
3,247
5
24
-
1
Other receivables < 12 months
76
312
66
59
403
Other financial assets < 12 months
74
4,430
Financial liabilities for rights of use > 12 months
-
-
-
-
-
Financial liabilities < 12 months
-
-
-
-
-
Financial liabilities for rights of use < 12 months
-
-
-
-
-
Trade payables
139
641
1,477
587
960
Other payables < 12 months
107
417
170
419
In thousands of Euros
Piaggio Group Americas Inc.
Piaggio Group Japan
Piaggio Hellas
Piaggio Hrvatska
Piaggio Limited
Income statement:
Net revenues
113,102
-
35,634
4,656
21
Cost for materials
-
-
-
-
-
Cost for services and leases and rentals
1,973
370
6
2,316
Other operating income
1,101
70
1,804
157
96
Other operating costs
-
-
-
-
-
Income/(loss) from investments
-
-
-
-
-
Financial income
-
-
-
-
-
Borrowing costs
-
-
-
-
-
Taxes
-
-
-
-
-
Financial statements:
Trade receivables
24,979
-
6,365
1,432
8
Other receivables < 12 months
334
33
89
42
43
Other financial assets < 12 months
-
-
-
-
-
Financial liabilities for rights of use > 12 months
-
-
-
-
-
Financial liabilities < 12 months
-
-
-
-
-
Financial liabilities for rights of use < 12 months
-
-
-
-
-
Trade payables
119
-
86
-
322
Other payables < 12 months
-
-
-
-
-
In thousands of Euros
Piaggio Vehicles Pvt. Ltd
Piaggio Vespa
Piaggio Vietnam
Pontedera & Tecnologia
PT Piaggio Indonesia
Income statement:
Net revenues
798
9
36,686
-
26
Cost for materials
25,587
106,295
-
Cost for services and leases and rentals
191
3,040
197
-
-
Other operating income
17,472
69
38,044
-
1,848
Other operating costs
-
367
-
-
-
Income/(loss) from investments
(6,951)
34,566
48,827
18
859
Financial income
-
-
-
-
-
Borrowing costs
-
37
-
-
-
Taxes
-
-
-
-
-
Financial statements:
Trade receivables
480
7
9,684
-
1
Other receivables < 12 months
6,449
44,551
60,321
-
915
Other financial assets < 12 months
-
-
-
-
-
Financial liabilities for rights of use > 12 months
-
-
-
-
-
Financial liabilities < 12 months
-
-
-
-
-
Financial liabilities for rights of use < 12 months
-
-
-
-
-
Trade payables
5,448
905
13,039
-
-
Other payables < 12 months
109
16,642
334
-
216
420
In thousands of Euros
Zongshen Piaggio Foshan Motorcycle
Piaggio China
TOTAL
% of accounting item
Income statement:
Net revenues
310
-
220,630
17.2%
Cost for materials
36,841
-
169,580
20.3%
Cost for services and leases and rentals
71
-
56,700
24.3%
Other operating income
159
-
65,201
40.3%
Other operating costs
18
-
498
2.5%
Income/(loss) from investments
(693)
(274)
43,429
100.0%
Financial income
-
-
3,626
94.4%
Borrowing costs
-
-
110
0.5%
Taxes
-
-
(3,832)
N.A.
Financial statements:
Trade receivables
452
-
57,958
89.0%
Other receivables < 12 months
544
-
140,073
88.0%
Other financial assets < 12 months
-
-
25,557
100.0%
Financial liabilities for rights of use > 12 months
-
-
645
14.6%
Financial liabilities < 12 months
-
-
375
0.6%
Financial liabilities for rights of use < 12 months
-
-
1,142
34.6%
Trade payables
9,377
-
34,596
7.2%
Other payables < 12 months
-
-
49,567
50.8%
421
44. Contract commitments and guarantees
Contract commitments of the Company are summarised based on their expiry.
