SAF-HOLLAND SE

Quarterly Report • Nov 7, 2019

Q3 2019

QUARTERLY STATEMENT OF SAF-HOLLAND GROUP

as of September 30, 2019

KEY FIGURES

Results of operations

in EUR thousands
		Q1-Q3/2019 Q1-Q3/2018	Q3/2019	Q3/2018
Sales	1,008,626	980,853	313,160	340,545
Gross profit	164,241	155,382	45,516	50,795
Gross profit margin in %	16.3	15.8	14.5	14.9
Earnings before interest and tax (EBIT)	38,895	59,299	2,151	22,522
EBIT margin in %	3.9	6.0	0.7	6.6
Adjusted EBIT	66,916	71,146	16,973	27,030
Adjusted EBIT margin in %	6.6	7.2	5.4	8.0
Result for the period	17,280	37,027	-3,488	15,254
Adjusted result for the period	42,871	46,069	9,841	17,859
Undiluted earnings per share	0.36	0.82	-0.09	0.34
Adjusted undiluted earnings per
share	0.94	1.01	0.21	0.39

Financial position

in EUR thousands
		Q1-Q3/2019 Q1-Q3/2018	Q3/2019	Q3/2018
Cash flow from operating activities before income tax paid	58,342	-12,700	21,845	4,250
Cash conversion rate in %	87.2	-17.9	128.7	15.5
Net cash flow from operating activities	44,721	-33,048	17,116	-2,192
Cash flow from investing activities	-42,794	-26,092	-7,695	-15,029
Purchase of property, plant and equipment and intangible assets	-36,861	-25,262	-12,625	-10,024
Operating free cash flow	7,860	-58,310	4,491	-12,216

Employees

		Q1-Q3/2019 Q1-Q3/2018
Employees (on average)	4,316	4,234
Sales per employee (in EUR thousands)	233.7	231.7

Net assets

in EUR thousands
		09/30/2019 12/31/2018
Balance sheet total	1,035,745	977,416
Equity	345,196	332,550
Equity ratio in %	33.3	34.0
Cash and cash equivalents	126,107	155,009
Net debt	274,695	213,386
Net working capital	195,124	172,468
Net working capital in % of sales	15.6	13.5

Yield

in %
		Q1-Q3/2019 Q1-Q3/2018
Return on capital employed (ROCE)	7.0	7.5

ROCE = EBIT (annualized) / (total assets – current liabili<es)

Due to rounding, the figures presented in this report may not add up precisely to the totals shown and per centages may not precisely reflect the absolute figures. Such differences are not of a material nature.

Table of Contents

4 Group Interim Management Report

• 4 Key Events in the First Nine Months of 2019
• 6 Sector Development
• 8 Earnings; Asset and Financial Position
• 15 Opportunities and Risk Report
• 16 Outlook
• 17 Events after the Balance Sheet Date
• 17 Alternative Performance Measures

18 Selected Financial Data

• 18 Consolidated Statement of Comprehensive Income
• 19 Consolidated Balance Sheet
• 20 Consolidated Cash Flow Statement
• 21 Regional Overview

22 Additional Information

• 22 Financial Calendar and Contact
• 22 Imprint

KEY EVENTS IN THE FIRST NINE MONTHS OF 2019

NEW SEGMENTATION SCHEME FOR CORPORATE MANAGEMENT

As of January 1, 2019, a new segmenta<on scheme was introduced to corporate management and group repor<ng, reflec<ng the growing importance of individual regions and the management approach. As a result, the APAC/China region is now divided into the regions "APAC" and "China". As of January 1, 2019, corporate management and group repor<ng are now conducted under the "EMEA", "Americas", "APAC" and "China" segments. These four regions cover both the original equipment and spare parts businesses.

ACQUISITION OF MAJORITY STAKE IN TRAILER TIRE PRESSURE MANAGEMENT SPECIALIST PRESSUREGUARD™

Effec<ve January 9, 2019, SAF-HOLLAND acquired 51 per cent of the shares in the manufacturer of <re pressure management systems PressureGuard. A purchase op<on for the remaining outstanding shares in the company was agreed between SAF-HOLLAND and the previous owner, Servitech Industries, Inc. SAF-HOLLAND can exercise this op<on at a later date. The purchase price for the acquired stake was in the low single-digit million euro range.

SAF-HOLLAND sees great poten<al in PressureGuard's proven <re pressure management technology to provide even more comprehensive axle and suspension solu<ons to its fleet customers in North America. By employing this solu<on, SAF-HOLLAND is not only expanding its systems exper<se but also increasing its added value. This one-stop sourcing approach provides fleet managers with a single point of contact and ensures a fully engineered system design that can address any compa<bility issues upfront. This approach also simplifies the warranty and aHer-sale support needed by today's fleets.

ACQUISITION OF THE STARA GROUP

Effec<ve February 1, 2019, SAF-HOLLAND acquired all shares in the Finnish Stara Group. SAF-HOLLAND took over the business opera<ons of the two family-owned companies AB Stara Parts Oy, Finland, and Trailax Ak<ebolag, Sweden. The purchase price was in the low double-digit million euro range. The Stara Group was previously the distribu<on partner of SAF-HOLLAND in Finland and Sweden, focusing primarily on axle and suspension systems for trailers. In addi<on, the Group has an excellent aHermarket network in the region with a total of three branches.

Through this acquisi<on, SAF-HOLLAND will be able to strengthen its brand awareness in Northern Europe. With Group-owned sales and service companies having a broader and more intensive coverage of the Finnish and Swedish markets, the Group also intends to further expand its market posi<on and the cross-selling of its Group brands.

CHANGE IN THE COMPANY'S TOP MANAGEMENT: SAF-HOLLAND APPOINTS ALEXANDER GEIS AS NEW CEO

On February 25, 2019, SAF-HOLLAND S.A. and Detlef Borghardt mutually agreed to terminate his mandates at SAF-HOLLAND effective February 26, 2019.

Alexander Geis, who was already responsible for the EMEA region and Global Procurement on the Group Management Board, was appointed as the new Chief Execu<ve Officer effec<ve February 26, 2019.

SAF-HOLLAND AND THE SCHWARZMÜLLER GROUP CONCLUDE 5-YEAR CONTRACT FOR TRAILER AXLES

In mid-April 2019, SAF-HOLLAND announced the conclusion of a contract with the Austrian company Wilhelm Schwarzmüller GmbH for the delivery of trailer axles with a contract value in the low three-digit million range. The contract period of five years is longer than customary. During this <me, SAF-HOLLAND will supply more than 75 per cent of the total volume put out for tender by the Schwarzmüller Group.

SAF-HOLLAND RECEIVES THE LARGEST SINGLE ORDER IN ITS HISTORY FROM KÖGEL TRAILER GMBH

At the end of April 2019, SAF-HOLLAND reported it had received another major contract for trailer axles and landing gear. SAF-HOLLAND and the Humbaur Group's Kögel Trailer GmbH, one of the leading trailer manufacturers in Europe, have concluded a mul<-year contract for the delivery of trailer axles and landing gear with a prospec<ve contract value in the low three-digit million range.

