Ducati Motor Holding Announces Second Quarter 2003 Results
Highest quarterly unit sales ever
Wins World Superbike Championship Manufacturer's title for 12th time
BOLOGNA, Italy, Aug. 7 -- Ducati Motor Holding S.p.A. , a leading manufacturer of high performance motorcycles, today announced financial results for the second quarter ended June 30, 2003.
For the second quarter of 2003, unit sales were 13,722, a 4.3% increase over the same period in 2002, the highest number of motorcycles ever sold by the Company in a single quarter. Revenues for the period were Euro 128.0 million, up 2.7% excluding foreign exchange effects, (or down 1.6% including foreign exchange effects) over the same period in 2002.
Second quarter revenues from Ducati motorcycles for the period increased 5.5% excluding foreign exchange effects, (or up 1.1% including foreign exchange effects) to Euro 108.3 million and represented 84.6% of revenues. Motorcycle-related products, including spare parts, technical accessories and apparel, decreased 7.7% excluding foreign exchange effects (or 12.0% including foreign exchange effects) to Euro 19.6 million over the comparable period in the previous year.
Gross margin was 32.6% of revenues versus 39.0% in the period, mainly due to a negative motorcycle mix and forex rate effects. Sales costs represented 16.5% of sales versus 19.0% in the period last year, representing a decrease of Euro 3.6 million. EBITDA was Euro 16.9 million, or 13.2% of revenues, versus 14.4% in the period of the previous year.
In the second quarter of 2003, EBT (Earnings before Taxes) were Euro 4.6 million, in line with the same period in 2002, thanks to lower financing charges counterbalancing a lower EBITDA an d higher depreciation costs. In accordance with Italian and US regulatory authorities, going forward Ducati will report all interim earnings results on a before-tax basis, down to Earnings Before Taxes (EBT) level, to avoid potential discrepancies between interim and full-year tax rates.
For the second quarter, unofficial Ducati worldwide registrations, a measure of retail sales, were down 4% versus the period last year and versus a 18% decline in the first quarter of 2003, with non-subsidiary importer countries up 19%, Germany up 6%, Benelux Countries up 3%, Italy flat, and France down 14%, Japan down 15%, the UK down 16% and the US down 25%. In the month of June, Ducati registrations grew 4%, giving the first signs of growth in the year.
"The second quarter of 2003 shows a marked up-tick in both Ducati's performance and in that of the market," said Federico Minoli, Ducati Chairman and Chief Executive Officer. "In particular, our business has been boosted by strong brand building resulting from our successes and excitement on the racetrack and by the enthusiastic acceptance by the market of our new products, the Multistrada and the Monster S4R, by reduced inventories and by our concerted cost-cutting efforts.
"Indeed, while the year continues to be challenging, the period since the close of the first quarter provides us with reasons to look forward with mild optimism," added Minoli. "We sold more motorcycles in the second quarter than in any previous quarter in our history; our newest family of motorcycles, the Multistrada, has already sold more units since its launch in April than any other single Ducati model in its first year; on June 15th, Loris Capirossi won the MotoGP race in Catalunya on the Desmosedici in our first year in the Championship after an absence of over 30 years; and on July 27th, we won the World Superbike Manufacturer's title for the twelfth time in the last fourteen years."
First half 2003 revenues of Euro 209.3 million, down 7.4% excluding foreign exchange effects, (or down 11.5% including foreign exchange effects) versus the period in 2002. First half EBITDA was Euro 25.8 million, down 33.5% versus the first half of 2002, and there was a loss at EBT level of Euro 1.6 million versus a gain of Euro 14.8 million in the 2002 period. Unit sales were 21,476, down 7.7% versus year ago, but improving compared to the first quarter 2003 decline of 23.2%.
For the first half, unofficial Ducati worldwide registrations, a measure of retail sales, were down 10% versus the period last year, with the US down 33%, the UK down 14%, France down 13%, Japan down 12%, Italy down 9% and Germany down 2%, while the Benelux Countries grew 6% and Non-subsidiary countries were up 4%.
