At a meeting in Milan chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. examined and approved the quarterly report to 30 September 2008. The Piaggio Group boosted productivity on its industrial operations in the first nine months of 2008, maintaining significant cash flow and thus offsetting the effects of the rise in raw materials costs.

Sales in the first nine months of the year slackened by 5.9% from the year-earlier period. The sales slowdown in the 2008 half-year was 7.0%. Consolidated net sales in the first nine months of 2008 amounted to € 1,289.3 million, from € 1,369.8 million in the year-earlier period. The 5.9% downturn in net sales was due in part to the rise in value of the euro against foreign currencies, with a negative impact of approximately € 34.4 million compared with the year-earlier nine months. Net of the exchange-rate effect, the net sales decrease was 3.4%.

The Group reported an improvement in the ratio of industrial gross margin to net sales from 30.1% to 30.3%, while the margin was € 390.5 million against € 412.7 million in the year-earlier period. Consolidated EBITDA was € 179.4 million, for an EBITDA margin of 13.9%, compared with € 200.4 million and 14.6% respectively in the year-earlier period. EBIT at the end of the third quarter of 2008 was € 110.1 million against € 138.3 million in the year-earlier period, reflecting the impact of an increase of € 7.2 million in depreciation and amortisation charges from the first nine months of 2007 as the Group continued its investment plans.

For the first nine months of 2008 the Piaggio Group posted profit before tax of € 83.8 million and a net profit of € 62.0 million (-6.6% YoY), after tax of € 21.8 million computed on an expected full-year mean tax rate lower than the rate applied in 2007, partly as the result of recognition of deferred tax assets.

Consolidated net debt at 30 September 2008 was € 327.4 million, from € 269.8 million at 31 December 2007. The increase of more than € 57 million reflects the cash settlement of 2004-2009 warrants for € 64.2 million, the dividend payout of € 23.5 million (€ 11.9 million in 2007) and share buybacks (€ 19.2 million at 30 September 2008). Shareholders' equity at 30 September 2008 was € 426.6 million, compared with € 471.4 million at 31 December 2007.

During October, the Parent Company continued to buy back shares as approved by the Shareholders' Meeting of 24 June 2008. At 29 October 2008 it held 24,644,318 own shares, with an average purchase price of € 2.0452. With reference to the Piaggio 2007-2009 Incentives Plan, on 3 October 2008 the company granted 300,000 stock options. Today, therefore, all 10,000,000 stock options have been granted. Since 27 October the Chief Financial Officer Michele Pallottini has also been head of Investor Relations.

In October work was completed ahead of schedule on the production facility in Hanoi, Vietnam, and Vespa pre-production began: mass production will commence in January 2009. The facility in India (Baramati) for production of the new 1000-1200 cc diesel engines is nearing completion, and will begin operations in the second half of 2009. The roll-out of the sales organisation in South East Asia and Australia to market 2-wheeler as well as 3/4-wheeler products was completed.