DMH Bank of America

BOLOGNA, Italy, September 30 /PRNewswire-FirstCall/ -- 1H05 1H04 Var% Revenues 188.1 220.4 -14.6% EBITDA 19.3 26.6 -27.9% Operating Result 4.6 12.1 -62.3% Net result (3.5) 2.6 n.a. Net Debt (116.3) (130.3) (Million euro) The Board of Directors of Ducati Motor Holding S.p.A. (NYSE:DMH) approved today the first half 2005 financial results, which have been prepared for the first time under International Financial Reporting Standards (IFRS). First half 2005 revenues were Euro 188.1 million, down 14.6% including forex effect (or 13.2% excluding forex effect) versus 2004 first half. This was due to the reduction of motorcycle volumes, combined with an unfavourable mix and adverse forex effects. Revenues from motorcycles for the period decreased 15.7% to Euro 147.4 million and accounted for 78.4% of revenues. Motorcycle-related products, including spare parts, accessories and apparel, were down by 7.7% to Euro 39.0 million over the comparable period in the previous year. Gross margin for the first half of 2005 amounted to Euro 45.9 million or 24.4% of revenues versus Euro 59.4 million or 26.9% in the first half of last year, caused by a reduction in motorcycle volumes, a negative mix and adverse forex effects, only partially offset by product cost reductions. EBITDA was Euro 19.3 million or 10.2% of revenues for the first semester of 2005 against Euro 26.6 million or 12.1% of revenues over the same period last year, due to the above-mentioned factors and down 27.9% at current exchange rate and 14.2% at constant exchange rate. With regard to depreciation and amortisation, please note that following the adoption of IFRS, the amortisation of intangible assets no longer includes brand and goodwill amortisation. Operating result (EBIT) amounted to Euro 4.6 million or 2.4% of sales versus Euro 12.1 million or 5.5% of sales a year ago. At EBT level, the result was a loss of Euro 0.7 million versus a profit of Euro 7.4 million due to lower EBIT. Net result for the period was a loss of Euro 3.5 million compared to a profit of Euro 2.6 million in the first half of 2004. Company net debt at June 30, 2005 was Euro 116.3 million versus Euro 130.3 million at June 30, 2004 and Euro 150.5 million at December, 31 2004. The company's gearing ratio was 75.8% compared to 79.0% on June 30, 2004 and 95.2% on December 31, 2004. For the first half of 2005, unofficial Ducati registrations were down by 6.7% on the same period last year. Registrations in the US were up by 18% and in the non-subsidiary countries by 2%, while France remained unchanged on last year. Registrations were down in Italy (-10%), Japan (-14%), Germany (-18%), Benelux (-25%), and the UK (-25%). As of June 30, 2005, the Company had re-purchased 3,769,249 shares, equivalent to Euro 3,283,016 or 2.37% of its stock capital. "While the first semester 2005 results seem negative in absolute terms, they are only slightly below our expectations which forecast a 2005 back-loaded to the last quarter, because of the shipping of approximately 4,000 pre-sold SportClassic bikes ", said Federico Minoli, Ducati Chairman and Chief Executive Officer. "Recent impressive victories from Loris Capirossi in the MotoGP prove Ducati's technological competitiveness and will have a very positive impact on morale and sales". "A prevision for 2005 will largely depend on our ability to deliver and invoice as many of the pre-sold SportClassic bikes as possible", said Enrico D'Onofrio, Ducati Chief Financial Officer. "At the moment, we foresee is a pre-tax loss of around Euro 2 million and a net financial position in line with last year. An accurate forecast will be possible, once we announce our third quarter results, in mid-November, when the SportClassic deliveries will have been entirely planned". Transition to