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

Schaeffler AG

05/03/2024 09:07

(Adds detail on e-mobility business in paragraph 4, analyst
comment in paragraphs 5-6)
    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 ($1.29 billion) on
Tuesday, weighed down by weak demand in China for the group's
Industrial division. 
    The profit result 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 COVID 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 the company gave. 
  
        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 deal, which had been expected to close by January 2024,
will be voted on at the AGMs of each company in April.
        Schaeffler's EBIT margin for the year was 7.3%, slightly
below the 7.6% analysts had expected in the Vara poll. 
  
        Schaeffler expects considerable revenue growth and an
EBIT margin before special items of 6% to 9% for 2024, including
the consolidated accounts of Vitesco.
  

($1 = 0.9219 euros)

 (Reporting by Louis van Boxel-Woolf and Chiara Holzhaeuser,
Editing by Louise Heavens and Christian Schmollinger)
 ((Louis.vanBoxel-Woolf@thomsonreuters.com;
Chiara.Holzhaeuser@thomsonreuters.com))