Quarterly Report • Aug 8, 2019
Quarterly Report
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HALF-YEAR FINANCIAL REPORT OF SAF-HOLLAND GROUP
as of June 30, 2019
| in EUR thousands | |
|---|---|
| ------------------ | -- |
| Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | Q2 / 2019 | Q2 / 2018 | |
|---|---|---|---|---|
| Sales | 695,466 | 640,308 | 349,498 | 345,438 |
| Gross profit | 118,725 | 104,587 | 58,473 | 54,018 |
| Gross profit margin in % | 17.1 | 16.3 | 16.7 | 15.6 |
| EBIT | 36,744 | 36,777 | 17,808 | 19,606 |
| EBIT margin in % | 5.3 | 5.7 | 5.1 | 5.7 |
| Adjusted EBIT | 49,943 | 44,116 | 25,168 | 23,859 |
| Adjusted EBIT margin in % | 7.2 | 6.9 | 7.2 | 6.9 |
| Result for the period | 20,768 | 21,772 | 9,330 | 11,992 |
| Adjusted result for the period | 33,030 | 28,209 | 16,683 | 16,008 |
| Undiluted earnings per share | 0.45 | 0.48 | 0.20 | 0.26 |
| Adjusted undiluted earnings per share | 0.73 | 0.62 | 0.37 | 0.35 |
| 06 / 30 / 2019 | 12 / 31 / 2018 | |
|---|---|---|
| Balance sheet total | 1,041,603 | 977,416 |
| Equity | 337,732 | 332,550 |
| Equity ratio in % | 32.4 | 34.0 |
| Cash and cash equivalents | 119,475 | 155,009 |
| Net debt | 247,613 | 213,386 |
| Net working capital | 195,066 | 172,468 |
| Net working capital in % of sales | 14.0 | 13.5 |
| in EUR thousands | ||||
|---|---|---|---|---|
| Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | Q2 / 2019 | Q2 / 2018 | |
| Cash flow from operating activities before income tax paid | 36,497 | –16,950 | 22,628 | –4,692 |
| Cash conversion rate in % | 73.1 | –38.5 | 89.9 | –19.7 |
| Net cash flow from operating activities | 27,605 | –30,856 | 19,046 | –8,385 |
| Cash flow from investing activities | –24,236 | –15,238 | –9,820 | –8,246 |
| Operating free cash flow | 3,369 | –46,094 | 9,226 | –16,631 |
| Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | |
|---|---|---|
| Employees (on average) | 4,330 | 4,101 |
| Sales per employee (kEUR) | 160.6 | 156.2 |
| Yield | ||
| in % | Q1 – Q2 / 2019 | Q1 – Q2 / 2018 |
| Return on capital employed (ROCE)* | 8.8 | 9.2 |
* ROCE = EBIT (annualized)/(total assets – current liabilities)
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.
As of January 1, 2019, a new segmentation structure was introduced to corporate management and reporting, reflecting the growing importance of individual regions and the management approach. The APAC/China region is now divided into the regions "APAC" and "China." As of January 1, 2019, corporate management and Group reporting have been conducted under the "EMEA," "Americas," "APAC" and "China" segments. The four regions cover both the original equipment and spare parts businesses.
Effective January 9, 2019, SAF-HOLLAND acquired 51 per cent of the shares in the manufacturer of tire pressure management systems PressureGuard. A purchase option 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 option at a later date. The purchase price for the acquired stake was in the low single-digit million euro range.
SAF-HOLLAND sees great potential in PressureGuard's proven tire pressure management technology to provide even more comprehensive axle and suspension solutions to its fleet customers in North America. By employing this solution, SAF-HOLLAND is not only expanding its systems expertise 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 compatibility issues upfront. This approach also simplifies the warranty and after-sale support needed by today's fleets.
Effective February 1, 2019, SAF-HOLLAND acquired all shares in the Finnish Stara Group. SAF-HOLLAND took over the business operations of the two family-owned companies AB Stara Parts Oy, Finland, and Trailax Aktiebolag, Sweden. The purchase price was in the low double-digit million euro range.
The Stara Group was previously the distribution partner of SAF-HOLLAND in Finland and Sweden, focusing primarily on axle and suspension systems for trailers. In addition, the Group has an excellent aftermarket network in the region with three branches.
Through this acquisition, 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 position and the cross-selling of its Group brands.
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 Executive Officer effective February 26, 2019.
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 usual. During this time, SAF-HOLLAND will supply more than 75 per cent of the total volume put out for tender by the Schwarzmüller Group.
At the end of April 2019, SAF-HOLLAND reported it had won another major contract for trailer axles and landing gears. SAF-HOLLAND and the Humbaur Group's Kögel Trailer GmbH, one of the leading trailer manufacturers in Europe, have concluded a multi-year contract for the delivery of trailer axles and landing gears with a prospective contract value in the low three-digit million range.
The thirteenth Annual General Meeting of SAF-HOLLAND S.A. on April 25, 2019 in Luxembourg was met by strong interest from SAF-HOLLAND's shareholders, with an attendance rate of more than 67 per cent. All of the proposed resolutions of the management were approved by a large majority, including the presentation of the annual and consolidated financial statements for the 2018 financial year, the management report and group management report, as well as the auditor's report and the discharge of the members of the Board of Directors. The Annual General Meeting also discharged the auditor, PricewaterhouseCoopers Société coopérative, for the 2018 financial year, who was then reappointed as the auditor for the 2019 financial year. The Annual General Meeting also resolved a dividend of EUR 0.45 (previous year EUR 0.45) per share for the 2018 financial year.
The Extraordinary General Meeting, which took place immediately after the Annual General Meeting, approved all of the management's resolution proposals by a large majority with one exception. 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 Securities Trading Act (Section 33 [1] WpHG), the Extraordinary General Meeting of SAF-HOLLAND S.A. decided by way of an amendment to Article 18 (1) sentence 1 of the Company's Articles of Association, that Company shareholders who reach, exceed or fall below the voting rights' threshold of 3 per cent are required to promptly file a voting rights notification with the Company. The statutory reporting obligations pursuant to Article 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, continue to apply.
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 cooperation is initially set up for 10 years and includes an extension clause. The worldwide distribution 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 application in the first quarter of 2019 for test purposes. In the next 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 Logistics.
On May 31, 2019, SAF-HOLLAND GmbH and Mr. Guoxin Mao, President China and member of the Group Management Board, mutually agreed on the termination of his service. Mr. Guoxin Mao resigned from his office with immediate effect. At the same time, Alexander Geis, CEO of SAF-HOLLAND, appointed Jürgen Knott as President China effective June 1, 2019. Jürgen Knott is a member of the extended management team and reports directly to Alexander Geis.
The production of trailers in Europe, China and North America, the production of trucks in North America, as well as the global aftermarket business, are all relevant factors when assessing the sector environment for the SAF-HOLLAND Group.
The truck business of SAF-HOLLAND breaks down as follows: North America (9.8 per cent of Group sales), EMEA (3.6 per cent of Group sales), China (0.7 per cent of Group sales) and APAC (0.4 per cent of Group sales).
The global truck and trailer markets developed quite differently in the first half of 2019, partly as a result of uncertainties concerning the future economic outlook. While the production of trailers in North America grew, fewer units were manufactured in Europe and China. At the same time, order intake for trailers and trucks in North America declined compared to the very strong prior year̕s period. Order backlogs are currently lower than the record levels realized at the end of 2018. Overall, our expectations for the sector environment described in the 2018 Annual Report have been confirmed so far in 2019.
According to estimates by the market research institute ACT Research, truck production in the first six months of 2019 increased by almost 20 per cent year-on-year. A key driver of the higher production was the working down of the high order backlog.
The North American trailer market posted positive performance in the first half of 2019. According to FTR Transport Intelligence (FTR) estimates, trailer production rose by around 8 per cent to 186,000 units.
Following a continued improvement in the economic environment, the Brazilian heavy truck market has continued to perform very positively since the beginning of the year. According to the Anfavea (Associação Nacional dos Fabricantes de Veículos Automotores) manufacturing association, production in the first six months of 2019 increased to around 31,000 units, or by 36 per cent, starting from a historically low level in 2018.
After the historic highs achieved in 2018 coupled with slightly lower economic growth at the beginning of the year, the production of trailers in the first two quarters of 2019 fell by around 12 per cent year-on-year.
According to the European Automobile Manufacturers Association (ACEA) industry association, new registrations of heavy trucks in the European Union rose by close to 16 per cent in the first half of 2019, among other factors, as a result of pull-forward effects ahead of the regulatory introduction of the "smart tachograph" as of June 15, 2019. Despite latent concerns about Brexit, the British market also grew by around 28 per cent. This increase, however, should be seen in the context of the low comparisons in the previous year. According to LMC Automotive, around 6 per cent more heavy trucks were produced in the first six months of 2019 than a year ago.
In the face of the escalating trade conflict between China and the United States and the resulting uncertainty concerning the further economic development in China, the production of trailers in the first half of 2019 declined by roughly 15 to 20 per cent. The premium segment relevant for SAF-HOLLAND's business development (disc brake technology and air suspension systems following stricter regulatory requirements) was unable to escape the negative market trend and, as a result, recorded a decline in demand.
Lower economic growth and the lack of the expected catch-up effect following customers' restraint ahead of the April/May elections led to a decline in trailer production of around 36 per cent in the first six months. Market analysts are anticipating a reduction in trailer production of up to 25 per cent in 2019.
