Ducati Motor Holding Announces First Quarter 2003 Results
BOLOGNA, Italy, May 7, 2003 -- Ducati Motor Holding S.p.A. , a leading manufacturer of high performance motorcycles, today announced financial results for the first quarter ended March 31, 2003.
For the first quarter of 2003, revenues were Euro 81.3 million down 23.5% over the same period in 2002, mainly caused by a 23.2% reduction in unit sales and a negative foreign exchange impact. Revenues from Ducati motorcycles for the period decreased 26.6% to Euro 65.5 million and represented 80.6% of revenues. Motorcycle-related products, including spare parts, technical accessories and apparel, decreased 9.5% to Euro 15.2 million over the comparable period in the previous year.
Gross margin was 36.9% of revenues versus 42.8% in the period, mainly due to lower unit sales and the negative foreign exchange impact. EBITDA was a Euro 9.0 million, or 11.0% of revenues, versus 18.9% in the period of the previous year. R&D investments for the Moto GP were Euro 1.6 million, equivalent to 2.0% of sales.
The net loss of the Ducati Group was Euro 3.7 million in the first quarter of 2003, compared with a Euro 5.5 million gain in the first quarter of 2002. This includes the impact of a one-off Euro 3.5 million restructuring charge which will be used to make the organization leaner and more efficient in anticipation of the challenging market conditions in 2003.
Unofficial Ducati worldwide registrations, a measure of retail sales, were down 18% versus the first quarter of last year, with the US down 42%, Italy down 21%, in Germany down 13%, France down 11%, the UK down 5% and in Japan down 6%, while the Benelux Countries grew 6%.
The Company's net debt at March 31, 2003 was Euro 123.6 million, down versus the Euro 132.0 million at the same date a year earlier, and up versus Euro 112.4 million at December 31, 2002. The company's gearing ratio was 78% at March 31, 2002 versus 82% at the same date a year earlier and 69% at December 31, 2002.
"2003 has got off to a very difficult start for Ducati. The results for the period ending March 31, 2003 represent the weakest first quarter at the company for many years," said Federico Minoli, Ducati Chairman and Chief Executive Officer. "The principle reasons are clear: a severe decline in our reference market was reflected in our considerably reduced sales in the period; the continued strengthening of the Euro versus the US Dollar, UK Sterling and the Japanese Yen has reduced the value in Euro of our sales in those countries; and start-up issues -- now resolved -- in the early production of the Multistrada and Monster S4R."
"We believe that, with the end of the first quarter, the worst is behind us in 2003, and the results of the period do not reflect our expectations for the full year," added Minoli. "As we move into the important second quarter, we have laid the foundations for a leaner and more efficient organization by cost-cutting and making management changes, and we are implementing a focused advertising and pricing campaign, in particular in the Monster family, to support sales. On a positive note, we have improved our financial position thanks to aggressive management of our working capital. At the same time we continue to emphasize our priorities for the long term, principally product innovation and brand-building. Indeed, the very positive reception from the press at the launches of our newest products, the Multistrada and the Monster S4R, are encouraging."
"The continuing uncertainty of the global economy and weak consumer confidence continue to give us limited visibility on how the rest of year will evolve at this stage," said Enrico D'Onofrio, Ducati Chief Financial Officer. "The second quarter will, to a large extent, determine the outcome of the year."
"We are also delighted with progress of our racing activities so far this year," concluded Minoli. "Racing ensures that the Company remains at the cutting-edge in terms of R&D and continues to broaden the appeal of its brand. The first quarter of 2003 saw the historic return of Ducati to the MotoGP Championship after an absence of 30 years. The financial and organizational effort made by the whole company to prepare for the MotoGP was rewarded with incredible performances from Loris Capirossi, Troy Bayliss and the whole Ducati Marlboro Team in the first races of the 2003 season. These successes confirm Ducati's ability to develop very competitive machines in a short period of time to compete at the highest level. In the meantime, our flagship 999 Testastretta Superbike is proving a winner. With racer Neil Hodgson, official Ducati Fila Team racer, it is unbeaten in the first six races of the World Superbike Championship."
