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October 24, 2019 2:30 PM, EDT

Haldex Sees Net Income Fall, Revenue Rise in Q3

Company Also Announces North American Production Move
Haldex boxes at a factoryHaldex Group

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Commercial vehicle brake supplier Haldex AB reported lower third-quarter earnings and higher revenue as it increased sales slightly in North America.

Net income for the period ended Sept. 30 fell to the equivalent of $3.8 million, or 8 cents per share, compared with $6 million, or 13 cents. The Landskrona, Sweden-based company reports in krona.

Revenue increased to $132 million compared with $131.5 million.

In North America, Haldex increased net sales by 2% during the quarter despite signs that the market is weakening, the company reported.

The quarter was the first under newly appointed CEO Helene Svahn.

CEO Helene Svahn

Svahn

“Through our business mix of development, production and sales of established components, and a large percentage of the noncyclical aftermarket, we are standing on solid ground,” she said in the earnings release.

“We also have leading technological solutions for the vehicles of the future, which is a good sign as we approach the exciting and most likely steep developmental curve that awaits the industry in the near future. The stable core business provides the financing for the journey we have embarked upon as we transition from being a component supplier to a system provider within brake, suspension and other related systems,” Svahn added.

During the third quarter, Haldex’s ownership structure changed after ZF Friedrichshafen AG’s divestment of its entire ownership stake of 20%, Svahn said, calling it a noteworthy event.

“We are very positive about this divestment, since it leads to improved competition and greater possibilities for large transactions with vehicle manufacturers,” she said. “Work is also under way to further improve the long-term ownership structure.”

Efforts to acquire Haldex began in July 2016 when ZF outbid SAF-Holland SA. Then Knorr-Bremse replaced ZF with a bid of about $540 million for Haldex. By September 2017, Knorr-Bremse had withdrawn its bid amid regulatory opposition.

Other quarterly highlights the company pointed to included: Haldex extending its framework agreement with one of the world’s largest truck manufacturers for the development of brake and suspension systems for self-driving and electric vehicles.

Also, it pointed to collaboration and reported Daimler Trucks decided during the quarter to begin serial production of disc brakes together with Haldex for their vehicles.

In related news, Haldex in October announced it was moving its North American production from the U.S. to Mexico as it aims to reach an operating margin of 10% by 2022. It also recently moved its European production to a facility in Hungary from Germany.

“With these changes in production structure, the savings are estimated to a total of $7.7 million annually, after they have been fully implemented,” according to a company statement.

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