In thousands of Euros
In 1 year
Between 2 and 5 years
After 5 years
Total
Other commitments
7,011
2,508
-
9,519
Total
7,436
2,793
-
10,229
The main guarantees issued by banks on behalf of Piaggio & C. S.p.A in favour of subsidiaries are listed below:
TYPE
AMOUNT €/000
A guarantee of Piaggio & C. for USD 11,000,000 relative to the working capital loan of USD 10,000,000 granted by Hongkong and Shanghai Banking Corporation to the subsidiary Piaggio Vietnam
- of which drawn
0
- of which undrawn
9,376
A guarantee of Piaggio & C. for USD 5,500,000 relative to the working capital loan of USD 5,000,000 granted by Hongkong and Shanghai Banking Corporation to the subsidiary Piaggio Indonesia
- of which drawn
0
- of which undrawn
4,688
A guarantee of Piaggio & C. for USD 3,000,000 relative to the working capital loan of USD 2,500,000 granted by Bank of America to the subsidiary Piaggio Indonesia
- of which drawn
0
- of which undrawn
2,344
A warrant to grant credit of Piaggio & C. to guarantee the credit line from Intesa Sanpaolo to the subsidiary Piaggio Group Americas for USD 5,000,000
- of which drawn
0
- of which undrawn
4,688
A warrant to grant credit of Piaggio & C. to guarantee the credit line from Intesa Sanpaolo to the subsidiary Piaggio Group Japan for USD 4,500,000
- of which drawn
2,417
- of which undraw
1,802
A guarantee of Piaggio & C. for USD 16,000,000 relative to the working capital loan of USD 15,000,000 granted by Hongkong and Shanghai Banking Corporation to the subsidiary Piaggio Vietnam
- of which drawn
0
- of which undrawn
14,063
The main guarantees issued by banks on behalf of Piaggio & C. S.p.A in favour of third parties are listed below:
Type
Amount €/000
Guarantee of BCC-Fornacette issued in favour of Motoride Spa to reimburse VAT following the deductible tax surplus
298
Guarantee of Banco di Brescia issued to the local authorities of Scorzè, to guarantee payment of urbanisation and construction charges relative to the Scorzè site
166
Guarantee of Banca Intesa Sanpaolo issued to the Ministry of the Defence of Algeria, to guarantee contract obligations for the supply of vehicles
158
422
45. Disputes
For details of litigation, see the same section in the Notes to the Consolidated Financial Statements.
46. Grants, contributions, paid appointments and economic benefits from the public administration
In compliance with paragraph 125 of Law no. 124/2017 of 4 August 2017, details per research project are given below of funds received during 2022, and revenues from sales to public administrations:
Projects
Funding entity
Grants 2022
Figures in Euro
C-MOBILE
EUROPEAN COMMISSION
997.44 €
I_HeERO
INEA
439.99 €
PIONEERS
EUROPEAN COMMISSION
1,334.44 €
LENS
EUROPEAN COMMISSION
104,522.43 €
Total
107,294.30 €
2022
Customer
Revenues from sales
Figures in Euro
Italian local authorities
198,803.40
Carabinieri Corps
283,970.00
Local health authorities
1,450.00
Total
484,223.40
During the year, grants were also obtained for investments in property, plant and equipment financed by the National Industry 4.0 Plan amounting to €/000 1,286, for investments in advertising of €/000 94, and €/000 2,687 for investments in Research, Development, Innovation and Design.
47. Significant non-recurring events and operations
No significant, non-recurring operations, as defined by Consob Communication DEM/6064293 of 28 July 2006 took place during 2022 and 2021.
48. Transactions arising from atypical and/or unusual transactions
During 2022 and 2021, the Company did not record any significant atypical and/or unusual operations, as defined by Consob Communication DEM/6037577 of 28 April 2006 and DEM/6064293 of 28 July 2006.
423
49. Events occurring after the end of the period
After 31 December 2022 and up to the date of approval of these financial statements, no event occurred that could have a material impact on the reported results of operations, as determined by IAS 10 paragraph 9.
The Financial Statements as of 31 December 2022 record a profit for the period equal to €75,057,500.48.
The Board of Directors of Piaggio & C S.p.A. proposes allocating profit as follows:
- €3,752,875.02 to the legal reserve;
- €5,641,334.17 to the "Retained Earnings" reserve;
-€65,663,291.29 to shareholders by way of dividend, of which €30,200,086.39 by way of interim dividend already paid.
