February 11, 2016  | 
Press release

Haldex annual statement, January - December 2015

High profitability in spite of slowdown late in year

Our profitability remains high with an operating margin of 9.3% for full year 2015 and earnings per share nearly doubling to SEK 4.28. Solid cost control measures, higher sales to the more profitable aftermarket and improved profitability for growing products helped to keep up the operating margin during a year of poorer market conditions. The North American market slowed down in the second half of the year and demand in Brazil and China has been significantly lower throughout the year. The poorer market conditions combined with a product recall led to a decrease in currency-adjusted net sales for full year 2015.

Net sales for full year 2015 totaled SEK 4,777 (4,380) m, equivalent to an increase of 9% compared with the previous year. After currency adjustments, net sales decreased by 3% in full year 2015. Net sales in Q4 totaled SEK 1,052 (1,092) m, which is equivalent to a currency-adjusted decrease of 9%.

Operating income for full year 2015 excluding one-off items amounted to SEK 444 (408) m, which is equivalent to an operating margin of 9.3 (9.3)%. Including one-off items, operating income was SEK 325 (233) m and the operating margin was 6.8 (5.3)%. The operating margin excluding one-off items for Q4 amounted to 7.3 (9.3)%.

Net income after tax totaled SEK 191 (107) m and earnings per share totaled SEK 4.28 (2.32) for full year 2015. The corresponding figures for Q4 are SEK 48 (17) m for net income after tax and SEK 1.08 (0.38) for earnings per share.

Cash flow from operating activities amounted to SEK 220 (435) m for full year 2015 and SEK 111 (204) m for Q4.

The board of directors proposes to the Annual General Meeting that a dividend of SEK 2.00 (3.00) per share be distributed. In addition, the board proposes that shares be repurchased for use in acquisitions or to be cancelled, thus increasing shareholder value.

Key figures for October - December 2015
(same period previous year in brackets)

  • Net sales, SEK m   1,052 (1,092)

  • Operating income, excl. one-off items, SEK m   76 (101)

  • Operating income, SEK m   69 (32)

  • Operating margin, excl. one-off items, %   7.3 (9.3)

  • Operating margin, %   6.6 (3.0)

  • Return on capital employed, excl. one-off items,%1    21.7 (21.4)

  • Return on capital employed,%1   15.9 (12.2)

  • Net income, SEK m   48 (17)

  • Earnings per share, SEK   1.08 (0.38)

  • Cash flow, operating activities, SEK m   111 (204)

  1. Rolling twelve months

Key figures for January - December 2015
(same period previous year in brackets)

  • Net sales, SEK m   4,777 (4,380)

  • Operating income, excl. one-off items, SEK m   444 (408)

  • Operating income, SEK m   325 (233)

  • Operating margin, excl. one-off items, %   9.3 (9.3)

  • Operating margin, %   6.8 (5.3)

  • Return on capital employed, excl. one-off items,%1    21.7 (21.4)

  • Return on capital employed,%1   15.9 (12.2)

  • Net income, SEK m   191 (107)

  • Earnings per share, SEK   4.28 (2.32)

  • Cash flow, operating activities, SEK m   220 (435)

1) Rolling twelve months


Comment from Bo Annvik, President and CEO:

“To sum up 2015, it was a year that started off with strong market conditions and ambitions to achieve profitable growth. Market conditions gradually deteriorated and, when compounded by the effects of the product recall that impacted us throughout the year, we chose to prioritize profitability over growth. We closed out 2015 with a high operating margin of 9.3%, in spite of having gone through a year of unexpected events and lower net sales. A Haldex that can deliver high profitability even when net sales are down is one of our highest priorities and we are continuing to work toward the target of at least 10% we set for the long term.

North America

The product recall of one version of our actuator on the US market has been the sole major event that impacted us negatively during the year. We have worked hard to regain the confidence of customers and received a very positive response to how we handled our obligations to our customers. I have personally visited all of the major truck and trailer manufacturers in North America and have scheduled visits with several major fleets early in this year. North America has experienced lower demand in the area of Reman as well. A long winter and a customer with financial problems brought sales down year-on-year. However, Reman is a segment with great growth potential and we still intend to expand inside and outside of North America.

