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Financial

28/02/2013

Despite improving performance in Asia Pacific, Indian and US markets, the ongoing severe slump in its domestic Italian market and elsewhere in Europe hammered Piaggio Group’s 2012 full-year revenue and profit.

Overall sales revenue for the 12 months dropped by 7.3 per cent to £1.21bn. Operating profit fell by 7.8 per cent to £83.4m. Net profit was down by 9.1 per cent to £36.3m. Piaggio’s global powered two-wheeler sales volume during the year declined by 2.4 per cent to 406,100 units. Related revenue shrank by 3.3 per cent to £857.4m.

Obviously the key factor in this reversal was a Europe-wide PTW sales decline of 13 per cent last year. Piaggio also pointed out that PTW sales in Italy have now fallen by massive 55 per cent over the past five years! Nevertheless, the company increased its European scooter market share marginally to 27.9 per cent.

But troubles near to home were ameliorated by satisfactory growth elsewhere in the world. In the Asia Pacific region, notably Vietnam (where it has a large manufacturing facility) and Thailand, Piaggio says it increased PTW unit volume by 7.5 per cent and related revenue by 12.6 per cent. Its new Indian scooter factory, which came on stream in May last year, also contributed an extra 26,000 Vespa-branded products sold through to December.

North America was even more positive, with scooter shipments into dealers up by 36.4 per cent and revenue climbing by 109.2 per cent. Specifically, in the USA, Piaggio consolidated its ranking as one of the top scooter manufacturers with a market share of 25.3 per cent and confirmed status as outright leader in over-50cc scooters, with a share of 39.3 per cent.

Perhaps the most remarkable feature of these results was an impressive turnaround for Piaggio’s most historic brand. In sharp contrast to declining over-500c motorcycle sales in Europe, Moto Guzzi bucked that trend to grow its sales volume by a muscular 15.3 per cent to 6664 units — significantly before arrival of its attention-grabbing new California 1400 models, which will reach dealers in early 2013.

However, net debt rose by 16.6 per cent to £339.2m year-on-year. Piaggio says this is primarily attributable to a 17 per cent increase in capital expenditure to £128.1m during the year, dedicated to further expansion of its industrial and commercial operations. The financial results statement also anticipated a relatively modest one-off restructuring charge of about £4.3m associated with closure of the Derbi motorcycle factory in Spain and transfer of its production to Italy.