Good day, welcome to the Piaggio full year 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, Executive Vice President, Head of Investor Relations, is going to chair the meeting. Please go ahead. Yes, thank you. Hello, everybody, and welcome to our 2022 earnings call. Joining me today are Roberto Colaninno, Chairman and Chief Executive Officer, and Alessandra Simonotto, Chief Financial Officer. You can access the slides supporting today's conference call on the Internet at Piaggio Group website in the investor relations section. As you may expect, 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 to Roberto Colaninno. [Foreign language] Starto? [Foreign language] Sì. Good day to everybody. Just yesterday, an Italian Motorcycle Association reported that the first two months of the year, in the first two months of the year, their sales of scooter and motorbikes growing to the first two months of the last year. The same flow, positive flow, we have from the Vietnam and all the South Pacific area. Question is in India, where despite to the situation after the COVID and after all the other problems following the pandemic era, the situation seems begin to be changed in the positive way. The same feeling, positive feeling we get from European country. Despite the question of Ukraine and Russia, the market in their area is positive. If I look at the first two months of the year, I easily can say that I'm quite positive for 2023. We never forget that we get just two months, and two months is too shortly to have an indication of the flow of the total of the year 2023. I want to anyway underline that problems that in the past was very important and had a negative influence on the whole situation now disappear. Transportation, material costs, difficulty on the supplier is really in a different and a good situation in relation with the last same period of the last year. The pandemic situation seems to be over in all the area where we sell in a traditional way. United States, India, South Pacific area and EMEA or otherwise the European country. I want to say that the total scenario of the first two months of 2023 is completely different and a positive change in relation to the same period of last year. In this scenario, we have the first results of our new investments in Indonesia that is quite good. It is better than our expectation in the area. What surprise everybody of us is the results of India, Vietnam, Philippines, Thailand, and all the country around Asian area. We have increased investments in Vietnam to produce more in term of vehicles, in term of engine than last year. We forecast the all this investment will be ready by the second part of the year, and we are positive sure that we are able to respond the positive demands of the market. I want to say that all the difficult situation of the last year is now, is visit here. All the area, Asian area, excluding for a moment to China, is quite clear and positive. Same is in Europe. In all the country in Europe, the market is quite good. The same is in United States. What I want to say is that in term of organization, we are putting in place some management model that guarantee us a productivity growing and the cost reduction. Our stock is in line with our budget in the way that we want to get the target to have a big reduction of stock product, finished products and components and material started from the second part of the year. This is the scenario where Piaggio now is moving. Positive, we expect it to be able to grow up on sales, and what is more important, to grow up in productivity. Finally, productivity is the real positive things that we want to achieve to support the results of 2023. I am ready for your question or to be able to explain your question and answer. We will now begin the question and answer session. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. The first question is from Monica Bosio. Please go ahead. just a second. Please, Ms. Bosio, your line is open. Thank you very much. Good afternoon, everyone, thanks for taking my question. First of all, thanks for the follow-up on Europe. As Europe is performing well, as you said, do you see as reasonable or maybe too conservative a clear decrease in Europe in the region of 7%-8% as the consensus is projecting? Do you believe that the market might be more or less flat or at least at the most at -3% for 2022 in Europe? My second question is on the shipping costs, which are materially decreasing. Do you expect the savings on the shipping costs for this year in comparison with the previous year? If yes, can you give us a rough indication on the savings side, please? The very last is on the tax rate, which was below our expectation, the tax rate. 23% and going forward. Okay. Starting from the market. As I told you before, exactly yesterday, the Italian Motorcycle Federation announced that the sales of the first two months in Italy is growing on the Scooter and motorbike, and is growing on the two digits on the market in relation of last year. We get positive reaction also from the market of, if you divide it, you know, how we divided Europe, is Spain, France, and Germany. These three market is in line with our budget, and especially on the bikes point of view. We don't consider now that the confusion generate now on the electrical side on what the commission in Brussels will decide in the next two