Profit Slump at Schaeffler

Schaeffler is increasingly feeling the doldrums in the auto industry, as he makes the bulk of his business with carmakers.

Automotive supplier Schaeffler is suffering from the meager auto market. At the end of July, the company is already adjusting its expectations for the current year.

The automotive and industrial supplier Schaeffler has suffered in the second quarter of the current fiscal year under the parlous state auto industry. The surplus broke by half to 136 million euros, as the SDax Group announced on Tuesday when presenting its final figures in Franconia Herzogenaurach.

At the end of July, Schaeffler had lowered its profit and revenue forecast for the current financial year and appeared more pessimistic. The new forecasts have now been confirmed. Instead of the targeted operating return on sales (EBIT margin) of eight to nine percent before special items, only seven to eight percent are still in it. Currency-adjusted sales would still grow by one percent at best, and even a slight decline would be possible. So far Schaeffler had expected an increase of up to three percent.

The auto and industrial supplier is getting more and more affected by the slowdown in the auto industry, as it makes the bulk of its business with carmakers. According to final figures, the francs posted a decline in sales of one percent to 3.6 billion euros in the past second quarter. The fact that the industrial division of the rolling bearing specialist is growing faster than expected could not make up for the losses in the original equipment business with the car manufacturers.

Automotive supplier Schaeffler underestimated the shift to e-mobility. Labor director Corinna Schittenhelm is now becoming a decisive protagonist of the desperate recovery.

"The environment continues to entail high risks for the remainder of the year," said CEO Klaus Rosenfeld at the end of July. At the beginning of the year, car production was expected to decline by only one percent, and now it would have to assume a drop of four percent. In addition, some major customers would have less spare parts. Rosenfeld had launched an austerity program in the dominant auto parts business in the spring. 

The owner family of Schaeffler also holds 46 percent of Continental . The automotive supplier from Hanover had already conceded the forecast for 2019 because of the weakening car economy in the past week, to a similar extent as Schaeffler.