SAF-HOLLAND SE
SAF-HOLLAND SE: SAF-HOLLAND achieves a good operating result in a difficult market environment and confirms its forecast
DGAP-News: SAF-HOLLAND SE
/ Key word(s): Half Year Results
SAF-HOLLAND achieves a good operating result in a difficult market environment and confirms its forecast – Group sales decreased by 31.5 per cent to EUR 476.3 million due to market conditions and corona – Adjusted EBIT margin of 5.0 per cent at the upper end of the range for the full year 2020 – Positive operating free cash flow – “Cash is King” project to improve performance of inventory and receivables management is making good progress – Comprehensive programme to reduce selling and administrative expenses at all locations pursued rigorously – Capital expenditure focused on long-term strategic initiatives in the field of operational excellence
Alexander Geis, Chairman of the Management Board of SAF-HOLLAND SE says: “In a market environment that is dominated by the global spread of the COVID-19 pandemic, we managed to generate a positive adjusted EBIT margin of 2.7 per cent in the second quarter of 2020 despite a 44.8 per cent fall in sales. With an adjusted EBIT margin of 5.0 per cent at the end of the first six months of 2020, we are lying at the upper end of the guidance range for the full year 2020 of between 3 per cent and 5 per cent.” “In addition to the high-margin spare parts business, which is resistant to economic cycles, the global programme to reduce our selling and administrative costs initiated at the end of September 2019 already and the supplemental collective agreement for the Bessenbach location that came into force on March 1, 2020 contributed to the good development in earnings from operations. Our investments in property, plant and equipment and intangible assets consistently focus on the long-term strategic initiatives in the field of operational excellence, which will lead to a decline in the capex ratio to a level of around 2.5 per cent both in the current financial year and the following years,” adds Alexander Geis. Group sales significantly down on the previous year due to market conditions and corona; adjusted EBIT margin of 5.0 per cent Despite the sharp decrease in sales, SAF-HOLLAND generated an adjusted EBIT of EUR 23.7 million in the first half of 2020 (previous year: EUR 49.9 million). This corresponds to an adjusted EBIT margin of 5.0 per cent (previous year: 7.2 per cent). The deterioration of the margin is attributable to the cost stickiness effect and impairment losses of EUR 5.6 million recorded on inventories. The cost-savings realised in selling and administrative expenses had a positive effect. The adjusted net profit for the first half of 2020 of EUR 12.7 million (previous year: EUR 33.0 million) lies 61.6 per cent below the previous year’s level. Based on unchanged approximately 45.4 million ordinary shares outstanding, adjusted basic earnings per share for the reporting period from January to June 2020 amounted to EUR 0.28 (previous year: EUR 0.73) and adjusted diluted earnings per share amounted to EUR 0.25 (previous year: EUR 0.61). Capex ratio reduced to 2.5 per cent Number of employees adjusted to the market environment Positive operating free cash flow The net cash flow from investing activities in property, plant and equipment and intangible assets of EUR -11.4 million lay EUR 11.4 million, or 50.2 per cent, below the comparable figure for the previous year. The operating free cash flow improved from EUR 4.8 million to EUR 11.2 million. The total free cash flow of EUR – 10.0 million (previous year: EUR -7.6 million) was affected by the cash outflow associated with the purchase of the remaining shares in V.Orlandi of EUR 21.2 million. Net financial debt (including lease liabilities) increased by EUR 27.2 million to EUR 278.9 million as of June 30, 2020 compared to the reporting date of December 31, 2019. As of June 30, 2020 SAF-HOLLAND carries cash and cash equivalents of EUR 209.4 million (December 31, 2019: EUR 131.2 million). “We have total liquidity – measured as the sum of freely available lines of credit on the closing date and cash on hand – of EUR 412.0 million (December 31, 2019: EUR 242.7 million) and therefore stand on a very robust financial cushion,” says Alexander Geis. “With our Cash-is-King project, that primarily addresses past-due receivables and the management of inventories, we are on track. As a result, we will free up additional liquidity by the end of the year, which will enable us to keep the Company on a stable course, even through these troubled times.” EMEA region: Adjusted EBIT margin remains robust despite COVID-19 Despite the significant sales decline, the EMEA region generated an adjusted EBIT of EUR 21.5 million in the reporting period from January to June 2020 (previous year: EUR 33.9 million) and an adjusted EBIT margin of 8.0 per cent (previous year: 9.7 per cent). The spare parts business had a strongly positive impact on the gross margin whereas the OE business had a slightly negative impact. The deterioration of the margin is attributable to the cost stickiness effect and impairment losses of EUR 2.5 million recorded on inventories in response to the decrease in inventory turnover because of the COVID-19 pandemic. The cost-savings realised in selling and administrative expenses had a positive effect. Americas region: EBIT margin positive despite massive slump in sales In the Americas region, sales declined in the first half of 2020 by 36.1 per cent to EUR 174.1 million (previous year: EUR 272.6 million) due to market conditions and corona. After eliminating the effects of exchange rates, sales decreased by 36.8 per cent to EUR 172.3 million. Despite the significant fall in sales, the Americas region generated a positive adjusted EBIT of EUR 4.5 million in the first half of 2020 (previous year: EUR 18.2 million) and an adjusted