SAF-HOLLAND S.A. / Key word(s): Half Year Results
18.08.2011 / 07:05
SAF-HOLLAND increases sales in the first half of 2011 by 45 percent as compared to the previous year
- Adjusted EBIT doubles to EUR 30.0 million
- Sales increase of 6.5 in the second quarter as compared to the first quarter
Luxembourg, August 18, 2011 - SAF-HOLLAND S.A., one of the world's leading manufacturers and providers of premium systems and components for trucks and trailers, increased its sales in the first half of fiscal year 2011 (reporting day: June 30) by 45 percent to EUR 417.9 million (previous year period: EUR 287.5 million). The Company benefited from the global recovery in the commercial vehicles industry as well as from internal measures to expand the product range and increase efficiency. Adjusted EBIT doubled in the same period to EUR 30.0 million (previous year: EUR 14.6 million). In the second quarter of 2011, sales increased by 6.5 percent in comparison to the previous quarter.
Detlef Borghardt, CEO of SAF-HOLLAND: 'SAF-HOLLAND continued its growth and achieved important strategic objectives in the first half of the year. We still expect to increase our sales by up to 25 percent over the course of the full year. This will also lead to an improvement in earnings.' Regarding the current market situation in the commercial vehicles industry: 'Strong growth in the market is currently resulting in some bottlenecks in capacity among SAF-HOLLAND's suppliers. In addition, the market is characterized by rising prices for raw materials. We have already reacted to these developments with a comprehensive series of counter-measures.'
Key earnings indicators significantly improved in first half year in comparison to previous year
Overall, SAF-HOLLAND increased sales in the first half year 2011 by 45 percent to EUR 417.9 million (previous year: EUR 287.5 million). Adjusted for exchange rate effects, sales amounted to EUR 427.9 million. All three business units contributed to the increase in sales. Europe accounted for 56.3 percent of sales (previous year: 47.2 percent), while 39.2 percent stemmed from North America (previous year: 46.5 percent), and 4.5 percent was contributed by the other regions (previous year: 6.3 percent). As a result of a changed product mix and increases in the prices for materials, the gross margin decreased in the first half year of 2011 to 18.4 percent (previous year: 19.2 percent). Adjusted EBIT doubled to EUR 30.0 million (previous year: EUR 14.6 million). This corresponds to an adjusted EBIT margin of 7.2 percent (previous year: 5.1 percent). The adjusted result for the period rose to EUR 11.9 million, whereas the figure for the previous year period was in the negative area (previous year: EUR -0.6 million). Adjusted earnings per share improved to EUR 0.37 (previous year: EUR -0.03) - this despite a significant rise in the number of shares following the capital increase in March 2011.
In the second quarter of 2011, SAF-HOLLAND was again able to increase its sales by 6.5 percent to EUR 215.5 million in comparison to the first quarter of 2011 (EUR 202.4 million). The adjusted EBIT margin held steady at 7.2 percent allowing adjusted EBIT to increase to EUR 15.4 million.
Cash flow from operating activities before income tax rose due to positive business development to EUR 23.6 million (previous year: EUR 19.7 million). As a result of the successful capital increase, the reduction of debt and positive business development, the financial position of the Company has improved significantly. The equity ratio amounted to 33.8 percent as of June 30
(December 31, 2010: 5.1 percent). Total assets increased to EUR 519.6 million (December 31, 2010: EUR 484.7 million).
As of June 30, 2011, the number of employees in the SAF-HOLLAND Group increased to 3,158 (June 30, 2010: 2,557).
Sales of Trailer Systems grows by 78 percent
The Trailer Systems Business Unit recorded dynamic development, which was primarily attributable to the two core markets of Europe and North America. An increased need for trailers has been created by the high utilization of fleet operators due to globally increased transport volumes on the one hand, and continued catch-up effects remaining from the crisis years of 2008-2010 on the other. Compared to the previous year period, sales rose in the first half year by about 78% to EUR 241.8 million (previous year: EUR 136.0 million). Primarily due to increased capacity utilization, the gross margin increased to 9.4 percent (previous year: 4.0 percent). The segment contributed 57.8 percent to Group sales (previous year: 47.3 percent).
Powered Vehicle Systems with a sales plus of 20 percent
The Powered Vehicle Systems Business Unit also expanded its business and targeted sales of EUR 73.8 million in the first six months (previous year: EUR 61.5 million). This Business Unit has also seen high production figures in the truck industry in Europe as well as in North America, which has generated an increase in demand, for fifth wheels for example. The gross margin was influenced by a changed product mix and rising material prices; in the first half year it amounted to 18.8 percent (previous year: 25.2 percent). Due to the strong growth in the Trailer Systems Business Unit, the share in total sales decreased to 17.7 percent (previous year: 21.4 percent).
Aftermarket generates reliable earnings
The Aftermarket Business Unit was an important source of earnings in the first half year. Sales rose by about 14 percent to EUR 102.3 million (previous year: EUR 90.0 million). Despite increases in the price of materials, the gross margin rose slightly to 39.3 percent (previous year: 38.1 percent). The spare parts business profited not only from increasing transport volumes and the associated rise in demand for spare parts, but also from the global presence of SAF-HOLLAND.
New products bring additional sales potential.
In the USA, SAF-HOLLAND introduced to a complete family of air suspended trailer axles to the market, which have already received a positive reception. The company has also made progress in the expansion of product range in China and Brazil, where axle systems designed specifically for this market were sold.
Stable development in the second half year of 2011 is expected
According to current forecasts from the Economic Research Institute, the positive development for the commercial vehicle industry should continue. SAF-HOLLAND assumes therefore that the dynamic growth in the second half year of 2011 will stabilize at the current levels. The extent to which the current development on the financial markets impacts the real economy is, for the moment, unclear. For that reason SAF HOLLAND maintains its expectation to achieve a sales increase of up to 25 percent for full year 2011 compared to 2010. Earnings should also increase significantly. In light of a changed customer and product mix and current increases in material prices, the growth in earnings will, as reported, not keep pace with the growth in sales. From today's perspective, a positive business development is also expected for 2012.
Notice: 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 as well as restructuring and integration costs.
With sales of approximately EUR 631 million in 2010 and approximately 3,000 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 axle and suspension systems, fifth wheels, coupling devices, 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 June 2007 and has been in the SDAX since December 2010.
SAF-HOLLAND Group GmbH
Phone +49 6095 301-617
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