Schaeffler generates record sales and earnings in 2011
- Sales for 2011 increase 13 percent to new record of €10.7 billion
- EBIT rises to €1.7 billion; EBIT margin at 15.8 percent
- Free cash flow of €319 million
- 6,500 new jobs; employee profit share increased
- Growth strategy being continued
In 2011, Schaeffler has significantly exceeded its 2010 record levels of sales and earnings. For the first time in the company's history, sales topped the €10 billion mark, increasing by 13 percent to approximately €10.7 billion, while EBIT improved by 12 percent to approximately €1.7 billion.
Schaeffler AG CEO Dr. Juergen M. Geissinger stated at the financial press conference: "Following our success in 2010, we were able to further improve our earnings across the board in 2011. That demonstrates the dedicated commitment of our employees around the world. Our wide range of components and systems for the automotive and the industrial sectors puts us in a very good strategic position as a globally oriented company."
Sales increased across all regions and divisions
This development was driven by all regions and divisions. The fastest growing region, Asia/Pacific, generated revenue growth of 18 percent, followed by Europe excluding Germany with 14 percent, North America with 12 percent and Germany with 11 percent. Sales at our two divisions Automotive and Industrial grew considerably faster than their respective markets in 2011. Automotive division sales increased by 13 percent to approximately €7.2 billion. The Industrial division grew by 15 percent to approximately €3.5 billion.
EBIT rose by 12 percent from the prior year to approximately €1.7 billion in 2011. As a result, the company was able to maintain its EBIT margin nearly unchanged from the prior year at 15.8 percent. Net income improved by €826 million to €889 million in 2011 and includes income of €324 million from the investment in Continental AG.
Positive free cash flow
Free cash flow was €319 million in 2011, following €526 million in the prior year. The decrease is primarily due to an increase in net working capital resulting from the expansion of our business and to higher capital expenditures. The company invested €773 million in property, plant and equipment and intangible assets, staying within the target range of six to eight percent of sales.
Net financial debt was approximately €7.1 billion at year-end. The leverage ratio, calculated as the ratio of net financial debt (excluding shareholder loans) to EBITDA for the past twelve months, amounted to 3.0 (prior year: 2.7).
Klaus Rosenfeld, CFO, commented: "We were able to further improve the Schaeffler Group's financing situation in 2011. Free cash flow remained at a sound level, and we expect to be able to generate a positive free cash flow in the coming years."
With a return on capital employed (ROCE) of approximately 27 percent for 2011, the Schaeffler Group was again able to generate value considerably in excess of its cost of capital.
Headcount increased significantly
The Group's headcount reflects the company's strong growth. The Schaeffler Group employed approximately 74,000 staff worldwide at the end of the year, an increase of approximately 6,500. In Germany, the company's workforce has grown by approximately 1,500 to 29,000 employees.
In light of the company's good results, Schaeffler is again recognizing its employees' performance and commitment in 2011 with a high earnings-based bonus. Eligible employees in Germany will receive €1,040 at the end of April.
Additional growth expected
On the basis of the patent applications filed in 2011, the Schaeffler Group continues to rank among the top innovative companies in Europe. The company plans to invest approximately five percent of sales in research and development projects again in 2012. The fields of energy efficiency, CO2 reduction, mechatronics, and electric mobility remain our general focal points for R&D. Current development activities are centered around optimizing conventional drive and hybrid technologies.
The company is cautiously optimistic about its development in 2012. "The trend we noted at the beginning of the second half of 2011 has continued. We are currently seeing demand in the European markets weaken. Globally, however, our business is continuing to show a positive trend. Following a moderate start, we are currently expecting global economic growth to gain momentum during the course of 2012," Dr. Geissinger stated. "We are anticipating particularly North America, but also China, India, and Russia providing impetus for growth. Based on these forecasts, we are currently aiming for sales growth of more than five percent and an EBIT margin of more than 13 percent in 2012. These targets mean our growth will continue to outpace that of our core markets."
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. No statement in this press release is intended to be nor may be construed as a profit forecast.
The Schaeffler Group with its product brands INA, FAG, and LuK is a leading global manufacturer of rolling bearings and linear products as well as a renowned supplier of high-precision components and systems for engines, transmissions and chassis applications to the automotive industry. The Group stands for global customer focus, strong innovative ability and maximum quality. Its 180 locations in more than 50 countries generated sales of approximately €10.7 billion in 2011. With approximately 74,000 employees worldwide, Schaeffler Group is one of the largest family-owned industrial companies in Germany and Europe.