SAF-Holland (ETR:SFQ) reported higher sales, improved profitability and stronger cash generation in the second quarter of 2026, as demand in Europe and Asia-Pacific offset mixed conditions in North America. Management reaffirmed its full-year outlook, citing continued momentum in key original-equipment markets and the resilience of its aftermarket business.
Second-quarter sales rose 2.6% year over year to €454 million, including organic growth of 3.8%. For the first half, revenue increased 1.6% to €905.7 million, while organic growth reached 4.7%, with unfavorable currency movements offsetting part of the increase.
Margins Improve as Volumes and Efficiency Measures Support Earnings
Adjusted EBIT rose about 8% to €43.4 million in the second quarter, lifting the adjusted EBIT margin to 9.6% from 9.1% a year earlier. Adjusted EBITDA margin improved to 13.2%. In the first half, adjusted EBIT increased to €85.9 million and the adjusted EBIT margin reached 9.5%, compared with 9.3% in the prior-year period.
Management attributed the improvement to higher volumes, productivity initiatives, operational discipline and efficiency measures, despite what it described as an unfavorable regional mix effect during the first half.
Reported EBIT increased 12.1% to €38.7 million in the second quarter. CFO Frank Lorenz-Dietz said adjustments remained limited and included a positive one-time adjustment to provisions related to the company’s efficiency program in indirect functions.
The finance result improved to negative €5.7 million, primarily due to lower unrealized foreign-exchange effects and reduced interest expense. Basic earnings per share doubled year over year to €0.48 in the quarter, while adjusted earnings per share rose to €0.63. For the first half, basic EPS totaled €0.93 and adjusted EPS was €1.24.
EMEA and APAC Lead Growth, While Americas Margins Expand
The EMEA region increased sales by 3.6% year over year in the second quarter, supported by European trailer demand and a resilient aftermarket business. Organic growth for the first half was 5.8%, broadly in line with market development, according to the company. EMEA adjusted EBIT reached €37.6 million in the first six months, with an adjusted EBIT margin of 8.0%.
In the Americas, sales were slightly below the prior-year level on a reported basis, as currency effects reduced second-quarter sales by 1.4%. Organic sales were broadly stable during the quarter, while first-half organic sales declined 1.3% from a year earlier.
Still, Americas adjusted EBIT increased to €18.6 million in the second quarter, and the margin improved to 11.1% from 10.2% a year earlier. Geis said the result reflected a combination of productivity gains, a strong aftermarket business, profitable remanufacturing operations and increased output at newer facilities, including truck fifth-wheel operations in Piedras Negras.
APAC was the group’s strongest regional growth contributor, posting organic growth of more than 18% in the second quarter, driven particularly by India and Australia. Reported sales were affected by a 5.8% currency headwind. Management said profitability improved as higher volumes increased operating leverage and China made a stronger contribution to earnings.
By customer segment, trailer original-equipment sales represented about 49% of group revenue, truck OE sales accounted for about 12%, and the aftermarket contributed 39%. Total OE sales increased about 6% year over year to €276 million in the second quarter.
Cash Flow Strengthens Despite Working-Capital Build
Operating cash flow for the first half rose to €86.6 million from €30.5 million a year earlier. Operating free cash flow increased to €65.8 million, after capital expenditures of €20.8 million, or 2.3% of group sales.
Lorenz-Dietz said the cash-flow improvement was primarily driven by a significantly lower cash outflow from net working capital. Net working capital nevertheless increased from year-end due to normal seasonal inventory buildup and inventory buffers established ahead of the July SAP S/4HANA go-live at Haldex facilities in the Americas.
The net working-capital ratio was 17.6% of sales at the end of June, up from 16.8% at year-end but down from 18.2% a year earlier. The company said the ratio remained within its target range.
Equity rose 3.1% from year-end to €507 million, while the equity ratio stood at 29.1%. Net debt to EBITDA remained at 2.3 times, despite a €28.8 million dividend payment and €13.3 million spent on the ongoing share buyback program. Excluding IFRS 16 lease liabilities, leverage would have been 2.0 times.
Management Maintains 2026 Outlook
SAF-Holland maintained its market assumptions and fiscal 2026 guidance. The company slightly raised its outlook for the European trailer market, now expecting growth of 5% to 10%, while retaining its expectation for North American Class 8 truck production to rise between 0% and more than 10%. North American trailer production is expected to remain broadly stable.
Geis said initial pre-buy activity ahead of EPA 2027 emissions rules, along with improving freight rates, should support North American truck demand in the second half. He said the company expects a more gradual increase rather than a sharp rise followed by a major decline in 2027.
The company also became somewhat more optimistic on China’s trailer market, forecasting growth of 5% to 10%. Management said potential procurement pressure from geopolitical uncertainty and energy and commodity volatility could largely be addressed through pricing, efficiency and productivity measures. It added that no broad logistics-related price increases had been implemented so far, though it is monitoring freight and shipping costs closely.
About SAF-Holland (ETR:SFQ)
SAF-Holland SE manufactures and supplies chassis-related assemblies and components for trailers, trucks, semi-trailers, and buses. The company offers axle and air suspension systems, fifth wheels, hweel systems, coupling systems, kingpins, and landing gears, as well as ball races, braking and EBS systems, lighting systems, and disc brakes. It markets its products under the SAF, Holland, Neway, KLL, V.Orlandi, TrailerMaster, and York brands. The company serves original equipment manufacturers. It primarily operates in Europe, the Middle East, Africa, the Americas, and the Asia Pacific.
