SAF-Holland (SFQ) H1 2024 earnings summary

Executive summary

• Q2 2024 sales declined 8.7% year-over-year, mainly due to weaker OE demand, but profitability improved with an adjusted EBIT margin rising to 10.7% from 9.1% last year.

• Aftermarket business grew significantly, offsetting weaker OE sales and supporting robust cash flow; aftermarket share of sales increased to 36.7% in H1 2024.

• Acquisitions of IMS Group, Tecma, and Assali Stefen expanded the specialty axle and suspension systems portfolio and regional footprint, with Assali Stefen expected to contribute EUR 15 million in 2024.

• Adjusted EBIT increased 9.1% to EUR 102.8 million in H1 2024, with margin improving to 10.2% (prior year: 9.1%).

• Net income attributable to shareholders rose 35.3% to EUR 50.3 million; basic EPS up to EUR 1.11.

Financial highlights

• Q2 2024 sales: EUR 507 million, down 8.7% year-over-year; H1 2024 sales: EUR 1,012.5 million, down 2.3% year-over-year.

• Adjusted EBIT margin rose to 10.7% in Q2 and 10.2% in H1 2024.

• Operating free cash flow in Q2: EUR 56.8 million; H1: EUR 44.3 million.

• Net working capital ratio at 15.8% at June-end, up from 14.1% at year-end 2023.

• ROCE at 22.6% at Q2-end, reflecting efficient capital use.

Outlook and guidance

• FY 2024 sales expected at around EUR 2,000 million (prior year: EUR 2,106.2 million); adjusted EBIT margin guidance raised to around 10% (previously 9.0–9.5%).

• CapEx ratio for 2024 up to 3% of sales.

• Second half sales expected to be slightly lower than H1, reflecting continued OE market weakness.

• Market recovery in North America and Europe expected by early 2025.

• Guidance supported by favorable product mix and Haldex synergies.