GERMANY: Schaeffler posts nine month revenue up 4.2% at $10.9bn
Schaeffler has unveiled revenue for the first nine months of this year up 4.2% to EUR8.4bn (US$10.9bn), with EBIT margin of 13.6% and free cash flow of EUR92m.
The supplier said it had performed well during the first nine months of the year despite difficult economic conditions, particularly latterly. "The situation in our markets deteriorated further during the third quarter," said Schaeffler CEO, Juergen Geissinger.
"Our industrial business in particular felt the impact of the difficult economic conditions in Europe and the slowdown in the economic development of the emerging countries over the course of the third quarter. However, we were able to again grow profitably within this challenging environment during the third quarter."
The automotive division expanded by 7% to around EUR5.8bn, while industrial division revenue remained stable at around EUR2.6bn.
Regional revenues for the first three quarters were varied with revenue growth in North America accelerating slightly to 20% while revenue for the Asia/Pacific region rose by 10%, less than during the first six months.
Growth in Europe was 1%, while South American revenue fell by 12%."
Schaeffler business maintains high-level performance
- Revenue increases 4.2 percent to around €8.4 billion during first nine months
- Earnings quality remains high: EBIT margin at 13.6 percent
- Free cash flow for third quarter at €92 million
- S&P and Moody’s upgrade company rating
- 2012 growth expectation updated, earnings target unchanged
Schaeffler, international supplier to the automotive and industrial sector, continued to perform well during the first nine months of the year despite difficult economic conditions. “The situation in our markets deteriorated further during the third quarter. Our Industrial business in particular felt the impact of the difficult economic conditions in Europe and the slowdown in the economic development of the emerging countries over the course of the third quarter. However, we were able to again grow profitably within this challenging environment during the third quarter,” stated Schaeffler AG CEO Dr. Juergen M. Geissinger.
The Schaeffler Group’s revenue increased by four percent to approximately €8.4 billion during the first nine months of 2012. The Automotive division expanded by seven percent to approximately €5.8 billion, while Industrial division revenue remained stable at approximately €2.6 billion. Regional revenues for the first three quarters still varied. While revenue growth in North America accelerated slightly to 20 percent, revenue for the Asia/Pacific region rose by ten percent, less than during the first six months. Growth in Europe amounted to one percent. South American revenue fell by twelve percent.
As expected, the company’s EBIT of €1,144 million fell short of the exceptionally high prior year level of €1,349 million. The EBIT margin for the first nine months was 13.6 percent (prior year: 16.7 percent). Net income for the period excluding non-controlling interests amounted to €731 million (prior year: €743 million).
Operating cash flow rose by 8.1 percent to €783 million (prior year: €724 million) during the first nine months. Capital expenditures amounted to €672 million (prior year: €514 million). Thus, Schaeffler generated free cash flow of €122 million (prior year: €229 million) during the first three quarters. “The proactive management of our cash flow is a key challenge for the Schaeffler Group. During the third quarter, we could improve free cash flow to €92 million. We expect free cash flow to be positive again in the fourth quarter,” said Klaus Rosenfeld, CFO of Schaeffler AG.
Schaeffler reduced its net financial debt slightly from the previous quarter to approximately €6.7 billion (end of June 2012: €6.8 billion). The leverage ratio was 3.2. On the basis of the refinancing arrangement completed during the first six months, the rating agencies Standard & Poor’s and Moody’s have upgraded Schaeffler AG’s company rating. Standard & Poor’s has assigned a “B+” rating to Schaeffler with a stable outlook, while Moody’s rates Schaeffler AG at “B1” with a positive outlook.
Outlook for 2012
The company does not expect global economic growth to revive during the fourth quarter of 2012. The current uncertainties particularly in the euro area and lower growth in Asia are dampening prospects. Looking to the final quarter, Dr. Geissinger stated: “We currently expect the volatile and challenging environment in key market sectors to continue. We are forecasting a further decline in demand in the fourth quarter, which will result in a temporary adjustment to our capacities. Given the current conditions in the market, it is more important than ever that we continue to improve our business processes, keep focusing on costs, and position our company towards the future.”
In light of this, although the Schaeffler Group expects to continue growing faster than the market, it no longer expects to meet the previous annual revenue growth target of more than 5 percent. Instead, the company now anticipates revenue growth of approximately 4 percent for 2012 as a whole. Schaeffler is maintaining its ambitious profitability target. “Our expectation of generating an EBIT margin in excess of 13 percent for 2012, thus meeting the target for the year as a whole, remains unchanged,” emphasized Dr. Geissinger.
Original source: http://www.schaeffler-group.com/content.schaefflergroup.de/en/press/press-releases/press-details.jsp?id=12433217
Schaeffler claims plans to end the mutual investment agreement with Continental are because the deal "no longer has any practical relevance for either company."...
This QUBE report from just-auto provides a comprehensive overview of the global light vehicle engine cooling sector, major suppliers, top 14 markets, technology trends and market size forecasts. Use t...
Ford Motor and Schaeffler have demonstrated the Fiesta-based eWheelDrive car, a driveable research vehicle that could lead to improvements in urban mobility and parking by making possible smaller, mor...
TechNavio's analysts forecast the Automotive Aftermarket in Europe to reach USD 116.9 billion by 2015. One of the key factors contributing to this market growth is increasing demand for high-performan...
German union IG Metall has said supplier Schaeffler plans to axe as many as half of 1,500 jobs at a facility in western Germany....
TechNavio's analysts forecast the Automotive Aftermarket in Germany to reach US$31.72 billion by 2015. One of the key factors contributing to this market growth is the increasing demand for advanced a...
Bearings and vehicle component maker Schaeffler said it remains "optimistic" this year, even though profits fell in 2012 by 1.9% to EUR872m (US$1.13 bn)....
This report has been prepared based on an in-depth analysis of the market with inputs from industry experts. The report focuses on the Western European region; it also covers the Automotive Aftermarke...
- Jaguar Land Rover's lightweight future
- INTERVIEW: Ford of Europe's chief, Stephen Odell
- THE WEEK THAT WAS: Musical chairs
- ANALYSIS: Scale and mega-platforms
- GENEVA WRAP: Europe still struggles, future bright
- GENEVA: Apple launches car iOS
- 'One Ford' has kept us alive in Europe
- GENEVA: Jaguar names 'small' saloon XE
- JLR reported close to Saudi Arabia factory deal
- GENEVA SHOW: World premieres [final list]
- Tesla: The Californian start-up that made head way on the automotive giants
- Dacia: The no frills automotive brand, that is becoming a serious world contender
- PLDB - vehicle cycle plan database (annual subscription)
- China’s One-Child Policy is Shaping a New Automotive Landscape
- Global light vehicle HVAC market 2008 to 2028