International Financial Reporting Standards (IFRS) Ducati has completed its process of transition to International Financial Reporting Standards or IFRS. The effect of this process is an increase of Euro 3.0 million in opening shareholders' equity at January 1, 2004 (the transition date to IFRS) compared to that of the consolidated financial statements prepared in accordance with Italian accounting principles. Shareholders' equity at December 31, 2004 in accordance with IFRS is Euro 7.9 million higher, and consolidated net result for 2004 is higher for Euro 4.3 million. The application of IAS 32 and IAS 39 with effect from January 1, 2005 resulted in a reduction of Euro 3.2 million in shareholders' equity at that date, with regard to the accounting treatment of treasury stock, recognised as a reduction of reserves under IFRS. Founded in 1926, Ducati develops racing-inspired motorcycles characterized by unique engine features, innovative design, advanced engineering and overall technical excellence. The Company produces motorcycles in six market segments which vary in their technical and design features and intended customers: Superbike, Supersport; Monster, Sport Touring, Multistrada and Sport Classic. The Company's motorcycles are sold in more than 60 countries worldwide, with a primary focus in the Western European and North American markets. Ducati has won thirteen of the last fifteen World Superbike Championship titles and more individual victories than the competition put together. 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. and Subsidiaries Net Sales and Shipment Data Six Months Ended Six Months Ended June, 30 June, 30 June, 30 June, 30 2005 2004 2005 2004 Net Revenues (Euro in thousands, US$ in thousands) Motorcycles EUR 147,388 EUR 174,739 $ 178,222 $ 211,294 Spare Parts, Accessories, Apparel 39,012 42,274 47,173 51,118 Other 1,705 3,355 2,062 4,057 Total Net Revenues EUR 188,105 EUR 220,368 $ 227,457 $ 266,469 Ducati Units Motorcycle shipments: % Change North America 3,569 2,667 33.8% Main European market 11,308 13,800 (18.1%) Japan 1,160 1,097 5.7% Rest of World 3,991 4,315 (7.5%) Total 20,028 21,879 (8.5%) Motorcycle product mix: % Change Superbike 3,780 5,586 (32.3%) Supersport 525 902 (41.8%) Sport Naked 10,482 11,369 (7.8%) Sport Touring 855 1,918 (55.4%) Multistrada 4,386 2,103 108.6% Total 20,028 21,878 (8.5%) Unofficial Motorcycle Registrations: % Change North America 3,933 3,322 18.4% Main European market 13,187 15,199 (13.2%) Japan 1,408 1,638 (14.0%) Rest of World 3,439 3,384 1.6% Total 21,967 23,543 (6.7%) 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 2005 2004 2005 2004 Change Revenues (net) EUR 188,105 EUR 220,368 $ 227,457 $ 266,469 (14.6%) Cost of goods sold (142,213) (161,017) (171,964) (194,702) Gross Margin 45,892 59,351 55,493 71,767 (22.7%) Other operating revenues 19,544 17,725 23,633 21,433 SG&A expenses (59,388) (63,711) (71,812) (77,039) Other operating income and expenses (1,491) (1,288) (1,803) (1,557) Operating result 4,557 12,077 5,511 14,604 (62.3%) Financing expense, net (5,292) (4,630) (6,399) (5,599) Profit/(loss)before income taxes and min.interest (735) 7,447 (888) 9,005 (109.9%) Income Tax (2,814) (4,884) (3,403) (5,906) (42.4%) Net Result (3,549) 2,563 (4,291) 3,099 (238.5%) Shares outstanding 159,360,037 158,826,407 159,360,037 158,826,407 Percent Other Financial Data Change Motorcycles Produced (Units) 20,266 23,177 (12.6%) Motorcycles Sold (Units) 20,028 21,878 (8.5%) Unofficial Registrations (Units) 21,967 23,543 (6.7%) EBITDA 19,179 26,656 23,191 32,231 (27.9%) EBITDA Margin 10.2% 12.1% Note : On June 30, 2005 US$1= 0,7779 Euros Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (Euro in thousands, except per share and share amounts) 30.06.2005 31.12.2004 EUR 000 % EUR 000 % Current