Consolidated Income Statement

Consolidated income statement (reclassified)

 In millions of eurosAccounting for a %In millions of eurosAccounting for a %In millions of euros%
Net sales revenues1,212.5100.0%1,406.2100.0%(193.6)-13.8%
Cost to sell6855.070.5%988.370.3%(133.2)-13.5%
Gross industrial margin357.529.5%417.929.7%(60.4)-14.5%
Operating expenses294.924.3%321.322.9%(26.4)-8.2%
Operating income62.65.2%96.66.9%(33.9)-35.1%
Result of financial items-32.4-2.7%-28.7-2.0%(3.7)12.7%
Profit before tax30.32.5%67.94.8%(37.6)-55.4%
  of which non-recurrent costs24.624.6
Net profit-6.5-0.5%42.13.0%(48.6)-115.5%
Adjusted net profit18.11.5%42.13.0%(24.0)-57.0%
6_For a definition of the parameter, see the “Economic Glossary”.

Vehicles sold

In thousands of units   
EMEA and Americas220.9278.2(57.4)
Asia Pacific 2W 101.4112.6(11.2)
TOTAL VEHICLES555.6615.5(59.9)
Two-wheeler 351.6406.1(54.5)
Commercial Vehicles 203.9209.4(5.5)
TOTAL VEHICLES555.6615.5(59.9)

Net revenues

In millions of euros   
EMEA and Americas699.1837.3(138.2)
Asia Pacific 2W 193.4211.1(17.7)
TOTAL NET REVENUES1,212.51,406.2(193.6)
Two-wheeler 852.6 993.3(140.6)
Commercial Vehicles 359.9412.9(53.0)
TOTAL NET REVENUES1,212.51,406.2(193.6)

The Piaggio Group sold 555,600 vehicles worldwide in 2013, with a reduction in volumes totalling around 9.7% compared to the previous year, when 615,500 vehicles were sold. The number of vehicles sold in India increased (+ 3.8%), also due to sales of the Vespa, while sales in EMEA and the Americas decreased (- 20.6%) as well as in Asia Pacific 2W (-10.0%). As regards the type of products sold, the main downturn occurred in the two-wheeler segment (- 13.4%).

Sales of two-wheeler vehicles were affected by a particularly negative market context and competitive scenario, at least as regards European markets. In particular, the two-wheeler market in Europe registered a downturn equal to approximately 12% (- 17% for scooters and - 4% for motorcycles). In Europe, the Piaggio Group retained its market leadership position, with a 17.6% share. The Group achieved excellent sales results on the American market (+ 10.4%). The number of Vespas sold in India totalled 38,900

Sales of commercial vehicles were negatively affected by the concurrent downturn on all reference markets (Italy - 12.5%, Germany -3.1%, France - 4.3% and the Indian three-wheeler market - 5.9%).

In terms of consolidated turnover, the Group ended 2013 with net revenues down by 13.8% compared to 2012, and equal to €1,212.5 million. As for the type of products sold, the downturn mainly concerned two-wheeler vehicles (- 14.2%). As a result, the percentage of two-wheeler vehicles accounting for overall turnover dropped from 70.6% in 2012 to the current figure of 70.3%; vice versa, the percentage of commercial vehicles rose from 29.4% in 2012 to 29.7% in 2013.
All geographic segments recorded a downturn: Asia Pacific 2W - 8.4%, India - 10.5% and EMEA and the Americas - 16.5%. This negative performance was exacerbated by the devaluation of Asian currencies, which had an impact of approximately €53 million on the decrease in turnover.

The Group's gross industrial margin decreased in absolute terms compared to the previous year by € 60.4 million, while in relation to net turnover, it was equal to 29.5% (29.7% in 2012). The decrease as a percentage, due mainly to the different mix of products sold on markets in EMEA and the Americas, and in India and Asia Pacific 2W, was within 0.2 percentage points, thanks to important actions to curb product costs.
Amortisation/depreciation included in the gross industrial margin was equal to €33.7 million (€32.9 million in 2012).

Operating expenses incurred during 2013 totalled €294.9 million, approximately €26.4 million less compared to the previous year (€321.3 million), and confirm the Group's constant focus on keeping costs down and maintaining high profitability levels.
Operating expenses also include amortisation/depreciation not included in the gross industrial margin, amounting to €50.5 million (€46.7 million in 2012).  

This performance resulted in a consolidated EBITDA which was lower than the previous period, and equal to € 146.8 million (€ 176.2 million in 2012). In relation to turnover, EBITDA was equal to 12.1% (12.5% in 2012). In terms of Operating Income (EBIT), performance was negative compared to 2012, with a consolidated EBIT equal to € 62.6 million, down € 33.9 million from 2012; in relation to turnover, EBIT was equal to 5.2%, (6.9% in 2012).

The result of financing activities declined compared to the previous year by € 3.7 million, with Net Charges amounting to € 32.4 million (€ 28.7 million in 2012). This increase was due to a lower capitalisation of interest amounting to €3.1 million and a lower result arising from investments of €1.3 million, partially offset by the improvement of €0.8 million registered by the balance of financial income and borrowing expenses and currency management.

Adjusted net profit stood at €18.1 million (1.5% of turnover), down on the figure for the previous year of €42.1 million (3.0% of turnover). The adjustment is relative to the non-recurrent cost recognised, following the inspection by the Italian Tax Authority for the 2009, 2010 and 2011 periods, which terminated with the issue of Formal Notices of Assessment (PVC) mainly concerning transfer pricing.
After explaining the correct nature of its operations to the Italian Tax Authority, the Company decided to benefit from the system of paying lower fines, to avoid tax litigation and therefore defined the Formal Notices of Assessment, considerably lowering the initial requests of the inspectors.

Taxes for the period were equal to €36.8 million, while they amounted to €25.8 million in 2012. The considerable increase compared to 2012 is due to the above mentioned recognition of a non-recurrent cost for € 24.6 million.