Group sales in the first half of 2019 reached EUR 695.5 million, or 8.6 per cent higher than the level of EUR 640.3 million generated in the first half of the prior year. The additional contribution to sales from the companies acquired since January 2018 amounted to EUR 34.5 million.
Organic sales growth, which stemmed exclusively from the Americas region, contributed EUR 4.2 million. Positive currency effects resulting primarily from the appreciation of the US dollar against the euro amounted to EUR 16.4 million (previous year EUR –36.2 million).
Sales from the original equipment business in the January to June 2019 reporting period improved by 7.5 per cent, or EUR 36.8 million, to a total of EUR 527.9 million. The Americas region was a key contributor to this growth, as was the APAC region due to acquisitions. The sales share declined slightly from 76.7 per cent to 75.9 per cent.
| Q1-Q2 / 2019 | Q1-Q2 / 2018 | Change absolute |
Change in % |
|---|---|---|---|
| 527,930 | 491,136 | 36,794 | 7.5% |
| 167,536 | 149,172 | 18,364 | 12.3% |
| 695,466 | 640,308 | 55,158 | 8.6 % |
| 75.9% | 76.7% | ||
| 24.1% | 23.3% | ||
Sales in the spare parts business increased by EUR 18.4 million, or 12.3 per cent, to EUR 167.5 million. The Americas and EMEA regions contributed substantially to this performance. The sales share of the spare parts business increased from 23.3 per cent to 24.1 per cent.
Cost of sales increased by 7.7 per cent in the reporting period, from EUR 535.7 million to EUR 576.7 million, following sales growth of 8.6 per cent. The cost of sales ratio improved slightly from 83.7 per cent to 82.9 per cent. This development was also positively influenced by the contractual passing on last year's steel price increases, global sourcing savings like lower procurement prices for steel, as well as from the lasting price increases in the US and Canadian aftermarket business. Import duties and impairments on inventories had a negative impact.
Selling and general administrative expenses increased year-onyear by EUR 14.1 million, or 23.9 per cent, to EUR 72.9 million in the first six months of the 2019 financial year. The corresponding cost ratio rose from 9.2 per cent to 10.5 per cent. In addition to consolidation effects, higher personnel costs from adjustments in collective wage agreements, as well as strategically planned new hirings – particularly in the areas of IT and digital – had a particularly negative impact. In addition, there was higher amortization of the customer base resulting from the purchase price allocation, severance payments for departing members of the Group Management Board, consultancy costs for the FORWARD and Greenfield project, as well as impairments on receivables.
Research and development costs in the first six months of 2019 amounted to EUR 10.7 million and were just below the prior year̕s level of EUR 10.8 million. Additionally, a total of EUR 2.4 million in development costs (previous year EUR 1.8 million) were capitalized. The R&D ratio (including capitalized development costs) amounted to 1.9 per cent of sales (previous year 2.0 per cent). Development activities focused on developing new products and adapting existing solutions to meet specific customer and regional market requirements. The theme "SMART STEEL," which refers to the combination of mechanical products with sensors and electronics, is increasingly gaining importance.
Group earnings before interest and taxes (EBIT) reached EUR 36.7 million in the first half of 2019, close to last year's level of EUR 36.8 million. The sharp rise in earnings achieved in the Americas region was able to compensate for the lower earnings contributions from the other regions.
in EUR thousands
| in EUR thousands | ||||
|---|---|---|---|---|
| Q1-Q2 / 2019 | Q1-Q2 / 2018 | Change absolute |
Change in % |
|
| Sales | 695,466 | 640,308 | 55,158 | 8.6 % |
| EBIT | 36,744 | 36,777 | – 33 | – 0.1 % |
| in % of sales | 5.3% | 5.7% | ||
| Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA |
4,695 | 3,470 | 1,225 | 35.3% |
| Step-up inventory from PPA | 41 | 379 | –338 | –89.2% |
| Valuation effects from call and put options | – | – | – | 0.0% |
| Restructuring and transaction costs | 8,463 | 3,490 | 4,973 | 142.5% |
| Adjusted EBIT | 49,943 | 44,116 | 5,827 | 13.2 % |
| in % of sales | 7.2% | 6.9% | ||
| Depreciation and amortization of property, plant and equipment and intangible assets (excluding PPA) |
16,167 | 10,074 | 6,093 | 60.5% |
| in % of sales | 2.3% | 1.6% | ||
| Adjusted EBITDA | 66,110 | 54,190 | 11,920 | 22.0 % |
| in % of sales | 9.5% | 8.5% | ||
Adjusted EBIT in the first half of 2019 amounted to EUR 49.9 million, surpassing the prior year's figure of EUR 44.1 million by 13.2 per cent. The adjusted EBIT figure includes restructuring and transaction costs of EUR 8.5 million (previous year EUR 3.5 million), as well as purchase price allocation effects (depreciation from PPA step-ups) of EUR 4.7 million (previous year EUR 3.5 million). The adjusted EBIT margin for the first halfyear of 2019 equaled 7.2 per cent (previous year 6.9 per cent).
The finance result recorded a marked improvement to EUR –5.1 million in the first half of 2019 (previous year EUR –6.3 million). This improvement was mainly due to a sharply lower level of average financial debt, result of 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.
The increase in the effective Group tax rate from 28.7 per cent to 34.3 per cent is due first and foremost to unrecognized deferred tax assets on loss carryforwards from foreign Group companies. These deferred tax assets were not recognized due to the conservative expectation of their earnings development.
Based on the higher effective tax rate, the result for the period in the first half of 2019 amounted to EUR 20.8 million (previous year EUR 21.8 million).
Based on a total of roughly 45.4 million ordinary shares issued, basic earnings per share for the first half-year of 2019 amounted to EUR 0.45 (previous year EUR 0.48) and diluted earnings per share amounted to EUR 0.39 (previous year EUR 0.41).
Group
in EUR thousands Q1-Q2 / 2019 Q1-Q2 / 2018 Change absolute Change in % Sales 695,466 640,308 55,158 8.6 % EBIT 36,744 36,777 – 33 – 0.1 % in % of sales 5.3% 5.7% Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA 4,695 3,470 1,225 35.3% Step-up inventory from PPA 41 379 –338 –89.2% Valuation effects from call and put options – – – 0.0% Restructuring and transaction costs 8,463 3,490 4,973 142.5% Adjusted EBIT 49,943 44,116 5,827 13.2 % Adjusted finance result –5,125 –6,251 1,126 –18.0% Adjusted earnings before taxes 44,817 37,865 6,952 18.4 % Income taxes –11,787 –9,656 –2,131 22.1% Group tax rate 26.3% 25.5% Adjusted result for the period 33,030 28,209 4,822 17.1 % Number of shares 45,394,302 45,394,302 Adjusted basic earnings per share in EUR 0.73 0.62 0.11 17.7% Adjusted diluted earnings per share in EUR 0.61 0.53 0.08 15.1%
Adjusted for restructuring and transaction costs and purchase price allocation effects 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 33.0 million (previous year EUR 28.2 million).
Based on the approximately 45.4 million ordinary shares issued, adjusted basic earnings per share amounted to EUR 0.73 (previous year EUR 0.62) and adjusted diluted earnings per share amounted to EUR 0.61 (previous year EUR 0.53).
in EUR thousands
| Change | Change | |||
|---|---|---|---|---|
| Q1-Q2 / 2019 | Q1-Q2 / 2018 | absolute | in % | |
| Sales | 348,035 | 345,096 | 2,939 | 0.9 % |
| EBIT | 29,513 | 36,040 | – 6,527 | – 18.1 % |
| in % of sales | 8.5% | 10.4% | ||
| Additional depreciation and amortization of property, | ||||
| plant and equipment and intangible assets from PPA | 2,147 | 1,652 | 495 | 30.0% |
| Step-up inventory from PPA | 2 | 103 | –101 | –98.1% |
| Valuation effects from call and put options | – | – | – | 0.0% |
| Restructuring and transaction costs | 2,224 | 1,827 | 397 | 21.7% |
| Adjusted EBIT | 33,886 | 39,622 | – 5,736 | – 14.5 % |
| in % of sales | 9.7% | 11.5% | ||
| Depreciation and amortization of property, plant and | ||||
| equipment and intangible assets (excluding PPA) | 6,925 | 4,708 | 2,217 | 47.1% |
| in % of sales | 2.0% | 1.4% | ||
| Adjusted EBITDA | 40,811 | 44,330 | – 3,519 | – 7.9 % |
| in % of sales | 11.7% | 12.8% |
The EMEA region increased sales in the first half of 2019 by 0.9 per cent to EUR 348.0 million (previous year EUR 345.1 million). The companies acquired since January 2018 contributed additional sales of EUR 14.0 million. Organic sales declined by 3.2 per cent to EUR 334.0 million as a result of volume effects.
In the first half of 2019, the EMEA region achieved an adjusted EBIT of EUR 33.9 million (previous year EUR 39.6 million) and an adjusted EBIT margin of 9.7 per cent (previous year 11.5 per cent). The aforementioned volume effects and higher personnel expenses had a negative effect in the first half of 2019. Earnings were positively affected by the companies acquired since January 2018. In addition the first half of 2018 was positively impacted by the reversal of warranty provisions.