"Although the outlook has improved significantly in the second quarter of 2003, the first half 2003 results still reflect the burden of a weak first quarter, and we therefore remain cautious in our objectives for the full year," said Enrico D'Onofrio, Ducati Chief Financial Officer. "We are aiming to post revenues, excluding foreign exchange effects, approximately in line with 2002, and to close the year with a positive bottom line."
The Company's net debt at June 30, 2003 was Euro 112.2 million, down versus the Euro 113.9 million at the same date a year earlier despite lower EBITDA mainly thanks to the first phase of a receivables securitization project off-setting the lower EBITDA. The company's gearing ratio was 71% at June 30, 2003 versus 70% at the same date a year earlier.
At the end of June, the Company has re-purchased 260,179 shares, equivalent to Euro 348,396, or 1.6% of its stock capital.
Founded in 1926, Ducati builds racing-inspired motorcycles characterized by unique engine features, innovative design, advanced engineering and overall technical excellence. Ducati has won twelve of the last fourteen World Superbike Championship titles and more individual victories than the competition put together. The Company produces motorcycles in four market segments which vary in their technical and design features and intended customers: Superbike, Supersport; Monster, Sport Touring and Multistrada. The Company's motorcycles are sold in more than 40 countries worldwide, with a primary focus in the Western European and North American markets. For more information about the Company, please visit our web site at http://www.ducati.com/.
Ducati Motor Holding S.p.A. and Subsidiaries
Net Sales and Shipment Data
Three Months Ended Three Months Ended
June, 30 June, 30 June, 30 June, 30
2003 2002 2003 2002
Net Sales (Euro in thousands,
US$ in thousands)
Motorcycles Euro 108,308 Euro 107,106 $123,764 $122,390
Spare Parts,
Accessories, Apparel 19,597 22,260 22,393 25,437
Miscellaneous Other 86 710 98 811
Total net sales Euro 127,991 Euro 130,076 $146,255 $148,638
Ducati Units
%
Motorcycle shipments: Change
North America 1,218 1,227 (0.7%)
Main European market 9,543 8,960 6.5%
Japan 832 1,024 (18.8%)
Rest of World 2,129 1,951 9.1%
Total 13,722 13,162 4.3%
Motorcycle product mix: %
Change
Sport Segment
(Superbike &
Supersport) 3,832 4,605 (16.8%)
Sport Naked 6,311 7,308 (13.6%)
Sport Touring 541 1,249 (56.7%)
Multistrada 3,038 0 n/a
Total 13,722 13,162 4.3%
Unofficial Motorcycle Registrations: %
Change
North America 1,603 2,137 (25.0%)
Main European market 9,909 10,156 (2.4%)
Japan 1,031 1,220 (15.5%)
Rest of World 2,169 1,816 19.4%
Total 14,712 15,329 (4.0%)
Ducati Motor Holding S.p.A. and Subsidiaries
Net Sales and Shipment Data
Six Months Ended Six Months Ended
June, 30 June, 30 June, 30 June, 30
2003 2002 2003 2002
Net Sales (Euro in thousands,
US$ in thousands)
Motorcycles Euro 173,826 Euro 196,387 $198,631 $224,411
Spare Parts,
Accessories, Apparel 34,841 39,102 39,813 44,682
Miscellaneous Other 590 867 674 991
Total net sales Euro 209,257 Euro 236,356 $239,118 $270,084
Ducati Units
%
Motorcycle shipments: Change
North America 2,054 2,326 (11.7%)
Main European market 14,040 15,223 (7.8%)
Japan 1,463 2,063 (29.1%)
Rest of World 3,919 3,646 7.5%
Total 21,476 23,258 (7.7%)
Motorcycle product mix: %
Change
Sport Segment
(Superbike &
Supersport) 7,515 8,955 (16.1%)
Sport Naked 9,808 12,154 (19.3%)
Sport Touring 1,033 2,149 (51.9%)
Multistrada 3,120 0 n/a
Total 21,476 23,258 (7.7%)
Unofficial Motorcycle
Registrations: %
Change
North America 2,515 3,726 (32.5%)
Main European market 15,418 16,629 (7.3%)
Japan 1,915 2,166 (11.6%)
Rest of World 3,291 3,164 4.0%
Total 23,139 25,685 (9.9%)
Ducati Motor Holding S.p.A.
