2020Quarterly Statement Q3

SAF-HOLLAND

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Key figures

KEY FIGURES

Results of operations

Financial position

in EUR thousands

Sales

Adjusted gross profit

Adjusted gross profit margin in %

Adjusted EBITDA

Adjusted EBITDA margin in %

Adjusted EBIT

Adjusted EBIT margin in %

Adjusted result for the period

Adjusted undiluted earnings per share in EUR

Q1-Q3/2020

Q1-Q3/2019

708,698

1,008,626

127,508

173,357

18.0

17.2

65,203

90,459

9.2

9.0

38,536

66,916

5.4

6.6

21,553

42,871

0.47

0.94

in EUR thousands

Q1-Q3/2020

Q1-Q3/2019

Cash flow from operating activities

79,787

44,721

Cash flow from investing activities

(property, plant and equipment/ intangible assets)

-15,426

-32,396

Operating free cash flow

64,361

12,325

Total free cash flow

43,168

1,439

Cash and cash equivalents

185,118

126,107

Net debt

232,375

274,695

Employees

Net assets

in EUR thousands

09/30/2020

12/31/2019

Balance sheet total

963,943

979,244

Equity

303,913

318,007

Equity ratio in %

31.5

32.5

Net working capital

138,681

183,763

Net working capital in % of sales (LTM)

14.1

14.3

Q1-Q3/2020

Q1-Q3/2019

Employees at the reporting date

3,113

3,923

Employees (on average)

3,337

3,916

Yield

in %

Q1-Q3/2020

Q1-Q3/2019

Return on capital employed (ROCE)*

9.1

13.1

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.

ROCE = Adjusted EBIT / (total equity + financial liabilities (excl. refinancing costs, incl. lease liabilities) + pension and other similar benefits - cash and cash equivalents). ROCE for Q1-Q3 2019 has been adjusted retrospectively to match the new definition.

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SAF-HOLLANDSE Quarterly Statement Q3 2020 | Key Events in the first nine Months of the Year 2020

KEY EVENTS IN THE FIRST NINE MONTHS OF THE YEAR 2020

NEW SEGMENTATION IN CORPORATE MANAGEMENT

The regions of APAC and China were combined into one region effective January 1, 2020 which was named APAC. Commencing January 1, 2020, the geographic segmentation of SAF-HOLLAND therefore consists of EMEA, the Americas and APAC.

ACQUISITION OF THE REMAINING SHARES IN V.ORLANDI S.P.A.

In January 2020, SAF-HOLLAND acquired the remaining 30 per cent of the shares in the coupling specialist, V.Orlandi S.p.A. for a purchase price of EUR 21.2 million. As a result, SAF-HOLLAND now holds all the shares, after already acquiring a stake of 70 per cent in the first quarter of 2018.

EXTRAORDINARY GENERAL MEETING APPROVES RESOLUTION TO CHANGE LEGAL FORM INTO A EUROPEAN COMPANY (SE)

The extraordinary general meeting of SAF-HOLLAND S.A. held on February 14, 2020 in Luxembourg, passed a resolution to convert the legal form into a European Company (Societas Europaea, SE) under the name of

SAF-HOLLAND SE.

CONVERSION INTO A EUROPEAN COMPANY COMPLETED

SAF-HOLLAND S.A. completed its conversion into a European Company (Societas Europaea, SE) upon being entered into the Luxembourg business register on February 24, 2020 under the name of SAF-HOLLAND SE.

PROMISSORY NOTE LOAN SUCCESSFULLY PLACED - ORIGINAL TARGETED VOLUME OF AT LEAST EUR 100 MILLION OVERSUBSCRIBED MULTIPLE TIMES, STEPPED UP TO

EUR 250 MILLION

On March 9, 2020 SAF-HOLLAND SE successfully placed a promissory note transaction with a volume of EUR 250 million via its subsidiary, SAF-HOLLAND GmbH. Because of the high demand and the resulting over- subscription, the final amount exceeded the target volume of EUR 100 million by EUR 150 million.

The tranches of the promissory note feature fixed as well as variable rates and maturities of three, three and a half, five, seven and ten years. All tranches were allocated at the lowest end of the respectively offered price

range. The loan will be paid out to the company at the end of March and at the end of September 2020.

The proceeds will be used to finance the company generally and, in particular, to refinance the convertible bond that falls due on September 12, 2020 (volume: EUR 94.8 million) and the 5-year tranches of the promissory note issued in November 2015 that falls due on November 27, 2020 (volume: EUR 52.0 million).

The issue will contribute to smoothing out the maturity profile and will widen the investor base of the SAF-HOLLAND Group.

SITE-SPECIFIC ADJUSTMENT OF PRODUCTION TAKING INTO ACCOUNT THE RESPECTIVE REQUIREMENTS

On March 30, 2020, SAF-HOLLAND announced that it is adjusting the production in its global production network site specific, taking into account the respective requirements. This affects the two German plants in Bessenbach and Singen as well as the production and assembly plants in Turkey, Italy, Brazil, India and South Africa as well as some sales companies. The measures range from introduction of partial short time work in Germany to temporary site closures - largely by official order. The duration and extent of the production cut-backs will be adjusted flexibly.

EULER HERMES RATING CONFIRMS INVESTMENT GRADE RATING

On June 4, 2020 SAF-HOLLAND SE published the combined rating report from Euler Hermes Rating GmbH. The report confirms the investment grade rating.

In its rating, Euler Hermes Rating particularly emphasises the sustainable growth prospects from the increasing global transport volumes and the Group's leading market positions in the markets for axle and suspension systems for trailers in the EMEA region and India as well as fifth wheels in the Americas region and the structurally growing, less cyclical, high-margin spare parts business. It also positively assesses the high barriers to market entry.

