1. business and industrial

Design
the future
First quarter results 2015
Detlef Borghardt, CEO
Wilfried Trepels, CFO
May 13, 2015
Executive Summary/ Highlights
2
1
Double-digit sales increase
• Sales increase of 15.2% to € 271.0 (235.3) mn driven by positive performance and organic
growth in all business units.
• Approx. two thirds of sales increase related to positive translational FX effects.
2
Disproportionate growth in adjusted EBIT
Adj. EBIT up 32.2% to € 22.6 (17.1) mn on sales growth, improved gross profit and reduced
SG&A ratio due to cost discipline; Adj. EBIT margin up 100 BPs at 8.3 % (7.3 %).
3
Significant swing in net finance result from - € 3,3 mn (Q1 2014) to € 6.6 mn in Q1 2015
driven by € 8,8 (0.1) mn from unrealized FX gains related to intercompany loans.
4
Strong growth in EPS undiluted
Net profit for the period more than doubled reaching € 18.1 (8.3) mn;
Basic EPS of € 0.40 in Q1 2015 as compared to € 0.18 in the previous year.
5
Outlook 2015 confirmed
• Sales to reach in between € 980 mn and € 1.035 bn.
• Full year adj. EBIT margin expected to come in at the lower end of a 9 to 10% target range.
• Assumption: no significant deterioration of the political, overall economic or industry-specific
environment.
Business performance – group sales and group adjusted EBIT
Sales in €mn
Adjusted EBIT in €mn
280
30
16%
271.0
270
22.6
12%
260
20
17.1
250
+35.7mn
8%
8.3%
240
7.3%
235.3
+5.5mn
10
230
4%
220
0
210
Q1/2014
Q1/2015
24
300
250
0%
Q1/2014
Q1/2015
22.6
271.0
235.3
246.7
241.5
19.4
20
236.2
19.1
17.1
200
16
150
12
8
50
4
0
0
12%
15.1
7.3%
100
16%
7.9%
8.3%
7.9%
8%
6.4%
4%
Q1
Q2
Q3
2014
3
Q4
Q1
2015
0%
Q1
Q2
Q3
2014
Q4
Q1
2015
Business performance – sales by region and business unit
Sales in €mn by region
Europe
Sales in €mn by business unit
North America
Other
Trailer Systems
+47.2%
250
28.7
(10.6%)
250
19.5
(8.3%)
57.9
(24.6%)
200
200
83.0
(35.3%)
150
+33.7%
111.0
(41.0%)
271.0
100
36.5
(15.5%)
150
235.3
235.3
+14.2%
66.1
(24.4%)
+24.1%
45.3
(16.7%)
+13.3%
271.0
100
132.8
(56.4%)
-1.1%
131.3
(48.4%)
0
50
140.9
(59.9%)
159.6
(58.9%)
0
Q1/2014
4
Aftermarket
300
300
50
Powered Vehicle Systems
Q1/2015
Q1/2014
Q1/2015
Business performance – Trailer Systems
Sales in €mn
Summary
• Sales increase of 13.3 % equaling € 18.7 mn to € 159.6
mn in Q1/2015 (Q1/2014: 140.9).
• Solid sales development in Europe despite prior year’s
high comparison basis from Q1/2014 related to spill-over
effects due to the coming into force of EURO-6 standard
for trucks.
• Strong sales development and market share gains in North
America.
180
159.6
160
140
140.9
139.9
133.3
130.3
Q3
Q4
120
100
80
60
40
20
0
Q1
Q2
2014
Q1
2015
Adjusted EBIT in €mn and margin in %
10
9.3
9%
9
8%
8
7%
7
6
6%
6.2
5.6
5.4
5.8%
5%
5
4
4.4%
4.2%
3.9%
4%
3.3
3%
3
2.5%
2
2%
1%
1
0
0%
Q1
Q2
Q3
2014
5
Q4
Q1
2015
• Strong increase in adj. EBIT to €9.3 (5.4) mn
• Adj. EBIT margin lifted to 5.8% as compared to 3.9% in
Q1/2014.
• Improvement in profitability driven by higher volume, the
effects of the restructuring measures undertaken in this BU
and keeping up strict cost discipline.
Business performance – Powered Vehicle Systems
Sales in €mn
50
45
40
44.0
42.4
46.6
45.3
Q4
Q1
Summary
• Sales increase of 24.1% to € 45.3 (36.5) mn in Q1/2015.
• Supportive market environment and favorable capacity
utilization levels in Europe.
• North America: Solid demand for class 8 trucks in yet
unchanged weak development of government business.
36.5
35
30
25
20
15
10
5
0
Q1
Q2
Q3
2014
2015
Adjusted EBIT in €mn and margin in %
4
26%
3.7
3.2
3
3.0
2.8
21%
16%
2.1
2
11%
7.5%
1
6.4%
5.7%
7.9%
6.6%
6%
1%
0
-4%
Q1
Q2
Q3
2014
6
Q4
Q1
2015
• Adj. EBIT coming in 42.9% higher at € 3.0 (2.1) mn in
Q1 2015.
• Adj. EBIT margin 90 BPs higher reaching 6.6 % (5.7 %)
in Q1/2015.
• Improved profitability as compared to previous year’s
quarter, but still burdened by unfavorable customer and
product mix.
Business performance – Aftermarket
Sales in €mn
70
60
64.4
Summary
• Sales increase of 14.2 % to € 66.1 (57.9) mn in Q1/2015
• Effects from weak Russian market largely compensated
by sales expansion in additional regions.
• Opening of significantly expanded Parts Distribution
Center in Dubai in Feb. 2015.
66.1
64.2
59.3
57.9
50
40
30
20
10
0
Q1
Q2
Q3
Q4
Q1
2014
2015
Adjusted EBIT in €mn and margin in %
12
10
35%
9.6
10.7
10.0
10.3
25%
8.1
8
30%
20%
6
16.6%
16.6%
15.5%
15.6%
13.7%
4
10%
2
5%
0
0%
Q1
Q2
Q3
2014
7
15%
Q4
Q1
2015