As resolved by the Board of Directors on 28 July 2022, the Company already paid an interim dividend per share of €0.085 on 21 September 2022 with an ex-dividend date of 19 September 2022; the Board of Directors is therefore requested to propose to the Shareholders' Meeting to pay, in settlement of the interim dividend already paid, a dividend equal to €0.10 for each ordinary share entitled, for a total maximum amount of €35,463,204.90 to be taken from the available profit for the year of €35,463,204.90, with ex-dividend date no. 20 on 24 April 2023, record date coinciding with 25 April 2023 and payment date on 26 April 2023.
51. Authorisation for publication
This document was published on 27 March 2023 authorised by the Chairman and Chief Executive Officer.
Mantova, 2 March 2023
for the Board of Directors
Chairman and Chief Executive Officer
Roberto Colaninno
425
426
Information pursuant to Article 149-duodiecies of the Consob Regulation on Issuers
Pursuant to Article 149-duodecies of the Consob Regulation on Issuers, the following table indicates the fees for 2022 paid for auditing services and services other than auditing services provided by the independent auditors and entities of its network.
Type of service
Subject providing the service
Fees for 2022
In Euros
Auditing services
Deloitte
370,972
Limited assurance engagement for the NFS
Deloitte
41,958
Certification services
Deloitte
29,000
Other services
Deloitte
15,670
Total
457,160
427
Information on company management and coordination activities
The Company is subject to the management and coordination of IMMSI S.p.A..
Pursuant to Article 2497-bis, section 4 of the Italian Civil Code, main data of the last financial statements of the parent company IMMSI S.p.A, with registered office in Mantova (MN), Piazza Vilfredo Pareto 3 – tax code 07918540019, for the year ended 31 December 2021, are summarised below. The above essential data were taken from the Financial Statements for the year ended 31 December 2021. To fully understand the financial position of IMMSI S.p.A as of 31 December 2021, as well as the financial performance of the company in the year ending at this date, reference is made to the financial statements, and the report of the independent auditors, available in the forms and according to procedures established by law.
Income statement
In thousands of Euros
2021
2020
Financial income
32,734
29,192
- of which related parties and intergroup
32,697
29,189
Borrowing costs
(59,352)
(23,647)
- of which related parties and intergroup
(50,527)
(15,020)
Income/(loss) from investments
0
0
Operating income
515
2,015
- of which related parties and intergroup
515
2,015
Costs for materials
(23)
(18)
Costs for services, leases and rentals
(3,432)
(3,155)
- of which related parties and intergroup
(396)
(422)
Employee costs
(1,340)
(1,271)
Depreciation of plant, property and equipment
(401)
(401)
Amortisation of goodwill
0
0
Amortisation of intangible assets with a definite life
0
0
Other operating income
126
187
- of which related parties and intergroup
80
80
Net reversals (write-downs) of trade and other receivables
Other operating costs
(276)
(277)
PROFIT BEFORE TAX
(31,449)
2,625
Taxes
185
2,266
- of which related parties and intergroup
0
0
EARNINGS AFTER TAX FROM OPERATING ACTIVITIES
(31,264)
4,891
Gain (loss) from assets held for sale or disposal
0
0
NET PROFIT FOR THE PERIOD
(31,264)
4,891
428
Statement of comprehensive income
In thousands of Euros
2021
2020
NET PROFIT FOR THE PERIOD
(31,264)
4,891
Items that may be reclassified to profit or loss:
Effective portion of profit (losses) from instruments to hedge cash flows
(45)
8
Items that will not be reclassified in the income statement:
Gains (losses) from the fair value measurement of financial assets
1,649
(1,502)
Actuarial gains (losses) on defined benefit plans
(9)
(13)
TOTAL GAINS (LOSSES) OF THE PERIOD
(29,669)
3,384
Statement of Financial Position
In thousands of Euros
As of 31 December 2021
As of 31 December 2020
NON-CURRENT ASSETS
Intangible assets
0
0
Plant, property and equipment
837
1,225
Investment Property
0
0
Investments in subsidiaries and associates
305,392
309,780
Other financial assets
265,823
288,062
