Our first ten years, new challenges

Commitments and strategiesto deal with the crisisThe history of the companies who led to the start of Brevini Fluid Power in 2003 has clung to its roots over the years and has witnessed the initial results of the Italian economic miracle.Since the start, the decision to gain market share in the fluid power market has been one and only: “to work together”. The acquisitions and mergers that have allowed us to join the forces of many businesses in 2003 to make one only.One only, Brevini Fluid Power, who intends to continue to be a “main hub” for the Italian fluid power industry over the next 10 years.There will be more mergers, acquisitions and international expansions with branches and facilities. There will be investments and research.There will be opportunities for those who wish to build a new “factory” model.There will be many new products: as producers of components, we at Brevini Fluid Power, will further our “system engineering” skills.Not only excellent components, but also a new way of dealing with our partners, a true co-design that will involve our team, ever more committed with the team of Brevini Power Transmission to develop new innovative solutions for the market. ... Continued on page 2

Vito Bonafede A.D. Brevini Fluid Power

Cormidi the winner of the IAPAs fair 2013

“Thanks to Brevini Fluid Power”The aerial platform KB X Performance developed by Cormidi of Roccaspide (SA) won a prestigious international award. It was chosen as Product of the Year in the Self Propelled section (booms, scissors, atrium lifts) at the IAPAs 2013 contest that was held on 26 March in Miami, Florida.

There are various Brevini Fluid Power products mounted on the platform KB X Performance manufactured by Cormidi. Cormidi has been committed to the development, production and trade of minidumper for many years, including, aerial platforms, tracked skid loaders and machines that have received worldwide focus due to their performance, sturdiness, reliability and captivating design.

These are successful products that have allowed Cormidi to open a direct branch in the US. However, this was not enough for the company and this is why it continues to offer innovative machines, also thanks to excellent suppliers, such as Brevini Fluid Power. ... Continued on page 9

FAIRS Bauma: a large-scale leading trade fairThe construction machinery industry meets every three years

in Munich for the BAUMA trade fair. The 2013 edition (from 15 to 21 of April) has given a cheering perspective, signs of recovery. Brevini Fluid Power created an innovated stand for the Bauma trade. (Pag. 6)

EVENTS Order of Merit for Labour to Claudio LucchiDuring the May 1st celebrations

for the traditional ceremony of the “Order of Merit for Labour” to workers of the Emilia-Romagna region, Claudio Lucchi of Brevini Power, as well as Sergio Mazzali of Brevini Power Transmission were both awarded. (Pag. 9)

TRAININGMaurizio Brevini in the Board of Directors of CISMaria Licia Ferrarini is the new

Vice Chairman of CIS, Management School of the Industrial Union of Reggio Emilia. The board also appointed a new board of directors, which includes Maurizio Brevini elected as member (Brevini Fluid Power Spa). (Pag. 8)

TECHNICAL Cartridge valves: “New solutions”From the simple component of the mini-power plants, today cartridge valves make part of

a product line with a wide range: more than 70 valves among various types, including maximum pressure valves, sequence valves, check valves, controlled stop valves and limit switch valves, among others.(Pag. 5)

QUALITYQuality Management System ATEX “positive audit”The regular audit on the Quality

Management System ATEX, conducted on 7 May 2013 by the third party accredited firm Det Norske Veritas (DNV) has confirmed the maintenance of the “Product Quality Assurance”. (Pag. 11)

Edito

rial

INTERNATIONAL AWARD

CORPORATE NEWSLETTERBREVINI FLUID POWER

Issue No 2 - June 2013Registration with the Court of Reggio Emilia

Press Registration 3 – 16/04/2012 – Registration No. 692/2012 R.G.V.G.

TABLE OF CONTENTS

1

This year there will be no parties or celebrations for the first 10 years of Brevini Fluid Power, but everyone, including shareholders, customers, suppliers and employees must know that we are part of a group of professionals who work together to build a “shared future”.

The analysis on the trend outlook for the markets for the first months of 2013 clearly shows evident signs of critical situations that impose the Italian industry a fundamental effort to take precise decisions that are not always easy. Several decisions require sacrifices and should be discussed internally and externally; however, a serious path must be followed and its goals should be the basis for stability and continuity in order to foster growth over the next years. The pace and growth methods will change, but Brevini Fluid Power will continue to play the role of pacemaker in the fluid power industry.

