SAF-HOLLAND SE: Solid financial profile has priority - no dividend for the 2019 financial year and publication of the outlook for 2020
SAF-HOLLAND: Solid financial profile has priority - no dividend for the 2019 financial year and publication of the outlook for 2020
Luxembourg, March 18, 2020. The Group Management Board and the Board of Directors of SAF-HOLLAND Group ("SAF-HOLLAND"), one of the world's leading suppliers of truck and trailer components, today decided to propose to the Annual General Meeting currently scheduled for May 20, 2020 to pay no dividend for the 2019 financial year.
Despite the fact that the adjusted targets for both Group sales and adjusted EBIT margin were reached: Group sales of EUR 1,284 million lie within the target corridor of between EUR 1,260 million and EUR 1,300 million, likewise, the adjusted EBIT margin of 6.2 per cent lies within the target range of between 6.0 per cent and 6.5 per cent.
At the end of the day, however, significantly higher restructuring expenses related to the plant consolidation in the China region and the program FORWARD in the Americas region led to a significant decrease in the result for the period of EUR 10.3 million (previous year: EUR 48.1 million), which corresponds to undiluted earnings per share of EUR 0.20 (previous year: EUR 1.06).
With an equity ratio remaining solid at 32.5 per cent and net financial debt (including lease liabilities) of EUR 251.7 million, SAF-HOLLAND has decided to give priority - also in light of the risks from the spread of the novel coronavirus SARS-CoV-2 (COVID-19) - to securing this solid financial profile sustainably.
Based on the expected macroeconomic and sector-specific framework conditions and taking account of the risk and opportunity potentials (including the currently foreseeable impact of the coronavirus on business), the Group Management Board of SAF-HOLLAND anticipates a low-double-digit percentage decrease in Group sales for the 2020 financial year (previous year: EUR 1,284 million).
Under the above assumptions, SAF-HOLLAND is expecting an adjusted EBIT margin of between 4 per cent and 5 per cent for the 2020 financial year. Besides the decline in sales further effects from COVID-19 will burden the result. Factors expected helping to stabilize earnings are the significant reduction of operating losses from Chinese operations, the consistent execution of programme FORWARD in the USA, the Group-wide roll-out of the SAF-HOLLAND Operational Excellence System and the high-margin aftermarket business.
In order to support the strategic objectives, the company is planning investments of approximately 3 per cent of Group sales (prior year: 4.1 per cent) in the 2020 financial year.
Moreover, with a view to the current spread of COVID-19, the economic effects on SAF-HOLLAND cannot currently be adequately determined or reliably quantified.
The SAF-HOLLAND Group will publish its annual report with all attested key financials for the 2019 financial year on March 19, 2020.