Consolidated statement of financial position

Consolidated statement of financial position As of 31 December 2011 As of 31 December 2010 Change
In millions of Euro
Net working capital (39.9) 8.8 (48.8)
Net tangible assets 274.9 256.8 18.1
Net intangible assets 649.4 652.6 (3.2)
Financial assets 2.6 0.5 2.1
Provisions (104.9) (125.9) 21.0
Net capital employed 782.1 792.8 (10.7)
Net Financial Debt 335.9 349.9 (14.0)
Shareholders’ equity 446.2 442.9 3.3
Sources of funds 782.1 792.8 (10.7)
Minority interest capital 1.2 1.6 (0.4)

Net working capital as of 31 December 2011 was equal to -39.9 million Euro, generating a positive cash flow of approximately 48.8 million Euro in 2011. Specifically, net working capital is defined as the sum of trade receivables, inventories, trade payables and other non-trade assets and liabilities. During 2011, 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 amortisation quota and assets held for sale, amounted to 274.9 million euro as of 31 December 2011, with an increase of approximately 18.1 million euro compared to 31 December 2010. This increase is due to the considerable volume of investments (equal to approximately 61.8 million Euro compared to 37.1 million Euro in the previous year) mainly targeting plant and machinery, buildings and industrial equipment, while depreciation was equal to approximately 35.2 million Euro. The value adjustment of the balance sheet item to the exchange rate in effect at the end of the reporting period generated a decrease in the carrying amount of approximately 8.9 million Euro.

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 649.4 million euro, with a decrease of approximately 3.2 million euro compared to 31 December 2010. This decrease is mainly due to the value adjustment of balance sheet items to the exchange rate in effect at the end of the reporting period (-6.2 million Euro), which entirely absorbed the positive difference between significant investment activities in the year equal to approximately 64.3 million Euro, mainly targeting product development (38.3 million Euro) and patent/know how rights (24.7 million Euro), and amortisation equal to approximately 59.8 million Euro.

Financial assets, defined as the sum of “investments” and “other non-current financial assets" totalled 2.6 million Euro. The increase refers to the equity valuation of the Zongshen Piaggio Foshan joint venture (2.3 million Euro).

Provisions, 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 104.9 million euro, registering a decrease compared to 31 December 2010 (- 21.0 million euro).

As fully described in the next section on the “Consolidated Cash Flow Statement”, net financial debt as of 31 December 2011 was equal to 335.9 million euro, compared to 349.9 million euro as of 31 December 2010. The improvement of approximately 14 million Euro is mainly due to the positive trend of cash flow from operating activities, as well as the good management of net working capital, which enabled the self-financing of investments and distribution of dividends.

Shareholders' equity as of 31 December 2011 amounted to 446.2 million Euro, up 3.3 million Euro compared to 31 December 2010.