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International

31/07/2020

Like all major bike manufacturers, Italian flag carrier Piaggio Group has had a torrid time in the recent past — but still kept its half-year performance shiny side up. BDN financial editor Roger Willis reports.

Consolidated six-monthly revenue fell sharply by 26.5% to £542.9m, as lockdowns in many countries led to suspended production and commercial activities. However, urgent action in the second quarter meant Piaggio managed to slash half-year operating costs by 16% to £133m. So although operating profit was savaged, 67.1% down to £22.3m, losses were avoided. Net profit of just £8.2m equated to a 73.7% dive. 

On a brighter angle, net debt during the period was cut too, by 3.7% to £478.1m. Effective inventory management in the first quarter, immediately prior to lockdowns, took the credit for that.

Global sales volume across Piaggio’s scooter and motorcycle businesses dropped by 24.5% to 163,000 machines. Associated turnover, including a parts and accessories contribution of £48.5m, was 19.8% down at £422.9m.

Volume in the EMEA and Americas declined by 20.5%, with revenue 21.5% down. India fared worst, losing 58.4% of its volume and 49% of revenue. Asia Pacific got off lightly, selling 9.6% fewer bikes and suffering only a 4.7% revenue reduction. And there was actually a Vespa sales increase in a number of Asian markets, most notably China.

All of Piaggio’s own and partnered factories throughout the world have been back in production since May. But the Group says it is unable to provide a full-year forecast as long as evolution of the pandemic remains unclear.