Schaeffler stays on track in year of transition 2024

2024-11-05 | Herzogenaurach

• Revenue for the first nine months of 2024 increased by 1.0 percent at constant currency to 12,233 million euros (prior year: 12,270 million euros)
• EBIT before special items for the reporting period at 713 million euros (prior year: 964 million), EBIT margin at 5.8 percent (prior year: 7.9 percent)
• Automotive Technologies generates order intake of 4.4 billion euros in
• E-Mobility, Vehicle Lifetime Solutions continues to grow at profitable double-digit rates, Bearings & Industrial Solutions revenue decreases
• Strong free cash flow before cash in- and outflows for M&A activities for the third quarter of 2024; about 97 million euros (prior year: 211 million euros) achieved for reporting period
• Group-level outlook for 2024 confirmed; Vitesco consolidated starting October 1, 2024

Schaeffler AG published its results for the first nine months of 2024 today. Revenue for the reporting period was 12,233 million euros (prior year: 12,270 million euros). The slight constant-currency increase in revenue by 1.0 percent compared to prior year resulted primarily from volume growth at the Vehicle Lifetime Solutions division. Automotive Technologies division revenue was slightly ahead of the prior year, while the Bearings & Industrial Solutions division reported a decrease in revenue. The group’s revenue for the third quarter declined by 1.1 percent at constant currency to 3,957 million euros (prior year: 4,062 million euros).

At the Automotive Technologies division, revenue for the first nine months of 2024 was 0.2 percent above prior year at constant currency, mainly due to increases at the E-Mobility business division (BD) in the Europe and Americas regions. Revenue at the Vehicle Lifetime Solutions division rose by 16.1 percent at constant currency primarily as a result of the considerable growth in Independent Aftermarket business in the same regions. In contrast, the Bearings & Industrial Solutions division reported a 4.2 percent constant-currency decrease in revenue mainly due to the impact of volumes at the Industrial Automation sector cluster in the Europe region as well as the impact of sales prices at the Wind sector cluster in the Greater China region.

While the Europe (0.5 percent), Americas (5.2 percent), and Asia/Pacific (2.0 percent) regions reported constant-currency revenue growth for the first nine months of the year, Greater China region revenue fell 3.3 percent short of the prior year figure at constant currency.

The Schaeffler Group generated 713 million euros (prior year: 964 million euros) in EBIT before special items in the first nine months of 2024, representing an EBIT margin before special items of 5.8 percent (prior year: 7.9 percent).

“The Schaeffler Group has stood its ground well in the first nine months of 2024, maintaining the prior year’s revenue level in challenging times. The Automotive Technologies division has reached 4.4 billion euros in E-Mobility order intake, and the Vehicle Lifetime Solutions division has even further exceeded its outstanding results for the prior year period, partly offsetting the decline in revenue and earnings at Bearings & Industrial Solutions. Given the challenging environment, the earnings for the third quarter of 2024 are acceptable. All the more so since we have completed the acquisition of Vitesco on schedule effective October 1st,” said Klaus Rosenfeld, CEO of Schaeffler AG.

Automotive Technologies – E-Mobility with double-digit growth
The Automotive Technologies division generated 5,212 million euros in revenue for the reporting period (prior year: 5,256 million euros). Revenue for the first nine months was 0.2 percent ahead of the prior year level at constant currency. The division outperformed the decreased global production of passenger cars and light commercial vehicles (down 1.6 percent) by 1.8 percentage points.

E-Mobility BD revenue grew in all regions. Higher volumes were reported especially in the Europe and Americas regions which generated double-digit growth rates despite delays in the ramp-up of the electric mobility market. The E-Mobility BD generated total constant-currency revenue growth of 10.7 percent during the reporting period. Schaeffler’s order intake amounted to 4.4 billion euros, considerably exceeding in the first nine months the range of 2 to 3 billion euros targeted for the full year. Revenue for the Engine & Transmission Systems and Chassis Systems BDs for the first nine months was 2.2 percent and 2.0 percent below the prior year at constant currency.

The division generated EBIT before special items of 200 million euros in the first nine months of 2024 (prior year: 283 million euros). The EBIT margin before special items amounted to 3.8 percent (prior year: 5.4 percent). The decline in EBIT margin before special items was partly attributable to higher costs of research & development, in part due to customer projects, as well as of sales and administration.

Vehicle Lifetime Solutions – Strong profitable growth
The Vehicle Lifetime Solutions division generated 1,953 million euros (prior year: 1,710 million euros) in revenue for the reporting period, representing 16.1 percent in additional revenue at constant currency compared to the prior year period. The considerable constant-currency growth in revenue in the first nine months of 2024 was primarily attributable to a favorable impact of volumes. The prior year’s adjustments to sales prices continued to have an additional slightly favorable impact on the revenue trend.

The Europe region – the region generating the highest revenue – grew its revenue by 13.7 percent at constant currency during the reporting period. The Americas region reported a 19.4 percent constant-currency increase in revenue primarily driven by the considerable growth of the Independent Aftermarket business. Greater China region revenue was up 28.1 percent at constant currency during the same period, mainly due to growth in the e-commerce business. Revenue in the Asia/Pacific region for the first nine months was 17.5 percent ahead of the prior year level at constant currency.

