SAF-Holland SE · XETR:SFQ
SAF-Holland — Q2 2023 Earnings Presentation
31 slides from SAF-Holland's earnings presentation, Aug 10, 2023
Slide 1: SAF-HOLLAND SE Q2 2023 Conference Call Presentation
CONFERENCE CALL PRESENTATION SAF-HOLLAND SE Q2 2023 ALEXANDER GEIS (CEO), FRANK LORENZ-DIETZ (CFO) AUGUST 10, 2023 Q2 2023 Call Presentation < 1 >
Slide 2: SAF-HOLLAND performed very well in a partially adverse economic environment
SAF-HOLLAND performed very well in a partially adverse economic environment 1 Economic environment challenged by post COVID-19 supply chain disruptions, substantial inflation and interest rate increases 2 Against this partially adverse economic environment and the cyberattack, SAF-HOLLAND performed
Slide 3: Q2 2023 Highlights and regional performance
Q2 2023 Highlights and regional performance Q2 2023 Call Presentation < 3 >
Slide 4: Q2 2023 Highlights
Q2 2023 Highlights Strong y-o-y sales increase of 37.7%, mainly driven by Americas and APAC, plus Haldex Trading Review having been consolidated for a full quarter for the first time. Organic growth 11.4% Strong organic sales growth in Americas and APAC, EMEA organically slightly down Development by
Slide 5: Strong Q2 2023 results with double-digit sales growth in all regions
Strong Q2 2023 results with double-digit sales growth in all regions, supported by Haldex consolidation and strong demand in Americas and APAC Q2 2023 y-o-y sales growth Sales Adjusted EPS € 555.7 mn € 0.74 EMEA +12.6% (Q2 2022: € 403.5 mn) (Q2 2022: € 0.51) Adj. EBIT Margin Americas +61.5% 9.1% NWC
Slide 6: Group sales strongly up due to Haldex consolidation, double-digit organic growth
Group sales strongly up due to Haldex consolidation, double-digit organic growth Group sales (in EUR mn) + 34.0% • Continued strong demand from customers for trailer and truck components • Both, higher volumes and prior price increases supported revenue growth 1,036.1 773.3 • H1 2023 sales increased
Slide 7: Americas and APAC gaining importance, aftermarket share above 30% for the Group
Americas and APAC gaining importance, aftermarket share above 30% for the Group Group sales split (by region, by customer category) 9.3% 12.5% 43.6% EMEA 53.3% EMEA Q2 2022 Americas 43.9% Q2 2023 Americas 37.4% APAC APAC 28.1% 31.7% Trailer OE Trailer OE Q2 2022 59.3% Q2 2023 Truck OE Truck OE 53.9%
Slide 8: Higher sales volume, increased aftermarket share and prior price adjustments supportive for Group adj. EBIT
Higher sales volume, increased after market share and prior price adjustments supportive for Group adj. EBIT Group adj. EBIT 9.1% (in EUR mn and % of sales) • In the first half of 2023 adj. EBIT improved by 69.3% to EUR 94.2 mn, leading to a significant margin 7.2% improvement from 7.2% to 9.1% • Q2
Slide 9: Sales increase driven by Haldex consolidation, organic sales growth above market in EMEA
Sales increase driven by Haldex consolidation, organic sales growth above market development in EMEA EMEA sales +13.6% (in EUR mn) • H1 2023 sales increased 13.6%, adjusted for FX and M&A effects -0.5% • Q2 2023 sales up 12.6%; adjusted for FX and M&A effects -1.8% 423.5 480.9 • Organic sales growth
Slide 10: Positive product and aftermarket mix as well as price increases supportive in EMEA
Positive product and aftermarket mix as well as price increases supportive in EMEA EMEA adj. EBIT (in EUR mn and % of sales) 7.7% • Double-digit increase in adj. EBIT in both the first six months and Q2 2023 5.5% • Product mix, higher aftermarket share as well as internal efficiency improvements als
Slide 11: Americas saw strong growth due to high customer demand and Haldex consolidation
Americas saw strong growth due to high customer demand and Haldex consolidation Americas sales (in EUR mn) +55.8% • 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 433.1 benefitted from the trend
Slide 12: Operating leverage and efficiency enhancements support strong margin improvement
Operating leverage and efficiency enhancements support strong margin improvement Americas adj. EBIT (in EUR mn and % of sales) 10.1% • The Americas region saw very strong double-digit adjusted EBIT improvement both in the first six months (+76.9%) and Q2 2023 (+67.4%) 8.9% • Strong improvement in ea
Slide 13: APAC recorded strong growth driven by demand in India
APAC recorded strong growth driven by demand in India, China sales grew significantly APAC sales (in EUR mn) +70.2% • H1 2023 sales increased 70.2%, adjusted for FX and M&A effects +60.3% • Q2 2023 sales up significantly with 85.5%; adjusted 122.1 for FX and M&A effects +72.4% 71.8 • Substantial gro
Slide 14: Strong profitability driven by scale effects and improved operating performance
