Posts
4/01/09
Source: http://www.mydigitalfc.com/companies/york-scouting-land-plans-invest-rs-300-crore-axle-plant-132
WITH the domestic market for heavy duty trailer trucks expected to grow substantially, York Transport Equipment (Asia) Pvt Ltd, the regional leader in highload axle, air suspension and trailer undergear manufacturing, plans to set up a manufacturing plant in India. The Singapore based company is expected to invest over Rs 300 crore in the project.
"The Indian high-load trailer market is estimated at around 20,000 units per year and is expected to grow at a compounded annual growth rate of around 30-35 per cent for the next five years," P V Balasubramaniam, Director and Chief Executive Officer (CEO), York Group told Financial Chronicle. As a result, having a manufacturing plant in India was necessary for the company, he said.
At present, York, which is now owned by the Tata group, has an assembly facility at Jamshedpur that assembles high-end trailer axles for container trucks and trailers with capacity to produce 24,000 axles per year. Components are imported from the Singapore manufacturing plant and assembled here to supply to customers. " Our new plant will have the capacity to produce 1,00,000 highload axles per year," Balasubramaniam said.
The company is looking for 5-6 acres of land, so that it can house high load trailer axles manufacturing, assembly, testing, research and development and training facilities. The plant is expected to come up over the next two to three years in keeping with market demand.
As soon as the green field facility becomes operational, York plans to shift the production of `12 tonne standard axles' that are priced around Rs 40,000 per unit from Singapore to India. "The cost of manufacturing in India is around 15-20 per cent lower than Singapore," he said.
2/12/09
With the successful completion of SAF-HOLLAND's new financing agreement, Dr. Reiner Beutel stepped down as Chief Executive Officer (CEO) and Member of the Board of Directors effective with the Annual General Meeting on December 18, 2009. Dr. Beutel has used his expertise and experience to lead the Company through a very difficult restructuring phase. The operational restructuring of the Company is taking effect and a sustainable reduction in costs and working capital has been achieved. With a positive EBIT, the Company was returned to profitability in the third quarter. Dr. Reiner Beutel: 'After the successful completion of the refinancing and implementation of the operational restructuring measures, I will now turn my attention to new challenges .' The Board of Directors would like to thank Dr. Beutel for his contribution. Dr. Reiner Beutel's successor as CEO will be Mr. Rudi Ludwig. After the restructuring, one of Rudi Ludwig's main tasks will be aligning the Company for growth. Rudi Ludwig is a recognized expert in the industry and a Member of the Board of Directors. Mr. Ludwig previously served as Chairman of SAF-HOLLAND's Management Board from 2003 to January 2009.
29/11/09
SAF-HOLLAND has reached agreement with its banks on a restructuring and extension of the existing EUR 316 million credit line until 2014. Negotiations have been successfully completed. With this new agreement, the Company improves its financial strength and secures flexibility and sufficient liquidity for its long-term growth course. SAF-HOLLAND is now equipped to participate in the anticipated upswing in the truck and trailer market. The financing takes into consideration the clear changes in the framework conditions that have occurred since mid-2008 and creates a solid foundation for a secure future.
'We have reached a good agreement with the banks - one that puts the Company on solid financial footing and, most importantly, gives us the room we need to continue to pursue our strategic goals. At the same time, the new financing confirms the degree of confidence that the banks have in our outstanding market position and in our competitiveness. Our prospects are good: We are seeing initial signs of a revival in the markets. SAF-HOLLAND as a global supplier of quality systems and components for the commercial vehicle industry is in an excellent position to benefit to an above-average degree from a recovery', says Wilfried Trepels, CFO of SAF-HOLLAND.
The new financing consists of the following key elements: ð§ The existing financing with a credit line of EUR 316 million which has been in place since February 2008 will be extended until September 2014. The first repayments of principal will be made in February 2012. ð§ The changed market and risk situation has been taken into account with the new conditions. ð§ The agreement gives the Company additional liquidity and flexibility. In exchange, the banks obtain enhanced security in the event of pending illiquidity or imminent insolvency. The new contract is subject to approval from an extraordinary Annual General Meeting of SAF-HOLLAND S.A.
In summary, the Company thus has a solid financial basis to enable growth and to expand its position worldwide. The developments of the last nine months have shown that SAF-HOLLAND is well positioned. In difficult market conditions, it turned the corner on earnings in the third quarter of 2009 and generated an operating cash flow in the amount of EUR 29.1 million in the first nine months of the year.
The new financing is part of a comprehensive restructuring. SAF-HOLLAND reacted to the market collapse that arose as a result of the global economic crisis at an early stage and has created a solid foundation for a secure future. The trailer market now having stabilized and the first signs of a recovery in the truck market are shown. The restructuring measures are expected to result in savings in personnel and non-personnel expenses of EUR 62 million by the end of 2009. To that end, locations will be consolidated and capacities reduced. Moreover, inventory reductions have led to a considerable decrease in our net working capital need
19/11/09
SAF-HOLLAND S.A. turned the earnings corner in the third quarter, returning to positive adjusted earnings (EBIT). The Company benefited from a highly successful restructuring of its operating business with a comprehensive cost reduction program, as well as a stabilization of sales and first signs of a return to growth in the Company's end markets. SAF-HOLLAND has thus successfully repositioned its operating and financial performance to reflect market conditions, establishing a solid base from which to achieve performance improvements going forward.
