Piaggio (PIA) Q2 2024 earnings summary

Executive summary

• H1 2024 net sales declined 15.2% to €990.3M, mainly due to weaker performance in Asia and the USA, while Europe focused on dealer stock for new regulations and India showed steady growth.

• Margins and cash flow improved, with EBITDA margin at 17.5% and EBIT margin at 10.5%, marking record or near-record levels for the group.

• Net profit was €52.1M, down 19.6% from H1 2023, but net debt reduced to €408M and leverage at 1.3x.

• Strategic investments continue in electric mobility, digitalization, and production upgrades, with 2024 and H1 2025 as peak years for capital expenditure.

• Interim dividend set at €0.115 per share, down from €0.125 in 2023.

Financial highlights

• Consolidated net sales: €990.3M (-15.2% YoY); EBITDA: €173.8M (17.5% margin, +117 bps YoY); EBIT: €104.1M (10.5% margin, +44 bps YoY); Net profit: €52.1M (-19.6%).

• Gross margin rose 170 bps to 29.8%; net sales and two-wheeler volumes declined, while commercial vehicle volumes rose 3.1%.

• Net debt reduced to €408M, with improved working capital and cash flow.

• Financial expenses increased 35.5% due to higher funding costs; cost of debt up €7M YoY.

• Operating expenses as a percentage of revenue increased by 1% YoY, reflecting ongoing investment.

Outlook and guidance

• Margins are expected to be maintained or slightly improved for full-year 2024, despite anticipated cost increases and market slowdowns.

• No significant recovery is expected in Asia for the rest of 2024, though Vietnam is stabilizing.

• New vehicle launches planned for H2 2024, primarily Euro 5 Plus compliant models.

• CapEx increased by ~€11M YoY, with 2024 and H1 2025 as peak investment periods.

• Prudent approach due to international political crises, logistics challenges, and regulatory-driven destocking.