Americas
| in EUR thousands | ||||
|---|---|---|---|---|
| Q1-Q2 / 2019 | Q1-Q2 / 2018 | Change absolute |
Change in % |
|
| Sales | 272,577 | 224,938 | 47,639 | 21.2 % |
| EBIT | 14,387 | – 2,537 | 16,924 | – |
| in % of sales | 5.3% | –1.1% | ||
| Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA |
1,270 | 1,247 | 23 | 1.8% |
| Step-up inventory from PPA | – | – | – | 0.0% |
| Valuation effects from call and put options | – | – | – | 0.0% |
| Restructuring and transaction costs | 2,569 | 1,251 | 1,318 | 105.4% |
| Adjusted EBIT | 18,226 | – 39 | 18,265 | – |
| in % of sales | 6.7% | 0.0% | ||
| Depreciation and amortization of property, plant and equipment and intangible assets (excluding PPA) |
5,774 | 4,594 | 1,180 | 25.7% |
| in % of sales | 2.1% | 2.0% | ||
| Adjusted EBITDA | 24,000 | 4,555 | 19,445 | 426.9 % |
| in % of sales | 8.8% | 2.0% |
Sales in the Americas region increased by 21.2 per cent in the first half of 2019 to EUR 272.6 million (previous year EUR 224.9 million). Sales adjusted for currency and portfolio effects improved by 14.0 per cent to EUR 256.4 million.
Business with axle systems with integrated disc brake technology developed very favourably. In addition to the company XTRA Lease, a second well-known major fleet customer was gained. In the first half of 2019, a total of approximately 21,000 axle systems equipped with disc brakes were delivered to customers, corresponding to a growth rate of just over 105 per cent. In order to meet the growing demand, additional capacity will be created at the Warrenton site. The aftermarket business will also be expanded accordingly.
The market environment continued to be driven by strong customer demand for truck and trailer components, which led to persistent capacity bottlenecks throughout the industry and along the entire supply chain.
At EUR 18.2 million, adjusted EBIT was well above the prior year̕s break-even level, as was the adjusted EBIT margin of 6.7 per cent (previous year 0.0 per cent). Contributing to this performance was a reduction in add-on operating expenses from EUR 6.2 million in the first half of 2018 to EUR 1.0 million in the first half of 2019. The contractual passing on of last year's steel price increases, lower steel purchase prices and lasting price increases in the US and Canadian aftermarket businesses also impacted earnings positively.
There was a continuous improvement in the overall situation in the North American plant network in the first half of 2019. SAF-HOLLAND launched the FORWARD project on March 1, 2019, in order to systematically realize the considerable optimization potential identified and to drive forward the network's turnaround. The focus of this project is to optimize the production and supply chain, the product portfolio, the aftermarket business and the procurement of material.
APAC
in EUR thousands
| Q1-Q2 / 2019 | Q1-Q2 / 2018 | Change absolute |
Change in % |
|
|---|---|---|---|---|
| Sales | 49,733 | 33,980 | 15,753 | 46.4 % |
| EBIT | 1,169 | 1,942 | – 773 | – 39.8 % |
| in % of sales | 2.4% | 5.7% | ||
| Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA |
1,249 | 542 | 707 | 130.4% |
| Step-up inventory from PPA | 39 | 276 | –237 | –85.9% |
| Valuation effects from call and put options | – | – | – | 0.0% |
| Restructuring and transaction costs | 494 | 162 | 332 | 204.9% |
| Adjusted EBIT | 2,951 | 2,922 | 29 | 1.0 % |
| in % of sales | 5.9% | 8.6% | ||
| Depreciation and amortization of property, plant and | ||||
| equipment and intangible assets (excluding PPA) | 1,045 | 277 | 768 | 277.3% |
| in % of sales | 2.1% | 0.8% | ||
| Adjusted EBITDA | 3,996 | 3,199 | 797 | 24.9 % |
| in % of sales | 8.0% | 9.4% | ||
During the first half of 2019, the APAC region increased sales by EUR 15.7 million to EUR 49.7 million. The additional sales contribution from the companies acquired since January 2018 was EUR 20.3 million. Sales adjusted for currency and portfolio effects declined by 14.0 per cent year-on-year to a total of EUR 29.2 million. The main reason for the sales decline was the continued weak market environment in India.
Despite the acquisitions in the previous year, adjusted EBIT, at EUR 3.0 million, was only slightly higher than the prior year's figure of EUR 2.9 million. The adjusted EBIT margin fell from 8.6 per cent to a level of 5.9 per cent. This decline in the margin stems from the dilutive effect of the York acquisition and the latest unsatisfactory sales and earnings development of the Indian subsidiary York.
| in EUR thousands | ||||
|---|---|---|---|---|
| Q1-Q2 / 2019 | Q1-Q2 / 2018 | Change absolute |
Change in % |
|
| Sales | 25,121 | 36,294 | – 11,173 | – 30.8 % |
| EBIT | – 8,325 | 1,332 | – 9,657 | – |
| in % of sales | –33.1% | 3.7% | ||
| Additional depreciation and amortization of property, plant and equipment and intangible assets from PPA |
29 | 29 | 0 | 0.0% |
| Step-up inventory from PPA | – | – | – | – |
| Valuation effects from call and put options | – | – | – | 0.0% |
| Restructuring and transaction costs | 3,176 | 250 | 2,926 | 1,170.4% |
| Adjusted EBIT | – 5,120 | 1,611 | – 6,731 | – |
| in % of sales | –20.4% | 4.4% | ||
| Depreciation and amortization of property, plant and equipment and intangible assets (excluding PPA) |
2,423 | 495 | 1,928 | 389.5% |
| in % of sales | 9.6% | 1.4% | ||
| Adjusted EBITDA | – 2,697 | 2,106 | – 4,803 | – |
| in % of sales | –10.7% | 5.8% |
The China region generated sales of EUR 25.1 million in the first half of 2019 (previous year EUR 36.3 million). This decline was the result of a shrinking export business due to the trade dispute between China and the US, as well as from cyclically short notice cancellations and delays in orders and temporary strikes following the announcement of plant closures.
Earnings were burdened by a low level of capacity utilization at the Xiamen and Qingdao plants and temporary cost pressure from the existence of duplicate structures in the course of the integration of the other Chinese sites into the new Greenfield project. In addition, there were inventory impairments as a result of a significant decline in incoming orders and higher marketability discounts, as well as impairments on receivables as a result of the bankruptcy of one customer and pending legal proceedings against several other customers due to payment defaults. Altogether, this led to an adjusted EBIT of EUR –5.1 million (previous year EUR 1.6 million).
To position itself successfully for further growth opportunities in the Chinese market, SAF-HOLLAND sent an experienced team of experts to China to support the local management in starting up the new plant in Yangzhou, integrating the other Chinese sites into the Greenfield project, acquiring local customers and concluding long-term contracts. In this context, Jürgen Knott assumed the position of President for the China region as of June 1, 2019. Mr. Knott brings with him extensive management experience in the areas of operations, product development and sales of axles, brake systems and chassis components for commercial vehicles, in addition to several years of intercultural leadership experience, especially in China and Asia.
In light of the unsatisfactory sales and earnings development, the Group Management Board has decided to significantly accelerate the consolidation of the Chinese sites into the Greenfield project. The plant in Qingdao has ceased operations from July 31, 2019. The two Beijing warehouses have also been closed from July 31, 2019. Further footprint optimization efforts will follow during the second half of the year including a downsizing of the Xiamen plant while the Greenfield plant is ramping up. The commencement of production at the new Yangzhou plant will be brought forward to the beginning of the fourth quarter.
At the end of the first half of 2019, total assets increased by 6.6 per cent to EUR 1,041.6 million compared to their level at the end of the 2018 financial year of EUR 977.4 million.
in EUR thousands 06 / 30 / 2019 12 / 31 / 2018 Change absolute Change in % Non-current assets 523,255 472,284 50,971 10.8 % of which intangible assets 267,949 265,765 2,184 0.8% of which property, plant and equipment 209,091 163,263 45,828 28.1% of which other (financial) assets 46,215 43,256 2,959 6.8% Current assets 518,348 505,132 13,216 2.6 % of which inventories 194,852 179,368 15,484 8.6% of which trade receivables 171,394 138,875 32,519 23.4% of which liquid assets 119,475 155,009 –35,534 –22.9% of which other (financial) assets 32,627 31,880 747 2.3% Total assets 1,041,603 977,416 64,187 6.6 %
The rise in property, plant and equipment was attributable to the changes to lease accounting under IFRS 16, the establishment of the Chinese Greenfield project, the modernization of the US plant network, as well as rationalization and expansion investments. At EUR 15.5 million, or 8.6 per cent, the rise in inventories compared to the end of 2018 was in accordance with the rise in sales. The increase in trade receivables compared to the end of 2018, however, was considerably higher than the rise in sales due to reporting date effects.
The decline in cash and cash equivalents of EUR 35.5 million in the first half of 2019 corresponds to the change in net financial liabilities of EUR 34.2 million. This change was primarily a result of the payment of the purchase prices for the Stara Group and PressureGuard, as well as the dividend payment made in May 2019.
