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Introduction & Market Context
SAF-Holland SE (SFQ) demonstrated resilience in its first quarter of 2025, maintaining stable profitability despite significant headwinds in global trailer and truck markets. During its May 8, 2025 earnings presentation, the commercial vehicle supplier reported that while sales declined by 11.1% year-over-year, the company managed to sustain its adjusted EBIT margin near previous year levels.
The company faced challenging market conditions across all regions, with trailer markets showing particular weakness in EMEA (-25% to -30%) and North America (-25%). Despite these challenges, SAF-Holland maintained its full-year 2025 guidance and unveiled a new long-term corporate strategy aimed at substantial growth by 2030.
Quarterly Performance Highlights
SAF-Holland reported Q1 2025 sales of EUR 449.2 million, down 11.1% from EUR 505.4 million in the same period last year, with an organic decline of 14.0%. Despite this topline pressure, the company’s adjusted EBIT margin remained relatively stable at 9.5% compared to 9.6% in Q1 2024, while the adjusted EBITDA margin actually improved to 13.3% from 12.6%.
As shown in the following financial highlights chart:
The company’s performance varied across regions, with all experiencing sales declines but maintaining solid profitability. EMEA sales fell to EUR 218.9 million (from EUR 244.3 million) with an adjusted EBIT margin of 7.5%. The Americas region demonstrated strong profitability with an 11.4% adjusted EBIT margin despite sales declining to EUR 176.4 million. APAC maintained a solid 11.4% adjusted EBIT margin with sales of EUR 53.9 million.
The sales mix by region and customer segment remained relatively stable year-over-year, with aftermarket business continuing to provide stability at 49.1% of total sales:
SAF-Holland’s ability to maintain profitability despite lower sales volumes highlights the effectiveness of its cost management initiatives and the strength of its aftermarket business. The company also reported a significant improvement in operating free cash flow, which reached EUR 8.2 million compared to negative EUR 12.4 million in the prior year.
Strategic Initiatives
A key highlight of the presentation was the unveiling of SAF-Holland’s new "drive2030" corporate strategy, which sets ambitious targets for the company’s long-term growth. The strategy outlines a vision to become "the most trusted partner" in the industry and aims to achieve sales exceeding EUR 3 billion with an adjusted EBIT margin of 10-12% by 2030.
The strategy framework and recent acquisition in India are illustrated here:
As part of this strategic direction, SAF-Holland announced the acquisition of an additional 40% stake in the Haldex ANAND India Pvt. Ltd. joint venture, effective April 11, 2025. This acquisition strengthens the company’s position in the growing Indian market and aligns with its strategy of regional expansion and portfolio leverage.
The company also emphasized technology as a core enabler of its strategy, alongside operational excellence, customer focus, and sustainability initiatives.
Detailed Financial Analysis
Despite the challenging market environment, SAF-Holland demonstrated strong operational execution in several key financial metrics. The reconciliation from EBIT to adjusted EBIT reveals the impact of PPA-related depreciation and amortization, as well as restructuring costs:
One notable challenge in the quarter was the significant impact of unrealized foreign exchange valuation effects on the company’s finance result, which declined to EUR -15.3 million from EUR -6.2 million in Q1 2024:
These FX effects, primarily related to EUR/USD and EUR/BRL exchange rate fluctuations, contributed significantly to the 50.2% decline in basic EPS, which fell to EUR 0.29 from EUR 0.58 in the prior year.
On a positive note, SAF-Holland’s balance sheet continued to strengthen, with the equity ratio improving to 31.2%, up 40 basis points from December 2024:
Working capital management also showed improvement, with net working capital declining by 11.6% to EUR 310.1 million compared to March 2024:
The company maintained a stable leverage ratio of 1.9x net debt to EBITDA, unchanged from December 2024, demonstrating disciplined financial management despite market challenges.
Forward-Looking Statements
SAF-Holland’s market outlook for 2025 indicates continued challenges, particularly in the first half of the year:
Despite these headwinds, the company maintained its full-year 2025 guidance, projecting sales between EUR 1,850 million and EUR 2,000 million, with an adjusted EBIT margin between 9.0% and 10.0%:
CEO Alexander Geis and CFO Frank Lorenz-Dietz emphasized the company’s resilience and ability to navigate the current market environment. The management highlighted four key takeaways from the quarter: the continued strength of the aftermarket business despite OE market weakness, solid profitability with improved EBITDA margins, strong cash flow generation, and the company’s positioning to demonstrate resilience amid the muted market outlook.
With its new long-term strategy and focus on operational excellence, SAF-Holland appears well-positioned to weather the current market challenges while building toward its ambitious 2030 targets.
Full presentation:
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