SAF-Holland SE · XETR:SFQ
SAF-Holland — FY2022 Earnings Presentation
34 slides from SAF-Holland's earnings presentation, Mar 30, 2023
Slide 1: SAF-HOLLAND SE Investors and Analysts Conference FY 2022
CONFERENCE CALL PRESENTATION SAF-HOLLAND SE Investors and Analysts Conference FY 2022 MARCH 30, 2023 Q4 2022 Call Presentation < 1 >
Slide 2: Financial Figures 2022 - Highlights
Financial Figures 2022 - Highlights < 2 >
Slide 3: Q4 2022 Highlights
Q4 2022 Highlights Double-digit sales growth Continued strong customer demand led to sales growth of 21.0% YoY to EUR 389.5 mn in Q4 2022; organic growth of 13.0% Higher input costs (steel, freight and energy) largely passed on to customers; additional Inflation mitigation efficiency gains achieved
Slide 4: Guidance exceeded: Strong performance in FY 2022 despite a challenging economic environment
Guidance exceeded: Strong performance in FY 2022 despite a challenging economic environment YoY sales growth Sales Adjusted EPS EUR 1,565 MN EUR 1.82 EMEA +11.0% (FY 2021: EUR 1,247 MN) (FY 2021: EUR 1.35) Adj. EBIT Margin Americas +47.0% 8.0% (FY 2021: 7.5%) NWC ratio Operating FCF* APAC +44.5% 12.
Slide 5: Group sales – Double-digit growth in each quarter
Group sales – Double-digit growth in each quarter Sales (In EUR million) • FY 2022 sales up 25.6%; adjusted for FX and M&A effects + 25.6% +17.9% • Favorable FX effects add EUR 78.7 mn or 6.3 percentage points (related mainly to US dollar) • Main drivers: strong customer demand, market share 1.565.1
Slide 6: Top line drivers: Americas region bolstering its share of Group sales
Top line drivers: Americas region bolstering its share of Group sales – Trailer OE business accounts for more than 60% Sales development (by region, by customer category) 8.9% 10.2% EMEA 52.1% EMEA 32.2% FY 2022 Americas FY 2021 58.9% Americas 37.7% APAC APAC 28.1% 26.9% Trailer OE Trailer OE FY 202
Slide 7: Group gross margin – Sequential yoy improvement in the course of 2022
Group gross margin – Sequential yoy improvement in the course of 2022 Gross profit 16.8% 16.6% • FY 2022 gross margin almost stable at 16.6% of sales (In EUR mn and % of sales) (PY: 16.8%) • Material price inflation, in particular steel, freight and energy prices, adversely impacted the gross margin
Slide 8: Group adjusted EBIT margin reaches the upper end of the target corridor
Group adjusted EBIT margin reaches the upper end of the target corridor Adj. EBIT (In EUR mn and % of sales) • Group adjusted EBIT increased by 33.8% 8.0% • Adjusted EBIT margin at 8.0%, reaching the upper end 7.5% of the target corridor of 7.0-8.0% • Margin improvement mainly a result of strict cos
Slide 9: EMEA FY and Q4 2022 – Sales
EMEA FY and Q4 2022 – Sales Sales +11.0% (In EUR mn) • FY 2022 sales up 11.0%, driven by truck and trailer OE business as well as the aftermarket • OE business in parts benefited from catch-up investments of fleet operators following a low level of 815.3 734.6 investments during the pandemic • Organ
Slide 10: EMEA FY and Q4 2022 – Adj. EBIT
EMEA FY and Q4 2022 – Adj. EBIT Adj. EBIT 9.2% (In EUR mn and % of sales) 6.5% • Earnings impacted by high steel and intermediate prices as well as sharp increases in freight and energy costs • Price inflation passed on to a large extend but with a 67.2 significant delay 52.7 • FY 2022 adjusted marg
Slide 11: Americas FY and Q4 2022 – Sales
Americas FY and Q4 2022 – Sales Sales • FY 2022 sales up 47.0% driven by all customer (In EUR mn) +47.0% segments • Structural growth with air disc brakes and mechanical suspensions in trailer business 590.6 • Adjusted for favourable FX effects from the 401.8 depreciation of the euro against the dol
