Financial Overview

(in million euros)

	FY2008	FY2007	Rate of change (%)	Factors
Overall
Sales	1,017.5	1,071.8	(0.5)	-
Filtration Division
Sales	497.5	548.2	(9.3)	-In 2008, business suffered in Europe partly due to the contraction of the original equipment market (11.6%) and also due to the deterioration of aftermarket sales, with sales in the independent market falling by 13.8% and those of original spare parts by 15%. In contrast, higher sales were recorded in South America, where progress was achieved in all market segments.
Operating income	43.2	57.7	(25.1)	-Over the year, two plants were closed, in Italy and Spain, and structural reorganization was undertaken in all of the division's main markets, incurring total costs of 10.4 million Euros (6.8 million in 2007). 2008 did not benefit from the afore-mentioned disposals of fixed assets, which amounted to 4.5 million euros in the previous year and from other positive liability adjustments.
Suspension Components and Precision Spring Division
Sales revenues	521.9	524.6	(0.5)	-In terms of sales, the reduction for the year taken as a whole was only 0.5%, thanks to an increase in sales prices implemented to offset the increase in the cost of steel. Revenues fell by 7.8% in the European auto market, rose by 16.5% in the same market for industrial vehicles and rose by 21.5% in the Mercosur, while the precision springs sector suffered a fall of 14.5%.
Operating income	47.5	58.8	(19.1)	-Operating profitability worsened, while structural costs remained steady, recording a consolidated operating profit of 47.5 million Euros (9.1% of sales), compared with 58,8 million (11.2% of sales) recorded in 2007.

Acquisitions
-In November 2008, the subsidiary company Filtrauto S.A., with an investment of 4.7 million euros, acquired 60% of two Indian companies, M.N.Ramarao Filters Private Ltd and EMW Environmental Technologies Private Ltd based in Bangalore that operate in the Indian market for vehicle and industrial filtration.

-In 2008, the Division acquired full control of the filtration company in China established previously with a local partner, by acquiring the remaining 30% owned by the latter.


Joint Venture
-In September 2008, with an investment of 1.1 million Euros, a joint venture was established between the subsidiary company Allevard Rejna Autosuspensions S.A. and a French company called Sardou S.A. to develop, produce and sell suspension components in materials other than steel, which enable a drastic reduction in weight, offering an excellent solution to the need of car manufacturers to build lighter cars with lower fuel consumption and that are less polluting.

R&D Expenditure

(in million euros)

	FY2008	FY2007	FY2006
Total	20.5	21.7	22.0

-The R&D activities in FY2008 entailed costs of 20.5 million Euros (2% of sales) compared to 21.7 million in 2007 (2% of sales).

-Six new patents were registered by the Filtration Division and one new patent by the Suspensions Division.

Capital Expenditure

(in million euros)

	FY2008	FY2007	FY2006
Total	41.1	35.9	39.7

-In 2008, the Group invested 41.1 million Euros in optimizing production capacity and automating processes, as well as developing business in the suspensions sector in China and the filtration sector in the US, compared with 35.9 million euros in 2007.

-Significant investments were made to upgrade plant and optimize production flows in the subsidiaries Allevard Rejna Autosuspensions S.A., Lpdn GmbH, Rejna S.p.A., Issa S.A. and Allevard Molas do Brasil Ltda.

-Numerous other smaller investments were made in 2008, which focused on upgrading production plants and developing new products in the subsidiaries Lpdn GmbH and Allevard Sogefi U.S.A. Inc.. Many of these projects were initiated towards the end of the year.

-Other projects were undertaken in the subsidiaries Sogefi Filtration Ltd, Sogefi Filtration S.p.A., Allevard Rejna Autosuspensions S.A., Filtrauto S.A., Allevard Rejna Argentina S.A., Shanghai Sogefi Auto Parts Co. Ltd (for the construction of a new stabilizer bar production line and new equipment) and Allevard Sogefi U.S.A. Inc. (for the construction of new filter production lines)