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- Revenue of approximately €5.6 billion at prior year level
- Automotive division growing at around six percent
- EBIT margin at approximately 13 percent
- Free cash flow improved significantly
International automotive and industrial supplier Schaeffler looks back on a successful first half of 2013. At €5.6 billion, revenue for the first six months of 2013 remained flat with the prior year period, albeit with revenue trends differing between the Automotive and Industrial divisions.
The Automotive division grew its revenue by about six percent to approximately €4.1 billion, while Industrial division revenue declined by about 14 percent to €1.5 billion. "We are very pleased with the performance of the Automotive division. It has held its ground very well despite the challenging market environment in Europe. Due to the current uncertainties in the various industrial sectors, the Industrial division was unable to maintain the very encouraging results of the prior year. However, our EBIT margin of 12.9 percent shows that we continue to maintain our high earnings quality," stated Dr. Juergen M. Geissinger, CEO of Schaeffler AG.
The company generated EBIT of €724 million (prior year: €780 million). Net income for the period was €561 million (prior year: €504 million).
Operating cash flow increased by about 22 percent to €606 million (prior year: €495 million) and includes €162 million in dividends received from Continental AG (prior year: €80 million). Cash used in investing activities amounted to €220 million, falling short of the prior year level of €465 million as expected. These trends are the basis for free cash flow of €386 million for the first six months of 2013 (prior year: €30 million).
Net financial debt decreased by €619 million to €6.5 billion as at the half-year mark compared to the corresponding prior year reporting date. Having obtained more favorable interest terms on its institutional loan tranches in February, the company also refinanced its bank debt at lower interest rates in April by issuing an additional approximately €1.25 billion in high-yield bonds and using the proceeds to partially prepay its bank loans. "The refinancing transactions completed during the first half of the year further lowered the company's borrowing costs and reduced its debt," Klaus Rosenfeld, CFO of Schaeffler AG, explained. The company's debt to EBITDA ratio (ratio of net financial debt to EBITDA for the last twelve months) decreased to 3.1 at June 30, 2013 (March 31, 2013: 3.3).
At the end of June, the Schaeffler Group employed 76,840 staff, 741 more than at the end of December 2012. New skilled personnel were recruited primarily in production and production-related areas - mainly in the Asia/Pacific and North America regions.
Outlook for 2013
Given the considerable decrease in revenue in the Industrial sector in the first six months of 2013, the sluggish recovery of the global economy so far and weak economic momentum in China, the Schaeffler Group is now forecasting revenue for 2013 as a whole to grow by one to two percent. "We continue to expect sustainable above market revenue growth for the Automotive division. However, we probably will not be able to offset the weakness in revenue experienced in the Industrial division to date," explained Dr. Geissinger.
The group is maintaining its ambitious profitability target. "Due to the stable earnings situation in the Automotive division we currently continue to expect the Schaeffler Group to generate an EBIT margin of approximately 13 percent for the full year 2013," Dr. Geissinger emphasized.
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 interim report as at June 30, 2013 is available for download at
http://www.schaeffler-group.com/content.schaefflergroup.de/en/investorrelations/newsir/reports/report_2013.jsp
- Revenue of approximately €5.6 billion at prior year level
- Automotive division growing at around six percent
- EBIT margin at approximately 13 percent
- Free cash flow improved significantly
International automotive and industrial supplier Schaeffler looks back on a successful first half of 2013. At €5.6 billion, revenue for the first six months of 2013 remained flat with the prior year period, albeit with revenue trends differing between the Automotive and Industrial divisions.
The Automotive division grew its revenue by about six percent to approximately €4.1 billion, while Industrial division revenue declined by about 14 percent to €1.5 billion. "We are very pleased with the performance of the Automotive division. It has held its ground very well despite the challenging market environment in Europe. Due to the current uncertainties in the various industrial sectors, the Industrial division was unable to maintain the very encouraging results of the prior year. However, our EBIT margin of 12.9 percent shows that we continue to maintain our high earnings quality," stated Dr. Juergen M. Geissinger, CEO of Schaeffler AG.
The company generated EBIT of €724 million (prior year: €780 million). Net income for the period was €561 million (prior year: €504 million).
Operating cash flow increased by about 22 percent to €606 million (prior year: €495 million) and includes €162 million in dividends received from Continental AG (prior year: €80 million). Cash used in investing activities amounted to €220 million, falling short of the prior year level of €465 million as expected. These trends are the basis for free cash flow of €386 million for the first six months of 2013 (prior year: €30 million).
Net financial debt decreased by €619 million to €6.5 billion as at the half-year mark compared to the corresponding prior year reporting date. Having obtained more favorable interest terms on its institutional loan tranches in February, the company also refinanced its bank debt at lower interest rates in April by issuing an additional approximately €1.25 billion in high-yield bonds and using the proceeds to partially prepay its bank loans. "The refinancing transactions completed during the first half of the year further lowered the company's borrowing costs and reduced its debt," Klaus Rosenfeld, CFO of Schaeffler AG, explained. The company's debt to EBITDA ratio (ratio of net financial debt to EBITDA for the last twelve months) decreased to 3.1 at June 30, 2013 (March 31, 2013: 3.3).
At the end of June, the Schaeffler Group employed 76,840 staff, 741 more than at the end of December 2012. New skilled personnel were recruited primarily in production and production-related areas - mainly in the Asia/Pacific and North America regions.
Outlook for 2013
Given the considerable decrease in revenue in the Industrial sector in the first six months of 2013, the sluggish recovery of the global economy so far and weak economic momentum in China, the Schaeffler Group is now forecasting revenue for 2013 as a whole to grow by one to two percent. "We continue to expect sustainable above market revenue growth for the Automotive division. However, we probably will not be able to offset the weakness in revenue experienced in the Industrial division to date," explained Dr. Geissinger.
The group is maintaining its ambitious profitability target. "Due to the stable earnings situation in the Automotive division we currently continue to expect the Schaeffler Group to generate an EBIT margin of approximately 13 percent for the full year 2013," Dr. Geissinger emphasized.
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 interim report as at June 30, 2013 is available for download at
http://www.schaeffler-group.com/content.schaefflergroup.de/en/investorrelations/newsir/reports/report_2013.jsp
