SAF-HOLLAND Boosts Sales and Earnings in 1. Halfyear
• Adjusted EBIT climbed in the first half of the year by 23.8% to EUR 37.5
million
• Sales rose in the first half of the year by 11.3% to EUR 458.0 million,
adjusted for exchange rate effects by 16.3% to EUR 478.5 million
• Acquisition of fifth wheel business strengthens the market position in
the European truck industry
Luxembourg, August 29, 2008 - SAF-HOLLAND S.A. (ISIN: LU0307018795), a
worldwide leading manufacturer and supplier of premium systems and
components for trailers and trucks, continued on its growth path in the
second quarter following its already strong performance at the start of the
year. Spurred by the strong growth dynamic of the European trailer market
at the beginning of the year, sales grew in the second quarter by 19.9% to
238,7 million (previous year: EUR 199,1); adjusted for exchange rate
effects, by 25.5% to 249,8 million (previous year: EUR 199,1 million).
Accordingly the adjusted EBIT improved significantly by 57.7% to 19,4
million (previous year: EUR 12,3 million).
Rudi Ludwig, CEO of SAF-HOLLAND group. 'The strategic advantages of the
business combination of SAF and Holland are becoming increasingly clear. We
have expanded our strong international presence. Our productivity is
improving step by step, and we are benefiting more and more from the
technology transfer between the companies.'
Double-digit Sales Growth
SAF-HOLLAND Group’s sales increased in the first half of the year by 11.3%
to EUR 458.0 million (previous year: EUR 411.6 million). Adjusted for
exchange rate effects, sales rose by 16.3% to EUR 478.5 million (previous
year: EUR 411.6 million). The primary growth driver was the European
business, which grew by 28.3% to EUR 322.0 million (previous year: EUR
250.9 million). A relatively strong first quarter of 2007 still affected
results in North America. In the early months of the previous year, new
emissions regulations had led to pull-forward effects. Accordingly,
SAF-HOLLAND recorded a drop in sales in North America in the first half of
2008 to EUR 136.0 million (previous year: EUR 160.7 million). Adjusted for
exchange rate effects, sales declined slightly by 2.6% to EUR 156.5 million
(previous year: EUR 160.7 million).
Powerful Earnings Growth
SAF-HOLLAND’s earnings improved significantly in the first half of the year
to be five times the result of the previous year at EUR 17.3 million
(previous year: EUR 3.1 million). The main catalysts for this growth were
lower finance, selling, and administrative expenses. Also integration and
transaction costs had impaired results in the first half of the previous
year. Against this backdrop, earnings per share reached a record of EUR
0.92. Adjusted EBIT climbed to EUR 37.5 million (previous year: EUR 30.3
million), and the adjusted EBIT margin of 8.2% remained within the target
range for 2008.
The high rate of growth characterising the European trailer market in
recent years returned to normal as expected. Nevertheless, the Trailer
Systems Business Unit’s sales grew by 19.9% in the first half of the year
to EUR 327.8 million (previous year: EUR 273.3 million). Adjusted for
exchange rate effects, sales even rose by 22.5%. A changed customer mix,
and increases in the prices for materials slightly reduced the Business
Unit’s gross margin from 13.4% to 13.0%. At the same time, SAF-HOLLAND took
an important step towards the further globalisation of the business and the
expansion of the trailer product line in Europe. With the acquisition of a
division of Austin-Westran, SAF-HOLLAND assumed control of a landing leg
production site in China. This acquisition gives the Company a starting
point for the expansion of the Asian business and simultaneously a
manufacturing site for landing legs for the European market. In the
smallest Business Unit, Powered Vehicle Systems, sales declined, as
expected, by 18.0% to EUR 37.0 million (previous year: EUR 45.1 million).
