Outlook revised for fiscal year 2019
SAF-HOLLAND: Outlook revised for fiscal year 2019
- Development of Group sales (revised): 0 per cent to minus 3 per cent
- Adjusted EBIT margin (revised): 6.0 per cent to 6.5 per cent
- Measures introduced to stabilize the operating result
- Implementation of program FORWARD progressing as planned
Luxembourg, September 23, 2019. The Group Management Board of SAF-HOLLAND S.A., one of the world's leading suppliers of truck and trailer components, has thoroughly analysed the course of business and the industry-specific framework conditions and adjusted the forecast for the full year 2019.
The analysis showed a clear deviation from the corresponding target figures as a result of the continued deterioration in overall economic conditions - particularly in Europe, China and India - the ongoing global trade disputes and the related impact on the market development for trucks and trailers. The significant year-on-year improvement in earnings in the Americas region during the period from January to August 2019 could compensate only slightly for the lower earnings contributions of the other regions.
In the absence of positive economic and market signals and taking into account potential risks and opportunities, the Group Management Board expects the negative trend of the last months to continue until the end of the year. Furthermore, following a full review of the China operations and further restructuring measures in the course of the ramp-up of the plant in Yangzhou, additional impairments on receivables and inventories are to be expected.
In light of the above, SAF-HOLLAND now expects Group sales for fiscal year 2019 to range from EUR 1,260 million to EUR 1,300 million (previous year EUR 1,301 million), corresponding to a rate of change of 0 per cent to minus 3 per cent (previous expectation: sales growth of 4 to 5 per cent). The Group Management Board now expects the adjusted EBIT margin in a range of 6.0 per cent to 6.5 per cent for the full year (previous expectation: around the midpoint of the range of 7 per cent to 8 per cent).
The investment volume is also anticipated to be lower, amounting to between EUR 58 million and EUR 63 million (previous expectation: EUR 68 million to EUR 70 million). SAF-HOLLAND expects the fourth key indicator, net working capital in relation to Group sales, to be in a range of 13 per cent to 14 per cent (previous expectation: 13 per cent).
"Our market environment continued to deteriorate considerably in August," says Alexander Geis, CEO of SAF-HOLLAND. "As a result of this development, which started in the second quarter, the Group Management Board has decided to significantly step-up cost controls and use instruments for the short term flexibilization of working hours to stabilize the operating result. Furthermore, projects that have been launched to increase efficiency (operational excellence) and optimize the production network will be systematically implemented."
Dr. Heiden, CFO of SAF-HOLLAND, adds: "We are fully on track with our program FORWARD, which is optimizing the production and supply chains, the product portfolio, the aftermarket business and the procurement of materials for the North American plant network. I am also optimistic about the consolidation of the Chinese sites into the Greenfield project in Yangzhou. In addition, we will further intensify our efforts to improve the operating free cash flow."
In view of the developments outlined above, the Group forecast for the fiscal year 2020 can no longer be maintained. The Company plans to announce its guidance for the coming fiscal year with the publication of the final financial figures for the fiscal year 2019.
SAF-HOLLAND will publish its quarterly statement for the third quarter of 2019 on November 7, 2019.
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 4,000 committed employees worldwide are already today working on the future of the transportation industry.
Head of Investor Relations and Corporate Communications
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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.
Director Investor Relations / Corporate Communications
Tel. +49 (0)6095 301 671
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