DMH Bank of America

Ducati Motor Holding Announces First Half 2004 Results Across the Board Improvements with Significant Net Debt Reduction BOLOGNA, Italy, August 5 /PRNewswire-FirstCall/ -- Ducati Motor Holding S.p.A. (NYSE:DMHNYSE:BorsaNYSE:ItalianaNYSE:S.p.A:NYSE:DMH), a leading manufacturer of high performance motorcycles, today announced first half 2004 financial results. First half 2004 revenues were Euro 221.0 million, up 6.9% excluding forex effects, (or up 5.6% including forex effects) versus first half 2003. Revenues from motorcycles for the period increased 0.9% to Euro 175.4 million and represented 79.4% of revenues. Motorcycle-related products, including spare parts, technical accessories and apparel, increased 21.3% to Euro 42.3 million over the comparable period in the previous year. Gross margin was 35.9% versus 34.3% last year, thanks to product cost reduction and operational efficiencies partly offset by negative forex effect. EBITDA was Euro 28.0 million, or 12.7% of revenues, up 16.4% excluding forex effects (or up 8.5% including forex effects), versus Euro 25.8 million, or 12.3% of revenues in first half 2003. At EBT level, the result was a profit of Euro 3.5 million versus a loss of Euro 1.6 million in first half 2003 thanks to a Euro 2.2 million increase in EBITDA and a Euro 3.5 million one-off restructuring cost accrued in 2003. The Company's net debt at June 30, 2004 was Euro 100.4 million, down versus the Euro 112.2 million at the same date a year earlier and down versus Euro 117.2 million at December 31, 2003. The company's gearing ratio was 62% at June 30, 2004 versus 71% at the same date a year earlier and versus 74% at December 31, 2003. In first half 2004 unofficial Ducati worldwide registrations, were up 2% versus last year, in a flat market, with the US up 33%, non-subsidiary countries up 6%, France up 5% and Italy up 3%, while the UK was down 4%, Germany down 13%, the Benelux Countries down 13% and Japan down 14%. "In a difficult environment, where the two-wheeled market remains weak, Ducati continues to grow by focusing on its niche strategy", said Federico Minoli, President and CEO of Ducati Motor Holding. "First half financial results showed significant improvements across the board, and in particular a reduction of our net debt position. Though, the second quarter was weaker than 2003, following the excellent results of the first quarter". "Our cost control and cash management efforts are bearing fruit and drove first half financial results, with return to profit and improvement of the Debt/Equity ratio", said Enrico D'Onofrio, Chief Financial Officer of Ducati. "We will continue to pay particular attention to these issues for the rest of 2004, as we pave the way for the growth of sales expected in 2005". As for the second quarter, revenues were Euro 120,7 million, down 5.5% excluding forex effects, (or down 5.7% including forex effects) over the same period in 2003, due to lower bike sales. Gross margin was 35.8% of revenues, versus 32.6% in the same period a year ago, thanks to product costs and operational efficiencies. EBITDA was Euro 15.7 million, down 4.3% excluding forex (or down 7.0% including forex effects), versus Euro 16.8 million of 2003, representing 13.0% of revenues in line with the same period year ago. In the second quarter of 2004, earnings before tax were Euro 2.7 million versus Euro 4.6 million last year. The decrease was mainly due to lower EBITDA and higher financial charges. By the end of June 2004, the Company had re-purchased 1,260,096 shares, equivalent to Euro 1,840,351 or 0.79% of its stock capital. A discussion by Ducati management of the first half 2004 results is available at http://www.ducati.com/ under Company and then Investor Relations. It can be accessed until mid-September 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 thirteen of the last fiftheen 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. Ducati Motor Holding S.p.A. and Subsidiaries Net Sales and Shipment Data Three Months Ended Three Months Ended June, 30 June, 30 June, 30 June, 30 2004 2003 2004 2003 ----------- ----------- ----------- ----------- Net Sales (Euro in thousands, US$ in thousands) Motorcycles EUR 95,339 EUR 108,308 $ 116,542 $ 132,396 Spare Parts, Accessories, Apparel 23,450 19,597 28,665 23,955 Miscellaneous Other 1,893 86 2,314 105 ----------- ----------- ----------- ----------- Total net sales EUR 120,682 EUR 127,991 $ 147,521 $ 156,456 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Ducati Units Motorcycle shipments: % Change North America 1,387 1,218 13.9% Main European market 8,079 9,340 (13.5%) Japan 564 832 (32.2%) Rest of World 2,379 2,332 2.0% ----------- ----------- Total 12,409 13,722 (9.6%) Motorcycle product mix: % Change Superbike 2,680 2,835 (5.5%) Supersport 477 997 (52.2%) Sport Naked 7,017 6,311 11.2% Sport Touring 1,063 541 96.5% Multistrada 1,172 3,038 (61.4%) ----------- ----------- Total 12,409 13,722 (9.6%) Unofficial Motorcycle Registrations: % Change North America 2,058 1,602 28.5% Main European market 9,130 10,034 (9.0%) Japan 922 1,031 (10.6%) Rest of World 2,155 2,118 1.7% ----------- ----------- Total 14,265 14,785 (3.5%) Ducati Motor Holding S.p.A. and Subsidiaries Net Sales and Shipment Data Six Months Ended Six Months Ended June, 30 June, 30 June, 30 June, 30 2004 2003 2004 2003 ----------- ----------- ----------- ----------- Net Sales (Euro in thousands, US$ in thousands) Motorcycles EUR 175,353 EUR 173,826 $ 214,352 $ 212,485 Spare Parts, Accessories, Apparel 42,274 34,841 51,676 42,590 Miscellaneous Other 3,355 590 4,101 721 ----------- ----------- ----------- ----------- Total net sales EUR 220,982 EUR 209,257 $ 270,129 $ 255,796 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Ducati Units Motorcycle shipments: % Change North America 2,667 2,054 29.8% Main European market 13,800 14,040 (1.7%) Japan 1,097 1,463 (25.0%) Rest of World 4,315 3,919 10.1% ----------- ----------- Total 21,879 21,476 1.9% Motorcycle product mix: % Change Superbike 5,586 5,606 (0.4%) Supersport 902 1,909 (52.8%) Sport Naked 11,369 9,808 15.9% Sport Touring 1,919 1,033 85.8% Multistrada 2,103 3,120 (32.6%) ----------- ----------- Total 21,879 21,476 1.9% Unofficial Motorcycle Registrations: % Change North America 3,383 2,552 32.6% Main European market 15,280 15,616 (2.2%) Japan 1,649 1,915 (13.9%) Rest of World 3,442 3,257 5.7% ----------- ----------- Total 23,754 23,340 1.8% Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (Euro in thousands, US$ in thousands, except per share and share amounts) Three Months Ended Three Months Ended June, 30 June, 30 June, 30 June, 30 Percent 2004 2003 2004 2003 Change Net Sales EUR 120,682 EUR 127,991 $ 147,522 $ 156,456 (5.7%) Cost of goods sold (77,483) (86,210) (94,715) (105,383) ------------------------------------------------- Gross Profit 43,199 41,781 52,807 51,073 3.4% Other operating revenues 6,587 5,954 8,052 7,278 SG&A expenses (34,254) (31,123) (41,872) (38,045) Other operating income/(expense), net 191 316 233 386 Depreciation & amortization (9,359) (9,245) (11,440) (11,301) ------------------------------------------------- Operating income/ (loss) 6,364 7,683 7,780 9,391 (17.2%) Financing expense, net (3,161) (2,519) (3,864) (3,079) Other non-operating income/(expense), net (476) (562) (582) (687) ------------------------------------------------- Profit/(loss)before income taxes 2,727 4,602 3,334 5,625 (40.7%) Shares outstanding 158,826,407 158,500,963 158,826,407 158,500,963 Percent Other Financial Data Change Motorcycles Produced (Units) 11,939 8,751 36.4% Motorcycles Sold (Units) 12,409 13,722 (9.6%) Unofficial Registrations (Units) 14,265 14,785 (3.5%) EBITDA 15,666 16,850 19,150 20,597 (7.0%) EBITDA Margin 13.0% 13.2% Note : On June 30, 2004 US$1= 0,8227 Euros Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (Euro in thousands, US$ in thousands, except per share and share amounts) Six Months Ended Six Months Ended June, 30 June, 30 June, 30 June, 30 Percent 2004 2003 2004 2003 Change Net Sales EUR 220,982 EUR 209,257 $ 270,128 $ 255,796 5.6% Cost of goods sold (141,752) (137,454) (173,278) (168,024) ------------------------------------------------- Gross Profit 79,230 71,803 96,850 87,772 10.3% Other operating revenues 12,422 12,056 15,185 14,737 SG&A expenses (63,545) (57,996) (77,677) (70,894) Other operating income (43) 111 (53) 136 Depreciation & amortization (19,018) (18,429) (23,249) (22,528) ------------------------------------------------- Operating income/ (loss) 9,046 7,545 11,056 9,223 19.9% Financing expense, net (5,077) (4,958) (6,206) (6,061) Other non-operating income/(expense), net (486) (4,146) (594) (5,068) ------------------------------------------------- Profit/(loss)before income taxes 3,483 (1,559) 4,256 (1,906) na Shares outstanding 158,826,407 158,500,963 158,826,407 158,500,963 Percent Other Financial Data Change Motorcycles Produced (Units) 23,177 19,117 21.2% Motorcycles Sold (Units) 21,879 21,476 1.9% Unofficial Registrations (Units) 23,754 23,340 1.8% EBITDA 27,997 25,811 34,224 31,550 8.5% EBITDA Margin 12.7% 12.3% Note : On June 30, 2004 US$1= 0,8227 Euros Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (Euro in thousands) June 30, 2004 June 30, 2003 EUR % EUR % ------------------------------------------------------------------------- Current assets Cash and cash equivalents 30,821 35,067 Trade receivables, net 90,213 85,900 Inventories 111,542 103,740 Other current assets 17,548 21,377 Current assets - Credit Link 15,000 - ------------------------------------------------------------------------- Total current assets 265,124 56.3% 246,084 52.3% ------------------------------------------------------------------------- Non current assets Property, plant and equipment-net 63,325 69,686 Intangible fixed assets, net 