SAF-Holland reports operating results

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SAF-Holland S.A. reported that it achieved an adjusted operating result nearly at a break-even point in the first half of 2009, with June the first month of the year to show a profit.

“SAF-Holland is benefitting from our decisive cost-reduction initiatives,” says Dr. Reiner Beutel, chief executive officer of SAF-Holland Group GmbH. “Both in June and July, a positive monthly operating result was achieved. In addition, liquidity has continuously improved. It is not only on the cost side where positive signs are visible. The truck market in the U.S. also seems to be stabilizing, and our global aftermarket business has been showing an upswing since March. We are confident that this positive development in North America and in the aftermarket will continue.”

A decline in sales of up to 90 percent, related mainly to plant closures by customers, was experienced by the Trailer Systems Business Unit. Since June, however, sales have increased but at a low rate. The company has started its own axle production in the United States, replacing purchased axles from external manufacturers. SAF-Holland expects its business to benefit from new braking regulations, which take effect in 2011.

The Powered Vehicle Systems Business Unit significantly increased sales and earnings compared to the previous year. Additional business from the former Georg Fischer Verkehrstechnik GmbH acquired in 2008 as well as a major order in the United States allowed for an increase in sales of 32.2 percent in the first half of the year. The gross margin improved to 21.1 percent (previous year, 14.9 percent). The share in group sales rose to 22.9 percent (previous year, 8.1 percent).

In the first half of 2009, the Aftermarket Business Unit again assisted in stabilizing sales of the group. Since March, demand has revived in Europe and North America. The acquisition of the former Georg Fischer Verkehrstechnik showed positive effects due to the broader product portfolio, the company said.

Even if the first signs of a market revival in the worldwide replacement part business and stabilization in the truck market in the United States are visible, SAF-Holland expects a clear sales decline over the year compared to 2008 with a corresponding reduction in earnings. Over the long term, the company expects an increase in demand, which also will be boosted by new emissions regulations in the United States beginning in 2010, and braking regulations beginning in 2011.