Piaggio & C. SpA (PIA) Earnings Call Transcript & Summary

Good day, and welcome to the Piaggio First Quarter of 2020 Financial Results Conference Call. [Operator Instructions]. Mr. Raffaele Lupotto, Executive and Vice President, Head of Investor Relations, is going to chair the meeting. Please go ahead.

Yes, hello. Hello, everybody. Thank you very much for taking your time to follow on this conference call on Q1 2020 financial results. Today's conference call will be hosted by Mr. Roberto Colaninno, Piaggio Chairman and Chief Executive Officer; and by Mrs. Alessandra Simonotto, Piaggio Group, Chief Financial Officer; and myself. All available materials are available in the Investor Relations section of the Group -- Piaggio Group website. At the end of the presentation, we will be available to answer the questions you may have. Before starting the presentation, as usual, I need to remind you that during today's conference call, we may use forward-looking statements based on Piaggio's current expectations and projections about future events. By their nature, forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to be materially different. I remind also you that the press has been invited to participate in this conference call in a listen-only mode. And finally, given the COVID-19 pandemic in order to mitigate risk today, we operate in distance. Therefore, bear with us if there will be some -- we'll be facing some difficulties in managing, sorry, the conference call. Now we'd like to turn the conference call over to Mr. Roberto Colaninno.

Yes, good afternoon to everybody. Well, just to -- before to introduce all the numbers and the details of the first quarter results, I would just underline that despite the incredible situation, possibly from the pandemic problems, I want to say that Piaggio is in the first quarter results that can assure us to the world manifesto of the program. And we think now, more deeply from a technological point of view, what is the better solution of the new mobility that we have to manage in the future, that 2020 year is a complicated year and it's very difficult to predict the results of this year. But I want to say you that all the decision, every decision that we have to take will be considered at the thinking before in very serious way in order to maintain the assets ratio in line with the predictable target. I believe that we are in front on a very industrial revolution, but I am very sure that we are able to control this, to manage this. And I believe that the rest of the year will be better than the first quarter, naturally, if we don't be back with the virus problem. All things and the people of the company is to look the rest of the year in order to be able to recuperate all the time that we are lost. Now I say that Dr. Alessandra Simonotto, the CFO of the company, will present to you the details of the data on the first quarter.

