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DGAP-News: SAF-HOLLAND S.A.: Successful second quarter of 2014 with strong growth in sales and earnings

August 6, 2014

DGAP-News: SAF-HOLLAND S.A. / Key word(s): Half Year Results SAF-HOLLAND S.A.: Successful second quarter of 2014 with strong growth in sales and earnings 07.08.2014 / 07:05 --------------------------------------------------------------------- SAF-HOLLAND: Successful second quarter of 2014 with strong growth in sales and earnings * Half-year sales increase by more than 10 percent to EUR 482 million * Further benefit from positive industry environment * Adjusted EBIT increases by 22.5 percent to EUR 36.5 million * Sales and earnings targets for 2014 and 2015 confirmed Luxembourg, August 7, 2014 - SAF-HOLLAND, the global supplier for the truck and trailer industry, continues its positive business development. In the second quarter, Group sales increased to EUR 246.7 million (previous year: EUR 225.5 million). Half-year sales rose to EUR 482.0 million (previous year: EUR 435.6 million) representing an increase of 10.7 percent on the prior-year period. Currency adjusted, sales even increased to EUR 490.8 million in the half-year. The strong expansion of sales volume was linked to a disproportionately high increase in profitability. Compared with the same period of the previous year, adjusted EBIT increased in the first six months by 22.5 percent to EUR 36.5 million (previous year: EUR 29.8 million), while the adjusted EBIT margin rose to 7.6 percent (previous year: 6.8 percent). Adjusted earnings per share increased to EUR 0.47 (previous year: EUR 0.37) with the number of shares remaining unchanged at 45.4 million shares. Sales increase of over 15 percent in Europe The European business made a significant contribution to the substantial sales increase. In this region, SAF-HOLLAND was able to expand sales by 15.1 percent to EUR 261.2 million (previous year: EUR 227.0 million). The Company reaped disproportionately large benefits from the favorable industry environment and further expanded its good position in this core market. Detlef Borghardt, CEO of SAF-HOLLAND: "The higher demand we expected in the European trailer market continued into the second quarter as expected following the strong first quarter." With a share in Group sales of 54.2 percent (previous year: 52.1 percent), Europe is the most important sales region for SAF-HOLLAND. Sales generated in North America in the first six months amounted to EUR 174.9 million (previous year: EUR 175.2 million) and were thus at nearly the same level as in the prior year period. In the second quarter, it was possible to beat the prior-year period with sales growth of 3.0 percent to EUR 91.9 million (previous year: EUR 89.2 million). The North American sales figures are characterized by unfavorable currency relations in the translation of the Canadian dollar and the US dollar into the Group currency euro. Adjusted for these currency effects, SAF-HOLLAND's half-year sales totaled EUR 182.6 million in the region. In countries outside of the core markets of Europe and North America, sales volume amounted to EUR 45.9 million in the first half of the year (previous year: EUR 33.4 million), which corresponds to growth of 37.4 percent. The large increase is based on organic growth. Furthermore, the newly added Corpco Beijing Technology and Development Co., Ltd. (Corpco) has been included in the scope of consolidation since the first quarter of 2014. The Chinese company is specialized in suspension systems for buses. Overall, the emerging markets increased their contribution to Group sales in the first half of the year to 9.5 percent (previous year: 7.7 percent). Trailer Systems: Sales and profitability increased The Trailer Systems Business Unit increased sales in the first six months by 12.7 percent to EUR 280.8 million (previous year: EUR 249.2 million). As a result of the substantial increase, the Business Unit's share in Group sales amounted to 58.2 percent (previous year: 57.2 percent). In Europe, the sales volume of the business area was supported by the favorable market environment, as numerous fleet operators had shifted their trailer orders from the fourth quarter of 2013 to the first quarter of 2014, initially investing in trucks in view of the Euro 6 standard. In the second quarter of 2014, the Business Unit was able to continue benefiting from the strong market. The first half of the year also developed as expected for the Business Unit in North America. SAF-HOLLAND will gradually utilize the production capacities added in this region in 2013. The package of measures introduced in the second half of 2013 to increase the profitability of the Business Unit showed initial positive effects. The Business Unit's adjusted EBIT in the first half of the current year showed strong growth to EUR 11.6 million (previous year: EUR 5.1 million), as a result of which the adjusted EBIT margin more than doubled rising by 2,0 percent to 4.1 percent. The implementation of the approved measures is proceeding as planned, especially with regard to the consolidation of the German plants, which is scheduled for completion in the second half of 2015. Powered Vehicle Systems: Improved business development in second quarter The Powered Vehicle Systems Business Unit recorded sales growth to EUR 78.9 million (previous year: EUR 75.5 million) in the first six months. It should be taken into account that the Business Unit generates the majority of its sales in North America, and is therefore affected by the unfavorable currency situation in the translation of dollar sales to the Group currency euro. Sales of the area in the months from April to June were 16.2 percent higher than the