2018 was in many ways an eventful year for SAF-HOLLAND. Group sales exceeded the EUR 1.3 billion threshold for the first time. Two factors were major contributors to this performance. For one, our organic sales grew a remarkable 12 percent, outpacing the market growth in virtually all regions, which enabled us to continue to consolidate our market position. This positive performance was in response to the successful market launch of new products and, particularly, the innovative and pioneering solutions in the areas of disc brake technology and lightweight construction.

In addition, our sales development was positively influenced by the acquisitions of V.ORLANDI and the York Group. Both companies have fully met our expectations. What is even more significant than the volume of business gained is the strategic importance these companies have for SAF-HOLLAND. York has given us a foothold in India, which is one of the fastest growing trailer markets worldwide. It has also opened up our access to other promising markets in the Asia-Pacific region, such as Thailand, Indonesia and Vietnam. With the acquisition of V.ORLANDI, we are expanding our product range to include coupling systems for agricultural and forestry vehicles and special applications in the mining sector. At the same time, V.ORLANDI helps us to consolidate our position as the number two in Europe for fifth wheel couplings.

With the acquisition of the British company Axscend, we added an application for digital trailer management to our product portfolio. With this application, important trailer data from components such as the brakes, lights and tires can be evaluated. We can now provide fleet managers with information about the condition of their fleets in real time; a crucial prerequisite for being able to further optimize their processes and costs. Together with our own new developments, which we presented at last year’s IAA Commercial Vehicles, we are reasserting our claim as a pioneer in the development of innovative customer solutions today and in the years to come.

Turning to the restructuring of our North American production network; despite the progress we made in the 2018 financial year, the higher-than-expected customer demand and related supply bottlenecks slowed down the anticipated reduction in our start-up costs. In addressing this situation, SAF-HOLLAND had made a deliberate decision to make timely delivery to customers and defending its market share its top priorities. The additional expenses that resulted, coupled with sharply higher steel prices, led us to revise our original target for the EBIT margin.

The further stabilization of our processes in North America and an accompanying improvement in our cost structures will be the focus of our efforts in the current financial year. These goals are also reflected in the recent changes that were made to the Group Management Board. On January 1, 2019, Dr. André Philipp assumed responsibility as Chief Operating Officer (COO) for all of the Group’s production sites. His core tasks include optimizing the processes and launching an efficiency enhancement program specifically aimed at the North American production network. The expansion in the Board and the appointment of Mike Ginocchio as President APAC underscore the growing importance of the Asian market for SAF-HOLLAND. In my role as the new chair of the Group Management Board, I will pay particular attention to optimizing the Group-wide processes and structure alongside my responsibility for the EMEA region and global procurement.

2019 will be a transitional year. Many of the goals we set for the 2020 growth strategy have either already been achieved or are within reach. We have made significant progress in recent years, especially in our quest to become a global player. Since we presented our Strategy 2020 in the year 2014, we have increased Group sales by approximately 35 percent. With the acquisition of KLL in 2016 and York in 2018, we have significantly expanded our position in the emerging markets. And, this year, our new plant in China will start production. This will be not only SAF-HOLLAND’s most modern plant but also its largest in terms of capacity. We believe the overall conditions in our industry will be challenging in 2019. However, thanks to our strong position in structurally growing market segments, we expect to be able to increase our sales by 4 to 5 percent in the current year. We also expect to achieve an adjusted EBIT margin around the mid-point of the range of 7 to 8 percent. We are standing by our goal of achieving an adjusted EBIT margin of at least 8 percent by 2020.

I am convinced that SAF-HOLLAND is well positioned given its product range, innovative strength and broad positioning in the three major commercial vehicle markets. We would like to sincerely thank you for the confidence that you have placed in your company and in us, and we look forward to continuing with you on the course ahead.


Alexander Geis
Chief Executive Officer (CEO) and
Chairman of the Group Management Board