EQS-News: SAF-HOLLAND SE: Scope rating agency assigns investment grade rating BBB-
SAF-HOLLAND: Scope rating agency assigns investment grade rating BBB-
Bessenbach (Germany), April 19, 2023. SAF-HOLLAND SE ("SAF-HOLLAND"), one of the world's leading suppliers of trailer and truck components, today obtained the rating report issued by Scope Ratings GmbH ("Scope"). After analyzing the business-specific and financial risks, Scope awarded SAF-HOLLAND SE with a rating of BBB- and a stable outlook. The newly issued BBB-/Stable rating by Scope Ratings GmbH is at the same level as the previously assigned rating by Scope Hamburg GmbH in April 2022.
In determining its rating, Scope addressed the impact of the recent acquisition of the Swedish braking systems specialist Haldex AB on SAF-HOLLAND's financial profile. The financing of the acquisition will result in a short-term increase in financial liabilities.
The advantages resulting from the combination of the two companies, including a further improvement in their strong market positions, a broader customer base, and complementary product portfolios, were all assessed as positive. This assessment was further underscored by the broader international presence and increasing share of Group sales of the more profitable aftermarket business. A better rating was precluded, according to Scope, by the comparatively high free cash flow volatility in recent years, cyclical business risks, and the existing room to improve operating profitability versus the industry as a whole.
According to Scope, the stable outlook is based on the expectation that the Company could even withstand a moderate cyclical downturn in the global commercial vehicle markets thanks to its resilient aftermarket-based business model. The rating could improve in the future through a gradual reduction in financial liabilities and a further rise in free cash flow.
During the past 2022 financial year, SAF-HOLLAND generated operating free cash flow of EUR 120.0 million, despite a challenging environment, demonstrating the strength of its internal financing capabilities. With the publication of the Annual Report 2022, the SAF-HOLLAND Management Board stated that it plans to significantly reduce its leverage again on the back of increasing profitability and the continued steady management of its working capital. The Company is targeting a ratio of net financial debt to EBITDA of less than 2x by the end of the 2024 financial year (December 31, 2022: approx. 2.6 x).
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SAF-HOLLAND SE is a leading international manufacturer of suspension-related assemblies and components for trailers, trucks and buses. The product range includes, among other things, axle and suspension systems for trailers, fifth wheels for trucks and coupling systems for trucks, semi-trailers and trailers as well as brake and EBS systems. In addition, SAF-HOLLAND develops innovative products to increase the efficiency, safety and environmental friendliness of commercial vehicles. The focus here is on the digitalization and networking of trailers as well as the electrification of axles. The products and solutions are marketed under the brands SAF, Holland, Haldex, V.Orlandi, TrailerMaster, Neway, KLL and York. SAF-HOLLAND supplies original equipment to vehicle manufacturers on six continents. In the aftermarket business, the company supplies spare parts to manufacturers' service networks as well as to wholesalers and, through an extensive global distribution network, to end customers and service centers. Around 5,900 dedicated employees worldwide are already working on the future of the transport industry. SAF-HOLLAND shares have been listed in the Prime Standard of the German Stock Exchange since 2007 and are part of the SDAX selection index. For further information, please visit www.safholland.com.