Dr. Reiner Beutel, CEO of SAF-HOLLAND group: 'SAF-HOLLAND is benefiting from the Group-wide restructuring of the operating business. We are now leaner and stronger. As a global supplier of quality systems and components for the commercial vehicle industry, we are thus perfectly positioned to participate in a major way in the expected upturn in the commercial vehicle market. We are already seeing the first signs of a recovery after an unprecedented downturn in the global commercial vehicle market.'
The Company has also made important progress with its banking syndicate on restructuring and extending existing financing facilities. Further to the recently announced standstill agreement extension to November 25, the Company expects to announce agreement with its banking syndicate in the near term. The objective of the new financing agreement is to put the Company on a solid financial footing in the long-term and to create sufficient financial flexibility to allow the Company to complete its operational restructuring and follow its planned growth path.
Sales stabilizing Parallel to the earnings trend reversal, sales stabilized in comparison to previous quarters. Sales in the third quarter amounted to EUR 103.1 million which reflects a slight upturn compared to the second quarter. The adjusted EBIT climbed to EUR 2.5 million compared to EUR -0,8 million in the second quarter. With EUR 6.5 million, adjusted EBITDA more than doubled compared to EUR 3.0 million in the previous quarter. Importantly, there has been a stabilization of sales and some signs of a return to growth are now visible in the global commercial vehicle market. In the first nine months of the year, the Group achieved sales in the amount of EUR 316.4 million (previous year: EUR 646.3 million). In particular, the Powered Vehicle Systems and Aftermarket Business Units, both of which exceeded their performance from 2008, cushioned the considerable decline of the Trailer Systems Business Unit.
Restructuring facilitates turnaround The stable gross margin of 16.8% (previous year: 16.9%) is proof of the success of the restructuring measures with extensive savings in personnel and non-personnel expenses. Overhead costs were also reduced to EUR 12.4 million. Adjusted EBIT amounted to EUR 1.2 million in the first nine months of this year.
Trailer Systems shows stable sales development compared to previous quarter In the third quarter, sales in the Trailer Systems Business Unit of EUR 41.0 million stabilized at the level of the second quarter. While the month of August was, as expected, quiet in Europe, the trailer business was able to make up for lost ground in September. A slight increase was also seen in August in North America. Another positive factor was the production of our own axle systems in the USA, which got underway in February. The number of orders for axle systems with disc brakes, which were first presented in America at the Mid-American Trucking Show at the beginning of the year, is still exceeding expectations. Sales in the first three months were EUR 130.5 million (previous year: EUR 451,3 million) and the gross margin decreased to -3.6% (previous year: 11.9%) due to the high under-utilization.
Powered Vehicle Systems sees growth of 20% over previous year The Powered Vehicle Systems Business Unit benefited from a slight upturn in the market in the USA, while business in Europe saw increasing stabilization. Year to date sales grew by 20.9% to EUR 73 million (previous year: EUR 60.4 million) and were EUR 24.1 in the third quarter compared to EUR 22.2 million in the second quarter. The sales increase over the previous year resulted primarily from the acquisition of the former Georg Fischer Verkehrstechnik GmbH and a major order in North America. Thanks to a good product mix and substantial improvements in efficiency, the gross margin increased significantly to 22.1% (previous year: 12.6%). The increased share of 23.1% of Group sales (previous year: 9.3%) shows the increasing importance of the Business Unit for the Group. Leading market research institutes expect demand in the USA to increase further at the end of the year with fleet purchases in anticipation of new emissions regulations taking effect from 2010.
Aftermarket raises gross margin The Aftermarket Business Unit continues to deliver a highly profitable performance for the group. Expansion of SAF-HOLLAND's international distribution and service network in Europe through a new agreement with Scania workshops and an extended product range as a result of the acquisition of the former Georg Fischer Verkehrstechnik GmbH were contributing factors for this increase. The Business Unit generated sales of EUR 112.9 million (previous year:134.6) in the first nine months of 2009. The third quarter showed a moderate upswing with EUR 38.0 million compared to EUR 36.7 million in the second quarter. The gross margin increased to 37.6% (previous year: 35.7%). The development confirms both the increasing and continued importance of the aftermarket business for the Group.
Strong development in cash flow Cash flow from operating activities totaled EUR 29.1 million and was thus at the level of the previous year despite a significant drop in sales. This positive development was a result of highly successful implementation of working capital reduction measures on a group-wide basis. The inventory reduction measures at SAF-HOLLAND have progressed well. Inventories decreased as of September 30, 2009 to EUR 60.2 million (December 31, 2008: EUR 85.8). The equity ratio as of the balance sheet date, September 30, 2009 was 6.6% (December 31, 2008: 13.4%). Total assets decreased to EUR 473.4 million (December 31, 2008: EUR 537.4), primarily as a result of the drop in net working capital and the extraordinary write-down in the amount of EUR 16.9 million of goodwill and intangible assets.
