Ducati Motor Holding Announces Fourth Quarter And Preliminary Full Year 2003 Results

BOLOGNA, Italy, February 12 -- Fourth Quarter 2003 EBITDA up 5%, despite adverse exchange rates

Ducati Motor Holding S.p.A. , a leading manufacturer of high performance motorcycles, today announced financial results for the fourth quarter and preliminary full year 2003 results.

Revenues for the fourth quarter were Euro 103.6 million, down 5.3% excluding forex effects, (or down 9.1% including forex effects) over the same period in 2002.

Gross margin was 36.1% of revenues excluding forex effects, (or 33.4% including forex effects) versus 36.5% in the same period a year ago, mainly due to a negative motorcycle mix.

EBITDA was Euro 14.2 million, up 30.5% excluding forex effects (or up 5.0% including forex effects), representing 13.7% of revenues versus 11.9%, in the same period of the previous year. The improvement was driven by higher sponsorships and a reduction in SG&A costs that more than offset the adverse forex rates.

In the fourth quarter of 2003, earning before tax were Euro 7.0 million versus Euro 4.8 million last year. The improvement was mainly due to the one-off revaluation of the brand name more than off-setting higher depreciation.

For the fourth quarter, unofficial Ducati worldwide registrations, a measure of retail sales, were up 2% versus the fourth quarter of last year, in a market which grew 7%. In particular, there was growth in Germany (up 53%), in Italy (up 18%), in Japan (up 9%), in non-subsidiary importer countries (up 1%) and declines in the Benelux Countries (down 8%), in the US (down 12%), in France (down 12%) and in the UK (down 37%).

"The fourth quarter of 2003 saw increasing registrations and an improved EBITDA margin, bringing to a close on a positive note a tough year," said Federico Minoli, Chairman and Chief Executive Officer of Ducati. "After a very difficult first quarter, we experienced a recovery during the remaining nine months. Indeed, excluding the first quarter, 2003 unit sales were up 5% versus last year."

Moving to preliminary 2003 results, revenues were Euro 388.2 million, down 1.9% excluding forex effects, (or down 6.0% including forex effects) versus 2002. Gross margin was 34.7% versus 39.6% last year, due to forex effects and a negative bike mix. EBITDA was Euro 45.0 million, up 6.0% excluding forex effects (or down 13.9% including forex effects), representing 11.6% of revenues versus Euro 52.3 million or 12.7% of revenues in 2002. Sales, General and Administrative Costs represented 23.5% of revenues, down from 25.3% last year, reflecting a reduction of Euro 13.1 million

. At EBT level, the result was a break even versus a gain of Euro 8.5 million in 2002 due to a lower EBITDA and increased depreciation which more than offset a reduction in financial charges.

In 2003, unofficial Ducati worldwide registrations, were down 3% versus last year, with the US down 17%, the UK down 16%, France down 8%, Japan down 7% while Germany was up 1%, Italy up 1%, the Benelux Countries grew 6% and Non-subsidiary countries were up 8%.

"In 2003, Ducati delivered, net of foreign exchange rates, a virtually flat top line and break-even earnings before tax," said Minoli. "This was made possible by our very effective restructuring program which helped off-set much of the adverse effect of the strengthening Euro. In addition, we have reduced production and sell-in as part of our strategy of cutting world-wide inventories, and warranties are down which is testament to the improving quality of our product.

"Over the last twelve months, Ducati has continued to develop and launch cutting-edge new products and to invest in building the most exciting sport motorcycle brand in the world," added Minoli. "Our sensational entrance into the MotoGP championship last year boosted the power of our brand around the globe, and with over one million unique visitors per month on ducati.com, our community and brand building activities are more resonate further and wider than ever before. The challenge for Ducati as we look ahead is to convert this 'share of dream' - the desire to be part of the World of Ducati - into share of market by building sales at dealer level."

"Looking forward, 2004 is expected to be stronger than 2003, and has got off to an encouraging start in terms of registrations," said Enrico D'Onofrio, Chief Financial Officer of Ducati. "The full impact of our restructuring program will be felt in 2004 and should off-set continuing negative forex impacts. We expect revenues to grow, to be profitable and to show significant improvements in our financial position. However, all in all, 2004 will be a year of further consolidation and preparation for 2005, when we expect notable improvements in the economic climate, and are confident that our new products will create positive momentum in markets around the world."

The Company's net debt at December 31, 2003 was Euro 117.2 million, up versus the Euro 112.4 million at the same date a year earlier mainly due to lower EBITDA. The company's gearing ratio was 74% at December 31, 2003 versus 70% at the same date a year earlier.

At the end of December, the Company has re-purchased 293,235 shares, equivalent to Euro 391,225 or 0.185% of its stock capital.

A discussion by Ducati management of the fourth quarter 2003 results is available at www.ducati.com under Company and then Investor Relations, and can be accessed until mid-March 2004 under Webcast of Results at the bottom of the IR Press Release Schedule section.

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 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.

For further information, please contact: Christopher Spira - Main Tel: +39-051-6413-111, Director, Investor Relations and Corporate Communications - Direct Tel:+ 39-051-6413-222 , Ducati Motor Holding S.p.A. - Direct fax: +39-051-6413-223, Via Cavalieri Ducati, 3 - E-mail: christopher.spira@ducati.com, Bologna 40132, Italy