Thank you, Mr. Colaninno. Good afternoon to everybody. As usual, I'll start the call with Page 3 on key financial metrics. As you can see, our performance has been deeply hit by COVID-19 effects, particularly during the last 3 weeks of the quarter where lockdowns and point of state closure increased, due to the spreading of the virus around the world that's affecting our production and product sales. Therefore, we saw 2 diverging trends in Q1. We posted outstanding growth in all key operating metrics heading towards all-time highs till early March, followed by a sharp downward correction in mid-March driven by lockdown measures. Unsurprisingly, the ultimated factor has been the typical downward trend with the revenue decline amplified at EBITDA levels, due to lower flexibility of cost to top line decline and magnified cash flow level, additionally impacted by higher seasonal working capital. On the following page, Page 4, we have summarized the key actions undertaken to face the challenges created by COVID-19. First and foremost, we continue to act quickly and in alignment with government efforts to protect the well-being of employees. The closure of facility and temporary suspension of manufacturing operations enable us to install workplace protection and develop the comprehensive plan to protect employee health. Second, we are providing dealer support based on the unique needs of each region, including financial support for product inventory, extending certain credit payment due dates. At the same time, as already stated during financial year 2019 conference call, we have been acting to secure our supply chain and to avoid any shortage of components for our production needs. That's the reason behind our decision not to halt purchasing in Q1. Third, we are actively taking all necessary actions to mitigate costs. For instance, we have suspended or canceled discretionary spending as well as renegotiated several suppliers' contracts and rent agreements. Results of these mitigation measures will be mainly visible from the second part of the second quarter onwards. Notably in the Q2, we will also fully benefit from the utilization of temporary unemployment support scheme, just like the CIG COVID in Italy. Fourth, we have tightened an effort to maintain a strong liquidity position. Since March, we initiated refinancing action to secure additional finance. Lastly, we are working to adapt our product launches on online app, consistently, CapEx profile will be adjusted to the new market environment. Let's move to Page 5, where we summarize our industry key demand trends, all deeply affected by COVID. Western countries strong demand growth in mid-March has been wiped out by market slowdown. Asia Pacific demand, while not immune to COVID-19 global shocks, was more resilient, also benefiting from major lockdown measures in some countries. Indian negative demand trend linked to introduction of Bharat VI engines accelerated at the end of March with the introduction of stringent lockdown measures. Going to Page 6 to have an in-depth analysis of trends by business. As said before, revenues grew high single digits in February before being hit by the sudden strong deceleration in March. Volumes and revenues trend by business mirrored the demand dynamics just described in the prior slide, apart from Asia Pacific, which posted outstanding results against market weakness. Notably, the drivers of growth had been Thailand, South Korea and China. In 2-wheelers, western countries, you can notice the highest degree of decline of revenues versus volumes. As we will see in the following slide, this effect is mainly due to the negative mix effect as motorbikes shrank more than scooter. At country level, Germany and North America stood outboard, ending with volumes and revenues on the rise. Lastly, in India, the strong positive price effect due to the introduction of Bharat VI vehicles was unable to compensate for the sharp drop in volumes. Let's move now to Page 7 to look at the breakdown of the performance by product. As you can notice, COVID-19 has negatively affected all product segment. Scooters proved to be the most resilient, benefiting from growth in Asia Pacific and low single-digit decline in Western countries. The scooter trend in Western countries is quite important, possibly suggesting that demand for scooter was already underpinned by the need to shift from public transport to individual and affordable commuting solutions to keep social distance. In this context, Vespa and the recently launched version of the Medley has been the bright spots. Looking at motorbike, I would like to highlight the relentless growth of Moto Guzzi V85TT since its launch in late 2018. Move now to Page 8 to have a look at the EBITDA bridge. As said before, EBITDA has been dragged down by the sharp drop of volumes and revenues due to lockdown measures. Conversely, the negative percentage gross margin performance, mainly stemming from the expected dilutive effect of Bharat VI vehicles in India, have been already more than offset by our ability to react quickly to the pandemic, activating a full set of cost savings action as underscored before. I would like to highlight that this cost-saving action will deploy their full effect, starting from Q2. Moving to Slide 9. We can see that net result decline has been mitigated by lower financial expenses, primarily driven by lower cost of debt and lower tax rate as we see here, we will fully benefit from the reduction of the corporate income tax in India. I will skip now Page 10 that summarizes the figures just discussed to move directly to Page 11 to have an in-depth analysis of cash flow, net debt and liquidity. As said before, cash flow has been hit the most in Q First. In detail, operating cash flow was lower than last year for the reasons discussed before. Working capital has been the real drag, namely the biggest cash absorption, standards from receivables and inventories. Receivables have been negatively affected by around EUR 16 million one-off payment delay. This effect has already been reverted. Additionally, we decide to support dealers, extending our payment terms to mitigate their financial burden during these difficult times. Inventories have been clearly deeply affected by sudden plants and point-of-sale closures, resulting in a normal level of inventory of both finished goods and raw material. Additionally, part of materials and components increase was aimed at securing the production in the following quarters. Capital expenditures remained broadly in line with last year. But as highlighted in the slide, we keep the flexibility to adapt the spending to the evolution of market and economic environment. As a result of the trends just described, the net debt increased to EUR 549 million. To compare net debt to last year, we should exclude the interim dividend paid last September, debt lending at around EUR 529 million of net debt, EUR 53 million above March 2019. Lastly, I would like to highlight that also having ample liquidity back up at the end of March, we have initiated action to secure additional finance. Thank you.

