Earnings call transcript: Piaggio & C sees strong EBITDA margin in Q4 2024

Published 05/03/2025, 10:06
Earnings call transcript: Piaggio & C sees strong EBITDA margin in Q4 2024

Piaggio & C reported its Q4 2024 earnings, highlighting a robust EBITDA margin despite a revenue decline due to a strategic destocking process. The company’s stock price saw a slight decrease of 0.62% to 1.939, reflecting mixed investor sentiment. The earnings call revealed Piaggio’s focus on innovation and market adaptation, particularly in the electric vehicle sector.

Key Takeaways

  • Achieved best-ever EBITDA margin percentage in 2024.
  • Revenue decreased by €110 million due to destocking.
  • Preparing to launch first electric vehicle in April 2025.
  • Strong presence in Asian markets, especially with Vespa.
  • Cautiously optimistic about market recovery in 2025.

Company Performance

Piaggio & C demonstrated resilience in Q4 2024 by maintaining strong margins despite a planned reduction in revenue. The company’s strategic destocking process, which is 95% complete, led to a revenue decline of €110 million. However, the focus on high-margin products and operational efficiency resulted in the best-ever EBITDA margin percentage for the year. Piaggio’s premium positioning and strong brand presence, particularly in Asia, have helped offset challenges in other markets.

Financial Highlights

  • Revenue: Decreased by €110 million due to destocking.
  • Gross margin: Increased to 29.2%.
  • Operating cash flow: Positive at approximately €200 million.
  • Dividend: Maintained stable despite reduced net income.

Earnings vs. Forecast

Piaggio & C’s earnings per share (EPS) and revenue forecasts for Q4 2024 were not explicitly detailed in the available data. However, the company’s focus on maintaining strong margins and operational efficiency indicates a strategic approach to managing expectations and delivering value.

Market Reaction

Following the earnings announcement, Piaggio & C’s stock price decreased by 0.62% to 1.939. This movement reflects a cautious investor sentiment, likely influenced by the revenue decline and ongoing market challenges. The stock remains within its 52-week range, with a high of 2.954 and a low of 1.911.

Outlook & Guidance

Looking ahead, Piaggio & C expects a slight improvement in top-line revenues in 2025. The company is preparing to launch its first electric vehicle in April 2025, aligning with its strategy to enhance technology investments and comply with Euro5 plus legislation. Capital expenditures are expected to peak in 2025 before declining, and the company aims to maintain margins around 17%.

Executive Commentary

CEO Michele Colanino emphasized the importance of technology investment, stating, "If you do not invest your money in technology, you will lose the opportunity to customers that are interested in technology." He also addressed pricing strategies, noting, "We are not increasing prices. Well, just a slightly increase due to Eurofighter motivation, but nothing serious."

Risks and Challenges

  • Legislative changes in Europe affecting market dynamics.
  • High interest rates impacting the U.S. market.
  • Competitive pressure from Chinese and Indian manufacturers.
  • Supply chain disruptions potentially affecting production.
  • Economic uncertainties in key markets like China.

Q&A

During the earnings call, analysts inquired about the completion of the destocking process and its impact on future revenue. Piaggio confirmed that minimal additional inventory reduction is expected, and the focus will remain on maintaining a gross margin of around 29.2%. The company also discussed strategies to enhance its brand presence in Asian markets, leveraging its strong dealer network and premium product positioning.

Full transcript - Piaggio & C (PIA) Q4 2024:

Conference Operator, Chorusco: Good afternoon. This is the Chorusco conference operator. Welcome and thank you for joining the Piaggio Full Year twenty twenty four Financial Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions.

At this time, I would like to turn the conference over to Mr. Raffaele Lupoto, Investor Relations of Tiago. Please go ahead, sir.

Raffaele Lupoto, Investor Relations, Piaggio Group: Yes. Thank you very much. Hello, everyone, and welcome to the full year twenty twenty four financial results conference call. Today’s conference call will be offered by Piero Group’s Chief Executive Officer, Mr. Michele Colanino and Piero Group’s CFO, Alessandro Simonotto.

