Home >Schaeffler presents financial results for 2019
Schaeffler presents financial results for 2019
10 March 2020
Global automotive and industrial supplier, Schaeffler Group’s revenue for the 2019 reporting period amounted to approximately 14.4 billion euros (prior year: approximately 14.2 billion euros). At constant currency, revenue for the period increased by 0.1 percent.
Constant-currency revenue growth of the two Automotive divisions was slightly negative, but trended up in the second half of the year, while the Industrial division reported revenue growth throughout the year, although this growth leveled off in the second half. Of the four regions, the Greater China and Americas regions contributed to constant currency revenue growth while revenue declined in the Europe and Asia/Pacific regions.
The Schaeffler Group generated earnings before financial result, income (loss) from equity-method investees, and income taxes (EBIT) of 790 million euros (prior year: 1,354 million euros) in 2019. These earnings were affected by special items for the reporting period of 372 million euros, largely consisting of 356 million euros in expenses related to the transformation and efficiency programs established in 2019 – RACE (Automotive OEM), GRIP (Automotive Aftermarket), and FIT (Industrial). The corresponding EBIT before special items amounted to 1,161 million euros (prior year: 1,381 million euros), representing an EBIT margin before special items of 8.1 percent (prior year: 9.7 percent). Along with the persistently challenging environment, the decline in EBIT margin before special items was largely attributable to an adverse impact of selling prices and a change in product mix in the Automotive OEM division. The margin trend was also held back by expenses for IT and digitalisation projects.
Net income attributable to shareholders of the parent company for the reporting period amounted to 428 million euros, falling considerably short of the prior year level (881 million euros). Earnings per common non-voting share were 0.65 euros (prior year: 1.33 euros). On that basis, Schaeffler AG’s Board of Managing Directors will propose a dividend of 45 cents to the annual general meeting. This represents a dividend payout ratio of approximately 43 percent (prior year: approximately 40 percent) of net income attributable to shareholders before special items.
Klaus Rosenfeld, CEO of Schaeffler AG, commented on the performance of the business in 2019: “In a challenging environment, we were able to meet our guidance for revenue growth as adjusted in July and slightly surpass the EBIT margin target. Even more encouraging is our strong free cash flow of 478 million euros, which was considerably higher than expected. Our earnings for 2019 prove that our positioning as a global automotive and industrial supplier is invaluable. In addition, we are seeing that the measures we have taken to strengthen our cost and capital efficiency, as well as the three divisional programs RACE, GRIP, and FIT are paying off.”
Industrial business with encouraging growth, weaker momentum in second half of the year
The Industrial division increased its revenue to 3,541 million euros (prior year: 3,383 million euros) during the reporting period despite weaker momentum in global industrial production. At constant currency, revenue growth amounted to 3.1 percent, with revenue for the second half of the year flat with prior year. The growth in revenue was primarily driven by the wind sector cluster in the Greater China region and the railway sector cluster in the Europe region. The raw materials and aerospace sector clusters, as well as Industrial Distribution, also contributed to growth. Demand decreased in the industrial automation, off-road, and power transmission sector clusters, which are particularly sensitive to economic conditions. Two of the Schaeffler Group’s four regions contributed to constant currency revenue growth during the reporting period. The largest increase was once again generated by the Greater China region at 23.4 percent, ahead of Americas with 2.9 percent, while revenue declined by 2.4 percent in Europe and fell slightly by 0.1 percent in Asia/Pacific.
The Industrial division generated 373 million euros in EBIT before special items in 2019 (prior year: 370 million euros), representing an EBIT margin before special items of 10.5 percent (prior year: 10.9 percent). Special items amounted to 147 million euros and included 137 million euros related to the program FIT.