Slide 1: Q2 and H1 2022 Schaeffler AG earnings
Q2 and H1 2022 Schaeffler AG earnings Earnings Call August 4, 2022 Herzogenaurach PUBLIC
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements. The words “anticipate”, “assume”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “project”, “should” and similar expressions are used to identify forward-looking statements. Forward-looking statements are statements that ar
Slide 3: Agenda
Agenda 1 Overview 2 Business Highlights Q2 and H1 2022 3 Financial Results Q2 and H1 2022 4 Outlook August 4, 2022 Q2 and H1 2022 Schaeffler AG earnings 3 PUBLIC
Slide 4: Overview: Solid Q2 despite complex macroeconomic environment
1 Overview Despite unprecedented complex macroeconomic environment, Schaeffler delivered a solid Q2 Key messages Q2 2022 Sales growth1 Q2 Order Intake2 H1 Q2 Sales1 +4.4% – Sales contracted in China in Q2 (-12.5%) due to Auto Technologies 1 Covid lockdowns, good growth in other regions +4.4% EUR 3,7
Slide 5: Schaeffler Group Q2 2022 – Highlights and lowlights
1 Overview Schaeffler Group Q2 2022 – Highlights and lowlights Automotive Technologies – Outperformance of 130 bps Global macroeconomic & geopolitical situation – Highly in Q2, strong growth in Americas, Europe growing despite complex and unprecedented combination in H1 2022 challenges; Strong Order
Slide 6: Q2 2022 Sales development by division and region
1 Overview Q2 2022 Sales1 development – All divisions were impacted by China lockdowns in Q2, even if to a different extent Automotive Automotive Industrial Technologies Aftermarket % of Group sales Q2 2022 59% 13% 28% Europe 43% +7.6% +2% +1% +25% Americas 23% +16.3% +20% +12% +9% Greater China 20%
Slide 7: Agenda
Agenda 1 Overview 2 Business Highlights Q2 and H1 2022 3 Financial Results Q2 and H1 2022 4 Outlook August 4, 2022 Q2 and H1 2022 Schaeffler AG earnings 7 PUBLIC
Slide 8: Automotive Technologies – Q2 Sales affected by China lockdowns, EBIT margin burdened
2 Business Highlights Q2 and H1 2022 Automotive Technologies – Q2 Sales1 affected by China lockdowns, EBIT margin2 burdened by higher input costs Sales -1.0%1 Strong growth in Region Americas, Region Europe growing even if in a challenging in EUR mn environment; Global Outperformance of 130 bps achi
Slide 9: Automotive Technologies – Strong E-Mobility Order Intake
2 Business Highlights Q2 and H1 2022 Automotive Technologies – Strong E-Mobility Order Intake1; FY 2022 target already reached by end of June 2022 Order Intake1 Business Highlights E-Mobility in EUR bn Schaeffler presents Innovative 4in1 E- 15.0 Axle with up to 15% more range, especially at cold tem
Slide 10: Automotive Technologies – Portfolio Management
2 Business Highlights Q2 and H1 2022 Automotive Technologies – Portfolio Management: Driving the transition by rigorous strategy execution Sale of the global DIVEST Innoplate BUILD chain drive business Joint Venture Build Growth Grow Fuel Cell BPPs Harvest • Strategic decision to cease chain • Innop
Slide 11: Automotive Aftermarket – Q2 sales growth driven by positive price effects
2 Business Highlights Q2 and H1 2022 Automotive Aftermarket – Q2 sales growth1 driven by positive price effects, Q2 EBIT margin2 lower due to 2021 positive one-offs Sales Underlying market conditions in Aftermarket business remain favorable – Sales in EUR mn +3.2%1 growth1 in all regions in Q2 excep
Slide 12: Automotive Aftermarket – Aftermarket CRM now live
2 Business Highlights Q2 and H1 2022 Automotive Aftermarket – Aftermarket CRM: Cloud-based, integrated customer relationship management now live Sales • 360° customer view • Business potential identification • Sales planning Marketing • One source for all customer • Reduced complexity information •
Slide 13: Industrial – Strong growth momentum continued
2 Business Highlights Q2 and H1 2022 Industrial – Strong growth1 momentum continued, solid EBIT margin2 despite increased cost headwinds Sales +13.6%1 Strong growth1 across all regions except Greater China – Industrial delivering more in EUR mn than EUR 1 bn sales level in Q2 again, despite macro he
Slide 14: Industrial – Orderbook indicating positive sales trend
