Interim / Quarterly Report • Aug 21, 2017
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
Half-year Financial Report as of 30 June 2017
| 1 | Report on Operations | 4 |
|---|---|---|
| Introduction | 7 | |
| Key operating and financial data | 8 | |
| Group profile | 11 | |
| Corporate structure | 14 | |
| Company Boards | 15 | |
| Significant events during first half of 2017 | 16 | |
| Financial position and performance of the Group | 18 | |
| Consolidated income statement (reclassified) | 18 | |
| Operating data | 19 | |
| Consolidated statement of financial position | 21 | |
| Consolidated Statement of Cash Flows | 22 | |
| Alternative non-GAAP performance measures | 23 | |
| Results by type of product | 24 | |
| Two-wheeler | 24 | |
| Commercial Vehicles | 28 | |
| The regulatory framework | 31 | |
| Risks and uncertainties | 35 | |
| External risks | 35 | |
| Internal risks | 37 | |
| Events occurring after the end of the period | 42 | |
| Operating outlook | 43 | |
| Transactions with related parties | 44 | |
| Investments of members of the board of directors and members of the control committee | 44 | |
| Other information | 45 | |
| Economic glossary | 46 | |
| 2 | Condensed Consolidated Interim Financial Statements as of 30 June 2017 | 48 |
| Consolidated Income Statement | 50 | |
| Consolidated Statement of Comprehensive Income | 51 | |
| Consolidated Statement of Financial Position | 52 | |
| Consolidated Statement of Cash Flows | 53 | |
| Changes in Consolidated Shareholders' Equity | 54 | |
| Notes to the Consolidated Financial Statements | 56 | |
| Attachments | 107 | |
| Piaggio Group companies | 107 | |
| Certification of the Consolidated Financial Statements pursuant to article 154-bis | ||
| of Italian Legislative Decree no. 58/98 | 111 | |
| Report of the Independent Auditors on the Consolidated Financial Statements | 112 | |
| Introduction | 7 |
|---|---|
| Key operating and financial data | 8 |
| Group profile | 11 |
| Significant events during first half of 2017 | 16 |
| Financial position and performance of the Group | 18 |
| Results by type of product | 24 |
| The regulatory framework | 31 |
| Risks and uncertainties | 35 |
| Events occurring after the end of the period | 42 |
| Operating outlook | 43 |
| Transactions with related parties | 44 |
| Other information | 45 |
| Economic glossary | 46 |
This Half-year Financial Report as of 30 June 2017 was drafted in compliance with Italian Legislative Decree no. 58/1998 as amended, as well as the Consob Regulation on Issuers. This Half-year Financial Report has been prepared in compliance with International Financial Reporting Standards (« IFRS ») issued by the International Accounting Standards Board (« IASB ») and approved by the European Union and in accordance with IAS 34 – Interim Financial Reporting.
Half-year Financial Report 2017 7
| 1st half | |||
|---|---|---|---|
| 2017 | 2016 | 2016 | |
| In millions of euros | |||
| Data on financial position | |||
| Net revenues | 725.3 | 706.5 | 1,313.1 |
| Gross industrial margin | 227.9 | 216.4 | 389.2 |
| Operating income | 53.0 | 47.8 | 60.9 |
| Profit before tax | 36.5 | 30.0 | 25.5 |
| Net profit | 21.1 | 18.0 | 14.0 |
| .Non-controlling interests | |||
| .Group | 21.1 | 18.0 | 14.0 |
| Data on financial performance | |||
| Net capital employed (NCE) | 841.3 | 873.1 | 884.7 |
| Net debt | (450.2) | (479.9) | (491.0) |
| Shareholders' equity | 391.1 | 393.2 | 393.7 |
| Balance sheet figures and financial ratios | |||
| Gross margin as a percentage of net revenues (%) | 31.4% | 30.6% | 29.6% |
| Net profit as a percentage of net revenues (%) | 2.9% | 2.5% | 1.1% |
| ROS (Operating income/net revenues) | 7.3% | 6.8% | 4.6% |
| ROE (Net profit/shareholders' equity) | 5.4% | 4.6% | 3.6% |
| ROI (Operating income/NCE) | 6.3% | 5.5% | 6.9% |
| EBITDA | 114.0 | 101.5 | 170.7 |
| EBITDA/net revenues (%) | 15.7% | 14.4% | 13.0% |
| Other information | |||
| Sales volumes (unit/000) | 280.7 | 276.7 | 532.0 |
| Investments in property, plant and equipment and intangible assets | 38.8 | 47.0 | 96.7 |
| Research and Development2 | 33.9 | 35.1 | 50.1 |
| Employees at the end of the period (number) | 6,584 | 7,025 | 6,706 |
1_ For a definition of individual items, see the "Economic Glossary". 2_The item Research and Development includes investments for the period recognised in the statement of financial position and costs recognised in profit and loss.
| EMEA and AMERICAS |
INDIA | ASIA PACIFIC 2W |
TOTAL | ||
|---|---|---|---|---|---|
| 1st half of 2017 | 145.5 | 99.4 | 35.8 | 280.7 | |
| Sales volumes | 1st half of 2016 | 137.6 | 101.7 | 37.5 | 276.7 |
| (units/000) | Change | 7.9 | (2.3) | (1.7) | 4.0 |
| Change % | 5.8% | -2.2% | -4.4% | 1.4% | |
| 1st half of 2017 | 479.6 | 160.8 | 84.9 | 725.3 | |
| Turnover | 1st half of 2016 | 456.4 | 165.0 | 85.1 | 706.5 |
| (million euros) | Change | 23.2 | (4.2) | (0.2) | 18.8 |
| Change % | 5.1% | -2.5% | -0.2% | 2.7% | |
| 1st half of 2017 | 3,741.9 | 1,977.3 | 827.8 | 6,547.0 | |
| Average number of staff | 1st half of 2016 | 3,855.3 | 2,274.7 | 874.5 | 7,004.5 |
| (no.) | Change | (113.4) | (297.4) | (46.7) | (457.5) |
| Change % | -2.9% | -13.1% | -5.3% | -6.5% | |
| 1st half of 2017 | 27.6 | 7.9 | 3.3 | 38.8 | |
| Investments in property, plant and equipment and |
1st half of 2016 | 36.6 | 5.9 | 4.5 | 47.0 |
| intangible assets | Change | (9.0) | 2.0 | (1.2) | (8.2) |
| (million euros) | Change % | -24.6% | 33.9% | -27.1% | -17.5% |
| 1st half of 2017 | 25.9 | 4.9 | 3.1 | 33.9 | |
| Research and | 1st half of 2016 | 28.9 | 3.7 | 2.5 | 35.1 |
| Development3 (million euros) |
Change | (3.0) | 1.2 | 0.5 | (1.2) |
| Change % | -10.4% | 33.8% | 21.7% | -3.4% |
3_ The item Research and Development includes investments for the period recognised in the statement of financial position and costs recognised in profit and loss.
The Piaggio Group is Europe's largest manufacturer of two-wheeler motor vehicles and an international leader in its field. The Group is also a major player worldwide in the commercial vehicles market.
The mission of the Piaggio Group is to generate value for its stakeholders by acting as a global player that creates superior quality products, services and solutions for urban and extraurban mobility that respond to evolving needs and lifestyles.
To stand out as a player that contributes to the social and economic growth of the communities in which it operates, considering, in its activities, the need to protect the environment and the collective well-being of the community. To be an Italian global player in the light mobility segment, standing out for its superior design, creativity and tradition. To become a leading European company with a world class reputation, championing a business model based on the values of quality and tradition, and on the ongoing creation of value.
The Group, with headquarters in Pontedera (Pisa, Italy), operates at an international level through production sites located in Pontedera, which manufactures two-wheeler vehicles under the Piaggio, Vespa and Gilera brands, vehicles for light transport for the European market and engines for scooters and motorcycles; in Noale (Venice) with a technical centre for the development of motorcycles for the entire Group and the headquarters of Aprilia Racing; in Scorzè (Venice), which manufactures Aprilia, Scarabeo and Derbi two-wheelers, and Piaggio Wi-Bikes; in Mandello del Lario (Lecco), which manufactures Moto Guzzi vehicles and engines; in Baramati (in the Indian state of Maharashtra), which manufactures three- and four-wheeler light transport vehicles for the Indian market and exports, scooters for the Indian market and engines for the Group's commercial vehicles; in Vinh Phuc (Vietnam), which manufactures scooters and engines for the local market and Asean area. The Piaggio Group is also a 45% stakeholder in a joint-venture operation in China (in Foshan, in the Guangdong province) which is therefore consolidated with the equity method in the Group's results. In the USA, Pasadena, California, is home to the Piaggio Group Advanced Design Center for R&D. In addition, Piaggio Fast Forward Inc. was set up in Cambridge, Massachusetts in June 2015, a subsidiary of Piaggio & C. S.p.A., for research into innovative solutions in the mobility and transport sector.
The Group's range of products, sold in almost 100 countries, includes scooters, motorcycles and mopeds from 50 to 1,400cc, 3- and 4-wheeler vehicles, plus a new concept of electric bicycle.
Ape is a successful brand with over sixty years of history; it is recognised in Europe and worldwide as the choice for light, handy and versatile transport, making Piaggio the absolute market leader in India in this specific product segment.
The Aprilia brand has racing in its blood and flies the sporting flag for the Piaggio Group. With 294 Grand Prix races won in the Road Racing World Championship, Aprilia holds the record for the most wins of any European manufacturer in the history of the premier class motorcycle road racing. In the Superbike World Championship, Aprilia conquered 41 wins and 89 podiums. To these are added as many as 54 world titles: 38 in World motorcycle racing championships (20 in the 125cc class and 18 in the 250cc class), 7 in the Superbike World Championships (winning both the Rider's and Manufacturer's titles in 2010, 2012 and 2014, and the Manufacturer's title in 2013) and 9 in Off Road races (7 in Supermoto and 2 in Trials).
Derbi is the first motorcycle for many generations of young riders. The brand has a competitive spirit, winning 21 world titles and embracing a motorcycling philosophy centred on sport, adventure and fun.
Gilera, the stylish, sporty Italian brand, produces premium vehicles with a standout style, performance and technology. Gilera is focused on a young, sportsoriented target clientèle looking for a vehicle with a superior performance and a dynamic, distinctive design that caters for their mobility needs, with advanced technological solutions that offer an outstanding riding experience.
Moto Guzzi is one of the world's best known brands of motorcycle, with fans and clubs in all four corners of the globe. Founded in 1921, Moto Guzzi is part of Italy and the world's motorcycle history. The company's business has continued uninterrupted for more than 90 years, starting from the legendary Mandello del Lario site where the "Marchio dell'Aquila" originated in 1921.
Moto Guzzi has made a name for itself over the years manufacturing motorcycles renowned for their remarkable reliability, which have become famous thanks to their visibility at international rallies and première sporting events. The current Moto Guzzi range features 750cc to 1,400cc touring, road enduro, custom and naked bikes, all with 90° V twin cylinder engines and final cardan drive.
The Piaggio brand is a symbol of freedom in everyday life, offering a complete range of original, creative and intelligent products for metropolitan mobility, plus an exclusive, sophisticated style.
Close to its customers' needs, the Piaggio concept is driven by technological innovation, safety and respect for the environment.
Piaggio is a leader in the two-wheeler light mobility segment in Europe and the United States. Building on its leadership, history and brand value, it is developing major investments to meet the changing mobility needs of large Asian markets.
Piaggio Commercial Vehicles is the partner of choice for all customers that need a vehicle on a daily basis to meet their professional and business requirements, with a range of commercial vehicles that are compact, easy-to-handle, with a large load capacity and environmentally friendly.
Scarabeo
Scarabeo is one of the Piaggio Group premium brands. A unique design, the utmost in comfort and technological innovation are
the drivers behind the brand that is an Italian "style setter" among younger customers and the most exclusive high-wheeled scooter.
Vespa is the icon of a unique and distinctive lifestyle. Its eternal success stems from its remarkable historical background and iconic status.
Vespa is an icon of the two-wheeler segment, the brand which "invented" the scooter, with a wealth of values that all reflect an Italian way of life, a joie de vivre and a taste for beautiful objects.
On the strength of this success, Vespa has a vintage yet modern soul, a recognition worldwide that is unrivalled and a timeless image on all markets where it is sold. In Europe, Asia and America, Vespa is a byword for an exclusive, elegant, "Made in Italy" scooter.
| Board of Directors | |
|---|---|
| Chairman and Chief Executive Officer | Roberto Colaninno (1), (2) |
| Deputy Chairman | Matteo Colaninno |
| Directors | Michele Colaninno |
| Giuseppe Tesauro (3), (4), (5), (6) | |
| Graziano Gianmichele Visentin (4), (5), (6) | |
| Maria Chiara Carrozza (4) | |
| Federica Savasi | |
| Vito Varvaro (5), (6) | |
| Andrea Formica | |
| Board of Statutory Auditors | |
| Chairman | Piera Vitali |
| Statutory Auditors | Giovanni Barbara |
| Daniele Girelli | |
| Alternate Auditors | Giovanni Naccarato |
| Elena Fornara | |
| Supervisory Body | |
| Antonino Parisi | |
| Giovanni Barbara | |
| Ulisse Spada | |
| Chief Financial Officer | Simone Montanari |
| Executive in charge of financial reporting | Alessandra Simonotto |
Independent Auditors PricewaterhouseCoopers S.p.A.
(1) Director responsible for the internal control system and risk management
(2) Executive Director
(4) Member of the Appointment Proposal Committee
(5) Member of the Remuneration Committee
(6) Member of the Internal Control and Risk Management Committee
All the information on the powers reserved for the Board of Directors, the authority granted to the Chairman and CEO, as well as the functions of the various Committees of the Board of Directors, can be found in the Governance section of the Issuer's website www.piaggiogroup.com.
(3) Lead Indipendent Director
19 January 2017 – The consolidation of the Piaggio Group multibrand store distribution network, launched just two years ago, continued at a buoyant pace. In just a few months, thanks to the distribution network's involvement in the project, the Group opened 60 new sales outlets and ended 2016 achieving the important goal of 200 Motoplex centres opened worldwide - in Europe, the Americas, Oceania, Asia and on the Indian sub-continent, which will flank the traditional distribution network. One of the world's most important Motoplexes was inaugurated on 15 February 2017 in Bangkok. Through the Bangkok Motoplex, the Piaggio Group has expanded its offering in the Thai market, launching the motorcycle business with the Aprilia and Moto Guzzi brands, alongside the well-established scooter segment with Piaggio and Vespa. The goal is to further consolidate our position in a market with strong growth.
2 February 2017 – The Piaggio Group presented GITA and KILO - the first projects developed by Piaggio Fast Forward (PFF), an advanced US research centre for future mobility, established and controlled by Piaggio - in Boston, just a stone's throw from Harvard and the MIT. Through its centre, the Group is exploring the world of mobility and thinking about its future, expanding its vision to technological solutions that are far wider-ranging than its current core business.
GITA is an autonomous, intelligent vehicle, designed to assist people. It can transport up to 18 kg, and observes and communicates. It can follow a person, reaching 35km/h and can move autonomously in a mapped environment. Its round shape and clean lines are a part of its personality.
KILO is the "big brother" of GITA; thanks to its larger payload, it is able to carry up to 100 kg in weight in its 120-litre load area. It is incredibly stable thanks to the 3-wheel support.
GITA and KILO are revolutionary because they can assist people in their activities when out and about on a daily basis, increasing the radius of action and limited load capacities of human beings. In fact the KILO and GITA have been designed as a platform for mobility and can be customised and integrated to meet different needs in multiple scenarios.
1 March 2017 – Effective from 1 March 2017, Simone Montanari replaced Gabriele Galli as CFO who left the Group after a cycle lasting more than a decade during which he contributed to the achievement of major goals with his experience and expertise.
30 March 2017 – The Piaggio Group announced that in recent months it had launched the production of 2-, 3- and 4-wheeler vehicles that comply with new Bharat Stage IV emission standards, which came into effect on 1 April 2017. Specifically, the Aprilia SR 150 scooter launched on the Indian market in August already complied with this stringent regulation on emissions already from the start of its production, while the Vespa models and 3- and 4-wheeler commercial vehicles manufactured at the Baramati plant (State of Maharashtra) comply with the Bharat Stage IV standards already from the month of February. The Piaggio Group has always focussed special attention on the engineering of its products to reduce emissions to a minimum. This attentive policy has allowed it to comply with the new regulation ahead of schedule without any risk of negative impacts on production or sales.
6 April 2017 - The Court of Turin handed down a historical ruling that declared the full validity of the 3D brand of the Vespa scooter and acknowledged the creative nature and artistic value of its shape. The ruling came at the end of a case started in 2013, when, on the occasion of the inauguration of EICMA, the two-wheeler show in Milan, the Mobile Unit of the Rho Company of the Italian Finance Police seized 11 scooters on display belonging to 7 different exhibitors because their shape was an imitation of a Vespa. The Italian Finance Police seized the vehicles after determining that the products violated the exclusive right of the Piaggio Group to the so-called "three-dimensional brand" registered by Piaggio to protect the distinctive shape of a Vespa. It is a title constituting an essential means of protection for the unique lines that characterise Vespa and is the most comprehensive instrument to protect the iconic shape of this global product. One of the companies involved in the seizure, the Chinese manufacturer Taizhou Zhongneng, filed a countersuit against Piaggio at the Court of Turin to declare null the brand constituted by the 3D form of the scooter and to rule out that the "Ves" scooter seized at EICMA was a counterfeit of the said brand. However, the Court of Turin rejected petitions and threw out the suit.
12 April 2017 - The Extraordinary Shareholders' Meeting of Piaggio & C. S.p.A. resolved to cancel 3,054,736 treasury shares. The share capital of the company (fully subscribed and paid up) is unchanged at €207,613,944.37 and is now divided into 358,153,644 shares. The change was filed for entry at the competent Register of Companies on 18 April 2017 and registered on 19 April 2017.
29 May 2017 - Piaggio Fast Forward (PFF), the advanced US research centre for future mobility established and controlled by the Piaggio Group, won the Disruptive Genius – Company category of the 2017 MITX Awards, for distinction in "unconventional innovative thinking, being the first to explore new frontiers and promoting the innovation economy through its operations".
Now in its 21st edition, the MITX Awards are an important annual competition for the technology and innovation sector held in the States.
12 June 2017 - The new Piaggio Porter 700 was unveiled in India - a modern, versatile, revolutionary vehicle for India, developed based on continual engagement between the Company and customers. The Piaggio Porter 700 is ideal for last-mile deliveries, but also perfect for intercity transport.
13 June 2017 - Aprilia was hailed as the most innovative company in Italy in the Motorcycle/Scooter segment, by the German Quality and Finance Institute, which hands out "TOP INNOVATIVE COMPANY" quality seals each year.
28 June 2017 – A long-term bond of a total value of 30 million euros was issued, subscribed by Fondo Sviluppo Export, the fund set up by SACE (CDP Group) and managed by Amundi SGR. The purpose of the five-year bond is to consolidate the Piaggio Group's internationalisation and support expansion on new markets, as part of ongoing actions to optimise the Group's financial debt structure and extend maturity times. The issue, for institutional investors, was subscribed by Fondo Sviluppo Export, with UniCredit acting as placement agent, using resources provided by SACE for Italian export companies, and is wholly guaranteed by SACE.
| 1st half of 2017 | 1st half of 2016 | Change | |||||
|---|---|---|---|---|---|---|---|
| In millions of euros | Accounting for a % | In millions of euros | Accounting for a % | In millions of euros | % | ||
| Net revenues | 725.3 | 100.0% | 706.5 | 100.0% | 18.8 | 2.7% | |
| Cost to sell4 | 497.4 | 68.6% | 490.1 | 69.4% | 7.3 | 1.5% | |
| Gross industrial margin4 | 227.9 | 31.4% | 216.4 | 30.6% | 11.5 | 5.3% | |
| Operating expenses | 174.9 | 24.1% | 168.6 | 23.9% | 6.3 | 3.7% | |
| EBITDA4 | 114.0 | 15.7% | 101.5 | 14.4% | 12.5 | 12.3% | |
| Amortisation/Depreciation | 61.0 | 8.4% | 53.7 | 7.6% | 7.3 | 13.6% | |
| Operating income | 53.0 | 7.3% | 47.8 | 6.8% | 5.2 | 10.9% | |
| Result of financial items | (16.5) | -2.3% | (17.7) | -2.5% | 1.2 | -6.9% | |
| Profit before tax | 36.5 | 5.0% | 30.0 | 4.2% | 6.4 | 21.4% | |
| Taxes | 15.3 | 2.1% | 12.0 | 1.7% | 3.3 | 27.5% | |
| Net profit | 21.1 | 2.9% | 18.0 | 2.5% | 3.1 | 17.4% |
4_ For a definition of the parameter, see the "Economic Glossary".
| 1st half of 2017 | 1st half of 2016 | Change | |
|---|---|---|---|
| In millions of euros | |||
| EMEA and Americas | 479.6 | 456.4 | 23.2 |
| India | 160.8 | 165.0 | (4.2) |
| Asia Pacific 2W | 84.9 | 85.1 | (0.2) |
| Total | 725.3 | 706.5 | 18.8 |
| Two-wheeler | 541.7 | 507.4 | 34.3 |
| Commercial Vehicles | 183.6 | 199.1 | (15.5) |
| Total | 725.3 | 706.5 | 18.8 |
In terms of consolidated turnover, the Group closed the first half of 2017 with net revenues up compared to the same period in 2016 (+2.7%). At a geographic level, growth in revenues in EMEA and the Americas (+5.1%) more than offset the downturn in India (-2.5%; -7.4% with constant exchange rates) and the decrease in Asia Pacific (-0.2%; - 1.7% with constant exchange rates).
As for product type, the increase in turnover from two-wheeler vehicles (+6.8%) considerably made up for the fall in revenues recorded for Commercial Vehicles (-7.8%). Consequently, the impact of twowheeler vehicles on turnover went up from 71.8% in the first half of 2016 to the current figure of 74.7%; conversely, the impact of Commercial Vehicles fell from 28.2% in the first half of 2016 to the current figure of 25.3%.
The gross industrial margin of the Group has shown an increase in absolute terms compared to the first half of the previous year (+11.5 million euro) in relation to the net turnover equal to 31.4% (30.6% in the first half of 2016).
Amortisation/Depreciation included in the gross industrial margin was equal to €18.2 million (€18.7 million in the first half of 2016).
Operating expenses incurred during the first half of 2017 increased compared to the same period of the previous year, amounting to €174.9 million.
Operating expenses include amortisation and depreciation not covered by the gross industrial margin totalling €42.8 million (€35.0 million in the first half of 2016).
The change in the aforementioned income statement resulted in a greater consolidated EBITDA, which was equal to €114.0 million (€101.5 million in the first half of 2016). In relation to turnover, EBITDA was equal to 15.7% (14.4% in the first half of 2016). Operating income (EBIT) improved, amounting to €53.0 million (€47.8 million in the first half of 2016); in comparison with turnover, EBIT was equal to 7.3% (6.8% in the first half of 2016).
The result of financing activities improved compared to the first half of the previous year by €1.2 million, with Net Charges amounting to €16.5 million (€17.7 million in the first half of 2016). This improvement is related to the positive trend of currency operations and to the decrease in average debt for the period, as well as the reduction in the cost of funding, partially offset by the lower capitalisation of borrowing costs.
Income taxes for the period are estimated at €15.3 million, equivalent to 42% of profit before tax.
Net profit stood at €21.1 million (2.9% of turnover), up on the figure for the same period of the previous year (€18.0 million, or 2.5% of turnover).
| 1st half of 2017 | 1st half of 2016 | Change | |
|---|---|---|---|
| In thousands of units | |||
| EMEA and Americas | 145.5 | 137.6 | 7.9 |
| India | 99.4 | 101.7 | (2.3) |
| Asia Pacific 2W | 35.8 | 37.5 | (1.7) |
| Total | 280.7 | 276.7 | 4.0 |
| Two-wheeler | 202.1 | 182.1 | 20.0 |
| Commercial Vehicles | 78.7 | 94.7 | (16.0) |
| Total | 280.7 | 276.7 | 4.0 |
In the first half of 2017, the Piaggio Group sold 280,700 vehicles worldwide, with an increase in volumes totalling around 1.4% compared to the same period of the previous year, when 276,700 vehicles were sold. Sales in EMEA and the Americas were up (+ 5.8%), driven by the volumes achieved in the Americas (+ 15.7%) and Europe (+ 6.3%), while there was a fall in vehicles sold in India (- 2.2%), and in Asia Pacific 2W (- 4.4%). As regards product type, the increase in sales of two-wheeler vehicles (+11.0%) more than offset the downturn in commercial vehicles (- 16.9%).
