Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
Innovative Vehicle Solutions
Second Quarter 2020 - Investor conference call
1
Innovative Vehicle Solutions
Presentation of the second quarter 2020
Business overview
Financial overview
Key priorities going forward
Q&A
2
Today’s agenda
Helene Svahn, President & CEO
Lottie Saks, CFO
Presenters
Innovative Vehicle Solutions
Sharply reduced sales, signs of recovery in
aftermarket at end of the quarter
▪ Extremely weak market conditions due
to covid-19
− Currency adjusted sales down -37%
▪ Adjusted operating margin -0.3%
− Non-recurring items of SEK 148m
▪ Powerful Savings programs initiated of
SEK 200m. Implementation on track
▪ Long-term financing solution in place
− A new directed share issue of SEK
157m
− Prolongation of loans until April 2022
▪ New Board and Chairman of the Board
elected at AGM
3
Highlights Q2
Innovative Vehicle Solutions
▪ The global truck market outlook has deteriorated dramatically, with an initial
supply shock emanating from China in Q2 turning into a wide-ranging global demand
drop
▪ Global truck production declining by 23%, during the financial crisis the drop was 38%
▪ A recovery is expected by 2022
Recovery of the truck market after Covid-19 crisis is
expected 2022, similar recovery as after the 2008/09
crisis
4
Global Truck Production [million CVs]
Data Source: LMC automotive
2013 2014 2015 20162006 2018 2019 2020 2021
2,4
20232022
2,53,0
1,5
2,12,22,7
3,2 3,32,9
3,54,0 3,9 3,8
3,5
2007
3,7
2017
3,02,5
20092008 20122010 2011
-38%
+42%
30%
+18%
-23%
+15%
11%
+8%
North America
APAC
South America
EMEA
Innovative Vehicle Solutions
North America
▪ Sharp decline due to covid-19. OEM revenue down
65%, OEM customers resumed production towards
the end of the quarter
▪ The aftermarket was down 24% but shows resilience
with positive signs in June
▪ Uncertainty regarding the impact of accelerating
number of covid-19 cases
▪ Closure of Blue Springs and Friction Centers run
according to plan
▪ Continued focus on driving aftermarket sales and
increasing efficiency
SEK million Q2/20 Q2/19 change1
Truck 46 190 -76%
Trailer 64 126 -49%
Aftermarket 321 416 -24%
Total 431 732 -42%1 currency adjusted
RevenueSEK m
Build rates
new vehicles
Thousands
Current fleet
Thousands
349 363 346416 392 361 397
321
122 99 135
126 13294
105
64
158 153190
190162
116109
46
0
100
200
300
400
500
600
700
800
Q2/19Q1/19Q4/18 Q2/20Q3/18 Q4/19Q3/19 Q1/20
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
0
500
1 000
1 500
2 000
2 500
3 000
20232018 20202019 2021 2022
Market predictions
2020
Truck -59%
Trailer -50%
5
Innovative Vehicle Solutions
Europe
▪ Sharp decline due to covid-19. OEM revenue
down 40%. OEM customers resumed
production towards the end of the quarter
▪ Aftermarket revenue down 20% but shows
resilience with positive signs of recovery in
June
▪ New contract signed with Wielton Group for
EBS and air control products. Another contract
renewed with major ADB customer
▪ Closure of Heidelberg plant is on track and will
be fully completed in q4
▪ Continued development work with major truck
OEM based on successful winter tests 2020 of
SBS
6
SEK million Q2/20 Q2/19 change1
Truck 25 49 -46%
Trailer 137 224 -39%
Aftermarket 140 175 -20%
Total 302 448 -32%1 currency adjusted
RevenueSEK m
Build rates
new vehicles
Thousands
Current fleet
Thousands
186 161 188 175 189 166 178140
209211
241224 184
153
198
137
4547
5149
40
37
41
0
50
100
150
200
250
300
350
400
450
500
Q4/18Q3/18 Q2/19Q1/19 Q1/20Q4/19Q3/19
25
Q1/20
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
0
500
1 000
1 500
2 000
2 500
3 000
2018 20232022202120202019
Market predictions
2020
Truck -34%
Trailer -20 to -30%
6
Innovative Vehicle Solutions
Asia & Middle East
• The business in China recovered from initial covid-
19 disruptions. OEM revenue down 6% in the
