SAF-Holland SE · XETR:SFQ
SAF-Holland — Q2 2018 Earnings Presentation
28 slides from SAF-Holland's earnings presentation, Aug 14, 2018
Slide 1: SMART STEEL Q2 2018 Results
SMART STEEL Q2 2018 Results Detlef Borghardt, CEO Dr. Matthias Heiden, CFO August 14, 2018
Slide 2: Agenda
Agenda Business Summary Guidance adjustment FY 2018 Market update Regional trends: Status and profitability trend in the Americas Adjustment Group targets in sales and earnings FY 2018 2
Slide 3: Business Summary Q2 2018
Business Summary Q2 2018 Q2 2018 sales growth of 15.0% reaching historically highest Q2 sales level of approx. € 345.4 mn (py: € 300.3 mn) Organic sales growth increased to 11.7% Current market environment marked by continued soaring customer demand and strained industry supply chain coincidin
Slide 4: Business Summary Q2 2018
Business Summary Q2 2018 Q2 2018 adjusted EBIT at € 23.8 mn (py: € 26.7 mn) down 10.9%; but sequentially higher than Q1 2018 (€ 20.3 mn) Adjusted EBIT margin came in at 6.9% (py: 8.9%) lower than anticipated Burden from increased operating cost related to the restructuring and realignment of t
Slide 5: Business Summary Q2 2018: Guidance adjustment
Business Summary Q2 2018: Guidance adjustment Based upon Q2 2018 figures and expected further developments for the remainder of the year, SAF-HOLLAND adjusts its sales and earnings targets for the full business year 2018 (adj. EBIT margin specification) Considering group adj. EBIT margin we now
Slide 6: Trailer market trend North America: Sustained strong order intake
Trailer market trend North America: Sustained strong order intake, backlog reaches up to six months Trailer net orders 50000 40000 30000 20000 10000 0 Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec. 2016 17649 21360 13789 15840 13302 11931 9482 14031 11746 20158 35790 34060 2017 32818 2
Slide 7: Truck market trend North America: Order boom versus strained supply chain
Truck market trend North America: Order boom versus strained supply chain Class-8 net orders 50000 40000 30000 20000 10000 0 Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec. 2015 34984 30838 24918 22044 20021 19747 23811 18926 19235 25749 16388 27660 2016 18062 17650 16147 13500 14095 13
Slide 8: Heavy truck market in the EU: Solid trend continues
Heavy truck market in the EU: Solid trend continues New registrations of heavy commercial vehicles (HCV) >16 tons 40000 30000 20000 10000 0 Jan Feb March April May June July Aug Sep Oct Nov Dec 2015 18564 17234 24798 21653 20633 23126 21865 15516 25171 28529 22431 20839 2016 21989 21052 28250 26756
Slide 9: Group sales and adjusted EBIT by quarter
Group sales and adjusted EBIT by quarter Sales in € mn Adj. EBIT in € mn. and adj. EBIT margin in % 400 35 14% 345.4 350 30 26.3 26.7 12% 300.3 294.9 300 287.3 25.1 273.7 277.1 274.2 25 23.8 259.9 255.8 252.6 22.7 21.6 10% 250 8.9% 20.9 20.3 9.6% 19.8 20 7.5% 18.5 8.7% 8% 200 8.7% 8.4% 7.8% 6.7% 6.9
Slide 10: Share of group sales by channel and region in Q2 2018
Share of group sales by channel and region in Q2 2018 12.9% (py: 8.0%) 23.1% (py: 24.2%) 35.6% (py: 38.9%) 76.9% (py: 75.8%) 51.5% (py: 53.1%) OE business Aftermarket business EMEA Americas APAC/China Share of the OEM business increases to 76.9%. Share of APAC/China picks up significantly to 12.9% w
Slide 11: Q2 2018 Sales composition
Q2 2018 Sales composition in € mn 370 345.4 360 350 21.1 340 330 -11.1 320 35.1 310 300.3 300 290 280 270 Sales in Q2 2017 Organic growth FX effects M&A Sales in Q2 2018 Top line in Q2 2018 increased by 15.0 % to € 345.4 mn incl. contributions from V.ORLANDI and York Group. Strong organic sales grow
Slide 12: Positive trend in organic sales growth continued in all regions
Positive trend in organic sales growth continued in all regions 60% 52.9% 49.2% 50% 40% 38.3% 35.8% 30% 20% 15.1% 11.0% 10% 8.6% 8.1% 7.6% 5.1% 5.2% 6.4% 0% EMEA Americas APAC/China Q3 17 Q4 17 Q1 18 Q2 18 (Versus py quarter) Positive trend in organic sales growth continued in all reporting regions.
