"First Half 2021 Financial Results Conference Call"
Thursday, July 29, 2021, 14:00 CET
MODERATORS: MATTEO TIRABOSCHI, EXECUTIVE DEPUTY CHAIRMAN
DANIELE SCHILLACI, CHIEF EXECUTIVE OFFICER
LAURA PANSERI, HEAD OF INVESTOR RELATIONS
OPERATOR:Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Brembo First Half 2021 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. Please go ahead, madam.
LAURA PANSERI: Good afternoon, ladies and gentlemen, and thank you for joining us today, to discuss Brembo Group's first half 2021 financial results. Today's call will be hosted by Matteo Tiraboschi, Executive Deputy Chairman and by Daniele Schillaci, CEO of Brembo. A slide presentation has been made available on our website in advance. Therefore we suggest to go directly to the Q&A session.
During this call, we will discuss our business outlook, and make forward- looking statements which are based on our predictions and expectations as of today. These comments are subject to risks and uncertainties that can cause actual results to be materially different. Finally, remind you that this call is being recorded.
Having said that, I leave the floor to Matteo and Daniele, and to your questions, 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." Please pick up the receiver when asking questions. Anyone who has a question, may press "*" and "1" at this time.
The first question is from Monica Bosio with Intesa SanPaolo. Please go ahead.
MONICA BOSIO: Good afternoon everyone, and thanks for taking my questions, and congratulations for the results. This is the first time; I say this during a call. Just skipping on the negative part of the results, can you comment on the net debt evolution and on the dynamics of the net working capital?
The second question, is regarding the divisions. I've seen that over the first half, the car division has come back to the pre-COVID level, while motor cycles well exceeded the pre-COVID levels. Can you give us some flavor on the full year trend for motorcycles? And very last question if you have some color on the future introduction of Brembo new products such as Brake-by-Wires? Thank you very much.
MATTEO TIRABOSCHI: Hi Monica, Matteo speaking. Starting from the net working capital, the comment is more or less the same that we made during the last conference call. We have a buffer or stock that we need to manage in a better way - maybe something around €20 million in over-stock - but we are working very hard to to get to the end of the year with a lower level of inventories.
About the net financial debt, I have no particular comment: compared to same period of last year the position is much better. Obviously, some of our businesses are more seasonal - aftermarket, racing and motorbike - they are asking for more parts during this season, so the debt naturally is increasing, but it's quite normal in the life of Brembo business during the year, I have no further comment about it.
MONICA BOSIO: Okay. So the overstock is, if I have understood well it is €20 million.
MATTEO TIRABOSCHI: More or less yes. More or less yes, it's something around €20 million.
MONICA BOSIO: And your CAPEX guidance for the full year is unchanged?
MATTEO TIRABOSCHI: Yes, we said something in the region of 200-250 € million, and we confirm that.
MONICA BOSIO: Okay, thank you. And as for motorbike?
DANIELE SCHILLACI: Yes Monica, hi, I am Daniele. Regarding your second question, you are totally right, on the motorcycle, the first half was really good, and I would say that the motorbike market is growing almost everywhere. And also given our very strong operation in India, we are having also in Asia interesting trend for the time being. And we see this good momentum of the motorbike lasting also for the rest of the year; the demand is quite strong and we are following these positive trend with our customers.
And by the way, the fact that - as you know - we have now fully integrated SBS, and hopefully soon J.Juan, the fact that we are integrating more vertically the motorbike BU, in light of the good momentum that we see will last also for the 2022, this is a good news for us. And also, to conclude with the motorbike, I'd like to underline that, on top of the traditional top customers, we are also acquiring new business on the e-bike in the mid and low segment, mainly in China. So it will be a new very interesting experience for us in that area. Regarding the passenger car segment, during the last call in May we said the forecast was around 84-
84.5 million; now the forecast seems to be more around 83 million, due to the chip shortage topic, but still strong. Anyway the Chinese market in 2021 will be probably the one who will be at the same level as in the pre-
COVID period, while Europe and U.S. should be slightly below, but overall, I would say the car sector seems to resist well, despite some headwinds occurring as you know.
Regarding Brake-by-Wire, it is of course a super strategic product for us. I can tell you that during '23 there will be the first application on the market, which is relatively soon for such new product with a prestigious OEM. Also, last week, we were part of the innovation day of another big OEM that invited us to show and test the Brake-by-Wire and the feedback was very, very positive. So I expect that Brake-by-Wire will no longer be a sort of prototype, but it is really moving to the application phase. But I will be more than happy, hopefully or I should say almost certainly, to be able to give you some update by end of the year.
MONICA BOSIO: Okay, thank you very much.
DANIELE SCHILLACI: Thank you.
OPERATOR:The next question is from Martino De Ambroggi with Equita. Please go ahead.
MARTINO DE AMBROGGI: Thank you. Good afternoon, everybody. The first question is on the top line guidance, if you could split among the different divisions, just to have a rough idea what could be the mix?
And the second question is on the EBITDA guidance, because if I look at the margin in the second half its implicitly lower than in the first half and even lower than the second half of last year, despite similar sales? So just to know if we should take into account some specific driver some specific variable?
MATTEO TIRABOSCHI: The guidance for the revenues regards all the activities that we have. We don't disclose details about single business unit.
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