SAF-HOLLAND SE
DGAP-News: SAF-HOLLAND SE
/ Key word(s): 9 Month figures/Change in Forecast
Corporate News SAF-HOLLAND achieves very strong operating free cash flow and raises guidance for adjusted EBIT margin for the full year 2020 to 5 to 6 per cent - Group sales decreased by 29.7 per cent to EUR 708.7 million due to market conditions and COVID-19
- Adjusted EBIT margin of 5.4 per cent above the upper end of the range previously forecasted for the full year 2020
- Quantitative year-end goals of the "Cash-is-King" project - performance improvement in inventories and receivables management - almost fully attained by the end of Q3/2020
- Operating free cash flow more than quintupled from EUR 12.3 million to EUR 64.4 million
- Comprehensive programme to reduce selling and administrative expenses at all locations pursued rigorously
Alexander Geis, Chairman of the Management Board of SAF-HOLLAND SE says: "Our operations performed extremely well in the third quarter of 2020 in a market environment that is still very challenging. With Group sales of slightly more than EUR 232 million (previous year: EUR 313.2 million) we generated an adjusted EBIT margin of 6.4 per cent and clearly exceeding the pre-COVID-19 figure of the previous year of 5.4 per cent."
"The recovery seen in the business environment that set in over recent weeks continued through into October. Assuming that there are no new, unexpected impacts of the COVID-19 pandemic, which continues unabated, on our production and supply chains in the remaining weeks of the financial year 2020, we expect to achieve an adjusted EBIT margin in a range between 5 and 6 per cent (formerly: between 3 and 5 per cent)," adds Alexander Geis. Group sales 29.7 per cent below the previous year due to market conditions and COVID-19; adjusted EBIT margin of 5.4 per cent
Despite the sharp decline in sales, SAF HOLLAND generated an adjusted EBIT of EUR 38.5 million in the first nine months of 2020 (previous year: EUR 66.9 million). This corresponds to an adjusted EBIT margin of 5.4 per cent (previous year: 6.6 per cent). The savings realised in selling and administrative expenses had a positive effect.
The adjusted net profit for the first nine months of 2020 of EUR 21.6 million lies 49.7 per cent below the previous year's level (previous year: EUR 42.9 million). Based on approximately 45.4 million ordinary shares outstanding, unchanged on the previous year, adjusted basic earnings per share for the reporting period from January to September 2020 amounted to EUR 0.47 (previous year: EUR 0.94). Number of employees adjusted to the market environment Significant improvement in operating free cash flow
The net cash flow from investing activities in plant, property and equipment and intangible assets of EUR -15.4 million lay EUR 17.0 million, or 52.4 per cent, below the comparable figure for the previous year.
The operating free cash flow improved from EUR 12.3 million to EUR 64.4 million. The total free cash flow of EUR 43.2 million (previous year: EUR 1.4 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) decreased by EUR 19.3 million to EUR 232.4 million as of September 30, 2020 compared to the reporting date of December 31, 2019. As of September 30, 2020 SAF HOLLAND carries cash and cash equivalents of EUR 185.1 million (December 31, 2019: EUR 131.2 million).
"The development of operating free cash flow is very pleasing," says Inka Koljonen, CFO of SAF-HOLLAND SE. "Our "Cash-is-King" project made a significant contribution in this regard, as it almost fully attained the quantitative goals for the year by the end of September already. We will continue to optimise net working capital and push the cash focus further." EMEA region: Adjusted EBIT margin very robust despite COVID-19
In the Americas region, sales declined in the first nine months of 2020 by 39.9 per cent to EUR 250.3 million (previous year: EUR 416.1 million) due to market conditions and COVID-19. After eliminating the effects of exchange rates, sales decreased by 38.8 per cent to EUR 254.6 million.
Despite the significant sales decline, the Americas region generated a positive adjusted EBIT of EUR 8.7 million in the first nine months of 2020 (previous year: EUR 26.1 million) and an adjusted EBIT margin of 3.5 per cent (previous year: 6.3 per cent). The spare parts business had a significant positive impact on the gross margin whereas the OE business had a significantly negative impact. This includes inventory write-downs of EUR 4.1 million in response to the decrease in inventory turnover because of the COVID-19 pandemic.
The savings realised in selling and administrative expenses had a positive effect, which was more than offset by cost stickiness. In addition it should be noted that the figure in the previous year of EUR 26.1 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 and delayed ramp-up burden
Adjusted EBIT improved by EUR 0.6 million to EUR -5.3 million. The adjusted EBIT margin amounted to -9.9 per cent (previous year: -5.9 per cent). The spare parts business had a slightly negative impact on the gross margin whereas the OE business, by contrast, had a significantly negative impact. The savings realised in selling and administrative expenses had a positive effect. Guidance for adjusted EBIT margin for the full year 2020 raised to 5 to 6 per cent
Based on the preliminary figures for October 2020, the Management Board of SAF-HOLLAND SE has decided raise the guidance for the adjusted EBIT margin for the full year 2020. The Company now expects an adjusted EBIT margin in a range between 5 and 6 per cent (formerly: between 3 and 5 per cent).
The positive trend in the adjusted EBIT margin is primarily based on the continued recovery of the trailer and truck markets in North America and Europe, gaining market shares, the high-margin spare parts business, which is less affected by economic cycles, as well as on significant savings in selling and administrative expenses.
The new guidance for the adjusted EBIT margin is made on the premise that there are no new, unexpected impacts from the ongoing COVID-19 pandemic on the production and supply chains in the remaining weeks of the 2020 financial year.
In order to support the strategic objectives, SAF-HOLLAND is still planning to make investments equal to approximately 2.5 per cent of Group sales in the 2020 financial year. These will focus primarily on the continuing introduction of a Global Manufacturing Platform and further automation in Germany and North America.
SAF-HOLLAND SE publishes the full quarterly statement 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-Q3 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-Q3 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: Michael Schickling Head of Investor Relations and Corporate Communications SAF-HOLLAND SE Hauptstraße 26 63856 Bessenbach Phone +49 6095 301-617 michael.schickling@safholland.de
17.11.2020 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: | 1148871 |
| End of News | DGAP News Service |
1148871 17.11.2020
