In the first quarter of 2008 the Piaggio Group sold 150,600 vehicles worldwide, compared with 159,800 last year; Group consolidated net sales amounted to 363.9 million euros, down by 7.7 pct on 394.2 million euros in the first quarter of 2007.

At a meeting yesterday in Milan chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. examined and approved the quarterly report at 31 March 2008.

In the first quarter of 2008 the Piaggio Group sold 150,600 vehicles worldwide, compared with 159,800 in the year-earlier period. Group consolidated net sales amounted to € 363.9 million, down by 7.7% on € 394.2 million in the first quarter of 2007.

First-quarter revenues reflected the reduced impact of the BMW five-year order (-€ 11 million compared with the year-earlier period) and the appreciation of the euro
against the dollar, the Indian rupee and the pound (with a negative impact of approximately € 4 million on net sales compared with the year-earlier period). Net of these factors, the reduction in net sales was 4%, arising as a result of the slowdown in demand on the European two-wheeler market (-6.8%). A geographical analysis of first-quarter 2008 net sales reflects a downturn of approximately 10% in the Europe/Americas area, net of the BMW effect, whereas significant progress was reported in the geographical areas where the Group is currently focusing investments: India +12.1%, Asia Pacific +41.5%.

The industrial gross margin in the first quarter was € 104.1 million, down 10% from € 115.7 million in the first quarter of 2007. The return on net sales fell from 29.3% to 28.6% in the first quarter of 2008. Consolidated EBITDA decreased against the year-earlier period, from € 44.4 million (11.3% of net sales) to € 35.1 million (9.7% of net sales) in the first quarter of 2008. EBIT in the first quarter of 2008 was € 13.1 million (3.6% of net sales), compared with € 25.6 million (6.5% of net sales) in the year-earlier period. The first quarter of 2008 closed with net profit of € 3.2 million, compared with € 9.7 million in the year-earlier period. Net debt at 31 March 2008 was € 311.8 million, a reduction of € 33 million from the figure at 31 March 2007, after buy-backs and dividend payouts totalling € 38.7 million. At 31 December 2007 net debt was € 344.8 million. Shareholders' equity at 31 March 2008 amounted to € 475.5 million against € 471.4 million at 31 December 2007 and € 456.3 million at 31 March 2007.

Events after 31 March 2008

On 8 April 2008 almost all the banks holding Piaggio & C S.p.A. 2004-2009 warrants issued by the company in connection with the acquisition of Aprilia S.p.A. exercised their warrants.

Outlook

Management will focus in particular on cash flow control. With regard to sales, the Group confirms its expectation of growth outside Europe and normalisation of seasonal trends in Europe.

-------------

The Board of Directors also deliberated a request for shareholder authorisation of a plan for the buy-back and disposal of ordinary shares. The own-share purchase and sale transactions to which the request for shareholder authorisation refers will be for the following objectives: (i) to purchase and/or assign own shares for investment purposes and to stabilise the share price and liquidity on the equities market; or (ii) to permit the use of own shares in connection with current operations or projects consistent with the company’s strategies for which share transactions are deemed advisable, including allocation of the shares in question to service possible convertible bonds and/or warrants. The proposal for authorisation to conduct transactions on own shares does not affect the authorisation already granted by the Shareholders' Meeting of 7 May 2007 in connection with the 2007-2009 Share-based Incentives Plan, which remains fully effective.

The authorisation is requested for the purchase, in one or more tranches, of ordinary shares with a par value of € 0.52 each, up to a maximum amount whereby, including ordinary shares held from time to time by the company and by its subsidiaries, the number of own shares does not exceed 10% of the share capital pursuant to art. 2357, para 3, of the Italian Civil Code. As of today, the company holds 7,340,000 own shares servicing the 2007-2009 share-based incentives plan. The authorisation for the purchase of own shares is requested for a period of eighteen months, as from the date of the shareholders’ resolution. The authorisation to dispose of own shares is requested for an indefinite period of time.

The Board of Directors proposes that the share buy-backs be effected for a consideration that is not more than 20% below or 10% above or the mean official Piaggio share price in the ten trading days preceding each purchase transaction or, in the event of purchases through public tender or exchange offers, for a consideration that is not more than 10% above or below the mean official Piaggio share price on the trading day before the public announcement. The Board of Directors proposes that the purchases be effected in compliance with art. 144-bis, para 1, lett. a), b) and d) of Consob Regulation 11971/99 (and subsequent amendments) and any applicable regulations, so as to ensure equity of treatment of shareholders in compliance with art. 132 of the Consolidated Law on Financial Intermediation. The Board of Directors also proposes authorisation of use, at any time, in full or in part, of any own shares acquired through share assignments or sale of any real and/or personal rights on such shares.

At the meeting, the Chairman of the Board of Directors observed that the company had disclosed to the creditor banks of Aprilia and to the selling shareholders the relevant financial parameters in compliance with the regulations governing warrants and financial instruments issued by the company. Following exercise of 9,959 warrants out of a total of 10,000 warrants outstanding and of financial instruments issued in favour of EMH, the company named an independent valuer to determine the cash value of the warrants in question and of the financial instruments. The independent assessor is expected to complete the valuation during the first week of June 2008.