Brembo S p A : TRANSCRIPT CONF. CALL 9M 2020

Brembo S.p.A.

"Nine Months 2020 Results Conference Call"

Monday, November 09, 2020, 14:00 CET

MODERATORS:MATTEO TIRABOSCHI, EXECUTIVE VICE CHAIRMAN

DANIELE SCHILLACI, CHIEF EXECUTIVE OFFICER

LAURA PANSERI, HEAD OF INVESTOR RELATIONS

OPERATOR:LAURA PANSERI:

Q&A

OPERATOR:

Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the presentation of Brembo Nine Months 2020

Financial Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing "*" and "0" on their telephone.

At this time, I would like to turn the conference over to Ms. Laura Panseri, Head of IR of Brembo. Please go ahead, madam.

Thank you. Good afternoon to everybody, and thank you for joining us today to discuss Brembo Group's 9 months 2020 financial results. Today's

call will be hosted by Matteo Tiraboschi, Executive Chief Deputy Chairman and by Daniele Schillaci, CEO of Brembo. The slide presentation has been made available on our website in advance; therefore we suggest we go directly to the Q&A session.

Before we begin, let me remind you that any forward-looking statements we may make during today's call are subject to risks and uncertainties that can cause actual results to be materially different. I also remind you that this call is being recorded. With that, we can start the Q&A session, please.

Excuse me. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press "*" and "1" on their touchtone telephone, to remove yourself from the question queue, please press "*" and "2." We kindly ask that you use handsets while asking questions. Anyone who has a question may press "*" and "1" at this time.

The first question is from Monica Bosio of Intesa SanPaolo. Please go ahead.

MONICA BOSIO:DANIELE SCHILLACI:MATTEO TIRABOSCHI:

Good afternoon, everyone, and thanks for taking my questions. I have 2, the first one is, could you please give us some flavor on the order intake by year end, and if you have some visibility or if the visibility has improved? And the second question is on the cost savings. If I compare the slides of the first half with the slides of the 9 months, I can see that you should have a benefit of roughly €10 million in the third quarter from the

operations. Are these €10 million cost savings? And if yes, do you expect to retain a part of this cost savings? I am asking this because I am just wondering if you feel confident to keep a stable or even improving EBITDA margin in the last quarter of the year, in comparison with the last quarter of 2019. Thank you very much.

Thank you for your question, Monica, and good afternoon, everybody. In terms of order taking, I would say this last quarter, and even after until October, has been particularly rich. We got some awards from our traditional customers, some are just a reconfirmation, some are new platforms, but more importantly we got 2 very important new orders that we didn't have in our portfolio. And this is extremely encouraging for us.

So I would say in terms of order taking, the situation is going pretty in line with our aspiration. Regarding cost savings, I leave the answer to Matteo.

Yes, during the third quarter we had very strong cost saving activities and we certainly can maintain the same austerity also for the last quarter of this year, but I think it's quite impossible to increase the

EBITDA margin compared to what we had in the third quarter. If we are really good to manage the fourth quarter, we can maintain more or less the same quality of earnings, difficult to do better, honestly.

MONICA BOSIO:MATTEO TIRABOSCHI:MONICA BOSIO:

Okay, you obviously…the third quarter was a very robust in terms of

EBITDA margin, but do you feel confident to keep at least flat year-on- year the EBITDA margin in the last quarter, so in the fourth quarter of '19,

the EBITDA margin was 19.5%, if I remember well. Can we expect a similar level for the last quarter of 2020, even the cost cutting?

It's very difficult to give you a number in this moment, because the

Q4 is quite unpredictable every year, this year in particular, so whatever number I give you now, most likely it will be wrong, so I prefer not to give you any number. Obviously, we will do our best as usual, but giving you a number for the full year is very difficult.

Okay, thank you very much.

OPERATOR:

The next question is from Renato Gargiulo of Fidentiis. Please go ahead.

RENATO GARGIULO:DANIELE SCHILLACI:

Yes, good afternoon. Well, my first question is still on the outlook for the last part of the year. Clearly, I know its visibility is quite low but related to the lockdown, so already announced in some European countries, do you have visibility about any potential impact for you in terms of operations, etc.?

Then the second question is still on cost savings, so as you were saying around €10 million from operation in the third quarter. All in all, can you

give us an indication about how much of this cost savings may be considered as a structural going forward so looking also at next year? And that's all for now. Thank you.

Regarding the outlook of the last quarter, we have to go by region, because the situation is very different region by region. As you know, in

Asia, it seems that the COVID situation is now under control and indeed