Today, we have also the pleasure to have Mitas, Piero Group’s Executive Chairman, Mr. Macias Cola Mino.

: You can

Raffaele Lupoto, Investor Relations, Piaggio Group: also have the slides supporting this conference call on the Internet at the Caljo Group website. And as you may expect before starting the presentation, I need to remind you that during today’s conference call, may use forward looking statements based on PagSeguro’s current expectations and projections about future events. By their nature, forward looking statements are subject to risks, uncertainties and other factors that can cause actual results to be materially detailed as mentioned in the sales Airbus statement included on Page two of today’s presentation. Also, I remind you that the press has been invited to participate in this conference call in a listen only mode. With that said, let me turn the call over to our CEO, Mr.

Lucero Colonino.

Michele Colanino, CEO, Piaggio Group: Thank you, Raffaele, and good afternoon to you all, ladies and gentlemen, and thank you for joining the PIATRE conference call of today. Let me say, even if today is not the perfect day to speak about numbers given what’s happening around the world, especially due to geopolitical situations that you know perfectly, I would like to say and point out that 2024 for Pietro Group has pointed out good results in terms of EBITDA margin, reaching the best ever percentage on net revenues that we ever achieved and at the same time, an increase in gross margin percentage, up to 29.2%. This is given by a strong management of the productivity around the world, by all the teams that everyday work in our company and with the attention of the cash flow generation and operating cash flow. As far as revenue is concerned, the declining that we have pointed out is the consequence of the strategy that you know we started at the beginning or at the end of twenty twenty three, destocking our dealers’ network around the world, especially in Europe, but not only in Europe. Giving you a number, the value of the destocking has been around €110,000,000 It means that we have a beginning of €25,000,000 that is quite satisfying considering the healthy of our dealers.

And you know that I am particularly interested in having our partners making money. With our solid and healthy dealer distribution network, we can continue with the selling strategy following the markets that, as you know, can go up or can go down. But we don’t have the necessity to stop deliveries because dealers are affected financially. And dealers are entrepreneurs, as in IHIM, And dealers are entrepreneurs, having high interest rates to pay, having consumer finance situation that is a little bit frustrating because of interest rates. But I’m positive about their sustainability in the future.

Another important key aspect of the 2024 results is the debt. The debt has arisen as a consequence of the destocking. It means that we have inflow of less value compared to the destock of EUR 110,000,000 roughly million. We have increased our CapEx in our factories, our plants and our iconic brands and product because I think that we have to fill the gap with the worldwide competition in some medium range bike, and we have done the job. We have to renew all the line in Europe given to the change in legislation, both for two wheeled vehicles, Euro5 to Euro5 plus and like commercial vehicles, the quarter, where we are investing and we will launch in April our first ever electric vehicle in our group.

What I expect is that the situation that we are having around the world, let’s say, not manageable by us. And I mean wars, I mean Suez Canal, I mean trade wars that probably will arise around the world, I mean interest rates that are slightly going down, all aspects that are affecting the consumer business, let’s say, the premium consumer business around the world, not just in our segment, but as we see on papers, it’s spreading on major business that are in the upper premium or luxury business. The Asian situation is not bleeding as it was in the 2024. It’s starting recovering a little bit in Vietnam and Thailand. It is positive in Indonesia, still positive in Indonesia.

I’m satisfied about Indonesian market in 2024. It’s still flat or bad in China. And this is for every business related to consumer business. As far as India is concerned, I’m satisfied. We’ve done a good job.

We can do better. We will do better in the medium to long term because we will enter new markets on the two wheeled vehicles. So not just the Vespas and the Prius medium range bikes, but also other scooters for mobility over there. We have electric vehicles being sold on the three wheeled market. We have new vehicles that are coming out in the next and coming months in India, especially on the light mobility of goods, so the three wheeled vehicles.

So I’m positive on India. Europe, it is stagnant. The beginning of the year is reflecting the change in Euro five plus legislations. That’s normal. Nothing strange in the market.

