SAF-HOLLAND SE

Investor Presentation • May 12, 2021

FINANCIAL RESULTS Q1 2021

ALEXANDER GEIS, CEO INKA KOLJONEN, CFO

MAY 12, 2021

AGENDA

HIGHLIGHTS Q1 2021

Alexander Geis

1

FINANCIAL PERFORMANCE

Inka Koljonen

Alexander Geis

HIGHLIGHTS Q1 2021: STRONG MARKET RECOVERY

• Sales: strong start to the year in the EMEA and APAC regions driven by dynamic market recovery and further gains in market share in Europe and India
• Solid aftermarket performance
• Adj. EBIT margin: structural cost-cutting measures of the last months strongly paying off in all regions
• Capex ratio: full year guidance of 2.5 per cent will be achieved
• NWC ratio: cyclical rebound requires higher investments into inventories and the supply chain
• Operating free cash flow: affected by NWC build up

ACCELERATING ORDER INTAKE LEADS TO STRONG VISIBILITY AND HIGH CAPACITY UTILISATION AT LEAST UNTIL AUTUMN

GROUP: STRUCTURAL COST-CUTTING MEASURES PAYING OFF

MAIN DRIVERS

• Due to excellent market position and strong order situation sales increased by 7.1 per cent to € 168 mn
• Sales growth adjusted for FX effects: +9.4 per cent
• Structural cost-cutting measures and supplemental collective agreement helping to secure profitability at a constant high level
• Various measures taken to counterbalance material price increases and supply chain shortages

EMEA REGION WELL POSITIONED FOR FURTHER MARKET RECOVERY

AMERICAS: ADJUSTED EBIT MARGIN STRONGLY IMPROVED

APAC: BREAK EVEN ACHIEVED

MAIN DRIVERS

• Sales increased by 28.7 per cent especially driven by strong OE business in India and Australia
• Sales growth adjusted for FX effects: +32.6 per cent
• Volume increase and cost decrease driving profitability
• China: trending in the right direction

APAC REGION HAS LAID THE FOUNDATION FOR FUTURE PROFITABLE GROWTH

INVESTMENTS: DISCIPLINED INVESTMENT POLICY CONTINUED

• Capex ratio of 1.9 per cent not representative for the full year
• Many investment projects are only at the beginning; cash outflow will follow in the subsequent quarters
• Focus of investing activities in Q1: further automation of production processes at the German and US locations

DISCIPLINED INVESTMENT POLICY SUPPORTS FREE CASH FLOW GENERATION

NET WORKING CAPITAL: CYCLICAL INCREASE TO SAFEGUARD DELIVERY PERFORMANCE

• Due to very high demand combined with severe tightness in supply chain, conscious investment in NWC was necessary in Q1
• Material availability and freight capacity extremely tight
• Inventories up by 23.2 per cent to € 156 mn
• Trade receivables up 36.4 per cent to € 130 mn
• Trade payables up by 37.5 per cent to € 147 mn
• Sales (LTM) up by only 0.2 per cent to € 962 mn
• Cash-is-King program continued with an extended scope

NWC REBOUND EXPECTED TO EASE UP IN THE COURSE OF THE YEAR

CASH CONVERSION RATE: NET WORKING CAPITAL KEY DRIVER

in EUR thousands	Q1 2020	Q2 2020	Q3 2020	Q4 2020	Q1 2021
EBITDA	25,876	6,551	21,059	28,606	30,827
Change in NWC	8,018	-20,209	29,824	30,848	-23,969
Other Cash and Non-Cash Items	2,980	3,728	6,191	1,635	2,275
Operating cash flow *	36,874	-9,930	57,074	61,089	9,133
Cash Conversion Rate in % **	142.5	-151.6	271,0	213.6	29.6
Net Capex	-6,323	-5,030	-4,073	-8,249	-5,201
Operating free cash flow *	30,551	-14,960	53,001	52,840	3,932

NET DEBT/EBITDA*: FURTHER DELEVERAGING EXPECTED

• Q1 2021 shows further improvement driven by slightly lower Net Debt and substantially better EBITDA (LTM)
• Further sequential deleveraging expected in the upcoming quarters driven by better EBITDA and lower Net Debt
• Strong gross liquidity position totalling € 380 mn (YE 2020: € 371 mn)
• Improved balance sheet structure and financial headroom provide flexibility for future growth