4

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Key Events in the first nine Months of the Year 2020

At the same time, the assessment of the slightly increased market risk reflects the high dependency on the cyclical commercial vehicle sector and the intense competition, which currently is being exacerbated by the COVID-19 pandemic.

Euler Hermes Rating rates the financial risk of SAF-HOLLAND as low to moderate, with reference to its stable earnings power, high internal financing potential and solid financing base.

SAF-HOLLAND SE COMPLETES TRANSFER OF ITS REGISTERED

OFFICE TO GERMANY

Upon entry into the commercial register of the local court of Aschaffenburg on July 1, 2020, SAF-HOLLAND SE completed the transfer of its registered office from Luxembourg to Bessenbach with legal effect.

As a result, the revised version of the articles of association passed by resolution of the extraordinary general meeting of May 20, 2020 also came into force. According to the revised version of the articles of association, the organisational structure of the Company is based on the dualistic board system comprising the Management Board as the management body and the Supervisory Board as the supervisory body, along with the Annual General Meeting. In addition, due to the revised version of the articles of association, the shares of SAF-HOLLAND SE were converted from nominal value shares to no-par value shares.

At the time of the transfer of the registered office, the Management Board of SAF-HOLLAND SE consisted of Alexander Geis (Chairman of the Management Board and provisional CFO) and Dr. André Philipp (Member of the Management Board and Chief Operating Officer). Inka Koljonen took over the position of Chief Financial Officer on September 1, 2020. The Supervisory Board of SAF-HOLLAND SE comprises the former members of the Board of Directors, Ingrid Jägering, Dr. Martin Kleinschmitt, Martina Merz and Carsten Reinhardt. The Deputy Chairman of the Management

Board of Webasto SE, Matthias Arleth, has been appointed to the Supervisory Board as a new appointee. The members of the Supervisory Board are elected for four years.

NEW ISIN DE000SAFH001 WITH HIGH RECOGNITION

Subsequent to the transfer of the registered office, the shares of SAF-HOLLAND SE are traded solely on the Frankfurt Stock Exchange. Since July 15, 2020, these have been listed under ISIN DE000SAFH001 and WKN SAFH00.

INKA KOLJONEN THE NEW CHIEF FINANCIAL OFFICER (CFO) SINCE SEPTEMBER 1, 2020

Effective September 1, 2020 the Supervisory Board appointed Inka Koljonen to the Management Board and as Chief Financial Officer. Within the SAF-HOLLAND Group, Ms. Koljonen is responsible for Finance, Accounting and Controlling, IT, Legal Affairs and Compliance, Internal Audit, Investor Relations and Corporate Communications.

Inka Koljonen succeeds Dr. Matthias Heiden, who left the company on June 30, 2020.

5

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Industry Environment

INDUSTRY ENVIRONMENT

SECTOR DEVELOPMENT: MUCH WEAKER TRUCK AND TRAILER

MARKETS

Production of heavy-duty trucks and trailers in the majority of relevant regions for SAF-HOLLAND - Europe, North and South America and India - contracted sharply in the first nine months of 2020 due to market conditions and COVID-19. However, the sometimes dramatic downwards trend seen in the preceding two quarters eased considerably in the third quarter. In China production figures at the end of September were substantially above previous years' figures.

EUROPEAN TRUCK REGISTRATIONS DOWN 35 PER CENT ON THE

LEVEL OF THE PREVIOUS YEAR

According to the European Automobile Manufacturers Association, ACEA, the number of new registrations of heavy-duty trucks (over 16 tons) in the European Union in the first nine months of 2020 were down 34.9 per cent on the level of the previous year. The two highest-volume markets, Germany and France, both recorded declines of 33.5 and 32.3 per cent respectively.

EUROPEAN TRAILER MARKET SLOWLY RECOVERING

Overall, the European trailer market was able to recover slightly in the third quarter. Nevertheless, there was a contraction of roughly 25 to 30 per cent in the period from January to September.

NORTH AMERICAN TRUCK MARKET REMAINS AT A LOW LEVEL

Production of Class 8 trucks in the first nine months of 2020 lay roughly 45 to 50 per cent below the figure for the comparative period of the prior year.

TRAILER MARKET IN NORTH AMERICA STILL WEAK

In contrast to the European trailer market, the North American trailer market was not able to recover in the third quarter. Production has fallen by roughly 40 to 45 per cent in the first nine months of 2020.

SUBDUED PRODUCTION IN THE SOUTH AMERICAN TRUCK AND TRAILER MARKET

Brazil, by far the largest market for trailers and heavy-duty trucks in South America was also unable to shield itself from the general market trend and recorded a fall in the production of trailers of approximately 10 to 15 per cent and 35 to 40 per cent in the production of heavy-duty trucks.

DEMAND FOR TRAILERS IN CHINA SEES STRONG RECOVERY

After a weak first quarter due to COVID-19, demand for trailers in China recovered strongly in the following two quarters. In sum, the production of trailers in the first nine months of 2020 laid roughly 10 percent up on the level of the prior year. Truck production laid 10 to 20 per cent higher than in the prior year.

MASSIVE SLUMP IN PRODUCTION IN INDIA

The recent weakness of the Indian truck and trailer market continued unabated in the first nine months of 2020. From January to September 2020, around 60 per cent fewer trailers and around 70 per cent fewer trucks were manufactured than in the same period last year.

