Ducati Motor Holding Announces 2005 Full Year Results
BOLOGNA, Italy, February 15 --
01/01/05-31/12/05 01/01/04-31/12/04 Var%
Revenues 320.8 363.4 -11.7%
EBIT (33.6) 9.2 n.a.
Net result (41.5) (3.5) n.a.
Net Debt (137.0) (154.0) n.a.
(Million Euro)
The Board of Directors of Ducati Motor Holding S.p.A. (Borsa Italiana: DMH; NYSE: DMH) approved today the 2005 full year group financial results, which reflect the new strategic direction following recent market developments and unsatisfactory company results.
The key elements in the new strategy are a concentration in the high end of the market, with particular emphasis on improving margins, generating cash flow and reducing the company's structural costs.
To support the strategic restructuring process, the following have been made available:
- a Euro 13.0 million restructuring reserve accrual and extraordinary devaluations for a total of Euro 17.0 million
- a capital increase to be offered to shareholders by way of subscription rights, of up to a total of Euro 80.0 million, for which the Board of Directors intend to exercise the power granted in the Extraordinary Shareholders Meeting on January 26, 2006.
Moreover, agreement was reached between the participating banks, who gave their consensus to the changes to the existing syndicated financing contract as requested by the company and in order to carry out the capital increase and the transfer of the relative majority stake. This consensus is subject to the acquisition by InvestIndustrial Holdings S.A. of 30% less one share of capital stock, and the latter's commitment to subscribe to said increase in proportion to its own share and the subscription by Unicredit Banca Mobiliare by May 31, 2006 to form a syndicate of stand-by underwriters who will subscribe to any shares that may remain unsubscribed. With reference to the transfer of the above stake, Texas Pacific Group communicated on December 2, 2005 that a preliminary non-binding agreement with InvestIndustrial Holdings S.A. had been signed, and which, to date, has not yet been finalised.
The Group's financial results are detailed below.
Revenues for 2005 were Euro 320.8 million, down 11.7% compared to 2004. This was due to the reduction in motorcycle volumes, combined with an unfavourable mix. Revenues from motorcycles for the period decreased 13.1% to Euro 247.2 million and accounted for 77.1% of total revenues. Motorcycle-related products, including spare parts, accessories and apparel, were Euro 70.4 million, down by 3.8% over previous year.
Gross margin for 2005 amounted to Euro 58.5 million or 18.2% of revenues versus Euro 86.7 million or 23.8% last year, caused by a reduction in motorcycle volumes, a negative product mix and as well as extraordinary devaluation of approximately Euro 15.0 million.
Operating result (EBIT) amounted to a loss of Euro 33.6 million versus Euro 9.2 million profit in 2004, due to the above-mentioned factors.
At EBT level, the result was a loss of Euro 41.0 million versus a profit of Euro 5.4 million due to lower EBIT and the above-mentioned factors.
Net result for the period was a loss of Euro 41.5 million compared to a loss of Euro 3.5 million in 2004.
Company net debt at December 31, 2005 was Euro 137.0 million versus Euro 154.0 million at December 31, 2004.
For 2005, unofficial Ducati registrations were down by 3.5% on last year. Registrations in the US were up by 25.7%, in the non-subsidiary countries by 4.5%, and in France by 1.5% Registrations were down in Benelux (-17.2%), the U.K. (-16.2%), Germany (-15.2%), Italy (-14.7%) and in Japan (-5.5%).
As of December 31, 2005, the Company owned 1,844,669 shares, equivalent to Euro 1,708,163 or 1.15% of its stock capital.
The Board of Directors also approved the project of the financial statements of Ducati Motor Holding S.p.A., a stand-alone company, which registered a net loss on December 31, 2005 of Euro 46.7 million and a net equity of Euro 134.6 million.
Lastly, the Board of Directors of Ducati Motor Holding S.p.A. has convened an Ordinary Shareholders Meeting for March 20, 2006 in first call and on March 22, 2006 in second call to approve the financial statements as of December 31, 2005 and present the Group's consolidated financial statements as of December 31, 2005. Given that from this Ordinary Meeting, the Company's adoption of the one-tier corporate governance system, as resolved by the previous Shareholders Meeting on May 5, 2005, will come into effect, shareholders are also called to appoint the new Board of Directors through a cumulative voting system.
