German ball bearing and clutch maker Schaeffler lowered its full-year revenue target after first-half growth stalled amid a sharp drop in demand at its industrial division.

The company, which competes with Swedish bearings maker SKF , said that it expects 2013 revenue growth of 1-2 percent, citing a fall in revenue from the industrial sector, the sluggish recovery of the global economy and weak economic momentum in China.

It had previously forecast growth of 4 perecent this year.

Privately-held Schaeffler, perhaps best known for being the controlling shareholder of Continental after its debt-financed takeover swoop for the German auto parts maker in 2008, also said it had reduced its debt.

Excluding obligations owed by its holding parent, net debt fell slightly to 6.5 billion euros ($8.7 billion) at the end of June, from 6.83 billion euros at the end of December.

Free cashflow, a measure of a company's ability to pay back debt without resorting to asset sales, jumped to 386 million euros in the first six months, from 30 million in the same period last year after Schaeffler cut its investments by half. ($1 = 0.7466 euros)

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