SAF-HOLLAND starts 2010 on a positive note
- Demand rising since January 2010
- Group sales in 2009 amounted to EUR 419.6 million as a result of the
global market collapse
- Positive adjusted EBIT in 2009 reached EUR 1.5 million
- Cash flow from operating activities increased by 15% to EUR 48.3
Luxembourg, April 1, 2010 - SAF-HOLLAND S.A., a leading supplier for the
global truck and trailer industry, saw significantly higher demand at the
beginning of the new fiscal year 2010 than was the case in the previous
fiscal year. The low point following the substantial market collapse in
2008 and 2009 thus seems to have passed. As a result of reduced global
demand, SAF-HOLLAND recorded Group sales of EUR 419.6 million in the
reporting year (previous year: EUR 798.8 million). Thanks to a promptly
implemented cost reduction program, the Group generated positive adjusted
earnings before interest and taxes (EBIT) in the amount of EUR 1.5 million
(previous year: EUR 41.2 million).
Rudi Ludwig, CEO of SAF-HOLLAND Group S.A.: 'In the crisis, we made our
company leaner and stronger while remaining true to our quality standards.
This will be rewarded by our customers in an improving market. The first
quarter has brought us initial positive signals. The objective now is to
gain from the positive market development'.
Liquidity and cash flow improved despite sales drop
As a result of the economic crisis, demand for trucks and trailers fell
substantially. Truck manufacturers recorded declines in sales of up to 50%
in Europe and 40% in North America. Trailer producers suffered through
decreases of up to 80% in Europe and 50% in North America. Against this
backdrop, Group sales of SAF-HOLLAND were EUR 419.6 million (previous year:
EUR 798.8 million) and, adjusted for exchange rate effects, EUR 408.9
million. Sales of EUR 196.7 million were recorded in Europe (previous year:
EUR 530.2 million) while sales in North America were EUR 198.9 million.
Thanks to the restructuring program, which consisted of both a
comprehensive cost-saving program and a reduction in net working capital,
the gross margin improved to 16.3% (previous year: 14.8%). Adjusted EBIT
was EUR 1.5 million (previous year: EUR 41.2 million). In addition to the
sales decrease, extraordinary write-downs and restructuring costs burdened
earnings. The adjusted result for the year amounted to EUR -15.6 million
(previous year: EUR 13.4 million) and adjusted earning per share were EUR
-0.75 (previous year: EUR 0.69). Cash flow from operating activities before
income tax payments, on the other hand, rose in the reporting period to EUR
48.3 million (previous year: EUR 41.9 million) - reflecting the success
achieved by the restructuring program, particularly the reductions in
inventories. Despite the drop in sales, cash and cash equivalents increased
to EUR 20.7 million (previous year: EUR 8.6 million). The equity ratio was
5.2% on the balance sheet date (previous year: 13.4%). Net debt
(interest-bearing loans and borrowings minus cash and cash equivalents)
fell to EUR 289.3 million (previous year: EUR 303.8 million).
Trailer Systems starts axle production in the USA
The Trailer Systems Business Unit was particularly hard hit by the market
collapse that followed the economic crisis because demand from trailer
manufacturers, especially in Europe, decreased dramatically. Sales in the
segment amounted to EUR 175.1 million (previous year: EUR 527.9 million),
adjusted for exchange rate effects the figure was EUR 172.5 million. The
underutilization of capacities that resulted from sales development
contributed to a decline in the gross margin to -1.7% (previous year:
9.5%). The Business Unit successfully launched production of its own axle
systems in the USA, thereby establishing a firm basis for future growth in
North America. As market leader in Europe for axle systems with disc-brake
technology, SAF-HOLLAND believes that it has an excellent opportunity to
establish itself as a quality supplier in North America.
Powered Vehicle Systems improves its gross margin
The Powered Vehicle Systems Business Unit benefited from the acquisition of
the current SAF-HOLLAND Verkehrstechnik GmbH. The division generated nearly
constant sales of EUR 98.3 million (previous year: EUR 102.3 million).
Adjusted for exchange rate effects, sales were EUR 94.1 million. As a
result of the strong customer-product-mix as well as the cost-saving
measures, the gross margin improved to 21.2% (previous year: 14.8%).
Aftermarket expands its service network
The Aftermarket Business Unit improved its sales volume potential in fiscal
year 2009 through additional service agreements with Scania and Daimler.
Already in 2008, SAF-HOLLAND had concluded cooperations with DAF, MAN and
Volvo. This has further increased the accessibility, product range and
service quality for the customer. The high-margin Aftermarket business once
again stabilized sales and earnings of the Group, although segment sales
decreased to EUR 146.2 (previous year: EUR 168.6 million) and adjusted for
exchange rate effects to EUR 142.3 million. The gross margin reached 36.4%
(previous year: 35.3%).
First quarter 2010: orders received above expectations
In the first quarter of 2010, orders in all regions are above expectations
and significantly higher than comparable figures from the previous year.
Earlier than originally planned, SAF-HOLLAND will halt reduced working
hours at its locations in Germany in April. Core employees will return to
full-time work. The plant in Keilberg, which had been shut down, will begin
operations again in April.
With initial indications of an improving economic situation, it is expected
that truck and trailer manufacturers will soon turn the corner. Sales
volumes will, however, increase only gradually. In recent months, the
markets have stabilized or, in some cases, risen slightly for the first
time. SAF-HOLLAND is well-equipped for the expected market development.
Following the comprehensive restructuring, the Company is aligned
efficiently and in a position to react flexibly to the actual market
demand. At the same time, fixed costs have been substantially reduced and
the secured long-term financing provides sufficient flexibility for the
planned growth course. Despite an initial upswing in demand, a truly
sustainable development in demand is not yet clearly recognizable for
SAF-HOLLAND. Until now, the Company has assumed that sales in 2010 will
increase by a double-digit percentage figure. On the earnings side, the
Group should profit from significant cost savings. As soon as demand
increases in a sustainable manner, SAF-HOLLAND can profit to an
above-average extent from growth in the industry. In the medium-term,
SAF-HOLLAND's goal is still to generate sales of EUR 1 billion while
achieving an adjusted EBIT margin of 10%.
EBIT was adjusted for the following effects which are not originally
attributable to the operating business: depreciation and amortization
arising from the purchase price allocation and impairment losses on
goodwill and intangible assets from the impairment tests as well as
The table of key figures is included in the press release and can be
With around EUR 420 million in sales in 2009 and over 2,000 employees,
SAF-HOLLAND S.A. is one of the worldwide 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 axle and suspension systems, fifth wheels, couplers, kingpins,
and landing legs. SAF-HOLLAND customers include the majority of large truck
and trailer producers all over the world. The products are sold to Original
Equipment Manufacturers (OEMs) and Original Equipment Suppliers (OESs) by
means of a global service and distribution network and via aftermarket
channels directly to the end users and service garages. SAF-HOLLAND has
therefore established itself as one of the few manufacturers in its sector
that is internationally positioned with an extensive product range and a
broad service network. SAF-HOLLAND S.A. has been listed in the Prime
Standard of the Frankfurt Stock Exchange since July 2007.
SAF-HOLLAND Group GmbH
Phone +49 6095 301-617
01.04.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de