Outlook The Company is pleased to report the first signs of a return to growth in its end markets. The Company also expects to benefit from good growth opportunities in all three of its Business Units. Furthermore, the measures taken to improve efficiency and reduce costs are having a positive effect and will give the Company a sustainable boost. The goal of saving EUR 60 million by the end of 2009 will be exceeded by about 10%. The Group will also further reduce net working capital by the end of 2009, thus putting liquidity on a stable foundation.
10/11/09
Source: http://money.cnn.com/news/newsfeeds/articles/prnewswire/200911100800PR_NEWS_USPR_____DE08425.htm
ArvinMeritor, Inc. (NYSE: ARM) today reported financial results for its fourth quarter and full fiscal year ended Sept. 30, 2009.
Fourth-Quarter Highlights
- Fourth-quarter sales were $984 million, approximately a four percent increase from the third quarter of fiscal year 2009; down from $1.5 billion in the fourth quarter of fiscal year 2008.
- On a GAAP basis, loss from continuing operations was $49 million for the fourth quarter, or a loss of $0.68 per diluted share, compared to a loss from continuing operations of $160 million, or $2.22 per diluted share, in the same period last year.
- Fourth-quarter EBITDA from continuing operations, before special items, was $40 million, approximately a 43-percent increase from the third quarter of fiscal year 2009, down from $87 million in the fourth quarter of fiscal year 2008.
- Cash flow from operations was $46 million compared to $157 million in the same period last year.
- Free cash flow (cash flow from operations, net of capital expenditures) was $22 million in the fourth quarter compared to free cash flow of $103 million in the fourth quarter of fiscal year 2008.
- Complied with all debt covenants.
- Entered into new two-year U.S. Receivables Securitization Agreement.
Fourth-Quarter Results 2009
"We are proud of our performance in the fourth quarter and the 2009 fiscal year," said Chairman, CEO and President Chip McClure. "Our team has not only generated positive free cash flow for two consecutive quarters, we’ve also reported cost savings in our commercial vehicle businesses of $195 million, complied with all debt covenants, and completed various other actions that we believe will strengthen the company as we benefit from improving conditions in global markets - particularly in China, India and Brazil," said McClure.
For the fourth quarter of fiscal year 2009, ArvinMeritor posted sales of $984 million, down thirty-six percent from the same period last year. This decrease in sales was primarily due to continued weakness in the global markets. As compared to the third quarter of fiscal year 2009, sales in the fourth quarter increased four percent as markets began to show signs of a recovery.
EBITDA from continuing operations (which excludes the wheels business), before special items, was $40 million, compared to $87 million in the fourth quarter of fiscal year 2008. EBITDA from continuing operations, before special items, increased 43 percent in the fourth quarter of fiscal year 2009 from the third quarter of fiscal year 2009. EBITDA margin from continuing operations, before special items, was 4.1 percent in the fourth quarter, down from 5.7 percent in the same period last year.
Loss from continuing operations, on a GAAP basis, was $49 million or $0.68 per diluted share, compared to a loss from continuing operations of $160 million or $2.22 per diluted share in the prior year.
Loss from continuing operations during the fourth quarter of fiscal year 2009, before special items, was $20 million, or $0.28 per diluted share, compared to income from continuing operations, before special items, of $26 million, or $0.35 per diluted share, a year ago. The loss from continuing operations, before special items, was driven by incremental tax expenses during the quarter due to the inability to recognize the tax benefit of losses in certain countries.
Free cash flow was $22 million in the fourth quarter compared to free cash flow of $103 million in the fourth quarter of fiscal year 2008. The company had $95 million in cash balances and an unutilized commitment of $611 million under its revolving credit facility as of Sept. 30, 2009.
Fiscal Year 2009 Results
- Sales from continuing operations for fiscal year 2009 were $4.1 billion, down 36 percent from fiscal year 2008.
- On a GAAP basis, net loss was $1,212 million or a loss of $16.72 per diluted share in fiscal year 2009.
- On a GAAP basis, loss per diluted share from continuing operations was $14.86 in fiscal year 2009, compared to a loss of $1.60 per diluted share in fiscal year 2008.
- Loss per share from continuing operations, before special items, was $1.32 per diluted share in fiscal year 2009, compared to income from continuing operations, before special items, of $1.11 per diluted share in fiscal year 2008.
- Free cash outflow (cash outflow from operations, net of capital expenditures) of $429 million for the full fiscal year.
"Our team remained focused and delivered on our 2009 priorities, while simultaneously managing the company through a global recession that affected all of our segments and customers worldwide," said McClure. "As we transform into a commercial vehicle and industrial company, we believe the results we demonstrated in each of these areas will make ArvinMeritor a leaner, more efficient organization well-positioned for future growth."
- Accelerate restructuring and other cost reductions
Achieved cost savings of $195 million in our core businesses for fiscal year 2009 due to swift and preemptive actions including workforce and temporary salary reductions; selective reductions in capital spending; extended manufacturing shutdowns; elimination of training programs; suspension of the quarterly dividend and elimination of all non-critical discretionary spending. The company also announced the closure of its Carrollton, Ky. assembly, machining and casting operation and the Tilbury, Ontario, Canada braking systems facility.
- Continue operational performance improvements
Further implemented production system methodology; optimized manufacturing footprint; lowered inventory; strategically focused capital spending on core processes to lessen dependency on layered capacity; and maintained focus on direct material optimization activities - with more than 900 of approximately 1,700 initiatives implemented.