assets Cash and cash equivalents 53,824 49,327 Trade receivables, net 115,345 118,622 Inventories 94,275 92,293 Other current assets 11,179 10,787 Current assets - Credit Link - 15,000 Total current assets 274,623 56.0% 286,029 56.9% Non current assets Property, plant and equipment -net 67,138 70,288 Goodwill and intangible assets with indefinite useful lives 86,050 86,050 Other intangible fixed assets net 39,952 38,268 Equity investments 20 20 Deferred tax assets 21,872 21,665 Other long-term assets 364 403 Total non current assets 215,396 44.0% 216,694 43.1% Total assets 490,019 100% 502,723 100% Current liabilities Short-term bank borrowings 43,040 93,738 Current portion of long-term debt 3,144 57,342 Accounts payable - trade 103,818 77,463 Income and other taxes payables 11,856 8,298 Other current liabilities 22,434 15,936 Provisions for risks and charges - current portion 4,726 4,726 Total current liabilities 189,018 38.6% 257,503 51.2% Long-term liabilities Long-term debt, net of current portion 113,645 51,913 Employee benefits 8,843 8,482 Deferred income taxes 13,075 12,207 Income and other taxes payables - long term portion - 1,292 Other long-term liabilities 10,276 11,869 Provision for risks and charges - long term portion 1,663 1,663 Total long-term liabilities 147,502 30.1% 87,426 17.4% Total liabilities 336,520 68.7% 344,929 68.6% Shareholders' equity Capital stock 82,867 82,590 Share premium reserve 16,769 16,662 Revaluation reserve 46,265 46,265 Reserve IFRS conversion 3,642 3,578 Other reserves 3,704 5,546 Retained earnings (losses) 3,785 6,606 Results for the period (3,549) (3,469) Total Group Shareholders' equity 153,483 31.3% 157,778 31.4% Minority interests 16 16 Total liabilities and shareholders' equity 490,019 100% 502,723 100% Ducati Motor Holding S.p.A. Consolidated Statements of Operations Data (US$ in thousands, except per share and share amounts) 30.06.2005 31.12.2004 $ 000 % $ 000 % Current assets Cash and cash equivalents 65,084 59,646 Trade receivables, net 139,475 143,438 Inventories 113,997 111,601 Other current assets 13,518 13,044 Current assets - Credit Link - 18,138 Total current assets 332,074 56.0% 345,867 56.9% Non current assets Property, plant and equipment -net 81,183 84,992 Goodwill and intangible assets with indefinite useful lives 104,052 104,052 Other intangible fixed assets net 48,310 46,274 Equity investments 24 24 Deferred tax assets 26,448 26,197 Other long-term assets 440 487 Total non current assets 260,457 44.0% 262,026 43.1% Total assets 592,531 100% 607,893 100% Current liabilities Short-term bank borrowings 52,044 113,348 Current portion of long-term debt 3,802 69,338 Accounts payable - trade 125,537 93,668 Income and other taxes payables 14,336 10,034 Other current liabilities 27,127 19,270 Provisions for risks and charges - current portion 5,715 5,715 Total current liabilities 228,561 38.6% 311,373 51.2% Long-term liabilities Long-term debt, net of current portion 137,420 62,773 Employee benefits 10,693 10,256 Deferred income taxes 15,810 14,761 Income and other taxes payables - long term portion - 1,562 Other long-term liabilities 12,425 14,352 Provision for risks and charges - long term portion 2,011 2,011 Total long-term liabilities 178,359 30.1% 105,715 17.4% Total liabilities 406,920 68.7% 417,088 68.6% Shareholders' equity Capital stock 100,203 99,868 Share premium reserve 20,277 20,148 Revaluation reserve 55,944 55,944 Reserve IFRS conversion 4,404 4,327 Other reserves 4,479 6,706 Retained earnings (losses) 4,576 7,988 Results for the period (4,291) (4,195) Total Group Shareholders' equity 185,592 31.3% 190,786 31.4% Minority interests 19 19 Total liabilities and shareholders' equity 592,531 100% 607,893 100% Ducati Motor Holding S.p.A. Consolidated Statements of Cash Flow (Euro