DGAP-News: SAF-HOLLAND S.A.: Strengthened profitability in

DGAP-News: SAF-HOLLAND S.A. / Key word(s): Final Results SAF-HOLLAND S.A.: Strengthened profitability in fiscal year 2013 led to achievement of dividend target 13.03.2014 / 07:00 --------------------------------------------------------------------- SAF-HOLLAND: Strengthened profitability in fiscal year 2013 led to achievement of dividend target * Group sales reach EUR 857.0 million * Adjusted EBIT rises to EUR 59.3 million * Dividend of 0.27 per share proposed * Outlook for 2014: Sales and earnings growth planned Luxembourg, March 13, 2014 - SAF-HOLLAND, the globally active supplier to the truck and trailer industry, further increased its sales in the core market Europe in financial year 2013 and once again generated disproportionate sales growth in emerging markets such as the BRIC countries. In North America, the development was characterized by a weakening of the market over the course of the year. Overall, Group sales reached EUR 857.0 million (previous year: EUR 859.6 million). If currency developments had remained stable, this would have resulted in total sales of EUR 869.7 million for fiscal year 2013. SAF-HOLLAND once again recorded progress in profitability. The Group's adjusted EBIT increased to EUR 59.3 million (previous year: EUR 58.2 million). The adjusted EBIT margin improved to 6.9 percent (previous year: 6.8 percent). If currency developments had remained stable in fiscal year 2013, this would have resulted in an adjusted EBIT of EUR 60.1 million. Vigorous demand at year-end In Europe sales increased as compared to the previous year by EUR 13.0 million to EUR 447.9 million (previous year: EUR 434.9 million). With a share in Group sales of 52.3% (previous year: 50.6%), Europe is the most important region for SAF-HOLLAND. In the North American market, the uncertain budgetary situation in the USA was particularly noticeable in 2013. Public cost-cutting policy as well as the government shutdown in the fourth quarter and the related delay in awarding orders also affected SAF-HOLLAND. Against this backdrop, sales in this region amounted to EUR 339.1 million (previous year: EUR 367.1 million). Detlef Borghardt, CEO of SAF-HOLLAND: "As a result of the increasing demand especially in Europe towards the end of 2013, we were able to get off to a good start in 2014. At the same time, SAF-HOLLAND was able to prove itself in North America. We are pleased with the well-filled order books in both core markets." SAF-HOLLAND once again recorded above average growth in 2013 in emerging markets, such as BRIC countries, where total sales increased to EUR 70.0 million (previous year: EUR 57.6 million). The company thereby generated 8.2 percent of Group sales in emerging markets (previous year: 6.7 percent). In order to expand activities in BRIC countries, SAF-HOLLAND, among other things, acquired 80 percent of the shares in the Chinese company Corpco Beijing Technology and Development Co., Ltd. (Corpco). The acquisition was agreed upon in 2013 and successfully concluded in January 2014. Development of the Business Units The largest Business Unit, Trailer Systems, increased its sales in 2013 to EUR 485.7 million (previous year: EUR 473.5 million) and thereby contributed 56.7 percent of Group sales (previous year: 55.1 percent). Adjusted EBIT totaled EUR 10.6 million (previous year: EUR 11.7 million) with an adjusted EBIT margin of 2.2 percent (previous year: 2.5 percent). In order to significantly increase the Business Unit's profitability, SAF-HOLLAND is already working on the implementation of a package of measures that aim at improving the Business Unit's adjusted EBIT margin to 5 to 6 percent by the end of 2015. The package combines a wide range of initiatives - from launching new products on the market and the expansion of sales activities to a multitude of cost-saving and earnings-boosting programs. The Powered Vehicle Systems Business Unit generated annual sales of EUR 144.7 million (previous year: EUR 157.6 million). This Business Unit focuses on the North American region where the market for class 8 heavy trucks decreased by over 11 percent in the year 2013. Adjusted EBIT of the Business Unit totaled EUR 12.4 million (previous year: EUR 14.7 million) with an adjusted EBIT margin of 8.6 percent (previous year: 9.3 percent). The realignment of the European organizational structures concluded in 2013 already showed initial positive effects. The Aftermarket Business Unit generated annual sales of EUR 226.6 million (previous year: EUR 228.5 million) corresponding to a 26.4 percent share in Group sales (previous year: 26.6 percent). With a Parts Distribution Center