- Complete LVS separation
Completed the sale of the company’s entire ownership interest in Gabriel de Venezuela and Meritor Suspension Systems Company (finalized in October 2009) joint ventures; and sold both the Wheels business and Gabriel Ride Control Products North America, thus reducing the company’s overall light vehicle business to 25 percent of total sales at the conclusion of fiscal year 2009.
- Continue to grow high-margin segments
Working with Lockheed Martin Systems Integration and BAE Systems U.S. Combat Systems on a technology demonstrator contract for the Joint Light Tactical Vehicle (JLTV) program; began production of Navistar MXT for British Ministry of Defense; added two key product families to expanding aftermarket portfolio for commercial vehicles including remanufactured Allison automatic transmissions and all-makes power steering gears and pumps.
- Innovate and strengthen technology
Introduced MXL greaseable drivelines for linehaul customers; launched PlatinumShield(TM) coating for both aftermarket and OE brake applications; completed internal integration of smart systems(TM) technology to further incorporate controls and electronics into the commercial vehicle advanced engineering group; opened technical center in Bangalore, India; preparing to launch MT-14X tandem axle in North America in 2010.
Business Segments
ArvinMeritor has revised its reporting segments following the recent divestitures of several light vehicle businesses. For continuing operations, the company will now report results as defined within Commercial Truck, Industrial, Aftermarket & Trailer and Light Vehicle Systems. Of these four segments, Commercial Truck, Industrial, and Aftermarket & Trailer are considered core to ArvinMeritor.
- Commercial Truck
Supplies drivetrain systems and components, including axles, drivelines, braking and suspension systems, primarily for medium and heavy duty trucks in North America, South America and Europe.
- Industrial
Supplies drivetrain systems including axles, brakes, drivelines and suspensions for off-highway, military, construction, bus and coach, fire and emergency, and other industrial applications. This segment also includes the company’s business in Asia Pacific, including all on- and off-highway activities.
- Aftermarket & Trailer
Supplies axles, brakes, suspension parts and other replacement and remanufactured parts, including transmissions, to commercial vehicle aftermarket customers. Also supplies a wide variety of undercarriage products and systems for trailer applications.
- Light Vehicle Systems
Supplies primarily roof and door systems for passenger cars to original equipment manufacturers; also includes company’s remaining Chassis operations.
2010 Priorities
ArvinMeritor has defined six key priorities for fiscal year 2010. The company believes it is imperative to execute well in each of these areas and has developed specific action plans to achieve strong results.
- Remain focused on rigorous cost management to realize improved operating leverage.
- Continue transformation to focus the company on global commercial vehicle and industrial markets.
- Successfully execute as global markets recover.
- Drive innovation - accelerating new products and advanced fuel efficient technologies.
- Maintain focus on sustainable profitable growth.
- Continued focus on balance sheet management.
Outlook for 2010
The company’s financial guidance for the first quarter of fiscal year 2010 is for expected results from continuing operations, which includes all four of ArvinMeritor’s current segments. For the first quarter of fiscal year 2010 (compared to the fourth fiscal quarter of 2009), the company anticipates:
- Revenue to be higher.
- EBITDA, before special items, to be higher.
- Income before taxes, before special items, to be higher.
In addition, on an absolute basis, the company anticipates:
- Free cash flow, before factoring and restructuring, to be slightly negative.
- Free cash flow to be around breakeven.
For fiscal year 2010, ArvinMeritor expects to report results in the following ranges for capital expenditures, interest expense, cash income taxes and income tax expense.
- Capital expenditures in the range of $90 million to $110 million.
- Interest expense to be in the range of $95 million to $110 million.
- Cash income taxes to be in the range of $25 million to $50 million.
- Income tax expense, before special items, to be in the range of $40 million to $60 million.
"With the steps we have taken to manage costs - in addition to our efforts to secure new multi-year contracts, develop advanced solutions for our customers, and focus talent and resources on strategic segments of our business - we believe we are on track to benefit from future recoveries in the global markets," said McClure.
Fourth-Quarter and Fiscal Year 2009 Results Conference Call
ArvinMeritor will host a telephone conference call and Web cast to discuss the company’s full-year and fourth-quarter results for fiscal year 2009 on Tuesday, Nov. 10, 2009, at 9 a.m. (ET).
To participate, call (617) 213-4837 ten minutes prior to the start of the call. Please reference participant pass code 85768695 when dialing in. Investors can also listen to the conference call in real time -- or the recorded version for 90 days afterward-- by visiting www.arvinmeritor.com.
A replay of the call will be available from Noon on Nov. 10, to 11:59 p.m. Nov. 17, 2009, by calling (888) 286-8010 (within the United States) or (617) 801-6888 for international calls. Please refer to replay pass code number 45056962.
The company’s fourth-quarter and full-year financial results will be released prior to the conference call and Web cast. The news release will be issued through PR Newswire and First Call, and will be available on the company’s Web site.
To access the listen-only audio Web cast, visit the ArvinMeritor Web site at www.arvinmeritor.com and select the Web cast link from the home page or the investor page.
