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Consolidated Cash Flow Statement

The consolidated cash flow statement, prepared in accordance with the schedules envisaged by international financial reporting standards, is presented in the “Consolidated Financial Statements and Notes as of 30 June 2011”; The following is a comment relating to the summary statement shown.

Change in consolidated net debt  As of 30 June 2011 As of 31 December 2010 Change
In millions of Euro      
Opening consolidated net debt (349.9) (352.0) 2.1
Cash flow from operating activities (earnings+amortisation/depreciation) 78.7 76.0 2.7
(Increase)/reduction in working capital 21.8 (3.5) 25.3
(Increase)/reduction in net investments (37.7) (48.9) 11.2
Net change in retirement funds and other provisions (10.9) 4.6 (15.5)
Change in shareholders' equity (34.0) (17.9) (16.1)
Total change 17.8 10.3 7.5
Closing consolidated net debt (332.1) (341.7) 9.6

During the first half of 2011 the Piaggio Group generated financial resources amounting to 17.8 million euro.

Cash flow from operating activities, defined as net income minus non-monetary costs and charges, was equal to 78.7 million euro.

Working capital generated a cash flow of 21.8 million euro;

Investment activities involved a total of 48.5 million euro of financial resources. These investments refer to approximately 25.3 million euro for capitalised research and development expenditure, and approximately 23.2 million euro for plant, property and equipment and intangible assets.

In more detail, research and development expenditure amounted to 17.3 million euro for the Two-wheeler segment (scooters, motorcycles and engines) and 8.0 million euro for the Commercial vehicles business.

The impact on cash flow of the distribution of dividends in 2011 was equal to 25.7 million euro.

As a result of the above financial dynamics, which generated a positive cash flow of 17.8 million euro, the net debt of the Piaggio Group stood at - 332.1 million euro.