Annual Report
Haldex provides proprietary and innovative technology solutions that improve safety, the environment and vehicle dynamics to the global vehicle industry within specific niches. Haldex generates value for its shareholders by focusing on expertise, stable growth and increased profitability.
Innovative Vehicle Technology
07
Innovative Vehicle Technology
Financial inFormation in 2008
February 22, 2008 Year-end Report 2007
March 2008 Annual Report 2007 April 15, 2008 Annual General Meeting
April 25, 2008
Interim report for the period January 1 to March 31, 2008 July 18, 2008
Interim report for the period January 1 to June 30, 2008
October 24, 2008
Interim report for the period January 1 to September 30, 2008
Year-end and interim reports are published in Swedish and English and can be downloaded from the Haldex website www.haldex.com. The Annual Report is published in Swedish and English on the Haldex website.
Annual General Meeting 2008
Haldex’s Annual General Meeting will be held at 4 pm on Tuesday April 15, 2008 at the IVA Conference Center, Grev Turegatan 16, Stockholm.
Participation in 2008 Annual General Meeting Shareholders who wish to participate in the Annual General Meeting must be registered in the VPC AB share register no later than Wednesday April 9, 2008. Notification must be made no later than noon on Thursday April 10, 2008, to Haldex AB, Box 7200, SE-103 88 Stockholm, or by telephone to +46 (0)8-545 049 50, or by e-mail to info@haldex.com.
Guide to reading the Annual Report
Haldex is a Swedish company, subject to Swedish laws. All values are expressed in Swedish kronor unless otherwise indicated. Millions of kronor are abbreviated as SEK m.
Figures in parentheses refer to 2006. Data concerning markets and the competitive situation represent Haldex’s own assessments unless a specific source is identified.
These assessments are based on the best and most recently available factual documentation from published sources in the vehicle industry.
Table of Contents
Direction and Strategy Page
Highlights of 2007 1
Report from the CEO 2
Strategic direction and financial objectives 6
Research and development 10
The vehicle market 13
Haldex divisions
Commercial Vehicle Systems 16
Hydraulic Systems 20
Garphyttan Wire 24
Traction Systems 28
Haldex in society
Human Resources and Social Responsibility 32
Environment 34
consolidated and Parent company Financial Statements 35
Report from the Management 36
Consolidated Income Statement 40
Consolidated Balance Sheet 41
Changes in Group Equity 42
Consolidated Cash Flow Statement 43
Notes to the consolidated financial statements 44
Parent Company Income Statement 60
Parent Company Balance Sheet 61
Changes in Parent Company Equity 62
Parent Company Cash Flow Statement 62
Notes to Parent Company financial statements 63
Auditors’ Report 67
corporate Governance
Corporate Governance Report 68
Board of Directors 74
Executive Committee 75
other
The Haldex share 76
Ten-year summary and quarterly review 78
Definitions and explanations 79
Addresses 80
Mission
Haldex provides proprietary and innova- tive technology solutions that improve safety, the environment and vehicle dynamics to the global vehicle industry within specific niches.
We strengthen our competitiveness and develop long-term customer relationships through products that offer high perfor- mance and low total costs for the customer throughout the product’s service life, ethical business practices and commitment to long- term partnerships.
Vision
Haldex will be the global vehicle industry’s first choice as a long-term partner.
We will contribute to social development by providing vehicle technology that satisfies our customers and society. By staying on the cutting edge of technology and developing skilled and motivated employees, we will also achieve profitable growth.
Values
• Customer first
• Respect for the individual
• Elimination of waste Strategy
The Group should focus on areas in which Haldex can achieve a strong market position based on innovative and leading products with the aim of creating a platform for sus- tainable growth and healthy profitability.
This strategy includes evaluating structural opportunities in order to create competitive units with favorable prospects. The follow- ing strategic initiatives are also being pur- sued in order to increase profitability and secure growth:
• Create growth and improve our competi- tive capabilities by developing and com- mercializing new products.
• Create growth by sharply strengthening positions in new markets, primarily through determined expansion in China, India, Brazil and Russia.
• Reduce purchasing costs, in part by con- tinuing to increase the share of purchases from low-cost countries.
• Improve the cost structure by increasing the share of production in low-cost coun- tries.
• Improve productivity and quality through intensified use of Haldex Way, our concept for management and process improvement.
• Develop employee competencies, strengthen the corporate culture and increase the focus on leadership.
• Acquire companies and establish pro- grams of cooperation that are consistent with the strategic direction.
• Niche strategy – safety, environment and vehicle dynamics.
Market
Consolidated sales were previously evenly distributed between Europe and North America. During 2007, the focus was shifted, so that Europe accounted for 54 percent of sales and North America for 38 percent. The remaining markets accounted for 8 percent.
The markets in South America and Asia, par- ticularly China, are showing robust growth, and their importance to the Group is increasing rapidly.
Legislation focusing on traffic safety, the environment and vehicle dynamics, com- bined with demands for continuous cost- rationalization measures, is the driving force for product development in today’s automo- tive industry. Demand is also driven by the increase in vehicle production worldwide.
Haldex has a global market presence, with 23 production plants in Sweden, Germany, the UK, Hungary, the US, Mexico, Brazil, India and China.
The Group in brief
net sales by region 2007 net sales by customer
segment 2007 net sales by division 2007
Haldex divisions
Haldex Group
commercial VeHicle SyStemS (cVS)
HyDraulic SyStemS
GarPHyttan Wire
traction SyStemS
Asia, Middle East and South America, 8%
North America, 38%
Europe, 54 %
Traction Systems, 11%
Garphyttan Wire, 14%
Commercial Vehicle Systems, 57%
Hydraulic Systems, 18%
Other, 3%
Engines, 13%
Heavy vehicles, 65%
Light vehicles, 11%
Industrial vehicles, 8%
Traction Systems
Hydraulics Systems
CVS Garphyttan Wire
commercial Vehicle Systems (cVS);
develops and manufactures brake sys- tems for heavy trucks, trailers and buses. The product offering covers all primary components and subsystems included in complete air brake systems.
Operations are divided into five business units: Actuators, Air Management, Brake Controls, Foundation Brake and Friction Products.
Hydraulic Systems; develops and manufactures hydraulic pumps, power systems, fuel transfer pumps for diesel engines and special pro- ducts to reduce diesel engine emis- sions. Hydraulic lifting systems and drive systems for industrial vehicles and trucks are also supplied.
