Schaeffler Cuts 2013 Sales Goal on Industrial Equipment
Schaeffler AG, the family-owned bearing maker that’s the biggest investor in car-parts producer Continental AG (CON), lowered its 2013 sales forecast on weaker demand for industrial components.
Revenue growth for the full year will be in a range of 1 percent to 2 percent, down from a previous forecast for an increase of about 4 percent, the Herzogenaurach, Germany-based Schaeffler said today in a statement.
“We probably will not be able to offset the weakness in revenue experienced in the industrial division to date,” with the global economic recovery sluggish and growth in China weak, Schaeffler Chief Executive Officer Juergen Geissinger said in the statement. “We continue to expect sustainable above-market revenue growth for the automotive division.”
Second-quarter earnings before interest and taxes decreased 2.6 percent to 369 million euros ($494 million). Sales rose 2.3 percent to 2.86 billion euros.
The company reiterated it is targeting an Ebit margin of about 13 percent of sales for the full year “due to the stable earnings situation in the automotive division,” Geissinger said in the statement. The margin contracted to 12.9 percent in the second quarter from 13.6 percent a year earlier.
For the first six months, Schaeffler’s sales declined 0.7 percent to 5.61 billion euros. Ebit fell 7.2 percent to 724 million euros.
The company lowered net debt by 619 million euros from a year ago to 6.5 billion euros as of June 30, Schaeffler said today. Chief Financial Officer Klaus Rosenfeld pledged on March 21 to work on reducing financing costs further in 2013.
The Schaeffler group including its parent holding Schaeffler Verwaltungs GmbH still has borrowings totaling about 10 billion euros stemming from its takeover of a majority of Continental in early 2009. Since then, Schaeffler has sold a part of its holding in the Hanover, Germany-based manufacturer and refinanced some of its debt to lower financing costs. Schaeffler still owns 49.9 percent in Continental.
The most recent refinancing step was by Schaeffler Verwaltungs GmbH in July. The holding company owned by Maria-Elisabeth and Georg Schaeffler raised 3.88 billion euros of new debt to replace financing arranged in 2009. It was the first time the holding company tapped the bond market.
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