Equity in comparison to December 31, 2018, increased by EUR 5.2 million to EUR 337.7 million. The main drivers of this increase were the net result for the period in the first half of 2019, which amounted to a total of EUR 20.8 million and positive exchange differences from the translation of foreign operations recognized directly in equity. The rise in total assets of EUR 64.2 million, or 6.6 per cent, to EUR 1,041.6 million led to a decline in the equity ratio from 34.0 per cent as of December 31, 2018, to 32.4 per cent as of June 30, 2019.
in EUR thousands
| 06 / 30 / 2019 | 12 / 31 / 2018 | Change absolute |
Change in % |
|
|---|---|---|---|---|
| Equity | 337,732 | 332,550 | 5,182 | 1.6 % |
| Non-current liabilities | 496,913 | 469,912 | 27,001 | 5.7 % |
| of which Interest bearing loans and bonds | 363,811 | 364,459 | –648 | –0.2% |
| of which other non-current liabilities | 133,102 | 105,453 | 27,649 | 26.2% |
| Current liabilities | 206,958 | 174,954 | 32,004 | 18.3 % |
| of which Interest bearing loans and bonds | 3,277 | 3,936 | –659 | –16.7% |
| of which trade payables | 150,799 | 129,115 | 21,684 | 16.8% |
| of which other current liabilities | 52,882 | 41,903 | 10,979 | 26.2% |
| Balance sheet total | 1,041,603 | 977,416 | 64,187 | 6.6 % |
Within non-current liabilities, finance lease liabilities increased following the introduction of the new IFRS 16 lease standard. The rise in trade payables of 16.8 per cent to EUR 150.8 million is balance sheet date-related. Current liabilities are also affected by the new IFRS 16 lease standard.
in EUR thousands
| 06 / 30 / 2019 | 06 / 30 / 2018 | Change absolute |
Change in % |
|
|---|---|---|---|---|
| Inventories | 194,852 | 194,383 | 469 | 0.2% |
| Trade receivables | 171,394 | 206,131 | –34,737 | –16.9% |
| Income tax receivables | 2,687 | 2,681 | 6 | 0.2% |
| Other current assets | 28,125 | 24,363 | 3,762 | 15.4% |
| Other provisions (non-current) | –7,507 | –6,747 | –760 | 11.3% |
| Other provisions (current) | –10,381 | –8,748 | –1,633 | 18.7% |
| Trade payables | –150,799 | –175,383 | 24,584 | –14.0% |
| Other liabilities | –29,677 | –24,467 | –5,210 | 21.3% |
| Income tax liabilities | –3,628 | –7,826 | 4,198 | –53.6% |
| Net working capital | 195,066 | 204,387 | – 9,321 | – 4.6 % |
| Net working capital ratio | 14.0% | 14.5% |
The net working capital ratio improved from 14.5 per cent to 14.0 per cent. This decline was accompanied by significantly lower trade receivables that were partially offset by lower trade payables.
At EUR 27.6 million, cash flow from operating activities in the first six months of 2019 was significantly above the previous year's level of EUR –30.9 million. This improvement is attributable, above all, to a sharply lower rise in net working capital – despite the continued expansion of sales.
| in EUR thousands | ||
|---|---|---|
| Q1-Q2 / 2019 | Q1-Q2 / 2018 | |
| Cash flow from operating activities | 27,605 | –30,856 |
| Cash flow from investing activities (property, plant and equipment/intangible assets) | –24,236 | –15,238 |
| Operating free cash flow | 3,369 | – 46,094 |
| Cash flow from investing activities (subsidiaries, financial assets) | –12,425 | –50,134 |
| Total free cash flow | – 9,056 | – 96,228 |
| Other | –25,171 | –50,202 |
| Change in net financial liabilities | – 34,227 | – 146,430 |
Cash flow from investing activities in property, plant and equipment and intangible assets amounted to EUR 24.2 million, which was EUR 9.0 million or 59.0 per cent above the prior year's level. This rise was primarily attributable to the Chinese Greenfield project, a new office building in Germany and the rationalization and expansion investments in the United States.
Operating free cash flow improved substantially, rising from EUR –46.1 million to EUR 3.4 million. Total free cash flow, in the amount of EUR –9.1 million, was affected by the cash outflow for the acquisitions of the Stara Group and PressureGuard.
The change in net financial liabilities of EUR –34.2 million resulted in net financial liabilities for the SAF-HOLLAND Group of EUR 247.6 million (December 31, 2018: EUR 213.4 million) as of the June 30, 2019 balance sheet date. The key reason for this change was not only total free cash flow in the amount of EUR –9.1 million but the dividend payment of EUR 20.4 million in particular. The SAF-HOLLAND Group had liquid assets of EUR 119.5 million as of June 30, 2019 (December 31, 2018: EUR 155.0 million).
In assessing the opportunities 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) in addition to the following exception:
The extent of risk associated with the "impairment risks" presented under "Operating Risks" has increased from "Low" to "High." The reason for this change is the decline in the operating performance of Corpco Beijing Technology and Development Co., Ltd., which was acquired in 2013, and the unresolved trade dispute between the US and China.
The 2019 outlook remains favorable for the commercial vehicle markets that are relevant to SAF-HOLLAND, despite uncertainties surrounding further economic developments. Based on record backlog for Class 8 trucks and trailers in North America, a relatively high level of production can also be expected during the further course of the current year. In the China region, SAF-HOLLAND is less exposed to the overall market and instead focuses on the premium segment for trailers. In this segment, the more stringent regulatory requirements for vehicle safety and load limits are expected to lead to continued investment by fleet operators. The situation is somewhat different in the important core market of Europe. After several years of growth, production figures for trailers can be expected to decline in 2019.
According to the estimates of LMC Automotive, the Western European truck market is expected to increase slightly in 2019 (+1 per cent). It is worth noting that the European truck market is only of comparably minor importance to SAF-HOLLAND. For Eastern Europe, LMC expects the market to be stable in 2019.
After sustained growth in the period from 2013 to 2018, the market research institute CLEAR expects trailer demand to decline in 2019. The market researchers justify their assessment by pointing out that the demand for trailers over the past several years has received an added boost from catch-up effects. CLEAR is currently forecasting a decline of 10 per cent in the production in Western Europe. In considering this forecast, it is important to take into account that the prior year had very high comparisons as more than 9 per cent more trailers were manufactured than the average for the prior three years.
The sustained robust growth of the US economy and the resulting higher than average increase in freight volumes and rates led to strong demand for additional transport capacity in North America in 2018. At the same time, the electronic logging device (ELD) introduced by the Federal Motor Carriers Safety Administration (FMCSA) on April 1, 2018, created more bottlenecks for fleet operators. The ELD requires that truck drivers document their break times, which in daily practice leads to shorter operating times. Fleet operators reacted to these bottlenecks with a flood of orders for new equipment. Due to the limited production capacity of the truck manufacturers, however, it will not be possible to fill these orders before 2019. In its latest forecast, ACT Research expects North American Class 8 truck production of +5 per cent compared with its forecast of +4 per cent at the start of the year. Higher growth is now expected, above all, in the US (+9 per cent), whereas Canada (–1 per cent) is expected to decline.
The outlook for the North American trailer market in 2019 continues to be positive, not least due to the continued high level of the order backlog. ACT Research expects roughly 3 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.
Based on the anticipation of a moderate economic recovery and political reforms in Brazil, LMC Automotive expects heavy truck production to grow by 15 per cent in 2019. As a result, the Brazilian truck market would continue the recovery that began in 2017, even though truck production will remain significantly below the level before the last downturn in 2013. After dynamic growth in the year 2018 of more than 60 per cent in 2018, CLEAR expects trailer demand to be more restrained and is projecting a rise in trailer production in 2019 of around 5 per cent in 2019.
After recording some high growth rates in the last several years, the consolidation of truck demand in China continued in 2019 as expected by many market watchers. The projected decline in heavy truck production in 2019 is 3 per cent, whereby it is worth noting that until now the Chinese truck market has had relatively minor importance for SAF-HOLLAND.
Due to the uncertainties surrounding the future economic development in China, market analysts are anticipating a 15 per cent decline in trailer production in the full year 2019. The expectation is that the premium segment relevant for SAF-HOLLAND will not be able to fully escape the negative market development, despite the recent introduction of load limits and safety regulations for trailers.
For Australia, which is an important regional market for SAF-HOLLAND, LMC Automotive expects registrations of heavy and medium-duty trucks to decline by 16 per cent in 2019. After a nearly 7 per cent increase in trailer production in 2018, CLEAR anticipates a decline of 6 per cent in the current year.
For the market in India, CLEAR and LMC Automotive are also forecasting declines. In 2019, a reduction in trailer production of up to 25 per cent is expected and up to 11 per cent in truck production.
Based on the expected macroeconomic and industry-specific conditions and weighing the risk and opportunity potential for the 2019 financial year, the Group Management Board of SAF-HOLLAND continues to expect sales growth at the Group level of 4 to 5 per cent.
From today's perspective, SAF-HOLLAND continues to expect an adjusted EBIT margin around the midpoint of the range of 7 to 8 per cent for the full year 2019 (previous year 6.9 per cent).
No material events relevant for reporting occurred after the reporting date.
In addition to the key figures defined or specified in the applicable IFRS financial reporting framework, SAF-HOLLAND also provides key financial ratios derived from or based on the prepared financial statements. These are known as Alternative Performance Measures (APM).
