SAF-HOLLAND S.A.: SAF-HOLLAND significantly increases sales and profitability

SAF-HOLLAND S.A. / Half Year Results

26.08.2010 07:11

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 - Noticeable growth in worldwide demand 
 - Sales in the first half-year increase by 34.8% 
 - Adjusted EBIT doubled in the second quarter
 - Forecast 2010: Sales expected to increase to over EUR 550 million 

 
Luxembourg, August 26, 2010 - SAF-HOLLAND S.A., a leading supplier for the
global truck and trailer industry, expects significant sales growth to over
EUR 550 million in the current fiscal year, after reaching EUR 419.6
million in 2009. Earnings are positively influenced by growing sales. The
Group benefits from rising demand and its own efficiency improvements.
Adjusted EBIT increased substantially to EUR 14.6 million in the first half
of the year. In the second quarter adjusted EBIT already doubled compared
to the previous quarter, while sales increased by 29.4% from April to June.

Rudi Ludwig, CEO of SAF-HOLLAND: 'SAF-HOLLAND can look back on a pleasing
business development in the first half of 2010. The second quarter in
particular gives us a positive outlook for the rest of the year. We notice
both the continuously rising demand and the positive effects of cost-saving
measures initiated in the past 18 months. As previously communicated,
SAF-HOLLAND is benefitting tremendously from the economic upswing and the
corresponding increase in demand for transportation services. This trend
will continue. We expect Group sales to be over EUR 550 million and Group
earnings to sustainability improve.'

Adjusted result for the period nearly reaches profit threshold

Overall, sales increased by 34.8% to EUR 287.5 million (previous year: EUR
213.3 million) in the first half of 2010, adjusted for exchange rate
effects to EUR 286.7 million. All three Business Units improved in the
reporting period. European business accounted for 47.2% (previous year:
49.2%), while the Group generated 46.5% of its sales in North America
(previous year: 46.1%). The share of other regions slightly increased to
6.3% (previous year: 4.7%). Thanks to greater capacity utilization and
project related Aftermarket sales, the gross margin rose to 19.2% (previous
year: 16.2%) in the reporting period. Adjusted EBIT improved to EUR 14.6
million (previous year: EUR -1.3 million). With adjusted profit for the
period of EUR 1.0 million (previous year: -4.6) in the second quarter, the
Group recorded a positive result once again, and was close to break-even
level with EUR -0.6 million (previous year: EUR -9.9 million) in the first
half of the year. Adjusted earnings per share amounted to EUR -0.03
(previous year: -0.48)

Cash flow from operating activities before income tax payments totaled EUR
19.7 million (previous year: EUR 21.0 million) in the first half of 2010 -
in the second quarter, it improved considerably compared to the previous
quarter. The Group benefited from its strict inventory management, which
reduced the turnover period to 47 days in the second quarter. In the first
three months of the year, it was 58 days. The equity ratio increased
slightly to 5.4% as of the reporting date (December 31, 2009: 5.2%). As a
result of growing demand, the Company employed 83 new industrial employees
for German plants; in North America, the number of employees has risen by
131 since the beginning of the year.

Trailer Systems with best quarter since 2008

The Trailer Systems Business Unit achieved the highest sales since the
fourth quarter 2008 in the second quarter of 2010. In both Europe and North
America, SAF-HOLLAND's sales volume increased. Despite the pleasing sales
increase, demand is still significantly below earlier levels. Overall, the
segment's sales increased by 52.0% to EUR 136.0 million in the first half
of the year (previous year: EUR 89.5 million), adjusted for exchange rate
effects to EUR 135.7 million. The gross margin improved to 4.0% (previous
year: -3.8%). The share in Group sales rose to 47.3% (previous year:
42.0%).

Powered Vehicle Systems significantly increases its gross margin

Thanks to growing demand and improved capacity utilization, the Powered
Vehicle Systems Business Unit increased its gross margin to 25.2% (previous
year: 21.1%). Sales in the segment grew by 25.8% to EUR 61.5 million
(previous year: EUR 48.9 million), adjusted for exchange rate effects to
EUR 61.2 million. The gross margin improved to 25.2% (previous year:
21.1%). The Business Unit accounted for 21.4% of total sales (previous
year: 22.9%).

Aftermarket receives project contracts from North Africa

Sales in the Aftermarket Business Unit increased to EUR 90.0 million
(previous year: EUR 74.9 million), adjusted for exchange rate effects to
EUR 89.8 million. The gross margin remained stable at 38.1% (previous year:
37.8%). The replacement parts business contributed 31.3% (previous year:
35.1%) to Group sales. The Business Unit benefits from new project business
in North Africa as well as from its strong international service and
distribution network. It will continue to be strengthened by establishing
and expanding warehouse locations in North America, among other things. The
Aftermarket Business Unit will continue to gain importance as a result of
the increasing number of SAF-HOLLAND installed axles and, for the Group, is
a guarantor of stable sales and earnings.

New efficient components presented

SAF­HOLLAND is continuously striving to increase the efficiency of trucks
and trailers. With lighter and thus more efficient components, SAF-HOLLAND
plans to build upon its strong market position and to reduce the burden on
the environment and enterprises with new products for commercial vehicles.
With a new disc brake, which was presented only recently, and a new wheel
head, the weight of a typical three-axle trailer decreases by 96 kilogram
for our European customers. The new components - disc brake and wheel head
- are the beginning of a number of other planned innovations.

2010: Sales increase to over EUR 550 million expected

As the demand for trucks and trailers increases significantly again
worldwide, the production is on the rise - a trend we expect to continue.
For example, the North American truck business (class 8) is expected to
grow in production by around 26% in the current year; the number of
deliveries in the trailer area is forecast to increase by around 39% in the
USA (source: Market research institute ACT). Due to the good business
development in the first half of the year and the positive forecasts,
SAF-HOLLAND expects sales to amount to over EUR 550 million for the full
year 2010. In terms of earnings, the Group will benefit from greater
capacity utilization and efficiency improvements. It is the Company's
mid-term goal to achieve sales of EUR 1 billion while generating an
adjusted EBIT margin of 10%.

Note: EBIT was adjusted for the following effects which are not originally
attributable to the operating business: depreciation and amortization
arising from the purchase price allocation as well as restructuring costs.

Company Profile: 

With approximately EUR 420 million in sales and over 2,000 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 axle
and suspension systems, fifth wheels, coupling devices, 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.



Contact:
SAF-HOLLAND Group GmbH
Barbara Zanzinger
Hauptstraße 26
63856 Bessenbach

Phone +49 6095 301-617
barbara.zanzinger@safholland.de




26.08.2010 Ad hoc announcement, Financial News and Press Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

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