Roadshow Presentation June 2, Wilfried Trepels, CFO 1
SAF-HOLLAND - Components Fifth Wheels Kingpins Suspensions Landing Gear Axle Systems 2
SAF-HOLLAND - Business Units Trailer Systems Powered Vehicle Systems Aftermarket 45.3% of sales 21.9% of sales 32.8% of sales Axle Systems Landing Legs Kingpins & Coupling Products Suspensions Fifth Wheels Suspensions (Truck, Bus & RV) Tag Axles Major Trailer and Truck Customers 3 Global Aftermarket and Service Center Network More than 8000 service stations worldwide
SAF-HOLLAND - Worldwide Germany Keilberg Wörth am Main Frauengrund Singen Canada Woodstock Norwich Cloverdale China Jinan Xiamen USA Holland OAC Muskegon Warrenton South Warrenton North Wylie Dumas India Brazil Jaguariuna 4 Madras HOLLAND (India) Pvt. Ltd. Australia Melton
Executive Summary of first quarter The upswing in the truck and trailer markets arrived Increasing sales across all business units Earnings benefit from sales increase and lean cost structure Cash flow performance remains strong Inventory turnover remained on last quarter s level despite higher sales New shareholder structure increases the Company s independency Double digit growth in expected 5
Business Performance Group Sales Sales in million Group Summary Sales of 125,3 million reflect a turnaround in all markets 130 125.3 125 120 Target Double digit growth expected in 115 112.1 110 105 / / 14 125.3 12 112.1 101.2 103.1 103.2 Q2 Q3 Q4 10 8 6 4 2 6
Business Performance Group Adjusted EBIT Adjusted EBIT in million 6.0 Summary Adjusted EBIT positive with 4.8 million Sales increase and restructuring measures influenced the positive development 4.8 5.0 4.0 3.0 2.0 Target Restructuring is ongoing and secures increasing profitability 1.0-0.5 / / -1.0 6.0 4.8 5.0 4.0 3.0 2.5 2.0 1.0-0.5-0.8 Q2 0.3-1.0-2.0 7 Q3 Q4
Business Performance Worldwide and per Business Unit Sales in million / / 7.5 Sales North America Sales Europe Sales Others 4.5 50.5 59.0 58.8 57.1 / / 41.1 38.2 27.5 8 47.2 56.7 Trailer Powered Aftermarket 26.7 Summary European sales increased due to higher sales volume in the Trailer business Powered Vehicle Systems sales remained stable due to pre-buy effects in the last quarter of
Business Performance Trailer Systems in million Sales 6 5 56.7 47.2 44.6 42.3 41.0 Q2 Q3 4 3 2 1 Q4 Q2-1.0 Q3 Q4 Summary Sales of 56.7 million (prev. year: 47.2) Increasing sales development across first three months One time effects improved earnings in the fourth quarter 09 Adjusted EBIT of -5.0 million (prev. year: -7.9) Adjusted EBIT margin -8.8% (prev. year: -16.7%) -2.0-3.0-4.0-5.0-4.8-6.0-6.0-7.0-8.0-9.0 9-5.0 Adj. EBIT -7.9-8.2 Target Further improvement of profitability Full participation in a market upturn Double digit growth expected
Business Performance Powered Vehicle Systems in million Sales 3 27.5 26.7 24.1 25.0 25.3 22.2 2 15.0 1 5.0 Q2 Q3 Q4 Summary Sales of 27.5 million (prev. year: 26.7) Sales were influenced by pre-buy effect in fourth quarter Steady growth of sales is continuing Strong adjusted EBIT of 4.9 million (prev. year: 3.7) Adjusted EBIT margin up to 17.8% (prev. year: 13.9%) 6.0 5.0 4.0 4.6 Adj. EBIT 4.9 Target Full participation in market growth 3.7 3.3 3.1 3.0 2.0 1.0 Q2 Q3 10 Q4
Business Performance Aftermarket Sales in million Sales 45.0 4 41.1 38.2 38.0 36.7 33.3 35.0 3 25.0 2 15.0 1 Summary Sales of 41.1 million (prev. year: 38.2) Adjusted EBIT of 5.9 million (prev. year: 5.1) is improving Adjusted EBIT margin reached 14.4% (prev. year: 13.4%) 5.0 Q2 Q3 Q4 7.0 Adj. EBIT 5.9 6.0 5.1 5.0 4.8 4.8 4.0 3.0 3.0 2.0 1.0 Q2 Q3 11 Q4 Target Further increase of sales due to market upturn and new business in growth markets
Business Performance - Operating Cash Flow Operating cash flow before income tax in million Summary Cash flow performance is remaining strong due to sales increase and inventory management 25.0 19.2 2 15.5 15.0 1 8.1 7.2 5.5 5.0 -Q2 -Q3 12 -Q4
Business Performance - Inventories in m in million Inventory Turnover in days 90 80 77.9 70 75 77 66.3 65.5 60.2 60 72 55.5 70 50 67 40 64 30 62 20 57 10 58 0 52 Q2 Q3 13 57 Q4 Summary Inventory turnover period remained stable compared to the fourth quarter Inventory turnover period will be further reduced to 45 days in the mid-term
