Good day, and welcome to the Piaggio Group's 2022 Financial Results Conference Call. All participants will be in listen only mode. At the end of today's presentation, there will be a question and answer session. To ask a question, you may press star then one on your telephone keypad. Mr. Raffaele Lupotto, Head of Investor Relations, is going to chair the meeting. Please go ahead. Hello. Thank you very much for taking the time to follow this conference call. Joining me today are Roberto Colaninno, Chairman and Chief Executive Officer. Michele Colaninno, Chief Executive of Global Strategy, Product, Marketing and Innovation. Alessandra Simonotto, Chief Financial Officer. You can access the slides supporting this call at piaggiogroup.com website. Before starting the presentation, I need to remind you that during today's conference call we may use forward-looking statements based on Piaggio's current expectations and projections about future events. By their nature, forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to be materially different. Also, I remind you that the press has been invited to participate in this conference call in a listen-only mode. Now, I would like to turn the conference over, Mr. Roberto Colaninno. Good afternoon, everybody. If you remember last time, six months ago, when we're talking about our expectations for 2022, we was, let's say, optimistic for the results of Piaggio in the first six months of the year despite the problems on the market of raw material, transportation and all the problems that we have seen during this period. At that time, we didn't want to consider strongly the inflation problem as today we have. I want today to open this presentation to say that we are very confident to achieve the results of the H2 of the year, and we have budget in line with what we expected based on the trend of sales, based on the capacity of the company to be able to produce on time the products. I want to say that in today's incredible results that we achieved in Southeast Asia and China, and the first positive indication coming from the Indian market from the month of May. Naturally, for India, we not have, again, the sensation what is the trend of the next six months. We see that now the raw material price beginning to going down. The transportation of the products coming from Far East is a little bit easy in respect to the past. The electronics products that was a big problem for everybody, beginning, as well for us, to be not so strong as in the past. The sales trend is positive in all the country, excluding India for the moment. What I want to say and underline, especially on the motorcycle, where we have achieved results that only some years ago was repeatedly very difficult to achieve. Today, all the product line sales is very strong. The demands of the customer coming from all the parts of the world is very positive. I want to underline that Piaggio not depends from the Italian market. Piaggio today is an international company that have, and the market where the Piaggio beginning to be a leader is, again, in South East Asia, Vietnam, Indonesia, Philippines, Thailand, China and United States, where the sales of motorcycle going up in a very strong degree. In Europe, too, we are strong in sales. Scooters and Vespa achieved a record of sales in the first six months. The motorcycle, again, is in line with our best expectation that we can have. What I want to say that the last products presented to the market, the MP3, is really successfully received from the market. Also, we're beginning to utilize our investments in Boston because we utilize the radar that will be fixed on the motorcycle and scooter to prevent problems and accidents, and to give the people and the rider that they're safe and security and information that is necessary to drive today. We don't have any relation with Russia and Ukraine. We don't sell one product there. We don't lose, we don't buy, and don't sell. For us, that part of the market doesn't give us any problem. We are concentrated today to be in line with the to finish the new plant in Indonesia, where the sales today is quite strong. We expected a big result there. The part of the market referring to our investments, our company in Vietnam, today achieve under 100,000 pieces where now we are in the process to increase the production facility there to be ready to be in line, to be able to satisfy the growing of the demands. Really it's quite positive moment for Piaggio. Piaggio need to be able to organize inside to be able to satisfy the market demand. Personally, I am totally satisfied on that. I am positive. I don't exclude the problems that we have in front to assume: inflation, the war, the supplier, new products, all problems that we are very clear in our mind. But I want to say that at this, as looking this refer to six months, I am confident that the next six month will be possible too. It's not impossible to achieve some result at this condition. We have a good quality, good sales, good products, a good strategic position in the world market. We don't make any. In Italian factory, we have never suspended one day the production. We was able to produce every day. In Vietnam, we have increased