Ducati Motor Holding Announces 2005 First Half Results
BOLOGNA, Italy, September 30 --
1H05 1H04 Var%
Revenues 188.1 220.4 -14.6%
EBITDA 19.3 26.6 -27.9%
Operating Result 4.6 12.1 -62.3%
Net result (3.5) 2.6 n.a.
Net Debt (116.3) (130.3)
(Million euro)
The Board of Directors of Ducati Motor Holding S.p.A. approved today the first half 2005 financial results, which have been prepared for the first time under International Financial Reporting Standards (IFRS).
First half 2005 revenues were Euro 188.1 million, down 14.6% including forex effect (or 13.2% excluding forex effect) versus 2004 first half. This was due to the reduction of motorcycle volumes, combined with an unfavourable mix and adverse forex effects. Revenues from motorcycles for the period decreased 15.7% to Euro 147.4 million and accounted for 78.4% of revenues. Motorcycle-related products, including spare parts, accessories and apparel, were down by 7.7% to Euro 39.0 million over the comparable period in the previous year.
Gross margin for the first half of 2005 amounted to Euro 45.9 million or 24.4% of revenues versus Euro 59.4 million or 26.9% in the first half of last year, caused by a reduction in motorcycle volumes, a negative mix and adverse forex effects, only partially offset by product cost reductions.
EBITDA was Euro 19.3 million or 10.2% of revenues for the first semester of 2005 against Euro 26.6 million or 12.1% of revenues over the same period last year, due to the above-mentioned factors and down 27.9% at current exchange rate and 14.2% at constant exchange rate.
With regard to depreciation and amortisation, please note that following the adoption of IFRS, the amortisation of intangible assets no longer includes brand and goodwill amortisation.
Operating result (EBIT) amounted to Euro 4.6 million or 2.4% of sales versus Euro 12.1 million or 5.5% of sales a year ago.
At EBT level, the result was a loss of Euro 0.7 million versus a profit of Euro 7.4 million due to lower EBIT.
Net result for the period was a loss of Euro 3.5 million compared to a profit of Euro 2.6 million in the first half of 2004.
Company net debt at June 30, 2005 was Euro 116.3 million versus Euro 130.3 million at June 30, 2004 and Euro 150.5 million at December, 31 2004. The company's gearing ratio was 75.8% compared to 79.0% on June 30, 2004 and 95.2% on December 31, 2004.
For the first half of 2005, unofficial Ducati registrations were down by 6.7% on the same period last year. Registrations in the US were up by 18% and in the non-subsidiary countries by 2%, while France remained unchanged on last year. Registrations were down in Italy (-10%), Japan (-14%), Germany (-18%), Benelux (-25%), and the UK (-25%).
As of June 30, 2005, the Company had re-purchased 3,769,249 shares, equivalent to Euro 3,283,016 or 2.37% of its stock capital.
"While the first semester 2005 results seem negative in absolute terms, they are only slightly below our expectations which forecast a 2005 back-loaded to the last quarter, because of the shipping of approximately 4,000 pre-sold SportClassic bikes ", said Federico Minoli, Ducati Chairman and Chief Executive Officer. "Recent impressive victories from Loris Capirossi in the MotoGP prove Ducati's technological competitiveness and will have a very positive impact on morale and sales".
"A prevision for 2005 will largely depend on our ability to deliver and invoice as many of the pre-sold SportClassic bikes as possible", said Enrico D'Onofrio, Ducati Chief Financial Officer. "At the moment, we foresee is a pre-tax loss of around Euro 2 million and a net financial position in line with last year. An accurate forecast will be possible, once we announce our third quarter results, in mid-November, when the SportClassic deliveries will have been entirely planned".
Transition to International Financial Reporting Standards (IFRS)
Ducati has completed its process of transition to International Financial Reporting Standards or IFRS. The effect of this process is an increase of Euro 3.0 million in opening shareholders' equity at January 1, 2004 (the transition date to IFRS) compared to that of the consolidated financial statements prepared in accordance with Italian accounting principles.