Despite the difficulties, we are committed everyday to take constructive decisions in order to open the door for a possible and sustainable future. Those that may seem sacrifices to some, over the next months, are actually shared investments.

These are the best investments that each of us, in our own role, can make.

Our people our are true capital. People and their commitment. No one can be forced to share decisions and sacrifices, but cohesion is demanded to everyone at this stage.

At the end of this difficult phase which all Italian businesses are experiencing, even differently, to go back to levels before the crisis will be very difficult from any perspective. We are experiencing an epochal event: the way of selling, producing and working has changed.

The managerial severity and attention to reduction and optimisation of

costs are not just a “passing need”, but rather a new standard used to

assess excellent and competitive businesses, those that will remain and

will create jobs, over the next few years.

This will be a new challenge for all shareholders, customers, suppliers

and employees. It means having to give main signs of change that will

be mostly signs of discontinuity.

Brevini Fluid Power is among businesses who are working to readily

overcome this complex crisis.

The recent Bauma trade fair has launched the market clear signs: “Your

Global Partner” is not a slogan, but a way of seeing the future. Working

for the future will be different than in the past, but it will be in any case

dictated by a will to grow thanks to new products, new production, as

well as organisational processes, new marketing instruments, new services

to customers and new bonds with suppliers.

These are the challenges that await us. We of Brevini Fluid Power are

getting ready to win them all, even if, just as in sports, to become and

remain champions, we need to make sacrifices. We will make them together.

Vito BonafedeManaging Director of Brevini Fluid Power

June 2013

Together to builda “shared future”

2003-2013

EDITORIAL

2

We cannot expect for things to change if we continue to do the same things.The crisis is the best blessing that can happen to people and countries, because the crisis brings progress.Creativity is born from the distress, as the day is born from the dark night. It is in crisis that invention, discovery and large strategies are born. Who ever overcomes crisis outdoes himself without being ‘overcome’. Who attributes their failures to the crisis and neglects violent his own talent and gives most respect to the problems rather than solutions.The real crisis is the crisis of incompetence.The problem of people and countries is laziness to find solutions to their problems.There’s no challenge without a crisis. Without challenges, life becomes a routine, a slow agony. There’s no merit without crisis.It’s in the crisis where we can show the very best in us. Without a crisis, any wind becomes a tender touch.To speak about a crisis is to promote it. Not to speak about it is to exalt conformism. Let us work hard instead.Let us stop, once and for all, the menacing crisis that represents the tragedy of not being willing to overcome it

Albert Einstein(1879-1955)

To listen and share. Learning how to listen and having the strength to share. When things go as planned and when there are sacrifices to make. This is the strength of our businesses.

Businesses that have been running for more than forty years. I have learnt much through the company and listening to people who have contributed to the company’s history and I know that “sharing” is important. The crisis that we are experiencing is not the first. Perhaps is the most serious and longest. Perhaps is different. We are told that nothing will be the way it was before 2008.

This is certainly true, the world has undergone a very evident change. But I wish for no one, at least in Brevini Fluid Power, to forget the word “to share”.

There are times that are difficult, but this crisis can be overcome only if we “stay in the same direction”. In the history of the “factory” lived and told, I have hear many times talked about difficulties in engaging in dialogue between blue collar and white collar workers.

This was another time, which has now changed. Today, we are all called to share sacrifices and opportunities. Today, a part of the company is affected, but tomorrow,

without sharing, another part will be affected.

This is inevitable. Just seeing where a

company stands in this fast-paced world,

does not pay off. It will always pay-off less in

the future. The production divisions are called,

and are already in process of, implementing

a complete restructuring plan in order to gain

more competitive edge and this goal must be

pursued for the entire company. There are

no “open areas” where nothing will change.

Everything is changing. What seems certain

today, may not be tomorrow, but if everyone,

without dividing roles, divisions, member

companies, are able to work together and

are determined to help each other, there will

certainly be less problems. “I am safe”, “this

crisis does not affect me”, I have heard this

type of comment too often and this certainly

does not help resolve any problems. What

I want to hear is “what can we do, what

can I do so that the entire company can

be successful and able to remain in the

market”. The future, just as it happened

forty years ago, is built with strong ideas,

with commitment and sharing.

