At a meeting in Mantua chaired by Roberto Colaninno, the Board of Directors of Piaggio & C. S.p.A. examined and approved the quarterly report at 31 March 2009. In the first quarter of 2009 the Piaggio Group sold a total of 120,100 vehicles worldwide, of which 77,900 in the 2-Wheel business and 42,200 in the Commercial Vehicles business (compared with a total of 150,600 vehicles in the year-earlier period).

First-quarter performance in the 2-Wheel business encountered particularly difficult market conditions in the Group’s main areas. Demand was down from Q1 2008 in Italy (-19.5%), Europe (-23.1%) and the USA (-29.1% overall and -36.7% in the scooter sub-segment). In the Commercial Vehicles business, after years of constant growth, the Indian market reported a downturn of 2.8% in the Group’s core segments.

Group consolidated net sales amounted to € 306.3 million, from € 363.9 million in the year earlier period. In addition to the sales slowdown in the 2-Wheel sector, the revenue downturn reflected the reduction in the BMW five-year order (-1.2 million € from Q1 2008) and the revaluation of the euro against the Indian rupee and the pound sterling, which had a negative impact on revenues of approximately € 3.8 million from Q1 2008.

At the same time, however, the first significant signs emerged of an improvement in market conditions, relating in part – as far as the 2-Wheel business in Italy is concerned – to the significant impact of state incentives for purchases of low-emission vehicles, initially limited to vehicles up to 400cc and subsequently extended to mopeds and to motorcycles up to 60 kW. In connection with the recovery trends on the two-wheel markets, Piaggio Group products and brands are displaying an impressive competitive capability, with important improvements in market share in the main areas.

On the Italian market, the Piaggio Group reported excellent performance, raising its overall market share to 28.3%, an increase of 2 percentage points compared with Q1 2008; specifically, the Group share of the branded scooter segment increased by more than 4 percentage points. In Europe, the Group boosted scooter market share for the Piaggio brand (to 12.6% from 12% in Q1 2008, thanks in part to the superlative performance of the Mp3 3-wheel scooter) and the Vespa brand (from 5.9% to 6.5%); in mid-range motorcycles (591-750cc), in the first quarter of 2009 it raised its European market shares for Aprilia (from 1.7% to 2.6%) and Moto Guzzi (from 0.4% to 0.8%). Particularly important results were reported in North America, where Group sales increased to 6,400 vehicles from 4,200 in Q1 2008, an improvement of 50.5% in sales volumes and 53% in net sales.

In the Commercial Vehicles sector, the Piaggio Group achieved a positive “mix effect” in its 2009 Q1 revenues, thanks to the success of the Porter range – notably the low-emission models – which, with sales volumes of 1,900 vehicles and revenues of € 19.8 million, represented growth of 10.5% in volumes and 26.9% in net sales. The Commercial Vehicles Division did not benefit in the January-March 2009 quarter from the launch of the new Piaggio Porter range, which took place in April and is expected to generate important sales results.

The industrial gross margin for the quarter was € 87.8 million, against € 104.1 million in the first quarter of 2008. The return on net sales improved, however, from 28.6% to 28.7% in the first quarter of 2009. Consolidated EBITDA was € 21 million (6.9% of net sales), from € 35.1 million in Q1 2008. EBIT was € 0.2 million, from € 13.1 million in the first quarter of 2008. The first quarter of 2009 closed with a net loss of € 4.7 million – from net profit of € 3.2 million in Q1 2008 – after positive income tax of € 3.5 million. Consolidated net debt increased from € 359.7 million at 31 December 2008 to € 446.7 million at 31 March 2009. The increase was largely due to the seasonal nature of the 2-Wheel business, which absorbs cash in the first half of the year and generates cash in the second half; the 2009 first-quarter increase was larger compared with previous years due to negative performance in some major European markets in the first two months of the year, despite close control of working capital. The € 134.9 million increase in net debt from € 311.8 million at 31 March 2008 reflected the decision to make a cash settlement on the Piaggio 2004-2009 warrants for a total amount of € 64.2 million, and the dividend payout of € 23.5 million. Shareholders' equity at 31 March 2009 totalled € 396.1 million, against € 398.2 million at 31 December 2008 and € 475.5 million at 31 March 2008.

On 22 April 2009, in Italy, the convention between the Italian Ministry for the Environment and the national motorcycle association (Confindustria Ancma) came into effect. The convention provides incentives for the purchase of mopeds and hybrid motorcycles, a segment where this year the Group will be launching its new three-wheel Mp3 scooter.