For a more detailed analysis of market trends and results, see relative sections.
In 2017, the Group continued to rationalise operations and organisational efficiency.
The decrease in the workforce of 122 is mainly concentrated in India, where the fall in demand for commercial vehicles led to less use of temporary labour.
| Breakdown of company employees by region |
As of 30 June 2017 | As of 31 December 2016 |
As of 30 June 2016 |
|---|---|---|---|
| Employee/staff numbers | |||
| EMEA and Americas | 3,729 | 3,752 | 3,851 |
| of which Italy | 3,496 | 3,518 | 3,619 |
| India | 2,016 | 2,113 | 2,282 |
| Asia Pacific 2W | 839 | 841 | 892 |
| Total | 6,584 | 6,706 | 7,025 |
| Average number of company employees by geographical area |
1st half of 2017 | 1st half of 2016 | Change |
|---|---|---|---|
| Employee/staff numbers | |||
| EMEA and Americas | 3,741.9 | 3,855.3 | (113.4) |
| of which Italy | 3,507.5 | 3,622.8 | (115.3) |
| India | 1,977.3 | 2,274.7 | (297.4) |
| Asia Pacific 2W | 827.8 | 874.5 | (46.7) |
| Total | 6,547.0 | 7,004.5 | (457.5) |
Average employee numbers were affected by seasonal workers in the summer (on fixed-term employment contracts).
In fact the Group uses fixed-term employment contracts to handle typical peaks in demand in the summer months.
In the first half of 2017, the Piaggio Group continued its policy of retaining technological leadership in the sector, allocating total resources of €33.9 million to research and development, of which €24.2 million capitalised under intangible assets as development costs.
| 1st half of 2017 | 1st half of 2016 | |||||
|---|---|---|---|---|---|---|
| Capitalised | Expenses | Total | Capitalised | Expenses | Total | |
| In millions of euros | ||||||
| Two-wheeler | 20.8 | 7.3 | 28.1 | 21.9 | 8.7 | 30.6 |
| Commercial Vehicles | 3.4 | 2.4 | 5.8 | 3.1 | 1.4 | 4.5 |
| Total | 24.2 | 9.7 | 33.9 | 25.0 | 10.2 | 35.1 |
| EMEA and Americas | 18.5 | 7.3 | 25.9 | 19.4 | 9.4 | 28.9 |
| India | 3.2 | 1.7 | 4.9 | 3.4 | 0.3 | 3.7 |
| Asia Pacific 2W | 2.4 | 0.7 | 3.1 | 2.1 | 0.4 | 2.5 |
| Total | 24.2 | 9.7 | 33.9 | 25.0 | 10.2 | 35.1 |
| Statement of financial position | As of 30 June 2017 | As of 31 December 2016 | Change |
|---|---|---|---|
| In millions of euros | |||
| Net working capital | (52.6) | (36.3) | (16.3) |
| Property, plant and equipment | 296.1 | 312.8 | (16.7) |
| Intangible assets | 656.1 | 668.7 | (12.6) |
| Financial assets | 7.8 | 7.9 | (0.1) |
| Provisions | (66.1) | (68.4) | 2.3 |
| Net capital employed | 841.3 | 884.7 | (43.4) |
| Net Financial Debt | 450.2 | 491.0 | (40.8) |
| Shareholders' equity | 391.1 | 393.7 | (2.6) |
| Sources of funds | 841.3 | 884.7 | (43.4) |
| Non-controlling interests | (0.3) | (0.3) | 0.0 |
5_ For a definition of individual items, see the "Economic Glossary".
As of 30 June 2017, net working capital amounted to negative €52.6 million, with a cash generation equal to approximately €16.3 million during the first half of 2017.
Property, plant and equipment, which include investment property, totalled €296.1 million as of 30 June 2017, down by around €16.7 million compared to 31 December 2016. This decrease is mainly due to depreciation, which exceeded investments for the period by approximately €11.4 million, and to the effect of the devaluation of Asian currencies against the euro (approximately €5.2 million). The adjustment of the value of investment property to fair value and divestments for the period refer to the remaining decrease of €0.1 million.
Intangible assets totalled €656.1 million, down by approximately €12.6 million compared to 31 December 2016. This decrease is due to amortisation, which exceeded investments for the period by approximately €10.8 million, and to the effect of the devaluation of Asian currencies against the euro (approximately €1.3 million), as well as disposals for the period, accounting for the remaining decrease of €0.5 million.
Financial assets totalled €7.8 million, practically in line with figures for the previous financial year.
Provisions totalled €66.1 million, decreasing compared to 31 December 2016 (€68.4 million).
As fully described in the next section on the "Consolidated Statement of Cash Flows", net financial debt as of 30 June 2017 was equal to €450.2 million, compared to €491.0 million as of 31 December 2016. The decrease of approximately €40.8 million is mainly attributable to the positive performance of operations and greater efficiency of working capital management, generating cash flows allowing for the payment of dividends (€19.7 million) as well as the financing of the investments programme.
The Group shareholders' equity as of 30 June 2017 totalled €391.1 million, down by around €2.6 million compared to 31 December 2016.
The Consolidated Statement of Cash Flows, prepared in accordance with the schedules envisaged by the International Financial Reporting Standards, is presented in the "Consolidated Financial Statements and Notes as of 30 June 2017"; the following is a comment relating to the summary statement shown.
| Change in consolidated net debt | 1st half of 2017 | 1st half of 2016 | Change | |
|---|---|---|---|---|
| In millions of euros | ||||
| Opening Consolidated Net Debt | (491.0) | (498.1) | 7.2 | |
| Cash flow from operating activities | 79.9 | 76.0 | 3.9 | |
| (Increase)/Reduction in Working Capital | 16.3 | 14.9 | 1.4 | |
| (Increase)/Reduction in net investments | (31.7) | (43.5) | 11.9 | |
| Change in shareholders' equity | (23.7) | (29.1) | 5.4 | |
| Total change | 40.8 | 18.2 | 22.6 | |
| Closing Consolidated Net Debt | (450.2) | (479.9) | 29.7 |
During the first half of 2017 the Piaggio Group generated financial resources amounting to €40.8 million.
Cash flow from operating activities, defined as net profit, minus non-monetary costs and income, was equal to €79.9 million.
Working capital generated a cash flow of approximately €16.3 million; in detail:
million for property, plant and equipment and intangible assets.
Investing activities involved a total of €31.7 million of financial resources. Investments for the period refer to approximately €24.2 million for capitalised development expenditure, and approximately €14.6
As a result of the above financial dynamics, which generated a use of €40.8 million, the net debt of the Piaggio Group amounted to €– 450.2 million.
6_Net of customer advances.
In accordance with Consob Communication DEM/6064293 of 28 July 2006 as amended (Consob Communication no. 0092543 of 3 December 2015 that enacts ESMA/2015/1415 guidelines on alternative performance measures), Piaggio, in its Report on Operations, refers to some alternative performance measures, in addition to IFRS financial measures (Non-GAAP Measures).
These are presented in order to measure the trend of the Group's operations to a better extent and should not be considered as an alternative to IFRS measures.
In particular the following alternative performance measures have been used:
The Piaggio Group is comprised of and operates by geographic segments - EMEA and the Americas, India and Asia Pacific - to develop, manufacture and distribute two-wheeler and commercial vehicles.
Each Geographical Segment has production sites and a sales network dedicated to customers in the relative segment. Specifically:
› Asia Pacific 2W has production sites and deals with the distribution and sale of two-wheeler vehicles.
For details of final results from each operating segment, reference is made to the Notes to the Consolidated Financial Statements.
The volumes and turnover in the three geographic segments, also by product type, are analysed below.
| 1st half of 2017 | 1st half of 2016 | Change % | Change | |||||
|---|---|---|---|---|---|---|---|---|
| Two-wheeler | Volumes Sell-in7 (units/ 000) |
Turnover (million euros) |
Volumes Sell-in (units/ 000) |
Turnover (million euros) |
Volumes | Turnover | Volumes | Turnover |
| EMEA and Americas | 138.3 | 433.8 | 130.5 | 410.1 | 6.0% | 5.8% | 7.8 | 23.6 |
| of which EMEA | 131.0 | 395.0 | 124.2 | 378.7 | 5.5% | 4.3% | 6.8 | 16.2 |
| (of which Italy) | 29.4 | 96.9 | 28.6 | 90.9 | 2.5% | 6.6% | 0.7 | 6.0 |
| of which America | 7.3 | 38.8 | 6.3 | 31.4 | 16.7% | 23.5% | 1.0 | 7.4 |
| India | 27.9 | 23.1 | 14.1 | 12.2 | 97.7% | 89.3% | 13.8 | 10.9 |
| Asia Pacific 2W | 35.8 | 84.9 | 37.5 | 85.1 | -4.4% | -0.2% | (1.7) | (0.2) |
| TOTAL | 202.1 | 541.7 | 182.1 | 507.4 | 11.0% | 6.8% | 20.0 | 34.3 |
| Scooters | 180.2 | 366.2 | 162.9 | 344.2 | 10.6% | 6.4% | 17.2 | 22.0 |
| Motorcycles | 21.9 | 106.9 | 19.1 | 96.8 | 14.5% | 10.4% | 2.8 | 10.1 |
| Spare parts and Accessories | 67.3 | 64.8 | 3.8% | 2.5 | ||||
| Other | 1.4 | 1.6 | -15.3% | (0.2) | ||||
| TOTAL | 202.1 | 541.7 | 182.1 | 507.4 | 11.0% | 6.8% | 20.0 | 34.3 |
7_"Sell-in" means Group sales to its distribution network.
Two-wheeler vehicles can mainly be grouped into two product segments, scooters and motorcycles, in addition to the related spare parts and accessories business, the sale of engines to third parties, involvement in main two-wheeler sports championships and technical service.
The world two-wheeler market comprises two macro areas, which clearly differ in terms of characteristics and scale of demand: economically advanced countries (Europe, United States, Japan) and emerging nations (Asia Pacific, China, India, Latin America).
In the first macro area, which is a minority segment in terms of volumes, the Piaggio Group has a historical presence, with scooters meeting the need for mobility in urban areas and motorcycles for recreational purposes.
In the second macro area, which in terms of sales, accounts for most of the world market and is the Group's target for expanding operations, two-wheeler vehicles are the primary mode of transport.
Based on available data, in the first half of 2017, the world market of two-wheeler motor vehicles (scooters and motorcycles) recorded sales of approximately 22 million vehicles, an increase of 1.5% compared to the same period of the previous year.
India, the most important two-wheeler market, reported a considerable increase, also in the first six months of 2017, closing with sales of nearly 9 million vehicles, up by 2.9% compared to the first half of 2016.
The People's Republic of China recorded a slight loss in the first half of 2017 (-0.7%), closing at just under 3.8 million vehicles sold.
The Asian area, Asean 5, reported an increase of 1.4%, closing with sales of just over 6.1 million units. In Indonesia, the main market in this area, the downturn in sales continued in the first half of 2017, with a drop of 4.8%, and over 2.8 million vehicles sold. Conversely, sales in Vietnam went up (over 1.5 million units sold; +5.7% compared to the first half of 2016). Figures for sales in the Philippines were significant, with an increase of 13.7%, equal to approximately 617 thousand units.
Other countries in the Asian area (Singapore, Hong Kong, South Korea, Japan, Taiwan, New Zealand and Australia) overall recorded a considerable increase compared to the first half of 2016, closing with sales of over 737 thousand units (+9.7%). In this area, Taiwan continued its growth trend, reporting a 17.1% increase compared to the first half of 2016 and closing the period with 411 thousand units sold. The Japanese market picked up, recording a growth of 4.3% and selling over 199 thousand vehicles.
The North American market recorded a downturn compared to the first half of 2016 (- 3.8%), selling over 287 thousand vehicles.
Brazil, the most important market in South America, also reported a strong downturn in the first half of 2017 (- 11.1%), closing with sales of just over 402 thousand vehicles.
Europe, which is the reference area for the Piaggio Group's operations, reported a fall in sales on the two-wheeler market by 1.5% compared to the first half of 2016 (-0.8% for the motorcycle segment and -2.2% for the scooter segment). On the scooter market, the 50cc segment recorded a positive trend in the first half of 2017 (+3.8%), while the over 50cc segment posted a negative performance (-5.8%). In the motorcycle segment, the over 50cc category reported a downturn (-1.5%), while performance in the 50cc segment was positive (+14%).
In the first half of 2017, the European scooter market stood at 346,000 registered vehicles, equal to a 2.2% drop in sales compared to the same period in 2016.
Vehicle registrations were higher in the over 50cc segment, with 206,900 units against 139,100 units in the 50cc scooter segment. Over 50cc scooters decreased by 5.8% compared to the first six months of 2016, whilst 50cc scooters went up by 3.8%.
In the first six months of 2017, Italy was still the most important market with 82,000 units, followed by France with 62,650 and Spain with 48,350. Holland ranked fourth in terms of sales (36,130 units), exceeding Germany which placed fifth, with sales of 31,180 units. Greece reported 13,370 units, while the United Kingdom closed with 12,555 vehicles registered.
In the first half of 2017, the Italian market recorded a growth of 5.5% compared to the first half of the previous year. The increase is due to the over 50cc segment, which went up by 7.1% to 71,800 thousand units, while the 50cc segment, down by 4.5% compared to the first six months of 2016, recorded 10,200 units sold.
With 62,650 vehicles sold, France reported a 2.2% increase compared to sales of 61,300 vehicles in the same period in the previous year. The increase was generated in the 50cc segment (+4.9%), while the over 50cc segment remained stable (- 0.8%).
The greatest increase was recorded in Holland, where the market grew by 8.3%, thanks to the excellent performance of the 50cc segment (+9.4%), which offset the 20.5% decrease in the over 50cc segment, which had little impact, in terms of figures, on the overall Dutch market.
The German and Spanish markets both reported downturns.
The German market registered a decrease of 6.2%, with approximately 31,180 vehicles sold in the first half of 2017 compared to 33,200 in the same period of the previous year. On this market, the 50cc segment performed well (+3.4%), while the over 50cc segment reported a downturn (-16.1%).
Spain continued its negative trend, reporting a decrease of 9%, following the downturn in the over 50cc segment (-12.9%), which was only partially offset by the excellent trend in the 50cc scooter segment (+17.7%).
In the first half of 2017, the United States, which is the main market in the area (accounting for 90% of the reference area) continued its downturn (-5.8%), with 13,150 thousand units sold: this negative trend was greater in the 50cc segment, with sales down by 7.9%, while the over 50cc scooter segment recorded a 3.2% decrease.
The Piaggio Group's most important market is Vietnam, where the automatic scooter market, closing with over 690 thousand vehicles sold, recorded a 6.2% growth.
The automatic scooter market increased by 9.8% in the first half of 2017, closing with nearly 3 million units sold.
The over 90cc range is the main product segment, with nearly 2.9 million units sold in the first half of 2017 (+9% compared to the previous year) and accounting for 98% of the total automatic scooter market. The 50cc scooter segment is not operative in India.
With 354 thousand units registered, the motorcycle market was basically stable in the first half of 2017 (-0.8% compared to the first half of 2016). The 50cc segment recorded a 14% increase, with 18,730 units sold; the 51-125cc motorcycle segment recorded sales of 36,800 units (-21%), while the 126-750cc segment reported sales of just under 106,300 units (+2.7%). The over 750cc segment was basically stable (+0.9%), selling 192,200 vehicles.
In the first half of 2017, the main European market was Germany with 74,200 units, while France ranked second (69,150); Italy came third with 54,800 vehicles, exceeding the United Kingdom which closed the period with 43,955 units sold; Spain ranked fifth with 28,650 vehicles sold.
In the first half of 2017, sales trends in main countries in the area were as follows: Italy (+7.7%), France (+5.3%), Spain (+2.4%), United Kingdom (-10.1%), and Germany (-11.6%).
In the United States (accounting for 89% of the area), the motorcycle segment recorded a 4.8% decrease, selling 236 thousand units against 248 thousand units in the first half of 2016. The negative trend in the over 50cc segment (-5%) was only partially offset by the positive performance (+3%) of the 50cc motorcycle segment.
The most important motorcycle market in Asia is India, which reported sales of more than 5.6 million vehicles in the first half of 2017, with a slight decrease compared to the first six months of 2016 (-0.2%). The motorcycle market in the Asean 5 area is far less important than the scooter sector. Sales of motorcycles in Vietnam were not significant.
During the first half of 2017, the Piaggio Group sold a total of 202,100 units in the two-wheeler segment worldwide, accounting for a net turnover equal to approximately €541.7 million (+6.8%), including spare parts and accessories (€67.3 million, +3.8%).
In terms of volumes and turnover, all geographic segments reported positive trends, apart from Asia Pacific. As for turnover, the increases recorded in America (+23.5%) and India (+89.3%) were particularly important. The results recorded on the Indian market are due to the success of the new Aprilia SR 150 scooter unveiled in July 2016.
On the European market, the Piaggio Group achieved a total share of 14.8% in the first half of 2017 (14.8% in the first half of 2016), confirming its leadership position on the total market for two-wheeler vehicles. In Italy, the Piaggio Group held a 19.6% share, maintaining its leadership position on the scooter market with its quota of 30.3%.
In India, the Group more than doubled volumes in the first half of 2017 compared to the same period of the previous year, closing at 27,917 vehicles thanks to the launch of the new Aprilia SR 150 model.
In Vietnam, sell-out volumes9 of Group scooters decreased by 25% in the first half of 2017, compared to the same period of the previous year.
The Group retained its strong position on the North American scooter market, where it closed the period with a market share of 19.1% (19.1% in the first half of 2016), and where it is committed to consolidating its profile in the motorcycle segment, through the Aprilia and Moto Guzzi brands.
Investments mainly targeted the following areas:
Industrial investments were also made, targeting safety, quality and the productivity of production processes.
8_Market shares for the first half of 2016 might differ from figures published last year, due to final vehicle registration data, which some countries publish with a few months' delay, being updated. 9_"Sell-out" means sales by the distribution network to final customers.
| 1st half of 2017 | 1st half of 2016 | Change % | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Commercial Vehicles | Volumes Sell-in (units/ 000) |
Turnover (million euros) |
Volumes Sell-in (units/ 000) |
Turnover (million euros) |
Volumes | Turnover | Volumes | Turnover | ||
| EMEA and Americas | 7.2 | 45.8 | 7.1 | 46.3 | 1.1% | -0.9% | 0.1 | (0.4) | ||
| of which EMEA | 6.4 | 44.2 | 6.4 | 44.3 | 0.4% | -0.4% | 0.0 | (0.2) | ||
| (of which Italy) | 2.5 | 26.1 | 2.6 | 25.6 | -5.3% | 2.2% | (0.1) | 0.6 | ||
| of which America | 0.8 | 1.7 | 0.8 | 1.9 | 7.0% | -13.9% | 0.1 | (0.3) | ||
| India | 71.5 | 137.8 | 87.5 | 152.8 | -18.4% | -9.9% | (16.1) | (15.1) | ||
| TOTAL | 78.7 | 183.6 | 94.7 | 199.1 | -16.9% | -7.8% | (16.0) | (15.5) | ||
| Ape | 75.5 | 134.0 | 90.4 | 149.3 | -16.5% | -10.2% | (15.0) | (15.2) | ||
| Porter | 2.0 | 23.3 | 1.7 | 19.6 | 16.3% | 19.1% | 0.3 | 3.7 | ||
| Quargo | 0.2 | 1.0 | 0.6 | 3.6 | -68.2% | -72.8% | (0.4) | (2.6) | ||
| Mini Truk | 1.0 | 2.7 | 1.9 | 4.3 | -47.2% | -37.2% | (0.9) | (1.6) | ||
| Spare parts and Accessories | 22.6 | 22.4 | 0.9% | 0.2 | ||||||
| TOTAL | 78.7 | 183.6 | 94.7 | 199.1 | -16.9% | -7.8% | (16.0) | (15.5) |
The Commercial Vehicles category includes three- and four-wheelers with a maximum mass below 3.5 tons (category N1 in Europe) designed for commercial and private use, and related spare parts and accessories.
In the first six months of 2017, the European light commercial vehicles market (vehicles with a maximum mass less than or equal to 3.5 tons), in which the Piaggio Group is active, recorded sales of 1,049,474 thousand units, a 4.7% increase compared to the first six months of 2016 (data source ACEA). In detail, the trends of main European reference markets are as follows: Germany (+3.3%), France (+6.4%), Italy (+6.5%) and Spain (+ 16.3%).
Performance on the Indian three-wheeler market, where Piaggio Vehicles Private Limited, a subsidiary of Piaggio & C. S.p.A. operates, was still negatively affected by the significant demonetisation policy adopted by the Indian Government in November 2016, with sales going down from 279,300 units in the first half of 2016 to 210,700 in the same period of 2017, registering a 24.6% decrease.
On this market, the trend was generated by the passenger vehicles segment (-31.8%; 154,700 units). Conversely, the cargo segment increased by 7%, from 52,300 units in the first six months of 2016 to 56,000 units in the first half of 2017. The traditional three-wheeler market is flanked by the four-wheeler light commercial vehicles (LCV) market (cargo vehicles for goods transport) where Piaggio Vehicles Private Limited operates. The LCV cargo market, with vehicles with a maximum mass below 2 tons, recorded sales of 62,180 units in the first six months of 2017, increasing by 3.8% compared to the first half of 2016.
During the first half of 2017, the Commercial Vehicles business generated sales of approximately €183.6 million, including around €137.8 million relating to spare parts and accessories, a 7.8% decrease compared to the same period in the previous year. 78,700 units were sold during the period, a decrease of around 16.9% compared to the first half of 2016.
On the EMEA and Americas market, the Piaggio Group sold 78,700 units, with sales increasing by 1.1% and a total net turnover of approximately €45.8 million, including spare parts and accessories for €9.2 million.
The Indian affiliate Piaggio Vehicles Private Limited (PVPL) sold 64,755 three-wheeler vehicles on the Indian market (78,991 in the first half of 2016) achieving a net turnover of approximately €113.0 million (€126.3 million in the first half of 2016).
The same subsidiary also exported 5,564 three-wheeler vehicles (6,377 in the first half of 2016); the downturn is mainly due to a slowdown in the sales of some African countries.
On the four-wheeler market, PVPL sales in the first half of 2017 fell by 47.3% compared to the first half of 2016, to 1,134 units.
In overall terms, the Indian affiliate PVPL registered a turnover of €137.8 million in the first half of 2017, down by 9.9% compared to the figure of €152.8 million for the same period of the previous year.
The Piaggio Group operates in Europe and India on the light commercial vehicles market (three and fourwheeler vehicles), with products designed for short range mobility in urban areas (European urban centres) and suburban areas (the product range for India).
in India the Group is present in the passenger vehicle and cargo sub-segments of the three-wheeler market, where it is market leader.
On the Indian three-wheeler market, Piaggio has a market share of 30.7% (28.3% in the first half of 2016). Detailed analysis of the market shows that Piaggio maintained its leadership position in the goods transport segment (cargo segment) with a share of 49.4% (52.8% in the first half of 2016). Its market share in the Passenger segment went up, standing at 24% (22.6% in the first half of 2016).
Besides the traditional three-wheeler market in India, Piaggio also operates on the four-wheeler light commercial vehicles (LCV) market (cargo vehicles for goods transport) with the Indian Porter range. On this market, its share fell to 1.8% (3.6% in the first half of 2016).
Investments mainly targeted the following areas:
Industrial investments were also made, targeting safety, quality and the productivity of production processes.
10_Market shares for the first half of 2016 might differ from figures published last year, due to final vehicle registration data, which some countries publish with a few months' delay, being updated.
As part of the revision of the current European Directive on driving licences, a report was published in April on the conclusion of the European Commission's study on "Training, assessing the ability and medical fitness of drivers". Improving road user education and training in Europe is an important strategic goal of the EU Commission for the 2011-2020 period. Another objective is to protect more vulnerable road users, and in particular motorcyclists and more senior drivers. The report outlined the following main suggestions: gradual access in all countries to licences to ride more powerful motorcycles; training that teaches users to perceive danger; a standard process to assess the physical fitness of drivers, in particular senior drivers, based on unambiguous, medical-based aspects rather than age.
In May, the European Commission (EC) published its set of initiatives "Europe on the Move", which has been expected since Juncker became Commission President. The initiatives do not specifically focus on two-wheeler vehicles, but on cars and heavy-duty vehicles to a greater extent, establishing a "programme for a socially fair transition towards clean, competitive and connected mobility" with a time frame up to 2025.
