Schaeffler Ag · XETR:SHA0
Schaeffler — BNP Paribas Exane MidCap CEO Conference 2022
53 slides from Schaeffler's conference presentation, Nov 16, 2022
Slide 1: BNP Paribas Exane MidCap CEO Conference
BNP Paribas Exane MidCap CEO Conference Klaus Rosenfeld, CEO Schaeffler Group Claus Bauer, CFO Schaeffler Group November 16-17, 2022 Paris 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 Q3 and 9M 2022 3 Financial Results Q3 and 9M 2022 4 Outlook Nov 16, 2022 BNP Paribas Exane MidCap CEO Conference 3 PUBLIC
Slide 4: Schaeffler Group with strong revenue growth and robust performance in Q3 2022
1 Overview Schaeffler Group with strong revenue growth and robust performance in Q3 2022 Key messages Q3 2022 at Group level Sales growth1 Q3 Gross Margin Q3 Q3 Sales1 +20.2% – Strong revenues across all divisions and regions; 1 9M Sales growth1 +8.7% +20.2% 23.2% Q3 Gross margin – Still hampered by
Slide 5: Schaeffler Group Q3 2022 – Highlights and lowlights
1 Overview Schaeffler Group Q3 2022 – Highlights and lowlights Automotive Technologies – Double-digit growth across all Gross margin – Different dynamics among divisions; High regions and business divisions; Strong Order Intake in gross margin protection in Auto Aftermarket & Industrial, E-Mobility
Slide 6: Q3 2022 Sales development – All regions and divisions contributed to the strong growth
1 Overview Q3 2022 Sales1 development – All regions and divisions contributed to the strong growth in Q3 2022 Automotive Automotive Industrial Technologies Aftermarket % of Group sales Q3 2022 60% 13% 27% Europe 40% +22.8% +34% +5% +19% Americas 22% +16.3% +22% +1% +11% Greater China 25% +24.8% +25%
Slide 7: Agenda
Agenda 1 Overview 2 Business Highlights Q3 and 9M 2022 3 Financial Results Q3 and 9M 2022 4 Outlook Nov 16, 2022 BNP Paribas Exane MidCap CEO Conference 7 PUBLIC
Slide 8: Automotive Technologies – Double-digit sales growth, slight progress in EBIT margin yoy
2 Business Highlights Q3 and 9M 2022 Automotive Technologies – Double-digit sales growth, slight progress in EBIT2 margin yoy Sales Strong double-digit growth across all regions and business divisions driven by in EUR mn +7.0%1 volume growth and price increases which came through in lump-sum mode; +
Slide 9: Automotive Technologies – High Order Intake in E-Mobility continued in Q3
2 Business Highlights Q3 and 9M 2022 Automotive Technologies – High Order Intake in E-Mobility continued in Q3 Order Intake1 Business Highlights E-Mobility in bn EUR Market success for E-Axle 15.0 transmissions with several new project nominations in 7.3 10.2 10.2 China and Asia-Pacific H2 9.7 4.8 3
Slide 10: Automotive Aftermarket – Continued growth across all regions, EBIT margin slightly lower
2 Business Highlights Q3 and 9M 2022 Automotive Aftermarket – Continued growth1 across all regions, EBIT margin2 slightly lower Sales Sales growth showing successful harnessing of ongoing robust market demand – in EUR mn +4.0%1 All regions grew in Q3, mainly driven by the Independent Aftermarket bus
Slide 11: Automotive Aftermarket – First E-Axle repair solution launched at Automechanika
2 Business Highlights Q3 and 9M 2022 Automotive Aftermarket – First E-Axle repair solution launched at Automechanika Key aspects • Repair system for gearbox application of E- Axle (BEV/HEV) • Pilot application for Volkswagen e-Golf VII VW e-Golf VII • Unique solution in the Aftermarket – First repai
Slide 12: Industrial – Double-digit sales growth, strong Gross and EBIT margin
2 Business Highlights Q3 and 9M 2022 Industrial – Double-digit sales growth, strong Gross and EBIT margin2 Sales +15.0%1 Double-digit growth1 with contribution from all regions, again driven especially by in EUR mn strong demand in Industrial Automation and Industrial Distribution +17.8%1 3,205 2,64
Slide 13: Industrial – Orderbook for Q3 still indicating growth
2 Business Highlights Q3 and 9M 2022 Industrial – Orderbook for Q3 still indicating growth; Strong growth in future-oriented business fields Orderbook 3-month Business Highlights Orderbook 3M 2 Lifetime Solutions YOY growth % 1 Sales Roadshow presenting the 40 entire portfolio of 35 Schaeffler’s dig
Slide 14: Schaeffler Group to acquire CERASPIN
2 Business Highlights Schaeffler Group to acquire CERASPIN – Extending our technology portfolio for production of ceramic rolling elements CERASPIN Transaction details Manufacturer of ceramic blanks for rolling Acquisition of 100% of shares in elements in high-precision bearings CERASPIN S.a.r.l. (S