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SAF-HOLLANDSE Quarterly Statement Q3 2020 | Net Assets, Financial Position and Financial Performance

NET ASSETS, FINANCIAL POSITION AND FINANCIAL PERFORMANCE

kEUR

Total

Q1-Q3/ 2020

in %

Total

Q1-Q3/2019

in %

Q1-Q3/2020

Adjustments

adjusted

of sales

Q1-Q3/2019

Adjustments

adjusted

of sales

Sales

708,698

-

708,698

100.0%

1,008,626

-

1,008,626

100.0%

Cost of sales

-589,694

8,504

-581,190

-82.0%

-844,385

9,116

-835,269

-82.8%

Gross profit

119,004

8,504

127,508

18.0%

164,241

9,116

173,357

17.2%

Other income

1,713

-522

1,191

0.2%

3,109

-1,850

1,259

0.1%

Impairment of goodwill

-

-

-

0.0%

-6,691

6,691

-

0.0%

Selling expenses

-44,324

6,315

-38,009

-5.4%

-53,181

5,590

-47,591

-4.7%

Administrative expenses

-47,139

5,040

-42,099

-5.9%

-54,258

8,195

-46,063

-4.6%

Research and development costs

-11,421

256

-11,165

-1.6%

-15,746

279

-15,467

-1.5%

Operating profit

17,833

19,593

37,426

5.3%

37,474

28,021

65,495

6.5%

Share of net profit of investments

accounted for using the equity method

1,110

-

1,110

0.2%

1,421

-

1,421

0.1%

EBIT

18,943

19,593

38,536

5.4%

38,895

28,021

66,916

6.6%

Finance income

1,762

-

1,762

0.2%

1,404

-

1,404

0.1%

Finance expenses

-10,483

-

-10,483

-1.5%

-10,151

-

-10,151

-1.0%

Finance result

-8,721

-

-8,721

-1.2%

-8,747

-

-8,747

-0.9%

Result before taxes

10,222

19,593

29,815

4.2%

30,148

28,021

58,169

5.8%

Income taxes

-2,270

-5,992

-8,262

-1.2%

-12,868

-2,430

-15,298

-1.5%

Income taxes in %

22.2%

27.7%

42.7%

26.3%

Result for the period

7,952

13,601

21,553

3.0%

17,280

25,591

42,871

4.3%

EXTRAORDINARY ITEMS

SAF-HOLLAND eliminates certain income and expense items to facilitate its operational management (see the notes on Alternative Performance Measures on page 19). The adjusted earnings presented below correspond to the management perspective.

In the first nine months of 2020 net expenses totalling EUR 19.6 million (previous year: EUR 28.0 million) were eliminated from earnings before interest and taxes (EBIT). These consist of restructuring expenses of EUR 11.7 million (previous year: EUR 14.0 million) and depreciation and amortisation of EUR 7.9 million (previous year: EUR 7.3 million) arising from purchase price allocations. In addition, expenses of EUR 6.7 million recorded in the comparable period of the prior year associated with the

impairment of goodwill in the China region were also eliminated. The restructuring expenses primarily consist of severance payments, costs for the conversion of the parent company into a European Company and the transfer of the registered office to Germany, costs for the restructuring programme FORWARD 2.0 and costs for site closures (see segment reporting, page 10).

Net expenses totalling EUR 8.5 million were eliminated from the cost of sales in the first nine months of 2020 (previous year: EUR 9.1 million). These consist of restructuring expenses of EUR 6.2 million (previous year: EUR 7.4 million) and depreciation and amortisation of EUR 2.3 million (previous year: EUR 1.7 million) arising from purchase price allocations.

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SAF-HOLLANDSE Quarterly Statement Q3 2020 | Net Assets, Financial Position and Financial Performance

Net expenses totalling EUR 6.3 million were eliminated from selling expenses in the first nine months of 2020 (previous year: EUR 5.6 million). These consist of restructuring expenses of EUR 1.1 million (previous year: EUR 0.3 million) and depreciation and amortisation of EUR 5.3 million (previous year: EUR 5.3 million) arising from purchase price allocations.

Moreover, expenses of EUR 5.0 million (previous year EUR 8.2 million) were eliminated from general administrative expenses, almost all of which relate to restructuring expenses.

With regard to research and development costs, an amount of EUR 0.3 million (previous year EUR 0.3 million) was eliminated, consisting almost solely of depreciation and amortisation arising from purchase price allocations.

The weighted average Group tax rate used to calculate the net result for the period increased slightly to 27.7 per cent (previous year: 26.3 per cent).

FINANCIAL PERFORMANCE

The development described below describes the changes in the most significant line items of the income statement in the reporting period after eliminating the extraordinary items discussed above.

GROUP SALES DOWN BY ALMOST 30 PER CENT ON THE PREVIOUS

YEAR DUE TO MARKET CONDITIONS AND COVID-19

Due to market conditions and COVID-19 Group sales in the first nine months of 2020 came to EUR 708.7 million, 29.7 per cent below the previous year's level of EUR 1,008.6 million. Currency effects amounted to EUR -10.3 million and resulted primarily from currency changes of both the Russian rouble and the Brazilian real against the Euro. Consequently, after eliminating the effects of exchange rates and acquisitions, sales decreased by 28.9 per cent to EUR 717.4 million.

