Piaggio & C

Earnings Release • Oct 27, 2017

Informazione Regolamentata n. 0835-72-2017		Data/Ora Ricezione 27 Ottobre 2017 13:16:07	MTA
Societa'	:	PIAGGIO & C.
Identificativo Informazione Regolamentata	:	95189
Nome utilizzatore	:	PIAGGION05 - LUPOTTO
Tipologia	:	REGEM
Data/Ora Ricezione	:	27 Ottobre 2017 13:16:07
Data/Ora Inizio Diffusione presunta	:	27 Ottobre 2017 13:16:07
Oggetto	:	PIAGGIO GROUP PRESS RELEASE: 3Q2017
Testo del comunicato

Vedi allegato.

PRESS RELEASE

PIAGGIO GROUP: RESULTS AT 30 September 2017

Consolidated net sales 1,057.3 million euro, up 2.5% (1,031.7 €/mln in at 30.09.2016)

Ebitda at 159 million euro, up 12.4% (141.5 €/mln at 30.09.2016) Ebitda margin 15% (13.7% at 30.09.2016)

Industrial gross margin 327.1 million euro, up 5.6% (309.9 €/mln at 30.09.2016), 30.9% of turnover (30% at 30.09.2016)

Ebit 69.1 million euro, up 14.3% (60.5 €/mln at 30.09.2016) Ebit margin 6.5% (5.9 % at 30.09.2016)

Profit before tax 44.1 million euro, up 31.2% (33.6 €/mln at 30.09.2016)

Net profit 25.1 million euro, up 31.2% (19.2 €/mln at 30.09.2016)

Cash generation of 60.2 million euros (28.6 million euros at 30.09.2016)

Net financial position -430.7 million euro an improvement of 60.2 €/mln from -491 €/mln at 31.12.2016 and an improvement of 38.8 €/mln from -469.5 €/mln at 30.09.2016

426,700 vehicles sold worldwide (411,700 at 30.09.2016)

***

The Piaggio Group reconfirms its leadership on the European two-wheeler market with a 15.2% overall share. At an international level, sales increased for Vespa (+11.4%) and high wheel segment (+6.4%)

Commercial Vehicles: leadership in the freight transport segment (cargo) affirmed

Piaggio Fast Forward: Gita and Kilo development activities continue

Mantua, 27 October 2017 – The Board of Directors of Piaggio & C. S.p.A. (PIA.MI), at a meeting today chaired by Roberto Colaninno, examined and approved the interim report on operations at 30 September 2017.

Piaggio Group business and financial performance at 30 September 20171

Compared to the corresponding period of 2016, at 30 September 2017 the Piaggio Group saw a net improvement in performance and a reduction in debt.

Consolidated net sales of the group totalled 1,057.3 million euro, an improvement of 2.5% from 1,031.7 million euro at 30 September 2016.

¹ The 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 and intangible assets, 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.

The industrial gross margin at 30 September 2017 was 327.1 million euro, up by 5.6% from 309.9 million euro at 30 September 2016. The return on net sales was 30.9% (30% at 30 September 2016).

Operating expenses sustained by the Group at 30 September 2017 amounted to 258 million euro, up (3.4%) with respect to data from the corresponding period in 2016, due to the rise in amortisations. Net of amortisations, operating expenses at 30 September 2017 saw a reduction of 0.4% with respect to 30 September 2016.

The changes in the income statement described above generated consolidated EBITDA of 159 million euro, up 12.4%with respect to 141.5 million euro at 30 September 2016. The EBITDA margin was 15% (13.7% at 30 September 2016).

EBIT at 30 September 2017 was 69.1 million euro, an increase of 14.3% (60.5 million euro at 30 September 2016). The EBIT margin was 6.5% (5.9% at 30 September 2016).

At 30 September 2017, the Piaggio Group posted a pre-tax profit of 44.1 million euro, up 31.2% compared to 33.6 million euro at 30 September 2016. Income tax for the period was 19 million euro, with an impact on pre-tax profit of 43%.

The Piaggio Group made a net profit of 25.1 million euro at 30 September 2017, an increase of 31.2% compared with 19.2 million euro at 30 September 2016.

