Immsi — Interim / Quarterly Report 2016

Nov 16, 2016

Share capital 178,464,000 euros fully paid up Registered office: P.zza Vilfredo Pareto, 3 – 46100 Mantova Mantova Register of Companies – Tax code and VAT number 07918540019

Interim Report on Operations

30 September 2016

This Interim Report on Operations is a translation provided only for the convenience of foreign readers. The Italian version will prevail.

Contents

Company boards…………………………………………………….………………	page	4
Financial highlights of the Immsi Group	page	6
Alternative non-GAAP performance measures………………………………………………	page	7
Form and content………………………………………………………………………………	page	8
Scope of consolidation…………………………………………………………………………	page	11
Reclassified consolidated financial statements and relative notes………	page	13
Directors' comments on operations…………………………………………………………	page	23
Events occurring after 30 September 2016 and operating outlook………………………	page	29
Segment reporting………….………………….…………………………………………………	page	31

This document was approved by the Board of Directors of Immsi S.p.A. on 14 November 2016 and is available for the public to consult at the Registered Office of the Company, on the website of the Borsa Italiana S.p.A. www.borsaitaliana.it, in the centralised storage system and on the Issuer's website www.immsi.it (section: "Investors/Financial reports/2016") according to legislation.

COMPANY BOARDS

The Board of Directors and the Board of Statutory Auditors of Immsi S.p.A. were appointed by shareholders' resolution of 13 May 2015 and will remain in office until the date the Shareholders' Meeting is convened to approve the financial statements for the year ending 31 December 2017.

BOARD OF DIRECTORS

Roberto Colaninno Chairman Daniele Discepolo Deputy Chairman Michele Colaninno Chief Executive Officer Matteo Colaninno Director Ruggero Magnoni Director Livio Corghi Director Rita Ciccone Director Giovanni Sala Director Patrizia De Pasquale Director

BOARD OF STATUTORY AUDITORS

• Alessandro Lai Chairman
• Daniele Girelli Statutory Auditor Silvia Rodi Statutory Auditor Gianmarco Losi Alternate Auditor Elena Fornara Alternate Auditor

INDEPENDENT AUDITORS AUDITORS

PricewaterhouseCoopers S.p.A. 2012 – 2020

GENERAL DIRECTOR DIRECTOR

Michele Colaninno

In accordance with the principles of Corporate Governance recommended by the Corporate Governance Code for Listed Companies, and pursuant to Italian Legislative Decree No. 231/01, the Board of Directors has established the following bodies:

	REMUNERATION COMMITTEE
	Daniele Discepolo	Chairman
	Giovanni Sala
	Rita Ciccone
	NOMINATIONS COMMITTEE
	Giovanni Sala	Chairman
	Daniele Discepolo
	Rita Ciccone
	CONTROL AND RISK COMMITTEE
	Daniele Discepolo	Chairman
	Giovanni Sala
	Rita Ciccone
	RELATED-PARTIES COMMITTEE
	Giovanni Sala	Chairman
	Rita Ciccone
	Patrizia De Pasquale
	COMPLIANCE COMMITTEE
	Marco Reboa	Chairman
	Alessandro Lai
	Maurizio Strozzi
	LEAD INDEPENDENT DIRECTOR
	Daniele Discepolo
DEPUTY CHAIRMAN
	Michele Colaninno
	INTERNAL AUDIT MANAGER
	Maurizio Strozzi
	FINANCIAL REPORTING OFFICER
	Andrea Paroli
	INVESTOR RELATIONS
	Andrea Paroli

All information on powers reserved for the Board of Directors, the authority granted to the Chairman and CEO, as well as functions of various Committees of the Board of Directors, is available in the Governance section of the Issuer's website www.immsi.it.

Financial highlights of the Immsi Group

In the first nine months of 2016, the revenues, EBITDA, profit before tax and net debt of the Immsi Group improved significantly compared to the same period of the previous year. It is recalled that in 2015 income for the enforcement of guarantees and definitive withholding of a deposit were recognised that were not repeated in 2016 amounting to approx. 4 million Euro, with an impact on net profit for consolidation purposes of more than 2 million Euro. Excluding these items, the net profit for the first nine months is therefore aligned in the two periods compared.

Results for the period have different trends with reference to the sectors comprising the Group, based on the different business trends of the period in question.

For a clearer interpretation, the following is reported on a preliminary basis:

• the "property and holding sector" consolidated the financial position and performance of Immsi S.p.A., Immsi Audit S.c.a r.l., ISM Investimenti S.p.A., Is Molas S.p.A., Apuliae S.p.A., Pietra S.r.l., Pietra Ligure S.r.l. and RCN Finanziaria S.p.A.;
• the "industrial sector" includes the companies owned by the Piaggio group, while
• the "marine sector" includes Intermarine S.p.A. and other minor subsidiaries or associated companies of Intermarine S.p.A..

Some of the main financial data of the Immsi Group are presented below, divided by business segment and determined, as already stated, in accordance with international accounting standards (IAS/IFRS). A more detailed description of the figures below may be found further on in this paragraph.

		Immsi Group as of 30 September 2016

In thousands of euro	Sector property and holding	as a %	Sector industrial	as a %	Sector marine	as a %	Immsi Group	as a %
Net revenues	4,105		1,031,723		43,533		1,079,361
Operating income before depreciation and amortisation (EBITDA)	-3,332	n/m	141,524	13.7%	1,334	3.1%	139,526	12.9%
Operating income (EBIT)	-3,704	n/m	60,489	5.9%	492	1.1%	57,277	5.3%
Profit before tax	-14,036	n/m	33,610	3.3%	-1,292	-3.0%	18,282	1.7%
Earnings for the period including non-controlling interests	-12,013	n/m	19,157	1.9%	-1,633	-3.8%	5,511	0.5%
Group earnings for the period (which may be consolidated)	-8,490	n/m	10,230	1.0%	-971	-2.2%	769	0.1%
Net debt Personnel (number)	-342,903 93		-469,536 7,197		-82,027 277		-894,466 7,567

Hereunder we give the same table referring to the same period of the preceding year. A comparison between the two periods is made in the specific comment related to the single business sectors presented further on.

Immsi Group as of 30 September 2015

In thousands of euro	Sector property and holding	as a %	Sector industrial	as a %	Sector marine	as a %	Immsi Group	as a %
Net revenues Operating earnings before amortisation and depreciation (EBITDA) Operating income (EBIT) Profit before tax Earnings for the period including non-controlling interests Group earnings for the period (which may be consolidated)	3,963 716 353 -10,186 -7,214 -3,988	18.1% 8.9% n/m n/m n/m	1,002,603 135,686 58,078 30,525 18,315 9,165	13.5% 5.8% 3.0% 1.8% 0.9%	45,963 648 -285 -4,468 -3,537 -2,235	1.4% -0.6% -9.7% -7.7% -4.9%	1,052,529 137,050 58,146 15,871 7,564 2,942	13.0% 5.5% 1.5% 0.7% 0.3%
Net debt Personnel (number)	-319,865 87		-495,844 7,527		-97,286 295		-912,995 7,909

The data in the previous tables refer to results that may be consolidated, i.e. net in particular of revenues and intergroup costs and any dividends of subsidiaries.

Alternative non-GAAP performance measures

This Report contains some measures that, although not indicated by IFRS ("Non-GAAP Measures"), derive from IFRS financial measures.

These measures – which are presented to allow a better assessment of the Group's operating performance – should not be considered as an alternative to IFRS measures. They are identical to those contained in the Annual Report and Financial Statements at 31 December 2015 and in the periodical quarterly reports of the Immsi Group.

Moreover, the procedures for determining these measures are not specifically regulated by reference accounting standards, so they might not be uniform with the measures adopted by other entities and therefore might not be sufficiently comparable.

In particular, the following alternative performance measures have been used:

• EBITDA: defined as operating income before amortisation/depreciation and impairment costs of intangible assets and property, plant and equipment, as reported in the consolidated income statement;
• Net financial debt: represented by (current and non-current) financial liabilities, minus cash on hand and other cash and cash equivalents, as well as other current financial receivables. The other financial assets and liabilities arising from the valuation at fair value of the derivative financial instruments designated as hedges and the fair value adjustment of the related hedged items do not, however, enter into determining net financial debt. The Notes include a table showing the breakdown of this aggregate. in this respect, in conformity with the CESR recommendation of 10 February 2005 "Recommendations for the consistent implementation of the European Commission's Regulation on Prospectuses", the indicator, as formulated, represents the items and activities monitored by the Group's management.

