Piaggio & C. SpA

Good afternoon, this is the Coruscall Conference Operator. Welcome and thank you for joining the Piaggio First Half 2025 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 relator of Piaggio. Please go ahead, sir.

Yes, hello. Thank you very much. Hello, everyone, and welcome to the first half of 2025 Financial Results Conference Call. The conference call will be hosted by Michele Colannino, Piaggio Group Chief Executive Officer, and Alessandro Simonotto, Piaggio Group CFO. Today, we have also the pleasure to have with us the group executive chairman, Matteo Colonino. You can access the slides supporting this conference call on the Internet at 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 subject to risk and uncertainties. And I would like also to mention that today we have also invited the press in a listening-only mode. With that said, let me turn the call over to our CEO, Michele Colanino.

Yeah, thank you, Raffaele. 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 happened in the second quarter of 2025. I have to point out two main things that I think are very, very interesting for analyzing the Piaggio numbers that are the gross margin and the EBDA. 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 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, with the declining revenues given declining markets quite everywhere, especially Europe, US, China, I think 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 also Chinese brands, Japanese brands, and Indian brands. The work on cash to maintain the level has been satisfactory 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 products you know, assets that we are now discovering, such as the robotic division in Boston. 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 Director, we are seeing a low signal, so low signal of recovery in Asia, especially Vietnam and Thailand, and finished, the definitive finish of Euro 5 stocking in Europe. It means that with that 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 not telling you that I got the positive scenario, but I got not the negative scenario. So something is moving. Obviously, consumer products such as 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 the tariffs, so I think that we can balance it, the U.S. trade balance and 15% tariffs with other markets, so I'm not too much worried of this. It is a problem. Obviously, it is a problem for every company exporting to the U.S., but given that we have a presence all around the world, we can mitigate the 15% of cost increase in our products. I think, Raffaello, this is just what I have to say. The numbers are clear on the slides, and revenues are declining by roughly 13%. in the first half of the year. It's Europe going down, U.S. going down, China going down, still going down. India, just to have 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-wheel 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 margin business, so we don't have to push too much on launching electric vehicles, given that also the termic one are good enough for our business in India. The two-wheel vehicles, I told you in the last conference call, they're starting to enter with new vehicles in the two-wheel scooter market in India. It's a huge market. And GDP per capita is helping us reaching the target price that we have in mind, given that it's slowly growing every year, because India is growing every year. And so now we are able to face, with some precise scooters, the competition. I have to say this is what I have to point out on the numbers of the second quarter. Then, obviously, Q&A are more interesting usually than what I have to say.