Piaggio Group: first half 2012

Jul 27 2012 12:19
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Consolidated net sales € 764.1 million (830.0 million in H1 2011)

EBITDA € 114.4 million (121.0 million in H1 2011)
with EBITDA margin 15.0% (14.6% in H1 2011)

Gross industrial margin € 236.3 million (253.2 million in H1 2011)
30.9% of revenues (30.5% in H1 2011)

EBIT € 71.7 million (75.6 million in H1 2011)

Net profit € 33.8 million (33.7 million in H1 2011)

Net financial position € -384.0 million

Mantua, 27 July 2012 – At a meeting today in Mantua chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. examined and approved the half-year report at 30 June 2012.

The performance of the Piaggio Group was positive in absolute terms and particularly significant considered in the context of the enormous difficulties of the worldwide macroeconomic and market scenario. In the first half of 2012 the Piaggio Group found itself dealing with very weak demand on the European two-wheeler market, as well as slowdowns on some of its key Asian markets and a generalised decline in the light commercial vehicles sector.

Despite these difficulties, the Piaggio Group’s performance reflects the ongoing consolidation of its European leadership in the two-wheeler business and strong progress in the USA, a two-wheeler market where demand is growing. In Asia, the Group continued to reap the rewards of the investment, production and sales & marketing globalisation strategy implemented since 2003. Meanwhile, rigorous measures to cut costs and boost productivity enabled the Group to maintain high – if not improve – profitability levels, and without slowing implementation of the global expansion strategies laid out in the 2011-2014 Business Plan.

Group consolidated net sales in the first half of 2012 were 764.1 million euro, compared with 830.0 million euro in the year-earlier period.

In the first six months of 2012, worldwide the Piaggio Group shipped a total of 315,400 vehicles, compared with 346,500 vehicles in the first half of 2011.

In the two-wheeler business, in the first six months of 2012 the Piaggio Group shipped 216,700 vehicles, for revenues of 561.9 million euro (227,700 two-wheelers and 578.7 million euro in the first half of 2011).

The decline in sales in Europe – where the two-wheeler market as a whole slackened by 16% in scooters and 13% in motorcycles compared with the first half of 2011 – was counterbalanced in part by the Group’s strong growth in the Asia Pacific area, where its sales and revenues improved by 36.6% and 38.3% respectively, and in America, where sales and revenues progressed by 42.8% and 111.5% respectively. On the US market, the Piaggio Group established itself as outright leader in over 50cc scooters, with a share of nearly 36%, and consolidated its leadership in two-wheelers in Europe with a 19.4% share of the total market (+0.4 percentage points from the first half of 2011) and 28.6% in scooters (+1.2 percentage points).

Sales on the Indian market of Vespa scooters produced in the new Baramati factory, which began shipping in May 2012, totalled approximately 5,000 vehicles, slightly above initial projections.

In the commercial vehicles business, Group sales reflected the simultaneous downturn on all its core markets (with overall declines of more than 38% in Italy and approximately 13% in Europe, and a fall of 4.6% on the Indian three-wheeler market). In this business, the Piaggio Group sold a total of 98,700 vehicles in the first half of 2012 (-16.9% from the first half of 2011) for revenues for the period of 202.2 million euro

On India’s domestic three-wheeler market, Piaggio Vehicles Private Ltd. (PVPL) had a market share of 34.5%.

The industrial gross margin rose to 30.9% of net sales (30.5% in the year-earlier period). In absolute terms, it was 236.3 million euro, down by 6.7% from the first half of 2011 (253.2 million euro).

Similarly, the EBITDA margin rose to 15% from 14.6% in the first half of 2011. In absolute terms, consolidated EBITDA in the first half of 2012 amounted to 114.4 million euro, down from the first half of 2011 (121.0 million euro). Piaggio Group EBIT for the first half of 2012 was 71.7 million euro from 75.6 million euro in the year-earlier period; an improvement was also seen in the EBIT margin, to 9.4%, from 9.1% in the year-earlier period.

