Preliminary financial figures for 2023 fiscal year confirm record levels of sales and profitability

SAF-HOLLAND SE: Preliminary financial figures for 2023 fiscal year confirm record levels of sales and profitability

• Outlook for 2023 fiscal year achieved
• Preliminary Group sales increase significantly to around EUR 2,106 million 
• Positive operating performance increases preliminary adjusted EBIT margin to ca. 9.6% (previous year: 8.0 %)
• Investments made in automation and capacity expansions lead to preliminary capex ratio of ca. 2.9%

Bessenbach (Germany), February 19, 2024. The SAF-HOLLAND SE ("SAF-HOLLAND"), one of the world’s leading suppliers of trailer and truck components, today published preliminary, unaudited financial figures for the 2023 financial year.

Due to high customer demand and the inclusion of Haldex AB in the scope of consolidation as of February 21, 2023, Group sales recorded growth of around 35% to ca. EUR 2,106 million (previous year: EUR 1,565.1 million), and thus confirmed the outlook of around EUR 2,100 million. Adjusted for currency and acquisition effects, sales in 2023 fiscal year increased by ca. 11%, with all three regions (EMEA, Americas and APAC) contributing to sales growth.

Regional mix and high share of aftermarket business strengthen resilience

The original equipment business with truck and trailer customers benefited from robust demand in all three regions in the past fiscal year. In addition, the acquisition of Haldex strengthened the regional distribution of sales and diversification by customer segment. As a result, the less cyclical aftermarket business increased to around 31% of Group sales (previous year: 26.9%), partly due to the strong growth in the original equipment business in previous periods. In terms of geographical distribution, the EMEA and Americas regions were almost equally represented (around 45% respectively 42%; previous year 52.1% respectively 37.7%) with APAC increasing to around 13% (previous year: 10.2%).

The adjusted EBIT increased by ca. 62% to around EUR 202 million in 2023 fiscal year (previous year: EUR 124.6 million). At around 9.6%, the adjusted EBIT margin was also significantly higher than in the same period of the previous year (8.0%) and benefited significantly from efficiency gains achieved, economies of scale due to higher production volumes and a higher share of the aftermarket business. In addition, synergy effects from the integration of Haldex helped to improve the margin. The outlook for profitability of around 9.5% was thus slightly exceeded.

Alexander Geis, Chairman of the Management Board and CEO of SAF-HOLLAND SE, says: “We achieved impressive results in the past fiscal year. We have not only achieved our ambitious targets, but also made better progress than expected with the acquisition and integration of Haldex AB. Thanks to the strategic measures we have taken and our significant aftermarket business, we are now in a more resilient position. With our one-stop shop offering and innovative products, we are a reliable partner for the commercial vehicle industry and want to continue to make the greatest possible contribution to our customers' success with a stronger market position.”

Region EMEA: Despite weaker market for trailer, significant increase in sales and profitability achieved

In the EMEA region, sales in 2023 increased by ca. 16% to around EUR 946 million (previous year: EUR 815.3 million), in particular due to the acquisition of Haldex AB. Adjusted for currency and acquisition effects, a slight increase of sales of approximately 1% was recorded despite a weaker development of the trailer market relevant for SAF-HOLLAND.

Cost increases, among others in the personnel area, and the comparatively lower profitability of Haldex AB were more than offset by measures to increase efficiency and economies of scale as well as the passing on of price increases to the market. In addition, acquisition-related cost synergies had a positive effect on adjusted EBIT. In total, this led to an adjusted EBIT in the EMEA region in the 2023 reporting period of ca. EUR 73 million (previous year: EUR 52.7 million). The adjusted EBIT margin of ca. 7.7% grew significantly compared to the previous year (6.5%).

Region Americas: Adjusted EBIT margin significantly raised to double-digit level

In the Americas region, sales revenue in 2023 increased by around 51% to ca. EUR 890 million (previous year: EUR 590.6 million). The main drivers were the first-time consolidation of Haldex and strong organic growth of around 12% particularly based on continued high demand for trailer and truck components in general as well as increased demand for technologically more sophisticated and effective disc-braked axle systems for trailers. The aftermarket business in the Americas region also recorded growth.

Based on the strong sales growth, economies of scale and cost savings achieved in the course of the integration of Haldex, the Americas region increased the adjusted EBIT in the 2023 fiscal year to around EUR 97 million (previous year: EUR 55.9 million) which corresponds to an increase of ca. 74%. The adjusted EBIT margin improved significantly from 9.5% to ca. 10.9%.