quarter
• India severely impacted, OEM revenue down 82%
• Aftermarket revenue down 33% mainly due
reduced bus travels throughout the region
• Vehicle tests of the electromechanical braking
system continue and additional test vehicles were
equipped during the second quarter
SEK million Q2/20 Q2/19 change1
Truck 68 84 -18%
Trailer 42 49 -15%
Aftermarket 12 19 -33%
Total 122 152 -19%1 currency adjusted
RevenueSEK m
Build rates
new vehicles
Thousands
Current fleet
Thousands
21 19 21 19 17 21 14 12
4337
50 49 4653
44 42
9489
72 84
64
90
53 68
0
20
40
60
80
100
120
140
160
180
Q4/18Q3/18 Q2/19 Q4/19Q1/19 Q3/19 Q1/20 Q2/20
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
0
500
1 000
1 500
2 000
2 500
3 000
20212018 2019 2020 2022 2023
Market predictions
2020
Truck -14%
Trailer 2%
7
Innovative Vehicle Solutions
South America
▪ Build rates for 2020 is expected to drop -32%
for trucks which is the most important category
▪ OEM revenue in South America dropped 67% as
several OEMS closed their production
▪ Negative currency effects impacted profitability
SEK million Q2/20 Q2/19 change1
Truck 5 32 -76%
Trailer 3 4 2%
Aftermarket 12 21 -21%
Total 20 57 -50%1 currency adjusted
RevenueSEK m
Build rates
new vehicles
Thousands
Current fleet
Thousands
20 19 18 21 22 25
1612
4
4
21 24 24
32 3221
21
5
0
5
10
15
20
25
30
35
40
45
50
55
60
Q2/19Q4/18
3
Q1/19Q3/18
32 3
Q3/19
3
Q4/19 Q1/20
3
Q2/20
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
0
500
1 000
1 500
2 000
2 500
3 000
202020192018 2021 2022 2023
Market predictions
2020 Truck -32%
8
Innovative Vehicle Solutions9
Financial highlights second quarter
Innovative Vehicle Solutions
▪ Truck sales decreased -58%– Sharp downturn in North America, -
76%
‒ Lockdown in India 2mts -90%
‒ 1% growth in China
▪ Trailer market dropped -39%‒ Still weak demand in EMEA, -39%
‒ North America down -49%
▪ Aftermarket drop -23%‒ Aftermarket dropped more than
expected in Q2
‒ North America poor development -24%
‒ EMEA -20% but June improved after
April-May lockdowns
▪ Almost no currency effects
10
Sales bridge second quarter 2020
Sharp downturn in Q2 for Total Haldex Sales but
signs of improvement in Aftermarket
631
879 875
403
355
Sales
Q2 19
Curr Adj
Sales
Q1 20
Trailer
-147
-206
Aftermarket Sales
Q2 20
Truck
-156
-5
Curr effect
Truck
Trailer
Aftermarket
1 389
-37%
57 41 20216 158 146 143 152 127 164 111 121
485439 420 480 448
413 357 417302
629628 615
671 732685
571 611
431
454441
Q2 2018
45
Q3 2018 Q1 2019Q4 2018
57
Q2 2019 Q3 2019
49
Q4 2019 Q12020 Q2 2020
1 3711 2821 271
1 2251 180
1 3401 389
1 140
875
Asia & Middle EastNorth America Europe South America
(42)%
(32)%
(19)%
(58)%
(39)%
(23)%
1 ) currency adjusted
1 ) Growth Q2 vs Q2
Currency Adjusted
1 ) Growth Q2 vs Q2
Currency Adjusted
Innovative Vehicle Solutions
▪ Truck sales decreased -47%– Softer market in Q1 in North America
with additional Covid-19 effect in Q2, -
61% ytd
‒ Lockdown in India, no demand -70%
‒ China -9% YTD, with Q1 Covid effect and
flat in Q2
▪ Trailer market dropped -29%‒ EMEA dropped , -28%, main effect from
Q2 Covid-19
‒ North America down -37%
▪ Aftermarket drop -11%‒ Strong Q1 was followed by a weak Q2
‒ Aftermarket expected to recover quicker,
positive signals from EMEA end of Q2
▪ Small currency effects, positive 1%
11
Sales bridge year to date 2020
First half year with really low Sales
1 205
2 027 2 055
832
691
Curr Adj
Sales
YTDQ2 20
-137
TruckSales
YTD 19
AftermarketTrailer
-323
-241
28
Curr effect
2 728
Sales
YTD 20
Truck
Trailer
Aftermarket
-26%
(47)%
(29)%
(11)%
1 ) Growth Q2 vs Q2
Currency Adjusted
Innovative Vehicle Solutions
Major Sales Drop and high focus on Cost Cutting
▪ Substantial drop in net sales volume in Q2
-37%, highly impacting EBIT
▪ Favorable Product mix where After market
increased from 45% to 55% of total sales.
