Piaggio & C. SpA

Good afternoon. This is the Coral School Conference Operator. Welcome and thank you for joining the Piaggio First Quarter 2024 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, Investor Relations of Piaggio. Please go ahead.

Thank you very much. Hello, everyone, and welcome to the first quarter 2024 financial results. The conference call will be hosted by Piaggio Chief Executive Officer, Mr. Michele Colanino, and Piaggio Chief Financial Officer, Alessandra Simonotto. Today, we are also pleased to have the Piaggio Group Executive Chairman, Mr. Matteo Colanino, with us. You can access the slides supporting this conference 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 risks, uncertainty, and other factors that could cause actual results to be materially different. As mentioned also in the safe harbor statement included on page three of today's presentation. Also, I remind you that the press has been invited to participate in this conference call in a listening-only mode. With that said, let me turn the call over to our CEO, Mr. Michele Conanino.

Thank you, Rafael, and good afternoon, ladies and gentlemen. Let me give a brief comment to our first quarter results. First of all, I hope that all of you are satisfied about the marginality we have reached, because gaining 3% on the BDA margin quarter on quarter has been a tough job, I can assure you. Now, the goal is to maintain that level to the end of the year, even that As you know, the global situation, especially geopolitical situation, is not showing fair solutions for a world in peace. Having said that, as far as revenues are concerned, I have to say that the decline has been mainly driven by the Asian market, where in the last first quarter of 23, we decided to push a little bit, expecting a forecasting a growth for the entire year of 2023 instead as you know as i have told you many times before asia started to decline in premium consumer business all over the countries since may last year and these has been managed by piaggio you know reducing and rebalancing the dealer stock so to do not have problems at that level uh India instead is showing a good market and I think and we think that it will continue to be good especially after the election period that in India takes two three months to conclude given that it's 1.5 billion people population. Europe the main situation in Europe is a legislative change due to the introduction in 2024 of legislations reducing CO2 emissions and introducing new technologies for passive and active safety on vehicles, both in two-wheeled and four-wheeled vehicles. I have to say that we do not want to follow the discount market that we see all over the Europe countries because we have to manage properly the correct ratio between sell-in and sell-out considering that if the dealers make margins, good margins, we make good margins. So it will continue all over the year, the situation of controlling sell-in and sell-out, given that the Euro 5 Plus legislations will be developed by the end of 2024. Last but not least, let me tell you something about the debt situation. the debt situation has been influenced by the decision we took to increase our stock of finished products and components due to the uncertainty we have seen and we see on the Red Sea. So we preferred to increase our stocks to be ready to fulfill and answer to any worsening situation on the delivery and transportation side. So this, you know, stock will be reduced by the end of June, I think, because we didn't push too much. But if you analyze the numbers, we had an increase in debt due to this situation, because the working capital has been roughly the same of last year, even with a decline in revenues line. So, from a cash point of view, I'm very satisfied. Productivity remains a driver among the business. And I have to say that e-markets that have declined until now, especially Asia, will start to recover by the end of the year. With those margins, we will be very satisfied and happy. Our estimation is that Asia will do like this. March and April has given us signals of stabilization on the market, and we foresee a slight increase by the end of the year, starting from, let's say, end of May, beginning of June, let's say by the end of the second quarter. We are continuing investing in our brand equity and customer experience all over the world because we think, I think, I'm personally convinced that in a situation like this, having a better experience for our customers and creating a world of brand equity around all our brands, Vespa, Moto Guzzi, Aprilia, Piaggio, and the commercial vehicles in India, is the differentiation that we can create among the markets that are, you know, continuously reducing prices all around the world. We're not doing that. As we are speaking, I have just to say, we are launching the new models for Vespa in Asia, especially in the Shanghai fair. The event is going on now and customers are happy and dealers are happy. The situation of the first quarter, it is a situation where we continued to push for margins, instead following up discounts to gain some revenue. And this is a strategy that is linked to our brand strategy, Learn the World. I've also to say that the launch of the new models, especially the MotoGurus Estelio and the middle engine RS457 Aprilia, has taken us some delay, but because of transportation and logistics. So the bikes have been introduced in Europe, let's say from 15th of March, will be introduced in US by the end of June. Because I repeat, transportation has 20 days more today compared to last year. From a cost side, we do not foresee major issues and major problems. But you know better than me that we are managing a world that can change the day from the other. I personally thought that the situation would have been better from a peace point of view. Instead, it's continuing to be the same situation of the end of last year, let's say last year. So having said that, what we foresee for the future of the company in the year is that we have to maintain those marginalities that are very high. It's not an easy job. because problems are there. We know that, but the forecast that we have from our markets and our CEOs around the world are on that line. This is just a brief introduction of what we had in the first quarter of this year. I repeat to you that there will be perhaps some markets going up, some markets going down, but that's normal. That's normal business. We are pushing to maintain dealers healthy, and marginality. If that is what we will reach by the end of the year, I think that the 2024 year can be a nice year, comparable to the 2023. Now I hand over to Alessandra Simonotto, our CFO, that will explain some details about the numbers we have seen on the presentations, and then I'm happy to answer all the doubt, questions, answer, whatever it is. Alessandra, up to you.