Cash generated at 30 September 2017 was 60.2 million euro (28.6 million euro at 30 September 2016).

Net financial debt at 30 September 2017 stood at 430.7 million euro, an improvement of 60.2 million euro from 491 million euro at 31 December 2016 and of 38.8 million euro from 469.5 million euro at 30 September 2016.

In the first nine months of 2017, the Piaggio Group made investments of 55.6 million euro (65.7 million euro at 30 September 2016), of which 35.2 million euro were for R&D costs (35.5 million euro at 30 September 2016) and approximately 20.4 million euro for property, plants and equipment, investment property and intangible assets (approximately 30.2 million euro in the first nine months of 2016).

The total workforce of the Piaggio Group at 30 September 2017 numbered 6,940 employees. The Group's Italian employees numbered 3,492, substantially unchanged from the year-earlier period.

Business performance in the first half to 30 September 2017

In the first nine months of 2017, the Piaggio Group sold 426,700 vehicles worldwide, up by 3.7% (411,700 units sold at 30 September 2016), and generated consolidated revenues of 1,057.3 million euros, up 2.5%.

At the level of geographical areas, the Group saw growth in revenues in EMEA and the Americas of +3.7%, and in India of +2.1% (-0.9% at constant exchange rates), a market that had experienced drops in previous months mainly caused by the demonetization policy of the Indian government as well as the reform of the Goods and Services Tax (GST). These increases more than offset the downturn recorded in Asia Pacific (-2.6%, -1.7% at constant exchange rates).

Two-wheelers:

At 30 September 2017, the Group sold 299,400 two-wheelers worldwide, up 12.4% (266,400 at 30 September 2016), generating net sales of 771.8 million euro, an improvement of 5.7% (730 million euro at 30 September 2016).

The figure includes spares and accessories, on which turnover totalled 101.3 million euro, an increase of 4% from the first nine months of 2016.

At 30 September 2017, the Piaggio Group maintained leadership in Europe with a total market share of 15.2%, up 25.4%, in sole reference to the scooter sector. The Group maintained a particularly strong presence on the North American scooter market, with a share of 20%; it is also committed to strengthening its position in motorcycles in North America. On the Indian twowheeler market, the Group more than doubled its sales volumes from the year-earlier period, thanks to the introduction of the new Aprilia SR 150 scooter and the excellent performance of Vespa. Analysing performance in Asia Pacific, Vietnam reported a decline in scooter sales volumes, while the Group expanded its offer in Thailand through its recent entry on to the motorcycle market with the introduction of the Aprilia and Moto Guzzi brands, flanking the already well-established scooter offer with the Vespa and Piaggio brands.

Highlights in the scooter sector included the excellent results of the Vespa brand, which boosted worldwide sales by 11.4% with respect to the first nine months of the last year, and strengthened its presence on the EMEA market, with net sales growth of 16.5%, and in India, where it saw growth in revenue of 31.3%. As also regards the Indian market, the Vespa brand has recently been enhanced with a new version, the new (VESPA)RED VXL model.

Performance was also positive in high-wheel scooters (growth in volume of 6.4%), where the Group reported revenue growth at global level, largely thanks to the new Liberty and to the Beverly.

In the scooter sector, the Aprilia brand also saw positive results, especially on the Indian market thanks to the Aprilia SR 150 sports scooter.

The motorcycle sector of the Group also made great strides. The Aprilia brand saw an increase in sales, in particular generated by the naked of the Tuono family, the new Aprilia Shiver 900 and Dorsoduro 900 (launched in June 2017), and the new 125cc, RS and Tuono, launched in April.

The revenue of Moto Guzzi was particularly driven by the positive sales trend of the V7, whose fiftieth anniversary this year has been marked with an ad hoc model.

Commercial vehicles:

In the commercial vehicles sector, the Group sold 127,300 vehicles (145,300 units in the first nine months of 2016) for net revenues of 285.5 million euro (301.7 million euro at 30 September 2016).

The figure includes spares and accessories, where sales totalled 34 million euro (33.1 million euro at 30 September 2016).