14/19/09
Source: http://trailer-bodybuilders.com/chassis/truck-sales-continue-climb-0914/
Truck sales in all eight classes were down by a smaller percentage in August than for the year to date, according to figures compiled by Wards Communications.
Among trucks with GVW ratings above 10,000 pounds, the biggest difference came in Class 5, with sales up 7% compared to July but down 48% for the year compared to 2008.
Medium and heavy truck sales were down 35% in August over the same period a year ago and down 6% over the previous month.
Dealers sold 21,956 trucks with GVW ratings above 10,000 pounds during the month, down from August 2008 (33,578) and from July 2009 (23,414). Year to date, sales were down 36%.
Compared with August 2008, Class 8 trucks were down 33%. Class 6 experienced a 44% decline.
Through the first eight months of 2009, truck dealers sold 192,492 trucks with GVW ratings above 10,000 pounds, down 36% from the corresponding period of 2008.
Sales of light-duty trucks (GVW ratings of 10,000 pounds or less) improved over July: Class 1 was up 25% and Class 2 up 12%. For the year, total sales were down 29%.
10/9/9
Source: http://www.hgvuk.com/09/10/scania-and-saf-holland-cooperation/
Scania has signed a cooperation agreement with the global German trailer axle manufacturer SAF-Holland. The agreement, which is unique within the industry, will provide Scania’s customers support on the complete vehicle combination that goes beyond the supply of parts and logistics.
With the support of this agreement, the workshops and dealers within Scania’s global service network will be fully authorised to carry out professional service on SAF-Holland trailer axle components. The agreement covers such aspects as logistics, warranty handling, workshop procedures, special tools, help desk and training of workshop technicians.
“I’m confident that this agreement with SAF-Holland will enable us to give an even better service to our customers. Uptime and peace of mind are the keystones for our customers. Our strategy is to focus on our customers productivity and what adds value for them; this agreement is another step in that direction,” said Anders Gustafsson, Senior Vice President, Service Operations at Scania.
25/8/09
SAF-HOLLAND S.A. achieved an adjusted operating result nearly at break-even point in the first half of 2009 with June the first month of the year to show a profit. The Group is beginning to benefit from the cost reduction and restructuring activities which the Company has initiated due to weak business conditions. Management and employees remain focused on the day to day business of the Company, a situation unaffected by the on-going negotiations with the banks on the Company's financing arrangements. The trustee model proposed by the banks primarily affects the interests of owners and financing banks.
Dr. Reiner Beutel, CEO of SAF-HOLLAND Group GmbH: 'SAF-HOLLAND is benefitting from our decisive cost reduction initiatives. Both in June and July, a positive monthly operating result was achieved. In addition, liquidity has continuously improved. It is not only on the cost side where positive signs are visible: the truck market in the USA also seems to be stabilizing and our global Aftermarket business has been showing an upswing since March. We are confident that this positive development in North America and in the Aftermarket will continue. Our efforts will pay off even more, if demand sustainably increases. Finalizing the negotiations with the banks, whether on the basis of the currently proposed 'trustee model', would also sustainably support and financially secure the operating business.'
Cost savings stop decline in earnings Demand for trucks, trailers, components and replacement parts continues to suffer from high inventories of unsold vehicles and under-utilized fleets and equipment. As a result, Group sales fell in the first half of the year by more than 50 % to EUR 213.3 million (previous year: EUR 458.0 million). The decline primarily affected business in Europe with a drop of 67.9 % to EUR 104.9 million (previous year: EUR 326.8 million) in the first half-year. In North America, sales went down by only 16.3% to EUR 98.3 million (previous year: EUR 117.5 million). While extraordinary expenses, which were primarily due to refinancing negotiations, burdened earnings, cost savings and efficiency increases had a positive effect. Adjusted EBIT amounted to a total of EUR -1.3 million (previous year: EUR 37.5 million). The gross margin in the first half of the year was almost at the same level as in the previous year at 16.2 % (previous year: 17.7 %). Adjusted profit for the period amounted to EUR -9.9 million (previous year: EUR 21.1 million) in the first half of the year, and was influenced by financing costs, particularly higher interest rates and a higher utilization of Bank credits. Adjusted earnings per share amounted to EUR -0.48 (previous year: 1.12)
The second quarter of 2009 was characterized by conflicting developments: a weak May was followed in June by the second highest monthly sales of 2009 to date. In the three months from April to June, the Group achieved sales of EUR 101.2 million (previous year: EUR 238.7 million). Adjusted EBIT was EUR -0.8 million (previous year: EUR 19.4 million).
Trailer Systems with higher demand since June A decline in sales of up to 90%, related mainly to plant closures by our customers, was experienced by the Trailer Systems Business Unit. Since June, however, sales have increased but at a low rate. We have started our own axle production in the USA, replacing purchased axles from external manufacturers. The Group also received its first orders for axle systems with disc brakes which offer reduced braking distances over drum brakes. We expect our business to benefit from new braking regulations which take effect in 2011 and require that braking distances for new trucks be reduced by 30%. Cumulative sales declined in the first half-year to EUR 89.5 million (previous year: EUR 327.8 million), the gross margin decreased to -3.8% (previous year: 13.0%) due to the high underutilization. The Business Unit's share of total sales fell to 42.0% (previous year: 71.6%).
