Schaeffler Ag · XETR:SHA0
Schaeffler — Schaeffler Ag Ord — Q2 2023 Earnings Presentation
47 slides from Schaeffler's earnings presentation, Aug 2, 2023
Slide 1: Q2 and H1 2023 Schaeffler AG earnings
Q2 and H1 2023 Schaeffler AG earnings August 2, 2023 Herzogenaurach PUBLIC
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements. The words “anticipate”, This presentation is intended to provide a general overview of Schaeffler Group’s “assume”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “project”, “should” and business and does not purport to dea
Slide 3: Overview
1 Overview 2 Business Highlights Q2 and H1 2023 3 Financial Results Q2 and H1 2023 4 Outlook Aug 2, 2023 Q2 and H1 2023 Schaeffler AG earnings 3 PUBLIC
Slide 4: Schaeffler Group – Robust Q2, Group guidance raised for FY 2023
1 OVERVIEW Schaeffler Group – Robust Q2, Group guidance raised for FY 2023 Key messages Q2 2023 Sales growth1 Q2 Gross Margin Q2 Q2 Sales1 +9.8% – All divisions and regions growing driven 1 by volumes in the Automotive divisions and by continued +9.8% 21.8% favourable pricing in all Q2 Gross margin
Slide 5: Sales Performance Q2 2023 – Growth across all divisions and regions
1 OVERVIEW Sales Performance Q2 2023 – Growth across all divisions and regions Automotive Automotive Industrial Technologies Aftermarket Q2 2023 1 % of Group Region Growth Sales 59% 14% 27% Europe 45% +14.5% +5.1% +8.1% +10.8% Americas 22% +1.6% +12.5% +15.5% +5.9% Greater 20% +15.2% +59.1% +4.2% +1
Slide 6: Schaeffler Group Q2 2023 – Highlights and lowlights
1 OVERVIEW Schaeffler Group Q2 2023 – Highlights and lowlights • Automotive Technologies solid margin • Automotive Technologies Outperformance Portfolio strategy paying off – Mature Business Sales growth in Americas and China below market performance strength in H1 continues to fuel the due to proje
Slide 7: Business Highlights Q2 and H1 2023
1 Overview 2 Business Highlights Q2 and H1 2023 3 Financial Results Q2 and H1 2023 4 Outlook Aug 2, 2023 Q2 and H1 2023 Schaeffler AG earnings 7 PUBLIC
Slide 8: Automotive Technologies – Q2 with double-digit sales growth, solid EBIT margin
2 BUS INES S H IGH LIGHTS Q2 AND H 1 2023 Automotive Technologies – Q2 with double-digit sales growth1, solid EBIT margin2 driven by scale effects and structural improvements Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn Sales growth1 of +10.7% driven by all business divisions and regions; +10.7%1 +8.
