AUTOMOTIVE COMPONENTS SECTOR

In 2010, its thirtieth year of business, the Sogefi group reported a significant rise in all its main performance indicators and a return to profit after the losses of 2009. These results were achieved thanks to the cost-cutting action taken by the company in the last two years together with the recovery in the production of motor vehicles in the main world markets after the sharp contraction in 2009.

In Europe, the significant reduction in vehicle registrations in the period April-December due to the end of Government incentives caused the annual figure to decline (-5.5% on 2009). However new vehicle production rose compared to the previous year, both because destocking had come to an end and because of the rise in demand from markets outside Europe recorded by German manufacturers. After the deepest crisis in its history, the North American market showed signs of recovery while growth continued in South America (+15%). In 2010 China became the top world market for the production and sale of cars with over 17 million vehicles sold (+33% on 2009). India continues to show strong growth (+19% on average over the last five years). As far as the industrial vehicle sector is concerned, the second half of the year saw a rise in production levels but was still nowhere near the record volumes of 2007.

In 2010 the Sogefi group reported sales revenues of € 924.7 million, which were up by 18.4% from € 781 million the previous year, and returned to profit, posting net income of € 18.8 million compared to a net loss of € 7.6 million in 2009.

The breakdown of consolidated sales of the Sogefi group by business sector is as follows:

The recovery was particularly significant in the original equipment sector, which accounted for 66% of total revenues; just under 30% of revenues came from non-European markets. In 2010 revenues obtained in Mercosur (€ 219.4 million) for the first time overtook those of France (€ 207.4 million), which had for years been Sogefi’s number one market. Revenues generated in China and India almost doubled compared to 2009, while sales in the United States rose by approximately 25%.

The gross operating margin (EBITDA) for the year came in at € 86.7 million (9.4% of sales revenues), and was up by 83.6% compared to the figure of € 47.2 million for the previous year (6% of sales). EBIT was also sharply higher, rising to € 41.8 million (4.5% of sales) from € 5.1 million (0.6% of sales) in 2009.

At December 31 2010 the group’s net debt stood at € 164.9 million, down by € 5.3 million from € 170.2 million at December 31 2009.

The group had 5,574 employees at December 31 2010, down from 5,770 at December 31 2009.

In view of the result for the year and the financial solidity of the group, the Board of Directors of Sogefi, which met on February 24 2011, proposed distributing a dividend for 2010 of  € 0.13 per share (no dividend was distributed last year).

The filter division reported sales revenues of € 465.1 million, with a rise of 12.1% from € 414.8 million in 2009 and an EBITDA for the division of € 39.2 million, which was up by 44.9% on 2009.

The revenues of the suspension components division came to € 461.6 million, showing an improvement of 25.4% on the figure of 368 million for 2009 and the EBITDA of the division was € 52.1 million (11.3% of revenues), showing strong growth from the figure of € 24 million in 2009.

In 2011 there is expected to be a rise in the world production of motor vehicles thanks to further growth in North and South America and the Chinese and Indian markets maintaining current levels of development.  In Western Europe, on the other hand, the situation is expected to remain stable overall compared to 2010. In line with the market trend, the group will continue in its strategy of downsizing its production capacity in Europe and expanding its presence in countries with higher growth levels.

Therefore, although there is likely to be a rise in the cost of the main commodities, the group believes that it can achieve growth in revenues and earnings in 2011 too unless there are any events of an exceptional nature that cannot be envisaged at present.