THE PIAGGIO GROUP

Established in 1884 by Rinaldo Piaggio and based in Pontedera (Pisa, Italy), the Piaggio Group is one of the world’s top manufacturers of two-wheel motor vehicles.

The Piaggio Group has been listed on the Milan Stock Exchange since 11 July 2006 (Piaggio & C. S.p.A.) and is controlled by Immsi S.p.A. (approximately 56%), an industrial holding listed on the Milan Stock Exchange and headed by Roberto Colaninno, who is Piaggio Group Chairman and Chief Executive Officer. The Group Deputy Chairman is Matteo Colaninno. Daniele Bandiera is Chief Operating Officer Operations, and Michele Pallottini is Chief Operating Officer Finance. Public Relations and Institutional Affairs Manager is Francesco Delzìo.

The Piaggio Group, which also includes Aprilia and Moto Guzzi, acquired on 30 December 2004, and Spain’s Derbi, acquired in 2001, ranks as one of the world’s top four players in its core business: a consolidated leadership position on the European 2-wheeler market; 5 R&D centres; approximately 7,000 employees.

In addition to its joint venture in China (Foshan), Group production operations are located in seven facilities: Pontedera (Pisa), with three plants for production of two-wheeler vehicles for the Piaggio, Vespa and Gilera brands, light transport vehicles (LTVs) for the European market, and scooter and motorcycle engines; Scorzè (Venice), for production of two-wheeler vehicles for the Aprilia and Scarabeo brands; Mandello del Lario (Lecco), for production of Moto Guzzi vehicles and engines; Barcelona (Spain), for the Derbi brand; Baramati (India), for production of LTVs for the local market.

In India, the wholly owned Piaggio subsidiary Piaggio Vehicles Private Ltd (PVPL) produces cargo and passenger Ape diesel 3-wheelers. PVPL is currently the second largest player on the Indian 3-wheeler market, with a share of around 39%, and leader in the Cargo 3-wheeler segment. During the second half of 2007, PVPL started the production of a new 4-wheeler product, Ape Truk, for entering in the growing 4-wheelr light commercial market. PVPL shipments rose from around 35,000 vehicles in 2003 to more than 154,000 units in 2007.
In China, operations are conducted by the Piaggio Zongshen Foshan Motorcycle joint venture, which produced more than 209,000 vehicles in 2007 (of which more than 57,000 based on Piaggio technology). Piaggio holds a 45% interest in the joint venture, which is therefore not included in the Group’s consolidated results.
In Vietnam, on 9 October 2007 the Piaggio Group officially inaugurated the site (in the province of Vinh Phuc) on which the Vespa scooter production facility will be built, to serve the local market and the ASEAN area. Total investment through to start-up of production operations is estimated in a range of 25-30 million US dollars. The facility will provide a production capacity of up to 100,000 scooters/year.

The Piaggio Group product range includes scooters, motorcycles and mopeds in the 50cc to 1200cc displacement range for the Piaggio, Vespa, Gilera, Aprilia, Moto Guzzi, Derbi and Scarabeo brands. The Group also manufactures three- and four-wheel light transport vehicles for the Ape, Porter and Quargo ranges.

In 2007 Group consolidated net sales totalled € 1,692.1 million, up 5.3% from 2006, with overall production of approximately 708.500 vehicles (scooters, motorcycles and three/four-wheel commercial vehicles), an improvement of 4.1% over 680,700 vehicles in 2006.

Specifically, Vespa sales in 2007 topped production of 117,000 units (+17.1% from 2006), another confirmation of the brand’s international success; Gilera and Derbi gained 12.2% and 7.1% respectively, while Aprilia sales volumes grew by 5.8%, largely as a result of strong performance in motorcycles (+26.6%).
Net of spares and accessories, the two-wheeler business reported Year on Year revenue growth thanks to strong performance in scooters, which gained 2.4% for turnover of € 854.1 million, and above all in motorcycles, where net sales progressed by 6.5% to € 277.9 million.
The commercial vehicles business had revenues (net of spares and accessories) of € 343.8 million (+7.0% YoY), including € 223.9 million on the Indian market, which gained 15.4% over 2006.
Net sales in spares and accessories amounted to € 195.2 million (+10.7% on 2006).

Consolidated EBITDA was € 226.1 million, an improvement of 10.8% from € 204.0 million in 2006. Operating profit amounted to € 136.6 million, an increase of 19.6% on € 114.2 million in 2006.
Financial year 2007 closed with a consolidated net profit of € 60.0 million, after Income tax amounted to € 43.5 million. Net debt at the end of 2007 decreased to € 269.8 million, a reduction in respect of 31 December 2006 (€ 318.0 million).