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Telugu Group reported a challenging second quarter for 2025, with a 13% decline in revenue during the first half of the year. Despite this, the company achieved a gross margin of 34.4%, one of the best in its history. The market reacted to these results with a cautious stance, as the stock saw a slight decrease of 1.31%, closing at 1.978. According to InvestingPro data, the company maintains a "GREAT" financial health score of 3.37, supported by strong profitability metrics and consistent dividend payments over the past 11 years. The company remains optimistic about future performance, expecting improved results in the third quarter.
Key Takeaways
- Revenue fell by 13% in the first half of 2025.
- Gross margin reached a record 34.4%.
- The company is expanding into the Indian scooter market.
- Stock price dropped by 1.31% post-earnings announcement.
- Optimism remains for a better third-quarter performance.
Company Performance
Telugu Group faced significant challenges in the second quarter, primarily due to declining markets in Europe, the US, and China. Despite a drop in revenue, the company managed to maintain a stable net financial position compared to December 2024. The introduction of new products, like an electric port vehicle for European urban markets, and entry into the Indian scooter market, highlight Telugu’s strategic focus on innovation and market expansion.
Financial Highlights
- Revenue: Declined by 13% in the first half of 2025.
- Gross margin: 34.4%, a historical high for the group.
- EBITDA margin: 17.7% in the second quarter.
Outlook & Guidance
Telugu Group remains cautiously optimistic about the second half of 2025. The company expects a better top-line performance in the third quarter compared to the previous year and is targeting a 30% margin for the latter half of the year. The company is also working to mitigate potential US trade tariffs through its global presence.
Executive Commentary
CEO Michele Colanino remarked, "The gross margin of 34.4 is one of the best that we ever achieved in the group." He also noted the company’s strategic restraint in launching electric vehicles, stating, "We are not pushing too much on launching electric vehicles." Colanino described the European market’s current state as one of hesitation, saying, "People are waiting. Nothing else."
Risks and Challenges
- Declining markets in Europe, the US, and China pose significant challenges.
- Logistics costs, particularly around the Suez Canal, continue to be a concern.
- Market share in Europe decreased by 1%.
- Potential US trade tariffs could impact global operations.
- Consumer hesitation in the European market remains a barrier to growth.
Full transcript - Piaggio & C (PIA) Q2 2025:
Conference Operator, Chorus Call: Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Piagro First Half twenty twenty five 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, Tiago Group: Yes. Hello. Thank you very much. Hello, everyone, and
Michele Colanino, Group Chief Executive Officer, Telugu Group: welcome to the First Half twenty twenty five Financial Results Conference Call.
Raffaele Lupoto, Investor Relations, Tiago Group: The conference call will be hosted by Michele Colanino, Telugu
Michele Colanino, Group Chief Executive Officer, Telugu Group: Group Chief Executive Officer and Aristandra Simonato, Telugu Group’s Today, we are also
Raffaele Lupoto, Investor Relations, Tiago Group: the pleasure to have with us the Group Executive Chairman, Mato Colanino. You can access the slides supporting this conference call on
Michele Colanino, Group Chief Executive Officer, Telugu Group: the Internet at Stagio Group website.
Raffaele Lupoto, Investor Relations, Tiago Group: As you may expect, before starting the presentation, I need to remind you that during today’s conference call, we
Michele Colanino, Group Chief Executive Officer, Telugu Group: may use forward looking statements such as risks and uncertainties. And would like also to mention that today, we have also invited the press in a listen only mode. With that said, let me turn the call over to our CEO, Mr. Michaero Coranino. Yeah.
Thank you, Rafaela. Good afternoon, ladies and gentlemen. Thank you for joining the conference. Well, just a few words because, you know, I don’t have to go deeply in numbers, but just to tell you what has what happened in the 2025. I have to point out two main things that I think are very, very interesting for analyzing the PRG numbers that are the gross margin and the EBITDA.