Garphyttan Wire; develops and manufactures advanced spring wire from various alloys for use mainly in combustion engines and transmis- sions. The main applications are valve springs, transmission springs, piston rings and springs for fuel injection systems.
Haldex market share of the global mobile hydraulic market is estimated at 5%. The market share of the Division’s main area of activity, gear pumps, is about 20%.
Haldex market share of the global market for oil-hardened valve spring wire is about one-third, which gives Haldex a leading global position in this product area.
4,529 116 3,149
57% 38% 57%
18% 29% 29%
1,467 88 1,591
14% 15% 9%
1,095 46 482
Net sales, SEK m, Group total
Employees, average, Group total Operating income,
SEK m, Group total
7,940 302 5,518
traction Systems; develops and manufactures electronically con- trollable systems for four-wheel drive systems for cars, known as AWD systems. The system software can be customized to meet each carmaker’s particular desires in terms of driving characteristics and traction.
Haldex market share in Europe, based on the number of vehicles produ- ced, is 30%, which makes Haldex the European mar- ket leader for controllable AWD systems.
11% 17% 5%
848 50 296
Haldex market share of the market served with its current product program is about 15%. The market share is substantially hig- her in individual product areas.
• Sales totaled SEK 7,940 m (7,890). Adjusted for currency exchange rates, sales rose 4%. Order intake totaled SEK 8,098 m (7,883), up 6% after adjustments for currency exchange rates.
• Earnings after tax amounted to SEK 141 m (310). Earnings per share amounted to SEK 6.24 (13.96).
• Operating income and operating margin before restructuring costs amounted to SEK 352 m (419) and 4.4% (5.3), respectively. The decline in earnings was mainly attributable to the CVS Division in North America.
• The operating income was stable for CVS in Europe, which reported an operating margin of 7.4% (7.8). The operating margin for CVS in North America declined to minus 1.3% (–2.7) before restructuring costs, due to the weaker market.
• The return on capital employed was 8.3% (11.5).
consolidated net sales and operating margin (Incl restructuring cost)
Dividend and earnings per share
return operating income by division
(Incl restructuring cost)
SEK 7 , 940 m SEK 141 m SEK 352 m 8.3 %
Operating margin, % Net sales, SEK m
% SEK m
02 0
1 2 3 4 5 6 7 8
07 06 05 04
03 0
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
SEK m
02 0
50 100 150 200 250
07 06 05 04 03 CVS Hydraulics
Traction Systems Garphyttan Wire
Dividend/share Earnings/share SEK
02 0
3 6 9 12 15
07 06 05 04 03
Return on capital employed, % Return on equity, %
%
02 0
5 10 15 20
07 06 05 04 03
Key figures 3 years 2007 2006 Change 2005 Change
Net sales, SEK m 7,940 7,890 1% 7,486 5%
Earnings before tax, SEK m 222 315 –30% 341 –8%
Earnings after tax, SEK m 141 310 –55% 270 15%
Earnings per share, SEK 6.24 13.96 –55% 12.19 15%
Operating margin, % 3.8 4.9 –1.1% 5.2 –0.3
Operating margin, excl restructuring cost, % 4.4 5.3 –0.9 5.6 –0.3
Proposed dividend, SEK 4.50 4.50 – 4.00 13%
Return on capital employed, % 8.3 11.5 –3.2 12.3 –0.8
Return on equity, % 7.3 16.6 –9.3 15.9 0.7
Equity/assets ratio, % 37 40 –3 40 –
Cash flow from operations, SEK m 312 402 –22% 493 –18
Investments, SEK m 453 409 11% 354 16%
Average number of employees 5,518 4,683 18% 4,606 2%
Highlights of 2007
report from the ceo
Strategic and operational progress for continued profitable growth
Haldex and our industry had a challenging year in 2007. The two main markets, Europe and Northamerica, trended in opposite directions.
The US market turned downward, with dramatic declines for heavy trucks, trailers and construc- tion machinery, while production in Europe rose sharply. Although the trend for heavy trucks in the US was expected, it was somewhat more accentuated than we had expected in early 2007.
In this difficult business environment, Haldex can point to several accomplishments:
• Sales after currency adjustments increased 4% to SEK 7,940 m and order intake rose 6% to SEK 8,098 m. Europe showed extremely strong growth in all divisions, while trends in the US reflected a direct contrast.
• Operating income, excluding restructuring costs, declined from SEK 419 m to SEK 352 m and the operating margin dropped from 5.3 to 4.4%. The decline was due largely to Commercial Vehicle Systems (CVS), in the US, where favorable sales and earnings growth in Europe could not compensate for the weak market and problems within Fric- tion Products in the US.
• Sales in our priority growth markets in Asia increased sharply, by 51% to SEK 443 m.
• Favorable results of our efficiency enhance- ment work were noted during the fourth
quarter, with improved operating income and operating margins in all divisions except CVS, compared with the preceding quarter.
The Group’s operating margin was 5.1% (3.4) and Traction, Hydraulics and Garphyttan Wire all showed favorable development on par with, or better than, Group objectives.
The same is true of CVS in Europe and Asia.
• Operations in 2007 continued to reflect strong market confidence in the Haldex Group and in its products and product development. The Alfdex system for elimina- tion of crankcase gases is becoming a global success, and several important orders were booked during the year. The same is true of the Group’s four-wheel drive systems, which showed a strong increase in deliveries and order bookings during the fourth quarter.
• Our efforts to penetrate the very large and important market for disc brakes are con- tinuing. We have started series deliveries to several large truck and trailer manufacturers.
As our volumes increase and cost-efficiency measures generate positive effects, charges against earnings will decline. Our second generation EBS for trailers has been intro- duced very successfully in Europe, and our acquired hydraulic business operations in China are progressing as planned.
• Scania chose the Alfdex system for the clean- ing of crankcase gases in its new 9 and 13 liter engines. Two major US manufacturers of diesel engines, International Truck and Detroit Diesel, also chose the Alfdex system. The order value for the latter transaction is SEK 200 m over a three-year period.
• Integration was made of the acquired com- pany Runguang Hydraulics, one of the leading suppliers of hydraulic products to the Chinese construction machine industry.
• Towards the close of the year, deliveries of the AWD system to the new Volkswagen model, the Tiguan, rose sharply. The order value is SEK 1,250 m over a five-year period.
• A new Ford model – Kuga – that uses the Haldex AWD system was launched in Sep- tember. The order value is estimated at SEK 400 m over a five-year period.
• Haldex received a new order for four-wheel- drive systems from Volkswagen, expanding a previous order from 2004.