• Adj. EBIT of € 10.3 (9.6) mn in Q1/2015, up 7.3%
• Trailing a weaker Q4/2014 (13.7%) adj. EBIT margin in
Q1/2015 came in at 15.6%, within the group’s target range
that is, despite pre-expenses for the expansion of global AM
activities
Business performance – operating cash flow
Operating cash flow before income tax in € mn
27.4
28
24
20
16
11.1
12
Ø: €10.2mn
8
4
6.4
3.9
2.3
0
Q1
Q2
Q3
Q4
2014
Summary
• Operating cash flow slightly lower as compared to Q1 2014
reaching € 2.3 (3.9) mn in Q1 2015
• As expected, higher NWC requirements (+ € 23.2 mn as compared
to 31/12/2014).
• NWC up on strong sales growth, higher inventories with regard to
plant consolidation, expansion of PDCs and disproportionately high
inventories in Russia due to the weak market situation.
• Approx. € 7 mn of the increase in Q1 2015 related to FX effects
Q1
2015
Net working capital in € mn and as % of sales
140
Inventories in € mn and days of inventories
20%
160
85
125.9
117.1
120
107.3
100
102.7
95.6
15%
125.5
122.7
120
114.2
75
122.2
65
100
80
60
135.9
140
12.1%
10.2%
10.9%
10.9%
11.6%
10%
80
54
58
55
56
56
60
40
5%
20
0%
Q1
Q2
Q3
2014
8
45
40
35
20
0
Q4
Q1
2015
55
0
25
Q1
Q2
Q3
2014
Q4
Q1
2015
Financials – balance sheet
in € mn
03/31/2015
%
12/31/2014
%
Non-current assets
383.3
52.9%
363.9
56.4%
Inventories
135.9
18.8%
122.2
18.9%
Other current assets
166.8
23.0%
114.9
17.8%
38.7
5.3%
44.2
6.9%
Total assets
724.7
100.0%
645.2
100.0%
Equity
277.6
38.3%
248.6
38.5%
93.7
12.9%
87.3
13.5%
Interest bearing loans and borrowings
184.3
25.4%
181.3
28.1%
Other current liabilities
169.1
23.4%
128.0
19.9%
Cash and cash equivalents
Other non-current liabilities
Net debt as of March 31, 2015: €145.6mn (12/31/14: €137.1mn)
9
Financials – profit and loss statement
in €mn
Q1/2015
%
Q1/2014
%
271.0
100%
235.3
100%
Cost of sales
-220.0
-81.2%
-191.3
-81.3%
Gross profit
51.0
18.8%
44.0
18.7%
Selling expenses
-14.5
-5.4%
-13.7
-5.8%
Administrative
expenses
-11.2
-4.1%
-10.6
-4.5%
Sales
Comments
• 15.2% sales growth: Approx. one third organic,
two thirds related to translational FX effects
• Slightly improved gross margin (+0.1 PP)
• SG&A cost increased at a lower percentage rate
than sales
• R&D spend constant at 2.0 % of sales
R&D
-5.4
-2.0%
-4.7
-2.0%
other
0.4
0.2%
0.1
0.0%
20.3
7.5%
15.1
6.4%
6.9
2.5%
-3.1
-1.3%
Earnings before tax
27.2
10.0%
12.0
5.1%
Income Tax
-9.1
-3.3%
-3.7
-1.6%
Result for the
period
18.1
6.7%
8.3
3.5%
Operating result
• Disproportionate 34.4% growth in operating
result
• Significant improvement in net finance cost
Financial Result
10
 € 8.8 (0.1) mn in unrealized FX gains in Q1
2015 due to positive effects from
intercompany loans
 Lower interest expenses due to improved
financing structure: € 2.1 (2.4) mn
Financials – cash flow statement
in €mn
Q1/2015
Q1/2014
Result before tax
27.1
12.0
Finance result
-6.6
3.3
5.2
4.7
-24.3
-15.6
Other items cash flow
0.9
-0.5
Operating cash flow before income tax
2.3
3.9
Income tax paid
-2.9
-2.3
Operating cash flow
-0.6
1.6
Cash flow from Investing
-5.6
-8.5
Cash flow from financing
-0.4
0.8
Effect of f/X changes
1.1
0
Net change in cash
-5.5
-6.1
Amortisation/depreciation
Changes in Net Working Capital
11
Share price and shareholder structure
Development of SAF-HOLLAND share price vs. indices (in %)
Shareholder Structure (in %)
As of April 2, 2015
Basic data for share as of March 31, 2015
SAF-HOLLAND share price development in Q1/2015
ISIN
LU0307018795
• Share price increase of 34.6% compared to 2014
Number of shares
45,361,112
Closing price
€14.94
Basic adjusted EPS
€0.31
12
closing price.
• Disproportionate share price development as compared
to benchmark indices DAX and SDAX.
2020 strategy: Megatrends driving SAF-HOLLAND business
Mega trends
2020 strategy
Changing demographics
until 2030
• Significantly growing world
population
• Aging societies
• Increasing urbanization and
concentration in cities
SAF-HOLLAND
key drivers
13
People
Money
Road network
development
Globalization & Future
markets until 2030
• Disproportionate growth of
real exports cp. to GDP
• BRIC: ”The new powerhouse”
middle class growing by
150% to 2 bn people
• Next 11: Middle class
expanding by 116%
Goods
• Global road network has
grown by 25% in recent
years
• 2/3 of this growth originated
in China and India
• Chinese road network
tripled within a 10-year time
span
Trucks/
Trailers
Roads
The right drivers for SAF-HOLLAND’s business
People
Money
Goods
Roads