Adjusted for exchange rate effects, sales fell by 5.5% to EUR 42.6 million
(previous year: EUR 45.1 million). An important factor was the strong
result in the previous year, reflecting pull-forward effects as a result of
regulatory changes in the first quarter of 2007. Due to a better
customer-product mix, the Business Unit’s gross margin increased from 14.2%
to 14.8%. In its profitable Aftermarket Business Unit, SAF-HOLLAND achieved
sales growth, adjusted for exchange rate effects, of 8.5% to EUR 101.1
million (previous year: EUR 93.2 million). Without taking exchange rate
effects into account, sales of EUR 93.2 million remained at the same level
as a year earlier. With the selection of new suppliers, the Business Unit’s
gross margin improved in the first half of the year from 33.3% to 35.4%.
Enhanced Financial Power
The total assets and equity of SAF-HOLLAND both increased. As of June 30,
total assets reached EUR 595.2 million (12/31/2007: EUR 554.6 million),
primarily reflecting growth in business activity. Equity also rose to EUR
117.4 million (previous year: EUR 108.2 million). However, non-current
liabilities declined to EUR 328.4 million (12/31/2007: EUR 329.2 million).
Consequently, the equity ratio of 19.7% at mid-year was slightly higher
than the 19.5% of the previous year. Higher business activity in the first
half of the year was also reflected in a lower cash flow of EUR 20.3
million (previous year: EUR 29.0 million). In the first half-year 2008
SAF-HOLLAND had an average of 3,037 employees (previous year: 2,949). This
increase was attributable to the acquisition of the landing leg business
Austin-Westran.
Acquisition of Georg Fischer Verkehrstechnik GmbH
SAF-HOLLAND is intending to accelerate on its growth path to expand its
European trailer business via the truck sector. SAF-HOLLAND is acquiring
all capital shares of Georg Fischer Verkehrstechnik GmbH, Singen, a
subsidiary of Georg Fischer AG, Schaffhausen (Switzerland).The acquisition
is an important step in SAF-HOLLAND’s growth strategy as this move
strengthens the Company’s position in the European market for fifth wheels
and helps it become a significant supplier of the European truck industry.
'We are gaining from an excellent opportunity to position ourselves already
as an international, comprehensive supplier and partner of the truck and
trailer industry. We are marketleader for fifth wheels in North America –
in the European market we can finally close a strategic gap and round up
our product range', says Rudi Ludwig, CEO of SAF-HOLLAND group. The
transaction will be financed through a mix of funds from borrowings and
additional equity. The therefore necessary borrowed capital is secured by
an adequate creditline, which was provided by a consortium led by Dresdner
Kleinwort and Unicredit Group at the beginning of 2008. Regarding the
additional equity the Board of Directors of SAF-HOLLAND intends to approve
a capital increase from the authorised capital of less than 10 percent.
Pamplona Capital Partners I LP, which currently holds more than 34.5
percent of the shares of SAF-HOLLAND S.A., intends to subscribe in a
material way to the offering. Additionally they have provided a guarantee
to underwrite new shares which cannot be placed. The capital increase will
be coordinated by the bank HSBC Trinkaus & Burkhardt AG.
Outlook for 2008
Despite the currently subdued economic environment, SAF-HOLLAND management
is optimistic that it will be able to achieve the lower end of its
announced target ranges of EUR 900 to 950 million sales and 8.0% to 8.5%
adjusted EBIT margin. In the coming months, volatile energy and commodity
prices, exchange rate fluctuations between the Euro and the US-Dollar, and
the effects of the financial crisis will continue to determine and
influence growth expectations in the American and European trailer and
truck markets. These factors will also affect the purchasing behavior of
end customers, such as trucking companies.
Please note: The 2008 half-year report of SAF-HOLLAND S.A. can be
downloaded from the internet at
http://www.safholland.com/de/investor/berichte.html.
Company Profile
With more than EUR 800 million in sales and approximately 3,000 employees,
SAF-HOLLAND S.A. is one of the 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.
29.08.2008 Financial News transmitted by DGAP