Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Piaggio & C. SpA (PIAGF, Financial) maintained a strong gross margin of 30.5% despite a decline in revenues.
- The company has improved its processes and productivity management since 2022, starting from a 25% gross margin.
- Piaggio & C. SpA (PIAGF) is investing in electric mobility, particularly in China and India, to align with market trends.
- The company is managing cash flow effectively, with a reduction in inventory value by 20 million compared to last year.
- Piaggio & C. SpA (PIAGF) is exploring new markets, such as Africa, which is seen as a promising opportunity similar to India.
Negative Points
- Overall market demand for two-wheel and four-wheel vehicles has declined globally, affecting revenues.
- The USA market is down by 10%, with uncertainty around tariffs impacting consumer confidence.
- The Asian market, particularly China, is still suffering, with low numbers for imported vehicles.
- Electric mobility in India is a low-margin business, and the company is cautious about pushing aggressively.
- The geopolitical situation and currency fluctuations pose challenges to maintaining profitability and forecasting future performance.
Q & A Highlights
Q: Can we expect a reversal of the negative revenue trend in the second quarter, particularly in Europe?
A: CEO Michael Conanino stated that predicting revenue trends is challenging, but he does not expect a significant jump in sales for the second quarter. However, he anticipates some positive results by the end of the year, as the second half of the previous year was affected by declining volumes.
Q: Are you confident with consensus expectations of net debt at roughly 480 million, or can we do better?
A: CEO Michael Conanino mentioned that cash generation is a consequence of revenues, and while the target is to be around 500 million, they aim to keep it lower than 500 million, acknowledging the challenging situation.
Q: Is there a strategic shift away from scooters, given the focus on motorbikes?
A: CEO Michael Conanino clarified that there is no strategic shift away from scooters. The company continues to upgrade existing models and maintains a strong presence in the scooter segment, which remains profitable and cash-generative.
Q: Is it reasonable to expect gross margins to remain high throughout the year?
A: CEO Michael Conanino indicated that they aim to maintain the current gross margin levels, acknowledging that logistics costs and other factors could impact this. However, they are working to sustain these numbers.
Q: How are you managing the competitive environment in Europe, particularly regarding pricing strategies?
A: CEO Michael Conanino emphasized that they are maintaining their pricing points and avoiding entering into a price war. They focus on brand equity and strategic promotions rather than significant discounts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
