Schaeffler “on course” to meet 2011 targets
Schaeffler AG, major shareholder in tyre maker Continental, reports it has “remained on its course of success” during the third quarter of 2011. Based on business development during the first nine months of the year, the company says it is confident of meeting its full-year targets – Schaeffler expects to increase sales by more than ten per cent and its EBIT margin by more than 13 per cent in 2011.
“Our business is continuing to develop positively. We were again able to clearly top prior year levels of sales and net income,” commented Schaeffler CEO Dr. Juergen M. Geissinger. “As in the previous quarters of this year, all regions and business divisions contributed to this development. The sales growth in our two divisions, Automotive and Industrial, was significantly higher than the corresponding market growth rates for the third quarter.”
Company sales increased 15 per cent to approximately 8.1 billion euros during the first nine months of the year. At 18 per cent, Europe excluding Germany saw the highest regional sales growth, followed by Asia with 16 per cent and Germany with 14 per cent. Schaeffler’s Automotive Division increased its sales by 15 per cent to 5.4 billion euros and the Industrial Division by 19 per cent to approximately 2.6 billion euros.
EBIT for the first nine months of 2011 grew 19 per cent year-on-year to 1.3 billion euros, while the EBIT margin increased to 16.7 per cent from its prior year level of 16.2 per cent. Net income improved by 856 million euros to 743 million euros during the first nine months of 2011; this figure includes the company’s 229 million euro share of Continental AG’s net income.
Forecast for 2011 confirmed
“Following the encouraging performance of our business during the first nine months of 2011 we continue to expect demand for our components, modules and systems to be stable for the rest of the year,” Geissinger stated. “We are currently seeing first indications of a slowdown in demand in the European markets. However, on a global basis, our orders in hand remain solid. We currently anticipate sales for the fourth quarter to increase slightly from prior year levels. On this basis, we are confident that we will achieve our forecast of generating sales growth of more than 10 per cent and an EBIT margin of more than 13 per cent for 2011 as a whole.”
Nevertheless, the Schaeffler Group says it is monitoring the current financial and debt crisis “very closely”, particularly in regards to the situation in Europe and the US and the effect increasing commodity prices and rising labour costs may have on margins. Despite such threats, the company says it is “well prepared for possible negative economic changes” due to its strong earnings growth, structural flexibility and the refinancing arrangement it concluded in March 2011. “As a leading global automotive and industrial supplier, we benefit particularly from our technological leadership, innovative products, excellent quality, as well as our strong regional presence in the growth markets,” Geissinger concluded. “We expect our growth to continue to exceed that of our core markets, despite an increasingly difficult market environment.”