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Schaeffler generates record sales and earnings in 2011

2012-03-20 | FRANKFURT a. MAIN / HERZOGENAURACH

  • Sales for 2011 increase 13 percent to new record of €10.7 billion
  • EBIT rises to €1.7 billion; EBIT margin at 15.8 percent
  • Free cash flow of €319 million
  • 6,500 new jobs; employee profit share increased
  • Growth strategy being continued

In 2011, Schaeffler has significantly exceeded its 2010 record levels of sales and earnings. For the first time in the company’s history, sales topped the €10 billion mark, increasing by 13 percent to approximately €10.7 billion, while EBIT improved by 12 percent to approximately €1.7 billion.

Schaeffler AG CEO Dr. Juergen M. Geissinger stated at the financial press conference: “Following our success in 2010, we were able to further improve our earnings across the board in 2011. That demonstrates the dedicated commitment of our employees around the world. Our wide range of components and systems for the automotive and the industrial sectors puts us in a very good strategic position as a globally oriented company.”

Sales increased across all regions and divisions

This development was driven by all regions and divisions. The fastest growing region, Asia/Pacific, generated revenue growth of 18 percent, followed by Europe excluding Germany with 14 percent, North America with 12 percent and Germany with 11 percent. Sales at our two divisions Automotive and Industrial grew considerably faster than their respective markets in 2011. Automotive division sales increased by 13 percent to approximately €7.2 billion. The Industrial division grew by 15 percent to approximately €3.5 billion.

EBIT rose by 12 percent from the prior year to approximately €1.7 billion in 2011. As a result, the company was able to maintain its EBIT margin nearly unchanged from the prior year at 15.8 percent. Net income improved by €826 million to €889 million in 2011 and includes income of €324 million from the investment in Continental AG.

Positive free cash flow

Free cash flow was €319 million in 2011, following €526 million in the prior year. The decrease is primarily due to an increase in net working capital resulting from the expansion of our business and to higher capital expenditures. The company invested €773 million in property, plant and equipment and intangible assets, staying within the target range of six to eight percent of sales.

Net financial debt was approximately €7.1 billion at year-end. The leverage ratio, calculated as the ratio of net financial debt (excluding shareholder loans) to EBITDA for the past twelve months, amounted to 3.0 (prior year: 2.7).

Klaus Rosenfeld, CFO, commented: “We were able to further improve the Schaeffler Group’s financing situation in 2011. Free cash flow remained at a sound level, and we expect to be able to generate a positive free cash flow in the coming years.”

With a return on capital employed (ROCE) of approximately 27 percent for 2011, the Schaeffler Group was again able to generate value considerably in excess of its cost of capital.

Headcount increased significantly

The Group’s headcount reflects the company’s strong growth. The Schaeffler Group employed approximately 74,000 staff worldwide at the end of the year, an increase of approximately 6,500. In Germany, the company’s workforce has grown by approximately 1,500 to 29,000 employees.

In light of the company’s good results, Schaeffler is again recognizing its employees’ performance and commitment in 2011 with a high earnings-based bonus. Eligible employees in Germany will receive €1,040 at the end of April.

Additional growth expected

On the basis of the patent applications filed in 2011, the Schaeffler Group continues to rank among the top innovative companies in Europe. The company plans to invest approximately five percent of sales in research and development projects again in 2012. The fields of energy efficiency, CO2 reduction, mechatronics, and electric mobility remain our general focal points for R&D. Current development activities are centered around optimizing conventional drive and hybrid technologies.

The company is cautiously optimistic about its development in 2012. “The trend we noted at the beginning of the second half of 2011 has continued. We are currently seeing demand in the European markets weaken. Globally, however, our business is continuing to show a positive trend. Following a moderate start, we are currently expecting global economic growth to gain momentum during the course of 2012,” Dr. Geissinger stated. “We are anticipating particularly North America, but also China, India, and Russia providing impetus for growth. Based on these forecasts, we are currently aiming for sales growth of more than five percent and an EBIT margin of more than 13 percent in 2012. These targets mean our growth will continue to outpace that of our core markets.”

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This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, Japan, or the United States of America (the "United States") or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to herein may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the "Securities Act") or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. The offer and sale of the securities referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada or Japan. There will be no public offer of the securities in any jurisdiction.

This document has been prepared on the basis that there was no public offering in connection with this transaction nor will there be a public offering of the securities. No approved prospectus was or will be prepared in connection with this transaction. Any offer of securities in any Member State of the European Economic Area ("EEA") which has implemented the Prospectus Directive (2003/71/EC), as amended, including any relevant implementing measures to implement the Directive 2010/73/EU, (each, a "Relevant Member State") will only be made if no prospectus for offers of securities has to be published. Accordingly any person making or intending to make any offer in that Relevant Member State of securities which are the subject of the placement contemplated in this announcement may only do so in circumstances in which no obligation arises for Schaeffler to publish a prospectus pursuant to Article 3 of the Prospectus Directive (as amended by the Directive 2010/73/EU, to the extent such amendments have already been implemented in the Relevant Member State) or supplement a prospectus pursuant to Article 16 of the Prospectus Directive (as amended by the Directive 2010/73/EU, to the extent such amendments have already been implemented in the Relevant Member State), in each case, in relation to such offer. Schaeffler has not authorized, nor does it authorize, the making of any offer of securities in circumstances in which an obligation arises for Schaeffler to publish or supplement a prospectus for such offer.

Publisher: Schaeffler AG
Country: Germany

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Schaeffler Technologies AG & Co. KG
Corporate Communication
Industriestrasse 1-3
91074 Herzogenaurach
Germany

presse@schaeffler.com

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