Group sales by segment Q1-Q3 2020

in %

APAC

7.6 (Vj. 9.9)

EMEA

57.1 (Vj. 48.8)

Americas

35.3 (Vj. 41.3)

SHARE OF SPARE PARTS BUSINESS INCREASES SIGNIFICANTLY

Sales in the OE business decreased by 34.7 per cent or EUR 263.5 million to EUR 496.0 million in the reporting period from January to September 2020. The sales share of the OE business decreased from 75.3 per cent to 70.0 per cent.

in EUR thousands

Change

Q1-Q3/2020

Q1-Q3/2019

absolute

Change in %

Original equipment business

496,003

759,521

-263,518

-34.7%

Spare parts business

212,695

249,105

-36,410

-14.6%

Group sales

708,698

1,008,626

-299,928

-29.7%

Original equipment business

in % of Group sales

70.0%

75.3%

Spare parts business

in % of Group sales

30.0%

24.7%

By contrast, sales in the spare parts business only decreased by 14.6 per cent or EUR -36.4 million to EUR 212.7 million. Consequently, the sales share of the spare parts business increased from 24.7 per cent to 30.0 per cent.

8

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Net Assets, Financial Position and Financial Performance

ADJUSTED GROSS PROFIT MARGIN ABOVE THE LEVEL OF THE

PREVIOUS YEAR

Adjusted gross profit slipped to EUR 127.5 million in the first nine months of 2020 due to the sales situation (previous year: EUR 173.4 million). This includes impairment losses on inventories of EUR 8.6 million. Due to the higher share of the high-margin spare parts business, the adjusted gross margin came to 18.0 per cent, which lies above the gross margin achieved in the comparable period of the previous year of 17.2 per cent.

ADJUSTED EBIT MARGIN AT 5.4 PER CENT DESPITE IMPACT OF

COVID-19

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, which was more than offset by cost stickiness.

NUMBER OF EMPLOYEES ADJUSTED TO THE MARKET

ENVIRONMENT

As of 30 September 2020 SAF-HOLLAND employed 3,113 people worldwide (previous year: 3,923 employees). Compared to the previous year, the number of employees has therefore decreased by 20.6 per cent. The reduction in the headcount was spread over all regions in order to address the changed market conditions.

Number of employees by region

09/30/2020

09/30/2019

EMEA

1,415

1,458

Americas

1,318

1,871

APAC

380

594

Total

3,113

3,923

FINANCIAL RESULT STABLE

The financial result remained unchanged in the reporting period from January to September 2020 at EUR -8.7 million (previous year: a loss of EUR -8.7 million). Financial income improved by EUR 0.4 million to EUR 1.8 million mainly due to realised capital gains on foreign currency loans and dividends. Financial expenses rose by EUR 0.3million to EUR 10.5 million, mainly on account of interest expenses related to leases.

ADJUSTED NET PROFIT FOR THE PERIOD SIGNIFICANTLY DOWN ON THE PREVIOUS YEAR

When calculating the adjusted net profit for the period, a Group's weighted average tax rate of 27.7 per cent (previous year: 26.3 per cent) was applied. 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 of EUR 42.9 million.

Based on approximately 45.4 million ordinary shares outstanding, unchanged on the previous year, adjusted undiluted earnings per share for the reporting period from January to September 2020 amounted to EUR 0.47 (previous year: EUR 0.94).

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SAF-HOLLANDSE Quarterly Statement Q3 2020 | Net Assets, Financial Position and Financial Performance

SEGMENT REPORTING

EMEA REGION: ADJUSTED EBIT MARGIN VERY ROBUST DESPITE

COVID-19

EMEA

in EUR thousands

Change

Q1-Q3/2020

Q1-Q3/2019

absolute

Change in %

Sales

404,584

492,485

-87,901

-17.8%

EBIT

28,823

40,518

-11,695

-28.9%

EBIT margin in %

7.1%

8.2%

Additional depreciation and

amortization of property, plant

and equipment and intangible

assets from PPA

3,478

3,449

29

0.8%

PPA step-up from inventory

measuring of acquisition

-

3

-3

-100.0%

Restructuring and

transaction costs

2,809

2,768

41

1.5%

Adjusted EBIT

35,110

46,738

-11,628

-24.9%

Adjusted EBIT margin in %

8.7%

9.5%

Depreciation and amortization of

property, plant and equipment

and intangible assets

(excluding PPA)

13,208

11,441

1,767

15.4%

in % of sales

3.3%

2.3%

Adjusted EBITDA

48,318

58,179

-9,861

-16.9%

Adjusted EBITDA margin in %

11.9%

11.8%

In the EMEA region, sales declined in the first nine months of 2020 by 17.8 per cent to EUR 404.6 million (previous year: EUR 492.5 million) due to market conditions and COVID-19. Organic sales fell by 17.2 per cent to EUR 407.6 million.

Despite the significant sales decline, the EMEA region generated an adjusted EBIT of EUR 35.1 million (previous year: EUR 46.7 million) in the reporting period from January to September 2020 and an adjusted EBIT margin of 8.7 per cent (previous year: 9.5 per cent). The spare parts business had a strongly positive impact on the gross margin whereas the OE business had a slightly negative impact. This includes inventory write-

downs of EUR 4.7 million in response to the decrease in inventory turnover because of the COVID-19 pandemic.

The restructuring expenses of EUR 2.8 million consist mainly severance payments and the costs of changing the legal form of the parent company to a European Company (Societas Europaea, SE) and transferring the registered office to Germany.

AMERICAS REGION: EBIT MARGIN POSITIVE DESPITE MASSIVE SALES DECLINE

Americas

in EUR thousands

Change

Q1-Q3/2020

Q1-Q3/2019

absolute

Change in %

Sales

250,298

416,146

-165,848

-39.9%

EBIT

2,949

18,567

-15,618

-84.1%

EBIT margin in %

1.2%

4.5%

Additional depreciation and

amortization of property, plant

and equipment and intangible

assets from PPA

1,794

1,912

-118

-6.2%

Restructuring and

transaction costs

4,005

5,571

-1,566

-28.1%

Adjusted EBIT

8,748

26,050

-17,302

-66.4%

Adjusted EBIT margin in %

3.5%

6.3%

Depreciation and amortization of

property, plant and equipment

and intangible assets

(excluding PPA)

11,282

9,446

1,836

19.4%

in % of sales

4.5%

2.3%

Adjusted EBITDA

20,030

35,496

-15,466

-43.6%

Adjusted EBITDA margin in %

8.0%

8.5%

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

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SAF-HOLLANDSE Quarterly Statement Q3 2020 | Net Assets, Financial Position and Financial Performance

(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.