Slide 9: Automotive Technologies – Confident on EUR 2-3 bn E-Mobility FY Order intake target
2 BUS INES S H IGH LIGHTS Q2 AND H 1 2023 Automotive Technologies – Confident on our EUR 2 - 3 bn E-Mobility FY Order intake target Business Highlights Order Intake1 in EUR bn Thereof 2.7 3.2 5.0 1.0 New Order Intake for coolant E-Mobility mixing valve for fuel cell applications in the heavy-duty se
Slide 10: Automotive Aftermarket – Q2 with double-digit sales growth, very strong EBIT margin
2 BUS INES S H IGH LIGHTS Q2 AND H 1 2023 Automotive Aftermarket – Q2 with double-digit sales growth1, very strong EBIT margin2 Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn Double-digit sales growth1 driven +17.6%1 by continued strong demand, +10.2%1 further implementation of price measures and impro
Slide 11: Automotive Aftermarket – Region Americas lays foundation for future success
2 BUS INES S H IGH LIGHTS Q2 AND H 1 2023 Automotive Aftermarket – Region Americas lays foundation for future success Strengthening of logistical footprint Business opportunities in Central & South America • Solidifying our leading market position with additional business • New state-of-the-art logi
Slide 12: Industrial – Q2 with positive sales growth, EBIT margin reduced
2 BUS INES S H IGH LIGHTS Q2 AND H 1 2023 Industrial – Q2 with positive sales growth1, EBIT margin2 reduced – Countermeasures initiated Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn Sales growth largely driven by Ewellix acquisition, organic growth +7.9%1 +10.6%1 in Q2 +2.3%1 2,237 -13 mn All regions
Slide 13: Industrial – Orderbook indicates headwinds in H2, investments in new business fields
2 BUS INES S H IGH LIGHTS Q2 AND H 1 2023 Industrial – Orderbook indicates headwinds in H2, investments in new business fields and growth areas continued Orderbook1, 2 3-month Orderbook 3M1 Sales3 Business Highlights yoy growth % 40 Production extension for spherical roller bearings/spherical 30 rol
Slide 14: Capital allocation – Continued prioritization of Capex for growth business
2 BUS INES S H IGH LIGHTS Q2 AND H 1 2023 Capital allocation – Continued prioritization of Capex for growth business Investment1 allocation KEY ASPECTS in EUR mn • Reinvestment Rate Target: Continued prioritization of Industrial FY 2021 FY 2022 Q2 2022 Q2 2023 H1 2023 division and BD E-Mobility; cle
Slide 15: Financial Results Q2 and H1 2023
1 Overview 2 Business Highlights Q2 and H1 2023 3 Financial Results Q2 and H1 2023 4 Outlook Aug 2, 2023 Q2 and H1 2023 Schaeffler AG earnings 15 PUBLIC
Slide 16: Sales – All regions and divisions growing in Q2
3 F INANCIAL RES ULTS Q2 AND H 1 2023 Sales – All regions and divisions growing in Q2, Europe and Greater China double-digit2 Sales KEY ASPECTS in EUR mn +7.0%1 +9.8%2 • Automotive Technologies: 10.7%2 growth in Q2; double-digit sales growth in all regions except Americas 4,242 4,019 4,152 4,056 3,7
Slide 17: Gross Profit – Positive pricing and volume effects compensated higher production costs
3 F INANCIAL RES ULTS Q2 AND H 1 2023 Gross Profit – Positive pricing and volume effects compensated higher productions costs and unfavourable FX Gross Profit Q2 2022 vs. Q2 2023 KEY ASPECTS in EUR mn • Pricing: Sustained positive pricing effect across all divisions • Volumes: Positive volume effect
Slide 18: Overhead costs – Overhead cost ratio decreased
