Brembo S.p.A. Business Report FY2007
Business Highlights
Financial overview
Factor
-Net sales amounted to 911,885 thousand euros, with a sharp increase compared to 2006 (+13.1%). The acquisition of Hayes Lemmerz contributed approximately 8 million euros to the increase in total sales, which for car applications were almost totally made in the United States.
The Commercial Vehicle and Motorbike business units performed particularly well, the latter especially in the United States; also the other sectors followed an upward trend. The highest increase was recorded in Brazil, where the continuing trend of sharp growth has led to a 36.6% rise in sales, as well as in Asia and in the NAFTA countries.
Consolidated sales generated abroad accounted for 76.2% of total sales, with Germany and Italy representing 48.8% of total sales.
Contracts
-Year 2007 also saw the conclusion of important sales agreements. The Company entered into an agreement with Toyota Motor Corporation for the supply of braking systems for the new Lexus IS-F, enabling the Company to consolidate its market presence in the high-performance automotive industry in Japan where it already serves other automobile manufacturers. The Company was again chosen as supplier also of car braking systems for the BMW Group, starting with a front braking system for one of the German manufacturer’s best-selling models, backed up by firm commitments for orders in coming years.
-In September 2007, the Company announced that it equips with its new co-cast brake disc the new Maserati Quattroporte Sport GT S. Brake discs used in the great majority of braking systems have been made of cast iron, whereas more recently, racing and other high performance cars have been equipped with discs of compound design that feature a hybrid composite material (carbon-ceramic). (From a press release on Sept. 11, 2007)
Joint ventures
-In September 2007, the Company and Sabelt SpA, a leading name in racing seat belts and child safety products, have signed a letter of intents with a view to integrate and develop their business operations in the area of components and special accessories for motor vehicles and motorcycles. A joint venture company, Brembo Performance SpA, is expected to be incorporated by the end of 2007. The new company, headquartered at Curno (near Bergamo), will combine Sabelt Spa (racing and child safety products: €16 mln sales revenue in 2006) with Brembo Group High Performance Kits Business (braking systems for cars and motorcycles tuning: €12 mln sales revenue in 2006). Brembo SpA will hold a 70% controlling interest in Brembo Performance. The new company will operate out of Sabelt production sites, at Moncalieri (Turin) and in Zilina (Slovakia) as well as Brembo factories. (From a press release on Sep. 6, 2007)
Acquisition
-In November 2007, the Company signed an agreement to acquire the Brake Division of the US company Hayes Lemmerz. The newly acquired business is a leader in the mechanical processing of brake discs for the most important North American car manufacturers and several component manufacturers.
The transaction was undertaken by the subsidiary Brembo North America Inc., which acquired 100% of the shares of two subsidiaries of Hayes Lemmerz in Homer, Michigan, and Apodaca, Mexico.
| (in millions euro) | FY2007 | FY2006 | Rate of change(%) | Factors |
| Overall Sales | 919.9 | 806.0 | 13.1 | See Factor |
Factor
-Net sales amounted to 911,885 thousand euros, with a sharp increase compared to 2006 (+13.1%). The acquisition of Hayes Lemmerz contributed approximately 8 million euros to the increase in total sales, which for car applications were almost totally made in the United States.
The Commercial Vehicle and Motorbike business units performed particularly well, the latter especially in the United States; also the other sectors followed an upward trend. The highest increase was recorded in Brazil, where the continuing trend of sharp growth has led to a 36.6% rise in sales, as well as in Asia and in the NAFTA countries.
Consolidated sales generated abroad accounted for 76.2% of total sales, with Germany and Italy representing 48.8% of total sales.
Contracts
-Year 2007 also saw the conclusion of important sales agreements. The Company entered into an agreement with Toyota Motor Corporation for the supply of braking systems for the new Lexus IS-F, enabling the Company to consolidate its market presence in the high-performance automotive industry in Japan where it already serves other automobile manufacturers. The Company was again chosen as supplier also of car braking systems for the BMW Group, starting with a front braking system for one of the German manufacturer’s best-selling models, backed up by firm commitments for orders in coming years.
