SAF-HOLLAND S.A. / Key word(s): Final Results
17.03.2011 / 06:56
SAF-HOLLAND with strong growth in sales and earnings
- Group sales 2010 increases by 50.4 percent to EUR 631.0 million
- Adjusted EBIT rises to EUR 37.1 million
- Stable upward trend expected also for 2011
Luxembourg, March 17, 2011 - SAF-HOLLAND S.A., a leading supplier for the global truck and trailer industry, is once again on a growth path. In financial year 2010, sales and earnings increased substantially. Sales rose by 50.4 percent as compared to the previous year to EUR 631.0 million (previous year: EUR 419.6 million), adjusted for exchange rate effects to EUR 616.7 million. Adjusted EBIT increased at an even greater rate, reaching EUR 37.1 million (previous year: EUR 1.5 million). The adjusted EBIT margin thus improved to 5.9 percent (previous year: 0.4 percent). All three Business Units contributed to this positive development.
Key to the good development is the recovery of global demand in the commercial vehicles market as well as the restructuring of SAF-HOLLAND. Rudi Ludwig, CEO of SAF-HOLLAND: 'The fact that we have not deviated from our strategy in recent years, even during times of economic crisis, has paid off. We were able to participate successfully in the market upswing in 2010 thanks to our lean and efficient alignment. There are four pillars to our success: the transfer of technology between our core markets Europe and the USA, the expansion of production and distribution in growth markets such as Brazil and China, efficient products which confirm our technological leadership as well as the continuous expansion of our global service network for the Aftermarket Business Unit.'
Clear growth in demand
According to market studies the commercial vehicles industry is clearly benefiting from the global economic recovery. The number of new truck registrations (over 16 tons) rose by more than 20 percent in Germany in 2010. Europe-wide the number of new truck registrations rose by 8.4 percent. In the USA, truck production was up by approximately 30 percent. The production of trailers also increased significantly in 2010. In Western Europe about 11 percent more trailers were produced than in the previous year. The SAF-HOLLAND group had sales of EUR 311.3 million in Europe (previous year: EUR 196.7 million) while sales in North America were EUR 279.2 million (previous year: EUR 198.9 million). Sales in the remaining regions amounted to EUR 40.5 million (previous year: EUR 24.0 million). The gross margin also improved further in 2010, amounting to 18.5 percent (previous year: 16.3 percent). Adjusted EBIT rose significantly to EUR 37.1 million (previous year: EUR 1.5 million). The adjusted result for the period showed a profit once again at EUR 2.9 million (previous year: EUR -15.6 million) and adjusted earnings per share were EUR 0.14 (previous year: EUR -0.75). Cash flow from operating activities before income tax payments amounted to EUR 46.0 million (previous year: EUR 48.3 million). As a result of the successful net working capital management, the days of inventory outstanding was down further to 43 days (previous year: 57 days). The equity ratio on the reporting date was nearly unchanged at 5.1 percent (previous year: 5.2 percent). Net debt (interest-bearing loans and borrowings minus cash and cash equivalents) amounted to EUR 302.1 million (previous year: EUR 289.3 million).
Trailer Systems with the strongest growth of all Business Units
The Trailer Systems Business Unit recorded the strongest growth in 2010. Demand rose substantially in all regions. Sales in the segment amounted to EUR 322.8 million (previous year: EUR 175.1 million), adjusted for exchange rate effects the figure was EUR 318.2 million. Due to a significant improvement in capacity utilization, the gross margin increased to 6.5 percent (previous year: -1.7 percent). Adjusted EBIT for the segment totaled EUR -9.0 million (previous year: EUR -27.0 million). There was steady sales growth in the Business Unit over the course of the year and this growth has continued in the beginning of 2011. This applies to both Europe and North America. Axle production in the USA tripled as compared to the previous year.
Powered Vehicle Systems significantly increases its profit margin
The Powered Vehicle Systems Business Unit benefited from steady growth in all regions. Compared to the previous year, sales in the segment increased to EUR 127.5 million (previous year: EUR 98.3 million), adjusted for exchange rate effects the figure was EUR 122.4 million. The gross margin rose to 23.6 percent, after a rate of 21.2 percent in the previous year. Adjusted EBIT climbed to EUR 22.4 million (previous year: EUR 14.7 million). SAF-HOLLAND is the market leader for fifth wheels in North America and is growing its business in Europe. The Company also anticipates growth in this segment in 2011.
Aftermarket expanding profitably
The Aftermarket Business Unit further expanded its service network in financial year 2010. In 2010, sales grew to EUR 180.7 million (previous year: EUR 146.2 million), at constant exchange rates to EUR 176.1 million. The gross margin increased slightly to 37.9 percent (previous year: 36.5 percent). As a result of the increase in sales, adjusted EBIT rose to EUR 25.9 million (previous year: EUR 17.7 million). The spare parts business is generally less influenced by economic cycles and is a stabilizing factor for the Group with a good degree of profitability.
Number of employees increases once again
As a consequence of higher demand, the Group hired new employees in all regions. As of December 31, 2010, SAF-HOLLAND employed 2,774 people (previous year: 2,331). The average for the year 2010 was 2,619 employees as compared to 2,320 in the previous year.
SAF-HOLLAND expects the market growth seen in recent months to continue in 2011. Against this backdrop and subject to the impact of the recent events in Japan, the Group anticipates a growth in sales of up to 20 percent in the current financial year. Earnings are also expected to improve but it must be kept in mind that during a return to normal market volumes, the customer and product mix tends to shift to lower-margin standard products. In the medium-term, SAF-HOLLAND's goal remains to generate sales of EUR 1 billion while achieving an adjusted EBIT margin of 10 percent.
EBIT was adjusted for the following items that are not originally attributable to the operating business: Depreciation and amortization from the purchase price allocation and impairment on goodwill and intangible assets from the impairment tests, reversal of impairment as well as restructuring and integration costs.
The table of key figures is included in the press release and can be viewed at http://corporate.safholland.com/en/investor/investor-news/press-releases....
With sales of approximately EUR 630 million in 2010 and around 2,800 employees, SAF-HOLLAND S.A. is one of the world's leading manufacturers and suppliers of premium product systems and components primarily for trailers as well as trucks, buses and recreational vehicles. The product range encompasses, inter alia, trailer axle systems and suspension systems, fifth wheels, couplers, kingpins, and landing gears. SAF-HOLLAND sells its products on six continents to original equipment manufacturers ('OEMs') in the first-fit market, and in the aftermarket to the OEMs' original equipment services ('OESs') and through a global distribution and service network. This network resells to end users and service centres. SAF-HOLLAND has established itself as one of the few manufacturers in its sector that is internationally positioned with an extensive product range and a wide service network. SAF-HOLLAND S.A. has been listed in the Prime Standard of the Frankfurt Stock Exchange since June 2007 and has been in the SDAX since December 2010.
SAF-HOLLAND Group GmbH
Phone +49 6095 301-617
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