Fabio Buttignon March 2017
Overview
2
Brembo SpA (also "Brembo", the "Company" or the "Group") is a recognized world leader and innovator in the field of automotive disc brake technology.
The Company supplies high performance braking systems to the premier makers of automobiles, motorcycles and commercial vehicles worldwide, as well as clutches, seats, harnesses and other components for the racing sector only. Brembo has unrivalled prestige in motorsport, with more than 200 world championship titles won to date in the role of OE supplier.
Brembo currently operates in 16 countries on 3 continents, with 4 reasearch laboratories, 18 industrial sites e 24 commercial officies. It has also some commercial branches in Sweden, France and Germany and markets its products in more than seventy nations worldwide.
The Group has a workforce of around 7700 employees, approximately 10% of whom engineers and product specialists engaged in vital research and development activities.
The primary goal of Brembo's strategy of international expansion is to establish a presence in the countries where the group's main clients have production plants, so that its products may be supplied more rapidly and more efficiently.Car Calipers
Bike Calipers
Pads Key data (€ mln)
€ million
Sales EBITDA EBIT Net income Net working capital Invested capital Net financial position ROIC
2011 2012 2013 2014 2015 CAGR
1.254,5 1.388,6 1.566,1 1.803,3 2.073,2 13,4%
145,8 167,7 210,6 275,4 356,6 25,1%
75,5 88,0 120,9 178,4 251,9 35,2%
42,9 77,8 89,0 129,1 184,0 43,9%
165,7 168,6 164,8 169,1 155,3 -1,6%
674,3 766,6 791,7 819,2 864,3 6,4%
380,0 395,9 394,5 324,2 211,8 -13,6%
9,8% 9,4% 11,1% 16,4% 20,7%
History
(1/2)
The company was founded just a few kilometers outside Bergamo in1961by Emilio Bombassei, the father of the group's current president.While it began as a small mechanical workshop, the experience of its founder in the mechanical sector and metallurgy was soon put to good use for prestigious clients such as Alfa Romeo.
1964was a historic year for Brembo, when the company started production of the first Italian brake discs for the spare parts market. Soon afterwards, production activities were broadened to include other braking system components, and the competence and specialization of the company and the quality of its products and services earned international recognition.
In1972Brembo began supplying Moto Guzzi and the brand became associated with Europe's best motorcycles securing the leadership in the motorcycle braking systems segment.
In 1975 Enzo Ferrari asked Brembo to equip the most prestigious racing cars in Formula 1. Since then, countless teams using Brembo brakes have won hundreds of world championships in every possible automobile and motorcycle racing category.
In 1980, the product range was joined by an aluminum brake caliper for automobiles which was revolutionary in both design and the materials used. This new caliper was gradually adopted by high performance car manufacturers such as Porsche, Mercedes, Lancia, BMW, Nissan and Chrysler.
From themid 1980s, Brembo decided to extend its operations into the industrial vehicle disc brake segment, becoming a strategic supplier for Iveco, Renault Industrial Vehicles and Mercedes. In 1983, to give itself a more international scope, Brembo agreed to the acquisition of a share in the company by Kelsey-Hayes, a US based multinational braking systems manufacturer.
InMarch 1993, as a consequence of a new strategic orientation, Kelsey-Hayes withdrew as a shareholder in the company. When the company bought back the shareholding from Kelsey-Hayes, the goal set by Brembo's management was achieved in full.
In1995the company was listed on the Milan Stock Exchange.3
History
(2/2)
In2000Brembo started his market expansion strategy acquiring the Brazilian company Alfa Real Minas for the machining of automobile brake discs and the assembly of engine flywheels, the British company AP Racing Limited, which is specialized in the production of brake and clutch systems for race cars and motorcycles and for high performance sports cars, and the 70% of Marchesini, a company specialized in the production of magnesium wheels for race motorcycles.
In 2000Brembo enter into the Chinese market, with the creation of a joint venture with Yuejin Motor Group and the constitution of the company Nanjing Yuejin Automotive Brake System for the production of systems for automobiles and commercial vehicles.
2005saw the creation of the Pune based KBX Motorbike Products Private Ltd., a joint venture between Brembo and Bosch's Indian subsidiary, Kalyani Brakes Ltd., for the production and commercialization of motorcycle braking systems.
In2009Brembo inaugurated its new plant in India for the production of braking systems for motorcycles and scooters, and launched the new brand Bybre (an abbreviation of “By Brembo”) dedicated to braking systems for scooters and small-mid engine size motorcycles (up to 250 cc) for the BRIC markets (Brazil, Russia, India and China) and other countries in South East Asia (ASEAN).
In 2006the group's third foundry was opened in Dabrowa Gornicza in Poland to optimize the production cycle of the disc manufacturing plant. In 2010 construction got underway for the expansion of this industrial centre, inaugurated in October 2011, for the automobile and commercial vehicle markets, with a goal of doubling output of brake discs.