In June, the European Commission presented the final report of the study commissioned in January 2016 to a group of European laboratories to carry out testing on models and technologies currently on the market, to assess possible applicability with a view to 2020 - and the cost/benefit ratio - of Euro 5 requirements for L category vehicles.
The report mainly confirmed the requirements and limits laid down by Regulation 168/2013 and its delegated acts in most cases, apart from a few exceptions, mainly concerning in-vehicle diagnostic systems, the testing procedure for the durability of pollutant systems and entry into force of Euro 5 standards for some vehicle subcategories (trial, enduro motorcycles and minicar vehicles).
Based on the report, the Commission is preparing some proposed changes to the regulation and delegated acts to submit to the European Parliament and Council. The new proposed provisions are expected to be adopted by the Commission in December, starting the co-decision stage with the European Parliament and Council, which generally lasts one year. Consequently, amendments are expected to be published in the first few months of 2019.
During the first half of 2017, the study on the sound emissions of L category vehicles (powered two- and three-wheelers and quadricycles) assigned to a group of European Laboratories in mid-2016 by the European Commission also continued, to define future post-2020 approval limits. Emission measurements have been completed and the cost/benefit ratio of various possible scenarios will be assessed in July and August. The final report and recommendations of the EU Commission will be presented by consultants in September/ October 2017. The resulting EC proposal and relative application dates will then be discussed with the European Parliament and Council.
On 7 July, the third European Regulation on Real Driving Emissions (RDE Act 3) for passenger and goods' vehicles was published in the Official Journal of the European Union; this regulation mainly concerns the measurement of road nitrogen oxide emissions and particle number emissions and further develops approval testing methods. The requirements will be compulsory from 1 September 2017 for newly approved vehicles (some less rigid constraints will apply to small-volume vehicle manufacturers).
A new bench testing cycle will also come into force on this date for vehicles, for approval measurements of pollutant emissions. This procedure (WLTP - Worldwide harmonized Light vehicles Test Procedure) is stricter than the current one and has been established at international level within the framework of the United Nations Commission for Europe (UNECE).
One year on from the publication of the EU Commission's proposal to replace Directive 2007/46, which contains main requirements currently applicable for the approval of motor vehicles, the European Parliament's Committee on Internal Market and Consumer Protection (IMCO) adopted a report in February, with some amendments to the original proposal - designed to further restrict approval testing (for example concerning market surveillance, recall campaigns, the designation and monitoring of Technical Services, etc.). The IMCO Report was approved by Parliament in a plenary session in April and text of the proposed amendment will be adopted by the European Council in May. At present, it is not possible to predict when the new legislation will be adopted.
On 13 January, the Government issued a decree implementing European Directive 2014/94 on the deployment of alternative fuels infrastructure (hydrogen, biofuels, natural gas and LPG) over the next few years. The decree also established the "National Strategic Framework" with objectives and procedures for developing the infrastructure, incorporating measures already introduced by the National Infrastructure Plan for recharging electric vehicles (PNire) and promoting guidelines for urban Sustainable Mobility plans.
In March, the Ministry of Transport issued Circular no. 7260 on 27/03/2017, which requires AM driving licence applicants (applicants for licences to ride two-wheelers up to 50cc and 45 km/h) to wear the following during the practical test: full-face helmet, gloves, jacket with elbow and shoulder protection, closed shoes, long trousers and knee protection.
On 12 June, the Ministry for the Environment and Ministry for Economic Development held a public consultation on the 2017 National Energy Strategy. The strategy submitted to the public addresses the competitiveness of energy prices, security of procurement and environmental objectives. In the transport sector, national objectives and initiatives will be flanked by local panels on sustainable mobility, to steer urban transport towards alternatives to private systems (pedestrian mobility, bicycles, public transport), pinpoint smart mobility initiatives (car sharing, car pooling, smart parking and bike sharing) and reduce traffic in town and city centres.
On 10 February, the Secretary General of the Ministry of the Economy and Finance, signed the document "Commitments of the Ministry of Economy and Finance for road safety". The Ministry of the Economy and Finance has committed to maintaining a strategy which is fully in line with government action to half the number of road victims by 2020, with seven undertakings: a ban on phone conversations while driving, a total ban on drinking alcohol and driving, the mandatory use of seat belts, observing speed limits, rest times included in calculations of goods' transport times, awareness and training for road safety officers and promoting safety devices for motorcyclists.
The Norwegian government introduced an amendment to registration tax for motorcycles based on provisions already in use for cars. A gradual tax will be introduced based on CO2 emissions rather than the previous method based on engine power. As from 1 July 2017, models with registered CO2 emissions (i.e. Euro 4 models11) will be taxed based on their CO2 emissions:
for emissions above 75 grams, 630 Norwegian krone (equal to approximately €65) for each gram/km,
for emissions above 140 grams, 800 Norwegian krone (equal to approximately €83) for each gram/km.
In the context of a twenty-year dispute involving the US against the EU concerning the EU's ban on imports to Europe of meat from animals bred using hormones, the USTR (United States Trade Representative) declared it intended applying duties (up to 100%) on some EU products, including two-wheeler vehicles with a horsepower from 51 to 500cc. On 14 February, a hearing at the USTR took place with various stakeholders attending, including Piaggio and the Motorcycle Industry Council, who spoke out against the senselessness of including two-wheeler products in a dispute concerning the food and agricultural industry, thus targeting a sector such as small two-wheelers in which US manufacturers have no interest. In subsequent months, the process came to a standstill and it is not currently known whether and how the US proposal will unfold.
The proposal submitted by the US Department of Transportations' National Highway Traffic Safety Administration (NHTSA) in 2016 for a new Federal Motor Vehicle Safety Standard (FMVSS), no. 150, which would require manufactures of vehicles and light goods' transport vehicles to add V2V communication systems was discussed and put to public consultation in the first few months of the year. Currently, the intention appears to be to standardise the message and format of V2V transmissions and include some data, such as vehicle speed, direction and braking status, in transmitted messages.
11_ For non-Euro 4 motorcycles, the registration tax will continue to be based on engine power.
In February, the second parliamentary hearing on the Bill S-2 "Strengthening Motor Vehicle Safety for Canadians Act" took place. The act will amend the current law on motor vehicle safety in order to consolidate its application and conformity and further protect citizens' safety, giving greater flexibility to support advanced safety technologies and other innovations designed for vehicles. In the future and with a view to harmonising laws, the Bill S-2 could also lead to manufacturers being able to choose whether to market vehicles in Canada that conform to UNECE regulations or to American FMVSS standards.
In the first few months of the year, institutions and industry representatives continued to discuss the future Bharat VI emission standards (similar to Euro 5). Based in information currently available, the standards should apply to all new vehicles as from 1 April 2020, so a few months before the entry into force of Euro 5 in the EU (as from 1 January 2021 for newly registered vehicles). Requirements for in-vehicle diagnostic systems should instead apply after EU dates.
The National Institution for Transforming India, also called NITI Aayog, formed via a resolution of the Union Cabinet on 1 January 2015 and the premier policy 'Think Tank' of the Government of India, presented the report "Transformative Mobility Solutions for India" in May 2017, which estimated that India could save up to 64% of its energy demand relative to passenger mobility and up to 37% of carbon emissions in 2030, compared to a "business as usual" strategy, pursuing a future of shared, electric and connected mobility. This report, although not a legislative document, is highly indicative of the Indian government's considerable focus on disseminating alternative mobility systems.
Emission measures similar to Euro 4 standards currently in force in Europe for motorcycles are expected to come into effect in Thailand and Malaysia as from 2018 and 2020 respectively, albeit with some limitations on requirements for in-vehicle diagnostic systems and for evaporative emissions.
Regulation UNECE No. 41-04 on sound emissions should also become mandatory in Thailand as from 2018 for newly approved vehicles and as from 2020 for newly registered vehicles.
On 1 January 2017, a new anti-pollution regulation came into force for two-wheelers, with requirements that are similar to Euro 3 standards, apart from some requirements on evaporative emissions.
Due to the nature of its business, the Group is exposed to different types of risks. To mitigate exposure to these risks, the Group has adopted a structured and integrated system to identify, measure and manage company risks, in line with industry best practices (i.e. CoSO ERM) and applicable regulatory requirements. Activities to analyse, measure, monitor and manage identified risks are described below.
To mitigate any negative effects arising from the macroeconomic scenario, the Piaggio Group continued its strategic vision, expanding operations on markets in Asia where growth rates of economies are still high and consolidating the competitive positioning of its products. To achieve this, the Group focuses on research activities, and in particular on the development of engines with a low consumption and a low or zero environmental impact.
Piaggio's success depends on its ability to manufacture products that cater for consumer's tastes and can meet their needs for mobility. If the Group's products were not appreciated by customers, lower revenues would be generated, or if more aggressive sales policies were adopted in terms of discounts given, margins would be lower, with a negative impact on financial position and performance.
To tackle this risk, the Piaggio Group has always invested in major research and development projects, to enable it to optimally meet customer needs and anticipate market trends, introducing innovative products with high added value, levering brand identity.
Over the last few years, the competitiveness of markets in which the Group operates has increased considerably, above all in terms of prices and also due to a declining demand worldwide. In addition, the Group is exposed to the actions of competitors that, through technological innovation or replacement products, could obtain products with better quality standards and streamline costs, offering products at more competitive prices. Piaggio has tried to tackle this risk, which could have a negative impact on the financial position and performance of the Group, by manufacturing high quality products that are innovative, cost-effective, reliable and safe, and by consolidating its presence in Asia.
Numerous national and international laws and regulations on safety, noise levels, consumption and the emission of pollutant gases apply to Piaggio products. Strict regulations on atmospheric emissions, waste disposal, the drainage and disposal of water and other pollutants also apply to the Group's production sites.
The enactment of regulations which are more stringent than those currently in force could lead to products being taken off the market and force manufacturers to make investments to renew product ranges and/or renovate/modernise production sites.
To deal with these risks, the Group has always invested in research and development into innovative products, anticipating any restrictions on current regulations. Moreover, the Group, as one of the sector's leading manufacturers, is often requested to be represented on parliamentary committees appointed to discuss and formulate new laws.
The Piaggio Group operates in an international arena and is therefore exposed to risks connected with a high level of internationalisation, such as exposure to local economic conditions and policies, compliance with different tax systems, customs barriers or more in general the introduction of laws or regulations which are more stringent than the current regulatory framework. The countries where the Piaggio Group operates may adopt economic policies and/or government measures in the form of incentives or tax relief, that may have a considerable impact on consumer trends.
All these factors may have a negative impact on the financial position and performance of the Group. In particular, the growing presence of the Group in India and Vietnam has increased its exposure to political instability or negative economic developments in these countries.
As regards Great Britain's decision to leave the European Community, the Group considers the effects on global sales and profitability as negligible. In fact, the Group's turnover on the British market accounts for around 2% of total turnover.
The Piaggio Group is exposed to financial risk concerning trends and the volatility of financial markets, that may affect the value of financial instruments and price of company shares. Any particularly negative economic trends could make it difficult or particularly expensive for the Group to raise funds.
The Group's business is extremely seasonal, particularly on western markets where sales of two-wheeler vehicles mainly take place in Spring and Summer. In addition, an extremely wet spring could lead to fewer sales of products with a negative effect on the Group's business and financial performance. Piaggio tackles these risks first and foremost by consolidating its presence on markets, such as India and Asia Pacific, which are not affected by an extremely seasonal nature, and by adopting a flexible production structure that can deal with peak demand through vertical part-time and fixed-term employment contracts, as well as seasonal planning.
The Group operates through industrial sites located in Italy, India and Vietnam. These sites are subject to operating risks, including natural disasters, sabotage, terrorist attacks and significant interruptions to supplies of commodities or components. Any interruption to production activities could have a negative impact on the operations and financial position and performance of the Group.
The operating risks related to industrial sites in Italy and other countries are managed through specific insurance cover assigned to sites based on their relative importance.
Natural disasters may also prevent the distribution and sale of company products in affected areas.
Group profitability on some markets could be negatively affected by any decrease in the purchasing power of currency and consequent increase in prices. In particular, the Group is subject to the risk arising from the organisation's failure to put in place an appropriate response plan to deal with these price fluctuations.
In carrying out operations, the Group might not be able to comply with social/environmental sustainability requirements of laws and/or meet communities' growing awareness of these issues. Piaggio is exposed to the following risks in particular:
Risk connected with a worsening of how stakeholders perceive the Group and its reputation, and loyalty to it.
The Group, which adopts a global sourcing policy for its suppliers, is exposed to risks connected with the use of suppliers or sub-suppliers that fail to comply with its sustainability standards. This is why suppliers worldwide that wish to do business with Piaggio have to sign the general conditions of supply of the Group which include the "Code of Ethics and Guidelines for doing business"; audits are regularly conducted on the Group's direct material suppliers to ensure their effective compliance.
Risk connected with inadequate technological investments that are functional for sustainable mobility, for creating environmentally friendly products and an adequate technological level of products to meet new mobility needs of consumers and regulatory developments (connected risk). During its life cycle, every product interacts directly and indirectly on both the health and safety of people and the environment understood as ecosystem quality. For this reason the Piaggio Group focuses its R&D activities on developing innovative solutions to reduce the emission of pollutants and to increase the safety, reliability and recyclability of its products. In its effort to ensure the sustainability of its products, the Group takes into account the entire life cycle, which comprises the design, procurement of raw materials, production proper, use of the product by customers and, finally, decommissioning, which consists in disassembly at the end of service life and in the disposal and/or recycling of the components and raw materials.
The Group has production sites, research and development centres and sales offices in different nations and so is exposed to the risk of not being able to guarantee a safe working environment, with the risk of causing potential harm to property or people and exposing the Group to legal sanctions, lawsuits brought by employees, costs for compensation payments and reputational harm. To mitigate these risks, Piaggio adopts a sustainable development model that is based on environmental sustainability, in terms of safeguarding natural resources and the possibility that the ecosystem might absorb the direct and indirect impact of production activities. Specifically, Piaggio seeks to minimise the environmental impact of its industrial activities through careful definition of the technological transformation cycle and using the best technologies and most modern methods of production. This commitment, enacted in the Code of Ethics12 and stated by top management in the Group's "environmental policy" which is the basis for environmental certification (ISO 14001) and health and safety certification (BSOHSAS 18001) already awarded and maintained at production sites, is a mandatory benchmark for all company sites no matter where they are working.
Risk arising from a failure to value diversity within the organisation and the absence of management that is heterogeneous as regards competency, experience, age brackets and gender; risk arising from discriminatory actions that may occur on the labour market due to gender, sexual orientation and other diversity aspects. To deal with this risk, the personnel management policy adopted by the Group rejects any form of discrimination on the basis of gender, age, nationality, ethnic background, ideology or religion. It operates in strict compliance with laws and contractual requirements, and in keeping with the customs, practices and usages of each country in which the Company operates.
12_ Code of Ethics - Article 8: "Without prejudice to compliance with the specific applicable regulation, the Company pays attention to environmental issues in its decisions, also adopting - where operationally and economically feasible and compatible - environmentally friendly production technologies and methods, with the aim of reducing the environmental impact of its activities".
The Piaggio Group undertakes operations in currencies other than the euro and this exposes it to the risk of fluctuating exchange rates of different currencies.
Exposure to the business risk consists of envisaged payables and receivables in foreign currency, taken from the budget for sales and purchases reclassified by currency and accrued on a monthly basis.
The Group's policy is to hedge at least 66% of the exposure of each reference month.
Exposure to the settlement risk consists of receivables and payables in foreign currency acquired in the accounting system at any moment. The hedge must at all times be equal to 100% of the import, export or net settlement exposure for each currency.
In the first half of the year, currency exposure was managed based on a policy that aims to neutralise the possible negative effects of exchange rate variations on company cash flow. This was achieved by hedging economic risk, which refers to changes in company profitability compared to the planned annual economic budget, based on a reference change (the "budget change"), and transaction risk, which refers to differences between the exchange rate at which receivables and payables are recognised in currency in the financial statements and the exchange rate at which the relative amount received or paid is recognised.
Production costs are exposed to the risk of fluctuating energy, raw material and component. Piaggio has chosen to manage this risk by adopting plans to reduce energy consumption and provide specific training on energy saving. If the Piaggio Group were not able to offset an increase in these costs against sales prices, its financial position and performance would be affected.
The Group has assets and liabilities which are sensitive to changes in interest rates and are necessary to manage liquidity and financial requirements. These assets and liabilities are subject to an interest rate risk and are hedged by derivatives or by specific fixed-rate loan agreements.
For a further description, reference is made to section 39 of the Notes to the Consolidated Financial Statements.
The Group is exposed to the risk arising from the production of cash flows that are not sufficient to guarantee Group payments due, or adequate profitability and growth to achieve its strategic objectives. Moreover, this risk is connected with the difficulty the Group may have in obtaining loans or a worsening in conditions of loans necessary to support Group operations in appropriate time frames.
To deal with these risks, cash flows and the Group's credit line needs are monitored or managed centrally under the control of the Group's Treasury in order to guarantee an effective and efficient management of financial resources as well as optimise the debt maturity standpoint.
In addition, the Parent Company finances the temporary cash requirements of Group companies by providing direct short-term loans regulated in market conditions or guarantees.
This risk is connected with any downgrading of the credit rating of customers and suppliers and consequent possibility of late payments, or the insolvency of customers and suppliers and consequent failure to receive payments.
To balance this risk, the Parent Company has stipulated agreements with primary factoring companies in Italy and other countries for the sale of trade receivables without recourse.
This risk is connected with compliance with covenants and targets to reduce loans, to maintain a sustainable debt/equity balance.
To offset this risk, the measurement of financial covenants and other contract commitments is monitored by the Group on an ongoing basis.
These risks are connected with a failure to maintain product technological innovation at adequate levels and failure to comply with regulatory requirements and product quality and safety standards in relation to market requests, with a consequent liability of the Group in relation to:
To mitigate these risks, the Piaggio Group adopts an efficient quality control system for supplied components and finished products.
The Group is exposed to the following risks:
To deal with these risks, the Group has a flexible production capacity and sources from several suppliers of components in order to prevent the unavailability of one supplier affecting company production. Moreover, the operating risks related to industrial sites in Italy and other countries are managed through specific insurance cover assigned to sites based on their relative importance.
In carrying out its operations, the Group sources raw materials, semifinished products and components from a number of suppliers. Group operations are conditioned by the ability of its suppliers to guarantee the quality standards and specifications requested for products, as well as relative delivery times.
The Piaggio Group legally protects its products and brands throughout the world. In some countries where the Group operates, laws do not offer certain standards of protection for intellectual property rights. This circumstance could render the measures adopted by the Group to protect itself from the unlawful use of these rights by third parties inadequate. Unlawful plagiarism by competitors could have a negative effect on the Group's sales.
The Group is also exposed to the risk of failing to comply with laws on intellectual property rights.
Within the framework of its operations, the Group is involved in legal and tax proceedings. As regards some of the proceedings, the Group could be in a position where it is not able to effectively quantify potential liabilities that could arise. A detailed analysis of the main disputes is provided in the specific paragraph in the Notes to the Consolidated Financial Statements.
In Europe, the Piaggio Group operates in an industrial context with a strong trade union presence, and is potentially exposed to the risk of strikes and interruptions to production activities.
In the recent past, the Group was not affected by major interruptions to production because of strikes. To avoid the risk of interruptions to production activities, as far as possible, the Group bases its relations with trade union organisations on dialogue.
The following are connected risks:
To offset these risks, the Group has established specific policies for recruitment, career development, training, remuneration and talent management, which are adopted in all countries where the Group operates according to the same principles of merit, fairness and transparency, and focussing on aspects that are relevant for the local culture.
The Group is exposed to the risk of the unauthorised access to/use of company data and information that could have a negative impact on profitability, in particular concerning data and information which is strategic for the company (e.g. technological and product know-how), confidential information and sensitive information protected by privacy laws (for example information about employees and customers). The Group has established operating policies and technical security measures designed to afford adequate protection for company data and information.
The Group is exposed to the risk of possible inadequacies in its procedures that are intended to ensure compliance with Italian and relevant foreign regulations applicable to financial disclosure, running the risk of fines and other sanctions. In particular there is a risk that financial reporting for Group stakeholders is not accurate and reliable due to significant errors or the omission of material facts and that the Group provides disclosure required by applicable laws in a manner which is inadequate, inaccurate or untimely.
To deal with these risks, the financial statements are audited by Independent Auditors. Moreover, the control activities required by Italian Law 262/2005 were extended to cover the most important subsidiaries, Piaggio Vehicles Pvt. Ltd., Piaggio Vietnam Co.Ltd., Aprilia Racing Srl and Piaggio Group Americas Inc.
No events to be reported occurred after the end of the period.
In a macroeconomic context in which the recovery of the global economy will probably consolidate, but that is still affected by uncertainties over the growth rate in Europe and risks of a slowdown in some countries in Far East Asia, the Group is committed, in commercial and industrial terms, to:
From a technological point of view, the Piaggio Group will continue research to develop new solutions to current and future mobility challenges through the efforts of Piaggio Fast Forward (Boston) and to explore the new frontiers of design through PADc (Piaggio Advanced Design center) in Pasadena.
In Europe, the Group's Research and Development Centres traditionally more focussed on defining and manufacturing new products, will target the development of technologies and platforms that emphasize the functional and emotional aspects of vehicles, with constant updates to engines and in particular electric engines, a sector where Piaggio has been a pioneer since the mid-nineteen seventies.
More in general, the Group is committed - as in recent years and for operations in 2017 - to increasing productivity with a strong focus on efficient costs and investments, while complying with its business ethics.
Revenues, costs, payables and receivables as of 30 June 2017 involving parent, subsidiaries and affiliated companies, refer to the sale of goods or services which are a part of normal operations of the Group. Transactions are carried out at normal market values, depending on the characteristics of the goods and services provided.
Information on related-party transactions, including the information required by Consob communication no. DEM/6064293 of 28 July 2006 is presented in the "Notes to the Condensed Consolidated Interim Financial Statements as of 30 June 2017".
The procedure for transactions with related parties, pursuant to article 4 of Consob Regulation no. 17221 of 12 March 2010 as amended, approved by the Board on 30 September 2010, is published on the institutional site of the Issuer www.piaggiogroup.com, under Governance.
Members of the board of directors and members of the control committee of the Issuer do not hold shares in the Issuer.
With reference to the obligations of the "Consolidated Privacy Act", enacted with Italian Legislative Decree no. 196 of 30 June 2003, – Annex B), Technical Regulations – Piaggio & C. S.p.A., as Data Controller has adopted the security measures listed in the regulations, and updated its Security Policy Document according to law.
The purpose of the Security Policy Document is to:
As regards regulatory requirements on conditions for listing companies controlling companies established and governed according to laws of non-EU Member States on the stock exchange and material importance for the purposes of consolidated financial statements, the following is reported:
Pursuant to article 2.6.2, section 13 of the Regulation of Stock Markets organised and managed by Borsa Italiana S.p.A., the conditions as of article 37 of Consob regulation no. 16191/2007 exist.
Net working capital: defined as the net sum of: Trade receivables, Other current and non-current receivables, Inventories, Trade payables, Other current and non-current payables, Current and noncurrent tax receivables, Deferred tax assets, Current and non-current tax payables and Deferred tax liabilities.
Net property, plant and equipment: consist of property, plant, machinery and industrial equipment, net of accumulated depreciation, investment property and assets held for sale.
Net intangible assets: consist of capitalised development costs, costs for patents and know-how and goodwill arising from acquisition/merger operations carried out by the Group.
Financial assets: defined by the Directors as the sum of investments and other non-current financial assets.
Provisions: consist of retirement funds and employee benefits, other long-term provisions and the current portion of other long-term provisions.
Gross industrial margin: defined as the difference between "Revenues" and corresponding "Cost to sell" of the period.
Cost to sell: include the cost for materials (direct and consumables), accessory purchase costs (transport of incoming material, customs, movements and warehousing), employee costs for direct and indirect manpower and related expenses, work carried out by third parties, energy costs, depreciation of property, plant, equipment and industrial equipment, external maintenance and cleaning costs net of sundry cost recovery recharged to suppliers.
Operating expenses: consist of employee costs, costs for services, leases and rentals, and additional operational expenditure net of operating income not included in the gross industrial margin. Operating expenses also include amortisation and depreciation not included in the calculation of the gross industrial margin.
Consolidated Ebitda: defined as "Operating income" before the amortisation/depreciation and impairment costs of intangible assets and property, plant and equipment, as resulting from the Consolidated Income Statement.