Mirco CampaldiOperations Director

Brevini Fluid Power

I have been taught to “share”

by Mirco Campaldi

Opinions

“3

OPERATIONS

Our new logisticsA new development phase has been set out for a corporate area which will be more and more strategic.

In the hope that major strategic projects for the future of Brevini Fluid Power, such as the integration and use of the large automated centralised warehouse located in the plant PCT, become a necessary instrument to improve the management of materials (unified and computerised) incoming and outgoing from and to the productions and that the realisation of the “machines of new operations” go into the construction design phase and never stop. “We have tried to make a calculation, not yet detailed – explains Mirco Campaldi, operations director of Brevini Fluid Power - to better understand how much have the rationalisation measures taken in various production phases have yielded in terms of savings and improvement in the quality of the work. Having to plan for a reduction of spaces of about 3100 square metres in 2012 which were used as warehouses and production areas with a savings in terms of rent of about Euro 160,000 compared to 2011, requires a great effort on the part of the company. Resources have are freed in order to make space for other investments that are more associated with the future. This is a clear sign that applies to everyone, not only for us who work in Brevini Fluid Power, but also for customers and suppliers. Everyone knows that we are doing our best to meet their demands. Another passage was the unification of the rectification division (completed in May) in the facility which according to the new Plant Map is called PLM 2 (Via Moscova 10).But, what actually makes the difference will be the unification of the logistic hub (for Shipments and Spare Parts) located in via De Chirico 7 and 9 in Cella. Just one point of reference which we will call PSR for everyone, for all the product lines that make up the offer of Brevini Fluid Power. This is a major change that completely falls within the scope of the logics that has led to the unification of many small businesses to

form a single large more efficient one. A business that is more capable of being competitive in the market. These actions will certainly bring operational benefits as much as issues and overlapping situations that must be analysed and resolved accordingly. We are thoroughly working on these issues and the PSR operation should be completed by this summer. Customers, distributors and branches should have just one point of reference: one logistic-business contact person. We have set out to ensure greater care, more accuracy and better quality even in this phase of our daily work. New professionalism and responsibilities will be needed for the people we work with in PSR.

The new unified Customer Service structure will be introduced into this trend of progress and fast return investment over the next months. The keyword that we

must bear in mind in this phase is to pursue a unification, namely to make each action more uniform and effective. The unification of the purchasing division accomplished in the end of 2012 is already yielding good results.

We need to continue heading in the right direction with conviction. Once the inevitable issues related to the adjustment of roles are resolved, we will be able to work better. The strategic decisions that will lead to the relocation to the valve and distribution production plant from the industrial village of Mancasale to that of Crostolo in via Moscova 6 are clear: a relocation, the umpteenth “functional transfer” to gain more productivity and competitive edge will be another key point of the project plan (for 2014) which was set out and pursued in many parts.

4

TECHNICAL

From component to product line:“It was a successful decision”

NEW / “Cartridge Valves”

http://www.brevinifluidpower.com/public/brevinifluidpower/it/Prodotti/Cataloghi.html

For a few years now, Brevini Fluid Power has invested in the unification of the cartridge valve offer that were present in the catalogues Aron, Hydr-App and OR. But, there is more. The range was expanded and has become more complete progressively over the years to meet numerous project demands and customers’ needs. From the simple component of the mini-power plant products, today cartridge valves make part of a product line with a wide range: more than 70 valves among various types, including maximum pressure valves, sequence valves, check valves, controlled stop valves and limit switch valves. The goal set out for 2013 is to reassess check solenoid valves with piloted action 2 ways 2 positions in order to reduce the available versions by expanding their functions.

Technical characteristics

Several application examples

Lifter used to transport wheelchairs for handicapped people

Forklifts for reels Standard FP flange

The entire range of cartridge valves can be viewed from the new dedicated catalogue that can be downloaded from the following website:

4 ways 2 positions 4 ways 3 positions

Maximum operating pressure = 250 bar. Maximum operating pressure = 250 bar.

