Full-year Report 2010year Report 2010

Full-year Report 2010Full year Report 2010

Joakim OlssonCEO and PresidentFebruary 22, 2011

2011-02-22

Summary 2010

● Sales of SEK 6 906m (5 622)

Summary 2010

● Sales of SEK 6,906m (5,622)● Sales increased by 34%, adjusted for currency and divestments● Sales in Q4 of SEK 1,705m (1,385), an increase of 28% currency adjusted

● Decreased by 2% compared to third quarter 2010 currency adjusted

● An increase in demand was noticed within all product segments and regions during 2010

● Adjusted Operating Income of SEK 459m (-79)● Operating margin 6.7% (-1.5)● Operating income in Q4 of SEK 129m (-24) and a margin of 7.5% (-1.8)● Second quarter in a row with a margin above Group target of 7%● Second quarter in a row with a margin above Group target of 7%● Continued operations, excluding restructuring costs, one-off items and

amortization of acquisition related surplus values

O ti I f SEK 282 (155)● Operating Income of SEK 282m (155)● Operating margin 4.1% (2.8)

2011-02-22Innovative Vehicle Technology 2

Summary 2010● Earnings after tax of SEK 131m (75)

● Earnings per share of SEK 2:87 (1:86)*

y

● Cash Flow amounted to SEK 252m (847)● Reduced net debt to SEK 684m (985)● Cash Flow from operating activities was positive SEK 441m (189)

● The Board of Directors proposes a dividend of 33 SEK per share● Ordinary dividend of 3 SEK● Extraordinary transfer of 30 SEK per share by a redemption of shares● Extraordinary transfer of 30 SEK per share by a redemption of shares● This corresponds to a total of SEK 1,447m

● Divestment of Traction Systems Division to BorgWarnerC l t d J 31 t 2011● Completed on January 31st 2011

● Purchase price of SEK 1,425m on cash debt free basis● Capital gain of approx. SEK 1,100m

● The reorganization of the Group into two separate listed companies, Commercial Vehicle Systems and Hydraulic Systems Division, is proceeding according to plan● Proposal will be submitted to the shareholders at the AGM on June 8th 2011


● Proposal will be submitted to the shareholders at the AGM on June 8 2011* Adjusted to the same amount of shares as in 2010

Business Event 2010Business Event 2010

● Haldex secured an order for automatic brake adjusters to a leading European j g pOEM● Order value approx. 300 MSEK● Contract valid until 2018

● Start of serial deliveries of the successful Alfdex oil-separator to three new customers● Paccar, Navistar and John Deere

SOP i Q4 2010● SOP in Q4 2010

● Development tests for variable water- and oil pump for Euro 6 Engines successful● Fuel savings of 0.5-3%● Development contract with several European Truck manufacturer● SOP 2013

Innovative Vehicle Technology 42011-02-22

Business Event 2010O d th SEK 1 000 f i di b k tOrder worth SEK 1,000m for air disc brakes to SAF Holland

● A major break through for Haldex’s air disc brake product line

● ModulT – a new air disc brake platform for various applications within the truck, bus and trailer segments.

● 22” version intended for 9t trailer axles the first product . ● Significantly lighter than a conventional air disc brake – 15% weight saving and the lightest 22” trailer

brake available

● SEK 1,000m over a five year period. In addition the order will generate aftermarket deliveries for many years to follow

● Deliveries will start in Q2 2011

2011-02-22

Cost Reduction ProgramPersonnel Reduction

● The earlier launched (mid 2008) cost reduction program generated approx. SEK 700m until 2009SEK 700m until 2009

● The program continued and was ended in 2010● Initiated actions 2010 will generate approx SEK 100m in annual cost reductions● Initiated actions 2010 will generate approx. SEK 100m in annual cost reductions● Consolidation of two Hydraulics factories in the US and a personnel reduction in the Hydraulics

factory in Germany● Further concentration of Haldex CVS’ North American manufacturing to the plant in Monterrey,

MexicoMexico

● Since 2006 a substantial consolidation and optimization of the Manufacturing Footprint has been doneFootprint has been done˗ Low cost country presence built˗ Substantially lowering the break even point

Number of facilities 2006 2011Number of facilities 2006 2011Production units 21 18

