Schaeffler Group 2019 in a difficult environment with strong cash flow

Revenue 2019 at the level of the previous year despite the challenging environment, EBIT margin before special items 8.1 percent below the previous year (9.7 percent)

Adjusted forecast of the Schaeffler Group and the divisions achieved

Free cash flow before deposits and withdrawals for M&A activities increased significantly to EUR 473 million (previous year EUR 384 million)

Proposed dividend of 45 cents per preferred share

2020 forecast reflects cautious market assessment

Global automotive and industrial supplier Schaeffler published its results for the 2019 financial year today. The Schaeffler Group's sales in the reporting period were around 14.4 billion euros (previous year: around 14.2 billion euros). Adjusted for currency effects, sales rose by 0.1 percent in this period. On a currency-neutral basis, sales growth in the two automotive divisions declined slightly, but showed a positive trend in the second half of the year, while sales growth in the industrial division increased over the entire reporting year, but leveled off in the second half. Of the four regions, the Greater China and Americas regions contributed to currency-neutral sales growth, while sales in the Europe and Asia / Pacific regions declined.

The Schaeffler Group generated earnings before financial result and equity investments and income taxes (EBIT) valued at equity in the amount of 790 million euros (previous year: 1,354 million euros), which was burdened with special effects of 372 million euros in the reporting period. The special effects resulted mainly from the expenses in connection with the transformation and efficiency programs RACE (Automotive OEM), GRIP (Automotive Aftermarket) and FIT (Industry) established in 2019 in the amount of 356 million euros. EBIT before special items was thus 1,161 million euros (previous year: 1,381 million euros). This corresponds to an EBIT margin before special items of 8.1 percent (previous year: 9.7 percent). In addition to the persistently difficult environment, the main reason for the decline in the EBIT margin before special items was negative sales price effects and a changed product mix in the Automotive OEM division. In addition, expenses for IT and digitization projects burdened margin development.

The group result attributable to the shareholders of the parent company amounted to 428 million euros in the reporting period and was thus significantly below the previous year's level (881 million euros). Earnings per preferred share were EUR 0.65 (previous year: EUR 1.33). On this basis, the Management Board of Schaeffler AG will propose to the Annual General Meeting to pay a dividend of 45 cents per preferred share. This corresponds to a payout ratio of around 43 percent (previous year: around 40 percent) based on the consolidated earnings attributable to shareholders before special items.

Klaus Rosenfeld, Chairman of the Board of Management of Schaeffler AG, said about the course of business in 2019: “In a difficult environment, we were able to meet our forecast for sales growth in July and slightly exceed the target for the EBIT margin. The strong free cash flow is even more gratifying, with EUR 473 million clearly exceeding expectations. The result of 2019 shows that our position as a global automotive and industrial supplier has proven itself. On the other hand, we see that the measures we have taken to strengthen capital and cost efficiency as well as the three divisional programs RACE, GRIP and FIT are paying off. ”