ORDINARY ANNUAL GENERAL MEETING APPROVES DIVIDEND PAYMENT OF EUR 0.45 PER SHARE AND EXTRAORDINARY GENERAL MEETING APPROVES THE INTRODUCTION OF AN ADDITIONAL THRESHOLD FOR VOTING RIGHTS NOTIFICATIONS (3 PER CENT)

The thirteenth Annual General Mee<ng of SAF-HOLLAND S.A. on April 25, 2019 in Luxembourg was met by strong interest from SAF-HOLLAND's shareholders, with an aNendance rate of more than 67 per cent. All of the proposed resolu<ons of the management were approved by a large majority, including the presenta<on of the annual and consolidated financial statements for the 2018 financial year, the management report and group management report, as well as the discharge of the members of the Board of Directors. The Annual General Mee<ng also discharged the auditor, PricewaterhouseCoopers Société coopéra<ve, for the 2018 financial year, who was then reappointed as the auditor for the 2019 financial year. The Annual General Mee<ng also resolved a dividend of EUR 0.45 (previous year EUR 0.45) per share for the 2018 financial year.

The Extraordinary General Mee<ng, which took place immediately aHer the Ordinary Annual General Mee<ng, approved all of the management's resolu<on proposals by a large majority with one excep<on. One of the most important items was the increase in Authorized Capital I from EUR 164.9 million to EUR 227.0 million.

In an effort to harmonize with the corresponding provisions of the German Securi<es Trading Act (Sec<on 33 [1] WpHG), the Extraordinary General Mee<ng of SAF-HOLLAND S.A. decided by way of an amendment to Ar<cle 18 (1) sentence 1 of the Company's Ar<cles of Associa<on, that Company shareholders who reach, exceed or fall below the vo<ng rights' threshold of 3 per cent are required to promptly file a vo<ng rights no<fica<on with the Company. The statutory repor<ng obliga<ons pursuant to Ar<cle 8 et seq. of the Transparency Act of the Grand Duchy of Luxembourg (Law of 11 January 2008 on transparency requirements for issuers), as amended, con<nue to apply.

SAF-HOLLAND AND LOHR INDUSTRIE SEAL STRATEGIC PARTNERSHIP FOR E-AXLES

In May 2019, SAF-HOLLAND signed a contract for a strategic partnership for electric trailer axles with the French world market leader for vehicle transporters LOHR Industrie S.A.

The coopera<on is ini<ally set up for 10 years and includes an extension clause. The worldwide distribu<on rights of the jointly developed AXEAL system are held by SAF-HOLLAND. The first semi-trailers for the transport of passenger cars were equipped with this new applica<on in the first quarter of 2019 for tes<ng purposes. In several weeks, the first LOHR customer vehicles equipped with AXEAL will be delivered to the US company Virginia Transport and the South African company KDG Logis<cs.

CHANGES IN THE COMPOSITION OF THE GROUP MANAGEMENT BOARD

On May 31, 2019, SAF-HOLLAND GmbH and Mr. Guoxin Mao, President China and member of the Group Management Board, mutually agreed on the termina<on of his service. Mr. Guoxin Mao resigned from his office with immediate effect. At the same <me, Jürgen KnoN was appointed as President China effec<ve June 1, 2019. Jürgen KnoN is a member of the extended management team and reports directly to Alexander Geis.

Steffen Schewerda, President Americas, resigned from office effec<ve September 6, 2019, aHer reaching an amicable agreement with SAF-HOLLAND GmbH on termina<ng his employment. Effec<ve September 9, 2019, Kent Jones was appointed as President Americas and member of the extended management team.

CHANGE IN CHAIRSHIP OF BOARD OF DIRECTORS

Dr. Mar<n KleinschmiN, member of the Board of Directors of SAF-HOLLAND S.A. since March 2013 and its vice chair since April 2017, assumed the du<es of Mar<na Merz effec<ve September 19, 2019 as ac<ng chair of the Board of Directors. Mar<na Merz resigned as chair for personal reasons but remains with the Company as a member of the Board of Directors.

OUTLOOK REVISED FOR 2019 FINANCIAL YEAR

The Group Management Board analysed the course of business and industry-specific framework condi<ons and adjusted the full-year forecast for 2019 on September 23, 2019.

SAF-HOLLAND now expects Group sales for fiscal year 2019 to range from EUR 1,260 million to EUR 1,300 million (previous year EUR 1,301 million), corresponding to a rate of change of 0 to minus 3 per cent (previous expecta<on sales growth of 4 to 5 per cent). The Group Management Board now expects the adjusted EBIT margin to range between 6.0 and 6.5 per cent for the full year (previous expecta<on: around the midpoint of the range of 7 to 8 per cent).

The investment is also an<cipated to be lower amoun<ng to between EUR 58 million and EUR 63 million (previous expecta<on: EUR 68 million to EUR 70 million). SAF-HOLLAND expects the fourth key indicator, net working capital in rela<on to Group sales, to be in the range of 13 to 14 per cent (previous expecta<on: 13 per cent).

CHRISTOPH GÜNTER APPOINTED AS PRESIDENT EMEA

SAF-HOLLAND GmbH appointed Christoph Günter as President EMEA and a member of the extended management team effec<ve October 1, 2019. In this role, he reports directly to Alexander Geis, CEO of SAF-HOLLAND.

SECTOR DEVELOPMENT

The produc<on of trailers in Europe, China and North America, the produc<on of trucks in North America, as well as the global aHermarket business, are all relevant factors when assessing the sector environment for the SAF-HOLLAND Group.

Sales breakdown Q1-Q3 2019

SAF-HOLLAND's truck business breaks down as follows: America (10.4 per cent of Group sales), EMEA (3.4 per cent of Group sales), China (0.6 per cent of Group sales) and APAC (0.4 per cent of Group sales).

DIVERGENT DEVELOPMENTS IN THE TRUCK AND TRAILER MARKETS

The global truck and trailer markets developed very differently during the first three quarter of 2019, partly as a result of uncertain<es concerning the future economic outlook. While the produc<on of trailers in North America grew, fewer units were manufactured in Europe and China. At the same <me, order intake for trailers and trucks in North America declined compared to the very strong prior-year period. Order backlogs are currently below the record levels achieved at the end of 2018. Overall, our expecta<ons for the sector environment described in the 2018 Annual Report have been confirmed so far in 2019.

HIGH PRODUCTION GROWTH FOR CLASS 8 TRUCKS IN NORTH AMERICA

According to es<mates by the market research ins<tute ACT Research, truck produc<on in the first nine months of 2019 increased by roughly 14 per cent year-on-year. A key driver of the higher produc<on was the working down of order backlogs.

CONTINUED UPSWING IN NORTH AMERICAN TRAILER MARKET

The North American trailer market con<nued its very posi<ve performance in the January through September 2019 period. According to the es<mates of FTR Transport Intelligence (FTR), trailer produc<on rose almost 8 per cent to 283,000 units.

LOWER YEAR-ON-YEAR TRAILER PRODUCTION IN EUROPE

AHer the historical highs achieved in 2018, the somewhat slower economic growth and persistent uncertain<es surrounding Brexit led to a 15 to 20 per cent reduc<on in trailer produc<on in the first three quarters of 2019 versus the prior year.

EUROPEAN TRUCK REGISTRATIONS INCREASE BY 5 PER CENT

According to the European Automobile Manufacturers' Associa<on (ACEA), new registra<ons of heavy trucks (over 16 tons) increased by 5 per cent in the European Union in the first three quarters of 2019. Despite the underlying concerns about Brexit, the Bri<sh market also registered growth of around 16 per cent. It is important, however, to view this growth in the context of the low prior-year comparisons. According to LMC Automo<ve, around 3 per cent more heavy trucks were produced in the first nine months than in the same period of the prior year.

