Focus on fleet customers SAF-HOLLAND Annual Financial Statements 2013

Transcription

1 Focus on fleet customers SAF-HOLLAND Annual Financial Statements 213 Detlef Borghardt, CEO Wilfried Trepels, CFO March 13, 214

2 Agenda 1 Financials 3 2 Appendix 21 2

3 Executive Summary Group sales of 857.mn (previous year: 859.6mn) influenced by government shutdown in the US and unusually strong translation effects of 12.7mn related to the conversion of US dollar sales to euro. Increase in adj. EBIT to 59.3mn (previous year: 58.2) and slight improvement of adj. EBIT margin to 6.9% (previous year: 6.8%) despite decrease in sales. Successful acquisition of Corpco, a leading Chinese commercial vehicle suspension systems supplier. Deal closed in January Measurements for improvement of adj. EBIT margin of BU Trailer Systems implemented and in line with planning. Further expansion of Aftermarket business: establishment of sales offices in Columbia, Peru and Argentina, opening of Parts Distribution Center in Mexico, Parts Distribution Center in Malaysia planned for Q1/214. Increase in production capacities, e.g. doubling of production capacities in Warrenton, Missouri, USA. Outlook 214 Sales between 92mn and 945mn. Adj. EBIT of approximately 7mn and increasing adj. EBIT margin. Assumptions: Generally stable economic and political conditions in Europe and North America and improvement of industry indicators for both core markets. 3

4 Business performance group sales and group adjusted EBIT Sales in mn 1, * mn Adjusted EBIT in mn mn 3 6.8% 6.9% % 14% 12% 1% 8% 6% 4% 2% % % 12% 8% % 6.8% 6.7% 6.9% 6.6% 7.1% 7.5% 6.4% 5 4 4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q % 4 * influenced by government shutdown in the US and unusually strong translation effects of 12.7mn

5 Business performance sales by region and business unit Sales in mn by region Sales in mn by business unit 1, Europe North America Other % 7. (6.7%) (8.2%) % (42.7%) (39.5%) , Trailer Systems Powered Vehicle Systems Aftermarket % (26.6%) (25.4%) % (18.3%) (16.9%) % (5.6%) (52.3%) % (55.1%) (56.7%)

6 Business performance Trailer Systems Sales in mn Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Summary Sales increase YoY of 2.6% to 485.7mn (FY 212: 473.5) YoY sales growth in Europe and North America despite negative translation effects. Improving business development in Europe led to expansion of capacities and adaption of shift model. Increasing interest in SAF-HOLLAND axle and suspension systems in North America and steadily increasing order intake. Adjusted EBIT in mn and margin in % * % % 2 2.7% 2.2% 2.1% 2.2% 1.9% 1.9.8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q % 5% 4% 3% 2% 1% % Adj. EBIT of 1.6mn in FY 213 (FY 212: 11.7). Adj. EBIT margin of 2.2% in FY 213 (FY 212: 2.5). Profitability influenced by substantially increased warranty costs particularly in Q4/ * Restated after change in allocation mode of overhead costs, for details please refer to page 22

7 Gap between BU TS target margin for 215 and current adj. EBIT margin needs to be closed by implementation of measures Targets 215 Sales: 98mn to 1.35bn Earnings: 9 to 1% adj. EBIT margin Net Working Capital: <1% of sales Capex: < 2% of sales Growth potential for 215 Trailer Systems Full product range of suspension systems in N.A. with own axle Increase of N.A. market share of up to 3% in medium term Current adj. EBIT margin not sufficient to reach 9 to 1% adj. EBIT target for the Group until 215 Adj. EBIT FY 212: 2.5%./. Required adj. EBIT: 5-6% Participation in potentially growing US disc brake market Development of bundle of measures for margin improvement = Gap adj. EBIT: ~3.% 9 to 1% adj. EBIT margin for the Group - Assumptions - Stable profits in BU Powered Vehicles Systems Overproportional increase of BU Aftermarket share Economies of scale and underproportional increase of overhead costs 7

