SAF-Holland SE · XETR:SFQ
SAF-Holland — Investor Day (January 2023)
56 slides from SAF-Holland's investor day presentation, Jan 26, 2023
Slide 1: Capital Markets Brush-up: HALDEX Post-Merger Integration: Status and Targets
Capital Markets Brush-up HALDEX Post-Merger Integration: Status and Targets JAN 26, 2023 Capital Markets Brush-up Jan 26, 2023 < 1 >
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by SAF-HOLLAND SE (“SAF-HOLLAND”) and comprises written materials concerning SAF-HOLLAND and Haldex AB (“Haldex”). It contains summary information only and does not purport to be comprehensive and is not intended to be (and should not be used as) the so
Slide 3: Welcome and Overview of Acquisition Integration HALDEX
Welcome and Overview of Acquisition Integration HALDEX Alexander Geis, CEO Capital Markets Brush-up Jan 26, 2023 << 3 >>
Slide 4: 2023 Outlook: Market Trends
TRUCK AND TRAILER MARKETS IN NA AND EUROPE EXPECTED TO BE MODERATELY LOWER WHILE APAC IS BOUND TO POST STRONG GROWTH 2023 Outlook: Market Trends EUROPE NORTH SOUTH CHINA INDIA AMERICA AMERICA Truck Trailer Truck Trailer Truck Trailer Truck Trailer Truck Trailer 2023 -5% -5% to -8% -4% -5 % -9% -8 %
Slide 5: Key benefits from the HALDEX acquisition
THE COMBINATION OF SAF-HOLLAND AND HALDEX FORMS A PROMISING FIT TO ACHIEVE A UNIQUE ROLE IN THE COMMERCIAL VEHICLE INDUSTRY Key benefits from the HALDEX acquisition 1 Unique combination of axle and suspension systems with telematics, EBS and predictive maintenance functions 2 Aftermarket powerhouse
Slide 6: Integration of Haldex prepared and to be continued in 2023
INTEGRATION OF HALDEX PREPARED AND TO BE CONTINUED IN 2023 WITH THE OBJECTIVE OF MAKING SAF-HOLLAND AND HALDEX TRULY ONE COMPANY Preparation Transition Integration / combination Phase 1: Phase 2: Phase 3: Phase 4: Go-Live Key elements PMI preparation Day-2 preparation & further integration* • "Corne
Slide 7: Measures to make SAF-HOLLAND and HALDEX truly one company
CONSISTENT PURSUIT OF MEASURES WITH THE OBJECTIVE OF MAKING SAF-HOLLAND AND HALDEX TRULY ONE COMPANY Contribution to overall corporate strategy B U I L D I N G T H E F U T U R E S T R O N G E R TO G E T H E R ! Implementation of the target organization in all functions and regions Optimization of le
Slide 8: Regional segmentation of SAF-HOLLAND Group
THE COMBINED GROUP TO REPORT IN CONSOLIDATED REGIONAL SEGMENTS Regional segmentation of SAF-HOLLAND GROUP Americas EMEA APAC Capital Markets Brush-up Jan 26, 2023 < 8 >
Slide 9: Lean management structure SAF-HOLLAND Group
LEAN MANAGEMENT STRUCTURE SAF-HOLLAND GROUP: REGIONALLY ORIENTED EXECUTIVE COMMITTEE, SUPPORTED BY GLOBAL ENGINEERING & TECHNOLOGY AND SOURCING NEW CEO Board CFO Board CFO Board EC (until 03/31) EC (from 01/01) EC ORGANIZATION Integration of COO organization into Alexander Wilfried Transition Frank
Slide 10: Meet and Greet: Introduction new CFO Frank Lorenz-Dietz
Meet and Greet: Introduction new CFO Frank Lorenz-Dietz Frank Lorenz-Dietz, CFO Capital Markets Brush-up Jan 26, 2023 << 10 >>
Slide 11: Introduction Frank Lorenz-Dietz
INTRODUCTION FRANK LORENZ-DIETZ PERSONAL B A C KG R O U N D • Born May 8, 1973, married, 2 kids • Bosch Group, Automotive division Germany and Spain 19 years in different management positions, i.e., plant • Diploma in Industrial Engineering and Business director finance Administration (Electrical En
Slide 12: Introduction Frank Lorenz-Dietz: Focus Targets
INTRODUCTION FRANK LORENZ-DIETZ FOCUS TA R G E T S • Cash is King! • Analyze and derive a cash generating focused product portfolio. Each and every product will be subject to this • Improved and sustained Cash Flow generation as a criterion in the development phase already pillar for self-financing