Operating expense for the first half was 164.6 million euro, down by approximately 13 million euro from the first half of 2011 (177.6 million euro), confirming the Group’s constant focus on reducing costs and maintaining high earnings and productivity levels.

In the first half of 2012 the Piaggio Group reported profit before tax of 56.3 million euro, compared with 62.5 million euro in the year-earlier period.

The first half of 2012 closed with net profit of 33.8 million euro, up from 33.7 million euro in the first half of 2011.

Net debt at 30 June 2012 amounted to 384.0 million euro. Compared to the net financial position at 31 December 2011 (335.9 million euro) and on a like-for-like basis to the first half of 2011 (332.1 million euro), the increase in net debt reflected the rise in capital expenditure– from 48.5 million euro in the first half of 2011 to 69.7 million euro in the first half of 2012 – to support the international expansion of the Piaggio Group’s industrial and commercial operations, as well as the effect of the purchase on 11 April 2012 of an important business unit located in Pontedera, declared bankrupt by the court of Pisa in August 2011, for an overall amount of 11.3 million euro. The purchase of this company had the effect of conserving a components production operation of strategic importance to the Piaggio Group.

Shareholders' equity at 30 June 2012 amounted to 444.4 million euro against 446.2 million euro at 31 December 2011.


* * *


Events after 30 June 2012 and outlook

To date, no significant events have occurred since 30 June 2012.

With regard to the outlook, in an increasingly complex scenario, in the second half of 2012 the Group will continue to pursue the underlying goals of the 2011-2014 Business Plan presented on 14 December 2011.

Consequently, its objectives remain, on one hand, strong growth in productivity to generate value for shareholders, customers and employees; and, in terms of business and the various geographical areas, a development strategy consistent with the world economic scenario, focusing on strong expansion in the high-growth emerging markets, accompanied by the continuation and consolidation of the Group leadership positions on the mature markets.

Specifically the Plan envisages:

  • in the Asia SEA area, the expansion of the engine and two-wheeler ranges, as well as completion of entry on to the Indonesian market and new Asian markets, assisted by an increase in production capacity at Piaggio Vietnam;
  • entry on to the Indian scooter market, where annual growth rates are high, with the Vespa premium brand and the presentation (26 April 2012) of the model for the Indian domestic market, production of which began in the first quarter of 2012 at the new Baramati facility, which was officially inaugurated on 28 April 2012;
  • on the mature Western markets, further consolidation of the Group’s European leadership on the two-wheeler market as a whole and in the scooter sector, and growth in sales and margins for motorcycles thanks to the Aprilia and Moto Guzzi ranges;
  • in commercial vehicles, maintenance of sales levels and market share in India (in part through the introduction of new 3- and 4-wheel vehicles in the fastest growing market segments) and in the emerging countries, maintenance of current market positions in Europe, and further growth in exports to African, Asian and South American markets.

As far as technology is concerned, the Piaggio Group is focusing strongly on the development – for two-wheelers and for commercial vehicles – of new highly innovative combustion engines, with sharply reduced fuel consumption and emissions. Supported by cooperation among the Group R&D centres in Europe and Asia and the world’s leading universities, Piaggio will also continue development work on vehicles equipped with new-generation electric motors, as well as hybrid engines, a field where the Group is already one of the world’s most advanced manufacturers.

Consistently with the Group’s increasingly global industrial and commercial organisation, strong emphasis will also be given to development of an international system of expertise and research in product marketing and styling, with Group centres in Europe, Asia and the USA bringing together the top designers and marketing specialists from all Piaggio Group locations around the world.


* * *


With effect from the first half of 2012 the Piaggio Group has elected early adoption of IAS 19 revised. Consequently, the previously published income statement figures for the first half of 2011 and the year to 31 December 2011 have been restated where necessary in this press release, to permit comparison on a like-for-like basis.

