SAF-HOLLAND SE

Investor Presentation • May 13, 2020

ALEXANDER GEIS (CEO) DR MATTHIAS HEIDEN (CFO)

Financial results Q1 2020

13 MAY 2020

AGENDA

Welcome

1 Performance Q1 2020 – Solid performance in a challenging environment

2 Outlook

Today's speakers – Welcome to our Q1 2020 Financial Results Conference

Alexander Geis

Chief Executive Officer

• CEO of the SAF-HOLLAND Group since February 26, 2019 and member of the Group Management Board since July 2011
• With SAF since 1995 and most recently President of Region EMEA and Chief Procurement Officer
• Previously member of the Management Board and responsible for the Business Unit Aftermarket and for the strategic and operative alignment of the global spare parts business
• MBA-degree of University of Maryland, USA

Dr Matthias Heiden

Chief Financial Officer

• CFO of the SAF-HOLLAND Group and member of the Group Management Board since March 2017
• Responsible for the areas of Finance, Accounting and Controlling, IT, Legal and Compliance, Human Resources, and Investor Relations and Corporate Communications.
• Previously CFO of SAP's German subsidiary and Regional CFO for Middle and Eastern Europe
• Degree in Business Administration and Doctor of Economic Sciences

1 Performance Q1 2020 – Solid performance in a challenging environment

WESTERN & EASTERN EUROPE		NORTH AMERICA			CHINA	SOUTH AMERICA		INDIA
Truck	Trailer	Truck	Trailer	Truck	Trailer	Truck	Trailer	Truck	Trailer
-27%	-15%	-25%	-25%	-45%	-45%	-6%	-7%	-56%	-60%

The global commercial vehicle markets declined in Q1 2020 (vs. Q1 2019), partly due to uncertainties about future economic prospects caused by the coronavirus.

P&L Q1 2020 – Quality of earnings slightly improved

		Total	Q1/2020	in %		Total	Q1/2019	in %
TEUR	Q1/2020	Adjustments	adjusted*	of sales	Q1/2019	Adjustments	adjusted*	of sales
Sales	283,411	–	283,411	100.0%	345,968	–	345,968	100.0%
Cost of sales	-232,454	1,304	-231,150	-81.6%	-285,716	1,839	-283,877	-82.1%
Gross profit	50,957	1,304	52,261	18.4%	60,252	1,839	62,091	17.9%
Other income	494	–	494	0.2%	365	–	365	0.1%
Other expenses	–	–	–	0.0%	–	–	–	0.0%
Impairment of goodwill	–	–	–	0.0%	–	–	–	0.0%
Selling expenses	-16,249	1,934	-14,315	-5.1%	-18,217	1,713	-16,504	-4.8%
Administrative expenses	-16,639	742	-15,897	-5.6%	-18,360	2,201	-16,159	-4.7%
Research and development costs	-4,567	88	-4,479	-1.6%	-5,590	86	-5,504	-1.6%
Operating profit	13,996	4,068	18,064	6.4%	18,450	5,839	24,289	7.0%
Share of net profit of investments accounted for using the equity method	377	–	377	0.1%	486	–	486	0.1%
EBIT	14,373	4,068	18,441	6.5%	18,936	5,839	24,775	7.2%
Finance income	1,222	–	1,222	0.4%	359	–	359	0.1%
Finance expenses	-4,048	–	-4,048	-1.4%	-2,765	–	-2,765	-0.8%
Finance result	-2,826	–	-2,826	1.0%	-2,406	–	-2,406	-0.7%
Result before taxes	11,547	4,068	15,615	5.5%	16,530	5,839	22,369	6.5%
Income taxes	-2,890	-1,437	-4,327	-1.5%	-5,092	-903	-5,995	-1.7%
Tax rate (%)	25.0%		27.7%		30.8%		26.8%
Result for the period	8,657	2,631	11,288	4.0%	11,438	4,936	16,374	4.7%

* Adjusted earnings correspond to the management perspective. The adjustments essentially include restructuring and transactions costs, write-off of goodwill, depreciation and amortization arising from purchase price allocations, expenses arising from the step-up of inventories arising from purchase price allocations and remeasurement effects related to call and put options.