After several years of work to strengthen our operating activities, Haldex is now moving forward with strategic measures to renew its Group structure. In February 2008, Haldex acquired Concentric, a global leader that complements our Hydraulics Division. We will continue to evaluate strategic alternatives for Garphyttan Wire, possible supplementary acquisitions and divestments, and programs of cooperation with other companies. The goal is to focus on areas where Haldex can achieve a strong market position based on leading and innovative products that create a platform of competitive units with good potential to generate sustained growth, strong profitability and thus higher shareholder value.
Key events during 2007
• Launch of the new SAAB 9-3 XWD with Hal- dex’s AWD, and a completely new electronic dif- ferential brake (XWD). The order value is SEK 2 billion over a five-year period.
• Haldex received a prototype order from Korean carmaker Hyundai-KIA for the fourth-generation Haldex coupling and Haldex XWD.
• The European axle manufacturer Gigant, launched its new “Euro Axle”, which utilizes
Haldex’s new “fixed caliper dual disc” brake concept.
• In the third quarter, Haldex obtained global production approval for the new Haldex disc brakes for heavy trucks.
• The new Indian legislation concerning auto- matic brake control for commercial vehicles that became effective in April 2007 created strong demand for Haldex’s automatic brake
adjusters in India. During 2007, Haldex initiated series delivery of its AWD system to Volkswagen Tiguan.
• The improvement program to increase the profitability of CVS’s US operations, which includes restructuring of the Friction unit, is progressing favorably. Production opera- tions will be discontinued and outsourced to subcontractors in low-cost countries. We also reduced CVS’s workforce in the US by 300 employees during the past year, and closed the compressor factory in Paris, TN, in the US.
Accordingly, the multi-year program to increase operating efficiency is about to create the expected foundation for better earnings.
Against this background, the Board of Direc- tors and management are evaluating various development opportunities to strengthen the Group’s structure. The goal is to derive greater benefits from the highly favorable strategic position that Haldex commands as a result of its outstanding product development and strong market positions, and to concentrate our resources on the most profitable niches long term.
An important step in this pursuit was the acquisition of Concentric, which was announced in February 2008. Concentric is one of the world’s leading suppliers of oil, water and fuel pumps for diesel engines. It rep- resents a major acquisition for us, being a com- pany with sales of SEK 900 m in 2007 and high margins. Concentric will strengthen Hydraulic Systems’ offering to the diesel mar- ket, which is considered to have very strong growth potential. Cost synergies will total about SEK 70 m annually, and there are very substantial coordination opportunities in product development and marketing. Our technological leadership in reducing emissions and fuel consumption will also be strength-
ened. We have an aggressive expansion plan for the “New Hydraulics Systems” and our goal by 2011 is to increase sales to SEK 3.2–3.5 billion and achieve an operating margin of 10–11%.
Concentric is a first step in Haldex’s strate- gic plan to gradually change the Group struc- ture and strengthen our competitiveness and accelerate the creation of shareholder value.
Strategic options are now being evaluated for Garphyttan Wire, including a possible divest- ment. We are also intensifying evaluations of other Haldex operations, for which the agenda includes cooperation with other companies, acquisitions or divestments.
Strong point of departure
There is no doubt that Haldex’s point of depar- ture is strong. Our operations are based on a number of the world’s principal trends: devel- oping technologies, products and solutions for our customers that reduce the transport sec- tor’s impact on the climate and environment while also improving the work, working con- ditions and safety of all of the millions of peo- ple worldwide who are engaged in transport- ing people and goods on a daily basis.
Our key concepts – environment, vehicle dynamics and safety – will be the leading growth themes for several decades in the trans- port sector and serve as strong, long-term driv- ers for the Haldex Group’s continued expan- sion. If we follow these three key concepts, opportunities will be created for achieving more rapid growth than general demand for motor vehicles, while generating strong profit- ability.
We have solutions for a better environment
The attention devoted today to climate issues has focused on the transport sector’s energy efficiency and emissions. Vehicle manufactur- ers are required to meet increasingly stringent demands from the general public and authori- ties to reduce the environmental impact of their products. Stricter legislation and a rapidly increasing flow of regulations in the US, Europe, Japan and many large growth coun- tries are imposing clearly defined deadlines for the achievement of emission goals. To meet these requirements, very substantial invest- ments in new and improved technologies in the vehicle industry will be needed. We intend to capture a growing share based on the prod- ucts and solutions that are already on the mar- ket, and make very determined efforts to develop tomorrow’s leading environmental technologies in our product areas.
Some examples: Our Alfdex system is already valued as a billion business and repre- sents the market’s most superior solution for reducing crankcase gases to levels mandated by legislation in the US from 2007 and in Europe from 2009. The market potential from 2010 could reach 700,000 trucks annually.
Our Varivent solution is an air intake sys- tem for diesel engines that controls and man- ages gas emissions and reduces fuel consump- tion by 2–5%. As a result, emissions of nitro- gen dioxides, which create smog, can be reduced to meet the regulations that will take effect in North America, South America, Europe, Japan and China by 2010.
In addition, our recent acquisition of Con- centric provides Haldex with increased skills and expertise, product development and prod- ucts that improve our performance with regard
Haldex is working on technologies that reduce the transport sector’s climate and environmental impact”
“
Report from the CEO
• Production has been transferred from Western Europe and the US to China, Hungary, India and Mexico.
• Local purchasing offices with procurement organizations have been established in Eastern Europe, India and China.
• The percentage of Group employees in low-cost countries rose to 31% in 2007, compared with 15% in 2006.
• In 2007 alone, the number of Group employees in low-cost countries increased from about 200 to 1,300.
• Procurements from low-cost countries doubled to 20% in 2007 compared with 2005.
North America Europe
Heavy trucks –44% +16%
Trailers –24% +30%
Passenger cars –2% +6%
Forklift trucks –10% +20%
Construction machinery –10% +12%
Haldex increases production
and purchasing from low-cost countries the vehicle market 2007
Demand continued to rise sharply in Europe during 2007, while development in North America was the opposite. The US market turned downward, with dramatic declines for trucks, trailers and construction equipment.
to emissions and fuel consumption in diesel engines. Our global technological leadership is being strengthened.
Vehicle dynamics and safety – our market
Vehicle dynamics are intimately associated with safety. It is basically a matter of adapting the vehicle and its performance to a person’s capabilities. Vehicle dynamics are becoming an increasingly important competitive factor among car manufacturers that are striving to create performance profiles for their brands.
