Schaeffler (SHA0) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales rose 4.2% year over year to €4,191m, led by Vehicle Lifetime Solutions and Automotive Technologies; Bearings & Industrial Solutions declined amid market headwinds.

• Q2 EBIT margin before special items fell to 4.9% from 7.1%; H1 margin was 6.3% versus 7.6%.

• Q2 free cash flow before M&A was €75m, down from €103m; H1 free cash flow was -€91m, pressured by Vitesco integration and financing costs.

• Vitesco integration preparations remained on track for the planned October 1, 2024 merger and Q4 consolidation.

Financial highlights

• H1 sales were €8,276m, up 2.0% at constant currency; EBIT before special items was €525m, down 15.8% year over year.

• Q2 EBIT before special items was €204m, down from €289m; gross margin was 21.0%, versus 21.4% a year earlier.

• H1 net income was €263m, nearly flat year over year; EPS was €0.40 per common non-voting share.

• Net financial debt reached €4,920m and net debt/EBITDA before special items rose to 2.4x from 1.5x at year-end 2023.

Outlook and guidance

• FY 2024 combined sales growth guidance was 5–8% at constant currency, revised from 6–9%.

• EBIT margin before special items guidance was reduced to 5–8% from 6–9%; free cash flow before M&A guidance fell to €200–300m from €300–400m.

• Guidance assumes Vitesco earnings for the first nine months and full consolidation from October 1, and reflects continued weakness in Bearings & Industrial Solutions.