Schaeffler AG

Q2 sales were minus 0.3% year over year on a currency-adjusted basis, described as broadly flat. Klaus Rosenfeld said gross profit margin improved by 1 percentage point and EBIT margin improved by 1 percentage point to 4.5%; he also said EPS was EUR 0.10 and free cash flow in the quarter was still negative. Christophe Hannequin said EBIT improved by a full point year over year, from EUR 3.5 million to EUR 4.5 million, and noted production costs improved by almost EUR 40 million year over year. For guidance, management confirmed 2026 targets and said full-year free cash flow should remain in the EUR 100 million to EUR 300 million range. They also reaffirmed the midterm margin and free cash flow targets for 2028 while lowering the top-line range to 24% to 26% from 27% to 29%; E-Mobility’s midterm EBIT margin target was reduced to 0 from above 0 to minus 4%.

Klaus Rosenfeld framed the quarter as good in a difficult environment, emphasizing that the business is improving earnings quality even without top-line growth. He said the decision to lower midterm revenue expectations was driven by a more realistic planning process, especially in the U.S. and in E-Mobility, but stressed that group EBIT margin and free cash flow targets were unchanged. His tone was confident but pragmatic: he repeatedly said the company had to be more realistic, yet argued the diversified portfolio and ongoing restructuring give him confidence in the 2028 plan.

Christophe Hannequin said Q2 gross profit improved by a full point versus last year, with pricing strong, production costs down almost EUR 40 million, and some items helped by one-off settlements and FX. He highlighted that the weaker line items were volume, mainly in PTC, and higher costs tied to R&D, SG&A, and restructuring cash out, but said these were partly offset by efficiency actions and favorable accounting effects compared with last year. On cash flow, he said Q1 and Q2 are typically negative and that the company is still targeting EUR 100 million to EUR 300 million for full-year free cash flow, with leverage at 2.4 expected to normalize by year-end.

Analysts focused on whether E-Mobility can become sustainably profitable, what makes humanoids different from E-Mobility, and why the humanoid order book only showed EUR 350 million. Management said E-Mobility can improve through a larger order book, more standardization, tighter R&D and overhead control, and conservative CapEx, while humanoids will rely on standardized actuator platforms, existing technology, and disciplined pricing rather than buying growth. On the humanoid backlog, Rosenfeld said only signed series-production orders are counted and that the EUR 350 million figure includes only three customers after applying haircuts of at least 50% in some cases. Questions also covered tax rates, cash flow, dividend policy, and restructuring in Germany; management said taxes should not improve quickly in 2026, free cash flow remains seasonal, and there is no decision to change the dividend framework.