FIRST QUARTER 2022
- Sales increased to SEK 1,272m (1,080), corresponding to an organic growth of 9 percent, largely driven by the price increases introduced during the previous year to mitigate the increased costs within the supply chain.
- The gross margin amounted to 27.7 percent (31.1). The gross margin increased by 2.9 percentage points compared to the fourth quarter 2021.
- The reported operating profit amounted to SEK 75m (112), which corresponds to a margin of 5.9 percent (10.4). Items affecting comparability of net SEK -5m (-3) affected earnings.
- Adjusted operating profit amounted to SEK 80m (115), corresponding to an adjusted operating margin of 6.3 percent (10.6).
- Earnings per share, basic and diluted, amounted to SEK 1.04 (1.44).
- Cash flow from operating activities amounted to SEK -60m (-30).
- The supply chain continues to be strained due to increased raw material and shipping costs as well as component and semiconductor shortages.
- In March, a long-term agreement was signed with KRONE Commercial Vehicle Group for the supply of the fourth generation Electronic Brake System (EBS) platform for trailers, which is a strategically important contract for Haldex.
- Haldex has stopped trade with Russia and Belarus following the military attack on Ukraine. As Haldex's sales in Russia and Belarus are limited, the direct effect is minimal.
EVENTS AFTER THE END OF THE QUARTER
- Haldex has refinanced its debt. See page 5.
Comment from Jean-Luc Desire, President & CEO:
Net sales in the first quarter amounted to SEK 1,272m (1,080), equivalent to an organic growth of 9 percent. Region Americas and region EMEA reported an organic growth of 16 and 7 percent respectively, largely driven by the price increases introduced during the previous year to handle the increased costs in the supply chain. Region APAC had an organic sales decline of 20 percent, where sales were negatively affected by the continued market downturn in China and the logistics challenges after the new Covid-19 outbreaks in the country. Both the Aftermarket and Trailer segments increased compared to the previous year, with an organic growth of 7 and 19 percent, respectively. Sales in the Truck segment were at approximately the same level as the previous year, with an organic decrease of 1 percent. According to our assessment of external market data, we continue to take market shares globally. Compared with the previous quarter, net sales increased by 7 percent.
The adjusted operating profit amounted to SEK 80m (115), corresponding to margin of 6.3 percent (10.6) in the first quarter. Compared with the previous quarter, the adjusted operating margin increased by 1.3 percentage points. This shows that we have been successful in raising prices to mitigate the increased costs for raw materials, semiconductors and freight, however, it has a dilutive effect of the margin. Ongoing management of pricing towards customers compared to increases in supplier costs will remain a key focus going forward. The reported operating margin amounted to 5.9 percent (10.4). The increased sales and constraints in supply chain tied up working capital which led to a weakened cash flow. The cash flow from operating activities in the first quarter amounted to SEK -60m (-30).
We are pleased that we have both signed and extended several long-term agreements during the quarter. A long-term agreement was signed with KRONE Commercial Vehicle Group, a leading trailer manufacturer, for the supply of the fourth generation Electronic Brake System (EBS) platform. This agreement extends a long existing partnership with KRONE and is an important step to expand Haldex’s market share within this segment and further strengthen our position in the trailer market. During the quarter we announced that we have signed a renewed long-term supply agreement for the supply of our Automatic Brake Adjuster (ABA) with Daimler Truck. By the end of the new contract period, Haldex will have supplied this customer the same product for 60 years. Being able to maintain the business for such a long time shows the strength in Haldex’s product offering. Haldex has also signed two agreements for ABA in China and Southeast Asia, which strengthens our already strong position for this product offering in Asia.
With our size, we have an advantage of being flexible which allows us to react quickly to change. We want to maximize this potential and are reviewing what changes to implement to become even more agile. We aim to continue to optimize our business and we see further opportunities within our operations. Through several initiatives, for example improved inventory management processes, we are taking steps to improve our operational efficiency.
Following the ongoing military attack on Ukraine, Haldex has suspended trade with Russia and Belarus. Haldex’s sales in Russia are limited and therefore the direct impact is minimal. Haldex has increased the focus on trade and sanction compliance to ensure that we handle this increased risk in a good way. The war in Ukraine may affect the future prospects of both us and our customers and lead to further raw material and electricity price increases and continued challenges in the already constraint supply chain. Furthermore, there is uncertainty as to how the situation with covid-19 in China will affect both us and our customers going forward. We are closely monitoring developments and the impact on both our business and employees and will continue to take necessary measures.
In summary, the first quarter of 2022 was a step in the right direction with several milestones reached, despite the continued impact of the challenges in the supply chain and the geopolitical situation. We are continuing with our strategic plan to fine-tune and optimize the current business model while capturing the strategic opportunities for the future. Our strategy has been well received, where customer feedback confirms that we are on the right track. We are hopeful to share more exciting news in the upcoming months. We are well-positioned to continue to take the lead and develop braking solutions that meet customer challenges and exceed their expectations.
For further information, please visit, www.haldex.com/en/corporate or contact:
Jean-Luc Desire, President & CEO
Lottie Saks, CFO
Jenny Boström, Investor Relations Manager
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 the contacts set out above on Thursday, April 28, 2022 at 7.20 am CEST.
Investors, analysts, and media are invited to an online presentation of the report on Thursday April 28, at 11.00 am CEST, with CEO Jean-Luc Desire and CFO Lottie Saks. The teleconference will be broadcasted live on the web.
Link to webcast and numbers to the teleconference:
The recorded webcast will be available afterwards, and both the interim report and the presentation can be downloaded from the Haldex website: https://www.haldex.com/en/corporate/investors/financial-reports/
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.
Over 100 years of powerful innovation gives Haldex unsurpassed expertise when it comes to braking systems and air suspension systems for heavy trucks, trailers and buses. We live and breathe our business with the goal to deliver robust and technically superior solutions which is founded in a deep insight in our customer’s reality. Through focusing on our core competences and the passion we all share, we achieve the agility and flexibility that the market demands. Innovative collaborations aren’t only the core of our products, but our philosophy. Our 2 000 employees, spread out across four continents, challenge the conventional on a daily basis in order to secure that the products we deliver create a unique value to our customers and the end users. We are listed on Nasdaq Stockholm and have a turnover of approx. 4.6 billion SEK.