Earnings conference call Q4 & FY 2016

Transcription

1 Earnings conference call Q4 & FY 2016 Bo Annvik, CEO / Åke Bengtsson, CFO February 10,

2 Agenda Business Highlights Market Update Sales Financials Way forward 2

3 Business Summary FY 2016 A year with weak market conditions and a lengthy public offer process Weak market conditions in North America, which was the main factor contributing to lower sales Disc brake sales increased significantly, but didn t compensate for lower actuator and brake adjuster sales. Operating margin excl one-offs of 6.6 percent, which is mostly due to lower volumes. Increased costs due to the public offer process. 3

4 STRATEGIC OBJECTIVES Profitable growth Green Haldex Ethical Haldex Safe Haldex DRIVING OUR FUTURE PRODUCT LEADERSHIP CUSTOMER FOCUS AFTERMARKET EXPANSION OPERATIONAL EXCELLENCE BRIDGE BUILDING CULTURE Innovative product development Value driving product properties R&D capabilities Product/technology roadmaps Entrepreneurship Customer service Key account approach Commercial excellence program. Lifecycle offering approach Second brand and reman offerings E-commerce M&A driven capability growth Digitalized offerings Safety #1 Quality 0 defects Manage cost Standardized work Continuous improvement Ethics 5C behaviors Leadership Competence 4

5 Market update 5

6 Build rates Heavy truck Thousands of units North America official build rates decreased with 39% in Q and with 31% FY The North American market is expected to decrease with 5% in China Europe North America India Brazil Europe official build rates decreased with 1% in Q and increased with 2% FY The European market is expected to grow with 1% in India is expected to be grow slightly and China to decline slightly in 2017 while Brazil will show growth with 18%. Source: the information pertaining to trucks is based on statistics from JD Powers. Information pertaining to the trailer market in Europe is based on statistics from CLEAR, the information pertaining to trucks and trailers in North America is based on statistics from FTR and the trailer information from South America and Asia is based on local sources. 6

7 Build rates - Trailer Thousands of units North America official build rates decreased with 9% in Q and with 7% for FY The North American market is expected to decrease with 13% in China Europe North America India Brazil European build rates increased with 8% in Q and with 7% FY The European market is expected to decline with 1% in China and India and are forecasted to show a decline while Brazil is expected to grow in Source: the information pertaining to trucks is based on statistics from JD Powers. Information pertaining to the trailer market in Europe is based on statistics from CLEAR, the information pertaining to trucks and trailers in North America is based on statistics from FTR and the trailer information from South America and Asia is based on local sources. 7

8 Sales 8

9 Sales, Haldex Group SEK m Q4/16 Q4/15 FY/16 FY/15 Net sales, SEK million 1,054 1,052 4,374 4,777 Growth, currency adjusted -5% -9% -9% -3% 9

10 Sales per product line Foundation Brake: Disc brake sales increased during all of Sales of actuators declined due to lower market demand. Lower sales of brake adjusters linked to market decline and higher disc brake penetration. Air Controls: ABS increased in The largest decline in sales was in Reman. An older version of an Air Controls product has been phased out as part of the restructuring program. SEK m Sales 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 Foundation Brake Air Controls SEK million Q4/16 Q4/15 change 1 FY/16 FY/15 change 1 Foundation Brake % 2,420 2,712-11% Air Controls % 1,954 2,065-6% 1 currency adjusted 10

11 Sales per region SEK m Europe SEK m North America Europe: Disc brake sales to Trailer customers have increased. Decreased sales of brake adjusters and an old Air Controls product. North America: The weaker market demand has negatively affected the actuator sales. Lower Reman sales due to a customer with financial difficulties. 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 Asia: The Indian market was strong during the first half of the year to decline at the end of the year. In China, the development was the opposite. South America: In Brazil, revenue declined due to the very weak market climate. Asia & Middle East South America SEK m SEK m 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 SEK million FY/16 FY/15 change 1 Europe 1,571 1,573-1% North America 2,238 2,641-16% Asia & Middle East % South America % 1 currency adjusted 11

12 Sales per customer category Truck: Sales have mainly decreased due to the weaker market in North America. SEK m Trailer: Continued success for the disc brake in Europe but somewhat lower sales to Trailer customers in North America, due to weaker market conditions. Aftermarket: Stable sales in Europe and Asia, while decline in North America and South America. Truck Trailer Aftermarket 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 SEK million Q4/16 Q4/15 change 1 FY/16 FY/15 change 1 Truck % 1,006 1,276-21% Trailer % 1,383 1,380 0% Aftermarket % 1,985 2,121-7% 1 currency adjusted 12

13 Joint venture for electromechanical brakes Joint venture with VIE to develop electromechanical brake systems for commercial vehicles with an initial focus on the electric bus market in China. The Chinese market for electrical buses is forecasted to grow by 47% between 2015 and 2020, to well over vehicles produced during New facilities in Shanghai officially opened. Most employees started. Different prototypes are being tested. 13

14 Financials 14

15 Earnings Operating income & margin* Sales & Margins* Earnings per share SEK m % SEK SEK Income Operating margin Revenue Gross margin Operating margin 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 FY/16 FY/15 change Gross margin, % Operating income (excl one-off items), SEK million % Operating income, SEK million % Operating margin (excl. one-off items), % Operating margin, % Net income, SEK million % Earnings per share, SEK % 86 MSEK in one-off items in 2016, of which 73 in Q4. * Excluding one-off items 15

16 Operating margin analysis Q4/16 Q4/15 Sales mix Product mix Volume Exchange rates Gross margin Restructuring program 16

17 Cash Flow Working Capital & Cash Conversion Days SEK m Cash flow operating activities SEK m Working capital & Cash conversion days Days Working capital Cash conversion days 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 1/15 2/15 3/15 4/15 1/16 2/16 3/16 4/16 SEK million Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 Cash flow from operating activities Cash flow after net investments* * excluding one-off items 17

18 Financial Key Figures Q vs. Q SEK million Dec 31 Sep 30 Quarterly change Working capital % Intangible assets % Capital employed 2,145 2,148 +0% Total assets 3,057 2,904 +5% Equity 1,374 1,374 +0% Net debt % Return on capital employed (excl. one-off items)* Return on capital employed* Equity ratio, % Net debt/equity ratio, % *) Rolling twelve months 18

19 Way forward 19

20 Åke Bengtsson, acting President & CEO Bo Annvik is handing over on February 28. Åke Bengtsson, CFO, to take over as acting President and CEO. 20

21 Market outlook 2017 North America Continues its negative trend. Europe Stable development with a slight increase. China Soft market conditions. India Weak market conditions but with a possibly stronger first half year. Brazil Not expected to recover in

22 Haldex in 2017 The forecast for the full year 2017 is that it will be difficult for Haldex to show growth due to the weak market conditions and the drawnout bidding process. Our ambition is to continue to ensure good profitability, but due to lower net sales the operating margin for 2017 is forecast to be slightly lower than in

23 Public offer July 14, the first offer was announced. Of three bidders SAF-HOLLAND, ZF and Knorr-Bremse Knorr-Bremse, with an offer of 125 SEK per share, remains. The processes to get approval from competitive authorities in USA and EU are on-going. Acceptance period set to June 16 by Knorr-Bremse. One June 27, the Knorr-Bremse offer has been open for nine months. 23

24 Questions? Thank You! 24