Schaeffler AG: Schaeffler Group starts new year with good first quarter
DGAP-News: Schaeffler AG
/ Key word(s): Quarter Results
– Schaeffler Group revenue grows by 1.9 percent at constant currency despite challenging market conditions
– EBIT margin before special items at 6.9 percent following strong exceptional prior year quarter (11.2 percent)
– Positive free cash flow before M&A activities of 14 million euros (prior year: 130 million euros)
– Automotive Technologies with 2.0 billion euros in order intake in E-Mobility BD
– Cautious FY 2022 guidance
Constant-currency revenue in the Europe and Americas regions rose by a noticeable 4.4 and 3.5 percent, respectively. In the Greater China region, revenue was down 3.4 percent at constant currency versus the high comparable prior year quarter challenged by the ongoing coronavirus pandemic. Asia/Pacific region revenue was up slightly, growing by 0.4 percent at constant currency.
The Schaeffler Group generated 258 million euros (prior year: 397 million euros) in EBIT before special items for the first three months, resulting in an EBIT margin before special items of 6.9 percent (prior year: 11.2 percent). This change from the extraordinarily strong first prior-year quarter, which was marked by considerable catch-up effects related to the coronavirus pandemic, is mainly attributable to sharp increases in input costs that were partly passed on to customers.
EBIT for the reporting period was adversely affected by 11 million euros (prior year: 15 million euros) in special items. EBIT amounted to 247 million euros (prior year: 382 million euros).
Automotive Technologies: 2 billion euros in order intake in E-Mobility BD
Additionally, the E-Mobility BD generated the highest year-on-year revenue growth rate of 18.4 percent at constant currency. The Engine & Transmission Systems and Bearings BDs experienced constant-currency revenue declines of 5.9 and 7.6 percent, respectively. The Chassis Systems BD expanded by 11.6 percent at constant currency.
While revenue changed only slightly in the Europe and Americas regions, which reported constant-currency growth of -1.9 and 0.3 percent, respectively, Greater China region revenue declined by 5.3 percent at constant-currency due to the still strained situation resulting from the coronavirus pandemic. The Asia/Pacific region reported a revenue decline of 8.3 percent at constant-currency.
The division earned 80 million euros (prior year: 240 million euros) in EBIT before special items in the first quarter. The EBIT margin before special items for the reporting period was 3.5 percent, considerably below the extraordinarily strong prior year level of 10.5 percent. The main reason for this decrease were significantly higher input costs that were only partially offset by adjustments to sales prices in the first quarter, as had been expected.
Automotive Aftermarket: EBIT margin before special items at 13.6 percent thanks to favorable one-off items
Revenue grew considerably in all regions except Europe – the region generating the highest revenue – where revenue was down slightly, declining by 2.0 percent at constant currency partly due to missed sales in Russia and Ukraine toward the end of the first quarter. The Americas and Asia/Pacific regions expanded their Independent Aftermarket business in particular, providing these regions with constant-currency growth rates of 11.3 and 15.6 percent, respectively. The 9.8 percent constant-currency revenue increase in the Greater China region was mainly due to strong growth in e-commerce business.
These developments resulted in EBIT before special items of 63 million euros (prior year: 58 million euros). This represents an EBIT margin before special items of 13.6 percent (prior year: 13.1 percent). The slight increase from the prior year is primarily attributable to favorable one-off items. Increased input costs that were not fully compensated for by price adjustments had an offsetting effect.
Industrial: 15.7 percent constant-currency growth in first quarter
Reporting a constant-currency increase of 26.2 percent, the Europe region generated very strong volume-driven growth, and the Americas and Asia/Pacific regions similarly generated considerable constant-currency revenue growth rates of 11.0 and 22.7 percent, respectively. The Greater China region experienced a heterogeneous trend resulting in a slight constant-currency revenue decline of 0.3 percent overall. Sales prices led to overall revenue increases at the Industrial division as well, as higher input costs were partly passed on to the market.
Although the Industrial division was impacted by significantly higher input costs as well, it earned 115 million euros (prior year: 98 million euros) in EBIT before special items in the first three months. This represents an EBIT margin before special items of 11.4 percent (prior year: 11.8 percent).
Positive free cash flow
Net income attributable to shareholders before special items decreased during the first three months of 2022 compared to the prior year period, amounting to 144 million euros (prior year: 247 million euros). Net income attributable to shareholders was 136 million euros (prior year: 235 million euros), representing earnings per common non-voting share of 0.21 euros (prior year: 0.35 euros).
The group’s net financial debt amounted to 1,992 million euros as at March 31, 2022. The net debt to EBITDA ratio was 1.0x as at the end of March 2022 (end of December 2021: 0.9x). The gearing ratio, i.e. the ratio of net financial debt to shareholders’ equity, decreased to approximately 54.4 percent (December 31, 2021: approximately 61.7 percent). The group employed a workforce of 83,089 as at the March 31, 2022, reporting date.
Claus Bauer, CFO of Schaeffler AG, said: “The Schaeffler Group has once again demonstrated its resilience in the first quarter of 2022 and responded flexibly to the challenging environment. With our broad portfolio and our robust balance sheet structure, we can cope with the more complex external headwinds, while continuing to invest in our business and especially in our growth segments.”
Cautious FY 2022 guidance
On May 9, 2022, the Board of Managing Directors of Schaeffler AG has agreed on a new full-year outlook for 2022 based on information currently available.
The outlook is based on the assumption that global economic growth will slow down noticeably and that this will affect the Schaeffler Group’s sales and procurement markets.
In its guidance for 2022, the Schaeffler Group expects the war in Ukraine and its significant economic consequences to adversely affect the Schaeffler Group’s business over the course of the year. The Schaeffler Group’s outlook reflects the extent of economic sanctions, impacts on supply chains, as well as the implications for both commodities and energy prices and the cost of transportation.
The impact of the coronavirus pandemic on the Schaeffler Group’s value chain is based on the assumption that economic activity in China will normalize by the end of June 2022.
The Schaeffler Group anticipates that its further development will be characterized by extraordinary uncertainty in the macroeconomic and geopolitical environment, in particular due to the course of the war in Ukraine and the future course of the coronavirus pandemic.
The guidance for the three divisions is as follows:
Klaus Rosenfeld, CEO of Schaeffler AG, stated: “The Schaeffler Group has generated good results for the first quarter of 2022. The strong order intake in the E-Mobility business division of 2 billion euros is particularly pleasing. It means we have already reached our full-year target in the first quarter. The high contribution to earnings our Industrial division has made demonstrates once again that our diversified set-up is paying off. We are consequently executing our strategy as planned, despite the challenging environment. This fiscal year, we continue to remain cautious with respect to the macroeconomic and geopolitical uncertainties. The guidance we published yesterday reflects this.”
Forward-looking statements and projections
10.05.2022 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
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