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
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.
These materials are not an offer of securities for sale in the United States. The securities may not be offered or sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of the company's securities to be made in the United States will be made by means of a prospectus that may be obtained from the company and that will contain detailed information about the company and its management, including financial statements.
Ducati Motor Holding Group
Net Sales and Shipment Data
Twelve Months Ended Twelve Months Ended
December, December, 31 December, 31 December,
31 31
2005 2004 2005 2004
Net Revenues (Euro in thousands, US$ in
thousands)
Motorcycles EUR 247,236 EUR 284,566 $ 291,664 $ 335,703
Spare Parts, 70,397 73,191 83,047 86,343
Accessories,
Apparel
Other 3,215 5,602 3,793 6,609
Total Net Revenues EUR 320,848 EUR 363,359 $ 378,504 $ 428,655
Ducati Units
Motorcycle shipments: % Change
North America 7,070 5,298 33.4%
Main European 18,158 21,862 (16.9%)
market
Japan 2,575 2,351 9.5%
Rest of World 6,733 7,049 (4.5%)
Total 34,536 36,560 (5.5%)
Motorcycle product % Change
mix:
Superbike 6,094 10,213 (40.3%)
Supersport 1,030 1,426 (27.8%)
Sport Naked 16,585 18,026 (8.0%)
Sport Touring 1,397 2,997 (53.4%)
Multistrada 6,156 3,898 57.9%
Sport Classic 3,274 0 n.a.
Total 34,536 36,560 (5.5%)
Unofficial Motorcycle % Change
Registrations:
North America 7,040 5,600 25.7%
Main European 18,961 21,752 (12.8%)
market
Japan 2,754 2,914 (5.5%)
Rest of World 5,876 5,621 4.5%
Total 34,631 35,887 (3.5%)
Ducati Motor Holding Group
Profit & Loss
(Euro in thousands, US$ in thousands, except for shares)
Twelve Months Ended Twelve Months Ended
December, December, 31 December, 31 December, Percent
31 31
2005 2004 2005 2004 Change
Revenues (net) EUR320,848 EUR363,359 $ 378,504 $ 428,655 (11.7%)
Cost of goods (262,392) (276,708) (309,544) (326,432)
sold
Gross Margin 58,456 86,651 68,960 102,223 (32.5%)
Other operating 34,184 30,810 40,327 36,347
revenues
SG&A expenses (111,298) (107,054) (131,298) (126,292)
Other operating (1,978) (1,226) (2,333) (1,446)
income and expenses
Restructuring (13,000) 0 (15,336) 0
Reserve
Operating result (33,636) 9,181 (39,680) 10,832
Financing expense,(7,315) (3,826) (8,630) (4,514)
net
Profit/(loss) (40,951) 5,355 (48,310) 6,318
before
income taxes and
min.interest
Income Tax (511) (8,824) (603) (10,410)
Net Result (41,462) (3,469) (48,913) (4,092)
including minority
interests
Minority Interests (1) (11) (1) (13)
Net Result for (41,463) (3,480) (48,914) (4,105)
the Group
Shares 159,360,037 158,826,407 159,360,037 158,826,407
outstanding
Note: On December 31, 2005 US$1 = 0,8477
Euros
Ducati Motor Holding
Group
Consolidated Balance Sheet
(Euro in thousands)
Period ended Period ended
31/12/2005 31/12/2004
EUR 000 % EUR 000 %
Current assets
Cash and cash 53,017 49,327
equivalents
Trade receivables 102,232 118,622
Inventories 81,380 92,293
Other current 9,217 25,787
assets
Total current 245,846 53.1% 286,029 56.9%
assets
Non-current assets
Property, plant and 66,556 70,288
equipment
Goodwill and intangible 86,050 86,050
assets with an indefinite
life
Other intangible 39,665 38,268
assets