TRAILER MARKET IN CHINA IN DECLINE

In the presence of the escala<ng trade conflict between China and the United States and the resul<ng uncertainty concerning China's further economic development, trailer produc<on since the beginning of 2019 has declined by approximately 15 to 20 per cent. As a result, the development of the premium segment, which is relevant for SAF-HOLLAND's business development (disc brake technology and air suspension systems aHer the imposi<on of stricter regulatory requirements), could not escape the impact of the nega<ve market trend and recorded a decline in demand.

LOWER ECONOMIC GROWTH AND NEW REGULATION IMPACT INDIA'S MARKET

Lower economic growth and the delayed introduc<on of the AIS113 regula<on (includes requirements for components used to manufacture commercial vehicles), as well as the ongoing effects from the implementa<on of uniform domes<c taxes for goods transporta<on, led to a decline in the produc<on of trailers of 60 per cent in the first nine months of the year. Market analysts are an<cipa<ng a decline in trailer produc<on for the year 2019 as a whole of 60 per cent.

EARNINGS; ASSET AND FINANCIAL POSITION

EARNINGS PERFORMANCE

GROUP SALES SLIGHTLY HIGHER YEAR-ON-YEAR

Group sales in the first nine months of 2019 reached a level of EUR 1,008.6 million and were 2.8 per cent higher than the level of EUR 980.9 million reported in the prior year. The addi<onal contribu<on to sales from the companies acquired since January 2018 amounted to EUR 38.1 million.

The posi<ve currency effects, resul<ng primarily from the apprecia<on of the US dollar versus the euro, amounted to EUR 22.0 million (previous year EUR –32.5 million). Sales adjusted for currency and acquisi<on effects therefore declined by 3.3 per cent to EUR 948.6 million.

PERCENTAGE OF SALES FROM SPARE PARTS BUSINESS GROWS

Sales from the original equipment business in the January to September 2019 repor<ng period improved by 1.3 per cent, or EUR 10.1 million, to EUR 759.5 million. The Americas region and acquisi<ons in the APAC region were the key contributors to this growth. The share of sales from the original equipment business in the repor<ng period declined slightly from 76.4 per cent to 75.3 per cent.

in EUR thousands
			Change
		Q1-Q3/2019 Q1-Q3/2018		absolute Change in %
Original equipment business	759,521	749,447	10,074	1.3 %
Spare parts business	249,105	231,406	17,699	7.6 %
Group sales	1,008,626	980,853	27,773	2.8 %
Original equipment business in %
of Group sales	75.3 %	76.4 %
Spare parts business in % of
Group sales	24.7 %	23.6 %

In contrast, sales in the spare parts business increased by EUR 17.7 million, or 7.6 per cent, to EUR 249.1 million. The key drivers of this performance were the Americas and EMEA regions. The share of sales from the spare parts business increased from 23.6 per cent to 24.7 per cent.

SLIGHT IMPROVEMENT IN COST OF SALES RATIO

The cost of sales in the repor<ng period increased 2.3 per cent from EUR 825.5 million to EUR 844.4 million following a rise in sales of 2.8 per cent. The cost of sales ra<o improved slightly from 84.2 per cent to 83.7 per cent. This performance was also posi<vely affected by the contractual passing on of last year's steel price increases, global sourcing savings, as well as by permanent price increases in the North American aHermarket business. Product mix effects and impairments on inventories had a nega<ve effect.

COMPREHENSIVE COST-CUTTING PROGRAMME LAUNCHED

Selling and general administra<ve expenses grew year-on-year by EUR 24.1 million, or 29.0 per cent, to EUR 107.4 million in the first nine months of the 2019 financial year. As a result, the corresponding cost ra<o increased from 8.5 per cent to 10.7 per cent. Beside consolida<on effects, higher personnel costs from adjustments in collec<ve wage agreements, as well as strategic new hirings had a par<cularly nega<ve impact. In addi<on, there were payments for depar<ng members of the Group Management Board, consultancy costs for the programme FORWARD in the US and the Chinese Greenfield project, as well as impairments on receivables. In the prior year, general administra<ve expenses included non-recurring income of EUR 4.4 million from the par<al seNlement of the US medical plan. In the light of the expected market development, Group Management Board launched a comprehensive cost-cuVng programme for all sites.

R&D RATIO SLIGHTLY ABOVE PREVIOUS YEAR'S LEVEL

Research and development costs in the first nine months of 2019 amounted to EUR 15.7 million and were slightly higher than previous year's level of EUR 15.5 million. In addi<on, a total of EUR 3.4 million (previous year EUR 2.4 million) in development costs were capitalized. The R&D ra<o (including capitalized development costs) amounted to 1.9 per cent of sales (previous year 1.8 per cent). The focus of the development ac<vi<es was on new products and adap<ng exis<ng solu<ons to meet specific customer and regional market requirements. The theme "SMART STEEL," which refers to the combina<on of mechanical products with sensors and electronics, is increasingly gaining importance.

ADJUSTED EBIT MARGIN UNDER PRESSURE FROM NON-RECURRING EXPENSES

Group earnings before interest and taxes (EBIT) were sharply lower in the first nine months of 2019, falling from EUR 59.3 million in the previous year to EUR 38.9 million. This figure contains non-recurring expenses in the amount of EUR 6.6 million (for more informa<on, please refer to the segment report for the China region) that were not adjusted for.

in EUR thousands
			Change
		Q1-Q3/2019 Q1-Q3/2018		absolute Change in %
Sales	1,008,626	980,853	27,773	2.8 %
EBIT	38,895	59,299	-20,404	-34.4 %
EBIT margin in %	3.9 %	6.0 %
Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA	7,288	5,849	1,439	24.6 %
Impairment of goodwill	6,691	-	6,691	-
PPA step-up from inventory measuring of acquisition	43	766	-723	-94.4 %
Valuation effects from call and put options		- -	-	-
Restructuring and transaction costs	13,999¹	5,232	8,767	167.6 %
Adjusted EBIT	66,916	71,146	-4,230	-5.9 %
Adjusted EBIT margin in %	6.6 %	7.2 %
Depreciation and amortization of property, plant and equipment and intangible assets (excluding
PPA)	23,543	15,572	7,971	51.2 %
in % of sales	2.3 %	1.6 %
Adjusted EBITDA	90,459	86,718	3,741	4.3 %
Adjusted EBITDA margin in %	9.0 %	8.8 %

1 Restructuring and transac<on costs of EUR 14.0 million (previous year EUR 5.2 million) include unscheduled deprecia<on of property, plant and equipment of EUR 2.1 million (previous year EUR 0.0 million).

The adjusted EBIT includes restructuring and transac<ons costs of EUR 14.0 million (previous year EUR 5.2 million), purchase price alloca<on effects of EUR 7.3 million (previous year EUR 6.6 million), as well as the full impairment of the goodwill from the China region (for more informa<on, please refer to the segment report for the China region) and amounted to EUR 66.9 million in the first nine months of 2019 (previous year EUR 71.1 million). The adjusted EBIT margin amounted to 6.6 per cent (previous year 7.2 per cent) in the first nine months of 2019.

IMPROVEMENT IN FINANCE RESULT

The finance result in the first nine months of 2019 improved to a level of EUR –8.7 million (previous year EUR –9.3 million). This improvement was mainly the result of lower average financial debt following the repayment of a bond with a volume of EUR 75.0 million and an interest coupon of 7 per cent in the prior year.