Slide 12: Americas FY and Q4 2022 – Adj. EBIT more than doubles
Americas FY and Q4 2022 – Adj. EBIT more than doubles Adj. EBIT 9.5% (In EUR mn and % of sales) • Margin improvement of 3.5 pp as a result of 6.0% economies of scale, mix effects and efficiency gains • General and administrative expenses and selling expenses increased at a lower percentage rate than
Slide 13: APAC FY and Q4 2022 – Sales
APAC FY and Q4 2022 – Sales Sales (In EUR mn) +44.5% • FY 2022 sales up 44.5% • Organic growth of 37.5% • Growth fuelled by strong trailer OE business in India and Australia 159.2 • Capacity expansion at the site in Pune (India) by a total 110.2 of 50% to serve the expected rising demand • Governmen
Slide 14: APAC FY and Q4 2022 – Adj. EBIT
APAC FY and Q4 2022 – Adj. EBIT 10.1% Adj. EBIT (In EUR mn and % of sales) 1.7% • Solid adjusted EBIT margin of 10.1% in FY 2022 16.0 • Sharp rise in volumes and sales had a positive impact on earnings due to operating leverage, especially in India • Additional restructuring charges (EUR 1.4 mn) and
Slide 15: Group P&L: Reconciliation from adjusted EBIT to EPS
Group P&L: Reconciliation from adjusted EBIT to EPS In EUR thsd. Q4 2022 Q4 2021 Change in % FY 2022 FY 2021 Change in % Adjusted EBIT 32,320 21,852 47.9 124,601 93,128 33.8 Adjusted EBIT margin in % 8.3 6.8 1.5PP 8.0 7.5 0.5 pp Total adjustments 6,505 12,370 -47.4 23,110 20,988 10.1 EBIT 25,815 9,4
Slide 16: Group P&L: Disproportionate earnings growth
Group P&L: Disproportionate earnings growth • Adjusted EBIT amounted to a record-breaking EUR 124.6 mn up 33.8% on PY Major one-offs adjusted: Restructuring and transaction cost totalling EUR 9.1 mn (of which EUR 6.2 mn transaction and legal fees in connection with Haldex transaction) as well as dep
Slide 17: Dividend increase to EUR 0.60 per share proposed to AGM
Dividend increase to EUR 0.60 per share proposed to AGM Target payout ratio of 40-50%* • Management Board and Supervisory Board propose a dividend of EUR 0.60 per share at the 49.9 Annual General Meeting on May 23, 2023 50% 46.4 43.2 44.6 • Dividend proposal in line with long-term 42.4 dividend poli
Slide 18: Equity ratio declines exclusively due to the acquisition of Haldex
Equity ratio declines exclusively due to the acquisition of Haldex • Compared to December 31, 2021, equity rose by a total of EUR 70.3 mn as of year-end 2022 36.6% 36.8% 37.3% 33.1% 34.6% • Equity increased due to the result for the period of EUR 32.6% 32.6% 32.2% 29.5% 61.2 million, currency effect
Slide 19: 280 basis points improvement in the net working capital ratio
280 basis points improvement in the net working capital ratio Net working capital (In % of sales) 20% • Net working capital ratio at 12.0%, 18% 17.4% down 2.8 pp from previous year 15.9% • YoY increase in net working capital of 15.5% 15.7% 16% only 1.9% to EUR 188.0 mn compared 14.8% 14.8% 14.4% to
Slide 20: Improvements in all NWC components
Improvements in all NWC components Inventories (in EUR mn of sales) and DIO (in days) Trade payables (in EUR mn of sales) and DPO (in days) 250 237.0 237.9 200.0 179.3 176.2 187.3 211.9 202.2 163.4 160.6 159.0 195.3 194.0 147.4 145.8 200 176.0 155.8 150.0 150 126.4 107.2 100.0 67 66 100 71 71 73 68
Slide 21: Cash flows: Sequentially improved operating free cash flow generation
Cash flows: Sequentially improved operating free cash flow generation Net cash flow from operating activities (in EUR million) • FY2022 net cash flow from operating 2021 activities reached EUR 153.4 mn, almost 4- 2022 times the amount of 2021 153.4 79.9 • Cash generation benefited from significantly
Slide 22: Net debt/EBITDA: Target for 2024 remains in place: 2x or lower
