Results Q1 2018

5/8/2018

BREMBO: Q1 REVENUES UP +4.0% TO €657.9 MILLION (+8.7% ON A LIKE-FOR-LIKE EXCHANGE RATE BASIS), EBITDA AT €126.6 MILLION (EBITDA MARGIN AT 19.2%) NET PROFIT AT €68.2 MILLION

Compared to Q1 2017:

• Revenues grew by 4.0% to €657.9 million (+8.7% on a like-for-like exchange rate basis)

• EBITDA margin at 19.2% to €126.6 million; EBIT margin at 13.9% to €91.6 million

• Net investments for the quarter amounted to €45.9 million

• Net financial debt was €275.7 million, up €48.8 million compared to 31 March 2017

Chairman Alberto Bombassei stated: “The figures for Q1 2018, approved today by the Board of Directors, confirm that the Company kicked off the new year with dynamism and a strong order book, stimulated not only by the introduction of innovative products but above all by the production growth reported by our new plants located in strategic markets and geographical areas, such as the USA, Mexico, Europe and India. These promising results were accompanied by the first, significant signs of easing in commercial tensions between the United States and Europe as, a few days ago, U.S. President Donald Trump's government decided to extend the exemption from steel and aluminium tariffs for EU, to the benefit of the whole automotive industry.”

Executive Deputy Chairman Matteo Tiraboschi commented: “The results for the first three months of 2018 are reassuring from the standpoint of the Group’s global growth and solidity in terms of acquisition of market shares and productivity of our plants, most of which are already fully operational, and with a production capacity that the recently built plants will meet by the end of the year. The promising performance of our industrial fundamentals was however impacted by a markedly negative exchange rate effect, which nearly halved our revenue growth and is expected to persist throughout the year.”

Results for the First Quarter of 2018

Brembo’s Board of Directors chaired by Alberto Bombassei examined and approved the Group’s quarterly results at 31 March 2018.

Net consolidated revenues amounted to €657.9 million in Q1 2018, up 4.0% compared to Q1 2017 (+8.7% on a like-for-like exchange rate basis).

In the quarter under review, nearly all the market segments contributed to revenue growth, except for the racing sector, which declined by 8.2%. Car applications rose by 3.7%, motorbikes by 6.8% and commercial vehicles by 10.9%.

At geographical level, sales grew by 9.5% in Germany and by 10.9% in the United Kingdom; conversely, sales dropped by 5.3% in Italy and by 7.1% in France. Asia continued to show a significant uptrend: India rose by 14.8% (+27.5% on a like-for-like exchange rate basis), China by 7.4% (+14.3% on a like-for-like exchange rate basis) and Japan by 11.1% (+12.4% on a like-for-like exchange rate basis).

The North American market (the United States, Mexico and Canada) decreased by 8.9%, but reported a 3.6% increase on a like-for-like exchange rate basis. South America (Brazil and Argentina) also performed well, up 1.7% (+25.4% on a like-for-like exchange rate basis).

In Q1 2018, the cost of sales and other net operating costs amounted to €420.1 million, with a 63.8% ratio to sales that remained virtually unchanged compared to the same period of the previous year (63.6% ratio to sales at €402.1 million).

Personnel expenses amounted to €115.5 million, with a 17.5% ratio to sales, slightly increasing compared to the same period of the previous year (17.0% of sales). At 31 March 2018, workforce numbered 10,154, compared to 9,837 at 31 December 2017 and 9,235 at 31 March 2017.

EBITDA for Q1 2018 amounted to €126.6 million (EBITDA margin: 19.2%), up 0.9% compared to the same period of 2017.

EBIT was €91.6 million (EBIT margin: 13.9%), down 1.3% compared to Q1 2017 as a result of the 7.0% increase in amortisation, depreciation and impairment losses.

Net interest expense for the quarter amounted to €1.5 million (€1.4 million in Q1 2017); this item includes interest expense amounting to €2.1 million (€2.0 million in Q1 2017) and exchange gains for €0.6 million (unchanged compared to Q1 2017).

Pre-tax profit was €90.0 million (13.7% of revenues), compared to €91.4 million for Q1 2017.

Based on the tax rates applicable under current tax regulations in force in each country, estimated taxes amounted to €21.1 million (€22.9 million in Q1 2017), with a tax rate of 23.4% compared to 25.0% for the same period of 2017.

The reporting period ended with a net profit of €68.2 million, up 0.8% compared to €67.7 million for the same period of the previous year.

Net financial debt at 31 March 2018 amounted to €275.7 million, increasing by €57.1 million compared to 31 December 2017.

Significant Events After 31 March 2018

Brembo’s General Shareholders’ Meeting held on 20 April 2018 approved, inter alia, the Financial Statements of the Parent Brembo S.p.A. for the year ended 31 December 2017 and the distribution of a gross dividend of €0.22 per outstanding share. Payment date for the dividend will be 23 May 2018, ex coupon No. 1 (ISIN code IT0005252728) on 21 May (record date: 22 May). L’Assemblea ha deliberato inoltre la proposta di esclusione volontaria delle azioni Brembo dal Segmento STAR di Borsa Italiana. Tale esclusione è effettiva dal 3 maggio 2017, a seguito della pubblicazione dell’Avviso di Borsa Italiana n. 8025 del 24 aprile 2017.

Foreseeable Evolution

The order backlog forecast confirms that sales will continue to rise in the remainder of the year, although the currency trends might curtail their growth also in the forthcoming months. Therefore, we will continue to carefully monitor the evolution of the global macroeconomic scenario.

Il dirigente preposto alla redazione dei documenti contabili societari Matteo Tiraboschi dichiara, ai sensi del comma 2 articolo 154 bis del Testo Unico della Finanza, che l’informativa contabile contenuta nel presente comunicato corrisponde alle risultanze documentali, ai libri ed alle scritture contabili.

Si forniscono in allegato gli schemi di conto economico e situazione patrimoniale e finanziaria, che non sono oggetto di verifica da parte della società di revisione.