Company News • 09.11.2016

Schaeffler presents its strategy "mobility for tomorrow"

Future trends climate change, urbanization, globalization and digitalization as starting point

Photo: Schaeffler presents its strategy mobility for tomorrow...
Source: Schaeffler

The demands on mobility are rapidly changing and require new responses. In order to address this challenge, the Executive Board of Schaeffler AG in close coordination with the Supervisory Board and after intensive dialogue with the Group’s executives have further developed the Group strategy »Mobility for tomorrow« and present it to the public today.

Following the reorientation of the corporate and capital structure over the last years, »Mobility for tomorrow« sets the course for future sustainable and profitable growth of the Schaeffler Group. The strategy addresses four essential megatrends of our time: climate change, urbanization, globalization and digitalization. Based on these megatrends, 4 focus areas have been identified, on which the Schaeffler Group will concentrate in the future, in keeping with its competency profile as global automotive and industrial supplier: (1) Eco-friendly drives, (2) urban mobility and (3) interurban mobility, as well as the optimization of the (4) energy chain.

Schaeffler aspires to actively shape the mobility for tomorrow as a leader in technology with a passion for innovation and the highest quality, which is the basis for the Group’s future strategic direction. Klaus Rosenfeld, Chief Executive Officer of Schaeffler AG, stated: “We want the strategy »Mobility for tomorrow« to be our contribution towards a cleaner, safer, and smarter world. This is the fundamental idea behind our vision to actively shape »Mobility for tomorrow« as a global automotive and industrial supplier.”

The strategy »Mobility for tomorrow« consists of 8 strategic pillars, which provide orientation and establish the future framework for the implementation of the strategy. These 8 strategic pillars are:

1. We want to be the preferred technology partner for our customers
2. We are an Automotive and Industrial supplier
3. We are a global company with a local presence throughout the world
4. We produce components and systems
5. We view E-Mobility, Industry 4.0, and Digitalization as key opportunities for the future
6. We strive for the highest possible quality, efficiency and delivery performance
7. We want to be an attractive employer
8. We live by the values of a global family business

The implementation of the new strategy is supported by a group-wide program, which is based on the experience of the ‘One Schaeffler’ program rolled out between October 2013 and December 2015 and which encompasses 16 strategic initiatives. Klaus Rosenfeld commented: “Any strategy is only as good as its execution. We, therefore, developed a customized excellence program with 16 initiatives to sustainably implement our strategy »Mobility for tomorrow«.”

The excellence program referred to as »Agenda 4 plus One« centers on 4 themes, (1) Customer focus, (2) Operational excellence, (3) Financial flexibility and (4) Leadership & Talent management, with a total of 12 associated initiatives, as well as one overarching objective, 'plus One', comprising 4 initiatives designed to maintain long-term competitiveness. In addition to the 16 group-wide strategic initiatives, more than 400 sub-initiatives have been developed that will be implemented on the divisional, functional and regional levels. Implementation of all initiatives is to be completed by 2020 and will be centrally managed and monitored by a program office under the direct responsibility of the Chief Executive Officer. The strategy »Mobility for tomorrow« and the excellence program »Agenda 4 plus One« will also extend to excellence in all interactions as expressed in the corporate values: sustainable, excellent, innovative and passionate. This goal is supported, both internally as well as externally, by 3 basic principles – Transparency, Trust, and Teamwork – which have been incorporated in the recently updated Code of Conduct of the Schaeffler Group and will be embedded deeper in the organization on a global level in the course of implementing the strategy.

Based on the foregoing, a strategic business plan has been developed which documents the Group’s Financial Ambitions to be realized by 2020. On an operational level, these goals include: Sales growth of 4-6% p.a. on average, EBIT margin of 12-13% p.a. and a Free Cash flow of around 900 million EUR in 2020. On this basis, the company aims to increase Earnings per share to around 2.00 Euro per share in 2020. Following the realization of Schaeffler’s debt-reduction strategy ahead of schedule, it is intended to sustainably improve the balance sheet quality, measured by net-debt-to-equity ratio (gearing ratio) by 2020 (objective <75%), and pay dividends to shareholders amounting to 30-40% of the annual profit. These financial ambitions are based on moderate growth assumptions for both divisions and are before one-off effects. In addition, any external growth through acquisitions is not taken into account. As part of the strategy »Mobility for tomorrow«, the Group plans smaller additive acquisitions in the triple-digit million Euro range, aimed at improving and complementing its competency profile with regard to key technologies.

The key objective of the strategy »Mobility for tomorrow« is to successfully position the Schaeffler Group for prospective challenges and establish the basis for continued sustainable and profitable growth. “The strategy »Mobility for tomorrow« and the excellence program »Agenda 4 plus One« have been developed in the course of 2016 following intensive discussions with our Group’s senior global executives. My Board colleagues and I are confident that this enables us to jointly reach our ambitious goals and ensure the long-term success of Schaeffler. In this context, our most valuable assets are the competences, commitment, and motivation of our employees worldwide,” Klaus Rosenfeld concluded.

Source: Schaeffler

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