Piaggio group: first quarter 2010

May 11 2010 09:00
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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 the quarterly report at 31 March 2010.

Net sales € 340.6 million (+11.2% on 1Q 2009)
EBIT € 11.3 million (€ 0.2 million in 1Q 2009)
Profit before tax € 5.4 million (loss of € 8.2 million in 1Q 2009)
Net profit € 2.9 million (net loss of € 4.7 million in 1Q 2009)
EBITDA € 31.8 million (+51.4% on 1Q 2009)
EBITDA margin rising from 6.9% (1Q 2009) to 9.3% (1Q 2010)
Net debt € 422.6 million (-24.1 million on 1Q 2009)
Increase in shipments in 2-wheel business (+12.4%) and commercial vehicles business (+33.1%)
Strong growth in 2-wheel business in Asia Pacific thanks to start-up of operations in Vietnam


Milan, 29 April 2010 – At a meeting today in Milan chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. examined and approved the quarterly report at 31 March 2010.

In the first quarter of 2010 the Piaggio Group sold a total of 143,730 vehicles worldwide, for a 19.7% improvement in volumes (on 120,100 vehicles shipped in the first quarter of 2009).

The increase arose in both the 2-wheel business, with 87,580 vehicles sold worldwide (+12.4% on the year-earlier period), and the commercial vehicles business, where vehicles sold totalled 56,150 (+33.1% on the first quarter of 2009).

In the 2-wheel business, the Piaggio Group’s performance in the first quarter of 2010 was all the more significant in view of the weakness of demand on the European market in both the scooter segment (-11.1%) and the motorcycle segment (-10.6%) compared with the first three months of 2009.

On the European market the Group shipped a total of 71,400 2-wheel vehicles in the first quarter of 2010 (69,000 in the year-earlier period), thanks above all to growth on the Italian market. As a result it improved its overall market share in Italy and in Europe.

In the Asia Pacific region, the Group shipped 15,000 2-wheel vehicles in the first quarter, an improvement of 504.8% on the year-earlier period; turnover rose to € 33.7 million, up 419.8% on the first quarter of 2009: these results reflected the success of Group industrial and commercial operations in Vietnam, where the production facility was not operational in the first quarter of 2009.

In the commercial vehicles business, the Piaggio Group closed the first quarter of 2010 with a total of 56,150 shipments (+33.1% on the year-earlier period), a result buoyed by the strong growth of the Indian market.

Group consolidated net sales amounted to € 340.6 million in the first quarter of 2010 (€ 306.3 million in the first quarter of 2009), an improvement of 11.2%.

The first-quarter industrial gross margin was € 102.5 million, up 16.7% from € 87.8 million in the first quarter of 2009. The return on net sales continued to grow, rising to 30.1% from 28.7% in the first quarter of 2009, thanks to constant control of production costs.

The Group reported a sharp improvement in consolidated EBITDA to € 31.8 million in the first quarter of 2010, an increase of 51.4% (€ 21 million in the year-earlier period). The EBITDA margin also made healthy progress, rising from 6.9% in the first three months of 2009 to 9.3% in the first quarter of 2010.

EBIT was € 11.3 million, compared with € 0.2 million in the year-earlier first quarter.

In the first quarter of 2010 the Piaggio Group posted profit before tax of € 5.4 million, compared with a pre-tax loss of € 8.2 million in the first quarter of 2009.

The first quarter of 2010 closed with a net profit of € 2.9 million – against a net loss of € 4.7 million in the first quarter of 2009 – after tax of € 2.6 million.

Net debt was € 422.6 million at 31 March 2010, compared with € 352 million at 31 December 2009, an increase of € 70.6 million. This was due to the seasonal nature of the 2-wheel business, which absorbs cash in the first half of the year and generates cash in the second half. On a like-for-like basis, compared with the first quarter of 2009 net debt at 31 March 2010 was down € 24.1 million from € 446.7 million at 31
March 2009.

Shareholders' equity at 31 March 2010 totalled € 433.2 million, against € 423.8
million at 31 December 2009.

Significant events in the first quarter of 2010

On 22 January 2010 Piaggio signed an agreement with Enel to study the mobility requirements of electric and hybrid vehicles, through joint pilot projects in a number of Italian cities.

On 1 March 2010 the Group entered an important technical cooperation agreement with China’s Dongan Power, a company in the ChangAn-Hafei Group, one of the top constructors in the Chinese automotives industry. The agreement provides for development of petrol engines for Piaggio light commercial vehicles produced in Italy and India, and for future technological development work in low/zero-emission hybrid
and electric engines. The first result of the agreement will be the new 4-cylinder 1300cc Euro 4 and Euro 5 petrol engines for the Piaggio light vehicles range.

Outlook

During 2010 the Piaggio Group will focus on continuous improvement of competitiveness in all markets and sectors where it operates.
Quality, product cost and productivity will continue to be the key drivers for operations in 2010, with action to boost sales of 3/4-wheel commercial vehicles in India and Europe. The Group will also pay special attention to the growth of its motorcycle brands in Europe, consolidation of its leadership position in the scooter sector in Europe and America, and marketing of Vespa scooters in Vietnam – launched
officially at the end of June 2009 – in part through the expansion of the product offer. In 2010 the Piaggio Group will be focusing on new investments, including the industrialisation of the new diesel and turbodiesel engines with the start-up of the production facility in India.

***

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.

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