Maximum operating capacity = 18l/min Maximum operating capacity = 18l/min.CURSOR LAYOUT CURSOR LAYOUT

New 4-way with 2 and 3-position cartridge valves, with thread ¾-16 UNF (C4V04022)The innovative valves C4V04022 that can be particularly applied to new plants FP Brevini Fluid Power, as well as to dedicated blocks upon request of customers, are used to control the movement of a dual-effect cylinder or motor. These types of valves consist of a cursor that slides into a cartridge housing with a reduced clearance coupling to contain oil leaks going towards the drain. The cursor is moved by an electromagnet, to the right and to the left, when one of the two coils is engaged allowing for communication between the inlets 1, 2, 3 and 4 according to different procedures depending on the type of cursor and housing.

A spring secures the return of

the cursor in central position.The new 4-way with 2 and 3-positions cartridge valves with thread ¾-16 UNF (C4V04022) are currently in production and readily available for order.

Introduced innovative aspectsThanks to an in-depth planning activity, the same housings and cursors were able to be used on both cartridges. This feature makes us one of the first to use the same cursor with bayonet coupling in the 2-position version which provides considerable benefits in terms of costs and assembly simplicity, even in the version with 3-positions. This last solution requires the use of a pin and a

plug used to make a coupling.

Moreover, the studied solution allows us to be among the first to use bronze welding on the sleeve with a single-nucleus solution when is generally used in various versions with two nucleus. In addition to providing greater strength to the sleeve, this offers the advantage of being able to mount and demount all components unlike the solution with two nucleus in which one remains incorporated after the welding and cannot longer be removed. Therefore, the assembly with the finished piece of the sleeve provides better control of the internal components that we produce and hence allows for an easy intervention in case the valve needs to be serviced.

5

The construction machinery industry meets every three years in Munich for the BAUMA trade fair. The fair’s 2013 edition (from 15 to 21 of April) has given signs of encouragement and recovery. “The stand that unites Brevini products gets a record presence thanks to innovative solutions” – added the Managing Director of Brevini Fluid Power, Vito Bonafede: “Not only fluid power components but also packages integrated with a power transmission that represents the strength of Brevini Power Transmission. In this way, the group can

provide machine manufacturers a series of benefits associated with quality, reliability and availability of the Brevini Group in terms of joint planning”. Maurizio Brevini, Technical Manager of Brevini Fluid Power, emphasises the importance of presenting new solutions to customers through technical and business meetings: “especially to new potential customers of Brevini”.

About 530 thousand visitors were present at the BAUMA 2013 trade fair representing an increase in presence of 26%: “this means that there is much interest for

FAIRS

SPECIAL“Ideas to go global”Brevini at the fair of Munich with new solutions for construction and earth-moving machines: “signs of recovery”

Our showcase of new products.Among the new products that Brevini presented in the trade fair with 3,420 exhibitors from 57 countries there is certainly the motor reducer fine-tuned for the firm Industrie Cometto of Cuneo that was present at Bauma 2013 with a new system used for handling large machineries (vessel section, off-shore platform components and aerospace components) making an integration between the engine SH7VR55cc and reducer CWD2150. A co-design between Brevini Fluid Power and Brevini Power Transmission which has fully met the demands of customers who require loads for axis of more than 20% with respect to previous solutions.

6

Brevini solutions at the fair CTT Moscow 2013Since the first edition in 2000, the fair CTT that every summer brings big market players to Moscow from the construction machinery and earth moving machine industry, conquered a top profile, a major showcase and Brevini Fluid Power decided to participate with a large stand at the “Crocus Expo” International Exhibition Centre even for the 2013 edition where all new businesses will come together.“Expanding markets, such as those revolving around Russia are very important for the future of the group and for this reason we will strive to be partners capable of supplying systems and not only high quality and competitive components” - explains Managing Director of Brevini Fluid Power, Vito Bonafede.CCT occupies an area of 124 thousand square metres and draws nearly thousand of exhibitors. About 33 thousand professional visitors are expected.The solutions of Brevini Power Transmission and Brevini Fluid Power will also be included in the showcase at the CTT Moscow in the stand that will joint made in Italy excellencies (hall 13 – stand 360). It is a teamwork that has demonstrated to have great potential.

the construction industry, which remains the central focus in Europe”. Brevini Fluid Power arranged an innovative stand for the Bauma trade fair, designed by architect Mirka Brevini: “the purpose is to bring visitors inside factories where fluid power components and reducers are manufactured and this was possible thanks to interactive multimedia”. The Bauma trade

fair will be held from 11 to 17 of April 2016 and the Brevini Fluid Power’s research and development department will make sure to launch new products by said date: “We have ideas and products in order to continue our growth and our goal is to work together with our customers and suppliers” added President Renato Brevini.

