Standard Profil/Adler Pelzer/Antolin/AMS - comment

Standard Profil/Adler Pelzer (Tomás):  In what could be a cautionary note for other auto suppliers, Schaeffler issued a profit warning this morning reducing its EBIT margin from a market consensus of 6.3% to c. 4.5%, To put into context, Schaeffler had achieved a 5.8% YTD margin in Q3, implying Q4 margins have fallen to 1.8%. This is partially explained by Vitesco Technologies acquisition which will be fully consolidated in Q4, but Schaeffler acknowledges the main driver is weak Q4 developments. Free cashflow will be ahead of consensus, which will reduce any immediate large impact on trading levels of Schaeffler, this announcement leaves no doubt that Q4 auto production levels were below market consensus. Anecdotally, we are monitoring German production and export volumes, which illustrate the current state of the sector. Even though overall volumes are stable, they are falling short of growth expectations for which OEMs had prepared. The result is a bullwhip effect rippling down the supply chain (see graph).