Schaeffler to expand cooperation with Continental
MUNICH (Bloomberg) -- Schaeffler says it will streamline its operations and widen cooperation with fellow German supplier Continental.
Schaeffler is the largest shareholder in Continental with a 46 percent stake. Schaeffler launched a debt-financed takeover bid for Continental in 2008 which failed.
The company plans to deepen cooperation in areas including engine and drivetrain technology.
"Our goal is to improve processes and boost efficiency" by the end of 2015, Schaeffler's Chief Financial Officer Klaus Rosenfeld said on Thursday.
"There's significantly more potential" to be had by working more closely with Continental, said Peter Gutzmer, a Schaeffler board member. Past efforts "could have gone further," he said.
While joint work intensifies, Schaeffler's automotive unit will remain the key earnings driver as global production of cars and light commercial vehicles is set to rise, Rosenfeld said.
Earnings before interest and taxes last year dropped 31 percent to 982 million euros ($1.35 billion), Schaeffler said on Thursday. It took a 380 million euro provision in 2013 in conjunction with a European Union antitrust probe.
Ebit adjusted for the provision and job-cut costs was unchanged at 1.41 billion euros, with the margin declining 0.1 percentage point to 12.7 percent of revenue, the German supplier said. The margin in 2014 will amount to 12 percent to 13 percent of sales, the company added.
Schaeffler has scaled back net debt to 5.9 billion euros at the end of December from a peak figure exceeding 10 billion euros shortly after the Continental stake purchase. Rosenfeld said it was "too early" to talk about possible steps for a larger debt reduction, and the figure won't decrease substantially this year. Additional debt booked at Schaeffler's holding company remained "largely unchanged," he said, without providing a specific number.
Schaeffler ranks second to Gothenburg, Sweden-based SKF AB in the global ball-bearings market. The two companies were among five bearing producers that the EU said agreed to pay a combined 953.3 million euros to settle an antitrust investigation into automotive parts.Contact Automotive News