The Company also announced that, at its Annual Shareholders Meeting held May 6, 2003, the Ducati Motor Holding S.p.A. annual report for the year ended December 31, 2002, was formally approved by shareholders without making any modifications.
Founded in 1926, Ducati builds racing-inspired motorcycles characterized by unique engine features, innovative design, advanced engineering and overall technical excellence. Ducati has won eleven of the last thirteen World Superbike Championship titles and more individual victories than the competition put together. The Company produces motorcycles in five 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/.
This press release contains statements that are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, as described in documents previously filed by the Company with CONSOB and with the U.S. Securities and Exchange Commission.
Ducati Motor Holding S.p.A.
Consolidated Statements of Operations Data
(Euro in thousands)
Three Months Ended Three Months Ended
March 31, 2003 March 31, 2002
euro % euro %
Current assets
Cash and cash equivalents 23,429 14,624
Trade receivables, net 84,443 122,686
Inventories 131,922 108,208
Other current assets 22,317 14,397
Total current assets 262,111 54.8% 259,915 56.1%
Non current assets
Property, plant and equipment-net 70,385 56,879
Intangible fixed assets, net 130,513 130,547
Equity investments 12 2
Other long-term assets 15,581 15,596
Total non current assets 216,491 45.2% 203,024 43.9%
Total assets 478,602 100.0% 462,939 100.0%
Current liabilities
Short-term bank borrowings 55,746 49,444
Current portion of long-term debt 3,146 2,555
Accounts payable - trade 110,715 91,181
Income and other taxes payables 6,264 7,947
Other current liabilities 23,049 19,507
Provisions for risks and charges -
current portion 8,637 9,300
Total current liabilities 207,557 43.4% 179,934 38.9%
Long-term liabilities
Long-term debt, net of current portion 86,000 91,000
Employees' leaving entitlement 7,459 6,077
Deferred income taxes 35 3,733
Other long-term liabilities 17,099 18,578
Provision for risks and charges -
long term portion 3,998 3,305
Total long-term liabilities 114,591 23.9% 122,693 26.5%
Total liabilities 322,148 302,627
Total shareholders' equity 156,454 32.7% 160,312 34.6%
Total liabilities and
shareholders' equity 478,602 100% 462,939 100%
Ducati Motor Holding S.p.A.
Consolidated Statements of Operations Data
(US$ in thousands)
Three Months Ended Three Months Ended
March 31, 2003 March 31, 2002
US$ % US$ %
Current assets
Cash and cash equivalents 21,504 13,423
Trade receivables, net 77,506 112,607
Inventories 121,085 99,319
Other current assets 20,484 13,214
Total current assets 240,579 54.8% 238,563 56.1%
Non current assets
Property, plant and equipment-net 64,603 52,206
Intangible fixed assets, net 119,792 119,823
Equity investments 11 2
Other long-term assets 14,301 14,315
Total non current assets 198,707 45.2% 186,346 43.9%
Total assets 439,286 100.0% 424,909 100.0%
Current liabilities
Short-term bank borrowings 51,167 45,382
Current portion of long-term debt 2,888 2,345
Accounts payable - trade 101,620 83,691
Income and other taxes payables 5,749 7,294
Other current liabilities 21,156 17,905
Provisions for risks and charges -
current portion 7,927 8,536
Total current liabilities 190,507 43.4% 165,153 38.9%
Long-term liabilities
Long-term debt, net of current portion 78,935 83,525
Employees' leaving entitlement 6,846 5,578
Deferred income taxes 32 3,426
Other long-term liabilities 15,694 17,052
Provision for risks and charges -
long term portion 3,670 3,033
Total long-term liabilities 105,177 23.9% 112,614 26.5%
Total liabilities 295,684 277,767
Total shareholders' equity 143,602 32.7% 147,142 34.6%
Total liabilities and
shareholders' equity 439,286 100.0% 424,909 100.0%