fourth quarter & full year 2020

Innovative Vehicle Solutions

Fourth Quarter & Full Year 2020 Investor conference callFebruary 11, 2021

1


Business overviewFinancial overviewTechnology updateSummary and Q&A

PresentersHelene Svahn, President & CEOLottie Saks, CFO

2

Today’s agenda


Sequential recovery – strong performance in trailer segment and aftermarket

n Continued market recoveryn Sales drop limited to 6%, currency adjusted n Achieved flat sales globally in aftermarketn Focus on trailer segment paid off, increasing

our market sharen Pre-series installation agreement with

Chinese bus OEM for electromechanical brake system

3

Commercial Highlights Q4

Innovative Vehicle Solutions2/11/214

Sales – Group and Regions


§ Organic sales -6%

§ Improved market share in

trailer and aftermarket

segments

§ Truck sales down -24%

§ Trailer sales flat

§ Aftermarket sales flat

§ Currency head winds

5

Sales bridge

Strong market recovery in Q4, especially in EMEA

572

1 076989

303

2650

Trailer

0

Sales Q4 19

-64

Truck

-87

Aftermarket Curr Adj Sales Q4 20

Curr effect Sales Q4 20

Truck

Trailer

Aftermarket

1 140-6%

(24)%

0%

0%

1 ) Growth Q4 vs Q4Currency Adjusted

57 41 20 36 39146 143 152 127 164 111 121 113 123

420 480 448 413 357 417302 351 368

615671 732

685571 611

431464 459

45Q2-19Q4-18

45Q1-19

57

1 140

Q3-19

1 389

49Q4-19 Q1-20 Q2-20 Q3-20 Q4-20

1 2251 340 1 282

1 180

875964 989

North America South AmericaEurope Asia & Middle East

(10)%

7%

(21)%

1 ) Growth Q4 vs Q4Currency Adjusted

12%

(6)%

(5)%


§ Organic sales -20%‒ COVID-19 effects

‒ North America also impacted by loss of

large OEM customer beginning of 2020

‒ Increased aftermarket share of sales

§ Truck sales down -41%

§ Trailer sales down -20%

§ Aftermarket sales down -8%

6

Sales bridge

Low sales FY 2020 due to COVID-19

2 397

4 140 4 007

1 502

1 252-195

Sales YTD 2019

Trailer Aftermarket

-5115 151

Truck

-305

Curr Adj Sales YTD

2020

-133

Curr effect Sales YTD 2020

Truck

Trailer

Aftermarket

-20%

4 140 4 007

586

1 698

2 659

208

-637

Sales YTD 2019

N America

-241

Curr effect

Sales YTD 2020

North America

Europe

S America

APACSouth America

-133-29-104

Europe

5 151

Asia Curr Adj Sales YTD

2020

-20%

(41)%

(20)%

(8)%

1 ) Growth 2020 vs 2019Currency Adjusted

(24)%

(14)%

(18)%

1 ) Growth 2020 vs 2019Currency Adjusted

(14)%


North America§ Cautious post-COVID-19 recovery

§ OEM revenue down 27%

§ The aftermarket, 70% of sales, was stable, with volumes in line with the previous year, despite COVID-19

§ Haldex gained market share in aftermarket and grew 7% better than peers*

§ Continued focus on driving aftermarket sales and increasing efficiency

§ Beginning of 2021, signed an important entry-level contract with one of the largest garbage carriers in the United States

§ Strong OEM market outlook for 2021

RevenueSEK m

Build ratesnew vehicles

ThousandsCurrent fleetThousands

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

0

500

1 000

1 500

2 000

2 500

3 000

2018 20212019 2020 2022 2023

Market predictions 2021 Truck +36% Trailer +60%

7

Sales, SEKm Oct-Dec2020

Oct-Dec2019 ∆¹

Truck 58 116 -44%Trailer 79 94 -6%Aftermarket 322 361 -1%Total 459 571 -10%

1) Currency adjusted

*) Mackay after market index

363 346416 392 361 397

321 329 322

99 135126 132

94105

64 81 79

153190

190 162

116109

46 54 58

0

100

200

300

400

500

600

700

800

Q2/19Q4/18 Q2/20Q4/19Q1/19 Q3/19 Q1/20 Q3/20 Q4/20


Europe§ Good recovery in all segments, truck, trailer and

aftermarket‒ OEM revenue up 9%‒ Aftermarket revenue up 4%

§ New prototype order for Haldex’s electromechanical braking systems from one of the major OEMs

