Earnings conference call

Transcription

1 Earnings conference call Full year 2017 Åke Bengtsson, President & CEO Andreas Ekberg, Acting CFO February 14,

2 Agenda Business Summary Market Update Sales Financials Way forward 2

3 Business Summary Q Strong end to the year Revenue growth in all geographic regions in Q4 which took us to sales growth for FY Disc brake sales continued to increase. Actuators back to growth. Growth for brake adjusters. New legislation in China will have a positive impact. Operating margin of 6.5% excluding one-offs for FY 2017, in line with previous year. Projects related to autonomous driving are progressing well. 3

4 New technology projects with customers High pace in the technology shift towards autonomous driving. Brake systems play a central role in the vehicle system. Open standards and nonhardware dependent solutions required. On-going projects with customers are progressing well. 4

5 EMB - Next test phase initiated Start conditions: 90 km/h, 40 t vehicle weigth ABS and Drum brakes ( Brake pressure 8 bar) Improvement from Disc brakes ( Brake pressure 10 bar) - 16% EBS on Truck - 7% EBS also on Trailer - 23% Electromechanical brakes - 14% Physical limit Braking distance

6 2017 an exceptional year OPERATING MARGIN 10% 6.5% ORGANIC GROWTH NET DEBT/EQUITY DIVIDEND faster than the market <1 1/3 1% SEK 6

7 Market update 7

8 Build rates Heavy truck Thousands of units North America official build rates increased with 11% in The North American market is expected to increase with 20% in Europe official build rates increased with 5% in The European market is expected to grow with 3% in China Europe North America India Brazil India and Brazil are expected to increase in 2018 while China will decline. 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. 8

9 Build rates - Trailer Thousands of units North America official build rates increased with 2% in The North American market is expected to decline with 1% in European build rates were on par in The European market is expected to decline with 4% in China Europe North America India Brazil Brazil is expected to grow, India to be flat and China to decline 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. 9

10 Sales 10

11 Sales, Haldex Group SEK m Q4/17 Q4/ Net sales, SEK million 1,049 1,054 4,462 4,374 Growth, currency adjusted 5% -5% 1% -9% 11

12 Sales per product line Foundation Brake: Disc brake sales and brake adjuster sales continued to increase. Actuators returned to growth in second half of the year and achieved growth also on a full year basis. SEK m Sales Air Controls: ABS was declining. The Reman sales has stabilized after previous year s decline. Foundation Brake Air Controls 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 SEK million Q4/17 Q4/16 change change 1 Foundation Brake % 2,529 2,420 4% Air Controls % 1,933 1,954-2% 1 currency adjusted 12

13 Disc brake technology shift Feedback from customers and industry analysts are consistent the shift in North America is happening now and it is happening faster than previously forecasted. Haldex disc brake has been selected as an option of one of the large axle manufacturers in the US. 13

14 Trend reversal for actuators Lower actuator sales since end of 2014 when the product recall was done. Trend broken in mid In second half of the year actuators had two digit growth, reaching growth on full year basis. Re-design of the product in order to relaunch a new version. To not damage our reputation, we have applied incredibly rigid tests and requirements on the product s quality. Launch took place during the fall. 14

15 New legislation drives demand for brake adjusters New legislation in China from 1 January All new heavy vehicles must have automatic brake adjusters. Manual brake adjusters are widely used today. 15

16 Sales per region SEK m Europe SEK m North America Europe: Sales of disc brakes, actuators and brake adjusters have increased. North America: Largest increase from sales of break adjusters and actuators. Disc brake sales is growing, but from low levels. 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 Asia: Sales in both India and China increased. Sales of brake adjusters and ABS have increased while sales of an older version of the disc brake has declined. South America: In Brazil, revenue increased mainly due to growth of sales in the aftermarket. Asia & Middle East South America SEK m SEK m 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 SEK million change 1 Europe 1,665 1,571 5% North America 2,202 2,238-2% Asia & Middle East % South America % 1 currency adjusted 16

17 HDAW launch of Midland products Second brand for value line products: Midland in NA and Grau in EU. NA has now launched a wider set of products under the Midland brand. Cooperation with suppliers like Fras-Le for jointly branded brake pads. 17

18 Sales per customer category Truck: Sales have increased in all geographic regions. SEK m Trailer: Continued success for the disc brake in Europe. Trailer sales in North America has decreased while it has increased in Asia. Aftermarket: Sales growth in all geographic regions. Truck Trailer Aftermarket 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 SEK million Q4/17 Q4/16 change change 1 Truck % 1,029 1,006 2% Trailer % 1,400 1,383 1% Aftermarket % 2,033 1,985 2% 1 currency adjusted 18

19 Financials 19

20 Earnings Operating income & margin* Sales & Margins* Earnings per share SEK m % SEK SEK Income Operating margin Revenue Gross margin Operating margin 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/ 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 % 143 MSEK in one-offs in 2017, of which SEK 19 m related to restructuring activities, SEK 56 m to customer commitments and SEK 68 m related to the bidding process. 20

21 Operating margin analysis Q4/17 Q4/16 Sales mix Product mix Volume Exchange rates Gross margin Restructuring program 21

22 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 1/16 2/15 3/16 4/16 1/17 2/17 3/17 4/17 1/16 2/16 3/16 4/16 1/17 2/17 3/17 4/17 SEK million Q4/17 Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 Cash flow from operating activities Cash flow after net investments* * excluding one-off items 22

23 Financial Key Figures Q vs. Q SEK million Dec 31 Sept 30 Quarterly change Working capital % Intangible assets % Capital employed 2,169 2,207-2% Total assets 3,078 3,120-1% Equity 1,395 1,361 +2% Net debt % Return on capital employed (excl. one-off items)* Return on capital employed* Equity ratio, % Net debt/equity ratio, % *) Rolling twelve months 23

24 Way forward 24

25 Smarter transportation drives long term value Increased transportation needs and improved infrastructure Sustainable and safe solutions needed Cost efficiency Connectivity Electrification Autonomous driving 25

26 Capital market event, March 9 Grand Hotel, Stockholm At STRATEGIC OBJECTIVES Profitable growth Ethical Haldex Green 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/technolog y 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 Safety #1 Quality 0 defects Manage cost Standardized work Continuous improvement Ethics 5C behaviors Leadership Competence. Digitalized offerings 26

27 Market outlook 2018 North America Has recovered and is expected to reach a higher level than the previous year. Difficult, to assess how quickly the shift to disc brakes will occur. Europe Considered to be stable with slightly higher order intake in China Weak market according to the forecast institutes, but Haldex sales is estimated to grow due to greater demand for brake adjusters. India Expected to return to growth in Brazil Signs of a recovery have persisted, and the market is expected to grow, although from very low levels. 27

28 Haldex in 2018 We estimate net sales for 2018 to increase compared to Higher sales enable higher operating income. This will be offset against greater investment in development projects and costs for expansion in North America and China. The operating margin for 2018 is expected to be slightly lower or in line with the operating margin excluding one-off items in

29 Questions? Thank You! 29