Schaeffler AG says it is off to a good start in 2012 with Q1 revenues up 6% on last year, though EBIT and net income were down on last year.
"We have successfully continued our growth strategy during the first quarter of 2012 despite an increasingly challenging environment. With sales increasing by six percent, our growth has again outpaced the market. We have managed to stabilise our profitability at a high level," said Schaeffler AG CEO Dr. Juergen M. Geissinger.
Sales for the first three months of 2012 grew by approximately 6% to EUR2.9bn, with revenue of both divisions, Automotive and Industrial, again expanding faster than their respective markets, Schaeffler said.
Automotive division sales increased by around six percent to approximately EUR1.9bn. The Industrial division also grew by around 6% to over EUR900m.
The fastest growing region, North America, generated revenue growth of 17%, followed by Asia/Pacific with 14% and Germany with 9%. Sales in the regions Europe excluding Germany and South America declined by 3% and 7%, respectively.
As expected, EBIT of EUR401m (prior year: €472 million) fell short of the higher-than-average prior year level due to the ongoing capacity expansion in the first quarter and growth-related pre-production costs, Schaeffler said.
Schaeffler generated an EBIT margin of 14% following 17.5% during the first quarter of 2011. Net income for the period, excluding non-controlling interests, was EUR236m (prior year: EUR438m). The prior year period included non-cash changes in the fair value of interest rate derivatives of EUR156m.
Schaeffler said it was able to slightly increase operating cash flows compared to the prior year period. Capital expenditures more than doubled. EUR244m in cash was used in investing activities (prior year: EUR114m). The regional focus of Schaeffler's investing activities was again on Asia, where the projects that started in China and India in 2011 were continued. They are aimed at increasing the proportion of value added locally. Free cash flow for the first quarter was an outflow of EUR107m (prior year: inflow of EUR11m) due to the significant increase in capital expenditures and one-time transaction costs related to the comprehensive refinancing arrangement in the first quarter.
"Refinancing our senior financial debt has significantly improved the maturity profile of our loans. We were able to place approximately EUR3.5bn in high yield bonds and loans in the capital markets, effectively broadening our funding sources," said Klaus Rosenfeld, CFO of Schaeffler AG. "Significantly higher capital expenditures and one-time effects of these transactions led to negative free cash flow for the first quarter. We are expecting free cash flow to become positive during the course of the year."