production at 2x the production respective last year. We have problems in India, but again, May, I hope that will be confirmed, is the first month where we're beginning to see some positive evolution. Based on all this situation, again, I am positive for the future of Piaggio and especially to be able to achieve what we are budgeting in the next, in the total year of 2022. We are discussing now for the budget of 2023. It's not easy. You know why? It's not easy because the first information that we get is that we need to be able to increase production quantity. We need to be able to be online with the presentation of the new products. We need to be able to finish the new factory of Moto Guzzi and the new factory in Indonesia. We need to be able to begin on electric products to present the new products and to be able to satisfy the quality that the market asks of us about that kind of new technology. Even in that way, let's say in electric region, we are in line with our plan, even with the strategic products, strategic line and all the products that is completely new. We have to change, find the customer, to change some mentality, but we are in line with all this. I say that we need to do what the market asks of us to do. What the market asks of us today is positive question. Okay. Thank you very much. I'll turn the call to Alessandra, that will give you an in-depth analysis of the financial figures that you can see and find also on our presentation that is published on the website. Okay, Alessandra? Thank you, Raffaele. Good afternoon, everybody. I don't know if you can hear me. Yeah, as usual, let's start from page 3, that provides a summary of the key financial metrics of our group in the H1 of 2022. As you can see, we continue reporting a record set of results, despite the backdrop of economic and geopolitical uncertainty. Net sales, EBITDA, and earnings per share kept on growing in Q2, thus all reaching in H1 the best results since IPO. Net debt edged slightly south versus December 2021, also being lower than June 2021, mainly driven by the usual seasonal cash absorption of the H1 of the year. From page four to page six, you can find a snapshot of the performance by brands. Brands that, as you know, are our key asset and allow us to meet the different needs of our diversified clientele. All sub-brands posted outstanding results, reaching the highest revenues to date. In this context, motorcycles were the brightest spot, with Moto Guzzi setting a fresh record high, both in volume and revenues, and Aprilia motorcycles reaching the best revenues since the IPO. As we will see later, motorbike's performance have been boosted by gain in market, both in Europe and US. Let's highlight that the new Aprilia racing team ended number one in MotoGP 2022 before the summer break. Clearly, thinking about our brands, we can't forget the MP3 scooters as the new version launched at the end of June, you can see on page seven, received an enthusiastic welcome from the press. Going to page eight, we have highlighted the outstanding results of Asia Pacific. Revenues in the area posted unabated growth since 2018, with a stunning 30% CAGR, also benefiting from heightened country diversification. In H1 of 2022, Vietnam, China grew above 30%, and Indonesia ended up close to the twofold versus prior year. The strong performance of Indonesia is particularly important as the opening of the new plant in Q4 should further boost our space in the country. We can move to page nine to look at 2022 key market demand. In a nutshell, EMEA posted solid demand despite a very challenging basis of comparison and supply constraints that were affecting the whole industry. Conversely, in US, emerged diverging trends as scooters kept on surging around 30%, while bikes took a downward trend. Asia's five countries posted an uneven trend, with China and Indonesia edging down, while Vietnam, Malaysia, and Thailand posted solid positive demand trends. As Mr. Colaninno already said, EMEA returned to growth, but this was mainly linked to a very easy basis of comparison. More importantly, unfortunately, demand was still significantly below pre-pandemic levels, mainly with LCV still 52% below 2019 levels. We can move now to page 10, where you can see that the growth of volumes and revenues have been driven by the synchronized positive performance of all geographies and businesses. Asia Pacific posted the strongest growth, mainly driven by the synchronized growth of all key markets, as we already commented before. Western countries confirmed solid positive performance, a significant result given the very challenging basis of comparison and the gloomy macroeconomic scenario. I would like to highlight the performance of US., which posted the strongest two-wheeler revenue growth in this area, mainly driven by the success of our motor bikes. It is worth also mentioning the good performance of LCV, driven by the new Porter NP6. India rebounded, mirroring the month trend, mainly benefiting from low one year ago basis. Let's move now to page 11 to look at the breakdown of the performance by product. As mentioned before, motorbikes posted high top-line results, with revenues surging by 37%, propelled by the success