Piaggio Group: First Half 2007 results

Sep 07 2007 11:01
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At a meeting today in Milan chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. examined and approved Group figures for the first six months of 2007, drawn up in accordance with the IAS/IFRS international accounting and financial reporting standards.

The half-year results reflect positive performance by the Group in both the two-wheeler and the light transport vehicle businesses, and confirm Piaggio strategy for the threeyear period 2007-2009 targeting compound annual average growth of approximately 7% (YoY half-year growth in 2007 was 7.2%), an EBITDA margin of around 14% (EBITDA margin of 15.1% in the first half of 2007) and an EBITDA/net debt ratio of close to 1.

During the first half of 2007 the Piaggio Group shipped 396,000 vehicles worldwide (+ 4% on sales volumes in the year-earlier period).
Specifically, a geographical breakdown of Group sales volumes shows growth of 16.8% in Europe (scooters, motorcycles, LTVs, accessories and spare parts), 15.5% in India (passenger and cargo LTVs in the 0.5 tonne class), and substantially stable sales volumes in North America.

Consolidated net sales in the first half of 2007 totalled € 968.6 million, an improvement of 7.2% on the year-earlier first-half. Specifically, growth was driven by revenue increases of € 26.8 million on the Piaggio, Gilera and Vespa brands, € 25 million on the Aprilia and Moto Guzzi brands, € 10.5 million at the LTV business unit (light transport vehicles).

The industrial gross margin of € 292.9 million, with a return on net sales of 30.2%, was up 3.9% from € 282 million in the year-earlier period.

EBITDA totalled € 145.9 million, an improvement of 8.1% on € 135.0 million in the first half of 2006. The 2007 half-year EBITDA margin was 15.1%, compared with 14.9% in the year-earlier period.

Half-year operating profit amounted to € 106.4 million, with a return on net sales of 11%, a 0.7 percentage point improvement on the operating profit-net sales ratio of the 2006 first half, when operating profit was € 92.7 million.
The Group posted a net financial charge of € 17.6 million, of which € 7.8 million relating to its bond loan.

In the first half of 2007, the Piaggio Group posted profit before tax of € 88.8 million (a YoY increase of 13.1%) and net profit of € 51.5 million (a YoY decrease of 20.5%).
The half-year tax charge, computed as required by IAS 34 by applying the 2007 average tax rate, amounted to € 37.3 million (€ 13.7 million in the first half of 2006).
The difference between the 2007 and 2006 average tax rates was due in part to the impact of deferred tax assets posted by the Parent Company in 2006 in accordance with IAS 12.

Net debt at 30 June 2007 was € 277.1 million, down from € 318.0 million at 31 December 2006 and € 344.8 million at 31 March 2007. The reduction reflected positive operating cash flow performance, offset in part by dividend payouts, own-share buybacks and capital expenditure totalling € 42.2 million.
Group shareholders’ equity at 30 June 2007 was € 471.7 million, from € 438.7 million at 31 December 2006.

Significant events after 30 June 2007

During July and August, the parent company completed further share buybacks, as authorised by the shareholder resolution of 7 May 2007. At 31 August, it held 7,190,000 own shares, for an average purchase price of € 3.666.


During 2007 the Piaggio Group will work to confirm and strengthen its position as international leader for innovation, design and creativity on the light mobility market.
The 2007 half-year results are in line with Group targets, enabling Piaggio to continue the programs outlined in the 2007-2009 business plan and achieve plan objectives despite the typical seasonal nature of the Group’s business.

During the meeting, in connection with the Group’s international expansion plans, the Board of Directors approved a project to build a new Vespa production factory in Vietnam. Illustrated by chairman Roberto Colaninno, the project involves construction of a facility in Vinh Phuc province (50 km from Hanoi). Production is scheduled to begin within two years from the formation of the company, which is expected to take place by the end of the year. Estimated investments through to production start-up at
the factory will amount to $ 25-30 million.

The Parent Company Piaggio & C. S.p.A.

The Parent Company half-year financial statements have been drawn up in accordance with IAS/IFRS policies. For the first six months of 2007, Piaggio &. C. S.p.A. posted net sales of € 780.7 million, positive EBITDA of € 108.9 million, a pre-tax
profit of € 75.1 million and net profit of € 49.3 million.

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