Shareholders' equity at December 31, 2004 in accordance with IFRS is Euro 7.9 million higher, and consolidated net result for 2004 is higher for Euro 4.3 million. The application of IAS 32 and IAS 39 with effect from January 1, 2005 resulted in a reduction of Euro 3.2 million in shareholders' equity at that date, with regard to the accounting treatment of treasury stock, recognised as a reduction of reserves under IFRS.
Founded in 1926, Ducati develops racing-inspired motorcycles characterized by unique engine features, innovative design, advanced engineering and overall technical excellence. The Company produces motorcycles in six market segments which vary in their technical and design features and intended customers: Superbike, Supersport; Monster, Sport Touring, Multistrada and Sport Classic. The Company's motorcycles are sold in more than 60 countries worldwide, with a primary focus in the Western European and North American markets. Ducati has won thirteen of the last fifteen World Superbike Championship titles and more individual victories than the competition put together. 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
Six Months Ended Six Months Ended
June, 30 June, 30 June, 30 June, 30
2005 2004 2005 2004
Net Revenues (Euro in thousands, US$ in thousands)
Motorcycles EUR 147,388 EUR 174,739 $ 178,222 $ 211,294
Spare Parts,
Accessories, Apparel 39,012 42,274 47,173 51,118
Other 1,705 3,355 2,062 4,057
Total Net Revenues EUR 188,105 EUR 220,368 $ 227,457 $ 266,469
Ducati Units
Motorcycle shipments: % Change
North America 3,569 2,667 33.8%
Main European market 11,308 13,800 (18.1%)
Japan 1,160 1,097 5.7%
Rest of World 3,991 4,315 (7.5%)
Total 20,028 21,879 (8.5%)
Motorcycle product mix: % Change
Superbike 3,780 5,586 (32.3%)
Supersport 525 902 (41.8%)
Sport Naked 10,482 11,369 (7.8%)
Sport Touring 855 1,918 (55.4%)
Multistrada 4,386 2,103 108.6%
Total 20,028 21,878 (8.5%)
Unofficial Motorcycle Registrations: % Change
North America 3,933 3,322 18.4%
Main European market 13,187 15,199 (13.2%)
Japan 1,408 1,638 (14.0%)
Rest of World 3,439 3,384 1.6%
Total 21,967 23,543 (6.7%)
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 Six Months Ended
June, 30 June, 30 June, 30 June, 30 Percent
2005 2004 2005 2004 Change
Revenues (net) EUR 188,105 EUR 220,368 $ 227,457 $ 266,469 (14.6%)
Cost of goods
sold (142,213) (161,017) (171,964) (194,702)
Gross Margin 45,892 59,351 55,493 71,767 (22.7%)
Other operating
revenues 19,544 17,725 23,633 21,433
SG&A expenses (59,388) (63,711) (71,812) (77,039)
Other operating
income and expenses (1,491) (1,288) (1,803) (1,557)
Operating result 4,557 12,077 5,511 14,604 (62.3%)
Financing expense,
net (5,292) (4,630) (6,399) (5,599)
Profit/(loss)before
income taxes and
min.interest (735) 7,447 (888) 9,005 (109.9%)
Income Tax (2,814) (4,884) (3,403) (5,906) (42.4%)
Net Result (3,549) 2,563 (4,291) 3,099 (238.5%)
Shares
outstanding 159,360,037 158,826,407 159,360,037 158,826,407
Percent
Other Financial Data Change
Motorcycles Produced
(Units) 20,266 23,177 (12.6%)
Motorcycles Sold
(Units) 20,028 21,878 (8.5%)
Unofficial
Registrations (Units) 21,967 23,543 (6.7%)
EBITDA 19,179 26,656 23,191 32,231 (27.9%)
EBITDA Margin 10.2% 12.1%
Note : On June 30, 2005 US$1= 0,7779 Euros
Ducati Motor Holding S.p.A.