SAF-HOLLAND considers these key financial ratios to be important supplemental information for investors and other readers of the financial reports and press releases. The key financial ratios should therefore be seen as a supplement to rather than a replacement of the information prepared in accordance with IFRS.
With regard to the requirements of the European Securities and Markets Authority (ESMA) Guidelines on Alternative Performance Measures (APM), SAF-HOLLAND provides an overview of the Alternative Performance Measures used, their definition and calculation on the SAF-HOLLAND website at https://corporate.safholland.com/en/apm.
| in EUR thousands | |||||
|---|---|---|---|---|---|
| Notes | Q1 – Q2 / 2019 | Q1 – Q2 / 2018* | Q2 / 2019 | Q2 / 2018* | |
| Sales | (5) | 695,466 | 640,308 | 349,498 | 345,438 |
| Cost of sales | –576,741 | –535,721 | –291,025 | –291,420 | |
| Gross profit | 118,725 | 104,587 | 58,473 | 54,018 | |
| Other income | 715 | 724 | 350 | 501 | |
| Selling expenses | –36,787 | –30,138 | –18,570 | –16,060 | |
| Administrative expenses | –36,132 | –28,701 | –17,772 | –14,036 | |
| Research and development costs | –10,728 | –10,769 | –5,138 | –5,362 | |
| Operating result | 35,793 | 35,703 | 17,343 | 19,061 | |
| Share of net profit of investments accounted for using | |||||
| the equity method | 951 | 1,074 | 465 | 545 | |
| Earnings before interest and taxes | 36,744 | 36,777 | 17,808 | 19,606 | |
| Finance income | (6) | 701 | 742 | 342 | 581 |
| Finance expenses | (6) | –5,826 | –6,993 | –3,061 | –2,952 |
| Finance result | (6) | – 5,125 | – 6,251 | – 2,719 | – 2,371 |
| Result before tax | 31,619 | 30,526 | 15,089 | 17,235 | |
| Income tax | (7) | –10,851 | –8,753 | –5,759 | –5,242 |
| Result for the period | 20,768 | 21,772 | 9,330 | 11,992 | |
| Attributable to: | |||||
| Equity holders of the parent | 20,335 | 21,982 | 9,028 | 11,961 | |
| Non-controlling interests | 433 | –210 | 302 | 31 | |
| Other comprehensive income | |||||
| Items that may be reclassified subsequently to profit or loss |
|||||
| Exchange differences on translation of foreign operations | (9) | 3,964 | 3,497 | –4,466 | 10,005 |
| Other comprehensive income | 3,964 | 3,497 | – 4,466 | 10,005 | |
| Comprehensive income for the period | 24,732 | 25,269 | 4,864 | 21,997 | |
| Attributable to | |||||
| Equity holders of the parent | 24,280 | 25,662 | 4,982 | 22,108 | |
| Non-controlling interests | 452 | –393 | –118 | –111 | |
| Basic earnings per share in EUR | 0.45 | 0.48 | 0.20 | 0.26 | |
| Diluted earnings per share in EUR | 0.39 | 0.41 | 0.17 | 0.22 |
* Since January 1, 2019, IFRS 16 "Leases" has been applied for the first time. It is applied using the modified retrospective 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 section 2 "Significant Accounting and Valuation Policies."
| in EUR thousands | |||
|---|---|---|---|
| Notes | 06 / 30 / 2019 | 12 / 31 / 2018* | |
| Assets | |||
| Non-current assets | 523,255 | 472,284 | |
| Goodwill | 88,921 | 84,480 | |
| Other intangible assets | 179,028 | 181,285 | |
| Property, plant and equipment | 209,091 | 163,263 | |
| Investments accounted for using the equity method | 17,826 | 16,833 | |
| Financial assets | (11) | 3,037 | 1,309 |
| Other non-current assets | 2,982 | 2,686 | |
| Deferred tax assets | 22,370 | 22,428 | |
| Current assets | 518,348 | 505,132 | |
| Inventories | 194,852 | 179,368 | |
| Trade receivables | 171,394 | 138,875 | |
| Income tax assets | 2,687 | 5,226 | |
| Other current assets | 28,125 | 25,149 | |
| Financial assets | (11) | 1,815 | 1,505 |
| Cash and cash equivalents | (8) | 119,475 | 155,009 |
| Balance sheet total | 1,041,603 | 977,416 | |
| Equity and liabilities | |||
| Total equity | (9) | 337,732 | 332,550 |
| Equity attributable to equity holders of the parent | 325,249 | 321,480 | |
| Subscribed share capital | 454 | 454 | |
| Share premium | 269,044 | 269,044 | |
| Legal reserve | 45 | 45 | |
| Other reserve | 720 | 720 | |
| Retained earnings | 86,106 | 86,282 | |
| Accumulated other comprehensive income | –31,120 | –35,065 | |
| Shares of non-controlling interests | 12,483 | 11,070 | |
| Non-current liabilities | 496,913 | 469,912 | |
| Pensions and other similar benefits | 31,006 | 30,507 | |
| Other provisions | 7,507 | 7,604 | |
| Interest bearing loans and bonds | (10) | 363,811 | 364,459 |
| Finance lease liabilities | (2.1)/(11) | 26,994 | 38 |
| Other financial liabilities | (11) | 16,484 | 16,271 |
| Other liabilities | 637 | 626 | |
| Deferred tax liabilities | 50,474 | 50,407 | |
| Current liabilities | 206,958 | 174,954 | |
| Other provisions | 10,381 | 9,992 | |
| Interest bearing loans and bonds | (10) | 3,277 | 3,936 |
| Finance lease liabilities | (2.1)/(11) | 8,155 | 191 |
| Trade payables | 150,799 | 129,115 | |
| Income tax liabilities | 3,628 | 4,007 | |
| Other financial liabilities | (11) | 1,041 | 776 |
| Other liabilities | 29,677 | 26,937 | |
| Balance sheet total | 1,041,603 | 977,416 |
* Since January 1, 2019, IFRS 16 "Leases" has been applied for the first time. It is applied using the modified retrospective 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 section 2 "Significant Accounting and Valuation Policies."
in EUR thousands
| Q1 – Q2 / 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Attributable to equity holders of the parent | |||||||||
| Sub scribed share capital |
Share premium |
Legal reserve |
Other reserve |
Retained earnings |
Accumulated other comprehensive income |
Total amount |
Shares of non controlling interests |
Total equity (Note 9) |
|
| As of 01 / 01 / 2019 | 454 | 269,044 | 45 | 720 | 86,282 | – 35,065 | 321,480 | 11,070 | 332,550 |
| Result for the period | – | – | – | – | 20,335 | – | 20,335 | 433 | 20,768 |
| Other comprehensive income |
– | – | – | – | – | 3,945 | 3,945 | 19 | 3,964 |
| Comprehensive income for the period |
– | – | – | – | 20,335 | 3,945 | 24,280 | 452 | 24,732 |
| Dividend | – | – | – | – | –20,427 | – | – 20,427 | – | – 20,427 |
| Put option for acquisition of remaining shares of PressureGuard LLC |
– | – | – | – | –84 | – | – 84 | – | – 84 |
| Transactions with non controlling interests |
– | – | – | – | – | – | – | 214 | 214 |
| Addition of shares of non-controlling interests from business combinations |
– | – | – | – | – | – | – | 747 | 747 |
| As of 06 / 30 / 2019 | 454 | 269,044 | 45 | 720 | 86,106 | – 31,120 | 325,249 | 12,483 | 337,732 |
Q1 – Q2 / 2018
| Attributable to equity holders of the parent | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Sub scribed share capital |
Share premium |
Legal reserve |
Other reserve |
Retained earnings |
Accumulated other comprehensive income |
Total amount |
Shares of non controlling interests |
Total equity (Note 9) |
|
| As of 01 / 01 / 2018 (as reported before) |
454 | 269,044 | 45 | 720 | 67,983 | – 39,404 | 298,842 | 2,133 | 300,975 |
| Effects from the adoption of IFRS 9 |
– | – | – | – | –471 | – | – 471 | – | – 471 |
| As of 01 / 01 / 2018 | 454 | 269,044 | 45 | 720 | 67,512 | – 39,404 | 298,371 | 2,133 | 300,504 |
| Result for the period | – | – | – | – | 21,982 | – | 21,982 | –210 | 21,772 |
| Other comprehensive income |
– | – | – | – | – | 3,680 | 3,680 | –183 | 3,497 |
| Comprehensive income for the period |
– | – | – | – | 21,982 | 3,680 | 25,662 | – 393 | 25,269 |
| Dividend | – | – | – | – | –20,427 | – | – 20,427 | – | – 20,427 |
| Put option for acquisition of remaining shares of V.ORLANDI S.p.A. |
– | – | – | – | –6,568 | – | – 6,568 | – | – 6,568 |
| Addition of shares of non-controlling interests from business combinations |
– | – | – | – | – | – | – | 8,187 | 8,187 |
| As of 06 / 30 / 2019 | 454 | 269,044 | 45 | 720 | 62,499 | – 35,724 | 297,038 | 9,927 | 306,965 |
| in EUR thousands | |||
|---|---|---|---|
| Notes | Q1 – Q2 / 2019 | Q1 – Q2 / 2018 1 | |
| Cash flow from operating activities | |||
| Result before tax | 31,619 | 30,526 | |
| – Finance income |
(6) | –701 | –742 |
| + Finance expenses |
(6) | 5,826 | 6,993 |
| +/– Share of net profit of investments accounted for using the equity method | –951 | –1,074 | |
| + Amortization/depreciation of intangible assets and property, plant and equipment |
20,862 | 13,544 | |
| + Allowance of current assets |
4,892 | 710 | |
| +/– Loss/Gain on disposal of property, plant and equipment | 89 | 30 | |
| + Dividends from investments accounted for using the equity method |
20 | 20 | |
| Cash flow before change of net working capital | 61,656 | 50,007 | |
| +/– Change in other provisions and pensions | 273 | –1,776 | |
| +/– Change in inventories | –11,606 | –40,714 | |
| +/– Change in trade receivables and other assets | –36,0062 | –63,9612 | |
| +/– Change in trade payables and other liabilities | 22,180 | 39,494 | |
| Change of net working capital | – 25,159 | – 66,957 | |
| Cash flow from operating activities before income tax paid | 36,497 | – 16,950 | |
| – Income tax paid |
–8,892 | –13,906 | |
| Net cash flow from operating activities | 27,605 | – 30,856 | |
| Cash flow from investing activities | |||
| + Proceeds from sale of other short term investments |
– | 53,879 | |
| – Purchase of property, plant and equipment |
–21,076 | –12,360 | |
| – Purchase of intangible assets |
–3,160 | –2,878 | |
| + Proceeds from sales of property, plant and equipment |
1,456 | 243 | |
| – Payments for acquisition of subsidiaries net of cash |
(4) | –12,425 | –50,134 |
| + Interest received |
106 | 187 | |
| Net cash flow from investing activities | – 35,099 | – 11,063 | |
| 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 |
(10) | – | –15,069 |
| – Payments for repayment of bonds |
– | –75,000 | |
| – Proceeds from foreign currency derivatives |
– | –243 | |
| – Payments for finance lease |
–4,046 | –16 | |
| – Interest paid |
–2,487 | –8,219 | |
| +/– Change in drawings on the credit line and other financing activities | (10) | –2,731 | –406 |
| Net cash flow from financing activities | – 29,691 | – 119,380 | |
| Net increase / decrease in cash and cash equivalents | – 37,185 | – 161,299 | |
| +/– Effect of changes in exchange rates on cash and cash equivalents | 1,651 | –564 | |
| Cash and cash equivalents at the beginning of the period | (8) | 155,009 | 278,775 |
| Cash and cash equivalents at the end of the period | (8) | 119,475 | 116,912 |
1 Since January 1, 2019, IFRS 16 "Leases" has been applied for the first time. It is applied using the modified retrospective 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 section 2 "Significant Accounting and Valuation Policies."