Equity investments 20 20
Prepaid taxes 24,662 21,665
Other non-current 386 403
assets
Total non-current 217,339 46.9% 216,694 43.1%
assets
Total assets 463,185 100% 502,723 100%
Current
liabilities
Due to banks 64,148 151,080
Trade payables 85,203 77,463
Due to tax 5,537 8,298
authorities
Other current 20,202 15,936
liabilities
Provisions for charges - 18,621 4,726
current portion
Total current 193,711 41.8% 257,503 51.2%
liabilities
Long-term
liabilities
Long-term debt 125,824 63,782
Provisions relating to 9,669 8,482
employees
Deferred taxation 13,697 12,207
Due to tax - 1,292
authorities
Provisions for charges - 1,525 1,663
long-term portion
Total long-term 150,715 32.5% 87,426 17.4%
liabilities
Total liabilities 344,426 74.4% 344,929 68.6%
Shareholders'
equity
Share capital 82,867 82,590
Reserve 69,998 69,085
Gain / Loss 7,341 9,572
Net results for (41,464) (3,469)
the period
Total Group shareholders' 118,742 25.6% 157,778 31.4%
equity
Minority interest 17 16
Total Shareholders 118,759 157,794
equity
Total liabilities and 463,185 100% 502,723 100%
shareholders' equity
Ducati Motor Holding Group
Consolidated Balance Sheet
(US$ in thousands)
Period ended Period ended
31/12/2005 31/12/04
$ 000 % $ 000 %
Current assets
Cash and cash 62,544 58,191
equivalents
Trade receivables 120,603 139,938
Inventories 96,004 108,878
Other current 10,873 30,421
assets
Total current 290,025 53.1% 337,428 56.9%
assets
Non-current assets
Property, plant 78,516 82,919
and equipment
Goodwill and 101,513 101,513
intangible assets
with an indefinite
life
Other intangible 46,793 45,145
assets
Equity investments 24 24
Prepaid taxes 29,094 25,558
Other non-current 455 475
assets
Total non-current 256,395 46.9% 255,634 43.1%
assets
Total assets 546,419 100% 593,062 100%
Current
liabilities
Due to banks 75,675 178,229
Trade payables 100,514 91,383
Due to tax 6,532 9,789
authorities
Other current 23,832 18,800
liabilities
Provisions for 21,967 5,575
charges - current
portion
Total current 228,521 41.8% 303,776 51.2%
liabilities
Long-term
liabilities
Long-term debt 148,435 75,244
Provisions 11,407 10,006
relating to
employees
Deferred taxation 16,158 14,401
Due to tax - 1,524
authorities
Provisions for 1,799 1,962
charges -
long-term portion
Total long-term 177,798 32.5% 103,136 17.4%
liabilities
Total liabilities 406,319 74.4% 406,913 68.6%
Shareholders'
equity
Share capital 97,758 97,431
Reserve 82,577 81,500
Gain / Loss 8,660 11,292
Net results for (48,915) (4,092)
the period
Total Group 140,080 25.6% 186,131 31.4%
shareholders'
equity
Minority interest 20 19
Total Shareholders 140,100 186,150
equity
Total liabilities 546,419 100% 593,062 100%
and shareholders'
equity
Ducati Motor Holding
Group
Consolidated Statements of
Cash Flow
(Euro in thousands)
Period Period
ended ended
31/12/05 31/12/04
EUR 000 EUR 000
Cash flow generated by
operating activities
Net profit (loss) for (41,464) (3,469)
the year
Conversion reserve 1,799 (987)
Adjustments to reconcile
net profit (loss) with the
movements of funds
generated by (used in)
operating activities
- Non cash items for 1,238 557
stock options
- Amortisation 24,094 27,330
- Devaluation 9,270 -
- Taxes paid 4,230 5,268
Change in operating
assets
and liabilities
- Working capital 35,043 (6,293)