The restructuring expenses of EUR 4.0 million mainly consist of severance payments related to the extensive lay-offs at US locations and the costs of the FORWARD 2.0 restructuring programme.

APAC REGION: LOCKDOWN AND DELAYED RAMP-UP BURDEN

APAC

in EUR thousands

Change

Q1-Q3/2020

Q1-Q3/2019

absolute

Change in %

Sales

53,816

99,995

-46,179

-46.2%

EBIT

-12,829

-20,190

7,361

-36.5%

EBIT margin in %

-23.8%

-20.2%

Additional depreciation and

amortization of property, plant

and equipment and intangible

assets from PPA

2,604

1,927

677

35.1%

Impairment

-

6,691

-6,691

-100.0%

PPA step-up from inventory

measuring of acquisition

-

40

-40

-100.0%

Restructuring and transaction

costs

4,903

5,660

-757

-13.4%

Adjusted EBIT

-5,322

-5,872

550

-9.4%

Adjusted EBIT margin in %

-9.9%

-5.9%

Depreciation and amortization of

property, plant and equipment

and intangible assets (excluding

PPA)

2,177

2,656

-479

-18.0%

in % of sales

4.0%

2.7%

Adjusted EBITDA

-3,145

-3,216

71

-2.2%

Adjusted EBITDA margin in %

-5.8%

-3.2%

The APAC region generated sales of EUR 53.8 million in the first nine months of 2020 (previous year: EUR 100.0 million) due to market conditions and COVID-19. After eliminating the effects of exchange rates, sales decreased by 44.8 per cent to EUR 55.2 million compared with the previous year. The reason for this sharp sales decline was mainly the lockdown in China, Australia, India and Singapore, which lasted a number of weeks, the ceased export business as a result of the trade dispute between China and the USA and the delay in ramping-up the new Chinese plant in Yangzhou due to COVID-19.

Adjusted EBIT improved by EUR 0.6 million to EUR -5.3million. 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

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SAF-HOLLANDSE Quarterly Statement Q3 2020 | Net Assets, Financial Position and Financial Performance

margin whereas the OE business, by contrast, had a significantly negative impact. The savings realised in selling and administrative expenses had a positive effect.

The restructuring expenses of EUR 4.9 million mainly consist of the costs incurred from liquidating the Chinese subsidiary Corpco Beijing Technology and Development Co., and the closures of the Xiamen plant and a number of subsidiaries of the York Group in the course of the post-merger integration measures.

NET ASSETS

in EUR thousands

Change

09/30/2020

12/31/2019

absolute

Change in %

Non-current assets

500,681

520,805

-20,124

-3.9%

of which intangible assets

248,686

257,926

-9,240

-3.6%

of which property,

plant and equipment

204,686

216,736

-12,050

-5.6%

of which other

(financial) assets

47,309

46,143

1,166

2.5%

Current assets

463,262

458,439

4,823

1.1%

of which inventories

133,800

168,129

-34,329

-20.4%

of which trade receivables

110,640

126,000

-15,360

-12.2%

of which liquid assets

185,118

131,166

53,952

41.1%

of which other

(financial) assets

33,704

33,144

560

1.7%

Balance sheet total

963,943

979,244

-15,301

-1.6%

TOTAL ASSETS DOWN SLIGHTLY IN COMPARISON TO THE CLOSE

OF 2019

Total assets decreased by EUR -15.3 million or 1.6 per cent compared to the end of the 2019 financial year and amount to EUR 963.9 million as of September 30, 2020. The main factor in this regard is the reduction in intangible assets and property, plant and equipment.

EQUITY RATIO AT 31.5 PER CENT

in EUR thousands

Change

09/30/2020

12/31/2019

absolute

Change in %

Equity

303,913

318,007

-14,094

-4.4%

Non-current liabilities

454,309

326,081

128,228

39.3%

of which interest-bearing

loans and bonds

327,381

195,793

131,588

67.2%

Finance lease liabilities

29,497

25,521

3,976

15.6%

of which other non-current

liabilities

97,431

104,767

-7,336

-7.0%

Current liabilities

205,721

335,156

-129,435

-38.6%

of which interest-bearing

loans and bonds

53,141

153,393

-100,252

-65.4%

Finance lease liabilities

7,474

8,126

-652

-8.0%

of which trade payables

105,759

110,366

-4,607

-4.2%

of which other

current liabilities

39,347

63,271

-23,924

-37.8%

Balance sheet total

963,943

979,244

-15,301

-1.6%

In comparison to December 31, 2019, equity has decreased by EUR -

14.1 million to EUR 303.9 million. The net profit for the period of EUR 8.0 million increased equity accordingly. Exchange differences arising from the translation of foreign operations of EUR -22.2 million had the contrary effect. Coupled with the small decrease in the balance sheet total, this leads to a slight decrease in the equity ratio to 31.5 per cent (December 31, 2019: 32.5 per cent).

Non-current liabilities increased by EUR 128.2 million in comparison to December 31, 2019 to EUR 454.3 million. The main factor was the issue of the promissory note loan in March 2020.

The decrease in current liabilities is mainly due to the repayment of the convertible bond on September 12, 2020 and a lower level of other current liabilities.

