Brembo Q1 2023 Results

5/9/2023

BREMBO: Q1 REVENUES UP 12.2% TO €961.9 MILLION (+11.6% ON A LIKE-FOR-LIKE EXCHANGE RATE BASIS) EBITDA AT €168.3 MILLION, NET PROFIT AT €76.8 MILLION.

Results for the First Quarter of 2023

Brembo’s Board of Directors, chaired by Matteo Tiraboschi, met today, examined and approved the Group’s results at 31 March 2023.

Net consolidated revenues amounted to €961.9 million, up 12.2% (+11.6% on a like-for-like exchange rate basis) compared to the first quarter of the previous year.

In the reporting quarter, the Group reported a very positive performance across all its sectors of operation: the car segment rose by 12.9%, motorbike applications by 3.0%, applications for commercial vehicles by 14.0% and racing applications by 23.4% compared to the same quarter of 2022.

At geographical level, sales rose by 4.0% in Italy, by 26.8% in Germany, by 19.7% in France and by 2.4% in the United Kingdom (+3.1% on a like-for-like exchange rate basis). India grew by 13.8% (+18.8% on a like-for-like exchange rate basis), China declined by 9.1% (-6.8% on a like-for-like exchange rate basis) and Japan grew by 8.7% (+12.0% on a like-for-like exchange rate basis). The North American market (USA, Mexico and Canada) rose by 14.1% (+10.1% on a like-for-like exchange rate basis) and the South American market (Brazil and Argentina) grew by 64.5% (+56.4% on a like-for-like exchange rate basis).

Executive Chairman Matteo Tiraboschi stated: “The results of the first quarter of 2023, approved today by the Board of Directors, show a double-digit revenue growth compared to the first quarter of the previous year. All the business segments contributed to this performance, confirming that Brembo is maintaining its technological leading position in the reference market. Within a deeply changing automotive sector, we are investing to consolidate our industrial footprint at global level. In Mexico, the doubling of the production capacity of our Escobedo plant will be completed soon. In China, we will expand the production and research areas of the Nanjing site, while in Poland we are launching a project aimed at building a new, technologically advanced foundry. These three major investments will contribute to our growth and to consolidating our role as a Solution Provider.”

In the first quarter of 2023, the cost of sales and other net operating costs amounted to €636.1 million, with a 66.1% ratio to sales, in line with the same period of the previous year in percentage terms (Q1 2022: €568.0 million or 66.2% of sales).

Personnel expenses amounted to €162.4 million, with a 16.9% ratio to sales, slightly increasing compared to the same period of the previous year (16.7% of sales). At 31 March 2023, Brembo people numbered 15,305, compared to 14,966 at 31 December 2022 and 14,632 at 31 March 2022.

In the reporting quarter, EBITDA amounted to €168.3 million (EBITDA margin: 17.5%), compared to €150.8 million (EBITDA margin: 17.6%) for Q1 2022. EBIT amounted to €104.0 million (EBIT margin: 10.8%) compared to €92.9 million (EBIT margin: 10.8%) for Q1 2022.

Net interest income for the quarter amounted to €1.0 million (€1.9 million in Q1 2022); this item includes interest expense amounting to €5.1 million (€3.0 million in Q1 2022) and net exchange gains of €6.1 million (€4.9 million in Q1 2022).

Pre-tax profit was €105.0 million (10.9% of sales) compared to €94.8 million (11.1% of sales) for Q1 2022. Based on the tax rates applicable under current tax regulations in force in each country, estimated taxes amounted to €27.9 million (€23.4 million in Q1 2022), with a tax rate of 26.6% compared to 24.7% for the same period of 2022.

The reporting period ended with a net profit of €76.8 million (8.0% of sales) compared to €71.7 million (8.4% of sales) for the same period of the previous year.

Net financial debt at 31 March 2023 amounted to €506.4 million, up €4.4 million compared to 31 December 2022. Excluding the impact of IFRS 16, net financial debt would have been €329.0 million, up €68.2 million compared to 31 December 2022. It should be noted that the Mexican building subject to expansion works — previously held under finance lease — was acquired in March.

Significant Events After 31 March 2023

The General Shareholders’ Meeting of Brembo S.p.A., held on 20 April, approved the Financial Statements at 31 December 2022, allocating net profit for the year amounting to €164.9 million as follows:

• to the Shareholders, a gross ordinary dividend of €0.28 per each ordinary share outstanding with payment as of 24 May 2023, ex-coupon date No. 6 on 22 May 2023, and record date on 23 May 2023;

• the remaining amount carried forward.

Foreseeable Evolution 

The orders backlog for the coming months remain robust at global level; barring significant changes in the current macro-economic and geopolitical context, for the current year Brembo expects an about 10% revenue growth, with margins in percentage terms in line with the previous year.