The gross margin of 34.4 is one of the best that we ever achieved in the group, and the 17.7 percentage on the second quarter is one is still one of the best that we ever achieved in the group. It means that the capability to react to the situation that globally is affecting the consumer business everywhere, I just only have to say that, you know, everything, wars, tariffs, exchange rates, and all the problems that we have to face daily, those numbers show the capability of the group and the people all around the world to maintain a certain financial stability. Because when you have those numbers at the first level after either declining revenues given declining markets quite everywhere, especially Europe, US, China. I think it is it is a good result for the group. And also the fact that the net financial position has not worsened compared to December 24 with low revenues, it means that we are managing properly the group, the costs, and the margins without entering any price war with the competitions.
As you know, we are pushing a lot on our brand equity value around the world with all the brands that we manage both in two wheel, three and four wheel vehicles. And that’s the strategy that we want to maintain so to have a differentiation compared to other brands that are not only European brands, but are also Chinese brands, Japanese brands, and Indian brands. The work on cash to maintain the level has been satisfactory for my on my view because it opened the window to have the possibility to maintain the investments for the medium term, both in products and technology and development of new, you know, assets that we are now discovering, such as the robotic division in in Boston. This is this is just what I have to point out given the fact that for the remaining part of the year, as I said, during our board of the EXO, we are seeing low signal, so low signal of recovery in Asia, especially Vietnam and Thailand. And finish the definitely finish of your price destocking in Europe.
It means that with the 30% margin for the second half of the year and maintaining it, it’s not so easy, by the way, but we are working on it every day. I’m I’m not telling you that I got a positive scenario, but I got not the negative scenario. So something is moving. Obviously, consumer products have said what we are selling to our customers needs a certain stability. So I hope not in a worsening situation, geopolitically speaking, so far.
And also that the tariff wars is at the climax of the problem. We are managing tariffs, so I think that we can balance it, the The US trade balance and and and and 15% tariff with other markets. So I’m not too much worried of it. It is a problem. Obviously, it is a problem for every company according to US.
But given that we have a presence all around the world, we we can mitigate in the the the the 16% of cost increase in our products. I think the referral of this is just what has to say, The numbers are clear on the on the slides and and and, you know, revenues are declining by roughly 13% in the first half of the year. If Europe going down, US going down, China going down, still going down. India, just to have, you know, a a showcase of what’s happening on three wheel market in India. You know that the electric vehicles are entering the market.
They are subsidized by the government. So the customer is buying electric three wheeled vehicles because of the subsidy. We see every time that the government cut the subsidies that the market goes down immediately. So there’s a direct reaction and direct relation with the subsidies. It’s a low it’s a low margin business, so we don’t have to push too much on on launching electric vehicles even that also the ceramic one are good enough for our business in India.
The two wheeled vehicles I told you in the last conference call, we are starting to enter with new vehicles in the two wheeled scooter market in India. It’s a huge market. And the GDP per capita is helping us reaching the target price that we have in mind. Even that slowly growing every year because India is growing every year, and so now we are we are we are able to face with some precise scooters the competition. I I have to say this is what I have to point out on the on the numbers of the second quarter.
Then, obviously, q and a are more interesting usually than what I have to say. Okay. Thank you very much. So we we are ready to start the q and a session. Thank you.
Conference Operator, Chorus Call: Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. To remove your cell from the question queue, please press star and 2.
Please pick up the receiver when asking questions. Answer First question is from Davide Manganiello, Integro Sao Paulo.
Raffaele Lupoto, Investor Relations, Tiago Group: Yes. I don’t know if you can hear me. Good morning, everyone. I’m on behalf of Monica Bosio, and thank you for taking my questions. So my first question is regarding your performance in Europe.
Europe looks to be the primary driver on overall results. And you also appear to be losing market share in the region. Can you comment on your current market share situation in Europe versus last year? And anticipate us how many vehicles does the company plan to restock in third quarter? Can we finally expect in third quarter a positive top line growth and a sequential recovery in market share?
And then my second question is about India. Here as well, performance has been very poor. And according to SIEM data, your market share in our CV segment continues to decline.
Michele Colanino, Group Chief Executive Officer, Telugu Group: Do you
Raffaele Lupoto, Investor Relations, Tiago Group: expect an improvement going forward, particularly in light of the new product launches mentioned during the last conference call? And finally, do you expect any savings from the logistic cost by year end? Thank you very much.