In 2007 was inaugurated the new R&D centre: "the Kilometro Rosso Technology and Science Park" which employs over 500 engineers, designers and technicians working on research and development. In the meantime, the company continues its strategy of international growth, acquiring the Brakes division of Hayes Lemmerz International in the USA: a division consisting of two plants (one near Detroit, Michigan and another in Mexico) that produce brake discs and drums for automobiles and commercial vehicles for the North American market.
In2010Brembo's activities in Eastern Europe were further consolidated with an investment of over 35 million Euros in the Czech Republic for a new automobile braking system plant. This move brought the company for the first time into the mid premium segment, working with clients such as Land Rover, BMW, GM and Audi.4
Ownership Structure
5
Brembo’s subscribed and fully paid-up share capital amounts to €34,727,914 and is divided into 66,784,450 ordinary shares of a par value of € 0.52, each bearing voting rights.
There are no restrictions on the transfer of securities.
No securities have been issued that carry special rights with regard to control of the company and there are no restrictions on voting rights.
There are no employee share ownership schemes in place.
There are no syndicate agreements or other Shareholders’ agreements pursuant to Article 122 of TUF.
Brembo S.p.A. is not subject to the direction and coordination of any other company or entity pursuant to Article 2497-bis of the Italian Civil Code, despite being controlled by another company.
At 31 December 2015, the Company held a total of 1,747,000 own shares, representing 2.616% of the share capital, at an average book value of €7.71 per share and for an overall value of €13,475,897.
Significant shareholdings in the share capital as of 31 December 2015 are listed on the chart below.Board of Statutory Auditors
Office held Name
Chairwoman Raffaella Pagani
Effective Auditor Sergio Pivato Effective Auditor Milena T. Motta Board of Directors
Office held Name
Chairman Alberto Bombassei
Executive Deputy Chairman Matteo Tiraboschi Managing Dir/General Manager Andrea Abbati Marescotti Executive Director Cristina Bombassei Independent Director Barbara Borra Independent Director Giovanni Cavallini Non-Executive Director Giancarlo Dallera Independent Director Bianca Maria Martinelli Non-Executive Director Umberto Nicodano Independent Director Pasquale Pistorio Independent Director Gianfelice Rocca
Group Structure
6 Brembo CZECH SRO
Czech Republic
Brembo SpA .
Brembo Scandinavia A.B.
Sweden
Brembo Poland Spolka Zo.o.
Poland AP Racing LTD.
UK
Brembo Deutschland Gmbh Germany
Corporacion Upwards 98 S.A.
Spain
Brembo Sgl CC Brakes SpA.
Italy Brembo Russia LLC.
Russia
Innova Tecnologie Srl Italy LA.CAM. Srl
Italy
Petroceramics SpA Italy
Intern. Sport Automobile Sarl France
E-Novia Srl Italy
n.d.
126
788
0
1,581
1
2
198
71
426**
n.d.
n.d.
n.d.
Brembo Nanying Foundry Co. Ltd.
China
Brembo Nanying Brake S. Co. Ltd.
China
Brembo Beijing Brakes Sys Co. Ltd China
Brembo Japan Co. LTD.
Japan
Qingdao Brembo Trading Co. Ltd China
Brembo Brake India Pvt. Ltd.
India Fuji Co.
Japan
15
207
21
0
284
232
n.d.
Brembo Mexico S.A. de C.B.
Mexico
Brembo Argentina S.A.
Argentina Brembo North America Inc.
USA
Brembo do Brasil Ltda.
Brazil 560
353
333
124
100%
100%
100%
100%
100%
100%
100%
68%
50%
30%
20%
10%
2,8%
100%
100%
100%
100%
100%*
99,9%
1,2%
100%
100%*
99,9%
100%*
2,971
** Including subsidiaries
* Direct and indirect participation Head count
Plants
Technical and Sale Dept.
R&D Centre
Industry Classification – SIC Codes
Division D - Manufacturing– 3700 - Transportation equipment
• 3710 - Motor vehicles and motor vehicle equipment – 3711 - Motor vehicles and car bodies
– 3713 - Truck and bus bodies
– 3714 - Motor vehicle parts and accessories
» Brake disc technology (BDT) for automotive vehicles
High level performance automotive BDT – 3715 - Truck trailers
– 3716 - Motor homes
7 SIC CODE
Markets and Products
Brembo is the world's leading manufacturer of braking systems, and operates in the original equipment, spare parts and racing segments both in car and motorbike markets.
The company offers a comprehensive range of products dedicated exclusively to racing and created for teams participating in the most important motor sports competitions (cars and bikes).
Brembo is also a frontrunner in the world commercial vehicle braking system market and operates in the OEM and spare parts sectors.
Today Brembo is the sole supplier of foundation brakes for top-end names like Ferrari, Porsche, Maserati and Lamborghini. In most of the premium car segments (sedan, supersport and luxury SUV), and with most of its customer, Brembo has a clear monopoly. Compared to the competition, the group looks to be the only "all-brakes", global and high-end player in the car segment today.8
Markets and Products - Cars
Brembo is the undisputed global leader in the production of brake discs, calipers and complete braking systems. With its unrivalled expertise, Brembo produces everything from brake discs for the most popular cars in the European, American and Asian markets to braking systems for the world's most prestigious and exclusive models.
