SAF-Holland (ETR:SFQ) reported fiscal year 2025 results marked by weaker original equipment (OE) demand in key markets, while profitability held up on strict cost discipline, a favorable mix, and a strong aftermarket contribution. Management said it met its guidance on the adjusted sales outlook and came in “slightly better” on profitability, while maintaining a capital expenditure ratio within targets.
Sales decline led by weak OE demand; Q4 turned positive organically
Group sales totaled EUR 1.73 billion, representing an organic decline of 6.5% year-over-year, which management attributed primarily to weaker OE demand in North America and parts of APAC. For the full year, management said sales declined 7.6%, including a negative foreign exchange impact of 2.3 percentage points.
Margins held up; tariffs and FX influenced results
Despite lower volumes, SAF-Holland posted an adjusted EBIT margin of 9.5% for the year and an adjusted EBITDA margin of 13.3%. In Q4, the adjusted EBIT margin improved to 10.1%, which management linked to better fixed cost absorption and “catch-up effects” tied to U.S. tariffs incurred since April 2025.
Management said the full-year adjusted EBIT margin was impacted by a negative FX valuation effect, but benefited from:
- Strict cost discipline
- A favorable product mix
- Ongoing synergies from the Haldex takeover
On a reported basis, fourth-quarter EBIT fell 14.8% year-over-year to EUR 29.6 million, which management said primarily reflected the lower sales base. Q4 adjustments totaled EUR 7.9 million, mainly restructuring and transaction costs, including expenses tied to an efficiency program for the indirect workforce and integration costs from recent acquisitions. The company also adjusted EUR 5.4 million of depreciation and amortization from purchase price allocations in the quarter.
Regional and segment performance: EMEA recovery, Americas tariff uncertainty, APAC resilient
Management said EMEA represented roughly 51% of group sales in 2025, supported by recovering trailer demand and a strong aftermarket. The Americas were pressured by tariff-related investment restraint affecting both trailer and truck markets, compounded by unfavorable FX. APAC saw weaker demand in India in the first half and continued reluctance among Asian customers, which management linked to U.S. tariff policy and FX valuation effects.
By customer segment, the company said weak commercial vehicle markets—particularly in the U.S. and APAC—drove an approximately 10% decline in OE sales to about EUR 1 billion. The truck segment accounted for about 12% of sales and the trailer segment about 48%. The aftermarket contributed nearly 40% of group sales, which management again characterized as stabilizing.
EMEA: In Q4, EMEA delivered nearly 11% organic growth year-over-year as OE demand improved. Full-year sales were described as “broadly stable.” The adjusted EBIT margin in the region improved to 9.1% in Q4 and came in at 8.2% for the year, with management citing cost discipline and an inter-company overhead reallocation, partly offset by adverse FX effects (including the Swedish krona) and higher group cost allocations.
Americas: OE demand remained subdued throughout 2025 due to uncertainty around U.S. tariff policy, which management said weighed on customer investment. Organic sales slipped around 1% in Q4, while the aftermarket remained robust. For the year, the company reported an 8.8% organic sales decline, which it said still outperformed the underlying market. FX reduced sales by 7.75% in Q4 and 4.3% for 2025. Profitability for the Americas was described as solid at 10.8% for the year, despite lower fixed cost absorption, higher depreciation tied to the new Rowlett, Texas plant, and added tariff costs in Q2 and Q3; management cited cost-cutting and retrospective tariff-related price adjustments during the year.
APAC: Management said conditions remained challenging toward year-end, though India’s domestic trailer market stabilized, with market growth of 5% in Q4. Reported sales were pressured by weaker India demand in the first half, tariff-driven hesitancy among customers exposed to the U.S. market, and significant FX headwinds of -10.3% in Q4 and -6% for the full year. Despite this, APAC delivered a 10.8% adjusted EBIT margin in 2025, marking the 12th consecutive quarter of double-digit adjusted EBIT margins, according to management.
Cash flow, leverage, and dividend proposal
Operating free cash flow was EUR 111 million, reflecting a continued focus on working capital management. Net cash flow from operating activities totaled EUR 160.3 million for 2025, with management attributing the year-over-year change to lower market-related earnings and working capital effects, including higher trade receivables toward year-end in EMEA and slightly higher tax payments.
Investments in property, plant, and equipment and intangibles were EUR 49.2 million, or 3% of sales. Management said spending focused on automation and modernization, regulatory measures for the Rowlett plant, capacity expansions at the Düzce and Alvorada sites, and the takeover of the “Granite Borders portfolio” in North America.
Leverage (net debt to EBITDA) increased to 2.3x at year-end 2025, driven by higher net debt from EUR 21 million in additional lease liabilities related to the Rowlett plant and lower EBITDA of EUR 221.7 million. Excluding IFRS 16 effects, management said leverage would have been 2.0x, and reiterated a target to reduce leverage to below 2x over the coming quarters.
The company also discussed capital returns, with management and the supervisory board proposing a dividend of EUR 0.65 per share, based on a new 2025 methodology for distribution-relevant net profit that adjusts for unrealized FX effects and related taxes. Management said the proposed dividend equates to about 47% of distribution-relevant net profit (and about 57% of the reported net result), and corresponds to a 4.2% dividend yield based on the year-end share price of EUR 15.30.
2026 outlook: sales range EUR 1.7B to EUR 1.85B; margin targeted at 9% to 10%
For 2026, management said it expects positive business development in EMEA and APAC, while North America is expected to remain subdued. The company forecast sales of EUR 1.7 billion to EUR 1.85 billion, assuming stable exchange rates, and an adjusted EBIT margin of 9% to 10%. The CapEx ratio is expected to remain up to 3% of sales, with priorities including production network optimization in the U.S., further automation, and continued rollout of SAP S/4HANA.
In Q&A, management described the guidance range as reflecting macro uncertainty, highlighting improving conditions and order book development in EMEA, while calling the U.S. market more difficult to predict due to shifting indicators. Management also emphasized the role of the aftermarket in supporting margins and cash generation, and said it has historically been able to manage cost changes through customer pass-through in its “oligopolistic” markets.
On M&A, management said it is investigating targets in off-highway and other adjacent industries, noting it has a short list and ongoing discussions but “nothing new to report.” Executives also said they are looking at “bigger targets,” not restructuring cases, and emphasized discipline on valuation.
On truck air disc brakes, management said it made progress in 2024 and 2025 and now has four production facilities globally, with capacity for trailer, truck, and bus brakes. The company said it is listed with two U.S. OE truck manufacturers and has two more in the approval process, is supplying three truck OEs in Europe, and has begun supplying Chinese truck manufacturers.
Asked about 2026 free cash flow, management did not provide formal guidance but said, based on disclosed assumptions, the outlook appeared stable to improving and indicated it would be “personally very disappointed” if free cash flow were not a “three-digit” million figure.
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.
