SAF-HOLLAND S.A.: Good earnings development over the course of the year

SAF-HOLLAND S.A. / Key word(s): Quarter Results

07.11.2013 / 07:01

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SAF-HOLLAND: Good earnings development over the course of the year

* Sales for the Group progress as planned
* Significant increase in profitability
* Sales and earnings target for 2013 confirmed

Luxembourg, November 7, 2013 - At SAF-HOLLAND, the globally active supplier
to the truck and trailer industry, business development progressed as
expected following a weaker start of the year. In the third quarter, Group
sales amounted to EUR 219.1 million (previous year: EUR 217.2 million) and
in the period from January to September sales totaled EUR 654.7 million
(previous year: EUR 657.5 million). Significant progress was made in
particular with regard to earnings. Detlef Borghardt, CEO of SAF-HOLLAND:
'Sales development over the course of the year and the current business
outlook are in line with our planning for a generally positive sales and
earnings development in 2013.'

Adjusted EBIT margin rises to over 7 percent
In the first nine months, the Group's gross profit rose to EUR 121.3
million (previous year: EUR 120.2 million) and, as a result, the gross
margin increased slightly to 18.5 percent (previous year: 18.3 percent).
Earnings before tax increased to EUR 27.5 million (previous year: EUR 24.3
million) which is attributable primarily to an improved finance result due
to the sustainable optimization of corporate financing. The increase in
adjusted EBIT to EUR 46.3 million (previous year: EUR 44.3 million) led to
an improved adjusted EBIT margin of 7.1 percent (previous year: 6.7
percent). Adjusted earnings before tax increased to EUR 34.1 million
(previous year: EUR 30.4 million). Although the number of SAF-HOLLAND
shares rose with the capital increase in December 2012 by about 10 percent
from 41.2 million to 45.4 million, adjusted earnings per share was at EUR
0.52 (previous year: EUR 0.51).

Increasing share of sales in emerging markets 
In what continues to be a challenging European market, SAF-HOLLAND was able
to further expand its position in the first nine months of the year. The
European region was the main sales driver, contributing 51.7 percent
(previous year: 50.7 percent) to Group sales. North America's share of
Group sales amounted to 40.2 percent (previous year: 42.7 percent). The
regions outside the two core markets - primarily emerging markets such as
the BRIC countries - increased their share of sales to 8.1 percent
(previous year: 6.6 percent).

The business segment with the strongest sales in the first nine months of
the year was once again Trailer Systems. This segment generated 57.0
percent of Group sales (previous year: 55.0 percent). The Powered Vehicle
Systems segment contributed 16.8 percent (previous year: 18.3 percent) of
total sales and the Aftermarket Business Unit added 26.2 percent (previous
year: 26.7 percent).

Trailer Systems: margin improvement initiatives launched
The Trailer Systems Systems Business Unit increased its sales in the first
nine months by EUR 11.6 million to EUR 373.1 million (previous year EUR
361.5 million). In addition to the already favorable business development
in North America, volume also increased significantly in Europe in the
third quarter. Adjusted EBIT for the Business Unit increased to EUR 12.3
million (previous year: EUR 11.5 million) with an adjusted EBIT margin of
3.3 percent (previous year: 3.2 percent). In order to improve the adjusted
EBIT margin of the Business Unit to about 6 percent by the end of 2015,
initiatives have been introduced to increase sales and, at the same time,
reduce costs. The integration of the production plant in the German city of
Wörth into the existing plants at the Bessenbach location along with the
outsourcing of the Logistics Service Center's activities have been decided
upon. Due to comprehensive agreements with IG Metall and the Works Council,
the first steps in this process will be taken as early as the end of the
year. The measures serve to support the mid-term targets of the entire
SAF-HOLLAND Group.

Powered Vehicle Systems: gross margin rises by 2 percent
Sales volume for the Powered Vehicle Systems Business Unit in the first
nine months of the year amounted to EUR 109.8 million (previous year: EUR
120.6 million). It should be taken into consideration that in the previous
year, a demand backlog that arose in 2011 was worked off and thus a
disproportionately strong first half of the year 2012 was recorded. Gross
profit in the Business Unit improved to EUR 19.3 million (previous year:
EUR 18.8 million) whereby the gross margin improved by two percentage
points to 17.6 percent (previous year: 15.6 percent). With an adjusted EBIT
of EUR 10.2 million (previous year: EUR 10.7 million), the adjusted EBIT
margin rose to 9.3 percent (previous year: 8.9 percent). In the third
quarter, the Business Unit also continued its activities aimed at
optimizing the European organization.

Aftermarket: business development as planned
In the first nine months of the year, the Aftermarket Business Unit
achieved sales of EUR 171.8 million (previous year: EUR 175.4 million). The
slight decrease as compared to the same period in the previous year period
is due to structural effects. In addition, segment sales in the first half
of 2012 increased as a result of working off an order backlog from
financial year 2011. The selection process for a qualified supplier has
also delayed the introduction of a new fifth wheel in the current year.
Further, generally weaker demand in the North American spare parts market
over the course of the first half of the year also played a role. Adjusted
EBIT for the Aftermarket Business Unit increased to EUR 28.4 million
(previous year: EUR 25.7 million) and the adjusted EBIT margin was 16.5
percent (previous year: 14.7 percent).