Financial Results Q1 2020 < 7 >

Group results – Satisfactory start into the current financial year

• Sales in Q1 2020 influenced by

• Acquisition effects (+0.5 per cent respectively € +1.6 mn)
• FX effects (+0.6 per cent respectively € +1.9 mn)
• Organic effects (-19.1 per cent respectively € -66.0 mn net)

• Adj. EBIT margin in Q1 2020 influenced by

• Improved gross profit margin due to higher share of high-margin aftermarket business (+)
• Higher SG&A ratio as not all cost-cutting measures have yet unfolded their full impact (-)

• No goodwill impairments

EMEA – Adj. EBIT margin stable in a challenging market environment

• Sales in Q1 2020 influenced by

• Acquisition effects (+0.9 per cent respectively € +1.6 mn)
• FX effects (0.0 per cent respectively € -0.1 mn)
• Organic effects (-11.7 per cent respectively € -20.5 mn)
• Adj. EBIT margin in Q1 2020 affected by
  • Improved gross profit margin (+)
    • Aftermarket business (+)
    • OE business (+)
  • Higher SG&A ratio as not all cost-cutting measures have yet unfolded their full impact (-)
• No goodwill impairment on EMEA region

Americas – Earnings situation influenced by significantly lower sales volume

• Sales in Q1 2020 influenced by
  • FX effects (+1.6 per cent respectively € +2.0 mn)
  • Organic effects (-21.5 per cent respectively € -28.2 mn)

• Adj. EBIT margin in Q1 2020 affected by

• Slightly lower gross profit margin (-)
  • Aftermarket business (+)
  • OE business (-)
• Higher SG&A ratio as not all cost-cutting measures have yet unfolded their full impact (-)
• Adj. EBIT margin in Q1 2019 affected by
  • Contractually agreed passing on of the 2018 steel price increases (+)

APAC – Moving close to break-even

• Sales in Q1 2020 influenced by

• FX effects (-0.5 per cent respectively € -0.2 mn)
• Organic effects (-44.8 per cent respectively € -17.3 mn due to unfavourable market development in China and India)

• Adj. EBIT margin in Q1 2020 affected by

• Significantly lower gross profit margin (-)
  • Esp. OE business (-)
• Higher SG&A ratio as not all cost cutting measures have yet unfolded their full impact (-)
• No goodwill impairment on APAC region

Investments and depreciation – Safeguard Operational Excellence Program

• Investments in plant, property, equipment and intangible assets reached 2.4 per cent of Group sales
• Operating cash flow (10.9 cent of Group sales) covers investments by far
• Focus of investments: rationalisation and expansion investments in the US and Germany; Program FORWARD 2.0
• Close monitoring of the investment approval process to streamline capital allocation
• Depreciation (excl. impairment of goodwill, R&D projects and tangible assets) increased due to higher investments in recent years and lower sales

Net working capital – Improvements support strong free cash flow generation

• Net working capital (NWC) 25.7 per cent or € 55.2 mn below previous year's figure
  • Inventories 14.9 per cent below prior year's level with a decrease in sales of 18.1 per cent
  • Trade receivables down 27.6 per cent on substantially improved cash collection
  • Trade payables down 15.1 per cent or € 25.5 mn compared to previous year's figure
  • Related to sales over the last twelve months (LTM), NWC ratio improved from 15.9 per cent to 13.0 per cent

Operating free cash flow – 9.1 per cent of sales

NOTE: All figures shown are rounded, minor discrepancies may arise from additions of these amounts. * Operating Free Cash Flow = Net cash flow from operating activities less Net cash flow from investing activities (purchase of PP&E and intangible assets less proceeds from sales of PP&E); Operating free cash flow for Q1 2018 to Q4 2019 retrospectively adjusted according to the new definition

Significant improvement in operating free cash flow to € 25.7 mn (Q1 2019: € -5.7 mn)

• Operating cash flow at € 32.0 mn (Q1 2019: € 8.6 mn)
  • Working capital optimization (Δ € 23.4 mn)
• Investing cash flow (PP&E and intangible assets) at € 6.3 mn (Q1 2019: € 14.3 mn)
  • Rationalisation and expansion investments in the US and Germany;
  • Program FORWARD 2.0

Net debt | Equity ratio – Stable net debt position

• Cash and debt position temporarily influenced by cash inflow from promissory note (March 2020)
• Cash inflow will be used to refinance the convertible bond that falls due on 12 September 2020 (volume: EUR 99.8 million) and the 5-year tranches of the promissory note issued in November 2015 that falls due on 27 November 2020 (volume: EUR 140.5 million).
• Equity ratio temporarily influenced by balance sheet extension due to refinancing

Product	Amount € mn	Maturity date
Convertible bond	95.4	09/2020
Promissory note loan old (5 years)	52.0	11/2020
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	11/2023
Promissory note loan new (5 years)	69	03/2025
Promissory note loan old (10 years)	9	10/2025
Revolving credit facility	200.0	10/2025
Non-current loan	50.0	06/2026
Promissory note loan new (7 years)	15	03/2027
Promissory note loan new (10 years)	5	03/2030

Financial Results Q1 2020 < 16 >

** option for an additional € 100 mn

• RCF mostly undrawn

Financial Results Q1 2020 Financial Results < 17 >

Employee Safety

• We protect the health and safety of our employees worldwide through close monitoring and regular guidance updates: travel suspended and precautionary updates have been issued and subsequently refined.
• Early quarantine measures established. Global COVID-19 response team in place including best practice sharing. Flexible working models established.