12

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Net Assets, Financial Position and Financial Performance

NET WORKING CAPITAL RATIO SIGNIFICANTLY BELOW ON THE

PREVIOUS YEAR

Net working capital

in EUR thousands

Change

09/30/2019

to

09/30/2020

09/30/2019

09/30/2020

Change in %

Inventories

133,800

183,012

-49,212

-26.9%

Trade receivables

110,640

166,614

-55,974

-33.6%

Trade payables

-105,759

-132,303

26,544

-20.1%

Net working capital

138,681

217,323

-78,642

-36.2%

Sales (LTM)

984,227

1,328,328

-344,101

-25.9%

Net working capital ratio

14.1%

16.4%

The net working capital ratio, measured as the ratio of net working capital to group sales over the last 12 months, improved significantly compared with the previous year, improving from 16.4 per cent to 14.1 per cent. A sharp decrease in inventories and trade receivables was countered by lower trade payables. This was countered by the decline in 12-month sales due to market conditions and COVID-19.

13

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Net Assets, Financial Position and Financial Performance

FINANCIAL POSITION

Financial position

in EUR thousands

Q1-Q3/2020

Q1-Q3/2019

Cash flow from operating activities

79,787

44,721

Cash flow from investing activities (property, plant and

equipment/ intangible assets)

-15,426

-32,396

Operating free cash flow

64,361

12,325

Cash flow from investing activities (acquisition of subsidiaries)

-21,193

-10,886

Total free cash flow

43,168

1,439

Other

-23,876

-62,519

Change in net financial liabilities

19,292

-61,080

SIGNIFICANT IMPROVEMENT IN FREE CASH FLOW FROM

OPERATING ACTIVITIES

The net cash flow from operating activities in the first nine-months of 2020 came to EUR 79.8 million, significantly above the level of the comparable period of the previous year of EUR 44.7 million. The increase is mainly attributable to the positive contribution from working capital management. It should be noted that the volume of factoring increased only slightly from EUR 35.2 million in the previous year to EUR 35.5 million in the reporting period from January to September 2020.

The net cash flow from investing activities in property, plant 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 focus of investing activities was on the further automation of production processes at various locations in the Americas region and Germany.

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 LIABILITIES SCALED BACK

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).

14

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Opportunities and Risk Report

OPPORTUNITIES AND RISK REPORT

There have been no significant changes to the statements made on risks and opportunities in the Annual Report 2019 (pages 74 to 83) with the following exception:

Compared to the assessment in the half-year financial report the extent of impairment risks presented under operating risks has increased in light of the continuing spread of COVID-19 from "medium" to "high".

15

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Outlook

OUTLOOK

SECTOR-SPECIFIC DEVELOPMENT: COVID-19 VIRUS DAMPENING

GLOBAL COMMERCIAL VEHICLE MARKETS

The prospects for 2020 remain challenging in the commercial vehicle markets that are relevant for SAF-HOLLAND. Based on the breakdown by customer segment into the OE (truck, trailer) and the aftermarket business, the regions relevant to SAF-HOLLAND vary in their importance.

While the EMEA region (approximately 3.5 per cent of Group sales) and the Americas region (approximately 8.1 per cent of Group sales) are the most relevant for the truck segment, in the OE trailer and aftermarket segments SAF-HOLLAND operates worldwide.

EUROPEAN TRUCK MARKET SIGNIFICANTLY DOWN ON THE

PREVIOUS YEAR

European truck production will decline sharply in 2020. According to industry experts, production is expected to fall by roughly 30 to 35 per cent. It should be noted, however, that the European truck market is only of minor importance for SAF-HOLLAND.

DECLINING DEMAND FOR TRAILERS IN EUROPE

Industry experts anticipate a decline in production of trailers of 15 to 20 per cent for the full year 2020. Aside from the dampening effect of the COVID-19 virus, this is based on the fact that many European fleet operators have modernised and expanded their vehicle fleets in recent years.

TRUCK MARKET IN NORTH AMERICA CONTRACTS SHARPLY

Market observers expect the production of Class 8 trucks in North America to contract by 40 to 45 per cent year-on-year, despite a slight recovery in the fourth quarter.

NORTH AMERICAN TRAILER MARKET AT A LOWER LEVEL

A gradual return to stability is also anticipated for the North American trailer market in the fourth quarter. On the bottom line, it is expected that 40 to 45 per cent fewer trailers will roll off the production belts in 2020 than in the strong previous year.

BRAZILIAN MARKET FOR TRUCKS AND TRAILERS STILL IN REVERSE

With regard to Brazil, by far the largest market in South America, market researchers are projecting a painful decrease in production of heavy-duty trucks of 30 to 35 per cent and 5 to 10 per cent in trailers for the full year 2020.

CHINESE TRAILER MARKET SIGNIFICANTLY UP ON THE PREVIOUS YEAR

Market experts anticipate that the Chinese truck market will cool off slightly in the fourth quarter, after a strong second and third quarter. In total, truck production will nevertheless lie up to 5 per cent above the prior year. Still, it is important to keep in mind that the Chinese truck market has no significance for SAF-HOLLAND.

The Chinese trailer market will also see a slightly weaker fourth quarter and is expected to fall by approximately 5 to 10 per cent below the level of the year 2019.

NO REAL SIGNS OF RECOVERY IN INDIA

Market experts are projecting that the negative trend will ease slightly in the fourth quarter. Nevertheless, a fall in production of between 40 and 50 per cent is forecasted for both the truck and the trailer markets.

16

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Outlook

BUSINESS OUTLOOK

The Management Board of SAF-HOLLAND SE continues to anticipate a decline in Group sales of between 20 to 30 per cent on the previous year.