Form and content

Italian Legislative Decree 25 of 2016, which implemented the new Transparency II Directive (2013/50/EU), eliminated the obligation of publication of the interim report on operations. The decree attributed to Consob the possibility to regulate any additional disclosure requirements, compared to the annual financial statements and half-year report, only after an impact assessment that takes account of the guidelines of other EU countries, in most of which the obligation has been abolished for all issuers. The decision to continue to publish information on the first quarter and the first nine months of the Immsi Group was taken in continuity with the past, also in the light of changes in the regulatory framework. In this regard, it is pointed out that Consob, with resolution no. 19770 of 26 October 2016, approved the amendments to the Consob Regulation on Issuers concerning interim reports on operations (additional periodic financial information) through introduction of the new Article 82-ter. The new provisions are adopted from 2 January 2017.

This Interim Report on Operations as of 30 September 2016, which is not audited, was prepared pursuant to Italian Legislative Decree 58/1998 as amended, and to Consob Regulation on Issuers and includes reclassified consolidated financial statements and notes prepared adopting the IFRS issued by the International Accounting Standards Board ("IASB") and endorsed by the European Union. The interpretations of the International Financial Reporting Interpretations Committee ("IFRIC") were also taken into account.

The disclosure on subsequent events and the outlook is provided later in the specific paragraph of this Report.

In preparing the Interim Report on Operations as of 30 September 2016, the Group adopted the same accounting standards as those used to prepare the Consolidated Financial Statements as of 31 December 2015 (to which reference is made), as well as amendments and interpretations required by IASB, applicable as from 1 January 2016, none of which had a material effect on the Group financial statements, and summarised below:

• IAS 16 and IAS 38 "Clarification of Acceptable Methods of Depreciation and Amortisation": according to the changes, it is considered inappropriate to adopt an amortisation/depreciation method based on revenues. As regards intangible assets, this indication is considered as a relative assumption, that may only be overcome in one of the following circumstances: (i) the right to use an intangible asset is related to the realisation of a predefined threshold for revenues to be produced; or (ii) when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated.
• IFRS 11 "Joint arrangements: "Recording the acquisition of investments in jointly controlled assets": the changes provide clarification on the recording for accounting purposes of the acquisition of investments in jointly controlled assets constituting a business. The amendments are applicable in a retrospective manner for years commencing from or after 1 January 2016.
• IAS 27 Revised Separate Financial Statements: the amendment, applicable from 1 January 2016, allows an entity to use the equity method to recognise investments in subsidiaries, joint ventures and associates in the separate financial statements.
• Annual amendments to IFRS 2012-2014: the amendments concern: (i) IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations; (ii) IFRS 7 – Financial Instruments: disclosures; (iii) IAS 19 – Employee Benefits; (iv) IAS 34 – Interim Financial Reporting. As regards the first point, the amendment clarifies that the financial statements need not be

restated if an asset or group of assets available for sale was reclassified as "held for distribution", or vice versa.

With reference to IFRS 7, the amendment states that if an entity transfers a financial asset on terms that allow the de-recognition of the asset, information must be disclosed concerning the entity's involvement in the transferred asset.

The proposed amendment to IAS 19 makes it clear that, in determining the discount rate of the obligation arising following the termination of the employment relationship, it is the currency in which the obligations are denominated that counts, rather than the country in which they arise.

The proposed amendment to IAS 34 requires cross-references between information reported in the interim financial statements and the related disclosure.

• IAS 1 Presentation of Financial Statements: the amendment to the principle in question is intended to provide clarification on the aggregation or disaggregation of financial statement items if the amount is significant, or "material". In particular, the amended standard requires there to be no aggregation of items with different characteristics or disaggregation that hampers disclosure or interpretation of the financial statements. Moreover, the amendment requires the presentation of headings, partial results and additional items, also separating the items listed in section 54 (Statement of Financial Position) and 82 (Income Statement) of IAS 1, when this presentation is significant for the purposes of understanding the statement of financial position and financial position and performance of the entity.
• IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Regarding the first point, the amendment clarifies that the exemption of the presentation of consolidated financial statements applies to a parent company that is controlled by an investment company, when the latter measures all its subsidiaries at fair value. IAS 28 was amended as regards investments in associates or joint ventures that are "investment entities": these investments may be recognised with the equity method or at fair value.

At the date of these Financial Statements, the competent bodies of the European Union had not yet completed the approval process necessary for the adoption of certain accounting standards and amendments.

• In May 2014, the IASB and FASB jointly published IFRS 15 Revenue from Contracts with Customers. The purpose of this standard is to improve reporting on revenues and their comparability between different financial statements. The new standard is applicable in a retrospective manner for years commencing from or after 1 January 2018. Early adoption is possible.
• On 24 July 2014, the IASB finalised its project to revise the accounting standard for financial instruments, with the issue of the complete version of IFRS 9 – Financial Instruments. In particular, the new provisions of IFRS 9: (i) amend the model that classifies and measures financial assets; (ii) introduce a new method for writing down financial assets that takes account of expected credit losses; and (iii) amend hedge accounting provisions. The provisions of IFRS 9 will be applicable for years commencing on or after 1 January 2018.
• In the month of January 2016, the IASB published IFRS 16 Leases. This new standard will replace the current IAS 17. The main change concerns the accounting by lessees that, according to IAS 17, were required to make a distinction between a financial lease (in the budget) and operating leases (off budget). With IFRS 16, operating leases will be treated for accounting purposes as financial leases. The IASB has provided for the optional exemption for certain leasing contracts and low value and short-term leases. This principal will apply from 1 January 2019. Early application will be possible if IFRS 15 - Revenue from contracts with customers - is jointly adopted.

• In February 2016, the IASB issued an amendment to IAS 12 Income Taxes. These amendments clarify how to enter active deferred taxes related to debt instruments calculated at fair value. These amendments will apply from 1 January 2017.

• In February 2016, the IASB issued an amendment to IAS 7 - Statement of Cash Flows. These amendments to IAS 7 introduce additional information that will enable users of financial statements to evaluate changes in liabilities arising from financing activities. These amendments will apply from 1 January 2017.

• In June 2016, the IASB issued an amendment to IFRS 2 Share-based Payments. These amendments clarify how some share-based payments are recognised. These amendments will apply from 1 January 2018.
• In September 2016, IASB issued an amendment to IFRS 4 Insurance Contracts as regards application of IFRS 9 – Financial Instruments. These amendments to the standard will provide all companies that issue insurance contracts the option of recognition in other comprehensive income rather than in the income statement; the volatility that could arise when IFRS 9 is applied before the new standard on insurance contracts is issued will also ensure companies whose activity is mainly connected with insurance contracts an option for temporary exemption in application of IFRS 9 until 2021. Entities that defer adoption of IFRS 9 will continue to apply IAS 39.

The Group will adopt these new standards, amendments and interpretations, based on the application date indicated, and will evaluate potential impact, when the standards, amendments and interpretations are endorsed by the European Union.

As provided for by Consob communication no. DEM/5073567 of 4 November 2005, the Company has indicated fewer details than required by IAS 34 – Interim Financial Reporting. The information in this Report should be read together with the Consolidated Financial Statements as of 31 December 2015, prepared according to IFRS.

The preparation of the Interim Report required the Management to make estimates and assumptions that particularly affect the reported amounts of revenues, expenses, assets and liabilities recorded in the financial statements and disclosure of contingent assets and liabilities at the closing date of the period. If in the future such estimates and assumptions deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances should change. In addition, some evaluative processes, particularly the more complex ones such as the determination of impairment losses on intangible assets, are generally carried out completely only at the time of drawing up the annual financial statements, when all the potentially necessary information is available, saving the cases in which there are indicators of impairment that require immediate evaluation of possible losses of value. This document can include forward-looking statements, regarding future events and operational,

economic and financial results of the Immsi Group. Said statements have a certain degree of risk and uncertainty by nature, since they depend on the occurrence of future events and developments. The actual results may differ even significantly compared to the forecast ones, in relation to several factors.

This Interim Report on Operation is expressed in Euros since that is the currency in which most of the Group's transactions take place. Unless stated otherwise, the figures in the financial statements and explanatory notes that follow are expressed in thousands of euros.

The exchange rates used to translate the financial statements of companies included in the scope of consolidation into euros are shown in the following table (data rounded up to 2 decimal places):

	Spot exchange rate 30 September 2016	Average exchange rate First nine months of	Spot exchange rate 31 December	Average exchange rate First nine months
Currency		2016	2015	2015
US Dollar	1.1161	1.11617	1.0887	1.11436
Pounds Sterling	0.86103	0.80304	0.73395	0.72715
Indian Rupee	74.3655	74.91642	72.0215	70.85495
Singapore Dollars	1.5235	1.52975	1.5417	1.52006
Chinese Renminbi	7.4463	7.34662	7.0608	6.96414
Croatian Kuna	7.5220	7.53679	7.638	7.61059
Japanese Yen	113.090	120.95228	131.07	134.77759
Vietnamese Dong	24,731.91	24,719.21010	24,435.06	24,065.9856
Canadian Dollars	1.4690	1.47459	1.5116	1.40384
Indonesian Rupiah	14,502.60	14,864.99409	15,029.50	14,788.49958
Brazilian Real	3.6210	3.95608	4.3117	3.52573

The reclassified Income Statement and Statement of Comprehensive Income relative to the first nine months of 2016 are given below, compared with the same period of 2015, as well as the reclassified Statement of Financial Position as of 30 September 2016, compared with the situation as of 31 December 2015 and 30 September 2015 and the Statement of Cash Flows as of 30 September 2016 compared with the same period of 2015. The Statement of changes in shareholders' equity as of 30 September 2016, compared with figures for the same period of the previous year is also presented.