Net capital employed: determined as the algebraic sum of "Net fixed assets", "Net working capital" and provisions.
In some cases, data could be affected by rounding off defects due to the fact that figures are represented in millions of euros; changes and percentages are calculated from figures in thousands of euros and not from rounded off figures in millions of euros.
| Consolidated Income Statement | 50 |
|---|---|
| Consolidated Statement of Comprehensive Income | 51 |
| Consolidated Statement of Financial Position | 52 |
| Consolidated Statement of Cash Flows | 53 |
| Changes in Consolidated Shareholders' Equity | 54 |
| Notes to the Consolidated Financial Statements | 56 |
| Attachments | 107 |
| 1st half of 2017 | 1st half of 2016 | ||||
|---|---|---|---|---|---|
| Total | of which related parties |
Total | of which related parties |
||
| Notes In thousands of euros | |||||
| 4 | Net revenues | 725,306 | 998 | 706,496 | 684 |
| 5 | Cost for materials | 420,130 | 16,424 | 412,043 | 14,825 |
| 6 | Cost for services and leases and rentals | 119,792 | 1,933 | 122,748 | 1,878 |
| 7 | Employee costs | 113,300 | 112,196 | ||
| 8 | Depreciation and impairment costs of property, plant and equipment | 23,500 | 23,145 | ||
| 8 | Amortisation and impairment costs of intangible assets | 37,503 | 30,565 | ||
| 9 | Other operating income | 53,276 | 189 | 52,358 | 510 |
| 10 | Other operating costs | 11,383 | 6 | 10,395 | 13 |
| Operating income | 52,974 | 47,762 | |||
| 11 | Income/(loss) from investments | 637 | 637 | 704 | 696 |
| 12 | Financial income | 407 | 581 | ||
| 12 | Borrowing costs | 18,113 | 66 | 18,348 | 67 |
| 12 | Net exchange gains/(losses) | 547 | (680) | ||
| Profit before tax | 36,452 | 30,019 | |||
| 13 | Taxes for the period | 15,310 | 12,008 | ||
| Profit from continuing operations | 21,142 | 18,011 | |||
| Assets held for sale: | |||||
| 14 | Profits or losses arising from assets held for sale | ||||
| Net Profit (loss) for the period | 21,142 | 18,011 | |||
| Attributable to: | |||||
| Owners of the Parent | 21,142 | 18,011 | |||
| Non controlling interests | |||||
| 15 | Earnings per share (figures in €) | 0.059 | 0.050 | ||
| 15 | Diluted earnings per share (figures in €) | 0.059 | 0.050 |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
| 1st half of 2017 | 1st half of 2016 | |
|---|---|---|
| Notes In thousands of euros |
||
| Net Profit (Loss) for the period (A) | 21,142 | 18,011 |
| Items that will not be reclassified in the income statement | ||
| 41 Remeasurements of defined benefit plans |
1,921 | (3,367) |
| Total | 1,921 | (3,367) |
| Items that may be reclassified in the income statement | ||
| Profit (loss) deriving from the translation of financial statements 41 of foreign companies denominated in foreign currency |
(5,440) | (2,544) |
| Portion of components of the Statement of Comprehensive Income 41 of subsidiaries/associates valued with the equity method |
(542) | (407) |
| 41 Total profits (losses) on cash flow hedges |
40 | 147 |
| Total | (5,942) | (2,804) |
| Other components of the Statement of Comprehensive Income (B)* | (4,021) | (6,171) |
| Total Profit (loss) for the period (A + B) | 17,121 | 11,840 |
| Attributable to: | ||
| Owners of the Parent | 17,094 | 11,889 |
| Non controlling interests | 27 | (49) |
* Other Profits (and losses) take account of relative tax effects
| As of 30 June 2017 As of 31 December 2016 | |||||
|---|---|---|---|---|---|
| Total | of which related parties |
Total | of which related parties |
||
| Notes In thousands of euros | |||||
| Assets | |||||
| Non-current assets | |||||
| 16 | Intangible assets | 656,104 | 668,665 | ||
| 17 | Property, plant and equipment | 284,412 | 301,079 | ||
| 18 | Investment Property | 11,667 | 11,710 | ||
| 33 Investments | 7,541 | 7,445 | |||
| 34 Other financial assets | 13,629 | 19,209 | |||
| 23 Long-term tax receivables | 17,090 | 15,680 | |||
| 19 | Deferred tax assets | 59,483 | 60,372 | ||
| 21 | Trade receivables | ||||
| 22 Other receivables | 12,355 | 115 | 13,170 | 133 | |
| Total non-current assets | 1,062,281 | 1,097,330 | |||
| 25 Assets held for sale | |||||
| Current assets | |||||
| 21 | Trade receivables | 126,885 | 2,100 | 75,166 | 3,350 |
| 22 Other receivables | 23,304 | 9,357 | 24,151 | 8,753 | |
| 23 Short-term tax receivables | 29,743 | 26,783 | |||
| 20 Inventories | 251,166 | 208,459 | |||
| 35 Other financial assets | 3,564 | 7,069 | |||
| 36 Cash and cash equivalents | 222,757 | 191,757 | |||
| Total current assets | 657,419 | 533,385 | |||
| Total assets | 1,719,700 | 1,630,715 | |||
| Shareholders' equity and liabilities | |||||
| Shareholders' equity | |||||
| 40 Share capital and reserves attributable to the owners of the Parent | 391,415 | 394,019 | |||
| 40 Share capital and reserves attributable to non-controlling interests | (278) | (305) | |||
| Total shareholders' equity | 391,137 | 393,714 | |||
| Non-current liabilities | |||||
| 37 | Financial liabilities falling due after one year 26 Trade payables |
521,739 | 2,900 | 535,105 | 2,900 |
| 27 | Other long-term provisions | 11,011 | 10,566 | ||
| 28 Deferred tax liabilities | 4,132 | 3,880 | |||
| 29 Retirement funds and employee benefits | 45,361 | 48,924 | |||
| 30 Tax payables | |||||
| 31 | Other long-term payables | 5,463 | 162 | 5,485 | 162 |
| Total non-current liabilities | 587,706 | 603,960 | |||
| Current liabilities | |||||
| 37 | Financial liabilities falling due within one year | 168,091 | 173,445 | ||
| 26 Trade payables | 492,013 | 16,845 | 395,649 | 9,935 | |
| 30 Tax payables | 16,284 | 8,128 | |||
| 31 | Other short-term payables | 54,755 | 7,198 | 46,936 | 7,152 |
| 27 | Current portion of other long-term provisions | 9,714 | 8,883 | ||
| Total current liabilities | 740,857 | 633,041 | |||
| Total Shareholders' Equity and Liabilities | 1,719,700 | 1,630,715 |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
This statement shows the factors behind changes in cash and cash equivalents, net of short-term bank overdrafts, as required by IAS 7.
| 1st half of 2017 | 1st half of 2016 | ||||
|---|---|---|---|---|---|
| Total | of which related parties |
Total | of which related parties |
||
| Notes In thousands of euros | |||||
| Operating activities | |||||
| Consolidated net profit | 21,142 | 18,011 | |||
| Allocation of profit to non-controlling interests | 0 | 0 | |||
| 13 | Taxes for the period | 15,310 | 12,008 | ||
| 8 | Depreciation of property, plant and equipment | 23,500 | 23,145 | ||
| 8 | Amortisation of intangible assets | 37,503 | 30,565 | ||
| Allocations to provisions for risks and retirement funds and employee benefits |
9,883 | 9,321 | |||
| Write-downs / (Reinstatements) | 775 | 514 | |||
| Losses / (Gains) on the disposal of property, plants and equipment | (77) | (74) | |||
| Losses / (Gains) on the disposal of intangible assets | (2) | 0 | |||
| 12 | Financial income | (343) | (499) | ||
| Dividend income | 0 | (7) | |||
| 12 | Borrowing costs | 16,610 | 16,927 | ||
| Income from public grants | (1,843) | (2,078) | |||
| Portion of earnings of associate companies | (637) | (697) | |||
| Change in working capital: | |||||
| 21 | (Increase)/Decrease in trade receivables | (51,195) | 1,250 | (39,828) | (9) |
| 22 (Increase)/Decrease in other receivables | 1,913 | (586) | 3,856 | (140) | |
| 20 (Increase)/Decrease in inventories | (42,707) | (44,191) | |||
| 26 Increase/(Decrease) in trade payables | 96,364 | 6,910 | 104,001 | 4,540 | |
| 31 | Increase/(Decrease) in other payables | 7,797 | 46 | 7,634 | 963 |
| 27 | Increase/(Decrease) in provisions for risks | (4,721) | (5,114) | ||
| 29 Increase/(Decrease) in retirement funds and employee benefits | (7,208) | 83 | |||
| Other changes | (861) | (18,989) | |||
| Cash generated from operating activities | 121,203 | 114,588 | |||
| Interest paid | (15,428) | (15,967) | |||
| Taxes paid | (6,704) | (9,941) | |||
| Cash flow from operating activities (A) | 99,071 | 88,680 | |||
| Investment activities | |||||
| 17 | Investment in property, plant and equipment | (12,109) | (19,871) | ||
| Sale price, or repayment value, of property, plant and equipment | 160 | 192 | |||
| 16 | Investment in intangible assets | (26,661) | (27,100) | ||
| Sale price, or repayment value, of intangible assets | 467 | 0 | |||
| Collected interests | 399 | 307 | |||
| Cash flow from investment activities (B) | (37,744) | (46,472) | |||
| Financing activities | |||||
| 40 Purchase of treasury shares | 0 | (4,980) | |||
| 40 Outflow for dividends paid | (19,698) | (17,962) | |||
| 37 | Loans received | 80,484 | 77,723 | ||
| 37 | Outflow for repayment of loans | (84,933) | (45,815) | ||
| 37 | Repayment of finance leases | (561) | (15) | ||
| Cash flow from funding activities (C) | (24,708) | 8,951 | |||
| Increase / (Decrease) in cash and cash equivalents (A+B+C) | 36,619 | 51,159 | |||
| Opening balance | 191,400 | 101,302 | |||
| Exchange differences | (5,354) | (1,182) | |||
| Closing balance | 222,665 | 151,279 |
| Share capital |
Share premium reserve |
Legal reserve |
Reserve for measurement of financial instruments |
IAS transition reserve |
|
|---|---|---|---|---|---|
| Notes In thousands of euros | |||||
| As of 1 January 2017 | 207,614 | 7,171 | 18,395 | (388) | (5,859) |
| Profit for the period | |||||
| Other components of the Statement 41 of Comprehensive Income |
40 | ||||
| Total profit (loss) for the period | 0 | 0 | 0 | 40 | 0 |
| Transactions with shareholders: | |||||
| 40 Allocation of profits | 700 | ||||
| 40 Distribution of dividends | |||||
| 40 Annulment of treasury shares | (5,646) | ||||
| As of 30 June 2017 | 207,614 | 7,171 | 19,095 | (348) | (11,505) |
| Share capital |
Share premium reserve |
Legal reserve |
Reserve for measurement of financial instruments |
IAS transition reserve |
||
|---|---|---|---|---|---|---|
| Notes In thousands of euros | ||||||
| As of 1 January 2016 | 207,614 | 7,171 | 17,643 | (586) | (5,859) | |
| Profit for the period | ||||||
| 41 | Other components of the Statement of Comprehensive Income |
147 | ||||
| Total profit (loss) for the period | 0 | 0 | 0 | 147 | 0 | |
| Transactions with shareholders: | ||||||
| 40 Allocation of profits | 752 | |||||
| 40 Distribution of dividends | ||||||
| 40 Purchase of treasury shares | ||||||
| 40 Other changes | ||||||
| As of 30 June 2016 | 207,614 | 7,171 | 18,395 | (439) | (5,859) | |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
| TOTAL SHAREHOLDERS' EQUITY |
Share capital and reserves attributable to non-controlling interests |
Consolidated Group shareholders' equity |
Earnings reserve |
Treasury shares |
Group translation reserve |
|---|---|---|---|---|---|
| 393,714 | (305) | 394,019 | 186,848 | (5,646) | (14,116) |
| 21,142 | 21,142 | 21,142 | |||
| (4,021) | 27 | (4,048) | 1,921 | (6,009) | |
| 17,121 | 27 | 17,094 | 23,063 | 0 | (6,009) |
| 0 | (700) | ||||
| (19,698) | (19,698) | (19,698) | |||
| 0 | 5,646 | ||||
| 391,137 | (278) | 391,415 | 189,513 | 0 | (20,125) |
| TOTAL SHAREHOLDERS' EQUITY |
Share capital and reserves attributable to non-controlling interests |
Consolidated Group shareholders' equity |
Earnings reserve |
Treasury shares |
Group translation reserve |
|---|---|---|---|---|---|
| 404,293 | (242) | 404,535 | 194,194 | (34) | (15,608) |
| 18,011 | 18,011 | 18,011 | |||
| (6,171) | (49) | (6,122) | (3,367) | (2,902) | |
| 11,840 | (49) | 11,889 | 14,644 | 0 | (2,902) |
| 0 | 0 | (752) | |||
| (17,962) | (17,962) | (17,962) | |||
| (4,980) | (4,980) | (4,980) | |||
| 0 | 0 | ||||
| 393,191 | (291) | 393,482 | 190,124 | (5,014) | (18,510) |
Piaggio & C. S.p.A. (the Company) is a joint-stock company established in Italy at the Register of Companies of Pisa. The addresses of the registered office and places where the Group conducts its main business operations are listed in the introduction to the financial statements. The main operations of the Company and its subsidiaries (the Group) are described in the Report on Operations.
These Financial Statements are expressed in euros (€) since this is the currency in which most of the Group's transactions take place. Foreign operations are included in the consolidated financial statements according to the standards indicated in the notes below.
As of 30 June 2017, the structure of the Piaggio Group was as indicated in the Report on Operations and is the structure referred to herein.
The scope of consolidation has not changed compared to the Consolidated Financial Statements as of 31 December 2016 and 30 June 2016.
These Condensed Interim Financial Statements have been drafted in compliance with the International Accounting Standards (IAS/IFRS) in force at that date, issued by the International Accounting Standards Board and approved by the European Commission, as well as in compliance with the provisions established in Article 9 of Legislative Decree no. 38/2005 (CONSOB Resolution no. 15519 dated 27 July 2006 containing the "Provisions for the presentation of financial statements", CONSOB Resolution no. 15520 dated 27 July 2006 containing the "Changes and additions to the Regulation on Issuers adopted by Resolution no. 11971/99", CONSOB communication no. 6064293 dated 28 July 2006 containing the "Corporate reporting required in accordance with Article 114, paragraph 5 of Leg. Decree no. 58/98"). The interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"), previously the Standing Interpretations Committee ("SIC"), were also taken into account.
During the drafting of these Condensed Interim Financial statements, prepared in compliance with IAS 34 - Interim Financial Reporting, the same accounting standards adopted in the drafting of the Consolidated Financial Statements as of 31 December 2016 were applied, with the exception of paragraph "New accounting standards, amendments and interpretations applied as from 1 January 2017".
The information provided in the Half-Year Report should be read together with the Consolidated Financial Statements as of 31 December 2016, prepared according to IFRS.
The preparation of the interim financial statements requires management to make estimates and assumptions which have an impact on the values of revenues, costs, consolidated balance sheet assets and liabilities and on the information regarding contingent assets and liabilities at the reporting date. If these management estimates and assumptions should, in future, differ from the actual situation, they will be changed as appropriate in the period in which the circumstances change. For a more detailed description of the most significant measurement methods of the Group, reference is made to the section "Use of estimates" of the Consolidated Financial Statements as of 31 December 2016.
It should also be noted that some assessment processes, in particular more complex ones such as establishing any impairment of fixed assets, are generally undertaken in full only when preparing the annual financial statements, when all the potentially necessary information is available, except in cases where there are indications of impairment which require an immediate assessment of any impairment loss.
The Group's activities, especially those regarding two-wheeler products, are subject to significant seasonal changes in sales during the year.
Income tax is recognised on the basis of the best estimate of the average weighted tax rate for the entire financial period.
These Condensed Interim Financial Statements have been subject to a limited review by PricewaterhouseCoopers S.p.A..
The Group has chosen to highlight all changes generated by transactions with non-shareholders within two statements reporting trends of the period, respectively named the "Consolidated Income Statement" and "Consolidated Statement of Comprehensive Income". The Financial Statements are therefore composed of the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Cash Flows and the Statement of Changes in Consolidated Shareholders' Equity, and these notes.
The Consolidated Income Statement is presented with the items classified by nature. The overall Operating Income is shown, which includes all income and cost items, irrespective of their repetition or fact of falling outside normal operations, except for the items of financial operations included under Operating Income and profit before tax. In addition, the income and cost items arising from assets that are held for sale or to be discontinued, including any capital gains or losses net of the tax element, are recorded in a specific item preceding profit attributable to the owners of the parent and to noncontrolling interests.
The Consolidated Statement of Comprehensive Income is presented in accordance with the provisions of IAS 1 amended. Items presented in "Other comprehensive income(expense)" are grouped based on whether they are potentially reclassifiable to profit or loss.
The Consolidated Statement of Financial Position is presented in opposite sections with separate indication of assets, liabilities and shareholders' equity.
In turn, assets and liabilities are reported in the Consolidated Financial Statements on the basis of their classification as current and non-current.
The Consolidated Statement of Cash Flows is divided into cash-flow generating areas. The Statement of Cash Flows model adopted by the Piaggio Group has been prepared using the indirect method. The cash and cash equivalents recorded in the Consolidated Statement of Cash Flows include the Consolidated Statement of Financial Position balances for this item at the reporting date. Financial flows in foreign currency have been converted at the average exchange rate for the period. Income and costs related to interest, dividends received and income taxes are included in the cash flow generated from operations.
The Statement of Changes in Consolidated Shareholders' Equity is presented as provided for in IAS 1 revised.
It includes the total statement of comprehensive income while separately reporting the amounts attributable to owners of the Parent company as well as the quota pertaining to non-controlling interests, the amounts of transactions with shareholders acting in this capacity and potential effects of retrospective application or of the retroactive calculation pursuant to IAS 8. Reconciliation between the opening and closing balance of each item for the period is presented.
The Consolidated Financial Statements of the Piaggio Group include the Financial Statements of the Parent Company Piaggio & C. S.p.A. and Italian and foreign companies in which it has direct or indirect control, which are listed in the attachments.
All amounts in the tables and in these notes have been rounded off to thousands of euros.
No new international accounting standards or amendments of those already adopted in the preparation of the 2016 Financial Statements have been adopted in these condensed interim financial statements.
At the date of these Financial Statements, competent bodies of the European Union had not completed the approval process necessary for the adoption of the following accounting standards and amendments:
At the date of these Financial Statements, competent bodies of the European Union had not completed the approval process necessary for the application of the following accounting standards and amendments:
› In the month of January 2016, the IASB published IFRS 16 "Leases". This new standard will replace the current IAS 17. The main change concerns the accounting by lessees that, according to IAS 17, were required to make a distinction between a finance lease (on balance sheet) and an operating leases (off balance sheet). With IFRS 16, operating leases will be treated for accounting purposes as finance leases. The IASB has provided for the optional exemption for certain leasing contracts and low value and short-term leases.
This standard will apply from 1 January 2019. Early application will be possible if IFRS 15 "Revenue from contracts with customers" is jointly adopted.
These amendments will enable companies that issue insurance contracts to recognise the volatility that may arise when IFRS 9 is adopted before the new standard on insurance contracts is issued in the statement of comprehensive income rather than in the income statement. It will also allow companies whose main activity is related to insurance contracts to temporarily defer the adoption of IFRS 9 until 2021. Entities that defer the adoption of IFRS 9 will continue to adopt IAS 39. These amendments will apply from 1 January 2018.
IFRS 1- First-time Adoption of International Financial Reporting Standards (effective date of 1 January, 2018);
IAS 28 - Investments in Associates and Joint Ventures (effective date of 1 January 2018).
The amendments clarify, correct or remove redundant wording in the related IFRS Standard and are not expected to have a material impact on our Consolidated Financial Statements or disclosures upon adoption of the amendments.
The Group will adopt these new standards, amendments and interpretations, based on the application date indicated, and will evaluate potential impact, when the standards, amendments and interpretations are endorsed by the European Union.
A specific paragraph in this Report provides information on any significant events occurring after the end of the period and on the expected operating outlook.
The exchange rates used to translate the financial statements of companies included in the scope of consolidation into euros are shown in the table below.
| Currency | Spot exchange rate 30 June 2017 |
Average exchange rate 1st half of 2017 |
Spot exchange rate 31 December 2016 |
Average exchange rate 1st half 2016 |
|---|---|---|---|---|
| US Dollar | 1.1412 | 1.08302 | 1.0541 | 1.11594 |
| Pounds Sterling | 0.87933 | 0.86059 | 0.85618 | 0.77877 |
| Indian Rupee | 73.7445 | 71.17602 | 71.5935 | 75.00187 |
| Singapore Dollars | 1.5710 | 1.52076 | 1.5234 | 1.53997 |
| Chinese Renminbi | 7.7385 | 7.44483 | 7.3202 | 7.29646 |
| Croatian Kuna | 7.4103 | 7.44860 | 7.5597 | 7.55941 |
| Japanese Yen | 127.75 | 121.78039 | 123.40 | 124.41362 |
| Vietnamese Dong | 25,837.39 | 24,408.40899 | 23,894.71 | 24,728.10126 |
| Canadian Dollars | 1.4785 | 1.44529 | 1.4188 | 1.48444 |
| Indonesian Rupiah | 15,201.92 | 14,437.95142 | 14,167.10 | 14,968.97504 |
| Brazilian Real | 3.7600 | 3.44311 | 3.4305 | 4.12955 |
In relation to the figures in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Cash Flows as at 30 June 2016 published last year and presented for comparative purposes, some items were reclassified, for a greater comparability with first half of 2017 figures.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
The organisational structure of the Group is based on 3 Geographical Segments, involved in the production and sale of vehicles, relative spare parts and assistance in areas under their responsibility: EMEA and the Americas, India and Asia Pacific 2W. Operating segments are identified by management, in line with the management and control model used.
In particular, the structure of disclosure corresponds to the structure of periodic reporting analysed by the Chairman and Chief Executive Officer for business management purposes.
Each Geographical Segment has production sites and a sales network dedicated to customers in the relative segment. Specifically:
Central structures and development activities currently dealt with by EMEA and the Americas, are handled by individual segments.
| Income statement by operating segment | |||
|---|---|---|---|
| EMEA and Americas |
India | Asia Pacific 2W | Total | ||
|---|---|---|---|---|---|
| 1st half of 2017 | 145.5 | 99.4 | 35.8 | 280.7 | |
| Sales volumes | 1st half of 2016 | 137.6 | 101.7 | 37.5 | 276.7 |
| (unit/000) | Change | 7.9 | (2.3) | (1.7) | 4.0 |
| Change % | 5.8% | -2.2% | -4.4% | 1.4% | |
| 1st half of 2017 | 479.6 | 160.8 | 84.9 | 725.3 | |
| Turnover | 1st half of 2016 | 456.4 | 165.0 | 85.1 | 706.5 |
| (millions of euros) | Change | 23.2 | (4.2) | (0.2) | 18.8 |
| Change % | 5.1% | -2.5% | -0.2% | 2.7% | |
| 1st half of 2017 | 151.9 | 42.0 | 34.0 | 227.9 | |
| Gross margin (millions of euros) |
1st half of 2016 | 139.4 | 45.6 | 31.4 | 216.4 |
| Change | 12.5 | (3.5) | 2.6 | 11.5 | |
| Change % | 8.9% | -7.8% | 8.2% | 5.3% | |
| 1st half of 2017 | 114.0 | ||||
| EBITDA | 1st half of 2016 | 101.5 | |||
| (millions of euros) | Change | 12.5 | |||
| Change % | 12.3% | ||||
| 1st half of 2017 | 53.0 | ||||
| EBIT | 1st half of 2016 | 47.8 | |||
| (millions of euros) | Change | 5.2 | |||
| Change % | 10.9% | ||||
| 1st half of 2017 | 21.1 | ||||
| Net profit | 1st half of 2016 | 18.0 | |||
| (millions of euros) | Change | 3.1 | |||
| Change % | 17.4% |
Revenues are shown net of premiums recognised to customers (dealers). This item does not include transport costs, which are recharged to customers (€/000 14,107) and invoiced advertising cost recoveries (€/000 1,950), which are posted under other operating income. The revenues for disposals of Group core business assets essentially refer to the marketing of vehicles and
spare parts on European and non-European markets.