Consolidated Statements of Operations Data
(Euro in thousands, US$ in thousands, except per
share and share amounts)
Three Months Ended
June, 30 June, 30
2003 2002
Net Sales Euro 127,991 Euro 130,076
Cost of goods sold (86,210) (79,379)
Gross Profit 41,781 50,697
Other operating revenues 5,954 3,272
SG&A expenses (31,046) (34,218)
Other operating income/(expense), net 239 (988)
Depreciation & amortization (9,245) (8,033)
Operating income/(loss) 7,683 10,730
Financing expense, net (2,519) (6,047)
Other non-operating income/(expense), net (561) (14)
Profit/(loss)before income taxes 4,603 4,669
Shares outstanding 158,500,963 158,500,963
Other Financial Data
Motorcycles Produced ( Units) 8,751 10,753
Motorcycles Sold (Units) 13,722 13,162
Unofficial Registrations (Units) 14,712 15,319
EBITDA 16,850 18,749
EBITDA Margin 13.2% 14.4%
Three Months Ended
June, 30 June, 30 Percent
2003 2002 Change
Net Sales $146,255 $148,638 (1.6%)
Cost of goods sold (98,512) (90,706)
Gross Profit 47,743 57,931 (17.6%)
Other operating revenues 6,804 3,739
SG&A expenses (35,476) (39,101)
Other operating income/(expense), net 273 (1,129)
Depreciation & amortization (10,564) (9,179)
Operating income/(loss) 8,780 12,261 (28.4%)
Financing expense, net (2,878) (6,910)
Other non-operating income/(expense), net (641) (16)
Profit/(loss)before income taxes 5,261 5,335 (1.4%)
Shares outstanding 158,500,963 158,500,963
Percent
Other Financial Data Change
Motorcycles Produced ( Units) (18.6%)
Motorcycles Sold (Units) 4.3%
Unofficial Registrations (Units) (4.0%)
EBITDA 19,254 21,424 (10.1%)
EBITDA Margin
Note : On June 30, 2003 US$1= 0,8751 Euros
Ducati Motor Holding S.p.A.
Consolidated Statements of Operations Data
(Euro in thousands, US$ in thousands, except per
share and share amounts)
Six Months Ended
June, 30 June, 30
2003 2002
Net Sales Euro 209,257 Euro 236,356
Cost of goods sold (137,454) (140,187)
Gross Profit 71,803 96,169
Other operating revenues 12,056 5,511
SG&A expenses (57,996) (61,744)
Other operating income 111 (1,133)
Depreciation & amortization (18,429) (15,645)
Operating income/(loss) 7,545 23,158
Financing expense, net (4,958) (8,368)
Other non-operating income/(expense), net (4,146) 0
Profit/(loss)before income taxes (1,559) 14,790
Shares outstanding 158,500,963 158,500,963
Other Financial Data
Motorcycles Produced (Units) 19,117 22,510
Motorcycles Sold (Units) 21,476 23,258
Unofficial Registrations (Units) 23,139 25,685
EBITDA 25,811 38,803
EBITDA Margin 12.3% 16.4%
Six Months Ended
June, 30 June, 30 Percent
2003 2002 Change
Net Sales $239,118 $270,084 (11.5%)
Cost of goods sold (157,069) (160,192)
Gross Profit 82,049 109,892 (25.3%)
Other operating revenues 13,776 6,297
SG&A expenses (66,272) (70,555)
Other operating income 127 (1,295)
Depreciation & amortization (21,060) (17,878)
Operating income/(loss) 8,620 26,461 (67.4%)
Financing expense, net (5,666) (9,562)
Other non-operating income/(expense), net (4,738) 0
Profit/(loss)before income taxes (1,784) 16,899 (110.5%)
Shares outstanding 158,500,963 158,500,963
Percent
Other Financial Data Change
Motorcycles Produced (Units) (15.1%)
Motorcycles Sold (Units) (7.7%)
Unofficial Registrations (Units) (9.9%)
EBITDA 29,494 44,339 (33.5%)
EBITDA Margin
Note : On June 30, 2003 US$1= 0,8751 Euros
Ducati Motor Holding S.p.A.