No non-recurrent, atypical or unusual transactions, as defined by Consob Communication no. DEM/6037577 of 28 April 2006 and no. DEM/6064293 of 28 July 2006, were recognised for the first nine months of 2016 and 2015.

The Manager in charge of preparing the Company accounts and documents Andrea Paroli, hereby declares, in accordance with paragraph 2 of article 154-bis of the Consolidated Finance Act, that accounting disclosure in this document corresponds to accounting records.

Scope of consolidation

For the purposes of consolidation, the financial statements as of 30 September 2016 of companies included in the scope of consolidation, appropriately modified and reclassified, where necessary, to bring them in line with international accounting standards and uniform classification criteria used by the Group, were used. The scope of consolidation includes the companies in which the Parent Company, directly or indirectly, owns more than half of the voting rights exercisable in Shareholders' Meetings, or has the power to control or direct voting rights by means of contractual or bylaw clauses, or can appoint the majority of the members of the Boards of Directors. Excluded from the line-by-line consolidation are non-operating controlled companies or those with low operating levels as their influence on the final result of the Group is insignificant.

The scope of consolidation compared to the consolidated financial statements as of 30 September 2015 and 31 December 2015 had the following non-significant changes:

• on 30 June 2016 the company Rodriquez Engineering S.r.l., a subsidiary of Intermarine S.p.A., was liquidated;
• On 5 August 2016 RCN Finanziaria S.p.A. purchased ordinary treasury shares held by the minority shareholder GE Capital Equity Holdings LLC equal to 12.86%.

These changes are limited and did not affect the comparability of the balance sheet and income statement between the two reporting periods.

Lastly, following the purchase of treasury shares by Piaggio & C. S.p.A., the share of consolidated shareholders' equity of the Piaggio group, which since 30 September 2016 amounts to 50.48%, amounted to 50.06% as of 30 September 2015 and 31 December 2015.

Reclassified consolidated financial statements and relative notes

Reclassified income statement of the Immsi Group

In thousands of euro	30/09/2016		30/09/2015		Change
Net revenues	1,079,361	100%	1,052,529	100%	26,832	2.5%
Costs for materials Costs for services, leases and rentals Employee costs Other operating income Other operating costs	610,301 206,402 176,316 74,789 21,605	56.5% 19.1% 16.3% 6.9% 2.0%	603,528 201,159 176,114 86,468 21,146	57.3% 19.1% 16.7% 8.2% 2.0%	6,773 5,243 202 -11,679 459	1.1% 2.6% 0.1% -13.5% 2.2%
OPERATING EARNINGS BEFORE AMORTISATION AND DEPRECIATION (EBITDA)	139,526	12.9%	137,050	13.0%	2,476	1.8%
Depreciation and write-downs of plant, property and equipment Amortisation of goodwill Amortisation and impairment of intangible assets with a definite useful life	34,641 0 47,608	3.2% - 4.4%	35,863 0 43,041	3.4% - 4.1%	-1,222 0 4,567	-3.4% - 10.6%
OPERATING INCOME	57,277	5.3%	58,146	5.5%	-869	-1.5%
Income/(loss) from investments Financial income Borrowing costs PROFIT BEFORE TAX	480 11,511 50,986 18,282	0.0% 1.1% 4.7% 1.7%	281 15,850 58,406 15,871	0.0% 1.5% 5.5% 1.5%	199 -4,339 -7,420 2,411	- -27.4% -12.7% 15.2%
Taxes EARNINGS AFTER TAXES FROM CONTINUING OPERATIONS	12,771 5,511	1.2% 0.5%	8,307 7,564	0.8% 0.7%	4,464 -2,053	53.7% -27.1%
Gain (loss) from assets held for disposal or sale EARNINGS FOR THE PERIOD INCLUDING NON CONTROLLING INTERESTS	0 5,511	- 0.5%	0 7,564	- 0.7%	0 -2,053	- -27.1%
Earnings for the period attributable to non-controlling interests	4,742	0.4%	4,622	0.4%	120	2.6%
EARNINGS FOR THE PERIOD ATTRIBUTABLE TO THE GROUP	769	0.1%	2,942	0.3%	-2,173	-73.9%

Statement of comprehensive income of the Immsi Group

	30/09/2016	30/09/2015
EARNINGS FOR THE PERIOD INCLUDING NON-CONTROLLING INTERESTS	5,511	7,564
Items that will not be reclassified to profit or loss
Actuarial gains (losses) on defined benefit plans	(4,544)	2,253
Total	(4,544)	2,253
Items that may be reclassified to profit or loss
Gains/(losses) on cash flow hedges	145	552
Profit (loss) deriving from the translation of financial statements of	(2,457)	2,171
foreign companies denominated in foreign currency
Gains/(losses) on the fair value measurement of assets available for sale and investment property	(8,547)	647
Total	(10,859)	3,370
Other Consolidated Comprehensive Income (Expense)	(15,403)	5,623
TOTAL COMPREHENSIVE PROFIT (LOSS) FOR THE PERIOD	(9,892)	13,187
Comprehensive earnings for the period attributable to non-controlling interests	1,303	7,053
COMPREHENSIVE EARNINGS FOR THE PERIOD	(11,195)	6,134
ATTRIBUTABLE TO THE GROUP

The figures in the above table are net of the corresponding tax effect.

Net revenues

Consolidated net revenues as of 30 September 2016 amounted to 1,079.4 million Euro, of which 95.6%, equal to 1,031.7 million Euro attributable to the industrial sector (Piaggio group), 4%, equal to 43.5 million Euro, to the marine sector (Intermarine S.p.A.), and the remaining part, of approximately 4.1 million Euro, to the property and holding sector (Immsi S.p.A. and Is Molas S.p.A. net of intergroup eliminations).

With reference to the industrial sector, the Piaggio group closed the first nine months of 2016 with net revenues equal to 1,031.7 million Euro, up by 2.9% compared to the same period of 2015, thanks in particular to the excellent performance in the Italian market.

With reference to the marine sector (Intermarine S.p.A.), consolidated revenues amounted to 43.5 million Euro as of 30 September 2016, down by 5.3% compared to the figure of 46 million Euro as of 30 September 2015, mainly due to a different distribution of production progress, with higher concentration in the second half of the year:

As regards the property and holding sector, net revenues as of 30 September 2016 amounted to approximately 4.1 million Euro, an increase of 3.6% over the figures for the first nine months of 2015.

Operating income before depreciation, amortisation and impairment costs of plant, property and equipment and intangible assets (EBITDA)

Consolidated operating income before depreciation, amortisation an impairment costs of plant, property and equipment and intangible assets (EBITDA) amounted to 139.5 million Euro as of 30 September 2016, equal to 12.9% of net revenues. compared to EBITDA of the first nine months of 2015, this figure represents an improvement of approx. 2.5 million euro (1.8%), mainly due to higher contributions attributable to the industrial (Piaggio group) and marine (Intermarine S.p.A.) sectors. As of 30 September 2015, EBITDA of the Immsi Group amounted to 137.1 million Euro, accounting for 13% of net revenues.

The component attributable to the industrial sector (Piaggio group) amounted to 141.5 million Euro, up by 5.8 million Euro compared to the figure as of 30 September 2015 (equal to 135.7 million Euro), and accounting for 13.7% of the net revenues of the sector, registering an increase compared to 13.5% for the same period of 2015. The component attributable to the marine sector (Intermarine S.p.A.) was equal to 1.3 million Euro, up by 0.7 million Euro compared to the figure as of 30 September 2015 (a positive amount of 0.6 million Euro). It is pointed out that the subsidiary recognised in other operating costs contractual penalties of approximately 3.1 million Euro applied to Intermarine on an order in progress, with partial offset of 1.6 million Euro in Financial/Income/Charges, previously recognised and now reversed as a result of a agreement related to the settlement of the case in question with a supplier.

Finally, the component attributable to real estate and holding sector amounted to a loss of 3.3 million Euro, while in the first nine months of 2015 there was a profit of 0.7 million Euro, mainly due to recognition: i) of income amounting to 2.7 million Euro, from the deposit paid by Como S.r.l. in 2005 for the preliminary purchase of the property site at Pietra Ligure. After conditions for suspension occurred, the promissory purchaser did not complete the purchase within contractual terms and so the deposit was retained on a final basis; ii) of income totalling 1.27 million Euro arising from the collection by Is Molas S.p.A. of two guarantees relative to contracts with Italiana Costruzioni S.p.A., following a court ruling in favour of Is Molas S.p.A. concerning breach of the contractor.