The breakdown of revenues by geographical segment is shown in the following table:
| 1st half of 2017 | 1st half of 2016 | Changes | ||||
|---|---|---|---|---|---|---|
| Amount | % | Amount | % | Amount | % | |
| In thousands of euros | ||||||
| EMEA and Americas | 479,586 | 66.1 | 456,389 | 64.6 | 23,197 | 5.1 |
| India | 160,840 | 22.2 | 165,020 | 23.4 | (4,180) | -2.5 |
| Asia Pacific 2W | 84,880 | 11.7 | 85,087 | 12.0 | (207) | -0.2 |
| Total | 725,306 | 100.0 | 706,496 | 100.0 | 18,810 | 2.7 |
In the first half of 2017 net sales revenues recorded a 2.7% increase compared to the same period in the previous year. For a more detailed analysis of trends in individual geographic segments, see comments in the Report on Operations.
The percentage of costs accounting for net sales went down, from 58.3% in the first half of 2016 to 57.9% in the current period. The item includes €/000 16,424 (€/000 14,825 in the first half of 2016) for purchases of scooters from the Chinese subsidiary Zongshen Piaggio Foshan, that are sold on European and Asian markets.
The following table details the content of this item:
| 1st half of 2017 | 1st half of 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Raw, ancillary materials, consumables and goods | 466,960 | 456,827 | 10,133 |
| Change in inventories of raw, ancillary materials, consumables and goods |
(15,263) | (10,824) | (4,439) |
| Change in work in progress of semifinished and finished products | (31,567) | (33,960) | 2,393 |
| Total | 420,130 | 412,043 | 8,087 |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
Below is a breakdown of this item:
| 1st half of 2017 | 1st half of 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Employee costs | 8,134 | 8,247 | (113) |
| External maintenance and cleaning costs | 3,875 | 4,319 | (444) |
| Energy and telephone costs | 7,445 | 8,416 | (971) |
| Postal expenses | 397 | 643 | (246) |
| Commissions payable | 236 | 483 | (247) |
| Advertising and promotion | 18,090 | 17,641 | 449 |
| Technical, legal and tax consultancy and services | 7,971 | 8,038 | (67) |
| Company boards operating costs | 1,080 | 1,030 | 50 |
| Insurance | 1,999 | 1,811 | 188 |
| Outsourced manufacturing | 14,542 | 11,898 | 2,644 |
| Outsourced services | 6,917 | 6,974 | (57) |
| Transport costs (vehicles and spare parts) | 17,435 | 18,063 | (628) |
| Internal shuttle services | 281 | 344 | (63) |
| Sundry commercial expenses | 5,237 | 6,060 | (823) |
| Expenses for public relations | 1,473 | 1,504 | (31) |
| Product warranty costs | 4,052 | 4,000 | 52 |
| Costs for quality-related events | 1,263 | 2,446 | (1,183) |
| Bank costs and factoring charges | 3,174 | 3,001 | 173 |
| Misc services provided in the business year | 2,471 | 4,457 | (1,986) |
| Other services | 3,772 | 3,898 | (126) |
| Insurance from related parties | 17 | 25 | (8) |
| Services from related parties | 1,116 | 1,078 | 38 |
| Lease and rental costs | 8,015 | 7,597 | 418 |
| Costs for leases and rentals of related parties | 800 | 775 | 25 |
| Costs for services and leases and rental costs | 119,792 | 122,748 | (2,956) |
Costs for leases and rentals include lease rentals for business properties of €/000 3,721, as well as lease payments for car hire, computers and photocopiers.
The item "Other" includes costs for temporary work of €/000 1,389.
Employee costs include €/000 2,565 relating to costs for redundancy plans mainly for the Pontedera and Noale production sites.
| 1st half of 2017 | 1st half of 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Salaries and wages | 83,708 | 83,796 | (88) |
| Social security contributions | 22,797 | 23,216 | (419) |
| Termination benefits | 3,645 | 3,722 | (77) |
| Other costs | 3,150 | 1,462 | 1,688 |
| Total | 113,300 | 112,196 | 1,104 |
Below is a breakdown of the headcount by actual number and average number:
| Level | Average number | 1st half of 2017 | 1st half of 2016 | Change |
|---|---|---|---|---|
| Senior management | 97.0 | 101.5 | (4.5) | |
| Middle management | 585.8 | 570.8 | 15.0 | |
| White collars | 1,725.2 | 1,825.7 | (100.5) | |
| Blue collars | 4,139.0 | 4,506.5 | (367.5) | |
| Total | 6,547.0 | 7,004.5 | (457.5) |
Average employee numbers were affected by seasonal workers in the summer (on fixed-term employment contracts).
In fact the Group uses fixed-term employment contracts to handle typical peaks in demand in the summer months.
| Number as of | 30 June 2017 | 31 December 2016 | Change | |
|---|---|---|---|---|
| Senior management | 98 | 97 | 1 | |
| Middle management | 593 | 599 | (6) | |
| White collars | 1,712 | 1,731 | (19) | |
| Blue collars | 4,181 | 4,279 | (98) | |
| Total | 6,584 | 6,706 | (122) | |
| EMEA and Americas | 3,729 | 3,752 | (23) | |
| India | 2,016 | 2,113 | (97) | |
| Asia Pacific 2W | 839 | 841 | (2) | |
| Total | 6,584 | 6,706 | (122) |
Changes in employee numbers in the two periods are compared below:
| Level | As of 31/12/2016 | Incoming | Leavers | Relocations | As of 30/06/2017 |
|---|---|---|---|---|---|
| Senior management | 97 | 3 | (7) | 5 | 98 |
| Middle management | 599 | 20 | (44) | 18 | 593 |
| White collars | 1,731 | 89 | (90) | (18) | 1,712 |
| Blue collars | 4,279 | 839 | (932) | (5) | 4,181 |
| Total (*) | 6,706 | 951 | (1,073) | 0 | 6,584 |
| (*) of which fixed-term contracts | 811 | 709 | (770) | 750 |
Amortisation and depreciation for the period, divided by category, is shown below:
| Property, plant and equipment | 1st half of 2017 | 1st half of 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| Buildings | 2,567 | 2,523 | 44 |
| Plant and machinery | 12,128 | 11,972 | 156 |
| Industrial and commercial equipment | 6,240 | 6,690 | (450) |
| Other assets | 2,565 | 1,960 | 605 |
| Total depreciation of property, plant and equipment | 23,500 | 23,145 | 355 |
| Write-down of property, plant and equipment | |||
| Total depreciation of property, plant and equipment and impairment costs |
23,500 | 23,145 | 355 |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
| Intangible assets | 1st half of 2017 | 1st half of 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| Development costs | 20,062 | 15,779 | 4,283 |
| Industrial Patent and Intellectual Property Rights | 14,929 | 12,228 | 2,701 |
| Concessions, licences, trademarks and similar rights | 2,412 | 2,412 | 0 |
| Other | 100 | 146 | (46) |
| Total amortisation of intangible assets | 37,503 | 30,565 | 6,938 |
| Write-down of intangible assets | |||
| Total amortisation of intangible assets and impairment costs | 37,503 | 30,565 | 6,938 |
| 1st half of 2017 | 1st half of 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Operating grants | 1,843 | 2,078 | (235) |
| Increases in fixed assets from internal work | 20,501 | 21,971 | (1,470) |
| Other revenue and income: | |||
| - Rent receipts | 2,208 | 1,906 | 302 |
| - Capital gains on the disposal of assets | 79 | 78 | 1 |
| - Sale of miscellaneous materials | 456 | 378 | 78 |
| - Recovery of transport costs | 14,107 | 13,394 | 713 |
| - Recovery of advertising costs | 1,950 | 2,661 | (711) |
| - Recovery of sundry costs | 1,492 | 1,761 | (269) |
| - Compensation for damage | 1,722 | 264 | 1,458 |
| - Compensation for quality-related events | 185 | 436 | (251) |
| - Licence rights and know-how | 1,103 | 1,125 | (22) |
| - Sponsorship | 1,454 | 1,057 | 397 |
| - Other income | 6,176 | 5,249 | 927 |
| Total other operating income | 53,276 | 52,358 | 918 |
The item "Operating grants" includes the amount of €/000 1,152 for government and Community grants for research projects and export subsidies of €/000 691 received relative to the Indian subsidiary. The subsidies are recognised in profit or loss, strictly relating to the amortisation and depreciation of capitalised costs for which the subsidies were received.
This item consists of:
| 1st half of 2017 | 1st half of 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Provision for future risks | 7 | 907 | (900) |
| Provisions for product warranties | 6,231 | 4,692 | 1,539 |
| Duties and taxes not on income | 2,469 | 2,162 | 307 |
| Various subscriptions | 721 | 643 | 78 |
| Capital losses from disposal of assets | 4 | (4) | |
| Losses from changes in the fair value of investment property | 43 | 150 | (107) |
| Miscellaneous expenses | 1,137 | 1,323 | (186) |
| Total sundry operating costs | 4,370 | 4,282 | 88 |
| Write-down of current receivables | 775 | 514 | 261 |
| Total | 11,383 | 10,395 | 988 |
The increase is mainly due to greater provisions for products under warranty, duties and taxes, partly offset by fewer allocations to other provisions.
The item Losses from changes in the fair value of investment property relates to the lower value assessed in the expert appraisal of the Spanish site of Martorelles. For more details on how fair value is determined, reference is made to note 37.
Income from investments refers to the portion attributable to the Group of the Zongshen Piaggio Foshan joint venture (€/000 651) and associate company Pontech (€/000 -14) measured at equity.
Financial expenses for the first half of 2017 totalled €/000 17,159, down compared to €/000 18,447 for the same period of the previous year. The positive result of currency operations and reduction in average debt and relative costs contributed most to this improvement, partially offset by a lower capitalisation of borrowing costs compared to the same period of the previous year. During the first half of 2017, borrowing costs for €/000 167 were capitalised (compared to borrowing costs of €/000 598 capitalised in the first half of the previous year).
The average rate used during 2017 for the capitalisation of borrowing costs (because of general loans), was equal to 17.2% and relates to loans taken out by the Vietnamese company in the local currency.
Income tax for the period, determined based on IAS 34, is estimated by applying a rate of 42% to profit before tax, equivalent to the best estimate of the weighted average rate predicted for the financial year.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
At the end of the reporting period, there were no gains or losses from assets held for disposal or sale.
Earnings per share are calculated as follows:
| 1st half of 2017 | 1st half of 2016 | ||
|---|---|---|---|
| Net profit | €/000 | 21,142 | 18,011 |
| Earnings attributable to ordinary shares | €/000 | 21,142 | 18,011 |
| Average number of ordinary shares in circulation | 358,153,644 | 359,312,853 | |
| Earnings per ordinary share | € | 0.059 | 0.050 |
| Adjusted average number of ordinary shares | 358,153,644 | 359,312,853 | |
| Diluted earnings per ordinary share | € | 0.059 | 0.050 |
The table below shows the breakdown of intangible assets as of 30 June 2017, as well as changes during the period.
| Develop ment costs |
Patent rights |
Concessions, licences and trademarks |
Goodwill | Other | Assets under develop ment and advances |
Total | |
|---|---|---|---|---|---|---|---|
| In thousands of euros | |||||||
| As of 31 December 2016 | |||||||
| Historical cost | 207,024 | 331,054 | 149,074 | 557,322 | 7,568 | 26,079 | 1,278,121 |
| Provision for write-downs | (379) | (379) | |||||
| Accumulated amortisation | (136,057) | (254,475) | (100,854) | (110,382) | (7,309) | (609,077) | |
| Net carrying amount | 70,588 | 76,579 | 48,220 | 446,940 | 259 | 26,079 | 668,665 |
| 1st half of 2017 | |||||||
| Investments | 10,339 | 875 | 57 | 15,390 | 26,661 | ||
| Transitions in the period | 6,536 | 1,343 | 7 | (7,886) | 0 | ||
| Amortisation | (20,062) | (14,929) | (2,412) | (100) | (37,503) | ||
| Disposals | (465) | (465) | |||||
| Write-downs | 0 | ||||||
| Exchange differences | (1,031) | (30) | (14) | (168) | (1,243) | ||
| Other changes | (11) | (11) | |||||
| Total movements for the period |
(4,683) | (12,741) | (2,412) | 0 | (50) | 7,325 | (12,561) |
| As of 30 June 2017 | |||||||
| Historical cost | 219,381 | 332,497 | 155,074 | 557,322 | 7,065 | 33,404 | 1,304,743 |
| Provision for write-downs | 0 | ||||||
| Accumulated amortisation | (153,476) | (268,659) | (109,266) | (110,382) | (6,856) | (648,639) | |
| Net carrying amount | 65,905 | 63,838 | 45,808 | 446,940 | 209 | 33,404 | 656,104 |
The breakdown of intangible assets for the period put into service and under development is as follows:
| Value as of 30 June 2017 | Value as of 31 December 2016 | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| In operation |
Under deve lopment and advances |
Total | In opera tion |
Under deve lopment and advances |
Total | In opera tion |
Under deve lopment and advances |
Total | |
| In thousands of euros | |||||||||
| Development costs | 65,905 | 30,326 | 96,231 | 70,588 | 23,185 | 93,773 | (4,683) | 7,141 | 2,458 |
| Patent rights | 63,838 | 3,076 | 66,914 | 76,579 | 2,890 | 79,469 | (12,741) | 186 | (12,555) |
| Concessions, licences and trademarks |
45,808 | 45,808 | 48,220 | 48,220 | (2,412) | 0 | (2,412) | ||
| Goodwill | 446,940 | 446,940 | 446,940 | 446,940 | 0 | 0 | 0 | ||
| Other | 209 | 2 | 211 | 259 | 4 | 263 | (50) | (2) | (52) |
| Total | 622,700 | 33,404 656,104 | 642,586 | 26,079 668,665 | (19,886) | 7,325 (12,561) |
Intangible assets went down overall by €/000 12,561 mainly due to amortisation for the period which was only partially balanced by investments for the period.
Increases mainly refer to the capitalisation of development costs for new products and new engines, as well as the purchase of software.
During the first half of the year, borrowing costs for €/000 91 were capitalised.
Development costs include costs for products and engines referable to projects for which, as regards the period of the useful life of the asset, revenues are expected that allow for at least the costs incurred to be recovered. This item also includes assets under development for €/000 30,326 that represent costs for which the conditions for capitalisation exist, but in relation to products that will go into production in future years.
Borrowing costs attributable to the development of products which require a considerable period of time to be realised are capitalised as a part of the cost of the assets themselves. Development costs included under this item are amortised on a straight line basis over a period of 3 to 5 years, in consideration of their remaining useful life.
In the first half of 2017, development costs amounting to €/000 9,700 were directly expensed in the income statement.
The item Patent rights comprises software for €/000 15,642 and patents and know-how. It includes assets under development for €/000 3,076.
Patents and know-how mainly refer to Vespa, MP3, RSV4 and Aprilia SR 150 vehicles. Increases for the period mainly refer to new calculation, design and production techniques and methodologies developed by the Group, referring to main new products in the 2017-2018 range.
Industrial patent and intellectual property rights costs are amortised over three years.
The item Trademarks, concessions and licences is broken down as follows:
| As of 30 June 2017 As of 31 December 2016 | Change | ||
|---|---|---|---|
| In thousands of euros | |||
| Guzzi trademark | 15,437 | 16,250 | (813) |
| Aprilia trademark | 30,333 | 31,930 | (1,597) |
| Minor trademarks | 38 | 40 | (2) |
| Total | 45,808 | 48,220 | (2,412) |
The Aprilia and Guzzi trademarks are amortised over a period of 15 years, expiring in 2026.
Goodwill derives from the greater value paid compared to the corresponding portion of the subsidiaries shareholders' equity at the time of purchase, less the related accumulated amortisation until 31 December 2003.
Goodwill was attributed to cash generating units.
| Emea and Americas | India | Asia Pacific 2W | Total | |
|---|---|---|---|---|
| In thousands of euros | ||||
| 30 06 2017 | 305,311 | 109,695 | 31,934 | 446,940 |
| 31 12 2016 | 305,311 | 109,695 | 31,934 | 446,940 |
The organisational structure of the Group is based on 3 Geographic Segments (CGUs), involved in the production and sale of vehicles, relative spare parts and assistance in areas under their responsibility: EMEA and the Americas, India and Asia Pacific 2W. Each Geographical Segment has production sites and a sales network dedicated to customers in the relative segment. Central structures and development activities currently dealt with by EMEA and the Americas, are handled by individual CGUs.
Goodwill is not longer amortised, but is tested for impairment annually or more frequently, if specific events take place or changed circumstances indicate that the asset may have been affected by impairment, to identify impairment as provided for by IAS 36 - Impairment of Assets.
The possibility of reinstating booked values is verified by comparing the net carrying amount of individual cash generating units with the recoverable value (value in use). This recoverable value is represented by the present value of future cash flows which, it is estimated, will be derived from the continual use of goods referring to cash generating units and by the terminal value attributable to these goods.
The recoverability of goodwill is verified at least once per year (as of 31 December), even in the absence of indicators of impairment losses.
As of 30 June 2017, the Group compared final and estimated figures of 2017, combined with forecast data for the 2018-2020 period, approved by the Board of Directors on 23 February 2017. This analysis did not highlight any indicators requiring an update to the impairment test carried out for the purposes of the financial statements as of 31 December 2016.
Given that the recoverable value was estimated, the Group cannot ensure that there will be no impairment losses of goodwill in future financial periods.
The item "Other intangible assets" mainly refers to costs incurred by Piaggio Vietnam.
The table below shows the breakdown of property, plant and equipment as of 30 June 2017, as well as changes during the period.
| Land | Buildings | Plant and machinery |
Equipment | Other assets |
Assets under construc tion and advances |
Total | |
|---|---|---|---|---|---|---|---|
| In thousands of euros | |||||||
| As of 31 December 2016 | |||||||
| Historical cost | 28,083 | 169,539 | 478,775 | 509,102 | 50,630 | 17,169 | 1,253,298 |
| Provision for write-downs | (483) | (2,526) | (64) | (3,073) | |||
| Accumulated depreciation | (70,012) | (351,637) | (485,101) | (42,396) | (949,146) | ||
| Net carrying amount | 28,083 | 99,527 | 126,655 | 21,475 | 8,170 | 17,169 | 301,079 |
| 1st half of 2017 | |||||||
| Investments | 244 | 1,028 | 2,401 | 1,920 | 6,516 | 12,109 | |
| Transitions in the period | 430 | 8,025 | 1,400 | 88 | (9,943) | 0 | |
| Depreciation | (2,567) | (12,128) | (6,240) | (2,565) | (23,500) | ||
| Disposals | (23) | (3) | (57) | (83) | |||
| Write-downs | 0 | ||||||
| Exchange differences | (1,201) | (3,589) | (192) | (222) | (5,204) | ||
| Other changes | 11 | 11 | |||||
| Total movements for the period |
0 | (3,094) | (6,687) | (2,442) | (806) | (3,638) | (16,667) |
| As of 30 June 2017 | |||||||
| Historical cost | 28,083 | 168,507 | 479,000 | 512,781 | 51,712 | 13,531 | 1,253,614 |
| Provision for write-downs | (483) | (2,408) | (64) | (2,955) | |||
| Accumulated depreciation | (72,074) | (358,549) | (491,340) | (44,284) | (966,247) | ||
| Net carrying amount | 28,083 | 96,433 | 119,968 | 19,033 | 7,364 | 13,531 | 284,412 |
Condensed Consolidated Interim Financial Statements Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
| Value as of 30 June 2017 | Value as of 31 December 2016 | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| In operation |
Under construc tion and advances |
Total | In opera tion |
Under construc tion and advances |
Total | In opera tion |
Under construc tion and advances |
Total | |
| In thousands of euros | |||||||||
| Land | 28,083 | 28,083 | 28,083 | 28,083 | 0 | 0 | 0 | ||
| Buildings | 96,433 | 1,972 | 98,405 | 99,527 | 2,035 | 101,562 | (3,094) | (63) | (3,157) |
| Plant and machinery | 119,968 | 7,085 | 127,053 | 126,655 | 9,800 136,455 | (6,687) | (2,715) | (9,402) | |
| Equipment | 19,033 | 4,366 | 23,399 | 21,475 | 5,229 | 26,704 | (2,442) | (863) | (3,305) |
| Other assets | 7,364 | 108 | 7,472 | 8,170 | 105 | 8,275 | (806) | 3 | (803) |
| Total | 270,881 | 13,531 284,412 | 283,910 | 17,169 301,079 | (13,029) | (3,638) (16,667) |
The breakdown of property, plant and equipment in operation and under construction is as follows:
Property, plant and equipment mainly refer to Group production facilities in Pontedera (Pisa), Noale (Venice), Mandello del Lario (Lecco), Baramati (India) and Vinh Phuc (Vietnam).
The increases mainly refer to moulds for new vehicles launched during the period.
Borrowing costs attributable to the construction of assets which require a considerable period of time to be ready for use are capitalised as a part of the cost of the assets themselves.
During the first half of the year, borrowing costs for €/000 76 were capitalised.
As of 30 June 2017, the net value of assets held through lease agreements was equal to €/000 12,071, and refers to the Pontedera painting plant for the Vespa and to the vehicles used by the Aprilia Racing Team.
| As of 30 June 2017 | |
|---|---|
| In thousands of euros | |
| Vespa painting plant | 11,983 |
| Vehicles | 88 |
| Total | 12,071 |
Future lease rental commitments are detailed in note 37.
Investment property refers to the Spanish site of Martorelles, where production was stopped in March 2013 and relocated to Italian sites.
| In thousands of euros | |
|---|---|
| Opening balance as of 1 January 2017 | 11,710 |
| Fair value adjustment | (43) |
| Balance as of 30 June 2017 | 11,667 |
The net book value as of 30 June 2017 was determined by a specific appraisal conducted by an independent expert who measured the "Fair Value less cost of disposal" based on a market approach (as provided for in IFRS 13). This analysis identified the total value of the investment as €/000 11,667. In this regard, the valuation took account of the current status of the property, the project to convert the area, for the development of a retail centre prepared by the Group, together with comparable transactions. Following the site redevelopment project, an agency management contract was given to a Spanish property company, to seek investors interested in the property.
The Group uses the "fair value model" as provided for in IAS 40, thus the measurement updated during 2017 resulted in profit adjusted to fair value, equal to €/000 43 being recognised under other costs in the income statement for the period.
If the cost criterion had still been used instead of fair value, the value of the Martorelles site would have been equal to €/000 6,442.
During the first half of 2017, costs incurred for site management amounted to €/000 205.
Deferred tax assets and liabilities are recognised at their net value when they may be offset in the same tax jurisdiction.
The item totalled €/000 59,483, down on the figure of €/000 60,372 as of 31 December 2016. Deferred tax assets and liabilities were determined applying the tax rate in effect in the year when temporary differences occur.
As part of measurements to define deferred tax assets, the Group mainly considered the following:
In view of these considerations, and with a prudential approach, it was decided to not wholly recognise the tax benefits arising from losses that can be carried over and from temporary differences.
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Raw materials and consumables | 120,155 | 99,137 | 21,018 |
| Provision for write-down | (15,157) | (14,464) | (693) |
| Net value | 104,998 | 84,673 | 20,325 |
| Work in progress and semifinished products | 14,981 | 16,624 | (1,643) |
| Provision for write-down | (852) | (852) | 0 |
| Net value | 14,129 | 15,772 | (1,643) |
| Finished products and goods | 154,818 | 129,930 | 24,888 |
| Provision for write-down | (22,866) | (22,065) | (801) |
| Net value | 131,952 | 107,865 | 24,087 |
| Advances | 87 | 149 | (62) |
| Total | 251,166 | 208,459 | 42,707 |
The increase as of 30 June 2017 in inventories is in line with performance expected for production and sales volumes.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
As of 30 June 2017 and 31 December 2016, there are no trade receivables in non-current assets. Current trade receivables are broken down as follows:
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Trade receivables due from customers | 124,785 | 71,816 | 52,969 |
| Trade receivables due from JV | 1,995 | 3,349 | (1,354) |
| Trade receivables due from parent companies | 2 | 1 | 1 |
| Trade receivables due from associates | 103 | 103 | |
| Total | 126,885 | 75,166 | 51,719 |
Receivables due from joint ventures refer to amounts due from Zongshen Piaggio Foshan Motorcycles Co. Ltd.
Receivables due from parent companies regard amounts due from Immsi.
The item Trade receivables comprises receivables referring to normal sale transactions, recorded net of a provision for bad debts of €/000 27,676.
