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February 10, 2017 | Annual Financial Statement
Haldex annual statement, January - December 2016: A year with a weak market and a drawn-out bidding process
Haldex’ net sales followed the general market trend in 2016. In North America, which represents more than half of Haldex’ net sales, the conditions on the market were weak during the year and demand fell even more during the fourth quarter. However, Haldex’ sales in North America during the fourth quarter did not decline at the same rate as the market. Net sales in Europe and Asia increased during the fourth quarter, but could not compensate for the decrease in North America.  Disc brake sales increased significantly during both the fourth quarter and the year as a whole, but sales of actuators and brake adjusters declined. The operating margin has followed net volumes each quarter, but weakened at the end of the year.

Net sales for Q4 totaled SEK 1,054 (1,052) m, which is on par with the same period of the previous year. After currency adjustments, net sales decreased by 5% in Q4. Net sales for full year 2016 totaled SEK 4,374 (4,777) m, which currency-adjusted is a 9% decline.

Operating income for Q4 excluding one-off items amounted to SEK 48 (76) m, which is equivalent to an operating margin of 4.6 (7.3)%. The operating margin excluding one-off items for full year 2016 amounted to 6.6 (9.3)%. The operating margin including one-off items was -2.4% for Q4 and 4.7% for the full year 2016. One-off items for full year 2016 totaled SEK 86 (119) m, of which SEK 73 (7) m in Q4.

The net income after tax for Q4 totaled SEK -56 (48) m and the earnings per share for Q4 totaled SEK -1.27 (1.08). Net income after tax for full year 2016 came in at SEK 91 (191) m and earnings per share at SEK 2.00 (4.28).

Cash flow from operating activities totaled SEK 88 (111) m in Q4 and SEK 256 (220) m for full year 2016.

A bidding process for Haldex was initiated on July 14 and is still ongoing. Knorr-Bremse’s offer of SEK 125 per share is conditional upon clearance from relevant competition authorities. The anti-trust investigations are currently underway. When and if approval is obtained, the offer can be completed.

President & CEO Bo Annvik, who previously announced his resignation, will leave his position on February 28, 2017. CFO Åke Bengtsson will take over as acting President & CEO until a replacement has been found.

The board proposes no dividend for 2016.

Key figures for October - December 2016
(same period previous year in brackets)

  •  Net sales, SEK m   1,054 (1,052)
  •  Operating income, excl. one-off items, SEK m   48 (76)
  •  Operating income, SEK m   -25 (69)
  •  Operating margin, excl. one-off items, %   4.6 (7.3)
  •  Operating margin, %   -2.4 (6.6)
  •  Return on capital employed, excl. one-off items,%1    13.8 (21.7)
  •  Return on capital employed,%1   9.7 (15.9)
  •  Net income, SEK m   -56 (48)
  •  Earnings per share, SEK   -1.27 (1.08)
  •  Cash flow, operating activities, SEK m   88 (111)

1)    Rolling twelve months

Key figures for January - December 2016
(same period previous year in brackets)

  •  Net sales, SEK m   4,374 (4,777)
  •  Operating income, excl. one-off items, SEK m   291 (444)
  •  Operating income, SEK m   204 (325)
  •  Operating margin, excl. one-off items, %   6.6 (9.3)
  •  Operating margin, %   4.7 (6.8)
  •  Return on capital employed, excl. one-off items,%1    13.8 (21.7)
  •  Return on capital employed,%1   9.7 (15.9)
  •  Net income, SEK m   91 (191)
  •  Earnings per share, SEK   2.00 (4.28)
  •  Cash flow, operating activities, SEK m   256 (220)

1) Rolling twelve months 

Comment from Bo Annvik, President and CEO: 

“I have been with Haldex for almost five years and I can say that 2016 has been the most challenging year during this period. The official forecast for the number of vehicles produced in North America has deteriorated quarter after quarter. Since half of our net sales are in North America, this weak demand has had a major impact on Haldex. In addition, the bidding process, which is still ongoing, was initiated during the summer, and creates uncertainty for both Haldex and its customers. With this in mind, Haldex has handled the challenges of the year well. The lower net sales in 2016 are in line with the general trend in the market, and thanks to flexible customer arrangements we have been able to remain in the discussions in the largest negotiations.