Region APAC: Significant double-digit organic growth and increase of profitability to ca. 11.9%

In 2023, the APAC region generated sales of around EUR 270 million (previous year: EUR 159.2 million) which corresponds to a plus of ca. 69%. Currency and acquisition effects had a subordinate significance in total so that organic revenue increased by ca. 59%. The main growth driver was the demand for axle and suspension systems in India, which was driven by government infrastructure measures and the expansion of the transportation sector. The business in Australia and Southeast Asia also contributed to the strong growth. In addition to the original equipment business, the aftermarket business also developed positively.

Adjusted EBIT almost doubled and achieved around EUR 32 million (previous year: EUR 16.0 million). In addition to economies of scale, an improved business mix also had a positive impact. A significant improvement in earnings in China also contributed to the improvement by reaching the operating break-even point. Accordingly, the adjusted EBIT margin rose significantly to ca. 11.9% (previous year: 10.1%).

Capex ratio reaches forecast level of a maximum of 3% of Group sales

Additions to property, plant and equipment and intangible assets (before effects of purchase price allocation) totalled around EUR 62 million in the 2023 financial year (previous year: EUR 36.3 million). As a result, SAF-HOLLAND achieved a capex ratio of ca. 2.9%. In the course of 2023, investments focused on the further automation of production processes, the construction of a new production line for fifth wheels in Mexico and capacity expansions in India.

Business performance in the fourth quarter of 2023

Group sales amounted to around EUR 517 million in the fourth quarter of 2023 and were up by ca. 33% on the previous year of EUR 389.4 million. In addition to the consolidation of Haldex, the main driver was a high demand, particularly in APAC and EMEA. Compared to the third quarter (EUR 552.9 million), sales decreased mainly due to a seasonally weaker business in the Americas and APAC.

The adjusted EBIT amounted to around EUR 49 million which corresponds to an improvement of approx. 52% compared to the previous year's figure of EUR 32.3 million. The adjusted EBIT margin increased to 9.5% in the fourth quarter of 2023 (previous year: 8.3%) due to the good operating performance. Compared to the third quarter of 2023 (EUR 58.6 million), adjusted EBIT fell slightly due to seasonal factors.

Frank Lorenz-Dietz, member of the Management Board and CFO of SAF-HOLLAND SE, says: „2023 was a very successful year in which we took a major step towards achieving our medium-term financial targets. Thanks not least to the acquisition of Haldex, we were able to record significant sales growth and raised the adj. EBIT margin to our long-term level. We remain committed to further profitable growth and aim to achieve consolidated sales of EUR 2,400 to 2,500 million and an adjusted EBIT margin in the range of 9.0 to 9.5% by 2027.”

SAF-HOLLAND will publish the final, audited figures with detailed information on the segments, the outlook for the 2024 fiscal year and the dividend proposal with the 2023 Annual Report on March 14, 2024. The 2023 Sustainability Report will be published at the same time.

The business figures in this press release are preliminary due to pending external audit and approval by the Supervisory Board.

Contact:

Dana Unger

VP Investor Relations, Corporate & ESG Communications

Tel: +49 6095 301 949

dana.unger@safholland.de

Alexander Pöschl

Senior Manager Investor Relations, Corporate & ESG Communications

Tel: +49 6095 301 117

alexander.poeschl@safholland.de

About SAF-HOLLAND

SAF-HOLLAND SE is a leading international manufacturer of suspension-related assemblies and components for trailers, trucks and buses. Around 5,900 dedicated employees worldwide are already working on the future of the transport industry today, generating sales of approximately EUR 1.6 billion in 2022.The product range includes, among other things, axle and suspension systems for trailers, fifth wheels for trucks and coupling systems for trucks, semi-trailers and trailers as well as brake and EBS systems. In addition, SAF-HOLLAND develops innovative products to increase the efficiency, safety and environmental friendliness of commercial vehicles. The focus here is on the digitalization and networking of trailers as well as the electrification of axles. The products and solutions are marketed under the brands SAF, Holland, Haldex, V.Orlandi, TrailerMaster, Neway, KLL and York. SAF-HOLLAND supplies original equipment to vehicle manufacturers on six continents. In the aftermarket business, the company supplies spare parts to manufacturers' service networks as well as to wholesalers and, through an extensive global distribution network, to end customers and service centers. SAF-HOLLAND shares have been listed in the Prime Standard of the German Stock Exchange since 2007 and are part of the SDAX selection index. For further information, please visit www.safholland.com.