March 18 (Reuters) - Italian premium brake maker Brembo sees no growth in its core profit margin or revenue in 2026, it said on Wednesday, underscoring lack of recovery in the auto industry and
Brembo sees no growth or worse in 2026 due to MidEast conflict
Brembo's Financial Forecast and Impact of Middle East Conflict
MILAN, March 18 (Reuters) - Italian premium brake maker Brembo on Wednesday forecast no growth in revenue and core profit margins this year, and warned they could dip if the conflict in the Middle East drags on, sending shares down.
Executive Commentary on Growth Prospects
Executive Chairman Matteo Tiraboschi told Reuters that, until a week ago, Brembo's forecast was for 3-5% growth in 2026.
"But we saw the war in the Middle East was continuing, so we decided do be more prudent," he said.
Regional Conflict and Market Impact
U.S.-Israeli strikes on Iran and Tehran's response have led to a broader regional conflict, drawing in several Gulf countries and sending oil and other commodity prices sharply higher while disrupting trade and shipping routes.
Dependence on Middle Eastern Markets
Brembo supplies premium and luxury carmakers such as Ferrari, Maserati, Tesla and BMW, which have historically relied on Middle Eastern markets as a source of high-margin sales.
Gloomy Outlook for 2026
GLOOMY OUTLOOK
Brembo said that for 2026 it expected both revenues and margin on core earnings (EBITDA) in line with those of 2025 "in the absence of further geopolitical deterioration and given the automotive sector context that remains challenging".
"Clearly, if this war goes on beyond, say, Easter, that's not going to be anymore a problem of a more or less flat guidance for Brembo. It would become a huge problem for all," Tiraboschi said.
Market Reaction and Company Response
Milan-traded shares in the company fell as much as 11% and were down 8.8% by 1620 GMT.
A protracted conflict would mean a hard shortage of commodities and energy costs "completely out of control", he added.
Countermeasures and Strategic Actions
Tiraboschi said Brembo was taking countermeasures to face the scenario, mostly based on the group's experience during the pandemic.
"We have already secured delivery slots and logistics services of a certain kind, we have increased our stocks of those materials that are most strategic for us," he said, adding that for now Brembo had not taken actions on energy costs "to stay flexible and not lock in prices".
Recent Financial Performance
In 2025, revenues at the Bergamo-based group fell almost 4% to 3.70 billion euros ($4.26 billion), with an EBITDA margin of 16.5%, down from 17.2% a tear earlier.
Brembo also said net profit fell 20% last year to 209 million euros, and pledged to pay dividends this year of 0.30 euro per share.
($1 = 0.8679 euros)
(Reporting by Romolo Tosiani in Gdansk and Giulio Piovaccari in Milan; Editing by Milla Nissi-Prussak and Alvise Armellini)
