Roberto Colaninno, Piaggio Group Chairman and CEO: “The Piaggio Group continues to invest and does so to improve the quality and technology of all its products in the world. Clearly, the difficult current situation requires a firm approach and pragmatic management of the future, but we have to go on because this is also a time of exceptionally effervescent cultural and scientific activity that is bound to transform and consequently re-organise mobility in the future. We have to grasp this interesting opportunity now.”
- Consolidated net sales 600.1 million euro (-26.5%, 817 €/mln at 30.06.2019)
- Industrial gross margin 171.7 million euro (250 €/mln at 30.06.2019),
6% return on net sales (30.6% at 30.06.2019) - Operating expense 147 million euro (-16%, 174.9 €/mln at 30.06.2019), a sharp contraction arising largely from the mitigating action put in place since the end of Q1 2020 in response to the Covid-19 emergency
- EBITDA 83.1 million euro (134.3 €/mln at 30.06.2019)
EBITDA margin 13.8% (16.4% at 30.06.2019) - EBIT 24.7 million euro (75.1 €/mln at 30.06.2019)
EBIT margin 4.1% (9.2% at 30.06.2019) - Profit before tax 15.1 million euro (62.8 €/mln at 30.06.2019)
- Net profit 9.1 million euro (34.6 €/mln at 30.06.2019)
- Net financial position -528.5 €/mln, an improvement of 20.1 €/mln from 548.6 €/mln at 03.2020 as a result of effective inventories management in the first quarter of the year
- 210,300 vehicles shipped worldwide (321,500 at 30.06.2019)
- Capital expenditure 52.8 million euro (60.4 €/mln at 30.06.2019)
Pontedera, 27 July 2020 – At a meeting today chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. (PIA.MI) examined and approved the half-year report on operations as at and for the six months to 30 June 2020.
Piaggio Group business and financial performance at 30 June 20201
Group consolidated net sales amounted to 600.1 million euro, a reduction of 26.5% from 817 million euro in the first half of 2019 as a result of the lockdown, which led to the suspension of production and commercial operations in many countries for a number of weeks.
The industrial gross margin was 171.7 million euro, down 31.3% from 250 million euro at 30 June 2019.
The return on net sales was 28.6% (30.6% at 30 June 2019).
The Group's operating expense in the first half to 30 June 2020 totalled 147 million euro, a sharp reduction of 16% from 174.9 million euro in the year-earlier period, arising largely as a result of the mitigating action put in place since the end of the first quarter of 2020 to respond to the Covid-19 emergency.
The changes in the income statement described above generated consolidated EBITDA of 83.1 million euro, down by 38.1% (-37.6% at constant exchange rates) from 134.3 million euro in the first half of 2019. The EBITDA margin was 13.8% (16.4% at 30 June 2019).
EBIT amounted to 24.7 million euro, a reduction of 67.1% from 75.1 million euro at 30 June 2019. The EBIT margin was 4.1% (9.2% at 30 June 2019).
Profit before tax in the first half was 15.1 million euro, a reduction of 75.9% from 62.8 million euro in the year-earlier period. Income tax for the period was 6 million euro, with an impact on pre-tax profit of 40%.
The Piaggio Group reported a net profit for the first half of 2020 of 9.1 million euro (34.6 million euro in the first half of 2019).
Net debt at 30 June 2020 stood at 528.5 million euro, an improvement of 20.1 million euro from 548.6 million euro at 31 March 2020, secured by effective inventories management in the first quarter of the year.
Group shareholders' equity at 30 June 2020 was 368.3 million euro (383.8 million euro at 31 December 2019).
In the first half, Piaggio Group capital expenditure amounted to 52.8 million euro (60.4 million euro in the year-earlier period).
Business performance in the first half to 30 June 2020
In the first half to 30 June 2020, the Piaggio Group sold 210,300 vehicles worldwide (321,500 in the year-earlier period) and reported consolidated net sales of 600.1 million euro.
As a consequence of the Covid-19 health emergency, markets reported a decline in sales. The drop was more contained on the Asia Pacific 2W market (-9.6%), whereas vehicle sales in the EMEA and Americas area and in India fell by 22.2% and 56.9% respectively.
Two-wheelers:
In the first half, the Group sold 163,000 two-wheelers worldwide (-24.5% from 215,900 in the year-earlier period), generating net sales of 467.6 million euro (-19.8% from 583.4 million euro in the first half of 2019).
The figure includes spares and accessories, on which turnover totalled 53.6 million euro.
The overall decline arose largely from downturns on the EMEA and Americas markets (-20.5% sales volumes; -21.5% net sales) and in India (-58.4% sales volumes; -49% net sales). The Asia Pacific region managed to limit the downturn (-9.6% sales volumes; -4.7% net sales; -6.4% at constant exchange rates).
The Piaggio Group confirmed its leadership in the European scooter segment with a share of 24.1% and maintained a strong positioning on the North American scooter market, with a share of 23.9%. In North America, the Group is also consolidating its presence in the motorcycle segment with the Aprilia and Moto Guzzi brands.
The scooter segment saw an increase in Vespa sales in a number of Asian countries, most notably China, and a rise in sales of the Piaggio Medley high-wheel scooter.
In the motorcycle segment, sales were steady for the Moto Guzzi V85TT and for the Aprilia RS 125 and Shiver.
