Schaeffler to Widen Car-Parts Joint Work With Continental
Schaeffler AG unveiled measures to streamline operations and widen cooperation with Continental AG (CON), the car-parts maker it gained majority control of six years ago.
“Our goal is to improve processes and boost efficiency” by the end of 2015, Schaeffler’s Chief Financial Officer Klaus Rosenfeld said today at a Munich press conference.
The company is the largest shareholder in Continental, Europe’s second-biggest maker of car parts, with a 46 percent stake, which it has reduced from a peak of 90 percent control. While joint work intensifies, Schaeffler’s automotive unit will remain the key earnings driver as global production of cars and light commercial vehicles is set to rise, Rosenfeld said.
“There’s significantly more potential” to be had by working more closely with Continental, said Peter Gutzmer, a Schaeffler board member. Past efforts “could have gone further,” he said. Schaeffler plans to deepen cooperation in areas including engine and drivetrain technology.
Earnings before interest and taxes last year dropped 31 percent to 982 million euros ($1.35 billion), Schaeffler said in a statement today. It took a 380 million-euro provision in 2013 in conjunction with a European Union antitrust probe.
Ebit adjusted for the provision and job-cut costs was unchanged at 1.41 billion euros, with the margin declining 0.1 percentage point to 12.7 percent of revenue, the Herzogenaurach, Germany-based manufacturer said. The margin in 2014 will amount to 12 percent to 13 percent of sales.
Schaeffler ranks second to Gothenburg, Sweden-based SKF AB (SKFB) in the global ball-bearings market. The two companies were among five bearing producers that the EU said yesterday agreed to pay a combined 953.3 million euros to settle an antitrust investigation into automotive parts.
The German company has scaled back net debt to 5.9 billion euros at the end of December from a peak figure exceeding 10 billion euros shortly after the Continental stake purchase. Rosenfeld said it’s “too early” to talk about possible steps for a larger debt reduction, and the figure won’t decrease substantially this year.
Additional debt booked at Schaeffler’s holding company remained “largely unchanged,” he said, without providing a specific number.
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