SAF-HOLLAND Secures Funding Leeway - Preliminary Figures for Fiscal Year
Luxembourg, February 27, 2008 - SAF-HOLLAND S.A., an international supplier
to the truck and trailer industry, has secured funding leeway for the
months ahead. An agreement signed today with the Company's current bank
consortium, led by Dresdner Kleinwort and UniCredit, marks an important
step toward adjusting the financing agreement from February 2008 to the
changes in the underlying economic conditions.
Dr. Reiner Beutel, CEO of SAF-HOLLAND GROUP GmbH, said: 'The agreement with
our lenders reaffirms SAF-HOLLAND's sound positioning in a tough market
environment. We have thereby secured corporate financing for the months
ahead and will now develop a strategy and a financing concept to ensure
that SAF-HOLLAND is well prepared for its further development.'
Against the background of strong market growth in the first half of 2008,
the Company had negotiated in February a credit line of EUR 325 million on
favorable interest rate terms in return for maintaining certain key
financial figures. The terms now agreed are the result of intensive
negotiations with the aim of adjusting the terms and conditions of the
financing against the backdrop of changing markets and the difficulty of
forecasting further industry development. The agreement suspends checks of
the above-mentioned key financial figures as of December 31, 2008 and March
The standstill agreement concluded with the banks concerned runs until June
2009. In this connection, the auditors KPMG were assigned the task of
carrying out a study on further financial and liquidity planning. Once the
study is available on April 20, a financing concept is to be drawn up
within 60 days - by June 19, 2009 - for the fiscal years ahead.
For this reason, SAF-HOLLAND will be publishing its annual report on
Monday, April 27, 2009 instead of April 2, 2009. The Company's Annual
General Meeting will also be postponed by a few weeks.
Business development in 2008 was characterized by contrasting influences
for SAF-HOLLAND. After dynamic growth rates in the first half of the year,
the Company was confronted by a substantial decline in demand in the fourth
quarter of 2008. The management responded to this decline swiftly and
consistently in order to adjust costs to the new situation. This extensive
program of measures included a significant reduction in personnel and
logistics costs, consolidation of production sites and a reduction of
capital tied up in inventories. For example, the Company recently relocated
a site in North America and closed an additional one in Slovakia. In total,
SAF-HOLLAND cut its costs by around EUR 15 million in the last four months
of 2008, and inventories were reduced by around EUR 20 million over this
For the full year 2008, SAF-HOLLAND's preliminary figures are EUR 798
million in sales, compared with EUR 812.0 million in the previous year. Due
mainly to the substantial sales decline in the fourth quarter, adjusted
IFRS earnings before interest and taxes totaled around EUR 41 million. The
adjusted EBIT margin was therefore approximately 5,1%.
On the basis of expectations about current sales developments in the truck
and trailer industry, SAF-HOLLAND assumes that the Company's sales in all
segments will be down compared with the previous year. Such developments
will also clearly have a negative impact on 2009 results. To improve
results on a lasting basis, the Company will intensify the measures already
initiated to reduce costs and improve liquidity. Inventories are to be
reduced by a further EUR 30 million during the current fiscal year, and the
cost reduction program will lead to an additional EUR 35 million. This will
be achieved by measures to reduce personnel expenses, by lowering materials
costs, curtailing capital expenditure and consolidating production sites.
One site closing concerns the plant in Bessenbach, near Aschaffenburg,
Germany. Against the background of these developments, the Company will not
recommend payment of a dividend. Its current focus is on downsizing the
cost and corporate structures and on refinancing the company.
With EUR 800 million in sales and more than 2000 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 June 2007.
27.02.2009 Financial News transmitted by DGAP