The main costs of the Immsi Group included personnel costs equal to 176.3 million Euro, in line with the figure for the same period of 2015, equal to 176.1 million Euro (accounting for 16.3% of net revenues, down from 16.7% for the first nine months of 2015). The average workforce in the first nine months of 2016 (7,396 units) was down compared to the same period of the previous year (8,068 units).

Operating income (EBIT)

Operating income (EBIT) in the first nine months of 2016 amounted to 57.3 million Euro, equal to 5.3% of net revenues. The decrease compared to the corresponding period of the previous year amounted to approx. 0.9 million euro (-1.5%). In the previous year, operating income (EBIT) in the first nine months amounted to 58.1 million Euro, with an incidence on net revenues of 5.5%.

The component attributable to the industrial sector (Piaggio group) amounted to 60.5 million Euro, up compared to the figure as of 30 September 2015 (equal to 58.1 million Euro), and accounting for 5.9% of the net revenues of the sector, registering an improvement compared to the same period of 2015 (5.8%). The component attributable to the marine sector (Intermarine S.p.A.) was equal to a positive amount of 0.5 million Euro, compared to the negative amount of 0.3 million Euro as of 30 September 2015. Finally, the component attributable to the real estate and holding sector was a negative value of 3.7 million Euro, a decrease compared to the figure recorded in the first quarter of the previous year (a profit of 0.4 million euro) as a result of the incidence of the abovementioned components.

Depreciation and amortisation for the period totalled 82.2 million Euro (up by 3.3 million Euro compared to the figure for the first nine months of 2015), accounting for 7.6% of net revenues, substantially in line with the same period of 2015 (7.5%), comprising depreciation of property, plant and equipment amounting to 34.6 million Euro (35.9 million Euro in the first nine months of 2015) and amortisation of intangible assets amounting to 47.6 million Euro (43 million Euro in the same period of 2015). In particular, depreciation and amortisation referable to the industrial sector (Piaggio group) amounted to approximately 81 million Euro (compared to 77.6 million Euro in the first nine months of 2015), of which 47.6 million relative to intangible assets (43 million Euro in the same period of 2015), and 33.5 million relative to plant, property and equipment (34.6 million Euro in the first nine months of 2015).

No impairment of goodwill was recognised in the first nine months of 2016, or in the same period of the previous year, as based on the results forecast by long-term development plans of Group companies and used in impairment testing carried out as of 31 December 2015 and 31 December 2014, no impairment was necessary, as the goodwill was considered as recoverable from future financial flows. Moreover, in the first nine months of 2016, no events occurred indicating a considerable impairment loss of the assets tested for impairment.

Considering that the analyses conducted to estimate the recoverable value for the Immsi Group cash-generating unit were also determined based on estimates, the Group cannot guarantee that there will be no goodwill impairment losses in future periods. Given the current ongoing difficulty of certain reference and financial markets, the various factors - both internal and external to cash generating units identified - used in making the estimates could be revised in future: the Group will constantly monitor these factors and the possible existence of future impairment losses.

Profit before tax

Profit before tax as of 30 September 2016 amounted to a profit of 18.3 million Euro, an improvement compared to a consolidated profit of 15.9 million Euro in the first nine months of the previous year.

Borrowing costs, net of income and earnings from investments, amounted to 39 million Euro in the first quarter of 2016, accounting for 3.6% of net revenues, with the contribution from the industrial sector amounting to 26.9 million Euro (27.6 in the first nine months of 2015), from the marine sector amounting to 1.8 million Euro (4.2 in the first three months of 2015) and from the property and holding sector the remaining amount (10.3 million Euro in the first nine months of 2016 compared to 10.5 million in the same period of the previous year). With reference to the marine sector, please refer to the explanation given in the paragraph on EBITDA.

Net financial borrowing costs recorded in the first nine months of 2016 were slightly down compared to figures for the same period of the previous year, and were equal to 42.3 million Euro, accounting for 4% of net revenues.

Group earnings for the period

Earnings for the period, net of taxes and the portion attributable to non-controlling interests, as of 30 September 2016 amounted to 0.8 million Euro (0.1% of net revenues for the period), a worsening compared to the positive figure of 2.9 million Euro registered in the same period of the previous year (0.3% of net revenues for the period).

Taxes accruing in the period represented a cost of approx. 12.8 million euro (during the first nine months of 2015 a cost of 8.3 million euro was recorded): income tax, also in view of requirements of IAS 34, was on average determined, based on the best estimate of the average weighted rate expected for the entire year.

Earning/(loss) per share

In euro

From continuing and discontinued operations:	30/09/2016	30/09/2015
Basic	0.002	0.009
Diluted	0.002	0.009

Average number of shares: 340,530,000 340,530,000

Diluted earnings per share correspond to basic profit as there are no potential shares with a diluting effect.

At the end of the reporting period, no gains or losses from assets held for sale or disposal had been recognised.

Reclassified statement of financial position of the Immsi Group

In thousands of euro	30/09/2016	as a %	31.12.2015	as a %	30/09/2015	as a %
Current assets:
Cash and cash equivalents Financial assets	154,419 0	7.1% 0.0%	124,510 0	5.8% 0.0%	112,825 0	5.1% 0.0%
Operating	546,422	25.1%	532,092	24.7%	616,320	27.8%
activities
Total current assets	700,841	32.2%	656,602	30.5%	729,145	32.9%
Non-current assets:
Financial assets	0	0.0%	0	0.0%	0	0.0%
Intangible assets	842,917	38.7%	852,211	39.5%	848,376	38.3%
Plant, property and equipment	333,353	15.3%	343,465	15.9%	338,323	15.3%
Other assets	302,185	13.9%	303,420	14.1%	301,853	13.6%
Total non-current assets	1,478,455	67.8%	1,499,096	69.5%	1,488,552	67.1%
TOTAL ASSETS	2,179,296	100.0%	2,155,698	100.0%	2,217,697	100.0%
Current liabilities:
Financial liabilities	527,707	24.2%	426,074	19.8%	349,197	15.7%
Operating liabilities	615,996	28.3%	559,908	26.0%	620,790	28.0%
Total current liabilities	1,143,703	52.5%	985,982	45.7%	969,987	43.7%
Non-current liabilities:
Financial liabilities	521,178	23.9%	625,088	29.0%	676,623	30.5%
Other non-current liabilities	115,805	5.3%	116,534	5.4%	123,435	5.6%
Total non-current liabilities	636,983	29.2%	741,622	34.4%	800,058	36.1%
TOTAL LIABILITIES	1,780,686	81.7%	1,727,604	80.1%	1,770,045	79.8%
TOTAL SHAREHOLDERS' EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	398,610 2,179,296	18.3% 100.0%	428,094 2,155,698	19.9% 100.0%	447,652 2,217,697	20.2% 100.0%

Analysis of capital invested by the Immsi Group

In thousands of euro	30/09/2016	as a %	31.12.2015	as a %	30/09/2015	as a %
Current operating assets	546,422	38.8%	532,092	36.2%	616,320	41.5%
Current operating liabilities	-615,996	-43.7%	-559,908	-38.1%	-620,790	-41.8%
Net operating working capital	-69,574	-4.9%	-27,816	-1.9%	-4,470	-0.3%
Intangible assets	842,917	59.8%	852,211	57.9%	848,376	57.2%
Plant, property	333,353	23.7%	343,465	23.3%	338,323	22.8%
and equipment
Other assets	302,185	21.4%	303,420	20.6%	301,853	20.3%
Capital employed	1,408,881	100.0%	1,471,280	100.0%	1,484,082	100.0%
Non-current non-financial liabilities	115,805	8.2%	116,534	7.9%	123,435	8.3%
Capital and reserves of non-controlling	161,927	11.5%	162,460	11.0%	170,314	11.5%
interests
Consolidated shareholders' equity	236,683	16.8%	265,634	18.1%	277,338	18.7%
attributable to the Group
Total non-financial sources	514,415	36.5%	544,628	37.0%	571,087	38.5%
Net financial debt	894,466	63.5%	926,652	63.0%	912,995	61.5%

Capital employed

Capital employed amounted to 1,408.9 million Euro as of 30 September 2016, down by 62.4 million Euro compared to 31 December 2015, and by 75.2 million Euro compared to 30 September 2015, when it stood at 1,471.3 million Euro and 1,484.1 million Euro respectively. In particular, in comparison with the opening balance, net working capital was down by 41.8 million Euro, mainly as a result of the increase in current operating liabilities.

Property, plant and equipment and intangible assets on the other hand decreased by 10.1 and 9.3 million Euro respectively compared to 31 December 2015 and by 5 and 5.5 million Euro compared to 30 September 2015.

