DMH Bank of America

Ducati Motor Holding Announces Preliminary Full Year and Fourth Quarter 2004 Financial Results BOLOGNA, Italy, February 11 /PRNewswire-FirstCall/ -- 2004 2003 Var% 4Q04 4Q03 Var% Revenues 382.8 388.2 -1.4% 114.8 103.6 10.8% EBITDA 39.1 45.2 -13.5% 13.0 14.3 -9.1% Profit/Loss (pre-tax) (1.8) 0.1 na 8.0 7.1 12.7% Net Debt (115.9) (117.2) 1.1% (Million euro) Ducati Motor Holding S.p.A. (NYSE:DMHNYSE:BorsaNYSE:ItalianaNYSE:S.p.A:NYSE:DMH), a leading manufacturer of high performance motorcycles, today announced preliminary full year and fourth quarter 2004 financial results. Revenues for 2004 were Euro 382.8 million, up 1.0% excluding forex effects, (or down 1.4% including forex effects) versus last year. Revenues from motorcycles decreased 4.4% to Euro 302.2 million and represented 78.9% of revenues. Motorcycle-related products, including spare parts, technical accessories and apparel, increased 8.2% to Euro 75.0 million against last year. Gross margin for 2004 was 36.0% versus last year's 34.7%, thanks to product cost reduction, operational efficiencies and related product sales increase, partly offset by a negative forex effect. EBITDA was Euro 39.1 million, or 10.2% of revenues, up 2.3% excluding forex effects (or down 13.5% including forex effects), versus Euro 45.2 million of the previous yea,. mainly due to increased sales costs. At EBT level, the result was a loss of Euro 1.8 million versus break-even in 2003, due to a lower EBITDA, which was partially offset by lower depreciation and financial charges. The Company's net debt on December 31, 2004 was Euro 115.9 million, down against Euro 117.2 million on December 31, 2003. The company's gearing ratio was 75% on December 31, 2004 versus 74% on the same date a year earlier. Unofficial Ducati worldwide registrations for 2004 were down 5.2% versus last year, with France down 1%, Italy down 6%, UK down 13%, Benelux down 17%, Japan down 19%, Germany down 20%, while Spain was up 33%, the US was up 15% and Australia was up 8%. "2004 was a challenging year for Ducati. The continuing weakness of the dollar and the difficult market conditions in Germany, France, UK and Japan together with the delay in the introduction of the new Monster S2R weighed heavily on both sales and registrations", said Federico Minoli, President and CEO of Ducati Motor Holding. "However, the company concluded 2004 with excellent fourth quarter results and 2 podiums in the MotoGP championship, which are both promising results for the coming year. The success of the presentation of the new Superbike, the arrival of the Monster S2R and the great excitement around the new Multistrada 620 all give us a year to look forward to with confidence". "We expect to close 2004 with a net loss of approximately 8 million Euro, due to current and deferred income taxes", added Enrico D'Onofrio, Chief Financial Officer of Ducati. "We are finalizing the refinancing of the bond which is expiring by the end of May 2005. The company is evaluating all possible financial instruments including a new bond issue in the range of 100 Million Euros." Revenues for the fourth quarter of 2004 were Euro 114.8 million, up 16.2% excluding forex effects, (or up 10.8% including forex effects) over the same period in 2003, due to higher bike sales. Gross margin for the fourth quarter was 33.4% of revenues, in line with the previous year. EBITDA was Euro 13.0 million, compared to Euro 14.3 million in 2003, due to a negative forex effect and higher sales costs. Results before tax for the fourth quarter of 2004 were a profit of Euro 8.0 million versus Euro 7.1 million last year. This increase is mainly due to lower financial charges. Fourth quarter 2004 financial results were approved by the Board of Director on February 10, 2005. By the end of the year 2004, the Company had re-purchased 3,769,249 shares, equivalent to Euro 3,283,016 or 2.37% of its stock capital. A discussion by Ducati management of 2004 results is available under the Company section of our website http://www.ducati.com/ in Investor Relations. It can be accessed until mid-March 2005 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 fifteen 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 60 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. 