8 Implementation of measures to increase sales and adj. EBIT margin of BU TS until 215 started in Q3/213 Measures Content Realization of additional market potentials Explore additional regional markets which are not yet in sales focus (ROW) costs decrease sales increase Introduction of new products Savings in sourcing and operations Optimization of asset structure Development of and go-to-market with new products in core markets, especially in Europe Savings plan in all regions for sourcing and operations Consideration of plant consolidations in Europe and N.A. & Outsourcing of business processes (make or buy decision) Sales increase: ~ 1mn (full year effect) Adj. EBIT increase: ~ 2mn (full year effect) SG&A expense controlling Realization of growth with existing resources; underproportional increase of overhead Major impact of measures in 215, full year effect for BU TS in 216 8

9 Business performance Powered Vehicle Systems Sales in mn Summary Sales of 144.7mn in FY 213 (FY 212: 157.6) strongly burdened by exchange rate effects related to the translation of US dollar sales to euro. Business development in 2 nd HY 213 impacted by restraint of public sector to order and decreasing investments of private 15 sector clients. 1 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Adjusted EBIT in mn and margin in % % 2 7.6% 9.% 8.5% 9.2% 8.6% 7.9% 8.6% 1 32% 27% 22% 17% 12% 7% 2% Adj. EBIT of 12.4mn in FY 213 (FY 212: 14.7). Adj. EBIT margin of 8.6% (FY 212: 9.3). Stable development of profitability during FY 213; Q4/212 influenced by one-time effects. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q % 9 * Restated after change in allocation mode of overhead costs, for details please refer to page 22

10 Successful acquisition of Corpco in China Key characteristics Corpco Beijing Technology and Development Co, Ltd. is a leading supplier of commercial vehicle suspension systems in China founded in 1992 with around EUR 18 mn sales and 18 employees Definitive share purchase agreement with Corpco to acquire 8% of equity Pull option regarding remaining 2% of shares No restructuring costs or additional capex required Rounding of existing portfolio of SAF-HOLLAND Deal closed in January 214, purchase price 8.4mn Key Benefits from acquisition of Corpco Powered Vehicle Systems strengthens footprint in growing Chinese market for bus and truck suspension systems More independence from cycles of truck industry Combination of strong market positions in commercial suspension systems of BU Powered Vehicle Systems in North America and of Corpco in China Synergies between dense Aftermarket network from Corpco in China and Business Unit Aftermarket 1

11 Business performance Aftermarket Sales in mn Summary Sales of 226.6mn in FY 213 (FY 212: 228.5). Sales development impacted by negative exchange rate effects related to the conversion from US dollar to euro Additional influence on business development due to structural effects; extraordinary high sales at the beginning of 212 as Business Unit serviced an order backlog from Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Adjusted EBIT in mn and margin in % % 16.7% 14.2% 13.6% 14.4% 15.1% 16.6% 13.4% 35% 3% 25% 2% 15% 1% Increase of adj. EBIT to 36.3mn in FY 213 (FY 212: 31.8). Increase of adj. EBIT margin from 13.9% to 16.% in FY 213. Profitability improvement due to favorable product mix during the whole year and positive effects of implementation of global sourcing strategy. 2 5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 % * Restated after change in allocation mode of overhead costs, for details please refer to page 22

12 Business performance operating cash flow Operating cash flow before income tax in mn Ø: 15.3mn Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Net working capital in mn and as % of sales Summary Operating cash flow of 63.mn in FY 213 (FY 212: 59.5). Net working capital reached 76.1mn (212: 82.4) and totaled 9.4% of sales (212: 1.2%). Days of inventory 54 days; target figure of 45 days could not be reached due to substantial increase in order backlog in Europe towards end of 213. Inventories in mn and days of inventories % 15% % 1.% 1.3% 1.2% 1.5% 8.7% 9.% 9.4% 1% % 2 35 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q

13 Financials balance sheet in mn 12/31/213 % 12/31/212 % Non-current assets % % Inventories % % Other current assets % % Cash and cash equivalents % % Total assets % % Equity % % Other non-current liabilities % % Interest bearing loans and borrowings % % Other current liabilities % % Net debt as of December 31, 213: 123.mn (12/31/12: 141.8mn) 13