of our brands, coupled with positive price effect. Scooters performed extremely well, too, reaching an all-time revenue high, benefiting from the combined strong growth in all geographic areas. As we saw before, Vespas reaches a new record high on the back of growth in all geographic areas, coupled with positive price effect. Additionally, it is worth mentioning the success of the new Aprilia SR GT. Let's move now to page 12 to have a look at the EBITDA average. EBITDA grew to EUR 92 million in the Q2, against a very challenging basis of comparison, thus reaching EUR 152 million, a new all-time high, with the percentage margin on sales at 14.5%. This is an extraordinary result, in my opinion, if we consider the growing number of negative externalities affecting the H1 of the year. As we saw in Q1, also in Q2, the key lever of EBITDA uplift has been the strong revenues growth, more than offsetting the heavy negative effects stemming from the inefficiencies of the supply chain and higher input costs. Cash OpEx has been kept under control, with the ratio of cash OpEx on revenue lower than last year. This testifies our ability to rein in costs without jeopardizing our competitive strength. Moving to slide 13, we can see the remaining P&L figures. I would like only to highlight the net profit grew to EUR 45 million, with the same tax rate that we applied in the Q1. Let's move to page 14 to have an in-depth analysis of net financial position and the gross cash. As we highlighted on page three, we kept net debt well under control, while returning value to shareholders through dividend and buybacks, and despite the seasonality of our business, which negatively affects the dynamic of working capital in the H1 of this year. In this regard, I would like to underscore that the rising complexities in supply chain management forced us to prioritize inventory build-up. Capital expenditure is in line with the multi-year target provided in prior conference calls. Lastly, the chart under cash shows how we strengthened the liquidity profile across the years, reaching EUR 463 million in June 2022, thus providing ample headroom to weather potential future headwinds. Thank you. Okay, thank you very much. Now we are ready to start the Q&A session. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one and touch confirm. To withdraw your question, please press star then two. The first question is from Monica Bosio with Intesa Sanpaolo. Please go ahead. Good afternoon, everyone, and thanks for taking my question. Unfortunately, I lost the first part of the presentation. Anyhow, I would be curious about the trend in APAC. Considering the positive trend in H1, do you feel the achievement of roughly 160,000 total volumes in APAC for 2022 achievable? And given the new plant in Indonesia, should we expect a significant similar growth or maybe high single digit also in 2023 for APAC area? Thank you very much. Okay, I understand your question, and I want to say that this is the central discussion on looking at the next six months and looking also the next year. Regarding Indonesia, the first reaction of the market to the products that today we have, again, introduced there that is imported from Vietnam and from Europe is extremely positive. We see that the market is very happy that we built a factory there, and the first reaction of the customer to us is unpredictable. We are discussing now how we'll be able to satisfy the demand trend of next six months and next year in this country. The decision to invest in Indonesia was quite right after the very successful story of the company in Vietnam. In Vietnam, we are now on the way to increase the production capacity because we expect that the next year, after the good results of this year, require very high demands of our products. The country that is most significant really for this type of situation is Thailand, is India, sorry, is Vietnam, is Philippines, is every other country of the Southeast Asia. Also China is quite positive. China give us the results that confirm the trend of these results of Vespa that is totally unexpected for us at the beginning. This part of the world, let's say, starting from Thailand and landing in China, is totally positive for next year. The only problem, if it is a problem, is to be able to increase the capacity production to be ready for November, December and January. I want to say that today seem to be in line and proceed in a very good situation. This part of the world for us is positive. I want to say, if allowed to me, to be extremely positive. India. India is a problematic situation. As you know, we have a terrible year again, but we have a good sign from May sales. We have increased the sales on May. The market begin to change. Now it's too early to confirm this, but if it is true that the trend begin to go a positive way, India will be big surprise next year. This year for six months, we are very we are, again, little concerned within that. We want to see how is the trend of this six months. If the trend confirm the trend of May, I think that India will be huge surprise for 2023. We have decided to produce motorcycle in India, and this build should be a big surprise for the market. Coming to