Schaeffler AG · XETR:SHA0

Schaeffler — Investor Presentation (November 2016)

22 slides from Schaeffler's investor presentation, Nov 9, 2016

  1. Slide 1: Update Strategy "Mobility for tomorrow" and Financial Ambitions 2020

    Update Strategy "Mobility for tomorrow" and Financial Ambitions 2020 Klaus Rosenfeld Conference Call November 9, 2016 1 November 9, 2016 Schaeffler Group | Conference Call

  2. Slide 2: Agenda

    Agenda 1 Introduction 2 Strategy "Mobility for tomorrow" 3 Financial Ambitions 2020 4 Summary 2 November 9, 2016 Schaeffler Group | Conference Call

  3. Slide 3: Chronology 2009-2016 – Foundation for further profitable growth

    1 Introduction Chronology 2009-2016 – Foundation for further profitable growth Key milestones Schaeffler Group  Restructuring and transformation phase Today finalized  “One Schaeffler” implemented in 2013- 2015  New corporate and capital structure Sustainable profitable growth implemented  Strat

  4. Slide 4: Strategy "Mobility for tomorrow" agreed – External communication on November 9, 2016

    1 Introduction Strategy “Mobility for tomorrow” agreed – External communication on November 9, 2016 Chronology and way forward Strategy Dialogue Today Feb 29 Strategy Dialogue kick-off March - June Strategy Workshops & Review Meetings Long-term profitable growth July 11-13 Strategy Dialogue 2016 Mob

  5. Slide 5: Automotive – Market growth driven by new technologies

    1 Introduction Automotive – Market growth driven by new technologies Development of the Automotive Market Growth Drivers Global production volume 2) Base case 1) CAGR Electrification CAGR  Stricter global regulation of CO2 emissions + 2.4% 120  Gradual shift toward (purely) electric propulsion wit

  6. Slide 6: Industrial – Flat market growth

    1 Introduction Industrial – Flat market growth Global market volume1) Growth drivers in EUR bn Base scenario Energy efficiency  Increasing importance of efficient drive technologies CAGR + 2.1% / + 0.5%2)  Conventional drivetrains (hydraulics, combustion 3.2% 3) engines) increasingly being replace

  7. Slide 7: Strategy "Mobility for tomorrow" – Long-term profitable growth and value creation

    2 Strategy "Mobility for tomorrow" Strategy "Mobility for tomorrow" – Long-term profitable growth and value creation A Vision/Mission „Mobility for tomorrow “ B Strategic pillars Preferred Automotive A global Components E-Mobility, Quality, Attractive Global family technology and Industrial player w

  8. Slide 8: Vision and Mission – Our mandate and our aspiration

    2 Strategy "Mobility for tomorrow" A Vision and Mission – Our mandate and our aspiration Vision „As a leader in technology, we combine a passion for Mission innovation with the highest standards of quality to shape the future of mobility for a world that will be cleaner, safer, and “Guided by the va

  9. Slide 9: 8 strategic pillars – Our strategic framework

    2 Strategy "Mobility for tomorrow" B 8 strategic pillars – Our strategic framework 1 We want to be the preferred technology 2 We are an Automotive and Industrial 3 We are a global company with a local presence 4 We produce components and systems. partner for our supplier. throughout customers. the w

  10. Slide 10: 16 strategic initiatives – Excellence program "Agenda 4 plus One"

    2 Strategy "Mobility for tomorrow" C 16 strategic initiatives – Excellence program “Agenda 4 plus One” Agenda 4 plus One Initiatives Sponsor Customer focus Long-term 1 Customer Excellence Prof. Pleus / Dr. Spindler competitive- 2 E-Mobility Prof. Gutzmer ness and value 3 Industry 4.0 Dr. Spindler 1

  11. Slide 11: E-Mobility – Powertrain with systems competence

    2 Strategy "Mobility for tomorrow" E-Mobility – Powertrain with systems competence Engine components and system know-how Transmission components and system know-how Key aspects  Competence in entire drivetrain is key to develop new e-mobility solutions  We already sell engine, transmission and/or