Out of which in HCC 16 9

Out of which in LCC 5 9

2011-02-22

Distribution centre 7 4

Reorganisation of Divisions into two S t Li t d E titiSeparate Listed Entities

● The Haldex Board of Directors will propose ● The reorganisation of the Group is Update

● The Haldex Board of Directors will proposea distribution of the divisions of Haldex

● Haldex shareholders will subsequentlyown shares in two separate listed companies instead of a single compan

g pproceeding according to plan

● The process for a separate stockexchange listing started at the beginning of 2011 and is planned for June 2011companies instead of a single company

● The intention is to submit this proposal to shareholders at the AGM 8th of June 2011

● The Haldex Board of Directors will propose

of 2011 and is planned for June 2011

● The cost of the reorganisation is estimated to approx. 100 MSEK● Cost in 2010 was 54 MSEK● The Haldex Board of Directors will propose

a distribution in accordance with the so-called Lex Asea rules

● Traction Systems Division divested to BorgWarner Inc. January 31st 2011

ShareholdersShareholders Divested

HALDEX AB

CVS H d li T i

Hydraulics TractionCVS

8Innovative Vehicle Technology 8

CVS Hydraulics Traction

2011-02-22

Vehicle Production* – 2010 vs. 200912 months 4th quarter12 months 4 quarter

North America Europe North America EuropeHeavy trucks +29% +62% +18% +85%Heavy trailers +55% +31% +88% +57%Heavy trailers +55% +31% +88% +57%Light vehicles +38% +14% +5% +3%Forklifts +24% +11% -% +13%Engine +41% +21% +52% +16%Engine +41% +21% +52% +16%

● An increase in demand was noticed within all product segments and regions during 2010● Production effect in 3rd quarter due to new emission regulation for Tier 4 engines and some customer inventory build up

● In 2011, heavy truck production is expected to increase by 55% in North America and by 32% in Europe compared to 2010.

● The official outlook indicates the second half 2011 to be stronger than the first.● Europe expected to remain on a similar level as second half 2010● North America expected to continue to increase from second half 2010 levels● North America expected to continue to increase from second half 2010 levels

● In 2011, trailer production in North America is expected to increase by 58%, while European production is predicted to increase by approx. 20% compared to 2010.

● The official outlook indicates evenly spread production rates between the first and the second half 2011● Second half year 2010 was much stronger than the first half year in North America● Second half year 2010 was much stronger than the first half year in North America

● Construction equipment indicate an increased production rate for both North America and Europe in 2011 compared to 2010. Engine is expected to grow by 19% in North America and 14% in Europe in 2011 compared to prior year. The outlook for Forklifts indicates growth in both the North American and European markets y-o-y 2011.

● Indicating a small growth from current run-rates


Indicating a small growth from current run rates

* Based on statistics from JD Powers, ACT, Clear, Power System s Research, Off-highway Research and International Truck Association Q4 2010 update

Market data – Q4 update-Heavy truck build rates

Heavy Truck build rates NA, >15t Heavy Truck build rates EU, >15t

20%3%29%

4%

4%

600

700

350

400

32%-18%

29%

55%-44% -3%

16%19%

400

500

in th

ousa

nds

250

300

in th

ousa

nds

62%

29%-42%

200

300Uni

ts

100

150

200

Uni

ts

-66%

1002006 2007 2008 2009 2010 2011 2012 2013 2014

50

100

2006 2007 2008 2009 2010 2011 2012 2013 2014

CAGR 2009-2014ENA, JDP

16 6%

CAGR 2009-2014EEU, JDP26 1%

Truck EU, JDPTruck NA, JDP

2011-02-22

16.6% 26.1%

Note: JDP data – official statistics per December 2010

Market data – Q4 update-Heavy trailer build rates

Heavy Trailer build rates NA Heavy Trailer build rates EU

24%8%

-14%

40%300

350

350

400

-12%-24%

58%

21%15%

6%12%

-14%

200

250

s in

thou

sand

s

200

250

300

s in

thou

sand

s

-32%55% 31%

61%100

150Uni

ts

100

150

200

Uni

ts

-47%-61%

502006 2007 2008 2009 2010 2011 2012 2013 2014

502006 2007 2008 2009 2010 2011 2012 2013 2014

CAGR 2009-2014ENA, JDP

23 5%

CAGR 2009-2014EEU, CLEAR

16 6%

Trailer NA, JDP Trailer EU, CLEAR

2011-02-22

23.5% 16.6%

Note: JDP data and CLEAR – official statistics per December 2010

Cast Iron Scrap, DGV Price trend in EuropePrice trend in Europe

2011-02-22

Aluminum priceAluminum price

Aluminium USD/ton LME (3 year chart) Aluminium USD/ton LME (12 month chart)