Based on the preliminary figures as of for October 2020, the Management Board of SAF-HOLLAND SE has decided to 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.

17

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Events after the Balance Sheet Date

EVENTS AFTER THE BALANCE SHEET DATE

There have not been any events of relevance since the reporting date that would require reporting here.

18

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Alternative Performance Measures

ALTERNATIVE PERFORMANCE MEASURES

In addition to the key figures defined or specified in the IFRS financial reporting framework, SAF-HOLLAND also reports key financial ratios derived from or based on the prepared financial statements. These are known as Alternative Performance Measures (APM).

SAF-HOLLAND considers these key financial ratios as important supplemental information for investors and other readers of the financial reports and press releases. These financial ratios should therefore be seen in addition to rather than as a substitute for the information prepared in accordance with IFRS.

In complying with the requirements of the European Securities and Markets Authority (ESMA) Guidelines on Alternative Performance Measures (APM), SAF-HOLLAND provides an overview of the Alternative Performance Measures used, as well as their definition and compilation, on the SAF-HOLLAND website at https://corporate.safholland.com/en/ investor-relations/alternative-performance-measures.

19

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Consolidated Statement of Comprehensive Income

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

kEUR

Q1-Q3/2020

Q1-Q3/2019

Q3/2020

Q3/2019

Sales

708,698

1,008,626

232,445

313,160

Cost of sales

-589,694

-844,385

-191,144

-267,644

Gross profit

119,004

164,241

41,301

45,516

Other income

1,713

3,109

910

2,394

Impairment of Goodwill

-

-6,691

-

-6,691

Selling expenses

-44,324

-53,181

-15,566

-16,394

Administrative expenses

-47,139

-54,258

-14,225

-18,126

Research and development expenses

-11,421

-15,746

-3,264

-5,018

Operating result

17,833

37,474

9,156

1,681

Share of net profit of investments accounted for using the equity method

1,110

1,421

356

470

Earnings before interest and taxes

18,943

38,895

9,512

2,151

Finance income

1,762

1,404

359

703

Finance expenses

-10,483

-10,151

-2,967

-4,325

Finance result

-8,721

-8,747

-2,608

-3,622

Result before income tax

10,222

30,148

6,904

-1,471

Income tax

-2,270

-12,868

-630

-2,017

Result for the period

7,952

17,280

6,274

-3,488

Net result for the period

Attributable to:

Equity holders of the parent

7,832

16,135

6,080

-4,200

Shares of non-controlling interests

120

1,145

194

712

Other comprehensive income

Items that may be reclassified subsequently to profit or loss

Exchange differences on translation of foreign operations

-22,214

14,916

-12,872

10,952

Other comprehensive income

-22,214

14,916

-12,872

10,952

Comprehensive income for the period

-14,262

32,196

-6,598

7,464

Attributable to:

Equity holders of the parent

-13,466

31,072

-6,617

6,792

Shares of non-controlling interests

-796

1,124

19

672

Basic earnings per share in EUR

0.17

0.36

0.13

-0.09

20

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Consolidated Balance Sheet

CONSOLIDATED BALANCE SHEET

kEUR

kEUR

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Assets

Equity and liabilities

Non-current assets

500,681

520,805

Total equity

303,913

318,007

Goodwill

77,830

78,826

Equity attributable to equity holders of the parent

300,309

304,981

Other intangible assets

170,856

179,100

Subscribed share capital

45,395

454

Property, plant and equipment

204,686

216,736

Share premium

224,103

269,044

Investments accounted for using the equity method

16,852

16,522

Legal reserve

45

45

Financial assets

608

1,147

Other reserve

720

720

Other non-current assets

2,407

2,868

Retained earnings

76,623

59,903

Deferred tax assets

27,442

25,606

Accumulated other comprehensive income

-46,577

-25,185

Current assets

463,262

458,439

Shares of non-controlling interests

3,604

13,026

Inventories

133,800

168,129

Non-current liabilities

454,309

326,081

Trade receivables

110,640

126,000

Pensions and other similar benefits

30,957

30,894

Income tax receivables

2,679

4,066

Other provisions

7,314

7,637

Other current assets

27,718

25,741

Interest bearing loans and bonds

327,381

195,793

Financial assets

3,307

3,337

Lease liabilities

29,497

25,521

Cash and cash equivalents

185,118

131,166

Other financial liabilities

9,249

13,031

Balance sheet total

963,943

979,244

Other liabilities

743

691

Deferred tax liabilities

49,168

52,514

Current liabilities

205,721

335,156

Other provisions

12,392

12,552

Interest bearing loans and bonds

53,141

153,393

Lease liabilities

7,474

8,126

Trade payables

105,759

110,366

Income tax liabilities

1,630

244

Other financial liabilities

1,240

21,719

Other liabilities

24,085

28,756

Balance sheet total

963,943

979,244

21

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Consolidated Statement of Cash Flows

CONSOLIDATED STATEMENT OF CASH FLOWS

kEUR

Q1-Q3/2020

Q1-Q3/2019

Cash flow from operating activities

Result before income tax

10,222

30,148

-

Finance income

-1,762

-1,404

+

Finance expenses

10,483

10,151

+/-

Share of net profit of investments accounted for

using the equity method

-1,110

-1,421

  • Amortization and depreciation of intangible assets

and property, plant and equipment

34,543

39,644

+

Allowance of current assets

13,888

8,279

+/-

Loss/Gain on disposal of property, plant and equipment

100

-707

  • Dividends from investments accounted for using the

equity method

21

1,305

Cash flow before change of net working capital

66,385

85,995

+/-

Change in other provisions and pensions

715

2,011

+/-

Change in inventories

15,783

-556

+/-

Change in trade receivables and other assets

6,201¹

-32,362¹

+/-

Change in trade payables and other liabilities

-5,066

3,254

Change of net working capital

17,633

-27,653

Cash flow from operating activities before income tax paid

84,018

58,342

-

Income tax paid

-4,231

-13,621

Net cash flow from operating activities

79,787

44,721

Cash flow from investing activities

-

Purchase of property, plant and equipment

-12,837

-31,935

-

Purchase of intangible assets

-3,312

-4,926

kEUR

Q1-Q3/2020

Q1-Q3/2019

+

Proceeds from sales of property, plant and equipment

723

4,465

+

Payment for the acquisition of the outstanding

shares in V.Orlandi S.p.A.

