SAF-Holland SE · XETR:SFQ
SAF-Holland — Q3 2016 Earnings Presentation
29 slides from SAF-Holland's earnings presentation, Nov 10, 2016
Slide 1: Strategy 2020 – Third quarter 2016 results
Strategy 2020 Third quarter 2016 results Detlef Borghardt, CEO Wilfried Trepels, CFO November 10, 2016
Slide 2: Agenda
Agenda 1 Highlights Q3/2016 3 2 Market Trend 7 3 Financial information 9 4 Outlook 21 2
Slide 3: Highlights of Q3/2016 (1)
Highlights of Q3/2016 (1) Business Trend Despite the challenging market environment in most emerging markets and persisting market weakness in North America, organic sales in 9M/16 close to PY’s level (- 1.3%); Organic sales trend improved -1.8% yoy in Q2/16 to +0.3% in Q3/16 Adj. EBIT margin for 9M
Slide 4: Highlights of Q3/2016 (2)
Highlights of Q3/2016 (2) Acquisition of KLL Equipamentos para Transporte Ltda. Acquisition of 57.5% stake in truck and bus air suspension specialist KLL, Brazil in Sept. Expansion of EMEA/I production capacities SAFH currently establishing additional production facility in Turkey for Mid-East deman
Slide 5: IAA new products & highlights
IAA new products & highlights SAF TRAK European Trailer Innovation Award winner First drive axle for trailers by SAFH Introduction of new products at St. Louis Press Event Introduction of P89 Series Air Disc brakes ELI-te launch (Electronic Lock Inspection for fifth wheels – technology enhanced) CBX
Slide 6: Agenda
Agenda 1 Highlights Q3/2016 3 2 Market Trend 7 3 Financial information 9 4 Outlook 21 6
Slide 7: Truck and trailer market trends
Truck and trailer market trends Global truck forecast Change Change 2014 2015 2016 in % yoy 2017 in % yoy ACT Truck Build1) 297,097 323,282 227,489 -29.6 202,915 -10.8 North America Class 8 FTR Truck Shipment2) 294,855 319,614 228,766 -28.4 225,000 -1.6 Change 2014 2015 2016 2017 in % yoy Western, C
Slide 8: Agenda
Agenda 1 Highlights Q3/2016 3 2 Market Trend 7 3 Financial information 9 4 Outlook 21 8
Slide 9: Executive Summary
Executive Summary Organic sales slightly increase in Q3/16 in weak markets • Group sales in 9M/16 decreased by 3.4% to € 789.4 mn (817.5), organically only -1.3%; 1 • Translational FX effects burden (€ -12.1 mn), Aerway divestiture impact € -5.3 mn • In Q3/16 organic sales trend significantly improv
Slide 10: Business performance – group sales and group adjusted EBIT (1)
Business performance – group sales and group adjusted EBIT (1) Sales in €mn Adjusted EBIT in €mn 300 30 14% 258.8 255.8 24.1 12% -3.0mn -2.5mn 21.6 10% 200 20 9.3% 8% 8.4% 6% 100 10 4% 2% 0 0 0% Q3 2015 Q3 2016 Q3 2015 Q3 2016 10
Slide 11: Business performance – group sales and group adjusted EBIT (2)
Business performance – group sales and group adjusted EBIT (2) Sales in €mn Adjusted EBIT in €mn 30 16% 26.9 26.3 300 287.7 271.0 273.7 24.1 258.8 259.9 255.8 22.6 22.7 243.2 21.6 12% 20.4 20 200 9.6% 9.4% 9.3% 8% 8.7% 8.4% 8.4% 8.3% 10 100 4% 0 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 20
Slide 12: Business performance – sales split by region and by channel
Business performance – sales split by region and by channel Sales in €mn by Region Sales in €mn by channel (OE and AM) EMEAI Americas APAC/ China OEM Aftermarket 900 900 -13.9% -0.6% 800 800 56.8 (6.9%) 48.9 206.3 -11.7% (5.9%) 205.1 700 700 (25.2%) (26.0%) 600 600 350.7 309.7 -4.4% (42.9%) (38.4%)
Slide 13: Business performance – EMEAI
Business performance – EMEAI Sales in €mn Summary 160 • Solid sales increase in Q3/16 by 3.1% to € 133.6 mn (129.6); 140 129.6 133.6 despite softer demand from Turkey in the quarter, adj. for 120 exchange rate effects + 3.7% 100 80 • Sales driven by continued solid demand in Western Europe, a 60 fir
Slide 14: Business performance – Americas
Business performance – Americas Sales in €mn Summary 120 111.3 104.7 • Q3/16 sales down 5.9% yoy to € 104.7 mn (111.3), clearly 100 outperforming the class-8 (-36.1%) and trailer (-13.1%) 80 markets Despite a further market fall sales versus Q2 were 60 sequentially down by only 0.1% due to market sh
Slide 15: Business performance – APAC/ China
Business performance – APAC/ China Sales in €mn Summary 20 17.9 17.5 • Sales in Q3/16 stable at € 17.5 mn (17.9); compared to Q2/16 sales sequentially rose by 3.6% in weak markets 15 • Organically sales were at PY’s level 10 • Typhoon hit Xiamen location in Sept. damaging parts of the inventories; i