Ramp-up of Greenfield Operation in China

• Chinese New Year break extension and regional quarantine measures have delayed return to ramp-up the Greenfield plant. Plant is back in operation since early April. First products delivered to customers.
• Availability of workforce has improved to > 95 per cent again with challenges remaining for international support and leadership.

Other SAFH Plants and subsidiaries

• Temporary production shutdowns: India (5 weeks in March/April), Canada (2 weeks in April), Brazil (2 weeks in April), Singapore (until June 2, 2020)
• Selective short-time work in April and May: Germany and Turkey
• Subsidiary shutdowns and/or remote work: Italy, France, Spain, Malaysia (until May 13, 2020), Romania, South Africa

Supply Chain and Customers

• SAFH's dual and multi-sourcing strategy instrumental to mitigate risks and manage the supply chain. No production stop until now due to missing parts at SAF-HOLLAND.
• Ongoing supply chain monitoring and mitigating activities.
• Communication lines to both customers and suppliers in place globally.
• Trailer builders across all Europe (e.g. Wielton, Krone, Kögel) have shut down temporarily or announced short-time work respectively. Re-start of production end of April / beginning of May with reduced volumes.

Anticipated Financial Impact

• Financial impact on FY2020 not fully quantifiable yet.
• Corona adds to market downturns and puts pressure on the industry and its supply chain.
• SG&A cuts initiated globally to flex cost base.
• "Cash is King" program started with dedicated team and specific targets.

WESTERN & EASTERN EUROPE		NORTH AMERICA		CHINA		SOUTH AMERICA			INDIA
	Truck	Trailer		Truck	Trailer		Truck	Trailer		Truck	Trailer		Truck	Trailer
New*	-35% to 40%	-20%	New*	-40% to -50%	-40% to -50%	New*	-30%	-40%	New*	-30%	-35%	New*	-25%	-30%
Old**	-10% to -15%	-5% to -10%	Old**	-40%	-35%	Old**	-20%	-30%	Old**	+20%	+5%	Old**	-20%	-20%

2020E:

• Lower volumes in Western & Eastern Europe
• Significant declines in North America and China

2020E:

• South America with lower volumes
• India with a weaker development

	FY 2019	FY 2020E (old)	FY 2020E* (new)
Sales	€ 1,284 mn	Low double digit percentage decline	Decline by 20 to 30 per cent
Adj. EBIT margin	6.2 per cent	Between 4 and 5 per cent	Between 3 and 5 per cent
CAPEX	4.1 per cent of sales	Around 3 per cent of sales	Around 3 per cent of sales

• The forecast takes into account the foreseeable adverse effects on our business due to the coronavirus at the time of preparation (May 13, 2020). However, the economic effects on SAF-HOLLAND cannot currently be adequately determined or reliably quantified in full. The forecast is therefore subject to a high degree of uncertainty.

• Stable contribution from aftermarket business
• Strong focus on SG&A savings and FCF generation
• Solid financial position
• OPERATIONAL EXCELLENCE as key strategic cornerstone
• Global COVID-19 response team in place
• Financial impact from COVID-19 on FY2020 not fully quantifiable yet

DATE	EVENT
20.05.2020	Ordinary Annual General Meeting 2020
20.05.2020	Extraordinary Annual General Meeting 2020
28.05.2020 Warburg Virtual Roadshow
25.06.2020	Warburg Highlights 2020
13.08.2020	Publication Half-Year Financial Report 2020
18.08.2020	Bankhaus Lampe German Conference
21.09.2020	Berenberg / Goldman Sachs German Corporate Conference
14.10.2020	Jefferies European Mid-Cap Industrial Forum

• 10.11.2020 CIC Market Solutions Forum
• 18.11.2020 Publication Quarterly Statement Q1-Q3 2020

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

»WE ARE HAPPY TO ANSWER YOUR QUESTIONS.«

Appendix

Financial Results Q1 2020 Financial Results < 24 >

Net working capital Q1 2020 (kEUR)