INCOME TAXES

The increase in the effec<ve Group tax rate from 25.9 per cent to 42.7 per cent is due above all to unrecognized deferred tax assets on loss carryforwards from foreign Group companies. The main source of losses year-to-date has been the Group companies in China, which recorded considerable losses because of restructuring measures. These losses are unlikely to be available for offseVng against taxes on future profits due to restric<ons on the use of losses under Chinese tax law. As a result, the recogni<on of a deferred tax asset for the losses incurred in the year 2019 was waived.

RESULT FOR THE PERIOD

Based on the higher effec<ve tax rate, the result for the period in the first nine months of 2019 amounted to EUR 17.3 million (previous year EUR 37.0 million).

Based on approximately 45.4 million ordinary shares issued, basic earnings per share in the first nine months of 2019 amounted to EUR 0.36 (previous year EUR 0.82), and diluted earnings per share amounted to EUR 0.32 (previous year EUR 0.71).

Group

in EUR thousands

		Change
		Q1-Q3/2019 Q1-Q3/2018		absolute Change in %
Sales	1,008,626	980,853	27,773	2.8 %
EBIT	38,895	59,299	-20,404	-34.4 %
EBIT margin in %	3.9 %	6.0 %
Additional depreciation and
amortization of property, plant
and equipment and intangible
assets from PPA	7,288	5,849	1,439	24.6 %
Impairment of goodwill	6,691	-	6,691	-
PPA step-up from inventory
measuring of acquisition	43	766	-723	-94.4 %
Valuation effects from call and
put options		- -	-	-
Restructuring and transaction
costs	13,999	5,232	8,767	167.6 %
Adjusted EBIT	66,916	71,146	-4,230	-5.9 %
Finance result	-8,747	-9,309	562	-6.0 %
Adjusted earnings before taxes	58,169	61,837	-3,668	-5.9 %
Income taxes	-15,298	-15,768	470	-3.0 %
Group tax rate	26.3 %	25.5 %
Adjusted result for the period	42,871	46,069	-3,198	-6.9 %
Number of shares	45,394,302	45,394,302
Adjusted basic earnings per share
in EUR	0.94	1.01	-0.07	-6.9 %
Adjusted diluted earnings per
share in EUR	0.80	0.87	-0.07	-8.0 %

Adjusted for restructuring and transac<on costs, purchase price alloca<on effects, the full impairment of the goodwill from the China region and based on an average Group tax rate of 26.3 per cent (previous year 25.5 per cent), the adjusted result for the period amounted to EUR 42.9 million (previous year EUR 46.1 million).

Based on the approximately 45.4 million ordinary shares issued, adjusted basic earnings per share amounted to EUR 0.94 (previous year EUR 1.01) and adjusted diluted earnings per share amounted to EUR 0.80 (previous year EUR 0.87).

SEGMENT REPORTING

EMEA REGION: SALES SLIGHTLY BELOW PRIOR-YEAR LEVEL

EMEA

in EUR thousands
			Change
		Q1-Q3/2019 Q1-Q3/2018		absolute Change in %
Sales	492,485	500,555	-8,070	-1.6 %
EBIT	40,518	51,007	-10,489	-20.6 %
EBIT margin in %	8.2 %	10.2 %
Additional depreciation and amortization of property, plant and equipment and intangible
assets from PPA	3,449	2,766	683	24.7 %
PPA step-up from inventory measuring of acquisition	3	207	-204	-98.6 %
Valuation effects from call and put options	-	-	-	-
Restructuring and transaction costs	2,768	3,071	-303	-9.9 %
Adjusted EBIT	46,738	57,051	-10,313	-18.1 %
Adjusted EBIT margin in %	9.5 %	11.4 %
Depreciation and amortization of property, plant and equipment and
intangible assets (excluding PPA)	11,441	6,861	4,580	66.7 %
in % of sales	2.3 %	1.4 %
Adjusted EBITDA	58,179	63,912	-5,733	-9.0 %
Adjusted EBITDA margin in %	11.8 %	12.8 %

In the EMEA region, sales in the first nine months of 2019 declined by 1.6 per cent to EUR 492.5 million (previous year EUR 500.6 million). The companies acquired since January 2018 contributed addi<onal sales of EUR 17.3 million. As a result of volume effects, organic sales declined by 4.9 per cent to EUR 476.1 million and outperformed the European sales markets.

In the first nine months of 2019, the EMEA region generated an adjusted EBIT of EUR 46.7 million (previous year EUR 57.1 million) and an adjusted EBIT margin of 9.5 per cent (previous year 11.4 per cent). The abovemen<oned volume effects and higher personnel expenses from the currently valid German collec<ve agreement had a nega<ve impact in the first nine months of 2019. A posi<ve effect on earnings in the repor<ng period came from the companies acquired since January 2018, while the earnings in first nine months of 2018 benefited from the reversal of warranty provisions and foreign currency effects (Turkish lira versus the euro).

AMERICAS REGION: EARNINGS SITUATION STABILISES

Americas

in EUR thousands
		Q1-Q3/2019 Q1-Q3/2018	Change	absolute Change in %
Sales	416,146	353,875	62,271	17.6 %
EBIT	18,567	3,317	15,250	459.8 %
EBIT margin in %	4.5 %	0.9 %
Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA	1,912	1,867	45	2.4 %
PPA step-up from inventory measuring of acquisition	-	-	-	-
Valuation effects from call and put options	-	-	-	-
Restructuring and transaction costs	5,571	1,303	4,268	327.6 %
Adjusted EBIT	26,050	6,487	19,563	301.6 %
Adjusted EBIT margin in %	6.3 %	1.8 %
Depreciation and amortization of property, plant and equipment and
intangible assets (excluding PPA)	9,446	7,407	2,039	27.5 %
in % of sales	2.3 %	2.1 %
Adjusted EBITDA	35,496	13,894	21,602	155.5 %
Adjusted EBITDA margin in %	8.5 %	3.9 %

Sales in the Americas region in the first nine months of 2019 increased by 17.6 per cent to EUR 416.1 million (previous year EUR 353.9 million). Sales adjusted for currency and acquisi<on effects improved by 11.3 per cent to EUR 393.8 million.

Business with axle systems with integrated disc brake technology performed very well. In addi<on to the company XTRA Lease, a second well-known major fleet customer and thus market share was gained. In the first nine months of 2019, 56 per cent more axle systems equipped with disc brakes were delivered to customers. To meet the growing demand, addi<onal capacity will be created at the Warrenton site. With the opening of a new aHermarket distribu<on center in Phoenix, Arizona, at the end of September, orders can be processed much faster.

At EUR 26.1 million, adjusted EBIT was significantly above the prior-year level of EUR 6.5 million. The adjusted EBIT margin was 6.3 per cent (previous year 1.8 per cent). Key contributors to this performance were the improved processes and procedures, contractual passing on of last year's steel price increases, lower purchasing prices for steel and other materials, and a significantly more profitable aHermarket business.

The overall situa<on at the North American plant network improved during the first nine months of 2019. On March 1, 2019, SAF-HOLLAND launched the programme FORWARD in order to systema<cally realize the considerable poten<al for improvements iden<fied and drive forward the region's turnaround. The focus of this project is to op<mize the produc<on and supply chains, the product por[olio, the aHermarket business and the procurement of materials.

