We are doing scheduled site maintenance. The site may feel slow and unresponsive at times. We're sorry for the inconvience.
October 25, 2018 | Interim Report
Haldex Interim Report, January - September 2018: Continued improvement in net sales and earnings
During Q3, like in the earlier quarters of the year, Haldex increased its net sales in all geographic regions. The development in a number of product areas continued to be strong, including brake adjusters and disc brakes. Large investments in R&D and increased costs to meet high demand, and thus a constrained supply chain in North America, had a negative effect on earnings, but, despite this, the operating margin and the earnings per share were higher than the same period the previous year. Cash flow from operating activities also continued to improve.

Net sales for Q3 totalled SEK 1,270 (1,081) m, equivalent to an increase of 17 per cent compared to the previous year. After currency adjustments, net sales increased by 9 per cent. Net sales for the first nine months of the year totalled SEK 3,894 (3,413) m, which is equivalent to a currency-adjusted increase of 13 per cent.

Operating income totalled SEK 79 (48) m for Q3 and SEK 272 (116) m for the first nine months of the year, which is equivalent to an operating margin of 6.3 (4.5) per cent for Q3 and 7.0 (3.4) per cent for the first nine months of the year.

The net income after tax for Q3 totalled SEK 58 (26) m and the earnings per share for Q3 totalled SEK 1.30 (0.59). The corresponding figures for the first nine months of the year are SEK 177 (65) m for net income after tax and SEK 3.95 (1.45) for earnings per share.

Cash flow from operating activities totalled SEK 74 (27) m in Q3 and SEK 75 (85) m for the first nine months of the year.

Key figures for July - September 2018
(same period previous year in brackets)

  •  Net sales, SEK m   1,270 (1,081)
  •  Operating income, SEK m   79 (48)
  •  Operating income, excl. one-off items, SEK m   79 (68)
  •  Operating margin, %   6.3 (4.5)
  •  Operating margin, excl. one-off items, %   6.3 (6.3)
  •  Return on capital employed,%1   12.5 (4.2)
  •  Return on capital employed, excl. one-off items,%1    13.8 (12.6)
  •  Net income, SEK m   58 (26)
  •  Earnings per share, SEK   1.30 (0.59)
  •  Cash flow, operating activities, SEK m   74 (27)

1)     Rolling twelve months

Key figures for January - September 2018
(same period previous year in brackets)

  •  Net sales, SEK m   3,894 (3,413)
  •  Operating income, SEK m   272 (116)
  •  Operating income, excl. one-off items, SEK m   272 (226)
  •  Operating margin, %   7.0 (3.4)
  •  Operating margin, excl. one-off items, %   7.0 (6.6)
  •  Return on capital employed,%1   12.5 (4.2)
  •  Return on capital employed, excl. one-off items,%1    13.8 (12.6)
  •  Net income, SEK m   177 (65)
  •  Earnings per share, SEK   3.95 (1.45)
  •  Cash flow, operating activities, SEK m   75 (85)

2)     Rolling twelve months

Comment from Åke Bengtsson, President and CEO: 

“Haldex’s net sales and earnings performed well in Q3. Market conditions continued to improve, and we have had higher net sales and operating income in all quarters of the year than in equivalent quarters the previous year. However, the high demand creates challenges in the supply chain, which we have managed better and better during the year.

Haldex’s market is going through a transformation. In the short term, we are facing a technology shift from drum brakes to disc brakes in North America and a sharp increase in demand for automatic brake adjusters due to a change in the legal requirements in China. In the long-term, changes are under way that will affect society as a whole as the market moves toward connected, electric and self-driving vehicles.

Open and scalable brake systems

The system architecture of a vehicle will change as self-driving vehicles develop. By developing the brake systems jointly with OEMs, we re-shape the principles for the vehicle system architecture. We believe in open and scalable brake systems, where truck and trailer manufacturers have full access to data from the wheel ends. By also separating the software from the hardware, we can use the same software functionality regardless of whether the vehicle has a disc brake, drum brake, or electromechanical brake.

