SAF-HOLLAND returns to profitability
September strongest sales month in 2009 to date
Sales in the first nine months: EUR 316.4 million
* Adjusted EBIT once again positive: EUR 1.2 million
Strong cash flow performance
Luxembourg, November 19, 2009 - SAF-HOLLAND S.A. turned the earnings corner
in the third quarter, returning to positive adjusted earnings (EBIT). The
Company benefited from a highly successful restructuring of its operating
business with a comprehensive cost reduction program, as well as a
stabilization of sales and first signs of a return to growth in the
Company's end markets. SAF-HOLLAND has thus successfully repositioned its
operating and financial performance to reflect market conditions,
establishing a solid base from which to achieve performance improvements
going forward.
Dr. Reiner Beutel, CEO of SAF-HOLLAND group: 'SAF-HOLLAND is benefiting
from the Group-wide restructuring of the operating business. We are now
leaner and stronger. As a global supplier of quality systems and components
for the commercial vehicle industry, we are thus perfectly positioned to
participate in a major way in the expected upturn in the commercial vehicle
market. We are already seeing the first signs of a recovery after an
unprecedented downturn in the global commercial vehicle market.'
The Company has also made important progress with its banking syndicate on
restructuring and extending existing financing facilities. Further to the
recently announced standstill agreement extension to November 25, the
Company expects to announce agreement with its banking syndicate in the
near term. The objective of the new financing agreement is to put the
Company on a solid financial footing in the long-term and to create
sufficient financial flexibility to allow the Company to complete its
operational restructuring and follow its planned growth path.
Sales stabilizing
Parallel to the earnings trend reversal, sales stabilized in comparison to
previous quarters. Sales in the third quarter amounted to EUR 103.1 million
which reflects a slight upturn compared to the second quarter. The adjusted
EBIT climbed to EUR 2.5 million compared to EUR -0,8 million in the second
quarter. With EUR 6.5 million, adjusted EBITDA more than doubled compared
to EUR 3.0 million in the previous quarter. Importantly, there has been a
stabilization of sales and some signs of a return to growth are now visible
in the global commercial vehicle market. In the first nine months of the
year, the Group achieved sales in the amount of EUR 316.4 million (previous
year: EUR 646.3 million). In particular, the Powered Vehicle Systems and
Aftermarket Business Units, both of which exceeded their performance from
2008, cushioned the considerable decline of the Trailer Systems Business
Unit.
Restructuring facilitates turnaround
The stable gross margin of 16.8% (previous year: 16.9%) is proof of the
success of the restructuring measures with extensive savings in personnel
and non-personnel expenses. Overhead costs were also reduced to EUR 12.4
million. Adjusted EBIT amounted to EUR 1.2 million in the first nine months
of this year.
Trailer Systems shows stable sales development compared to previous quarter
In the third quarter, sales in the Trailer Systems Business Unit of EUR
41.0 million stabilized at the level of the second quarter. While the month
of August was, as expected, quiet in Europe, the trailer business was able
to make up for lost ground in September. A slight increase was also seen in
August in North America. Another positive factor was the production of our
own axle systems in the USA, which got underway in February. The number of
orders for axle systems with disc brakes, which were first presented in
America at the Mid-American Trucking Show at the beginning of the year, is
still exceeding expectations. Sales in the first three months were EUR
130.5 million (previous year: EUR 451,3 million) and the gross margin
decreased to -3.6% (previous year: 11.9%) due to the high
under-utilization.
Powered Vehicle Systems sees growth of 20% over previous year
The Powered Vehicle Systems Business Unit benefited from a slight upturn in
the market in the USA, while business in Europe saw increasing
stabilization. Year to date sales grew by 20.9% to EUR 73 million (previous
year: EUR 60.4 million) and were EUR 24.1 in the third quarter compared to
EUR 22.2 million in the second quarter. The sales increase over the
previous year resulted primarily from the acquisition of the former Georg
Fischer Verkehrstechnik GmbH and a major order in North America. Thanks to
a good product mix and substantial improvements in efficiency, the gross
margin increased significantly to 22.1% (previous year: 12.6%). The
increased share of 23.1% of Group sales (previous year: 9.3%) shows the
increasing importance of the Business Unit for the Group. Leading market
research institutes expect demand in the USA to increase further at the end
of the year with fleet purchases in anticipation of new emissions
regulations taking effect from 2010.
Aftermarket raises gross margin
The Aftermarket Business Unit continues to deliver a highly profitable
performance for the group. Expansion of SAF-HOLLAND's international
distribution and service network in Europe through a new agreement with
Scania workshops and an extended product range as a result of the
acquisition of the former Georg Fischer Verkehrstechnik GmbH were
contributing factors for this increase. The Business Unit generated sales
of EUR 112.9 million (previous year:134.6) in the first nine months of
2009. The third quarter showed a moderate upswing with EUR 38.0 million
compared to EUR 36.7 million in the second quarter. The gross margin
increased to 37.6% (previous year: 35.7%). The development confirms both
the increasing and continued importance of the aftermarket business for the
Group.
Strong development in cash flow
Cash flow from operating activities totaled EUR 29.1 million and was thus
at the level of the previous year despite a significant drop in sales. This
positive development was a result of highly successful implementation of
working capital reduction measures on a group-wide basis. The inventory
reduction measures at SAF-HOLLAND have progressed well. Inventories
decreased as of September 30, 2009 to EUR 60.2 million (December 31, 2008:
EUR 85.8). The equity ratio as of the balance sheet date, September 30,
2009 was 6.6% (December 31, 2008: 13.4%). Total assets decreased to EUR
473.4 million (December 31, 2008: EUR 537.4), primarily as a result of the
drop in net working capital and the extraordinary write-down in the amount
of EUR 16.9 million of goodwill and intangible assets.
Outlook
The Company is pleased to report the first signs of a return to growth in
its end markets. The Company also expects to benefit from good growth
opportunities in all three of its Business Units. Furthermore, the measures
taken to improve efficiency and reduce costs are having a positive effect
and will give the Company a sustainable boost. The goal of saving EUR 60
million by the end of 2009 will be exceeded by about 10%. The Group will
also further reduce net working capital by the end of 2009, thus putting
liquidity on a stable foundation.
EBIT was adjusted for the following effects that are not originally
attributable to the operating business: depreciation and amortization
resulting from the purchase price allocation and impairment test as well as
restructuring costs.
Contact:
SAF-HOLLAND Group GmbH
Barbara Zanzinger
Hauptstraße 26
63856 Bessenbach
Phone +49 6095 301-617
barbara.zanzinger@safholland.de
19.11.2009 Financial News distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de