14
Trucks/
Trailers
Our demand was, is and will be driven by people, who have the money to buy goods that
are transported in trucks on roads.
Forecast development of global population
2015: 7,324,782,000
40.8% between age 25 and 55
2,988,511.000

15
+15%
+12%
People
2030: 8,424,937,000
39.8% between age 25 and 55
3,353,125,000
SAF-HOLLAND will profit from a significant growth of the global mid-ager (25 to 55)
population featuring increasing purchasing power driving consumption
Forecast development of global population
People
POPULATION and CONSUMERS (age 25 - 55)
2015
numbers in [000]
people
age 25
- 55
active
consumers
Population
Δ vs.
2015
age 25 55
active
consumers
abs
%
WORLD
7,324,782
40.8%
2,988,511
8,424,937
15.0%
39.8%
3,353,125
364,614
12.2%
Asia
4,384,844
43.2%
1,894,253
4,886,846
11.4%
42.7%
2,086,683
192,431
10.2%
Africa
1,166,239
31.0%
361,534
1,634,366
40.1%
34.0%
555,684
194,150
53.7%
Latin America +
Caribbean
630,088
40.9%
257,706
716,617
13.7%
41.5%
297,396
39,690
15.4%
Europe (w Russia)
743,122
42.8%
318,056
736,636
-0.9%
38.0%
279,922
-38,135
-12.0%
North America
(w/o Mex)
361,127
39.8%
143,729
403,373
11.7%
37.6%
151,668
7,940
5.5%
39,359
39.8%
15,665
47,317
20.2%
38.0%
17,980
2,316
14.8%
Oceania

