After a really strong post-Covid recovery, Piaggio Group’s growth started to soften three-quarters of the way through 2023. But it is still consistently profitable. BDN financial editor Roger Willis reports.
In the relatively few weeks since his vastly experienced and hard-nosed father Roberto passed away, novice Piaggio chief executive Michele Colaninno has at least learned to waffle. A necessary skill set for explaining why the business immediately developed issues and its share price tanked as soon as Dad died has yet to emerge. Presenting his first set of quarterly results, this was the best Colaninno Junior could manage:
“Although the global macro-economic scenario is becoming more complex from one quarter to the next, the Piaggio Group’s international expansion strategy allows us to counterbalance the temporary slowdowns in some markets against the favourable response of more dynamic areas,” he expounded.
“The improvement in customer perception of our brands and products around the world has enabled us to achieve very interesting margins, which we should
consolidate in the coming years. New technologies, design and productivity are the drivers of our global growth today and above all for the future.”
Getting down to the nitty-gritty, total three-quarterly turnover flatlined on £1.421bn. But within that, revenue attributable to global sales of powered two-wheelers plus associated spares and accessories suffered a modest 3.4% decline to £1.131bn. Worldwide scooter and motorcycle sales volume fell more firmly by 11% to 364,999 units.
However, operating profit was 18.7% up to £139.8m and operating margin improved to 9.8% from 8.3%. Pre-tax profit rose by 13.6% to £113.5m. And net profit was a nine-monthly all-time record, climbing by 20.9% to £74.9m. Net debt at the end of September had grown to £340.1m from £321.8m at the beginning of this year.
As usual, the company’s report subsequently shrugs off inconvenient details. Apparently turnover from powered two-wheeler sales improved by 5.1% across Europe and the Americas. A “very healthy” performance on the Italian domestic mark added 13.2% and North America was 5.4% up.
European scooter market share of 23.1% “confirmed its leadership position,” and the North American scooter share was 29.5%. Highlights in the scooter sector were the excellent sales performance of Piaggio Beverley and Medley high-wheel models, and double-digit percentage turnover growth for Vespa scooters in Western markets. Charmed by such admirative prose, any speed reader would hardly notice: “Sales slowed in India and the Asia-Pacific region.”
€-£ currency translation at forex rates applicable on 30 October