EBITDA* 85.7 63.0 63.2 82.1 87.0

2. Outlook

TRUCK AND TRAILER PRODUCTION 2021: STRONG UPSWING

All Company

	EUROPE		NORTH AMERICA			SOUTH AMERICA*	CHINA			INDIA
	Truck	Trailer	Truck	Trailer	Truck	Trailer	Truck	Trailer	Truck	Trailer
New:	+22%	+20%	+42%	+42%	+30%	+16%	-5% to -10%	0% to +5%	+114%	+182%
Old:	+15%	+16%	+41%	+32%	+30%	+6%	-15% to -20%	-5% to -10%	+30%	+40%

• SIGNIFICANT REBOUND IN NORTH AMERICA AND INDIA

* mainly Brazil;

• HIGHER VOLUMES IN EUROPE AND SOUTH AMERICA

• CHINA WITH DECLINING TRUCK VOLUMES

NOTE: Market estimates for trucks and trailers based on ACT Research, CLEAR, Deutsche Bank Research and local sources

Financial Results Q1 2021 < 13 >

New: As of May 2021, Old: As of March 2021

GUIDANCE 2021* UNCHANGED

	FY 2020	FY 2021
Sales	€ 959.5 mn	€ 1,050 mn to € 1,150 mn
Adj. EBIT margin	6.1 per cent	Around 7 per cent
CAPEX	2.5 per cent of sales	Around 2.5 per cent of sales

• The EBIT guidance for FY 2021 is based on the assumption that in the remainder of the year there will be no unexpected impacts from the ongoing COVID-19 pandemic on the production and supply chains.

WE ARE VERY WELL ON TRACK TO ACHIEVE OUR FULL YEAR TARGETS

• 1. Benefiting from the upswing in Europe, Brazil and India based on leading market positions; US trailer business to follow shortly
• 2. Structural cost-cutting measures bearing fruit
• 3. Disciplined approach to manage accelerating customer demand and working capital investments in recovery cycle
• 4. Further deleveraging expected
• 5. Material price increases included in full year guidance

DATE	EVENT
02.06.2021	ODDO BHF Next Cap Forum
10.06.2021	Annual General Meeting
12.08.2021	Publication of the Half-Year Financial Report 2021
01.09.2021	Commerzbank Corporate Conference
15.11.2021	Publication of the Quarterly Statement Q3 2021

INVESTOR RELATIONS CONTACT

Michael Schickling T: +49 (0) 6095 301 617 E: ir@safholland.de

Alexander Pöschl T: +49 (0) 6095 301 117 E: ir@safholland.de

Klaus Breitenbach T: + 49 (0) 6095 301 565 E: ir@safholland.de

3. Appendix

TRUCK AND TRAILER PRODUCTION 1Q 2021: STRONG START TO THE YEAR

	EUROPE	NORTH AMERICA			SOUTH AMERICA**	CHINA		INDIA
Truck*	Trailer	Truck	Trailer	Truck	Trailer	Truck	Trailer	Truck	Trailer
+15%	+12%	+12%	+7%	+25%	+41%	+98%	+142%	+110%	+37%

• HIGHER VOLUMES IN EUROPE AND NORTH AMERICA

NOTE: Market estimates for trucks and trailers based on ACT Research, CLEAR, ACEA, ANFIR, ANFAVEA and local sources * Registrations, ** mainly Brazil

P&L Q1 2021: QUALITY OF EARNINGS SUBSTANTIALLY IMPROVED

in EUR thousands	Q1 2021	Total Adjustments	Q1 2021 adjusted*	in % of sales	Q1 2020	Total Adjustments	Q1 2020 adjusted*	in % of sales
Sales	285,620	–	285,620	100.0%	283,411	–	283,411	100.0%
Cost of sales	-230,159	524	-229,635	-80.4%	-232,454	1,304	-231,150	-81.6%
Gross profit	55,461	524	55,985	19.6%	50,957	1,304	52,261	18.4%
Other income	276	–	276	0.1%	494	–	494	0.2%
Other expenses	–	–	–	–	–	–	–	–
Impairment of goodwill	–	–	–	–	–	–	–	–
Selling expenses	-14,692	1,794	-12,898	-4.5%	-16,249	1,934	-14,315	-5.0%
Administrative expenses	-15,847	-125	-15,972	-5.6%	-16,639	742	-15,897	-5.6%
Research and development costs	-6,034	311	-5,723	-2.0%	-4,567	88	-4,479	-1.6%
Operating profit	19,164	2,504	21,668	7.6%	13,996	4,068	18,064	6.4%
Share of net profit of investments accounted for using the equity method	289	–	289	0.1%	377	–	377	0.1%
EBIT	19,453	2,504	21,957	7.7%	14,373	4,068	18,441	6.5%
Finance income	927	–	927	0.3%	1,222	–	1,222	0.4%
Finance expenses	-2,605	–	-2,605	-0.9%	-4,048	–	-4,048	-1.4%
Finance result	-1,678	–	-1,678	-0.6%	-2,826	–	-2,826	-1.0%
Result before taxes	17,775	2,504	20,279	7.1%	11,547	4,068	15,615	5.5%
Income taxes	-6,508	1,104	-5,404	-1.9%	-2,890	-1,437	-4,327	-1.5%
Tax rate (%)	36.6%		26.7%		25.0%		27.7%
Result for the period	11,267	3,608	14,875	5.2%	8,657	2,631	11,288	4.0%

