Piaggio Group - Full Year 2011 Financial Results
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Piaggio Group reported full year 2011 financial results, with key highlights including: - Net sales increased 2.1% to €1.516 billion, driven by growth in emerging markets like Asia Pacific and India. - EBITDA grew 1.7% to €200.6 million despite €17 million in restructuring costs and negative FX impact of €13 million. - Net income increased 9.8% to €47 million due to improved EBITDA and lower tax rate, which offset higher depreciation. - Net financial position was reduced by €14 million to €335.9 million through healthy cash flow and working capital control.
Piaggio Group - Full Year 2011 Financial Results
- 1. Piaggio Group Full Year 2011 Financial Results Conference Call February 23rd, 2012 1
- 2. Disclaimer This presentation contains forward-looking statements regarding future events and future results of Piaggio & C S.p.A (the “Company”). that are based on the current expectations, estimates, forecasts and projections about the industries in which the Company operates, and on the beliefs and assumptions of the management of the Company. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management, competition, changes in business strategy and the acquisition and disposition of assets are forward-looking in nature. Words such as „expects‟, „anticipates‟, „scenario‟, „outlook‟, „targets‟, „goals‟, „projects‟, „intends‟, „plans‟, „believes‟, „seeks‟, „estimates‟, as well as any variation of such words and similar expressions, are intended to identify such forward-looking statements. Those forward-looking statements are only assumptions and are subject to risks, uncertainties and assumptions that are difficult to predict because they relate to events and depend upon circumstances that will occur in the future. Therefore, actual results of the Company may differ materially and adversely from those expressed or implied in any forward-looking statement and the Company does not assume any liability with respect thereto. Factors that might cause or contribute to such differences include, but are not limited to, global economic conditions, the impact of competition, or political and economic developments in the countries in which the Company operates. Any forward-looking statements made by or on behalf of the Company speak only as of the date they are made. The Company does not undertake to update forward- looking statements to reflect any change in its expectations with regard thereto, or any change in events, conditions or circumstances which any such statement is based on. The reader is advised to consult any further disclosure that may be made in documents filed by the Company with Borsa Italiana S.p.A (Italy). The Manager in Charge of preparing the Company financial reports hereby certifies pursuant to paragraph 2 of art. 154-bis of the Consolidated Law on Finance (Testo Unico della Finanza), that the accounting disclosures of this document are consistent with the accounting documents, ledgers and entries. This presentation has been prepared solely for the use at the meeting/conference call with investors and analysts at the date shown below. Under no circumstances may this presentation be deemed to be an offer to sell, a solicitation to buy or a solicitation of an offer to buy securities of any kind in any jurisdiction where such an offer, solicitation or sale should follow any registration, qualification, notice, disclosure or application under the securities laws and regulations of any such jurisdiction. 2
