During the quarter, the global financial crisis directly affected Brembo market segments causing a sizeable decline of passenger cars and light commercial vehicles demand. Most automakers reacted to the market scenario reducing fourth-quarter production and extending the year-end holiday season shutdown.

Brembo reacted to the market slowdown by adopting extraordinary measures with a view to align its production levels to demand; workforce has been reduced in most plants in Italy and in the Group subsidiaries. Furthermore, in Italy Brembo resorted to temporary layoff schemes for the factory workers.

Brembo also implemented measures to control costs and working capital and curtailed or postponed some investment plans in order to limit the impact of the slowdown on margins and financial position.

In the above described scenario, revenues of fourth quarter amount to EUR 230.9 million, down 3.4% over previous year. Such amount includes EUR 22.7 million of the recently acquired companies. Like-for-like the quarter revenues are down 12.9%.

In particular, sales of applications for commercial vehicles sharply declined (-24.9%) after a long positive cycle and passenger car segment closed the quarter down 4.6%.

Racing applications sales recorded a sound growth (+26.8%), in spite of the market uncertainty, and motorcycles sales were flat, confirming the trend started during Q3.

From a geographic point of view, the main drivers of sales slowdown were Brazil (-34.5%) and the European countries, in particular United Kingdom (-28%); Nafta and Asia continued to grow thanks to the contribution of the recent acquisitions.

During the quarter, the cost of sales and other net operating costs amount to EUR 153.7 million, with a ratio of 66.6% to sales, compared to 63.3% for the same period in the previous year. Development costs capitalized as intangible assets amount to EUR 2.9 million (EUR 6.7 million in 2007 forth quarter).

The personnel expenses amount to EUR 49.8 million with and incidence on revenues of 21.6%, up compared to the same period of the previous year (20.9%) due to the volume slowdown.

The number of employees at 31 December 2008 was 5,847 (5,304 at 31 December 2007). Life-for-like, Brembo personnel is down 205 employees.

EBITDA of 2008 fourth quarter amounts to EUR 27.4 million (11.9% of revenues), compared to EUR 37.7 million of previous year (15.8% of revenues)

Depreciation and amortization of the quarter are EUR 19.3 million (EUR 14.5 million in 2007); the increase is due to the high level of investments made by the Group in recent years and to the write off of some development projects which have been canceled.

EBIT is EUR 8.1 million compared to EUR 23.2 million in Q4 2007.

Net financial charges in the quarter are EUR 12.4 million compared to EUR 2.6 million of previous year. The increase is mostly due to negative exchange rate differences amounting to EUR 6.8 million, while in Q4 2007 were positive for EUR 0.9 million. Financial charges were EUR 5.6 million (EUR 3.5 million in 2007). The increase is due to the higher level of net financial indebtedness.

Pre-tax income is negative (-EUR 4.3 million) and estimated tax charges are positive for an amount of EUR 0.5 million. The quarter records a net loss of EUR 3.7 million.

Investments made in the quarter amount to EUR 20.2 million, EUR 13.5 million of which are equipment and machinery and EUR 6.7 million intangible assets.

Net financial indebtedness reaches EUR 339.1 million up compared to EUR 235.9 million at 31 December 2007, but down compared to EUR 359.3 at 30 September 2008.

Preliminary results of the period ended 31 December 2008

In the period closed at 31 December 2008 revenues grew by 16.3% to EUR 1,060.9 million. Such an amount includes EUR 99.8 million connected with the recent acquisitions made in China, India, Italy, Spain and USA. Like-for-like revenues growth would be 5.4%.

EBITDA amounts to EUR 142.1 million, or 13.4% of revenues, up 3.8% over previous year.

Amortization and depreciation are EUR 64 million, up 32.5% due to the acquisitions and the already mentioned capex increase of the last quarters.

EBIT amounts to EUR 78.1 million, down 11.9% over previous year.

Net profit of the period is EUR 39.4 million, down 35.2% compared to 2007 profit that benefited from positive non-recurring items.

Significant events of the quarter

On 27 October 2008 Brembo signed an agreement with Bosch Chassis Systems India Ltd. for the acquisition of 50% of KBX motorbike Products Private Ltd (KBX), based in Pune (India), previously a 50-50 joint-venture. The agreed upon price was EUR 10.7 million. The acquisition was executed in November, after completing the mandatory legal fulfilments required by the Indian Law.

On 18 December 2008 Brembo Shareholders resolved to appoint Mr. Mauro Pessi, coopted by the Board of Directors on 6 June 2008, Director and to renew the buyback plan.

Significant events after the close of the quarter

On 9 January 2009 Brembo purchased, through Brembo do Brasil Ltda., a fully owned subsidiary, from the Brazilian Company Sawem Industrial Ltda., assets and business relating to the production and sale of flywheels for the automotive industry. The amount of the transaction was approximately R$8.2 million (about EUR 2.8 million) debt free.

The 2008 turnover of the purchased business is of R$15 million (about EUR 5 million).

On 20 January 2009 Brembo celebrated the official opening of KBX new plant in India. The facility will manufacture disc braking systems for scooters and motorcycles between 125 and 250 cc for the Indian market. The plant is in the city of Pune, about 160 km south of Mumbai, the capital of India's automotive sector.

During the month of January the Mexican subsidiary Brembo Rassini S.A. de C.V. started a restructuring plan of its Puebla plant which implies about 160 job cuts.

Foreseeable evolution

During the month of January, passenger car sales were as sluggish as the previous months recording a decline of about 25% compared to the previous year and the coming months forecasts are not showing any signs of recovery.

Consequently production levels of most car makers are significantly below last year.

In this scenario, Brembo order book is weak and the company will continue to adopt all the extraordinary measures needed to align production to demand.

Brembo will also continue with all actions implemented during the fourth quarter of 2008 to reduce costs, inventory and investments and to ensure customers honor payment terms.

Furthermore, Brembo will extend the temporary layoff schemes to all headquarters employees in Italy, starting from next March.

The manager responsible for preparing the company's financial reports Corrado Orsi declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law of Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.