Schaeffler Sees 'Good Start' to 2012

Major Continental AG shareholder Schaeffler AG has reported a ‘good start" to 2012. On announcing the company’s January to March results on May 29, CEO Juergen Geissinger said, "we have successfully continued our growth strategy during the first quarter of 2012 despite an increasingly challenging environment. With sales increasing by 6%, our growth has again outpaced the market. We have managed to stabilize our profitability at a high level."

Sales for the first three months of 2012 grew approximately 6% to 2.9 billion euros, with revenue of both Schaeffler’s automotive and industrial divisions again expanding faster than their respective markets. Automotive division sales increased by around 6% to approximately 1.9 billion euros. The industrial division also grew by a corresponding amount to over 900 million euros.

The fastest growing region, North America, generated revenue growth of 17%, followed by Asia/Pacific with 14% and Germany with 9%. Sales in the Europe (excluding Germany) and South America declined by 3% and 7%, respectively.

As expected, the first quarter’s EBIT of 401 million euros fell short of the higher-than-average 472 million euros recorded in the first quarter of last year. Schaeffler says this is due to on-going capacity expansion programs in the first quarter and growth-related pre-production costs. Schaeffler generated an EBIT margin of 14%, down from 17.5% during the first quarter of 2011.

Net income for the period, excluding non-controlling interests, was 236 million euros, substantially lower than the 438 million euros earned in a year earlier. Schaeffer, however, explains that the prior year period included non-cash changes in the fair value of interest rate derivatives of 156 million euros.

Looking ahead to the rest of this year, Schaeffler says trends in its markets are increasingly differing by region. While automotive production and industrial sectors in North America and Asia continue to grow, the situation in Europe is said to remain a challenging one.

In light of its stated good start to 2012, however, Schaeffler states that is maintaining its targets for the full year. “We continue to see solid growth opportunities for our business worldwide despite the current clear regional differences in market trends,” said Geissinger. “Therefore, we are still expecting to generate sales growth of more than five per cent and an EBIT margin of more than 13% in 2012.” (Tyres & Accessories)

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