(November 17, 2010)
Jan – Sep sales up by 31% to #8364;7.0 billion
Jan – Sep EBIT margin still at 16%
Positive net income in third quarter: #8364;147 million
Sustainable strong free cash flow at #8364;526 million
Sales and earnings forecasts raised
Sales expected above #8364;9 bn, EBIT margin around 15 %
Business development at the Schaeffler Group remained on a high level in the third quarter of 2010. Schaeffler, one of the world’s leading automotive and industrial suppliers, continues to benefit from the ongoing demand in the automotive and industrial sectors. There was hardly any sign of the usual seasonal slowdown; growth impetus came from all regions and businesses. The company expects an ongoing favorable environment in the automotive and industrial sectors in the fourth quarter 2010 and has increased its forecast for the current year.
Dr. Juergen M. Geissinger, President and CEO of the Schaeffler Group, commented: “The Schaeffler Group has generated an excellent operating result for the first nine months of 2010. We are experiencing growth that is stronger than expected and are working close to capacity in nearly all of our plants worldwide. In addition, we are still benefiting from our favorable cost structure.”
Sales rose by 31% in the first nine months of 2010 to #8364;7.0 billion (compared to around #8364;5.4 billion in the same period of the previous year). Schaeffler generated earnings before interest and taxes (EBIT) of #8364;1.1 billion (#8364;0.3 billion) over the first nine months from business operations. The EBIT margin increased to 16.2 percent (5.5 percent) and is thus above the long-term average.
Both divisions – Automotive and Industrial – significantly increased sales in the reported period. In the Automotive division sales rose by 39 percent to #8364;4.7 billion; sales in the Industrial division increased by 15 percent to #8364;2.2 billion. The operating results in both divisions improved significantly.
Net income for the first nine months was minus #8364;113 million (minus #8364;860 million). This includes a one-off dilution loss of #8364;396 million in connection with the rights issue at Continental AG in January 2010, in which the Schaeffler Group did not participate. Without this one-off effect, group net profits for the first nine months would be #8364;283 million. The third quarter recorded a positive result of #8364;147 million (minus #8364;235 million).
Free cash flow amounted to #8364;526 million in the first nine months, which is further evidence of the operative strength and improved financial flexibility of the Schaeffler Group.
The company’s net financial debt was around #8364;5.8 billion at the end of September, representing a debt reduction of #8364;368 million compared with the end of the previous year. This positive development is also reflected in the leverage ratio, calculated as net financial debt in relation to the EBITDA of the last 12 months, which was reduced to 3.0 at the end of the September from 5.6 at the end of 2009. The Schaeffler Group’s equity was #8364;3.0 billion on September 30, 2010. With total assets of around #8364;13.3 billion, this resulted in an equity ratio of 23 percent. Schaeffler Group CFO Klaus Rosenfeld commented: “Our financing situation has further eased in the third quarter. Free cash flow is developing in a sustainably positive manner. This means we are in a comfortable position to reduce debt further and at the same time capture the growth opportunities that the market is presenting.”
Total staff increased by around 4,500 compared to the end of 2009.
On the basis of the strong business development in the first nine months of 2010 and the ongoing positive business environment, the company has increased its outlook for 2010. Dr. Juergen M. Geissinger said: “The Schaeffler Group generated an excellent operating result for the first three quarters of 2010. We are optimistic that we will be able to exceed the targets we set ourselves at the beginning of the year. For 2010 as a whole, we now expect sales to exceed #8364;9 billion and an EBIT margin of around 15 percent.”
Geissinger also points out the long-term growth prospects for the company: ”We are very well positioned to benefit from the main trends in our industry. Thanks to our wide product range, our innovative strength and our strong position in emerging markets, we will drive the major future trends in our sector – energy efficiency, mechatronics and electric mobility. This will enable us to further expand the Schaeffler Group’s market position in the future.”
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