Release Date: July 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Positive cash flow registered in the first half of 2024 compared to a reduction in 2023.
- India shows continuous, albeit slow, growth, providing a stable market.
- Second best six-month performance ever recorded, indicating strong overall performance.
- Introduction of new vehicles and investment in electric mobility and digitalization of production plants.
- Successful legal outcome against Peugeot, contributing to financial gains.
Negative Points
- Revenues are down in Asia and the USA, impacting overall financial performance.
- Increased costs, particularly in logistics and raw materials, due to geopolitical issues.
- Declining top-line results for four consecutive quarters, raising concerns about market competition and pricing policy.
- Higher competition in Europe, especially with significant discounts from competitors.
- Challenges in the two-wheel market in India, requiring new strategies and management adjustments.
Q & A Highlights
Q: Piaggio has reported declining top-line results for four consecutive quarters. Is this due to higher competition in Europe or pricing policy? Will the top line in Europe start to grow in the third quarter?
A: Michele Colaninno, Executive Director: The decline is partly due to competition and pricing policy. We are focusing on maintaining a balanced dealer stock to ensure future growth rather than pushing for immediate sales. The market's development will depend on various factors, including interest rates and consumer credit costs.
Q: Will the company face margin pressure in 2025 due to higher costs?
A: Michele Colaninno, Executive Director: We can manage cost increases with the current production levels. If markets decline, we will take necessary actions. We are flexible and resilient, and we take decisions annually to protect against raw material cost fluctuations.
Q: What new products can we expect in the second half of 2024?
A: Michele Colaninno, Executive Director: We will introduce new Euro 5+ vehicles in the second half of 2024. We will continue to invest in new vehicles and enhance our product line, both in scooters and bikes.
Q: Can you explain the significant other operating revenues and costs in the first half of the year?
A: Michele Colaninno, Executive Director: This is related to winning a legal case against Peugeot and insurance reimbursements for extraordinary items like last year's flood in Italy. These are not related to ongoing business operations.
Q: What are your expectations for the European market in the second half of the year?
A: Michele Colaninno, Executive Director: We will continue to stock but maintain control to be ready for 2025. The market should follow, and we are introducing new vehicles. We aim to have a positive stock at the end of the year.
Q: Are there any new markets Piaggio is considering for expansion?
A: Michele Colaninno, Executive Director: We are already present in most markets globally. Africa could be a potential market, but it's too early to consider localization of production there.
Q: What is the status of Piaggio's two-wheeler segment in India?
A: Michele Colaninno, Executive Director: We have introduced the RS457 bike and are satisfied with its performance. We have made mistakes in the scooter segment but are putting a new team in place to address competition from low-cost vehicles. We will continue to target the high-end market with Vespa and bikes.
Q: How is the German market performing for Piaggio?
A: Michele Colaninno, Executive Director: We are not reducing working capital financing in Germany. We have a new dealer contract in place and are focusing on a multiplex distribution strategy. The German market is important, and we are happy with our dealer network and customer appreciation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
