1st quarter 2012: Schaeffler off to a good start

(PresseBox) (Herzogenaurach, ) .
- Growth strategy continued; sales increase six percent to €2.9 billion
- EBIT at €401 million; EBIT margin at 14 percent
- Net income at €236 million
- Maturity profile of loans improved significantly; successful placement of approximately €3.5 billion in high yield bonds and loans

Schaeffler AG has made a good start to 2012. "We have successfully continued our growth strategy during the first quarter of 2012 despite an increasingly challenging environment. With sales increasing by six percent, our growth has again outpaced the market. We have managed to stabilize our profitability at a high level," stated Schaeffler AG CEO Dr. Juergen M. Geissinger.

Sales for the first three months of 2012 grew by approximately six percent to €2.9 billion, with revenue of both divisions, Automotive and Industrial, again expanding faster than their respective markets. Automotive division sales increased by around six percent to approximately €1.9 billion. The Industrial division also grew by around six percent to over €900 million. The fastest growing region, North America, generated revenue growth of 17 percent, followed by Asia/Pacific with 14 percent and Germany with nine percent. Sales in the regions Europe excluding Germany and South America declined by three and seven percent, respectively.

As expected, EBIT of €401 million (prior year: €472 million) fell short of the higher-than-average prior year level due to the ongoing capacity expansion in the first quarter and growth-related pre-production costs. Schaeffler generated an EBIT margin of 14.0 percent following 17.5 percent during the first quarter of 2011. Net income for the period, excluding non-controlling interests, was €236 million (prior year: €438 million). The prior year period included non-cash changes in the fair value of interest rate derivatives of €156 million.

Schaeffler was able to slightly increase operating cash flows compared to the prior year period. Capital expenditures more than doubled. €244 million in cash was used in investing activities (prior year: €114 million). The regional focus of Schaeffler's investing activities was again on Asia, where the projects that started in China and India in 2011 were continued. They are aimed at increasing the proportion of value added locally. Free cash flow for the first quarter was an outflow of €107 million (prior year: inflow of €11 million) due to the significant increase in capital expenditures and one-time transaction costs related to the comprehensive refinancing arrangement in the first quarter.

Net financial debt was approximately €7.2 billion at the end of the first quarter (year-end 2011: €7.1 billion). The company's debt refinancing announced in late January was largely completed during the first quarter of 2012. "Refinancing our senior financial debt has significantly improved the maturity profile of our loans. We were able to place approximately €3.5 billion in high yield bonds and loans in the capital markets, effectively broadening our funding sources," said Klaus Rosenfeld, CFO of Schaeffler AG. "Significantly higher capital expenditures and one-time effects of these transactions led to negative free cash flow for the first quarter. We are expecting free cash flow to become positive during the course of the year."

Outlook for 2012

Trends in the Schaeffler Group's markets are increasingly differing by region. While automobile production and industrial sectors in North America and Asia continue to grow, the situation in Europe remains challenging. In light of the good start to 2012, however, Schaeffler is maintaining its targets for the full year. Dr. Geissinger stated: "We continue to see solid growth opportunities for our business worldwide despite the current clear regional differences in market trends. Therefore, we are still expecting to generate sales growth of more than five percent and an EBIT margin of more than 13 percent in 2012."

Forward-looking statements and projections

Certain statements in this press release are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. No one undertakes any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You should not place any undue reliance on forward-looking statements which speak only as of the date of this press release. Statements contained in this press release regarding past trends or events should not be taken as representation that such trends or events will continue in the future. The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that Schaeffler, or persons acting on its behalf, may issue.

The full interim report as of March 31, 2012 is available for download at http://www.schaeffler-group.com/...


Schaeffler AG
Industriestraße 1-3
D-91074 Herzogenaurach
Marcus Brans
Schaeffler Gruppe
Senior Vice President Corporate Communication
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