Piaggio & C. SpA

Good morning. This is the Coruscall Conference Operator. Welcome and thank you for joining the Piaggio Group First Half 2023 Financial Results Conference Call. As a reminder, our 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 very much. Hello, everybody, and welcome to our first half of the 2023 earnings call. Joining me today are Roberto Colannino, Chairman and Chief Executive Officer, 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 use forward-looking statements. based on Piaggio's current expectations and projections about future events. By their nature, forward-looking statements are subject to risks, 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 listen-only mode. And we say that you can, with that, we can now turn, I can turn the call to Roberto Colanino.

Okay. Good morning to everybody. I just... Just finished the Board of Directors, where I described the results of Piaggio on the first six months of 23, where, just to be synthetic, Piaggio was able to achieve a record in every sector of the balance sheet. I mean sales, industrial margin, EBITDA, EBIT, net profit, and debt. We never were able, from the time that I am involved in Piaggio, to achieve such results. Why we are able to achieve these results? Well, the position of the organization of Piaggio around the world have achieved the possibility to be a big player in all market. But what is more important is is able to be in line with different requests of this market. And Piaggio was able to be a big player in all markets at EMEA, Italy, United States, and India, where the market is beginning to react in a positive way especially on three-wheeler, and especially on the request on electric three-wheeler. Regarding Vietnam, Indonesia, generally speaking the southeast of Asia, we see that Piaggio was able to maintain and to increase the results, financial results, of 23 on 22 and was able to absorb some impact of the sun market without increase in a substantial way the price. In other terms, the results of Piaggio of the first six months is achieved mainly for the productivity activity, where we are able to gain some important points that impact positively on all the results of the company. And this is done without the price on each country where we try to keep, as was last year, and we don't decrease the value of the price in a substantial way. This gives us the possibility to look for the next six months with the possibility to achieve the results as we have in our plan, and we believe in a positive way the results of the end of the year. This reason is because we were able, finally, to introduce the productivity management system in each area, production, engineering, and sales. To be able to increase productivity, is not so easy for Italian company because productivity means to be able to adapt the company to the customer requirements and customer care. So, for instance, we have achieved very good results on spare parts and and the other piece of the products. We are able to be very satisfied in the transformation of the company and to become also be able to be an important actor on electrical market. We was able also with the investments in the new products that we maintain and that we will maintain on the last six months at the same level to be able, let's say, to satisfy the customer requirements, especially in the motorcycle and especially in the big scooter-sized products. I want to remark that regarding the motorcycle, Guzzi is coming with very unexpected results in terms of quantity and in terms of sales in the first six months. And as we have decided, we proceed in the new restructure of the company, of the factory, let's say beginning by the end of the year, and to follow the trademark GUTSI as the market requirements. But generally speaking, the results is be achieved based on the validity of the trademark of Piaggio that is leader in all the markets. Aprilia, Vespa, Moto Guzzi, Piaggio, and let's say not only in the two-wheeler, but also in the three-wheeler, and now in Italy and in Europe, we are working to be ready to develop a four-wheeler commercial vehicle on electrical version. We're working hard with our partners and our partner to be able to achieve the results on this market that we consider very important. But I want to underline that the ability of the company to reduce the cost of production and to control all the general expenses give up the results That is a show today. We expected not to be finished on the second six months to increase our penetration on the cash control, especially to reduce the stock and especially to reduce the credit exposition and maintain the leadership in Europe Italy, Spain, United States, and to follow again what is the India three-wheeler trend. We consider the results of Asia very satisfied in the terms of the results because it's much better than last year. Let's say in terms of EBIT and on top of everything, the EBDR. EBDR of the group, we expected to be able to go in the same way of the first six months and to maintain the same level of EBDR on the year of 2023. So in our vision, despite all the problems around the world, Piaggio today is in a position that is able, on the strategic point of view, to be able to control all the situation that can be, situation can cause problem on a different market. We don't expect that to have a problem on the quality of the products. We don't expect to have a delay on a new product that we launched before the end of the year and that we expected to be able to keep and to bring the opportunity of India market where we was able to expect and to trust in this market because the terms that we have is a positive evolution on the famous three-wheeler. Let's say traditional and electrical way. Means the cash flow and means the investments, we have the possibility to control this and we expected that the debt going down as is down until today on the same way. So generally speaking, we see positively the results of Piaggio today is not just casual results, but is results that is based on the general organization of the group, the capability of the group to control productivity, to control production, to control the fixed cost, the general expenses, and to follow what the market in terms of sales requires to us. So we don't expect to increase price for the first six months in a substantial way. We expect to reconfirm the positive trend of productivity. We confirm to be able to do better on the cash point of view and to be able to reduce the financial cost due to interest increase all over the market. So more than this, I don't know what to say more than this. I hope, but now we are sure to achieve all the target that we have explained that we have described in our strategic plan. That means, again, margin, that is EBITDA, that is EBIT, to reduce financial costs and to increase cash flow.