APAC REGION: ONGOING MARKET WEAKNESS IN INDIA BURDENED-COST-CUTTING PROGRAMME SHOWS FIRST POSITIVE EFFECTS

APAC

in EUR thousands
		Q1-Q3/2019 Q1-Q3/2018	Change	absolute Change in %
Sales	69,159	65,268	3,891	6.0 %
EBIT	3,795	3,210	585	18.2 %
EBIT margin in %	5.5 %	4.9 %
Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA	1,883	1,173	710	60.5 %
PPA step-up from inventory measuring of acquisition	40	559	-519	-92.8 %
Valuation effects from call and put options	-	-	-	-
Restructuring and transaction costs	-1,641	469	-2,110	-
Adjusted EBIT	4,077	5,411	-1,334	-24.7 %
Adjusted EBIT margin in %	5.9 %	8.3 %
Depreciation and amortization of property, plant and equipment and
intangible assets (excluding PPA)	1,154	430	724	168.4 %
in % of sales	1.7 %	0.7 %
Adjusted EBITDA	5,231	5,841	-610	-10.4 %
Adjusted EBITDA margin in %	7.6 %	8.9 %

In the first nine months of 2019, the APAC region increased sales by EUR 3.9 million to EUR 69.2 million. The addi<onal sales contribu<on from the companies acquired since January 2018 amounted to a total of EUR 20.4 million. Currency- and acquisi<on-adjusted sales declined 26.2 per cent year-on-year to EUR 48.2 million, primarily because of the ongoing weak market environment in India.

In contrast, adjusted EBIT amounted to EUR 4.1 million and fell short of the previous year's figure of EUR 5.4 million. Restructuring income of EUR 2.2 million from the sale of a building as part of the merger of SAF-HOLLAND Australia and York Transport Equipment Pty. Ltd. (Australia) was eliminated. The adjusted EBIT margin fell from 8.3 per cent to 5.9 per cent. The reason for this was also the persistently weak market environment in India. An ini<ated cost-cuVng programme shows first posi<ve effects.

CHINA REGION: EXTENSIVE REORGANIZATION MEASURES IMPLEMENTED IN A CHALLENGING MARKET ENVIRONMENT

China

in EUR thousands
		Q1-Q3/2019 Q1-Q3/2018	Change	absolute Change in %
Sales	30,836	61,155	-30,319	-49.6 %
EBIT	-23,985	1,765	-25,750	-
EBIT margin in %	-77.8 %	2.9 %
Additional depreciation and amortization of property, plant and equipment and intangible
assets from PPA	44	43	1	2.3 %
Impairment of goodwill	6,691	-	6,691	-
PPA step-up from inventory measuring of acquisition	-	-	-	-
Valuation effects from call and put options	-	-	-	-
Restructuring and transaction costs	7,301	389	6,912	1776.9 %
Adjusted EBIT	-9,949	2,197	-12,146	-
Adjusted EBIT margin in %	-32.3 %	3.6 %
Depreciation and amortization of property, plant and equipment and
intangible assets (excluding PPA)	1,502	874	628	71.8 %
in % of sales	4.9 %	1.4 %
Adjusted EBITDA	-8,447	3,071	-11,518	-
Adjusted EBITDA margin in %	-27.4 %	5.0 %

The China region generated sales of EUR 30.8 million in the first nine months of 2019 (previous year EUR 61.2 million). This decline was the result of the shrinking export business stemming from the trade dispute between China and the US, as well as from short-no<ce cyclical cancella<ons and delays in orders and temporary strikes following the announcement of plant closures.

The China region achieved an adjusted EBIT of EUR –9.9 million in the first nine months of 2019 (previous year EUR +2.2 million). Unadjusted nonrecurring expenses totalled EUR 6.6 million, which were evenly spread over the second and third quarter. These expenses are related to impairments on inventories and receivables of EUR 3.9 million and EUR 1.2 million, losses on disposals of assets of EUR 0.8 million and strike-related costs of EUR 0.8 million.

Excursus: In the course of the transion from a business unit structure to a regional group structure, the regions EMEA/India, Americas and APAC/China were defined as cash-generang units in 2016. The allocaon of the carrying amounts of goodwill to the cash-generang units was based on the use of future synergies from past company acquisions.

In a further step, as part of the new segment reporng as of January 1, 2019, the regions APAC and China were defined as cash-generang units. The goodwill allocated to the APAC/China region was allocated to the regions of China and APAC on a relave value approach.

For this reason, it is not possible to allocate goodwill impairment based on past transacons.

The integra<on of the other Chinese loca<ons into the new plant in Yangzhou is at an advanced stage. The plant in Qingdao ceased opera<ons as of July 31, 2019. The two warehouses in Beijing were also closed as of July 31, 2019. General business ac<vi<es at the plant in Xiamen as well as the Beijing office are scheduled to terminate by the end of 2019. The commencement of pre-series produc<on at the new Yangzhou plant took place in the fourth quarter.

ASSET POSITION

TOTAL ASSETS INCREASE BY 6.0 PER CENT

At the end of the third quarter of 2019, total assets increased by 6.0 per cent from EUR 977.4 million at the end of the 2018 financial year to EUR 1,035.7 million.

in EUR thousands

		09/30/2019 12/31/2018	Change	absolute Change in %
Non-current assets	522,851	472,284	50,567	10.7 %
of which intangible assets	262,295	265,765	-3,470	-1.3 %
of which property, plant and equipment	212,122	163,263	48,859	29.9 %
of which other (financial) assets	48,434	43,256	5,178	12.0 %
Current assets	512,894	505,132	7,762	1.5 %
of which inventories	183,012	179,368	3,644	2.0 %
of which trade receivables	166,614	138,875	27,739	20.0 %
of which cash and cash equivalents	126,107	155,009	-28,902	-18.6 %
of which other (financial) assets	37,161	31,880	5,281	16.6 %
Total assets	1,035,745	977,416	58,329	6.0 %

The rise in property, plant and equipment is primarily aNributable to the new IFRS 16 lease standard, amoun<ng to EUR 32.9 million. The level of inventories compared to the end of 2018 rose EUR 3.6 million, or 2.0 per cent, and slightly lagged the rate of sales growth. The increase in trade receivables since the end of 2018 was dispropor<onately higher than the rate of sales growth as a result of repor<ng date effects.

The decline of EUR 28.9 million in cash and cash equivalents in the first nine months of 2019 primarily resulted from the purchase price payments for Stara Group and PressureGuard as well as the dividend payment made in May 2019.

EQUITY RATIO AT SOLID 33.3 PER CENT

Equity in comparison to December 31, 2018, increased by EUR 12.6 million respec<vely 3.8 per cent to EUR 345.2 million. The main drivers of this increase were the net result for the period in the first nine months of 2019, amoun<ng to EUR 17.3 million and posi<ve exchange differences from the transla<on of foreign opera<ons recognized directly in equity. The rise in total assets of EUR 58.3 million, or 6.0 per cent, to EUR 1,035.7 million decisive for this was the first-<me applica<on of the new leasing standard IFRS 16 - led to a slight decline in the equity ra<o from 34.0 per cent to 33.3 per cent.

in EUR thousands
			Change
		09/30/2019 12/31/2018		absolute Change in %
Equity	345,196	332,550	12,646	3.8 %
Non-current liabilities	394,381	469,912	-75,531	-16.1 %
of which interest-bearing loans
and bonds	262,308	364,459	-102,151	-28.0 %
of which other non-current
liabilities	132,073	105,453	26,620	25.2 %
Current liabilities	296,168	174,954	121,214	69.3 %
of which interest-bearing loans
and bonds	104,974	3,936	101,038	2567.0 %
of which trade payables	132,303	129,115	3,188	2.5 %
of which other current liabilities	58,891	41,903	16,988	40.5 %
Balance sheet total	1,035,745	977,416	58,329	6.0 %

Non-current liabili<es decreased by EUR 75.5 million to EUR 394.4 million compared to December 31, 2018. The main factor here was the termina<on of the variable por<on of the promissory notes by the end of November 2019 in the amount of EUR 101.5 million and the associated reclassifica<on to current interest-bearing loans and bonds. On the other hand, finance lease liabili<es increased by EUR 25.2 million following the introduc<on of the new IFRS 16 lease standard. The slight rise in trade payables of 2.5 per cent to EUR 132.3 million is the result of repor<ng date effects. Current liabili<es were also affected by the new IFRS 16 lease standard in the amount of EUR 8.1 million and by the reclassifica<on of the variable por<on of the promissory notes in the amount of EUR 101.5 million to current interest-bearing loans and bonds.