11 % i 12 th-6 % in 3 years +11 % in 12 months

Aluminium USD/ton LME (3 month chart)

+1 % in 3 months

2011-02-22

Actual 2010

Nom Xadj

SEKm

Sales 1)

9000

Sales 6,906 (5,390) 28% 34%

Sales1) 6 906 (5 622) 23% 29% 7000

7500

8000

8500

9000

Sales ) 6,906 (5,622) 23% 29%

Sales● Commercial Vehicle

S t 3 710 18% 25%5500

6000

6500

7000

IV 09-I II III IV 10-I II III IVSystems 3,710 18% 25%

● Hydraulic Systems 1,977 41% 49%● Traction Systems 1,219 43% 44%

IV 09 I II III IV 10 I II III IV

R12

Sales 1)

2100

● NA 3,190 25% 32%● EU 3,040 30% 37%● Asia & ME 454 26% 31%● SA 222 48% 40%

1500

1700

1900

● SA 222 48% 40%

1) Sales including Discontinued Operations900

1100

1300

IV 09-I II III IV 10-I II III IV


1) Sales including Discontinued Operations

(Traction Systems treated as continued operations).


Actual 2010SEKm

O ti I 2)

OPERATING INCOME 1) 459 (-79) Discontinued Operations - (-52) Restructuring costs -129 (-69)

Operating Income 2)

100

200300400500

Restructuring costs 129 ( 69)One-off items -19 (386) Amortization PPA -29 (-31)OPERATING INCOME 282 (155) -300

-200-100

0100


2010 2009Operating Income 2)

125150

09 0

R12

2010 2009● CVS 162 -60● Hydraulic Systems 179 -47● Traction 118 29 -75

-50-25

0255075

100125

-225-200-175-150-125-100



Excl restr incl rest1) Adjusted Operating Income (Traction Systems treated as continued operations)

2) Adjusted Operating Income incl. Discontinued Operations

Development per division - CVSSEKm 2010 2009 ChangeNet sales 3 710 3 134 18%Operating income1 162 -60 N.AOperating income 110 -112 N.AOperating margin1 4.4% -1.9% 6.3Operating margin 3.0% -3.6% 6.6Return on capital employed2 5.9% 5.1% 0.8

● 2010 sales increased with 25% compared to 2009 currency adjusted

1 Excluding restructuring costs.2 Rolling 12 months

● The increase was noticed within all segments and regions.● Sales in the Q4 were slightly down on Q3 2010 due to currency effects, less shipping days and customer

inventory adjustments during the third quarter

● Operating income1 SEK 162m, an improvement of SEK 222m compared to last year● An operating margin1 of 4.4% (-1.9)● Improved operating income through stronger volumes and the lower cost level● The operating margin in Q4 of 4.3% (-0.4) was lower than in Q3 due to lower salesp g g Q ( ) Q

2011-02-22 18

Development by division - HydraulicsSEKm 2010 2009 ChangeNet sales 1 977 1 406 41%Operating income1 179 -47 N.AOperating income 109 -91 N.AOperating margin1 9.1% -3.4% 12.5Operating margin 5.5% -6.5% 12.0Return on capital employed2 7.2% -5.0% 12.2

2 3 15 0% 7 6% 22 6Return on capital employed2,3 15.0% -7.6% 22.61 Excluding restructuring costs and amortization of acquisition-related surplus values.2 Rolling 12 months.3 Adjusted for acquisition-related surplus values.