Vehicle dynamics and safety comprise a completely integrated combination in Haldex solutions for controllable four-wheel drive, a business segment that has now surpassed SEK 10 billion in total order intake since 1999.
Demand for these systems is growing faster than the passenger car markets in Europe and the US. Haldex has reached a position of mar- ket leadership in Europe. With the launch of Generation IV in autumn 2007 and the ongo- ing marketing of Generation V, the future appears bright. On the strength of Generation IV and our new product cross-wheel drive (XWD), volumes during the period up to 2011 will double. Our own productivity also improves significantly for every new generation.
Most of safety products for passenger cars are also outperforming the automotive market in terms of overall growth. With its ModulX, Haldex has the best disc brake offering for heavy vehicles on the market today. Market potential is substantial in the US, where pene- tration is very low compared with Europe’s 70 to 75%. The disc brake market is expected to increase from SEK 3.5 billion in 2006 to more than SEK 5 billion by 2011.
The next generation of disc brakes is already in the pipeline. With our Fixed Caliper Dual Disc, a giant step forward has been taken in technological development. A key European
customer introduced the new disc brake dur- ing the second quarter of 2007. In the third quarter, we also received global production approval for our disc brake for heavy trucks from one of the foremost global truck manu- facturing companies. In Asia, we see major potential for our new automatic brake adjuster: the market is expected to grow from 500,000 units in 2006 to six million in 2011.
We are growing in China and India Another path to business expansion is offered through efforts to increase our presence in the world’s emerging markets. China is a key ele- ment in this strategy. Forecasts indicate that market growth in China for heavy trucks and trailers will average almost 10% annually through year 2011 and 20% annually for trail- ers. The country is also by far the largest mar- ket for wheel loaders. In addition to its very large volume needs, China is undergoing a comprehensive technological upgrade that is driven by statutory requirements encompass- ing the entire automotive spectrum, from cars to heavy trucks and trailers, with particular emphasis on our specialized offering in the brake segment, and within hydraulics and engines.
We have built two new plants near Shang- hai within a short period of time for produc- tion of valve spring wire, brake and hydraulics products, and transferred production from high-cost countries to China. In 2007, we also acquired Runguang Hydraulics, one of the leading suppliers of hydraulic products to the Chinese construction machinery industry. We deliver to domestic and western manufacturers in China and export both to Europe and the US. We also have a highly functional sales organization in the country. Concentric’s many years of experience in China will further strengthen our position.
India is another highly interesting market for heavy vehicles, accounting for 130,000
units annually and with low technology levels.
Growth is estimated at 40% over the next five years. Legislation is also driving the market in our direction. Since 2007, automatic brake adjusters, a product area in which we are the market leader, have been required by law. Leg- islation will also be enacted soon mandating anti-lock brakes, and we are evaluating our opportunities in this market. CVS has a plant in Nashik and we have a majority interest in Haldex India Ltd. Production is concentrated on brake adjusters and anti-lock brakes. Con- centric has been represented in the country for many years with a high-quality production plant that has about 200 employees.
Productivity will be improved To enhance profitability and shareholder value in line with our potential, we have focused on Haldex’s cost position since I was appointed CEO three years ago. We have four main mis- sions: to increase production and procure- ments in low-cost countries, improve produc- tivity and implement efficiency enhancements programs in CVS and Garphyttan Wire.
In 2007 alone, we increased the number of Group employees in low-cost countries from about 200 to 1,300, and reduced our work- force in the US by nearly 350. We also invested heavily in these countries during the past year.
We transferred production from Western Europe to Hungary and India and from the US to Mexico. I have already mentioned our investments in China, including the transfer of production from the CVS plant in the US, which we later shut down, and transfers of production from some European units. The percentage of Group employees in low-cost countries has risen to 31%, compared with 15% in 2006.
The efficiency of our purchasing function
has been enhanced through improved coordi-
nation between the business areas and system-
We are increasing our presence in the emerging markets in China and India”
“
Haldex’s innovative solutions for the global vehicle industry result in increased safety, a better environment and improved vehicle dynamics.
atic efforts to find cost-effective and quality conscious subcontractors in Eastern Europe, India and China, where we have also estab- lished local purchasing offices with procure- ment organizations. We doubled our procure- ments from low-cost countries from early 2005 to 20% in 2007. The goal is to exceed 30% by 2010.
Continuous efforts to improve productiv- ity have also involved a significant upgrade of equipment and production plants, greater effi- ciency in flows and processes and actions to reduce the capital tied up in operations within the framework of our overall management system, Haldex Way. As I have already men- tioned, we have also implemented improve- ment programs at CVS and Garphyttan Wire, which are now beginning to generate results.
Focus on leadership and expertise A cornerstone in our improvement work is a further increase in the quality of our manage- ment personnel and the skills and expertise of our employees. This work includes stronger communication of our values and corporate culture, development of our management and
leadership skills, better recruitment procedures and a candidate pool for advanced leadership positions, training and education. There will be a strong emphasis on the implementation of continued processes of change and better structures and procedures for all efforts by management personnel to create conditions required for developing employee skills and effective cooperation within the organization.
Market outlook for 2008
General growth prospects are uncertain due to the economic slowdown that is spreading to a growing number of countries, and the after- effects of the US home mortgage crisis.
However, projected demand in the vehicle market during 2008 is generally promising, with expectations of a strong increase in the production of trucks and trailers in Europe.
Production in North America is expected to increase gradually, compared with the levels noted in the fourth quarter of 2007. The mar- kets for construction machinery both in North America and Europe are expected to remain largely unchanged, with some increase in demand for forklift trucks.
Against this background, Haldex believes that sales during 2008 are expected to increase somewhat compared with 2007. The increase is mainly attributable to new products, such as the Alfdex system and disc brakes, and from increased volumes in the Traction Division.
Operating income is expected to be better than in 2007 (excluding restructuring costs).
The improved earnings will derive mainly from productivity improvements within the Garphyttan Wire division, the restructuring of the Friction Products business unit, earnings improvements for disc brakes and increased sales volumes. The effects of the Concentric acquisition should be added to this.