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 S.p.A. Consolidated Statements of Operations Data (Euro in thousands) December 31, 2004 December 31, 2003 EUR % EUR % Current assets Cash and cash equivalents 33,327 23,973 Trade receivables, net 84,333 80,421 Inventories 92,293 104,774 Other current assets 18,642 18,869 Current assets - Credit Link 15,000 - Total current assets 243,595 54.4% 228,037 52.4% Non current assets Property, plant and equipment-net 62,961 67,167 Intangible fixed assets, net 119,532 124,721 Equity investments 20 12 Non current assets - Credit Link / ABS 10,000 25,000 Other long-term assets 11,822 12,096 Total non current assets 204,335 45.6% 228,996 50.1% Total assets 447,930 100.0% 457,033 100.0% Current liabilities Short-term bank borrowings 93,346 65,587 Current portion of long-term debt 61,850 3,740 Accounts payable - trade 77,112 89,503 Income and other taxes payables 7,406 12,212 Other current liabilities 16,335 15,930 Provisions for risks and charges - current portion 3,871 4,011 Total current liabilities 259,920 58.0% 190,983 41.6% Long-term liabilities Long-term debt, net of current portion 7,116 81,882 Employees' leaving entitlement 9,253 8,277 Deferred income taxes 86 35 Income an other taxes payables - long term portion 1,292 - Other long-term liabilities 11,869 14,939 Provision for risks and charges - long term portion 2,518 2,518 Total long-term liabilities 32,134 7.2% 107,651 23.6% Total liabilities 292,054 298,634 Total Group shareholders' equity 155,860 34.8% 158,399 34.7% Minority interests 16 - Total shareholders' equity 155,876 34.8% 158,399 34.7% Total liabilities and shareholders' equity 447,930 100% 457,033 100% Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (US$ in thousands) December 31, 2004 December 31, 2003 US$ % US$ % Current assets Cash and cash equivalents 45,395 32,654 Trade receivables, net 114,870 109,541 Inventories 125,712 142,713 Other current assets 25,392 25,701 Current assets - Credit Link 20,432 - Total current assets 331,801 54.4% 310,609 52.4% Non current assets Property, plant and equipment-net 85,759 91,488 Intangible fixed assets, net 162,815 169,882 Equity investments 27 16 Non current assets - Credit Link / ABS 13,621 34,053 Other long-term assets 16,102 16,476 Total non current assets 278,324 45.6% 311,915 50.1% Total assets 610,125 100.0% 622,524 100.0% Current liabilities Short-term bank borrowings 127,146 89,336 Current portion of long-term debt 84,246 5,094 Accounts payable - trade 105,034 121,912 Income and other taxes payables 10,088 16,634 Other current liabilities 22,250 21,698 Provisions for risks and charges - current portion 5,273 5,463 Total current liabilities 354,037 58.0% 260,137 41.6% Long-term liabilities Long-term debt, net of current portion 9,693 111,532 Employees' leaving entitlement 12,604 11,274 Deferred income taxes 117 48 Income an other taxes payables - long term portion 1,760 - Other long-term liabilities 16,166 20,348 Provisionfor risks and charges - long term portion 3,429 3,430 Total long-term liabilities 43,769 7.2% 146,632 23.6% Total liabilities 397,806 406,769 Total Group shareholders' equity 212,297 34.8% 215,755 34.7% Minority interests 22 Total shareholders' equity 212,319 34.8% 215,755 34.7% Total liabilities and shareholders' equity 610,125 100% 622,524 100% Ducati Motor Holding S.p.A. Consolidated Statements of Cash Flow (Euro in thousands) Year ended Year ended 31/12/04 31/12/03 EUR 000 EUR 000 Cash flow generated by operating activities Net profit (loss) for the period (1,763) 40 Change in cumulative translation adjustment (1,012) (1,381) Change in minority interests - - Adjustments to reconcile net profit (loss) with the movements of funds generated by (used in) operating activities: - Amortisation, depreciation and writedowns 35,519 38,889 - Deferred income taxes 51 - - Net change in employees' leaving entitlements 976 1,151 Change in operating assets and liabilities - Trade receivables (3,912) 1,621 - Inventories 12,481 6,653 - Other current assets 365 (1,443) - Trade payables (12,391) (5,611) - Other current liabilities 265 (4,781) - Due to tax authorities (3,514) 6,858 - Other long-term assets and liabilities - (13,026) Net cash generated by operating activities 27,065 28,970 Cash flow (used in) generated by investing activities Net change in property, plant and equipment (10,472) (15,746) Net change in intangible fixed assets (15,652) (18,110) Decrease (increase) in equity investments 144 - Other non-current assets - 66 Net cash used in investing activities (25,980) (33,790) Net cash generated by operating activities less cash flow used in investing activities 1,085 (4,820) Cash flow (used in) generated by financing activities Change in short- and long-term debt 29,533 30,169 Subscription to (buy back of) bonds (21,500) (15,336) Increase in share capital and reserves 236 - Other non-current financial assets - (10,000) Net cash (used in) generated by financing activities 8,269 4,833 Increase (decrease) in cash on hand, bank deposits and securities 9,354 13 Cash and cash equivalents, beginning of the period 23,973 23,960 Cash and cash equivalents, end of the period 33,327 23,973 Ducati Motor Holding S.p.A. Consolidated Statements of Cash Flow (US$ in thousands) Year ended Year ended 31/12/04 31/12/03 $/000 $/000 Cash flow generated by operating activities Net profit (loss) for the period (2,401) 54 Change in cumulative translation adjustment (1,378) (1,881) Change in minority interests - - Adjustments to reconcile net profit (loss) with the movements of funds generated by (used in) operating activities: - Amortisation, depreciation and writedowns 48,378 52,968 - Deferred income taxes 69 - - Net change in employees' leaving entitlements 1,329 1,568 Change in operating assets and liabilities - Trade receivables (5,328) 2,208 - Inventories 16,999 9,062 - Other current assets 497 (1,965) - Trade payables (16,877) (7,642) - Other current liabilities 361 (6,512) - Due to tax authorities (4,786) 9,341 - Other long-term assets and liabilities - (17,742) Net cash generated by operating activities 36,863 39,459 Cash flow (used in) generated by investing activities Net change in property, plant and equipment (14,263) (21,446) Net change in intangible fixed assets (21,318) (24,666) Decrease (increase) in equity investments 196 - Other non-current assets - 90 Net cash used in investing activities (35,385) (46,022) Net cash generated by operating activities less cash flow used in investing activities 1,478 (6,563) Cash flow (used in) generated by financing activities Change in short- and long-term debt 40,225 41,091 Subscription to (buy back of) bonds (29,284) (20,888) Increase in share capital and reserves 321 - Other non-current financial assets - (13,620) Net cash (used in) generated by financing activities 11,262 6,583 Increase (decrease) in cash on hand, bank deposits and securities 12,740 20 Cash and cash equivalents, beginning of the period 23,973 23,960 Cash and cash equivalents, end of the period 36,713 23,980 Ducati Motor Holding S.p.A. and Subsidiaries Net Sales and Shipment Data Three Months Ended Three Months Ended Dec, 31 Dec, 31 Dec, 31 Dec, 31 2004 2003 2004 2003 Net Sales (Euro in thousands, US$ in thousands) Motorcycles EUR 97,936 EUR 86,210 $ 133,399 $ 117,427 Spare Parts, Accessories, Apparel 16,099 15,567 21,928 21,204 Miscellaneous Other 761 1,864 1,037 2,539 Total net sales EUR 114,796 EUR 103,641 $ 156,364 $ 141,170 Ducati Units Motorcycle shipments: % Change North America 1,974 1,701 16.0% Main European market 6,440 5,743 12.1% Japan 816 1,252 (34.8%) Rest of World 2,090 1,380 51.4% Total 11,320 10,076 