Schaeffler (SHA0) Q4 2023 earnings summary

Executive summary

• FY 2023 sales rose 5.8% at constant currency to €16,313 mn; EBIT margin before special items increased to 7.3% from 6.6%.

• Free cash flow before M&A reached €421 mn, above the €300–400 mn guidance range; challenging markets weighed on Industrial margins.

• A €0.45 dividend per common non-voting share was proposed; Vitesco merger preparation remained on track, while 2024 was expected to be a challenging transition year.

Financial highlights

• FY sales were €16,313 mn, up 5.8% at constant currency and 3.2% reported; Q4 sales were €4,043 mn, up 3.3% at constant currency and 0.6% reported YoY.

• FY EBIT before special items rose to €1,187 mn from €1,046 mn, with margin up to 7.3% from 6.6%; reported EBIT was €834 mn, including €353 mn of special items.

• Q4 EBIT before special items was €222 mn, down €11 mn YoY, with a 5.5% margin; FY net income attributable to parent shareholders fell to €310 mn from €557 mn, partly affected by Vitesco transaction accounting.

• FY free cash flow before M&A rose to €421 mn from €280 mn; capex increased to €938 mn from €791 mn, with working-capital management supporting cash generation.

Outlook and guidance

• FY 2024 guidance: considerable constant-currency sales growth, EBIT margin before special items of 6–9%, and free cash flow before M&A of €300–400 mn.

• Guidance assumes the 38.87% Vitesco stake acquired in January is equity-accounted through Q3 2024, followed by full consolidation after anticipated Q4 merger registration.

• FY 2024 guidance is Group-only; divisional guidance is planned to resume in 2025, with 2024 reporting following the transitory operating model.

• Merger closing was expected in Q4 2024; integration preparation and business-plan development were on track, with finalization targeted for July 2024.