weeks about the law provide the stop of the electrical engine regarding not two-wheeler, but regarding four-wheeler, any way can generate. We see that sales is growing. The reason that's speaking about Europe, is the people thinking that is much better, is much more convenient to buy two-wheeler now than four-wheeler, and they wait what happens in the market. We don't see that the market is in term of, we see that the sales is quite regular, and we don't see any peak in some market. All the market is moving on the same scenario, on the same logic, and let's say, on the same tax going. For Europe, my opinion is that we are, from the market point of view, in a positive point, in a positive moment, awaiting on what will happens on the electrical market. In the meantime, we see that the market is oriented to buy two-wheeler than other products. Regarding transportation cost, material cost, as I told you before, we see that the transportation, especially through transportation by boat, is quite quiet. We don't see that the cost of transportation is moving as last year or reach a level that is lower than last time. I believe that also the cost of the gas and the electricity give a big improvement on the material cost reduction. I want to underline also that a sign of the control of interest that control quite well the inflation is the positive impact of the market. If I want to consider the first two months, talking about Europe, in relation for the rest of the year, my feeling is totally positive. About tax, I ask to the Alessandra Simonotto to say what is her feeling about. Yes, thank you, Mr. Colaninno. About the tax rate, as we have written, in the specific slide at page 23, we are benefiting of a different EBT geographical mix. As you have re-read in the slides, you have seen that the impact of the impact market on our revenue is the growth of the impact market is more than 6%-7%. If the geographic mix of our business will be more or less the same of the 2022, I expect the tax rate of the 2023 years and of the next years will be more or less about the one that we have used on 2022 financial statement. Okay, thank you very much. Very clear. Thank you. The next question is from Michele Baldelli with BNP Paribas. Please go ahead. Yes, good afternoon to everybody. I have a couple of questions. The first one relates to Vietnam. If I'm not wrong, you should increase also capacity in Vietnam. If you can quantify how much you are going in case to expand capacity, why? If it's also only scooters or also motorbikes. To give a little bit more granularity on the investment. What time period? The second question relate to India. We have seen some volumes coming out from your competitors on the market and of their volumes. If you can provide some data also for your volumes in February, how it went, it would be great. Thank you very much. Regarding Vietnam, we have invested already about $80 million to be able to increase production of products till 400,000 units, and to increase on the same way the engine production. Consider that the production today is about. 250. 250,000 products, scooter. Consider that we have to supply the Indonesia plant, where we send some components to be assembled in that market. Consider also that this country is. We expected a big quantity from this country, Indonesia, because in term of two-wheeler market, as you know, is a huge market. In the same way, we follow also the Thailand's market. Thailand's market, we expected to grow on 2023 and much more than 2022. We sell in Thailand, let's say, between 60,000 and 80,000 pieces. It's all exported from Vietnam. In this area, let me say in the south, the South Pacific area, is a huge market for two-wheeler, with a big growing rate, where Vespa particularly is very welcome. You have to consider that the value of the trademark beginning to be the reason why the market is so positive to Piaggio. Vespa is a trademark that is very, very accepted on a positive in that kind of market. The policy that we have introduced in term of advertising and in term of style and design of the products, is very welcome from the young people. All this country that for us is very important, let's say Thailand, Vietnam, Indonesia, Philippines, if you put all together and consider this market is million of products every year. We follow with a high interest this area. You have to consider China. China surprise us because it's a big importer of Vespa products, even the price is now low. We have a budget for China. We, let's say, we are very conservative. We don't want to be too much positive for huge market as China. In case we make a mistake on term of sales number, we are ready to respond and to satisfy the demands eventually coming plus from China. When you see this area, you have to consider this area then for Piaggio and for Vespa, for Moto Guzzi, and for Aprilia, that is big surprise to us. Very important. Okay, thank you. Michele, for concerning your second question, the data that you should see very soon on the CV should be in the region of 9,000 units per month in my commercial vehicle, and around 3,000 two-wheeler per month for clearly two-wheeler scooters. Those are the numbers. Thank you very much. Okay. You're welcome. The next question is from Niccolò Storer with Kepler. Please go ahead. Good afternoon, everybody. Congratulations on this set of results. Very strong, thank