Financial Overview

(in million euros)

	FY2010	FY2009	Rate of change (%)	Factors
Overall
Sales	1075.3	825.8	30.2
Car Application Segment
Sales	716.2	530.4	35.0	1)
Commercial and Light Commercial Vehicle Applications Segment
Sales	156.2	112.9	38.4	2)

Factors
1)
Car Applications
-In 2010, the global light vehicle market reported an overall increase in registrations of 13.3%, driven in particular by the impetus provided by emerging markets and, in part, by the North American market. Within this scenario, Brembo reported 716.2M euros in net sales for car applications in 2010, representing 66.6% of the Group’s turnover, up by 35% compared to 2009.
2)
Commercial and Light Commercial Vehicle Applications
-In 2010, the light vehicle market in Europe reported overall registration growth of 10.2% compared to 2009, showing a turnaround compared to the two-year critical period. Positive performances were reported across all segments, with the sole exception of the bus segment, whose sales account for approximately 2% of the total. However, the growth figure should be viewed in the proper context, considering that registrations had declined by 32.4% at the global level in 2009.As a result of the recovery in commercial and industrial vehicle registrations, Brembo’s sales of applications increased more for this segment than for any other in 2010, with net sales of 156.2M euros, up by 38.3% compared to 113.0M euros for the previous year.

Acquisition

-The Company acquired a 30 percent interest in its subsidiary Brembo Performance S.p.A, thus making the company its wholly-owned subsidiary. Brembo Performance develops and manufactures passive safety components. (From a press release on September 27, 2010)

Contract
-The Company currently supplies its brake discs for the Ford Focus, Fusion and Lincoln MKZ and its brake systems for the Ford Mustang Shelby GT 500 and Mustang GT (as optional) in the United States. (From a press release on September 2, 2010)

Awards

-Ford announced that it is adding 13 new companies to its Aligned Business Framework (ABF), bringing the total to 90 members. The new ABF suppliers are: Akebono; Automotive Lighting; Benteler; Brembo; Federal Mogul; Gentex; GKN; Hayes Lemmerz; Key Safety Systems; Michelin; Ronal GmbH; Samvardhana Motherson Reflectec; Takata. Ford created ABF in 2005 to strengthen its collaboration with key suppliers. (From a Ford press release on April 23, 2010)

R&D Activities

-Development costs in 2010 amounted to 10,231 thousand euros and were incurred primarily by the parent company Brembo S.p.A.

-In the field of cast-iron discs, work has continued successfully on optimising the parameters that allow a disc’s vibration characteristics to be manipulated so that a disc’s properties may be managed as early as the planning stage in order to improve　the system’s comfort performance. The ability to manage these parameters during the design stage, along with subsequent control during production, represents an advantage over the competition.

-Work on cast-iron discs for heavy commercial vehicles is aimed at optimising mass characteristics and cooling/ventilation capacity while continuing to deliver the required performance.

-For car applications, new concepts of “light” discs are being developed through a significant evolution of the “co-cast” disc, with the aim of reducing production costs to allow for wider application. In the field of carbon-ceramic discs, the establishment of BSCCB– the joint venture with the SGL Group – allowed the Group to continue to improve the technical offering of this product and thus to apply it to segments other than high-end racing.

-Development of materials in collaboration with Hitachi Chemical resulted in the creation of a NAO (non-asbestos organic) friction
material, typical of the U.S. and Asia-Japan markets, scheduled for standard production as soon as early 2011 with Daimler-Mercedes.

Investment Activities

-From 2010 to 2014, Brembo will spend 82 million euros in its plant at Dabrowa Gornicza, Poland (Brembo Poland Spolka Zo.o.). The plant makes brake discs for the cars and commercial vehicles market. Brembo plans to increase the production capacity there, with the goal of doubling it by the end of 2014. (From a press release on March 12, 2010)

-The Company will invest approximately 35 million euros over the next 3 years in a new brake systems plant that will be located at Ostrava in the Czech Republic. With this end in view, Brembo S.p.A. has set up a wholly owned subsidiary trading under the name of Brembo Czech s.r.o. The new factory, which is due to become operative in 2011, will initially manufacture brake calipers and other aluminium components for medium and high-end sadans in the European market. In 2014 the company expects to produce more than 1.5 million brake calipers and knuckles, generating new business worth around 55 million euros. To date, projects have been secured from Land Rover, BMW, GM and Audi. (From a press release on September 13, 2010)