Piaggio & C

Earnings Release • Oct 28, 2016

Informazione Regolamentata n. 0835-68-2016		Data/Ora Ricezione 28 Ottobre 2016 12:06:58	MTA
Societa'	:	PIAGGIO & C.
Identificativo Informazione Regolamentata	:	80705
Nome utilizzatore	:	PIAGGION05 - LUPOTTO
Tipologia	:	IRAG 03
Data/Ora Ricezione	:	28 Ottobre 2016 12:06:58
Data/Ora Inizio Diffusione presunta	:	28 Ottobre 2016 12:21:59
Oggetto	:	PIAGGIO GROUP: RESULTS AT 30 SEPTEMBER 2016
Testo del comunicato

Vedi allegato.

PRESS RELEASE

PIAGGIO GROUP: RESULTS AT 30 SEPTEMBER 2016

Consolidated net sales 1,031.7 million euro, up 2.9% (+4.7% at constant exchange rates) (1,002.6 €/mln at 30 September 2015)

Ebitda 141.5 million euro, up 4.3% (+5.5% at constant exchange rates) (135.7 €/mln at 30 September 2015) Ebitda margin 13.7% (13.5% at 30 September 2015)

Industrial gross margin 309.9 million euro, up 4.5% (296.5 €/mln at 30 September 2015)

Ebit 60.5 million euro, up 4.2% (58.1 €/mln at 30 September 2015) Ebit margin 5.9% (5.8% at 30 September 2015)

Net profit 19.2 million euro, up 4.6% (18.3 €/mln at 30 September 2015)

Net financial position -469.5 million euro an improvement of 28.6 €/mln from -498.1 €/mln at 31 December 2015 and an improvement of 26.3 €/mln from -495.8 €/mln at 30 September 2015

411,700 vehicles shipped worldwide (+3.9% from 396,200 at 30 September 2015)

***

The Piaggio Group strengthens its leadership on the European two-wheeler market with a 15.5% overall share and a 25.9% share of the scooter sector

Strong revenue growth in high-wheel scooters assisted by the new Piaggio Liberty and Medley ABS, as well as the Beverly

Mantua, 28 October 2016 – At a meeting today chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. examined and approved the interim report on operations for the nine months to 30 September 2016.

Piaggio Group performance was positive in the first nine months of 2016, with an improvement in all the main indicators compared with the first nine months of 2015.

Piaggio Group business and financial performance at 30 September 20161

Group consolidated net sales in the first nine months of 2016 totalled 1,031.7 million euro, up 2.9% (+4.7% at constant exchange rates) from 1,002.6 million euro at 30 September 2015.

Revenues rose on all the main Group lines of business, with turnover in the two-wheeler sector rising to 730 million euro, up 4.1% from 701.1 million euro in the first nine months of

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.

2015 including spares and accessories. Revenues for commercial vehicles, including spares and accessories, were 301.7 million euro, substantially stable compared with 301.5 million euro at 30 September 2015.

At geographical level, the revenue growth in EMEA and the Americas (+4.9%) and Asia Pacific (+3.1%) more than counterbalanced the decrease reported in India due to a negative exchangerate effect (-2.0%; +3.3% at constant exchange rates). Performance was particularly positive in the main Asian countries covered by Piaggio Vietnam, with turnover in the first nine months of 2016 rising by approximately 40%, a clear sign of the huge potential in the area.

The industrial gross margin at 30 September 2016 was 309.9 million euro, up by 4.5% from 296.5 million euro in the year-earlier period. The return on net sales was 30%, up from 29.6% in the first nine months of 2015. Amortisation and depreciation included in the industrial gross margin totalled 26.9 million euro, compared with 28.2 million euro in the first nine months of 2015.

Operating expense in the first nine months of 2016 was 249.4 million euro (238.4 million euro at 30 September 2015). Operating expense includes amortisation and depreciation of 54.1 million euro not included in the industrial gross margin (49.4 million euro in the first nine months of 2015).

