FY 2019 RESULTS

3/9/2020

 BREMBO: REVENUES 2019 AT €2,591.7 MILLION, DOWN BY 1.8% (-1.3% ON A LIKE-FOR-LIKE CONSOLIDATION BASIS), EBITDA AT €515.2 MILLION (EBITDA MARGIN: 19.9%), EBIT AT €318.5 MILLION (EBIT MARGIN: 12.3%). DIVIDEND PROPOSAL: €0.22 PER SHARE.

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Compared to 2018 results:​

Revenues decreased by 1.8% to €2,591.7 million (-1.3% on a like-for-like consolidation basis) 


EBITDA €515.2 million (EBITDA margin: 19.9%); EBIT 318.5 million (EBIT margin: 12.3%) 


Net profit amounted to €231.3 million 


Net investments amounted €247.3 million 


Net financial debt at €346.2 million 


Proposal to distribute an ordinary dividend of €0.22 per share 

 

 

Chairman Alberto Bombassei stated: “Brembo’s operating results in 2019, approved today, show that the Company succeeded in effectively managing its long-term strategies within a particularly challenging market environment, which throughout the year has impacted the automotive industry at world level. Despite a slight decline compared with the 2018 results, Brembo continued to outperform the average of its reference market, while also succeeding in retaining strong margin levels. The business sectors related to motorbikes, commercial vehicles and racing applications showed improving results due to an integrated portfolio of innovative solutions capable of meeting customers’ constantly increasing needs for excellence, quality and design. 

However, the automotive market scenario continues to be characterised by severe uncertainty and volatility, partly due to the global spread of the coronavirus. We are following the related developments very closely and attentively, and taking a series of monitoring and prevention measures at all production facilities to safeguard our personnel and the communities in which we operate, in concert with the local authorities. Our ability to innovate, together with our production excellence that is without peer in the sector and the daily efforts of our people in serving our customers, will allow us to improve our competitive and strategic positioning on all the markets on which Brembo operates.”



Impacts Arising From the Application of the New IFRS16 ​ ​​ 

It bears recalling that the Group adopted the new IFRS16 effective 1 January 2019, using the modified retrospective method (option B, without restating contracts already in place at 1 January 2019, not applying the standard to low-value and short-term assets). Data at 31 December 2019 include the following impacts due to the adoption of the new Standard: ​


• €23.7 million in reversal of rental costs; 

• €20.1 million increase in amortisation and depreciation; 

• €5.0 million increase in interest expense; 

• €194.5 million increase in Net Invested Capital; 

• €196.0 million increase in Net Financial Position. ​


 

Results at 31 December 2019​​


Brembo S.p.A.’s Board of Directors met today and approved the Group’s annual results at 31 December 2019​.​

 

Brembo Group’s net consolidated revenues amounted to €2,591.7 million, down 1.8% compared to 2018 (-1.3% on a like-for-like consolidation basis). ​


As previously announced, as of 30 June 2019 Brembo decided to discontinue its industrial operations at the Buenos Aires plant. As a result, Brembo Argentina S.A. will be placed in liquidation. Brembo took this decision as it was impossible to boost new projects because of the sharp downtrend experienced by the Argentinian automotive sector and its quite discouraging recovery prospects. Accordingly, all main local manufacturers decided not to proceed with industrial projects nor to launch new models. Pursuant to IFRS5, revenues and costs related to the Argentinian company for the reporting period were therefore reclassified. The negative result of the company’s ordinary operations at 31 December 2019, as well as the estimated costs associated with the discontinuation, were reclassified to the Statement of Income item “Result from discontinued operations” and amounted to €6.4 million. ​

 

With regard to the market segments in which the Group operates, car applications decreased by 3.7% due to the global automotive market’s severe downtrend. All other market segments grew: motorbike applications rose by +5.7%, applications for commercial vehicles by +1.7%, and racing applications by +7.5%.​