same figure in the first quarter of 2014. The weaker business development at the beginning of the year - due to the hard winter in the USA and the still hesitant awarding of orders from the public sector following the US budget crises - was well compensated for by the end of the first half of the year. Adjusted EBIT for the Business Unit totaled EUR 5.3 million (previous year: EUR 6.7 million), corresponding to an adjusted EBIT margin of 6.7 percent (previous year: 8.9 percent). The earnings figures, which were weaker than the prior-year period as expected, primarily reflect structural effects such as the unfavorable customer and product mix in the first quarter and seasonal influences from the Corpco integration. The Business Unit generated most of the adjusted EBIT for the half-year in the second quarter. The development of both sales and earnings confirm the positive trend seen in the course of business in this area. Aftermarket: Development with double-digit growth rates The Aftermarket Business Unit increased its sales in the half-year under review by 10.3 percent to EUR 122.3 million (previous year: EUR 110.9 million). The segment thereby further secured its orders received. The positive development was aided by growing success in Mexico and South America where SAF-HOLLAND decisively expanded spare parts distribution in 2013. Adjusted EBIT for the Business Unit increased to EUR 19.6 million (previous year: EUR 18.0 million) with an adjusted EBIT margin of 16.0 percent (previous year: 16.2 percent). From a geographical perspective, the Business Unit is, among other things, strengthening the spare parts business in the Southeast Asian market this year. Opened in the first half of the year, the Malaysian Parts Distribution Center plays an important role here. Investments in distribution and manufacturing In the first half of the year, SAF-HOLLAND invested EUR 14.6 million throughout the Group (previous year: EUR 10.3 million). The costs were primarily influenced by the acquisition of Corpco and thus above those of the previous year as planned. Investments in the current financial year have focused on the modernization and expansion of production facilities at the primary location in Bessenbach as well as on the expansion of business activities in Dubai. Dividend of EUR 0.27 per share for financial year 2013 At the Annual General Meeting of SAF-HOLLAND S.A. on April 24, 2014, shareholders approved the recommendation of the Board of Directors and elected to distribute a dividend of EUR 0.27 per share for financial year 2013. The dividend was distributed on April 25, 2014. Wilfried Trepels, CFO of SAF-HOLLAND: "We are pleased that we were again able to reach the requirements in the past financial year for the payment of a dividend and were able to distribute 50 percent of the available net earnings as a dividend." SAF-HOLLAND's dividend policy calls for 40 to 50 percent of available net earnings to be distributed as a dividend on a continual basis when the equity ratio is about 40 percent. Business development forecast confirmed With the expectation that the industry environment does not worsen and overall economic or further negative political developments do not occur, SAF-HOLLAND confirms the forecast for the full-year as laid out in March of this year. For financial year 2014, SAF-HOLLAND thereby strives to achieve Group sales between EUR 920 and 945 million - with adjusted EBIT of approximately EUR 70 million and a rising adjusted EBIT margin. The mid-term target introduced in December 2013 also remains unchanged. For financial year 2015, SAF-HOLLAND thereby continues to plan Group sales of EUR 980 million to EUR 1.035 billion and an adjusted EBIT margin of 9 to 10 percent. Notes: EBIT was adjusted for the following items that are not originally attributable to the operating business: Depreciation and amortization from the purchase price allocation and reversals of impairment of intangible assets from impairment tests as well as restructuring and integration costs. The key figures chart included in the press release can be accessed at http://corporate.safholland.com/de/investor/finanznachrichten/pressemittei lungen.html. Company Profile With sales of approximately EUR 860 million in 2013 and more than 3,000 employees, SAF-HOLLAND S.A. is one of the world's 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 trailer axle systems and suspension systems, coupling devices, kingpins, and landing legs, among other things. SAF-HOLLAND sells its products on six continents to Original Equipment Manufacturers (OEMs) in the replacement parts market and, in the aftermarket business, to the OEM's Original Equipment Suppliers (OESs), as well as by means of a global service and distribution network. SAFHOLLAND also sells its products to end users and service centers using this network. 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. is listed in the Prime Standard of the Frankfurt Stock Exchange and is a component of the SDAX index (ISIN: LU0307018795). Contact: SAF-HOLLAND GmbH Claudia Hoellen Hauptstraße 26 63856 Bessenbach Phone +49 6095 301-617 claudia.hoellensafholland.de --------------------------------------------------------------------- 07.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: SAF-HOLLAND S.A. 68-70, boulevard de la PÉtrusse L-2320 Luxembourg Grand Duchy of Luxembourg Phone: +49 6095 301 - 0 Fax: +49 6095 301 - 260 E-mail: info@safholland.de Internet: www.safholland.com ISIN: LU0307018795, DE000A1HA979, WKN: A0MU70, A1HA97 Indices: SDAX Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, DÜsseldorf, Hamburg, MÜnchen, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 281155 07.08.2014


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