GROUP: RECONCILIATION EBIT TO ADJUSTED EBIT

in EUR thousands	Q1 2021	Q1 2020	Change absolute	Change in %
EBIT	19,453	14,373	5,080	35.3%
EBIT margin in %	6.8%	5.1%	–	–
Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA	2,290	2,436	-146	-6.0%
Valuation effects from call and put options	–	–	–	–
Restructuring and transactions costs	214	1,632	-1,418	-86.9%
Adjusted EBIT	21,957	18,441	3,516	19.1%
Adjusted EBIT margin in %	7.7%	6.5%	–	–

EMEA: RECONCILIATION EBIT TO ADJUSTED EBIT

in EUR thousands	Q1 2021	Q1 2020	Change absolute	Change in %
EBIT	15,124	14,019	1,105	7.9%
EBIT margin in %	9.0%	8.9%	–	–
Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA	1,162	1,162	–	–
Valuation effects from call and put options	–	–	–	–
Restructuring and transactions costs	-88	-347	259	-74.6%
Adjusted EBIT	16,198	14,834	1,364	9.2%
Adjusted EBIT margin in %	9.6%	9.4%	–	–

AMERICAS: RECONCILIATION EBIT TO ADJUSTED EBIT

in EUR thousands	Q1 2021	Q1 2020	Change absolute	Change in %
EBIT	4,695	2,860	1,835	64.2%
EBIT margin in %	5.2%	2.7%	–	–
Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA	542	619	-77	-12.4%
Valuation effects from call and put options	–	–	–	–
Restructuring and transactions costs	135	641	-506	-78.9%
Adjusted EBIT	5,372	4,120	1,252	30.4%
Adjusted EBIT margin in %	6.0%	3.9%	–	–

APAC: RECONCILIATION EBIT TO ADJUSTED EBIT

in EUR thousands	Q1 2021	Q1 2020	Change absolute	Change in %
EBIT	-366	-2,506	2,140	-85.4%
EBIT margin in %	-1.3%	-11.9%	–	–
Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA	586	655	-69	-10.5%
Valuation effects from call and put options	–	–	–	–
Restructuring and transactions costs	167	1,338	-1,171	-87.5%
Adjusted EBIT	387	-513	900	-175.4%
Adjusted EBIT margin in %	1.4%	-2.4%	–	–

D&A RATIO: FURTHER LEVER TO IMPROVE ADJ. EBIT MARGIN

• Investments in plant, property, equipment and intangible assets reached 1.9 per cent of Group sales (FY 2021 guidance: around 2.5 per cent of Group sales)
• Focus of investments: further automation of production processes at the Bessenbach location and subsequent payments for the Yangzhou plant
• Close monitoring of the investment approval process to streamline capital allocation
• Depreciation and Amortization ratio (excl. PPA, impairment of goodwill and R&D projects) has peaked in Q2 2020

Financial Results Q1 2021 < 26 >

CURRENT FINANCING STRUCTURE

Product	Amount € mn	Maturity date
Loan RMB	9.0	06/2022
Promissory note loan old (7 years)	5.0	11/2022
Promissory note loan new (3 years)	141.0	03/2023
Promissory note loan new (3.5 years)	20.0	09/2023
Revolving credit facility***	200.0	10/2024
Promissory note loan new (5 years)	69.0	03/2025
Loan	5.0	09/2025
Promissory note loan old (10 years)	9.0	10/2025
Non-current loan	45.0	06/2026
Promissory note loan new (7 years)	15.0	03/2027
Promissory note loan new (10 years)	5.0	03/2030

Financial Results Q1 2021 < 27 >

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