Consolidated Statements of Operations Data
(Euro in thousands, except per share and share amounts)
Three Months ended Three Months ended
June 30, 2003 June 30, 2002
Euro % Euro %
Current assets
Cash and cash equivalents 35,067 19,668
Trade receivables, net 85,900 112,784
Inventories 103,740 91,830
Other current assets 21,377 18,630
Total current assets 246,084 52.3% 242,912 54.1%
Non current assets
Property, plant and equipment-net 69,686 61,406
Intangible fixed assets, net 129,838 129,060
Equity investments 12 1
Other long-term assets 25,560 15,626
Total non current assets 225,096 47.7% 206,093 45.9%
Total assets 471,180 100.0% 449,005 100.0%
Current liabilities
Short-term bank borrowings 45,687 36,494
Current portion of long-term debt 19,148 2,735
Accounts payable - trade 91,160 88,241
Income and other taxes payables 8,123 7,221
Other current liabilities 19,573 17,507
Provisions for risks and charges -
current portion 10,867 9,468
Total current liabilities 194,558 41.3% 161,666 36.1%
Long-term liabilities
Long-term debt, net of current portion 91,000 91,000
Employees' leaving entitlement 7,798 6,352
Deferred income taxes 35 5,392
Other long-term liabilities 16,525 18,382
Provision for risks and charges -
long term portion 3,022 3,262
Total long-term liabilities 118,380 25.1% 124,388 27.7%
Total liabilities 312,938 286,054
Total Group shareholders' equity 158,242 33.6% 162,951 36.3%
Minority interests
Total shareholders' equity 158,242 33.6% 162,951 36.3%
Total liabilities and shareholders'
equity 471,180 100% 449,005 100%
Memo : Net consolidated financial
position (112,282) (113,943)
Ducati Motor Holding S.p.A.
Consolidated Statements of Operations Data
(US$ in thousands, except per share and share amounts)
Three Months ended Three Months ended
June 30, 2003 June 30, 2002
US$ % US$ %
Current assets
Cash and cash equivalents 40,071 22,475
Trade receivables, net 98,158 128,878
Inventories 118,544 104,934
Other current assets 24,427 21,289
Total current assets 281,200 52.3% 277,576 54.1%
Non current assets
Property, plant and equipment-net 79,630 70,169
Intangible fixed assets, net 148,366 147,476
Equity investments 14 1
Other long-term assets 29,207 17,856
Total non current assets 257,217 47.7% 235,502 45.9%
Total assets 538,417 100.0% 513,078 100.0%
Current liabilities
Short-term bank borrowings 52,207 41,702
Current portion of long-term debt 21,880 3,125
Accounts payable - trade 104,169 100,834
Income and other taxes payables 9,282 8,251
Other current liabilities 22,366 20,005
Provisions for risks and charges -
current portion 12,417 10,819
Total current liabilities 222,321 41.3% 184,736 36.1%
Long-term liabilities
Long-term debt, net of current portion 103,986 103,987
Employees' leaving entitlement 8,911 7,258
Deferred income taxes 40 6,161
Other long-term liabilities 18,883 21,005
Provision for risks and charges - long
term portion 3,453 3,727
Total long-term liabilities 135,273 25.1% 142,138 27.7%
Total liabilities 357,594 326,874
Total Group shareholders' equity 180,823 33.6% 186,204 36.3%
Minority interests
Total shareholders' equity 180,823 33.6% 186,204 36.3%
Total liabilities and shareholders'
equity 538,417 100% 513,078 100%
Memo : Net consolidated financial
position (128,305) (130,203)