3 F INANCIAL RES ULTS Q2 AND H 1 2023 Overhead costs – Overhead cost ratio decreased based on volume related fixed cost absorption Overhead costs KEY ASPECTS in EUR mn +1.8% • R&D: Stable development of R&D expenses 648 666 • Selling expenses: Increase due to Ewellix and higher volumes 622 628 633 6
Slide 19: EBIT margin – Robust Group margin with heterogenous development across divisions
3 F INANCIAL RES ULTS Q2 AND H 1 2023 EBIT margin1 – Robust Group margin with heterogenous development across divisions EBIT1 KEY ASPECTS in EUR mn +EUR 89 mn • Automotive Technologies: EBIT margin1 improved yoy, driven by scale effects and structural improvements 355 336 • Automotive Aftermarket: E
Slide 20: Automotive Technologies – Double-digit sales growth, EBIT margin significantly up
3 F INANCIAL RES ULTS Q2 AND H 1 2023 Automotive Technologies – Double-digit sales growth1, EBIT margin2 significantly up Sales by business division yoy growth EBIT2 Q2 2022 vs. Q2 2023 in EUR mn Q2 2022 Q2 2023 ∆1 E-Mobility 293 296 +3.6% +12 102 Engine & Transmission 1,212 1,318 +11.2% +13 Bearing
Slide 21: Automotive Aftermarket – Double-digit sales growth, very strong EBIT margin
3 F INANCIAL RES ULTS Q2 AND H 1 2023 Automotive Aftermarket – Double-digit sales growth1, very strong EBIT margin5 Sales by region yoy growth EBIT5 Q2 2022 vs. Q2 2023 in EUR mn Q2 2022 Q2 2023 ∆1 Europe 337 354 +5.1% Americas 110 121 +12.5% +25 +6 89 0 Greater China 26 38 +59.1% Asia/Pacific -6 0
Slide 22: Industrial – Organic growth slowing, EBIT margin significantly lower yoy
3 F INANCIAL RES ULTS Q2 AND H 1 2023 Industrial – Organic growth slowing, EBIT margin2 significantly lower yoy Sales by region yoy growth EBIT2 Q2 2022 vs. Q2 2023 in EUR mn Q2 2022 Q2 2023 ∆1 Europe 445 481 +8.1% Americas 182 203 +15.5% 125 Greater China 275 265 +4.2% +14 -3 -5 Asia/Pacific 160 15
Slide 23: Net Income – EPS at EUR 0.22, ROCE reached 13.2%
3 F INANCIAL RES ULTS Q2 AND H 1 2023 Net Income1 – EPS² at EUR 0.22, ROCE³ reached 13.2% Net income1 KEY ASPECTS in EUR mn • Q2 2023 Net income1 higher driven by better EBIT, but impacted +25 mn by higher interest on financial debt from Ewellix acquisition 169 • ROCE³ and Schaeffler Value Added4 se
Slide 24: FCF – Positive Q2 development driven by higher EBITDA and working capital
3 F INANCIAL RES ULTS Q2 AND H 1 2023 FCF – Positive Q2 development driven by higher EBITDA and effective Working Capital management Free Cash Flow before M&A1 in EUR mn Reconciliation Q2 2023 in EUR mn 531 +9 +322 mn 240 244 -198 103 -9 14 -99 103 -131 -73 EBITDA ∆ Net Capex Net Interest Taxes Othe
Slide 25: Net debt of EUR 3.2 bn – Leverage ratio at 1.5x
3 F INANCIAL RES ULTS Q2 AND H 1 2023 Net debt of EUR 3.2 bn – Leverage ratio at 1.5x, EUR 295 mn dividends paid in Q2 Net financial debt and Leverage ratio1 KEY ASPECTS in EUR mn 3,231 2,999 • In Q2 2023 dividend payment of EUR 295 mn for FY 2022 (payout ratio 48%) 2,552 2,331 2,235 1,992 • Leverag
Slide 26: Outlook
1 Overview 2 Business Highlights Q2 and H1 2023 3 Financial Results Q2 and H1 2023 4 Outlook Aug 2, 2023 Q2 and H1 2023 Schaeffler AG earnings 26 PUBLIC
Slide 27: Market assumptions changed – Automotive Technologies raised, Industrial lowered
4 OUTLOOK Market assumptions changed – Automotive Technologies market expectations raised, Industrial lowered Automotive Technologies – Global LVP1 2023 Automotive Aftermarket – Global LV Parc3 Industrial – Industrial Production4 Up to 10.3% 82.3 86.7 85.6 5.2% World 3.2% 38.9 43.4 43.3 43.4 2.6% Wo