-In September 2007, the Company announced that it equips with its new co-cast brake disc the new Maserati Quattroporte Sport GT S. Brake discs used in the great majority of braking systems have been made of cast iron, whereas more recently, racing and other high performance cars have been equipped with discs of compound design that feature a hybrid composite material (carbon-ceramic). (From a press release on Sept. 11, 2007)
Joint ventures
-In September 2007, the Company and Sabelt SpA, a leading name in racing seat belts and child safety products, have signed a letter of intents with a view to integrate and develop their business operations in the area of components and special accessories for motor vehicles and motorcycles. A joint venture company, Brembo Performance SpA, is expected to be incorporated by the end of 2007. The new company, headquartered at Curno (near Bergamo), will combine Sabelt Spa (racing and child safety products: €16 mln sales revenue in 2006) with Brembo Group High Performance Kits Business (braking systems for cars and motorcycles tuning: €12 mln sales revenue in 2006). Brembo SpA will hold a 70% controlling interest in Brembo Performance. The new company will operate out of Sabelt production sites, at Moncalieri (Turin) and in Zilina (Slovakia) as well as Brembo factories. (From a press release on Sep. 6, 2007)
Acquisition
-In November 2007, the Company signed an agreement to acquire the Brake Division of the US company Hayes Lemmerz. The newly acquired business is a leader in the mechanical processing of brake discs for the most important North American car manufacturers and several component manufacturers.
The transaction was undertaken by the subsidiary Brembo North America Inc., which acquired 100% of the shares of two subsidiaries of Hayes Lemmerz in Homer, Michigan, and Apodaca, Mexico.
R&D
R&D Expenditure
-A total of 9% of the Company's staff works in R&D, and over 5% of the Company's turnover is invested in this sector of activity.
R&D Structure
-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. The R&D Centre also houses the laboratories of Brembo Ceramic Brake Systems, a joint-venture set up between Brembo and Daimler for the development and manufacture of ceramic brake discs, installed on the most exclusive sports car models.
Major R&D activities implemented during 2007
-In September 2007, against an order placed by an Italian customer, series production started of the “co-cast disc”. This is a new-concept disc combining the Company’s expertise in cast iron with that acquired using aluminium to obtain a product with top braking performance thanks to the cast iron braking surface, and reduced weight due to the aluminium hat. Another five application projects, relating to this type of product and involving European and American customers, are currently underway.
In 2007, structured research began on new alloys for cast-iron brake discs that will provide a “muffling” effect, thus allowing future improvements in the acoustic qualities of the braking system.
-A total of 9% of the Company's staff works in R&D, and over 5% of the Company's turnover is invested in this sector of activity.
R&D Structure
-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. The R&D Centre also houses the laboratories of Brembo Ceramic Brake Systems, a joint-venture set up between Brembo and Daimler for the development and manufacture of ceramic brake discs, installed on the most exclusive sports car models.
Major R&D activities implemented during 2007
-In September 2007, against an order placed by an Italian customer, series production started of the “co-cast disc”. This is a new-concept disc combining the Company’s expertise in cast iron with that acquired using aluminium to obtain a product with top braking performance thanks to the cast iron braking surface, and reduced weight due to the aluminium hat. Another five application projects, relating to this type of product and involving European and American customers, are currently underway.
In 2007, structured research began on new alloys for cast-iron brake discs that will provide a “muffling” effect, thus allowing future improvements in the acoustic qualities of the braking system.
Investment Activities
| (in millions euro) | Dec. 2007 | Dec. 2006 |
| Total |
41.1 |
41.5 |
-Investments in property, plant and equipment amounted to 41,072 thousand euros.
-Additional significant investments were made by subsidiaries Brembo Spolka Zo.o. and Brembo Poland Spolka Zo.o. for an amount of 7,300 thousand euros and 8,209 thousand euros, respectively; these investments, which were also the result of the decision to insource certain processing phases, mainly concerned production machinery and were made with a view to meeting rising demand.