SAF-HOLLAND Holds The Line

In a challenging market, SAF-HOLLAND S.A. maintained group sales in 2008 at nearly the same level as in the previous year at $1.05 billion (previous year: $1.07 billion). Business performance was characterized by conflicting developments. Following a successful first half of the year with double-digit growth rates, the economic crisis restrained sales in the final months of 2008. SAF-HOLLAND responded promptly by taking steps to adjust to the new environment as early as October 2008.

“The past fiscal year was marked by above-average growth at the beginning and a drastic drop in sales in the final four months of the year,” said Dr. Reiner Beutel, CEO of SAF-HOLLAND GROUP GmbH. “Our comprehensive projects to reduce costs and working capital and to stabilize liquidity are helping us overcome the current market weakness and are simultaneously fortifying us for the time following the crisis. As soon as demand revives, we will benefit from our high quality and innovative products and international positioning as one of the leading global suppliers to the truck and trailer industry.”

Adjusted operating earnings before interest and taxes (EBIT) amounted to $54.2 million (previous year: $ 79 million) and the adjusted EBIT margin was 5.2% (previous year: 7.4%). The decline from the previous year resulted primarily from the sharp decrease in demand at the end of the fiscal year. Drops in production of up to 70% in the fourth quarter led to overcapacity, which exerted pressure on earnings. In addition, extraordinary write-downs on goodwill and intangible assets as well as restructuring expenses impaired profitability.

The Powered Vehicle Systems Business Unit, which generates sales primarily from fifth wheels and axle suspensions, benefited in 2008 from the acquisition of the former Georg Fischer Verkehrstechnik GmbH. As a result, the Business Unit was able to boost its sales during the period under review to $134 million (previous year: $107 million).

SAF-HOLLAND’s Trailer Systems Business Unit with a predominantly European focus was most strongly affected by the collapse in demand in the fall. During the period under review, the Business Unit generated sales of $697 million (previous year: $728 million).

Similarly, the replacement parts business of the Aftermarket Business Unit suffered from the overall market weakness in the fourth quarter. Unused trucks and trailers as well as large inventories of new vehicles weighed on demand. For the entire year, the Business Unit recorded sales of $222 million (previous year: $237 million).

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