SAF-HOLLAND returns to growth path

SAF-HOLLAND S.A. / Quarter Results

27.05.2010 07:15

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  - Demand from truck and trailer manufacturers picks up

  - Group sales increased by 11.8% to EUR 125.3 million.

  - Adjusted EBIT at EUR 4.8 million 

  - Forecast for 2010 affirmed

Luxembourg, May 27, 2010 - SAF-HOLLAND S.A., a leading supplier for the
global truck and trailer industry, turned the corner in the first quarter
of 2010. Sales and earnings saw a considerable increase with the Company
benefiting from a sales increase as well as the efficiency improvements of
recent months. As a result of the restructuring, the Group is well equipped
for the expected growth course and will be able to react flexibly to actual
demand.

Rudi Ludwig, CEO of SAF-HOLLAND: 'The trend reversal in the truck and
trailer industry has begun. The upward trend of the first few months of
2010 is stabilizing. The upturn in the market also saw SAF-HOLLAND return
to a growth path. Thanks to our strong market position worldwide, we will
increase our capacity utilization this year and also benefit from improved
efficiency as a result of the restructuring. We therefore expect
double-digit percentage sales growth for the full year and an improvement
in earnings compared to 2009.'

Further improvement in gross margin

SAF-HOLLAND recorded increasing sales and an improvement in orders received
Group-wide in the first quarter. In the Trailer Systems and Aftermarket
Business Units, business grew to a greater extent than initially expected.
Overall, Group sales increased by 11.8% to EUR 125.3 million (previous
year: EUR 112.1 million), adjusted for exchange rate effects to EUR 129.1
million. The Group generated 46.9% of its sales in Europe (previous year:
50.9%), 47.1% in North America (previous year: 45.1%) and 6% in other
regions (previous year: 4%). Thanks to higher capacity utilization, a
better product mix and restructuring measures, the gross margin climbed to
18.9% (previous year: 16.9%). Adjusted earnings before interest and taxes
(EBIT) improved to EUR 4.8 million (previous year: EUR -0.5 million), and
thus displayed a rising tendency. Adjusted earnings per share amounted to
EUR -0.08 (previous year: EUR -0.26). Cash flow from operating activities
before income tax payments also increased in the reporting period to EUR
7.2 million (previous year: EUR 5.5 million). The equity ratio remained
almost stable at 4.9% (December 31, 2009: 5.2%), cash and cash equivalents
amounted to EUR 10.2 million (December 31, 2009: EUR 20.7 million).

A good start to the year for Trailer Systems

The Trailer Systems Business Unit recorded an encouraging increase in
sales, after having been significantly burdened in the previous year by the
market collapse that followed the economic crisis. In addition to increased
demand overall, demand for replacement investments increased in the USA. In
Europe, reduced inventories of finished trailers had a positive effect.
Sales in the segment increased by 20.1% to EUR 56.7 million (previous year:
EUR 47.2 million), adjusted for exchange rate effects to EUR 57.8 million.
As a result of higher capacity utilization, the Business Unit returned to a
positive gross margin of 3.4% (previous year: -2.1%). The business unit
contributed 45.3% to total sales.

Improved customer and product mix for Powered Vehicle Systems

As expected, there was only a slight increase in demand for products in the
Powered Vehicle Systems Business Unit. This was due to early purchase
effects in the previous year in advance of new emissions regulations in the
USA that have been effective since the beginning of this year. With a sales
increase of 3.0% to EUR 27.5 million (previous year: EUR 26.7 million),
adjusted for exchange rate effects to EUR 28.9 million, the Business Unit
nevertheless continued on its growth path. As a result of cost reductions
and an improved customer and product mix, the gross margin increased to
24.4% (previous year: 20.6%). 21.9% of Group sales is attributable to this
Business Unit.

Aftermarket benefits from market revival

Sales in the Aftermarket Business Unit increased in the reporting period by
7.6% to EUR 41.1 million (previous year: EUR 38.2 million), adjusted for
exchange rate effects to EUR 42.4 million. The gross margin remained almost
constant at 36.7% (previous year: 38.0%) and is slightly influenced by a
higher risk provision for warranty and an unfavorable product mix.

2010: Double-digit sales growth and earnings improvement expected

The trend reversal for the commercial vehicle industry started at the
beginning of the year. Truck manufacturers have recorded important growth
stimulus while double-digit growth rates have already being achieved in the
trailer sector. For the full year, market analysts expect growth in
production of approximately 14% in the North American truck industry. The
trailer sector in Europe and North America are both expected to grow by
more than 40%. On this basis, SAF-HOLLAND forecasts a double-digit
percentage increase in sales. Earnings are expected to improve thanks to
higher capacity utilization and ongoing restructuring. In the mid term,
sales are expected to grow to EUR 1 billion with 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 more than EUR 420 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, 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




27.05.2010 Ad hoc announcement, Financial News and Media 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 Berlin, Düsseldorf, München, Hamburg, Stuttgart
 
End of News                                     DGAP News-Service
 
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