Brembo offers the Aftermarket professional a more comprehensive and reliable range of spare parts that covers over 96% of all vehicles on the road today.
With a global sales presence and production plants in Europe, USA, Mexico, Brazil and China, Brembo supplies a complete range of original equipment (OE) products for all of the major categories of car and motorcycle and for many of the world's most important constructors.In addition to prestigious manufacturers of sports and luxury automobiles such as Ferrari, Porsche, Corvette and Mercedes, Brembo's client portfolio also includes some of the world's largest carmakers, such as Ford, GM and Fiat, among others.
Calipers Discs Modules Carbon ceramic
discs
Alluminium
components Pads
Major clients
Markets and Products - Motorcycles
Brembo is a leader in the production of brake discs, calipers and master cylinders for world's most prestigious motorcycle manufacturers. Brembo designs and manufactures each individual part to ensure that it delivers maximum performance as well as superlative reliability and durability. Brembo brake discs are the industry benchmark for innovation and quality. Brembo brake calipers embody state of the art design and performance, while Brembo master cylinders apply technology to ensure comfort and reliability.
Brembo offers a comprehensive range of spare parts that respond to the specific technical requisites of all motorcycle types: from racing bikes and street bikes to city and off-road machines.
Brembo offers a comprehensive range of Original Equipment (OE) products for all the main categories of motorcycle and for many of the world's most prestigious motorcycle manufacturers, including Harley Davidson, Ducati, BMW and KTM.10
Discs Calipers Master cylinder
Major clients
Markets and Products – Commercial Vehicle
Brembo offers a comprehensive range of original equipment products that have been chosen by the world's most prestigious commercial vehicle manufacturers.
Brembo original braking systems for commercial vehicles are a guarantee of safety for clients demanding absolute reliability from their daily work tools. Calipers offering long-lasting reliability in all conditions, discs with extended durability and resistance to repetitive thermo-mechanical stress and parking brakes that are safe and simple to use.
With a global sales presence and production plants in Europe, USA, Mexico, Brazil and China, Brembo supplies a complete range of original equipment (OE) products for all of the major categories of commercial vehicle and for many of the world's most important constructors, offering the advantages in terms of competitiveness and service quality of a centralized product development process and localized production.11
Discs Calipers Parking brakes
Major clients
Markets and Products – Racing
Brembo offers a comprehensive range of Racing products created for teams competing in the world's major motorsports categories (formula racers, endurance, GT, Touring Car and Rally, among others), as well as a range of products dedicated to enthusiasts who enjoy performance driving or who use their vehicles for both normal road use and track days.
MotoGP represents the pinnacle of motorcycle racing for its extreme technology and engineering. Over the past 31 years, Brembo has equipped the winning bikes of a remarkable 27 championships with its braking systems: bikes embodying the cutting edge of technology from Honda, Suzuki and Yamaha. But the greatest cause for pride is being a part in the worldwide success of true stars in the class, such as Valentino Rossi.
Brembo has dominated many seasons of the World Superbike Championship. Of the 28 seasons disputed to date, Brembo has won an incredible 24, providing braking systems for the bikes ridden by the greatest champions in the class, from Carl Fogarty to Max Biaggi. SBK is also an arena that pits the world's most prestigious marques against one another, many of which - first and foremost Ducati - race and win with Brembo brakes.12
MOTOGP e WSBK Palmares
Market Application and Geography
Sales turnover in 2015 amounted to € 2,073 million. Looking at the business segmentation, passenger cars accounts for the lion's share, as for geographies, Germany is the single biggest market for the Group, while Europe is the biggest region.13
Sales by application
Sales by geographical area
In Europe, Germany — Brembo’s second top market at 23.2% of sales — showed an increase by 11.2% compared to 2014;
a good sales performance was also recorded in the UK market (+15.8%), whereas in Italy there was a more modest growth (+2.3%) and France showed a slight decrease (-1.2%). North America, Brembo’s top market since 2014 at 29.1% of sales, increased by 30.0%, whereas South America showed a 21.0% decline. In the main Asian
markets, results for 2015 were
particularly positive in China (+29.2%), India (+26.3%) and Japan (+39.0%).
All businesses in 2015 performed well. Passenger cars increased by 18.8 as compared to the full year, motorbikes by 11.7% and commercial vehicle by 10.4%. The racing sector declined by 4.7% due to the elimination of Sabelt SpA and Belt & Buckle S.r.o. from the consolidation area. On a like- for-like consolidation area, the increase in net sales in this segment would have been 10.8%.
1.546
194 207
125 18,8%
11,7% 10,4%
-4,7%
Passenger cars Motorcycle Commercial vehicle Racing
% YoY 2015-2014 increase CAGR 2011-2015 17,6%
9,2% 1,6%
9,8%
2,6%
7,6%
18,6%
3,9%
9,7%
21,7%
15,4%
-2,0.