While demand on the Indian market for three-wheel commercial vehicles is still falling as compared to the previous year - but with an upward trend, the PVPL subsidiary had an overall share of three-wheel vehicles of 28.7% (28.3% at 30 September 2016) and confirmed its leadership in the cargo segment with a share of 49.4%.

In the first nine months of 2017, the PVPL production hub also exported 14,600 commercial vehicles worldwide. These sales arose in part in the EMEA and Americas areas and in part in the India area, in connection with responsibility for management of the individual markets.

Piaggio Fast Forward:

With regard to Piaggio Fast Forward (PFF), the Piaggio Group company based in Boston, which represents the research centre of the Group as regards future mobility, development continues on the first innovative projects, Gita and Kilo, presented in Boston on 2 February. They are intelligent vehicles that can move autonomously, designed to improve mobility productivity in increasingly complex urban developments, with a payload of up to 100 kilograms and an autonomy of 20 kilometres on urban roads. They accompany the user, map their surroundings and monitor other moving objects.

Significant events for the period and after 30 September 2017

In addition to that stated herein and communicated during the approval of the results for the first half of 2017 (Board of Directors of 28 July 2017), the main events of the period or subsequent periods are listed below.

On 4 September, Piaggio Fast Forward was added to the Top 100 Most Innovative and Disruptive Construction Companies in the Robotics category thanks to "the strong technological boost of Gita".

On 19 September, Piaggio & C. S.p.A. and Foton Motor Group signed an important preliminary agreement in Beijing for the strategic development of a new range of four-wheel light commercial vehicles. Following this agreement, a team composed of representatives of both parties are working to validate the production and marketing plan and prepare the contractual documentation with the objective - if the aforementioned activities prove successful - of finalising the technical documentation of the project and the related contracts by spring 2018.

On 2 October, PFF was the only Italian company present at the World Frontiers Forum, the annual event that brings large international groups and companies together with the academic world and cultural institutions, all of which are characterised by a pioneering vision and products that can improve the future of the world. The WFF was held in Cambridge and at Harvard University.

On 4 October, Piaggio was selected by Borsa Italiana along with 21 other listed companies for the Italian Listed Brands showcase. Based on this list, a new dedicated index will be created by FTSE Russell in coverage of the Italian market. The selection was made by Borsa Italiana on the basis of creativity, excellence, innovation and global appeal.

* * *

Outlook

In a general economic context likely to see a strengthening of the global economic upturn, where uncertainty will nonetheless remain with regard to the speed of European growth and the risk of a slowdown in some Asian countries in the Far East, Piaggio Group commercial and industrial operations will focus on:

• confirming the leadership position on the European two-wheeler market, taking full advantage of the expected recovery through:
• further strengthening of its product range;
• maintenance of current positions on the European commercial vehicle market;
• consolidating its presence in Asia Pacific, in part through the opening of new Motoplex stores, the exploration of new opportunities in countries in the region, with a particular focus on the premium segment of the market;
• increasing sales on the Indian scooter market thanks to the Vespa offer and the success of the new Aprilia SR 150;
• growing the penetration of commercial vehicles in India and related sales in the emerging countries, aiming for further growth in exports to Africa and South America.

From the technological viewpoint, the Piaggio Group will continue research on new solutions to current and future mobility problems, through the work of Piaggio Fast Forward (Boston) and new advances in design at PADc (Piaggio Advanced Design center) in Pasadena.

At a more general level, the Group maintains its commitment – a characteristic of recent years and continuing in 2017 – to generate higher productivity through close attention to cost and investment efficiency, in compliance with its ethical principles.

* * *

Conference call with analysts

The presentation of the financial results as at and for the six months ended 30 September 2017, which will be illustrated during a conference call with financial analysts, is available on the corporate website at www.piaggiogroup.com/it/investor.

* * *

The Piaggio Group consolidated income statement, consolidated statement of financial position and consolidated statement of cash flows as at and for the six months ended 30 September 2017 are set out below.

