SAF-HOLLAND SE

Investor Presentation • Mar 19, 2020

ALEXANDER GEIS (CEO) / DR MATTHIAS HEIDEN (CFO) / DR ANDRÉ PHILIPP (COO)

Analysts' and Investors' Conference

19 MARCH 2020

Welcome

• 1 Performance 2019 We achieved important milestones in all regions and laid the foundation for our future success
• 2 Outlook We will strengthen our leading market positions and improve our profitability in the coming years

Today's speakers – Welcome to our Annual Analysts' and Investors' 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

Dr André Philipp

Chief Operating Officer

• COO of the SAF-HOLLAND Group and member of the Group Management Board since January 2019
• Responsible for all of the Group's production plants worldwide and for Global Quality, Global Lean Organization and Global Operations
• Previously in management positions such as CTO and COO, for the HELLA and Deutz Dalian Engine Co.
• Degree in industrial engineering, MBA-degree and doctorate in economics

1 Performance 2019 – We achieved important milestones in all regions and laid the foundation for our future success

WESTERN & EASTERN EUROPE		NORTH AMERICA			CHINA		SOUTH AMERICA	INDIA
1 Truck	2 Trailer	3 Truck	3 Trailer	1 Truck	2 Trailer	1 Truck	2 Trailer	1 Truck	2 Trailer
-2%	-7%	+6%	+3%	-3%	-20%	+4%	+23%	-53%	-65%

• European trailer market eased after historic highs in 2018
• Upswing coming to an end against declining order intake in North America

• Trade conflict between China/US and lack of macroeconomic impetus weighted on trailer production in China

• Lasting recovery in South America

• Strong slump of the Indian trailer market as the expected catch-up effect after the April/May elections did not materialize and lower than expected GDP growth

Group results – Sales and adjusted EBIT margin in line with revised guidance and market expectations

• Sales in 2019 influenced by

• Acquisition effects (+3.2 per cent respectively € +41.4 mn)
• FX effects (+2.0 per cent respectively € +25.8 mn)
• Organic effects (-6.4 per cent respectively € -83.6 mn net; strong organic growth in the Americas region could not compensate for the other regions)

• Adj. EBIT margin in 2019 influenced by

• Substantial losses due to restart in China (-)
• Product mix effects and inventory write-offs (-)
• Higher selling and administrative expenses (-)
• Contractual passing on of last year's steel price increases (+)
• Sustained price increases in the North American aftermarket business (+)
• Earnings generated by the entities acquired since January 2018 (+)
• Improved procedures and processes at our plants (+)
• Savings in global sourcing (+)
• Adj. EBIT margin in 2018 positively affected by the partial settlement of a medical plan in the US

EMEA – Solid development in a challenging market environment

• Sales in 2019 influenced by
• Acquisition effects (+3.1 per cent respectively € +20.5 mn)
• FX effects (0.0 per cent respectively € -0.3 mn)
• Organic effects (-8.0 per cent respectively € -53.0 mn)
• Adj. EBIT margin in 2019 affected by
• Companies acquired since January 2018 (+)
• Strict cost discipline (+)
• Declining sales volume and higher personnel expenses (-)
• Adj. EBIT margin in 2018 supported by
• Foreign currency effects Turkish Lira – Euro (+)
• No goodwill impairment on V.ORLANDI

• Sales in 2019 influenced by

• Organic effects (+8.0 per cent respectively € +37.8 mn; outperformed the market)
• FX effects (+5.3 per cent respectively € +24.8 mn)
• Adj. EBIT margin in 2019 affected by
• Operational efficiency gains from program FORWARD (+)
• Contractual passing on of prior year's steel price increases (+)
• Lower purchase prices for steel and other materials (+)
• More profitable aftermarket business (+)
• Adj. EBIT margin in 2018 positively affected by the partial settlement of a medical plan in the US in Q3/2018

Analysts' and Investors' Conference 2020 < 9 >

APAC – Challenging market environment

• Sales in 2019 influenced by

• Acquisition effects (+21.7 per cent respectively € +20.4 mn)
• FX effects (+1.1 per cent respectively € 1.0 mn)
• Organic effects (-28.6 per cent respectively € -26.9 mn due to unfavourable market development in India)

• Adj. EBIT margin in 2019 affected by

• Lack of profit contributions due to missing volume of the Indian subsidiary (-)
• Restructuring income from the sale of a building in the course of a merger of SAF-HOLLAND Australia and York Transport Equipment Pty. Ltd. (Australia) (-)
• Product mix effects, mainly in Australia in Q4 (-)

• No goodwill impairment on York

• Sales in 2019 sales influenced by

• Declining export business of Chinese customers following the trade dispute between China and the US
• Short notice cancellations and delays in orders in declining domestic market
• Temporary strikes following the announcement of plant closures

• Adj. EBIT margin in 2019 burdened by

• Low level of capacity utilization at the Xiamen and Qingdao plant (-)
• Temporary cost burden from duplicate structures in the course of the integration of the other Chinese locations into the new Greenfield plant (-)
• Inventory and accounts receivable impairments (-)
• Strike-related costs (-)
• Losses on disposal of fixed assets (-)