 

At geographical level, sales shrank by 1.1% in Italy, by 15.3% in Germany and by 1.7% in France compared to 2018, whereas growth was reported by United Kingdom (+3.2%). In Asia, India rose by 12.1% and China by 2.8%, whereas Japan declined by 8.0%. Sales in North America (USA, Canada and Mexico) rose by 0.5%, whereas South America declined by 13.9% due to the exit of the Argentinian company from the consolidation area (+12.4% on a like-for-like consolidation basis). ​​

 

In 2019, the cost of sales and other net operating expenses amounted to €1,624.6 million, with a 62.7% ratio to sales, down in percentage terms compared to 64.0% for the previous year. Personnel expenses amounted to €465.7 million with an 18.0% ratio to sales, substantially in line with the previous year (17.6% of sales). At 31 December 2019, the workforce numbered 10,868, increasing by 234 people compared to the previous year (10,634). ​

 

EBITDA for the year amounted to €515.2 million (EBITDA margin: 19.9%), compared to 500.9 million (EBITDA margin: 19.0%) for 2018. Net of the effect of IFRS16, EBITDA was €491.5 million (EBITDA margin: 19.0%).​

 

Depreciation and amortisation amounted to €196.6 million (176.5 million net of the effect of IFRS16). EBIT amounted to €318.5 million (EBIT margin: 12.3%), down 7.7% compared to 2018. Net of the above-mentioned impact of IFRS16, EBIT was €314.9 million (EBIT margin: 12.2%). ​

 

Net interest expense amounted to €11.1 million for the year ended 31 December 2019 (€19.9 million in 2018) and consisted of net exchange gains of €3.2 million (net exchange losses of €6.2 million in 2018) and other net interest expense of €14.3 million (€13.7 million in the previous year). Net of the above-mentioned impact of IFRS16, net interest expense was €9.3 million.​

 

Pre-tax profit was €307.7 million, compared to 325.4 million for the previous year. Based on tax rates applicable under current tax regulations, estimated taxes amounted to €68.2 million, with a tax rate of 22.2%, compared to €83.9 million in 2018 (tax rate of 25.8%). ​

 

The period ended with a net profit of €231.3 million, down by 3.0% compared to the previous year (€238.3 million). Net of the above-mentioned impact of IFRS16, net profit was €232.7 million.​

 

Net financial debt at 31 December 2019 was €346.2 million, down by €68.3 million compared to the figure at 30 September 2019 (€414.5 million). Net of the above-mentioned impact of IFRS16, net financial debt was €150.2 million, up by €13.3 million compared to 31 December 2018. ​


Approval of Consolidated Disclosure of Non-Financial Information for 2019​​​
Brembo’s Board of Directors examined and approved the Consolidated Disclosure of Non-Financial Information for 2019 pursuant to Legislative Decree No. 254/2016. 

This Disclosure, drawn up in compliance with the Guidelines of the Global Reporting Initiative (GRI standards), describes the company’s business model, the Group’s strategies and policies, the actions implemented and the results achieved in pursuing its sustainable economic growth, while taking account of the expectations of the stakeholders involved and seeking constant improvement of the environmental and social impacts of its activities. The Disclosure will be made available to the public on the Group’s website within the terms established by applicable laws and will be submitted to the General Shareholders’ Meeting scheduled for 23 April 2020. ​​


 

Calling of General Shareholders' Meeting – 23 April 2020 ​ ​​

Today, the Board of Directors has called the General Shareholders’ Meeting on 23 April at 10:30 a.m. (CET), at the Company's offices at Viale Europa 2, Stezzano (Bergamo). Among the main items on the agenda, the Board of Directors has resolved to submit the following matters to the forthcoming session of the General Shareholders’ Meeting. ​

 

During the ordinary session: ​

 

1) Examination and approval of the Financial Statements for the year ended at 31 December 2019.​

 

