Decline in profits and revenue for Schaeffler as turnover and profits take a hit
Schaeffler, the German automotive and industrial supplier, has reported its business performance for the first half of 2025, showing a solid but slightly declining revenue trend with ongoing investments. Despite the challenges in the automotive industry and the market-driven decline in revenue in the Powertrain & Chassis and Bearings & Industrial Solutions divisions, the company remains optimistic about its future.
Financial Results
The company generated €482 million in EBIT before special items in H1 2025, slightly down from €531 million the previous year. Revenue totaled €11.8 billion, a 2.6% decrease at constant currency compared to the prior year’s €12.4 billion. The EBIT margin before special items remained stable at about 4.1%, close to last year's 4.3%.
Challenges and Opportunities
Schaeffler faced negative impacts from phaseouts and business run-downs within its Powertrain & Chassis segment but secured important long-term contracts such as a significant diesel ECU order in the US passenger car sector. Vehicle Lifetime Solutions maintained a strong gross margin above 30%, though growth was less positive compared to prior quarters.
Investments include a new logistics center to enhance growth and logistics efficiency in Europe. Free cash flow improved in H1 2025 compared to 2024, moving towards positive free cash flow in Q2 2025. Schaeffler confirmed its full-year 2025 guidance despite some tariff-related burdens that impacted Q2 results but are expected to normalize from Q3 onwards.
Plant Closures and Job Losses
The company has closed its plant in Saarland, Homburg, resulting in the loss of 200 jobs. However, no explicit announcements of plant or business closures were found in the latest 2025 reports, apart from the ongoing run-down of certain businesses within the Powertrain & Chassis segment.
Potential Entry into Defense Industry
There are no reports or confirmations regarding Schaeffler entering the defense industry as of the latest updates in 2025. However, the potential entry into the defense industry is seen as a response to the challenges in the automotive supply business.
Successes and Future Plans
The Schaeffler Group has successfully continued its development based on its new structure with four product-oriented divisions. The CEO of Schaeffler, Klaus Rosenfeld, remains optimistic despite the setbacks. The CEO praised the positive development of the E-Mobility division and the "strong performance" of the Vehicle Lifetime Solutions division in the company announcement.
Schaeffler's E-Mobility division revenue increased by 6.7% in the first half of 2025, while losses in the division decreased from 584 to 461 million euros. The company has also made significant strides in developing new technologies, such as a new car sensor that enables opening and closing of sliding doors and trunk without a free hand, with series production already begun.
In conclusion, Schaeffler's 2025 first half business performance reflects stable earnings with slight revenue declines, strategic investments in logistics, and business optimization within some segments, without evidence of closures or defense sector involvement at this time. The company continues to focus on its customer business, innovative technologies, and maintaining its financial guidance for the year.
The company's E-Mobility division has made significant strides in developing new technologies, such as a new car sensor that enables opening and closing of sliding doors and trunk without a free hand, with series production already begun, showcasing Schaeffler's commitment to technological advancement. Schaeffler, in its future plans, is expected to focus on customer business, innovative technologies, and maintaining its financial guidance for the year, suggesting the importance of technology in its growth strategy.