12.3% Motorcycle product mix: % Change Superbike 3,509 2,660 31.9% Supersport 406 570 (28.8%) Sport Naked 5,069 4,734 7.1% Sport Touring 832 849 (2.0%) Multistrada 1,504 1,263 19.1% Total 11,320 10,076 12.3% Unofficial Motorcycle Registrations: % Change North America 839 886 (5.3%) Main European market 1,902 2,442 (22.1%) Japan 600 795 (24.5%) Rest of World 1,153 902 27.8% Total 4,494 5,025 (10.6%) Ducati Motor Holding S.p.A. and Subsidiaries Net Sales and Shipment Data Twelve Months Ended Twelve Months Ended Dec, 31 Dec, 31 Dec, 31 Dec, 31 2004 2003 2004 2003 Net Sales (Euro in thousands, US$ in thousands) Motorcycles EUR 302,179 EUR 315,959 $ 411,598 $ 430,368 Spare Parts, Accessories, Apparel 74,985 69,298 102,137 94,391 Miscellaneous Other 5,598 2,984 7,625 4,065 Total net sales EUR 382,762 EUR 388,241 $ 521,360 $ 528,824 Ducati Units Motorcycle shipments: % Change North America 5,298 4,618 14.7% Main European market 21,862 23,808 (8.2%) Japan 2,351 3,508 (33.0%) Rest of World 7,049 6,483 8.7% Total 36,560 38,417 (4.8%) Motorcycle product mix: % Change Superbike 10,213 9,308 9.7% Supersport 1,426 2,818 (49.4%) Sport Naked 18,027 17,991 0.2% Sport Touring 2,996 2,275 31.7% Multistrada 3,898 6,025 (35.3%) Total 36,560 38,417 (4.8%) Unofficial Motorcycle Registrations: % Change North America 5,673 4,927 15.1% Main European market 21,806 24,080 (9.4%) Japan 2,914 3,579 (18.6%) Rest of World 5,696 5,502 3.5% Total 36,089 38,088 (5.2%) Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (Euro in thousands, US$ in thousands, except per share and share amounts) Twelve Months Ended Twelve Months Ended Dec, 31 Dec, 31 Dec, 31 Dec, 31 Percent 2004 2003 2004 2003 Change EUR EUR $ $ Net Sales 382,762 388,241 521,360 528,823 (1.4%) Cost of goods sold (244,846) (253,406) (333,505) (345,164) Gross Profit 137,916 134,835 187,855 183,659 2.3% Other operating revenues 24,718 23,178 33,668 31,571 SG&A expenses (123,178) (112,993) (167,781) (153,908) Other operating income (371) 187 (505) 255 Depreciation & amortization (35,520) (38,889) (48,383) (52,971) Operating income/(loss) 3,565 6,318 4,854 8,606 (43.6%) Financing expense, net (4,764) (6,756) (6,488) (9,202) Other non-operating income/(expense), net (564) 558 (768) 760 Profit/(loss)before income taxes (1,763) 120 (2,402) 164 (1568.3%) Shares outstanding 158,826,407 158,500,963 158,826,407 158,500,963 Percent Other Financial Data Change Motorcycles Produced (Units) 35,538 36,661 (3.1%) Motorcycles Sold (Units) 36,560 38,417 (4.8%) Unofficial Registrations (Units) 36,089 38,088 (5.2%) EBITDA 39,084 45,207 53,236 61,517 (13.5%) EBITDA Margin 10.2% 11.6% Note : On December 31, 2004 US$1= 0,7342 Euros Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (Euro in thousands, US$ in thousands, except per share and share amounts) Three Months Ended Three Months Ended Dec, 31 Dec, 31 Dec, 31 Dec, 31 Percent 2004 2003 2004 2003 Change EUR EUR $ $ Net Sales 114,796 103,641 156,364 141,169 10.8% Cost of goods sold (76,457) (68,977) (104,142) (93,954) Gross Profit 38,339 34,664 52,222 47,215 10.6% Other operating revenues 6,460 6,854 8,799 9,336 SG&A expenses (32,042) (27,582) (43,644) (37,569) Other operating income/(expense), net 177 193 241 263 Depreciation & amortization (7,403) (10,770) (10,084) (14,670) Operating income/(loss) 5,531 3,359 7,534 4,575 64.7% Financing expense, net 2,649 (971) 3,610 (1,323) Other non-operating income/(expense), net (134) 4,736 (183) 6,451 Profit/(loss)before income taxes 8,046 7,124 10,961 9,703 13.0% Shares outstanding 158,826,407 158,500,963 158,826,407 158,500,963 Percent Other Financial Data Change Motorcycles Produced ( Units) 6,509 9,800 (33.6%) Motorcycles Sold (Units) 11,320 10,076 12.3% Unofficial Registrations (Units) 4,494 5,025 (10.6%) EBITDA 12,933 14,129 17,739 19,505 (9.1%) EBITDA Margin 11.3% 13.6% Note : On December 31, 2004 US$1= 0,7342 Euros 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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