Schaeffler Group in challenging environment with strong cash flow in 2019

Global automotive and industrial supplier Schaeffler presented its results for 2019 today. The Schaeffler Group’s revenue for the reporting period amounted to approximately 14.4 billion euros (prior year: approximately 14.2 billion euros). At constant currency, revenue for the period increased by 0.1 percent. Constant-currency revenue growth of the two Automotive divisions was slightly negative, but trended up in the second half of the year, while the Industrial division reported revenue growth throughout the year, although this growth leveled off in the second half. Of the four regions, the Greater China and Americas regions contributed to constant currency revenue growth while revenue declined in the Europe and Asia/Pacific regions.

The Schaeffler Group generated earnings before financial result, income (loss) from equity-method investees, and income taxes (EBIT) of 790 million euros (prior year: 1,354 million euros) in 2019. These earnings were affected by special items for the reporting period of 372 million euros, largely consisting of 356 million euros in expenses related to the transformation and efficiency programs established in 2019 – RACE (Automotive OEM), GRIP (Automotive Aftermarket), and FIT (Industrial). The corresponding EBIT before special items amounted to 1,161 million euros (prior year: 1,381 million euros), representing an EBIT margin before special items of 8.1 percent (prior year: 9.7 percent). Along with the persistently challenging environment, the decline in EBIT margin before special items was largely attributable to an adverse impact of selling prices and a change in product mix in the Automotive OEM division. The margin trend was also held back by expenses for IT and digitalization projects.

Net income attributable to shareholders of the parent company for the reporting period amounted to 428 million euros, falling considerably short of the prior year level (881 million euros). Earnings per common non-voting share were 0.65 euros (prior year: 1.33 euros). On that basis, Schaeffler AG’s Board of Managing Directors will propose a dividend of 45 cents to the annual general meeting. This represents a dividend payout ratio of approximately 43 percent (prior year: approximately 40 percent) of net income attributable to shareholders before special items.

Klaus Rosenfeld, CEO of Schaeffler AG, commented on the performance of the business in 2019: “In a challenging environment, we were able to meet our guidance for revenue growth as adjusted in July and slightly surpass the EBIT margin target. Even more encouraging is our strong free cash flow of 473 million euros, which was considerably higher than expected. Our earnings for 2019 prove that our positioning as a global automotive and industrial supplier is invaluable. In addition, we are seeing that the measures we have taken to strengthen our cost and capital efficiency as well as the three divisional programs RACE, GRIP, and FIT are paying off.”

To read the full press release, please visit the Schaeffler homepage.