Okay. Thank you, Alessandra. We are ready now to answer the questions you may have. Please go ahead.

[Operator Instructions] The first question is from Monica Bosio with Banca IMI.

The first one is on the outlook. I fully understand that it's very difficult to make prediction. But just your feeling that the consensus is calling now for net EBITDA by year-end in the range of EUR 196 million, do you feel comfortable with this number? And the second question is on Europe. Given the new needs in mobility, I was wondering if you can give us some update. Did you have cancellations during the lockdown period? And how did it evolve the order backlog in this month? And maybe if you have a flavor of the current situation. And then the very last is on Asia, where the downturn was less severe. Can you just give us an update on how it's evolving their situation and driver of growth for this area?

Okay. I want to reply to the second and the third question, and I leave to Ms. Simonotto the first one. I want to try to give you a real picture of what happens for us about the biggest market, the global -- we divided global in 3 big areas. One is EMEA plus United States. The second one is India. The third one is Vietnam and South -- Southeastern Country and China. If you look at EMEA where we have a better future idea, I want to say that the trend of the order that we get already from May give us an idea that the EMEA market, plus United States, will be in line with our budget. If you look at India -- on India, the situation is this. The country as you know, a big federation, and each state take a different decision. The area of the state, the nation where we are is Maharashtra, that is area starting from Mumbai to Baramati. The area in Baramati is where we have a factory. And today, the factory is open. But between Mumbai and Baramati is another area that is named Pune that is very well-known in India as automotive business concentration. And that is where we have the biggest -- the more supplier entity. Now we are open in the area in Baramati, but the government has not yet -- given yet the permission to open the supplier company. We expect that this will be open before the end of May.

Before the end, okay?

Yes. Now what is particularly important to know from you is that all people working in a factory in India stemming from different countries, is [ start ] migrate. And is right now the people where the time of lockdown go at home. And the problem is to reorganize the company if these people not coming back. The good news is that Piaggio India today is totally confident that the people is in the area and the day that we open, the people is in the factory. Now as soon as we receive the green light from the Pune area, the company -- the plant is able to start 100%. What is very important to say coming back is the sales organization? The sales organization in EMEA, our sales organization, is very good. All our dealer working based on exclusive agreement with Piaggio. So this people is allowed to sell only Piaggio products. And we have certified, in the first quarter, that this type of organization all over Europe, working very well and had very -- the information that we get is that this organization is ready to start again. If you go to India, we have a similar organization, but despite the all-India market. And India, as you know, is a big -- is a huge country. Now the majority of the dealer is open today, and they already placed the order, even the company is now ready to deliver the products. The big advantage that we have in India is this: As you know, India introduced the Bharat VI, very, very complicated engine solution. And their government said that they -- all they called Bharat IV is not unable to sell anymore. Okay? Our plant has no stock of Bharat IV. So we are ready to sell Bharat VI without withdrawing any products Bharat IV. So I'm confident as if it's true, if it is true that the governments open the area of Pune and the company could then start at 100%, we can deliver the products starting from May immediately. Another big things in India is the credit. All the credits that we have in India is a good credit. We don't have any lost credits. But this is due for the system, very complicated system of payment in India. But we don't think that we will lose any dollar for the credit line. So even India, I believe that if the virus is not coming back or not growing as no one expected, we are ready to start from May with the production and products as the market expected. Going in the big area of Southeast Asia. We are in -- Vietnam have managed the situation very well. I believe that the best performance in the country in our experience is how Vietnam have managed all these type of things. Substantially, we don't have any lockdown there. We have just some area in Hanoi and Ho Chi Minh, but the government was able to maintain the balance, even they are around country with a big problem. Today, we don't have any pessimistic view in that area because the basic country where we have a business, that is Malaysia, that is Philippines, that is -- Thailand is still open market. We are waiting something from -- very important from Indonesia market that today is closed down again, but we are waiting for the license of input and we are ready to sell because we have a big quantity of order to delivery products that is parking on the area of Jakarta. So if we look at this area, we'll be very positive, very optimistic -- I'm looking very optimistic way the end of -- now at the end of the year. Now the big surprise is China. In China, we import Vespa from Vietnam. And the market is a small number, okay? I don't believe this. But anyway, what is growing in the first quarter, with sales more than 30% than last year, we expected to sell this year about 10,000 Vespa. But this is a big, big, good sign because China is a huge market. And we believe that in China, the develop of the motorcycle use will be implemented from now and the future. So if you look other things around the world, I want to say that pandemic and with the virus problems, we are very positive because we don't have problems of material in Italy and in Europe, because we invested on the first quarter, and we have a very good position on material on the stock. Our company in Pontedera, in Mondello, and in Scorzè is open, is working every day. We have some problem to introduce something difficult organization, but anywhere we are in line with our expectation. Rate in India, where the company is already the plant -- sorry, is already to start pending from the supplier situation pending with the government solution, but everybody there expected that this will be done by the end of the year. The rest of Asia is quite positive. So again, pending from the virus situation, I believe that the worst is under our back. The future is much better than what we have managed in the last 4 years.