Haldex has been developing these principles for a long time, and at the IAA Commercial Vehicles trade show in Hannover in September we presented two products that offer the same result but are based on different technologies: Fast Acting Brake Valve (FABV), which is a high-performance valve that can be used in existing pneumatic brake systems, and the electromechanical disc brake, which is a disc break for fully electric brake systems. Few heavy vehicles have an electric brake system today, despite the increasing range of electric vehicles. This is because electric brake systems to date are allowed only in China; not in Europe and North America.

Both products offer a stopping distance that is 15 per cent shorter, compared to systems that are established today, but, more importantly for self-driving vehicles, they keep the vehicle in the intended path with a stability and predictability not available in any other technology available today. Haldex’s investment in R&D rests on a stable foundation of technology for both today’s brake systems and the brake systems of tomorrow. The technology shift facing the industry requires investments to remain competitive in the future, but it also requires another way of addressing the market and take on customers’ challenges. Discussions about how Haldex best will handle these changes has started and our plans will be presented in the months to come.

Brake adjusters are growing rapidly in China

On 1 January 2018, a new law went into effect that requires automatic brake adjusters on new heavy vehicles in China. The Chinese market is showing negative growth in 2018, but, following the change in the law, Haldex has been growing in China. Compliance with the law is however still lagging, and the rate of introduction of automatic brake adjusters slowed somewhat. This is positive for Haldex since expansion that occurs too rapidly creates challenges in how to balance growth against expansion costs. In Q3, the new law in China resulted in brake adjusters being one of Haldex’s fastest growing products on a global scale. We have also strengthened our market position on the Chinese market.

Technology shift in North America

In North America, the technology shift continues from drum brakes to disc brakes. Knowledge about disc brakes in terms of maintenance and related costs is still being built up in different customer groups, and Haldex can influence this by actively working with the fleets to raise the level of knowledge. Another important target group is manufacturers of trucks and trailers, where Haldex’s disc brake has already been an option at one of the USA’s largest axle manufacturers. In Q3, Haldex’s disc brake achieved standard position at one of the trailer manufacturers, which is a strategically important achievement, even if it will not result initially in high sales. The technology shift from drum brake to disc brake is expected to have a minor impact in 2018 and will primarily affect demand for disc brakes in coming years.

Cost control and cash flow

Cost control continues to be good. There have been noticeable increases in material prices throughout the entire year, and in Q3 the new tariffs entered into force as well. There is a delay between this type of cost increase and the price increase for the customer. Haldex will be impacted by a higher cost level for the rest of the year, which can first be transferred to the customers next year. Haldex plans to continue with the current investment level in R&D and production capacity.

Activities were initiated in Q1 to optimise the working capital and thus cash flow, which had an effect in Q2 and Q3. These activities are continuing, and the working capital is still not at a satisfactory level.

Outlook for 2018

The outlook for 2018 has not changed. We believe that net sales for 2018 will increase compared to 2017. Costs for a higher rate of investment in development projects and costs for expansion in North America and China will burden income. In Q4, the increase in material cost and tariffs will have a greater impact than in Q3. Haldex’s assessment is that the operating margin in 2018 will be in line with or possibly slightly higher than the operating margin in 2017 excluding one-off items.”

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 Åke Bengtsson, President and CEO and Andreas Ekberg, acting CFO. The presentation will also be webcasted live and you can participate with questions by telephone.

Date & Time: Thursday, October 25, 2018 at 11.00 CEST

The press conference is broadcasted at:


To join the telephone conference:

SE: +46 85 66 42 691

UK: +44 203 008 98 01

US: +1 855 831 59 47

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:

Åke Bengtsson, President & CEO, +46 418 476000
Andreas Ekberg, acting 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. The information was submitted for publication by the Haldex media contact stated in the release on October 25, 2018 at 7.20 CET.

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.

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 4.5 billion SEK.