2) ​The following proposal for the distribution of profit of the Parent Brembo S.p.A:

 

- a gross ordinary dividend of €0.22 per ordinary share outstanding at ex-coupon date; 

- to the reserve pursuant to Article 6(2) of Legislative Decree No. 38/2005 €1.1 million; 

- the remaining amount carried forward. ​

 

It will also be proposed that dividends should be paid as of 20 May 2020, ex-coupon No. 3 on 18 May 2020 (record date: 19 May 2020).​


3) Renewal of the Board of Directors and Statutory Auditors​ 


4) Report on Remuneration Policy and Remuneration Paid for 2020​


5) Plan for the buy-back and sale of own shares with the following objectives:


- undertaking any investments, directly or through intermediaries, including aimed at containing abnormal movements in stock prices, stabilising stock trading and prices, supporting the liquidity of Company’s stock on the market, so as to foster the regular conduct of trading beyond normal fluctuations related to market performance, without prejudice in any case to compliance with applicable statutory provisions; - carrying out, in accordance with the Company’s strategic guidelines, share capital transactions or other transactions which make it necessary or appropriate to swap or transfer share packages through exchange, contribution, or any other available methods; and 

- buying back own shares as a medium-/long-term investment. 

The proposal envisages that the Board of Directors may purchase, in one or more tranches, up to a maximum of 8,000,000 ordinary shares, for a minimum price not lower than the closing price of the shares during the trading session on the day before each transaction is undertaken, reduced by 10%, and for a maximum price not higher than the closing price of the shares during the trading session on the day before each transaction is undertaken, increased by 10%. With reference to the disposal of own shares, the Board of Directors will define, from time to time, in accordance with applicable legislation and/or allowed market practices, the criteria to set the relevant consideration and/or methods, terms and conditions to use own shares in portfolio, taking due account of the realisation methods applied, the price trend of the stock in the period before the transaction and the best interest of the Company. The authorisation is requested for a period of 18 months from the date of the resolution by the General Shareholders' Meeting and for a maximum purchasing amount of €144,000,000, which is adequately covered by the available net reserves recognised in the balance sheet. At present, the Company holds 10,035,000 own shares representing 3.005% of share capital.

 

During the extraordinary session: ​

- amendment of the By-laws to align them with the new legislation on gender balance within the governing bodies of listed companies.​

 

Foreseeable Evolution ​

 

The situation is still evolving and Brembo is following developments relating to the spread of the coronavirus very closely and has taken all necessary monitoring and prevention measures, in concert with local authorities, at all locations concerned. 

At present, Italian production remains unaffected by the situation, whereas the Chinese plants (located in Nanjing and Langfang), following a period of additional closure beyond that already planned for the Chinese New Year’s festivities, gradually resumed production between 14 and 17 February. 

 Due to the possible economic impact of the coronavirus and the current major changes in automotive industry, the global automotive market scenario continues to be marked by a high degree of uncertainty and volatility and a rather limited level of visibility. Within this environment, Brembo will remain constantly committed to improving its strategic positioning on all the markets on which it operates. ​

 

The manager in charge of the Company’s financial reports Andrea Pazzi, declares, pursuant to paragraph 2 of Article 154-bis of Italy's Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the documented results, books and accounting records.​

 

Annexed hereto are the Statement of Income, Statement of Financial Position and Statement of Cash Flows, which are currently being audited.​

 

Company contacts: ​

​Matteo Tiraboschi
Executive Deputy Chairman​
Ph. ​ +39 035 605 2090
 
Laura Panseri
Head of Investor Relations
Ph. ​ +39 035 605 2145
e-mail: laura_panseri@brembo.it

www.brembo.com
Roberto Cattaneo ​
Head of Media Relations​
Ph. +39 035 605 5787 ​
e-mail: press@brembo.it
 
 
 
 
                        
 www.brembo.com​

 
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Brembo S.p.A. | P.IVA 00222620163

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