America. America, United States, is really in a very good situation. We are achieve a market share of the scooter very high in related to last year. Also motorcycle, good to have a trend growing in sales, and the demand confirm is growing. Even in United States and Canada will be positive for next year. Coming from Europe. Okay, we are conservative for Italian market, and we look in the Italian market to confirm the sales of 2022, but the trends are now beginning to grown up. To grow up with Moto Guzzi, to grow up with Aprilia, and to grow up with MP3 family that represent the newest products, and it was very, very welcome to the market. The other countries, Spain, France, Germany, Holland, Benelux, and Sweden and Norway, I don't see problem on that. We'll be in line with our expectation. The trend will be in line with our expectation. We don't have any problem with Russia and the other country because we have no sales, no relation, no supplier, so we don't see any problem coming from that. I say that even 2023 we'll see that from the budget point of view will be very, very positive. Growing and growing. Now the only problem that we have is to be able to organize our production, our general facility, to be able to satisfy the customer demand. On top of this, looking at the cost of material beginning to go down, and this despite inflation costs. Transportation beginning to be more positive, not so confused as in the past. Even all the raw material and transportation logistics problems with the price, they're going to be more contained than with the price. In my opinion, and I know it's my own opinion, 2023 is a good year, much better than 2022, and 2022 will be much better than 2021. Okay, thank you very much. Just on the back of your positive statement, it is reasonable to assume, for APAC, 160,000 vehicles? Yeah. More or less, yes. Okay, thank you. Thank you very much. Very clear. The next question is from Anna Frontani with Berenberg. Please go ahead. Hi, good afternoon, everyone. Thank you for your presentation. One question from my side. What is it you expect in terms of consumer confidence for the H2 of the year? Do you see your customers maybe trading down from bikes to Piaggio scooters? Also related to it, how do you think about your electric offering if consumer have lower spending power? It's very easy to respond to you on the demands. If you look, we have done recently research on how the value of our trademark. This research has said that the value of our mark, trademark is quite positive. Vespa, Aprilia, Moto Guzzi is considered by the market the best, together with the other competitor, naturally, the best in the market. You know, we have developed a relation with China. We were in different business, in music, in products. You know, we are beginning to see that the consideration of the market for our products, they're going to say not only a mechanics problem or transportation product. Also product that is very close to the other products that is independent totally and different from this. We have decided new color together with some big guy in the music and the young people in the United States and China. We have signed an agreement with a lady that is one of the leader on model on the fashion field. We say begin that we sell products, but not only, let's say, products that is a mechanics problem. We're beginning, and we are very successful with the Christian Dior Vespa, to give an acquisition to our products that is a little bit different than in the past. The market reacted very well. The market confirmed that they like the color, they like the design of the new products. They like what we have developed in terms of accessories and what we have developed in terms of new style of these products. We are beginning to build a new relation for the market, to offer to the market different position, a different strategy than in the past, how we build the products. Nothing against technology, nothing against the products, new products that is able to be in line with the communication, give all the information, to be safe, to be in line with the new electronic products. We also don't forget the other, let's say, strategy products develop, color, design, and then presentation of this. This give to us the confidence that the market will follow us. The market will appreciate that. Even with the problems existing in the market, we hope the market prefers Piaggio products to the competition. Thank you very much. Very clear. The next question is from François Robillard with Intermonte. Please go ahead. Hi, and good afternoon. Thank you for taking my question. First one is just a procedure on Indonesia. You mentioned so robust market trends locally, but in the presentation, I read that there was a double-digit dip in the Q2. Just can you give us some more color, clarity on that. Is it reasonable to assume that, after the supply constraint H1 of the year, especially in Europe, there was some kind of pent-up demand that has built, so, that may support volumes on the H2. If you can give us some more color, for instance, on your order book exiting the H2 of the year, that would be much appreciated. Thank you very much. Raffaele Lupotto speaking. In Indonesia, we