Financials Key Financials in million / / 125.3 112.1 Cost of Sales -101.6-93.1 Gross profit 23.7 19.0 18.9% 16.9% -1.6-5.3-1.3% -4.7% Adjusted EPS in -8-0.26 Adjusted EBITDA 8.6 3.1 6.9% 2.8% 4.8-0.5 3.8% -0.4% 7.2 5.5 Sales Margin Adjusted loss Margin Margin Adjusted EBIT Margin Operating cash flow (before income tax) 14
Financials Balance Sheet in million 03/31/10 03/31/09 320.4 318.1 Cash and cash equivalents 10.2 20.7 Inventories 65.5 55.5 Other current assets 81.8 63.8 477.9 458.1 Equity 23.6 23.8 Other non current liabilities 52.2 60.2 Other current liabilities 87.8 64.1 314.3 31 Non-current assets Total assets Interest bearing loans and borrowings current/non currrent 15
Interest Bearing Loans and Borrowings in million 03/31/10 12/31/09 Interest bearing collateralized bank loans 305.7 314.3 Financing costs -11.2-11.0 Bank overdrafts 0.6 0.7 Success fee 0.6 0.1 Accrued interests 3.3 0.1 Management and Board of Directors loans 1.3 1.3 14.0 4.5 314.3 31 Other loans Total 16
Financials Cash Flow Statement in million / / Loss before tax -9.4-9.7 Finance income/expenses 12.5 6.9 Amortization/depreciation 5.4 Change in NWC -1.7 3.0 Other items cash flow 0.4-0.1 Operating cash flow (before income tax) 7.2 5.5 Income tax paid Operating cash flow (after income tax) 17 5.4-1.0-0.4 6.2 5.1 Cash flow from investing -0.9-1.7 Cash flow from financing -16.5 3.9 Effect of f/x changes 0.7-0.4 Net change in cash -10.5 6.9
Change of shareholder structure The private equity investor Pamplona Capital Partners I, LP, sold their shares on May 12 to 14 institutional investors in the United Kingdom, Germany and the USA New shareholder structure gives SAF-HOLLAND a greater degree of independence 18
Strategic Highlights - Trailer Systems North America Trailer production, unit, thousands Source: ACT 241.5 201.1% 151.4 105.5 80.2 2008 SAF-HOLLAND marketshare 30% 18% 15% 10% 2008 19 SAF-HOLLAND is expanding its own axle production in US which started in Feb. We see a good opportunity to leverage our number 1 position for axle systems with disc brake technology in Europe and gain further market share in North America also triggered by new braking distance regulations The market is open for another player
Strategic Highlights - Trailer Systems Europe Trailer production, unit, thousands 263.2 Source: Beecroft 105.4% 208.5 147.9 101.5 2008 SAF-HOLLAND market share 40% 37% 35% 34% 2008 20 Strong market position in Europe SAF-HOLLAND will fully participate in the market upturn SAF-HOLLAND expects to continuously increase its market share of newly introduced products like landing legs and kingpins
Strategic Highlights - Powered Vehicle Systems North America Truck production, unit, thousands Leading market position for fifth wheels Source: ACT 255.5 115.8% 205.6 141.0 118.4 2008 SAF-HOLLAND market share for fifth wheels 52.0% 48.5% 48.0% 45.3% 2008 21 SAF-HOLLAND will fully participate in a market upturn
Strategic Highlights - Powered Vehicle Systems Europe Truck production, unit, thousands Source: JD Powers 630.5 579.1 216.2% International approach offers significant growth potential in Europe as well as in China and Brazil 241.3 199.4 2008 SAF-HOLLAND market share for fifth wheels3% 22.0% 19.0% 2008 22 2% Integration of VKT turned SAFHOLLAND into an international supplier for the global truck OEM business
Strategic Highlights - Aftermarket Summary Stable high-margin business, contributing significantly to Group EBIT One of the most comprehensive aftermarket and service networks in North America and Europe Aftermarket Cooperations New service cooperation contracts with DAF, MAN, Volvo, Scania and Daimler have strengthened the international network Considerable growth potential in the Middle East, Africa, Asia and Russia Aftermarket benefits from increasing installed axle base Installed Axle Base 2,400,000 1,900,000 1,400,000 900,000 400,000 23 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 19 99 19 98 19 97 19 96 19 95 19 94 19 93-100,000
Strategic Highlights - China Trailer production, unit, thousands * 287.2 Summary China will be one priority for next investments 15 14 Xiamen will become one core production site for systems and components for the local markets as well as for export 155.4 SAF-HOLLAND ended its joint venture with 2008 Truck production, unit, thousands* 716.0 749.0 635.6 474.4 AL-KO in Yantai and as a countermove acquired 100% of a second joint venture in Jinan The number of production locations was reduced from three to two Next steps Start of axle production in Xiamen Reduction of locations to one site in Xiamen Expansion of production capacities 2008 24 * Company source