2 Business Highlights Q2 and H1 2022 Industrial – Orderbook2 for Q2 still indicating a positive sales trend; Good business prospects supported by strong customer relationships Orderbook2 3-month Business Highlights 2 Orderbook 3M yoy growth % Sales 1 New long-term partnership agreement 40 with Rolls
Slide 15: Industrial – Acquisition of Ewellix
2 Business Highlights Q2 and H1 2022 Industrial – Portfolio management: Compelling acquisition of Ewellix, significant growth and synergy potential Strong market attractiveness – With the acquisition of Ewellix, Schaeffler Industrial Division 1 increases its business in sizeable and attractive secto
Slide 16: Capital allocation – Capex prioritizing growth business and regions
2 Business Highlights Q2 and H1 2022 Capital allocation – Capex prioritizing investments in growth business and regions, Capex ratio2 of 4.6% in Q2 Investment1 allocation | in EUR mn Key aspects Q2 2022 • Reinvestment Rate Target: Continued prioritization of Industrial Division FY 20 FY 21 Q2 21 Q2
Slide 17: Agenda
Agenda 1 Overview 2 Business Highlights Q2 and H1 2022 3 Financial Results Q2 and H1 2022 4 Outlook August 4, 2022 Q2 and H1 2022 Schaeffler AG earnings 17 PUBLIC
Slide 18: Sales – Moderate growth in Q2
3 Financial Results Q2 and H1 2022 Sales – Moderate growth2 in Q2 yoy, other regions overcompensated the China Q2 lockdown contraction Sales | in EUR mn Key aspects +9.7%1 • Automotive Technologies: Strong growth2 (+20%) in Americas driven by +4.4%2 New and Mature Business, Region Europe growing2 (+
Slide 19: Gross Profit – Partial compensation of higher production costs
3 Financial Results Q2 and H1 2022 Gross Profit – Partial compensation of higher production costs thanks to overall positive pricing and increased volumes Gross Profit Q2 2021 vs. Q2 2022 | in EUR mn Key aspects • Pricing realization: Sequentially further improved in all divisions even if to a diffe
Slide 20: Overhead costs – Increase yoy
3 Financial Results Q2 and H1 2022 Overhead costs – Increase yoy, freight and logistics costs the main drivers Overhead costs | in EUR mn Key aspects • R&D: Slightly higher yoy, mainly related to New Business projects in +12.1% Automotive Technologies and in business fields Hydrogen and Robotics in
Slide 21: EBIT – Solid margin in Industrial and Aftermarket
3 Financial Results Q2 and H1 2022 EBIT1 – Solid margin in Industrial and Aftermarket, decline in Auto Technologies due to stronger headwinds EBIT1 | in EUR mn Key aspects • AT margin: Significantly declined yoy driven by lower absorption of fixed -3.5pp costs, production inefficiencies caused by vo
Slide 22: Automotive Technologies – Growth in New Business, EBIT margin burdened
3 Financial Results Q2 and H1 2022 Automotive Technologies – Growth1 in New Business, EBIT margin2 sharply burdened by increased input costs, volatile customer call-offs and declined overall volumes Sales by business division | yoy growth EBIT2 Q2 2021 vs. Q2 2022 | in EUR mn Q2 2021 Q2 2022 ∆1 E-Mo
Slide 23: Automotive Aftermarket – Moderate growth driven by Americas and Asia/Pacific
3 Financial Results Q2 and H1 2022 Automotive Aftermarket – Moderate growth1 driven by Americas and Asia/Pacific, EBIT margin5 down yoy due to positive one-off impact in Q2 2021 Sales by region | yoy growth EBIT5 Q2 2021 vs. Q2 2022 | in EUR mn Q2 2021 Q2 2022 ∆1 Europe 332 337 +1.2% Americas 86 110
Slide 24: Industrial – Strong growth continued, EBIT margin flat yoy
3 Financial Results Q2 and H1 2022 Industrial – Strong growth1 continued, EBIT margin2 flat yoy supported by both positive price and volume effects Sales by region | yoy growth EBIT2 Q2 2021 vs. Q2 2022 | in EUR mn Q2 2021 Q2 2022 ∆1 Europe 357 448 +25.2% -4 Americas 146 179 +9.1% Greater China 272
Slide 25: Net Income – EPS at EUR 0.17, ROCE reached 11.6%
3 Financial Results Q2 and H1 2022 Net Income1 – EPS2 at EUR 0.17, ROCE3 reached 11.6% Net income1 | in EUR mn Key aspects • Q2 2022 Net income1 follows lower EBIT -115 mn • ROCE3 and Schaeffler Value Added4 reduced as strong prior year quarters rolled off 235 227 149 145 136 113 Q1 21 Q2 21 Q3 21 Q
Slide 26: Free Cash Flow – Impacted by tactical increase in inventory