Cash flow from operating activities positively influenced by factoring
Cash flow from operating activities before income tax increased to EUR 48.9
million by the end of September (previous year: EUR 39.4 million). One
reason for the substantial difference to the previous year was the
unusually low cash inflow in 2012 from customer payments brought forward in
December 2011. In the reporting period 2013, on the other hand, cash
inflows increased primarily as a result of non-recourse factoring, which is
now being used more intensively.

Equity ratio of around 40 percent targeted
As of September 30, 2013 the balance sheet total rose to EUR 557.8 million
(December 31, 2012: EUR 536.7 million). Because equity as of September 30,
2013 rose to EUR 211.0 million (December 31, 2012: EUR 197.9 million), it
was possible to increase the equity ratio despite the significantly higher
balance sheet total to 37.8 percent (December 31, 2012: 36.9 percent).
SAF-HOLLAND thus once again came a good step closer to achieving its goal
of an equity ratio of about 40 percent. Total liquidity as of September 30,
2013 was EUR 147.0 million (previous year: EUR 70.9 million / December 31,
2012: EUR 140.5 million).

Global growth strategy benefits from acquisition in China
SAF-HOLLAND is well positioned to benefit from growth in the commercial
vehicles markets in both its core markets of Europe and North America and
in emerging markets. An important component of the company's growth
strategy is more intensive activities in emerging markets, especially the
BRIC countries. These activities include the acquisition agreed in the
third quarter of the Chinese Corpco Bejing Technology and Development Co.,
Ltd. (Corpco). The purchase of Corpco will strengthen the presence of
SAF-HOLLAND in China and, at the same time, drive the opening of markets in
other Asian countries.

Sales and adjusted EBIT target confirmed for 2013
Assuming that the general financial and economic environment does not take
a turn for the worse, SAF-HOLLAND, on the basis of the first three quarters
of the current financial year, continues to anticipate Group sales of
between EUR 875 and EUR 900 million. The earnings goal for 2013 is
unchanged at an adjusted EBIT of at least EUR 60 million. Wilfried Trepels,
CFO of SAF-HOLLAND: 'From today's perspective, earnings in the current
financial year will not be impacted by significant burdening effects such
as the refinancing in 2012. Without these effects we can expect a
significantly improved result for the period in financial year 2013.' In
the medium-term, the goal of SAF-HOLLAND continues to be the achievement of
sales of EUR 1 billion and an adjusted EBIT margin of 10 percent in
financial year 2015.


Notes:
For financial years beginning on or after January 1, 2013, IAS 19R, the
amended version of the accounting standard IAS 19 'Employee Benefits', is
valid. SAF-HOLLAND had already taken the amended standard into account in
the preparation of its consolidated financial statements for 2012. The
previous version, IAS 19, was applied for the interim financial statements
of the past financial year. IAS 19R has been used for interim financial
reporting since the beginning of 2013. In line with IFRS and for better
comparability, the new standard will also be applied retroactively to the
respective reporting periods in the previous year.

EBIT was adjusted for the following items that are not originally
attributable to the operating business: amortization from the purchase
price allocation and impairment reversals on goodwill and intangible assets
from the impairment tests as well as restructuring and integration costs.

The key figures chart included in the press release can be accessed at
corporate.safholland.com/de/investor/finanznachrichten/pressemittei
lungen.html.


Company Profile:
With sales of approximately EUR 860 million in 2012 and more than 3,000
employees, SAF-HOLLAND S.A. is one of the world's 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 trailer axle systems and suspension systems, coupling devices,
kingpins, and landing legs, among other things. SAF-HOLLAND sells its
products on six continents to Original Equipment Manufacturers ('OEM') in
the replacement parts market and, in the aftermarket business, to the OEM's
Original Equipment Suppliers ('OES'), as well as by means of a global
service and distribution network. SAFHOLLAND also sells its products to end
users and service centers using this network. SAF-HOLLAND has thus
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. is listed in the Prime Standard of the
Frankfurt Stock Exchange and is among the stocks in the SDAX (ISIN:
LU0307018795).


Contact:
SAF-HOLLAND GmbH
Claudia Hoellen
Hauptstraße 26
63856 Bessenbach

Phone +49 6095 301-617
claudia.hoellensafholland.de


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Language:    English                                               
Company:     SAF-HOLLAND S.A.                                      
             68-70, boulevard de la Pétrusse                       
             L-2320 Luxembourg                                     
             Grand Duchy of Luxembourg                             
Phone:       +49 6095 301 - 0                                      
Fax:         +49 6095 301 - 260                                    
E-mail:      info@safholland.de                                    
Internet:    www.safholland.com                                    
ISIN:        LU0307018795, DE000A1HA979,                           
WKN:         A0MU70, A1HA97                                        
Indices:     SDAX                                                  
Listed:      Regulierter Markt in Frankfurt (Prime Standard);      
             Freiverkehr in Berlin, Düsseldorf, Hamburg, München,  
             Stuttgart                                             
 
 
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