Powered Vehicle Systems with stable demand in the USA The Powered Vehicle Systems Business Unit significantly increased sales and earnings compared to the previous year. Additional business from the former Georg Fischer Verkehrstechnik GmbH acquired in 2008 as well as a major order in the USA allowed for an increase in sales of 32.2% to EUR 48.9 million (previous year: EUR 37.0 million) in the first half of the year. The gross margin improved to 21.1% (previous year: 14.9%). The share in Group sales rose to 22.9% (previous year: 8.1%). According to estimates from leading market research institutes, the truck market in the USA has stabilized. In view of new emission regulations beginning in 2010, an upturn of demand can be expected at the end of the year.
Aftermarket with upswing since March In the first half of 2009, the Aftermarket Business Unit again assisted in stabilizing sales of the Group. Since March, demand has revived in Europe and North America. The acquisition of the former Georg Fischer Verkehrstechnik showed positive effects due to the broader product portfolio. In addition, new orders were generated in the Middle Eastern states and the worldwide services network is continuously being extended. With -19.6%, the decline in sales to EUR 74.9 million (previous year: EUR 93.2 million) was lower than in the Trailer Systems business. New international sourcing activities contributed to an improved gross margin, which increased to 37.8% (previous year 35.4%). This business segment currently contributes 35.1% (previous year: 20.3%) to total Company sales.
Milestones reached in cost reduction programme SAF-HOLLAND made good progress in terms of cost reductions and efficiency improvements in the first half of 2009. Net working capital declined significantly by EUR 13.6 million; inventories were reduced by EUR 22.8 million to EUR 66.3 million. Cash and cash equivalents rose to EUR 14.2 million (December 31, 2008: EUR 8.6 million) as of the reporting date June 30, 2009. Cash flow from operating activities before income tax improved despite weak sales development to EUR 21.0 million (previous year: EUR 20.3 million). Repayments for current financing were made on schedule. The equity ratio was 10.5% (December 31, 2008: 13.4%). In addition, the Group reached a supplementary labor agreement with the workforce in Germany. It provides for savings in the single-digit millions and grants employment and location guarantees in return.
In parallel with operating the business, there have been intensive discussions with the lending banks on the Group's refinancing. Until the end of July, a standstill agreement was in force with the banks, who have also endorsed a preliminary expert opinion on the financial restructuring from the auditing firm KPMG and the prognosis as a going concern. In August, the banks proposed a refinancing arrangement that included the transfer of the Company's operational activities to a trustee. This would mean that SAF-HOLLAND S.A. would, to a large extent, be legally separated from the operating business and the assets of the Group. At the same time, the operating business would be sustainably supported and financially secured. After negotiating the economic considerations, an extraordinary General Meeting of the shareholders must make a decision on the proposal.
Outlook: Even if the first signs of a market revival in the worldwide replacement part business and stabilization in the truck market in the USA are visible, SAF-HOLLAND expects a clear sales decline over the year compared to 2008 with a corresponding reduction in earnings. The planned cost reductions of EUR 60 million will, however, cushion the decline in earnings. Moreover, liquidity is to be improved by inventory cuts and lower net working capital. Over the long term, SAF-HOLLAND expects an increase in demand which will also be boosted by new emissions regulations in the USA (beginning in 2010) and braking regulations (beginning in 2011).
Note: SAF-HOLLAND reports adjusted earnings figures since costs have accrued as a result of the business combination, the IPO and restructuring that are not directly attributable to the operating business. EBIT has been adjusted for the following effects: depreciation and amortization from the purchase price allocation as well as restructuring and integration costs.
10/8/09
ArvinMeritor Inc.'s (NYSE: ARM) Chairman, CEO and President Chip McClure today announced that the company is committed to remaining a strong and growing manufacturer and supplier in South America. Addressing a group of South American journalists, he said the company is focused on becoming a global commercial vehicle company with expanded leadership in original equipment and aftermarket for both the on- and off-highway global markets.
McClure said the company is planning an up to a $10-million [U.S.] investment for its commercial vehicle business in Brazil, which will support its expansion into new product segments as well as new manufacturing technology like advanced gear-making and efficient, high-quality equipment to make parts and components.
While ArvinMeritor is impacted by unprecedented economic changes, its production in South America is up nine percent quarter-over-quarter.
"Our growth strategy involves bringing new products and technology to South America," said McClure. "With a rich 100-year history, we are always exploring new opportunities that will meet our customers' needs. With the right products and a dedicated and talented workforce, ArvinMeritor will continue to be a strong commercial vehicle supplier in Brazil and across the continent."
According to McClure, ArvinMeritor's success in the region can be attributed to its experienced South American management team: Antonio Rossi, director - axle operations; Silvio Barros, director - sales and marketing; Angelo Morino, director - aftermarket; Jose M. Fernandes - director procurement; and Adalberto Momi, director - finance.
Also acknowledging the contributions of its joint venture companies - Freios Master and Suspensys - with the Randon Corp., McClure reinforced the importance of its ongoing collaboration with Randon and its management team. "ArvinMeritor has renewed its commitment to further strengthening its customer-focused relationship and business strategy with Randon," he said. Both joint ventures are based in Caxias do Sul, Brazil.