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

* * *

In line with the recommendations of CESR Communication 05-178b, attention is drawn to the fact that this press release contains a number of indicators that, though not yet contemplated by the IFRS ("Non-GAAP Measures"), are based on financial measures envisaged by the IFRS. These indicators – presented in order to assist assessment of the Group's business performance – should not be considered as alternatives to those envisaged by the IFRS and are consistent with those in the Piaggio Group report and financial statements at 31 December 2016 and quarterly and half-year reports. Furthermore, since determination of such indicators is not specifically regulated by the IFRS, the methods used may not coincide with those adopted by other companies/groups, and consequently the indicators in question may not be comparable. In compliance with Consob Communication no. 9081707 of 16 September 2009, it should be noted that the alternative performance indicators ("Non-GAAP Measures") have not been audited by the independent auditors.

This press release may contain forward-looking statements relating to future events and Piaggio Group business and financial results. By their nature, these statements are subject to inherent risks and uncertainties, since they relate to events and depend on circumstances that may or may not occur or exist in the future. Actual results may differ materially from those expressed in such statements as a result of a variety of factors.

For further information:

Piaggio Group Corporate Press Office Director Diego Rancati Via Broletto, 13 - 20121 Milan – Italy +39 02.319612.19/.16

diego.rancati@piaggio.com stefania.giorgioni@piaggio.com

Image Building

Via Privata Maria Teresa, 11 - 20123 Milan - Italy +39 02 89011300 piaggio@imagebuilding.it

Piaggio Group Investor Relations Viale Rinaldo Piaggio, 25 56025 Pontedera (PI) – Italy +39.0587.272286 investorrelations@piaggio.com

piaggiogroup.com

SCHEDULES

Consolidated Income Statement

It should be noted that, with respect to the overall Income Statement and Cash Flow values for the first nine months of 2016, as published last year and used as a comparison, a reclassification took place with certain item lines in order to make them more comparable with the data of the first nine months of 2017.

	First nine months 2017		First nine months 2016
		of which		of which
		related		related
	Total	parties	Total	parties
In thousands of euro
Net Sales	1,057,292	1,503	1,031,723	739
Cost of materials	619,228	21,776	610,365	20,011
Cost of services and use of third-party assets	174,946	2,919	178,067	2,919
Employee expense	164,631		161,914
Depreciation and impairment property, plant and
equipment	33,798		33,484
Amortisation and impairment intangible assets	56,111		47,551
Other operating income	77,341	306	74,172	665
Other operating expense	16,797	9	14,025	21
EBIT	69,122		60,489
Results of associates	789	778	487	480
Finance income	668		733
Finance costs	27,048	100	27,853	100
Net exchange-rate gains/(losses)	567		(246)
Profit before tax	44,098		33,610
Income tax expense	18,963		14,453
Profit from continuing operations	25,135		19,157

Discontinued operations:

Profit or loss from discontinued operations

Profit (loss) for the period	25,135	19,157
Attributable to:
Equity holders of the parent	25,135	19,157
Minority interests	0	0
Earnings per share (in €)	0.070	0.053
Diluted earnings per share (in €)	0.070	0.053

Consolidated Statement of Comprehensive Income

	First nine months 2017	First nine months 2016
In thousands of euro
Profit (loss) for the period (A)	25,135	19,157
Items that cannot be reclassified to profit or loss
Re-measurement of defined benefit plans	1,425	(4,341)
Total	1,425	(4,341)
Items that may be reclassified to profit or loss
Gains (losses) on translation of financial statements of foreign entities	(10,122)	(1,966)
Share of components of Comprehensive Income relating to
equity-accounted investees	(658)	(491)
Total gains (losses) on cash flow hedges	(23)	31
Total	(10,803)	(2,426)
Other comprehensive income (expense) (B)*	(9,378)	(6,767)
Total comprehensive income (expense) for the period (A + B)	15,757	12,390
* Other comprehensive income (expense) taking related tax effects into account
Attributable to:
Equity holders of the parent	15,730	12,437
Minority interests	27	(47)