Stockholm in March 2008
Joakim Olsson CEO and President
Report from the CEO 5
Strategic orientation
Mission, vision, strategies and objectives
Strategies
The Group should focus on areas in which Haldex can achieve a strong mar- ket position based on innovative and leading products with the aim of creating a platform for sustainable growth and healthy profitability. This strategy includes evaluating structural opportunities in order to create competitive units with favorable prospects. The following strate- gic initiatives are also being pursued in order to increase profitability and secure growth:
• Product development
• Stronger positions in new markets
• Reduced purchasing costs
• Increased production in low-cost countries
• Improved productivity – Haldex Way
• Development of employee competen- cies, strengthening of the corporate culture and increased focus on man- agement
• Strategic acquisitions
• Niche strategy – safety, environment and vehicle dynamics
Profitability has the highest priority in the Group’s strategy. In parallel, continued robust growth is an important prerequi- site for success. Haldex offers proprietary vehicle technology solutions that meet three customer requirements, safety, environment and vehicle dynamics. These customer requirements represent trends in our business environment that drive development in the vehicle industry and
enable Haldex to outperform the vehicle market as a whole in terms of growth combined with healthy profitability.
Objectives
Haldex shall create value for the share- holders by focusing on competence, sta- ble growth and increased profitability in a sustainable manner.
The goal will be achieved through a distinct customer focus, growth in niche sectors offering higher growth potential than the automotive market in general and determined strategies for cost savings and greater efficiency.
Financial objectives
Haldex has two overall objectives:
• 15 percent return on capital employed
• 6 percent annual growth
the secondary goals are:
• Operating margin of 7 percent
• Capital turnover rate of 2.5
Mission
Haldex provides proprietary and innova- tive technology solutions that improve safety, the environment and vehicle dynamics to the global vehicle industry within specific niches.
We strengthen our competitiveness and create long-term customer relations through highly skilled employees, high- performance products, low total costs for the customer throughout the product’s service life, ethical business practices and a commitment to long-term partnerships.
Vision
Haldex will be the global vehicle industry’s first choice as a long-term partner.
We shall contribute to social improve- ments by providing vehicle technology that satisfies both customers and society.
We shall also achieve profitable growth by staying at the cutting edge of technology and developing skilled and motivated employees.
Values
• Customer first
• Respect for the individual
• Elimination of waste
Safety, environment and vehicle dynamics
The Haldex Group offers proprietary vehicle technology solutions that meet three primary customer requirements: safety, environment and vehicle dynamics. These customer require- ments represent trends in our business envi- ronment that drive development in the vehicle industry and enable Haldex to outperform the vehicle market as a whole in terms of growth.
The direction of demand is governed by such factors as increasingly stringent safety and environmental requirements from legisla- tors, reflecting global consumer opinion that is becoming progressively pronounced.
Growth opportunities are strengthened fur- ther by the importance of vehicle dynamics in positioning and differentiating between vehicle manufacturer brands. With Haldex’s
brake systems, four-wheel drive systems, hydraulic systems and engine products, the Group is able to offer technical solutions of the highest quality to the world’s leading vehicle manufacturers.
In accordance with the company’s vision of being a reliable, long-term primary choice, our products are often developed in close cooperation with customers to meet their spe- cific requirements and applications. Haldex creates value for the world’s leading vehicle manufacturers, which provides opportunities for continued strong growth and expansion.
Strategic options relating to Haldex Group structure
Haldex is evaluating various strategic alterna- tives for the Group structure. The acquisition of Concentric is the first step in Haldex’s stra-
tegic plan to optimize the Group structure and to create a strong Hydraulic Systems Division.
Haldex will continue to analyze the Group’s structure in an effort to create competitive operations with favorable prospects. At pres- ent, various strategic alternatives for Garphyt- tan Wire are being studied, including the pos- sible sale of this business.
Strategies for growth and profitability
Profitability has the highest priority in the
Group’s strategy. In parallel, continued robust
growth is an important prerequisite for suc-
cess. To achieve its financial objectives for
growth and profitability, Haldex applies the
following strategies:
rake systems
Hydraulics
Spring wire
AWD systems
Passenger cars Engines
Industrial vehicles Heavy vehicles
Haldex largest customers
Daewoo Bus, Daimler, Dongfeng Motor, Eicher, Ford, First Auto Works, General Motors, Hino, Hyundai, Isuzu, INTERNATIONAL, IVECO, Kamaz, MAN, Oshkosh, Paccar, Renault Trucks, Scania, TATA, Volkswagen, Volvo.
Arvin Meritor, Bendix Spicer, Bosch, BPW, CICM, Dana, Gigant, Great Dane, Guerra&Facchini, Hendrickson, Jindo, Kögel, Krone, Randon, SAF, Schmitz, Stoughton, TRW, Utility, Wabasch.
Atlet, Crown, Jungheinrich, Linde (Still, OM Pimespo), NACCO (Hyster, Yale), Rocla, Toyota (BT, Raymond, Prime Mover).
Bobcat, Caterpillar, Dynapac, Genie, Grove, Komatsu, O&K, Vögele, Wey- hausen, Volvo.
Behrens, Bär, Dautel, D’Hollandia, Maxon, Ray Smith, Scania, Sorensen, Zepro, Volvo.
Caterpillar, Cummins, DAF, Daimler, Detroit Diesel, Renault Trucks, Scania, Volvo.
Associated, Dana, Federn Brand, Otto Joos, Mahle, Matthew Warren/Au- tomatic, Muhr&Bender, Peterson, Scherdel, United Spring.
Ford (Landrover Freelander, Volvo), General Motors (SAAB 9-3 XWD), Volkswagen (Audi, Bugatti, Seat, Skoda, VW)
Trucks & buses Axles & trailers
Forklift trucks Industrial vehicles
Tailgate lifting devices & bogie axles
Engines
Spring manufacturers
Passenger cars
Products for
Strategic orientation
Growth
• Niche strategy for increased growth, through a focus on products with higher growth potential than for the vehicle market as a whole. For Haldex, this involves prod- ucts that improve safety, the environment and vehicle dynamics.
• Increased competitiveness through product development is a central element in Hal- dex’s strategy. This involves both new prod- uct development and efforts to create new applications for our existing products.
• Strengthening positions in new markets is essential for growth. This will be achieved through goal-oriented expansion, primarily in China, but also in other countries such as India, Brazil, Russia and countries in Eastern Europe.
• Haldex continuously analyzes opportunities for strategic company acquisitions, while simultaneously launching other forms of cooperation. Developing new technologies and more rapidly establishing positions in new markets are key goals in Haldex’s acqui- sition strategy.
Profitability
• The cost structure is being improved by means of structural and efficiency-enhanc- ing measures. An increasing share of pro- duction is being located in low-cost coun- tries, thus reducing costs and bringing important parts of production closer to our strategic markets and customers.
