Klaus Rosenfeld, the 57-year-old CEO of Schaeffler AG, will continue to steer the Franconian automotive and industrial supplier for another five years. The announcement came following the Supervisory Board's meeting on Friday, with Rosenfeld joining Schaeffler in 2009 as Chief Financial Officer and becoming CEO in 2013.
The upcoming merge with Vitesco AG is a major task for Rosenfeld and his executive team, considered one of their most significant challenges. During his tenure, Rosenfeld has played a significant role in shaping Schaeffler's future, driving innovation in the car industry and contributing to the growth of the German industry overall.
Recent Developments
The merger with Vitesco Technologies has led to a significant increase in sales, closing its fiscal year 2024 with a total of €18.2 billion, including Vitesco Technologies' activities from Q4 onwards. Despite integration challenges, Schaeffler's EBIT margin was 4.5% in 2024, below the initial guidance of 5% to 8%.
Future Plans
To address the underperformance in the Bearings & Industrial Solutions division, Schaeffler has initiated a restructuring program, referred to as the "forward program." The program aims to reduce costs and improve the division's profitability, with effects anticipated by the second half of 2025.
Schaeffler will continue to operate with four strong operational units: E-Mobility, Powertrain and Chassis, Vehicle Lifetime Solutions, and Bearings & Industrial Solutions, with a fifth division, Corporate and Other, consolidating startup activities and external revenues.
Cost Implications
The integration of Vitesco AG will involve significant costs, including a low triple million effort in 2025 for integration costs, impacting the company's free cash flow but necessary for the consolidation process. The operational impact from the Vitesco integration is expected to be minor, mainly driven by some mix effects, but accounting-related changes will have a more significant impact on the EBIT margin.
Commitment to Success
Klaus Rosenfeld has committed to personally overseeing the integration and restructuring efforts, ensuring that the Bearings & Industrial Solutions business is brought back on track. He emphasized the need for a deep dive analysis to understand the specific factors contributing to the underperformance and to take necessary actions to improve the division's performance.
In conclusion, Klaus Rosenfeld is focused on integrating Vitesco AG, addressing the challenges in the Bearings & Industrial Solutions division, and ensuring Schaeffler AG maintains its operational efficiency and profitability despite integration complexities.
Bootnote: This article incorporates insights into the merger with Vitesco Tech, sales growth, EBIT margin, restructuring program, operational units, integration costs, operational impact, and leadership commitment, all derived from the enrichment data provided.
Enrichment Data:
Recent Achievements:
- Integration of Vitesco Technologies:
- Sales Growth: €18.2 billion in total sales for 2024, with Vitesco Technologies' activities from Q4 onwards.
- EBIT Margin: 4.5%, below the initial guidance of 5% to 8% due to weak Q4 development at the Vitesco Technologies activities and Bearings & Industrial Solutions division.
Future Plans:
- Restructuring Program (Forward Program):
- Bearings & Industrial Solutions Division: Aimed at reducing costs and improving profitability, with effects anticipated by the second half of 2025.
- Operational Units: Schaeffler will continue to operate with four main operational units and a fifth division for startup activities and external revenues.
Cost Implications:
- Integration Costs: €100 million low triple million effort in 2025 for integration costs, impacting free cash flow.
- Operational Impact: Minor operational impact mainly driven by mix effects, but accounting-related changes will have a more significant impact on the EBIT margin.
Leadership Commitment:
- Personal Involvement: Klaus Rosenfeld committed to overseeing the integration and restructuring efforts, ensuring the Bearings & Industrial Solutions business is brought back on track. He emphasized the need for a deep dive analysis to understand specific factors contributing to underperformance and take necessary actions to improve the division's performance.
