18th May 2007 - Brembo Approves Financial Results at 31 March 2007

First Quarter 2007

Results of the Quarter

Sales in the quarter amount to € 229.3 million, up 13.8% over the same quarter last year.

Good performance of the passenger car segment (+ 14.7%), also thanks to the after market sales.  Commercial vehicles sales were up 24.0% in the quarter benefiting from the continuing positive cycle of road transportation and the progressive ramp up of DaimlerChrysler platform.  The motorcycle segment recorded a +6.8% turnover increase as well as the racing segment (+5.5%).

From a geographic point of view, very good growth in the German market (+24.2%) and the other UE countries (+30.5%) due to the positive evolution of after market and original equipment sales. A turnover increase recorded in the French market (+13.3%) and Italian market (+10.5%).  Brazil keeps on growing (+18.9%), while sales in Japan, expected to increase during the next twelve months, were slow during the quarter (-13.0%); sales in the NAFTA area (-10.2%) suffered the negative market trend.

In the quarter, the cost of sales and other operative costs amount to € 152.3 million, with an incidence of 66.4% on sales, compared to 65.1% of the same period of the previous year. The greater incidence is due to several factors: a different sales mix, in comparison with the same period of 2006, and a significant increase of costs of the main raw materials, all positioned around the all time peak.

The personnel expenses amount to € 43.5 million, +8.2% compared to the previous quarter, with an incidence on revenues that decreases from 20.0% to 19.0%.

EBITDA is up 11.3% and goes from € 30.0 million (14.9% of revenues) to € 33.4 million (14.6% of revenues), as a result of the above mentioned factors.

Depreciation and amortization in the quarter on approval amount to € 10.8 million, up 21.1% over 2006 first quarter. These are related to both investments made in the last quarters (i.e. polish foundry) and to capitalized development costs.

EBIT amounts to € 22.7 million, or 9.9% of sales, compared to € 21.1 million (10.5% of sales) in the same quarter of the previous year.

Net financial charges, amounting to € 3.1 million, are composed by negative exchange rate differences for € 0.6 million (2006 same quarter: negative for € 1.4 million) and financial charges for € 2.5 million ( € 1.3 million in 2006). The increase of financial charges is mainly due to the fact that the previous year included a positive fair value of a financial derivative instrument held for trading.

Estimated taxes for the quarter amounts to € 6.8 million, or 34.7% of income before taxes (39.2% in 2006 first quarter). The decrease of tax rate compared to 2006 is due to a different country mix of the consolidated taxable income.

The first quarter investments amount to € 10.0 million, mainly to gear up installed capacity in Italy in order to match the increasing demand.

Net financial indebtedness rises up to € 199.1 million at 31.03.2007, compared to € 193.3 million at 31.12.2006, due to an increase of working capital linked to the strong sales growth.

Significant Events After the Close of the Quarter

From a commercial point of view, in April Brembo reached an agreement with Toyota Motor Corporation for the supply of new Lexus IS-F.

No significant events occurred after the closing of the 2006 fourth quarter.

Foreseeable evolution

The order portfolio seems to confirm a good performance of Brembo Group for the current year, but there is still a situation of tension on costs of raw materials and energy.

Source: Brembo Press Release