Third-quarter revenue slightly below prior year quarter (down 2.6 percent)

Third-quarter EBIT margin before special items of 9.4 percent significantly improved from first six months (1.2 percent) and ahead of prior year quarter (9.1 percent)

Recovery in 3rd quarter primarily driven by the two Automotive divisions; Industrial division revenue trend improved slightly compared to first half of 2020

Free cash flow before cash in- and outflows for M&A activities of 333 million euros slightly below prior year quarter (362 million euros)

New full-year guidance for 2020 issued, uncertainty remains high in 4th quarter

Global automotive and industrial supplier Schaeffler presented its interim report for the first nine months of 2020 today. The Schaeffler Group generated 8,971 million euros in revenue during the period (prior year: 10,839 million euros). As a result of lower demand due to the coronavirus pandemic, revenue for the period decreased considerably at constant currency, falling by 15.4 percent; in the third quarter, demand improved primarily due to the recovery at the two Automotive divisions, reducing the decline from the third quarter of the prior year to only 2.6 percent. The revenue decrease during the reporting period was driven by volume-related revenue declines at all three divisions. The impact of the pandemic on the four regions varied. The Greater China region reported constant-currency revenue growth of 8.1 percent for the reporting period due to the recovery emerging there in the second quarter; its third-quarter growth rate from the prior year quarter was 16.5 percent. The remaining three regions each experienced a considerable constant-currency revenue decrease for the first nine months, amounting to 22.6 percent in the Europe region, 18.4 percent in Americas, and 19.3 percent in Asia/Pacific.

The Schaeffler Group earned 385 million euros in EBIT before special items in the first nine months of 2020, considerably less than in the prior year (883 million euros). This represents an EBIT margin before special items of 4.3 percent (prior year: 8.1 percent).

EBIT for the reporting period was adversely affected by 798 million euros (prior year: 88 million euros) in special items. These included an impairment of goodwill allocated to the Automotive Technologies division by 249 million euros recognized in the first quarter. Special items also comprise 549 million euros in expenses incurred to expand the programs RACE (Automotive Technologies division), GRIP (Automotive Aftermarket division), and FIT (Industrial division), especially in connection with downsizing the workforce to adjust excess structural capacity as communicated in September. Including these special items, EBIT amounted to -413 million euros (prior year: 795 million euros).

Strong Q3 results, break-even operating earnings at Automotive Technologies

The Automotive Technologies division generated 5,429 million euros in revenue (prior year: 6,772 million euros) in the first nine months of 2020. At constant currency, revenue decreased considerably from the prior year, falling by 18.2 percent mainly driven by volumes. Following a slump in global automobile production in the first half of 2020 as a result of the coronavirus pandemic, the third quarter saw demand recover considerably, especially in the Greater China and Americas regions. Since global automobile production declined by 23 percent during the reporting period, Automotive Technologies division outperformance for the same period was approximately 5 percentage points.

The significant decline in revenue in the first nine months of 2020 affected all regions except Greater China. In the Europe region, revenue fell by 27.7 percent at constant currency. The Americas region reported 20.7 percent less revenue at constant currency, and the decline in Asia/Pacific amounted to 20.1 percent. The Greater China region increased its revenue by 4.1 percent at constant currency. Following a slight decline in revenue of 2.2 percent at constant currency in the first half of 2020, this region’s revenue was up 14.2 percent at constant currency in the third quarter, driven by a considerable recovery of demand.

Within the four business divisions (BDs), all of which experienced falling revenue, revenue growth was reported by the wet double clutches product group