Schaeffler (SHA0) Pre-Close Call summary

Executive summary

• Preliminary full-year sales reached €18.2 billion, mainly due to full consolidation of Vitesco Technologies from Q4 onward.

• EBIT margin for 2024 was 4.5%, below the guided 5%-8% range, mainly due to weak Q4 in Vitesco and Bearings & Industrial Solutions.

• Free cash flow exceeded guidance at €360 million, driven by strong working capital management and some early customer payments.

• Immediate deep-dive analysis and restructuring (Forward Program) initiated to address Bearings & Industrial Solutions underperformance.

• New reporting structure with four operational units and a Corporate & Other division effective from January 2025.

Trading performance and revenue trends

• Automotive Technologies saw market stabilization but slight underperformance, mainly due to China.

• Vehicle Lifetime Solutions delivered strong year-over-year sales growth, though growth rates are normalizing.

• Bearings & Industrial Solutions experienced continuous sales decline, especially in Europe.

• Vitesco activities contributed to sales growth in Q4 but underperformed expectations, especially in e-mobility.

• "Others" division, mainly Vitesco, posted strong sales growth but negative EBIT margin due to consolidation and integration costs.

Profitability and margins

• Automotive Technologies EBIT margin improved year-over-year and quarter-on-quarter, reaching above prior year levels.

• Vehicle Lifetime Solutions EBIT margin higher than previous year but slightly lower quarter-on-quarter due to e-commerce dilution.

• Bearings & Industrial Solutions saw a significant EBIT shortfall in December, with profitability impacted by multiple small factors.

• Vitesco's negative EBIT margin in Q4 driven by integration and accounting effects, not operational performance.