15,2%
% YoY 2015-2014 increase CAGR 2011-2015
1,8%.
25,9%
248
481
81
168 204
52
120
32 62
602
23 2,3%
11,2%
-1,2%
15,8%
12,7%
26,3%
29,2%
39,0%
-21,0%
30,0%
8,1%
Italy Germany France UK Other EU India China Japan Brazil and
Argen na
North America Other
Competitive Strategy and Business Idea
Brembo superior performance was (and is) based on a focused differentiation strategy that consisted in the following key elements:14
FOCUS
Brembo is market focused with a wide
range of vehicle application from top
of range cars to commercial vehicles
FLEXIBILITY
The ability to manage complexity in manufacturing
SPEED
Short decision making chain
Concept and delivery under the same roof
Integrated process
UNIQUE SELLING PROPOSITION
Growing with the right partners
Increasing importance of OEM
vs. aftermarket
PERFORMANCE
High performance brakes Brake system for
racing
STYLE
Innovation Design
Brand Novelty
SERVICE
Comfort with every vehicle in every
condition
BUSINESS IDEA
To produce the highest performing braking systems in
the world for a wide range of applications
Strategy: The Results Tell the Story
Revenues
EBITDA
Stock price
297 353 458 532 566 634 685 722 817 924 1.075 835 1.085 1.266 1.400 1.577 1.814 2.085
21,8% 19,0%
29,8%
16,1%
6,3%
12,0%
8,1% 5,4%
13,2% 13,1% 16,2%
-22,3%
30,0%
16,7%
10,6% 12,7% 15,0% 14,9%
-30,0%
-20,0%
-10,0%
0,0%
10,0%
20,0%
30,0%
40,0%
0 500 1.000 1.500 2.000
2.500 YoY % increase
55 71 82 83 91 100 107 109 112 132 134 86 121 138 160 199 259 357
18,4% 20,1%
17,8%
15,5% 16,2% 15,7% 15,6% 15,1%
13,7% 14,3%
12,5%
10,2% 11,1% 10,9% 11,4% 12,6% 14,3%
17,1%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
0,0 50,0 100,0 150,0 200,0 250,0 300,0 350,0 400,0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EBITDA margin
-200,%
0,%
200,%
400,%
600,%
800,%
1998 1999 2001 2003 2005 2007 2009 2011 2013 2015
Brembo S.p.A. (BIT:BRE) - Share Pricing FTSE 100 Index (^FTSE) - Index Value
Strategy: Implementation and Development for the Future
In recent years Brembo has pursued a strong internationalization strategy and it still continues to implement it. Brembo's growth goes hand-in-hand with the expansion of his production in those markets that are showing the greatest development potential in the international scenario. The Group is also consolidating his presence on the more traditional markets.
The development strategy of the Group aims to strengthening of production capacity in the areas where customers demand a greater product volume and a higher service level.
In 2013, investments exceeded €127 million and were mostly concentrated in Italy (34%), the United States and Brazil (18%) and , above all, Eastern Europe (40%).– In Italy, significant modernization work was done on the Mapello cast-iron foundry, in the province of Bergamo, which is now among the best in its class in Europe in terms of efficiency and environmental respect.
– In Eastern Europe, investments aimed at increasing production capacity are still underway in the integrated industrial hubs in Poland and the Czech Republic, devoted respectively to the casting and processing of brake discs for cars and commercial vehicles, and the casting, processing and assembly of brake calipers and other aluminium components. A new investment plan of several tens of millions of euro was launched, which is set to be completed in 2017 and is aimed at further reinforcing Brembo’s industrial presence in this area.
– In the American region, Brembo inaugurated our new plant in Homer, Michigan, in May. The plant manufactures brake systems for their major automotive clients on the North American market. The construction of a cast-iron foundry in an adjacent area has also been announced. The project aims to achieve vertical integration of our production capacity at this facility as well, thereby enhancing process efficiency. Works will begin in 2015 and conclude in 2017, entailing an investment of €74 million. During the same three-year period, the Group will invest €32 million in Mexico to build a foundry and a new aluminium caliper production facility, planned to start operations as early as 2016.
The second element in Brembo's strategy is the high level of technology and reliability of his products. This is what has allowed the Group to achieve and maintain the position of global leader and recognized innovator in the area of disc braking systems technology for vehicles, as well as of supplier of the world’s most prestigious manufacturers of cars, motorbikes and commercial vehicles. As many as five Formula 1 teams (Ferrari, Mercedes, Red Bull, Sauber and Toro Rosso) used Brembo technology in 2013, as did most of the motorbike teams that took part in the MotoGP.