BAUMA VIDEO NEWS

FAIRS

SPECIAL Yourglobal

partner

The Brevini Fluid Power media gallery accessible through the website www.brevinifluidpower.com has a section dedicated to BAUMA 2013 and the corporate You Tube channel BrevinifluidpowerIT contains three versions of the report in Italian, English and German prepared by the marketing team of Brevini Fluid Power during the fair.For more information check out the link: http://www.youtube.com/user/brevinifluidpowerIT

7

FACTS & PEOPLE

TRAINING/ INDUSTRIAL UNION OF REGGIO EMILIA

Maurizio Brevini joints the Board of Directors of CIS

M a r i a L i c i a Ferrarini is the new Vice Chairman of CIS, Management Schoo l o f the Industrial Union of Reggio Emilia.

The entrepreneur from Reggio Emilia

also covers the role of Vice Chairman of the Industrial Union of Reggio Emilia, responsible for the Education and Relations with schools. Cristina Strozzi from Walvoil Spa passed on the role as her term of office ended having strongly contributed to the entity’s increase in equity with a strong position in the education sector.

The Board also appointed a new Board of Directors whose members are as follows: Roberta Anceschi (Simet Srl), Maurizio Brevini (Brevini Fluid Power Spa), Enrico Giuliani (Oto Spa) and Giovanni Roveda (General Manager of the Industrial Union of Reggio Emilia).

CISCIS - the management school of the Industrial Union of Reggio Emilia has been dedicated for 28 years to training human resources to favour the development of the economy of Reggio Emilia, offering every year initiatives addressed to young school and university graduates to join the world of work and offer inter-company courses for professional development. The management schoo ls conducts :

- co rpora te and i n te r - company professional development training courses

- post graduate and post-diploma courses (masters, IFTS, etc.);

- foreign language courses and Italian courses for foreigners, including non-business subjects;

- consultancy on specific subjects (e.g. privacy, human resources, training leaves, Law 53...);

- research actions with international partnerships financed by public entities.

CIS is accredited by the Emilia-Romagna Region and finances part of numerous training programmes of the school together with the Province of Reggio Emilia. CIS is committed to the realisation of courses approved by Fondimpresa and Fondirigenti.

CIS is a member of Asfor and SFC (Association of Italian Industries Training System) and is certified ISO 9001:2008.

Open the doors of the “factory” to explain how Brevini Fluid Power works. This objective constitutes the basis of many initiatives aimed at young people and schools that Brevini Fluid Power puts out every year. “It is a commitment that is combined with our vision of the future and growth with two classes 4 G and 4 B of the IIS Nobili accompanied by teachers who have visited the production facility in via Natta accompanied by Ivan

Talami, responsible for the maintenance of the plant of Brevini Fluid Power” - Added Maurizio Brevini. Moreover, Maurizio Brevini, manager of TMS, the Technical and Management School of Brevini Fluid Power, emphasized the commitment in “continuing education ever more oriented to more specialised roles and future development of the “Werther Campaldi Student Project” that follows worthy students of the IIS L. Nobili for over ten

years, from high school until graduation in engineering. The results of this investment on the future are really positive and the new vision given to our company confirms that continuing education is a key factor in global competition”. In fact, “open doors” in Brevini Fluid Power mean many things, even internships and other initiatives that strive to have a closer relationship between school and the company.