Consolidated Statement of Financial Position

		At 30 September 2017		At 31 December 2016
		of which		of which
		related		related
In thousands of euro	Total	parties	Total	parties
ASSETS
Non-current assets
Intangible assets	648,817		668,665
Property, plant and equipment	274,610		301,079
Investment property	11,667		11,710
Equity investments	7,565		7,445
Other financial assets	8,923		19,209
Non-current tax receivables	18,749		15,680
Deferred tax assets	59,596		60,372
Trade receivables
Other receivables	11,732	115	13,170	133
Total non-current assets	1,041,659		1,097,330
Assets held for sale
Current assets
Trade receivables	104,041	1,951	75,166	3,350
Other receivables	22,708	9,151	24,151	8,753
Current tax receivables	32,705		26,783
Inventories	237,729		208,459
Other financial assets	3,112		7,069
Cash and cash equivalents	179,387		191,757
Total current assets	579,682		533,385
Total Assets	1,621,341		1,630,715

	At 30 September 2017		At 31 December 2016
		of which		of which
		related		related
	Total	parties	Total	parties
In thousands of euro
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital and reserves attributable to
equity holders of the parent	390,051		394,019
Share capital and reserves attributable to
minority interests	(278)		(305)
Total shareholders' equity	389,773		393,714
Non-current liabilities
Borrowings due after one year	452,604	2,900	535,105	2,900
Trade payables
Other non-current provisions	10,891		10,566
Deferred tax liabilities	3,711		3,880
Pension funds and employee benefits	45,416		48,924
Tax payables
Other non-current payables	5,195	162	5,485	162
Total non-current liabilities	517,817		603,960
Current liabilities
Borrowings due within one year	169,389		173,445
Trade payables	456,545	14,414	395,649	9,935
Tax payables	24,883		8,128
Other current liabilities	53,086	7,230	46,936	7,152
Current portion of other non-current provisions	9,848		8,883
Total current liabilities	713,751		633,041
Total Shareholders' equity and Liabilities	1,621,341		1,630,715

Consolidated Statement of Cash Flows

	First nine months 2017		First nine months 2016
		of which		of which
		related		related
	Total	parties	Total	parties
In thousands of euro
Operating assets
Consolidated net profit (loss)	25,135		19,157
Earnings attributable to minority interests
Tax for the period	18,963		14,453
Depreciation property, plant and equipment	33,798		33,484
Amortisation intangible assets	56,111		47,551
Allowances for risks, retirement funds and employee benefits	14,253		13,797
Impairment losses / (Reversals)	1,879		852
Losses / (Gains) realised on sale of property, plant and equipment	(81)		(93)
Losses / (Gains) realised on sale of intangible assets
Finance income	(591)		(733)
Dividend income	(11)		(7)
Finance costs	24,771		25,471
Income from public grants	(2,647)		(2,970)
Share of results of associates	(778)		(480)
Change in working capital:
(Increase)/Decrease in trade receivables	(27,573)	1,399	(14,224)	19
(Increase)/Decrease in other receivables	3,404	(380)	4,373	(218)
(Increase)/Decrease in inventories	(29,270)		(23,451)
Increase/(Decrease) in trade payables	60,896	4,479	65,961	2,827
Increase/(Decrease) in other payables	5,860	78	9,106	972
Increase/(Decrease) in provisions for risks	(6,955)		(7,869)
Increase/(Decrease) in retirement funds and employee benefits	(9,139)		(1,723)
Other changes	2,533		(24,980)
Cash generated by operating activities	170,558		157,675
Interest expense paid	(21,904)		(21,704)
Tax paid	(12,346)		(16,935)
Cash flow from operating activities (A)	136,308		119,036
Investing activities
Investment in property, plant and equipment	(16,831)		(26,912)
Sale price or redemption value of property, plant and equipment	172		224
Investment in intangible assets	(38,817)		(38,767)
Sale price or redemption value of intangible assets	456
Dividends from equity investments	11
Interest collected	658		359
Cash flow from investing activities (B)	(54,351)		(65,096)
Financing activities
Own share purchases			(5,565)
Outflow for dividends paid	(19,698)		(17,962)
Loans received	55,090		72,050
Outflow for loan repayments	(119,734)		(65,398)
Finance leases received			12,839
Repayment of finance leases	(842)		(1,307)
Cash flow from financing activities (C)	(85,184)		(5,343)
Increase / (Decrease) in cash and cash equivalents (A+B+C)	(3,227)		48,597
Opening balance	191,400		101,302
Exchange differences	(9,008)		(1,130)
Closing balance	179,165		148,769