We have some adjustment in stocks given that the dealers cannot sell anymore Euro 5 and they have to sell Euro 5 plus To be pragmatic, we decided that the inflow and the selling of this new all new vehicle, Euro 5 plus will be not suddenly done by PIATR Group. We have begun at the beginning of twenty twenty five with the Euro5 plus vehicles, where we continue until the March substituting selling of new vehicles. So we are taking a low page sell in for Euro5 plus respecting, obviously, all the obligation that we have from the law. United States has been affected in 2024 given 99% because of high interest rates. We don’t have major problems there.

It’s a big market for us. It’s an interesting market for the medium range bikes. So we are satisfied of the new Aprilia bikes that we are introducing that we have introduced. And I think that we need some stability. That’s what I think given that entrepreneurs cannot substitute politicians and policymakers.

But I want to be positive, let’s say, and I hope that our policymakers will find a solution for the situation that we are seeing since the beginning of 2025. As you can see, we have slightly declining in inventories that is positive. It’s not growing, let’s say, even though we have a longer period due to the Suez Canal that impact working capital and inventories. It seems that in June, if nothing get worse, the situation can be positive in that site. So ships starting to enter the Suez Canal and not being obliged to go around Africa to reach Europe coming from Asia, I mean.

As you can see, we have a declining in commercial tables, and that’s positive to work properly with our suppliers because we work with our suppliers and we have to work together. We are not enemies, we are friends. As I said, we have a destocking of EUR 100,000,000, increasing CapEx for EUR 20,000,000 and operating cash flow positive of around EUR 200,000,000. This is very briefly what we are pointing out in our slides that as you can see here also showing our product range and our iconic brands that we are selling around the world. As you can see, we have approved a dividend and that’s positive even if it is reflecting the reduction in net income.

I think that shareholders will be satisfied about the payout that is not increasing. It’s maintained stable. And we are managing also a return a positive return on stock investments. Given that the percentage of the total amount of the dividend is roughly 10% on the actual value of the share listed on the stock. That is to say that we are continuously investing in our product.

I don’t see any necessity to reduce the investments stage. We will have, for sure, a slight reduction this year given that the electric quarter has will enter the market and that all the homologations are finished. So in the next years, I foresee a declining necessity of capital expenditure in new products as far as in production facilities, where as you know, we are totally renewing the Monte Guzzi house in Mandel De Lario, and that’s one of the reason of increasing in CapEx. And we are investing in safety processes for our workers. And obviously, we are investing, as you are aware of, in electrifying our engines production in Italy, also through the possibility and the opportunity given by the recovery plan that has been delivered by European Unions in the last years.

So we will be investing in these electrification of our product range without Panieri. As you know, we decided not to rush too much in electrifying our vehicles because we foresaw something that would have taken more period of time compared to what is in the future of the electrification of the world. I repeat and I point out that two wheeled vehicles are not under the legislation of any reduction of CO2 emissions and obligation to convert all the product range because the electric two wheeled vehicles market is at a weight of just 0.5 of CO2 emissions all over the world compared to the total and overall emissions of CO2. The ratio between net financial position and EBITDA is still under control, below two. So I’m not worried about the number because we know why we have this increase in debt, the stocking and investments.

So it’s, let’s say, momentum that we will recover in the coming years, and we will continue to push on productivity, perfect investments and return on investments and hoping to have, let’s say, negative or positive vision for the medium to long term period. What’s happening around the world, I don’t have to tell you, you know everything. The market now is overall down in every single listed market because of trade wars between U. S, Europe and China. Let’s hope that they will find a solution because I am not in favor of these situations given that the policies about Paris, it’s a temporary relief perhaps for some economy, but in the medium term, it’s a disaster.

So let’s see what happens. Just to give you a brief disruption of what at the Assam level and the Chairman in Brussels we are discussing is that we don’t need any tariffs between Europe and U. S. We are in favor of good competition, fair competition And even if even because the balance between U. S.

And Europe on our vehicles is quite flat. It’s the same. We don’t have any need of tariffs, import or export. Let’s hope that also United States will take the same direction that we are aiming at the asset level. And that’s what I think.