Slide 13: Update Financial Integration Synergies Potential 2023 and mid-term 2027
Update Financial Integration Synergies Potential 2023 and mid-term 2027 Wilfried Trepels, CFO Capital Markets Brush-up Jan 26, 2023 << 13 >>
Slide 14: Synergies of EUR 17.4 mn in 2023 identified bottom-up
SYNERGIES OF EUR 17.4 MN IN 2023 IDENTIFIED IN A BOTTOM-UP PROCESS SYNERGY OVERVIEW – SIGNIFICANT POTENTIAL IN G&A, PROCUREMENT AND CROSS-SELLING Bottom-up savings potential evaluation – EBIT contribution (in EUR mn), 2023 Annual EBIT impact after one-off cost 2.4 0.0 Key synergy opportunities Syner
Slide 15: Synergy potential adjusted by 35% risk buffer
BOTTOM-UP SYNERGY POTENTIAL ADJUSTED BY A 35% RISK BUFFER – SYNERGY OVERVIEW TARGET RANGE OF EUR 10-12 MN TO BE REALIZED IN 2023 Synergy expectations – EBIT contribution (in EUR mn), 2023 21 3-5 17 10-12 Bottom-up Transformation Net synergies Risk buffer Full synergies synergies cost (35%) 2023 Capi
Slide 16: Bulk of 2023 synergies from SG&A and cross-selling
THE BULK OF THE SYNERGY POTENTIAL IN 2023 RESULTS FROM SG&A AND SYNERGY OVERVIEW CROSS-SELLING SYNERGIES HALDEX integration synergy overview – P&L view of EBIT effect (in EUR mn), 2023 • Most of the synergies are 7-9 expected in the overhead due to a disproportionately high SG&A ratio at HALDEX 10-1
Slide 17: Americas and EMEA contribute large part of synergies
THE AMERICAS AND EMEA REGIONS CONTRIBUTE THE LARGE PART OF REGIONAL VIEW SYNERGIES – CORPORATE SYNERGIES INCL. HALDEX LISTING COST HALDEX integration synergies – Regional Split of EBIT effect (in EUR mn), 2023 • Strong synergy impact in 1-2 Americas due to high footprint 5-7 <1.0 overlaps and cross-
Slide 18: 2027 synergies of EUR 52.5 mn identified
FOR 2027, SYNERGIES OF EUR 52.5 MN IDENTIFIED IN BOTTOM-UP PROCESS SYNERGY PROCUREMENT PROVIDES FOR MAJOR PART OF EXPECTED SYNERGY POTENTIAL OVERVIEW Bottom-up savings potential evaluation – EBIT contribution (in EUR mn), 2027 Annual EBIT impact after one-off cost 3.3 0.0 52.5 Key synergy opportunit
Slide 19: Synergy potential adjusted by 40% risk buffer
BOTTOM-UP SYNERGY POTENTIAL ADJUSTED BY A 40% RISK BUFFER – SYNERGY OVERVIEW TARGET RANGE OF EUR 25-35 MN MID-TERM Synergy expectations – EBIT contribution (in EUR mn), 2027 • Higher assumed risk buffer of 40% due to mid-term planning 52.5 horizon • Assuming 60% implementation 20-25 of identified sy
Slide 20: Mid-term financial impact from synergy potential
MID-TERM FINANCIAL IMPACT RESULTING FROM EXPECTED SYNERGY SYNERGY OVERVIEW POTENTIAL IN SG&A EXPENSES, CROSS-SELLING AND MATERIAL COST HALDEX integration synergy overview – P&L view of EBIT effect (in EUR mn), 2027 • Cross-selling synergies driven by 3-4 25-35 sustainable access to an 9-12 extended
Slide 21: Americas and EMEA biggest synergy contributors mid-term
THE AMERICAS AND EMEA REGIONS ARE THE BIGGEST SYNERGY REGIONAL VIEW CONTRIBUTORS ALSO MID-TERM HALDEX integration synergies – Regional view of EBIT effect (in EUR mn), 2027 • Americas and EMEA synergy 1-2 25-35 >1 potentials are expected to 11-15 unfold in the mid-term • The regions are driving the
Slide 22: Mid-term synergy effects of EUR 25-35 mn
INTEGRATION OF HALDEX INTO THE SAF-HOLLAND GROUP EXPECTED TO SYNERGY OVERVIEW YIELD MID-TERM SYNERGY EFFECTS OF EUR 25 - 35 MN HALDEX integration synergies overview – EBIT effect (in EUR mn) • Risk-adjusted synergy potential with an effect of EUR 10-12 mn 25 - 35 identified for 2023 already • Risk-a