2 As of June 30, 2019, trade receivables in the amount of € 39.3 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.
For the period January 1 to June 30, 2019
SAF-HOLLAND S.A. (the "Company") was incorporated on December 21, 2005, as a "Société Anonyme" according to Luxembourg law. The Company's registered office is located in Luxembourg. The Company's shares are listed in the Prime Standard of the Frankfurt Stock Exchange. The shares have been included in the SDAX since 2010.
The consolidated financial statements for SAF-HOLLAND S.A. and its subsidiaries (the "Group") were prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union and applicable as of the reporting date.
The interim consolidated financial statements for the first half of 2019 were prepared in accordance with IAS 34 "Interim Financial Reporting." Generally, the same accounting and valuation principles and consolidation methods were applied as those applied to the consolidated financial statements for the 2018 financial year unless explicit reference is made to changes. The interim consolidated financial statements should therefore be read in conjunction with the consolidated financial statements as of December 31, 2018. Except for the changes discussed in the section "Changes to Accounting and Measurement Standards," the same accounting principles were applied as those applied to the consolidated financial statements for the 2018 financial year.
In preparing the interim consolidated financial statements, management is required to make assumptions and estimates that affect the reported amounts of assets, liabilities, income, expenses and contingent liabilities as of the reporting date. In certain cases, actual amounts may differ from these assumptions and estimates.
Income and expenses that occur irregularly during the financial year are accrued or deferred when it is appropriate to recognize these expenses at the end of the financial year.
The most important functional currencies for the Company's foreign operations are presented in the following table:
| Closing rate | Average rate | ||||
|---|---|---|---|---|---|
| 06 / 30 / 2019 | 06 / 30 / 2018 | 2019 | 2018 | ||
| US-Dollar | USD | 0.87980 | 0.86457 | 0.88533 | 0.82622 |
| Canadian Dollar | CAD | 0.67075 | 0.65030 | 0.66385 | 0.64698 |
| Chinese Renminbi | CNY | 0.12794 | 0.13062 | 0.13051 | 0.12980 |
| Indian Rupee | INR | 0.01273 | 0.01256 | 0.01266 | 0.01260 |
The interim consolidated financial statements and the interim group management report have not been audited by an auditor.
The applied accounting and measurement policies are basically the same as those applied in the prior year, with the following exception:
SAF-HOLLAND applied IFRS 16 "Leases" for the first time as of January 1, 2019. IFRS 16 introduces a uniform accounting model that obliges the lessee to recognize an asset for the right-ofuse and a lease liability for the outstanding lease payments for all leases. With regard to the accounting of leases at the lessor, the new standard generally adopts the provisions of IAS 17 and retains the distinction between operating and finance leases.
In accordance with IFRS 16, the Group applies the simplified approach to short-term and low-value leases and therefore does not recognize any rights-of-use or liabilities for such leases. The related lease payments continue to be recognized as an expense in the income statement.
In making the transition to IFRS 16, the Group has applied the modified retrospective approach, under which the carrying amounts for the comparative period are presented in accordance with the accounting principles of IAS 17 and will not be adjusted to the new standard. In the first-time application of IFRS 16, the rights-of-use were always measured at the amount of the lease liability. The lease liability corresponds to the present value of the lease payments that are still outstanding. The weighted average incremental borrowing rate amounted to 2.4 per cent.
As part of the transition to IFRS 16 lease liabilities and rightsof-use amounting to EUR 17.9 million were recognized in the consolidated balance sheet as of January 01, 2019.
The following tables provide an overview of the effects of IFRS 16 as of June 30, 2019:
in EUR million 06 / 30 / 2019 Effects IFRS 16 06 / 30 / 2019 without application IFRS 16 12 / 31 / 2018 without application IFRS 16 ASSETS Non-current assets 523.3 34.7 488.6 472.3 Current assets 518.3 – 518.3 505.1 Balance sheet total 1,041.6 34.7 1,006.9 977.4 EQUITY AND LIABILITIES Equity 337.7 – 337.7 332.6 Non-current liabilities 496.9 26.6 470.3 469.9 Current liabilities 207.0 8.1 198.9 174.9 Balance sheet total 1,041.6 34.7 1,006.9 977.4
The increase in lease liabilities as of June 30, 2019, compared to January 1, 2019, resulted from the acquisition in the current financial year and the leasing of a new distribution center for the aftermarket business in both Aschaffenburg, Germany, and Phoenix, USA.
| in EUR million | 06 / 30 / 2019 without appli |
06 / 30 / 2018 without appli |
||
|---|---|---|---|---|
| 06 / 30 / 2019 | Effects IFRS 16 | cation IFRS 16 | cation IFRS 16 | |
| EBITDA | 57.6 | 4.0 | 53.6 | 50.3 |
| EBIT | 36.7 | 0.3 | 36.4 | 36.8 |
Seasonal effects during the year can result in variations in sales and the resulting earnings. For information on earnings development, please refer to the explanations contained in the interim group management report.
The changes to the scope of consolidation compared to the consolidated financial statements as of December 31, 2018, are as follows:
On January 9, 2019, SAF-HOLLAND Inc. acquired 51 per cent of the shares in the American manufacturer of tire pressure management systems PressureGuard LLC, based in Nashville, Tennessee. As part of the acquisition, the parties were granted a call/put option for the acquisition/sale of the remaining 49 per cent of the shares.
The call option can be exercised in the period from July 1, 2022, through July 1, 2025. The exercise period for the put option begins one year later on July 1, 2023, and also ends on July 1, 2025. The other liability resulting from the put option is accounted for in accordance with the regulation of IFRS 9. As SAF-HOLLAND Inc. holds the voting rights majority, it gained control of PressureGuard LLC at the time of acquisition.
The first-time consolidation of PressureGuard LLC was carried out in accordance with IFRS 3 using the purchase method.
The preliminary purchase price of approximately EUR 0.9 million was paid in cash.
The following table shows the preliminary purchase price allocation and the amounts for the main groups of assets acquired and liabilities assumed as of the date of acquisition:
| Fair value as of acquisition date |
|
|---|---|
| Other intangible assets | 1,271 |
| Property, plant and equipment | 33 |
| Inventories | 328 |
| Trade receivables | 73 |
| Other assets | 76 |
| 1,781 | |
| Deferred tax liabilities | 247 |
| Trade payables | 10 |
| 257 | |
| Total of identified net assets | 1,524 |
| Shares with non-controlling interests | –747 |
| Goodwill from the acquisition | 140 |
| Consideration transferred | 917 |
The gross amount of trade receivables amounted to EUR 73 thousand at the time of acquisition.
The preliminary goodwill of EUR 140 thousand includes non-separable intangible assets, such as sales synergies that mainly result from the expansion of the portfolio, as well as cost synergies, particularly in the area of purchasing.