SLIGHT IMPROVEMENT IN NET WORKING CAPITAL RATIO

Net working Capital

in EUR thousands

			Change
		09/30/2019 09/30/2018		absolute Change in %
Inventories	183,012	193,953	-10,941	-5.6 %
Trade receivables	166,614	206,974	-40,360	-19.5 %
Income tax receivables	3,462	2,459	1,003	40.8 %
Other current assets	31,025	23,116	7,909	34.2 %
Other provisions (non-current)	-7,047	-6,837	-210	3.1 %
Other provisions (current)	-13,287	-8,244	-5,043	61.2 %
Trade payables	-132,303	-159,517	27,214	-17.1 %
Other liabilities	-32,251	-25,366	-6,885	27.1 %
Income tax liabilities	-4,101	-8,646	4,545	-52.6 %
Net working capital	195,124	217,892	-22,768	-10.4 %
Net working capital ratio	15.6 %	16.0 %

The net working capital ra<o improved from 16.0 per cent in the previous year to 15.6 per cent. This decline resulted from lower inventories and significantly lower trade receivables partly offset by a sharply lower level of trade payables.

FINANCIAL POSITION

POSITIVE OPERATING FREE CASH FLOW

At EUR 44.7 million, cash flow from opera<ng ac<vi<es in the first nine months of 2019 was significantly above the previous year's level of EUR –33.0 million. This improvement is aNributable, above all, to a lower change in net working capital, despite the con<nued growth in sales. The main reason for this was the significantly lower change in inventories and receivables.

Financial position

		Q1-Q3/2019 Q1-Q3/2018
Cash flow from operating activities	44,721	-33,048
Cash flow from investing activities (property, plant and
equipment/intangible assets)	-36,861	-25,262
Operating free cash flow	7,860	-58,310
Cash flow from investing activities (subsidiaries, financial
assets)	-10,886	-58,186
Total free cash flow	-3,026	-116,496
Other	-58,512	-46,549
Change in net financial liabilities (incl. finance lease)	-61,080	-163,045

Cash flow from inves<ng ac<vi<es in property, plant and equipment and intangible assets amounted to EUR 36.9 million, which was EUR 11.6 million or 45.9 per cent above the prior year's level. This rise was primarily aNributable to the Chinese Greenfield project, ra<onaliza<on and expansion investments in the United States as part of the programme FORWARD and a new administra<ve office building in Germany.

Operating free cash flow improved substantially, rising from EUR –58.3 million to EUR 7.9 million. Total free cash flow, in the amount of EUR –3.0 million, was affected by the cash ou[low for the acquisi<ons of the Stara Group and PressureGuard.

SLIGHT RISE IN NET FINANCIAL LIABILITIES BY IFRS 16

Net financial liabili<es (including liabili<es from finance leases) increased by EUR 61.1 million to EUR 274.7 million as of September 30, 2019 compared to the balance sheet date of December 31, 2018. This was due to the total free cash flow of EUR -3.0 million and the dividend payment of EUR 20.4 million, in par<cular the first-<me applica<on of the new leasing standard IFRS 16 with EUR 33.3 million in this regard. As of September 30, 2019, the SAF-HOLLAND Group had liquid assets of EUR 126.1 million (December 31, 2018: EUR 155.0 million).

OPPORTUNITIES AND RISK REPORT

In assessing the opportuni<es and risks for the SAF-HOLLAND Group, there were no significant changes compared to the opportunity and risk-related statements in the 2018 Annual Report (pages 63 to 72) other than the following excep<on:

The extent of risk associated with the "impairment risks" presented in the sec<on en<tled "Opera<ng Risks" has increased in the APAC region from "low" to "high." The reason for this change is the shor[all in sales and earnings versus the expecta<ons.

OUTLOOK

SECTOR ENVIRONMENT: REGIONAL DIFFERENCES IN COMMERCIAL VEHICLE MARKETS

The outlook for the commercial vehicle markets relevant to SAF-HOLLAND remains challenging for 2019. Based on a record backlog for Class 8 trucks and trailers in North America, a rela<vely high level of produc<on can also be expected for the remainder of the current year. The situa<on is somewhat different however in the important core market of Europe. AHer many years of growth, produc<on figures for trailers are expected to decline for the year 2019.

EUROPEAN TRUCK MARKET IS STABLE

According to the es<mates of LMC Automo<ve, the Western European truck market is expected to increase slightly in full-year 2019 (produc<on + 2 per cent). It is worth no<ng that the European truck market is of only rela<vely minor importance to SAF-HOLLAND. For Eastern Europe, LMC currently expects a decline in the market of 6 per cent for the year 2019.

TRAILER MARKET IN EUROPE ON THE DECLINE

Following a period of sustained growth from 2013 to 2018, market research ins<tutes are now an<cipa<ng a decline in trailer demand for the year 2019. Market researchers are jus<fying their assessment, arguing that trailer demand received an addi<onal boost over the last several years as a result of pent-up demand. As a result, a decline in trailer produc<on, ranging from 15 to 20 per cent, is currently expected in Europe. This decline, however, follows last year's high comparisons, when more than 9 per cent more trailers were manufactured than on average over the prior three years.

NORTH AMERICAN TRUCK MARKET AHEAD OF ANOTHER RECORD YEAR

The sustained robust growth of the US economy and the resul<ng higher than average increase in freight volumes and rates led to strong demand for addi<onal transport capacity in North America in 2018. At the same <me, the electronic logging device (ELD) introduced by the Federal Motor Carriers Safety Administra<on (FMCSA) on April 1, 2018, created added boNlenecks for the fleet operators. The ELD requires that truck drivers document their break <mes which, in prac<ce, results in shorter opera<ng <mes. Fleet operators reacted to these boNlenecks with a flood of orders for new equipment. However, the limited produc<on capacity of the truck manufacturers meant it was not possible to fill these orders before 2019. In its latest forecast, ACT Research expects North American Class 8 truck produc<on to rise 6 per cent, compared to its forecast at the start of the year of + 4 per cent. Higher growth is now expected, above all, in the US (+ 10 per cent); whereas truck produc<on in Canada (– 2 per cent) is expected to decline.

NORTH AMERICAN TRAILER MARKET OUTLOOK REMAINS POSITIVE

The outlook for the North American trailer market in 2019 con<nues to be posi<ve, not least due to the con<nued high level of the order backlog. ACT Research expects roughly 2 per cent more trailers to roll off the assembly lines in 2019 than in the prior year, which was already a strong year. SAF-HOLLAND will also benefit from the growing use of disc brakes on trailers.

