Consolidated statement of financial position

Net working capital as of 31 December 2010 was equal to 8.8 million euro, generating a positive cash flow of approximately 8.4 million euro in 2010. In particular, net working capital is defined as the sum of trade receivables, inventories, trade payables and other non-trade assets and liabilities During 2010, in a particularly challenging market context, the Piaggio Group was able to maintain a balance in net working capital, thanks above all to a careful management in the collection of trade receivables, and to a major focus on inventory management and optimisation.

Plant property and equipment, comprising plant, property, machinery and industrial equipment, net of amortization quota and assets held for sale, amounted to 256.8 million euro as of 31 December 2010, with an increase of approximately 6.3 million euro compared to 31 December 2009. This increase is due to investments and depreciation which were basically aligned. Investments during 2010 in property, plant and equipment amounted to approximately 37.1 million euro, mainly concerning plant and machinery and industrial equipment, while depreciation amounted to approximately 35.9 million euro. The residual increase is mainly due to the value adjustment of balance sheet items to the exchange rate in effect at the end of the reporting period.

Intangible assets, comprising capitalised development costs, costs for patents and know-how, as well as goodwill arising from acquisitions/mergers taking place within the Group over the last few years, totalled 652.6 million euro, with an increase of approximately 11.4 million euro compared to 31 December 2009.
This increase is mainly due to significant investment activities during the period, equal to approximately 59.1 million euro, targeting above all product development (40 million euro) and patent rights/know how (18.3 million euro), while amortisation was equal to approximately 50.1 million euro. As in the previous case, intangible assets increased, due to the value adjustment of balance sheet items to the exchange rate in effect at the end of the reporting period.

Financial assets, defined as the sum of “equity investments” and “other non-current financial assets” totalled 0.5 million euro, without any significant changes compared to 31 December 2009.

Funds, comprising retirement funds and employee benefits, other long term provisions, from the current portion of other long term provisions, as well as deferred tax liabilities, totalled 125.9 million euro, registering a decrease compared to 31 December 2009 (- 7.8 million euro).

As fully described in the next section on the “Consolidated Cash Flow Statement”, net financial debt as of 31 December 2010 was equal to 349.9 million euro, compared to 352.0 million euro as of 31 December 2009. The improvement of approximately 2.0 million euro in net debt is mainly due to the positive trend of cash flow from operating activities, as well as management of net working capital, which enabled the selffinancing of investments, as well as the distribution of dividends for an amount equal to 25.8 million euro and the purchase of treasury shares amounting to approximately 3.3 million euro.

Shareholders’ equity as of 31 December 2010 amounted to 442.9 million euro, up 19.1 million euro compared to 31 December 2009.