EBIT margin of 2.6 per cent (previous year: 6.7 per cent). The spare parts business had a positive impact on the gross margin whereas the OE business had a significantly negative impact. The deterioration of the margin is attributable to the cost stickiness effect and impairment losses of EUR 3.3 million recorded on inventories due to streamlining the product portfolio as well as the decrease in inventory turnover as a result of the COVID-19 pandemic. The cost-savings realised in selling and administrative expenses had a positive effect. In addition it should be noted that the figure in the previous year of EUR 18.2 million significantly benefited from the contractually agreed passing on of the rise in the price of steel in 2018 coupled with lower purchase prices for steel. APAC region: Lockdown represents a great burden Adjusted EBIT of EUR -2.4 million is down slightly on the result of the previous year of EUR -2.2 million. The adjusted EBIT margin amounted to -6.9 per cent (previous year: -2.9 per cent). The spare parts business had a positive impact on the gross margin whereas the OE business had a significantly negative impact. The cost-savings realised in selling and administrative expenses had a positive effect. Outlook for the 2020 financial year confirmed Under this assumption, SAF-HOLLAND is still expecting an adjusted EBIT margin of between 3 per cent and 5 per cent for the 2020 financial year. The higher shares of sales of the spare parts business is helping to stabilize the margin. On the other hand, factors burdening the margin are the OE business and the relatively below-average decline in selling and administrative expenses as the savings measures that have been initiated will be fully effective in the further course of the year. In order to support the strategic objectives, SAF-HOLLAND is planning investments of around 2.5 per cent of Group sales in the 2020 financial year (previously around 3.0 per cent). These will focus primarily on continuing the introduction of a Global Manufacturing Platform, further automation and the programme FORWARD 2.0. The exact commercial impact of the current COVID-19 pandemic on SAF-HOLLAND however can still not be precisely identified or reliably quantified. SAF-HOLLAND will publish its third quarter results as of September 30, 2020 on November 18, 2020.
Note: All figures shown are rounded. Minor discrepancies may arise from additions of these amounts. Net working capital ratio = Ratio of inventories and trade receivables less trade payables to sales of last twelve months. The net working capital ratio for Q1-Q2 2019 has been adjusted retrospectively to match the new definition. Operating free cash flow = Net cash flow from operating activities less net cash flow from investing activities (purchase of PP&E and intangible assets less proceeds from sales of PP&E). The operating free cash flow for Q1-Q2 2019 has been adjusted retrospectively to match the new definition. About SAF-HOLLAND SAF-HOLLAND SE, located in Bessenbach, is the largest independent listed commercial vehicle supplier in Europe and primarily supplies the trailer markets. With sales of around EUR 1,284 million in 2019, the Company is one of the leading international manufacturers of chassis-related assemblies and components, primarily for trailers and trucks. In addition to axle and suspension systems, the product range includes fifth wheels, coupling systems, kingpins and landing legs, which are sold under the SAF, Holland, Neway, KLL, V.Orlandi and York brands. SAF-HOLLAND supplies original equipment manufacturers (OEM) on six continents. In the Aftermarket business, the Group supplies replacement parts to manufacturers’ service networks (OES) and, with the help of distribution centers, to end customers and service centers via an extensive global sales network. SAF-HOLLAND has a broad international base and is present in almost all markets worldwide. With the innovation offensive “SMART STEEL – ENGINEER BUILD CONNECT”, SAF-HOLLAND combines mechanics with sensors and electronics and is driving forward the digital networking of commercial vehicles and logistics chains. Around 3,000 committed employees worldwide are already working on the future of the transport industry today. Contact Michael Schickling
Future-oriented statements This press release contains certain future-oriented statements that are based on current assumptions and forecasts made by the management of SAF-HOLLAND SE. Various known and unknown risks, uncertainties and other factors may lead to the actual results, financial position, development or performance of the company deviating considerably from the appraisals specified here. The company assumes no obligation to update future-oriented statements of this nature or adapt them to future events or developments. Note This announcement is for information purposes only and does neither constitute an offer to sell, purchase, exchange or transfer any securities nor a solicitation of any offer to sell, purchase, exchange or transfer any securities. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. SAF-HOLLAND SE does not intend to register any securities referred to herein under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States in connection with this announcement. Contact: SAF-HOLLAND Group Michael Schickling Hauptstraße 26 63856 Bessenbach Phone +49 6095 301-617 michael.schickling@safholland.de
13.08.2020 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. |
Language: | English |
Company: | SAF-HOLLAND SE |
Hauptstraße 26 | |
63856 Bessenbach | |
Germany | |
Phone: | +496095301117 |
Fax: | +49 6095 301 – 260 |
E-mail: | ir@safholland.de |
Internet: | www.safholland.com |
ISIN: | DE000SAFH001 |
WKN: | SAFH00 |
Indices: | SDAX |
Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange |
EQS News ID: | 1117005 |
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