§ Strengthened position

§ Continued focus on the aftermarket and trailer segment

8

1 currency adjusted

RevenueSEK m



161 188 175 189 166 178 140 157 167

211241

224 184153

198

137160 163

47

5149

40

37

41

34 38

0

50

100

150

200

250

300

350

400

450

500

Q1/20Q4/18

25

Q1/19 Q2/20Q2/19 Q3/19 Q4/19 Q3/20 Q4/20

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

0

500

1 000

1 500

2 000

2 500

3 000

202120192018 2020 20232022

Market predictions 2021Truck +14% Trailer +16%

8

Sales, SEKmOct-Dec

2020Oct-Dec

2019 ∆¹

Truck 38 38 8%Trailer 163 153 9%Aftermarket 167 166 4%Total 368 357 7%


Asia & Middle East

§ Commercial pre-series EMB agreement signed with electric bus manufacturer in China

§ Turnover was adversely impacted by COVID-19

§ OEM revenue down 23% in the quarter

1 currency adjusted

RevenueSEK m


Thousands

Current fleetThousands

19 21 19 17 21 14 12 16 18

3750 49 46

5344 42 45 42

89 72 8464

90

53 68 53 63

0

20

40

60

80

100

120

140

160

180

Q4/18 Q2/19Q1/19 Q2/20Q1/20Q3/19 Q4/19 Q4/20Q3/20

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

0

500

1 000

1 500

2 000

2 500

3 000

20222018 20232019 2020 2021

Market predictions 2021Truck -12% Trailer +4%

9


Oct-Dec2019 ∆¹

Truck 63 90 -26%Trailer 42 53 -18%Aftermarket 18 21 -9%Total 123 164 -21%


South America

§ Heavy-duty vehicle production reached record levels in the fourth quarter

§ Aftermarket is returning to normal levels, while trailer sales were at a high level for the whole year of 2020

§ OEM revenue up 36%

§ Negative currency effects impacted profitability

1 currency adjusted

RevenueSEK m



19 18 21 22 2516 12

19 16

44

24 24

32 3221

21

5

14 20

05

1015202530354045505560

Q2/19 Q3/19

2

3

Q1/19

3

Q4/18

3

Q4/19 Q1/20

3

Q2/20

3

Q3/20

3

Q4/20

0

500

1 000

1 500

2 000

2 500

3 000

0

50

100

150

200

250

300

350

400

2018 2019 202320222020 2021

Market predictions 2021 Truck +24%Trailer -12%

10


Oct-Dec2019 ∆¹

Truck 20 21 32%Trailer 3 3 59%Aftermarket 16 25 -11%Total 39 49 12%

Innovative Vehicle Solutions11

Financial highlights Q4


Sequential recovery and improved margins

Financial highlights Q4

n Earnings § Organic sales -6%§ Gross margin increased 3pp vs Q4 2019 to 28.6%,

corresponding to a FY increase from 26.0% to 27.3%.§ Strong contribution from savings program, SEK 65m.§ Adjusted operating margin of 6.7 (3.8)%, best Q4 adj

operating margin since Q4 2015.§ Negative currency effects of SEK 20m.§ Non-recurring items net of SEK 22m including income of

SEK 35m from property sale in Blue Springs, USA

n Continued focus on cash flow protection§ Cash flow from operating activities total SEK 123m (239)§ Improved earnings and prudent capex strengthened

cash flow, increasing financial self-sufficiency§ Large payouts of approx. SEK 100m due to restructuring

but also received payment from the property divestment in Blue Springs

12


Cost cuts supported adj. Q4 EBIT improvement

§ Organic sales decrease of 6%, resulted in an EBIT reduction of SEK 22 m.

§ Positive product mix in Q4, aftermarket share 53% (50) of total sales.

§ Cost reductions total of SEK 65m, related to footprint changes, reduced headcount and general savings initiatives in bonus, travel, etc.

§ One-time costs of net SEK 22m related to the communicated cost saving programs SEK 48m, external services concerning the ownership structure SEK 4m, write-down of intangible assets related to ERP system SEK 5m as well as a positive result from building sale in US SEK+35m.

13

EBIT Bridge Q4 2020 vs. Q4 2019

6,0%

-1,5% 0,9%

0,5%0,2%

6,1%

Cost reduction

ADJ EBIT Q4

2019

176

6

Product Mix

One-time 2019

Volume Material savings

65

Other (inc. FX efftect)

ADJ EBIT Q4

2020

-22

One-time 2020

44

EBIT Q4 2020

44

-133

66

EBIT Q4 2019

-22

-30

3

1

1 2

3

2

3

4

4


Adjusted EBIT supported by cost reductions

§ Substantial drop in net sales in YTD -20%.§ Customer segment mix favorable, AM share

increase from 47% to 53%. § Direct material savings favorable, mainly in

North America (Mexico).§ Cost reductions total SEK 161m whereof

SEK 92m general savings in bonus, travel, furlough etc.

