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Schaeffler continues along its growth path
- Revenue increases by approximately four percent to €11.1 billion
- EBIT of €1.4 billion
- EBIT margin at 13 percent
- Free cash flow increases to €381 million
- Headcount grows by about 2,000 to approximately 76,000 worldwide
- Further growth planned for 2013
Schaeffler AG successfully continued its growth strategy in 2012. Revenue increased by four percent to approximately €11.1 billion, exceeding the very encouraging level reached in 2011. Earnings before interest and taxes (EBIT) was approximately €1.4 billion (prior year: €1.7 billion). At approximately 13 percent, the EBIT margin remained high.
At the financial press conference, Dr. Juergen M. Geissinger, CEO of Schaeffler AG, stated: "The Schaeffler Group continued its course for growth in 2012 despite a market environment that weakened increasingly over the course of the year. Our long-term operating strength enabled us to further grow our revenue and again maintain our earnings quality at the top of the industry."
Revenue growth in North America and Asia/Pacific
The Schaeffler Group's global structure and its excellent position in the growth markets, particularly in the North America and Asia/Pacific regions, have contributed to this encouraging development. Revenue increased by 18 percent in the North American market region while the Asian market reported an increase in revenue of 10 percent from the already high prior year level. In a weak economic environment, revenue in Europe still increased by 0.3 percent from the prior year.
The Automotive division reported record revenue levels in 2012 and enjoyed high growth rates. Revenue increased by approximately seven percent to €7.7 billion, growing significantly faster than global automobile production. The Industrial division's strong growth rates in the aerospace sector and in heavy industries only partially offset the significantly weaker or declining growth trends seen in other sectors. Market forces held back Industrial division revenue to €3.4 billion, approximately 2 percent below the prior year level.
Driven by Schaeffler's solid EBIT, net income for the period excluding non-controlling interests amounted to €872 million (prior year: €889 million), including the Group's share of net income of Continental AG of €554 million (prior year: €324 million).
Free cash flow improved
Cash flows from operating activities increased by €129 million to €1.2 billion in 2012, again demonstrating the long-term strength of the Schaeffler Group's operations. The resulting free cash flow amounted to €381 million (prior year: €319 million), including a €80 million net dividend received from Continental AG. Expenditures for property, plant and equipment and intangible assets amounted to €860 million, which was within the target range of six to eight percent of revenue.
Net financial debt was reduced to approximately €6.8 billion at year-end (prior year: €7.1 billion). The debt to EBITDA ratio, calculated as the ratio of net financial debt (excluding shareholder loans) to EBITDA for the past twelve months, amounted to 3.2 (prior year: 3.0).
Chief financial officer Klaus Rosenfeld commented: "Schaeffler AG has taken extensive measures to refinance its existing financial liabilities in 2012. With these transactions, Schaeffler diversified its financing resources, extended the maturity profile of its debt, strengthened the existing consortium of banks, and reduced its borrowing cost. We will continue on this course in 2013."
Schaeffler's headcount rose by 2,068 across all significant regions and functional areas in 2012. The largest increases in headcount in absolute terms took place in the Asian and North American entities. The number of employees in Germany increased by 335 to 29,778. At the end of the year, the Schaeffler Group had approximately 76,000 employees worldwide.
Continuing along the growth path
Schaeffler was again able to increase the number of patent applications compared to the prior year. With 1,854 patent registrations in 2012 the company once again ranked fourth amongst the most innovative companies in Germany. The company intends to maintain its development activities at the level of recent years. The group again plans to invest approximately five percent of revenue in researching and developing new products and processes in 2013.
The company is optimistic about the 2013 revenue trend. The Schaeffler Group expects the worldwide production of passenger vehicles and light commercial vehicles to increase by approximately two percent. The company is not expecting the European automotive markets to recover quickly and anticipates that automobile production in this region will decline by approximately two percent compared to the previous year. For the various Industrial markets, Schaeffler estimates that demand will recover slightly starting in the latter half of the year. Here, too, regional trends will likely vary widely.
Dr. Geissinger stated: "North America and Asia/Pacific are and will remain our growth drivers. Thanks to our global orientation, our broad product range, and our outstanding innovative strength we are able to significantly capitalize on the momentum in the growth regions. Based on these factors, we are aiming for revenue growth of approximately four percent and an EBIT margin of approximately 13 percent in 2013. In achieving these targets, we will continue to grow faster than our core markets."
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.
The full annual report 2012 is available for download at http://www.schaeffler-group.com/content.schaefflergroup.de/en/investorrelations/newsir/reports/reports.jsp
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