Michele Colanino, Group Chief Executive Officer, Telugu Group: Thank you for your questions. Well, starting from market share, you pointed out correctly that we have lost 1% overall Europe market share compared to last year. It is due to mainly the, you know, the stocking of Euro 5 compared to 2024. And then we don’t see any any any product problem. Product wise, I don’t have any any any problem to tell.
We took the decision not to discount our products, so to maintain the gross margin. So that’s why we are performing very well at the at the EBA level and managing all the costs in Italy for the production for Europe and and and and and USA. On the third quarter, if I expect a a better market share than than the than the second one or than the first the first half, It could be because, you know, we have finished the destocking of your price, definitely. Yeah. We have some ten, twenty vehicles somewhere, but no problem.
And and I hope that all the products that we have launched, so the buy the new bikes that we have launched, we take, you know, bigger and bigger space in the market. So what happened what happened in India? Well, India is a market where, as I told you, electric vehicles are have been introduced, low margin vehicles. We are not, you know, pushing too much. On the term mix overall, we have lost slightly zero points in some in some state of India, but we are quite the same market share of last year.
You know, India is a growing country, so I don’t expect the market to decline. It’s it’s a market where, you know, the the money for purchasing vehicles, such as our vehicles on for commercial and business, that are the three wheel vehicles, are very are very linked to to the to the price positioning. So the subsidies have been the electric one, not the service one. We have launched new vehicles starting July. So I think and I and I and I and I have, you know, clue that in the second half of the year, we can include increase our our revenues over there.
Given that India performed better than last year in the in the first half of the of the 2025. So when you have a country that performed better than last year, I’m very happy. Okay. We we have lost some some zero point in in in market share. The third question is Logistics cost.
Logistics cost. Well, logistics cost, I’m
Raffaele Lupoto, Investor Relations, Tiago Group: not showing any any reduction.
Michele Colanino, Group Chief Executive Officer, Telugu Group: We have just some some shipping company that now is is entering the Suez Canal. The other are continuously going around Africa. So for for groups and components coming from India and South Southeast Asia, the situation has not been better than than than the previous month. This is even to the board. So there are nothing we can we can manage.
To be prudent, we consider the logistic cost continuing to be, like, the first half in our in our projection.
Raffaele Lupoto, Investor Relations, Tiago Group: Okay. Thank you very much.
Michele Colanino, Group Chief Executive Officer, Telugu Group: Thank you.
Conference Operator, Chorus Call: Next question is from Nicola Stora, Kepler Cheuvreux.
Raffaele Lupoto, Investor Relations, Tiago Group: Good afternoon, and thanks for taking my question, which is about commercial vehicles in EMEA and Americas. I see that year to date, the the the the performance in volume terms has been slightly positive while in revenue terms, it has been severely negative. So if you can elaborate on why on why that and what we can expect in the remainder of the year if any changes to this trend is on the horizon? Thank you.
Michele Colanino, Group Chief Executive Officer, Telugu Group: Thank you for your question. Well, as far as market share and business of polite commercial vehicles in in Europe, let’s say, EMEA and and in America, the the market is going down. For every competitor, it’s going down. We are showing a good market share in Italy. We are thinking to organize better, and we have to do this job.
The European organization to do a better job, especially in Germany, Spain, and France. As you know, we have just launched the electric port in Europe. It is a very good vehicle, very intelligent for big towns and downtown. That’s our mission. You have to consider that European European markets are not the only one that we serve.
With the full leader, yes. With the three leader, we have proposal from India to European in Latin America, the business is going is going well. So that’s why you you pointed out the numbers that you that you that you pulled up. I think that those kinds of vehicles, for Europe and the the situation that we are foreseeing for the next for the next decade, where, you know, every city, every big city has to intervene as we’re using our traffic jam and and and and and and reduce the CO2 emissions. They let report that in a long scenario, so not tomorrow morning, is the right vehicle.
And and, frankly, I didn’t expect that the quality to be so good, and the and the and the characteristic of the vehicle is is we think is the right vehicle for for downtown. Thank you.