§ Cost reduction includes SEK 44m for closure of Friction center, Blue Springs and Heidelberg.

§ One-time cost includes write-down of intangible assets SEK 176m, restructuring SEK 109m, external services related to ownership structures SEK 13m. One-time cost also includes the positive result from the property sale in Blue Springs of SEK 35m.

14

EBIT bridge YTD Q4 20 vs. YTD Q4 19

6,0%

-1,5% 0,9%

0,5%0,2%

6,1%

One-time 2019

EBIT YTD 2020

Volume

48-263

Product Mix

-45

17

Material savings

Cost reduction

ADJ EBIT YTD 2020

One-time 2020

-100

105

EBIT YTD 2019

ADJ EBIT YTD 2019

-100

163

317

212

Other (inc. FX efftect)

-335161

1 2 3 4

1

3

2

4


Margin Optimization and Profit Protection

15

Substantial long-term structural program with SEK ~300m in annual savings

To summarize long-term structural savings program total§ Annual savings of SEK ~300m.§ Estimated non-recurring cost of SEK ≈ 275m.§ Savings 2020 SEK 69m.§ Cost Base Adjustment 2 covers among other things workforce

reductions of 70 positions located across all regions.

Long-term savings programInitiative

Saving from: Estimated annual saving (SEKm)

Estimated non-recurring cost (SEKm)

Actual non-recurring cost (SEK m)2019 2020

Friction Centers, US May 2019 28 0 5 6Heidelberg, Germany September 2020 50 156 143 13Blue Springs, US October 2020 25 40 24 16Total Footprint related programs 103 196 172 35Cost Base Adjustment 1 July 2020 100 33 - 33Cost Base Adjustment 2 Q2 2021 100 tba - 41Total 303 229 172 109


Long Term Savings ProgramInitiatives, SEKm Start Total Q2 YTD Q2 Q3 YTD Q3 Q4 2020

Foot Print Optimisation May 2019 103 5 9 14 23 21 44Cost Base Adjustment July 2020 100 0 0 12 12 13 25Total 203 5 9 26 35 34 69

Short Term SavingsInitiatives, SEKm Start Total Q2 YTD Q2 Q3 YTD Q3 Q4 2020

Short Term Savings Program April 2020 70 27 28 21 49 31 80Furlough 10 10 2 12 0 12Adjustment Accrual 7 0 0 0 0 0Total Short term Cost impact 44 38 23 61 31 92

Margin Optimisation and Profit Protection

16

Savings program overview

§ Additional short-term savings program initiated− 2020 reduction of bonuses and savings in travel, consultants and furloughs.− Saving 2020 SEK 92 m (80+12). Impact Q4 ~SEK 31m (31+0).

In total all savings efforts reduced cost by SEK 161m in 2020


Financial development

17

Sales & Profitability Q1 2019 – Q4 2020, improved trend 2H 2020

Truck

403

1,340

2019 Q2

355

430

2019 Q1

349

190

384

224

407

210

296

265

366

206

414

1,282

1,389

155

2019 Q3

224

303

195

377

2019 Q4

352

395

2020 Q1

144

245

165

335

171

321

2020 Q2

289

IAM

2020 Q3

989

178

1,140

288

188

2020 Q4

OES

Trailer

3361,180

875

964

-13%

4%

2019 Q1

2019 Q2

0

97

7%

18

73

2020 Q2

7%

17

6%

68

7%

2019 Q3

57176

-133

4%

2019 Q4

12

30

2020 Q1

97

148

-151

0%

91

80

-23

22

44

7%

2020 Q4

2020 Q3

44

-2

66

42

85

+51%

NRI Adjustments Adj. EBIT margin

Reported EBIT

334

358 355

292

313

228

269283

2019 Q3

2019 Q2

2019 Q1

26%

2019 Q4

25%28%

26%27%

2020 Q1

26%

2020 Q2

28%

2020 Q3

29%

2020 Q4

-3%

Gross marginGross Profit

Sales(SEK m)

Gross Profit (SEK m & %)

Operating Profit(SEK m & %)

Reported

NRI Adjustments

Adjusted

Actual currency rates.