- of which related parties and intergroup
265,823
288,062
Tax receivables
0
0
Deferred tax assets
1,573
1,624
Trade receivables and other receivables
13,059
13,017
- of which related parties and intergroup
12,931
12,889
TOTAL NON-CURRENT ASSETS
586,684
613,708
ASSETS HELD FOR DISPOSAL
0
0
CURRENT ASSETS
Trade receivables and other receivables
4,752
5,069
- of which related parties and intergroup
3,759
4,045
Tax receivables
407
413
Inventories
0
0
Works in progress to order
0
0
Other financial assets
4,906
3,593
- of which related parties and intergroup
1,119
1,455
Cash and cash equivalents
13,944
8,460
TOTAL CURRENT ASSETS
24,009
17,535
TOTAL ASSETS
610,693
631,243
429
In thousands of Euros
As of 31 December 2021
As of 31 December 2020
SHAREHOLDERS' EQUITY
Share capital
178,464
178,464
Reserves and retained earnings
197,653
191,167
Net profit for the period
(31,264)
4,891
TOTAL SHAREHOLDERS’ EQUITY
344,853
374,522
NON-CURRENT LIABILITIES
Financial liabilities
40,790
71,226
- of which related parties and intergroup
223
345
Trade payables and other payables
49
4
Retirement fund and similar obligations
403
373
Other long-term provisions
0
0
Deferred tax assets/liabilities
5,511
8,033
TOTAL NON-CURRENT LIABILITIES
46,753
79,636
LIABILITIES ON DISCONTINUED OPERATIONS
0
0
CURRENT LIABILITIES
Financial liabilities
214,066
172,312
- of which related parties and intergroup
122
161
Trade payables
1,033
1,915
- of which related parties and intergroup
159
782
Current taxes
2,467
876
Other payables
1,521
1,982
- of which related parties and intergroup
0
139
Current portion of other long-term provisions
0
0
TOTAL CURRENT LIABILITIES
219,087
177,085
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
610,693
631,243
430
Certification of the Financial Statements pursuant to Article 154-bis of Legislative Decree 58/98
1. The undersigned Roberto Colaninno (Chairman and Chief Executive Officer) and Alessandra Simonotto (Executive in charge of financial reporting) of Piaggio & C. S.p.A. hereby certify, also in consideration of article 154-bis, sections 3 and 4, of Legislative Decree no. 58 of 24 February 1998:
•the appropriateness with regard to the company’s characteristics and
•the actual application of administrative and accounting procedures for the formation of the Separate Financial Statements as of 31 December 2022.
2. With regard to the above, no relevant aspects are to be reported.
3. Moreover
3.1 the financial statements:
a) have been prepared in compliance with the international accounting standards endorsed by the European Community pursuant to regulation (EC) no. 1606/2002 of the European Parliament and Council of 19 July 2002;
b) correspond to accounting records;
c) give a true and fair view of the statement of financial position and results of operations of the Issuer;
3.2 The Report on Operations includes reliable analysis of the trend of operations and operating results, as well as the situation of the Issuer and a description of main risks and uncertainties to which they are exposed.
Date: 2 March 2023
Chairman and Chief Executive Officer
Roberto Colaninno
Executive in charge of financial reporting
Alessandra Simonotto
432
433
434
435
436
437
439
440
441
442
443
444
This report is available on the Internet at:
www.piaggiogroup.com
We would like to thank all colleagues for their valuable help
in preparing this document.
The Financial Statements as of December 31, 2022 of Piaggio & C S.p.A. constitute a non-official version which has not been prepared in accordance with the provisions of the Commission Delegated Regulation (EU) 2019/815 and has been translated into English solely for the convenience of the international readers. In the event of conflict or inconsistency between the terms used in the Italian version of the report and the English version, the Italian version shall prevail, as the Italian version constitutes the sole official document. Accordingly, only the original text in Italian language is authoritative.
Management and Coordination
IMMSI S.p.A.
Share capital €207,613,944.37, fully paid up
Registered office: Viale R. Piaggio 25, Pontedera (Pisa)
Pisa Register of Companies and Tax Code 04773200011
Pisa Economic and Administrative Index no. 134077