Slide 16: Business performance – strong operating free cash flow in Q3/2016
Business performance – strong operating free cash flow in Q3/2016 Operating free cash flow in € mn Operating FCF • Q3/16 operating free cash flow increased by 10.9% to € 19.4 mn 30 26.3 (17.5) yoy due to lower NWC requirements and less capex 19.4 20 17.5 13.0 NWC/ Inventories 10 6.0 Ø: €10.5mn • NWC
Slide 17: Financials – Balance Sheet
Financials – Balance Sheet in € mn 09/30/2016 % 12/31/2015 % Non-current assets 380.7 38.7% 380.3 42.8% Inventories 124.6 12.7% 118.0 13.3% Other current assets 172.8 17.6% 129.5 14.6% Other short-term investments 0.0 0.0% 115.0 12.9% Cash and cash equivalents 304.8 31.0% 145.7 16.4% Total assets 98
Slide 18: Financials – Profit and Loss statement
Financials – Profit and Loss statement Comments in € mn Q1-Q3/2016 % Q1-Q3/2015 % • Organic sales almost at PY’s level: 3.4% sales decline, organically down only 1.3%; Sales 789.4 100% 817.5 100% € 12.1 mn in negative translational FX effects, € 5.3 mn reduction due to Aerway divestiture Cost of sal
Slide 19: Financials – Cash Flow statement
Financials – Cash Flow statement in €mn Q1-Q3/2016 Q1-Q3/2015 Result before tax 51.4 63.2 Finance result 10.3 2.5 Amortization/depreciation 16.8 16.0 Changes in Net Working Capital -17.5 -39.3 Other items cash flow 2.1 1.3 Operating cash flow before income tax 63.1 43.7 Income tax paid -9.2 -13.8 Op
Slide 20: Agenda
Agenda 1 Highlights Q3/2016 3 2 Market Trend 7 3 Financial information 9 4 Outlook 21 20
Slide 21: Outlook: Financial targets 2016 confirmed
Outlook: Financial targets 2016 confirmed FY 2016* Strategy 2020 Organically constant or slight increase Organic: € 1,250 mn Sales € 1,050 mn to € 1,070 mn + Coop., JVs, Acquisitions: tending to the lower end of the € 1,500 mn range 8 - 9% Adj. EBIT-margin expected to reach the upper half ≥ 8% of th
Slide 22: Appendix
Appendix NLD)
Slide 23: Reconciliation statement for adjusted EBIT
Reconciliation statement for adjusted EBIT in €mn Q1-Q3/2016 Q1-Q3/2015 Result of the period 36.3 42.1 Income tax 15.1 21.1 Financial Result 10.3 2.5 Depreciation and amortization from PPA 4.0 4.9 Restructuring and integration costs 4.9 3.0 Adjusted EBIT 70.6 73.6 in % of Sales 8.9% 9.0% 23
Slide 24: Key financials
Key financials in €mn Q1-Q3/2016 Q1-Q3/2015 Sales 789.4 817.5 Cost of sales -631.4 -658.6 Gross profit 158.0 158.9 Margin 20.0% 19.4% Adjusted result 42.8 49.3 Margin 5.4% 6.0% Undiluted adjusted EPS in €** 0.94 1.09 Adjusted EBITDA 83.1 84.8 Margin 10.5% 10.4% Adjusted EBIT* 70.6 73.6 Margin 8.9% 9
Slide 25: Strong financial profile supporting further growth & dividend payments
Strong financial profile supporting further growth & dividend payments Strong financial profile* Corporate Bond Revolving Credit Convertible Bond Promissory note Non-current loan €75mn lines €100.2mn (SSD) €50mn due 04/2018 €157mn due 09/2020 €200mn due 06/2026 due 10/2020 with €140mn due in 11/2020
Slide 26: Truck market development Europe
Truck market development Europe New registrations of heavy commercial vehicles (HCV) >16 tons Analytics • Pent-up demand and sustained moderate economic recovery drive European truck 40000 production • For 2016 SAFH expects a low to mid single- digit percentage increase in European truck production
Slide 27: Truck market trend North America
Truck market trend North America Class-8 net orders Analytics • US trucks: Market has decreased even further with a trend change expected not before mid 2017 • Less than 10% of SAFH group sales are related to US class-8 truck build: vocational and 60000 governmental business is not linked to OE-in-s
Slide 28: Disclaimer
Disclaimer • By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: The information in this document has been prepared by SAF-HOLLAND S.A. ("SAF-HOLLAND") for use at a road show presentation by SAF-HOLLAND
Slide 29: Investor Relations
Investor Relations SAF-HOLLAND GmbH Stephan Haas Hauptstraße 26 63856 Bessenbach Phone +49 6095 301-617 Telefax +49 6095 301-102 Mobile +49 170 306 64 97 Stephan.Haas@safholland.de www.safholland.com 29