One-off items China – Substantial restructuring successfully executed

					FY 2019
75,970	12,302	12,819	5,715	4,050	34,886
-57	-2,688	-5,637	-15,660	-8,989	-32,974
57	15	14	15	13	57
–	–	–	6,691	1	6,692
1,271	1,658	1,518	4,125	6,036	13,337
1,271	-1,015	-4,105	-4,829	-2,939	-12,888
1.7%	-8.3%	-32.0%	-84.5%	-72.6%	-36.9%
–	-103	-1,414	-2,416	-952	-4,885
–	0	-968	-187	-520	-1,675
–	0	0	-761	56	-705
–	0	-800	0	0	-800
–	-103	-3,182	-3,364	-1,416	-8,065
1,271	-913	-922	-1,465	-1,522	-4,822
1.7%	-7.4%	-7.2%	-25.6%	-37.6%	-13.8%
431					174
5					1
	FY 2018	Q1 2019	Q2 2019	Q3 2019	Q4 2019

P&L 2019 – Sales and adjusted EBIT margin within guidance range

TEUR	Q1-Q4/2019	Total Adjustments	Q1-Q4/2019 adjusted*	in % of sales	Q1-Q4/2018	Total Adjustments	Q1-Q4/2018 adjusted*	in % of sales
Sales	1,284,155	–	1,284,155	100.0%	1,300,555	71	1,300,626	100.0%
Cost of sales	-1,082,414	15,857	-1,066,557	-83.1%	-1,101,292	7,815	-1,093,477	-84.1%
Gross profit	201,741	15,857	217,598	16.9%	199,263	7,886	207,149	15.9%
Other income	4,010	-2,167	1,843	0.1%	10,491	-8,090	2,401	0.2%
Other expenses	-2,971	2,971	–	0.0%	-834	833	-1	0.0%
Impairment of goodwill	-6,692	6,692	–	0.0%	–	–	–	0.0%
Selling expenses	-70,754	7,688	-63,066	-4.9%	-61,286	6,264	-55,022	-4.2%
Administrative expenses	-71,289	13,086	-58,203	-4.5%	-51,821	4,065	-47,756	-3.7%
Research and development costs	-20,794	490	-20,304	-1.6%	-19,572	648	-18,924	-1.5%
Operating profit	33,251	44,616	77,867	6.1%	76,241	11,608	87,849	6.8%
Share of net profit of investments accounted for using the equity method	1,948	–	1,948	0.2%	1,729	–	1,729	0.1%
EBIT	35,199	44,616	79,815	6.2%	77,970	11,608	89,578	6.9%
Finance income	2,099	–	2,099	0.2%	1,266	–	1,266	0.1%
Finance expenses	-13,087	–	-13,087	-1.0%	-15,015	–	-15,015	-1.2%
Finance result	-10,988	–	-10,988	0.9%	-13,749	–	-13,749	-1.1%
Result before taxes	24,211	44,616	68,827	5.4%	64,221	11,608	75,829	5.8%
Income taxes	-13,914	-5,158	-19,072	-1.5%	-16,106	-4,216	-20,322	-1.6%
Tax rate (%)	57.5%		27.7%		25.1%		26.8%
Result for the period	10,297	39,458	49,755	3.9%	48,115	7,392	55,507	4.3%

* 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.

Analysts' and Investors' Conference 2020 < 13 >

Investments and depreciation – Preparing for the future

• Investments in plant, property, equipment and intangible assets (excl. IFRS 16) reached 4.1 per cent of Group sales
• Operating cash flow (7.1 per cent of Group sales) covers investments by far
• Focus of investments: construction of the Chinese Greenfield project, rationalisation and expansion investments in the US, new office building in Germany
• Close monitoring of the investment approval process to streamline capital allocation
• Depreciation (excl. impairment of goodwill, R&D projects and tangible assets) increased mainly due to IFRS 16 effects (0.6 per cent of Group sales)

Net working capital – Improvements support cash flow generation

• Net working capital (NWC) 4.7 per cent or € 8.1 mn below previous year's figure
• Inventories 6.3 per cent below prior year's level despite sales decrease of 1.3 per cent
• Trade receivables down 9.3 per cent on substantially improved cash collection
• Trade payables down 14.5 per cent or € 18.8 mn compared to year end 2018
• Related to sales over the last twelve months (LTM), NWC ratio improved from 13.3 per cent to 12.8 per cent

Operating free cash flow – Turnaround accomplished

Significant improvement in operating free cash flow to € 37.6 mn (2018: € 0.0 mn)

• Operating cash flow at € 90.6 mn (2018: € 40.8 mn)
• Working capital optimization (Δ € 48.1 mn)
• Lower payment of income tax (Δ € 7.2 mn)
• Investing cash flow (PP&E and intangible assets) at € 53.0 mn (2018: € 40.8 mn)
• Greenfield project in China
• Program FORWARD

