Financial Overview

(in million euros)

	FY2010	FY2009	Rate of change (%)	Factors
Overall
Sales	924.7	781.0	18.4	-
Filtration Division
Sales	465.1	414.8	12.1	1)
Operating income	35.8	22.1	62.0	2)
Suspension Components and Precision Spring Division
Sales revenues	461.6	368.0	25.4	3)
Operating income	35.9	15.0	139.3	4)

Factors
1)
Filtration Division
-In 2010, the Division recorded a rise in consolidated revenues of 12.1%, recording 465.1 million euros compared to the 414.8 million of 2009.

-Revenues in South America (+28.8%), USA (+245.9%) and India (+48.7%) rose significantly. The recovery impacted both the original equipment (+28.6%) and aftermarket segments (independent +6.2% and original equipment spares +3.5%).

2)
-Profitability also improved: operating profit rising to 35.8 million euros (7.7% of sales) from the previous 22.1 million euros(5.3% of sales), the Division’s EBITDA was 39.2 million euros (8.4% of sales), up 44.9% compared to the 27.1 million euros(6.5% of sales) recorded last year. During the year, the French production plant of Louvigné was closed. Aftermarket spare parts distribution in Holland was restructured, in view of a reorganisation of logistics operations in Europe.

3)
Suspension Components and Precision Spring Division
-The Division has considerably improved its activity levels and results in all market sectors, including that of industrial vehicles which, as mentioned earlier, had continued to show low volumes until the summer.

-The Division’s consolidated revenues were 461.6 million eoros, a 25.4% improvement on the 368 million recorded in the previous year, owing to the recovery of volumes in Europe (+18%) and the explosion of demand in Latin America (+64.8%) and China (+58.9%).

4)
-Operating profit rose by 138.9% to  35.9 million from the previous figure of 15 million, representing 7.8% of sales compared to the previous 4.1%. Over the year, the French production plant in Mussey stopped production activities and the production of precision springs was transferred to other sites.

Investment

-The Company has started producing engine oil filters in the United States at its factory at Prichard in West Virginia. The investment in the conversion of the facility originally used to produce suspension components amounts to approximately 7 million USD. Sogefi supplies filters to Chrysler for Multiair engines mounted in the Fiat 500s built for the American market and for Ford diesel engines. In 2011, the Company expects to have revenues in the United States of over 20 million USD. (From a press release on June 30, 2010)

Joint Ventures

Sogefi group and the Imperial Auto group, an automotive component supplier in India, have finalized a joint-venture agreement. The two parties will establish a new company named Allevard IAI Suspensions for the production of suspension components in India. Sogefi will own 51% of the company. The JV will produce stabilizer bars at a new plant in the Pune area for motor vehicles manufacturers operating in the Indian market. Sogefi's planned investment during 2010-2011 is 2 million euros. Allevard IAI Suspensions aims at generating revenues of around 5 million euros in 2012, bringing the total revenues of the group in India to approximately 15 million euros. (From a press release on September 2, 2010)

R&D Expenditure

(in million euros)

	FY2010	FY2009	FY2008
Overall	20.2	18.5	20.5

 

Capital Expenditure

(in million euros)

	FY2010	FY2009	FY2008
Overall	24.3	22.6	41.1

The main investments are reported in:
-the subsidiaries Allevard Rejna Autosuspensions S.A., Allevard Springs Ltd, Allevard Rejna Argentina S.A. e Sogefi Filtration d.o.o. for the update of plants and the improvement of production processes;
-in Sogefi Filtration Ltd for the development of a new product, for the maintenance and improvement of plants and processes;
-in LPDN Gmbh for a new production process for stabiliser bars and for the renewal of equipments;
-in ISSA S.L. for the development of a production line relating to a new product;
-in Sogefi Filtration do Brasil Ltda for the renewal of several machines;
-in Sogefi MNR Filtration India Private Ltd and EMW Environmental Technologies Private Ltd for the increases in production following the rise in internal and external demand
-and lastly in S.ARA Composites S.A.S. for the spring prototypes line in composite material.

The most important investment projects:
-in the subsidiaries Allevard Rejna Autosuspensions S.A., Filtrauto S.A. and Sogefi Filtration Ltd for the internal development of new products and technologies;
-in Allevard Molas do Brasil Ltda for the increase in production capacity of hot production line and for improvements to production processes;
-in Sogefi Filtration Argentina S.A. for building improvements;
-in Sogefi Filtration do Brasil Ltda for the development of equipments and the safety compliance of production plants and lastly in S.ARA Composites S.A.S. for a new winding system related to the spring prototypes line in composite material.