Slide 13: Business performance Americas: Burden from realignment of plant network
Business performance Americas: Burden from realignment of plant network and soaring steel prices; successive improvement continues Sales in € mn Summary 200 Soaring customer demand and net order intakes coincide with strained industry supply chain 116.8 123.0 Despite ongoing realignment measures
Slide 14: Burdening effects on Q2 2018 adj. EBIT Americas region
Burdening effects on Q2 2018 adj. EBIT Americas region Add-on operating expenses of € 2.3 mn in € mn 8 7 -0.5 6 -1.8 5 4 7.3 3 -4.3 2 1 0.7 0 Adj. EBIT Q2 2017 Customer debit Expedited freight/ Plant Steel price Adj. EBIT Q2 2018 inefficiencies € 2.3 mn in extra operating expenses caused by the real
Slide 15: Add-on operating costs and adjusted EBIT margin trend Americas
Add-on operating costs and adjusted EBIT margin trend Americas: Successive improvement Add-on operating costs in € mn Adj. EBIT margin in % 7.0 6.3 10% 6.0 8% 6% 5.0 4.5% 4% 4.0 3.9 4.0 0.6% 2% -0.7% 0% 3.0 -4.1% 2.3 -2% 2.0 -4% -6% 1.0 -8% 0.0 -10% Q3 2017 Q4 2017 Q1 2018 Q2 2018 Cost situation der
Slide 16: Business performance by region: EMEA
Business performance by region: EMEA posts solid organic sales growth and operational leverage Sales in € mn Summary 250 Q2 2018 sales growth of 11.5 % to € 177.9 mn (py: € 200 177.9 159.6 mn) 159.6 150 Favorable macroeconomic environment, improved Eastern European and Middle-East business and O
Slide 17: Business performance by region: APAC/China
Business performance by region: APAC/China again achieves highest percentage sales growth within the Group Sales in € mn Summary 50 APAC/China as of Q2 2018 includes India: Acquired York 44.5 Group consolidated as of May 2018 40 Q2 2018 sales increased by 86.2% from € 23.9 mn 30 23.9 to € 44.6 m
Slide 18: Reconciliation sales to gross profit Q2 2018
Reconciliation sales to gross profit Q2 2018 in € mn Impact on gross margin in Q2 2018 400 350 345.4 291.3 Temp. workforce - 300 total Volume +- - 250 Raw materials 200 150 Product mix - - Thereof: Effects from US steel price Restructuring cost 100 4.3 Additional operating cost related to US 2.3 50
Slide 19: Reconciliation of reported EBIT to adjusted EBIT Q2 2018
Reconciliation of reported EBIT to adjusted EBIT Q2 2018 in € mn 30 23.8 1.6 19.6 2.6 20 10 0 Reported EBIT Depreciation and amortization from Restructuring and transaction costs Adjusted EBIT PPA Excl. restructuring and transaction costs totaling € 1.6 mn (py: € 1.9 mn) and PPA of € 2.6 mn (py: € 1
Slide 20: From EBIT to net income Q2 2018
From EBIT to net income Q2 2018 in € mn 30 19.6 20 -2.4 5.2 12.0 10 0 EBIT Finance result Income taxes Net income Clean EBIT of € 19.6 mn (py: € 20.6 mn) combined with lower net finance cost of € 2.4 mn (py: € 3.9 mn) and stable Group income taxes of € 5.2 mn (py: € 5.0 mn) producing net income of €
Slide 21: Basic EPS versus adjusted EPS
Basic EPS versus adjusted EPS in € 0.60 0.50 0.40 0.35 0.35 0.30 0.26 0.26 0.20 0.10 0.00 Basic earnings per share Adjusted basic earnings per share Q2 2017 Q2 2018 Based on 45.4 mn shares outstanding, basic EPS amounted to € 0.26 (py: € 0.26) and adjusted basic EPS to € 0.35 (py: € 0.35). 21
Slide 22: Inventories and net working capital (NWC)
Inventories and net working capital (NWC) Inventories in € mn and days of inventories Summary 200 194.4 75 Inventories, due to strong organic sales growth, and 151.8 deliberate step-up in the US, due to soaring steel 160 145.7 65 138.9 139.3 133.7 prices and stressed supply chain, increased to € 1
Slide 23: Operating free cash flow by quarter
Operating free cash flow by quarter in € mn 30 26.8 20 10.9 10 7.5 0 Q1 Q2 Q3 Q4 Q1 Q2 -10 -15.6 2017 2018 -16.6 -20 -29.5 -30 Q2 OFCF (net cash flow from operating activities less investments in PPE and intangible assets, pre M&A) came in at € -16.6 mn in 2018 (py: € 7.5 mn) caused a.o. by the incr
Slide 24: Net debt at € 252.0 mn - Equity ratio remains solid at 30.4%
Net debt at € 252.0 mn - Equity ratio remains solid at 30.4% Net debt Equity ratio in € mn Σ 105.5* Σ 252.0* 500 400 300 30.2% 30.4% 200 442.6 368.9 100 0 -116.9 -100 -200 -337.1 -300 -400 Dec 31, 2017 Jun 30, 2018 Dec 31, 2017 Jun 30, 2018 Cash Debt * Net debt including cash and cash equivalents an
Slide 25: Reconciliation of net debt Q1 2018 to Q2 2018
Reconciliation of net debt Q1 2018 to Q2 2018 in € mn 280 252.0 6.1 16.6 230 66.3 180 75.0 142.6 20.4 130 80 30 Net debt Mar 31 Repaid Bond Dividend payment M&A op. FCF Others Net debt Jun 30 2018 -20 2018 Net debt up by € 109.4 mn driven by dividend payout, M&A spend (V.Orlandi and York Group) and
Slide 26: Adjusted financial targets 2018 and mid-term planning 2020
Adjusted financial targets 2018 and mid-term planning 2020 New FY 2018 outlook* FY 2018* Strategy 2020 Organic: € 1,250 mn Organic increase of 5 to 7% Organic increase of 4 to 5% assuming stable FX rates and assuming stable FX rates and unchanged scope of unchanged scope of consolidation consolidati
Slide 27: Disclaimer
Disclaimer Not for general release, publication or distribution in the United States, Australia, Canada or Japan. By attending this presentation you agree to be bound by the following limitations: This presentation has been prepared by SAF-HOLLAND S.A. (“SAF-HOLLAND”) and comprises written materials
Slide 28: Investor Relations
Investor Relations SAF-HOLLAND GmbH Stephan Haas Hauptstraße 26 63856 Bessenbach Phone +49 6095 301-617 Telefax +49 6095 301-102 Mobile +49 170 306 64 97 [email protected] www.safholland.com 28