Slide 23: Haldex integration expected to be EPS-accretive
THE HALDEX INTEGRATION IS EXPECTED TO BE EPS-ACCRETIVE, GENERATING A POSITIVE ROI AS OF 2023 Contribution of the HALDEX acquisition after synergies (in EUR mn), 2023 • Synergy identification process well advanced and first realization of potentials expected in 2023 • Financing cost and one-off cost
Slide 24: Smart Trailer: Rationale, Synergies and Technology Roadmap
„Smart Trailer“: Rationale, Synergies and Technology Roadmap Christoph Günter, President EMEA / CTO Fredrik Seglö, SVP R&D Capital Markets Brush-up Jan 26, 2023 << 24 >>
Slide 25: Highly complementary product portfolio of SAF-HOLLAND and HALDEX
HIGHLY COMPLEMENTARY PRODUCT PORTFOLIO OF SAF-HOLLAND AND HALDEX FORMING THE BASIS FOR THE DEVELOPMENT OF FUTURE TECHNOLOGY SAF-HOLLAND HALDEX Lift Axle EBS* and Air Suspension Parking Safety Control ABS* Kingpins Trailer Management Fifth Wheels Wheel Systems Suspension Systems Landing Gear Brake Ac
Slide 26: Ability to drive industry transformation via smart solutions
UNIQUE ABILITY OF SAF-HOLLAND TO DRIVE INDUSTRY TRANSFORMATION AND ADDRESS MEGATRENDS VIA SMART SOLUTIONS AND MECHATRONIC SYSTEMS Overview of CV industry megatrends ELECTRIFICATION DIGITALIZATION AUTOMATED TRAFFIC DRIVING SAFETY CV INDUSTRY MEGATRENDS • CO2 reduction • Predictive maintenance • CO2 r
Slide 27: Data from intelligent EBS system and sensors signal maintenance incidents
DATA FROM INTELLIGENT EBS SYSTEM AND SENSORS SIGNAL REPAIR AND MAINTENANCE INCIDENTS ON CRITICAL TRAILER COMPONENTS ELECTRIFICATION/ Telematics platform (e.g., predictive maintenance, fleet ALTERNATIVE DRIVES management or real-time marketing) Automated docking for loading/unloading Lightweight Diff
Slide 28: Unique one-stop-shop solution provider position
UNIQUE POSITION AS A ONE-STOP-SHOP SOLUTION PROVIDER WITH A COMPREHENSIVE PORTFOLIO OF AXLES & SUSPENSIONS, BRAKE & CHASSIS CONTROL AND TELEMATICS Competitive advantage from technological positioning & • Unique comprehensive product MARKET ACCESS portfolio consisting of axles & Fleets 0 suspension s
Slide 29: Megatrend Electrification
MEGATREND ELECTRIFICATION Electrified Trailer solutions leveraging SAF-HOLLAND and HALDEX technology EBS Gen4 • Sensor and CAN data hub for Trailers • Support brake energy recuperation and topography optimized energy recuperation and E-Axle control • E-Axle and Brake diagnostics TRAKr RECUPERATION T
Slide 30: Megatrend Connectivity
MEGATREND CONNECTIVITY SAF-HOLLAND offers solutions for predictive maintenance and smart product offerings Electronic brake performance Smart Steel measurement system • Combined mechatronic • Analysis of Brake performance via Big know-how with telematics Data analysis and axle & suspension • Reduced
Slide 31: Megatrend Automated Driving
MEGATREND AUTOMATED DRIVING Autonomous technology shaping the future of transportation of goods SHAC • Set industry standard for intelligent Truck / Trailer interface and communication • Harmonized with HALDEX brake system, paving the road for automated driving AUTOMATED COUPLING EBS Gen4 SEMI-AUTOM
Slide 32: Integration Benefits, Measures and Market Trend – Americas Region
Integration Benefits, Measures and Market Trend – Americas Region Kent Jones, President Americas Capital Markets Brush-up Jan 26, 2023 << 32 >>
Slide 33: Americas region now largest contributor to the group
THE AMERICAS REGION NOW LARGEST CONTRIBUTOR TO THE CONSOLIDATED SAF-HOLLAND AND HALDEX GROUP Key facts and figures Americas region Overview Market positioning 439 Covered • Canada ABA1) / Act. #1 Sales countries • USA 09/2022 YTD 230 • Mexico & Latin Am. (€mn) • Brazil & South Am. Couplers #1 SAF-Ho
