WABCO's Outstanding Growth in 2017 Powers Record Sales

WABCO full year 2017 sales were up 17.6% from a year ago, and full year 2018 sales growth is expected to range from 10.0-15.0%.

WABCO Holdings Inc., a leading global supplier of technologies and services that improve the safety, efficiency and connectivity of commercial vehicles, has reported Q4 and full year 2017 results.

WABCO Q4 2017

"In Q4 2017, WABCO delivered exceptional growth, before adding the contribution from our two largest acquisitions, R.H. Sheppard with its advanced steering technologies, and taking full ownership of the Meritor WABCO joint venture in North America," says Jacques Esculier, WABCO Chairman and Chief Executive Officer.

"We demonstrated once again our ability to capitalize on solid growth in the commercial vehicle market while continuing WABCO's strong outperformance of global truck and bus production," says Esculier. "In addition, we achieved a record quarterly performance operating margin, and we delivered record quarterly earnings per share on a performance basis, up 36% versus a year ago."

WABCO Full Year 2017

"Overall, WABCO's outstanding growth in 2017 powered record annual sales, before adding the contribution of WABCO's two largest acquisitions," says Esculier. "Moreover, 2017 represents WABCO's eleventh consecutive year of solid outperformance of the commercial vehicle industry relative to global truck and bus production.

"In 2017, we continued to increase WABCO content onboard vehicles through further adoption of our safety and efficiency technologies in both mature and emerging markets," says Esculier. "We also demonstrated WABCO's exceptional ability to transform top-line growth into superb bottom-line results, delivering record annual earnings per share on a performance basis, up 18% versus a year ago."

In 2017, WABCO's Operating System, the company's globally standardized management environment, delivered $83.2 million of materials and conversion productivity, another annual record. It also generated gross materials productivity of 5.3 %.

"Throughout 2017, we continued to drive cost efficiency across WABCO's global value chain, reaching conversion productivity of 8.1% in our factories, and setting yet another annual record," says Esculier.

In 2017, WABCO continued to strongly convert income into cash, resulting in net cash from operating activities of $421.5 million.

WABCO Share Buyback Program

Since June 2011, WABCO has repurchased 19,328,912 shares for $1,591.0 million in open market transactions as of December 31, 2017. As previously disclosed, due to WABCO's global strategic acquisitions during second half 2017, no shares were repurchased in this period. WABCO is further authorized to repurchase up to $480.0 million of additional shares through December 31, 2018, as previously reported.

Recent WABCO Highlights

In January 2018, WABCO announced that it has entered into a new long-term agreement to supply automated manual transmission (AMT) valve technology for a major global manufacturer of trucks and buses headquartered in Europe. In a new technological development for heavy-duty transmissions, WABCO will supply its latest generation of tailored AMT valves. WABCO will support future series production as sole supplier, primarily in Europe and South America. Further differentiated by its global infrastructure, WABCO provides production and supply chain capabilities that are near sites where this major customer plans their new gearbox and transmissions to be produced. WABCO's innovative AMT technology improves fuel economy through optimized gear shifting. WABCO is the global market leader with more than 4 million AMT systems sold.

In Q4 2017, WABCO disclosed that it has signed a new agreement to strengthen its strategic partnership with Dongfeng Liuzhou Motor, one of China's major truck makers, and to extend their existing strategic supply agreement. WABCO will offer new products, systems and value-added services to Dongfeng Liuzhou with a view to upgrading technology and optimizing onboard systems performance for Dongfeng Liuzhou brands. As part of the agreement, WABCO will provide Dongfeng Liuzhou with technologies to enhance fuel efficiency and advanced driver assistance systems, such as ESCsmart electronic stability control, air disc brakes and other active safety systems.

WABCO announced in Q4 2017 that it has made a $10 million strategic investment in Nikola Motor Company, a leader in the design and manufacturing of hydrogen-electric vehicles, vehicle components, energy storage systems and electric vehicle drivetrains, headquartered in Salt Lake City, UT, U.S.A. This transaction further demonstrates WABCO's commitment to advance the development of electric and highly automated commercial vehicles in North America and around the globe. In addition, WABCO and Nikola agreed to accelerate the development of industry-leading safety technologies specifically designed for electric commercial vehicles, including electronic braking systems, as well as traction and stability control technologies. Nikola plans to begin testing among commercial vehicle fleets in late 2018 and launch full production in 2021.

WABCO reported in Q4 2017 that it has acquired the remaining 51% interest of its South African partnership with Sturrock and Robson Industries, Pty Ltd., creating wholly-owned WABCO South Africa. This acquisition will help WABCO to introduce its extended global portfolio to the African region, enabling continued growth. WABCO has operated in South Africa for nearly 40 years, and its customers in South Africa and nearby countries include the region's top five trailer manufacturers, a strong aftermarket network and a wide range of commercial vehicle makers.

In Q4 2017, WABCO introduced WABCO OnSide, an advanced blind spot detection system for commercial trucks and trailers. The radar-based system alerts drivers of the presence of a moving vehicle in a truck's blind spot and provides a side collision warning to reduce the risk of accidents. When used with WABCO's OnLaneASSIST lane keeping assist system, OnSide has the capability to go beyond warning to enable active collision avoidance. OnSide is available through major North American truck makers as of Q1 2018. 

WABCO INDIA reported in Q4 2017 that it received the "Future Ready Factory Award" for its Mahindra World City plant's operational performance and business results. This recognition by the 2017 India Manufacturing Excellence Awards further differentiates this plant as one of India's best facilities in the automotive manufacturing industry. In addition, WABCO's Mahindra World City plant recently received the "Export Excellence Award" from India's Ministry of Commerce and Industry. The plant secured first position for its unparalleled contribution to India's net foreign exchange earnings for the year 2015-16. "Export Excellence Awards" are granted by India's government to recognize the contribution of outstanding engineering and services companies in the nation's Special Economic Zones.

WABCO Full Year 2018 Guidance

Based on its estimate of future market conditions, tax environment, foreign exchange movements and contributions from acquisitions, WABCO provides guidance for 2018.

"We are committed to continue WABCO's market outperformance and to transform top-line growth into healthy bottom-line results through our three-pillar strategy of technology leadership, globalization and excellence in execution," says Esculier. "We also reiterate our confidence in our ability to sustain WABCO's delivery of outstanding shareowner value."

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