- 3. Highlights (1/2) 2011 Full Year results confirm Piaggio’s strategy is consistent with global market dynamics Emerging markets continuing to grow at a double digit rate Vietnam scooter market +31% vs. prior year India 2 wheel scooter market +22%, 3 wheels +5% and 4 wheels +29% Western markets stable or decreasing, especially Italy and Spain Piaggio’s position in the market is very strong… Western Countries: resilient performance in a challenging scenario Third consecutive year of market share gain in European scooters (up to 27.6%, + 0.9 pp vs. 2010) confirming Piaggio‟s leadership Growth of volumes and net sales in Northern European Countries and North America Southern Europe affected by a tough market environment; recent contract with “Poste Italiane” will sustain 2012 European sales and production volumes Double-digit revenue increase in Bikes with Moto Guzzi growing at more than 40% India: solid performance even versus an outstanding 2010 despite slower underlying market growth Growth in 3W Cargo segment and stable performance in 3W Passenger; entry in the small Pax segment with the launch of Apé City petrol in July will sustain revenue growth in 2012 Double-digit growth in 4W Sub 0.5 Ton segment; opportunity to play a stronger role in Sub 1 Ton segment to be pursued Launch of Vespa in April 2012 as planned entering a 2.4m unit market expected to grow at a double-digit rate in the medium term Asia Pacific: strong momentum continues Market share increase in the growing Vietnamese market generating strong revenue growth Reaping the initial benefits of geographical expansion: Indonesia ~14K units sold since August 2011 Fifth consecutive year of % Gross Margin increase despite enlargement of product range and geographical presence 3
- 4. Highlights (2/2) … leading to Net sales increase Net sales up 2.1%, 5.2% at constant exchange rates Increase sustained by emerging markets with Asia Pacific growing at 40.7% ( 55.1% excluding FX effect ) and India at 1.6% (8.8% excluding FX effect) Robust performance of Northern European Countries growing at 8% despite the difficult market environment Improvement of EBITDA and tax rate more than offset significantly higher depreciation … EBITDA growing at 1.7% despite ~17 €m of one-off restructuring costs and ~13 €m of negative currency effect Tax rate, no longer affected by expiration of deferred tax assets on losses in Italy and benefitting from increased Vietnam contribution to EBT, down by 8 pp … leading to a Net Income increase of around 10% Net Debt reduction for the fourth consecutive year Further improvement of Net Financial Position (-14€m) stemming from… Healthy operating cash flow generation Strict control on working capital …more than offsetting strong CapEx increase (+31% vs. prior year) to sustain growth opportunities in emerging markets Debt profile further strengthened thanks to successful refinancing of bank facilities expiring in December 2012… $75m USPP bond expiring in 2021 €130m syndicated RCF expiring end of 2015 …leading to an extension of the average life of debt to more than 3 years and reinforcing the Group‟s comfortable liquidity cushion 4
- 5. Increase in all the key financial figures despite significant one-off restructuring costs and higher depreciation P&L Change 2011 vs. 2010 €m 2010 2011 Absolute % % excl. FX Net Sales 1,485.4 1,516.5 31.1 +2.1% +5.2% Gross Margin 462.3 454.6 -7.7 -1.7% +2.2% % on Net Sales 31.1% 30.0% -1.1% EBITDA 197.1 200.6 3.4 +1.7% +8.4% % on Net Sales 13.3% 13.2% -0.1% Depreciation (86.0) (95.0) -9.0 +10.5% EBIT 111.1 105.5 -5.6 -5.0% +5.1% % on Net Sales 7.5% 7.0% -0.5% Financial Expenses (27.3) (26.2) 1.1 -3.9% Income before Tax 83.8 79.3 -4.5 -5.4% Tax (41.0) (32.3) 8.7 -21.2% Net Income 42.8 47.0 4.2 +9.8% % on Net Sales 2.9% 3.1% +0.2% NFP Change 2011 vs. 2010 €m 2010 2011 Absolute % Net Financial Position (349.9) (335.9) +14.0 -4.0% Significant further improvement at constant exchange rates 5