Slide 34: Joint manufacturing footprint in the Americas
JOINT MANUFACTURING ORGANIZATION COVERING ALL RELEVANT MARKETS IN THE AMERICAS WITH ESTABLISHED FOOTPRINT IN MEXICO Footprint of SAF-HOLLAND and HALDEX production sites in Americas SAF-HOLLAND site HALDEX site BRAZIL WOODSTOCK ONTARIO Ontario A LV O R A D A Washington RIO GRANDE DO SUL MISSOURI Nort
Slide 35: Consolidation increases content per vehicle
CONSOLIDATION PUTS SAF-HOLLAND IN A STRONG POSITION TO INCREASE CONTENT PER VEHICLE AND ENABLES AN INTEGRATED OFFERING EFFICIENCY MEASURES MID-TERM BENEFITS • System level integration of both company products • Increased OEM content per Truck and customer into vehicle OEM’s support efficiency. Syste
Slide 36: Leverage Haldex know-how to navigate 2023 volatility
WE WILL LEVERAGE THE HALDEX KNOW-HOW TO NAVIGATE THE EXPECTED VOLATILITY IN 2023 AND DEVELOP INTEGRATED PRODUCT SOLUTIONS MARKET TRENDS HOW WE UTILIZE OUR T E C H N O LO GY A D VA N TA G E • 2023 solid OEM demand in North America for Truck • System integration of HALDEX Brake components into and Tra
Slide 37: Integration Benefits, Measures and Market Trend – EMEA Region
Integration Benefits, Measures and Market Trend – EMEA Region Christoph Günter, President EMEA / CTO Capital Markets Brush-up Jan 26, 2023 << 37 >>
Slide 38: Introduction to the consolidated EMEA region
INTRODUCTION TO THE CONSOLIDATED SAF-HOLLAND AND HALDEX EMEA REGION Key facts and figures EMEA region Overview Market positioning Covered • Operating region for Trailer axles & Sales 624 countries Europe, Middle East & #1-2 09/2022 YTD suspensions Africa (€mn) 145 ABA1) #1 SAF-Holland Haldex Head- •
Slide 39: Consolidated manufacturing footprint in EMEA
THE CONSOLIDATED MANUFACTURING FOOTPRINT STRENGTHENS THE POSITIONING OF THE SAF-HOLLAND GROUP IN THE EMEA REGION Footprint of SAF-HOLLAND Group production sites in EMEA SAF-HOLLAND site HALDEX site LANDSKRONA Sweden SWEDEN BESSENBACH(1-3) GERMANY Germany S Z E N T L O R I N C K ATA HUNGARY Hungary S
Slide 40: Leveraged business and infrastructure network enhancing Haldex positioning in EMEA
LEVERAGED SAF-HOLLAND BUSINESS AND INFRASTRUCTURE NETWORK AND EFFICIENCY BENCHMARK ENHANCING THE HALDEX POSITIONING IN EMEA EFFICIENCY MEASURES MID-TERM BENEFITS • Cross-selling between SAF-HOLLAND and HALDEX • Leveraging joint access to key Truck OE and Trailer accounts customers • Strengthened mar
Slide 41: Technological lineup to outperform EMEA market trends
UNIQUE TECHNOLOGICAL LINEUP ENABLEING SAF-HOLLAND TO OUTPERFORM EXPECTED EMEA MARKET TRENDS GOING FORWARD MARKET TRENDS HOW WE UTILIZE OUR T E C H N O LO GY A D VA N TA G E • Truck production still marked by pent- • Build-up of remanufacturing business for one of the up demand but assumed to come EM
Slide 42: Integration Benefits, Measures and Market Trend – APAC Region
Integration Benefits, Measures and Market Trend – APAC Region Andreas Richter, President APAC Capital Markets Brush-up Jan 26, 2023 << 42 >>
Slide 43: Introduction to the consolidated APAC region
INTRODUCTION TO THE CONSOLIDATED SAF-HOLLAND AND HALDEX APAC REGION Key facts and figures APAC region Overview Product Region Position 112 Covered • India Trailer axles #1 Sales countries • China 09/2022 YTD • Korea (€mn) 26 • Indonesia ABA1) #2 • Australia/New Zealand SAF-Holland Haldex • Singapore
Slide 44: Production sites across APAC