Wheels Business Divested
ArvinMeritor announced last week that it had entered into an agreement to sell its Wheels business to Iochpe-Maxion, a Sao Paulo, Brazil-based producer of wheels and frames for commercial vehicles, railway freight cars and castings. The sale is expected to close by the end of 2009.
"Iochpe-Maxion approached us about acquiring this asset and we determined that selling it was in the best interest in terms of ArvinMeritor's strategy and the Wheels businesses' long-term growth," said McClure. "This new owner will invest in Wheels and the valuable, talented people who support it.
"The Fumagalli wheel brand has a 60-year heritage and holds significant meaning for the global customer base," he said. "This transaction supports our efforts to move our goal of becoming a commercial vehicle company while at the same time offering Wheels an exciting new future as a strategic core business in the Iochpe-Maxion portfolio. We are grateful for the significant contributions the people of this business made to the success of our company. The White Shirt culture will continue to be recognized as a benchmark for best-in-class manufacturing initiatives."
The Wheels business operates manufacturing facilities in Limeira, Brazil and San Luis Potosi, Mexico.
Body Systems
ArvinMeritor's Body Systems business currently continues to be part of its portfolio. "As part of our transformation strategy to continue to divest our Light Vehicle Systems businesses, we intend to pursue the sale of our Body Systems business when market conditions support such actions," said McClure.
South America
For original equipment vehicle manufacturers in South America, ArvinMeritor manufactures and supplies front steer axles, drive axles (single and tandem drive), bus axles (low floor and entry platforms), and cab suspension systems. In collaboration with its joint ventures, Freios Master and Suspensys, ArvinMeritor supplies drum brakes, hubs, trailer and truck suspensions and trailer axles. The companies provide aftermarket distributors with axle parts such as precision axle gear forgings, bearings, oil seals, air brakes, friction material, brake hardware, kingpin kits, shock absorbers, trailer axles, suspension systems and wheels.
30/7/09
Source: http://au.sys-con.com/node/1054046
WABCO Holdings Inc. (NYSE: WBC), a global technology leader and tier-one supplier to the commercial vehicle industry, today reported that Q2 2009 sales totaled $316 million, down 59 percent from prior year and down 53 percent in local currencies due to the unprecedented continued severe slump in global demand for new commercial vehicles.
"As emerging markets such as China, Brazil and India are expanding their share of WABCO's total revenue, our strategy of investing in global expansion is proving to be increasingly powerful. As of Q2 2009, our second largest customer worldwide is China National Heavy Truck Corporation (CNHTC), the largest producer of heavy duty trucks in China," said Jacques Esculier, WABCO Chairman and Chief Executive Officer. "On June 3, 2009, we took majority control of WABCO-TVS in India, the leader in its market, further strengthening WABCO's capabilities to connect with and grow in the world's emerging markets."
"Emerging markets have been hit less hard by the industry's current downturn and are likely faster to recover, further powering WABCO's future growth. The European market suffers from both depressed demand for new commercial vehicles as well as a decline of around 15 percent in production due to inventory sell-off by original equipment manufacturers. Market conditions in the United States are weak but we expect these conditions to recover soon on a growth path," said Esculier.
WABCO reported a Q2 2009 gross profit margin of 21.4 percent versus 27.5 percent a year ago. Excluding separation and streamlining costs, performance gross profit margin was 22.6 percent versus 27.5 percent a year ago.
WABCO reported a Q2 2009 operating loss of $7.6 million versus operating income of $84.4 million a year ago. Performance operating income was a loss of $5.5 million, down from operating income of $93.2 million in prior year.
WABCO reported Q2 2009 Earnings Before Interest and Taxes (EBIT) at a loss of $15.3 million, down from $85.0 million of income a year ago. Performance EBIT loss was $1.6 million, down from $93.7 million of income a year ago.
"Even as the global commercial vehicle industry is facing its worst downturn in history, and despite the company's sales decline of 53 percent in local currencies versus a year ago, WABCO almost reached break-even at the operational level in Q2 2009, showing our powerful ability to perform," said Esculier. "Our achievements in Q2 2009 demonstrate that WABCO continues to move quickly to mitigate adverse market conditions while also making outstanding progress on our strategy of excellence in execution, global expansion and technology leadership."
"In Q2 2009, we achieved cost savings of $33 million in operating expenses, resulting in a reduction of approximately 25 percent year on year. Our WABCO Operating System also delivered $10.9 million of materials and conversion productivity, with materials productivity representing 5.4 percent of total materials cost and close to a record level, despite an unusually severe sourcing environment. As another mark of excellence in execution, in Q2 2009, we achieved zero defective parts-per-million on a greater number of production lines than ever before, which contributed to an overall improvement in quality," said Esculier.
On a U.S. GAAP basis, Q2 2009 reported a net loss of $17.4 million or $0.27 per diluted share versus net income of $67.0 million or $1.00 per diluted share a year ago. Excluding separation and streamlining costs, the one-time impact from the Indian joint venture transactions, and discrete and other one-time tax items, Q2 2009 resulted in a performance net loss of $4.7 million or $0.07 per diluted share versus performance net income of $75.5 million or $1.13 per diluted share a year ago.