• In order to increase profitability, Haldex strives to reduce purchasing costs, mainly
by increasing the proportion of procure- ments from low-cost countries.
• Productivity is being improved through con- tinued implementation and development of the Haldex Way management system.
• The organization’s efficiency is being improved through increased competencies and more distinct lines of control and responsibility.
• Making sure that large development proj- ects are profitable.
7
Product areas
0 4 8 12 16 20
00 99 14.1
8.3 12.1
5.8 6.0 6.8 12.8 12.3
11.5
Target 15%
%
01 02 03 04 05 06 07
return on capital employed
Financial objectives
To better reflect the conditions in Haldex’s mar- kets and the long-term nature of its business, financial objectives are expressed as average val- ues over a business cycle.
the Group’s overall objectives are:
• return on capital employed of 15%
• annual growth of 6%
the Group also has the following secondary goals:
• profit margin of 7%
• capital turnover rate of 2.5
The objectives apply to the Group as a whole. Tar- gets for the various business areas may differ depending on capital structure, degree of refine- ment or other business-related conditions. The return on capital employed has been less than 15% in the past five years. Efficiency efforts to strengthen Haldex’s profitability remain one of management’s main priorities.
Correctly positioned for growth Haldex’s mission and strategic orientation position the Group for growth. Asia, Eastern Europe and South America are new markets characterized by major requirements and strong growth. The scope of current social develop- ment in countries such as China and India is historically unique. At the same time, climate issues and other challenges are placing greater demands on all of us to assume a global respon- sibility for reducing energy consumption and achieving a better and safer environment. In parallel with increased global commerce, which is driving up transport requirements, the West- ern World’s infrastructure is being expanded and upgraded. For Haldex, this trend is creating strong forces that drive business growth.
We develop and deliver products that improve safety, the environment and the dynamics of vehicles used in the transport and infrastructure sectors. In the world’s new and expansive markets, investments in these sectors are vital for growth and social welfare. In tradi- tional industrialized countries, the transport and vehicle sectors must assume a greater responsibility for a better environment and increased safety. With strategic strengths in safety, environment and vehicle dynamics, the competencies represented by Haldex are extremely well positioned to meet demand from the global vehicle industry.
Global presence and world-leading customers
Haldex has a global presence and its customers include world-leading vehicle manufacturers, which is a strategic strength. The Group has production operations distributed among 23
production plants and nine development units in North America, South America, Europe and Asia.
We are favorably positioned and able to offer proprietary products that focus on the environment, safety and vehicle dynamics. All of these features and characteristics are strate- gically important to our customers and pro- vide considerable growth potential. Haldex is positioned on the cutting edge of technology in all areas, but without being an inventor. We develop and commercialize innovations, often in partnership with our customers, to provide maximum customer value. Serving world-lead- ing customers in all product areas subjects the company to considerable demands, while also signifying recognition of Haldex as a leading global manufacturer and market driver within its market segments.
Product development and world- leading products
Product development is a key driving force for organic growth and is a decisive success factor for Haldex. The Group specializes in transform- ing innovations into profitable, world-leading products in its niches. Investments in product development have increased steadily and led to a pioneering contribution to the vehicle industry’s technological advancement in four-wheel drive and disc brakes and in cleaning and increasing the efficiency of engines and hydraulics.
In 2007, development costs accounted for slighty more than 4 percent of sales. Product development is a key factor in Haldex’s strat- egy for being able to offer products in high- growth niches of the global vehicle market.
An important prerequisite is the ability to
develop technical solutions that satisfy cus- tomer requirements arising several years into the future, while having the product planning that facilitates efficient and profitable sale of new products. With its model for innovative product development, Haldex will be able to offer a series of new and attractive products to the market in the years ahead.
Competencies of managers and other employees
Continuously operating at the leading edge of technological development and having world- leading customers exposes the competencies of both individual employees and the organiza- tion as a whole to stringent requirements.
Based on the skills and efforts of its employees, Haldex aims to develop a high-performance, world-class organization that continuously strives to improve operations in accordance with the internal management system, Haldex Way. Determining factors are how well this work is organized and ensuring that each employee is given opportunities to utilize his or her full potential.
Management and HR work is governed by the following aims:
• To continuously develop our ability. By constantly raising the competency level of the organization and creating conditions that enable us to remain innovative and by continuously learning and improving our operations, we generate a distinct competi- tive edge over our competitors.
• To continuously improve as managers. By increasing our ability to manage people and the organization, in both the short and the long term and in a generally more complex
Our strategic strengths
Strategic orientation
0 1 2 3 4 5 6 7 8
00 99
5.6 6.6
3.8 3.0 2.9 3.1
5.2 5.2 4.9
Target 7%
%
01 02 03 04 05 06 07
Profit margin
–10 –5 0 5 10 15 20 25
00 99
6 22
1
–4 7
–7 15
11
5
Target 6%
%
01 02 03 04 05 06 07
annual sales growth
0.0 0.5 1.0 1.5 2.0 2.5 3.0
99 00
2.12.2 2.2
1.9 2.0 2.2
2.5 2.4 2.3
Target 2.5 times times
01 02 03 04 05 06 07
capital turnover rate
business, conditions are created for Haldex
to become a high-performance company.
• To strengthen our corporate culture. By developing a strong corporate culture that encourages performance and responsibility, we create an attractive workplace for our employees and conditions for continuous improvements in our operations and earn- ings.
This can only be achieved through the contri- bution of each employee in the organization and when each individual:
• can act independently, make decisions and act on the basis of his or her ability and in accordance with the company’s norms and values.
• is positively committed to and participates in the development of his or her work and has the capabilities to interact with others
for the benefit of both the employee and the company.
Productivity and Haldex Way In order to capitalize on its excellent growth potential, Haldex must improve is cost-effec- tiveness and increase its productivity. This work is conducted within the framework of the overall management and process improve- ment system, Haldex Way.
Haldex Way focuses on customer satisfac- tion and the achievement of world-class pro- duction. Haldex Way is based on the lean production philosophy, and the objective is to create a continuous link in flows between cus- tomers, subcontractors, production and prod- uct development. Haldex Way is an overall management philosophy for the entire value chain, including products, information and future requirements.