Slide 28: FY 2023 Guidance updated – Increased for Group and Automotive divisions
4 OUTLOOK FY 2023 Guidance updated – Increased for Group and Automotive divisions, reduced for Industrial FY 2023 Guidance Schaeffler Group Automotive Technologies Automotive Aftermarket Industrial Guidance Guidance Guidance Guidance FY 20231 FY 2023 FY 2023 FY 2023 Outperformance Sales 5 – 8% 10 –
Slide 29: Conclusion & Outlook – On track to deliver 2025 Roadmap Mid-term Targets
4 OUTLOOK Conclusion & Outlook – Robust Q2, Group guidance raised for FY 2023 1 Automotive Technologies – Double-digit growth, good quality of earnings driven by both Gross and EBIT margin. Promising E-Mobility development expected for H2 2 Automotive Aftermarket – Double-digit growth, high quality
Slide 30: Financial calendar and selected IR events
4 OUTLOOK Financial calendar and selected IR events Roadshows & Conferences Financial calendar 2023 with Top Management participation Aug 3 Roadshow – Virtual, UK, Stifel Aug 2 H1 2023 Earnings Release Aug 4 Roadshow – Virtual, DACH, Metzler Nov 8 9M 2023 Earnings Release Sep 4 - 5 IAA Cars Conferen
Slide 31: Thank you
Thank you Investor Relations Contact Phone +49 9132 82-4440 Email ir@schaeffler.com Web www.schaeffler.com/ir Aug 2, 2023 Q2 and H1 2023 Schaeffler AG earnings 31 PUBLIC
Slide 32: Aug 2, 2023 Q2 and H1 2023 Schaeffler AG earnings
Aug 2, 2023 Q2 and H1 2023 Schaeffler AG earnings 32 PUBLIC
Slide 33: Equity Story – Positioning Schaeffler for long-term value creation
BACKUP Equity Story – Positioning Schaeffler for long-term value creation 1 Roadmap 2025 in execution – Focus on capital allocation, portfolio management and FCF generation 2 Automotive Technologies – Conquer leadership positions in New Business for electrified Powertrains and Chassis applications C
Slide 34: Ancillary comments to support the Equity Story
BACKUP Ancillary comments to support the Equity Story Additional KPIs FY 2023 Comments Order Intake E-Mobility EUR 2 – 3 bn Starting from 2022 onwards the new target of EUR 2 - 3 bn applied Focus areas include Digitalization, Sustainability, Innovation & Technology and Capex Around EUR 900 mn invest
Slide 35: Road to 2025 – Mid-term targets and Financial Framework
BACKUP Road to 2025 – Mid-term targets are reflected in Schaeffler’s comprehensive Financial Framework Mid-term targets 2025 Automotive Technologies Automotive Aftermarket Industrial Outperformance1 Constant-currency revenue growth Constant-currency revenue growth 200 to 500 bps > GDP growth > Ind.
Slide 36: Key figures Q2 and H1 2023
BACKUP Key figures Q2 and H1 2023 Q2 2023 H1 2023 in EUR mn Q2 2022 Q2 2023 vs. Q2 2022 H1 2022 H1 2023 vs. H2 2022 +7.0% +8.7% Sales 3,790 4,056 7,548 8,208 +9.8%1 +10.1%1 Gross Profit 832 886 +54 mn 1,703 1,870 +167 mn Gross margin 22.0% 21.8% -0.2pp 22.6% 22.8% +0.2pp EBIT2 200 289 +89 mn 458 625
Slide 37: Sales Performance H1 2023 – Growth across all divisions and regions
BACKUP Sales Performance H1 2023 – Growth across all divisions and regions Automotive Automotive Industrial Technologies Aftermarket H1 2023 1 % of Group Region Growth Sales 59% 14% 27% Europe 45% +14.8% +17.1% +10.1% +14.0% Americas 22% +1.2% +14.1% +15.0% +5.6% Greater 20% +2.6% +36.6% +11.4% +6.6
Slide 38: Automotive Technologies – Competitive landscape increasingly dynamic
BACKUP Automotive Technologies1 – Competitive landscape increasingly dynamic and offering great opportunities Europe 1 4 36% of Sales in 2022 Greater China 1 2 4 25% 25% 2 3 4 of Sales in 2022 of Sales in 2022 Americas 1 Asia Pacific 1 4 14% of Sales in 2022 Market Financial Automotive penetration p