Financial position


Working capital and no. of cash conversion days substantially reduced in Q4, rather flat inventory

19

§ Working capital reduced in Q4 and for FY 2020§ Cash conversion days in 2020 suffered from lower

volumes due to covid-19.§ No. of cash conversion days reduced to 82 in Q4

850

892934 911

860

757 723 747 733 712 717

8893 94 93

109118

124

98 9994

8994

0

1020

3040

5060

708090

100110

120130

0

100200

300400

500600

700800900

1 0001 100

1 2001 300

JunMarDec. 19

FebJan Apr May

106

Jul Aug

815

Sep Oct Nov Dec

849

12%

Haldex Days of Inventory Inventory

SEK m # Days

§ Long lead times and global sourcing cased increased inventories in 2020 as sales dropped due to covid-19

§ Inventory more normal in 2H 2020 following inventory reduction program and sales increase of 3% vs H1 (currency adjusted)

Inventory Monthly 2020 Development

0102030405060708090100110120130

200

900

0

400

600

100

1.100

500

1.000

300

700

800

1.029

Q1-20

Ø 898785

Q4-18

SEK m

Q3-20

#Days

Q2-19Q1-19 Q3-19 Q4-19 Q2-20 Q4-20

945

777796

1.0431.082

912

712

Working Capital Cash Conversion Cycle

Actual currency rates.


§ Net Debt1) down by SEK 70 m in Q4. § Our focus on becoming financially self-

sufficient during 2H, 2020 paid off§ Pension liabilities was down by SEK 80

mainly due to higher interest rates

Strong Q4 cash flow, net debt1) back to year-end 2019 level

20

SEK m2)Dec 31

2020Dec 31

2019

Assets as part of the net debt:

Cash and cash equivalents 440 315

Liabilities as part of the net debt:

Interest-bearing liabilities including derivative instruments -888 -768

Pension liabilities -578 -562

Net debt in total, excluding IFRS16 – financial leasing -1 026 -1 015

Debt related to IFRS16 -334 -423

Net debt in total -1 360 -1 438

§ Cash flow from operating activities in Q4 positively impacted by improved earnings

§ Working capital in Q4 negatively impacted by payout of restructuring reserve from 2019.

-100

-50 200

0

100

50

250

150

200

600

800

1.400

1.000

1.200

0

400

Net debt, SEKmCash flow, SEKm

12397

Q1/18 Q2/18 Q3/18

-43

Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q3/20

74

Q4/20

-64

65

199

Q2/20-96-84

76

239 231

Cash flow from operating activities

Net debt, excl IFRS16

1) Excl IFRS16 2) All numbers at actual currency rates


Technology update - electrification


EMB supports e-mobility by its unique efficiency

SBS is a platform project meeting new demands on braking systems in connected, electric and autonomous trucks and trailers.

§ Modular solution with open architecture

§ Pneumatic and electrical platforms

§ Integrates with OEM´s control systems

22

Haldex Scalable Brake System (SBS)

Electromechanical brake (EMB)

Electromechanical brake (EMB)Electromechanical brake is a core module of the SBS portfolio. § Reduced energy consumption, enabling increased range,

or reduced battery cost in electrified vehicles § Reduced CO2 emissions in combustion vehicles

Other advantages of the electromechanical brake:§ Improved controllability, reduced braking distance,

improved stability, and increased comfort§ Simplified pneumatics reducing vehicle installation time

and enable battery§ It requires less space and thus increase packaging space

§ Reduced noise supporting nighttime deliveries


Haldex EMB is well positioned to meet increasing demand of electric braking systems

23

Overview of powertrain concepts

1) Mainly diesel-electric hybrids, but also gas-electric 2) Includes NOx, PM and CO2

Diesel

• Proven concept capable of both long-haul and urban duties

• Possible to reduce particle matter and CO2emissions through new technology (e.g common rail injection systems)

• Fossil fuel driven with increasingly unfavorable TCO due to rising fuel prices

CNG/LNG

• Ready concept available for city buses, short and long-haul

• Dramatically reduced PM and NOx levels makes gas vehicles urban compatible

• Current fueling infrastructure is in need of continued expansion –route planning somewhat difficult

Hybrid1) Electric

• Emerging segment attracting both traditional OEMs and new entrants

• High potential for last mile delivery with low emissions, but short range and high weight of battery pack

• Rapidly expanding passenger car infrastructure beneficial for commercial vehicles

Fuel Cell

• Latest technology mainly driven by newcomers (e.g. Nikola)

• High cost, but enables the highest range making FC suitable for long-haul freights

• Very limited charging infrastructure and currently unproven technology means adoption after 2030

Outlook

Emission levels2) 4 2 2 0 0

Market readiness 4 3 2 2 0

• Increased weight due to dual fuel systems means city environment and urban areas are best suited for hybrids

• Limited fuel consumption improvements –relatively high costs for limited additional effects

NegativeStablePositiveLowMediumHigh 024


Summary and outlook


Summary and outlook

25

*According to market data

§ Satisfied with the trends in Q4§ Strong performance in our aftermarket and

trailer market segments§ Strong customer interest in EMB§ Cost savings program implemented as

planned, full effect expected 2H 2021

Outlook§ We expect Haldex growth to be somewhat

lower than the global growth rate of newly produced heavy vehicles as global growth primarily comes from truck segment and trailer segment in North America.

fourth quarter & full year 2020

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