The R&D Centres proceed to work on the study and design of increasingly challenging systems from the standpoint of technology and innovation.Brembo is very focused on reducing the weight and environmental impact of its brake systems by cutting atmospheric particulate emissions. To achieve this objective, the Group launched in 2013 a four year research programme, involving an investment of €116 million, to be conducted at the
Kilometro Rosso Science and Technology Park. 16
Strategy: Competitive Positioning
The world market of brake disc technology for automotive vehicle is a mature oligopoly dominated by big players. Almost 65% of the total share can be referred to just 4 main players.
Listed companies to be considered as comparables for Brembo are:– large sample – which includes different companies in the motor vehicle parts and accessorize industry – small sample – which includes only companies in the BDT market
Japanese Akebono (listed in Tokyo) is focused on braking systems for passenger cars, motorcycles and commercial vehicles, with a presence also in racing (F1, working only with McLaren and Tour Car Racing), and does not operate in other business. It is positioned in the medium-high-end segment of the market, working with all the main Japanese names as well as some European and North American ones, such as Mercedes, GM and Ford.
Continental Teves is the Continental group's subsidiary for the chassis & safety business, with regard to braking system focused on high-end segment.
Brembo's leading position in the motorbike high performance segment is less contested. In fact Brembo is the sole supplier of Japanese names in racing. Its main competitors are two Japanese players: Nissin Kogyo (listed and 35%-owned by Honda) and Tokico (not listed).17
Michelin
Continental
Brembo
Akebono
Nissin
Faurecia
Valeo
Sogefi Small sampleLarge sample
Industry (High Level Performance BDT) – Five Forces Analysis
18
Rivalry among existing firms Threat of new entrants Threat of substitute products
DEGREE OF ACTUAL AND POTENTIAL COMPETITION
BARGAINING POWER IN INPUT AND OUTPUT MARKETS INDUSTRY
PROFITABILITY
Bargaining power of buyers Bargaining power of suppliers
Industry growth
Concentration
Differentiation
Switching costs
Scale/Learning economies Fixed-Variable costs
Excess capacity Exit barriers
Scale economies
First mover advantage
Switching costs Relationship with
customer Legal barriers
Relative price and performance
Buyers' willingness to switch Cheap alternative
products
Switching costs
Differentiation
Importance of product for cost
and quality Numbers of buyers
Volume per buyer
Switching costs
Differentiation
Importance of product for cost
and quality Numbers of buyers
Volume per buyer
Industry (High Level Performance BDT) – Five Forces Analysis Synthesis
19
Weak Strong
Degree of rivalry
New entrants
Substitutes Buyer power
Supplier power
Bargaining power of suppliers
Switching costs 2.0
Differentiation 2.0
Importance of product for cost and quality 2.5
Numbers of buyers 1.5
Volume per buyer 1.5
Avg 1.9
FF impact Weak
Bargaining power of buyers
Switching costs 2.5
Differentiation 2.0
Importance of product for cost and quality 1.5
Numbers of buyers 4.0
Volume per buyer 4.0
Avg 2.8
FF impact High medium
Threat of substitute products
Relative price and performance 1.5
Buyers' willingness to switch 2.0
Cheap alternative products 3.0
Avg 2.2
FF impact Low medium
Threat of new entrants
Scale economies 2.0
First mover advantage 1.0
Switching costs 1.5
Relationship with customer 1.0
Legal barriers 4.5
Avg 2.0
FF impact Weak
Rivalry among existing firm
Industry growth 2.5
Concentration 1.5
Differentiation 2.0
Switching costs 1.5
Scale/Learning economies 2.0
Fixed-Variable costs 4.0
Excess capacity 1.0
Exit barriers 3.5
Avg 2.3
FF impact Low medium
SWOT Analysis
20
High-end sector is over performing thanks to lower cyclicality
Higher attention of Chinese carmakers to the quality of their vehicles
Liberalization of the tuning in Italy and in other countries
Leadership in competitions allows to develop new solutions and find new partners (i.e. SKF Group)
Volatility and uncertainty of the automotive sector– Downturn in the auto industry can affect profitability
Volatility and uncertainty in raw material prices
Downturn of the Brazilian market and currency risk
Crisis in the racing sector
High level of capex needed
No patent protection in the market: Brembo's technological excellence and flexibility can be replicated
Distinctive know-how and long track record and well established relationship with customers– Many different clients with limited weight on Company's revenues
Strong brand awareness and reputation – Increasing presence in strategic geographicareas
The main competitors would need to refocus their strategy and heavily invested in order to attack the Company in the upper-end segment of the market.OPPORTUNITIES STRENGHTS
THREATS WEAKNESSES
Peer Analysis – Focus on Akebono (Overview)
Akebono Brake Group manufactures, sales and conducts research and development of various brakes and its components and related parts
Major products are– Brakes for automobiles - Akebono develops and evaluates friction materials and brake components. With manufacturing locations in Japan, North America, Europe and Asia, the company provides products as OEM suppliers to global automobile manufacturers. Akebono have approximately 40% share in the Japanese original equipment automotive disc brake pad market. The main OEM customers include Japanese manufacturers such as Toyota, Nissan, Honda, Mitsubishi and Isuzu. The company also supplies a wide range of global manufacturers, such as Porsche, GM, Ford, Mercedes Benz and others.