A “lesson” to understand the factory: Brevini Fluid Power opens its doors to students

8

EVENTS

A word from the Application Manager

AWARDS/ in BolognaOrder of Merit for Labour to Claudio Lucchi

During the May 1st celebrations in Bologna the traditional ceremony with the award of the “Order of Merit for Labour “. Workers of the Emilia-Romagna region were awarded, including Claudio Lucchi of Brevini Power and Sergio Mazzali

of Brevini Power Transmission. The merit awards were handed out by a Committee appointed and chaired by the Ministry of Labour and made up of the Chairman of the National Federation of Teachers of Labour of Italy, the Chairman of the National Association of Elderly Workers, including five executives appointed by the Chairman of the Board and by the Ministry of Foreign Affairs, Agriculture, Industry, Labour, six members appointed by trade associations and four members representing employers. The

Order of Merit for Labour, a prestigious honour of the Republic awarded by the Chief of State to those workers of public and private companies who have been meritorious and have a good moral conduct for at least twenty-five years of business have been awarded at the Opera House of Bologna to Claudio Lucchi and Sergio Mazzali who look after the company’s results and are not just concerned with receiving awards. During the course of the event greeted by the representatives of the Emilia-Romagna Region, the Province,

Municipality, Chamber of Commerce of Bologna and the Italian Federation of Masters of Work of the Region, Prefect Angelo Tranfaglia awarded the honour diplomas granted by the President of the Republic. “Development of the people and promotion of human dignity are strictly difficult to accomplish in a historical time such as the one were are experiencing, characterised by a serious alarming economic and financial crisis that has affected all segments of our society in different ways” - added the Prefect Tranfaglia.

The aerial platform KB X Performance

developed by Cormidi of Roccaspide (SA)

won a prestigious international award. It was

chosen as Product of the Year in the Self

Propelled section (booms, scissors, atrium

lifts) at the IAPAs 2013 contest that was

held on 26 March in Miami, Florida. There

are various Brevini Fluid Power products

mounted on the platform KB X Performance

produced by Cormidi, such as:

• Gearmotor: 2xCTM1016 S 609 CF F07 05 001 VAM 01

• Traction distributor: CXDH3004

• Stabiliser feet distributor: CDC30019

• Arm distributor: CDC30023

• Basket levelling block: P15111926

Armando Cormidi, President of the group, thanked the team Brevini Fluid Power for the synergies that have led to the realisation of a successful product in the market and for the jury of the International Awards for Powered Access (IAPA), the only Italian company out of 13 companies to be awarded in American soil.

Good morning guys!I wanted to thanked all of you who have provided the technology and taken the efforts to realise the best aerial tracked platform in the world...a specialised jury during the Awards 2013 of Miami gave the award to Cormidi KB for the best machine of 2013 in the world... I will send you pictures as soon as possible ... Not to mention..... It was the only Italian company to win..... Thanks to everyone, the victory is also yours..................Regards

Armando CormidiPresident Design, R & D Manager

“Brevini Fluid Power also thanked Cormidi” added engineer Maurizio Brevini, technical manager of the group “this is the type of partnership that we intend to pursue: together to grow just as we wrote in the invitation to BAUMA 2013. We are ready to cooperate at this high level and this award proves that many things can be achieved by working together. A sincere thanks to all the Team Cormidi from all Brevini Fluid Power!”.

IAPAs 2014 is planned for 3 April in London.The challenge continues.

“Working closely with Cormidi” explains Claudio Chiesa, Application Manager of Brevini Fluid Power who followed the project “other improvements will be implemented, but the results are already excellent in this version. The handling of the platform for the most part counts on Brevini Fluid Power products.Cormidi is a cutting-edge company engaged in the development and production of mini dumpers and tracked skid loaders, namely sturdy and versatile machines, but extremely compact and

easy to handle, to be used in building sites and for earth-moving works.

Thanks to an efficient research and development centre within the company and a young dynamic staff, Cormidi is constantly updating its machines by following the progress of the components used. The goal is to continue to supply sturdy, powerful and long lasting machines, guaranteeing absolute safety for those who use it”.

Cormidi the winner of the IAPAs fair 2013:

“Thanks to Brevini Fluid Power”

9

HUMAN RESOURCES

Training is an essential instrument to improve personal and professional knowledge and allows for constant growth, opportunities and incentives required to grow.The management training school TMS was created based on these convictions and Brevini Fluid Power continues to invest in training every year following said principles.This is a very important commitment for the company who organises the courses, but also for those you attend it: each collaborator get involved in the courses in a constructive and conscious manner. In 2012, 221 training courses were set out for workers, several of which were repeated on more editions for a total of 294 training activities.