Strong profitability driven by scale effects and improved operating performance APAC adj. EBIT 11.0% (in EUR mn and % of sales) • Overall economies of scale from the higher business 10.2% volume in India and a favorable product mix were supportive both in Q1 and Q2 2023 13.5 • Highly profitable busi
Slide 15: Financials H1 and Q2 2023
Financials H1 and Q2 2023 Q2 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 H1 2023 H1 2022 Q2 2023 Q2 2022 in % in % EBIT 72.3 48.7 48.4 33.5 27.7 20.8 EBIT margin in % 7.0 6.3 - 6.0 6.9 – Additional depreciation 8.2 4.6 77.6 1 5.9 2.4 >100 and amortization from PPA Inventory step-up at 5.3 - - 5.3
Slide 17: Q2 2023 adjusted earnings per share significantly up
Q2 2023 adjusted earnings per share significantly up (EUR mn and y-o-y change in %) 20.8% 5.1% -1.6% 0.0% 46.8% 45.1% 34.0 1 Tax rate -37.2% 2 € 0.39 € 0.74 Basic EPS Adj. EPS Result before Result for Adj. result for EBIT Finance result Income tax income tax the period the period 1 Includes a mid-si
Slide 18: Equity ratio slightly down due to balance sheet expansion driven by Haldex acquisition
Equity ratio slightly down due to balance sheet expansion driven by Haldex acquisition • Compared to 31 Dec. 2022, equity is slightly down 1.8% due to the dividend 36.6% 36.8% 37.3% payment towards shareholders and 34.6% 32.6% 32.6% 33.1% 32.2% negative FX effects, while balance sheet 29.5% total is
Slide 19: Strict NWC-management leads to sequentially stable net working capital ratio
Strict NWC-management leads to sequentially stable net working capital ratio Net working capital (in % of sales) 17.4% • NWC ratio of SAF-HOLLAND was 15.4%, slightly improved sequentially due to the strict NWC-management 15.9% 15.7% 15.6% 15.5% 15.4% • Against Dec 2022 NWC increased 14.8% 14.8% 14.4
Slide 20: Very strong development of operating and free cash flow
Very strong development of operating and free cash flow Net cash flow from operating activities (EUR mn) • The increase in operating cash flow was mainly due to higher earnings before taxes and strict NWC-management 79.9 43.6 54.8 • Cash taxes were around EUR 27 mn in H1 31.5 2023, up from around EU
Slide 21: ROCE improvement driven by stable capital employed while LTM EBIT improved
ROCE improvement driven by stable capital employed while LTM EBIT improved Return on capital employed (in %) • Q2 2023 ROCE was 17.1%, up vs. Q1 16.5% 17.1% 2023 due to stable capital employed 15.6% 15.7% while EBIT (LTM) increased slightly 15.2% 14.8% 14.5% • As of Q1 2023 the calculation 12.9% inc
Slide 22: Net debt/EBITDA: Target for 2024 confirmed with 2x or lower
Net debt/EBITDA: Operating performance offset by dividend payment and PPA items. Target for 2024 confirmed with 2x or lower Net debt/EBITDA • Including pro-forma EBITDA contribution of 2.6 *** Haldex and related debt, net debt/EBITDA 2.5 *** 2.4 *** Net debt/EBITDA* ratio amounted to 2.5x, down from
Slide 23: Update on Haldex goodwill allocation and integration
Update on Haldex goodwill allocation and integration Q2 2023 Call Presentation < 23 >
Slide 24: Haldex acquisition leads to goodwill increase of around EUR 59 mn
Haldex acquisition leads to a goodwill increase of around EUR 59 mn. Integration and reaching targeted synergies progressing very well Forecasted acquisition Acquisition related Comments on acquisition related impacts on SAF-HOLLAND in EUR mn related impacts on impacts on SAF- SAF-HOLLAND HOLLAND •
Slide 25: Outlook 2023 and key takeaways
Outlook 2023 and key takeaways Q2 2023 Call Presentation < 25 >
Slide 26: FY 2023 market outlook - European trailer market normalizes
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 27: Updated FY 2023 outlook targets sales slightly above € 2 bn
Updated FY 2023 outlook targets sales slightly above € 2 bn and a margin of up to 9% Old Group Updated Group • Based on ongoing strong demand for trailer and truck components, SAF- FY 2023 Outlook FY 2023 Outlook HOLLAND is targeting group sales slightly above EUR 2,000 mn, as of as of assuming stab
Slide 28: Key takeaways
Key takeaways SAF-HOLLAND benefitting from a more balanced regional mix with Americas having gained 1 importance, due to the Haldex acquisition and strong organic growth, while APAC benefitted strongly from organic growth 2 Haldex integration and synergy targets well under way. Enhanced product port
Slide 29: Contact and additional information
Contact and additional information Q2 2023 Call Presentation < 29 >
Slide 30: Investor relations contact & financial calendar
Investor relations contact & financial calendar Issuer & contact Financial calendar and events ODDO BHF & Commerzbank Corporate SAF-HOLLAND SE | Hauptstrasse 26 | 63856 Bessenbach September 6, 2023 Conference, Frankfurt Berenberg & Goldman Sachs German Fabian Giese September 19 & 20, 2023 Corporate
Slide 31: 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