The invisible champion is under pressure to change Schaeffler with "China engine"
the invisible champion is under pressure to change Schaeffler with "China engine"
China Construction machinery information
across the three meter wide road, Schaeffler Group and Adidas live next to each other. Puma's headquarters is not far away
this is herzogen orach, a small town in Bavaria, Germany. With a population of only 20000, it has bred three world-class companies. Different from the international popularity of Adidas and puma among ordinary consumers, Schaeffler, a supplier of industrial bearings and auto parts, is more like a company with the characteristics of "invisible champion" described by Herman Simon, a management master: it is not well-known and family owned, but it occupies an irreplaceable position in the professional field that has become the key to win market competition
now, this ubiquitous enterprise in the industrial and automotive fields is silently carrying out an organizational structure and personnel reform. The background is that Schaeffler once carried too much debt for radical mergers and acquisitions and the continuous rise of emerging markets. This century old enterprise needs to inject new vitality. China, especially its auto market, is regarded as the best catalyst
as a famous domestic testing instrument and testing service supplier, Jinan Sida Testing Technology Co., Ltd.
some customers of Schaeffler have had a difficult time in the past few years, especially in the field of industrial manufacturing
as one of the largest construction machinery manufacturers in China, Sany Heavy Industry has experienced a cycle from industry excitement to market demand contraction in the past few years. Affected by China's 4trillion stimulus policy, Sany Heavy Industry's operating revenue reached the peak of 50.8 billion in 2011, After that "Painful adjustment: sales fell to 37.3 billion yuan in 2013. Zoomlion, Sany's old rival, also failed to escape the industry cycle. Last year's sales revenue fell to 38.5 billion yuan from 48.1 billion yuan at the peak.
the plight of Sany and Zoomlion is a microcosm of the slowdown in China's infrastructure construction. After experiencing the super stimulus policy, construction machinery manufacturers are paying a price for it.
Schaeffler is manufacturing machinery The field has a wide range of customers, including Sany Heavy Industry. Under the pressure of the supply chain, Schaeffler, especially the industrial business, is under pressure. The problem comes not only from China, but also from the world manufacturing market
"due to market factors, the sales of the industrial division is lower than the level of the previous year." Klaus Rosenfeld, CEO of Schaeffler AG, said
Schaeffler Group has two business divisions: Industry and automobile. It is a heavyweight enterprise producing rolling bearings and sliding bearings worldwide. It is also an important supplier of parts and systems in the field of automotive engines, transmissions and chassis. Affected by the continued weakness of the global manufacturing industry, industrial sales, accounting for one third of Schaeffler's business, failed to achieve positive growth for two consecutive years in 2012 and 2013. The pressure of this world-class enterprise with 79000 employees and sales revenue of 11.2 billion Euros can be imagined
another heavy pressure comes from the financial burden brought by large mergers and acquisitions
in 2008, during the tenure of Juergen M. geissinger, the former CEO of Schaeffler, Schaeffler pocketed the strong income of Continental, the global auto parts giant, and carried more than 10billion euros of debt for this purpose. Since then, the global economic crisis has worsened, and Schaeffler was once under great pressure, making the deal seem reckless
"the acquisition of Continental is still the right decision, but the timing is questionable." Six years later, a senior executive of Schaeffler Group, who declined to be named, said
although Schaeffler's automobile business has always maintained an overall growth trend, the Schaeffler family, the board of supervisors and the board of directors have gradually introduced reform plans for the organizational structure and personnel since last year. The latest step is that Klaus Rosenfeld, the former chief financial officer who has led Schaeffler Group since October last year, officially assumed the post of new CEO on July 1, with a five-year term. At the same time, the company also appointed Professor Peter gutzmer, the prestigious group chief technology officer, as the deputy CEO to ensure the strategic and technological direction of the company
how to match the "China engine"
China is becoming increasingly important in Schaeffler's organizational structure reform
"China's market size, maturity and future potential are self-evident, and will only become more and more important to Schaeffler." Helmut bode, President of Schaeffler Greater China Industrial Division, said. Based on this, Greater China has been separated from the original Asia Pacific region as an independent plate since 2014. Bode himself also took up his new post in Greater China in August last year
"as an independent development region, Schaeffler Greater China currently accounts for about 11% of the group's sales revenue." Bode said. In the future, the Chinese market is booming, and the group's goal is to increase the market share of Greater China to more than 15% in the near future