The Group sells, on a rotating basis, a large part of its trade receivables with and without recourse. Piaggio has signed contracts with some of the most important Italian and foreign factoring companies as a move to optimise the monitoring and the management of its trade receivables, besides offering its customers an instrument for funding their own inventories, for factoring classified as without the substantial transfer of risks and benefits. On the contrary, for factoring without recourse, contracts have been formalised for the substantial transfer of risks and benefits. As of 30 June 2017, trade receivables still due sold without recourse totalled €/000 146,126. Of these amounts, Piaggio received payment prior to natural expiry, of €/000 137,171.
As of 30 June 2017, advance payments received from factoring companies and banks, for trade receivables sold with recourse totalled €/000 26,236 with a counter entry recorded in current liabilities.
Other non-current receivables totalled €/000 12,355 against €/000 13,170 as of 31 December 2016, whereas other current receivables totalled €/000 23,304 compared to €/000 24,151 as of 31 December 2016. They consist of:
| Other non-current receivables | As of 30 June 2017 | As of 31 December 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| Sundry receivables due from associates | 115 | 133 | (18) |
| Prepaid expenses | 9,737 | 10,904 | (1,167) |
| Advances to employees | 52 | 61 | (9) |
| Security deposits | 1,091 | 927 | 164 |
| Receivables due from others | 1,360 | 1,145 | 215 |
| Total non-current portion | 12,355 | 13,170 | (815) |
Receivables due from associates regard amounts due from the Fondazione Piaggio.
| Other current receivables | As of 30 June 2017 | As of 31 December 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| Sundry receivables due from parent companies | 8,317 | 7,705 | 612 |
| Sundry receivables due from JV | 1,002 | 957 | 45 |
| Sundry receivables due from associates | 38 | 91 | (53) |
| Accrued income | 594 | 513 | 81 |
| Prepaid expenses | 4,602 | 3,790 | 812 |
| Advance payments to suppliers | 1,111 | 736 | 375 |
| Advances to employees | 258 | 2,214 | (1,956) |
| Fair value of derivatives | 243 | 401 | (158) |
| Security deposits | 283 | 221 | 62 |
| Receivables due from others | 6,856 | 7,523 | (667) |
| Total current portion | 23,304 | 24,151 | (847) |
Receivables due from parent companies refer to the recognition of accounting effects relating to the transfer of taxable bases pursuant to the Group Consolidated Tax Convention.
Receivables due from joint ventures refer to amounts due from Zongshen Piaggio Foshan Motorcycle Co. Ltd.
Receivables due from associates are amounts due from Immsi Audit and the Fondazione Piaggio.
The item Fair Value of hedging derivatives comprises the fair value of hedging transactions on the exchange risk on forecast transactions recognised on a cash flow hedge basis (€/000 243 current portion).
Other receivables are recognised net of a write-down provision of €/000 5,579.
Receivables due from tax authorities consist of:
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| VAT receivables | 28,601 | 25,956 | 2,645 |
| Income tax receivables | 13,500 | 11,869 | 1,631 |
| Other tax receivables | 4,732 | 4,638 | 94 |
| Total tax receivables | 46,833 | 42,463 | 4,370 |
Non-current tax receivables totalled €/000 17,090, compared to €/000 15,680 as of 31 December 2016, while current tax receivables totalled €/000 29,743 compared to €/000 26,783 as of 31 December 2016. The increase is mainly due to higher VAT receivables of the Indian subsidiary and Parent Company, along with tax receivables accrued abroad by Piaggio & C. S.p.A.
As of 30 June 2017, there were no receivables due after 5 years.
As of 30 June 2017, there were no assets held for sale.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
As of 30 June 2017 and as of 31 December 2016 no trade payables were recorded under non-current liabilities. Trade payables recorded as current liabilities are broken down as follows:
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Amounts due to suppliers | 475,168 | 385,714 | 89,454 |
| Trade payables to JV | 16,684 | 9,777 | 6,907 |
| Trade payables due to other related parties | 27 | 26 | 1 |
| Amounts due to parent companies | 134 | 132 | 2 |
| Total | 492,013 | 395,649 | 96,364 |
| Of which reverse factoring | 166,344 | 173,058 | (6,714) |
To facilitate credit conditions for its suppliers, the Group has used factoring agreements since 2012, mainly supply chain financing and reverse factoring agreements. These operations did not change the primary obligation, nor substantially changed payment terms, so their nature is the same and they are still classified as trade liabilities.
As of 30 June 2017, the value of trade payables covered by reverse factoring or supply chain financing agreements was equal to €/000 166,344 (€/000 173,058 as of 31 December 2016).
The breakdown and changes in provisions for risks during the period were as follows:
| Balance as of 31 December 2016 |
Allocations | Uses | Reclassifica tions |
Exchange differences |
As of 30 June 2017 |
|
|---|---|---|---|---|---|---|
| In thousands of euros | ||||||
| Provision for product warranties | 11,700 | 6,231 | (4,160) | 44 | (198) | 13,617 |
| Provision for contractual risks | 4,546 | 7 | (75) | (10) | 4,468 | |
| Risk provision for legal disputes |
2,082 | (277) | (29) | 1,776 | ||
| Provisions for risk on guarantee |
58 | 58 | ||||
| Other provisions for risks | 1,063 | (253) | (4) | 806 | ||
| Total | 19,449 | 6,238 | (4,765) | 44 | (241) | 20,725 |
The breakdown between the current and non-current portion of long-term provisions is as follows:
| Non-current portion | As of 30 June 2017 | As of 31 December 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| Provision for product warranties | 4,386 | 3,939 | 447 |
| Provision for contractual risks | 4,349 | 4,349 | 0 |
| Risk provision for legal disputes | 1,512 | 1,512 | 0 |
| Other provisions for risks and charges | 764 | 766 | (2) |
| Total non-current portion | 11,011 | 10,566 | 445 |
| Current portion | As of 30 June 2017 | As of 31 December 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| Provision for product warranties | 9,231 | 7,761 | 1,470 |
| Provisions for contractual risks | 119 | 197 | (78) |
| Risk provision for legal disputes | 264 | 570 | (306) |
| Provisions for risk on guarantee | 58 | 58 | 0 |
| Other provisions for risks and charges | 42 | 297 | (255) |
| Total | 9,714 | 8,883 | 831 |
The product warranty provision relates to allocations for technical assistance on products covered by customer service which are estimated to be provided over the contractually envisaged warranty period. This period varies according to the type of goods sold and the sales market, and is also determined by customer take-up to commit to a scheduled maintenance plan.
The provision increased during the half year by €/000 6,231 and was used for €/000 4,160 in relation to charges incurred during the period.
The provision for contractual risks refers mainly to charges which may arise from the ongoing negotiation of a supply contract.
The provision for legal disputes concerns labour litigation and other legal proceedings.
Deferred tax liabilities amount to €/000 4,132 compared to €/000 3,880 as of 31 December 2016.
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Retirement funds | 781 | 755 | 26 |
| Post-employment benefits provision | 44,580 | 48,169 | (3,589) |
| Total | 45,361 | 48,924 | (3,563) |
Retirement funds comprise provisions for employees allocated by foreign companies and additional customer indemnity provisions, which represent the compensation due to agents in the case of the agency contract being terminated for reasons beyond their control. Uses refer to the payment of benefits already accrued in previous years, while allocations refer to benefits accrued in the period.
The item "Termination benefits provision", comprising severance pay of employees of Italian companies, includes termination benefits indicated in defined benefit plans.
The economic/technical assumptions used by Group companies operating in Italy to discount the value are shown in the table below:
| Technical annual discount rate | 1.67% |
|---|---|
| Annual rate of inflation | 1.50% |
| Annual rate of increase in termination benefits | 2.625% |
As regards the discount rate, the Group uses the iBoxx Corporates AA rating with a 10+ duration as the valuation reference.
If instead an iBoxx Corporates A rating with a 10+ duration had been used, the value of actuarial losses and the provision as of 30 June 2017 would have been lower by €271 thousand.
The table below shows the effects, in absolute terms, as of 30 June 2017, which would have occurred following changes in reasonably possible actuarial assumptions:
| Provision for termination benefits | |
|---|---|
| In thousands of euros | |
| Turnover rate +2% | 44,312 |
| Turnover rate -2% | 44,877 |
| Inflation rate + 0.25% | 45,177 |
| Inflation rate - 0.25% | 43,961 |
| Discount rate + 0.50% | 42,685 |
| Discount rate - 0.50% | 46,588 |
The average financial duration of the bond ranges from 10 to 28 years.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
| Year | Future amounts |
|---|---|
| In thousands of euros | |
| 1 | 4,890 |
| 2 | 1,247 |
| 3 | 3,426 |
| 4 | 5,210 |
| 5 | 4,648 |
The subsidiaries operating in Germany and Indonesia have provisions for employees identified as defined benefit plans. As of 30 June 2017, these provisions amounted to €/000 154 and €/000 122 respectively.
As of 30 June 2017 and as of 31 December 2016 no tax payables were recorded under non-current liabilities.
Their breakdown was as follows:
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Due for income taxes | 11,663 | 1,184 | 10,479 |
| Due for non-income tax | 42 | 38 | 4 |
| Tax payables for: | |||
| - VAT | 1,419 | 1,958 | (539) |
| - Tax withheld at source | 2,322 | 4,186 | (1,864) |
| - other | 838 | 762 | 76 |
| Total | 4,579 | 6,906 | (2,327) |
| Total | 16,284 | 8,128 | 8,156 |
The item includes tax payables recorded in the financial statements of individual consolidated companies, set aside in relation to tax charges for the individual companies on the basis of applicable national laws. Payables for withheld taxes made refer mainly to withheld taxes on employees' earnings, on employment termination payments and on self-employed earnings.
This item comprises:
| Non-current portion | As of 30 June 2017 | As of 31 December 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| Guarantee deposits | 2,601 | 2,553 | 48 |
| Deferred income | 2,530 | 2,597 | (67) |
| Miscellaneous payables to JV | 162 | 162 | 0 |
| Other payables | 170 | 173 | (3) |
| Total non-current portion | 5,463 | 5,485 | (22) |
| Current portion | As of 30 June 2017 | As of 31 December 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| Payables to employees | 23,134 | 14,881 | 8,253 |
| Accrued expenses | 7,854 | 5,664 | 2,190 |
| Deferred income | 1,560 | 1,227 | 333 |
| Amounts due to social security institutions | 5,285 | 8,821 | (3,536) |
| Fair value of derivatives | 106 | 237 | (131) |
| Miscellaneous payables to JV | 159 | 181 | (22) |
| Sundry payables due to associate companies | 39 | 34 | 5 |
| Sundry payables due to parent companies | 7,000 | 6,937 | 63 |
| Other payables | 9,618 | 8,954 | 664 |
| Total current portion | 54,755 | 46,936 | 7,819 |
Amounts due to employees include the amount for holidays accrued but not taken of €/000 11,698 and other payments to be made for €/000 11,436.
Payables due to associates refer to various amounts due to the Fondazione Piaggio.
Payables to parent companies consist of payables to Immsi referring to expenses relative to the consolidated tax convention.
The item Fair Value of hedging derivatives comprises the fair value of hedging transactions on the exchange risk on forecast transactions recognised on a cash flow hedge basis (€/000 106 current portion).
The item Accrued liabilities includes €/000 1,471 for interest on hedging derivatives and relative hedged items measured at fair value.
The Group has loans due after 5 years, which are referred to in detail in Note 37 Financial Liabilities. With the exception of the above payables, no other long-term payables due after five years exist.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
This section provides information on the carrying amount of financial assets and liabilities held, and in particular:
The investments heading comprises:
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Interests in joint ventures | 7,404 | 7,294 | 110 |
| Investments in associate companies | 137 | 151 | (14) |
| Total | 7,541 | 7,445 | 96 |
The increase in the item Interests in joint ventures refers to the equity valuation of the investment in the Zongshen Piaggio Foshan Motorcycles Co. Ltd. joint venture.
The table below summarises main financial data of the joint ventures:
| Zongshen Piaggio Foshan Motorcycle Co. Ltd | Accounts as of 30 June 2017 |
as of 31 December 2016 | Accounts | |
|---|---|---|---|---|
| In thousands of euros | ||||
| 45% * | 45% * | |||
| Working capital | 3,618 | 1,628 | 10,794 | 4,857 |
| Net debt | 1,694 | 762 | ||
| Total assets | 16,268 | 7,321 | 12,993 | 5,847 |
| Net capital employed | 21,580 | 9,711 | 23,787 | 10,704 |
| Provisions | 125 | 56 | 132 | 59 |
| Net debt | 0 | 0 | 2,302 | 1,036 |
| Shareholders' equity | 21,455 | 9,655 | 21,353 | 9,609 |
| Total sources of financing | 21,580 | 9,711 | 23,787 | 10,704 |
| Shareholders' equity attributable to the Group | 9,655 | 9,609 | ||
| Elimination of margins on internal transactions | (2,251) | (2,315) | ||
| Value of the investment | 7,404 | 7,294 |
* Group ownership
| 7,294 |
|---|
| 587 |
| (541) |
| 64 |
| 7,404 |
This item comprises:
| Associates | Carrying amount as of 31 December 2016 |
Adjustment | Carrying amount as of 30 June 2017 |
|---|---|---|---|
| In thousands of euros | |||
| Immsi Audit S.c.a.r.l. | 10 | 10 | |
| S.A.T. S.A. – Tunisia | - | - | |
| Depuradora D'Aigues de Martorelles | 31 | 31 | |
| Pontech Soc. Cons. a.r.l. – Pontedera | 110 | (14) | 96 |
| Total associates | 151 | (14) | 137 |
The value of investments in associates was adjusted during the period to the corresponding value of shareholders' equity.
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Fair value of derivatives | 13,593 | 19,173 | (5,580) |
| Investments in other companies | 36 | 36 | 0 |
| Total | 13,629 | 19,209 | (5,580) |
The item Fair value of hedging derivatives refers to €/000 12,731 from the long-term portion of the fair value of the cross currency swap for a private debenture loan, to €/000 812 from the long-term portion of the fair value of the cross currency swap for medium-term loans of the Indian subsidiary and to €/000 50 from the long-term portion of the cross currency swap for a medium-term loan of the Vietnamese subsidiary. For more details see section 39 "Financial risks" of the Notes.
The breakdown of the item "Investments in other companies" is shown in the table below:
| Other companies | As of 30 June 2017 | As of 31 December 2016 | Change |
|---|---|---|---|
| In thousands of euros | |||
| A.N.C.M.A. – Rome | 2 | 2 | 0 |
| ECOFOR SERVICE S.p.A. – Pontedera | 2 | 2 | 0 |
| Consorzio Fiat Media Center – Turin | 3 | 3 | 0 |
| S.C.P.S.T.V. | 21 | 21 | 0 |
| IVM | 8 | 8 | 0 |
| Total other companies | 36 | 36 | 0 |
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Fair value of derivatives | 3,564 | 7,069 | (3,505) |
| Total | 3,564 | 7,069 | (3,505) |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
This item refers to €/000 2,922 for the short-term portion of the fair value of the cross currency swap for the private debenture loan, to €/000 541 for the short-term portion of the fair value of the cross currency swap for medium-term loans of the Indian subsidiary and to €/000 101 for the short-term portion of the cross currency swap for the medium-term loan of the Vietnamese subsidiary. For more details see section 39 "Financial risks" of the Notes.
The item, which mainly includes short-term and on demand bank deposits, is broken down as follows:
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Bank and postal deposits | 201,873 | 166,114 | 35,759 |
| Cheques | 3 | 1 | 2 |
| Cash on hand | 73 | 48 | 25 |
| Securities | 20,808 | 25,594 | (4,786) |
| Total | 222,757 | 191,757 | 31,000 |
The item Securities refers to deposit agreements entered into by the Indian subsidiary to effectively use temporary liquidity. The increase in cash and cash equivalents compared to the previous year is mainly due to the issue of a new debenture loan in the last few days of June 2017.
The table below reconciles the amount of cash and cash equivalents above with cash and cash equivalents recognised in the Statement of Cash Flows.
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Liquidity | 222,757 | 152,591 | 70,166 |
| Current account overdrafts | (92) | (1,312) | 1,220 |
| Closing balance | 222,665 | 151,279 | 71,386 |
During the first half of 2017, the Group's total debt decreased by €/000 18,720. Net of the fair value measurement of financial derivatives to hedge the exchange risk and interest rate risk, and the adjustment of relative hedged items, as of 30 June 2017 total financial debt of the Group had decreased by €/000 9,805.
| Financial liabilities as of 30 June 2017 |
Financial liabilities as of 31 December 2016 |
Change | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Current | Non current |
Total Current | Non current |
Total Current | Non current |
Total | |||
| In thousands of euros | |||||||||
| Gross financial debt | 164,419 | 508,489 672,908 | 166,371 | 516,342 682,713 | (1,952) | (7,853) (9,805) | |||
| Fair value adjustment | 3,672 | 13,250 | 16,922 | 7,074 | 18,763 | 25,837 | (3,402) | (5,513) (8,915) | |
| Total | 168,091 | 521,739 689,830 | 173,445 | 535,105 708,550 | (5,354) (13,366) (18,720) |
Net financial debt of the Group amounted to €/000 450,151 as of 30 June 2017 compared to €/000 490,956 as of 31 December 2016.
| As of 30 June 2017 | As of 31 December 2016 | Change | |
|---|---|---|---|
| In thousands of euros | |||
| Liquidity | 222,757 | 191,757 | 31,000 |
| Securities | 0 | ||
| Current financial receivables | 0 | 0 | 0 |
| Payables due to banks | (83,246) | (64,150) | (19,096) |
| Current portion of bank borrowings | (43,847) | (80,132) | 36,285 |
| Debenture loan | (9,624) | (9,617) | (7) |
| Amounts due to factoring companies | (26,236) | (11,030) | (15,206) |
| Amounts due under leases | (1,135) | (1,114) | (21) |
| Current portion of payables due to other lenders | (331) | (328) | (3) |
| Current financial debt | (164,419) | (166,371) | 1,952 |
| Net current financial debt | 58,338 | 25,386 | 32,952 |
| Payables due to banks and lenders | (185,026) | (222,912) | 37,886 |
| Debenture loan | (313,371) | (282,442) | (30,929) |
| Amounts due under leases | (9,740) | (10,311) | 571 |
| Amounts due to other lenders | (352) | (677) | 325 |
| Non-current financial debt | (508,489) | (516,342) | 7,853 |
| Net Financial Debt* | (450,151) | (490,956) | 40,805 |
Non-current financial liabilities totalled €/000 508,489 against €/000 516,342 as of 31 December 2016, whereas current financial liabilities totalled €/000 164,419 compared to €/000 166,371 as of 31 December 2016.
The attached tables summarise the breakdown of financial debt as of 30 June 2017 and 31 December 2016, as well as the changes for the period.
| Non-current portion | Accounting balance as of 31/12/2016 |
Re payments |
New issues |
Reclassi fication to the current portion |
Exchange delta |
Other changes |
Book value as of 30/06/2017 |
|---|---|---|---|---|---|---|---|
| In thousands of euros | |||||||
| Bank financing | 222,912 | 571 | (37,227) | (1,547) | 317 | 185,026 | |
| Bonds | 282,442 | 30,000 | 929 | 313,371 | |||
| Other medium-/long-term loans: |
|||||||
| of which leases | 10,311 | (569) | (2) | 9,740 | |||
| of which amounts due to other lenders |
677 | (323) | (2) | 352 | |||
| Total other loans | 10,988 | 0 | 0 | (892) | 0 | (4) | 10,092 |
| Total | 516,342 | 0 | 30,571 | (38,119) | (1,547) | 1,242 | 508,489 |
* Pursuant to Consob Communication of 28 July 2006 and in compliance with the recommendation of the CESR of 10 February 2005 "Recommendation for the consistent implementation of the European Commission's Regulation on Prospectuses". The indicator does not include financial assets and liabilities arising from the fair value measurement of financial derivatives for hedging and otherwise, the fair value adjustment of relative hedged items equal to €/000 16,922 and relative accruals.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
| Current portion | Accounting balance as of 31/12/2016 |
Re payments |
New issues |
Reclassi fication from the non current portion |
Exchange delta |
Other changes |
Accounting balance as of 30/06/2017 |
|---|---|---|---|---|---|---|---|
| In thousands of euros | |||||||
| Current account overdrafts | 357 | (265) | 92 | ||||
| Current account payables | 63,793 | (11,551) | 34,707 | (3,795) | 83,154 | ||
| Bonds | 9,617 | 7 | 9,624 | ||||
| Payables due to factoring companies | 11,030 | 15,206 | 26,236 | ||||
| Current portion of medium- /long-term loans: |
|||||||
| of which leases | 1,114 | (561) | 569 | 13 | 1,135 | ||
| of which due to banks | 80,132 | (73,061) | 37,227 | (492) | 41 | 43,847 | |
| of which amounts due to other lenders |
328 | (321) | 323 | 1 | 331 | ||
| Total other loans | 81,574 | (73,943) | 0 | 38,119 | (492) | 55 | 45,313 |
| Total | 166,371 | (85,759) | 49,913 | 38,119 | (4,287) | 62 | 164,419 |
The breakdown of the debt is as follows:
| Accounting balance as of 30/06/2017 |
Accounting balance as of 31/12/2016 |
Nominal value as of 30/06/2017 |
Nominal value as of 31/12/2016 |
|
|---|---|---|---|---|
| In thousands of euros | ||||
| Bank financing | 312,118 | 367,194 | 312,968 | 368,402 |
| Bonds | 322,995 | 292,059 | 331,799 | 301,799 |
| Other medium-/long-term loans: | ||||
| of which leases | 10,876 | 11,425 | 10,889 | 11,440 |
| of which amounts due to other lenders |
26,919 | 12,035 | 26,919 | 12,035 |
| Total other loans | 37,795 | 23,460 | 37,808 | 23,475 |
| Total | 672,908 | 682,713 | 682,575 | 693,676 |
The table below shows the debt servicing schedule as of 30 June 2017:
| Nominal value as of 30/06/2017 |
Amounts falling due |
Amounts falling due after |
Amounts falling due in | |||||
|---|---|---|---|---|---|---|---|---|
| within 12 months |
12 months | 2nd half of 2018 |
2019 | 2020 | 2021 Beyond | |||
| In thousands of euros | ||||||||
| Bank financing | 312,968 | 127,278 | 185,690 | 53,420 | 59,369 | 16,326 | 14,299 | 42,276 |
| - including opening of credit lines and bank overdrafts |
83,245 | 83,245 | ||||||
| - of which medium/long-term bank loans |
229,723 | 44,033 | 185,690 | 53,420 | 59,369 | 16,326 | 14,299 | 42,276 |
| Bonds | 331,799 | 9,669 | 322,130 | 9,669 | 10,360 | 11,050 | 261,051 | 30,000 |
| Other medium-/long-term loans: | ||||||||
| of which leases | 10,889 | 1,135 | 9,754 | 575 | 1,240 | 1,147 | 1,167 | 5,625 |
| of which amounts due to other lenders | 26,919 | 26,567 | 352 | 7 | 335 | 10 | ||
| Total other loans | 37,808 | 27,702 | 10,106 | 582 | 1,575 | 1,157 | 1,167 | 5,625 |
| Total | 682,575 | 164,649 | 517,926 | 63,671 | 71,304 | 28,533 276,517 | 77,901 |
The following table analyses financial debt by currency and interest rate.
| Accounting | as of 30/06/2017 | |||
|---|---|---|---|---|
| balance as of 31/12/2016 |
Accounting balance |
Nominal value |
Applicable interest rate |
|
| In thousands of euros | ||||
| Euro | 583,469 | 578,116 | 587,783 | 3.29% |
| Indian Rupee | 13,393 | 7,447 | 7,447 | 9.45% |
| Indonesian Rupiah | 2,824 | 3,947 | 3,947 | 8.94% |
| US Dollar | 26,090 | 24,693 | 24,693 | 2.96% |
| Vietnamese Dong | 53,668 | 56,279 | 56,279 | 7.00% |
| Japanese Yen | 3,269 | 2,426 | 2,426 | 2.75% |
| Total currencies other than euro | 99,244 | 94,792 | 94,792 | |
| Total | 682,713 | 672,908 | 682,575 | 3.69% |
Medium and long-term bank debt amounts to €/000 228,873 (of which €/000 185,026 non-current and €/000 43,847 current) and consists of the following loans:
› a €/000 5,332 medium-term loan for USD/000 6,553 granted by International Finance Corporation to the subsidiary Piaggio Vietnam with interest accruing at a variable rate. The loan will fall due on 15 July 2018 and has an amortisation schedule of six-monthly instalments from July 2014. Contract terms include a guarantee of the Parent Company and some covenants (described below). Cross currency swaps have been taken out on this loan to hedge the exchange risk and interest rate risk;
› a €/000 13,860 medium-term loan for VND/000 358,104,752 granted by VietinBank to the subsidiary Piaggio Vietnam to finance the R&D investments plan. The loan matures in June 2021, with a repayment schedule in 7 six-monthly instalments, starting from June 2018, with a fixed rate for the first year, followed by a variable rate;
All the above financial liabilities are unsecured.