TRAINING 2012

More than 200 COURSES

13,493 Attendance hours

84% Employees involved

Below several figures of the previous year:In 2012, 16,792 hours of actual attendances to courses and seminars were distributed, including seminars, workshops and training.

13,493 hours of attendances only for Brevini Fluid Power employees of the facilities of Reggio, divided as follows:

• 4,041 hours of attendances to training activities (30% total attendance hours)

• 8,925 attendance hours to classroom courses at the company or with training entities (66% of total attendance hours)

• 527 hours of attendance to seminars and workshops (4% of total attendance hours)

The percentage of hours dedicated to classroom training remains high.

There is about 24 classroom training hours for each person involved. 34

hours in average per person if we consider on the job training.

84% of Brevini Fluid Power employees in 2012, attended at least one training activity, course, seminar or on the job training.

Compared to 2011, training hours and efforts to training have increased slightly and remain high firmly.

The reasons that have brought about the organisation of courses include, professional growth, training following organisational interventions and job rotations for newly recruits, mandatory training (e.g. safety and privacy), continuing education (SW updates,..). Major subjects include technical courses on fluid power and technical courses on product lines, not to mention managerial courses and professional development courses (from an IT, regulatory and internal procedure standpoint).

The resu l ts of sat i s fac tor y questionnaires have revealed that

participants were overall satisfied.

The verification on the effectiveness of the training has been completed in liaison with internal instructors and managers.

Several technical training courses on external product lines have been organised within the scope of the corporate training school TMS in which customers and distributors have participated.

Despite the difficult economic situation, in 2013 we will try to pursue the goal set out in the past years by prioritising strategic training activities, also thanks to the recent approval of 20 courses financed by Fondimpresa.

In the first 4 months of 2013 we arranged about 70 training activities within the Group, considering internal training and classroom courses (externally and internally).

Investing in continuing training programmes:

more than 200 courses in 2012

10

BUSINESS & TERRITORY

QUALITY

“We invest in young people, change is possible and the perspectives of qualified work can and must be built”. These are the words of Mirco Campaldi, operations manager of the Brevini Fluid Power of Reggio Emilia expressed before the students of the IIS Nobili who received a study grant 2013.

Three young students from Reggio Emilia who can count on an “extra allied” to guarantee the path that will lead them to a degree in engineering and subsequently to the world of work. The three students who received the scholarship grant at the Great Hall of ITIS “Nobili” are: Andrea Bergamini from class 5 C mechanics, Giaia Codeluppi from class 5 L and Andrea Polito from class 5 B. “We were very proud of seeing a woman join the Student Werther Campaldi Project and graduating in mechanical engineering. In these years we have constantly seen the improvement in the preparation of young people who leave IIS Nobili and we are more and more convinced that given the difficult situation that unemployment presents for young people, the training courses and alliance between

schools and businesses will make the difference” – commented Mirco Campaldi, son of Werther and operations manager of Brevini Fluid Power.

The Student Project dedicated to Werther Campaldi which since 2001 until today it has accompanied 23 worthy students from Reggio Emilia from the school diploma at ITIS “Nobili” to a degree in engineering thereby guaranteeing a scholarship for good grades, as well as an internship in the company and degree dissertation support.

“This is a major experience which year after year confirms the decision to invest on young talented people. This helps change the negative perception on the future and renews the constructive and dynamic sense between the school and the business” – added the school director, Valerio Messori, in charge of IIS Nobili.

Thanks to initiatives like the Werther Campaldi Student Project of Reggio Emilia, we are on the right track towards making our territory ever more competitive and attractive in the world market where the qualification of human resources who come into our company will become a key factor.