The non-controlling interests in the acquired company are measured at the fair value of the relevant share in the identifiable net assets of the acquired company and amounted to EUR 747 thousand at the time of acquisition.
The cash outflow as a result of the acquisition is as follows:
| Actual cash outflow | 917 |
|---|---|
| Cash acquired | – |
| Cash outflow | 917 |
PressureGuard LLC was assigned to the Americas region.
The value of the put option for the remaining 49 per cent of the shares in PressureGuard LLC is dependent on future earnings figures and amounted to EUR 84 thousand at the time of acquisition.
In the period between the acquisition and June 30, 2019, the business acquired contributed sales of EUR 184 thousand and, taking into account earnings effects from the purchase price allocation and integration costs, EUR –110 thousand to the Group's result before tax.
Effective February 1, 2019, SAF-HOLLAND GmbH acquired the business operations of the Finnish Stara Group from the former owner family. The Stara Group has previously been the distribution partner of SAF-HOLLAND GmbH, focusing primarily on axle and suspension systems for trailers in Finland and Sweden.
The transaction was completed in two steps. In the first step, SAF-HOLLAND GmbH acquired all shares in Stara Parts Oy, based in Finland, as well as in Trailax AB, based in Sweden, from the Finnish company Oy Arne Stara AB. In the second step, Stara Parts acquired the business operations of Oy Arne Stara AB.
As SAF-HOLLAND GmbH holds the voting rights majority, it gained control of both Stara Parts Oy and Trailax AB as of the date of acquisition.
The preliminary purchase price of approximately EUR 12.5 million was paid in cash.
A preliminary purchase price allocation for the acquired assets and liabilities as of the acquisition date was not possible due to the short period of time between the acquisition and the publication of this report.
Based on the preliminary purchase price paid, the net cash outflow amounted to EUR 11.5 million.
Since its acquisition, the Stara Group has contributed sales of EUR 6,073 thousand to Group sales and EUR 196 thousand to the Group's result before tax.
The Stara Group was assigned to the EMEA region.
Rednet Pte. Ltd., Singapore, was deconsolidated in the reporting year upon its liquidation on April 4, 2019. The deconsolidation did not result in a profit or loss contribution.
As of May 1, 2019, York Sales (Thailand) Co. Ltd., and SAF-HOLLAND (Thailand) Co. Ltd., were merged under the newly formed SAF-HOLLAND (Thailand) Co. Ltd.
After the completion of the acquisition process, Stara Parts Oy and Trailax AB were renamed SAF-HOLLAND Suomi Oy and SAF-HOLLAND Sverige AB, respectively.
As of January 1, 2019, a new segment structure was introduced within the corporate management and reporting system, reflecting the growing importance of individual regions. As a result, the APAC/China region is now divided into the regions "APAC" and "China." Beginning January 1, 2019, corporate management and group reporting are now conducted under the "EMEA," "Americas," "APAC" and "China" segments. These four regions cover both the original equipment and spare parts businesses.
The management assesses the performance of the regional segments based on the adjusted EBIT. The reconciliation from the Group's operating result to the adjusted EBIT is as follows:
| in EUR thousands | ||
|---|---|---|
| Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | |
| Operating result | 35,793 | 35,703 |
| Share of net profit of investments accounted for using the equity |
||
| method | 951 | 1,074 |
| EBIT | 36,744 | 36,777 |
| Additional depreciation and amortization from PPA |
4,695 | 3,470 |
| PPA step-up from inventory measuring of acquisitions |
41 | 379 |
| Restructuring and transaction costs | 8,463 | 3,490 |
| Adjusted EBIT | 49,943 | 44,116 |
| in EUR thousands | |||||
|---|---|---|---|---|---|
| Q1 – Q2 / 2019 | |||||
| Regions | |||||
| Americas1 | EMEA2 | APAC3 | China4 | Consolidated | |
| Sales | 272,577 | 348,035 | 49,733 | 25,121 | 695,466 |
| Adjusted EBIT | 18,226 | 33,886 | 2,951 | – 5,120 | 49,943 |
| Adjusted EBIT margin | 6.7% | 9.7% | 5.9% | –20.4% | 7.2% |
2 Includes Europe, Middle East and Africa
3 Includes Asia/Pacific and India
4 Includes China
| in EUR thousands | Q1 – Q2 / 2018 | ||||
|---|---|---|---|---|---|
| Regions | |||||
| Americas1 | EMEA2 | APAC3 | China4 | Consolidated | |
| Sales | 224,938 | 345,096 | 33,980 | 36,294 | 640,308 |
| Adjusted EBIT | – 39 | 39,622 | 2,922 | 1,611 | 44,116 |
| Adjusted EBIT margin | 0.0% | 11.5% | 8.6% | 4.4% | 6.9% |
1 Includes Canada, the USA as well as Central and South America
2 Includes Europe, Middle East and Africa
3 Includes Asia/Pacific and India
4 Includes China
For information on the earnings development of the individual segments, please refer to the related explanations contained in the interim group management report.
| in EUR thousands | ||
|---|---|---|
| Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | |
| Unrealized foreign exchange gains on foreign currency loans and dividends | 157 | 10 |
| Realized foreign exchange gains on foreign currency loans and dividends | – | 152 |
| Finance income due to derivatives | 298 | 390 |
| Interest income | 106 | 186 |
| Other | 140 | 4 |
| Total | 701 | 742 |
in EUR thousands
| Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | |
|---|---|---|
| Interest expenses due to interest bearing loans and bonds | –4,237* | –5,612* |
| Amortization of transaction costs | –206 | –178 |
| Finance expenses due to pensions and other similar benefits | –439 | –458 |
| Finance expenses due to derivatives | –260 | –325 |
| Finance expenses due to leasing | –341 | – |
| Other | –343 | –420 |
| Total | – 5,826 | – 6,993 |
* Includes the non-cash interest expenses of EUR 333 thousands (previous year: EUR 328 thousands) for the convertible bond
The Group's average tax rate as a guide for expected taxes decreased by 0.8 per centage points compared to the previous year and amounted to 26.3 per cent as of the reporting date (previous year: 25.5 per cent). The increase of the Group's average tax is mainly driven by the increase of tax rates in the states of the US from 2 per cent to 4 per cent .
The Group's effective tax rate based on the actual tax expense for the reporting period relative to the result before tax increased by 5.65 per centage points over the previous year to 34.32 per cent (previous year: 28.67 per cent). This rise in the Group's effective tax rate resulted primarily from higher tax losses for which no tax income from the capitalization of deferred taxes was recognized for reasons of prudence.
The difference between the Group's effective tax rate and the Group's average tax rate, which amounts to 8.02 per cent (previous year: 3.17 per cent), is primarily a result of unrecognized deferred tax assets on tax loss carryforwards and a rise in tax-increasing effects under the US tax reform, which took effect as of January 1, 2018, and non-deductible operating expenses.
| in EUR thousands | ||
|---|---|---|
| 06 / 30 / 2019 | 12 / 31 / 2018 | |
| Cash on hand, cash at banks | ||
| and checks | 119,360 | 154,865 |
| Short-term deposits | 115 | 144 |
| Total | 119,475 | 155,009 |
The decline in cash and cash equivalents is a result of higher investments in property, plant and equipment in the course of the modernization of the American plant network and the construction of the new plant in China. The dividend payment and net cash outflows for the acquisition of the Stara Group and PressureGuard LLC also resulted in a reduction in cash and cash equivalents. For further information on the development of cash and cash equivalents, please refer to the cash flow statement.
The Company's subscribed share capital was unchanged compared to December 31, 2018, and, as of June 30, 2019, amounted to EUR 453,943.02 (previous year: EUR 453,943.02). Subscribed share capital is fully paid-in and consists of 45,394,302 ordinary shares (previous year: 45,394,302) with a nominal value of EUR 0.01 per share.
The Company's reserves, namely the share premium, legal and other reserves, were also unchanged compared to December 31, 2018.
The changes in accumulated other comprehensive income as of the balance sheet date is as follows:
| in EUR thousands | ||||||
|---|---|---|---|---|---|---|
| Before tax amount | Tax (income) / expense | Net of tax amount | ||||
| Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | |
| Exchange differences on translation | ||||||
| of foreign operations | 3,964 | 3,497 | – | – | 3,964 | 3,497 |
| Total | 3,964 | 3,497 | – | – | 3,964 | 3,497 |
At the Annual General Meeting on April 25, 2019, it was resolved to distribute a dividend from the result for the period of the past financial year in the amount of EUR 0.45 per share to the shareholders. The distribution amount totaled EUR 20,427 thousand.
In the previous year, a dividend of EUR 0.45 per share was paid, amounting to the same total payout of EUR 20,427 thousand.