The changes in the income statement described above generated consolidated EBITDA of 141.5 million euro, an increase of 4.3% (5.5% at constant exchange rates) from 135.7 million euro in the first nine months of 2015, and an EBITDA margin of 13.7% (up from 13.5% at 30 September 2015).

EBIT in the first nine months of 2016 amounted to 60.5 million euro, up 4.2% from 58.1 million euro in the year-earlier period. The EBIT margin was 5.9% (5.8% at 30 September 2015).

At 30 September 2016, the Piaggio Group posted profit before tax of 33.6 million euro, up 10.1% compared with 30.5 million euro in the year-earlier period. Income tax for the period was 14.5 million euro, with an impact on pre-tax profit of 43%.

The first nine months of 2016 closed with net profit of 19.2 million euro, an increase of 4.6% compared with 18.3 million euro in the year-earlier period.

At 30 September 2016, the Piaggio Group had net debt of 469.5 million euro, an improvement of 28.6 million euro from 31 December 2015 (498.1 million euro) and of 26.3 million euro from 30 September 2015 (495.8 million euro).

Group shareholders' equity at 30 September 2016 was 393.2 million euro (404.3 million euro at 31 December 2015).

Piaggio Group capital expenditure in the nine months to 30 September 2016 amounted to 65.7 million euro (68.2 million euro in the year-earlier period), of which 35.5 million euro for R&D expenditure (39.9 million euro in the first nine months of 2015) and approximately 30.2 million euro for property, plant and equipment, investment property and intangible assets (28.3 million euro at 30 September 2015).

The total workforce of the Piaggio Group at 30 September 2016 numbered 7,197 employees. The Group's Italian employees numbered 3,585, substantially unchanged from the year-earlier period.

Business performance in the nine months to 30 September 2016

In the first nine months of 2016, the Piaggio Group sold 411,700 vehicles worldwide, an increase of 3.9% from 396,200 in the year-earlier period.

In the nine months to 30 September 2016, the Group sold 266,400 two-wheelers worldwide (up 6.1% from 251,000 in the year-earlier period), generating net sales of 730 million euro, an

improvement of 4.1% from 701.1 million euro in the first nine months of 2015. The figure includes spares and accessories, on which turnover totalled 97.4 million euro (in line with the first nine months of 2015).

A positive contribution to two-wheeler revenues also came from the marketing of the Piaggio Wi-Bike pedal-assisted bicycle, a clear example of the developments being taken forward by the Group in electric vehicles.

In the first nine months of 2016, the Piaggio Group continued to strengthen its leadership on the European two-wheeler market, with an overall market share of 15.5% (15.1% at 30 September 2015) and a 25.9% share of the scooter segment. The Group also maintained a particularly strong positioning on the North American scooter market, with a share of 18.9%. On this market, the Group is also boosting its presence in the motorcycle segment with the Aprilia and Moto Guzzi brands.

In the scooter segment, attention is drawn to the results of the Piaggio Group in the high-wheel segment, where global revenues made strong progress, largely thanks to the Nuovo Piaggio Liberty, the Beverly and the new Piaggio Medley ABS, which has boosted market share for Group vehicles since entering the segment.

The Vespa brand strengthened its presence on the European market, with revenues up by 3.6%.

In August, the Aprilia brand made its debut on the Indian scooter market (the largest in the world, with more than 5 million vehicles shipped every year and growth of 22% in the first nine months of 2016 from the year-earlier period), with the launch of the Aprilia SR 150 sports scooter sold at the competitive price of 65,000 rupees (approximately 880 euro). Around 3,000 scooters had been sold by the end of September 2016 and sales are expected to intensify in the final months of the year.

The Group motorcycle sector also reported healthy performance, thanks to an 8% increase in Moto Guzzi sales, assisted by the new V9 Roamer and Bobber and by the first sales of the MGX-21, the large total black cruiser, which had its world preview in August at the 76thSturgis Motorcycle Rally to a warm reception from users and the international media. Analysis of the Aprilia brand reflects the growth of the supersport models in the Tuono V4 range, which reported a 43.4% increase in sales. Aprilia was also in the spotlight at the German two-wheeler show Intermot in Cologne in early October, where it presented the new Aprilia Tuono 125 and the Aprilia RS 125 my 2017, to strengthen its position in 125cc vehicles, one of the fastest growing market segments to date (+33.3% in the first nine months in Italy, YoY – Ancma figures).