The manager in charge of preparing the company accounts and documents, Alessandra Simonotto, certifies, pursuant to paragraph 2, art. 154 bis of Legislative Decree no. 58/1998 (Consolidated Law on Financial Intermediation), that the accounting disclosures in this statement correspond to the accounting documents, ledgers and entries.





    H1 2012   H1 2011 Re-stated (1)   
In thousands of euro Note Total of which related parties   Total of which related parties
Net sales 4 764,076 (219)   830,012 903
Cost of materials 5 443,299 19,626   492,258 20,751
Cost of services and use of third-party assets 6 131,312 2,014   139,588 2,026
Employee expenses 7 119,493     132,603 0
Depreciation property, plant and equipment 8 18,444     18,306 0
Amortisation intangible assets 8 24,292     27,056 0
Other operating income 9 54,864 91   65,030 251
Other operating expense 10 10,424     9,586 0
EBIT   71,676     75,645  
Share of result of associates 11 2,556     0 0
Finance income 12 1,153     2,318 0
Finance expense 12 19,382 186   14,962 158
Net exchange-rate gains/(losses) 12 329     (488) 0
Profit before tax   56,332     62,513  
Income tax 13 22,540     28,818 0
Result from on-going operations   33,792     33,695  
Discontinued operations:            
Profit or loss from discontinued operations 14          
Net profit (loss) for the period   33,792     33,695  
Attributable to:            
Equity holders of the parent   33,734     33,661  
Minority interests   58     34  
Earnings per share (in €) * 15 0.091     0.091  
Diluted earnings per share (in €) * 15 0.091     0.090  

(1) Amounts have been re-stated after application of IAS 19 revised, which, among other things, has modified the policy for recognising actuarial gains and losses with respect to employee severance entitlements and pension funds. For further information see paragraph 2.1 Accounting policies, amendments and interpretations applied as from 1 January 2012 in the "Notes to the Financial statements".



    At 30 June 2012    At 31 December 2011    
In thousands of euro Note Total of which related parties Total of which related parties
Non-current assets          
Intangible assets 16 652,302   649,420  
Property, plant and equipment 17 302,039   274,871  
Investment property 18        
Equity investments 19 5,032   2,482  
Other financial assets 20 16,048   11,836  
Non-current tax receivables 21 1,140   976  
Deferred tax assets 22 55,026   55,726  
Trade receivables 23        
Other receivables 24 15,129 405 15,165 405
Total non-current assets   1,046,716   1,010,476  
Assets held for sale 28        
Current assets          
Trade receivables 23 140,956 1,486 65,560 2,453
Other receivables 24 31,311 6,489 28,028 6,456
Current tax receivables 21 27,449   27,245  
Inventories 25 287,776   236,988  
Other financial assets 26 0   0  
Cash and cash equivalents 27 107,340   151,887  
Total current assets   594,832   509,708  
TOTAL ASSETS   1,641,548   1,520,184  


    At 30 June 2012    At 31 December 2011 
In thousands of euro Note Total of which related parties Total of which related parties
Shareholders' equity          
Share capital and reserves attributable to equity holders of parent 29 443,116   445,036  
Share capital and reserves attributable to minority interests 29 1,243   1,182  
Total shareholders' equity   444,359   446,218  
Non-current liabilities          
Borrowings due after one year 30 383,035 2,900 329,200 2,900
Trade payables 31 254   235  
Other non-current provisions 32 12,541   12,429  
Deferred tax liabilities 33 34,383   32,735  
Pension funds and employee benefits 34 47,492   46,603  
Non-current tax payables 35 1,339   2,539  
Other non-current payables 36 5,530   5,948  
Total non-current liabilities   484,574   429,689  
Current liabilities          
Borrowings due within one year 30 123,579   170,261  
Trade payables 31 479,548 21,287 375,263 18,903
Tax liabilities 35 30,036   20,920  
Other current liabilities 36 66,367 85 64,718 75
Current portion of other non-current provisions 32 13,085   13,115  
Total current liabilities   712,615   644,277  
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