SAF-HOLLAND AND HALDEX COVER ALL MAJOR MARKETS ACROSS APAC: 44 MARKET LEADER POSITION FOR AXLES IN THE THRIVING INDIAN MARKET Footprint of SAF-HOLLAND and HALDEX production sites in the APAC region SAF-HOLLAND site HALDEX site X I A N YA N G ( ) Joint Venture partner North Korea CHINA (FAST) Japan C
Slide 45: APAC synergy potential driven by cross-selling
APAC SYNERGY POTENTIAL IS DRIVEN BY CROSS-SELLING OPPORTUNITIES AND AN ENHANCED JOINT MARKET ACCESS BENEFITS AND OPPORTUNITIES • Extension of customer reach both through direct sales but also by using both companies well established distributor network • Cross-selling opportunities between the compa
Slide 46: Combination strengthens regional coverage and product offering in APAC
THE COMBINATION OF SAF-HOLLAND AND HALDEX WILL STRENGTHEN THE REGIONAL COVERAGE AND PRODUCT OFFERING IN THE APAC REGION TECHNOLOGICAL ADVANTAGE MARKET TRENDS • The two companies bring together their knowledge • India: Further expansion of Truck and Trailer and competencies for Trailer axles and brak
Slide 47: Purpose and Mid-Term Targets
Purpose and Mid-Term Targets Alexander Geis, CEO Frank Lorenz-Dietz, CFO Capital Markets Brush-up Jan 26, 2023 << 47 >>
Slide 48: Sales target of EUR 2.4 to 2.5 billion by 2027
SUSTAINED SALES GROWTH ABOVE MARKET TREND TARGETED TO GENERATE EUR 2.4 TO 2.5 BILLION IN SALES BY 2027 SAF-HOLLAND Group Sales (in EUR bn) • SAF-HOLLAND mid-term CAGR is 2.4-2.5 expected to come in significantly higher bn compared to T&T market growth of 2.0% to 2.5% at approx. 3.5% to 4.5% • Main g
Slide 49: Adjusted EBIT margin targeted at 9.0 to 9.5% by 2027
ADJUSTED EBIT MARGIN TARGETED TO EXPAND TO 9.0 TO 9.5% BY 2027 SAF-HOLLAND Adjusted EBIT margin as a %-age of Group Sales • Group adj. EBIT margin is expected to be expanded to 9.0% to 9.5% 9.0 – 9.5 • Aftermarket Powerhouse with an 7.0-8.0 guidance increased AM share in sales of more 7.5 7.8 consen
Slide 50: Focus on cash generation: reduce NWC requirements
FOCUS ON CASH GENERATION: FURTHER REDUCTION OF NWC REQUIREMENTS EXPECTED Net Working Capital as a %-age of Group Sales • Integral part of "Cash is King" program 24.61) • Target is to further reduce the inventory level going forward based upon supply chain 18.91) normalization 15.9 14.8 15.0-16.0 • I
Slide 51: Joint ROCE target of at least 15.0% by 2027
FOCUS ON RETURNS: JOINT ROCE TARGET LEVEL AT LEAST 15.0% BY 2027 Return on Capital Employed Target (in %) • ROCE of SAF-HOLLAND based on capital employed incl. the 17.71) financing related to the HALDEX 15.7 transaction was 12.9% (Sept. 30, >=15.0 2022) • Mid-term target level of at least 15.0 % bas
Slide 52: Capex ratio poised to increase to a maximum of 3.0%
CAPEX RATIO GOING FORWARD POISED TO INCREASE SLIGHTLY TO A MAXIMUM OF 3.0% CAPEX Ratio of SAF-HOLLAND (% of Group Sales) • Very asset-light business model featuring low CAPEX intensity <=3.0 • The higher vertical integration of HALDEX implies a slightly higher 2.0-2.5 CAPEX ratio as compared to guid
Slide 53: Questions & Answers Session
Questions & Answers Session Capital Markets Brush-up Jan 26, 2023 << 53 >>
Slide 54: Closing Remarks
Closing Remarks Alexander Geis, CEO Capital Markets Brush-up Jan 26, 2023 << 54 >>
Slide 55: Closing remarks: We are building the future – stronger together
CLOSING REMARKS: WE ARE BUILDING THE FUTURE – STRONGER TOGETHER! P E R S P EC T I V E S N E X T I N F O TO U C H P O I N T S • 2023 focus on integration and transformation: Detailed integration and synergy plan. We are building the Preliminary Figures FY 2022 SAFH stand-alone Future - Stronger toget
Slide 56: Thank you for your attention!
Thank you for your attention! Capital Markets Brush-up Jan 26, 2023 << 56 >>