The item Bonds for €/000 322,995 (nominal value of €/000 331,799) refers to:
The company may repay in advance:
Medium-/long-term payables due to other lenders equal to €/000 11,558 of which €/000 10,092 due after the year and €/000 1,466 as the current portion, are detailed as follows:
Financial advances received from factoring companies and banks, on the sale of trade receivables with recourse, totalled €/000 26,236.
In line with market practices for borrowers with a similar credit rating, main loan contracts require compliance with:
The measurement of financial covenants and other contract commitments is monitored by the Group on an ongoing basis. According to results as of 30 June 2017, all covenants had been fully met.
The high-yield debenture loan issued by the company in April 2014 requires compliance with typical covenants of international high-yield market practices. In particular, the company must observe the EBITDA/Net borrowing costs index, based on the threshold established in the Prospectus, to increase financial debt defined during issue. In addition, the Prospectus includes some obligations for the issuer, which limit, inter alia, the capacity to:
Failure to comply with the covenants and other contract commitments of the loan and debenture loan, if not remedied in agreed times, may give rise to an obligation for the early repayment of the outstanding amount of the loan.
All financial liabilities are measured in accordance with accounting standards and based on the amortised cost method (except for liabilities with hedging derivatives measured at Fair Value Through Profit & Loss, for which the same measurement criteria used for the derivative are applied): according to this method, the nominal amount of the liability is decreased by the amount of relative costs of issue and/or stipulation, in addition to any costs relating to refinancing of previous liabilities. The amortisation of these costs is determined on an effective interest rate basis, and namely the rate which discounts the future flows of interest payable and reimbursements of principal at the net carrying amount of the financial liability.
IFRS 13 – Fair Value Measurement defines fair value on the basis of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of an active market or market that does not operate regularly, fair value is measured by valuation techniques. The standard defines a fair value hierarchy:
The valuation techniques referred to levels 2 and 3 must take into account adjustment factors that measure the risk of insolvency of both parties. To this end, the standard introduces the concepts of Credit Value Adjustment (CVA) and Debit Value Adjustment (DVA): CVA makes it possible to include the counterparty credit risk in the fair value measurement; DVA reflects the risk of insolvency of the Group.
The table below shows the fair value of payables measured using the amortised cost method as of 30 June 2017:
| Nominal value | Carrying amount | Fair Value * | |
|---|---|---|---|
| In thousands of euros | |||
| High yield debenture loan | 250,000 | 241,328 | 259,100 |
| Private debenture loan 2021 | 51,799 | 51,667 | 68,859 |
| Private debenture loan 2022 | 30,000 | 30,000 | 30,181 |
| EIB (R&D loan 2013-2015) | 27,273 | 27,273 | 27,473 |
| EIB (R&D loan 2016-2018) | 65,714 | 65,615 | 61,529 |
| Credit line from B. Pop. Emilia Romagna | 16,670 | 16,640 | 16,658 |
| Loan from Banco BPM | 12,500 | 12,500 | 12,551 |
| Revolving credit line from B. del Mezzogiorno | 20,000 | 19,991 | 19,503 |
| Loan from Banco BPM | 5,000 | 4,995 | 5,001 |
| Revolving syndicated loan | 5,000 | 4,529 | 4,996 |
| Syndicated loan maturing in July 2019 | 50,000 | 49,764 | 50,219 |
| VietinBank medium-term loan | 13,860 | 13,860 | 14,002 |
*The value deducts DVA related to the issuer, i.e. it includes the risk of insolvency of Piaggio.
For liabilities due within 18 months, the carrying amount is basically considered the same as the fair value.
The table below shows the assets and liabilities measured and recognised at fair value as of 30 June 2017, by hierarchical level of fair value measurement.
| Level 1 | Level 2 | Level 3 | |
|---|---|---|---|
| In thousands of euros | |||
| Assets measured at fair value | |||
| Investment Property | 11,667 | ||
| Financial derivatives: | |||
| - of which financial assets | 17,005 | 151 | |
| - of which other receivables | 243 | ||
| Investments in other companies | 36 | ||
| Total assets | 17,248 | 11,854 | |
| Liabilities measured at fair value | |||
| Financial derivatives | |||
| - of which financial liabilities | |||
| - of which other payables | (106) | ||
| Financial liabilities at fair value recognised through profit or loss |
(81,454) | ||
| Total liabilities | (81,560) | ||
| General total | (64,312) | 11,854 |
Investment property relative to the Martorelles site was measured as hierarchical level 3. This value was confirmed by a specific valuation of an independent expert, who measured the "Fair value less cost of disposal" based on a market approach (as provided for by IFRS 13). The valuation took account of comparable transactions on the local market, and the project to convert the area (from an industrial to a commercial site, as approved by the local authorities on 18 February 2014), referring however the value of the investment to its current status. Consequently, an accompanying 10% increase or decrease in all the variables based on the valuation of the investment would have generated a higher value of around €/000 3,800 and a lower value of €/000 3,100, with an equivalent greater or lesser impact on the income statement for the period.
The valuation of the cross currency swap relative to the Vietnamese subsidiary was also assigned the same hierarchy level. This classification reflects the illiquidity of the local market, which does now allow for a valuation based on conventional criteria. If valuation techniques typical of liquid markets had been adopted, which is not the case for the Vietnamese financial market, derivatives would have had a fair value totalling €/000 129, rather than €/000 151 (included under financial hedging instruments - level 3) and accrued expenses on financial derivatives for hedging equal to €/000 319.
The following tables show Level 2 and Level 3 changes during the first half of 2017:
| Level 2 | |
|---|---|
| In thousands of euros | |
| Balance as of 31 December 2016 | (72,471) |
| Gain (loss) recognised in profit or loss | 124 |
| Gain (loss) recognised in the statement of comprehensive income | (164) |
| Increases/(Decreases) | 8,199 |
| Balance as of 30 June 2017 | (64,312) |
| Level 3 | |
| In thousands of euros | |
| Balance as of 31 December 2016 | 12,218 |
| Gain (loss) recognised in profit or loss | (364) |
| Increases/(Decreases) | |
| Balance as of 30 June 2017 | 11,854 |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
This section describes all financial risks to which the Group is exposed and how these risks could affect future results.
The Group considers that its exposure to credit risk is as follows:
| As of 30 June 2017 | As of 31 December 2016 | |
|---|---|---|
| In thousands of euros | ||
| Liquid assets | 201,873 | 166,114 |
| Securities | 20,808 | 25,594 |
| Financial receivables | 17,193 | 26,278 |
| Other receivables | 35,659 | 37,321 |
| Tax receivables | 46,833 | 42,463 |
| Trade receivables | 126,885 | 75,166 |
| Total | 449,251 | 372,936 |
The Group monitors or manages credit centrally by using established policies and guidelines. The portfolio of trade receivables shows no signs of concentrated credit risk in light of the broad distribution of our licensee or distributor network. In addition, most trade receivables are short-term. In order to optimise credit management, the Group has established revolving programmes with some primary factoring companies for selling its trade receivables without recourse in Europe and the United States.
The financial risks the Group is exposed to are liquidity risk, exchange risk, interest rate risk and credit risk.
The management of these risks, in order to reduce management costs and dedicated resources, is centralised and treasury operations take place in accordance with formal policies and guidelines which are applicable to all Group companies.
The liquidity risk arises from the possibility that available financial resources are not sufficient to cover, in due times and procedures, future payments arising from financial and/or commercial obligations. To deal with these risks, cash flows and the Group's credit line needs are monitored or managed centrally under the control of the Group's Treasury in order to guarantee an effective and efficient management of the financial resources as well as optimise the debt's maturity standpoint.
In addition, the Parent Company finances the temporary cash requirements of Group companies by providing direct short-term loans regulated in market conditions or guarantees. A cash pooling zero balance system is used between the Parent Company and European companies to reset the receivable and payable balances of subsidiaries on a daily basis, for a more effective and efficient management of liquidity in the Eurozone.
As of 30 June 2017 the most important credit lines irrevocable until maturity granted to the Parent Company were as follows:
Other Group companies also have irrevocable loans totalling €/000 26,591, with final settlement in June 2021.
As of 30 June 2017, the Group had a liquidity of €/000 222,757, undrawn irrevocable credit lines of €/000 182,500 and revocable credit lines of €/000 110,381, as detailed below:
| As of 30 June 2017 | As of 31 December 2016 | |
|---|---|---|
| In thousands of euros | ||
| Variable rate with maturity within one year - irrevocable until maturity | ||
| Variable rate with maturity beyond one year - irrevocable until maturity | 182,500 | 170,457 |
| Variable rate with maturity within one year - cash revocable | 91,381 | 104,290 |
| Variable rate with maturity within one year - with revocation for self liquidating typologies |
19,000 | 19,000 |
| Total undrawn credit lines | 292,881 | 293,747 |
Management considers that currently available funds, as well as funds that will be generated from operations and loans, will enable the Group to meet its requirements relative to investments, the management of working capital and repayment of loans on expiry and will ensure an adequate level of operating and strategic flexibility.
The Group operates in an international context where transactions are conducted in currencies different from the euro. This exposes the Group to risks arising from exchange rates fluctuations. For this purpose, the Group has an exchange rate risk management policy which aims to neutralise the possible negative effects of the changes in exchange rates on company cash-flows.
This policy analyses:
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
As of 30 June 2017, the Group had undertaken the following futures operations (recognised based on the settlement date), relative to payables and receivables already recognised to hedge the transaction exchange risk:
| Company | Operation | Currency | Amount in currency |
Value in local currency (forward exchange rate) |
Average maturity |
|---|---|---|---|---|---|
| In thousands | In thousands | ||||
| Piaggio & C. | Purchase | CNY | 116,000 | 15,121 | 01/08/2017 |
| Piaggio & C. | Purchase | JPY | 360,000 | 2,900 | 07/07/2017 |
| Piaggio & C. | Purchase | SEK | 9,500 | 974 | 31/07/2017 |
| Piaggio & C. | Purchase | USD | 10,850 | 9,714 | 11/07/2017 |
| Piaggio & C. | Sale | CAD | 7,610 | 5,181 | 03/08/2017 |
| Piaggio & C. | Sale | CNY | 16,000 | 2,063 | 03/07/2017 |
| Piaggio & C. | Sale | GBP | 600 | 680 | 29/09/2017 |
| Piaggio & C. | Sale | INR | 85,000 | 1,152 | 31/07/2017 |
| Piaggio & C. | Sale | JPY | 65,000 | 523 | 31/07/2017 |
| Piaggio & C. | Sale | SEK | 1,000 | 103 | 31/07/2017 |
| Piaggio & C. | Sale | SGD | 200 | 127 | 31/07/2017 |
| Piaggio & C. | Sale | USD | 9,420 | 8,415 | 24/07/2017 |
| Piaggio Group Americas | Purchase | CAD | 5,290 | 3,940 | 31/07/2017 |
| Piaggio Group Americas | Sale | € | 275 | 311 | 21/09/2017 |
| Piaggio Group Americas | Sale | CAD | 1,800 | 1,336 | 27/07/2017 |
| Piaggio Vietnam | Sale | € | 25,700 | 653,251,000 | 08/10/2017 |
| Piaggio Indonesia | Purchase | USD | 3,462 | 49,024,000 | 06/08/2017 |
| Piaggio Vehicles Private Limited | Sale | € | 3,874 | 280,613 | 24/08/2017 |
| Piaggio Vehicles Private Limited | Sale | USD | 1,626 | 105,650 | 19/08/2017 |
As of 30 June 2017, the Group had undertaken the following hedging transactions on the exchange risk:
| Company | Operation | Currency | Amount in currency |
Value in local currency (forward exchange rate) |
Average maturity |
|---|---|---|---|---|---|
| In thousands | In thousands | ||||
| Piaggio & C. | Purchase | CNY | 69,100 | 8,895 | 12/10/2017 |
| Piaggio & C. | Sale | GBP | 5,160 | 6,070 | 20/09/2017 |
To hedge the economic exchange risk alone, cash flow hedging is adopted with the effective portion of profits and losses recognised in a specific shareholders' equity reserve. Fair value is determined based on market quotations provided by main traders.
As of 30 June 2017 the total fair value of hedging instruments for the economic exchange risk recognised on a hedge accounting basis was negative by €/000 137. During the first half of 2017, profit was recognised under Other Comprehensive Income amounting to €/000 18 and losses from Other Comprehensive Income were reclassified under profit/loss for the period amounting to €/000 44.
The net balance of cash flows during the first half of 2017 in main currencies is shown below:
| Cash flow for the 1st half of 2017 | ||
|---|---|---|
| In millions of euros | ||
| Canadian Dollar | 3.6 | |
| Pound Sterling | 13.6 | |
| Japanese Yen | (2.8) | |
| US Dollar | 17.5 | |
| Indian Rupee | (0.7) | |
| Croatian Kuna | 1.6 | |
| Chinese Yuan* | (22.1) | |
| Vietnamese Dong | (14.9) | |
| Indonesian Rupiah | 6.5 | |
| * Cash flow partially in euros | Total cash flow in foreign currency | 2.3 |
In view of the above, an assumed appreciation/deprecation of 3% of the euro would have generated potential profits for €/000 299 and potential losses for €/000 317 respectively.
This risk arises from fluctuating interest rates and the impact this may have on future cash flows arising from variable rate financial assets and liabilities. The Group regularly measures and controls its exposure to the risk of interest rate changes, as established by its management policies, in order to reduce fluctuating borrowing costs, and limit the risk of a potential increase in interest rates. This objective is achieved through an adequate mix of fixed and variable rate exposure, and the use of derivatives, mainly interest rate swaps and cross currency swaps.
As of 30 June 2017, the following hedging derivatives were taken out:
purpose of the instruments is to hedge the exchange risk and partially hedge the interest rate risk, turning the loan from US dollars at a variable rate into Vietnamese Dong at a fixed rate, except for a minor portion (24%) at a variable rate. As of 30 June 2017 the fair value of the instruments is positive, amounting to €/000 151. Sensitivity analysis of the instrument and its underlying, assuming a 1% increase and decrease in the shift of the variable rates curve, showed a potential impact on the Income Statement, net of the relative tax effect, of €/000 13 and €/000 -14 respectively, assuming constant exchange rates. Assuming a 1% reversal and write-down of the exchange rate of the Vietnamese Dong, sensitivity analysis of the instrument and its underlying identified a potential impact on the Income Statement, net of the relative tax effect, which was basically negligible.
| Fair value | |
|---|---|
| In thousands of euros | |
| Piaggio & C. S.p.A. | |
| Cross Currency Swap | 15,652 |
| Piaggio Vehicles Private Limited | |
| Cross Currency Swap | 1,353 |
| Piaggio Vietnam | |
| Cross Currency Swap | 151 |
equal to €207,613,944.37 divided into 358,153,644 ordinary shares.
| 40. Share capital and reserves | €/000 391,137 |
|---|---|
| Share capital | €/000 207,614 |
| During the period, the nominal share capital of Piaggio & C. did not change. | |
| On 19 April 2017 the new composition of share capital of Piaggio & C. S.p.A (fully subscribed and paid | |
| up) was registered at the relative Companies Register, following the cancellation of 3,054,736 treasury | |
| shares without any change to the share capital, resolved by the Extraordinary Shareholders' Meeting of | |
| 12 April 2017. | |
| Therefore, as of 30 June 2017, the nominal share capital of Piaggio & C., fully subscribed and paid up, was |
Treasury shares €/000 0
On 12 April 2017, the Extraordinary Shareholders' Meeting resolved to cancel 3,054,736 treasury shares. Therefore, as of 30 June 2017 Piaggio & C. did not hold any treasury shares.
| Shares in circulation and treasury shares | 2017 | 2016 |
|---|---|---|
| no. of shares | ||
| Situation as of 1 January | ||
| Shares issued | 361,208,380 | 361,208,380 |
| Treasury portfolio shares | 3,054,736 | 16,000 |
| Shares in circulation | 358,153,644 | 361,192,380 |
| Movements for the period | ||
| Cancellation of treasury shares | (3,054,736) | |
| Purchase of treasury shares | 3,038,736 | |
| Situation as of 30 June 2017 and 31 December 2016 | ||
| Shares issued | 358,153,644 | 361,208,380 |
| Treasury portfolio shares | 3,054,736 | |
| Shares in circulation | 358,153,644 | 358,153,644 |
The share premium reserve as of 30 June 2017 was unchanged compared to 31 December 2016.
The legal reserve as of 30 June 2017 had increased by €/000 700 as a result of the allocation of earnings for the last period.
The financial instruments fair value reserve is negative and refers to the effects of cash flow hedge accounting in foreign currencies, interest and specific business transactions. These transactions are described in full in the note on financial instruments.
The Shareholders' Meeting of Piaggio & C. S.p.A. of 12 April 2017 resolved to distribute a dividend of 5.5 eurocents per ordinary share. During April this year, therefore, dividends were distributed to a total value of €/000 19,698. During 2016, dividends totalling €/000 17,962 were paid.
| Total amount | Dividend per share | ||||
|---|---|---|---|---|---|
| 2017 €/000 |
2016 €/000 |
2017 € |
2016 € |
||
| Authorised and paid | 19,698 | 17,962 | 0.059 | 0.05 |
The end of period figures refer to non-controlling interests in Aprilia Brasil Industria de Motociclos S.A.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
| Reserve for measure ment of financial instruments |
Group translation reserve |
Earnings reserve |
Group total |
Share capital and reserves attributable to non controlling interests |
Total Other Comprehen sive Income |
|
|---|---|---|---|---|---|---|
| In thousands of euros | ||||||
| As of 30 June 2017 | ||||||
| Items that will not be reclassified in the income statement |
||||||
| Remeasurements of defined benefit plans |
1,921 | 1,921 | 1,921 | |||
| Total | 0 | 0 | 1,921 | 1,921 | 0 | 1,921 |
| Items that may be reclassified in the income statement |
||||||
| Total translation gains (losses) | (5,467) | (5,467) | 27 | (5,440) | ||
| Portion of components of the Statement of Comprehensive Income of subsidiaries/associates valued with the equity method |
(542) | (542) | (542) | |||
| Total profits (losses) on cash flow hedges |
40 | 40 | 40 | |||
| Total | 40 | (6,009) | 0 | (5,969) | 27 | (5,942) |
| Other components of the Statement of Comprehensive Income |
40 | (6,009) | 1,921 | (4,048) | 27 | (4,021) |
| As of 30 June 2016 | ||||||
| Items that will not be reclassified in the income statement |
||||||
| Remeasurements of defined benefit plans |
(3,367) | (3,367) | (3,367) | |||
| Total | 0 | 0 | (3,367) | (3,367) | 0 | (3,367) |
| Items that may be reclassified in the income statement |
||||||
| Total translation gains (losses) | (2,495) | (2,495) | (49) | (2,544) | ||
| Portion of components of the Statement of Comprehensive Income of subsidiaries/associates valued with the equity method |
(407) | (407) | (407) | |||
| Total profits (losses) on cash flow hedges |
147 | 147 | 147 | |||
| Total | 147 | (2,902) | 0 | (2,755) | (49) | (2,804) |
| Other components of the Statement of Comprehensive Income |
147 | (2,902) | (3,367) | (6,122) | (49) | (6,171) |
The tax effect relative to other components of the Statement of Comprehensive Income is broken down as follows:
| As of 30 June 2017 | As of 30 June 2016 | |||||
|---|---|---|---|---|---|---|
| Gross value | Tax (expense) / benefit |
Net value Gross value | Tax (expense) / benefit |
Net value | ||
| In thousands of euros | ||||||
| Remeasurements of defined benefit plans | 2,528 | (607) | 1,921 | (4,428) | 1,061 | (3,367) |
| Total translation gains (losses) | (5,440) | (5,440) | (2,544) | (2,544) | ||
| Portion of components of the Statement of Comprehensive Income of subsidiaries/associates measured with the equity method |
(542) | (542) | (407) | (407) | ||
| Total profits (losses) on cash flow hedges | 52 | (12) | 40 | 163 | (16) | 147 |
| Other components of the Statement of Comprehensive Income |
(3,402) | (619) | (4,021) | (7,216) | 1,045 | (6,171) |
As of 30 June 2017, there were no incentive plans based on financial instruments.
Revenues, costs, payables and receivables as of 30 June 2017 involving parent, subsidiaries and associate companies, refer to the sale of goods or services which are a part of normal operations of the Group. Transactions are carried out at normal market values, depending on the characteristics of the goods and services provided.
The information on transactions with related parties, including information required by Consob in its communication of 28 July 2006 DEM/6064293, is analysed below.
The procedure for transactions with related parties, pursuant to article 4 of Consob Regulation no. 17221 of 12 March 2010 as amended, approved by the Board on 30 September 2010, is published on the institutional site of the Issuer www.piaggiogroup.com, under Governance.
Piaggio & C. S.p.A. is controlled by the following companies:
| Designation | Registered office | Type | % of ownership | |||
|---|---|---|---|---|---|---|
| As of 30 June 2017 |
As of 31 December 2016 |
|||||
| IMMSI S.p.A. | Mantua - Italy | Direct parent company | 50.4891 | 50.0621 | ||
| Omniaholding S.p.A. | Mantua - Italy | Final parent company | 0.1370 | 0.0858 |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
Piaggio & C. S.p.A. is subject to the management and coordination of IMMSI S.p.A. pursuant to article 2497 et seq. of the Italian Civil Code. During the period, management and coordination comprised the following activities:
In 2016, for a further three years, the Parent Company signed up to the National Consolidated Tax Mechanism pursuant to articles 117 to 129 of the Consolidated Income Tax Act (T.U.I.R.) of which IMMSI S.p.A. is the consolidating company, and to whom other IMMSI Group companies report to. The consolidating company determines a single global income equal to the algebraic sum of taxable amounts (income or loss) realised by individual companies that opt for this type of group taxation.
The consolidating company recognises a receivable from the consolidated company which is equal to the corporate tax to be paid on the taxable income transferred by the latter. Whereas, in the case of companies reporting tax losses, the consolidating company recognises a payable related to corporate tax on the portion of loss actually used to determine global overall income. Under the National Consolidated Tax Mechanism, companies may, pursuant to article 96 of Presidential Decree no. 917/86, allocate the excess of interest payable which is not deductible to one of the companies so that, up to the excess of Gross Operating Income produced in the same tax period by other subjects party to the consolidation, the amount may be used to reduce the total income of the Group.
Piaggio & C. S.p.A. has undertaken a rental agreement for offices owned by Omniaholding S.p.A.. This agreement, signed in normal market conditions, was previously approved by the Related Parties Transactions Committee, as provided for by the procedure for transactions with related parties adopted by the Company.
Piaggio Concept Store Mantova Srl has a lease contract for its sales premises and workshop with Omniaholding S.p.A.. This agreement was signed in normal market conditions.
Omniaholding S.p.A. has undersigned Piaggio & C. bonds for a value of €2.9 million on the financial market, and collected related interest.
Pursuant to article 2.6.2, section 13 of the Regulation of Stock Markets organised and managed by Borsa Italiana S.p.A., the conditions as of article 37 of Consob regulation no. 16191/2007 exist.
The main relations with subsidiaries, eliminated in the consolidation process, refer to the following transactions:
Piaggio Vietnam sells vehicles, spare parts and accessories, which it has manufactured in some cases, for sale on respective markets, to:
Piaggio Vehicles Private Limited sells vehicles, spare parts and accessories, for sale on respective markets, and components and engines to use in manufacturing, to Piaggio & C. S.p.A..
Piaggio Hrvatska, Piaggio Hellas, Piaggio Group Americas and Piaggio Vietnam
› distribute vehicles, spare parts and accessories purchased by Piaggio & C. on their respective markets.
› provide a vehicle, spare part and accessory distribution service to Piaggio Vietnam for their respective markets.
Condensed Consolidated Interim Financial Statements Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
› provide a sales promotion service and after-sales services to Piaggio & C. S.p.A. for their respective markets.
› provides a sales promotion service and after-sales services to Piaggio Vietnam in the Asia Pacific region.
› provides a sales promotion service and after-sales services to Piaggio Group Americas in Canada.
Foshan Piaggio Vehicles Technologies R&D provides to:
› provides a vehicle and component research/design/development service to Piaggio & C. S.p.A.
