SAF-HOLLAND SE
SAF-HOLLAND S.A.: SAF-HOLLAND: Focus on operational excellence and structural cost savings
DGAP-News: SAF-HOLLAND S.A.
/ Key word(s): 9 Month figures
SAF-HOLLAND: Focus on operational excellence and structural cost savings – Group sales and adjusted EBIT margin in line with adjusted forecast figures – Comprehensive programme initiated to reduce selling and administrative expenses at all locations – Americas region: Realization of programme FORWARD has been accelerated – China region: Extensive reorganization measures successfully implemented – significant earnings improvement expected in 2020 – Positive development in operating free cash flow
Alexander Geis, CEO of SAF-HOLLAND, says: “We have responded immediately to the decline in the market environment for trailers and heavy trucks and have initiated a comprehensive programme to cut selling and administrative costs at all locations. We have intensified our efforts in the USA under our programme FORWARD and will continue to drive ahead the expansion in our high-margin aftermarket business. Upon the successful completion of the comprehensive reorganization in China towards the end of the year, we will have laid the foundation for a significant improvement in the China region’s operating result in the year ahead. Now is the time for us to focus on winning new orders for the domestic Chinese market and expanding our strategic customer relationships.” Group sales and adjusted EBIT margin in line with adjusted forecast figures Adjusted Group earnings before interest and taxes (EBIT) declined by 5.9 per cent from EUR 71.1 million in the same prior-year period to EUR 66.9 million in the first nine months of 2019. The significant earnings improvement in the Americas region was not enough to compensate for lower earnings contributions from the remaining three regions. The adjusted EBIT margin in the first nine months of 2019 equalled 6.6 per cent (previous year 7.2 per cent). The adjusted result for the period before minority interests was EUR 42.9 million (previous year EUR 46.1 million) based on a slightly improved finance result and a higher tax rate. Based on the approximately 45.4 million ordinary shares issued, adjusted basic earnings per share amounted to EUR 0.94 (previous year EUR 1.01), and adjusted diluted earnings per share amounted to EUR 0.80 (previous year EUR 0.87). Investments concentrated on optimizing processes and procedures Positive development in operating free cash flow Net financial liabilities (including lease liabilities) rose by EUR 61.1 million compared to their level as of December 31, 2018 and amounted to EUR 274.7 million as of September 30, 2019. This increase resulted not only from total free cash flow in the amount of EUR -3.0 million but also from the dividend payment of EUR 20.4 million and especially the effect from the first-time application of the new IFRS 16 leasing standard of EUR 33.3 million. As of September 30, 2019, the SAF-HOLLAND Group had liquid assets of EUR 126.1 million (December 31, 2018: EUR 155.0 million). “Over the next few quarters, we will continue to work intensely on managing our net working capital to achieve a sustained, positive operating free cash flow,” explained Dr. Matthias Heiden, CFO of SAF-HOLLAND. “This will also be the basis for continuing to comply with our financial covenants.” Equity ratio is a solid 33.3 per cent EMEA region: Sales slightly below prior-year level In the first nine months of 2019, the EMEA region generated an adjusted EBIT of EUR 46.7 million (previous year EUR 57.1 million) and an adjusted EBIT margin of 9.5 per cent (previous year 11.4 per cent). The above-mentioned volume effects and higher personnel expenses resulting from the collective wage agreement currently in effect in Germany had a negative impact in the first nine months of 2019. A positive effect on earnings in the reporting period came from the companies acquired since January 2018, while the earnings in the first nine months of 2018 benefited from the reversal of warranty provisions and foreign currency effects (Turkish lira versus the euro). Americas region: Earnings situation stabilises At EUR 26.1 million, adjusted EBIT was significantly above the prior-year level of EUR 6.5 million. The adjusted EBIT margin was 6.3 per cent (previous year 1.8 per cent). Key contributors to this performance were the improvement in processes and procedures, the contractual passing on of last year’s steel price increases, lower purchasing prices for steel and other materials and a significantly more profitable aftermarket business. APAC region: Under pressure from persistent market weakness in India – cost-cutting programme shows initial positive effects In contrast, adjusted EBIT amounted to EUR 4.1 million and fell short of the previous year’s figure of EUR 5.4 million. Restructuring income of EUR 2.2 million from the sale of a building as part of the merger of SAF-HOLLAND Australia and York Transport Equipment Pty. Ltd. (Australia) was eliminated. The adjusted EBIT margin fell from 8.3 per cent to 5.9 per cent. The decline in the margin is also attributable to the persistent market weakness in India. A cost-cutting programme was launched and is showing first positive effects. China region: Extensive reorganization measures implemented in a challenging market environment The China region achieved an adjusted EBIT of EUR -9.9 million in the first nine months of 2019 (previous year EUR +2.2 million). No adjustment was made for non-recurring expenses totalling EUR 6.6 million, which were fairly evenly spread over the second and third quarters. These expenses are related to impairments on inventories and receivables of EUR 3.9 million and EUR 1.2 million, losses on disposals of assets of EUR 0.8 million and strike-related costs of EUR 0.8 million. The integration of the other Chinese locations into the new plant in Yangzhou is at an advanced stage. The plant in Qingdao ceased operations as of July 31, 2019. The two warehouses in Beijing were also closed as of July 31, 2019. Business activities at the plant in Xiamen and the office in Beijing are scheduled to be discontinued by the end of 2019. The commencement of pre-series production at the new Yangzhou plant took take in the fourth quarter. Outlook for the 2019 financial year
SAF-HOLLAND S.A., located in Luxembourg, is the largest independent listed supplier to the commercial vehicle market in Europe delivering mainly to the trailer markets. With sales of approximately EUR 1,301 million in 2018, the Company is one of the world’s leading manufacturers and suppliers of chassis-related systems and components primarily for trailers, trucks, buses, and recreational vehicles. The product range comprises axle and suspension systems, fifth wheels, kingpins, and landing gear marketed under the brands SAF, Holland, Neway, KLL, V.Orlandi and York. SAF-HOLLAND sells its products to Original Equipment Manufacturers (OEM) on six continents. The Group’s Aftermarket business supplies spare parts to the service networks of Original Equipment Suppliers (OES), as well as to end customers and service centers through its extensive global distribution network. SAF-HOLLAND is one of the few suppliers in the truck and trailer industry that is internationally positioned in almost all markets worldwide. With the innovation campaign “SMART STEEL – ENGINEER BUILD CONNECT” SAF-HOLLAND combines mechanics with sensors and electronics and drives the digital networking of commercial vehicles and logistics chains. More than 4,000 committed employees worldwide are already today working on the future of the transportation industry.
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 S.A. 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.
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 S.A. 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
07.11.2019 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. |
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: | ir@safholland.de |
Internet: | www.safholland.com |
ISIN: | LU0307018795 |
WKN: | A0MU70 |
Indices: | SDAX |
Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange |
EQS News ID: | 906893 |
End of News | DGAP News Service |