Net financial debt of the Immsi Group

The net financial debt of the Immsi Group, equal to 894.5 million Euro as of 30 September 2016, is analysed below and compared with the same data as of 31 December 2015 and 30 September 2015.

In this respect, it is recalled that - in conformity with the CESR recommendation of 10 February 2005 "Recommendations for the consistent implementation of the European Commission's Regulation on Prospectuses" - the indicator, as formulated, represents the items and activities monitored by the Group's management.

In thousands of euro	30/09/2016	31.12.2015	30/09/2015
Short-term financial assets
Cash and cash equivalents	-154,419	-124,510	-112,825
Financial assets	0	0	0
Total short-term financial assets	-154,419	-124,510	-112,825
Short-term financial payables
Convertible	9,617	0	0
Payables due to banks	464,731	372,551	284,652
Amounts due for finance leases	1,132	31	31
Amounts due to other lenders	52,227	53,492	64,514
Total short-term financial payables	527,707	426,074	349,197
Total short-term financial debt	373,288	301,564	236,372
Medium/long-term financial assets
Receivables for loans	0	0	0
Other financial assets	0	0	0
Total medium/long-term financial assets	0	0	0
Medium/long-term financial payables
Convertible	281,462	290,139	289,210
Payables due to banks	228,442	333,765	386,275
Amounts due for finance leases	10,595	179	187
Amounts due to other lenders	679	1,005	951
Total medium/long-term financial payables	521,178	625,088	676,623
Total medium-/long-term financial debt	521,178	625,088	676,623
Net financial debt *)	894,466	926,652	912,995

*) The measure includes financial assets and liabilities arising from fair value measurements of the financial derivatives used for hedging, the fair value adjustment of the relative hedged items equal to 22,321 thousand Euro (26,735 thousand Euro and 25,075 thousand Euro as of 31 December 2015 and 30 September 2015 respectively) and relative accruals and deferrals.

As of 30 September 2016 the Group reduced its net debt compared to 30 September 2015 by approx. 18.5 million Euro: this decrease is attributable to the increase in short-term availability while the increase in short-term borrowings was partially offset by an increase in average medium and long-term debt. The decrease as of 30 September 2016 compared to the end of 2015 in the Group's net financial debt of approximately 32.2 million Euro is attributable in particular to the good performance of operations.

Investments

Gross investments as of 30 September 2016 made by the Group totalled 66.5 million Euro (69 million in the first nine months of 2015) referring nearly entirely to the Piaggio group, of which 39 million relative to intangible assets (43.3 million in the first nine months of 2015) and 27.5 million Euro relative to plant, property and equipment (up compared to 25.6 million Euro recognised in the same period of the previous year).

Cash flow statement of the Immsi Group

In thousands of euro	30/09/2016	30/09/2015
Operating activities
Profit before tax	18,282	15,871
Depreciation of plant, property and equipment (including investment	34,641	35,863
property)
Amortisation of intangible assets	47,608	43,041
Provisions for risks and for severance indemnity and similar obligations	17,619	16,659
Write-downs / (Reversals) Losses / (Gains) on the disposal of plant, property and equipment (including investment property)	914 (119)	1,714 (151)
Interest income	(2,287)	(348)
Dividend income	(7)	0
Interest expense	38,466	41,554
Amortisation of grants	(3,200)	(2,710)
Change in working capital	42,974	(19,139)
Change in non-current provisions and other	(31,901)	(8,734)
changes
Cash generated from operating activities	162,990	123,620
Interest paid	(30,628)	(34,875)
Taxes paid	(17,675)	(15,024)
Cash flow from operations	114,687	73,721
Investing activities Acquisition of subsidiaries, net of cash and cash equivalents	(5,585)	0
Sale price of subsidiaries, net of cash and cash equivalents	0	5,206
Investments in plant, property	(27,534)	(25,644)
and equipment
Sale price, or repayment value, of plant, property and equipment (including investment property)	260	413
Investments in intangible assets	(38,990)	(43,314)
Sale price, or repayment value, of intangible assets	0	44
Collected interests	363	363
Grants received	0	159
Other changes	4,756	(1,022)
Cash flow from investing activities	(66,730)	(63,795)
Financing activities
Loans received	109,609	224,233
Outflow for repayment of loans	(130,677)	(207,668)
Financing received for leases	12,839	0
Repayment of finance leases	(1,307)	(23)
Outflow for dividends paid to Parent company Shareholders	(5,107)	0
Outflow for dividends paid to non-controlling interests	(8,921)	(12,851)
Cash flow from financing activities	(23,564)	3,691
Increase / (Decrease) in cash and cash equivalents	24,393	13,617
Opening	104,415	75,899
balance
Exchange	(1,047)	2,095
differences
Closing	127,761	91,611
balance

The table shows the changes in cash and cash equivalents as of 30 September 2016 which total 154.4 million Euro (124.5 million as of 31 December 2015) including short-term bank overdrafts equal to 26.7 million Euro (20.1 million as of 31 December 2015).

Total shareholders' equity and equity attributable to the Immsi Group

In thousands of euro	Shareholders' equity shareholders' Group	Capital and reserves attributable to non-controlling interests	Total consolidated Equity attributable to the Group and to non-controlling interests
Balances at 1 January 2015	268,188	173,923	442,111
Distribution of dividends	0	(12,851)	(12,851)
Other changes	3,016	2,189	5,205
Net comprehensive earnings for the period	6,134	7,053	13,187
Balances as of 30 September 2015	277,338	170,314	447,652

In thousands of euro	Shareholders' equity shareholders' Group	Capital and reserves attributable to non-controlling interests	Total consolidated Equity attributable to the Group and to non-controlling interests
Balances at 1 January 2016	265,634	162,460	428,094
Distribution of dividends	(5,107)	(8,921)	(14,028)
Other changes	(12,649)	7,085	(5,564)
Net comprehensive earnings for the period	(11,195)	1,303	(9,892)
Balances as of 30 September 2016	236,683	161,927	398,610

Human resources

As of 30 September 2016, the Immsi Group employed 7,567 staff, of which 93 in the property and holding sector, 7,197 in the industrial sector (Piaggio group) and 277 in the marine sector (Intermarine S.p.A.).

The following tables divide resources by category and geographic segment:

Human resources by category

numbers			30/09/2016
	Property and holding sector	Industrial sector	Marine sector	Group total
Senior management	7	98	8	113
Middle managers and white collars	40	2,336	148	2,524
Manual workers	46	4,763	121	4,930
TOTAL	93	7,197	277	7,567
numbers	31.12.2015
	Property and holding sector	Industrial sector	Marine sector	Group total
Senior management	7	104	8	119
Middle managers and white collars	37	2,506	156	2,699
Manual workers	30	4,443	133	4,606
TOTAL	74	7,053	297	7,424
numbers			Changes
	Property and holding sector	Industrial sector	Marine sector	Group total
Senior management	0	-6	0	-6
Middle managers and white collars	3	-170	-8	-175
Manual workers	16	320	-12	324
TOTAL	19	144	-20	143

Human resources by geographic segment

numbers			30/09/2016
	Property and holding sector	Industrial sector	Marine sector	Group total
Italy	93	3,585	277	3,955
Rest of Europe	0	176	0	176
Rest of the World	0	3,436	0	3,436
TOTAL	93	7,197	277	7,567
numbers	31.12.2015
	Property and holding sector	Industrial sector	Marine sector	Group total
Italy	74	3,638	297	4,009
Rest of Europe	0	187	0	187
Rest of the World	0	3,228	0	3,228
TOTAL	74	7,053	297	7,424
numbers			Changes
	Property and holding sector	Industrial sector	Marine sector	Group total
Italy	19	-53	-20	-54
Rest of Europe	0	-11	0	-11
Rest of the World	0	208	0	208
TOTAL	19	144	-20	143

The increase in staff compared to 31 December 2015 (+143) is mainly attributable to the industrial sector (+144) and property and holding sector (+19), partially offset by the decrease in staff in the marine sector (-20), and is due to the employment of staff on a seasonal basis and on fixed-term contracts to meet the peak demand of summer months.

Directors' comments on operations

In the first nine months of 2016, Immsi Group revenues improved compared to the same period of the previous year. With reference to the real estate sector, it is recalled that in the first nine months of 2015, income for the enforcement of guarantees and definitive withholding of a deposit had been recorded that were not repeated in 2016, while the marine sector in 2016 envisages a concentration of production progress and related margins especially starting from the second half of the year compared to a more even distribution in 2015. Final results for the period have different trends with reference to the various sectors comprising the Group, based on business trends and the different impact of seasonality.