Interest bearing loans and bonds consisted of the following:
| in EUR thousands | ||||||
|---|---|---|---|---|---|---|
| Non-current | Current | Total | ||||
| 06 / 30 / 2019 | 12 / 31 / 2018 | 06 / 30 / 2019 | 12 / 31 / 2018 | 06 / 30 / 2019 | 12 / 31 / 2018 | |
| Interest bearing bank loans | 10,404 | 12,196 | – | – | 10,404 | 12,196 |
| Convertible bond | 98,986 | 98,653 | – | – | 98,986 | 98,653 |
| Promissory note loan | 200,000 | 200,000 | – | – | 200,000 | 200,000 |
| Financing costs | –869 | –1,045 | –398 | –393 | – 1,267 | – 1,438 |
| Accrued interests | – | 3 | 1,694 | 771 | 1,694 | 774 |
| Other loans | 55,290 | 54,652 | 1,981 | 3,558 | 57,271 | 58,210 |
| Total | 363,811 | 364,459 | 3,277 | 3,936 | 367,088 | 368,395 |
The following table shows the calculation of total liquidity as the sum of available undrawn credit lines measured at the period-end exchange rate plus available cash and cash equivalents and short-term, freely available financial assets:
| 06 / 30 / 2019 | ||||
|---|---|---|---|---|
| Amount drawn valued as at the period-end exchange rate |
Agreed credit lines valued as at the period-end exchange rate |
Cash and cash equivalents |
Total liquidity | |
| Revolving credit line | 3,457 | 200,000 | – | 196,543 |
| Other Facilities | 6,947 | 8,067* | 119,475 | 120,595 |
| Total | 10,404 | 208,067 | 119,475 | 317,138 |
* Includes the bilateral credit line for the activities of the Group in China
| 12 / 31 / 2018 | ||||
|---|---|---|---|---|
| Amount drawn valued as at the period-end exchange rate |
Agreed credit lines valued as at the period-end exchange rate |
Cash and cash equivalents |
Total liquidity | |
| Revolving credit line | 5,216 | 200,000 | – | 194,784 |
| Other Facilities | 6,980 | 8,016* | 155,009 | 156,045 |
| Total | 12,196 | 208,016 | 155,009 | 350,829 |
* Includes the bilateral credit line for the activities of the Group in China
The fair values and carrying amounts of financial assets and liabilities as of the balance sheet date were as follows:
| in EUR thousands | |||||
|---|---|---|---|---|---|
| 06 / 30 / 2019 | 12 / 31 / 2018 | ||||
| Measure ment category in accordance with IFRS 9 |
Fair value | Carrying amount | Fair value | Carrying amount | |
| Assets | |||||
| Cash and cash equivalents | FAAC | 119,475 | 119,475 | 155,009 | 155,009 |
| Trade receivables | FAAC | 171,394 | 171,394 | 138,875 | 138,875 |
| Other financial assets | |||||
| Derivates without a hedging relationship |
FAHfT | 48 | 48 | 135 | 135 |
| Other financial assets | FAAC | 4,804 | 4,804 | 2,679 | 2,679 |
| Liabilities | |||||
| Trade payables | FLAC | 150,799 | 150,799 | 129,115 | 129,115 |
| Interest bearing loans and borrowings | FLAC | 375,015 | 367,088 | 377,425 | 368,395 |
| Finance lease liabilities | n.a. | 35,149 | 35,149 | 229 | 229 |
| Other financial liabilities | |||||
| Other financial liablities | FLtPL | 16,704 | 16,704 | 16,271 | 16,271 |
| Derivates without a hedging relationship |
FLHfT | 821 | 821 | 776 | 776 |
| Of which aggregated by category in accordance with IFRS 9 |
|||||
| Financial assets measured at amortized cost |
FAAC | 295,673 | 295,673 | 296,563 | 296,563 |
| Financial liabilities measured at amortized cost |
FLAC | 525,814 | 517,887 | 506,540 | 497,510 |
| Financial assets held for trading | FAHfT | 48 | 48 | 135 | 135 |
| Financial liabilities held for trading |
FLHfT | 16,704 | 16,704 | 16,271 | 16,271 |
| Financial liabilities at fair value through profit and loss |
FLtPL | 821 | 821 | 776 | 776 |
The following table shows the allocation of financial assets and liabilities measured at fair value to the three fair value hierarchy levels:
in EUR thousands
| 06 / 30 / 2019 | |||||
|---|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | ||
| Convertible bond | – | 105,772 | – | 105,772 | |
| Promissory note loan | – | 196,480 | – | 196,480 | |
| Interest bearing loans and borrowings | – | 72,763 | – | 72,763 | |
| Put option for the remaining shares in KLL Equipamentos | |||||
| para Transporte Ltda. | – | – | 7,483 | 7,483 | |
| Put option for the remaining shares in V.ORLANDI S.p.A. | – | – | 8,905 | 8,905 | |
| Put option for the remaining shares in PressureGuard LLC | – | – | 84 | 84 | |
| Derivative financial assets | – | 48 | – | 48 | |
| Derivative financial liabilities | – | 821 | – | 821 |
in EUR thousands
| 12 / 31 / 2018 | ||||
|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | |
| Convertible bond | – | 108,757 | – | 108,757 |
| Promissory note loan | – | 196,480 | – | 196,480 |
| Interest bearing loans and borrowings | – | 72,188 | – | 72,188 |
| Put option for the remaining shares in KLL Equipamentos para Transporte Ltda. |
– | – | 7,366 | 7,366 |
| Put option for the remaining shares in V.ORLANDI S.p.A. | – | – | 8,905 | 8,905 |
| Derivative financial assets | – | 135 | – | 135 |
| Derivative financial liabilities | – | 776 | – | 776 |
Derivative financial liabilities as of June 30, 2019 consisted mainly of forward exchange transactions and serve to hedge the risk position from currency fluctuations.
The following tables show the composition of the Group Management Board, which is the managing body of the SAF-HOLLAND Group's operating business and consists of selected managers of the Group, as well as the composition of the Board of Directors of SAF-HOLLAND S.A. as of the reporting date:
| Alexander Geis | Chief Executive Officer (CEO), Chief Procure ment Office (CPO), President Region EMEA |
|---|---|
| Dr. Matthias Heiden | Chief Financial Officer (CFO) |
| Dr. André Philipp | Chief Operating Officer (COO) |
| Steffen Schewerda | President Region Americas |
| Mike Ginocchio | President Region APAC |
| Chair of the Board of Directors |
|---|
| Dr. Martin Kleinschmitt Vice Chair of the Board of Directors |
| Member of the Board of Directors |
| Member of the Board of Directors |
| Member of the Board of Directors |
On February 25, 2019, SAF-HOLLAND S.A. and Detlef Borghardt mutually agreed to terminate his mandate at the SAF-HOLLAND Group, effective February 26, 2019.
Alexander Geis, who was already a member of the Group Management Board and responsible for the EMEA region, as well as for global purchasing, was appointed Chief Executive Officer, effective February 26, 2019.
Furthermore, the contract with Guoxin Mao, who represented the China region on the Group Management Board in his role as President China, was terminated by mutual agreement as of May 31, 2019.
Transacti ons with related parti es and companies in which members of the Company's management hold key management positi ons:
| in EUR thousands | ||||
|---|---|---|---|---|
| Sales to related parti es | Purchases from related parti es | |||
| Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | Q1 – Q2 / 2019 | Q1 – Q2 / 2018 | |
| Joint ventures | 605 | 277 | – | – |
| Associates | – | 220 | 18,833 | 17,863 |
| Total | 605 | 497 | 18,833 | 17,863 |
| Amounts owed by related parti es |
Amounts owed to related parti es |
||||
|---|---|---|---|---|---|
| 06 / 30 / 2019 | 12 / 31 / 2018 | 06 / 30 / 2019 | 12 / 31 / 2018 | ||
| Joint ventures | 77 | 167 | – | – | |
| Associates | – | – | 1,501 | 1,294 | |
| Total | 77 | 167 | 1,501 | 1,294 |
There were no material events aft er the interim reporti ng date.
Luxembourg, August 8, 2019
Marti na Merz Chair of the Board of Directors
Dr. Marti n Kleinschmitt Vice Chair of the Board of Directors
To the best of our knowledge and in accordance with the applicable fi nancial reporti ng principles, the consolidated fi nancial statements give a true and fair view of the sales and earnings performance, net assets and cash fl ows of the Group, and the Group's management report includes a fair review of the development and performance of the Group's business and positi on, together with a descripti on of the principal opportuniti es and risks associated with the expected development of the Group.
Luxembourg, August 8, 2019 SAF-HOLLAND S.A.
Marti na Merz Chair of the Board of Directors
November 7, 2019 Quarterly Statement of SAF-HOLLAND Group as of September 30, 2019
SAF-HOLLAND Group Hauptstraße 26 63856 Bessenbach Germany
www.safholland.com
[email protected] Phone: +49 (0) 6095 301-617 Fax: +49 (0) 6095 301-102
[email protected] Phone: +49 (0) 6095 301-117 Fax: +49 (0) 6095 301-102
Fax: +49 (0) 6095 301-102
SAF-HOLLAND S.A. 68–70, Boulevard de la Pétrusse 2320 Luxembourg Luxembourg
Date of publication: August 8, 2019 Editorial office: Michael Schickling, SAF-HOLLAND Group; Alexander Pöschl, SAF-HOLLAND Group; Klaus Breitenbach, SAF-HOLLAND Group Design and realization: 3st kommunikation GmbH Translated by: Klusmann Communications, Niedernhausen
This Half-Year Financial Report is also available in German.
The German version takes precedence.
This report contains certain statements that are neither reported financial results nor other historical information. This report contains forward-looking statements, which as such are based on certain assumptions and expectations made at the time of publication of the report. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the Group's ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the achievement of anticipated synergies, and the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this publication. SAF-HOLLAND S.A. does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of publication of these materials.
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