It’s a good way to manage the business instead of having unfair competition. The maturity of our debt is safe. We have roughly four years of debt profile. We don’t have any ROE this year. We don’t have any ROE next year.

So we are very happy about the situation of our relation with banks and bondholders. So this is a fact. Fortunately or not fortunately, there is a strategy. We have secured all of that profile. So we can concentrate now on doing our day by day job.

Sellout is the priority, so to have a consequence of let’s see, increasing revenues and the consequence of increasing revenues is everything that is below revenue. Our priority is very briefly what we decided today during the Board of Directors and we have filled all the numbers and this is what we have achieved last year.

Raffaele Lupoto, Investor Relations, Piaggio Group: Thank you very much. So with that, we are ready to start the Q and A session. So please ask your question and also on conference call sake, please limit the number of questions to maximum three per person. Thank you very much.

Conference Operator, Chorusco: Thank you. This is the Coruscall conference operator. We will now begin the question and answer session. The first question is from Monica Bossio in Teva San Paolo. Please go ahead.

Monica Bossio, Analyst, Teva San Paolo: Good afternoon, everyone, and thanks for taking my questions. I will limit it to three. The first one is on the destocking process and the situation in term of revenues in Western countries. So if I understood well, the company lost EUR 110,000,000 revenues due to the destocking, which according to my math was in the range of 24,000 vehicles. So how much of these revenues are is the company going to recover in 2025, given also that the sell in in the first part of the year will be weak, if I have understood well.

Any indication could be useful just to address if revenues in Europe will grow low single digit or will keep flat or whatever? The second question is on the CapEx. I understood that it will go down, but I understood also that it will go slightly down in 2025. So any indication could be useful on this side also on the free cash flow generation that the company expects for this year? And the very last is on on the production the company has in India for two wheels.

Are you going to manufacture scooters in India and then maybe to export these scooters into Europe? Is these strategies that you’re going to pursue? Thank you.

Michele Colanino, CEO, Piaggio Group: Thank you, Mrs. Bozi, for your questions. Let’s start from the stocking process. I think that we have quite finished the stocking process. At the beginning of the year, let’s say, January and February, we have a last way in page of destocking in Europe.

But the major and the 95% of the process has been done in 2024. Now if we have the possibility to start stocking again, it just belongs to markets. If market growth is what we expect, because we expect some growth around the world, we have the possibility to increase also the stock because we have a ratio that we don’t want to we want to maintain that ratio to sustain the dealer’s profitability. So it basically depends on the markets. We hopefully will increase some market share on our vehicles.

But what I can tell you is that 95% of the work has been done in 2024. The remaining 5% is just normal management of the dealers, nothing serious, nothing that will need us to break the system and stop selling the vehicles. CapEx, yes, it’s slightly down. We have to finish the BANDELO Lario investment, and we have to improve our electromobility investment in Italy, because I’m convinced that it’s intelligent to manage, the, let’s say, the heart of the vehicle that is the engine and the software, as you know, I told you many times in the past. So we will invest in this technology.

I’m totally convinced that in the world of today, any company and we are doing that, must invest in technology. If you do not invest your money in technology, you will lose the opportunity to customers that are interested in technology. So we are investing in software. We are investing in capability for verticalization of some components that we think are crucial for our engines and our vehicles to be ready whenever the European and, let’s say, the Western countries will ask for this kind of demand. We know that Asia, especially China, is the only market that is pushing on selling electric vehicles.

But I’ve been in Beijing in the last twenty days. I’ve been there one week to understand what’s going on. I can tell you that China is living on exports. They are investing a lot in technology. We know that.

It’s a technology that we can manage. It’s a technology that we are investing in. But the market is still a marginal market. A marginal market means that the breakeven, let’s say the breakeven of the volumes you have to achieve on these cheap vehicles in China is 2,000,000 average. So it’s not our strategy to go into a marginal business.

We are not in China, we are in Europe. We have to sustain our margins, possibly not increasing prices and is what we are doing. We are not increasing prices. Well, just a slightly increase due to Eurofighter motivation, but nothing serious. So we don’t want to enter the Chinese marginal market.