In the commercial vehicles sector, the Group sold 145,300 vehicles (145,100 in the first nine months of 2015) for net sales of 301.7 million euro (301.5 million euro in the year-earlier period). The figure includes spares and accessories, where sales totalled 33.1 million euro (+5.6% from 31.4 million euro in the first nine months of 2015). On the Indian market for threewheel commercial vehicles, the PVPL subsidiary had an overall share of 28.3% and confirmed its leadership in the Cargo segment with a market share of 51.2%. The Group also recently strengthened its positioning in South America where it began marketing the new Ape City and Ape Romanza in Mexico. By the end of 2016 the vehicles will also be exported to Peru, Colombia, Guatemala and Honduras, where previous models of the Ape are already available and with versions for goods transport or that can be adapted for use as mobile shops.

In the first nine months of 2016 the PVPL production hub also exported 15,300 three-wheel commercial vehicles worldwide. These sales arose in part in the EMEA and Americas area and in part in the India area, in connection with responsibility for management of the individual markets.

Significant events in the first nine months of 2016

In addition to the information published at the time of approval of the 2016 half-year results (directors' meeting of 29 July 2016):

On 7 July, the Piaggio Group signed important agreements to market the Vespa and Piaggio brands in Brazil, Argentina and Uruguay.

On 7 July, the Group also presented the new versions of the Vespa Primavera and Vespa Sprint equipped with the new Piaggio I-Get engine, which complies with Euro4 regulations The new scooters offer a richer range of features, including ABS, which is now a standard function on all 125 and 150cc versions, and a USB port.

On 14 July, the Piaggio Group announced its continuation of growth on the world's fastest growing high-volume markets with the entry of the Aprilia brand on to the Indian scooter market. Local marketing began in August of the new Aprilia SR 150 sports scooter at the competitive prices of 65,000 rupees (approximately 880 euro).

In August, Moto Guzzi took part in the 76th Sturgis Motorcycle Rally (8 – 14 August), one of the world's largest two-wheeler rallies, for a preview presentation of the new MGX-21. The Moto Guzzi MGX-21 is a large cruiser with a 1400cc transverse 90° V-twin engine, featuring latestgeneration electronic driving systems; the model is sold in carbon fibre total black with red cylinder heads, a front shield and large 21" front wheel.

On 11 August, the Piaggio Group announced the roll-out of its distribution network on the Indian and Asia Pacific market (APAC) with the opening of 12 new Motoplex multibrand stores. The latest additions take the worldwide total of Piaggio Group Motoplex stores flanking the traditional distribution network to 140, located in the Emea area, APAC (including India) and the Americas.

Significant events after 30 September 2016

On 4 October the Piaggio Group took part in Germany's Intermot two-wheeler show, with the presentation of important additions for its Aprilia and Moto Guzzi motorcycle brands and for the Vespa range. Specifically, it unveiled the Aprilia Tuono 125, the Aprilia RS 125 my 2017, the Moto Guzzi Audace Carbon and the new Vespa GTS equipped with the liquid-cooled I-Get engine, in 125 and 150cc displacements.

On 10 October, as part of its plans to expand and strengthen its operations on markets in South America, the Piaggio Group began marketing the Ape, its well-known three-wheel vehicle, in Mexico. In Mexico, the Ape has been launched in the new Ape City and Ape Romanza passenger models. By the end of 2016 the Group also plans to begin marketing in Peru, Colombia, Guatemala and Honduras, where previous models of the Ape are already available and with versions for goods transport or that can be adapted for use as mobile shops.