The concept for Haldex Way is based on three fundamental values:
• Customer first
• Respect for the individual
• Elimination of all waste
Customer requirements are the controlling fac- tor for these values. Our customers’ needs form the platform for what we produce – motivated employees are a basic prerequisite for the pro- duction of qualitative products – and we strengthen our competitiveness by eliminating all forms of waste. Management within Haldex must go hand-in-hand with the principles of Haldex Way and serve in a manner that pro- vides support, leadership and development.
research and development
Product development generates growth and improved market positions
Globalization increases demands As the CVS Air Management Business Unit Engi- neering Director for North America, Yiming Yuan is responsible for leading a team of product develop- ment engineers. The products engineered are uti- lized in the air brake system to generate and store compressed air, clean and dry the compressed air, and control the air downstream to the brake and suspension control devices.
Due to the increasing demand on reliability and added value to our customers, we must develop new products that meet our customer’s require- ment within shorter lead times. With the help of
CAD simulation tools, the product development period can be reduced significantly compared with the traditional design and validation approach.
With increased global presence, developing products that support all geographical markets is critical to our success. We must utilize global engi- neering resources, modular product designs and fast exchange of product knowledge. Culture, lan- guage, and time differences make the global cooperation quite challenging but also very inter- esting and rewarding. To help us overcome some of these challenges, we are utilizing more tools to
speed up communications. We have implemented several customer and supplier document sharing web/ftp sites, utilized web-based project manage- ment, and increased our time face-to-face with our colleagues around the globe.
Yiming Yuan, engineering director, CVS
Research and development drive the
vehicle industry forward. Innovative new products generate growth and improved market positions for Haldex.
Haldex develops vehicle engineering solutions that improve vehicle dynamics, the environ- ment and safety in the global vehicle industry.
Efforts to develop innovative new products form the foundation of our continued growth and future profitability.
Nearly one-third of all Haldex products have been developed in the past five years.
Haldex is recognized as a company with the know-how and ability to industrialize innova- tions, and the Group has the world’s leading vehicle manufacturers as its customers. Product development work is conducted by every busi- ness area, often in cooperation with customers and partners, which guarantees future demand when the product is ready for market launch.
Legislation calling for increased traffic safety, more stringent environmental require- ments and improved vehicle dynamics, com- bined with demands for continuous cost ratio- nalization, are the primary forces for product development in the vehicle industry. Products in these three areas are also considered to yield much higher growth than the vehicle industry in general, which provides Haldex good poten- tial for increased value creation.
In parallel, the vehicle industry places demands for the differentiation of the prod- ucts and customized solutions. Haldex’s strength is its ability to meet every customer’s individual needs based on platform design.
The point of departure in our product development lies in close customer relations
that lead to new concepts and improvements of existing products. Complementing our own basic development work, Haldex has also acquired ideas and concepts over the years that have subsequently been upgraded for cost- effective, high-volume production that has generated increased growth for Haldex and strengthened the Group’s market positions.
Vehicle dynamics
The market for products that improve vehicle dynamics is growing continuously. Driving characteristics and vehicle dynamics are becoming increasingly important differentia- tion factors and brand features for automotive manufacturers, particularly in the passenger car industry, at a time when cooperation between different manufacturers is increasing in order to reduce operating costs. Through determined product development work, Hal- dex has established a strong market position as a supplier of world-leading technology.
This applies in particular to four-wheel drive, an area in which the fourth generation of our continuously upgraded system is now being introduced by General Motors. In Feb- ruary 2008, a completely new plant was opened in Mexico for production of Haldex four-wheel drive systems and electronic differ- ential brakes for delivery to a number of Gen- eral Motors platforms in North America and Europe. The new Saab 9-3 XWD is the first car from General Motors to be equipped with Haldex’s new four-wheel drive system.
During 2007, Haldex also received its first prototype order from Hyundai-Kia Motors in South Korea for an electronic four-wheel drive system based on the fourth generation of
Haldex AWD. It was not only the first order from Hyundai-Kia Motors, but also the first order from an Asian car manufacturer.
At the same time, development of the fifth- generation cost-effective, four-wheel drive system is now in progress in cooperation with several vehicle manufacturers. Two prototype installa- tions are being tested during the winter of 2008 and production is expected to begin in 2011.
The mechanical components of Haldex’s four-wheel drive systems are essentially the same for different car models, but vehicle dynamics can be customized through various program- ming and control systems to meet each manu- facturer’s individual preferences and require- ments. The combination of mechanics and elec- tronics – mechatronics – provides considerable flexibility, while Haldex’s modular approach reduces costs for vehicle manufacturers.
Haldex has also developed a system with a controllable differential slip that improves the vehicle’s traction and stability when maneuver- ing at high speeds.
The first generation of Haldex’s four-wheel drive system was introduced in 1998. Through continued product development, the system characteristics have been refined and improved for each new generation. Haldex is one of the leading suppliers of four-wheel drive systems and its business is outperforming the market in terms of growth both in Europe and the US.
To continue to strengthen its leading posi-
tion, Haldex is also working with the next
technology generation, a system for torque
vectoring, known as Haldex Dual Torque
Drive, which offers significant improvements
with regard to vehicle dynamics, compared
with traditional four-wheel drive systems.
Research and development
Matthias Fuchs, chief engineer, Haldex plant in Hof, Germany
More efficient solutions that make the impossible possible
Matthias Fuchs is the chief engineer at the Haldex plant in Hof, Germany. He and his team of engineers are responsible for the development of hydraulic gear pumps and engines in various combinations. The prod- ucts are used in construction and agricul- tural equipment and forklifts. The area of responsibility also includes development of fuel transfer pumps for diesel engines.
“Our ambition is always an entire sys- tem solution for customer-specific applica- tions. System solutions with their integrated components and functions facilitate more efficient products that consume less energy, as required due to the increasingly stringent environmental legislation and lower costs for our customers.”
“The challenge is to train, motivate and intellectually stimulate our engineers, to do their best, both individually and as a group.
This is necessary in order to find sometimes
“impossible” solutions for our customers.”
Safety
Products and functions that increase vehicle safety are showing stronger growth than the automotive market in general. Development is driven by increased customer demand and new legislation creating new requirements. The substantial resources that Haldex has invested in developing more innovative products in recent years are now generating returns in the form of higher revenues and market shares.
Haldex has developed ModulX, a modular system for compressed-air-based disc brakes that can be adapted for different requirements.
The new system offers customers simpler adap- tation, fewer variations, fewer spare parts and lower maintenance costs. For Haldex, it entails more effective development, since most of the modules can be used in future generations of disc brake systems. The market reception for ModulX has been highly favorable and the results include two large orders from Scania and Volvo.