● 2010 sales increased with 49% compared to 2009 currency adjusted● Sales increased by 2% in Q4 compared to Q3 2010 currency adjusted, despite less shipping days and the

inventory adjustment and pre-buy effect that was noticed during the third quarter ● Sales volumes remained steady within all segments● Sales volumes remained steady within all segments

● Operating income1 of SEK 179m (-47) with an operating margin1 of 9.1% (-3.4)● Operating income1 of SEK 60m (10) in Q4, an operating margin1 of 11.5% (2.7)● The operating income continued to improve due to increased sales volumes and a maintained cost structure● The operating income continued to improve due to increased sales volumes and a maintained cost structure

2011-02-22 19

Development by division - TractionSEKm 2010 2009 Change

Net sales 1 219 850 43%1 118 29 N AOperating income1 118 29 N.A

Operating income 118 26 N.AOperating margin1 9.7% 3.4% 6.3Operating margin 9.7% 3.1% 6.6Return on capital employed2 56.8% 12.7% 44.1

1 Excluding restructuring costs2 Rolling 12 months

● 2010 sales increased with 44% compared to 2009 adjusted for currency● Sales in Q4 increased by 6% compared to Q3 2010 currency adjusted

● Operating income1 amounted to SEK 118m (29), an operating margin1 of 9.7% (3.4)● Operating income in Q4 of SEK 31m (17) an operating margin of 10 0% (6 9)● Operating income in Q4 of SEK 31m (17), an operating margin of 10.0% (6.9)

2011-02-22 20

Actual 2010SEKm

Income Bef Taxes400

INCOME BEF TAXES 178 (54) N.A

Fi i l t 104 101 3% -100

0

100

200

300

● Financial costs -104 -101 +3%

-400

-300

-200

-100

IV 09-I II III IV 10-I II III IVR12

NET INCOME 131 (75) 75%

R12

Income Bef Taxes

200250300350

INCOME 131 (75) 75%

● Taxes -47 (21) N.A● Tax rate % 26 (39) N.A

150-100

-500

50100150200

-350-300-250-200-150


2011-02-22

Actual 2010SEKm

CAPEX 410

CAPITAL EXPENDITURES 164 (120) +37%(Tangible assets)

210

250

290

330

370

2010 2009Commercial Vehicle Systems 119 79Hydraulics Division 16 28

90

130

170

210

III IV 09-I II III IV 10-I II III IV

Traction Systems 29 13Discontinued operations - 6

D i ti 233 257

R12

CAPEX

120

140

Depreciation -233 -257

60

80

100

120

0

20

40


2011-02-22


Actual 2010SEKm

Cash Flow

500

60078

2010 2009OIBD* 608 87 100

200

300

400

500

1234567

Working capital change -27 203

Capital expenditure -212 -169 -200

-100

0

100

IV 09-I II III IV 10-I II III IV-4-3-2-10

Operating Cash Flow** 369 121Financials -108 -108

Taxes -32 7

R12 % Sales

Cash Flow

280330380

Cash Flow 229 20

-203080

130180230280

-270-220-170-120

-7020



* 2010 including restructuring costs of SEK 129m (69)** Cash Flow from operating activities, continued operations SEK 372m (188).

Actual 2010Actual 2010BALANCE SHEET, SEKm

2010 2009 Nom

● Working Capital 467 572 -18%

● Intangible assets 1,552 1,715 -10%

● Capital Employed 3,553 3,794 -6%

● Total Assets 5 053 5 039 %● Total Assets 5,053 5,039 -%

● Net Indebtedness 684 985 -31%

● Equity 2,351 2,373 -1%

● Equity/assets ratio 47% 47%

● Net indebtedness 28% 42%● Net indebtedness 28% 42%

2011-02-22

F di f D 2010Funding as of Dec, 2010

Source Currency Nominal amount Unutilized MaturitySource Currency Nominal amount Unutilized Maturity

Syndicated loan facility USD 125.000.000 107.132.000 2012

Bond Loans SEK 650.000.000 2015

Short terms facilities Local SEK eqv. 100.000.000 100.000.000

Accounts receivable Sell USD 35.000.000 13.630.000 2012

Funding as per Dec 31, 2010 SEK 1.796.000.000 1.117.000.000


OutlookOutlook

● 2011 Market Outlook indicates expected growth in most marketsp g

● The Cost Reduction Program has had a positive impact and focus will remain on maintaining the improved cost level ● The Cost Reduction Program ended with the last announced activities

● Higher raw material cost expectedg p

● The strengthening of the SEK will continue to have an impact

● Two well positioned divisions that can continue their successful development as stand-alone companies● Good trend towards the Group Financial Targets● A certain increase in costs during the first half year 2011 due to additional corporate

costs in the Divisions

2011-02-22

Innovative VehicleVehicle

Technology

2011-02-222008-07-18

Documents

Full-year Report 2010year Report 2010