SAF-Holland SE · XETR:SFQ
SAF-Holland — Q3 2023 Earnings Presentation
30 slides from SAF-Holland's earnings presentation, Nov 9, 2023
Slide 1: SAF-HOLLAND SE Q3 2023 Conference Call Presentation
CONFERENCE CALL PRESENTATION SAF-HOLLAND SE Q3 2023 ALEXANDER GEIS (CEO), FRANK LORENZ-DIETZ (CFO) NOVEMBER 9, 2023 Q3 2023 Call Presentation < 1 >
Slide 2: Setting the scene
Setting the scene 1 Strong performance across all metrics in Q3 and 9M 2023, despite OEM demand normalization in EMEA. On track to deliver on targeted Haldex synergies and cross-selling targets for FY 2023 2 Increased profitability combined with strict NWC-management led to strong cash generation an
Slide 3: Q3 2023 Highlights and regional performance
Q3 2023 Highlights and regional performance Q3 2023 Call Presentation < 3 >
Slide 4: Q3 2023 Highlights
Q3 2023 Highlights Sales up strongly by 37.4%, driven by Americas and APAC, robust aftermarket and Haldex Trading Review consolidation. Organic sales +13.2% Strong double-digit organic sales growth in Americas and APAC, EMEA organically Development by Region slightly down y-o-y due to demand normali
Slide 5: Strong Q3 2023 results with significant improvements on all metrics
Robust aftermarket and continuous OEM demand especially in APAC led to strong Q3 2023 results with significant improvements on all metrics Q3 2023 y-o-y sales growth Sales Adjusted EPS € 552.9 mn € 0.78 EMEA +15.2% (Q3 2022: € 402.4 mn) (Q3 2022: € 0.54) Adj. EBIT Margin Americas +51.3% 10.6% NWC ra
Slide 6: Group sales strongly up due to Haldex consolidation
Group sales strongly up due to Haldex consolidation. Robust OEM and aftermarket demand led to double digit organic growth Group sales (in EUR mn) + 35.2% • Robust demand from customers for trailer and truck components in Americas and EMEA, very strong demand in APAC • Both, higher volumes and prior
Slide 7: Strong growth increases Americas and APAC share, aftermarket share around 34%
Strong growth increases Americas and APAC-share, aftermarket share around 34% for the Group Group sales split (by region, by customer category) • Sales split change against Q3 2022 due to strong 10.1% 14.1% y-o-y sales growth of 91.1% in APAC, Americas +51.3% and EMEA +15.2%, driven by Haldex consol
Slide 8: Robust OEM business and increased aftermarket share supportive for Group adj. EBIT
Robust OEM business and increased after market share supportive for Group adj. EBIT Group adj. EBIT (in EUR mn and % of sales) 9.6% • In the first nine months of 2023 adj. EBIT improved strongly by 65.6% to EUR 152.8 mn, leading to a 7.8% significant margin improvement from 7.8% to 9.6% • Q3 2023 ad
Slide 9: Organic sales development above market in EMEA
Organic sales development above market in EMEA, mild sales decline in Q3 vs. Q2 2023 due to demand normalization for trailers EMEA sales + 14.1% (in EUR mn) • 9M 2023 sales increased 14.1%, adjusted for FX and M&A effects -0.7% • Q3 2023 sales up 15.2%; adjusted for FX and M&A effects -1.1% 711.8 62
Slide 10: Improved Haldex profitability led to sequential margin increase in EMEA
Improved Haldex profitability, PMI synergies and robust aftermarket led to sequential margin increase in EMEA EMEA adj. EBIT (in EUR mn and % of sales) 7.8% • Double-digit increase in adj. EBIT in both the first 6.3% nine months and Q3 2023 • Higher aftermarket share, internal efficiency improvement
Slide 11: Americas with strong growth due to robust demand and Haldex consolidation
Americas with strong growth due to robust customer demand and Haldex consolidation Americas sales (in EUR mn) + 54.1% • Overall, demand for trailer and truck components remained robust in the region due to solid OEM- backlogs • Due to its strong position, SAF-HOLLAND also 677.2 benefitted from the t
Slide 12: Operating leverage and efficiency support strong margin step-up
Operating leverage, efficiency improvements and aftermarket business support strong margin step-up Americas adj. EBIT (in EUR mn and % of sales) 10.9% • The Americas region saw very strong double-digit adjusted EBIT improvement both in the first nine months (+78.7%) and Q3 2023 (+81.5%) 9.4% • Stron
Slide 13: Further growth in APAC driven by India, Southeast Asia and Australia
Further growth in APAC driven by strong demand in India, Southeast Asia and Australia APAC sales (in EUR mn) + 78.1% • 9M 2023 sales increased 78.1%, adjusted for FX and M&A effects +68.6% • Q3 2023 sales up significantly with 91.9%; adjusted for FX and M&A effects +83.3% 200.0 112.3 • Substantial g
Slide 14: Strong APAC profitability, China close to break-even
Strong profitability driven by scale and mix effects as well as Chinese business being close to break-even per Q3 2023 APAC adj. EBIT (in EUR mn and % of sales) 11.8% • Overall economies of scale from the higher business volume in India and a favorable product mix were supportive both all quarters o