India. India is a market that is very interesting for two wheeled vehicles. It’s starting to enter a value that we can be competitive in, so we will localize, produce and sell India on India. Some export markets are interesting for sure. It is not for Europe, it is not for United States.

Just to give you the view that I have on the country, it means that Europe and United States will be supplied by Italy Ninety Five Percent of the sell in that we have in that markets. We continue and I think, look at this, that the strategy that we took many years ago to produce and sell where we have production facilities, it’s demonstrating it was a good strategy. Because if we enter in a tariff war, every company, every continent will increase their tariffs in imports, but we decided to have production facilities, supplier base that is good and the market that we supply from the market that we where we produce. So you know that Asia is supplied by Vietnam, Indonesia and China, India and surrounding countries that it’s the export possibility that we have. The surrounding countries and perhaps a microton country is supplied by India, Europe and United States will be supplied by Europe.

So the strategy is correct. The strategy it’s demonstrated that we took the right decision. Now it’s our job to make that the strategy transform into Selena. And I have to say, sorry, I forgot to say this, but it’s very important to me that I’m satisfied of the people that are working in the PRG group around the world. They’ve done a good job.

We have done a good job. We have done together a good job because being resilient, that’s a word that we have to stress in a 2024 that has been characterized by many, many magnitude problem of big magnitudes that was not forecasted. We cannot do nothing. So the fact that we would be we have been able to achieve not the budget that we had approved in January 2024, but the numbers that we have, even it is reducing compared to last year’s, are quite solid numbers. It is the best third ever year of the Piaggio Group and the best ever on percentage of EBITDA that since 02/2003.

So that’s why I’m satisfied. If you ask me if I’m satisfied about revenues, no, but I cannot do nothing to stop the wars, unfortunately.

Monica Bossio, Analyst, Teva San Paolo: Got it. Thank you very much. Thank you.

Conference Operator, Chorusco: The next question is from Emmanuel Galazzi, Equita. Please go ahead.

Michele Colanino, CEO, Piaggio Group: Yes. Good afternoon, everybody.

Emmanuel Galazzi, Analyst, Equita: Thank you for taking my questions. I have basically two questions. One is on the dealers. You mentioned some measure to support them, including the destocking and also the better credit condition. But just looking at Europe, what kind of feedback are you getting from them about the Euro 5 plus products and the overall market condition there?

My second one is still on the net working capital because we have seen this give or take 50,000,000 cash absorption in 2024. I was just trying to understand what do you expect for 2025? Should we have to expect inventories down and also payables down?

Michele Colanino, CEO, Piaggio Group: Thank you for your question. Dealers are happy. Obviously, we have shown them at the Ecma fair in Milan what we will have done in the 2025 product range. They are waiting for us to have the especially medium range capacity bikes. They are positive on that market.

They are happy about the rest of the brand. Let’s say that they are not happy, but they are entrepreneurs like me. They are not happy paying 8% to the bank for doing their business. And but that’s life. We pay our interest, they pay our interest.

So they are not they are still not the same confidence, let me say, that they had in 2022 or 2023, but that was an exceptional momentum of our market. So from the product line, Euro5 plus European dealers, they are satisfied, and they think the products are okay. The stocking. The stocking has been intelligent. It is a way to work together with them.

It’s not that we want to sustain them. I continually tell them that they have to do their job like we do our job. So that we have to work together to have an increase allowed. But what we have done is it has been necessary because we forecasted that it would have been a tough year in 2024 in Europe, mainly due to the legislation changes, but also due to factors that you cannot manage without having any impact on your business case. The high inflation rates in the previous years and the interest rates are the two major aspects that affect heavy business that has relation with consumer.

So I hope that we will find a let’s say that we’ll not go back to the problem of that we foresaw in 2023 and 2024. If the situation will continue like this and given that they are satisfied about the product range that we have given them, I don’t see any decline. Let’s say like this. We know that Europe is not a big growth market. It’s quite stable.