Consolidated Statements of Operations Data
(Euro in thousands, except per share and share amounts)
30.06.2005 31.12.2004
EUR 000 % EUR 000 %
Current assets
Cash and cash equivalents 53,824 49,327
Trade receivables, net 115,345 118,622
Inventories 94,275 92,293
Other current assets 11,179 10,787
Current assets - Credit Link - 15,000
Total current assets 274,623 56.0% 286,029 56.9%
Non current assets
Property, plant and equipment -net 67,138 70,288
Goodwill and intangible assets with
indefinite useful lives 86,050 86,050
Other intangible fixed assets net 39,952 38,268
Equity investments 20 20
Deferred tax assets 21,872 21,665
Other long-term assets 364 403
Total non current assets 215,396 44.0% 216,694 43.1%
Total assets 490,019 100% 502,723 100%
Current liabilities
Short-term bank borrowings 43,040 93,738
Current portion of long-term debt 3,144 57,342
Accounts payable - trade 103,818 77,463
Income and other taxes payables 11,856 8,298
Other current liabilities 22,434 15,936
Provisions for risks and charges
- current portion 4,726 4,726
Total current liabilities 189,018 38.6% 257,503 51.2%
Long-term liabilities
Long-term debt, net of
current portion 113,645 51,913
Employee benefits 8,843 8,482
Deferred income taxes 13,075 12,207
Income and other taxes payables
- long term portion - 1,292
Other long-term liabilities 10,276 11,869
Provision for risks and charges
- long term portion 1,663 1,663
Total long-term liabilities 147,502 30.1% 87,426 17.4%
Total liabilities 336,520 68.7% 344,929 68.6%
Shareholders' equity
Capital stock 82,867 82,590
Share premium reserve 16,769 16,662
Revaluation reserve 46,265 46,265
Reserve IFRS conversion 3,642 3,578
Other reserves 3,704 5,546
Retained earnings (losses) 3,785 6,606
Results for the period (3,549) (3,469)
Total Group Shareholders' equity 153,483 31.3% 157,778 31.4%
Minority interests 16 16
Total liabilities and
shareholders' equity 490,019 100% 502,723 100%
Ducati Motor Holding S.p.A.
Consolidated Statements of Operations Data
(US$ in thousands, except per share and share amounts)
30.06.2005 31.12.2004
$ 000 % $ 000 %
Current assets
Cash and cash equivalents 65,084 59,646
Trade receivables, net 139,475 143,438
Inventories 113,997 111,601
Other current assets 13,518 13,044
Current assets - Credit Link - 18,138
Total current assets 332,074 56.0% 345,867 56.9%
Non current assets
Property, plant and equipment -net 81,183 84,992
Goodwill and intangible assets with
indefinite useful lives 104,052 104,052
Other intangible fixed assets net 48,310 46,274
Equity investments 24 24
Deferred tax assets 26,448 26,197
Other long-term assets 440 487
Total non current assets 260,457 44.0% 262,026 43.1%
Total assets 592,531 100% 607,893 100%
Current liabilities
Short-term bank borrowings 52,044 113,348
Current portion of long-term debt 3,802 69,338
Accounts payable - trade 125,537 93,668
Income and other taxes payables 14,336 10,034
Other current liabilities 27,127 19,270
Provisions for risks and charges
- current portion 5,715 5,715
Total current liabilities 228,561 38.6% 311,373 51.2%
Long-term liabilities
Long-term debt, net of
current portion 137,420 62,773
Employee benefits 10,693 10,256
Deferred income taxes 15,810 14,761
Income and other taxes payables
- long term portion - 1,562
Other long-term liabilities 12,425 14,352
Provision for risks and charges
- long term portion 2,011 2,011
Total long-term liabilities 178,359 30.1% 105,715 17.4%
Total liabilities 406,920 68.7% 417,088 68.6%
Shareholders' equity
Capital stock 100,203 99,868
Share premium reserve 20,277 20,148
Revaluation reserve 55,944 55,944
Reserve IFRS conversion 4,404 4,327
Other reserves 4,479 6,706
Retained earnings (losses) 4,576 7,988
Results for the period (4,291) (4,195)
Total Group Shareholders' equity 185,592 31.3% 190,786 31.4%
Minority interests 19 19
Total liabilities and
shareholders' equity 592,531 100% 607,893 100%
Ducati Motor Holding S.p.A.