Slide 39: Gross Profit Q1 – Positive Pricing, Volume and Mix effects
BACKUP Gross Profit Q1 – Positive Pricing, Volume and Mix effects in Q1 2023 Gross Profit bridge corrected Gross Profit Q1 2022 vs. Q1 2023 KEY ASPECTS in EUR mn • Pricing: Sustained positive pricing effect across all Divisions +64 +11 • Volumes: Increased volumes, particularly in the Automotive +11
Slide 40: Automotive Technologies – All business divisions growing, improved EBIT margin
BACKUP Automotive Technologies – All business divisions growing, improved EBIT margin2 Sales by business division yoy growth EBIT2 H1 2022 vs. H1 2023 in EUR mn H1 2022 H1 2023 ∆1 E-Mobility 600 632 +6.6% +3 207 Engine & Transmission 2,469 2,658 +8.4% +27 Bearings 1,273 1,323 +5.5% +10 +71 +4 Chassi
Slide 41: Automotive Aftermarket – Double-digit sales growth, very strong EBIT margin
BACKUP Automotive Aftermarket – Double-digit sales growth1, very strong EBIT margin5 Sales by region yoy growth EBIT5 H1 2022 vs. H1 2023 in EUR mn H1 2022 H1 2023 ∆1 Europe 643 748 +17.1% +87 0 Americas 209 241 +14.1% 192 +9 Greater China 56 72 +36.6% Asia/Pacific 62 70 +18.1% -31 -1 128 Total 970
Slide 42: Industrial – All regions and market cluster growing, EBIT margin below prior year
BACKUP Industrial – All regions and market cluster growing, EBIT margin2 below prior year Sales by region yoy growth EBIT2 H1 2022 vs. H1 2023 in EUR mn H1 2022 H1 2023 ∆1 Europe 872 958 +10.1% +46 Americas 352 405 +15.0% Greater China 531 562 +11.4% 238 -13 +26 225 Asia/Pacific 310 312 +5.4% -20 -5
Slide 43: Net Income – EBIT reconciliation and special items
BACKUP Net Income1 – EBIT reconciliation and special items Reconciliation H1 2023 in EUR mn KEY ASPECTS • Special items amounted to EUR 98 mn in H1, mainly related to valuation of energy forward contracts 625 • Financial Result lower yoy due to higher interest payments and 527 higher expenses for in
Slide 44: Working Capital ratio 19.2% – Capex ratio 4.9% in Q2
BACKUP Working Capital ratio 19.2% – Capex ratio 4.9% in Q2 Working capital1 Capex2 in EUR mn in EUR mn -19 mn +23 mn 3,368 3,224 3,184 3,165 2,976 2,803 240 219 221 198 175 156 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2022 2022 2022 2022 2023 2023 2022 2022 2022 2022 2023 2023 in % of Sales (LTM) in % o
Slide 45: Automotive Technologies outperformance by quarters
BACKUP Automotive Technologies (AT) outperformance by quarters Adjusted comparative figures 2022 YTD Outperformance: -2.9pp Q1 23 Q2 23 Outper- Outper- S&P1 AT2 formance S&P1 AT2 formance World +7.1% +6.0% -1.1pp +15.5% +10.7% -4.8pp Europe +14.2% +15.1% +0.9pp +12.6% +14.5% +1.9pp Americas +9.9% +0
Slide 46: Key figures by Group and Division
BACKUP Key figures by Group and Division Adjusted comparative figures 2022 Group in EUR mn Automotive Aftermarket in EUR mn Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Sales 3,758 3,790 4,242 4,019 4,152 4,056 Sales 464 506 548 523 582 549 Sales Growth1 +1.9% +4.4% +20.2%
Slide 47: Overview Corporate and Financing Structure
BACKUP Overview Corporate and Financing Structure Corporate structure (simplified) as of June 30, 2023 Financing structure as of June 30, 2023 A IHO Verwaltungs GmbH Debt instrument Nominal Nominal Interest Maturity Rating INA-Holding Schaeffler USD mn EUR1 mn Fitch/Moody’s/S&P GmbH & Co. KG Loans R