– Brakes for motorcycles - Akebono supplies motorcycle manufacturers with high-quality brake friction materials, disc brakes, master cylinders and disc brake pads. Since it began production of them in 1974, Akebono has pursued the development of motorcycle brakes that offer high degree of control, stability and performance regardless of road surface or weather conditions.
– Brakes for rolling stock - Akebono has played a significant role in the development of rail vehicles in Japan. In 1952, at the request of Japanese National Railways, Akebono began development of rail vehicle products. Akebono currently enjoys a large market share of brake installations on Japanese bullet trains.
– Brakes for industrial machinery - Akebono thanks to the know-how acquired in automotive and rail vehicle fields, actively applies its technology to industrial machinery such as forklifts, cranes, automobile air-conditioning units, agricultural equipment, heavy-duty trailers and wind power generation systems. Products for industrial machinery include friction materials, drum
brakes, disc brakes and negative brakes 21
Peer Analysis – Focus on Akebono (Key Number)
22
Sales by geographical area
Key data
43,8% 43,8%
35,4% 31,9% 27,4%
43,9% 43,9%
48,7% 51,6% 55,1%
2,4% 2,4% 4,3% 5,3% 6,4%
6,4% 6,4% 6,2% 6,0% 5,5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015
Indonesia Thailand China Europe North America Japan
Key data comparison (€ mln)
€ million
Sales YoY % increase EBITDA EBITDA margin EBIT EBIT margin Net income Net income margin Net working capital Invested capital Net financial position ROIC
2012 2013 2014 2015 CAGR
1.388,6 1.566,1 1.803,3 2.073,2 14,3%
10,7% 12,8% 15,1% 15,0%
167,7 210,6 275,4 356,6 28,6%
12,1% 13,4% 15,3% 17,2%
88,0 120,9 178,4 251,9 42,0%
6,3% 7,7% 9,9% 12,2%
77,8 89,0 129,1 184,0 33,2%
5,6% 5,7% 7,2% 8,9%
168,6 164,8 169,1 155,3 -2,7%
766,6 791,7 819,2 864,3 4,1%
395,9 394,5 324,2 211,8 -18,8%
9,4% 11,1% 16,4% 20,7%
Brembo Akebono
2012 2013 2014 2015
1.692,9 1.944,5 2.088,2 2.311,5
-1,7% 14,9% 7,4% 10,7%
105,4 136,4 118,9 72,9
6,2% 7,0% 5,7% 3,2%
34,8 63,5 30,5 (34,5)
2,1% 3,3% 1,5% -1,5%
4,3 19,9 (50,1) (159,9)
0,3% 1,0% -2,4% -6,9%
198,2 184,4 219,1 178,5
888,2 1.005,4 1.102,9 1.002,9
625,2 688,5 859,7 875,4
2,0% 3,9% -0,7% -5,3%
Akebono
CAGR 10,9%
-11,6%
-3,4%
4,1%
11,9%
EXHIBIT 1 BREMBO: Reorganized Balance-Sheet (Invested Capital)
€ million
Working cash*
Trade receivables Inventories Trade payables Trade working capital
Other operating current assets Other operating current liabilities Other current assets and liabilities Net working capital
Tangible assets Operating intangibles Total operating fixed capital
Operating receivables and other non-current assets Operating deferred-tax assets/(liabilities) Operating non-current liabilities Operating provisions
Total other non-current operating assets and liabilities Invested capital excluding goodwill and similar intangibles
Goodwill and similar intangibles
Deferred tax asset/(liabilities) on similar intangibles Goodwill and other similar intangibles
Invested capital including goodwill and similar intangibles
Non-operating current assets Other non-operating current liabilities Non-operating non-current assets
Non-operating deferred-tax assets/(liabilities) Non-operating non-current liabilities Non-operating assets
Total funds invested
EXHIBIT 1 BREMBO: Reorganized Balance-Sheet (Invested Capital)
Operating receivables and other non-current assets