TRUCKS AND TRAILERS CONTINUE TO GROW IN BRAZIL

Based on an an<cipated moderate economic recovery and poli<cal reforms in Brazil, LMC Automo<ve expects heavy truck produc<on in 2019 to grow by 20 per cent (previous expecta<on 15 per cent). As a result, the Brazilian truck market would con<nue the recovery that began in 2017, even though truck produc<on would stay significantly below the level before the last downturn in 2013. AHer dynamic growth in the year 2018 of more than 60 per cent, CLEAR expects trailer demand to be more restrained and is projec<ng a rise in trailer produc<on in 2019 of around 5 per cent.

CHINESE PREMIUM SEGMENT FOR TRAILERS UNABLE TO FULLY ESCAPE NEGATIVE MARKET TREND

AHer recording periods of high growth rates over the past several years, truck demand in China con<nued to consolidate in 2019, as expected by many market analysts. Heavy truck produc<on in 2019 is currently projected to decline by 3 per cent. It is important to point out, however, that the Chinese truck market has not been of any notable importance to SAF-HOLLAND thus far.

Due to the uncertain<es surrounding future economic developments in China, market analysts are foreseeing a 20 per cent decline in trailer produc<on for full-year 2019. The expecta<on is that even with the recent introduc<on of load limits and safety regula<ons for trailers, the premium segment relevant for SAF-HOLLAND will not be able to fully escape the nega<ve market trend.

For Australia, which is an important regional market for SAF-HOLLAND, LMC Automo<ve expects registra<ons of heavy and medium-duty trucks to decline by 21 per cent in 2019. AHer a nearly 7 per cent increase in trailer production in 2018, CLEAR anticipates a decline of 6 per cent in the current year.

CLEAR and LMC Automo<ve are also forecas<ng declines in the Indian market. In 2019, trailer produc<on is expected to decline 60 per cent and truck produc<on by 60 per cent.

COMPANY OUTLOOK

Based on the expected macroeconomic and industry-specific condi<ons and weighing the poten<al risks and opportuni<es for the 2019 financial year, the Group Management Board of SAF-HOLLAND unchanged expects to achieve Group sales in the range of EUR 1,260 million to EUR 1,300 million (previous year EUR 1,301 million), corresponding to a rate of change of 0 to minus 3 per cent. According to the Group Management Board's assessment, the adjusted EBIT margin is expected to range from 6.0 to 6.5 per cent for the full year.

EVENTS AFTER THE BALANCE SHEET DATE

INGRID JÄGERING APPOINTED AS A MEMBER OF THE BOARD OF DIRECTORS

In the mee<ng of the Board of Directors of SAF-HOLLAND S.A. on November 5, 2019 Ingrid Jägering was appointed as a member of the Board of Directors and Chair of the Audit CommiNee with immediate effect. In the same mee<ng, Dr. Mar<n KleinschmiN was elected as the new Chair of the Board of Directors. Dr. KleinschmiN succeeds Mar<na Merz, who resigned from this posi<on for personal reasons in September 2019 and has now been elected as Vice Chair.

ALTERNATIVE PERFORMANCE MEASURES

In addi<on to the key figures defined or specified in the applicable IFRS financial repor<ng framework, SAF-HOLLAND also provides key financial ra<os derived from or based on the prepared financial statements. These are known as Alterna<ve Performance Measures (APM).

SAF-HOLLAND considers these key financial ra<os to be important supplemental informa<on for investors and other readers of the financial reports and press releases. The key financial ra<os should therefore be seen as a supplement to rather than a replacement of the informa<on prepared in accordance with IFRS.

With regard to the requirements of the European Securi<es and Markets Authority (ESMA) Guidelines on Alterna<ve Performance Measures (APM), SAF-HOLLAND provides an overview of the Alterna<ve Performance Measures used, their defini<on and calcula<on on the SAF-HOLLAND website at hNps://corporate.saaolland.com/en/apm.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

in EUR thousands
	Q1-Q3/2019	Q1-Q3/2018¹	Q3/2019	Q3/2018¹
Sales	1,008,626	980,853	313,160	340,545
Cost of sales	-844,385	-825,471	-267,644	-289,750
Gross profit	164,241	155,382	45,516	50,795
Other income	3,109	1,186	2,394	462
Impairment of Goodwill	-6,691	-	-6,691	-
Selling expenses	-53,181	-44,291	-16,394	-14,153
Administrative expenses	-54,258	-39,011	-18,126	-10,310
Research and development expenses	-15,746	-15,469	-5,018	-4,700
Operating result	37,474	57,797	1,681	22,094
Share of net profit of investments accounted for using the equity method	1,421	1,502	470	428
Earnings before interest and taxes	38,895	59,299	2,151	22,522
Finance income	1,404	923	703	181
Finance expenses	-10,151	-10,232	-4,325	-3,239
Finance result	-8,747	-9,309	-3,622	-3,058
Result before tax	30,148	49,990	-1,471	19,464
Income tax	-12,868	-12,963	-2,017	-4,210
Result for the period	17,280	37,027	-3,488	15,254
Attributable to:
Equity holders of the parent	16,135	37,336	-4,200	15,355
Non-controlling interests	1,145	-309	712	-101
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translation of foreign operations	14,916	-5,540	10,952	-9,037
Other comprehensive income	14,916	-5,540	10,952	-9,037
Comprehensive income for the period	32,196	31,487	7,464	6,217
Attributable to:
Equity holders of the parent	31,072	32,065	6,792	6,402
Non-controlling interests	1,124	-578	672	-185
Basic earnings per share in EUR	0.36	0.82	-0.09	0.34
Diluted earnings per share in EUR	0.32	0.71	-0.07	0.30

1 Since January 1, 2019, IFRS 16 "Leases" has been applied for the first <me. It is applied using the modified retrospec<ve approach, under which the previous year's figures are not adjusted. As a result, some figures are not comparable with the prior year period. See explanatory notes in sec<on 2 "Significant Accoun<ng and Valua<on Policies."

CONSOLIDATED BALANCE SHEET

		09/30/2019 12/31/2018¹
Assets
Non-current assets	522,851	472,284
Goodwill	78,805	84,480
Other intangible assets	183,490	181,285
Property, plant and equipment	212,122	163,263
Investments accounted for using the equity method	17,683	16,833
Financial assets	3,071	1,309
Other non-current assets	3,033	2,686
Deferred tax assets	24,647	22,428
Current assets	512,894	505,132
Inventories	183,012	179,368
Trade receivables	166,614	138,875
Income tax assets	3,462	5,226
Other current assets	31,025	25,149
Financial assets	2,674	1,505
Cash and cash equivalents	126,107	155,009
Balance sheet total	1,035,745	977,416

in EUR thousands
		09/30/2019 12/31/2018¹
Equity and liabilities
Total equity	345,196	332,550
Equity attributable to equity holders of the parent	332,041	321,480
Subscribed share capital	454	454
Share premium	269,044	269,044
Legal reserve	45	45
Other reserve	720	720
Retained earnings	81,906	86,282
Accumulated other comprehensive income	-20,128	-35,065
Shares of non-controlling interests	13,155	11,070
Non-current liabilities	394,381	469,912
Pensions and other similar benefits	31,581	30,507
Other provisions	7,047	7,604
Interest bearing loans and bonds	262,308	364,459
Finance lease liabilities	25,207	38
Other financial liabilities	16,193	16,271
Other liabilities	637	626
Deferred tax liabilities	51,408	50,407
Current liabilities	296,168	174,954
Other provisions	13,287	9,992
Interest bearing loans and bonds	104,974	3,936
Finance lease liabilities	8,313	191
Trade payables	132,303	129,115
Income tax liabilities	4,101	4,007
Other financial liabilities	939	776
Other liabilities	32,251	26,937
Balance sheet total	1,035,745	977,416

¹ Since January 1, 2019, IFRS 16 "Leases" has been applied for the first <me. It is applied using the modified retrospec<ve approach, under which the previous year's figures are not adjusted. As a result, some figures are not comparable with the prior year period.

