earnings conference call - haldex abcorporate.haldex.com/media/2468/2014-q3.pdfearnings conference...

Innovative Vehicle Solutions Innovative Vehicle Solutions

Earnings conference call Q3 2014

Bo Annvik, CEO / Andreas Ekberg, CFO 5 November 2014

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Innovative Vehicle Solutions

Agenda

Business Highlights

Market Update

Sales

Financials

Restructuring

Outlook

2


Business Highlights Q3 2014

Sales growth of 7% (currency adjusted) with net sales reaching SEK 1,123 (994) million.

Operating margin of 10.1% (excluding one-off items)

Operating income, excluding one-off items, increased to SEK 113 (84) million.

Earnings per share, excluding one-off items increased to SEK 1.51 (1.03).

Cash flow from operating activities amounted to SEK 112 (94) million.

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Market update

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Build rates – Heavy truck

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Thousands of units

North America official build rates increased 21% Q3 2014 compared to Q3 2013. The North American market is expected to increase 20% 2014 compared to 2013.

Europe official build rates decreased 5% Q3 2014 compared to Q3 2013. The European market is expected to decrease with 7% 2014 compared to 2013.

China Europe North America

India Brazil


Build rates - Trailer

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Thousands of units

China Europe North America

India Brazil

North America official build rates indicating a increase of 23% Q3 2014 compared to Q3 2013. The North American market is expected to increase 15% 2014 compared to 2013.

European build rates are 11% higher in Q3 2014 compared to Q3 2013. The European market is expected to grow 9% 2014 compared to 2013.


Sales

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Q3/14 Q3/13 9M/14 9M/13 2013

Net sales, SEK million 1,123 994 3,288 3,012 3,920

Growth 13% 7% 9% -2% 0%

Sales, Haldex Group

Currency adjusted growth of 7% in Q3 and growth of 7% in the first 9 months.

SEK m Net sales

1/13 2/13 3/13 4/13 1/14 2/14 3/14

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Sales per region

SEK m SEK m

Europe North America

1/13 2/13 3/13 4/13 1/14 2/14 3/14 1/13 2/13 3/13 4/13 1/14 2/14 3/14

SEK m SEK m

Asia & Middle East South America

1/13 2/13 3/13 4/13 1/14 2/14 3/14 1/13 2/13 3/13 4/13 1/14 2/14 3/14

SEK million Q3/14 Q3/13 change1

Europe 370 345 3% North America 600 527 7% Asia & Middle East 98 75 22% South America 55 47 9%

1 currency adjusted

SEK million 9M/14 9M/13 change1

Europe 1,162 1,047 7% North America 1,696 1,573 6% Asia & Middle East 272 233 14% South America 158 159 5%

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Sales per product line

Foundation Brake: Wheel-end products for brake actuation and lining wear adjustment.

Air Controls: Products to dehumidify, clean and control compressed air in the brake system.

SEK m

Sales

Foundation Brake Air Controls

1/13 2/13 3/13 4/13 1/14 2/14 3/14

1 currency adjusted

SEK million Q3/14 Q3/13 change1 9M/14 9M/13 change1

Foundation Brake 630 529 13% 1,809 1,617 10% Air Controls 493 465 0% 1,479 1,395 3%

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Sales per customer group

Largest growth in the trailer group, mainly driven by good sales growth in North America and increased disc brake revenue in Europe.

July-Sept: 31% Truck 27% Trailer 42% Aftermarket

1 currency adjusted

SEK million Q3/14 Q3/13 change1 9M/14 9M/13 change1

Truck 344 312 5% 953 866 9% Trailer 309 249 18% 957 831 12% Aftermarket 470 433 3% 1,378 1,315 2%

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Financials

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Earnings

Operating margin excluding one-off items at record high 10.1% in Q3 and at 9.3% in the first nine months.

SEK

Earnings per share

SEK m

Operating income & margin

%

Income Margin

1/13 2/13 3/13 4/13 1/14 2/14 3/14 1/13 2/13 3/13 4/13 1/14 2/14 3/14

Q3/14 Q3/13 change 9M/14 9M/13 change Operating income (excl one-off items), SEK million 113 84 35% 307 215 43%

Operating income, SEK million 15 89 -83% 201 100 101%

Operating margin (excl. one-off items), % 10.1 8.4 1.7 9.3 7.1 2.2

Operating margin, % 1.3 9.0 -7.7 6.1 3.3 2.8

Net income, SEK million -22 46 - 90 26 246%

Earnings per share, (excl one-off items), SEK 1.51 1.03 47% 4.14 2.55 62%

Earnings per share, SEK -0.53 1.03 - 1.94 0.54 257%

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Sales & Operating Margin 2011 - 2014

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5.8%

6.4%

6.4%

4.8%

6.0%

5.6%

5.6%

3.9%

5.8%

7.1%

8.4%

7.3%

8.1%

9.7%

10.1%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

600

700

800

900

1 000

1 100

1 200

Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14

Operating Margin Sales, SEK m

Sales Operating Margin, excl one-off items


Statement of Financial Position Sept vs. June

SEK million Sept 30 June 30 quarterly 2014 2014 change

Working capital 581 605 -4%

Intangible assets 448 464 -3%

Capital employed 1,892 1,908 -1%

Total assets 2,747 2,683 +2%

Equity 1,199 1,183 +1%

Net debt 413 442 -7%

Equity ratio, % 44 44

Net debt/Equity ratio, % 34 37

Contingent liabilities 35 0

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Cash Flow Working Capital & Cash Conversion days

1 excluding one-off items

SEK million Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 Q2/13 Q1/13

Operating cash flow1 116 124 6 83 96 111 40

Cash flow after net investments1 63 92 1 49 81 109 20

76 76 71

68 66 66 62 60 62

59 57 56 60 59

63

0

10

20

30

40

50

60

70

80

90

0

100

200

300

400

500

600

700

800

900

1 000

1103 1106 1109 1112 1203 1206 1209 1212 1303 1306 1309 1312 1403 1406 1409

Cash

Con

vers

ion

Cycl

e, d

ays

Wor

king

Cap

ital,

MSE

K

Working Capital Cash Conversion Days

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Restructuring program

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Negotiations with the German unions completed. 104 of 184 employees will remain in total.

Previously, annual savings of MSEK 100 and total costs of MSEK 250, with cash effects of approximately MSEK 150, were expected.

New estimates of annual savings of MSEK 85 and total costs of MSEK 250, with cash effects of approximately MSEK 100.

The German/Hungary relocation project will be carried out during 2015 and completed latest at the end of 2015.


Outlook

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Market outlook 2014

North America +10%

Europe A couple of percentage points up

China Slightly negative, 0% to -5%

India Signs of improvement

Brazil Weaker than the previous year

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Objectives

Financials

Organically grow faster than the market (weighted segment volume)

Sustainable operating margin of 10% or above

Net debt/equity ratio less than 1

1/3 of the yearly net income over a business cycle in dividend

People & Environment

Safe Haldex – vision zero

Ethical Haldex – vision zero

Green Haldex – global mapping on-going

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Questions?

Thank You!

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earnings conference call - haldex abcorporate.haldex.com/media/2468/2014-q3.pdfearnings conference...

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