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SCHAEFFLER REVENUES DOWN IN ‘PERSISTENTLY DIFFICULT’ MARKET

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SCHAEFFLER REVENUES DOWN IN ‘PERSISTENTLY DIFFICULT’ MARKET


Automotive components and systems manufacturer Schaeffler has published its financial report for the first half of the year. 

Company revenue, reported as €7.2 billion euros for the first six months, decreased at constant currency by 0.8 percent in what the report referred to as a ‘persistently difficult market environment’. This was driven largely by the automotive divisions, while the industrial division saw some revenue growth. 

Meanwhile, the firm’s earnings before interest and taxes (EBIT) margin was 7.7 percent compared with the prior year’s 11.0 percent margin, with the decrease attributed to a decrease in gross margin and higher expenses. However, this did improve from 7.5 percent in the first quarter to 7.9 percent in the second. 

READ: SCHAEFFLER PLANT SOLD IN MBO

The Automotive OEM division saw revenue of approximately 4,514 million euros for the first half of this year, with the firm claiming a drop of 2.9 percent on last year in constant currency. Though the company did say that ‘order intake was very encouraging in the first six months, totaling 7.7 billion euros’ and that the E-Mobility business division won a 1.1 billion euro supply contract.

Schaeffler’s Langen HQ

Similarly, the Aftermarket division also reported a revenue of 905 million euros, a drop of 2.4 percent at constant currency, attributed to a ‘considerable decline in revenue in the Europe region’. EBIT before special items was reported as 136 million euros compared to 177 million euros in the prior year, while EBIT margin before special items was 15.1 percent, down from 19.3 percent in the prior year. 

READ: SCHAEFFLER’S NEW DATA DIVISION

Dietmar Heinrich, CFO of Schaeffler, said the company is ‘increasingly successful in managing our use of capital more efficiently,’ and noted: “In the second half of 2019, we will focus on even stronger discipline regarding cost and capital and on generating cash flow. 

Meanwhile, Klaus Rosenfeld, CEO of Schaeffler, noted the ‘persistent weakness’ of the global automotive business, and said: “Following a difficult first six months that fell slightly short of our expectations, we believe that the market environment will remain challenging in the second half of 2019 as well.

“We have acted on this trend by adjusting our full-year guidance for 2019,” he said. 

 

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‘MAJOR DIFFICULTIES WITH SOFTWARE’ BLAMED FOR POOR RESULTS AT LIQUI MOLY

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‘MAJOR DIFFICULTIES WITH SOFTWARE’ BLAMED FOR POOR RESULTS AT LIQUI MOLY


The introduction of new company software has been blamed for mixed half-year results at lubricant manufacturer Liqui Moly.

Problems with the suite have had a ‘direct impact on business relations’  according to the company, leaving customers frustrated.  “In my entire professional career, I have not had to apologize so often to customers, as I have had to in the last six months. The level of service that we are currently delivering really pains me,” says Ernst Prost. The company is also incurring considerable extra costs, for example, because containers can only be half filled, delivery vehicles have to wait longer than planned to be loaded, or air freight needs to be used when items that are needed urgently do not arrive by ship in time. “It’s not our customers’ fault that we are having problems, so we are doing everything we can to minimize the impact on them and to bear any additional costs.” These expenses are not the whole story either. “In addition to the huge cost of having the software installed, every day produces new things to trouble shoot and problems to solve.”

READ: LIQUI MOLY ACQUIRED BY WURTH GROUP

All of this has left significant tracks in the company’s figures. Compared to the first half of 2018, turnover has fallen slightly by 0.8 percent to € 259.6 million, and this is only because the high backlog of orders cannot be fully processed due to the computer problems. Earnings for the half-year fell by around 30 percent to € 11 million. “I never would have thought that in 2019 a change of software could send a whole company skidding off the road” concluded Prost.

The company hopes to have the computer problems under control, and a new central warehouse in action, ‘by the end of the year at the latest’.

Software causes production delays at plant

 

 

 

 

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HALFORDS INTERIM RESULTS: MODEST GROWTH IN ‘CHALLENGING CONDITIONS’

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HALFORDS INTERIM RESULTS: MODEST GROWTH IN ‘CHALLENGING CONDITIONS’


Retail chain Halfords has published interim results for 2018. This will be the first set of results released since CEO Jill McDonald finished working out her notice at the end of October.

The group published modest growth in most areas, during what it described as ‘challenging conditions’, citing the weak pound and disappointing summer weather as reasons for gross margin to be weaker than it could be.

Like-for-like sales in car accessories were down two percent, which the group blamed on the continuing slide in the sale of sat-navs (which now make up around three percent of accessory sales, down from a high of 20 percent). The results were offset to some extent by the continued growth in dashcam sales.

The number of pushbikes sold was lower than the previous period, but the sector still recorded growth as the bikes had a higher average price, helped in no small part by the increase in popularity of e-bikes, which are now available across the chain’s network. The report also mentioned that two new Cycle Republic stores opened during the period.

Jonny Mason, Chief Financial Officer & Interim Chief Executive Officer, commented: “It is pleasing to report positive sales growth for this period, despite the poorer summer weather and the uncertainty in the UK economy. We are also pleased with our profit performance in the half, as we offset a large part of the (circa) £15m increase in costs that resulted from the impact of the weaker pound. Looking ahead, we have strong plans both in-store and online for the Cyber, Christmas and winter peaks.”

Ex-Dixons Carphone boss, Graham Stapleton has been hired as the new CEO and is expected to start in January.

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