Ducati Motor Holding Announces 2005 First Half Results

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: [phone], Direct Tel:

[phone]

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