The next question is from Renato Gargiulo with Fidentiis.

Well, my first question is on your cost-cutting actions. You have been talking about suspension of discretionary spending, renegotiation of supplier contracts, et cetera, I can imagine on labor costs. Can you give us some indications about what you are targeting in terms of cost-savings starting from the second quarter? And the same question on CapEx, if you can give us an indication about what can be the potential reduction versus your previous plans? My second question is on -- if you see any particular distressed situation at your dealers level or suppliers? And then my last question is on, well Vespa metric, which despite the scenario, reported an increase in sales. If you can give us any more color about the volume trend?

As you prepare Mr. Colaninno. Do you like to give an answer or may I go ahead?

[Foreign Language]

So about cost-cutting action and all the things that we have showed to you about the cost reduction for is -- for the other figures of our P&L, we are not, in this moment, we don't feel enough -- we don't have enough visibility to understand where we can arrive at the end of the year. So we don't like to give you a specific guidance about -- which will be the amount of the cost-cutting, the impact of the cost-cutting in the next Q2 and in the next part of the year. We will work -- we have already worked on it. We will work on it for all the year because we know very well that the only way to be resilient and to be efficient in this moment is to answer in the best way to any other matter with COVID we can give to us is to be able to cost -- to cut in the faster way cost and to be resilient also and efficient also on CapEx. But I'm not -- I don't feel myself so confident on our next figures to give you a specific amount. About the situation of dealer and supplier. In this moment, what we have seen in all the markets in where we are present, we don't have any matter with our dealers, and we don't have any matter with our supplier. All the suppliers have opened at the end of the lockdown in any specific country. And the supplier are able to continue to supply us what we have asked them before and they have confirmed to us that they are able to answer to the program that we are -- we have already sent to them. And from the dealer point of view, as of now, we don't receive any information about the difficulties. So we work with them any day. We have a specific situation from our people on the markets from -- in any countries. But as of now, we don't face any problem also from the dealer point of view. And I believe that that's all.

On Vespa and Medley?

On this -- sorry, can you repeat that?

My last question was on Vespa and Medley.

Vespa and Medley. I want to say that Medley, we have a very, very good, good, very good impact on a European market for Medley. And we believe that we will improve our sales and we can compete with other big competitor on the same line. Because the opinion of the market, the opinion of the customer is quite good. Vespa, as you know, Vespa is Vespa. It's a fantastic product. We don't have any negative forecast of this kind of products. Vespa will be sell on the same products, on the same country, at the same level and they respond all the time currently in a very good way and is very well positioned in all the market.

The next question is from Niccol Storer with Kepler.