Commercial vehicles:
In commercial vehicles, the Piaggio Group reported sales volumes of 47,300 vehicles, (-55.2% from 105,700 vehicles in the first half of 2019), and net sales of 132.4 million euro (-43.3% from 233.5 million euro in the year-earlier period). The figure includes spares and accessories, on which turnover totalled 17.5 million euro.
At geographical level, Group sales dropped by 45% in the EMEA and Americas markets and by 56.3% in India. On the Indian three-wheeler market, the Indian subsidiary PVPL sold 36,946 vehicles (81,723 in the first half of 2019), for an overall share of the Indian three-wheeler market of 26.1%, up 1.3 percentage points from last year, and also confirmed its leadership in the cargo segment, with a 48.3% market share, up from 44.3% at 30 June 2019.
The Piaggio Group is working on a project for the development and production of a new range of light commercial four-wheel vehicles, the new Porter. The vehicle will be produced in the Italian factory in Pontedera, and operations are expected to begin by the end of the year, in line with the planned timetable.
Piaggio Fast Forward:
Piaggio Fast Forward (PFF), the Piaggio Group robotics and future mobility company based in Boston, continued the marketing of its first innovative project, Gita, a unique follow-me robot carrier, with a payload of 20 kg, designed to follow the user indoors and outdoors, at a top speed of 10 km/hour and with a 4-hour battery life.
Gita is produced in the Piaggio Fast Forward factory in the Charlestown district of Boston. The first marketing phase focuses on the US market, where the circulation of robots on city streets is already regulated.
Significant events in and after the first half of 2020
Supplementing the information published above or at the time of approval of the 2020 first-quarter results (directors’ meeting of 8 May 2020), this section illustrates key events in and after the first half of 2019.
On 11 May, with the return to production at the Baramati plant in India, all Piaggio Group manufacturing facilities had resumed operations after the stoppages caused by Covid-19.
Also in May, the invalidity division of the European Union Intellectual Property Office (EUIPO) declared a design registered by a Chinese party, used to justify the production of scooters similar to the Vespa and exhibited at the EICMA 2019 two-wheeler show in Milan, to be invalid, since it was “incapable of eliciting a different general impressions with respect to the registered design” of the Vespa Primavera, and pointed out that the registration was an unlawful attempt to reproduce the scooter’s aesthetic elements.
On 12 June, the Vespa brand and the Paris fashion house Christian Dior announced a collaboration agreement on the Vespa 946 Christian Dior, designed by Maria Grazia Chiuri, Dior’s creative director for women's collections. The iconic scooter will be available from Spring 2021 in Dior boutiques around the world and subsequently in selected Motoplex stores, the Piaggio Group flagship stores.
On 2 July, the Piaggio Group signed a 60 million euro credit facility with Banca Monte dei Paschi di Siena and Cassa Depositi e Prestiti (in equal proportions). The new line of credit will enable the parent company to continue consolidating and expanding its leadership position in the mobility sector, and further strengthen the Group's financial structure.
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Outlook
Although the acute phase of the Covid-19 virus reached a peak in the second quarter of 2020, and some markets are still feeling the negative effects due to continuing localised lockdowns, results at 30 June clearly and effectively reflect the resilience and incisiveness of the Piaggio Group in responding to the crisis that has hit the world economy.
At the present time, even after making the appropriate valuations based on the information available, providing full-year guidance remains complicated as it depends in part on the evolution of the pandemic and the effects over the coming months of the measures that have been and will be put in place by the authorities in the countries in which the Group operates.
In this general context, the Piaggio Group will continue to work to meet its commitments and targets, maintaining all the measures taken to manage the crisis generated by the pandemic as long as necessary.
From the technological viewpoint, the Piaggio Group will in any case continue research on new solutions to current and future mobility problems, through the activities of Piaggio Fast Forward (Boston) and new advances in design at the PADc (Piaggio Advanced Design Center) in Pasadena.
More generally, Piaggio confirms its commitment to containing any momentary losses of productivity that might ensue as a result of the Coronavirus emergency by increasing its attention to cost and investment efficiency, while continuing to adopt all the health and safety measures necessary to safeguard its employees around the world, consistently with the Group's ethical principles.
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Piaggio & C. S.p.A.
Interim dividend
In view of the current macroeconomic situation and the possible effects it might have on the Group's results, the Board of Directors took up the proposal of the Chairman to defer the decision on the distribution of an interim dividend for 2020 until the approval of the report on operations for the nine months to 30 September, and eventually pay such a dividend in November 202
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Conference call with analysts
The presentation of the financial results as at and for the first half ended 30 June 2020, which will be illustrated during a conference call with financial analysts, is available on the corporate website at www.piaggiogroup.com/it/investor.
1The main alternative performance indicators used by the Piaggio Group, representing the data monitored by management, are as follows:
- EBITDA: earnings (EBIT) before amortisation and depreciation and impairment losses on property, plant and equipment, intangible assets, and rights of use, as reflected in the consolidated income statement;
- Industrial gross margin: net sales less costs to sell;
- Net financial position: gross financial debt less cash and cash equivalents, and other current financial receivables. Determination of the net financial position does not include other financial assets and liabilities arising from measurement at fair value, derivatives designated or not as hedges, fair value adjustments of the related hedged items and related accruals.