Consolidated income statement

Consolidated income statement (reclassified)
  2012 2011 Change
  In millions of euro Accounting for a % In millions of euro Accounting for a % In millions of euro %
Net sales revenues 1,406.2 100.0% 1,516.5 100.0% (110.3) -7.3%
Cost to sell 988.3 70.3% 1,062.2 70.0% (73.9) -7.0%
Gross industrial margin 417.9 29.7% 454.3 30.0% (36.4) -8.0%
Operating expenses 321.3 22.9% 349.5 23.0% (28.2) -8.1%
EBITDA 176.2 12.5% 199.8 13.2% (23.6) -11.8%
Depreciation/Amortisation 79.6 5.7% 95.0 6.3% (15.4) -16.2%
Operating income 96.6 6.9% 104.8 6.9% (8.2) -7.8%
Result of financial items -28.7 -2.0% -26.2 -1.7% (2.5) 9.5%
Profit before tax 67.9 4.8% 78.6 5.2% (10.7) -13.6%
Taxes 25.8 1.8% 32.3 2.1% (6.5) -20.2%
Net profit 42.1 3.0% 46.3 3.1% (4.2) -9.0%
   

Vehicles
  2012 2011 Change
In thousands of units
EMEA and Americas 278.2 323.5 (45.3)
India 224.7 225.0 (0.3)
Asia Pacific 2W 112.6 104.8 7.8
Total Vehicles
615.5 653.3 (37.7)
 
Two-wheeler 406.1 415.0 (8.9)
Commercial Vehicles 209.4 238.3 (28.9)
Total Vehicles
615.5 653.3 (37.7)
   

Net revenues
  2012 2011 Change
In millions of euro      
EMEA and Americas 837.3 933.9 (96.6)
India 357.8 395.0 (37.3)
Asia Pacific 2W 211.1 187.5 23.6
Total net revenues
1,406.2 1,516.5 (110.3)
 
Two-wheeler 993.3 1,025.3 (32.1)
Commercial Vehicles 412.9 491.1 (78.2)
Total net revenues 1,406.2 1,516.5 (110.3)
 

In 2012, the Piaggio Group sold 615,500 vehicles worldwide, with a decrease in volumes of approximately 5.8% over the previous year, when 653,300 vehicles had been sold. There was considerable growth in sales of vehicles in the Asia Pacific 2W area (+ 7.5%), thanks to the increase in production capacity at the Vietnamese plant, while sales fell considerably in EMEA and the Americas (-14.0%). Volumes sold in India were basically stable (- 0.1%) also thanks to the launch of the Vespa in April. As regards the type of products sold, the downturn mainly concerned the commercial vehicles segment (- 12.1%).

Sales of two-wheeler vehicles were affected by a particularly complex market context and competitive scenario, at least as regards European markets. In particular, the two-wheeler market in EMEA registered a downturn equal to approximately 13% (- 13% for scooters and - 12% for motorcycles). In the EMEA area, the Piaggio Group retained its market leadership position, with a 19.8% share. The Group achieved excellent sales results on the North American market (+ 36.4%) and in India, where the Vespa is now being marketed.  

Sales of commercial vehicles were negatively affected by the concurrent downturn on all reference markets (Italy - 32%, Europe - 13.3% and the Indian cargo market - 9.8%).

In terms of consolidated turnover, the Group ended 2012 with net revenues down by 7.3% compared to 2011, and equal to 1,406.2 million euro. As for the type of products sold, the downturn mainly concerned commercial vehicles (- 15.9%). As a result, the impact of two-wheeler vehicles on overall turnover went up from 67.6% in 2011 to the current figure of 70.6%; whereas, the same parameter in the commercial vehicles segment decreased from 32.4% in 2011 to 29.4% in 2012.

Turnover in the Asia Pacific 2W area went up considerably (+ 12.6%), while revenues fell in India (- 9.4%), and in EMEA and the Americas (- 10.3%). As regards the latter area, America achieved an excellent performance, with turnover up by 105.1%.

The Group's gross industrial margin, defined as the difference between “net revenues” and “cost to sell” decreased by 36.4 million euro in absolute terms compared to the previous year, while in relation to net turnover, it amounted to 29.7% (30.0% in 2011). The decrease as a percentage, due mainly to the different mix of products sold on markets in EMEA and the Americas, and in India and Asia Pacific 2W, was within 0.3 percentage points, thanks to important actions to curb product costs.

For example, the "cost to sell" includes costs for materials (direct and consumables), accessory purchase costs (transport of incoming material, customs, warehousing), employee costs for direct and indirect manpower and relative expenses, work carried out by third parties, energy costs, depreciation of property, plant, machinery and industrial equipment, maintenance and cleaning costs net of sundry cost recovery recharged to suppliers. Amortisation/depreciation included in the gross industrial margin was equal to 32.9 million euro (31.7 million euro in 2011).

Operating expenses incurred during 2012 totalled 321.3 million euro, approximately 28.2 million euro less compared to the previous year (349.5 million euro), and highlight the Group's constant focus on keeping costs down and maintaining high profitability levels. This saving benefited from the decrease in the item amortisation of intangible assets, due to particularly high figures for the previous year related to measures to renew the range and due to the changed useful life of the Aprilia and Moto Guzzi brands.
For example, operating expenses include employee costs, costs for services, leases and rentals, as well as operating costs net of operating income not included in the gross industrial margin. Operating expenses also include amortisation/depreciation not included in the gross industrial margin, amounting to 46.7 million euro (63.4 million euro in 2011).

These trends in the income statement resulted in a consolidated EBITDA – defined as operating income gross of amortisation/depreciation – which was lower than the previous period, and equal to 176.2 million euro (199.8 million euro in 2011). In relation to turnover, EBITDA was equal to 12.5% (13.2% in 2011). In terms of Operating Income (EBIT), performance was negative compared to 2011, with a consolidated EBIT equal to 96.6 million euro, down 8.2 million euro from 2011; compared to turnover, EBIT remained steady at 6.9%, as in the previous year.  

The result of financial assets declined compared to the previous year, with Net Charges amounting to 28.7 million euro (26.2 million euro in 2011). This increase, offset by the capitalisation of 6.9 million euro, based on IAS 23, is affected by the increase in debt, necessary to support investments made in 2012, combined with an increase in the cost of funding and charges for debt refinancing.

Consolidated net profit stood at 42.1 million euro (3.0% of turnover), down on the figure for the previous year of 46.3 million euro (3.1% of turnover). Taxes for the period were equal to 25.8 million euro, while they accounted for 32.3 million euro in 2011. The significant decrease compared to 2011 is due to the decrease in profit before tax and the registration of deferred tax assets for temporary differences that will be cancelled in future years.