Yes, it’s plus two, minus two, minus five, plus five. But it’s a rich market, so the price and the margins are very good for us. And we are satisfied about the process that we are introducing in the network from now to March. Net working capital, I would leave to Alessandra, our CFO, to explain you the major issues that we had to manage.

Alessandro Simonotto, CFO, Piaggio Group: Right. The major issue that we had during the year was more or less the first one the Suez Canal, as already said before. Third to date more of by the team around the Africa, more or less cost to everyone that work on at least more or less million more on the inventory. So this is the third factor of the net of the working capital. The second one is the minimum half what we have given to our customers.

In a period in which they have to work on a destocking and heavy destocking on the EMEA market, we give them two or three days more as a lower credit fund. So and this is more or less cost to Piaju and to our cash flow, €10,000,000. The last thing that you can see in our cash flow is the slowdown of the payables. Also in this, we have worked with the supplier in a period in which the cost of that is higher than 2022 or 2021. So in that case, it’s in which we consider important to support the supplier.

We have helped them with a reduction of the payment terms and which is more or less impact on the net capital on the working capital for more or less USD 40,000,000. So we see the picture that we put on the table when we talk about the most important effect.

Michele Colanino, CEO, Piaggio Group: Okay. Very clear. Thank you.

Conference Operator, Chorusco: The next question is from Niccolo Storey, Kepler Cheuvreux. Please go ahead.

Alessandro Simonotto, CFO, Piaggio Group: Good afternoon. Thanks for taking

Niccolo Storey, Analyst, Kepler Cheuvreux: my questions. The first one is again on inventories. I see basically that even if I took off the 20,000,000 you were mentioning of Suez Canal impact days of inventories are still much higher compared to your historical averages. So is there any room for further improvements in 2025 onwards? And if not, why?

My second question is on gross margin. What are your expectation going forward assuming no big changes in the country mix? Are you seeing any particular cost item which is trending against you? Or you consider that everything is under control? My very last question is on Southeast Asia.

At the beginning of the call, you said that markets are in a sort of stabilization phase, bottoming out phase. But over the past few quarters, we have seen a marked difference between overall markets and the premium segment. So can you give us any insight of how the premium segment of the market is fairing so far? Thank you.

Michele Colanino, CEO, Piaggio Group: Thank you, Mr. Stoller. Yes, starting from the inventories, yes, I think, further improvements in the 2025 year. The 2024 situation has been affected by the delay on delivery of logistics given to the Suez Canal that has pushed us to have a slight increase in what we have bought given that we take a longer period due to the situation. I’m not worried about this.

We are working every day to reduce the level of inventories. So I’m saying that I can say we will have improvements, yes. If you’re asking this, I can confirm this. As far as gross margin is concerned, well, confirming the 29.2% of 2024% is what I can tell you we’re working for. I see some issues, but it’s more local issues.

If you take the electricity costs in Italy, if you take possible tariffs that can affect the business, if you take the cost of the debt that is affecting the business, but it’s not affecting the gross margin. But overall, I don’t see major risks even because we have taken some opportunities during 2024 on raw material prices, we have taken some opportunities in some exchange rate with some international currency. So we have fixed what we could fix to maintain the actual level of gross margin. Southeast Asia during my trade in Southeast Asia last month, I have to tell you, we could do better in Indonesia because Indonesia has not been affected until now of the China crisis. So with the brand that we have, I’m positive that we can do better results over there.

I’m not positive on China, but I can tell you that the only positive picture that I have in front of my eyes was cranes around Beijing. It means that they are starting to push a little bit on real estate. And you know better than me that the problem of real estate in China is what affected the market of banks and consumer business. So if they foresee recovery, even if it is a slight recovery in real estate markets, it means that the consumer markets can restart. And these affected especially premium and luxury markets in China.

So they told us they see some chime at the end of the day. They are not fully positive they’re not it means our the people we spoke with,

Michele Baldelli, Analyst, BNP Paribas (OTC:BNPQY) Exane: that are bankers, that are entrepreneurs, that

Michele Colanino, CEO, Piaggio Group: are real estate businessmen. But the policymakers, let’s say, like this, told them we have not to belong too much to export because we do not know what happens in the world. So we have to push for our internal market. And you know that’s what I mean. China is a place where the decision when the decision is taken, everyone, everybody follow the decision.

