Solid first quarter of 2019 - outlook confirmed

SAF-HOLLAND: Solid first quarter of 2019 - outlook confirmed

- Group sales at a record level: + 17.3 per cent to EUR 346.0 million

- Adjusted EBIT margin advances to 7.2 per cent

- Continued high investment level

- Significantly better operating free cash flow

Luxembourg, May 9, 2019. The SAF-HOLLAND Group ("SAF-HOLLAND"), one of the leading suppliers of truck and trailer components, today published its quarterly statement for the first three months of 2019.

"The beginning of the 2019 financial year has been satisfactory overall," says Alexander Geis, CEO of SAF-HOLLAND. "The results from the Americas region show the first signs of improvement. The market environment for heavy trucks and trailer remains challenging, except for the Americas region. It will therefore remain important that we firmly move forward with implementing the operational excellence programs introduced company-wide."

Group sales at a record level, EBIT margin advances to 7.2 per cent

Group sales in the first quarter of 2019 reached EUR 346.0 million, which was 17.3 per cent higher than the level of EUR 294.9 million generated in the first quarter of the prior year. Organic sales growth, which mainly stemmed from the Americas region, accounted for EUR 19.1 million. Positive currency effects, resulting primarily from the appreciation of the US dollar against the euro, amounted to EUR 7.8 million (previous year: EUR -17.7 million). The companies acquired between April 2018 and March 2019 contributed EUR 24.2 million to sales in the first quarter of 2019.

Adjusted earnings before interest and taxes (EBIT) in the first quarter of 2019 improved year-on-year by 22.3 per cent, reaching EUR 24.8 million (previous year: EUR 20.3 million). Most of this improvement was due to the significant rise in earnings achieved in the Americas region. The adjusted EBIT margin for the first quarter of 2019 equalled 7.2 per cent (previous year: 6.9 per cent).

The adjusted result for the period before minority interests amounted to EUR 16.4 million (previous year: EUR 12.2 million) and was impacted by a significantly improved net finance result and a slightly higher tax rate. Based on the approximately 45.4 million ordinary shares issued, adjusted basic earnings per share amounted to EUR 0.36 (previous year: EUR 0.27) and adjusted diluted earnings per share amounted to EUR 0.31 (previous year: EUR 0.24).

Continued high investment level

Additions to property, plant and equipment and intangible assets amounted to EUR 14.4 million in the first quarter of 2019 (previous year: EUR 7.0 million) and included capitalized development costs of EUR 0.9 million (previous year: EUR 0.9 million). Investments came to EUR 3.7 million in the EMEA region (previous year: EUR 2.8 million), EUR 6.6 million in the Americas regions (previous year: EUR 4.0 million), EUR 4.0 million in the China region (previous year: EUR 0.1 million) and EUR 0.2 million in the APAC region (previous year: EUR 0.1 million). Key areas of investment included the construction of the Chinese Greenfield plant and rationalisation and expansion investments in the US.

Significantly better operating free cash flow

At EUR 8.6 million, cash flow from operating activities in the first three months of 2019 was significantly above the previous year's level of EUR -22.5 million. This improvement despite a renewed increase in sales is attributable, above all, to the significantly lower increase in the net working capital. Net of the cash flow from investing activities in property, plant and equipment and intangible assets amounting to EUR 14.4 million, the operating free cash flow improved substantially to EUR -5.9 million (previous year: EUR -29.5 million). "This has given us a solid base to achieve our full-year 2019 target for positive operating free cash flow," says Dr. Matthias Heiden, CFO of SAF-HOLLAND.

EMEA region: Sales slightly above previous year

The EMEA region increased its sales in the first quarter of 2019 by 5.4 per cent to EUR 176.1 million (previous year: EUR 167.1 million). This includes a sales contribution in the amount of EUR 8.4 million from companies which have been acquired between April 2018 and March 2019. The strongest growth was generated in France, Poland and Russia. Organically, sales increased 1.1 per cent to EUR 168.9 million.

In the first quarter of 2019, the EMEA region achieved an adjusted EBIT of EUR 17.1 million (previous year: EUR 19.2 million) and an adjusted EBIT margin of 9.7 per cent (previous year: 11.5 per cent). It should be noted that the adjusted EBIT in the first quarter of 2018 included a positive consolidation effect (elimination of inter company results following a warehouse fire at the Russian subsidiary in February 2018). In the first quarter of 2019, product mix and material price effects, among others, had a negative impact.

America region: First signs of improvement

Sales in the Americas region increased by 28.9 per cent in the first quarter of 2019 to EUR 131.3 million (previous year: EUR 101.9 million). Sales adjusted for positive currency effects improved 20.1 per cent to EUR 122.4 million. In the US - the largest OE market for trucks and trailer in North America - SAF-HOLLAND grew much faster than the market and gained market shares accordingly.

The market environment continued to be driven by strong customer demand for truck and trailer components, which led to persistent capacity bottlenecks throughout the industry and along the entire supply chain.

At EUR 6.8 million, adjusted EBIT was significantly higher than the previous year's figure of EUR -0.7 million and the adjusted EBIT margin amounted to 5.2 per cent (previous year: -0.7 per cent). A key contributor to this increase was the reduction in add-on operating expenses from EUR 3.9 million in the first quarter of 2018 to EUR 0.6 million in the first quarter of 2019. Volume, product mix and economies-of-scale effects and the contractually agreed passing on of the prior year's steel price increases also had a positive impact on results.

The overall situation in the North American plant network has improved in the first quarter of 2019. On March 1, 2019, SAF-HOLLAND launched the project FORWARD to systematically realize the significant optimization potential identified and drive forward the turnaround. The focus is on the optimization of the production and supply chains, the product portfolio, the aftermarket business and the purchase of materials.