-21,193

-

-

Payments for acquisition of subsidiaries net of cash

-

-10,886

+

Proceeds from sales of financial assets

424

-

+

Interest received

507

488

Net cash flow from investing activities

-35,688

-42,794

Cash flow from financing activities

  • Dividend payments to shareholders of

SAF-HOLLAND SE (previously S.A.)

-

-20,427

+

Proceeds from promissory note loan

250,000

-

  • Repayments of current and non-current

financial liabilities

-32,500

-

-

Payments for repayment of bonds

-99,167

-

  • paid transaction costs relating to the issuance

of the promissory note loan

-3,019

-

-

Payments for lease liabilities

-6,776

-6,510

-

Interest paid

-4,261

-3,804

+/-

Change in drawings on the credit line and other

financing activities

-85,618

-3,290

Net cash flow from financing activities

18,659

-34,031

Net increase/decrease in cash and cash equivalents

62,758

-32,104

+/-

Effect of changes in exchange rates on cash

and cash equivalents

-8,806

3,202

Cash and cash equivalents at the beginning of the period

131,166

155,009

Cash and cash equivalents at the end of the period

185,118

126,107

1 As of September 30, 2020, trade receivables in the amount of € 35.5 million (previous year: € 35.2 million) were sold in the context of a factoring contract. Assuming the legal validity of receivables, no further rights of recourse to SAF-HOLLAND exist from the receivables sold.

22

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Segment Information

SEGMENT INFORMATION

EMEA¹

Americas²

APAC³

Total

kEUR

Q1-Q3/2020

Q1-Q3/2019

Q1-Q3/2020

Q1-Q3/2019

Q1-Q3/2020

Q1-Q3/2019

Q1-Q3/2020

Q1-Q3/2019

Sales

404,584

492,485

250,298

416,146

53,816

99,995

708,698

1,008,626

Adjusted EBIT

35,110

46,738

8,748

26,050

-5,322

-5,872

38,536

66,916

Adjusted EBIT margin in %

8.7

9.5

3.5

6.3

-9.9

-5.9

5.4

6.6

Amortization and depreciation of intangible assets

and property, plant and equipment (without PPA)

13,208

11,441

11,282

9,446

2,177

2,656

26,667

23,543

in % of sales

3.3

2.3

4.5

2.3

4.0

2.7

3.8

2.3

Adjusted EBITDA

48,318

58,179

20,030

35,496

-3,145

-3,216

65,203

90,459

Adjusted EBITDA margin in %

11.9

11.8

8.0

8.5

-5.8

-3.2

9.2

9.0

Purchase of property, plant and equipment

and intangible assets

7,156

15,126

6,706

15,612

2,287

6,123

16,149

36,861

in % of sales

1.8

3.1

2.7

3.8

4.3

6.1

2.3

3.7

Employees core workforce (at the reporting date)

1,415

1,458

1,318

1,871

380

594

3,113

3,923

  1. Includes Europe, Middle East and Africa.
  2. Includes Canada, the USA as well as Central and South America.
  3. Includes Asia/Pacific, India and China.

23

SAF-HOLLANDSE Quarterly Statement Q3 2020 | Financial Calendar and Contact Information / Imprint

FINANCIAL CALENDAR AND

CONTACT INFORMATION

FINANCIAL CALENDAR

November 25, 2020

Investor and Analyst Day 2020

CONTACTS

SAF-HOLLAND SE

Hauptstrasse 26

D-63856 Bessenbach

www.safholland.com

Michael Schickling

ir@safholland.de

Phone: + 49 (0) 6095 301-617

Alexander Pöschl

ir@safholland.de

Phone: + 49 (0) 6095 301-117

Klaus Breitenbach

ir@safholland.de

Phone: + 49 (0) 6095 301-565

IMPRINT

Responsibility:

SAF-HOLLAND SE

Hauptstrasse 26

D-63856 Bessenbach

Date of publication: November 18, 2020

Editors: Michael Schickling, SAF-HOLLAND SE;

Alexander Pöschl, SAF-HOLLAND SE;

Klaus Breitenbach, SAF-HOLLAND SE

Produced inhouse using www.firesys.de.

The quarterly statement is also available in German.

In cases of doubt, the German version shall prevail.

Disclaimer

This report contains certain statements that are neither reported financial results nor other historical information. This report contains forward- looking statements. Such forward-looking statements are based on certain assumptions, expectations and forecasts made at the time of publication of the report. Consequently, they are inherently subject to risks and uncertainties. Moreover, the actual events could diverge significantly from the events described in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the ability of SAF-HOLLAND SE to control or estimate precisely, such as future market conditions and economic developments, the behaviour of other market participants, the achievement of anticipated synergies, and legal and political decisions. Readers are cautioned that these forward-looking statements only apply as of the date of this publication. Likewise, SAF-HOLLAND SE does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of publication of these materials.

24

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