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Schaeffler with a strong 3rd quarter 2020

2021-04-19

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Sales in the 3rd quarter slightly below the same quarter of the previous year (minus 2.6 percent)
EBIT margin before special items in the 3rd quarter of 9.4 percent significantly improved compared to the first half of the year (1.2 percent) and above the same quarter of the previous year (9.1 percent)
Recovery in the 3rd quarter mainly driven by the two automotive divisions, sales development in the industrial division slightly improved compared to the first half of the year
Free cash flow before incoming and outgoing payments for M&A activities in the 3rd quarter of 333 million euros, slightly below the previous year's quarter (362 million euros)


New forecast made for the 2020 financial year, uncertainty in the fourth quarter remains high


The global automotive and industrial supplier Schaeffler presented its interim report for the first nine months of 2020 today. During this period, the Schaeffler Group achieved sales of 8,971 million euros (previous year: 10,839 million euros). Adjusted for currency effects, sales fell significantly by 15.4 percent in this period, in particular as a result of the decline in demand in connection with the coronavirus pandemic Compared to the third quarter of the previous year was only 2.6 percent. The volume-related decline in sales in all three divisions was the main reason for the decline in sales in the reporting period. The four regions were affected differently by the pandemic. As a result of the recovery that began in the region in the second quarter, the Greater China region recorded a currency-adjusted sales growth of 8.1 percent in the reporting period; in the third quarter the increase was 16.5 percent compared to the same quarter of the previous year. The other three regions each recorded a significant decline in sales in the first nine months after adjusting for currency effects. This was 22.6 percent in the Europe region, 18.4 percent in the Americas and 19.3 percent in Asia / Pacific.


The Schaeffler Group achieved EBIT before special items of 385 million euros in the first nine months, which was well below the previous year's figure (883 million euros). This corresponds to an EBIT margin before special items of 4.3 percent (previous year: 8.1 percent).


The EBIT in the reporting period was burdened by special effects amounting to 798 million euros (previous year: 88 million euros). This included an impairment loss in the first quarter of the goodwill allocated to the Automotive Technologies division by EUR 249 million. In addition, the special effects include expenses of 549 million euros for the expansion of the RACE (Automotive Technologies division), GRIP (Automotive Aftermarket division) and FIT (Industry division) programs, particularly in connection with the job cuts announced in September to adapt structural overcapacity. With these one-off effects, EBIT was minus 413 million euros (previous year: plus 795 million euros).


Strong Q3 leads to a balanced operating result at Automotive Technologies

The Automotive Technologies division generated sales of 5,429 million euros in the first nine months of 2020 (previous year: 6,772 million euros). Adjusted for currency effects, sales fell significantly by 18.2 percent compared to the previous year, primarily due to volume factors. After a collapse in global automobile production in the first half of the year as a result of the coronavirus pandemic, the third quarter saw a significant recovery in demand, particularly in the Greater China and Americas regions. In the period under review, global automobile production fell by 23 percent, so that the Automotive Technologies division outperformed by around 5 percentage points in the same period.


The significant decline in sales during the first nine months of 2020 affected all regions with the exception of the Greater China region. In the Europe region, currency-adjusted sales fell by 27.7 percent. The Americas region recorded a currency-neutral sales decrease of 20.7 percent, and in Asia / Pacific the decrease was 20.1 percent. In the Greater China region, sales increased by 4.1 percent on a currency-adjusted basis. After a slight decline in sales in the first half of the year by 2.2 percent after adjustment for currency effects, sales increased by 14.2 percent after adjustment for currency effects in the third quarter due to a significant increase in demand.


Within the four corporate divisions, which all recorded a decline in sales, the product groups wet double clutches, driven primarily by the strong demand in Greater China, and electric axle drives in Europe (both E-Mobility division) increased their sales.

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