you. The question is on pricing of vehicles. Should we expect any further price increases in 2023? Related to that, and to Monica's question, what should we expect in terms of gross profit, gross margin? We have had in 2022, the lowest gross margin in many, many years, probably at least since the IPO and probably beyond. Should we expect an expansion return towards the average 30%, or should we expect a more gradual return to normal? Thank you. Talking about pricing for 2023, we do not expect another growing on pricing on 2023 as of now. If all the material costs will be crazy then, like than our expectation or something will be very different from the basis of our thought about this year, something would be changed. As of now, we don't expect any price increase, nothing more than 1%. This is not an increase, having in mind this inflation rate that we are seeing on our, on EMEA market, in the last six, nine months. About the gross margin, we are seeing, and we are more or less waiting for a gradual return back to some better figures, because as Mrs. Bosio asked us before, the shipping cost in 2023, as you were known, will be lower than 2022 and 2021. The same is for energy in EMEA. We expect that this kind of production cost will help us in getting some better results. Thank you. The next question is from Anna Frontani with Berenberg. Please go ahead. Good afternoon. Congratulations on the record results. Just one quick question from my side. If you can please elaborate on the investment plan for 2023 in terms of new products, because you mentioned that in the press release. I was wondering, what is it you're doing, in terms of new products investment. Thank you. Anna, Raffaele speaking. Essentially, we don't give a breakdown of our investment. The vast majority of investment, the good part will be clearly focused in the introduction on new technologies and new products. This is what we can tell you. We can't give you more granularity or a detail in terms of investment by product. Okay? Okay, thank you. The next question is from Gabriele Gambarova with Banca Akros. Please go ahead. Yes, good afternoon, and thanks for taking my question. Regarding Asia, I saw that volumes grew around 45% in 2022 or 60,000 units. I was wondering if you can give us a flavor of what you expect for 2023. I mean, do you expect, do you think it's possible to grow the volumes in absolute terms are more or less the same way you did in 2022, which would be around 60,000 units. Regarding Asia, if you can give me some more flavor, even in this case, on the expectations for 2023. What do you see basically from this market? Thank you. Yes. Raffaele speaking. Yes, we expect growth for Asia for 2023. will be double-digit growth. I won't say the same level of 2022. Absolutely double-digit or yes, significant growth, yes, in term of volumes and even in term of revenues. This is the first question. The second one, can you remind me? No, it was on India. Basically, what do you. India. from this market? India, as the CEO said, we see a good rebound on the market. If we follow this rebound, for commercial vehicle, we should grow maybe totally in line with consensus figures. We should expect also the light growth also in two-wheeler in the second part of the year. These are the trend that we are seeing. Clearly, the first sign of the light commercial vehicle market for January and February are quite encouraging. The market here is really recovering. As we have highlighted in our slides, there is still a lot to catch up because the market is still 42% below pre-pandemic levels. There are good opportunities in India, too. Okay, thank you. If I may. Yeah. follow up on Indonesia. You said that, basically the results exceeded your expectations. Is it fair to assume that, the 40,000 unit production capacity there will be fully exploited this year? Or am I too optimistic? Yes, we are very positive on Indonesia, we will use a good part of our capacity in the country. Keep in mind that Indonesia, we said something made in Indonesia, something still fully made in Vietnam. Yes, the data and the prospect are very positive. Okay, many thanks. You're welcome. The next question is from Emanuele Gallazzi with Equita. Please go ahead. Yes. Good afternoon, everybody. three quick question from my side. The first one is on working capital. If you can just comment on the networking capital demand you expect for 2023 and what you expect in terms of free cash flow. The second one is on factoring, if you can quantify the factoring at the end of 2022. The last one is on 2023, EBITDA. I know that there is no quantitative guidance on 2023, but I would like to understand how confident are you on the consensus EBITDA of at around EUR 310 million. Thank you. Raffaele speaking. In term of factoring, which are the costs you mean probably or receivables. This was around EUR 167 million. This is the number. Expectation in term of working capital going forward? The expectation is that, during 2023, the working capital will be lower than 2022. This is something that we are working on from the closing on 2022, not from the beginning of 2023, as you well understand. This is something that we will expect for this year. On the consensus EBITDA, any comment? Yes, it's okay. We don't see issues. Okay? So far. Okay. Thank you very much. The next question is from François Robillard with Intermonte. Please