Still, sales drop higher than expected
▪ Cost reductions total SEK 49m whereof 37
was related to general savings initiative in
bonus, travel, furlough etc, 7 reversal of
bonus accrual from Q1
▪ Cost reduction also included impact from
Strategic Structural savings program of 5
for closure of Friction center in NA
▪ One-time costs related to Cost Base Adj
savings program SEK -34m. Costs for
Structural savings program Friction Center
SEK-8m and Heidelberg SEK-6m.
▪ In addition, write-down of Intangible Asset
Module-T SEK-40m, write down of AX12
intangible SEK-60m
12
EBIT Bridge Q2 20 vs Q2 19
6,0%
-1,5% 0,9%
0,5%
0,2%6,1%
73,091,0
-3,0
-151,0
18,0
4,0
One-
time
2019
ADJ
EBIT
Q2 20
EBIT
Q2 19
VolumeADJ
EBIT
Q2 19
-179,0
26,0
Product
Mix
DM
savings
49,0
Cost
reduction
6,0
other
-148,0
One-
time
2020
EBIT
Q2 20
1
1 2
3
2
34
4
Innovative Vehicle Solutions
Sales drop puts pressure on profitability
▪ Substantial drop in net sales in YTD -26%
▪ Aftermarket product mix favourable. AM
share increase from 44% to 53%. Q1 good
progress, but Q2 big drop
▪ DM savings favourable, mainly from North
America
▪ Cost reductions total SEK 47m whereof 38 is
related to general saving in bonus, travel,
furlough etc
▪ Cost reduction also included impact from
Strategic Structural savings program of 9 for
closure of Friction center in NA
▪ One-time costs related to Cost Base Adj
savings program SEK -34m. Costs for
Structural savings program Friction Center
SEK-14m and Heidelberg SEK-6m. Legal
costs SEK -6m
▪ In addition, write-down of Intangible Asset
Module-T SEK-40m, write down of AX12
intangible SEK-60m
13
EBIT Bridge YTD 20 vs YTD 19
6,0%
-1,5% 0,9%
0,5%
0,2%6,1%
170,0188,0
39,0
-121,0
One-
time
2019
54,0
EBIT
YTD 19
18,0
Fixed
Cost
reduction
ADJ
EBIT
YTD 19
-276,0
Volume Product
Mix
ADJ
EBIT
YTD 20
11,0
DM
savings
47,0
15,0
other
-160,0
One-
time
2020
EBIT
YTD 20
1 2 3 4
1
3
2
4
Innovative Vehicle Solutions
Margin optimisation and Profit Protection
14
Substantial Long-term Structural savings program of SEK ~200m in annual saving
▪ Foot-Print Optimisation related savings program implemented
− Annual savings of SEK ~100m
− Expected saving 2020 SEK 35m. Impact Q2 ~SEK 5m, YTD Q2 SEK ~9m
▪ Cost Base Adjustment (FTE) savings program implemented
− Annual target savings of SEK 100m
− Expected saving 2020 SEK 25m. Impact from Q3
Non-recurring cost
Initiatives, MSEK Start Total 2019 2020
Estimated
Annual
Savings
Friction Center May 2019 18 5 13 28
Heidelberg Sep 2020 156 143 13 50
Blue Springs Oct 2020 29 24 5 25
Cost Base Adjustment July 2020 tba 0 34 100
Total 203 172 65 203
▪ Summary Long-term Structural savings program
− Annual savings of SEK ~200m
− Expected saving 2020 SEK 60m. Impact Q2 5, YTD Q2 SEK ~9
Innovative Vehicle Solutions
Initiatives, MSEK Start Total Q2 YTD Q2
Rest of
Year 2020
LONG TERM STRUCTURAL SAVINGS
PROGRAM
Foot Print Optimisation May 2019 103 5 9 26 35
Cost Base Adjustment jul-20 100 0 0 25 25
Subtotal 203 5 9 51 60
Short Term Savings Program apr-20 70 32 33 27 60
Subtotal Initiatives 37 42 78 120
Furlough 5 5 5 10
Adjustment Accrual 7 0 0 0
Subtotal Other items 12 5 5 10
Grand Total Short term Cost impact 44 38 32 70
GRAND TOTAL Cost Reductions 49 47 83 130
Margin optimisation and Profit Protection
15
Short-term savings program
▪ Additional Short-term savings program initiated
− 2020 reduction of bonus and savings in travel, consultants plus furlough
− Expected saving 2020 SEK 70m (60+10). Impact Q2 ~SEK 37m (32+5), YTD Q2 38 (33+5)
Total reduction
2020
Innovative Vehicle Solutions
Earnings
SEK m Earnings per share
16
SEK 148 m in one-off
items in Q2
SEKSales & Margins
Revenue
Gross
margin
Operating
margin
Q2/20 Q2/19 change