- Effects of IAS 39 and (994) -
32 adoption from 1
January 2005
- Other current assets 1,570 2,517
- Other current 4,266 6
liabilities
- Due to tax (8,283) (7,890)
authorities
- Deferred tax 1,490 -
liabilities (net)
- Deferred tax assets (2,997) 5,833
(net)
- Employee benefits 1,187 711
- Provisions for 757
charges
- Restructuring 13,000 (140)
Reserve
Net cash generated by
operating
activities (A) 44,206 23,443
Cash flow (used in)
generated by
investing activities
Net change in property, (10,928) (10,613)
plant and equipment
Net change in intangible (20,455) (15,099)
fixed assets
Disposal from property, 354 219
plant and equipment
Other fixed assets 17 139
Net cash used in investing (31,012) (25,354)
activities (B)
Cash flow generated from
operating activities,
net of cash used in
investing
activities (A-B) 13,194 (1,911)
Cash flow (used in)
generated by financing
activities
Change in short-term and (13,248) 9,724
long-term debt
Interest 3,358 7,290
Change in minority 1 16
interests
Increase in share capital 385 235
and reserves
Change in cash generated by (9,504) 17,265
financing activities
Increase (decrease) in cash
on hand, bank deposits
and securities 3,690 15,354
Cash and cash equivalents, 49,327 33,973
beginning of year
Cash and cash equivalents, 53,017 49,327
end of period/ year
Ducati Motor Holding Group
Consolidated Statements of Cash
Flow
(Dollar in thousands)
Period ended Period ended
31/12/05 31/12/04
$ 000 $ 000
Cash flow generated by operating
activities
Net profit (loss) for the (48,915) (4,092)
year
Conversion reserve 2,122 (1,164)
Adjustments to reconcile net
profit (loss) with the
movements of funds generated by
(used in)
operating activities
- Non cash items for stock 1,460 657
options
- Amortisation 28,424 32,241
- Devaluation 10,936 -
- Taxes paid 4,990 6,215
Change in operating assets
and liabilities
- Working capital 41,340 (7,424)
- Effects of IAS 39 and 32 (1,173) -
adoption from 1 January 2005
- Other current assets 1,852 2,969
- Other current 5,033 7
liabilities
- Due to tax authorities (9,771) (9,308)
- Deferred tax liabilities 1,758 -
(net)
- Deferred tax assets (3,536) 6,881
(net)
- Employee benefits 1,400 839
- Provisions for charges 893 -
- Restructuring Reserve 15,336 (165)
Net cash generated by
operating
activities (A) 52,150 27,656
Cash flow (used in) generated
by
investing activities
Net change in property, plant and (12,892) (12,520)
equipment
Net change in intangible fixed (24,131) (17,812)
assets
Disposal from property, plant and 418 258
equipment
Other fixed assets 20 164
Net cash used in investing (36,585) (29,910)
activities (B)
Cash flow generated from operating
activities,
net of cash used in investing
activities (A-B) 15,565 (2,254)
Cash flow (used in) generated by
financing activities
Change in short-term and long-term (15,629) 11,471
debt
Interest 3,961 8,600
Change in minority interests 1 19
Increase in share capital and 454 277
reserves
Change in cash generated by (11,212) 20,368
financing activities
Increase (decrease) in cash on
hand, bank deposits
and securities 4,353 18,113
Cash and cash equivalents, 58,191 40,078
beginning of year
Cash and cash equivalents, end of 62,544 58,191
period/ year
Ducati Motor Holding
S.p.A.