On 24 October Piaggio & C. S.p.A. said it had signed a 12.8 million euro leasing agreement with Alba Leasing expiring in 2026 to finance the new automated paint shop at the Pontedera factory. For the Piaggio Group, the leasing contract is part of an on-going series of measures to optimise its debt structure by extending its average debt maturity and diversifying its sources of funding, assisted by the opportunities currently offered by a favourable market scenario.

* * *

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:

• a further strengthening of the product range, to grow sales and margins in the highwheel scooter sector with the new Liberty and Medley and in the motorcycle sector, with the renewed Moto Guzzi and Aprilia ranges and with the entry on to the e-bike market, with the new Piaggio Wi-Bike;
• maintenance of current positions on the European commercial vehicle market;
• consolidation in the Asia Pacific region by exploring new opportunities in mid-range motorcycles and replicating the premium strategy in Vietnam throughout the region, with a special focus on the Chinese market;
• strengthening sales on the Indian scooter market by extending the offer of Vespa products and introducing new models in the premium scooter and motorcycle segments for the other Group brands;
• growing commercial vehicle sales in India and the emerging countries, aiming for further growth in exports to Africa and South America.

* * *

Conference call with analysts

The presentation of the financial results as at and for the nine months ended 30 September 2016, which will be illustrated during a conference call with financial analysts, is available on the corporate website at www.piaggiogroup.com/it/investor and on the "eMarket Storage" authorised storage mechanism on the website **.

* * *

The Piaggio Group consolidated income statement, consolidated statement of financial position and consolidated statement of cash flows as at and for the nine months ended 30 September 2016 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 2015 Annual Report 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 Via Broletto, 13 20121 Milan – Italy +39 02 02.319612.19 diego.rancati@piaggio.com press@piaggio.com piaggiogroup.com press.piaggiogroup.com

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

SCHEDULES

Consolidated Income Statement

	First nine months 2016		First nine months 2015
		of which		of which
		related		related
	Total	parties	Total	parties
In thousands of euro
Net Sales	1,031,723	739	1,002,603	216
Cost of materials	610,365	20,011	590,289	21,464
Cost of services and use of third-party assets	178,067	2,919	177,884	2,848
Employee expense	161,914		162,236
Depreciation and impairment property, plant and
equipment	33,484		34,635
Amortisation and impairment intangible assets	47,551		42,973
Other operating income	74,172	665	78,984	496
Other operating expense	14,025	21	15,492	30
EBIT	60,489		58,078
Results of associates	487	480	281	302
Finance income	733		564
Finance costs	27,853	100	28,551	124
Net exchange-rate gains/(losses)	(246)		153
Profit before tax	33,610		30,525
Income tax expense	14,453		12,210
Profit from continuing operations	19,157		18,315

Discontinued operations:

Profit or loss from discontinued operations

Profit (loss) for the period	19,157	18,315
Attributable to:
Equity holders of the parent	19,157	18,307
Minority interests	0	8
Earnings per share (in €)	0.053	0.051
Diluted earnings per share (in €)	0.053	0.051

Consolidated Statement of Comprehensive Income

	First nine	First nine
In thousands of euro	months 2016	months 2015
Profit (loss) for the period (A)	19,157	18,315
Items that cannot be reclassified to profit or loss
Re-measurement of defined benefit plans	(4,341)	2,233
Total	(4,341)	2,233
Items that may be reclassified to profit or loss
Gains (losses) on translation of financial statements of foreign
entities	(2,457)	2,171
Total gains (losses) on cash flow hedges	31	256
Total	(2,426)	2,427
	(6,767)	4,660
Total comprehensive income (expense) for the period (A + B)	12,390	22,975
* Other comprehensive income (expense) taking related tax effects into account
Attributable to:
Equity holders of the parent	12,437	22,874
Minority interests	(47)	101

