Schaeffler (SHA0) Q4 2025 earnings summary

Executive summary

• Delivered resilient performance in a volatile environment, with FY 2025 revenue at EUR 23.5 billion, down 0.6% year-over-year, but improved adjusted 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 sale of turbocharger business in China and closure of Ultra Precision Drives in Germany.

• Growth initiatives in humanoids, defense, and space sectors advanced, with new partnerships, innovation factory, and MOUs signed.

• High one-off restructuring and impairment costs led to a reported net loss of EUR 424 million, despite positive adjusted net income.

Financial highlights

• Adjusted gross margin improved to 19.9% (reported 18.4% due to one-off losses), up from 19.1% year-over-year.

• EBIT margin before special items rose to 4.0% from 3.5% year-over-year, with EBIT before special items at EUR 936 million.

• Free cash flow before M&A was EUR 266 million, exceeding expectations.

• Dividend proposal of EUR 0.30 per share, a EUR 0.05 increase over the previous year.

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

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.

• E-Mobility expected to grow, Powertrain & Chassis to decline, VLS and Bearings & Industrial Solutions to show some growth.

• CEO priorities include closing EBIT break-even gap in E-Mobility and advancing growth in Humanoids, Defense, and Space.

• No meaningful top-line impact from new growth activities in 2026; focus remains on operational improvements.

• 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%.