Profit & Loss
(Euro in
thousands)
Period Period ended
ended
31.12.2005 31.12.2004
Revenues (net) 285,958 319,671
Cost of goods sold (254,072) (260,938)
Gross Margin 31,886 11.2% 58,733 18.4%
Other operating revenues 10,042 13,247
Sales expenses (38,091) (47,309)
G&A expenses (33,805) (19,138)
Other operating income and (1,261) (237)
expenses
Gain on brand disposal - 23,000
Restructuring (13,000) -
Reserve
Operating Result (44,229) (15.5%) 28,297 8.9%
Financial revenues 1,644 1,337
Financing expenses (8,281) (10,656)
Exchange rate difference 851 3,833
Profit/(loss)before income taxes (50,016) (17.5%) 22,811 7.1%
and min.interest
Income Tax 3,246 (11,251)
Net Result including minority (46,770) (16.4%) 11,560 3.6%
interests
Minority Interests - -
Net Result for the Group (46,770) (16.4%) 11,560 3.6%
Ducati Motor Holding Group
Balance Sheet
(Euro in thousands)
Period ended Period ended
31.12.2005 31.12.2004
% %
Current assets
Cash and cash equivalents 21,693 17,559
Trade receivables 47,275 56,721
Intercompany receivables 75,853 101,893
Inventories 53,287 61,653
Other current assets 6,998 22,517
Total current assets 205,106 47.0% 260,343 52.7%
Non-current assets
Property, plant and equipment 65,429 68,126
Goodwill and intangible 80,976 80,976
assets with an indefinite
life
Other intangible assets 39,961 38,257
Equity investments 26,530 34,009
Prepaid taxes 18,472 12,262
Other non-current assets 148 147
Total non-current assets 231,517 53.0% 233,778 47.3%
Total assets 436,623 100% 494,121 100%
Current liabilities
Due to banks 80,677 177,181
Trade payables 73,224 64,978
Intercompany payables 15,024 11,782
Due to tax authorities 2,681 5,570
Other current liabilities 11,533 8,659
Provisions for charges - 24,418 4,692
current portion
Total current liabilities 207,558 47.5% 272,863 55.2%
Long-term liabilities
Long-term debt 71,703 18,455
Provisions relating to 8,311 7,715
employees
Deferred taxation 12,960 10,993
Due to tax authorities - 1,292
Provisions for charges - 1,525 1,663
long-term portion
Total long-term liabilities 94,498 21.6% 40,119 8.1%
Total liabilities 302,056 69.2% 312,982 63.3%
Shareholders' equity
Share capital 82,867 82,590
Reserve 98,469 86,989
Net results for the period (46,770) 11,560
Total Group shareholders' 134,567 30.8% 181,139 36.7%
equity
Minority interest
Total Shareholders equity 436,623 100% 494,121 100%
Ducati Motor Holding S.p.A.
Statement of Cash Flow
(Euro in thousands)
Period ended Period ended
31.12.2005 31.12.2004
EUR 000 EUR 000
Cash flow generated by operating
activities
Net profit (loss) for the (46,769) 11,560
year
Conversion reserve - -
Adjustments to reconcile net profit
(loss) with the
movements of funds generated by (used
in)
operating activities
- Non cash items for stock options 1,029 558
- Amortisation 22,655 24,515
- Devaluation 9,271 -
- Taxes paid 3,879 3,656
Change in operating assets
and liabilities
- Working capital 55,340 (23,117)
- Effects of IAS 39 and 32 (1,216) 4,466
adoption from 1 January 2005
- Other current assets 519 (10,314)
- Other current 2,874 (20,483)
liabilities
- Due to tax authorities (8,086) (3,915)
- Deferred tax liabilities (6,210) 769
(net)
- Deferred tax assets 1,967 6,129
(net)
- Employee benefits 595 643
- Provisions for charges 6,614 (38)
- Restructuring Reserve 13,000 -
Net cash generated by
operating
activities (A) 55,461 (5,571)
Cash flow (used in) generated by
investing activities
Net change in property, plant and (10,370) (11,312)
equipment
Net change in intangible fixed assets (20,688) (13,017)
Disposal from property, plant and 124 -
equipment
Decrease/Increase in equity 7,479 (341)
investments
Other fixed assets - 133
Net cash used in investing activities (23,455) (24,537)
(B)
Cash flow generated from operating
activities,
net of cash used in investing
activities (A-B) 32,006 (30,108)
Cash flow (used in) generated by
financing activities
Change in short-term and long-term (31,327) 20,675
debt
Financial activities - Credit - 15,000
Link
Interest 3,070 7,280
Change in minority interests - -
Increase in share capital and 385 236
reserves
Other fixed financial assets - -
Change in cash generated by financing (27,872) 43,191
activities
Increase (decrease) in cash on hand,
bank deposits
and securities 4,134 13,083
Cash and cash equivalents, beginning 17,559 4,477
of year
Cash and cash equivalents, end of 21,693 17,560
period/ 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