DGAP-Adhoc: SAF-HOLLAND S.A.: SAF-HOLLAND meets targets for 2007 and gives positive outlook for 2008

SAF-HOLLAND S.A. / Final Results

31.03.2008 

Release of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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- Consolidated sales rise to €812.5 million:                               
+4.5%, on a constant currency basis +7.9%
- Adjusted EBIT of €60.5 million, in line with forecast
- Recommended dividend of 42.47 Euro cent per share
- Outlook 2008: further strong growth and increase in profitability


Luxembourg, 31 March 2008 – SAF-HOLLAND S.A., a world-leading producer and
supplier of key systems and components for the truck and trailer
industries, has seen a solid increase in sales over the last financial
year, thanks to consistently high demand in Europe. In view of the
successful financial year, the Board of Directors will recommend to the
General Meeting of Shareholders on 24 April 2008 that a dividend of 42.47
Euro cent per share should be paid already for the year of the IPO. This
would result in a total dividend payment of €8.0 million.

Fast-rising sales in Europe
In the 2007 financial year, consolidated sales rose by 4.5% to €812.5
million (2006 PF: €777.8 million). On a constant currency basis the
increase is by 7.9% to €839.0 million. The strongest growth of 29.2% was
achieved in the European markets. With sales of €519.7 million, the
European share of total sales rose continuously over the course of the year
to 64%. The importance of the American market, on the other hand, continued
to fall short as expected. Owing to the regulatory framework, and a
slowdown in sales triggered by the property crisis in the US, sales reached
€292.8 million in the period (on a constant currency basis: €319.3 million)
compared to €375.6 million the previous year. SAF-HOLLAND reacted to this
development by adjusting production capacities in the US and reducing
personnel. Correspondingly, the number of SAF-HOLLAND employees fell by
9.3% to 2,974 at the end of 2007, compared with 3,279 the previous year.

In order to better understand the operating result, it was adjusted for
unusual influences arising from the company acquisitions as well as further
transaction costs. Adjusted EBIT stood at €60.5 million and the adjusted
net profit for the 2007 financial year came to  €22.3 million, which meant
that the results were within the announced forecasts.

Sustainable growth momentum in Trailer Systems
The trailer business, which represents 68% of group sales showed a
continuously positive development in 2007. Against the background of strong
growth in transport volumes in Europe, sales in this business unit rose by
16.5% (on a constant currency basis: 18.5%) to €551.1 million (2006 PF:
€473.0 million). Due to the increasing trade flows between eastern and
western Europe, SAF-HOLLAND expects the demand to continue to rise strongly
in 2008. The gross margin of 12.3% (2006 PF: 14.0%) was affected by
increased material costs and an under-utilisation of production capacities
in the US. In the medium term, the company is aiming to bring the gross
margin back to its level of 2006. Measures to reduce costs and thus
increase profitability have already been introduced over the past financial
year.
In the Powered Vehicle Systems business unit (systems for tractors, buses
and mobile homes), SAF-HOLLAND was able to further increase its market
share in the US. However, the development of sales was significantly marked
by the introduction of new emission standards in the US on 1 January 2007,
and the resulting pull-forward investments made by truck fleet operators in
2005 and 2006. This led to an expected market downturn of approximately 40%
in 2007. Whereas sales decreased only by 28.9% (on a constant currency
basis: 22.4%) from €114.3 million to €81.3 million. Based on favourable
product mix, the gross margin rose from 12.1% to 14.0%.

The Aftermarket business unit generated sales of €180.1 million in 2007
(2006 PF: €190.5 million). While the European business was able to grow
considerably (+14%), sales in North America fell by 15% owing to the
conditions mentioned above (exchange-rate adjusted 7.3%). The gross margin
rose slightly to 34.6% (2006 PF: 34.2%) and is expected to remain at this
level. In 2007, in the context of optimising operating processes,
SAF-HOLLAND also began to concentrate the administrative and sales
functions of the Aftermarket business unit for Europe at a single location
in Aschaffenburg. This process was successfully completed in the first
quarter of 2008. The newly created structure will make an important
contribution to further increasing productivity and improving customer
services.


Continuous expansion of production capacities
Due to the high demand for SAF-HOLLAND products, particularly in Europe,
incoming orders exceeded the manufacturing capacities in 2007. In order to
meet this increased demand in the long term – and in order to build on its
strong position amongst the global competition – SAF-HOLLAND is making the
investments necessary to expand its capacities. Axle production capacity in
Europe already rose by 25% in 2007, and will increase by another 20% in
2008. Another focus of investment in the current financial year will be the
set-up of the company's axle production in the US.

Research and development
Expenditure on research and development (R&D) came to €11.8 million in
2007, compared with €12.1 the previous year. This represents an R&D quota
of 1.5% (2006 PF: 1.6%). One important investment in 2007 was the
commissioning of the R&D testing laboratory in Bessenbach. Total investment
for this item was €4.4 million. The R&D department focuses on reducing
weight, improving energy efficiency, cutting total operating costs of our
products and developing new technologies.

Good prospects for 2008
SAF-HOLLAND expects further strong growth in the current financial year of
2008 based on a consistently high trend of demand in Western Europe, and
additional potential from the important growth markets of Eastern Europe,
Brazil and Asia. SAF-HOLLAND expects a sales volume of between €900 million
and €950 million in 2008. Based on the expected increase in sales and
economies of scale, the company’s profitability is as well expected to
increase. SAF-HOLLAND is therefore targeting an adjusted EBIT margin of
8 to 8.5% in the 2008 financial year.



Investor Relations: 
Sandra Fabian, CNC AG
+49 6095 301 865 
Sandra.Fabian@safholland.de


DGAP 31.03.2008 
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Language:     English
Issuer:       SAF-HOLLAND S.A.
              68-70, boulevard de la Pétrusse
              L-2320 Luxemburg
              Luxemburg
Phone:        +49 6095 301 - 0
Fax:          +49 6095 301 - 260
E-mail:       info@safholland.de
Internet:     www.safholland.com
ISIN:         LU0307018795
WKN:          A0MU70
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Düsseldorf, Hamburg, München, Stuttgart
End of News                                     DGAP News-Service
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