WABCO generated $61.1 million in net cash from operating activities in Q2 2009 and $43.4 million of free cash flow.
"After three consecutive quarters in deeply depressed market conditions, we continue to generate strong operating cash flow, with $61.1 million in Q2 2009, further indicating WABCO's ability to execute efficiently and with maximum flexibility as we tightly manage working capital by reducing inventories and improving accounts receivable, among other measures," said Esculier.
"Despite the current global economic slump, WABCO continues to make outstanding strategic achievements, which we highlight as examples of our passion to rise to new challenges," said Esculier.
Recent Highlights
On July 15, 2009, WABCO announced that its new ESCsmart(TM) system is now approved for use in all 27 countries in the European Union and in 20 other countries worldwide where electronic stability control (ESC) for commercial vehicles is applied in accordance with the United Nations Economic Commission for Europe's Regulation 13 for braking. WABCO's ESCsmart system is the industry's most efficient method to certify ESC for trucks and buses. It is the industry's first technology that uses computational simulation to homologate ESC systems, avoiding the traditional approach to ESC homologation, which requires original equipment manufacturers to physically test all variants of vehicles. It substantially increases flexibility and saves significant time and labor for truck and bus makers.
On July 7, 2009, WABCO announced that the company was awarded a major contract to supply anti-lock braking systems (ABS) to KAMAZ, the largest manufacturer of commercial vehicles in the Russian Federation. In addition, KAMAZ has contracted WABCO to supply air disc brakes and actuators for their commercial vehicles.
WABCO disclosed in June 2009 that a new report by The Smart Cube, a global independent research firm, has identified WABCO as one of the five strongest and most financially stable companies in the U.S. automotive parts industry. Facing its most difficult operating environment in history, the automotive parts industry provides an opportunity for a few suppliers to emerge leaner, stronger, more financially stable and more competitive than ever before, according to The Smart Cube's analysis of financial metrics of 98 companies that are domiciled and publicly listed in the United States.
On June 3, 2009, WABCO reported that the company executed its previously announced plan to take majority control of award-winning WABCO-TVS (India) Ltd.
On May 22, 2009, WABCO's factory in Qingdao, China, was awarded "Enterprise of the Year 2008" for its outstanding contribution to economic development by the Qingdao Municipal Government, further strengthening WABCO's reputation as a brand of reference in China.
WABCO announced in Q2 2009 that the company has been awarded a contract by a major original equipment manufacturer in Europe to supply EcoSmart(TM) systems to equip their heavy duty truck engines for series production starting in 2011. WABCO's EcoSmart system is a breakthrough in air compression technology for trucks and buses that substantially improves fuel efficiency and reduces emissions. The EcoSmart clutch compressor optimally disengages a truck or bus compressor from the engine when the vehicle's air system reaches full pressure.
In Q2 2009, the company's joint venture in North America, Meritor WABCO, was awarded new business from Crete Carrier, one of North America's largest trucking companies. Crete Carrier placed orders for 2,000 trucks equipped with SmartTrac(TM) stability control systems and OnGuard(TM) collision mitigation systems for delivery in 2009. Crete Carrier had purchased 390 OnGuard units in 2008 and reportable accidents significantly decreased compared with vehicles operating without such units. OnGuard is the only collision mitigation system available in North America.
As of Q2 2009, the Meritor WABCO PAN 22 Air Disc Brake is available for trailers through Hendrickson, the leader in North America for trailer suspensions. Combining best-in-class braking torque output with low weight and long pad life, Meritor WABCO's PAN 22 Air Disc Brake is expected to become available through other trailer suspension and axle manufacturers in North America.
As reported in Q2 2009, WABCO extended its technology leadership in electronic braking systems (EBS) for trailers by introducing two breakthrough technologies to enhance the performance of EBS on extra long trailers and truck-trailer combinations with two or more trailers. WABCO's new Controller Area Network (CAN) Repeater and Router are the industry's first application of high-speed data transmission using CAN in-vehicle communications to improve braking performance of trailers.
Also in Q2 2009, WABCO announced several breakthrough features in its Intelligent Trailer Program, further enhancing electronic braking and air suspension functionalities through new OptiLoad(TM), OptiTurn(TM), Tilt Alert(TM) and Bounce Control(TM), all of which increase vehicle performance while enabling safer operation, more efficient loading and unloading, and more cost efficient maintenance.
Full Year 2009 Operating Framework
Due to continued uncertainties associated with market forecasts for commercial vehicles, WABCO is presently not providing full year 2009 earnings guidance. Based on market developments, the company has updated its operating framework for 2009 to include an estimated decline in 2009 sales of 35 to 40 percent in local currencies, resulting in a full year reported operating margin of negative 3.2 percent or better, including streamlining and separation related costs, and a positive operating margin on a performance basis. The company also expects to generate strongly positive free cash flow, excluding streamlining and separation related costs.
WABCO has also notified works councils that the company intends to terminate 300 additional positions in Germany.
"WABCO continues to anticipate and mitigate adverse market conditions without compromising our commitment to excellence in execution, global expansion and technology leadership," said Esculier. "We anticipated this economic crisis nearly a year ago, and now more than ever, we feel confident about adapting and executing what is necessary in the short term while preserving and powering the global capabilities and growth potential of WABCO."
