Schffler AG revenue increases to above EUR billion

2016-03-15 | 000-006-685 DE-EN

SCHAEFFLER AG, HERZOGENAURACH

Annual Results 2015

Schaeffler AG revenue increases to above EUR 13 billion

Revenue rises by more than 9% - EBIT margin before special items at 12.7%

Automotive division growing more rapidly than market - realignment of Industrial division well under way

Over EUR 1 billion invested - 1,900 new jobs created

Dividend proposal of 35 cents per share - special dividend of 15 cents per share

Technology and innovation driving future growth - revenue growth of 3 to 5% at constant currency expected for 2016

Automotive and industrial supplier Schaeffler was able to continue moving along its successful course in 2015. The company expanded its revenue by 9.1 percent to EUR 13.2 billion. At constant currency, the growth rate amounted to 3.5 percent. We were able to considerably increase our revenue in the previous year, despite the challenging environment. We are planning to continue on our profitable growth path in 2016, as well. Our strategic concept mobility for tomorrow puts us in a good position to do that, said Klaus Rosenfeld, CEO.

Automotive division growing more rapidly than market - realignment of Industrial division well under way

With its growth rate of 11.2 percent compared to the prior year ( 5.8 percent at constant currency), the Automotive division once more clearly outpaced the increase in production volumes of passenger cars and light commercial vehicles of 1 percent. The OEM business benefitted from the high level of demand for Schaeffler products in the U.S. and strong growth in China in the first half of 2015. During the latter half, demand in the Asia/Pacific region picked up noticeably. The Automotive division also profited from above-average revenue growth in the Aftermarket business.

The company's Industrial business generated growth of 3.0 percent in 2015 ( 3.2 percent at constant currency). Especially the wind power and motorcycle sector businesses contributed to the growth. The realignment of the Industrial division (CORE program) is progressing on schedule. The realignment is aimed at improving the efficiency and competitive position of the Industrial business for the long term in order to facilitate profitable growth. The division is aiming for an EBIT margin of 13 percent by 2018.

All four of the Schaeffler Group's regions reported revenue increases in 2015, with currency translation making a favorable impact on revenue. The growth dynamic varied widely across regions. Revenue grew fastest in the Schaeffler Group's Greater China region, rising by 23.5 percent ( 6.0 percent at constant currency) over prior year there, followed by the group's Americas region, where revenue increased by 17.5 percent ( 8.2 percent at constant currency). The Asia/Pacific region reported revenue growth of 13.5 percent ( 5.0 percent at constant currency), while the Europe region grew by 2.1 percent ( 1.0 percent at constant currency).

Earnings quality remains high - EBIT margin before special items at 12.7%

Earnings before interest and taxes (EBIT) excluding special items increased by EUR 115 million to EUR 1,676 m. The corresponding EBIT margin amounted to 12.7 percent. The special items adversely affecting EBIT consisted of the EUR 238 million provision for legal risks recognized for potential third party claims in connection with the EU antitrust proceedings finalized in March 2014 and EUR 36 million in restructuring provisions related to the CORE program. Including these special items, the Schaeffler Group's EBIT for 2015 amounted to EUR 1,402 million (prior year: EUR 1,523 million) and the EBIT margin was 10.6 percent (prior year: 12.6 percent).

Cash flows from operating activities were EUR 1,372 million (prior year: EUR 900 million). We generated sustainable positive free cash flow of EUR 370 million in 2015, significantly higher than the prior year amount of EUR 48 million, explained CFO Dr. Ulrich Hauck.

Over EUR 1 billion invested - 1,900 new jobs created

The Schaeffler Group has significantly raised its total capital expenditures, investing EUR 1,025 million (prior year: EUR 857 million) in new products and technologies as well as in the expansion of the group's global production network. This represents an increase of approximately 20 percent from the prior year. The company's capex ratio (capital expenditures as a percentage of revenue) was 7.7 percent (prior year: 7.1 percent). In addition to the construction and expansion of new manufacturing locations such as the ones in Chonburi, Thailand and in Puebla, Mexico, capital expenditures made in 2015 also related to the European Distribution Center (EDC) project.

The Schaeffler Group had 84,198 employees as at December 31, 2015, about 1,900 or about 2 percent more than in the prior year. In Germany, the Schaeffler Group employed a total of about 30,800 staff at year-end (prior year: approximately 30,500). Worldwide, about 2,900 trainees or about 3 percent of the group's workforce were pursuing an apprenticeship at the Schaeffler Group. This represents an increase in the number of trainees by about 6 percent compared to the prior year.

Listing completed successfully - financial debt reduced considerably

With its listing on October 9, 2015, the company has laid the foundation for successfully continuing its profitable growth in the coming years. The proceeds of the listing have helped improve its equity ratio and reduce its debt to EBITDA ratio. Net financial debt fell by EUR 889 million to EUR 4,889 million (prior year: EUR 5,778 million). The adjusted net debt to EBITDA ratio was 2.1 at December 31, 2015 (prior year: 2.6).

Dividend proposal of 35 cents per share -special dividend of 15 cents per share

The Board of Managing Directors and the Supervisory Board will propose a dividend of EUR 0.35 per common non

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