Slide 15: Financials 9M and Q3 2023
Financials 9M and Q3 2023 Q3 2023 Call Presentation < 15 >
Slide 16: EBIT to adjusted EBIT reconciliation for the Group
EBIT to adjusted EBIT reconciliation for the Group Change Change in EUR mn 9M 2023 9M 2022 Q3 2023 Q3 2022 in % in % EBIT 124.9 75.7 65.1 1 52.6 27.0 95.3 EBIT margin in % 7.9 6.4 - 9.5 6.7 – Additional depreciation 2 14.1 7.1 99.9 5.9 2.4 >100 and amortization from PPA Valuation effects from call 1
Slide 17: Strong sequential increase in adj. EBIT margin
Strong sequential increase in adj. EBIT margin due to positive mix, Haldex synergies and FX-effects Adj. EBIT margin bridge (in EUR mn and %) 10.6% 9.1% 2 3 1 555.7 552.9 Q2 2023 Q2 2023 Phasing effect Q3 2023 Q3 2023 Mix Sales adj. EBIT from Haldex FX effects adj. EBIT Sales effects margin synergie
Slide 18: Both basic and adjusted EPS significantly up
Both basic and adjusted EPS significantly up (EUR mn and y-o-y change in %) 95.3% 76.2% 53.4% 52.8% 44.5% 44.4% 1 Tax rate -39.8% 35.4 2 € 0.55 € 0.78 Basic EPS Adj. EPS Result before Result for Adj. result for EBIT Finance result Income tax income tax the period the period 1 Finance result includes
Slide 19: Equity ratio significantly improved against June 2023
Equity ratio significantly improved against June 2023 levels • Strong operating performance in the first nine months lead to equity 36.6% 36.8% 37.3% having increased 6.2% and close to 34.6% 32.6% 32.6% 33.1% 32.2% EUR 470 mn 29.5% 27.2% 27.5% 25.7% • Balance sheet total is up 13.9% against 31 Decem
Slide 20: Strict NWC-management leads to improved net working capital ratio
Strict NWC-management leads to another improvement in net working capital ratio Net working capital (in % of sales) 17.4% • NWC ratio of SAF-HOLLAND was 14.5%, showing another sequential improvement due 15.7% 15.9% 15.6% to ongoing strict NWC- 15.5% 15.4% management 14.8% 14.8% 14.4% 14.5% • Against
Slide 21: Operating and free cash flow significantly up
Operating and free cash flow significantly up due to SAF-HOLLAND’s strong cash generation capabilities with cash flow conversion of > 50% in the first nine months Net cash flow from operating activities (EUR mn) • The increase in operating cash flow was mainly due to higher earnings before taxes 128
Slide 22: Further increased ROCE of 18.3% in Q3 2023
Further increased ROCE of 18.3% in Q3 2023. ROCE constantly above WACC, creating considerable shareholder value Return on capital employed (in %) 18.3% 17.1% • Strong shareholder value 16.5% creation with ROCE constantly 15.6% 15.7% 15.2% 14.8% above WACC* 14.5% 12.9% • Q3 2023 ROCE at 18.3%, up vs.
Slide 23: Strong cash generation led to decrease in leverage
Strong cash generation led to a decrease in leverage already close to FY 2024 target Net debt/EBITDA • Dec 2022 net debt/EBITDA ratio of 0.7x did 2.6 not include additional debt to finance the 2.5 2.4 Net debt/EBITDA* acquisition of Haldex 2.2 target 2024e: 2.1 <= 2x • Including pro-forma EBITDA con
Slide 24: Outlook FY 2023 and key takeaways
Outlook FY 2023 and key takeaways Q3 2023 Call Presentation < 24 >
Slide 25: FY 2023 market outlook
FY 2023 market outlook - European trailer market normalizes while other important market are set to keep on growing, especially N. America and Indian trailer market FY 2023e FY 2023e • EMEA Trailer Market Trucks Market • Due to the adverse economic environment and persistent uncertainties surroundin
Slide 26: Updated FY 2023 outlook targets sales of around EUR 2.1 bn
Updated FY 2023 outlook targets sales of around EUR 2.1 bn and a margin around 9.5% Group Group Group • Based on the strong performance in the FY 2023 Outlook FY 2023 Outlook FY 2023 Outlook financial year to date, continued solid demand as of as of as of for trailer and truck components, especially
Slide 27: Key takeaways
Key takeaways 1 Strong performance across all metrics in Q3 and 9M 2023, despite OEM demand normalization in EMEA 2 Increased profitability combined with strict NWC-management led to strong operating free cash flow and deleveraging to 2.1x, close to FY 2024 target 3 Double-digit ROCE constantly abov
Slide 28: Contact and additional information
Contact and additional information Q3 2023 Call Presentation < 28 >
Slide 29: Investor relations contact & financial calendar
Investor relations contact & financial calendar Issuer & contact Financial calendar and road show activities Hauck Aufhäuser Lampe Roadshow SAF-HOLLAND SE | Hauptstrasse 26 | 63856 Bessenbach November 23, 2023 Lugano / Milan, virtual & IR-only Kepler Cheuvreux Nordics Roadshow, Fabian Giese December
Slide 30: 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