Piaggio & C. SpA

Good afternoon. This is the Coral School Conference Operator. Welcome and thank you for joining the Piaggio Group First Quarter 2023 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. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Raffaele Lupotto, Executive Vice President, Head of Investor Relations. Please go ahead, sir.

Thank you. Thank you. Hello, everybody. Thank you for joining us to follow this earning call. Joining me today are Roberto Colannino, Chairman and Chief Executive Officer, Michele Colannino, Chief Executive of Global Strategy, Product Marketing and Innovation, Alessandra Simonotto, Chief Financial Officer. You can access the slides supporting today's call on the Internet at the Piaggio Group website. As you may expect, before starting the presentation, I need to remind you that during today's conference call, we may use forward-looking statements based on Piaggio's current expectations and projections about future events. By their nature, forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to be materially different. Also, I remind you that the press has been invited to participate in this conference call in a listening-only mode. With that, let me turn the call over to our CEO, Roberto Colanino.

Good afternoon to everybody. As you have seen, the results of the first quarter is quite good. Just to reconfirm that this quarter is in line, with our budget configuration. So the results that we show is in line with our expectation. As you know, the Piaggio Group is present in all the world's market, and the vision that we have is globally intensive. And based on that, we see that the market evolution of the first three months is in line on what we expected for the future month. The area where we look our business is Europe, where we have some country going extremely well, Italy, Germany, Austria. Other country has Holland and France, is a little bit delayed based on different questions. But generally speaking, Europe presents a sales line very stable. The second huge area is Asia, where we are present in India, in Vietnam, in Indonesia, and China. So I want to say that our vision is based on 100% experience on the production and sales and marketing and products developed. We see that India presents some number that can be sure that the year Twenty-three will be much better than 22, especially on the three-wheeler. Vietnam, Indonesia, Philippines is in line with the last year business, and we expected that even this year we maintain the same quantity price EBIT and results as last year. I want to underline that last year we have very, very positive results. China is a little bit delayed. Generally speaking, the effectiveness is a huge duty that we have to pay for the products that we import in China from Europe. And instead the products that China buy from Vietnam is very good and due to the fact that the duty is very close to be zero. The United States is, the development of the United States is on the good development, stable, especially on the motorcycle. we have good results and we expect the same things for the rest of the year. To say this, I want to underline that we are totally looking at the productivity management system because we try not to increase price, but to find to confirm and to increase the margin through productivity strategy. We find very high results already in the first three months after the reorganization in the production, especially, and due to the raw material cost, especially on the gas and electricity, where the price of 23 in relation with the price of 22 is going down, slowly going down. So productivity plus the decrease of price give us a big positive vision for the rest of the year. In terms of investments, we go on with the electrical new technology that cost to us in term of new organization, new people, that we already complete all the plan. And now we are on the way to be in the executive area. Let's say that electrical market is not so... enthusiastic as everybody thinking about. The market, generally speaking, is a little bit reluctant to be open to electrical system due to the main problems that is infrastructure, the price, and they say, generally speaking, the general organization. In terms of problems on the political and the position, the problems around the world, our market is a little bit out from this type of problem. We don't have any problem from the Ukraine war. We don't have problem with China, United States. We don't have a problem in other parts of the world so that now, especially in some countries of Africa, the situation is very critical. The two-wheeler market, fortunately, is a little bit independent for this type of situation. Regarding the inflation, inflation Because our budget is based much more on productivity and cost reduction than price increase, we follow this strategy for the rest of the year because we have seen some advantage coming from the raw material market, coming from transportation cost, and coming also from the high results in time of reduction for the production technology and the production engineering of the products. We confirm so the results of the first three months also for the rest of the year in time of range of productivity. Based on that, we are positive on the results. The new, we are on the way to manage a big evolution on trade name, on advertising and promotion, and on the sales distribution organization, where we base our future strategy to support production and new products. We have a big plan on sales organization. We have a big plan on support the trade name as Vespa, Moto Guzzi, and Aprilia. And we have a big work to do on the sales organization and how we sell our products. So, We say that this year for us means productivity, sales organization, advertising promotion, and quality of the products.