So that is the only positive situation I can tell you, even though the market has been struggled in 2024. And we are working, especially with the Vespa brand, all over the Asia markets to push on the brand image that we have over there. So to enhance our brand visibility, not just on the vehicle, but also on the lifestyle that is the Vespa soul, let me say, of the brand. Without any intention to go to Paris or Couture De Fillet, but the brands, especially in Asia, can sustain an enlargement of the value, let’s say, the value of the brand. You can take it as a marketing opportunity instead of opportunity for revenues, but I think that we can do also some revenues on that.

But this is not included in our budget and forecast. Let’s say, we take it as a marketing opportunity. We have created these pop ups around the Asia markets for the $9.46, EUR 15,000 value Vespa Snake, the Lunar calendar edition. We have done these pop ups in Beijing, Jakarta, Indonesia, Singapore and Hanoi. And let me say that they started since January 1 and they are going on to, let’s say, March to see if the market, to explain to our customers what we do, to show them the value of our brand and to show the quality of our brand.

It is totally different compared if you buy a 300 cc scooter just to go from A to B. This is a strategy that you guys all know and that we are pushing, and I think that the return will be positive. It’s not tomorrow morning because the situation the financial situation is not for high spend value in the Asian market, but we cannot stop the enhancing the value of our brand. Bikes are different, so we don’t have any production of bikes for the time being in Asia. The Vester brand and the PIATO brand, we introduced a new Liberty in Hanoi.

We launched a new vehicle that is in our middle low middle value market. So it’s not cheap market, it’s not marginal market. It’s a community business that is totally in line with the Piaggio brand strategy. So I don’t have to say that I’m positive on China and Thailand. We can do better in Indonesia.

I’m slightly positive on Thailand and Vietnam because numbers are slightly positive. They are not the same of 22, but the sellout per week, it’s starting to grow. Few numbers, low numbers, but it’s a positive momentum of consumer attitude. Let me say like this. Usually, when the consumer attitude is growing, also the purchasing power will grow.

So they are now in a situation of having saved money because in especially in China, they are saving money, unemployment and design. But let me say that I’ve seen the Beijing that it’s starting to ignite the engines again.

Conference Operator, Chorusco: Next (LON:NXT) question is from Gianluca Bertuzzo in Termonte. Please go ahead.

: Hi, everybody, and thank you for taking my question. You mentioned that you expect in 2025 to improve compared to 2024. The improvement you are seeking is on both the top line and profitability? Or just broadly speaking, do you expect an improvement only in revenues or and a flat profitability? And what are your thoughts around that?

Thank you.

Michele Colanino, CEO, Piaggio Group: Let me say that if we achieve an increase in top line, I would be very satisfied and we are working for that. Moving further, the margins of EBITDA that is 70%, it’s not easy given the situation that we have. So we are working on top line.

: Okay. And a follow-up maybe on competition. What are the effects on the market due to the particular situation of your competitor? And are you seeing higher competitive pressure overall? Or the situation is more or less stable?

Michele Colanino, CEO, Piaggio Group: You’re referring all over the world or Europe?

: In Europe and if you want to add a specific comment to Asia Pacific, it would be helpful as well.

Michele Colanino, CEO, Piaggio Group: Asia Pacific, very low competition compared to the Vester brand. I think that we are the best premium vehicle in the market. It has been affected by declining consumer purchasing power and aptitude. So I don’t see any big risk on that market. As far as Europe is concerned, you know that we had a turbulent, let’s say, end of the year given that some of our competitors has been obliged to discount up to 50% the bike, and it’s a European competitor, unfortunately, and luckily that I hope that so we’ll solve the problem very soon, and it seems that they will solve the problem.

So the pricing point has been affected by some hysteric situation on the dealers, not because particular situations because of destocking, Euro5 plus and some competitors that has fixed their problems in house. Chinese are coming. They are about doing a good job. As I told you, I don’t think that they can go even further in price compression in China because they need also the internal and local markets, not just the export. But once again, we will now enter the low price competition.