120,472 129,838 Equity investments 12 12 Non current assets - Credit Link / ABS 10,000 25,011 Other long-term assets 12,110 549 ------------------------------------------------------------------------- Total non current assets 205,919 43.7% 225,096 47.7% ------------------------------------------------------------------------- Total assets 471,043 100.0% 471,180 100.0% ------------------------------------------------------------------------- Current liabilities Short-term bank borrowings 71,210 45,687 Current portion of long-term debt 67,873 19,148 Accounts payable - trade 107,775 91,160 Income and other taxes payables 8,355 8,123 Other current liabilities 19,146 19,573 Provisions for risks and charges - current portion 4,906 10,867 ------------------------------------------------------------------------- Total current liabilities 279,265 59.3% 194,558 41.3% ------------------------------------------------------------------------- Long-term liabilities Long-term debt, net of current portion 3,835 91,000 Employees' leaving entitlement 8,900 7,798 Deferred income taxes 211 35 Income an other taxes payables - long term portion 1,292 - Other long-term liabilities 13,282 16,525 Provision for risks and charges - long term portion 1,687 3,022 ------------------------------------------------------------------------- Total long-term liabilities 29,207 6.2% 118,380 25.1% ------------------------------------------------------------------------- Total liabilities 308,472 312,938 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total Group shareholders' equity 162,558 34.5% 158,242 33.6% ------------------------------------------------------------------------- Minority interests 13 - ------------------------------------------------------------------------- Total shareholders' equity 162,571 34.5% 158,242 33.6% ------------------------------------------------------------------------- Total liabilities and shareholders' equity 471,043 100% 471,180 100% ------------------------------------------------------------------------- Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (US$ in thousands) June 30, 2004 June 30, 2003 US$ % US$ % ------------------------------------------------------------------------- Current assets Cash and cash equivalents 37,462 42,624 Trade receivables, net 109,654 104,411 Inventories 135,579 126,096 Other current assets 21,330 25,984 Current assets - Credit Link 18,233 - ------------------------------------------------------------------------- Total current assets 322,258 56.3% 299,115 52.3% ------------------------------------------------------------------------- Non current assets Property, plant and equipment-net 76,971 84,703 Intangible fixed assets, net 146,434 157,818 Equity investments 14 14 Non current assets - Credit Link / ABS 12,155 30,401 Other long-term assets 14,720 667 ------------------------------------------------------------------------- Total non current assets 250,294 43.7% 273,603 47.7% ------------------------------------------------------------------------- Total assets 572,552 100.0% 572,718 100.0% ------------------------------------------------------------------------- Current liabilities Short-term bank borrowings 86,556 55,532 Current portion of long-term debt 82,500 23,274 Accounts payable - trade 131,001 110,805 Income and other taxes payables 10,155 9,874 Other current liabilities 23,272 23,791 Provisions for risks and charges - current portion 5,963 13,208 ------------------------------------------------------------------------- Total current liabilities 339,447 59.3% 236,484 41.3% ------------------------------------------------------------------------- Long-term liabilities Long-term debt, net of current portion 4,661 110,611 Employees' leaving entitlement 10,818 9,478 Deferred income taxes 256 43 Income an other taxes payables - long term portion 1,570 - Other long-term liabilities 16,144 20,086 Provisionfor risks and charges - long term portion 2,051 3,673 ------------------------------------------------------------------------- Total long-term liabilities 35,500 6.2% 143,891 25.1% ------------------------------------------------------------------------- Total liabilities 374,947 380,375 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total Group shareholders' equity 197,589 34.5% 192,343 33.6% ------------------------------------------------------------------------- Minority interests 16 ------------------------------------------------------------------------- Total shareholders' equity 197,605 34.5% 192,343 33.6% ------------------------------------------------------------------------- Total liabilities and shareholders' equity 572,552 100% 572,718 100% ------------------------------------------------------------------------- DATASOURCE: Ducati Motor Holding S.p.A. CONTACT: 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, E-mail:

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