Similarly to previous quarters of the year, about half of the sales decline we experienced in the fourth quarter was related to actuators. This is primarily linked to our strong position in the Truck segment, which experienced the greatest decline in North America, and was only partially linked to the product recall. We are also seeing a decrease in brake adjuster sales due to the weaker market conditions.

The operating margin of 6.6 percent for the full year excluding one-off items does not meet our long-term goal of 10 percent. However, the downturn is related to lower sales and not to the cost structure. We have also been more generous with our goodwill and customer obligations in order to maintain good customer relationships during this current period of turbulence. When demand picks up again, Haldex will be well-equipped to take the next step toward its long-term profitability goal.  

Disc brake sales continue to grow

Disc brake sales continued to show strong growth throughout the year. This increase is in line with previously announced expectations that this product category would be on the rise this year and then hopefully gradually reach even higher volumes over coming years. However, it is crucial for the future development of the disc brakes that we win several of the major negotiations in which we are currently participating. The uncertain ownership situation creates greater risk for the customers, but to date we have managed to stay in the customer discussions by offering flexible arrangements. There is an overhanging risk that we will lose business which in turn will impact our growth opportunities.

Focus on the current operations

Since the first bid was placed for Haldex in the summer of 2016, our primary goal has been to continue conducting business in accordance with previously established targets. During the fourth quarter, we re-launched the strategy for the next few years internally. We anchored the long-term strategy in a number of projects and activities with relevant key performance indicators. Internal reception has been very positive, and the aim is to counteract the vacuum that can arise during periods of uncertainty and thereby stop projects. We continue to build a stronger Haldex, which is positive for customers, employees and owners.

We had already planned to implement a new training program at Haldex, and we decided to roll it out as soon as possible as an additional measure to keep and motivate our employees. Part of the program targets middle management and focuses on management guided by our values and 5Cs (the name of our behaviors) as well as specific areas of knowledge, such as leading through change, effective communication and creating team involvement. These areas feel more relevant than ever before. Key staff members will also be able to attend an international training program that has been tailored for Haldex in collaboration with Stockholm School of Economics. We believe there is a high risk of losing key people and leadership training serves many purposes, such as motivate employees to stay in the company, raise the competence levels and ensure succession planning if somebody resigns.

We will be channeling a lot of time and energy in the near future into maintaining customer relationships, ensuring that key staff members stay with the company and assisting in the complex competition investigations. To date we have been successful, but this takes resources, in particular for the ongoing extensive competition investigations since we must purchase external resources and competence to be able to assist the investigators.

Collaboration on electromechanical breaks

One area in which we are pleased to see progress is our joint venture with Chinese VIE. We will jointly develop electromechanical brakes for electrical commercial vehicles. During the fourth quarter, the new operations officially started with the opening of the office in Shanghai, and the majority of the newly recruited employees are now on-site. We have great confidence in the future of this joint venture and how we can develop sustainable and environmental friendly products for this rapidly growing market.

Handover to Åke Bengtsson

In March, I will hand over the reins to our CFO, Åke Bengtsson, who will become the acting President and CEO. The past years have been very fruitful since I began working on our strategy and the path toward profitable growth in 2012. The intensive public offer situation the company is currently undergoing is itself an indication that what we have jointly created at Haldex is held in high esteem. I am convinced that Åke and a very strong management group will continue to lead the company in the proper direction until my replacement is appointed.  

Haldex in 2017

The assessment for the full year 2017 is that it will be difficult for Haldex to show growth due to the weak market conditions and the drawn-out bidding process. Our ambition is to continue to ensure good profitability, but due to lower net sales and high costs related to the bidding process, the operating margin for 2017 is forecast to be slightly lower than in 2016.

Full interim report

The full interim report is available at http://corporate.haldex.com/en/investors/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: Friday, February 10 at 11.00 CEST

The press conference is broadcasted at:


To join the telephone conference:

Sweden: +46 8 56 64 26 69

UK: +44 20 3008 9808

US: +1 85 5831 5947

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

For further information visit http://corporate.haldex.com or contact:

Bo Annvik, President & CEO, +46 418 476000
Åke Bengtsson, CFO, +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 EU Market Abuse Regulation and the Swedish Financial Instruments Trading Act. The information was submitted for publication by the Haldex media contact stated in the release on February 10, 2017 at 7.20 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 2,100 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 4.4 billion SEK.