Schaeffler Ag Ord

2025 earnings conference call. I'm Sergen, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and the one on your telephone. For operator assistance, please press dance zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Heiko Eber, Head of Investor Relations. Please go ahead.

Thank you, Operator. Ladies and gentlemen, I'm very happy to welcome you to today's call on the financial results Q3 2025. The press release, the following presentation, and our interim statement have been published today at 8 a.m. CET on our Investor Relations webpage. And for sure, after the meeting, we will provide the recording and the transcript of this webcast. As a quick reminder, please note that all figures as reported figures, and the mentioned pro forma figures 2024 and related information are unaudited. As always, Klaus Rosenfeld, our CEO, and Christoph Wannecke, our CFO, have joined the conference call to guide you through the key information in our presentation. And, of course, afterwards, both gentlemen will be available for our Q&A. Now, without further ado, let me hand over to our CEO.

Thank you, Heiko. Ladies and gentlemen, welcome to our Q3 call. You all have the presentation in front of you that we distributed this morning. You also saw the three press releases we published. I will start immediately on page number four with the summary. Good performance in a soft market environment is the headline. You see sales growth of plus 1.3% in Q3. I will go into a little bit more detail there. Gross margin at 20.3%. Please read the footnote. An extraordinary one-off loss of $100 million due to the depreciation of SAP licenses. It's a comparable number to the 19.1% in Q3 previous year. So you see an quarter-over-quarter improvement there. EBIT margin at 4.5%, nearly a percentage point better than Q3 2024, also sequentially clearly pointing in the right direction. Positive development and free cash flow, 175 million in Q3 really points also in the right direction. in the last days. And then EPS is negative, in particular due to the one-off restructuring, but also due to the depreciation of SAP licenses. On an adjusted basis, it is positive. Now, with this, let me quickly go through the business performance. You see on page six the usual breakdown of where the growth is coming from. And we can basically say that except for the flattish development in powertrain and chassis overall, all divisions and regions contributed here. Europe is a little weaker than we would like to see it with minus 1.6%. also driven by powertrain and chassis. You see some of the unusual developments. Strong growth in Asia-Pacific is the same trend that we explained last time. It has to do with the shift of an important project from China to South Korea. And America's with 18.4% in e-mobility is new consequences. to perform. Vehicle lifetime solutions with 2.3% weaker than in the previous quarters, but we always said this two-digit growth is not going to continue. So with strong growth in America, also in the two other regions, Europe here, again, is the reason why this was not as strong as before and bearings and industrials with 2.2% I think is in line with market. So a trend from our point of view that should not surprise anyone with 1.3% at least the Q3 was a gross quarter despite all this turbulent environment. Page 7 then gives you more detail in our OEM business, auto powertrain. That's what we promised to give you the breakdown by powertrain type, both for the outperformance number and also for order intake and book to bill. And what you see is a continuation of the trend that we showed you for the first six months, nine months, plus 30% outperformance in VAP shows that we are well on track there and have is for these nine months still below market. The same with ICE. The number has come down a little bit. Key for going forward is not what we are printing today, but the order intake and the book to bill. And there you see that BEF and HEF are more or less on the same level with 1.8 times. Let me stay here as we outlined also during our capital markets day. We have a significant order book. Our key priority is to deliver that order book. We appreciate new projects, but only if they make sense and also drive our profitability. E-mobility, next page, page eight. As you probably expected, sales growth on the positive side, 4.7%, clearly driven by Americas and Asia Pacific. order intake in that quarter was 1.2 billion, slightly below the second quarter, but still on track. That also leads to a book-to-bill in Q3 of 0.9. What really counts here is, from my point of view, the full nine months. What is on the positive side here is the continuous improvement of the cross-profit margin, plus three percentage points in Q3. And this also excludes the impact from the SAP licenses that for e-mobility would have been 24 million. You see two examples for new projects. And with the development that we see here, we feel good that we are on track to deliver what we promised for the mid-term. Powertrain chassis. decline, gross margin continues to be strong, and further improvement, 1.2 percentage points, good order intake, but clearly with a book to bill that is below 1. As you always said, you need to, at the end of the day, look at these two divisions somehow together, in particular when you think about the power paying off. Vehicle lifetime solutions, I already said it, lower growth compared to previous quarters in line with market and gross profit margin further improving. We always said it's not going to grow every quarter by 10%, but I'm really proud to say that our gross profit margin stays at a very high and satisfactory Level bearings and industrial solutions, also here, we decided to improve our guidance a bit. The 5 to 7 was after a further improved third quarter, a little bit outdated, so we moved it up to 6 to 8%, and we feel good that the business is further improving due to the various self-help measures. growth in particular in aerospace, but also in construction, agriculture, machinery, and the new emerging area of medical equipment. Let's wait for the fourth quarter and see where we end up there. Capital allocation, page number 12. We continue our course here. Capital allocation schemes are known to you. We are very disciplined here. You see the reinvestment rate at 0.5 times for the whole year, for the whole business, excuse me. And that clearly means we are releasing capital at the moment. That is important. Bring the SVA number back on track. We are now slightly below previous quarter, 12.3 billion, and we will manage capital tightly. Let me also say this does not mean that we have restricted any type of growth because there's enough cash flow available to fund the project that we're seeing. But as you know, we are restrictive and want to bring SVA back to where it should be. Last page from my side before I hand over to Christoph, short follow-up on the top three priorities that I explained through the capital markets thing. First is delivery of our order book. Again, we have seen a prominent SOP of electric drive products for a Chinese OEM. Again, an interesting player who is a pure play on the new energy vehicles. Several other SOPs, one in Europe for a premium European OEM, and another one, again, for a European OEM and a Chinese OEM. In chassis, we were steering, so I'm happy to say that the delivery of the order book is on track. The size is big and challenging, but we are learning, we are moving forward, and we're seeing good results from these three examples. Synergies is also on track. You remember what we said during the capital markets day, we have more or less finalized our program that we call program Here's more detail on the plant in Steinhagen that was already in the numbers that we showed you. We will finish production in 2026. The portfolio, we consolidated into another plant and production is outlined and at the moment negotiates with workers' council. And I can tell you that this cooperation in particular our German operations. And last but not least, you saw the press release. We promised to streamline the business portfolio and reallocate capital. We said during the Capital Markets Day, there are 10 portfolio elements in the pipeline. This is now our first example. We have yesterday or this morning closed the contract with a Chinese specialist in turbocharger technology. that acquires our turbocharger business in China. It's a business that we inherited through Vitesco. It made 100 million euros and is at the moment in a structural decline. So it makes a lot of sense to get rid of this. The agreement is signed. Please understand we are not disclosing more details, but it's a proof point of our promise to streamline. With that, I hand over to Christoph for the financial performance.