Schaeffler (SHA0) Q4 2025 earnings summary

Executive summary

• FY 2025 delivered resilient performance amid volatility, with revenue at EUR 23.5 billion, a -0.6% FX-adjusted decline, and improved gross and EBIT margins driven by restructuring and operational efficiency.

• Free cash flow before M&A reached EUR 266 million, significantly above prior year and guidance, supporting a proposed dividend increase to EUR 0.30 per share.

• Integration and portfolio optimization continued, including the sale of the turbocharger business in China and closure of Ultra Precision Drives in Germany.

• Growth initiatives in humanoids, defense, and space are gaining traction, with new partnerships, MOUs, and an innovation factory launched.

• High one-off expenses, mainly restructuring and impairments, led to a net loss of EUR 424 million, despite positive adjusted net income of EUR 148 million.

Financial highlights

• Pro forma sales for 2025 were EUR 23.5 billion, with gross margin improving to 19.9% (reported 18.4% due to one-off losses), and EBIT margin before special items rising to 4.0% from 3.5% year-over-year.

• Free cash flow before M&A was EUR 266 million, a significant improvement from the prior year.

• Net income before special items was EUR 148 million; reported net income was negative due to EUR 572 million in special items.

• Leverage ratio improved to 2.1x, with liquidity at EUR 5.1 billion.

• CapEx for 2025 was EUR 974 million, down from EUR 1,460 million prior year.

Outlook and guidance

• FY 2026 guidance: sales EUR 22.5–24.5 billion, EBIT margin 3.5–5.5%, free cash flow EUR 100–300 million.

• No meaningful top-line impact from new growth activities expected in 2026.

• CEO priorities: closing EBIT break-even gap in E-Mobility, securing operating performance, and investing in growth areas.

• Market assumptions: global light vehicle production to decline by 0.4% in 2026, car parc growth 2.0–2.5%, industrial production growth 2.5–3.0%.

• E-Mobility revenue guidance: EUR 5.2–5.8 billion, EBIT margin -15.0% to -13.0%.