Property and holding sector

In thousands of euro	30/09/2016	as a %	30/09/2015	as a %	Change	as a %
Net revenues	4,105		3,963		142	3.6%
Operating income before depreciation and amortisation (EBITDA)	-3,332	n/m	716	n/m	-4,048	n/m
Operating income (EBIT)	-3,704	n/m	353	n/m	-4,057	n/m
Profit before tax	-14,036	n/m	-10,186	n/m	-3,850	n/m
Earnings for the period including non-controlling interests	-12,013	n/m	-7,214	n/m	-4,799	n/m
Group earnings for the period (which may be consolidated)	-8,490	n/m	-3,988	n/m	-4,502	n/m
Net debt	-342,903		-319,865		-23,038	-7.2%
Personnel (number)	93		87		6	6.9%

Overall, in the first nine months of 2016, the property and holding sector reported a loss for consolidation purposes of approx. 8.5 million Euro, a deterioration over the same period of the previous year (which recorded a loss for consolidation purposes of 4 million Euro), mainly due to recognition in 2015: 1) of income equal to 2.7 million euro relating to the deposit paid by Como S.r.l. in 2005 when signing the preliminary purchase agreement for the property portfolio of Pietra Ligure, following a breach of contract terms, and 2) income for a total of 1.27 million euro from Is Molas S.p.A. collecting two guarantees relative to contracts with Italiana Costruzioni S.p.A., following the ruling in favour of the subsidiary due to breach by the contractor;

Net debt for the sector amounted to 342.9 million Euro, compared with 328.7 million Euro and 319.9 million Euro as of 31 December 2015 and 30 September 2015 respectively.

The operating outlook of main companies belonging to the sector in the first nine months of 2016 is described below, with reference to the separate financial statements of each company (therefore including intergroup eliminations).

The Parent Company Immsi S.p.A in the first nine months of 2016 recorded an operating loss (EBIT) of approximately 0.6 million Euro (in line with the first nine months of the previous year) while net profit, amounting to approximately 8.1 million Euro, decreased compared to a net profit of approximately 16 million Euro in the same period of 2015, mainly due to the balance of financial operations, given by the difference between financial income and financial expenses, which in 2015 benefited from Piaggio dividends of 13.2 million Euro, compared to 9 million in 2016, and a gain on the sale of Piaggio shares of 2.7 million Euro.

In preparing this Interim Report on Operations as of 30 September 2016, the Parent Company did not carry out any specific impairment testing on the carrying amount of investments held in companies consolidated on a line-by-line basis, as these investments and any changes resulting from relative impairment tests would have been eliminated in full during consolidation. With reference to the investment in Alitalia - CAI, in the absence of significant changes compared to testing indicated in the 2015 financial statements, reference is made to comments in the Directors' Report on Operations and Financial Statements of the Immsi Group as of 31 December 2015.

Net financial debt as of 30 September 2016 amounted to 80.7 million Euro, up by approximately 2.6 million Euro compared to the figure as of 31 December 2015, mainly as a result of dividend distribution of 5.1 million Euro and payment in March 2016 of 1.1 million Euro as "payment for a future capital increase", in compliance with the Stand-by Equity Commitment undertaken in September 2014 to subscribe and release for a maximum of 10 million Euro the capital increase resolved by the shareholders' meeting of Alitalia - CAI on 25 July 2014.

With reference to the bank debt of the Parent Company, it is pointed out that the problems that emerged as of 30 June 2016 related to the sharp fall in share prices, including those of Piaggio S.p.A. and Unicredit S.p.A. used by the Company to secure credit lines used on its own behalf and by other Group companies, which at the end of the first half of 2016 led to a momentary situation of non-compliance with certain financial covenants and Guarantee Values (Value to Loan), were remedied in the months of July and August 2016 by obtaining the appropriate waivers and exemptions form the banks. The Company therefore restored the accounting of the loans in compliance with the contractual maturities of each of them. For further details of the above, please refer to the Half-year Financial Report as of 30 June 2016.

Finally, it is pointed out that the Immsi S.p.A. holding in Unicredit S.p.A. is recognised under other current assets. The Unicredit share price at 30 September 2016 stood at 2.07 Euro, lower than the book value (equal to approximately 5.326 Euro per share). This difference is not considered to be a permanent impairment as determined by the procedure adopted by Immsi S.p.A.: in this regard, this procedure relating to the determination of the impairment of equity financial instruments classified as "Available For Sale" ("AFS") has defined alternatively the conditions of a prolonged or significant reduction in fair value on the basis of i) a reduction in the market value exceeding two thirds of the original cost; and ii) a market value continuously lower than the original carrying amount, observed over a period of time of at least two years. In this regard it is pointed out that on 6 and 7 July 2016, the reduction in the market value of Unicredit shares compared to the book value slightly exceeded the threshold of two-thirds of the book value (constituting the first condition provided for by the aforementioned procedure). The Board of Directors, however, deemed that this decrease was part of a general context of significant weakness of European stock markets and, in particular, in the banking sector, and found that, after overcoming the above factors, the markets were now quieter and showing signs of recovery. In accordance with the aforementioned Company procedure, the Board of Directors therefore decided not to consider the market valuation of Unicredit shares for the two closures mentioned above as bring indicative of a "significant reduction in fair value" and to exceptionally waiver the indicated threshold.

With regard to the subsidiary Is Molas S.p.A., it is pointed out that works on the construction of 15 villas in the FCn10 sector and the primary infrastructure works are ongoing. The construction of 4 show villas has been substantially completed and commercial activities aimed at identifying possible buyers, also at the international level, is in progress.

Revenues from tourism/hospitality/golf for the first nine months of 2016 grew (+7.9%) compared to the same period of 2015, while in terms of margins, the company recorded an operating loss of approx. 2.6 million Euro (compared to a loss of 1.3 million Euro in the corresponding period of 2015), and a net loss for consolidation purposes of 1.6 million euro, a deterioration compared to 30 September 2015 of approximately 0.5 million Euro, mainly due to the recognition in the first nine months of 2015 of income for a total of 1.27 million Euro arising from the collection of two guarantees relative to contracts with Italiana Costruzioni S.p.A., following a court ruling in favour of the subsidiary for breach of the contractor.

Net debt of the company amounted to 42.4 million Euro, with a cash flow absorption of 1.2 million Euro compared to 31 December 2015 (when it stood at 41.2 million Euro): this change consists of the net cash flow absorbed by operations of approximately 10 million Euro (in particular to fund the progress of works for construction of the first lot of 15 villas) and of the investments in plant, property and equipment of 0.4 million Euro, only partially offset by the contribution of 9.2 million Euro by the shareholder ISM Investimenti S.p.A. for subscription to the capital increase mainly intended for the start up of the property activities.

With reference to the Pietra Ligure project, it is pointed out that, among other things, on 19 January 2016, at the Municipality of Pietra, the Final Design of the Infrastructure Works envisaged by the urban transformation plan of the area was submitted, in compliance with the formalities required by the Urban Planning Agreement entered into with the Municipality of Pietra Ligure. Moreover, activities aimed at identifying potential parties interested in development of the Project continued. The net profit for consolidation purposes of Pietra S.r.l. in the first nine months of 2016 was close to break-even, compared to a profit of 1.5 million Euro in the same period of the previous year, due to the recognition of income of 2.7 million Euro as a withholding of the confirmation deposit paid in 2005 by Como Srl mentioned earlier, while the net financial debt was unchanged compared to 31 December 2015, amounting to 2.6 million Euro. The consolidated loss of Pietra Ligure S.r.l., a subsidiary of Pietra S.r.l. and which incorporates the property complex of Pietra Ligure with the related Urban Planning Permissions and Agreements, amounted to 0.1 million Euro (as in the first nine months of 2015); net financial debt amounted to 0.5 million Euro (0.1 million Euro as of 31 December 2015).

With reference to the subsidiary Apuliae S.p.A. no further information is available in addition to comments in the Directors' Report on Operations and Financial Statements of the Immsi Group as of 31 December 2015, to which reference is made. As of 30 September 2016, the company posted a substantial break-even position, with net financial debt in slight deterioration compared to 31 December 2015 and amounting to a negative value of 0.4 million Euro.

Other companies in the property and holding sector include RCN Finanziaria S.p.A. and ISM Investimenti S.p.A.:

• RCN Finanziaria S.p.A., owned Immsi S.p.A. and sole shareholder of Intermarine S.p.A., recorded a net loss for consolidation purposes as of 30 September 2016 for the Immsi Group of approximately 2.2 million Euro, in line with the corresponding period of the previous year, and net financial debt of 120.8 million Euro as of 30 September 2016, in line with the value as of 31 December 2015; It is pointed out that, following the purchase by the RCN Finanziaria of all the ordinary shares of the company held by the minority shareholder GE Capital Equity Holdings LLC finally last August, the stake of Immsi S.p.A. in the subsidiary increased from 63.18% to 72.51%;
• ISM Investimenti S.p.A., in which Immsi S.p.A. holds 72.64% in terms of voting rights, and which controls Is Molas S.p.A. with an 89.48% share, recorded a net loss for consolidation purposes for the Immsi Group equal to approximately 2.5 million Euro (compared to a loss of 2.1 million Euro in the fist nine months of 2015), and a net financial debt as of 30 September 2016 of 95.4 million Euro, an increase of approximately 9.9 million Euro compared to 31 December 2015, mainly due to the capital increase contribution in the subsidiary Is Molas S.p.A..

