Motorcycles and news

The full year 2006 results show a significant reversal of the 2005 trend with a return to a positive operating result and a substantial improvement of the net financial position. The results are due to a successful relaunch strategy implemented at the end of 2005 which focused on the improvement of gross margin, reduction of dealer stock, reduction of fixed costs and working capital.

Revenues for 2006 are Euro 304.8 million, down 1.2% compared to 2005 with a decrease in the number of bikes sold and revenues partially offset by an improvement in bike mix and by an increase in sales of accessories and apparel.

32.312 bikes were sold in 2006 yielding revenues of Euro 239.7 million (bike units -6.4% with revenues down 3% versus 2005) while sales of spare parts, accessories and apparel and reached revenues of Euro 60.1 million (up 3.4% on 2005)

The decrease in the number of bikes sold, and the increase in the number of registrations (35.286 units, up by 2.1% over 2005), generated a network stock reduction of 3000 bikes equivalent to approximately 1 month of sales and in line with the relaunch strategy.

Registrations increased notably in the USA (+16.3%), in the non-subsidiary countries (+9.4%), in France (+1.5%), and in Japan (+0.8%) whilst they decreased in the UK (-16.5%), Benelux (-12.5%), Germany (-8.8%) and Italy (-3.9%). It is important to consider that the new Superbike 1098 has had very little impact on the 2006 registrations due to being distributed only during the last months of the year.

Gross margin for 2006 amounted to Euro 72.7 million or 23.9% of revenues versus Euro 47.3 million or 15.3% in 2005. The consistent increase is due to an improved product mix, fewer amortizations and the extraordinary devaluation in 2005.

EBITDA was Euro 27 million or 8.9% of revenues compared to a negative EBITDA in 2005 of Euro 0.3 million. The increase is due to the improved bike mix and to extraordinary accruals in 2005.

The operating result (EBIT) was positive at Euro 4.8 million versus a loss of euro 33.6 million the previous year, thanks to the improved EBITDA and lower accruals.

EBT was negative at Euro 1.6 million versus a loss of Euro 41 million the previous year, thanks to the improved operating result and reduced financial charges.

Net result was negative at Euro 8.5 million compared to a loss of Euro 41.5 million the previous year and includes the accrual of deferred taxes.

Federico Minoli, Ducati’s President and CEO commented on the 2006 results: “I am extremely satisfied with the results brought by Ducati’s relaunch plan which is living up to our expectations and is producing results earlier than anticipated. In particular the decrease of dealer inventory is a good preparation for the sale of new products in 2007. The new Superbike 1098, Hypermotard, and Desmosedici are creating high expectations in the market and a significant number of orders. These products will further increase the gross margin.