APAC region: Acquisition of York leads to significant increase in sales

In the first quarter of 2019, the APAC region grew its sales by EUR 16.4 million to a total of EUR 26.2 million. This amount includes a sales contribution of EUR 15.6 million from the companies V.ORLANDI Australia Pty. Ltd. and York Group, which were included for the full year for the first time. After adjusting for minor currency effects, sales increased by 8.0 per cent to a total of EUR 10.6 million.

Following the acquisitions in the previous year, adjusted EBIT improved by 44.6 per cent to EUR 1.9 million in the reporting period. The adjusted EBIT margin, however, declined from 13.6 per cent to 7.4 per cent, primarily as a result of the dilutive effect of the York acquisition.

China region: Sales decline and temporary duplicate structures burden earnings

The China region generated sales of EUR 12.3 million in the first quarter of 2019 (previous year: EUR 16.0 million). This sales decline resulted primarily from the declining export business following the trade dispute between China and the US.

Insufficient capacity utilization at the Xiamen plant, as well as temporary cost pressure from duplicate structures in the course of the started integration of the other Chinese locations into the Greenfield project weighed on earnings. As a result, the adjusted EBIT amounted to EUR -1.0 million (previous year: EUR 0.4 million).

To ensure that it positions itself successfully for further growth opportunities in the Chinese market, SAF-HOLLAND has sent an experienced team of experts to China which supports the local management in starting up the new plant in Yangzhou, integrating the other Chinese locations into the Greenfield project, as well as to winning local customers and concluding long-term contracts.

Outlook for the 2019 financial year confirmed

Based on the expected macroeconomic and sector environments and weighing the potential risks and opportunities for the 2019 financial year, the Group Management Board of SAF-HOLLAND continues to expect sales growth at the Group level of 4 to 5 per cent.

From today's perspective, SAF-HOLLAND continues to expect an adjusted EBIT margin around the midpoint of the range of 7 to 8 per cent for the full year 2019 (previous year: 6.9 per cent).

SAF-HOLLAND will publish its 2019 half-year financial report on August 8, 2019 .


Key financial figures for the first quarter 2019


Results of operations    
kEUR Q1 / 2019 Q1 / 2018
Sales 345,968 294,870
Cost of sales 60,252 50,569
Gross profit margin in % 17.4 17.2
EBIT 18,936 17,171
EBIT margin in % 5.5 5.8
Adjusted EBIT 24,775 20,257
Adjusted EBIT margin in % 7.2 6.9
Result for the period 11,438 9,780
Adjusted result for the period 16,374 12,201
Undiluted earnings per share 0.25 0.22
Adjusted undiluted earnings per share 0.36 0.27
Net Assets    
kEUR 03 / 31 / 2019 12 / 31 / 2018
Balance sheet total 1,062,023 977,416
Equity 352,715 332,550
Equity ratio in % 33.2 34.0
Cash and cash equivalents 135,307 155,009
Net debt 232,735 213,386
Net working capital 198,163 172,468
Net working capital/sales 14.3 13.5
Financial position    
kEUR Q1 / 2019 Q1 / 2018
Cash flow from operating activities before income tax paid 13,869 -12,258
Cash conversion rate in % 56.0 -60.6
Net cash flow from operating activities 8,559 -22,471
Cash flow from investing activities -27,599 48,241
Purchase of property, plant and equipment and intangible assets -14,416 -6,992
Free cash flow -5,857 -29,463
  Q1 / 2019 Q1 / 2018
Employees (on average) 4,377 3,767
Sales per employee (kEUR) 79.0 78.3
in % Q1 / 2019 Q1 / 2018
Return on capital employed (ROCE)* 9.1 9.0
* ROCE = EBIT (annualized) / (total assets - current liabilities)    







SAF-HOLLAND S.A., located in Luxembourg, is the largest independent listed supplier to the commercial vehicle market in Europe delivering mainly to the trailer markets. With sales of approximately EUR 1,301 million in 2018, the Company is one of the world's leading manufacturers and suppliers of chassis-related systems and components primarily for trailers, trucks, buses, and recreational vehicles. The product range comprises axle and suspension systems, fifth wheels, kingpins, and landing gear marketed under the brands SAF, Holland, Neway, KLL, V.Orlandi and York. SAF-HOLLAND sells its products to Original Equipment Manufacturers (OEM) on six continents. The Group's Aftermarket business supplies spare parts to the service networks of Original Equipment Suppliers (OES), as well as to end customers and service centers through its extensive global distribution network. SAF-HOLLAND is one of the few suppliers in the truck and trailer industry that is internationally positioned in almost all markets worldwide. With the innovation campaign "SMART STEEL - ENGINEER BUILD CONNECT" SAF-HOLLAND combines mechanics with sensors and electronics and drives the digital networking of commercial vehicles and logistics chains. More than 4,400 committed employees worldwide are already today working on the future of the transportation industry.


Michael Schickling
Head of Investor Relations and Corporate Communications
Tel: +49 (0) 6095 301 617

Future-oriented statements

This press release contains certain future-oriented statements that are based on current assumptions and forecasts made by the management of SAF-HOLLAND S.A. Various known and unknown risks, uncertainties and other factors may lead to the actual results, financial position, development or performance of the company deviating considerably from the appraisals specified here. The company assumes no obligation to update future-oriented statements of this nature or adapt them to future events or developments.


This announcement is for information purposes only and does neither constitute an offer to sell, purchase, exchange or transfer any securities nor a solicitation of any offer to sell, purchase, exchange or transfer any securities. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. SAF-HOLLAND S.A. does not intend to register any securities referred to herein under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States in connection with this announcement.