STEZZANO, Italy – Brembo recently reported Q1 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.
“The results of the first quarter of 2023, approved by the Board of Directors, show a double-digit revenue growth compared to the first quarter of the previous year,” said Executive Chairman Matteo Tiraboschi. “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 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.
Brembo Reports Record Financials in 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).
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 (01 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 01 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 01 2022); this item includes interest expense amounting to €5.1 million (€3.0 million in 01 2022) and net exchange gains of €6.1 million (€4.9 million in 01 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 01 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 March 31, 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:
- 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.
Brembo Strengthens its Global Industrial Footprint
Thanks to overall investments of about €500 million, Brembo is growing globally and increasing its production capacity in three key countries on three continents, namely Mexico, China and Poland, through new plants built with a view to digital transformation and sustainability.
In Mexico, Brembo is completing the expansion of its plant specializing in the manufacturing of brake calipers located in Escobedo, in the Nuevo León State. Once fully operational, the plant will enable to double the Company’s production capacity in the country.
In China, Brembo will expand its brake system manufacturing plant in Nanjing, strengthening its production capacity in the country. The investment also provides for the renewal of the R&D centre within the said site, with the aim of creating an advanced center supporting the development of the new technologies required by the Chinese market. Works will begin in the second half of 2023 and the project is expected to be completed by the first half of 2025.
In Poland, Brembo decided to build another cast iron foundry in Dąbrowa Górnicza. The investment will create the most innovative Brembo foundry at global level, which will be endowed with cutting-edge technology, also in terms of sustainability. The first pouring of the foundry is expected in the first half of 2025.
These projects are in addition to the already announced acquisition of the Italcementi property at Kilometro Rosso in Stezzano, expected to be finalized by the end of 2023, which will allow Brembo to expand its headquarters in Italy.
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.