Total other non-current operating assets and liabilities Invested capital excluding goodwill and similar intangibles
Deferred tax asset/(liabilities) on similar intangibles
Invested capital including goodwill and similar intangibles EXHIBIT 1 BREMBO: Reorganized Balance-Sheet (Invested Capital)
2012 2013 2014 2015
13,9 15,7 18,0 20,7
236,6 282,5 289,4 311,2
207,1 209,0 230,7 247,7
(247,3) (301,6) (309,0) (349,9)
210,3 205,5 229,1 229,7
19,6 16,3 15,5 19,5
(61,3) (57,0) (75,5) (93,9)
(41,7) (40,7) (60,0) (74,3)
168,6 164,8 169,1 155,3
475,4 503,1 540,0 589,8
56,5 56,8 54,7 52,4
531,8 560,0 594,7 642,2
3,7 6,3 5,7 4,9
24,2 28,0 29,7 34,3
(0,6) (5,0) (14,4) (1,0)
(7,7) (5,8) (9,8) (18,1)
19,6 23,5 11,2 20,0
720,0 748,3 775,0 817,5
46,8 43,6 44,4 46,9
(0,2) (0,1) (0,3) (0,0)
46,6 43,4 44,2 46,8
766,6 791,7 819,2 864,3
24,9 26,6 23,0 16,9
(27,7) (24,0) (23,1) (27,1)
20,9 22,9 29,8 36,9
5,1 6,6 11,6 8,3
0,0 0,0 0,0 0,0
23,1 32,0 41,3 35,0
789,7 823,7 860,5 899,3
% on Sales
2012 2013 2014 2015
1,0% 1,0% 1,0% 1,0%
17,0% 18,0% 16,0% 15,0%
14,9% 13,3% 12,8% 11,9%
(17,8%) (19,3%) (17,1%) (16,9%)
15,1% 13,1% 12,7% 11,1%
1,4% 1,0% 0,9% 0,9%
(4,4%) (3,6%) (4,2%) (4,5%)
(3,0%) (2,6%) (3,3%) (3,6%)
12,1% 10,5% 9,4% 7,5%
34,2% 32,1% 29,9% 28,4%
4,1% 3,6% 3,0% 2,5%
4,1% 3,6% 3,0% 2,5%
0,3% 0,4% 0,3% 0,2%
1,7% 1,8% 1,6% 1,7%
(0,0%) (0,3%) (0,8%) (0,0%)
(0,6%) (0,4%) (0,5%) (0,9%)
1,4% 1,5% 0,6% 1,0%
51,9% 47,8% 43,0% 39,4%
3,4% 2,8% 2,5% 2,3%
(0,0%) (0,0%) (0,0%) (0,0%)
3,4% 2,8% 2,4% 2,3%
55,2% 50,6% 45,4% 41,7%
1,8% 1,7% 1,3% 0,8%
(2,0%) (1,5%) (1,3%) (1,3%)
1,5% 1,5% 1,7% 1,8%
0,4% 0,4% 0,6% 0,4%
0,0% 0,0% 0,0% 0,0%
1,7% 2,0% 2,3% 1,7%
56,9% 52,6% 47,7% 43,4%
% on Sales
Financial Overview – Total Funds Invested
(2012-2015)23 Includes the provisions for employees benefits Includes shareholdings valued using the equity method and other financial assets (including investments in other companies) None factoring effect at 31 December (see next slide for details)
Financial Overview – Total Source of Financing
(2012-2015)24
In excess cash calculation was also incorporated the working cash included in Trade Working Capital – TWC (1,0% on Sales)
In adjustment of short term borrowings calculation has been considered also the factoring effect at 31 December, the same correction was made on"Trade receivables”. In 2015 Brembo factoring effect equals to zero.
EXHIBIT 2 BREMBO: Reorganized Balance-Sheet (Source of Financing)
€ million
Excess cash
Long-term borrowings
Adjustment on short term borrowings Short-term borrowings
Net financial position
Provision for employee benefit Non-operating provisions Debt equivalents
Net financial position and debt equivalents Minority interests
EXHIBIT 2 BREMBO: Reorganized Balance-Sheet (Source of Financing) EXHIBIT 2 BREMBO: Reorganized Balance-Sheet (Source of Financing)
2012 2013 2014 2015
(111,6) (100,4) (198,1) (182,2)
270,5 259,2 277,3 215,1
34,3 30,9 2,5 0,0
175,7 177,3 209,3 148,5
368,8 367,1 290,9 181,4
26,7 27,0 32,8 30,3
0,4 0,4 0,5 0,0
27,1 27,4 33,3 30,3
395,9 394,5 324,2 211,8
10,5 4,9 5,4 5,7
% on Sales
2012 2013 2014 2015
(8,0%) (6,4%) (11,0%) (8,8%)
19,5% 16,6% 15,4% 10,4%
2,5% 2,0% 0,1% 0,0%
12,7% 11,3% 11,6% 7,2%
26,6% 23,4% 16,1% 8,8%
1,9% 1,7% 1,8% 1,5%
0,0% 0,0% 0,0% 0,0%
1,9% 1,8% 1,8% 1,5%
28,5% 25,2% 18,0% 10,2%
0,8% 0,3% 0,3% 0,3%
% on Sales
Shareholders' equity Total source of financing
383,3 424,4 531,0 681,9
789,7 823,7 860,5 899,3
27,6% 27,1% 29,4% 32,9%
56,9% 52,6% 47,7% 43,4%
*Working cash on revenues 1,0% 1,0% 1,0% 1,0%
€ million