Gross margin, % 26.1 25.7 0.4
Operating income, SEK million -151 73 -224
Operating income (excl one-off items), SEK million -3 91 -94
Operating margin, % -17.2 5.3 -22.5
Operating margin (excl one-off items), % -0.3 6.5 -6.8
Operating margin (excl new technology), % 0.8 7.4 -6.6
Net income, SEK million -139 49 -188
Earnings per share, SEK -2.95 1.11 -4.06
%
-5,0
0,0
5,0
10,0
15,0
20,0
25,0
30,0
0
200
400
600
800
1 000
1 200
1 400
Q4/19Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q1/20
875
Q2/20
26
0
-3
-1.00
-4.00
0.00
-3.00
2.00
-2.00
1.00
Q3/18 Q4/19Q4/18 Q1/19 Q2/19 Q3/19 Q1/20 Q2/20
Innovative Vehicle Solutions17
Financial position
Innovative Vehicle Solutions
Cash flowCash flow & Inventory development
18
SEK m
Cash flowoperating activities
-96
-100
-50
0
50
100
150
200
250
Q4/18 Q4/19Q3/18 Q1/19 Q2/19 Q2/20Q3/19 Q1/20-100
▪ Cash-flow from operating activities highly
affected by the low revenue and loss of
operational profit.
▪ Working capital developed negatively during
the quarter.
849 850
934 911860
8893 94 93
109
118124
0
10
20
30
40
50
60
70
80
90
100
110
120
130
0
100
200
300
400
500
600
700
800
900
1 000
1 100
1 200
1 300
May
815
MarDec. 19
892
AprJan Feb Jun
+6%
Haldex Days of Inventory Inventory
SEKm# Days
77 (32)SEKm
Change
In Q
▪ Long lead time and global sourcing led to
increased inventory levels despite sudden drop in
sales from covid-19 impact mid-march
▪ Positive trend noted from June. Inventory turn
planned to be normalised during second half of
2020 as Inventory reduction program initiated.
Inventory Monthly 2020 Development
Innovative Vehicle Solutions
▪ Capital Injection of 4 421 597 new shares issued on May 11th to
AMF and AFA Försäkring. Total Amount 157,2Msek
▪ Current financing prolonged 12 months until 21 Apr 2022
▪ Pension Liabilities increased due to big reduction in interest rates
in Q2
▪ Working capital increase and purchase of Heidelberg facility
increased need of interest bearing liabilities and thus increasing
net debt. Hidelberg facility expected to be divested in Q3.
Net Debt
19
Net Debt
SEK mJun 30
2020
Jun 30
2019
Assets as part of the net debt:
Cash and cash equivalents 260 196
Liabilities as part of the net debt:
Interest-bearing liabilities including
derivative instruments-920 -731
Pensions liabilities -651 -511
Net debt in total, excluding IFRS16 –
financial leasing-1 311 -1 046
Debt related to IFRS16 -321 -397
Net debt in total -1 632 -1 443
Innovative Vehicle Solutions20
Key priorities going forward
Innovative Vehicle Solutions
Secure a strong and agile Haldex
▪ Increased focus on growing the aftermarket
to mitigate drop in OE demand in North
America and Europe
▪ Secure launch of new EBS for trailers in
Europe
▪ COVID-19 mitigation and profit protection
▪ Continued focus on long-term structural
cost savings
▪ Adapt to customers priorities in terms of
increased focus on electrification
21
Key priorities
Innovative Vehicle Solutions22
Appendix
Innovative Vehicle Solutions
Regional performance
23
Sales Q2 2020
Truck sales down -18%
Trailer sales down -15%
Aftermarket down -33%
Total Sales -19%
Market predictions 2020
Truck -14%
Trailer up 2%
North America Europe ASIA & Middle East
South America
Sales Q2 2020
Truck sales down -76%
Trailer sales down -49%
Aftermarket down -24%
Total Sales -42%
Market predictions 2020
Truck -59%
Trailer -50%
Sales Q2 2020
Truck sales down -46%
Trailer sales down -39%
Aftermarket down -20%
Total Sales -32%
Market predictions 2020
Truck -34%
Trailer -20 to -30%
Sales Q2 2020
Truck sales down -76%
Trailer sales up 2%
Aftermarket down -21%
Total Sales -50%
Market predictions 2020
Truck -32%
49.0%
35.0%
2.0%
14.0%
Asia
North America
EMEA
South America