Q4 19

New office building in Germany

Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19

Net debt | Equity ratio – Disciplined Balance Sheet Management

• First time application of IFRS 16 alone accounts for approx. € 33.6 mn
• Cash and cash equivalents and other short-term investments influenced by dividend payments and purchase price payments for Stara Group and PressureGuard

Former financing structure before planned refinancing activities

** option for an additional € 100 mn

Analysts' and Investors' Conference 2020 < 18 >

New financing structure after refinancing activities

• RCF mostly undrawn ** option for an additional € 100 mn

Analysts' and Investors' Conference 2020 < 19 >

2 Outlook – We will strengthen our leading market positions and improve our profitability in the coming years

OPERATIONAL EXCELLENCE Program – We operationalize corporate strategy and build the basis for future success

Project FORWARD 2.0 – Accelerate efforts to continue path to success

• Program FORWARD 2.0
• accelerate efforts in 2020 with focus on operational excellence
• Current downturn in the U.S. market is an opportunity for SAFH
• improve processes in the plants due to potential lower utilization levels

Operational CAPEX Americas – Example: Axle Production Warrenton North

NEW YANGZHOU GREENFIELD FACILITY

General Plant Status

• Ramp-up in progress
• Preliminary pullback of expats due to COVID-19 creates challenges

Operational Excellence Focus

• Focus on ramp-up and technical training
• Directly include LEAN methods: Safety, QRQC, 5S, Materialflow, etc.
• SAP Global Manufacturing template

Operational CAPEX China – State-of-the-art equipment will allow output and quality to gain market share

COVID-19: Impact On SAF-HOLLAND Group*

• 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.
• Early quarantine measures established.
• Global COVID-19 response team in place.
• 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 now.
• Availability of workforce has improved to > 90% again with challenges remaining for international support and leadership.

• Supply Chain and Customers

• SAFH's dual and multi-sourcing strategy instrumental to mitigate risks and manage the supply chain.
• Early supply chain monitoring and mitigating activities.
• So far no significant supply chain shortages but dynamic developments which are monitored constantly.
• Communication lines to both customers and suppliers in place globally.
• First key account customer announced plant closures.
• 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.
• Savings measures initiated globally.
• "Cash is King" program started with dedicated team.

WESTERN & EASTERN EUROPE		NORTH AMERICA		CHINA		SOUTH AMERICA			INDIA
	1 Truck	2 Trailer		3 Truck	3 Trailer		1 Truck	2 Trailer		1 Truck	2 Trailer		1 Truck	2 Trailer
2018	-2%	+6%	2018	+27%	+12%	2018	-7%	-4%	2018	+23%	+55%	2018	+41%	+13%
2019	-2%	-7%	2019	+6%	+3%	2019	-3%	-20%	2019	+4%	+23%	2019	-53%	-65%
2020E	-10% to -15%	-5% to -10%	2020E	-40%	-35%	2020E	-20%	-30%	2020E	+20%	+5%	2020E	-20%	-20%

2020E:

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

¹ LMC Global Commercial Vehicles Forecast , medium & heavy truck, local sources ² CLEAR, local sources ³ACT Truck & Trailer Outlook, local sources

* As of March 2020

2020E:

• South America continues its upward trend
• India with a weaker development

	FY 2019	FY 2020E*
Sales	€ 1,284 mn	Low double digit percentage decline
Adj. EBIT margin	6.2 per cent	Between 4 and 5 per cent
CAPEX	4.1 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 (March 18, 2020). However, the economic effects on SAF-HOLLAND cannot currently be adequately determined or reliably quantified in full.

Summary – Our business model is resilient and we are well-positioned for future growth

• CAGR 2015-2019: +4.9% Stable contribution from aftermarket business
• Global footprint and local content

• Diversified customer base

• Stable contribution from aftermarket business

• Strong focus on SG&A savings and FCF generation
• OPERATIONAL EXCELLENCE as key strategic cornerstone
• Global COVID-19 response team in place
• Solid financial position (cash FY2019 € 131 mn, mostly undrawn credit lines € 300 mn)
• Financial impact from COVID-19 on FY2020 not fully quantifiable yet

Financial calendar & IR contact

DATE	EVENT
13.05.2020	Publication Quarterly Statement Q1 2020

20.05.2020 Ordinary Annual General Meeting 2020

20.05.2020 Extraordinary Annual General Meeting 2020

• 13.08.2020 Publication Half-Year Financial Report 2020
• 18.11.2020 Publication Quarterly Statement Q1-Q3 2020

Investor Relations Contact

E: ir@safholland.de

Michael Schickling Head of Investor Relations / Corporate Communications T: +49 (0) 6095 301 617 E: michael.schickling@safholland.de

Alexander Pöschl Senior Manager Investor Relations / Corporate Communications T: +49 (0) 6095 301 117 E: alexander.poeschl@safholland.de

Klaus Breitenbach Senior Manager Investor Relations / Corporate Communications T: + 49 (0) 6095 301 565 E: klaus.breitenbach@safholland.de

»WE ARE HAPPY TO ANSWER YOUR QUESTIONS.«