I have 2 questions. The first one on your gross profit. You said that it was impacted by Bharat VI introduction. But at the same time, I'm seeing that you had a very strong price/mix effect on India in commercial vehicles. So if you can elaborate a bit on that? Second one, on the new debt financing, you are negotiating, I suppose, with banks, if you can elaborate a bit and remind us which is your current gross debt position. And the last one, a clarification on EMEA sales. When you said we expect them to be in line with budget, were you referring to a pre-COVID budget or a post-COVID budget, just to give us an idea.

Okay. Raffaele speaking. So about gross margin dilution, if we have understood well the question. Yes, as you have noticed, the gross margin went down a little bit compared to last year. That was mainly linked, as you were saying to India. Essentially, as you probably can recall, in prior conference call, we said that new Bharat VI products are bringing significant higher production costs. So we are undertaking very calibrating annual price hikes across the year to...

[Foreign Language]

Sorry. And -- okay, sorry. And so essentially, the mismatch is between price increase and cost is driving this dilution in terms of gross margin. So this is the big delta that comes from India. And the situation will revert as nicely going forward. And then as you have seen, clearly, we are pretty sure that we are able to compensate this dilution in margin with strong action on operating expenses. Then the second question, if you can ask again was on.

Was on financing.

Yes, financing. So essentially, we have a very good liquidity position. As we said, and we brought on the slide. So we have a comfortable liquidity backup we had already at the end of March. And we have already started strong actions to improve our liquidity profile. The so-called gross cash is -- was already above -- already in the region of EUR 300 million. So there is enough -- it's more than enough to face potential difficulties arising from COVID-19. And the very -- sorry, because we don't hear very well here. If you can ask me again the very last question.

Before you said that, let's say that for the year, you expect to be in line with your budget, and I was wondering which kind of budget you are referring to.

Probably our CEO was referring to our internal expectation in terms of that. I don't know now exactly, which is the topic that you are referring to, but again, in some cases, there are areas that are performing in line or even better than budget. In other cases, as you know, there has been a deep impact of COVID-19. That's it.

The next question is from Massimo Vecchio with UBI Banca.

Good afternoon to everybody. Two questions, if I may. The first one is on Europe. It seems that you performed better than the market because your deliveries went down 6.6%, the market was down 11%. So I was wondering if you are gaining market share on the market, or if this only because of the limits allowed to mismatch, and if you can anyway, elaborate a little bit on your market performances in Europe, which seems very good. The second question is on CapEx. I have in front of me a historical graph of your CapEx, which you put in the full year 2019 presentation. In some years, like 2017 and 2013 you spent as low as EUR 87 million in CapEx. So I was wondering if, let's say, in a worst-case scenario, we can imagine that this is the minimum level of CapEx requirement that you can push the organization to.

Yes, Massimo. In terms of performance, our market share in Q1 this year in Europe has been pretty much in line with prior year. Clearly, the market share trends have been deeply affected by closures in mid-March. So it's also very difficult to give you some data. In any case, the market share is not a problem. We kept our leadership position in the scooter market as we did in -- we don't see any problem there. Yes, that the sell-in volumes has been higher than the market decline. As you probably can recall from prior call, normally we tend to -- we want to reduce the gap between sell-in and sell-out in the first 2 months of the year. Sell-out, our group selling volumes. But the trend clearly suddenly reverting margin drop-down altered the dealer's sale. As for the remaining part of the year, we're seeing that sell-out with our gross sale in Q2, Q3, while we expect to have a stronger sell-in at the end of the year, just ahead of the production of Euro5 engine. So this is the picture that we have, but really consistent with what we said in prior conference call. In terms of CapEx, I think that Ms. Alessandra already answered you and can give you -- she can give you some more details.