  12. Slide 12: Program CORE – Revitalizing the Industrial division

    2 Strategy "Mobility for tomorrow" Program CORE – Revitalizing the Industrial division 4 key drivers 1  Strengthen sales organizations in the regions Customer  Strengthen regional engineering / customer support centers focus and growth  Establish dedicated global key account management 2  Reduce

  13. Slide 13: Cost reduction and efficiency improvements – First wave mostly completed

    2 Strategy "Mobility for tomorrow" Cost reduction and efficiency improvements – First wave mostly completed Key aspects Indicative Financial Impact Δ EBIT in EUR mn 40  First wave announced in August 2015 31 15 2)  Cost savings through HCO reduction in overhead functions of the Industrial Division

  14. Slide 14: Cost reduction and efficiency improvements – Second wave initiated

    2 Strategy "Mobility for tomorrow" Cost reduction and efficiency improvements – Second wave initiated Key aspects Indicative Financial Impact Δ EBIT in EUR mn 58  Second wave announced in November 2016 23 41 50 60 37  Cost savings through consolidation of plants in Europe and Americas -2 and HCO r

  15. Slide 15: Program CORE – Overall target remains in place

    2 Strategy "Mobility for tomorrow" Program CORE – Overall target remains in place Successful implementation Financial ambitions Today Indicative Stable market Timing environment Continuous improvement through further optional measures EBIT margin 500 HCO Industrial Division Cost reduction 10-11% in

  16. Slide 16: Revised Financial Ambitions for 2020 – Sustainable value creation

    3 Financial Ambitions 2020 D Revised Financial Ambitions for 2020 – Sustainable value creation Capital Markets Day July 20, 2016 Old Strategy Communication Nov. 9, 2016 New Sales Growth Ø 4-6% p.a. Sales Growth Ø 4-6% p.a. w/o external growth, FX-adjusted w/o external growth, FX-adjusted EBIT Margin

  17. Slide 17: Use of cash – M&A strategy based on selected add-on acquisitions

    3 Financial Ambitions 2020 Use of cash – M&A strategy based on selected add-on acquisitions M&A strategy Use of cash Approach  Focus on technological competence to maintain our strong position as technology and innovation leader External growth  Focus on smaller add-on acquisitions that contribute

  18. Slide 18: Summary – Key messages

    4 Summary Key messages 1 Restructuring and transformation phase finalized, foundation laid for further profitable growth 2 Long-term growth strategy "Mobility for tomorrow" based on eight strategic pillars agreed Excellence Program "Agenda 4 plus ONE" with 16 key initiatives to secure long-term 3 co

  19. Slide 19: Backup

    Backup Backup 19 November 9, 2016 Schaeffler Group | Conference Call

  20. Slide 20: Four megatrends – Four focus areas

    Backup Four megatrends – Four focus areas Eco-friendly drives Urban mobility Environment Climate change  Optimized combustion engine  Two-wheelers  Electric vehicles  Metro rail traffic  Industrial drives  Micro mobiles Society Urbanization Mobility for tomorrow Economy Globalization Interurba

  21. Slide 21: Agenda 4 plus One – 16 strategic initiatives

    Backup Agenda 4 plus One – 16 strategic initiatives 1 Customer Excellence Improve customer focus and develop best-in-class Customer Relationship Management 2 E-Mobility Establish Schaeffler as technology partner for E-Mobility powertrain solutions 3 Industry 4.0 Position Schaeffler as a premium supp

  22. Slide 22: Gearing Ratio – 185% as of September 30, 2016

    Backup Gearing Ratio – 185% as of September 30, 2016 Net financial debt Development Gearing Ratio in EUR mn 6,190 6,245 5,950 4,889 4,909 4,874 31/12/2015 30/09/2016 2,876 Gross debt (in EUR mn) 5,688 5,441 - Cash (in EUR mn) 799 2,565 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 = Net financial debt (in EUR mn)

Schaeffler Group — Investor Presentation (November 2016) on 6ix