Germany's Schaeffler misses expectations for 2023 core profit (updated)

Schaeffler AG

05/03/2024 12:48

(Adds CEO comment in paragraph 9)
    By Louis van Boxel-Woolf and Chiara Holzhaeuser
       March 5 (Reuters) - German automotive and industrial
supplier Schaeffler AG  SHA_p.DE  reported 2023 full-year
adjusted core profit (EBIT) of 1.19 billion euros ($1.29
billion) on Tuesday, weighed down by weak demand in China for
the group's Industrial division. 
    The profit missed a consensus of 1.24 billion euros for the
year compiled by Vara Research and supplied by the company, but
was up 13.5% from 2022.   
    A supplier to machine and vehicle makers, Schaeffler's
fortunes are closely tied to broader industrial activity. China
accounted for about 21% of the company's revenue last year and
factory activity there has stumbled since the pandemic,
according to official surveys.
    Order intake at Schaeffler's E-mobility business, however,
was 5.1 billion euros for the year, beating the 2 billion to 3
billion euro guidance range given by the company.
    Pal Skirta, an analyst at Metzler Equities, said strong
orders were likely a result of Schaeffler's ongoing merger with
Bavarian drive-train maker Vitesco Technologies  VTSCn.DE .
    "Customers know that after the merger Schaeffler will be a
so-called 'one stop shop' for electromobility where carmakers
can get everything they need in terms of e-mobility," he told
Reuters.
    The ball-bearings specialist said it would acquire
powertrain supplier Vitesco in October last year, aiming to
increase its product line of parts for electric vehicles.  
    The merger deal will be voted on at the respective AGMs of
each company in April.
    Schaeffler CEO Klaus Rosenfeld told Reuters that the
family-owned firm had not undergone a "radical transformation"
to become exclusively concerned with electric vehicles, pointing
out that a further eight billion euros worth of orders had come
in over the year to other parts of the business.
    Schaeffler's EBIT margin for the year was 7.3%, slightly
below the 7.6% indicated in the Vara poll. 
    Schaeffler expects considerable revenue growth and an EBIT
margin before special items of 6% to 9% for 2024, with Vitesco
to be fully included in Schaeffler's accounts after the expected
conclusion of the merger in the fourth quarter of 2024.

($1 = 0.9219 euros)

 (Reporting by Louis van Boxel-Woolf and Chiara Holzhaeuser,
Additional Reporting by Alexander Hübner, Editing by Louise
Heavens and Kirsten Donovan)
 ((Louis.vanBoxel-Woolf@thomsonreuters.com;
Chiara.Holzhaeuser@thomsonreuters.com))