Industrial sector

In thousands of euro	30/09/2016	as a %	30/09/2015	as a %	Change	as a %
Net revenues	1,031,723		1,002,603		29,120	2.9%
Operating income before depreciation and amortisation (EBITDA)	141,524	13.7%	135,686	13.5%	5,838	4.3%
Operating income (EBIT)	60,489	5.9%	58,078	5.8%	2,411	4.2%
Profit before tax	33,610	3.3%	30,525	3.0%	3,085	10.1%
Earnings for the period including non-controlling interests	19,157	1.9%	18,315	1.8%	842	4.6%
Group earnings for the period (which may be consolidated)	10,230	1.0%	9,165	0.9%	1,065	11.6%
Net debt	-469,536		-495,844		26,308	5.3%
Personnel (number)	7,197		7,527		-330	-4.4%

During the first nine months of 2016, the Piaggio group sold 411,700 vehicles worldwide, with a reduction in volumes of approximately 3.9% compared to the previous year, when 396,200 vehicles were sold.

Sales in EMEA and the Americas were up (+ 6.8%), driven by the volumes achieved on the Italian market (+ 18.4%) and in Europe (+ 5.4%), while there was a fall in vehicles sold in the Americas (- 11.5%). As regards product types with an improved sales performance, sales increased for both two-wheeler vehicles (+ 6.1%), boosted by the introduction of the Wi-Bike, while commercial vehicle volumes were substantially stable (+0.1%).

In terms of consolidated turnover, the Group closed the first nine months of 2016 with higher net revenues compared to the same period in 2015 (+2.9%).

The increase in revenues in EMEA and the Americas (+4.9%) and in Asia Pacific (+3.1%) more than offset the downturn in India, due to the effect of an unfavourable exchange rate (- 2.0%; +3.3% with constant exchange rates). With regard to product type, the increase in turnover was greater for two-wheeler vehicles (+4.1%) while commercial vehicles were substantially stable (+0.1%). As a result, the impact of two-wheeler vehicles on overall turnover went down from 69.9% in the first nine months of 2015 to the current figure of 70.8%; conversely, the percentage of Commercial Vehicles of overall turnover fell from 30.1% in the first nine months of 2015 to the current figure of 20.2%.

Consolidated operating income before depreciation and amortisation (EBITDA) for the first nine months of 2016 improved compared to the same period of the previous year and was equal to 141.5 million Euro (135.7 million Euro in the first nine months of 2015). In relation to turnover, EBITDA went up by 0.2% compared to the first nine months of 2015, to 13.7%. In terms of Operating Income (EBIT), the performance of the year in progress has also improved with consolidated EBIT of 60.5 million Euro; in relation to turnover, EBIT amounted to 5.9% compared to 5.8% for the same period of the previous year.

The result of financing activities improved compared to the corresponding period of the previous year by 0.7 million Euro, with net charges amounting to 26.9 million Euro (27.6 million Euro in the first nine months of 2015). The improvement is related to the reduction in average debt for the period and the cost of funding, partially offset by the lower capitalisation of financial charges and by the negative effect of currency management.

Net profit stood at 19.2 million Euro (1.9% of turnover), up on the figure for the same period of the previous year, which was equal to 18.3 million Euro (1.8% of turnover). Taxation on profit before taxes is estimated to be equal to 43% and is determined based on the average expected tax rate for the entire year.

The portion of net profit which may be consolidated for the Immsi Group in the first nine months of 2016 amounted to 10.2 million Euro (an improvement compared to the figure for the same period of the previous year of 9.2 million Euro).

Net financial debt as of 30 September 2016 was equal to 469.5 million Euro, compared to 498.1 million Euro as of 31 December 2015. The reduction of approx. 28.6 million Euro was mainly due to the good operating performance and greater efficiency in the management of working capital, whose cash generation allowed payment of dividends and funding of the investment programme. In particular, the flows that generated financial resources are detailed below:

• the operating cash flow amounted to +104.4 million Euro (+91.3 million Euro in the first nine months of 2015);
• working capital dynamics generated a cash flow of 16.6 million Euro (0.7 million Euro in the first nine months of 2015);
• investing activities absorbed a total of 62.1 million Euro (73.7 million Euro in the first nine months of 2015); and
• changes in shareholders' equity absorbed 30.3 million Euro (compared to 21.3 million Euro in the first nine months of 2015).

In thousands of euro	30/09/2016	as a %	30/09/2015	as a %	Change	as a %
Net revenues	43,533		45,963		-2,430	-5.3%
Operating income before depreciation and amortisation (EBITDA)	1,334	3.1%	648	1.4%	686	105.9%
Operating income (EBIT)	492	1.1%	-285	-0.6%	777	272.6%
Profit before tax	-1,292	-3.0%	-4,468	-9.7%	3,176	71.1%
Earnings for the period including non-controlling interests	-1,633	-3.8%	-3,537	-7.7%	1,904	53.8%
Group earnings for the period (which may be consolidated)	-971	-2.2%	-2,235	-4.9%	1,264	56.6%
Net debt	-82,027		-97,286		15,259	15.7%
Personnel (number)	277		295		-18	-6.1%

Marine sector

With reference to the income data of the marine sector (Intermarine S.p.A.), during the first nine months of 2016, net sales revenues (consisting of sales and changes in work in progress) amounted to 43.5 million Euro, compared to 46 million Euro in the corresponding period of 2015 (reduction of 5.3%). Production progress, including research and development, and the completion of constructions and deliveries, concerned in particular:

• the Defence division, with 41.2 million Euro (43.2 million in the first nine months of 2015), mainly due to progress in the order for construction of an integrated minesweeper platform as sub-contractor in a contract with a leading company operating in the field and in the processing relating to the construction of a naval platform in a contract with an Asian shipyard;
• the Fast Ferries and Yacht division, with a total of 2.3 million Euro (2.8 million during the first nine months of 2015), mainly for repair activities. In the Fast Ferries and Yacht sector, no significant sales contracts for new and previously owned vessels were acquired.

In view of the above, an operating income (EBIT) of 0.5 million Euro was recorded for the first nine months of 2016, improving by approximately 0.8 million Euro compared to the same period of the previous year (when this figure stood at a loss of 0.3 million Euro). As regards profit before tax, a negative value of 1.3 million Euro was recorded (compared to a negative value of 4.5 million Euro in the same period of 2015) while the net loss for consolidation purposes for the Immsi Group as of 30 September 2016 amounted to 1 million Euro, compared to a loss of 2.2 million Euro recorded in the same period of the previous year. It is pointed out that the subsidiary recognised in other operating costs contractual penalties of approximately 3.1 million Euro applied to Intermarine on an order in progress, with partial offset of 1.6 million Euro in Financial/Income/Charges, previously recognised and now reversed as a result of an agreement related to the settlement of the case in question with a supplier. Excluding this component, the net profit/loss for the first nine months of 2016 would have been in break even.

The company continued during the first nine months of 2016 to reduce overheads as much as possible. At the same time, commercial activities continued in all the operational businesses of the company, pursuing favourable commercial opportunities.

The total value of the orders portfolio of the company amounted to 350 million Euro at 30 September 2016, referring nearly entirely to contracts of the Defence sector.

From an equity point of view, the net financial debt of 82 million Euro at 30 September 2016, represents a decrease of approximately 17.8 million Euro compared with the balance at 31 December 2015, mainly due to the good performance of working capital management.

Events occurring after 30 September 2016 and operating outlook

With regard to events after 30 September 2016 with reference to the Parent Company Immsi S.p.A., please note that a financial requirement envisaged by a credit line was slightly breached at the end of October 2016. The Company is monitoring the situation and assessing the appropriate remedy measures within the contractually envisaged 'grace period'.

As regards the operating outlook of the Immsi Group, with reference to the subsidiary Is Molas S.p.A., the company will proceed with the urban infrastructure works and works for completion of the first phase of 15 villas, along with the sales activities of the same.

As regards the industrial sector, in a macroeconomic context in which the recovery of the global economy will probably consolidate, but which is still affected by uncertainties over the growth rate in Europe and risks of a slowdown in some Far East Asian countries, the Group is committed, in commercial and industrial terms, to:

• confirm its leadership position on the European two-wheeler market, optimally levering expected recovery by:
• further consolidating the product range and targeting a growth in sales and margins in the high-wheeled scooter segment, with the new Liberty and Medley, and in the motorcycle segment, thanks to the restyled Moto Guzzi and Aprilia ranges and launch on the market of electric bicycles with the new Piaggio Wi-Bike;
• current positions on the European commercial vehicles market will be maintained;
• consolidating operations in Asia Pacific, exploring new opportunities in medium and large sized motorcycle segments, and replicating the premium strategy for Vietnam, throughout the region, with particular reference to the Chinese market;
• consolidating sales on the Indian scooter market, focussing on an increase in Vespa products and the introduction, along with other Group brands, of new models in the premium scooter and motorcycle segments;
• increasing sales of commercial vehicles in India and in emerging countries, targeting a further development of exports to African and Latin American markets.

