SAF-HOLLAND Solidly Positioned
* Group sales in 2008 total EUR 798.8 million,
EUR 817.2 million on an exchange rate-adjusted basis
* Adjusted EBIT of EUR 41.2 million
* Program to boost productivity and financial strength continued
Luxembourg, April 27, 2009 - In a challenging market, SAF-HOLLAND S.A.
maintained Group sales in 2008 at nearly the same level as in the previous
year at EUR 798.8 million (previous year: EUR 812.5 million), exchange-rate
adjusted EUR 817.2 million. Business performance was characterized by
conflicting developments. Following a successful first half of the year
with double-digit growth rates, the economic crisis restrained sales in the
final months of 2008. SAF-HOLLAND responded promptly by taking steps to
adjust to the new environment as early as October 2008.
Dr. Reiner Beutel, CEO of SAF-HOLLAND GROUP GmbH, commented: 'The past
fiscal year was marked by above-average growth at the beginning and a
drastic drop in sales in the final four months of the year. Our
comprehensive projects to reduce costs and working capital and to stabilize
liquidity are helping us overcome the current market weakness and are
simultaneously fortifying us for the time following the crisis. As soon as
demand revives, we will benefit from our high quality and innovative
products and international positioning as one of the leading global
suppliers to the truck and trailer industry.'
Sales at Previous Year's Level - Earnings Under Pressure
For the entire year, SAF-HOLLAND achieved only slightly lower sales of EUR
798.8 million (previous year: EUR 812.5 million). Exchange rate-adjusted
sales of EUR 817.2 million reached the level of 2007. SAF-HOLLAND generated
EUR 530.2 million (previous year: EUR 519.7 million) of its sales in
Europe, while North America accounted for EUR 239.7 million (previous year:
EUR 271.4 million). In the remaining regions, sales climbed to EUR 28.9
million (previous year: EUR 21.4 million).
Adjusted operating earnings before interest and taxes (EBIT) amounted to
EUR 41.2 million (previous year: EUR 60.5 million) and the adjusted EBIT
margin was 5.2% (previous year: 7.4%). The decline from the previous year
resulted primarily from the sharp decrease in demand at the end of the
fiscal year. Drops in production of up to 70% in the fourth quarter led to
overcapacity, which exerted pressure on earnings. In addition,
extraordinary write-downs on goodwill and intangible assets as well as
restructuring expenses impaired profitability. As a result, the adjusted
profit for the period after taxes fell to EUR 13.4 million (previous year:
EUR 22.3 million). Adjusted earnings per share totaled EUR 0.69 (previous
year: EUR 1.15). As of the balance sheet date, the Group had cash and cash
equivalents of EUR 8.6 million as well as unused credit lines of EUR 15.0
million. The equity ratio was 13.4% (previous year: 19.5%).
Powered Vehicle Systems Improved Sales and Earnings
The Powered Vehicle Systems Business Unit, which generates sales primarily
from fifth wheels and axle suspensions, benefited in 2008 from the
acquisition of the former Georg Fischer Verkehrstechnik GmbH. As a result,
the Business Unit was able to boost its sales during the period under
review to EUR 102.3 million (previous year: EUR 81.3 million) or EUR 107.7
million on an exchange rate-adjusted basis, thus contributing 12.8% to
Group sales. A major order in North America with a term of five years has
further strengthened the Business Unit. Due to an improved product and
customer mix, the Business Unit achieved a gross margin of 14.8% (previous
year: 14.0%).
Trailer Systems Business Declined
SAF-HOLLAND's Trailer Systems Business Unit with a predominantly European
focus was most strongly affected by the collapse in demand in the fall.
During the period under review, the Business Unit generated sales of EUR
527.9 million (previous year: EUR 551.1 million). Adjusted for exchange
rate effects, sales amounted to EUR 534.0 million, corresponding to 66.1%
of Group sales. The gross margin narrowed from 12.3% to 9.5%.
Weaker Sales in Aftermarket
Similarly, the replacement parts business of the Aftermarket Business Unit
suffered from the overall market weakness in the fourth quarter. Unused
trucks and trailers as well as large inventories of new vehicles weighed on
demand. For the entire year, the Business Unit recorded sales of EUR 168.6
million (previous year: EUR 180.1 million). Adjusted for exchange rate
effects, Business Unit sales totaled EUR 175.5 million, accounting for
21.1% of Group sales. The gross margin rose slightly to 35.3% (previous
year: 34.6%).
Acquisitions Reinforce Market Position
With two company acquisitions in fiscal year 2008, SAF-HOLLAND has rounded
out its product range and positioned itself even more broadly
internationally. With Georg Fischer Verkehrstechnik GmbH - today
SAF-HOLLAND Verkehrstechnik GmbH - the Company acquired the second leading
manufacturer of fifth wheels in Europe. Thus, the Group has significantly
improved its basis for growth in the truck sector. In addition, SAF-HOLLAND
acquired the landing leg business of the US manufacturer Austin-Westran
with production in China. This transaction has not only increased sales
potential in the trailer market but also simultaneously improved the cost
structure thanks to production in China. By taking these two steps, the
Group has significantly strengthened its market position in the worldwide
truck and trailer business.
Additional Improvements in Efficiency Expected
The Group will continue to further its cost-reduction program. In the final
four months of the past fiscal year, approximately EUR 15 million in
savings had already been achieved. The program encompasses measures
involving materials, non-personnel and personnel expenses. In the second
half year of 2008, the number of employees was reduced by more than 700
excluding acquisitions but including contractors). In addition to the
introduction of reduced working hours and a waiver of bonuses by all
executives, sites were relocated and/or closed. In order to boost
liquidity, the Company trimmed inventories by around EUR 25 million during
the last four months. Additional measures in fiscal year 2009 are a
supplemental EUR 35 million in cost savings and a further reduction in
capital tied up in inventories of an additional EUR 25 million to the level
of one month's worth of sales. Within the framework of the Group's
reorientation, the auditing company KPMG drafted an expert restructuring
opinion in recent weeks. The opinion confirms SAF-HOLLAND's ability to
restructure financially under certain conditions and emphasizes its
sustainable profitability and competitiveness. On this basis, the Group
intends to negotiate a new financing concept with the bank consortium by
the end of June.
Volatile Demand Impedes Outlook
Weak economic conditions are dampening the truck and trailer market in the
new fiscal year as well. Since orders are for the most part only placed on
a short-term basis, reliable planning and publication of a forecast are
currently not feasible. SAF-HOLLAND expects Group sales will decline
substantially in 2009. This will result in pressure on earnings since the
adjustment measures that have already been introduced will only show effect
over the course of the year. Therefore, the focus is primarily on securing
liquidity, to which numerous additional measures to reduce costs and net
working capital will contribute. Over the long term, management anticipates
the demand for transportation services to turn upward again. Several market
research institutes are forecasting a slight recovery in demand in North
America as early as the end of the current fiscal year. With its
comprehensive product range and worldwide presence, SAF-HOLLAND is well
equipped to participate successfully in future growth.
Company Profile:
With more than EUR 800 million in sales and over 2,000 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 July 2007.
More information under
www.safholland.com
27.04.2009 Financial News transmitted by DGAP