Forecasters are in agreement that the North American market will decline in 2016 in comparison to 2015, which makes the situation even more challenging. I will be spending a lot of time in North America during the year to ensure that we build long-term, profitable and growth-oriented operations in this region. This decision was made even more important, given that our new North America manager was forced to resign in early 2016 for personal reasons. I will temporarily fill in as SVP North American sales and ensure that these operations are run satisfactorily before I pass on this responsibility to a successor. We have a good reputation on the North American market, and with the relaunch of our disc brake and an improved version of our actuator later in the year, we have everything we need to get back to previous net sales. However, it will take time and visible effects cannot be expected until late in the year.

Products driving growth

Haldex has a strong product portfolio with the disc brake serving as its main growth driver. In 2016, net sales from this product category are expected to increase by one-third and then gradually reach even higher volumes over the coming years thanks to contracts already signed. We are currently in discussions with several of the major truck and trailer manufacturers about future contracts. One of the major truck manufacturers has qualified Haldex’ disc brake to the next step and we are now one of a few suppliers remaining for the final award of contract. However, there are long planning times in our industry and revenue from these contracts is expected to start coming in 2020.

Another product category that exhibited solid growth during the year is EBS for trailers. We have a major ongoing R&D project for this product, and so I am pleased that Haldex is increasingly bolstering its position in this area. EBS as a technology is implemented in Europe but has the potential to be introduced in other parts of the world in the long term.  

Good aftermarket sales

On the aftermarket, Europe and South America reported positive sales figures in full year 2015. The market has generally seen higher profitability than Truck and Trailer, which contributed to the strong operating margin for full year 2015. It is also great to see that aftermarket disc brake sales are gradually gaining momentum.

Haldex is aiming to broaden its range of products for the aftermarket, and its work on introducing new products is in full swing. In January, we launched an actuator under the Midland brand in the low-cost segment at Heavy Duty Aftermarket. In Europe, similar products will be launched under the Grau brand in the spring. This is a part of our efforts to offer a broader range of products focused on third and fourth vehicle owners with shorter service life requirements than the premium products mainly purchased by first and second owners with longer service life requirements.

Market outlook

The European market is looking promising in 2016 with an increase in order intake, while North America is forecasted to see a decline from the strong year of 2015. However, 2016 is forecasted to be a year of above average volumes in North America. The positive trend will continue in India, but we expect no significant improvement in Brazil and China in 2016.

Haldex in 2016

Haldex is heading into 2016 with growth in key product categories. The restructuring program has been completed and focus has been shifted to roll out of our aftermarket strategy and to secure a major truck contract. However, these are activities which will lead to future revenue and will not provide a positive effect in 2016. We see a year ahead of us where the effects of the events in North America will continue to be noticeable and it will be difficult to generate growth. However, our goal is to continue securing high profitability in line with 2015, but with a softer market it will be a challenge to reach this objective for the full year.”

Full interim report

The full interim report is available at http://www.haldex.com/financialreports or at http://news.cision.com/haldex

Press and analyst meeting

Media and analysts are invited to a telephone conference at which the report will be presented with comments by Bo Annvik, President and CEO, and Åke Bengtsson, CFO. The presentation will also be webcasted live and you can participate with questions by telephone.

Date & Time: Thursday February 11 at 11.00 CEST

The press conference is broadcasted at: http://financialhearings.nu/160211/haldex/

To join the telephone conference:

Sweden: +46 8 56 64 26 99
UK: +44 20 3008 9809
US: +1 347 329 1282

The webcast will also be available afterwards and you can download the Interim report and the presentation from Haldex website: http://www.haldex.com/financialreports

For further information visit www.haldex.com or contact:

Bo Annvik, President & CEO, 46 418 476000
Catharina Paulcén, SVP Corporate Communications, catharina.paulcen@haldex.com or 46 418-476157

Haldex AB (publ) is required to publish the above information under the Swedish Financial Instruments Trading Act. The information was submitted for publication on February 11, 2016 at 7.20 am CET.

About Haldex

With more than 100 years of intensely focused innovation, Haldex holds unrivaled expertise in brake systems and air suspension systems for heavy trucks, trailers and buses. We live and breathe our business delivering robust, technically superior solutions born from deep insight into our customers’ reality. By concentrating on our core competencies and following our strengths and passions, we combine both the operating speed and flexibility required by the market. Collaborative innovation is not only the essence of our products – it is also our philosophy. Our 2,200 employees, spread on four continents, are constantly challenging the conventional and strive to ensure that the products we deliver create unique value for our customers and all end-users. We are listed on the Nasdaq Stockholm Stock Exchange and have net sales of approximately 4 billion SEK.