The division’s EBIT before special items for the first nine months amounted to 333 million euros (prior year: 263 million euros), representing a 26.5 percent increase and an EBIT margin before special items of 17.1 percent (prior year: 15.4 percent). The higher EBIT margin before special items was partly the result of a favorable impact of sales prices.

Bearings & Industrial Solutions – revenue decrease driven by volumes and prices
The Bearings & Industrial Solutions division reported 4,976 million euros in revenue for the reporting period (prior year: 5,270 million euros). The constant-currency 4.2 percent decrease in revenue for the first nine months of 2024 was primarily attributable to the impact of volumes in the Europe region and sales prices in the Greater China region. The division has already initiated measures in recent months in order to adapt production capacity to this trend. Along with a reduction of flexitime accounts in the affected areas and reduced weekly working hours, the division has also put in place additional measures to promote sales.

In the Europe region, revenue fell 8.5 percent at constant currency. This change was mainly marked by the market-driven decline in revenue in the Industrial Automation sector cluster. While Americas region revenue for the first nine months was up 3.1 percent at constant currency, the Greater China

region experienced a constant-currency decline in revenue of 5.8 percent. The weak market environment and the local competitive situation, especially in the Wind sector cluster, weighed on the revenue trend. Revenue in the Asia/Pacific region rose by 1.0 percent at constant currency during the reporting period, mainly due to the favorable trend at the Wind and Two Wheelers sector clusters.

The Bearings & Industrial Solutions division generated 257 million euros in EBIT before special items for the first nine months of the year (prior year: 428 million euros), representing an EBIT margin before special items of 5.2 percent (prior year: 8.1 percent). This decline was mainly attributable to the impact of volumes and sales prices.

Free cash flow – strong third quarter 2024 with 188 million euros
Free cash flow before cash in- and outflows for M&A activities for the third quarter of 2024 amounted to 188 million euros, in line with the prior year level (prior year: 182 million euros). The resulting free cash flow before cash in- and outflows for M&A activities for the reporting period is 97 million euros (prior year: 211 million euros). The decrease was partly due to cash outflows for integration activities and interest payments for the financing transactions related to the merger.

Capital expenditures on property, plant and equipment and intangible assets (capex) for the third quarter of 2024 amounted to 227 million euros (prior year: 247 million euros), representing a capex ratio of 5.7 percent (prior year: 6.1 percent). The Schaeffler Group’s net financial debt amounted to 4,812 million euros as at September 30, 2024 (December 31, 2023: 3,189 million euros). The net financial debt to EBITDA ratio before special items increased to 2.5 as at the same date (December 31, 2023: 1.5).

“The Schaeffler Group has generated solid earnings in the first nine months of 2024 while successfully executing the merger with Vitesco. This demonstrates our focus on the operating business, which forms the financial basis for the successful integration and for realizing the potential synergies from the merger,” said Claus Bauer, CFO of the Schaeffler Group.

Net income attributable to shareholders of the parent company was 250 million euros (prior year: 416 million euros) in the first nine months of 2024. Earnings per common non-voting share amounted to 0.38 euros (prior year: 0.63 euros). The Schaeffler Group had a workforce of 82,074 employees worldwide as at September 30, 2024 (December 31, 2023: 83,362).

Guidance for 2024 confirmed – acquisition of Vitesco successfully completed
The Schaeffler Group continues to anticipate considerable constant-currency revenue growth in 2024. In addition, the company expects to generate an EBIT margin before special items of 5 to 8 percent in 2024. The Schaeffler Group continues to anticipate free cash flow before cash in- and outflows for M&A activities of 200 to 300 million euros for 2024.

The merger of Vitesco into Schaeffler became effective when the transaction was entered in Schaeffler AG’s commercial register on October 1, 2024. Schaeffler’s voting common shares have been listed on the stock exchange since October 2, 2024. Trading in Vitesco shares and in the previously exchange-traded common non-voting shares of Schaeffler AG has ceased. Thus, Schaeffler has successfully completed the business combination announced on October 9, 2023, and standardized its class of shares as at the beginning of the fourth quarter of 2024. The Schaeffler Group will operate under the uniform corporate brand “Schaeffler” going forward.

Klaus Rosenfeld, CEO of Schaeffler AG, stated: “The successful merger of Vitesco into Schaeffler AG and the standardization of the class of shares mark the successful completion of this complex three-step transaction. We are now looking forward with confidence to the upcoming integration and the opportunities arising from the merger. As of October 1st 2024, we have come one step closer to our strategic objective of forming the leading Motion Technology Company.”

¹ Includes content supplied by S&P Global Mobility© [IHS Markit Light Vehicle Production Forecast (Base), October 2024]. All rights reserved.

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Forward-looking statements and projections
Certain statements in this press release are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. No one undertakes any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You should not place any undue reliance on forward-looking statements which speak only as of the date of this press release. Statements contained in this press release regarding past trends or events should not be taken as representation that such trends or events will continue in the future. The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that Schaeffler, or persons acting on its behalf, may issue.