With reference to the marine sector, it is pointed out that at the beginning of November 2016, Intermarine S.p.A. delivered the third Katanpää class minesweeper to the Finnish Navy. Following this delivery, Intermarine completed the contract for the delivery of three minesweepers to the Finnish Navy, mainly used for national defence, the result of a long phase of refinement and adaptation of the standard Intermarine design to the specific needs of the customer.

It is pointed out that - in the current international and industry crisis - the company is aiming for considerable growth in the defence sector, which does not seem to be affected by the same critical aspects as the passenger transport and yacht/ferry markets. Pending start of production of all new contracts, particularly in the Defence sector, company Management:

• will rigorously monitor the progress of production of the contracts in place;
• will continue to pursue all opportunities to keep organisation costs down.

In view of the production progress that will be made in 2016, concerning ongoing contracts and planned developments for new contracts, growth in revenues and a significant improvement in operating income is expected for 2016 compared with 2015.

From an equity point of view we expect a significant reduction in net financial exposure and an annual level of cash flow in equilibrium.

Segment reporting

The information for operating segments presented below reflects the internal reporting system utilised by management for making strategic decisions. In this respect, as regards the different business areas – where possible – information is provided relating to the property and holding sector, industrial and naval sectors.

Primary sector: business areas

Income statement as of 30 September 2016

	Sector property	Sector industrial	Sector marine	Immsi Group
In thousands of euro	and holding
Net revenues to non-controlling interests Intercompany net revenues	4,105	1,031,723	43,533	1,079,361 0
NET REVENUES	4,105	1,031,723	43,533	1,079,361
OPERATING INCOME	-3,704	60,489	492	57,277
Income/(loss) from investments Financial income Borrowing costs PROFIT BEFORE TAX	0 420 10,752 -14,036	480 9,428 36,787 33,610	0 1,663 3,447 -1,292	480 11,511 50,986 18,282
Taxes EARNINGS AFTER TAXES FROM CONTINUING OPERATIONS	-2,023 -12,013	14,453 19,157	341 -1,633	12,771 5,511
Gain (loss) from assets held for disposal or sale EARNINGS FOR THE PERIOD INCLUDING NON-CONTROLLING INTERESTS	0 -12,013	0 19,157	0 -1,633	0 5,511
Earnings for the period attributable to non controlling interests	-3,523	8,927	-662	4,742
EARNINGS FOR THE PERIOD ATTRIBUTABLE TO THE GROUP	-8,490	10,230	-971	769

Statement of financial position as of 30 September 2016

In thousands of euro	Sector property and holding	Sector industrial	Sector marine	Immsi Group
Segment assets Investments in affiliated companies	368,505 0	1,627,945 145	182,687 14	2,179,137 159
TOTAL ASSETS	368,505	1,628,090	182,701	2,179,296
TOTAL LIABILITIES	349,621	1,234,934	196,131	1,780,686

In thousands of euro	Sector property and holding	Sector industrial	Sector marine	Immsi Group
Investments in plant, property and equipment and intangible assets	433	65,679	627	66,739
Depreciation, amortisation and write-downs	387	81,887	889	83,163
Cash flow from operating activities	-16,565	113,091	18,161	114,687
Cash flow from investing activities	-7,166	-59,234	-330	-66,730
Cash flow from financing activities	-141	-5,343	-18,080	-23,564

Secondary sector: geographic segments

The following table presents the Group's financial position and performance as of 30 September 2016 in relation to geographic segments "of origin", i.e. referring to the country of the company that realised the revenues or which owns the assets.

Income statement as of 30 September 2016

In thousands of euro	Italy	Rest of Europe	India	United States	Rest of the World	Immsi Group
Net revenues to non controlling interests Intercompany net revenues	618,640	21,923	255,079	48,072	135,647	1,079,361 0
NET REVENUES	618,640	21,923	255,079	48,072	135,647	1,079,361

Statement of financial position as of 30 September 2016

In thousands of euro	Italy	Rest of Europe	India	United States	Rest of the World	Immsi Group
Segment assets Investments in affiliated companies	1,776,717 124	30,728 35	187,575 0	45,245 0	138,872 0	2,179,137 159
TOTAL ASSETS	1,776,841	30,763	187,575	45,245	138,872	2,179,296

In thousands of euro	Italy	Rest of Europe	India	States United States	Rest of the World	Immsi Group
Total receivables *	88,946	16,314	26,859	11,084	18,550	161,753
Total payables **	404,954	38,597	105,593	1,717	41,923	592,784

*) Contract work in progress and Amounts due from the Tax authorities are not included.

**) Payables for Current taxes and Financial liabilities are not included.

~ 32 ~ Immsi Group Interim Report on Operations

In thousands of euro	Italy	Rest of Europe	India	United States	Rest of the World	Immsi Group
Investments in plant, property and equipment and intangible assets	56,484	77	5,089	549	4,540	66,739
Depreciation, amortisation and write downs	63,586	217	9,833	135	9,392	83,163

For comparability, the corresponding tables referring to 30 September 2015 are shown below:

Primary sector: business areas

Income statement as of 30 September 2015

In thousands of euro	Sector property and holding	Sector industrial	Sector marine	Immsi Group
Net revenues to non-controlling interests Intercompany net revenues	3,963	1,002,603	45,963	1,052,529 0
NET REVENUES	3,963	1,002,603	45,963	1,052,529
OPERATING INCOME	353	58,078	-285	58,146
Income/(loss) from investments Financial income Borrowing costs PROFIT BEFORE TAX	0 382 10,921 -10,186	281 15,397 43,231 30,525	0 71 4,254 -4,468	281 15,850 58,406 15,871
Taxes EARNINGS AFTER TAXES FROM CONTINUING OPERATIONS	-2,972 -7,214	12,210 18,315	-931 -3,537	8,307 7,564
Gain (loss) from assets held for disposal or sale EARNINGS FOR THE PERIOD INCLUDING NON-CONTROLLING INTERESTS	0 -7,214	0 18,315	0 -3,537	0 7,564
Earnings for the period attributable to non-controlling interests	-3,226	9,150	-1,302	4,622
EARNINGS FOR THE PERIOD ATTRIBUTABLE TO THE GROUP	-3,988	9,165	-2,235	2,942

Statement of financial position as of 30 September 2015

In thousands of euro	Sector property and holding	Sector industrial	Sector marine	Immsi Group
Segment assets Investments in affiliated companies	368,092 0	1,596,771 177	252,644 13	2,217,507 190
TOTAL ASSETS	368,092	1,596,948	252,657	2,217,697
TOTAL LIABILITIES	326,884	1,186,911	256,250	1,770,045

In thousands of euro	Sector property and holding	Sector industrial	Sector marine	Immsi Group
Investments in plant, property and equipment and intangible assets	369	68,190	399	68,958
Depreciation, amortisation and write-downs	378	78,617	1,623	80,618
Cash flow from operating activities	-12,138	90,672	-4,813	73,721
Cash flow from investing activities	3,834	-67,385	-244	-63,795
Cash flow from financing activities	9,162	-9,762	4,291	3,691

Secondary sector: geographic segments

Income statement as of 30 September 2015

In thousands of euro	Italy	Rest of Europe	India	United States	Rest of the World	Immsi Group
Net revenues to non controlling interests Intercompany net revenues	582,732	19,101	260,253	58,785	131,658	1,052,529 0
NET REVENUES	582,732	19,101	260,253	58,785	131,658	1,052,529

Statement of financial position as of 30 September 2015

In thousands of euro	Italy	Rest of Europe	India	United States	Rest of the World	Immsi Group
Segment assets Investments in affiliated companies	1,825,447 125	30,829 3	183,318 0	38,138 0	139,775 62	2,217,507 190
TOTAL ASSETS	1,825,572	30,832	183,318	38,138	139,837	2,217,697

In thousands of euro	Italy	Rest of Europe	India	United States	Rest of the World	Immsi Group
Total receivables *	128,249	34,929	26,715	9,308	19,063	218,264
Total payables **	387,727	78,776	97,264	2,574	30,838	597,179

*) Contract work in progress and Amounts due from the Tax authorities are not included.

**) Payables for Current taxes and Financial liabilities are not included.

In thousands of euro	Italy	Rest of Europe	India	United States	Rest of the World	Immsi Group
Investments in plant, property and equipment and intangible assets	55,228	72	3,734	132	9,792	68,958
Depreciation, amortisation and write downs	59,335	263	12,965	90	7,965	80,618