Definition	Old	New	New vs. Old
Inventories (kEUR)	166,767	166,767	0
Trade receivables (kEUR)	135,340	135,340	0
Income tax receivables (kEUR)	7,058	-	-7,058
Other current assets (kEUR)	33,925	-	-33,925
Financial assets (kEUR)	4,126	-	-4,126
Trade payables (kEUR)	-142,938	-142,938	0
Other current liabilities (kEUR)	-30,145	-	+30,145
Income tax liabilities (kEUR)	-704	-	+704
Other provisions (current and non-current) (kEUR)	-17,724	-	+17,724
Net working capital (kEUR)	155,705	159,169	+3,464

Net working capital ratio (%) Q1 2020

Definition	Old	New	New vs. Old
Sales (Q1 2020 x 4) (kEUR)	1,133,644	-
Sales (LTM) (kEUR)	-	1,221,598
Net working capital (kEUR)	155,705	-
Net working capital (kEUR)	-	159,169
Net working capital ratio (%)	13.7	13.0	-70bps

Operating Free Cash Flow Q1 2020 (kEUR)

Definition	Old	New	New vs. Old
Net cash flow from operating activities (kEUR)	32,014	32,014	0
Purchase of PP&E (kEUR)	-5,446	-5,446	0
Purchase of intangible assets (kEUR)	-1,295	-1,295	0
Proceeds from sales of PP&E (kEUR)	-	0,418	+0,418
Operating Free Cash flow (kEUR)	25,273	25,691	+0,418

Capital employed Q1 2020 (kEUR)

Definition	Old	New	New vs. Old
Total assets (kEUR)	1,181,276	-	-1,181,276
Current liabilities (kEUR)	-345,574	-	+345,574
Total equity (kEUR)	-	318,554	+318,554
Financial liabilities (excl. refinancing costs, incl. finance lease liabilities) (kEUR)	-	575,618	+575,618
Pension and other similar benefits (kEUR)	-	31,233	+31,233
Cash and cash equivalents (kEUR)	-	-319,393	-319,393
Capital employed (kEUR)	835,702	606,012	-229,690

Return on capital employed (ROCE) (%) Q1 2020

Definition	Old	New	New vs. Old
EBIT (Q1 2020 x 4) (kEUR)	57,492	-
Adjusted EBIT (LTM) (kEUR)	-	73,482
Capital employed (kEUR)	835,702	-
Capital employed (kEUR)	-	606,012
ROCE (%)	6.9	12.1	+520bps

Disclaimer

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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 information only and does not purport to be comprehensive and is not intended to be (and should not be used as) the sole basis of any analysis or other evaluation. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither SAF-HOLLAND nor any of its directors, officers, employees or advisors nor any other person shall have any responsibility or liability whatsoever (for negligence or otherwise) arising, directly or indirectly, from the use of this presentation, or its contents or otherwise in connection with this presentation.

This presentation contains certain statements related to our future business and financial performance and future events or developments involving SAF-HOLLAND and/or the industry in which SAF-HOLLAND operates that may constitute forward-looking statements. These statements may be identified by words such as "believes," "expects," "predicts," "intends," "projects," "plans," "estimates," "aims," "foresees," "anticipates," "targets," and similar expressions. Forward-looking statements are not historical facts, but solely opinions, views and forecasts which are based on current expectations and certain assumptions of SAF-HOLLAND's management or cited from third party sources which are uncertain and subject to risks. Actual events may differ significantly from the anticipated developments due to a number of factors, including without limitation, changes in general economic conditions, changes affecting the fair values of the assets held by SAF-HOLLAND and its subsidiaries, changes affecting interest rate levels, changes in competition levels, changes in laws and regulations, environmental damages, the potential impact of legal proceedings and actions and the Group's ability to achieve operational synergies from past or future acquisitions. Should any of these risks or uncertainties materialize, or should underlying expectations not occur or assumptions prove to be incorrect, actual results, performance or achievements of SAF-HOLLAND may (negatively or positively) vary materially from those described, explicitly or implicitly, in the relevant forward-looking statement.

The information contained in this presentation, including any forward-looking statements expressed herein, speaks only as of the date hereof and reflects current legislation and the business and financial affairs of the SAF-HOLLAND which are subject to change and audit. Neither the delivery of this presentation nor any further discussions of SAF-HOLLAND with any of the recipients thereof shall, under any circumstances, create any implication that there has been no change in the affairs of SAF-HOLLAND since such date. Consequently, SAF-HOLLAND neither accepts any responsibility for the future accuracy of the information contained in this presentation, including any forward-looking statements expressed herein, nor assumes any obligation, to update or revise this information to reflect subsequent events or developments which differ from those anticipated.

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