Consolidated Statement of Financial Position

	At 30 September 2016		At 31 December 2015
		of which		of which
	Total	related parties	Total	related parties
In thousands of euro
ASSETS
Non-current assets
Intangible assets	664,526		673,986
Property, plant and equipment	297,860		307,608
Investment property	11,811		11,961
Equity investments	9,518		9,529
Other financial assets	17,299		24,697
Non-current tax receivables	8,945		5,477
Deferred tax assets	55,879		56,434
Trade receivables
Other receivables	12,584	133	13,419	153
Total non-current assets	1,078,422		1,103,111
Assets held for sale
Current assets
Trade receivables	94,534	1,131	80,944	1,150
Other receivables	25,782	9,117	29,538	8,879
Current tax receivables	36,548		21,541
Inventories	236,263		212,812
Other financial assets	5,585		2,176
Cash and cash equivalents	150,956		101,428
Total current assets	549,668		448,439
Total Assets	1,628,090		1,551,550

	At 30 September 2016		At 31 December 2015
		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	393,445		404,535
Share capital and reserves attributable to
minority interests	(289)		(242)
Total shareholders' equity	393,156		404,293
Non-current liabilities
Borrowings due after one year	472,737	2,900	520,391	2,900
Trade payables
Other non-current provisions	10,703		9,584
Deferred tax liabilities	4,040		4,369
Pension funds and employee benefits	53,506		49,478
Non-current tax payables	29
Other non-current payables	5,199		4,624
Total non-current liabilities	546,214		588,446
Current liabilities
Borrowings due within one year	170,076		105,895
Trade payables	446,324	12,935	380,363	10,108
Non-current tax payables	7,078		14,724
Other current liabilities	56,448	9,505	48,050	8,666
Current portion of other non-current provisions	8,794		9,779
Total current liabilities	688,720		558,811
Total Shareholders equity and Liabilities	1,628,090		1,551,550

Consolidated Statement of Cash Flows

This schedule shows the determinants of changes in cash and cash equivalents net of bank overdrafts, as required by IAS 7.

	First nine months 2016		First nine months 2015
		of which		of which
		related		related
	Total	parties	Total	parties
In thousands of euro
Operating assets
Consolidated net profit (loss)	19,157		18,307
Earnings attributable to minority interests	0		8
Tax for the period	14,453		12,210
Depreciation property, plant and equipment	33,484		34,635
Amortisation intangible assets	47,551		42,973
Allowances for risks, retirement funds and employee benefits	13,797		13,881
Impairment losses / (Reversals)	852		1,009
Losses / (Gains) on sale of property, plant and equipment	(93)		(153)
Finance income	(733)		(563)
Dividend income	(7)		0
Finance costs	25,471		27,905
Income from public grants	(2,970)		(2,474)
Share of results of associates	(480)		(281)
Change in working capital:
(Increase)/Decrease in trade receivables	(14,224)	19	(37,173)	(18)
(Increase)/Decrease in other receivables	4,373	(218)	6,182	495
(Increase)/Decrease in inventories	(23,451)		699
Increase/(Decrease) in trade payables	65,961	2,827	23,172	(3,198)
Increase/(Decrease) in other payables	8,973	839	7,712	712
Increase/(Decrease) in provisions for risks	(7,869)		(8,055)
Increase/(Decrease) in retirement funds and employee benefits	(1,723)		(10,676)
Other changes	(30,782)		1,105
Cash generated by operating activities	151,740		130,423
Interest expense paid	(15,769)		(24,761)
Tax paid	(16,935)		(14,990)
Cash flow from operating activities (A)
	119,036		90,672
Investing activities
Investment in property, plant and equipment	(26,912)		(24,937)
	224		415
Investment in intangible assets	(38,767)		(43,253)
Sale price or redemption value of intangible assets			44
Interest collected	359		346
Cash flow from investing activities (B)	(65,096)		(67,385)
Financing activities
Own share purchases	(5,565)		0
Outflow for dividends paid	(17,962)		(26,007)
Loans received	72,050		84,458
Outflow for loan repayments	(65,398)		(68,190)
Finance leases received	12,839		0
Repayment of finance leases	(1,307)		(23)
Cash flow from financing activities (C)	(5,343)		(9,762)
Increase / (Decrease) in cash and cash equivalents (A+B+C)	48,597		13,525
Opening balance	101,302		90,125
Exchange differences	(1,130)		2,095
Closing balance	148,769		105,745