go ahead. Hi, everyone. Thank you for taking my question. First question is, can you quantify for us the amount spent this year on e-energy and transportation, so for 2022? Give us a hint on what portion of this spend was basically linked to cost inflation, so higher freight costs and energy prices booming exceptionally, let's say, this year in Europe. That's my first question. My second question is related to CapEx. You say, you confirm your CapEx spending targets, which I believe amounts to about EUR 150 million a year. You announced those targets more than a year ago now, and in the meantime you have rolled out some investments to increase capacity in Asia Pacific mostly. Does that mean that you have had to cut on other projects, or does it mean that the EUR 150 million has become something more, like closer to EUR 155 million or EUR 160 million for next year? Thank you very much. François, Raffaele speaking. Essentially, total energy cost, you will find the detail in the annual report, end up around EUR 28 million, so EUR 50 million higher than prior year. Free cost that we can save next year, at least EUR 50 million. Okay. In term of CapEx, we can confirm more or less what you said, something more, something less, and we include all the investments for products, for capital, for, sorry, for increasing production capacity. We are hovering around EUR 150 million, EUR 170 million. We have to see. We retain clearly as usual, as we write in the slides, our ability or the possibility to reduce the CapEx if the situation will worsen. I think these are all your questions. Correct. Am I mistaken or right? Okay. Thank you. No, it's all. Thank you. Okay. Thank you. The next question is from Sébastien Lemonnier with INOCAP. Please go ahead. Hi, good afternoon, gentlemen, and congrats for the results. Just a question on the electric vehicle and especially the scooter opportunity, having in mind that there is more and more regulation in Europe, can you start by the scooters with EVX? Shall we expect them? Can you provide us more color on the new electric vehicle, readings of which, swappable batteries, which I think would be quite attractive for the customer? Thank you. Okay, this is a good question about the Indian market, where the swap system seem very popular in relation to the European market. We said that in India, we are on the way to develop, to investigate and to develop how to use the three-wheeler swap battery system for the Indian market. First reaction seems quite positive, we are looking now how is the best way to offer to our customer a real and practical system to use the battery swap. Naturally, the market in India is totally different than the other part of the world because the cost of the electricity in India is quite low in relation to the diesel and the other one. Today, what is difficult as all the other country is how to develop the infrastructure for battery swap machine. As I told you, we are looking now what is the best way to develop this type of system. Mr. Lemonnier, your line is open if you want to talk. No, thank you. Thank you. The next question is a follow-up from Michele Baldelli with BNP Paribas. Please go ahead. Yes, thanks for taking my question. I've got two questions. First one, if you can share what is the percent of Vespa inside your total revenues, more or less, just to make the math together with the motorbikes, how much they weigh to all together. Then, on 2023, do you see price decline for your products? Thank you. Mr. Baldelli, the first beginning from the last question. About the price increase, we are not thinking to a decline of pricing, but we are thinking that the pricing will be not increase more than 1% during 2023. This is not a decrease. We are not believe that we will need to increase more than what we have already done during this year. Okay. Yes. Thank you. Okay. On the other question about motorbikes, you have the information, in the slides, we established at page. Yeah, I know. I know, I know. On the Vespa, do you give the some detail around? Michele, sorry, we don't disclose exactly the revenues coming from that. Clearly are very important, but we don't disclose numbers so far. Okay, no worries. Lastly, well, if you don't increase the price, you get EUR 15 million from transportation costs, the volumes in Asia are growing. I mean, that context is not all defined. It's probably cautious. I don't know if. Michele, Sorry, Michele. I don't hear you very well. Can you ask the question again, please? Yes. No. The question was related to the fact that you confirmed the guidance, the consensus, and you said that it's okay. At the same time you are saying Asia is growing. Transportation costs at least EUR 15 million will flow through the PNL, no price declines. And consensus implies only + EUR 15 million compared to last year, the EBITDA. Am I missing something, or do you have an explicit negative view on some parts of your business? I was prudent. It was a low-hanging fruit. Let's put in this way. Okay? Okay. It's not what we see. Okay. Perfect. There are no questions at the moment. If there are no more questions, we can conclude now. Thank you very much for attending this conference call. As usual, you can call me later to have further info. Thank you. Bye. The conference call has now concluded. Thank you for attending to this presentation. You may now disconnect.