Haldex Interim Report, April - June 2021
Strong sales growth, but margin temporarily pressured by supply chain disruption
STOCKHOLM, July 16, 2021 /PRNewswire/ -- SECOND QUARTER
EVENTS AFTER THE END OF THE QUARTER
Comment from Jean-Luc Desire, President & CEO:
In mid-June I took over the role of CEO of Haldex after 20 years of global experience from the automotive industry. Over the past 30 days, I have had the opportunity to meet with hundreds of employees across the organization, and I have been truly impressed by their commitment and professionalism. During customer meetings, workshops, operating reviews and deep dives into our businesses I have gained a better understanding of both the opportunities and challenges we face and have identified areas where we can further drive improved performance.
STRONG ORGANIC GROWTH
Net sales showed strong improvement, despite continued constraints in the supply chain, and totaled SEK 1,138m (875) in the second quarter, equivalent to an organic growth of 42 percent compared to the same period last year. The strong growth is partly due to higher demand from our customers but mainly due to the vast drop in sales last year. Net sales for the half-year amounted to SEK 2,218m (2,055), corresponding to organic growth of 19 percent.
A strong organic sales growth was reported by Region Americas and Europe, while Asia reported a negative growth. The decline in Asia is mainly explained by high government support in China last year and the fact that the extremely high demand in China last year has now normalised.
The trailer segment showed strong organic growth, which is a result of our increased focus on the trailer market as well as the vast sales drop last year. The truck segment also noted strong organic growth, mainly due to the large sales decline last year. The aftermarket segment was generally less affected by COVID-19 last year and hence organic sales growth was somewhat smaller in this customer segment than in the other two.
MARGIN PRESSURED BY THE STRAINED SUPPLY CHAIN
Adjusted operating profit totalled SEK 82m (-3), and the equivalent margin was 7.2 percent (-0.3). The margin was lower than in the previous quarter as it was impacted by significantly higher commodity prices, higher freight costs and a somewhat lower share of aftermarket sales. For the half-year, adjusted operating profit amounted to SEK 197m (39), corresponding to a strong margin of 8.9 percent (1.9).
PRODUCT AND OFFERING
The development of our proposition focusing on the trailer segment and aftermarket continues. As well as growing our position as an Air Disc Brake supplier of specific applications addressing both trucks and bus OEMs.
In mid-April we announced the agreement to form a joint venture company with FAST Group to produce and sell Air Disc Brakes and provide aftermarket service with initial focus on the Chinese market. The formation of the new JV is proceeding according to plan.
Our key focus on electrification and our EMB product has proved successful. We are in close dialog with several key OEMs in Europe and are seeing increasing interest in the United States. I am also pleased to report that our EMB product has successfully passed validation through homologation with a customer in China. These are significant steps for EMB which will build confidence in this system with more customers.
I am also pleased to announce that we after the reporting period have closed an agreement with one of the world's largest manufacturer of heavy trucks for our ADB product. The deal is an important milestone to grow in the truck segment besides our excellent position in the trailer market. In particular we would like to mention the strategic importance of an embedded additional agreement, which include to equip a showcase truck with our new EMB product. This breakthrough of introducing our next generation product on the European market strengthens our confidence in our market opportunities and ability to meet new demands on braking systems in connected, electric trucks and trailers.
Although the second quarter noted a recovery from the challenging last year, there are still a lot of uncertainties left. During the second quarter, we see increased costs for commodities, semiconductors and freight. From the third quarter onwards, we expect to mitigate large parts of the additional costs in terms of increased material costs by adjusting raw material prices between our suppliers and customers. We estimate that increased freight costs will continue throughout the year. However, there is great uncertainty about these external factors and we are following market developments closely.
In addition to increased costs, there is also a significant lack of access to semiconductors, which will have an impact on some of Haldex products for at least the second half of 2021.
We are taking strong measures to improve our supply chain processes and in addition to this, my focus for the coming months will be on performance management, people development, and meeting with customers. Our work on the strategic review is also continuing and I will provide an update during the second half of 2021. I am confident we will see solid results from these efforts and I look forward to great collaborations and an exciting journey ahead.
For further information,visit https://haldex.com/sv/corporate/investerare/ or contact:
Jean-Luc Desire, President & CEO. Telephone: +46 (0) 418-47 60 00
This report has not been reviewed by the company's auditors.
This information is such that Haldex AB (publ) is obliged to publish under the EU Market Abuse Regulation. The information was submitted for publication through contacts on Friday July 16, 2021 at 7.20 am.
Investors, analysts and media are invited to a presentation of the report on Friday July 16, at 11.00 am, together with CEO Jean-Luc Desire and CFO Lottie Saks.
Link to the webcast and conference call number:
The webcast will be available afterwards, and both the interim report and the presentation can be downloaded from the Haldex website: http://www.haldex.com/sv/corporate/investerare/finansiella-rapporter/
The interim report is essentially a translation of Swedish language original thereof. In the event of any discrepancies between this translation and the original Swedish document the latter shall be deemed correct.
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Company Codes: Stockholm:HLDX, Bloomberg:HLDX@SS, ISIN:SE0000105199, RICS:HLDX.ST
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