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TALE OF WOE FOR PIAGGIO

Covid-19 inflicted plunging profitability and mounting debt upon Italian powered two-wheeler flagship Piaggio Group during the first quarter of 2020. BDN financial editor Roger Willis counted the cost.

Overall revenue for the period was 10.1% down to £272.1m. Within that, turnover attributable to scooters, motorcycles and associated P&A fell by 7.9% to £182.5m. 

Group operating profit suffered a 51.7% dive to £8.7m.  Operating margin declined to 3.2%, against 6% in Q1 last year. Pre-tax earnings plummeted by 63.4% to £4.5m and net profit amounted to just £2.7m, 60.3% in arrears.

Borrowing across these three months climbed by 27.7%, an additional £103.9m, pushing the group’s net debt burden up to £479.4m. Piaggio’s results statement said this was largely due to stockpiling raw materials and outsourced component sub-assemblies — to guarantee production continuity in regions where temporary supply-chain disruption through coronavirus-related lockdowns might occur.

Worldwide quarterly bike sales volume for group brands dropped by 9.7% to 76,400 units. The Italian domestic market and India were held predominantly responsible for this decrease. 

In Italy, wholesale shipments to dealers were 33% lower and net sales sank by 35.9%. Shipments on the Indian sub-continent fell by 33.5%, with net sales 20.3% down. Offering some slight mitigation, North America saw a 5.5% shipments rise and nets sales increase of 4.5%. Asia-Pacific regional shipments were 3.5% up and net sales rose by 4.8%.

Globally, the company’s scooter segment benefited from a 5.6% sales gain for over-50cc Vespa models, as well as 24% hike for the big-wheeled Piaggio Medley. For motorcycles, there were sales improvements of an unspecified size for the Moto Guzzi V85TT, plus Aprilia, RX, RS125 and Shiver models.      

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