Piaggio Group’s full-year 2013 financial results show a sharp drop in revenue and profit, as sales declined in many of its key markets and disgruntled Italian taxmen came calling.
Revenue for the year fell by 13.8 per cent to £1.01bn. Negative foreign currency exchange effects of £44.2m — prinicipally driven by the shrinking value of India’s rupee — exacerbated falling sales.Â
Operating profit dropped by 35.2 per cent to £52.2m and an adjusted net profit figure was down by 57 per cent to £15.1m. The adjustment was inclusion of an additional £4.3m taxation hit after investigation by Italian tax authorities of Piaggio’s internal transfer-pricing shenanigans between overseas subsidiaries over the past four years. If the full £20.5m penalty had been attributed to its 2013 results, Piaggio would have had to declare a net loss of £5.4m.
For the sixth consecutive year, the Group’s domestic European powered two-wheeler market fell, by a further 12 per cent. Scooters declined by 17 per cent and motorcycles by four per cent. Volumes in Italy and Spain are now 70 per cent down on those of 2007. Volumes also shrank in a number of Asia-Pacific markets, with Vietnam and Thailand showing double-digit decreases.
However, there were some brighter notes. US motorcycle and scooter sales were up by 10.4 per cent. Global Vespa-branded scooter sales rose by by 14 per cent to 188,600 units — including 38,900 units in India, where Piaggio only began making and marketing them in the second half of 2012. Scooter sales recovered in Thailand, the Philippines and Indonesia in the second half of the year too. The Moto Guzzi motorcycle brand also continued to grow for the third year in a row, up by 2.4 per cent to 6800 bikes.