in thousands) Period ended Period ended 30/06/05 31/12/04 EUR 000 EUR 000 Cash flow generated by operating activities Net profit (loss) for the (3,549) 2,566 year Adjustments to reconcile net profit (loss) with the movements of funds generated by (used in) operating activities - Non cash items for stock options 645 217 - Amortisation, depreciation and 14,622 14,579 writedowns - Interests paid 1,034 5,919 - Taxes paid 307 3,853 Change in operating assets and liabilities - Working capital 27,650 3,442 - Other current assets (392) 1,422 - Other current 6,498 3,216 liabilities - Due to tax authorities 1,959 (3,330) - Deferred tax liabilties (assets) net 661 1,867 - Employee benefits 361 491 64 Net cash generated by operating activities (A) 49,796 34,306 Cash flow (used in) generated by investing activities Net change in property, plant and equipment (4,176) (5,087) Net change in intangible fixed assets (9,183) (5,927) Disposal from property, plant and equipment 201 486 Other fixed assets 41 (3) Net cash used in investing activities (B) (13,117) (10,531) Cash flow generated from operating activities, net of cash used in investing activities (A-B) 36,679 23,775 Cash flow (used in) generated by financing activities Change in short-term and long-term debt (45,791) (18,468) Financial assets - Credit Link 15,000 - Change in cumulative translation adjustment 1,443 433 Change in minority interests 13 Increase in share capital and reserves 385 235 Change in shareholders' equity due to IAS 32,39 adoption as of 1st January 2005 (3,219) - Change in cash generated by financing activities (32,182) (17,787) Increase (decrease) in cash on hand, bank deposits and securities 4,497 5,988 Cash and cash equivalents, beginning of year 49,327 33,973 Cash and cash equivalents, end of period/year 53,824 39,961 Ducati Motor Holding S.p.A. Consolidated Statements of Cash Flow (Dollar in thousands) Period Period ended ended 30/06/05 31/12/04 $ 000 $ 000 Cash flow generated by operating activities Net profit (loss) for the (4,291) 3,103 year Adjustments to reconcile net profit (loss) with the movements of funds generated by (used in) operating activities - Non cash items for stock options 780 262 - Amortisation, depreciation and 17,681 17,629 writedowns - Interests paid 1,250 7,157 - Taxes paid 371 4,659 Change in operating assets and liabilities - Working capital 33,434 4,162 - Other current assets (474) 1,719 - Other current 7,857 3,889 liabilities - Due to tax authorities 2,369 (4,027) - Deferred tax liabilties (assets) net 799 2,259 - Employee benefits 437 594 77 Net cash generated by operating activities (A) 60,213 41,483 Cash flow (used in) generated by investing activities Net change in property, plant and equipment (5,050) (6,151) Net change in intangible fixed assets (11,104) (7,167) Disposal from property, plant and equipment 243 588 Other fixed assets 50 (4) Net cash used in investing activities (B) (15,861) (12,734) Cash flow generated from operating activities, net of cash used in investing activities (A-B) 44,352 28,749 Cash flow (used in) generated by financing activities Change in short-term and long-term debt (55,371) (22,332) Financial assets - Credit Link 18,138 - Link Change in cumulative translation adjustment 1,745 524 Change in minority interests 15 Increase in share capital and reserves 466 284 Change in shareholders' equity due to IAS 32,39 adoption as of 1st January 2005 (3,892) - Change in cash generated by financing (38,914) (21,509) activities Increase (decrease) in cash on hand, bank deposits and securities 5,438 7,240 Cash and cash equivalents, beginning of year 59,646 41,080 Cash and cash equivalents, end of period/year 65,084 48,320 year 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

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