Okay. About CapEx, we have not already prepared a specific analysis on which we be -- or which could be the lowest floor in which we can arrive. As we -- as you know, the most important CapEx for this year are all compliance CapEx, because that was strictly connected to Bharat VI and EURO5 and are connected to new Porter and are connected to the new vehicles, Aprilia 660. So we will work to be resilient on CapEx, but we can give you a specific down the lowest one.

The next question is from Franois Robillard with Intermonte.

First one is on India. So basically, the market has been closed since late March. So that overall, we will have 2 months of closure. Can you give us some more color on the rolling drop expected in the second quarter, especially in volumes and price-sensitive markets such as India with the price hikes going on, especially on the commercial vehicles, if you have -- can give us some bit of color on your expectation on volume drops for the year? And then the second one is just to clarify, if I understood well, Mr. Colaninno, what -- from what Mr. Colaninno said earlier, are you still expecting some volume growth year-on-year in Europe in the 2 wheelers? Or is it just for scooters?

So if I understood well your question, the first one is about India and about closure of India. So about this, we know that India has closed in April, is opening in these days, more or less any single state after the authorization of Mr. Modi at the state level is designing any single rules for the opening in any single state and region. In this moment, Baramati, where we have the factory, is authorized to open while some other states are not opening. But we believe that within the next week, everyone is able to go back to work and all the shops will be open. As of now, we know that more or less, the 50% of our dealers in India are already open and the other part will be open on the next week. So in this moment, we are not able to understand if there will be some other closure -- closing in India because, as you know, everything depends just like in Europe, in U.S., in China and so far, from the virus. And this is something that we cannot imagine. We -- for the information that we have at our hands now, we believe that when everything will be open, everything will be opened in a safe way, and there is no risk for this period to reclose in a few days. On the other side -- the other question, if I understood well, is if we are waiting for growth of the volumes in the second part or is it true?

No. Is that compared to the 2019 level, are you still expecting some growth on scooters in Europe, given the boost coming from the renewed demand and individual mobility.

Yes, as the CEO said at the beginning of the conference call, clearly, we don't want to provide -- we don't provide because that doesn't make sense. Now some sort of guidance in terms of volumes by geographic areas. So specific guidance. So also in terms of market trends. The very strong level of uncertainty that we have on the market.

Okay. Just a quick one to finish. In India, while the factories were closed, did you still hold sort of the salaries of your employees in your P&L? Or did you just do some temporary layoff?

Sorry, Franois, we have some issues. We don't hear you very well. Can you please repeat the question because there is a little of echo here so.

Can you hear me now?

Yes.

Okay. Just on India, during the time of the lockdown, did you have temporary layoff of your workers there or?

Yes, understood. No, no, no. We -- no, in India, we were paying normally our workers during the period of lockdown.

The next question is from Sbastien Lemonnier from INOCAP.

Two very quick questions. First one, as this unlock start already in Italy and starting next week in France, can you give a bit of color how has been the very last news from your retailer, because, I guess, it could be new clients rushing to get a scooter to make sure that they can move being secure. So can you update on us about this one? And the second one, which is also linked is, do you have any view of any incentives, fiscal incentives, I think there is something in relation to 2-wheel use in this context. But are there any other country in the world, especially in Europe, where you may have this opportunity?

We don't have any information about incentives for now. We don't have any picture about that give us an idea if this incentive will be introduced to the market. So at this moment, we don't consider that as an opportunity to receive incentive on the European market.

Okay. And about the retailer and the appetite of the client that -- as in Italy, in fact, since the lockdown has been started and next week in France, for example, how is the appetite? Because I guess some of the people are already planning how are they going to go Monday or how they were going last Monday at work basically. So can you give more color about the updated situation, please?

I'm sorry but the line is very troubled and [Foreign Language]

The question was to know -- can you hear me now?

Yes.

Yes. Okay. The question is to know as there is unlock in Italy already since Monday, and it's going to come next Monday or something in France. Do you really receive some order from your retailer? Because I guess some people are planning to move as they look forward that solution as you outlined, in fact. So can you give a bit of color, how is the kind of very updated situation in the unlock process where you can probably become a winner?

