UPDATE 2-Brembo shares hit record on strong 2013 and outlook

Thu Mar 6, 2014 2:07pm EST

* Company forecasts 8-10 pct rise in 2014 revenue

* Shares close up 10.55 pct

* 2013 net profit up 14.4 pct, revenues up 12.8 pct

* Analyst says FY results beat forecast, optimistic for 2014 (Recasts with deputy chairman comments, adds details, updates shares)

By Agnieszka Flak and Stefano Rebaudo

MILAN, March 6 (Reuters) - Italian brakes maker Brembo expects sales to increase by 8-10 percent this year, boosted by strong growth across its markets, a senior executive said on Thursday, building on a strong 2013 that sent its shares to a record high.

Even in Italy, among European countries most hit by a six-year slump in auto sales that only now show modest signs of recovery, Brembo's sales grew by 2 percent last year, primarily because of its focus on the premium market.

The company supplies brakes to carmakers including Ferrari and Porsche, and has also been involved with Formula One racing since the mid-1970s.

"All of the areas where Brembo operates are going well, so I expect the sales growth to be fairly homogenous across the world (this year). We expect to be able to grow our sales in a high single-digit figure, between 8 and 10 percent," Deputy Chairman Matteo Tiraboschi said, adding that the company expects an EBITDA margin of 14 percent this year, up from 13.5 percent in 2013.

A jump in sales in most western European markets, North America and China lifted Brembo's full-year net profit by 14.4 percent to 89 million euros. Total revenues last year increased by 12.8 percent to 1.57 billion euros.

RECORD HIGH

The stock rose as much as 12 percent to a record 24.84 euros. It finished the day up 10.55 percent, outperforming a 0.4 percent rise in Milan's all-share index.

"I liked everything about these results, their performance was definitely above expectations," one Milan-based analyst said. "Now their guidance of an EBITDA margin of 14 percent for this year seems excessively conservative."

Brembo said that it expects 2014 capital expenditure to be between 130 million euros and 140 million euros ($178-192 million), broadly in line with last year.

The group's board is to ask shareholders for a mandate to pursue a capital increase, excluding option rights, for up to 10 percent of its share capital to raise funds for acquisitions if and when opportunities arise.

Tiraboschi emphasised, however, that no deals are in its sights at the moment.

In terms of organic growth, Brembo is targeting Asia, and China in particular, where it hopes to increase production capacity. Sales in that country are expected to continue growing "in line with the trend of recent years", Tiraboschi said. Chinese sales grew 36 percent last year.

While Germany and North America made up nearly half of Brembo's sales last year, in the long term the company hopes for an even spread between Asia, Europe and the Americas.

It proposed paying a gross dividend of 0.50 euros per share. ($1 = 0.7278 euros) (Editing by Jane Merriman and David Goodman)

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