3 Financial Results Q2 and H1 2022 Free Cash Flow – Impacted by tactical increase in inventory and softer margins in Q2 Free Cash Flow before M&A1 | in EUR mn Reconciliation Q2 2022 | in EUR mn -332 mn -316 429 225 55 14 130 113 -175 -3 -88 -66 -219 -219 EBITDA ∆ Net Capex Net Taxes Others FCF Q1 21
Slide 27: Net debt of EUR 2.6 bn – Leverage ratio at 1.3x
3 Financial Results Q2 and H1 2022 Net debt of EUR 2.6 bn – Leverage ratio1 at 1.3x and solid liquidity position, EUR 328 mn paid in Dividends Net financial debt and Leverage ratio1 | in EUR mn Key aspects Leverage ratio1 • In April 2022 Dividend payment of EUR 328 mn for FY 2021 (44% payout ratio)
Slide 28: Agenda
Agenda 1 Overview 2 Business Highlights Q2 and H1 2022 3 Financial Results Q2 and H1 2022 4 Outlook August 4, 2022 Q2 and H1 2022 Schaeffler AG earnings 28 PUBLIC
Slide 29: Market assumptions – What changed since May
4 Outlook Market assumptions – What changed in our market assumptions since May Automotive Technologies – Global LVP1 2022 Automotive Aftermarket – Global LV Parc3 Industrial – Industrial Production4 7% 77.2 ~77 8% 6% Around -3.8 5% 6% World 42.1 mn discount 4% 39.4 37.8 38.7 vs. IHS2 estimate of 4%
Slide 30: FY 2022 Guidance – Outlook for all metrics confirmed
4 Outlook FY 2022 Guidance – Outlook for all metrics confirmed Group Guidance Divisional Guidance Automotive Automotive Industrial Technologies Aftermarket Actuals Guidance Actuals Guidance Actuals Guidance Actuals Guidance FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 Out- Out- Co
Slide 31: Conclusion & Outlook
4 Outlook Conclusion & Outlook Despite unprecedented headwinds impacting our markets, solid Group performance in Q2 – 1 Substantial progress in Order Intake in Automotive; Profit protection contribution from Aftermarket and Industrial, next to growth Tackling the market headwinds – Proactive mitigat
Slide 32: 2022 Capital market activities
4 Outlook 2022 Capital market activities Roadshows & Conferences – With Top Management participation Financial calendar 2022/2023 Aug 5 Roadshow – DACH, Stifel Aug 4 H1 2022 Earnings Release Aug 8 Roadshow – US, UK, Credit Suisse Sep 22 InnoTrans Trade Fair, Industrial Sep 8 Roadshow – Industrial, J
Slide 33: IR Contact
IR Contact Investor Relations Phone: + 49 9132 82-4440 Email: ir@schaeffler.com Web: www.schaeffler.com/ir PUBLIC
Slide 34: External headwinds
Backup External headwinds • The macroeconomic, geopolitical and political situation remains exceptionally severe, complex and unprecedented • Supply chain constraints may intensify, impacting on the availability and price developments of raw materials and energy • The inflationary pressure on compan
Slide 35: 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 Automotive Technologies – Conquer leadership positions in New Business for electrified 2 Powertrains and Chassis applications 3
Slide 36: Ancillary comments to support the Equity Story
Backup Ancillary comments to support the Equity Story Update Additional KPIs FY 2022 Comments Order Intake E-Mobility EUR 2 - 3 bn Starting from 2022 the new target of EUR 2 - 3 bn applies Focus areas include Digitalization, Sustainability, Innovation & Technology and investments in New Capex Around
Slide 37: Key figures Q2 and H1 2022
Backup Key figures Q2 and H1 2022 Q2 2022 H1 2022 in EUR mn Q2 2021 Q2 2022 vs. Q2 2021 H1 2021 H1 2022 vs. H1 2021 +9.7% +7.6% Sales 3,454 3,790 7,014 7,548 +4.4%1 +3.1%1 Gross Profit 843 832 -11 mn 1,800 1,703 -97 mn Gross margin 24.4% 22.0% -2.4pp 25.7% 22.6% -3.1pp EBIT2 305 200 -105 mn 702 458
Slide 38: H1 2022 Sales development by division and region
Backup H1 2022 Sales1 development – All divisions were impacted by China lockdowns in Q2, even if to a different extent Automotive Automotive Industrial Technologies Aftermarket % of Group sales H1 2022 60% 13% 27% Europe 42% +6.0% +0% +0% +26% Americas 23% +9.5% +9% +12% +10% Greater China 21% -8.0
Slide 39: Automotive Technologies – H1 growth in New Business
Backup Automotive Technologies – Growth1 in New Business, EBIT margin2 sharply burdened by increased input costs Sales by business division | yoy growth EBIT2 H1 2021 vs. H1 2022 | in EUR mn H1 2021 H1 2022 ∆1 E-Mobility 506 601 +13.0% Engine & Transmission 2,426 2,468 -3.2% Bearings 1,291 1,273 -4.
