Consolidated income statement (reclassified)

  1st half of 2013 1st half of 2012 Change
  In millions of eurosAccounting for a% In millions of eurosAccounting for a % In millions of euros%
Net sales revenues 671.5 100.0% 764.1 100.0% (92.5) -12.1
Cost of sale 464.2 69.1% 527.8 69.1% (63.6) -12.0
Gross industrial margin 207.3 30.9% 236.3 30.9% (28.9) -12.2
Operating expenses 149.8 22.3% 164.6 21.5% (14.8) -9.0
EBITDA 100.6 15.0% 114.4 15.0% (13.8) -12.1
Amortisation / Depreciation 43.0 6.4% 42.7 5.6% 0.3 0.7
Operating income 57.6 8.6% 71.7 9.4% (14.1) -19.7
Result of financial items (16.0) -2.4% (15.3) -2.0% (0.6) 4.1
Profit before tax 41.6 6.2% 56.3 7.4% (14.7) -26.2
Taxes 16.6 2.5% 22.5 2.9% (5.9) -26.2
Net profit 25.0 3.7% 33.8 4.4% (8.8) -26.1

Vehicles

  1st half of 2013 1st half of 2012 Change
In thousands of units
EMEA and Americas 132.5 167.1 (34.5)
India 117.4 97.5 19.9
Asia Pacific 2W 48.5 50.8 (2.3)
TOTAL VEHICLES 298.5 315.4 (16.9)
 
Two-wheeler 202.0 216.7 (14.8)
Commercial Vehicles 96.5 98.7 (2.2)
TOTAL VEHICLES 298.5 315.4 (16.9)
     

Net revenues

  1st half of 2013 1st half of 2012 Change
In thousands of units       
EMEA and Americas 414.0 503.5 (89.5)
India 165.9 165.0 0.8
Asia Pacific 2W 91.7 95.6 (3.9)
TOTAL NET REVENUES 671.5 764.1 (92.5)
 
Two-wheeler 489.8 561.9 (72.1)
Commercial Vehicles 181.7 202.2 (20.4)
TOTAL NET REVENUES 671.5 764.1 (92.5)

In the first half of 2013, the Piaggio Group sold 298,500 vehicles worldwide, with a reduction in volumes totalling around 5.4% compared to the same period of the previous year, when 315,400 vehicles were sold. The number of vehicles sold in India went up considerably (+ 20.4%) as the Vespa production site was fully operative, with sales starting in the second quarter of 2012. Sales fell instead in Asia Pacific (- 4.6%) and in EMEA and the Americas (- 20.7%). As regards the type of products sold, the main downturn occurred in the two-wheeler segment (- 6.8%).

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 16% (- 22% for scooters and - 8% for motorcycles). In the EMEA area, the Piaggio Group retained its market leadership position, with a 17% share. The Group achieved excellent sales results on the American market (+ 12.9%) and in India, where sales of the Vespa totalled 25,400 units.

Sales of commercial vehicles fell slightly (-2.2%). The decline in EMEA and the Americas was more considerable following the concurrent downturn on all reference markets: Germany (-9.6%), France (-9.2%), Spain (-9.0%) and Italy (-22.5%).

In terms of consolidated turnover, the Group ended the first half of 2013 with net revenues down by 12.1% compared to same period in 2012, and equal to €671.5 million.
Turnover in India went up slightly (+ 0.5%), while revenues fell in Asia Pacific (- 4.0%), and in EMEA and the Americas (- 17.8%).
As regards product type, sales of commercial vehicles fell by 10.1% and two-wheelers by 12.8%. As a result, the impact of two-wheeler vehicles on overall turnover went down from 73.5% in the first half of 2012 to the current figure of 72.9%; vice versa, the impact of commercial vehicles went up from 26.5% to 27.1%.

The Group's gross industrial margin, defined as the difference between “net revenues” and “cost to sell” decreased in absolute terms by €28.9 million compared to the first half of 2012, while in relation to net turnover, it remained steady at 30.9%, as in the first half of 2012.
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 related 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 € 17.2 million (€ 16.4 million in the first half of 2012).

Operating expenses incurred during the first half of 2013 totalled € 149.8 million, € 14.8 million less compared to the same period of the previous year (€ 164.6 million), and confirmed 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 the change in the useful life of the Aprilia and Moto Guzzi brands as from December 2012.
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 € 25.8 million (€ 26.3 million in the first half of 2012).

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 € 100.6 million (€ 114.4 million in the first half of 2012). In relation to turnover, EBITDA was equal to 15.0%, as in the first half of 2012. In terms of Operating Income (EBIT), performance was negative compared to the first half of 2012, with a consolidated EBIT equal to € 57.6 million, down € 14.1 million; in relation to turnover, EBIT fell slightly from 9.4% in the previous half year to 8.6%.

The result of financing activities worsened compared to the first half of the previous year, with Net Charges amounting to € 16.0 million (€ 15.3 million in the first half of 2012). This increase was affected by higher debt, the negative impact of currency management and lower revaluation of the investment in the Chinese joint venture, and was offset by the capitalisation of € 2.4 million in application of IAS 23 and by the reduction in the cost of funding.

Consolidated net profit stood at € 25.0 million (3.7% of turnover), down on the figure for the same period of the previous year of € 33.8 million (4.4% of turnover). Income taxes for the period are estimated at € 16.6 million, equivalent to 40% of profit before tax.