14 Financials profit and loss statement in mn 213 % 212 % Sales % % Cost of Sales % % Gross Profit % % Selling expenses % % Administrative expenses % % R&D % % Other 3.1.3% 1.5.2% Impairment..% % Reversal of impairment..% 1.8.2% Operating result % % Financial result % % Comments Strict control of sales, general and admin costs led to increased adj. EBIT despite sales decrease. Reduction of administrative expenses to 38.mn (FY 212: 39.3) led to margin of 4.4% (FY 212: 4.6); reduction i.a. influenced by higher capitalized expenses (harmonization of SAP systems) of 2.1mn (FY 212: 1.4) Earnings before tax nearly doubled which is attributable to a higher operating result and a strongly improved finance result as a consequence of the optimization of external financing in 212. Earnings before tax % % Income tax % % Result for the period % 7.4.9% 14

15 Financials cash flow statement in mn Result before tax Finance result Amortization/depreciation Change in Net Working Capital Other items cash flow Operating cash flow before income tax Income tax paid Operating cash flow Cash flow from investing Cash flow from financing Effect of F/X changes Net change in cash

16 Key financials in mn Sales Cost of sales Gross profit Margin 18.2% 18.2% Adjusted result Margin 3.4% 3.3% Adjusted EPS in Adjusted EBITDA Margin 8.3% 8.5% Adjusted EBIT* Margin 6.9% 6.8% Operating cash flow (before income tax) * Please refer to page 21 for detailed information on EBIT adjustments

17 Key financial ratios and figures Net financial debt ( mn) Summary Significantly improved financial profile through capital increases Reduction of interest costs Further improvement of the equity ratio Further reduction of net debt Long-term safeguarding of liquidity Proven access to capital markets (equity and bond market) Equity ( mn)* Net financial debt/ adjusted EBITDA (x) % 7% 6% 2.x 16.x 17.3x % % % 36.9% 41.4% 5% 4% 3% 2% 1% 12.x 8.x 4.x 3.2x 5.6x 5.7x 2.2x 2.x 1.7x 5.2% 5.1% %.x * Adjusted for effects of IAS 19R

18 Share price and shareholder structure Development of SAF-HOLLAND share price vs. indices (in %) Shareholder Structure (in %) As of February 26, 214 Basic data for share as of December 31, 213 ISIN LU Number of shares 45,361,112 Closing price 1.81 Adjusted EPS.63 SAF-HOLLAND share price more than doubled in 213 Share price grew at a rate greater than that of the benchmark indices. Market capitalization significantly increased from 237.7mn in 212 to 49.4mn by end of

19 Targets and outlook: Increase in sales and earnings expected for 214 Targets 214 Sales between 92mn and 945mn Adj. EBIT approximately 7mn and increasing adj. EBIT margin Assumptions: Generally stable economic and political conditions in Europe and North America and improvement of industry indicators for both core markets. Targets 215 Sales: 98mn to 1.35bn Earnings: 9 to 1% adj. EBIT margin Net Working Capital: <1% of sales Capex: < 2% of sales Growth potential Trailer Systems Aftermarket BRIC Countries Full product range of suspension systems in N.A. with own axle Increase of N.A. market share of up to 3% in medium term Participation in potentially growing US disc brake market Increase of installed product base driving the Aftermarket business ( automatically) Enlarged product portfolio (A2 brand and 3rd party products) Regional expansion of distribution & sales channels Taylor-made products for China and Brazil Localized operations Increase of market share in strong growing market environments (e.g. China 5%) 9 to 1% adj. EBIT Margin Overproportional increase of A.M. share, economies of scale and underproportional increase of overheads. 19

20 Agenda 1 Financials 3 2 Appendix 21 2

21 Reconciliation statement for adjusted EBIT in mn Result of the period Income tax Finance Result Depreciation and amortization from PPA Impairment of goodwill and intangible assets Reversal of Impairment of intangible assets Restructuring and integration costs Adjusted EBIT in % of sales 6.9% 6.8% 21

22 Change in allocation mode of overhead costs Before converting the accounting modalities 213 mn Adj. EBIT Adj. EBIT margin Share of overhead costs After converting the accounting modalities Adj. EBIT Adj. EBIT margin Trailer Systems % % Powered Vehicle Systems % % Aftermarket % % Before converting the accounting modalities 212 mn Adj. EBIT Adj. EBIT margin Share of overhead costs After converting the accounting modalities Adj. EBIT Adj. EBIT margin Trailer Systems % % Powered Vehicle Systems % % Aftermarket % % 22

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