In parallel, Haldex has been working on developing the next generation of disc brakes, called Fixed Caliper Dual Disc, which are based on a unique and patented technology. The solu- tion combines a fixed caliper and two movable disc brakes, which is the opposite of traditional disc brakes. The system offers several advantages including improved performance with lower volume and weight, longer service life and easier spare parts maintenance. The new brake system has been tested extensively on trucks and trailers in Europe and the US. Preliminary series pro- duction and deliveries of Fixed Caliper Dual Disc will start during 2008.
To meet demands for tomorrow’s brake sys- tems, with further improved brake performance and improved vehicle dynamics, Haldex is
developing a completely electronic brake system for trucks and trailers that features electro- mechanical brakes, known as brake-by-wire sys- tems. The new technology shortens braking dis- tances by an average of 15 percent depending on road conditions, thereby contributing to a significant increase in traffic safety.
Haldex is also continuing its development of ModulAir, a modular-based range of products with integrated electronics for intelligent air drying and air distribution. ModulAir offers advantages by combining functions normally situated in several different parts of the vehicle.
Furthermore, costs will be lower and the prod- uct can be adapted easily to meet the specific requirements of various vehicle manufacturers.
In the vehicle segment comprising trailers, Haldex occupies a leading position today with its brake and air suspension systems. We strengthened our positions further during 2007 with the introduction of a new generation of our electronic brake system (EB+ gen. 2) in the European market. The system provides greater functionality and, in addition to brake adjust- ment, also includes electronic stability control (ESC), intelligent control of lift axles (ILAS) and suspension control of the trailer chassis (Colas). Haldex is the clear leader for ILAS and Colas in the European market.
Environment
Environmental issues are attracting increasing attention in the vehicle industry. Haldex has positioned itself at the forefront in an effort to increase environmental awareness and is now conducting several projects that offer signifi- cant market potential. Demands by public authorities for reduced emissions, combined
Alfdex meets new environmental legislation that took effect in the US during 2007. Alfdex eliminates virtually all emissions of lubrication oil from the crank cases of diesel-powered truck engines.
Ola Nicklasson is a development engineer within the Traction Division. His job is to develop the software used for Haldex’s four-wheel drive systems. It is this part of the electronics unit’s control software that determines the distribution of power between the front and rear axels.
“What makes active four-wheel drive systems spe- cial is the opportunity to equip cars with excellent trac- tion and, at the same time, exceptional driving perfor- mance. You could say that active four-wheel drive increases the car’s utility value and its enjoyment value.
“The challenge is to both understand the car- makers’ wishes regarding how the car should per- form and how the four-wheel drive system can help meet these needs. As well as writing programming logistics that all of our customers can use. And finally, working with the carmakers’ driving-perfor- mance technicians to adjust the logistic parameters so that the cars receive the characteristics requested by each specific carmaker.”
Ola Nicklasson, development engineer, Traction
with increased awareness among customers,
are creating greater demand for products that reduce the environmental impact. This is a trend that will almost certainly grow stronger during coming years.
Work is now in progress to develop the next generation of Alfdex, which separates oil and dust particles in ventilator air from diesel engine crankcase gases. Alfdex was developed in cooperation with Alfa Laval, and the new generation is expected to further improve the purification of crankcase gases.
The first generation of Alfdex was intro- duced in 2004 and is used today by about 10 of the world’s leading truck and engine manu- facturers. Examples of key customers include Scania, International Truck and Detroit Die- sel. A number of other manufacturers are also testing the system. With an order backlog val- ued at SEK 1 billion over the next three to five years, Alfdex is firmly established as the lead- ing supplier of highly effective solutions for the treatment of crankcase gases. Today’s wide- spread interest in the product is attributable in part to more stringent legislation concerning engine emissions, with respect both to exhaust fumes and crankcase gases. Alfdex reduces emissions from the crankcase to virtually zero, thereby fulfilling the environmental require- ments introduced in the US in 2007. This rep- resents a new field for Haldex and will contrib- ute to the company’s continued growth.
Varivent, another example of Haldex’s innovative product development, reduces emissions of nitrogen oxides from diesel engines while also contributing to lower fuel consumption. Following a series of tests, sev- eral major manufacturers of diesel engines plan to integrate Varivent in their engine platforms beginning in 2010. As a result of new and more stringent international environmental regulations, demand for solutions such as Vari- vent is expected to increase sharply.
At the same time, Haldex is continuing to develop new technology for the control of hydraulic systems, Energy Management Sys-
tem (EMS), a combination of hydraulics and electronics that improves operating efficiency and reduces energy consumption. The tech- nology is believed to offer substantial market potential and will also create new opportuni- ties for hydraulic vehicles.
EMS captures and recycles a large amount of the energy normally lost in vehicle braking.
This is a critical factor for improved fuel econ- omy. Using hydraulic hybrid technology, engine speed and torque can be made indepen- dent of vehicle speed.
In response to demands for reduced emis- sion from combustion engines, manufacturers have introduced a more sophisticated valve- control mechanism while increasing fuel injec- tion pressures. At the same time, the number of valves has been increased. This is placing greater demands on spring valve wire. Through continued product development, Haldex has raised the quality and strength of spring valve wire as much as 25 percent.
Cooperation in research and development
Haldex has programs of close cooperation with several universities and institutes of advanced education in Sweden and other countries.
Research is conducted in cooperation with the Universities of Technology in Luleå and Linköping. Haldex has also entered programs of cooperation with Chalmers Institute of Technology in Gothenburg, the Royal Insti- tute of Technology (KTH) in Stockholm, the University of Linköping and universities in Aachen, Germany and Cambridge, in the UK.
To ensure that Haldex remains at the lead- ing edge of technology and progressive prod- uct development in the future, and continues to adopt new trends that will contribute to future earnings, the Group participates actively in a number of national and interna- tional research and development projects.
Working with certain Swedish vehicle manufacturers, Haldex is also participating in IVSS (Integrated Vehicle Safety Systems), a
research project that is also supported by Vin- nova and the Swedish Road Administration.
The Program for Automotive Research (PFF) is conducting a Green Car research proj- ect to develop more environmentally compati- ble vehicles. Green Car is a program of coordi- nated activities based on an agreement between the Swedish government and domestic vehicle manufacturers. Haldex is contributing knowl- edge and the experience gained through its development of Alfdex and other projects.
Development work on the next-generation brake system, Brake by Wire, was conducted within the framework of SPARC (Secure Pro- pulsion and Advanced Redundant Control), an EU development project. Haldex was one of more than 20 companies participating in a consortium led by Daimler.
Matching customer demands with technical possibilities