- 6. Total volume increase driven by Emerging Markets with Asia Pacific accelerating thanks to strong organic growth in Vietnam and positive results in Indonesia by Cash Generating Unit by Geographic Area by Business Kunits Kunits Kunits +4.0% +4.0% +4.0% 653.3 653.3 653.3 628.4 628.4 628.4 225.0 225.0 238.3 CV 219.6 India 219.6 +2.4% India +2.4% CV 233.4 +2.1% CV -3.6% 13.3 Europe 13.8 38.3 Asia 59.5 -4.0% 2W Pacific +75.9% 104.8 Bikes 39.9 59.5 +75.9% 104.8 Asia Pacific Western 2W Countries Western 355.1 +6.1% 376.7 335.4 349.2 -7.4% Scooters Countries -7.5% 310.2 323.5 2010 2011 2010 2011 2010 2011 6 2W: 2 Wheels CV : Commercial Vehicles
- 7. Strong revenue growth in Emerging Markets more than offsets minor decline in 2 Wheels Western Countries; outstanding sales of Vespa at more than150k units and strong growth of Moto Guzzi by Cash Generating Unit by Geographic Area by Business €m €m €m +2.1% +2.1% +2.1% 1,516.5 1,516.5 1,516.5 1,485.4 1,485.4 1,485.4 +5.2% 3.0 n.m. 18.8 Exl. FX Other 180.1 178.3 Spares -1.0% CV +1.6% 395.0 India 395.0 388.9 388.9 +1.6% India +8.8% Exl. FX CV 96.1 455.6 -1.6% 448.3 108.4 -11.3% Asia CV Europe 133.2 +40.7% 187.5 Pacific 2W 133.2 +40.7% 187.5 Asia Pacific +55.1% Bikes 155.5 Exl. FX 138.6 +12.2% Western 2W Countries 963.2 -3.0% 933.9 Western 854.9 -2.0% 837.8 Countries Scooters 708.1 +1.1% 715.5 2010 2011 2010 2011 2010 2011 7 2W: 2 Wheels CV : Commercial Vehicles
- 8. Strong efficiency on fixed costs ensures EBITDA growth notwithstanding ~17 €m of one-off restructuring costs and ~13 €m of negative FX impact EBITDA evolution (€m) 11.2 197.1 200.6 (13.3%) (7.7) (13.2%) 2010 Change in Cash Gross Change in Cash Opex 2011 Margin Streamlined structures lower break even point 8
- 9. Improvement of EBITDA and tax rate more than offset significantly higher depreciation leading to increase of Net Income Net Income evolution (€m) 8.7 3.4 47.0 1.1 (3.1%) 42.8 (2.9%) (9.0) 2010 Change in Change in Change in Change in Taxes 2011 EBITDA Depreciation Financial Expenses 9
- 10. Healthy operating cash flow and tight control of Working Capital allow improvement of NFP even after strong CapEx increase to foster international expansion (1/2) Chg. Chg. €m 2009 2010 2011 ‘10 vs ‘09 ’11 vs ‘10 Trade Receivable 99.0 78.0 61.7 -21.0 -16.2 Inventories 252.5 240.1 237.0 -12.4 -3.1 Commercial Payable (341.8) (340.3) (371.7) +1.6 -31.4 Other assets/liabilities 7.5 31.1 33.0 +23.5 +2.0 Working Capital 17.2 8.8 (39.9) -8.4 -48.8 Tangible Fixed Assets 250.4 256.8 274.9 +6.3 +18.1 Intangible Fixed Assets 641.3 652.6 649.4 +11.4 -3.2 Financial Investments 0.6 0.5 2.6 -0.1 +2.1 Provisions (133.7) (125.9) (104.9) +7.8 +21.0 Net Invested Capital 775.8 792.8 782.1 +17.1 -10.7 Net Financial Position 352.0 349.9 335.9 -2.0 -14.0 Equity 423.8 442.9 446.2 +19.1 +3.3 Total Sources 775.8 792.8 782.1 +17.1 -10.7 NFP/Equity 0.83 0.79 0.75 10
- 11. Healthy operating cash flow and tight control of Working Capital allow improvement of NFP even after strong CapEx increase to foster international expansion (2/2) €m Operating Cash Change in Change in Equity NFP YE 2010 Flow Working Capital Capex and Other NFP YE 2011 48.8 121.0 (126.1) (335.9) (349.9) (29.7) 2010 €m (352.0) 121.1 8.4 (96.2) (31.2) (349.9) NFP YE 2009 NFP 2010 Increased shareholder return through higher net income, dividends and share buy back 11
- 12. Contacts Investor Relations Office E: investorrelations@piaggio.com T: +39 0587 272286 W: www.piaggiogroup.com Raffaele Lupotto Head of Investor Relations E: r.lupotto@piaggio.com T: +39 0587 272286 12