We keep now our value, let’s say, slightly higher if you compare to other Chinese or Indian brands, given that I think that the value of our brands are still stronger than their value. If it is just money versus money, they are stronger than us. But it’s not a competition that I would like to have given the brands that we are managing.

Raffaele Lupoto, Investor Relations, Piaggio Group: Okay. Thank you.

Conference Operator, Chorusco: The next question is from Javier Echevarria in Vaxal. Please go ahead. Maybe your line is on mute. We cannot hear you. Please

: check your line.

Michele Colanino, CEO, Piaggio Group: Yes, sorry.

Raffaele Lupoto, Investor Relations, Piaggio Group: Sorry. My question has already been answered. It was about the competition. So thank you very much.

Michele Colanino, CEO, Piaggio Group: Thank you. And happy to have you here.

Conference Operator, Chorusco: The next question is from Michele Baldelli, BNP Paribas Exane. Please go ahead.

Michele Baldelli, Analyst, BNP Paribas Exane: Hi, hello to everybody. I have a question on the, let’s say, recurring no record factoring. I would like to know how much was at the end of twenty twenty four the no record factoring that is off balance sheet? And the second question relates to the level of CapEx spent in the last year on intangible assets because I saw that the amortization on this was just $76,000,000 last year in 2024. But if I’m not wrong, the investments were $90,000,000 on average and plus in the last five, six years.

So shall we see an increase of those amortization in 2025 with the electric vehicles going into production? And the last question relates a little bit on the trends in Q1 that we should expect, if you can give some color because I was looking to the statistics and also your comments. It seems like Q1 will hardly show any growth. Thank you.

Michele Colanino, CEO, Piaggio Group: Well, I will play to the second and third question and then I leave the stage to Alessandro for the non recourse factory. Markets, as you see from public communications, I’d say India is positive, still positive. Europe is down because of Euro5 and Euro5 plus problem, basically. It’s not because of any bigger issue on the market. It will finish, so it will recover.

CapEx, the intangible is research and development that we do every year. And obviously, we will have slight increase on amortization costs due to introduction of the electric quarter. Nothing related to two wheeled vehicles, even if we are introducing also new vehicles. So we will have a slight increase in amortization, but that’s the consequence of doing our products. Also, the monetization, as I told you about the CapEx, I think that we will reach the peak in 2025 and then we’ll start reducing them because we have we are entering now in a not necessary necessity of totally new vehicles.

We are filling the gap. Once we fill the gap with the competition, especially in bikes, we don’t have to put on the streets every day, every year any new vehicle. So let’s say, the maintenance, let me say like this, cost and capital expenditure on vehicles that we have launched, it is not at the same magnitude of doing a totally new vehicle. I leave the stage for Alessandro.

Alessandro Simonotto, CFO, Piaggio Group: Without the factoring or without the cost, that’s the at the December 2024, we were at €125,000,000 against the €117,000,000 at the end of twenty twenty three.

Michele Colanino, CEO, Piaggio Group: So no

Raffaele Lupoto, Investor Relations, Piaggio Group: particular differences.

Alessandro Simonotto, CFO, Piaggio Group: And I do not remember where the other question is about the intangible assets.

Michele Colanino, CEO, Piaggio Group: No, it was about the R and D. Yes.

Raffaele Lupoto, Investor Relations, Piaggio Group: Okay.

Michele Colanino, CEO, Piaggio Group: Yes. He asked about why we have these amount in amortization, it’s just because we invest in R and D development. Yes. For the new projects.

Raffaele Lupoto, Investor Relations, Piaggio Group: Great. So I think there are no more questions. So operator, can you confirm?

Conference Operator, Chorusco: Yes, there are no more questions registered at this time.

Raffaele Lupoto, Investor Relations, Piaggio Group: Okay. Thank you. The call is over and thank you for attending this conference call. If you need further info, you can call me later as usual. Bye.

Conference Operator, Chorusco: Ladies and gentlemen, thank you for joining. The conference is now over and you may disconnect your telephones.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.