CONSOLIDATED CASH FLOW STATEMENT

in EUR thousands

			Q1-Q3/2019 Q1-Q3/2018¹
	Cash flow from operating activities
	Result before tax	30,148	49,990
-	Finance income	-1,404	-923
+	Finance expenses	10,151	10,232
	+/- Share of net profit of investments accounted for using the equity method	-1,421	-1,502
+	Amortization/depreciation of intangible assets and property, plant and equipment	39,644	21,421
+	Allowance of current assets	8,279	1,159
	+/- Loss/Gain on disposal of property, plant and equipment	-707	-38
+	Dividends from investments accounted for using the equity method	1,305	20
	Cash flow before change of net working capital	85,995	80,359
	+/- Change in other provisions and pensions	2,011	-2,690
	+/- Change in inventories	-556	-43,372
	+/- Change in trade receivables and other assets	-32,362²	-69,427²
	+/- Change in trade payables and other liabilities	3,254	22,430
	Change of net working capital	-27,653	-93,059
	Cash flow from operating activities before income tax paid	58,342	-12,700
-	Income tax paid	-13,621	-20,348
	Net cash flow from operating activities	44,721	-33,048
	Cash flow from investing activities
-	Purchase of other short term investments	-	-1,410
+	Proceeds from sale of other short term investments	-	57,006
-	Purchase of property, plant and equipment	-31,935	-20,919
-	Purchase of intangible assets	-4,926	-4,343

			Q1-Q3/2019 Q1-Q3/2018¹
+	Proceeds from sales of property, plant and equipment	4,465	1,495
-	Payments for acquisition of subsidiaries net of cash	-10,886	-58,186
+	Interest received	488	265
	Net cash flow from investing activities	-42,794	-26,092
	Cash flow from financing activities
-	Dividend payments to shareholders of SAF-HOLLAND S.A.	-20,427	-20,427
-	Repayments of current and non-current financial liabilities	-	-15,069
-	Payments for repayment of bonds	-	-75,000
-	Proceeds from foreign currency derivatives	-	-193
-	Payments for finance lease	-6,510	150
-	Interest paid	-3,804	-9,576
	+/- Change in drawings on the credit line and other financing activities	-3,290	-2,631
	Net cash flow from financing activities	-34,031	-122,746
	Net increase / decrease in cash and cash equivalents	-32,104	-181,886
	+/- Effect of changes in exchange rates on cash and cash equivalents	3,202	-1,408
	Cash and cash equivalents at the beginning of the period	155,009	278,775
	Cash and cash equivalents at the end of the period	126,107	95,481

1 Since January 1, 2019, IFRS 16 "Leases" has been applied for the first <me. It is applied using the modified retrospec<ve approach, under which the previous year's figures are not adjusted. As a result, some figures are not comparable with the prior year period. See explanatory notes in sec<on 2 "Significant Accoun<ng and Valua<on Policies."

2 As of September 30, 2019, trade receivables in the amount of € 35.2 million (previous year: € 32.4 million) were sold in the context of a factoring contract.

Assuming the legal validity of receivables, no further rights of recourse to SAF-HOLLAND exist from the receivables sold.

REGIONAL OVERVIEW

		EMEA	Americas		APAC		CHINA		Total
in EUR thousands		Q1-Q3/2019 Q1-Q3/2018 Q1-Q3/2019 Q1-Q3/2018 Q1-Q3/2019 Q1-Q3/2018 Q1-Q3/2019 Q1-Q3/2018 Q1-Q3/2019 Q1-Q3/2018
Sales	492,485	500,555	416,146	353,875	69,159	65,268	30,836	61,155	1,008,626	980,853
Cost of sales	-394,275	-400,813	-354,519	-315,850	-56,841	-54,308	-38,750	-54,500	-844,385	-825,471
Gross profit	98,210	99,742	61,627	38,025	12,318	10,960	-7,914	6,655	164,241	155,382
Gross profit margin in %	19.9	19.9	14.8	10.7	17.8	16.8	-25.7	10.9	16.3	15.8
Sundry operating income and expenses*	-51,472	-42,691	-35,577	-31,538	-8,241	-5,549	-2,035	-4,458	-97,325	-84,236
Adjusted EBIT	46,738	57,051	26,050	6,487	4,077	5,411	-9,949	2,197	66,916	71,146
Adjusted EBIT margin in %	9.5	11.4	6.3	1.8	5.9	8.3	-32.3	3.6	6.6	7.2

¹ Sundry opera<ng income and expenses consists of selling expenses, general and administra<ve expenses, research and development costs, other opera<ng income and net profit of investments accounted for by using the euqity method, less restructuring and transac<on costs in the amount of EUR 14. million (previous year: 5.2 million), less deprecia<on and amor<za<on from PPA in the amount of EUR 7.3 million (previous year: 6.6 million) and less impairment of goodwill in the amount of EUR 6.7 million (previous year: 0.0 million).

FINANCIAL CALENDAR AND CONTACT INFORMATION

FINANCIAL CALENDAR

November 7, 2019 Quarterly Statement of SAF-HOLLAND Group as of September 30, 2019

CONTACT INFORMATION

SAF-HOLLAND Group Hauptstraße 26 63856 Bessenbach Germany

www.saaolland.com

Michael Schickling

michael.schickling@saaolland.de Phone: + 49 (0) 6095 301-617

Alexander Pöschl

alexander.poeschl@saaolland.de Phone: + 49 (0) 6095 301-117

Klaus Breitenbach

klaus.breitenbach@saaolland.de Phone: + 49 (0) 6095 301-565

IMPRINT

Responsible:

SAF-HOLLAND S.A. 68 – 70, Boulevard de la Pétrusse L – 2320 Luxemburg Luxembourg

Date of publicaQon: November 7, 2019 Editors: Michael Schickling, SAF-HOLLAND Group; Alexander Pöschl, SAF-HOLLAND Group; Klaus Breitenbach, SAF-HOLLAND Group

Produced in-house with www.firesys.de

The report is also available in German.

The German version takes precedence.

Legal Disclaimer

This report contains certain statements that are neither reported financial results nor other historical informa<on. This report contains forwardlooking statements, which as such are based on certain assump<ons and expecta<ons made at the <me of publica<on of the report. These forwardlooking statements are subject to risks and uncertain<es that could cause actual results to differ materially from those expressed in the forwardlooking statements. Many of these risks and uncertain<es relate to factors that are beyond the Group's ability to control or es<mate precisely, such as future market and economic condi<ons, the behaviour of other market par<cipants, the achievement of an<cipated synergies, and the ac<ons of government regulators. Readers are cau<oned not to place undue reliance on these forward-looking statements, which apply only as of the date of this publica<on. SAF-HOLLAND S.A. does not undertake any obliga<on to publicly release any revisions to these forward-looking statements to reflect events or circumstances aHer the date of publica<on of these materials.