A website (www.werthercampaldi.it) is dedicated to the Student Project “Werther Campaldi” which relies on the youtube channel BFPWertherCampaldi to provide video news dedicated to the awarding of study grants for 2013.

http://www.youtube.com/watch?v=fbFXAAb7VlY

The Student Project “Werther Campaldi”

“We invest in young people, change is possible”

Quality Management System ATEX:

“validity confirmed”

Three students joint the course aimed at graduation and qualified introduction to the world of work: a woman for the first time

The periodic audit on the Quality Management System ATEX, completed on May by the third party accredited entity Det Norske Veritas (DNV), has confirmed Brevini Fluid Power the maintenance of the “Product Quality Assurance”

pursuant to exhibit VII of ATEX Directive 94/09/EC and standard EN ISO/IEC 80079- 34:2011 Edition 1, regarding electrohydraulic modules version Atex Brevini Hydraulics line (series MHOFX, MHPODX, MHPEDX, MHPEPX). Therefore,

the first certification obtained in 2010 for the production process of electrohydraulic modules has been strengthened and is reflecting a continuous increase in turnover since 2011 with excellent forecasts even for the current year.

11

SALES

The OT Oil Technology technical area, in liaison with the R&D Area of Brevini Fluid Power has implemented major technical improvements in the family of motors OT200, the purpose being to meet technical demands of various mobile applications where reliability of the product is required with high velocity conditions. Tests were carried out to validate the operation of a OT200 8.2cm3 motor with a rotation regime between 5,000 and 6,000 rev/min. Said tests were conducted to meet the application demands of a customer who needs a motor to power a water centrifugal pump.

Test description

The motors being tested are subject to an operation cycle of a total duration of 5 seconds in which for the first 4 seconds, the motor is exposed to a pressure of 150 bar and for the remaining second is connected to the drain. The test is completed after 200,000 cycles. As evidenced in the previous graph, despite the loading pressure calibrated at 150 bar, pressure values are obtained at the pickup of about 300 bar. The test was conducted on two different motors, the first one mounted a standard seal while the second mounted a special seal.

FIRST MOTOR TESTED (Standard Seal)

The first motor tested was stopped due to an oil leak after 7,543 cycles.

SECOND MOTOR TESTED (Special Seal)

After about 110,000 cycles, there was a slight oil leak in the front seal. The test continued to be carried out, monitoring the testing conditions (to ensure that the leak did not entail a loss in motor’s high performance) and the oil recovery tank (to make sure that the leak was not too excessive). The test reached 200,000 cycles successfully and it was then concluded. It is worthy of mentioning that there was a slight oil leak in the front seal after 110,000 cycles. However, said “defect” is attributed to the type of cycle that was very burdensome (peaks during pick-ups of more than 300 bar) and the unit was running continuously over 24 hours. Upon completion of the test, the motor was removed to ascertain the condition of the various components. Apart from a pronounced wear on the bushing, all other components showed slight signs of wear from the operation.

Conclusions The motor with standard production seals did not pass the test as there was a premature loss of seal. The motor with “special” seals passed the duration test successfully,

reaching 200,000 cycles without evident structural issues on the components. The success of the tests carried out on the motor with special seals allowed OT to acquire a new line of business in liaison with a leader manufacturer of centrifugal pumps. Moreover, the experience gained will allow OT to offer own motors OT200 with special seals for all applications in which the gear motors have to run at high speeds or with counterpressure up to 30 bar.

PLUS – Competitive advantages“This new solution will allow us to offer OT Oil Technology motors for many applications where gear motors are used at very high speeds: centrifugal pump operation or forest machines used to process wood” - explains Fabrizio Cattani, Sales Manager of Brevini Fluid Power.Moreover, this line of motors with strengthened special seal can ensure full reliability in applications where there are high working counterpressures or counterpressure peaks on the return line. These motors can also be supplied with different options and accessories such as integrated supports for radial loads and integrated anti-cavitation valves. The new motors will also be offered in applications for brush cutter machines, silo unloaders and other agricultural machines, including small earth augers. The Brevini Fluid Power sales team can count on a new trump card because these new motors are proving to have an excellent quality to price ratio, in addition to providing application techniques.

Also thanks to the new OT Oil Technology facility in Fontevivo of Parma, the trend of the first four months of 2013 is in line with the budget set out at Euro 3.8 million (+25% compared to 2012).

Major increases were registered in Europe and Asia, but for the second semester of the year, a major business development is expected for the North American market.

Gear motors OT200:

we are now at the top of the range

12