Slide 40: Automotive Aftermarket – Moderate growth driven by Americas and Asia/Pacific
Backup Automotive Aftermarket – Moderate growth1 driven by Americas and Asia/Pacific, EBIT margin5 down yoy due to positive one-off impact in Q2 2021 Sales by region | yoy growth EBIT5 H1 2021 vs. H1 2022 | in EUR mn H1 2021 H1 2022 ∆1 Europe 644 642 -0.3% Americas 169 209 +11.9% 0 -1 -14 +4 +2 Grea
Slide 41: Industrial – Strong growth continued, EBIT margin at prior-year level
Backup Industrial – Strong growth1 continued, EBIT margin2 at prior-year level supported by positive price and volume effects Sales by region | yoy growth EBIT2 H1 2021 vs. H1 2022 | in EUR mn H1 2021 H1 2022 ∆1 Europe 699 877 +25.7% Americas 285 347 +10.0% -6 Greater China 507 531 -4.6% -28 -1 +4 +
Slide 42: Net Income – EBIT reconciliation and special items
Backup Net Income1 – EBIT reconciliation and special items Reconciliation H1 2022 | in EUR mn Key aspects • Special items amounted to EUR 24 mn in H1, mainly related to the consolidation of the Footprint in Europe within “Roadmap 2025” • Financial Result EUR -22 mn below prior year mainly driven by
Slide 43: Free Cash Flow details H1 2022
Backup Free Cash Flow1 details H1 2022 – FCF hampered by lower EBITDA and Working Capital outflow FCF1 H1 2021 vs. H1 2022 | in EUR mn Key aspects • Negative EBITDA development yoy mainly due to challenging conditions ∆ Net Working Capital EUR -58 mn • Net Working Capital negative with EUR -58 mn dr
Slide 44: Working Capital ratio 22.1% – Capex ratio 4.6% in Q2
Backup Working Capital1 ratio 22.1% – Capex ratio2 4.6% in Q2 Working capital1 | in EUR mn Capex2 | in EUR mn +458 mn +39 mn 2,543 2,726 2,752 2,700 2,803 3,184 132 136 215 188 156 175 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 in % of sales (LTM) in % of sales 19.8% 19.
Slide 45: Automotive Technologies outperformance by quarters
Backup Automotive Technologies (AT) outperformance by quarters YTD Q1 22 Q2 22 Outperformance: +0.8pp Outper- Outper- IHS1 AT2 formance IHS1 AT2 formance World -3.4% -3.2% +0.2pp 0.0% +1.3% +1.3pp Europe -15.0% -1.9% +13.1pp -2.9% +2.4% +5.3pp Americas -3.3% +0.3% +3.6pp +11.4% +19.5% +8.1pp Greater
Slide 46: Key figures by Group and Division
Backup Key figures by Group and Division Adjusted comparative figures 2021 Group | in EUR mn Automotive Aftermarket | in EUR mn Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Sales 3,560 3,454 3,332 3,506 3,758 3,790 Sales 444 467 500 437 463 506 Sales Growth1 +12.3% +52.8%
Slide 47: Overview Corporate and Financing Structure
Backup Overview Corporate and Financing Structure Corporate structure (simplified) | as of June 30, 2022 Financing structure | as of June 30, 2022 A IHO Verwaltungs GmbH INA-Holding Schaeffler Debt instrument Nominal Nominal Interest Maturity Rating GmbH & Co. KG (USD m) (EUR1 m) (Fitch/Moody’s/S&P)