Financial overview

in million euro	Dec. 2006	Dec. 2005	Rate of change	Remarks
Overall Sales	806.0	711.6	13.3%	See below: Note (1)
Gross Operating income	119.0	111.8	6.4%	See below: note (2)

Note (1) :
-Net sales for 2006 amounted to 806.0 million euros, up 13.3% compared to 2005.
The sectors that most contributed to the growth in sales were commercial vehicles and car applications. The motorbike and racing business areas also recorded positive results. Development was concentrated mainly in Europe, especially in Germany and Italy, and in the NAFTA countries.
Consolidated sales generated abroad accounted for 76% of total sales, with Germany and Italy representing 50% of total revenues. Development continued in Brazil( +37%), while the Asian area recorded a contraction, with a slight recovery in the last quarter thanks to the positive performance of applications for automobiles supplied to Japanese customers and the launching of operations in China. Revenues in the NAFTA area also increased.

Note (2) :
-Gloss operating profit totaled 119.0 million euros (14.8% of sales), compared to 111.8 million euros (15.7% of sales) an increase of 6.4%.
-In FY2006, the cost of goods sold and other operating costs totaled 530.4 million euro, with a 65.8% ratio to sales, against 64.6% of the previous year.
-The higher incidence was due to different factors: a penalizing sales mix compared to 2005; other exceptional costs related to the closure of Italian facilities and the launching of operations in China

New Company
In October 2006, Brembo Performance S.p.A. was incorporated in October 2006. The Company, which is 100% held by the Company is still in the start-up phase. It designs, manufactures, and sells components and accessories for cars and both road and racing vehicles; subscribed share capital amounts to 120 thousand euros.

Acquisition
In November 2006, the Company subscribed the 500 thousand euros increase in the share capital of Petroceramics S.r.l., thereby acquiring 20% of share capital in the company engaged in the research and development of technologies for the production of technical and advanced ceramic materials.

(in million euro)	Dec. 2006	Dec. 2005
total	25.3	18.3

-The Company's R&D center was transferred to the Science and Technology Park "Kilometro Rosso" in Stezzano (Bergamo). In the end of December 2006, the new Brembo R&D Center was already operational, and involved both mechatronics and sensortronic sciences. This is a joint-venture laboratory with DaimlerCrhrysler (involving composite and ceramic base materials); these two concerns alone hosted about 650 employees in R&D by the end of 2006.

Major R&D activities implemented during 2006
The Company presented a new concept in brake discs, which reduces weight by around 20% and whose thermal performance is significantly higher than the best product currently available. Five applications had been developed with customers.

Structured research operations were launched on new alloys for cast iron discs with a damping effect that helps improve acoustic comfort of the braking system.
As planned, the Advanced R&D department continued to develop the mechatronics projects licensed in early 2006.

Electromechanical braking systems with an electric button control managed by a control unit that converts the driver's request into a braking force applied to the brakes.
This project had successfully been presented to the customer by the end of 2006.

The Commercial Vehicle braking system (electric cable puller for combined caliper and/or DIH) was developed in collaboration with an Austrian partner.

The Car braking system (fixed caliper with integrated electronic braking via motor on caliper) will be developed with electronics partners to be confirmed during the early part of 2007.

(in million euro)	Dec. 2006	Dec. 2005	Dec. 2004
total investments	84.1	95.8	92.3

-In 2006, the sum of 84.1 million euro was committed to all the operating units, of which a total of 69.7 million euro were purchased.
-The parent company Brembo S.p.A. invested 41.5 million euro in property, plant and equipment, mostly relating to the construction of a new industrial shed in Mapello (Bergamo) where several disc manufacturing operations will be relocated. Other investments were allocated to the purchase of machinery and the development of equipment to increase production levels for the car sector and, more in general, to increase the capacity of manufacturing plants.

-Further major investments were made by the subsidiary Brembo Poland Sp. Zo.o. The subsidiary completed construction on the new cast-iron foundry in Dabrowa Gornicza for the manufacture of discs for both the aftermarket and original equipment market, and it upgraded the mechanical disc processing plants. The foundry became fully operational in 2006.

-Again in Poland, investments in the Czestochowa plants were allocated to increasing production capacity.