Consolidated Statements of Cash Flow
(Euro in thousands)
Period ended Period ended
30/06/05 31/12/04
EUR 000 EUR 000
Cash flow generated by operating
activities
Net profit (loss) for the (3,549) 2,566
year
Adjustments to reconcile net profit (loss)
with the
movements of funds generated by (used in)
operating activities
- Non cash items for stock options 645 217
- Amortisation, depreciation and 14,622 14,579
writedowns
- Interests paid 1,034 5,919
- Taxes paid 307 3,853
Change in operating assets
and liabilities
- Working capital 27,650 3,442
- Other current assets (392) 1,422
- Other current 6,498 3,216
liabilities
- Due to tax authorities 1,959 (3,330)
- Deferred tax liabilties (assets) net 661 1,867
- Employee benefits 361 491
64
Net cash generated by
operating
activities (A) 49,796 34,306
Cash flow (used in) generated by
investing activities
Net change in property, plant and equipment (4,176) (5,087)
Net change in intangible fixed assets (9,183) (5,927)
Disposal from property, plant and equipment 201 486
Other fixed assets 41 (3)
Net cash used in investing activities (B) (13,117) (10,531)
Cash flow generated from operating
activities,
net of cash used in
investing activities (A-B) 36,679 23,775
Cash flow (used in) generated by financing
activities
Change in short-term and long-term debt (45,791) (18,468)
Financial assets - Credit Link 15,000 -
Change in cumulative translation adjustment 1,443 433
Change in minority interests 13
Increase in share capital and reserves 385 235
Change in shareholders' equity due to IAS
32,39 adoption as of 1st January 2005 (3,219) -
Change in cash generated by financing
activities (32,182) (17,787)
Increase (decrease) in cash on hand, bank
deposits and securities 4,497 5,988
Cash and cash equivalents, beginning of year 49,327 33,973
Cash and cash equivalents, end of period/year 53,824 39,961
Ducati Motor Holding S.p.A.
Consolidated Statements of Cash Flow
(Dollar in thousands)
Period Period
ended ended
30/06/05 31/12/04
$ 000 $ 000
Cash flow generated by operating activities
Net profit (loss) for the (4,291) 3,103
year
Adjustments to reconcile net profit (loss)
with the
movements of funds generated by (used in)
operating activities
- Non cash items for stock options 780 262
- Amortisation, depreciation and 17,681 17,629
writedowns
- Interests paid 1,250 7,157
- Taxes paid 371 4,659
Change in operating assets
and liabilities
- Working capital 33,434 4,162
- Other current assets (474) 1,719
- Other current 7,857 3,889
liabilities
- Due to tax authorities 2,369 (4,027)
- Deferred tax liabilties (assets) net 799 2,259
- Employee benefits 437 594
77
Net cash generated by
operating activities (A) 60,213 41,483
Cash flow (used in) generated by
investing activities
Net change in property, plant and equipment (5,050) (6,151)
Net change in intangible fixed assets (11,104) (7,167)
Disposal from property, plant and equipment 243 588
Other fixed assets 50 (4)
Net cash used in investing activities (B) (15,861) (12,734)
Cash flow generated from operating
activities,
net of cash used in
investing
activities (A-B) 44,352 28,749
Cash flow (used in) generated by financing
activities
Change in short-term and long-term debt (55,371) (22,332)
Financial assets - Credit Link 18,138 -
Link
Change in cumulative translation adjustment 1,745 524
Change in minority interests 15
Increase in share capital and reserves 466 284
Change in shareholders' equity due to IAS
32,39 adoption as of 1st January 2005 (3,892) -
Change in cash generated by financing (38,914) (21,509)
activities
Increase (decrease) in cash on hand, bank
deposits and securities 5,438 7,240
Cash and cash equivalents, beginning of year 59,646 41,080
Cash and cash equivalents, end of period/year 65,084 48,320
year
For further information, please contact: Fabrizio Nardi, Director, Investor Relations, Ducati Motor Holding S.p.A., Via Cavalieri Ducati, 3 Bologna 40132, Italy, Main Tel: +39-051-6413-111, Direct Tel: +39-051-6413-213
