2012 Half year financial report

  1st half of 2012 1st half of 2011 Change
 In millions of euroAccounting for aIn millions of euroAccounting
for a
In millions of euro%
Net revenues 764.1 100.0% 830.0 100.0% (65.9) -7.9%
Cost to sell 527.8 69.1% 576.8 69.5% (48.9) -8.5%
Gross industrial margin 236.3 30.9% 253.2 30.5% (17.0) -6.7%
Operating expenses 164.6 21.5% 177.6. 21.4% (13.0) -7.3%
EBITDA 114.4 15.0% 121.0 14.6% (6.6) -5.5%
Depreciation 42.7 5.6% 45.4 5.5% (2.6) -5.8%
Operating income 71.7 9.4% 75.6 9.1% (4.0) -5.3%
Result of financial items (15.3) -2.0% (13.1) -1.6% (2.2) 16.9%
Earnings before tax 56.3 7.4% 62.5 7.5% (6.2) -9.9%
Taxes 22.5 2.9% 28.8 3.5% (6.3) -21.8%
Net income 33.8 4.4% 33.7 4.1% 0.01 0.3%
     

Vehicles
In thousands of units  1st half of 2012 1st half of 2011 Change
EMEA and Americas 167.1 197.9 (30.8)
India 97.5 111.4 (13.9)
ASIA SEA  50.8 37.2 13.6
Total vehicles
315.4 346.5 (31.1)
Two-wheeler  216.7 227.7 (11.0)
Commercial Vehicles  98.7 118.8 (20.1)
Total vehicles 315.4 346.5 (31.1)
 

Net revenues
In millions of Euro  1st half of 2012 1st half of 2011 Change
EMEA and Americas 503.5 563.3 (59.8)
India 165.0 197.6 (32.6)
ASIA SEA  95.6 69.1 26.5
Total net revenues
764.1 830.0 (65.9)
Two-wheeler                      561.9  578.7 (16.8)
Commercial Vehicles  202.2 251.3 (49.2)
Total net revenues
764.1 830.0 (65.9)

During the first half of 2012, the Piaggio Group sold 315,400 vehicles worldwide, registering a downturn of approximately 9.0% in volume over the same period of the previous year, when 346,500 vehicles were sold. There was considerable growth in sales of vehicles in Asia SEA (+ 36.6%), thanks to the increase in production capacity at the Vietnamese plant and entry on the Indonesian market, while sales fell in EMEA and the Americas (- 15.6%) and in India (- 12.4%). As regards the type of products sold, the main downturn occurred in the Commercial Vehicles segment (- 16.9%).

Sales of two-wheeler vehicles were affected by a particularly complex market context and competitive scenario, at least as regards European markets. In particular, the two-wheeler market in EMEA registered a downturn equal to approximately 14% (- 16% for scooters and - 13% for motorcycles). In EMEA, the Piaggio Group retained its market leadership, with a 19.4% share (up 0.3 percentage points). The Group achieved excellent sales results on the North American market (+ 42.8%) and in India, where the Vespa is now being marketed.

Sales of commercial vehicles were negatively affected by the concurrent downturn on all reference markets (Italy – 38.7%, Europe – 12.7% and India – 4.6%).

In terms of consolidated turnover, the Group ended the first half of 2012 with lower net revenues compared to the first half of 2011 (- 7.9%), equal to 764.1 million Euro. Turnover in Asia SEA went up considerably (+ 38.3%), while revenues fell in India (- 16.5%), and in EMEA and the Americas (- 10.6%). As regards the latter area, America achieved an excellent performance, with turnover up by 111%. As for the type of products sold, the downturn mainly concerned the Commercial Vehicles segment (- 19.6%). The decrease in turnover from two-wheeler products (- 2.9%) was offset by the shift in demand to vehicles with larger engines.

As a result, the impact of two-wheeler vehicles on overall turnover went up from 69.7% in the first half of 2011 to 73.5% in the same period in 2012; on the other hand, the impact of commercial vehicles fell from 30.3% in the first six months of 2011 to 26.5% in the first half of 2012.

The Group's gross industrial margin, defined as the difference between “net revenues” and “cost to sell” decreased by 17.0 million Euro in absolute terms compared to the first half of the previous year, while in relation to net turnover, it increased by 30.5% in the first half of 2011 to the current figure of 30.9%. The increase in percentage terms is mainly due to the greater impact of two-wheeler vehicles on total turnover.

For example, the "cost to sell" includes costs for materials (direct and consumables), accessory purchase costs (transport of incoming material, customs, warehousing), employee costs for direct and indirect manpower and relative expenses, work carried out by third parties, energy costs, depreciation of property, plant, equipment and industrial equipment, maintenance and cleaning costs net of sundry cost recovery recharged to suppliers. Amortisation/depreciation included in the gross industrial margin was equal to 16.4 million Euro (16.4 million Euro in the first half of 2011).

Operating expenses incurred during the first half of 2012 totalled 164.6 million Euro, 13.0 million Euro less compared to the same period of the previous year (177.6 million Euro), and confirm the Group's constant focus on keeping costs down and maintaining high profitability levels.

For example, operating expenses include employee costs, costs for services and lease and rental costs, as well as operating costs net of operating income not included in the gross industrial margin. Operating expenses also include amortisation/depreciation not included in the gross industrial margin, amounting to 26.3 million Euro (29.0 million Euro in the first half of 2011).

These trends in the income statement resulted in a consolidated EBITDA, defined as operating income gross of amortisation/depreciation, which was lower in absolute terms compared to the first half of 2011 (114.4 million Euro in the first half of 2012 and 121.0 million Euro in the first half of 2011), but higher in relation to turnover, up from 14.6% recorded in the first half of the previous year to 15.0% in the first half of 2012. In terms of Operating Income (EBIT), the performance of the period was also down in absolute terms compared to the first six months of 2011, with a consolidated EBIT equal to 71.7 million Euro, but up in relation to turnover, from 9.1% in the first half of the previous year to 9.4% in the first half of 2012.

The result of financial assets worsened compared to the first half of the previous year, with Net Charges amounting to 15.3 million Euro (13.1 million Euro in the first half of 2011). This increase was affected by higher debt combined with a higher cost of funding and charges for debt refinancing, partially offset by the positive impact of currency management and the equity valuation of the joint venture in China.

Consolidated net profit stood at 33.8 million Euro (4.4% of turnover), slightly up on the figure for the first half of 2011, equal to 33.7 million Euro (4.1% of turnover). Income tax for the period is estimated at 22.5 million Euro, equivalent to 40.0% of earnings before tax.