Aprilia Racing provides to Piaggio & C:
› rents a property to Piaggio & C. S.p.A.
Main intercompany relations between subsidiaries and JV Zongshen Piaggio Foshan Motorcycle Co. Ltd, refer to the following transactions:
Piaggio & C. S.p.A.
› grants licences for rights to use the brand and technological know how to Zongshen Piaggio Foshan Motorcycle Co. Ltd..
Foshan Piaggio Vehicles Tecnologies R&D
› sells vehicles to Zongshen Piaggio Foshan Motorcycle Co. Ltd. for sale on the Chinese market.
The tables below summarise relations described above and financial relations with parent companies, subsidiaries and associate companies as of 30 June 2017 and relations during the period, as well as their overall impact on financial statement items.
| As of 30 June 2017 | Fondazione Piaggio |
Zongshen Piaggio Foshan |
IMMSI Audit |
Pontech - Pontedera & Tecnologia |
Studio Girelli |
Trevi | Omniaholding | IMMSI | Total | % of account ing item |
|---|---|---|---|---|---|---|---|---|---|---|
| In thousands of euros | ||||||||||
| Income statement | ||||||||||
| Revenues from sales | 998 | 998 | 0.14% | |||||||
| Costs for materials | 16,424 | 16,424 | 3.91% | |||||||
| Costs for services | 472 | 18 | 9 | 617 | 1,116 | 1.18% | ||||
| Insurance | 17 | 17 | 0.10% | |||||||
| Leases and rentals | 109 | 691 | 800 | 9.08% | ||||||
| Other operating income | 121 | 41 | 27 | 189 | 0.35% | |||||
| Other operating costs | 6 | 6 | 0.05% | |||||||
| Write-down/Impairment of investments |
651 | (14) | 637 | 100.00% | ||||||
| Borrowing costs | 66 | 66 | 0.37% | |||||||
| Assets | ||||||||||
| Other non-current receivables | 115 | 115 | 0.93% | |||||||
| Current trade receivables | 1,995 | 103 | 2 | 2,100 | 1.66% | |||||
| Other current receivables | 22 | 1,002 | 16 | 8,317 | 9,357 | 40.15% | ||||
| Liabilities | ||||||||||
| Financial liabilities falling due after one year |
2,900 | 2,900 | 0.56% | |||||||
| Other non-current payables | 162 | 162 | 2.97% | |||||||
| Current trade payables | 16,684 | 18 | 9 | 37 | 97 16,845 | 3.42% | ||||
| Other current payables | 39 | 159 | 7,000 | 7,198 | 13.15% |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
Piaggio opposed the proceedings undertaken by the consumer association Altroconsumo, in accordance with article 140 of the Consumer Code, opposing, also with the filing of a specific technical report written by an independent expert, the alleged existence of a design defect and hazardous nature of the Gilera Runner first series, which was manufactured and sold by Piaggio from 1997 to 2005. In the case put forward by Altroconsumo, the erroneous design would make the vehicle in question more hazardous in the event of an accident with frontal impact, referring, as an example to two accidents occurring in 1999 and 2009 to Mr Gastaldi and Mr Stella respectively, following which the Gilera Runner burst into flames. The trial judge rejected the claim, ordering Altroconsumo to pay Piaggio's legal fees. Following the appeal made by Altroconsumo, the Board ordered a technical appraisal to ascertain the existence of the design defect claimed by Altroconsumo. Following the results of the appraisal and hearing held on 18 December 2012, the Board informed the parties on 29 January 2013 that Altroconsumo's appeal had been upheld, ruling Piaggio to (i) inform owners of the hazardous nature of the product, (ii) publish the ruling of the Board in some newspapers and specialised magazines (iii) recall the product. The effects of the ruling were subsequently suspended by the Court of Pontedera with a ruling ("inaudita altera parte") of 28 March 2013, concerning the appeal made by Piaggio, in accordance with article 700 of the Italian Code of Civil Proceedings. Following the cross examination with Altroconsumo, the suspension ruling was confirmed by the Court of Pontedera on 3 June 2013. Altroconsumo appealed against the suspension ruling before the Board at the Court of Pisa. The Board therefore ordered a new Court-appointed expert's report, having noted contradictions between i) the report of the Courtappointed expert Professor Cantore in proceedings brought by Altroconsumo and ii) the report of the Courtappointed expert Professor Cantore in proceedings brought by Mr Stella in a separate suit for the compensation for damages. Activities of the expert were completed and the related report was filed in December 2014. The results of the expert's report were discussed at the hearing of 19 January 2015, at the end of which the Court of Pisa upheld the judgement issued on 29 January 2013. Piaggio has complied with the decision by publishing a notice in the press and launching a recall campaign for its vehicles pending the outcome of the proceedings, as described below.
Piaggio took action before the Court of Pontedera (now the Court of Pisa) for a final dismissal of the ruling of the Court of Pisa of 29 January 2013. Upholding Piaggio's appeal, the Judge ordered a new expert witness report on the product, appointing Professor Belingardi of Turin Polytechnic as the expert, who was sworn in during the hearing of 14 July 2015. On 10 March 2017, the expert witness filed a technical report. The hearing was held on 6 April 2017. The judge has adjourned the case to 3 October 2017 for closing arguments.
Canadian Scooter Corp. (CSC), sole distributor of Piaggio for Canada, summoned Piaggio & C. S.p.A., Piaggio Group Americas Inc. and Nacional Motor S.A to appear before the Court of Toronto (Canada) in August 2009 to obtain compensation for damages sustained due to the alleged infringement of regulations established by Canadian law on franchising (the Arthur Wishart Act). The proceedings have been suspended at present, as attempts at settlement are still pending, due to no action being taken by the other party.
In 2010, Piaggio took action to establish an arbitration board through the Arbitration Chamber of Milan, for a ruling against some companies of the Case New Holland Group (Italy, Netherlands and the USA), to recover damages under contractual and non-contractual liability relating to the execution of a supply and development contract of a new family of utility vehicles (NUV). In the award notified to the parties on 3 August 2012, the Board rejected the claims made by the Company. The Company appealed against this award before the Appeal Court of Milan, which established the first hearing for 4 June 2013. The hearing for closing arguments set for 12 January 2016 was adjourned to 26 January 2016. With the ruling of 8 June 2016, the Court of Appeal of Milan rejected Piaggio's appeal. The Company filed an appeal with the Court of Cassation.
Da Lio S.p.A., by means of a complaint received on 15 April 2009, summoned the Parent Company before the Court of Pisa to claim compensation for the alleged damages sustained for various reasons as a result of the termination of supply relationships. The Company appeared in court requesting the rejection of all opposing requests. Da Lio requested a joinder with the opposition concerning the injunction obtained by Piaggio to return the moulds retained by the supplier at the end of the supply agreement. Judgements were considered and a ruling issued pursuant to article 186-ter of the Italian Code of Civil Proceedings, on 7 June 2011, ordering Piaggio to pay the sum of Euro 109,586.60, plus interest relative to sums which were not disputed. During 2012, testimonial evidence was presented. After reaching a decision at the end of testimonial evidence, the Judge admitted a technical/accounting court-appointed expert requested by Da Lio to quantify the amount of interest claimed by Da Lio and value of stock. The technical appraisal was completed at the end of 2014. At the hearing of 12 February, the Judge arranged for a mediation hearing for 23 April 2015. Following the hearing and in the absence of conciliation, the case was adjourned to 23 September 2016 for closing arguments and was therefore ruled on.
In June 2011 Elma Srl, a Piaggio dealer since 1995, started two separate proceedings against the Parent Company, claiming the payment of approximately €2 million for alleged breach of the sole agency ensured by Piaggio for the Rome area and an additional €5 million as damages for alleged breach and abuse of economic dependence by the Company. Piaggio opposed the proceedings undertaken by Elma, fully disputing its claims and requesting a ruling for Elma to settle outstanding sums owing of approximately €966,000.
During the case, Piaggio requested the enforcement of bank guarantees that ensured against the risk of default by the dealer issued in its favour by three banks. Elma attempted to stop enforcement of the guarantees with preventive proceedings at the Court of Pisa (Pontedera section): the proceedings ended in favour of Piaggio that collected the amounts of the guarantees (over €400,000). Trial proceedings took place and a hearing was held on 24 April 2013 to examine evidence. After reaching a decision at the aforesaid hearing, the Judge rejected requests for preliminary examination of Elma and set the hearing for 17 December 2015 for closing arguments, which was adjourned to 3 March 2016 and was then not held as the judge was transferred. The case was assigned to a new Judge, who will take up office in autumn 2017.
As regards the matter, Elma has also brought a case against a former senior manager of the Company before the Court of Rome, claiming compensation for damages: Piaggio appeared in the proceedings, requesting, among other things, that the case be moved to the Court of Pisa. At the hearing of 27 January 2014, the Judge ruled on the preliminary exceptions and did not admit preliminary briefs. The hearing for closing arguments set for 21 December 2015 and subsequently adjourned, was not held as the Judge, on petition of Elma, re-opened the preliminary investigation, admitting testimonial evidence and setting the hearing for 25 May 2016. On this date, examination of the witnesses began and the hearing was adjourned to 24 October 2016 to continue the preliminary investigation. The Judge set the hearing for 11 April 2017 to reach a settlement between the parties, which was not successful. The Judge therefore admitted an accounting expert requested by Elma, although with a far more limited scope compared to the petition filed by the counterparty, adjourning the case to the hearing of 16 October 2017 to appoint the expert witness.
In a complaint received on 29 May 2007, Gammamoto S.r.l. in liquidation, an Aprilia licensee in Rome, started a legal action against the Parent Company before the Court of Rome for contractual and non-contractual liability. The Company fully opposed the injunction disputing the validity of Gammamoto's claims and objecting to the lack of jurisdiction of the Judge in charge. The Judge, accepting the petition formulated by the Company, declared its lack of jurisdiction with regards to the dispute. Gammamoto has continued proceedings through the Court of Venice. The Judge admitted testimonial evidence and evidence for examination requested by the parties, establishing the hearing for the preliminary investigation on 12 November 2012. After defining the closing arguments of the hearing of 26 June 2013, the terms for final statements and relative replies were granted, and the case was not ruled on. The Court of Venice issued a ruling in favour of Piaggio, filed on 17 February 2014. Gammamoto appealed and at the first hearing on 23 October 2014 the Court decided to rule without proceeding with the preliminary investigation requested by the opposing party, and in particular without ordering a technical appraisal. The hearing for closing arguments has been set for 1 April 2019.
The company TAIZHOU ZHONGNENG summoned Piaggio before the Court of Turin, requesting the annulment of the Italian part of the 3D trademark registered in Italy protecting the form of the Vespa, as well as a ruling denying the offence of the counterfeiting of the 3D trademark in relation to scooter models seized by the Guardia di Finanza [Italian tax police] at the 2013 EICMA trade show, based on the petition filed by Piaggio, in addition to compensation for damages. At the first hearing for the parties to appear, set for 4 February 2015 and adjourned to 5 February 2015, the Judge lifted reservations, arranging for a court-appointed expert's report to establish the validity of the Vespa 3D trademark and the counterfeiting or otherwise through Znen scooter models, setting the hearing for the court-appointed expert to be sworn in on 18 March 2015, which was adjourned to 29 May 2015. At that hearing, the judge set the deadline for filing the final expert's report for 10 January 2016, and scheduled the discussion hearing for 3 February 2016. During this hearing, the Judge, considering the preliminary investigation as completed, set the hearing for closing arguments for 26 October 2016. In a ruling of 6 April 2017, the Court of Turin upheld in full the validity of the 3D Vespa mark of Piaggio, and the counterfeiting of said by the "VES" scooter by Znen.
The Court of Turin also recognised the protection of Vespa in accordance with copyright, confirming the creative nature and artistic value of its form, declaring that the scooter "VES" by Znen infringes Piaggio copyright. The other party challenged the ruling before the Appeal Court of Turin.
In a writ of 27 October 2014 Piaggio summoned the companies PEUGEOT MOTOCYCLES ITALIA s.p.a., MOTORKIT s.a.s. di Turcato Bruno e C., GI.PI. MOTOR di Bastianello Attilio and GMR MOTOR s.r.l. before the Court of Milan to obtain the recall of Peugeot "Metropolis" motorcycles from the market, and to establish the infringement of some European patents and designs owned by Piaggio, as well as a ruling for the compensation for damages for unfair competition, and the publication of the ruling in some newspapers.
In the hearing for the first appearance of 4 March 2015, the judge set the deadline for filing statements pursuant to article 183.6 of the Italian Code of Civil Procedure and appointed an expert witness. The hearing for swearing in the expert took place on 6 October 2015. On 23 December 2016, the expert submitted his provisional report to the parties and the final report was filed on 2 May 2017. The judge adjourned the case to the hearing of 28 February 2018 for closing arguments.
Piaggio started a similar legal action against Peugeot Motocycles SAS before the Tribunal de Grande Instance in Paris. As a result of the Piaggio action ("Saisie Contrefaçon"), several documents were obtained by a bailiff and tests carried out to prove the infringement of the MP3 motorcycle by the Peugeot "Metropolis" motorcycle. The hearing took place on 8 October 2015 for the appointment of the expert, who will examine the findings of the Saisie Contrefaçon. On 3 February 2016 the hearing took place to discuss the preliminary briefs exchanged between the parties. The hearing to assess preliminary findings, set for 29 September 2016, was adjourned to 9 February 2017 and then to 6 September 2017.
The amounts allocated by the Company for the potential risks deriving from the current disputes appear to be consistent with the predictable outcome of themselves.
As regards tax disputes involving the Parent Company Piaggio & C. S.p.A., two appeals are ongoing against two tax assessments notified to the Company and related to the 2002 and 2003 tax years respectively. These assessments originate from the Italian Revenue Agency accessing the Parent Company's offices in 2007, following information filed in the report of verification issued in 2002 following a general verification.
The Parent Company obtained a favourable ruling concerning these assessments, in both the first and second instance, and with reference to both tax periods. The Italian Revenue Agency filed an appeal with the Court of Cassation and the Company filed related appeals against it on 27 May 2013, with reference to the tax litigation made related to the 2002 tax period, and on 10 March 2014, for the tax litigation made relative to the 2003 tax period. The dates for the hearings still have to be set.
The Company was also successful before the Income Tax Appellate Tribunal with reference to appeals filed against assessment orders received on completion of the assessment of income generated by Piaggio & C. S.p.A. in India during the 2009-2010 and 2010-2011 Indian tax periods, involving sums for approximately €1.2 million and €1 million respectively; at present, the Company is waiting for the local tax authorities to challenge the ruling or to drop the case. As regards the appeal filed with the Income Tax Appellate Tribunal against the assessment order received on completion of the assessment relative to the 2011-2012 Indian tax period, concerning the same matter and involving sums of approximately €1 million, the Company is waiting for the date of the hearing to be set. In compliance with local laws, the Parent Company has already paid part of the amounts related to the appeals to the Indian tax authorities, for a total of €0.7 million; these amounts will be paid back to the Company if the rulings on the appeals are in its favour.
The Company has not considered allocating provisions for these disputes, in view of the positive opinions expressed by consultants appointed as counsel. Furthermore, based on the above mentioned opinions, the Company considers a favourable outcome of the rulings and subsequent reimbursement of amounts paid with reference to the Indian disputes as likely.
The main tax disputes of other Group companies concern Piaggio Vehicles PVT Ltd, Piaggio France S.A. and Piaggio Hellas S.A..
With reference to the Indian subsidiary, some disputes concerning different tax years from 1998 to 2015 are ongoing related to direct and indirect tax assessments and for a part of which, considering positive opinions expressed by consultants appointed as counsel, provisions have not been made in the financial statements. The Indian company has already partly paid the amounts contested, as required by local laws, that will be paid back when proceedings are successfully concluded in its favour.
As regards the French company, a favourable ruling was issued in December 2012 by the Commission Nationale des Impôts directes et des taxes sur le chiffre d'affaires, the decision-making body ruling prior to legal proceedings in disputes with the French tax authorities concerning a general audit of the 2006 and 2007 periods. The French tax authorities however upheld their claims against the Company, requesting payment of the amounts claimed and issuing related notices (one for withholding tax and the other for corporate income tax and VAT). The amount concerned, equal to approximately €3.7 million, was paid in full to the French tax authorities.
The Company appealed against the notices and appeals were filed against the findings on withholding tax and corporate income tax, before the Tribunal Administratif. Appeals were lodged against decisions taken against the Company on 7 September 2015 and 8 July 2016 before the Cour Administrative d'Appel de Versailles; the dates for the hearings still have to be set.
The Company has not considered allocating provisions, considering that amounts paid may be recovered, based on the positive opinions expressed by consultants appointed as counsel, as well as the opinion of the above Commission. Furthermore, based on the above mentioned opinions, the Company considers a favourable outcome of the rulings and subsequent reimbursement of amounts paid as likely.
On 8 April 2015, Piaggio Hellas S.A. received a Tax Report following a general assessment for the 2008 tax period, with findings for approximately €0.5 million. On 12 June 2015, the Company appealed against the report with the Tax Center – Dispute Resolution Department. Following the unfavourable outcome of this appeal, the Company appealed before the Administrative Court of Appeal, which ruled in favour of the local tax authorities in a ruling of 27 April 2017. The Company therefore appealed before the Supreme Court. The amount in question was paid in full to the Greek tax authorities; based on positive opinions from professionals appointed as counsel, the Company considers a favourable outcome and subsequent reimbursement of amounts paid as likely.
During 2016 and the first half of 2017, there were no significant non-recurring transactions.
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
During financial year 2016 and in first half of 2017, the Group did not carry out any significant atypical and/ or unusual operations, as defined by CONSOB Communication no. DEM/6037577 of 28 April 2006 and no. DEM/6064293 of 28 July 2006.
No events to be reported occurred after the end of the period.
This document was published on 21 August 2017 and authorised by the Chairman and Chief Executive Officer.
Mantua, 28 July 2017 for the Board of Directors
Roberto Colaninno
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
Companies and material investments of the Group are listed below.
The list presents the companies divided by type of control and method of consolidation.
The following are also shown for each company: the company name, the registered office, the country of origin and the share capital in the original currency, in addition to the percentage held by Piaggio & C. S.p.A. or by other subsidiaries. It should be noted that the percentage share of ownership corresponds to the percentage share of the voting rights exercised at Ordinary General Meetings of Shareholders.
List of companies included in the scope of consolidation on a line-by-line basis as of 30 June 2017
| % of the holding | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Company name | Registered office |
Country | Share capital | Currency | Direct | Indirect | Means | % total interest |
|
| Parent company: | |||||||||
| Piaggio & C. S.p.A. | Pontedera (Pisa) Italy | 207,613,944.37 | Euro | ||||||
| Subsidiaries: | |||||||||
| Aprilia Brasil Industria de Motociclos S.A. |
Manaus | Brazil | 2,020,000.00 | R\$ | 51% | Aprilia World Service Holding do Brasil Ltda |
51% | ||
| Aprilia Racing S.r.l. | Pontedera (Pisa) Italy | 250,000.00 | Euro | 100% | 100% | ||||
| Aprilia World Service Holding do Brasil Ltda. |
São Paulo | Brazil | 2,028,780.00 | R\$ | 99.999950709% | Piaggio Group | Americas Inc 99.999950709% | ||
| Atlantic 12 – Fondo Comune di Investimento Immobiliare Rome |
Italy | 10,736,464.00 | Euro | 100% | 100% | ||||
| Foshan Piaggio Vehicles Tecnology Research and Development Co Ltd |
Foshan City | China | 10,500,000.00 | RMB | 100% | Piaggio Vespa B.V. | 100% | ||
| Nacional Motor S.A. | Barcelona | Spain | 60,000.00 | Euro | 100% | 100% | |||
| Piaggio Advanced Design Center Corp. |
California | USA | 100,000.00 | USD | 100% | 100% | |||
| Piaggio Asia Pacific PTE Ltd. Singapore | Singapore 100,000.00 | sin\$ | 100% | Piaggio Vespa B.V. | 100% | ||||
| Piaggio China Co. LTD | Hong Kong | China | 12,500,000 auth. capital (12,110,000 subscribed and paid up) |
USD | 99.999990% | 99.999990% | |||
| Piaggio Concept Store Mantova S.r.l. |
Mantua | Italy | 100,000.00 | Euro | 100% | 100% | |||
| Piaggio Deutschland Gmbh Düsseldorf | Germany 250,000.00 | Euro | 100% | Piaggio Vespa B.V. | 100% | ||||
| Piaggio Espana S.L.U. | Alcobendas | Spain | 426,642.00 | Euro | 100% | 100% | |||
| Piaggio Fast Forward Inc. | Delaware | USA | 7,790.70 | USD | 86% | 86% | |||
| Piaggio France S.A.S. | Clichy Cedex | France | 250,000.00 | Euro | 100% | Piaggio Vespa B.V. | 100% | ||
| Piaggio Group Americas Inc New York | USA | 2,000.00 | USD | 100% | Piaggio Vespa B.V. | 100% | |||
| Piaggio Group Canada Inc | Toronto | Canada | 10,000.00 | CAD\$ | 100% | Piaggio Group Americas Inc |
100% | ||
| Piaggio Group Japan | Tokyo | Japan | 99,000,000.00 | Yen | 100% | Piaggio Vespa B.V. | 100% | ||
| Piaggio Hellas S.A. | Athens | Greece | 1,004,040.00 | Euro | 100% | Piaggio Vespa B.V. | 100% | ||
| Piaggio Hrvatska D.o.o. | Split | Croatia | 400,000.00 | HKD | 100% | Piaggio Vespa B.V. | 100% | ||
| Piaggio Limited | Bromley Kent United | Kingdom | 250,000.00 | GBP | 0.0004% | 99.9996% | Piaggio Vespa B.V. | 100% | |
| Piaggio Vehicles Private Limited |
Maharashtra | India | 349,370,000.00 | INR | 99.9999971% 0.0000029% | Piaggio Vespa B.V. | 100% | ||
| Piaggio Vespa B.V. | Breda | Holland | 91,000.00 | Euro | 100% | 100% | |||
| Piaggio Vietnam Co Ltd | Hanoi | Vietnam | 64,751,000,000.00 VND | 63.5% | 36.5% | Piaggio Vespa B.V. | 100% | ||
| PT Piaggio Indonesia | Jakarta | Indonesia 4,458,500,000.00 Rupiah | 1% | 99% | Piaggio Vespa B.V. | 100% |
| % of the holding | ||||||||
|---|---|---|---|---|---|---|---|---|
| Company name | Registered office |
Country | Share capital | Currency | Direct | Indirect | Means | % total interest |
| Zongshen Piaggio Foshan Motorcycle Co. Ltd |
Foshan City | China | 29,800,000.00 | USD | 32.50% | 12.50% | Piaggio China Co. LTD |
45% |
List of investments in associate companies as of 30 June 2017
| % of the holding | ||||||||
|---|---|---|---|---|---|---|---|---|
| Company name | Registered office |
Country | Share capital | Currency | Direct | Indirect | Means | % total interest |
| Depuradora D'Aigues de Martorelles Soc. Coop. Catalana Limitada |
Barcelona | Spain | 60,101.21 | Euro | 22% | Nacional Motor S.A. |
22% | |
| Immsi Audit S.c.a.r.l. | Mantua | Italy | 40,000.00 | Euro | 25% | 25% | ||
| Pont - Tech, Pontedera & Tecnologia S.c.r.l. |
Pontedera (Pisa) |
Italy | 884,160.00 | Euro | 20.45% | 20.45% | ||
| S.A.T. Societé d'Automobiles et Triporteurs S.A. |
Tunis | Tunisia | 210,000.00 | TND | 20% | Piaggio Vespa B.V. | 20% |
Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
Condensed Consolidated Interim Financial Statements Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Changes in Consolidated Shareholders' Equity Notes to the Consolidated Financial Statements Attachments
Raffaele Lupotto Email: [email protected] Tel. +390587 272286 Fax +390587 276093
Piaggio & C. SpA Viale Rinaldo Piaggio 25 56025 Pontedera (PI)
This report is available on the Internet at: www.piaggiogroup.com
This Half-year Financial Report as of 30 June 2017 has been translated into English solely for the convenience of the international reader. In the event of conflict or inconsistency between the terms used in the Italian version of the report and the English version, the Italian version shall prevail, as the Italian version constitutes the sole official document.
Management and Coordination IMMSI S.p.A. Share capital €207,613,944.37, fully paid up Registered office: Viale R. Piaggio 25, Pontedera (Pisa) Pisa Register of Companies and Tax Code 04773200011 Pisa Economic and Administrative Index no. 134077
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.