Net debt/EBITDA: Target for 2024 remains in place: 2 x or lower 3.00 • For comparability reasons, net financial debt has Net debt/EBITDA* target: <= 2 2.6** been adjusted for the purchase of the Haldex 2.50 shares and granting of the loan to Haldex since 2.2 the second quarter of 2022 2.0 • Excludin
Slide 23: ROCE impacted by Haldex transaction, still well above WACC
ROCE impacted by Haldex transaction, still well above WACC Return on capital employed (in %) 20% • SAF-HOLLAND’s cost of capital (WACC) 18% amounted to close to 12% 15.6% 15.7% • The Group’s target is to consistently 16% 15.2% 14.5% 14.8% achieve returns well in excess of capital 14% cost, creating
Slide 24: Update Haldex Integration
Update Haldex Integration < 24 >
Slide 25: Integration of HALDEX continues as PATA consent allows for closing of transaction
Integration of HALDEX continues as PATA consent allows for closing of transaction and Outlook 2023 inclusion into the scope of consolidation of SAF-HOLLAND Group Preparation Transition Integration / Combination Phase 1: Phase 2: Phase 3: Phase 4: Key elements PMI preparation Day-2 preparation Closin
Slide 26: Status of Haldex integration: Another two milestones achieved
Status of Haldex integration: Another two milestones achieved Closing Transaction finally closed with the approval of the Polish antitrust authority on February 21, 2023 Squeeze-out to be legally completed in due time as SAF-HOLLAND is holding 100% of Haldex AB Squeeze-out shares since March 1, 2023
Slide 27: Haldex sales trend 2022 (based upon preliminary figures)
Haldex sales trend 2022 (based upon preliminary figures) Sales by quarter • Sales according to preliminary figures amounted to EUR (In EUR million) 526.1 mn (PY EUR 454.9 mn), up 15.7% on the prior year 2021 2022 • Overall sales growth in FY 2022 of 20.9 % in SEK; 137.0 142.8 • FY sales driven by st
Slide 28: Conservative approach when including HALDEX in SAF-HOLLAND’s scope of consolidation
Conservative approach when including HALDEX in SAF-HOLLAND’s scope of consolidation Haldex SAF-HOLLAND • The first-time consolidation of the acquired company in EUR mn could not take place until February 21, 2023, due to 2022 Group 2023 delayed approval of the Polish antitrust authority. Impairments
Slide 29: Outlook 2023
Outlook 2023 < 29 >
Slide 30: Expected development of trailer and truck production in 2023
Expected development of trailer and truck production in 2023 EMEA Trailer Trucks • European trailer market expected to decline moderately, mainly due to the uncertain macroeconomic environment • SAF-HOLLAND supported by market share gains Europe -5% -1% • Truck market assumed to consolidate slightly
Slide 31: FY 2023 Outlook SAF-HOLLAND Group incl. Haldex
FY 2023 Outlook SAF-HOLLAND Group incl. Haldex IFRS Pro-forma Adjusted EBIT margin drivers (incl. Haldex as of Feb. 21) (incl. Haldex as of Jan. 1) Efficiency gains by operational excellence and automation Sales EUR 1,800 - 1,950 mn EUR 1,850 - 2,000 mn Net synergies from Haldex integration of EUR 1
Slide 32: Next info touch-points and contact
Next info touch-points and contact < 32 >
Slide 33: Financial calendar & IR contact
Financial calendar & IR contact Issuer & contact Additional information SAF-HOLLAND SE ISIN DE000SAFH001 Hauptstrasse 26 WKN SAFH00 63856 Bessenbach Listing Frankfurt Stock Exchange Prime Standard Stephan Haas Head of IR Tel: +49 6095 301 – 803 Financial calendar 2023 May 26, 2023 Quarterly Statemen
Slide 34: Disclaimer
Disclaimer This presentation has been prepared by SAF-HOLLAND SE (“SAF-HOLLAND”) and comprises written materials concerning SAF-HOLLAND. It is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. It contains summary inform