Conference Operator, Chorus Call: Next question is from Emmanuel Gallatti, Edita.
Raffaele Lupoto, Investor Relations, Tiago Group: Good afternoon, everybody. I have, let’s say, three questions. Well, the first two are on Europe. Starting from the volume side, I know that it is a little bit difficult to to read numbers with the Euro five plus. But when we look at the data for registration across Europe in the first semester, there is basically a diversion trend between Italy and Spain, resilient, I would say.
And on the other end, a weak performance in France, Germany, and The UK, which are all down double digit. How do you explain this trend across Europe? The second one is still on Europe is on pricing because you said that you are not entering in a price war with Asian players. But I’m just trying to understand if you are seeing, like, a more aggressive commercial policy from your Asian competitors. And the last one is on the second half.
First of all, thank you for the comments on the second half. But I’m just trying to understand because if I look at the consensus right now, I just pointing to an implied 10% growth in revenues and EBITDA in the second half. Is it your, let’s say, base case scenario at this stage?
Michele Colanino, Group Chief Executive Officer, Telugu Group: So Europe, as you said, markets are down. And I think that markets are down not because the customer is no more interested in our in a in a two wheeled vehicle, let’s say, but because the consumer attitude is to postpone the the the buying of the vehicle. It’s not a question of, you know, the market is declining because it has no interest and so the product is old. The product is still good. The expectation that we have is that, you know, market will will will do better in the future.
But, you know, we have to see as a every piece because this is what we’re analyzing every every every every time into the group in in Europe, especially in Europe, mean. People are waiting. Nothing else. Because, you know, every day they read on papers about problems, about wars, about, you know, interest rates, about the money they have to spend for the house, about the the services, about energy, and and that’s a cost for a family. So they are just not for the brands that we manage, for instance, because that’s why it’s not affected, let me say, too much by these by these assets.
But if I if I think about commuter scooters from a to b, easy, downtown. So the Piazza brand, for instance, it’s our it’s our it’s our brand for for commuting. It is a little bit affected by the, you know, situation of of postponing the the the the acquisition of the vehicle. Second question was about pricing. Okay.
Pricing from Chinese. I’m not worried about pricing from Chinese. Well, obviously, they they are growing in quality. So I I I will never say them. They’re not producing good vehicles.
Luckily for us, we have brands that are of a value higher than than other competitors. And so what we are doing in our in our investments, especially marketing and dealers, is to maintain and to and to invest to maintain the this equity. What I think we have to manage and that’s why we are in a good position, I would not say better with others, but good position with the dealer distribution network with the Mel MotoPlex project that is able to display them show a de facto multi brand shop. And the multi brand is is owned by the traffic group. So we can give to the dealers and at the end of the day to the customer proposition that is quite unique.
I think we are we are in a good position with our product range. We are in a good position of pricing compared to the competition. What we have to maintain is a good relation with the dealers because Asian and and Indians are entering the dealer distribution network in Europe with, you know, commercial policies that are somehow difficult to be matched by European’s producer, the OEMs. What we have is that we have a good relation with our partners. We have a multipurpose, a multi brand activity, and and and the marketplace is enough for an entrepreneur that work with us to manage their business.
Well, the consensus of the second half, it’s difficult today to to to have a a brutal and and an objective projection for the second half. What I can tell you is that for the third quarter, we are seeing and we can see numbers at top line that are better compared to last year. This is what we are forecasting. Obviously, revenues are not sufficient because when you do the revenues, then you have to maintain the 17% margin on an EBITDA that is a strong workers. It’s a tough work every day around the world.
But compared to last year quarter, I can tell you that we expect to do better. Thank you.
Conference Operator, Chorus Call: For any further questions, please press star and one on your telephone. Mister Lupato, there are no more questions registered at this time.
Raffaele Lupoto, Investor Relations, Tiago Group: Okay. So we the I think that the call is over.
Michele Colanino, Group Chief Executive Officer, Telugu Group: Thank you very much for attending the call. If you need the further info, you can call me later as usual. Thank you very much. Bye.
Conference Operator, Chorus Call: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.
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