in Mexico as well as sales offices in Colombia, Peru and Argentina, the spare parts business was particularly expanded further in Central and South America in the reporting year. The Business Unit's adjusted EBIT increased to EUR 36.3 million (previous year: EUR 31.8 million). In relation to sales, this results in an improved adjusted EBIT margin of 16.0 percent (previous year: 13.9 percent). Cost structures nearly unchanged SAF-HOLLAND's Group gross profit was approximately at the same level of the previous year with EUR 155.6 million (previous year: EUR 156.2 million), with an unchanged gross margin of 18.2 percent. Expenses for research and development amounted to the same level as the previous year with EUR 18.0 million. Selling expenses were also approximately at the same level of the previous year at EUR 53.3 million (previous year: 53.5 million). General administrative expenses, on the other hand, decreased to EUR 38.0 million (previous year: EUR 39.3 million). Earnings before tax in the reporting year increased sharply to EUR 31.5 million, almost double the amount of the prior year (previous year: EUR 16.0 million). In addition to the higher operating result, this increase was primarily attributable to the improved finance result of EUR -17.8 million (previous year: EUR -30.8 million). The finance result was burdened by unrealized exchange rate losses of EUR 3.7 million (previous year: EUR 1.2 million). Cash flow from operating activities before income tax increased in the reporting year to EUR 63.0 million (previous year: EUR 59.5 million). Investments which benefit the company's competitive position remained the target. Major points of focus included the expansion of production capacities within the core markets of Europe and North America as well as the one-time expenses in the course of a global IT project. SAF-HOLLAND invested a total of EUR 23.2 million throughout the Group in financial year 2013 (previous year: EUR 22.3 million). Dividend requirement fulfilled SAF-HOLLAND's capital structure improved once again. As of December 31, 2013, equity amounted to EUR 222.2 million (previous year: EUR 197.9 million). The equity ratio increased to 41.4 percent (previous year: 36.9 percent). Wilfried Trepels, CFO of SAF-HOLLAND: "We were able to achieve our longstanding goal and at the same time fulfilled the requirement for a potential dividend payment. The Annual General Meeting on April 24, 2014 will be recommended a dividend of EUR 0.27 per share as a result." This would result in a total distribution amount of EUR 12.2 million, which corresponds to a 50 percent share of available net earnings. Based on the year's average, SAF-HOLLAND had 3,106 employees worldwide (previous year: 3,118), roughly half of these were in North America, approximately 39 percent in Europe and 14 percent were at locations outside of the two core markets. Adjusted EBIT to increase to at approximately EUR 70 million in 2014 SAF-HOLLAND considers itself well-positioned for its continued growth path in the global commercial vehicles markets. For the current financial year, the company aims to achieve sales growth of approximately 10 percent to EUR 920 to 945 million with the support of the industry's good growth forecasts. In terms of earnings, an increase in adjusted EBIT to approximately EUR 70 million with a growing adjusted EBIT margin is expected. The forecast for 2014 is based on an overall positive European economic development with the continued improvement of the European sovereign debt crisis along with the improvement of industry indicators for North America and Europe. SAF-HOLLAND's medium-term target for the year 2015 remains Group sales of between EUR 980 million to EUR 1.035 billion with 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/f...essemittei 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 ("OEM") in the replacement parts market and, in the aftermarket business, to the OEM's Original Equipment Suppliers ("OES"), as well as by means of a global service and distribution network. SAF-HOLLAND also sells its products to end users and service centers using this network. SAF-HOLLAND has 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 among the stocks in the SDAX (ISIN: LU0307018795). Contact: SAF-HOLLAND GmbH Claudia Hoellen Hauptstra�e 26 63856 Bessenbach Phone +49 6095 301-617 claudia.hoellensafholland.de End of Corporate News --------------------------------------------------------------------- 13.03.2014 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's 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 --------------------------------------------------------------------- 257203 13.03.2014