Schaeffler currently divides the global business into four regions: Europe, America, Greater China and Asia Pacific (excluding China), and China is the region with the strongest market development at present
undoubtedly, China is experiencing a structural slowdown in economic growth, but compared with the economic growth rate in Europe and North America, the Chinese market is precious. At the beginning of July this year, the German Institute of economics and the statistical offices of France and Italy predicted that the GDP of the euro zone would grow by 0.3% in the third and fourth quarters, while China is still expected to achieve economic growth of about 7.5%
at present, Schaeffler's growth engine mainly comes from automobile and some advantageous industrial industries, such as high-speed railway, machine tool and aerospace. "We are no longer a bearing enterprise in the traditional sense. Schaeffler regards future mobility as a new growth direction. This kind of mobility is not only in the automotive industry, but also includes various industrial applications facing the future, such as high-speed railway, low friction bearings and power drive. But at least in the next 20 years, the power and transmission mode of cars will not change fundamentally, which is our advantage." Professor guzmer, chief technology officer of Schaeffler Group, said
according to the data released by the China Association of automobile manufacturers, China's automobile sales were strong. In 2013, the production and sales of automobiles were 22.1168 million and 21.9841 million, with a year-on-year increase of 14.76% and 13.87%. Schaeffler not only supplies products to global auto companies such as Volkswagen and general motors, but also provides products and solutions for Chinese auto companies such as Chang'an and great wall, including cooperative development
in view of the continuous development of China's automobile market and the increasing pressure of environmental pollution, many Schaeffler executives believe that electric vehicle technology and electric vehicle promotion are more likely to be the first to jointly develop xcp150/100 and xcp120/90 rubber melt gear pump extrusion units to make a breakthrough in China, and Schaeffler is investing heavily in related fields
this year is expected to be optimistic
the wind direction of the economy is beginning to turn in favor of Schaeffler
after the acquisition of continental group, under the pressure of 10 billion euros of debt, deleveraging has always been an important challenge for Schaeffler
now, the eurozone economy is recovering, and the share price of listed company continental group has returned to a high level. In September last year, Schaeffler sold 7.8 million continental shares to international investors at a price of 122.5 euros per share. The income from this equity transfer is about 950million euros. With 325million euros from surplus free cash flow, Schaeffler reduced its liabilities by about 1.275 billion euros, reducing Schaeffler's total liabilities from about 10.3 billion euros to about 9 billion euros
at the same time, financing in the European market is more convenient and cheaper, which gives Schaeffler the opportunity to improve its debt structure. In May this year, Schaeffler completed a comprehensive refinancing plan of 3.5 billion euros. This part of financing will be used to replace Schaeffler's high interest debt and reduce its financing cost, which is regarded by CEO Rosenfeld as "a major measure to optimize the asset structure"
the biggest surprise may still come from Greater China
many Schaeffler's industrial customers are coming out of the cold winter. Take Goldwind technology as an example. After several years of sales contraction, the sales of China's largest local fan manufacturer finally rebounded in 2013. The demand growth of downstream customers has brought "warm air" to Schaeffler's traditional bearing business. In addition, the recovery of China's railway construction and the sustainable development of the aviation industry will also inject impetus into Schaeffler
"we started very well in 2014." Rosenfeld commented
data show that in the first quarter of this year, compared with the same period last year, the sales growth rate of Schaeffler Greater China was the highest, reaching 26%, followed by the Asia Pacific region, with 10%, and the growth rates of Europe and the Americas were 7% and 2% respectively. Today, this multinational enterprise with more than 8000 employees in China is increasing its investment in China. Schaeffler's No. 5 plant in Taicang, Jiangsu Province, was completed at the beginning of this year. It will mainly produce wet dual clutches and hydraulic torque converters, which are key components of automotive automatic transmissions and are the first to be produced in China
"the important factor that drives the revenue to develop in a positive direction is still our automobile business." Rosenfeld said that the revenue of Schaeffler's automotive division in the first quarter of 2014 increased by 11.3% to about 2.2 billion euros, and the growth rate at the fixed exchange rate reached 14.4%, far exceeding the growth rate of the global automotive production industry
based on this, Schaeffler raised its expectation of profit prospects, and it is expected that the revenue growth in 2014 will exceed 7%