were referring to our volumes clearly and the trend that we are having is reflecting market trends markedly. If you look at the slide that we provided with a breakdown by country in Asia Pacific, you see that the growth in Indonesia is well above 40%. We had to close 2x prior year. We're referring to our trend. Wait a second, please. Second question was regarding the European trend going forward. If I'm not mistaken, can you ask again the question please? No, just to put it more bluntly, given the H1 was constrained by supply chain issues, is it reasonable to assume there was some pent-up demand that may boost volume in the H2 of the year in Europe? Well, you know, to manage to have a pent-up demand, I don't know. Clearly, in some cases, the demand was probably higher than the offer of the industry. There are several players that are having a big constraint in production. We have to see. Keep in mind that last year in Q3 and Q4, the European market went down. Okay? The toughest part in terms of comparison basis is already behind us. Okay? Okay, when you mentioned you need to increase your capacity of production in Vietnam, is that already included in the current CapEx targets? Something is already in the CapEx that you see, François. There will be another part going forward. [inaudible] The target that we provide before in prior call in term of total CapEx remain the same. Okay? Remember the magic number, EUR 450 million divided by three years. This is roughly what we are planning to have. Okay. If I may just a final one, you mentioned as well the lowering pressure from raw material costs. What kind of gross margin progress can we expect for the H2 of the year? If any. Quite difficult to explain now. Let's say we have the margin depends not only from the raw material, but depends from the productivity that we are able to achieve. Never forget. It's difficult to introduce the concept of productivity and the retraining people. Productivity is really the key of the success of the budget. We are focused totally to increase productivity of all the company. This is based on not a big number, but anyway quite difficult because means that convince the people that is necessary to work better, not in term of quantity, but in term of quality. Even if it's small things. Even if it's more purchasing. Even if how be able to react to our customer to supply spare parts. How we'll be able to react to our customer in term of delivery time. How we are able to react to our supplier to receive the products on time. How we'll be able to react on quality. All this is not question of investment. It's not question of to work more. It's just a question to work better and to consider that the productivity, the strength of productivity, we thank for the success of the company. We working hard to develop and to organize the company to use all the instrument to give the policy the possibility to control the productivity achievement. This has to be continuous achievement in productivity all the time, all the morning, in all part of the company. Even if you are able to do this, the success is guaranteed. Thank you. The next question is from Gabriele Gambarova in Banca Akros. Please go ahead. Yes, good afternoon, and thanks for taking my questions. Just a couple. The first one is on India. You are making reference to the May data, but I was wondering if you have a more recent, let's say, data you are looking at for June or July. I mean, what are you seeing at the real margin? And possibly, can we assume as reasonable 140,000 unit target for this year, so basically flat, most likely up versus last year. The second question is on the H2 of 2022. Last year, you had the impact of rising raw material costs, rising inflation on logistics for roughly EUR 40 million, more or less concentrated in the H2 of the year. I was wondering if, even only qualitatively you can tell me, if you are assuming that, these trends you are seeing on the costs, on raw mat and logistics, may be more than offset by rising, increasing, prices and mix. If you see the balance positive in the H2 for what you see. The first question about India. What we are seeing as of today is that more or less the amount of units you have thought about could be reasonable. We are at the beginning of the restart of the market, as Mr. Colaninno already said, and so we have to wait if this new wave of the market in India will be confirmed or not in the next months. What we are seeing as of today is that more or less this total units could be reasonable. About your second question about costs on logistics and raw material and the fact that we began to face in the H2 of 2021. As you well understand, what we have saw in the H2 of last year is something that all the supplier has more or less reconfirmed at the beginning of the 2022, asking higher prices for logistics, asking higher prices for raw materials and so far. We are seeing something now that is lowering, yes, which could be the saving that we could have in the second part of the year is very early to define a reasonable saving as on all these things, because as you have read this morning, in China, a lockdown has began again, and so we don't know what will happen in the next-