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Financial

19/03/2020

Although overall growth stagnated, Volkswagen Group’s Ducati subsidiary enjoyed a sound 2019 fiscal year thanks to the premium-priced chunk of its model range. BDN financial editor Roger Willis reports.

Annual revenue rose by just 2.4% to £656m, while global retail sales volume added a mere 0.3% to 53,183 bikes. But resultant operating profit was initially 16% up to £27m. And once German beancounter magic had adjusted those figures  to account for purchase price allocation, profitability was restated as 6.1% higher at £48m. Similarly, operating margin was amended by PPA adjustment. An initial rise to 4% from 3.6% in the previous year became 7.2% against 7%. Ducati said both turnover and earnings were positively impacted by pricing and model mix. And, in the latter case, mix effects “proved particularly beneficial”.

The Dual/Hyper segment, mainly made up of big-ticket Multistrada adventure machines with lesser quantities of Hypermotard products, delivered strongest sales volume, climbing by 20.9% to 16,632 units. Full-on sports bikes fell by 14.7% to 10,858. However, that segment included the supremely expensive Panigale V4R, which was rolled out to Ducati dealerships worldwide in the first quarter of 2019. The Naked segment, covering Diavel, Monster and Streetfighter models put on a modest 3.3% to 13,820.

On the flip side, Ducati's Scrambler sub-brand continued its serial sales decline for yet another year, this time falling by 9.6% to 11,873. And in a sharp inventory-reduction move, Scrambler production during 2019 was slashed by 36.2% to 9350.

Total yearly production dropped by 3% to 51,723. Dual/Hyper was 26.4% up to 17,353. Sports bikes were 29% down at 10,044. Naked kit rose by 38.7% to 14,976. The number of machines assembled by Ducati’s Bologna plant in Italy fell by 3.3% to 42,759. Those manufactured in Thailand were 1.4% lower on 8038. Contract assembly in Brazil dropped by 2.4% to 926.

When the above results were announced on 19 March, Ducati had already shut down its Bologna factory as Europe was ravaged by the Covid-19 pandemic and global consumer confidence collapsed. But Audi, its direct parent under the Volkswagen Group umbrella, had made no attempt to qualify the forecast contained therein.

This epitaph of hope over grim reality opined: “For 2020 we expect to see stable demand worldwide for motorcycles in the displacement segment above 500cc. The Western European motorcycle market in particular is expected to develop positively...”