Brembo S.p.A.

Brembo said first-half 2024 revenues surpassed €2 billion for the first time, with growth of 2.8%. Management also said EBITDA grew in the first half, while net profit declined year over year due to exchange-rate effects and higher interest rates. On outlook, Brembo confirmed it expects to close 2024 with moderate revenue growth and percentage margins in line with 2023. It also said net debt should be around €500 million for the full year and capex should be about €350 million-€400 million, higher than previously discussed due to earlier investment timing.

Matteo Tiraboschi framed the quarter as a milestone period, emphasizing the record revenue level and the company’s resilience in a difficult automotive backdrop. He pointed to positive contributions from aftermarket, China, Germany, and the U.S., while noting weakness in European commercial vehicles and the drag from FX and interest costs on net profit. His tone was confident but cautious, with repeated emphasis on disciplined investment and maintaining margins despite a weaker market outlook.

Andrea Pazzi focused on cash generation, capex, and balance sheet discipline. He said second-half free operating cash flow should be positive, with net debt expected to rise to about €500 million because of heavier capex, but offset partly by cash generation and the fact that there will be no distributions in the second half. He also said there is no buyback underway at present, though the company has shareholder authorization, and explained that the tax rate should normalize after an exceptional Mexico-related functional currency effect in Q1.

Analysts pressed management on capex, net debt, China, Porsche, buybacks, free cash flow, and the aftermarket mix. Management confirmed around €500 million net debt and raised capex to roughly €350 million-€400 million, saying investment is being brought forward for Euro 7, IT systems, and aftermarket marketing. On China, they said Brembo does not expect the severe slowdown implied by broader market forecasts because of customer mix and strong aftermarket growth; on Porsche, they said there is no current impact on Brembo’s targets. They also said aftermarket is about €0.5 billion of revenue and growing quickly, while the Mexican plant will add some revenue late in 2024 but most of the ramp is expected in 2025.