Schaeffler : Weak Car Market Weighs on Schaeffler Earnings

Schaeffler's Q1 2025 revenue declined by 2.9% to EUR 5.9 billion, impacted by a weak automotive market, particularly in Europe within the Powertrain & Chassis division . E-Mobility showed growth, with strong regional performance in the Americas and Asia/Pacific offsetting European declines. Rising R&D expenses pressured EBITDA, while the EBIT margin remained flat. Free cash flow was negative, though improved year-over-year. Net debt increased, raising leverage concerns. Despite this, liquidity remains strong. While guidance remains optimistic, the report notes the risk of global trade policies. Schaeffler monitors trade policies closely, passing tariff costs to customers, but struggles to quantify long-term impacts due to policy volatility. In our view, c ommunication regarding tariff responses lacks specificity, potentially concerning stakeholders about preparedness. Overall, the outlook is cautiously pessimistic and we maintain our underweight view .