Cash and cash equivalents Working cash (included in TWC) Financial current assets and derivatives Excess cash
Factoring (pro soluto) to NFP Increase of short term borrowings
2012 2013 2014 2015
(115,6) (106,1) (206,0) (202,1)
13,9 15,7 18,0 20,7
(9,9) (10,0) (10,1) (0,8)
(111,6) (100,4) (198,1) (182,2)
34,3 30,9 2,5 0,0
34,3 30,9 2,5 0,0
Taxes Current taxes Deferred taxes
Estimated taxes payables and taxes of previous years Total taxes
Estimated taxes payables and taxes of previous years
2014 2015
42,5 60,1
(6,5) (2,9)
0,2 0,5
36,2 57,7
Pre-tax profit
Actual (blended global) tax rate Actual (blended global) tax rate
164,9 243,5
22,0% 23,7%
Deferred tax assets Czech Republic*
Deferred tax assets Poland*
Other adjustments*
Total adjusted taxes
Tax rate net of extraordinary effects Deferred tax assets Czech Republic*
Tax rate net of extraordinary effects
5,2 5,1
3,6 8,1
(0,4) 6,2
44,6 77,1
27,1% 31,7%
EXHIBIT 3 BREMBO: Reorganized Income Statement
€ million
Revenues Other income
Raw materials, consumables and goods Other operating costs
Costs for capitalised internal works
Operating cost (personnel and D&A excluded) Personnel expenses
EBITDA Depreciation
Amortization of operating intangibles Total D&A
EBITA
Amortization of assets similar to goodwill EBIT
Impairment losses
Non-recurring and extraordinary items Interest income (expense) from investments Exchange rate (losses) gains
Interest (expense) income Net financial result
EBT Taxes
Group Net Income Minority result Net Income
EXHIBIT 3 BREMBO: Reorganized Income Statement
2012 2013 2014 2015
1.388,6 1.566,1 1.803,3 2.073,2
4,8 6,7 10,3 13,5
(715,4) (802,8) (928,7) (1.053,8)
(244,0) (268,2) (290,7) (331,9)
11,5 11,2 10,7 12,0
(947,9) (1.059,8) (1.208,7) (1.373,7)
(277,8) (302,4) (329,6) (356,4)
167,7 210,6 275,4 356,6
(64,1) (72,3) (79,8) (89,0)
(13,5) (15,5) (15,6) (14,5)
(77,6) (87,8) (95,4) (103,5)
90,1 122,8 180,0 253,2
(2,1) (1,9) (1,6) (1,2)
88,0 120,9 178,4 251,9
(2,5) (1,0) (4,4) (3,9)
4,0 2,9 4,4 3,3
(0,2) (0,0) 0,1 0,0
5,1 (7,3) (1,0) 4,6
(11,6) (11,2) (12,7) (12,4)
(6,5) (18,4) (13,7) (7,8)
82,9 104,4 164,9 243,5
(5,1) (15,3) (36,2) (57,7)
77,8 89,1 128,7 185,8
0,1 (0,1) 0,4 (1,8)
77,8 89,0 129,1 184,0
% on Sales
2012 2013 2014 2015
100,0% 100,0% 100,0% 100,0%
0,3% 0,4% 0,6% 0,7%
(51,5%) (51,3%) (51,5%) (50,8%)
(17,6%) (17,1%) (16,1%) (16,0%)
0,8% 0,7% 0,6% 0,6%
(68,3%) (67,7%) (67,0%) (66,3%)
(20,0%) (19,3%) (18,3%) (17,2%)
12,1% 13,4% 15,3% 17,2%
(4,6%) (4,6%) (4,4%) (4,3%)
(1,0%) (1,0%) (0,9%) (0,7%)
(5,6%) (5,6%) (5,3%) (5,0%)
6,5% 7,8% 10,0% 12,2%
(0,2%) (0,1%) (0,1%) (0,1%)
6,3% 7,7% 9,9% 12,2%
(0,2%) (0,1%) (0,2%) (0,2%)
0,3% 0,2% 0,2% 0,2%
(0,0%) (0,0%) 0,0% 0,0%
0,4% (0,5%) (0,1%) 0,2%
(0,8%) (0,7%) (0,7%) (0,6%)
(0,5%) (1,2%) (0,8%) (0,4%)
6,0% 6,7% 9,1% 11,7%
(0,4%) (1,0%) (2,0%) (2,8%)
5,6% 5,7% 7,1% 9,0%
0,0% (0,0%) 0,0% (0,1%)
5,6% 5,7% 7,2% 8,9%
% on Sales
Financial Overview – Income Statement
(2012-2015)Taxes Current taxes Deferred taxes
Estimated taxes payables and taxes of previous years Total taxes
Estimated taxes payables and taxes of previous years
2013 2014
23,2 42,5
(7,0) (6,5)
(0,9) 0,2
15,3 36,2
Pre-tax profit
Actual (blended global) tax rate Actual (blended global) tax rate
104,4 164,9
14,6% 22,0%
Deferred tax assets Czech Republic*
Deferred tax assets Poland*
Other adjustments*
Total adjusted taxes
Tax rate net of extraordinary effects
* Source: Company Presentations Deferred tax assets Czech Republic*
Tax rate net of extraordinary effects
* Source: Company Presentations
0,0 5,2
13,0 3,6
3,0 (0,4)
31,3 44,6
30,0% 27,1%