16
Population
Δ consumers
age 25 - 55
2030
Development of “big spender” part of the population varies strongly region by region with
Europe being bottom of the league versus buoyant trends in Africa, Asia/ASEAN and Latin
America: Regional focus for SAF-HOLLAND
Global income development
Shares of Global Middle Class Consumption, 2000-2050
Money
Goods
Middle Class: USD 10 and USD 100 in purchasing power parity (PPP) terms

Middle class consumption as a share of global total purchasing power will fall tellingly in
Europe as well as in the US while India, China and the ASEAN region post huge gains,
picking up from 30% to 55%.
17 Source: OECD Development Centre; Working Paper 285; The Emerging Middle Class in Developing Countries, January 2010
Road network
Trucks/
Trailers
TOTAL km
km
35,000,000
15,000,000
+24.5%
30,000,000
14,000,000
+56.8%
25,000,000
+4.0%
20,000,000
13,000,000
12,000,000
15,000,000
11,000,000
10,000,000
10,000,000
5,000,000
9,000,000
0
8,000,000
2005
2010
G7

Roads
2012
BRICS+MINT
2015
TOTAL
Heavy investments in road infrastructure will occur predominantly in the emerging markets:
Requirements for transport capacity – a key driver for demand for SAF-HOLLAND products
– will grow by more than 50% in BRIC/ MINT countries
18 Source: CIA World Factbook
SAF-HOLLAND extrapolated sales trend by region until 2030
Region

Actual 2014
MTP 2020
Trend 2030
Core markets
(Europe & North
America)
~90%
~70%
~50%
Emerging
Markets/ RoW
~10%
~30%
~50%
ΣΣ
100%
100%
100%
SAF-HOLLAND will exploit the opportunities of the global megatrends outlined by organic
growth and complementary acquisitions/cooperations;
By 2020 30% of sales will originate from EM/RoW trending towards 50% by 2030
19 Source: CIA World Factbook
SAF-HOLLAND strategic implementation measures: 8 areas of priority
China
all product areas
Middle East/ Africa
all product areas
Trailer axles & suspensions (OE) Europe
Trailer axles & suspensions (OE) North America

20
Truck suspensions (OE)
all regions worldwide
Bus suspensions (OE)
all regions worldwide
Spare parts
Europe
Spare parts
North America
SAF-HOLLAND technological and regional priority areas of activity enable the group to
exploit sustainable growth opportunities from megatrends mid- and long-term. These areas
of priority are bound to represent 80% of Group sales.
Strategy 2020:Targets and outlook
Mid term 2020
Sales target € 1.250 bn (organic growth) to € 1.500 bn with cooperations and complementary
acquisitions supporting the group’s growth strategy outside the core regions
• ~1/3 of sales to emanate from markets outside Europe & North America.
• Adj. EBIT margin of at least 8%.
• Increase of EPS by approx. 75% as compared to 2014
(higher number of shares from convertible bonds issue in 2014 fully considered).
Long term 2030
The majority of our sales growth until 2030 is supposed to be outside of the core regions of
North America and Europe.
21
Strategy 2020: Mid- and long-term sales shares and financial targets
Sales in €mn
Europe & NA
1600
250
1400
1250
160
100%
800
10%
120
33%
50%
40%
67%
50%
20%
0
2020 MT
40
20
0
0%
2014 Actual
71
60
90%
400
200
100
80
60%
600
≥ 100 - 120
140
80%
960
Emerging markets /RoW
120%
1200
1000
Adj. EBIT in €mm
Sales share in %
2014 Actual
2020 MT
2030 Trend
2014 Actual
Average adj. EBIT margin of at least 8% in the medium term with an
increase of EPS until 2020 by approx. 75% as compared to 2014*
22 *Fully considering the higher number of shares from convertible bond issue in 2014.
2020 MT
Investment highlights / Equity story
23
1
Megatrends will provide sustainable mid- and long-term growth perspectives and
business opportunities
2
SAF-HOLLAND will focus on and stay with its core competencies: “We will stay
with where we are really good at”
3
Expand core competencies and applications into new markets outside current
core regions Europe and North America
4
Taking advantage of strong market and technological position: Among TOP 3
players in every product area in predominantly oligopolistic markets
5
In emerging markets/RoW technological mid-market segments will be
addressed, in which more technology is involved than what is available today
6
Product innovation: Ramp-up of new products
7
Aftermarket will be strengthened simultaneously focusing on Europe and North
America: Targeted share in total Group sales of at least 25%
Thank you for your attention.
24