I don't know if it -- no, I think that it's too early now to give you a feedback about people going to our dealer shop to buy the new vehicles. So we open up just on Monday. We have to wait a little bit to give you a more comprehensive answer. And then we need also other markets to be open. So it's too early. If it was the meaning. It's too early and importantly, yes, we don't have a sufficient data to give you the clear path. Clearly, it's clear to everybody. And then also for you that since the start of this COVID-19 crisis, the 2-wheeler are managed clearly as the ideal solution for commuters, searching for individual and sustainable mobility solution. So as an alternative part of transportation, this is clear. But to give you the strategy to give you, it's too early. Okay. We have feeling with no data, okay?

The next question is from Gabriele Gambarova with Banca Akros.

Thank you for taking my questions. Most of them have been already answered. I was wondering if you have an idea of what could be the tax rate for this year. So I know that you expect something in the region of 40%, just to check on this. And then I was wondering, Mr. Colaninno mentioned the Vespa sales in China. I was wondering how many Vespas you sold in 2019, in China, of course?

Okay. About the tax rate, as you can see, as you've seen in the slide before, the tax rate we applied for 2020 is 40%, which has come from the analysis we have made on the basis of the new tax rate in on the countries where we are, on the basis of the new tax rate designed by the India government last year for 2020 and above on company tax rate and dividend distribution tax. This is what we believe will be the tax rate for the year, and this is the only things that I can give you as information as of now. About the China phase.

In 2019.

In 2019, we will find -- we will try to find the information, and then Mr. Lupotto, have you already find?

And we have the information clearly to give a breakdown by country of our Vespa sales, something that we don't know -- don't do usually. Clearly, last year, the China grew significantly as we showed and said during the last conference call. And this year, our volumes went up in the first quarter, more than 30%, as Mr. Colaninno was saying. But to give you a breakdown of sales of Vespa by single country, something that we don't do so far. We are not doing. Sorry for that.

No, don't worry. Did I understood well or there could be some kind of, let's say, incentive in China? I'm not -- I don't mean cash incentive, but in a way or another way to -- or is it just a market trend?

No, no, sorry, it's not a market. This is something that I can give you. It's not a market trend. It's our overall performance because the Chinese market last year was quite weak and also in Q1, this year, the market was slightly negative in the scooter segment, single-digit down. The part of the market in which we compete, the scooter, over 150cc because we are selling 150cc and 300cc vehicles was the more resilient. And but was still slightly negative is essentially our overperformance in the market. So the market is very interesting, but on top of that, we are overperforming the market. It is something that is quite interesting.

Yes. I want to just before -- to me, this understand. I want to clarify this. Our sales in China is peanuts. We believe that our sales, total sales in China should be about 10,000 pieces in a year. Now what I say is that the trend of the market, starting from India, or let's say Southeast Asia plus China, is a good trend for us. This is an example of how we -- the first time we are able to sell something that is irrelevant for us in China.

Yes. I get -- I mean I understand the numbers are very small. I was just wondering what happened to outperform this way in the market if there was a different commercial proposition or more dealers or pricing positioning? I don't know. Is there any reason to explain this? I mean you -- your very good performance in China. This was my...

But Piaggio has a trade company there with about 50 people working on sales. And following other things, our business did well in China. So this sales is through our organization that is going on the market, and we have some dealer. I don't know how many dealers we have in China today. It's quite difficult to say. But we are very impressed about the sales that we are able to do in the country as China, even in the situation of the virus and even the situation of the very -- where the Japanese have a very incredible control of the market of scooter.

There is no question booked at the moment.

Okay. So I'm looking at -- yes, there are no more questions. So I think that we can close the call now. And thank you very much for attending this conference call. As usual, if you need further information, you can call me later on. Thank you very much.

The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.