Strategic Highlights - Brazil Truck production, units, thousands* Trailer production, units, thousands* 8 67.7 68.7 54.4 51.5 42.0 2008 44.6 40.5 2008 Summary Focus of investments for SAF-HOLLAND is on Brazil Brazil is the fourth largest truck and trailer market worldwide Next steps Market share axles* Market share fifth wheels* 8.0% 15% 6.4% 5% 0% 25 * Company source Expansion of the fifth wheel business Increase of the product range (suspensions, landing legs and kingpins) 4.0% Start with production of steering axles and tag axles
Strategic Highlights Russia Trailer Sales in Russia in units* Summary 29,000 Well established relationships to local OEMs 23,500 9,300 9,300 4,700 4,700 13,700 2008 Trailer new foreign 15,300 Trailer local SAF-HOLLAND marketshare* 10% 4% 40% 2008 5% 5% 36% 36% Trailer new foreign 26 SAF-HOLLAND provides an established aftermarket service network all over Russia * Company source Trailer local 40% Next steps Sales force across the country will be increased Local stocks will be established to provide timely delivery to customers
Strategic Highlights India Bus production, unit, thousands* Summary 105.0 SAF-HOLLAND has developed a unique 4-bag suspension for the Indian and other markets 65.0 48.0 2 6.8 4.8 India Bus Market Size With air suspension SAF-HOLLAND marketshare*15.5% 5.6% 0.4% 27 * Company source SAF-HOLLAND is well positioned to establish itself as a major supplier in the market with a locally produced suspension
Next steps Further cost reductions of 10 million in Consolidation of Chinese sites into one production facility in Xiamen Start of axle production in China for the local as well as for foreign markets Continued efforts to achieve target for days of inventory of 45 days mid-term Leverage the axle production in North America 28
Assumptions for Outlook Expected growth rates of Truck and Trailer markets: Truck Production NA (Class 8) by 14% (Source: ACT) Trailer Production NA by more than 40% (Source: ACT) Truck Production Europe by 20% (Source: JD Powers) Trailer Production Europe by more than 40% (Source: Beecroft) Outlook Sales will show a double digit percentage increase Earnings will profit from sales growth and past and future cost reductions 29
Mid-term Financial Targets Growth 1 billion sales Earnings 10% adj. EBIT margin Net Working Cap. < 10% of sales Capex > 2% of sales Capital Structure 30 Possible capital increase when markets will have recovered
Appendix 31
Reconciliation Statement for Adjusted EBIT in m Loss for the period Taxes on income Finance Result / -9.4-8.3 - -1.4 12.5 6.9 Depreciation and amortization from PPA 1.6 1.8 Restructuring and integration costs 0.1 0.5 Adjusted EBIT 4.8-0.5 3.8% -0.4% in % 32 /
Determination of overall liquidity as the total of available credit lines plus cash 03/31/10 million Facility A1 Facility A2 Facility B Bank overdraft China Total Amount drawn valued as at the period-end exchange rate 71.9 61.5 171.9 0.4 305.7 Agreed Amount credit lines drawn valued valued as as at the at the Cash borrowing borrowing and date date cash exchange exchange equival rate rate ents 71.9 71.9 55.2 55.2 171.9 188.8 10.2 0.4 0.7 299.4 316.6 10.2 Total liquidity 27.1 0.3 27.4 Agreed credit lines valued as at the Cash borrowing and date cash exchange equival rate ents 71.9 55.2 188.8 20.7 0.6 316.5 20.7 Total liquidity 25.2 0.2 25.5 12/31/09 million Facility A1 Facility A2 Facility B Bank overdraft China Total 33 Amount Amount drawn valued drawn valued as at the as at the borrowing period-end date exchange exchange rate rate 71.9 71.9 57.7 55.2 184.3 184.3 0.4 0.4 314.3 311.8
Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. 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 behaviour of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated synergies and the actions of government regulators. Readers are cautioned not to place undue reliance on these forwardlooking statements, which apply only as of the date of this presentation. 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 these materials. 34