Slide 15: Compelling acquisition – Further strengthening our Industrial business
2 Business Highlights Compelling acquisition – Further strengthening our Industrial business High market attractiveness – Ceramic rolling bearings are used in a wide range of strategic 1 growth areas, e.g. Wind, Rail, Aerospace, Medical Equipment, Electrical Engineering and Vacuum Pumps for Semicond
Slide 16: Capital allocation – Capex prioritizing investments in growth business and regions
2 Business Highlights Q3 and 9M 2022 Capital allocation – Capex prioritizing investments in growth business and regions, Capex ratio2 of 5.2% in Q3 Investment1 allocation | in EUR mn Key aspects Q3 2022 • Reinvestment Rate Target: Continued prioritization of Industrial division FY 20 FY 21 Q3 21 Q3
Slide 17: Structural measures – We drive our transformation in Automotive Technologies
2 Business Highlights Q3 and 9M 2022 Structural measures – We drive our transformation in particular in Automotive Technologies Footprint & Headcount Executing our Strategy Indicative Financial Impact Mature Business New Business HCO Reduction: ~1,300 HCO globally, thereof Morbach ~1,000 HCO in Germ
Slide 18: Agenda
Agenda 1 Overview 2 Business Highlights Q3 and 9M 2022 3 Financial Results Q3 and 9M 2022 4 Outlook Nov 16, 2022 BNP Paribas Exane MidCap CEO Conference 18 PUBLIC
Slide 19: Sales – Strong growth in Q3 driven by all regions and divisions
3 Financial Results Q3 and 9M 2022 Sales – Strong growth in Q3 driven by all regions and divisions, all divisions achieving all-time high quarterly sales Sales | in EUR mn Key aspects +27.3%1 • Auto Technologies: Double-digit growth2 in all regions and business +20.2%2 divisions on low comps • Auto
Slide 20: Gross Profit – Positive pricing and volumes compensating higher production costs
3 Financial Results Q3 and 9M 2022 Gross Profit – Positive pricing and volumes compensating higher production costs Gross Profit Q3 2021 vs. Q3 2022 | in EUR mn Key aspects • Pricing: Sequentially improved in all divisions, price increases including retroactive lump sum payments in Auto Technologies
Slide 21: Overhead costs – Cost ratio below previous year
3 Financial Results Q3 and 9M 2022 Overhead costs – Cost ratio below previous year, continued high costs for freight and logistics Overhead costs | in EUR mn Key aspects • R&D: In line with previous year +13.2% • Selling expenses: Increase yoy due to higher freight/logistics and warehousing costs du
Slide 22: Robust EBIT margin – Strong margin in Industrial and Aftermarket
3 Financial Results Q3 and 9M 2022 Robust EBIT margin1 – Strong margin in Industrial and Aftermarket, Automotive Technologies margin improved EBIT1 | in EUR mn Key aspects • Robust Q3 EBIT margin1 of 8.4% +0.6pp • Auto Technologies margin: Higher yoy and sequentially driven by positive volume and pr
Slide 23: Automotive Technologies – Continued strong growth in New Business
3 Financial Results Q3 and 9M 2022 Automotive Technologies – Continued strong growth1 in New Business, EBIT margin2 improved sequentially and yoy Sales by business division | yoy growth EBIT2 Q3 2021 vs. Q3 2022 | in EUR mn Q3 2021 Q3 2022 ∆1 E-Mobility 226 391 +62.6% Engine & Transmission 1,073 1,3
Slide 24: Automotive Aftermarket – Moderate growth driven by Europe and Greater China
3 Financial Results Q3 and 9M 2022 Automotive Aftermarket – Moderate growth1 driven by Europe and Greater China, EBIT margin5 slightly lower in Q3 due to higher selling expenses Sales by region | yoy growth EBIT5 Q3 2021 vs. Q3 2022 | in EUR mn Q3 2021 Q3 2022 ∆1 Europe 341 358 +5.4% Americas 102 11
Slide 25: Industrial – Strong growth continued, EBIT margin increase
3 Financial Results Q3 and 9M 2022 Industrial – Strong growth1 continued, EBIT margin2 increase driven by both price and volume effects Sales by region | yoy growth EBIT2 Q3 2021 vs. Q3 2022 | in EUR mn Q3 2021 Q3 2022 ∆1 Europe 372 438 +19.1% Americas 151 194 +10.9% -4 -21 +8 +11 Greater China 250
Slide 26: Net Income – EPS at EUR 0.25, ROCE reached 12.4%
3 Financial Results Q3 and 9M 2022 Net Income1 – EPS2 at EUR 0.25, ROCE3 reached 12.4% Net income1 | in EUR mn Key aspects • Q3 2022 Net income1 follows higher EBIT +20 mn • 9M ROCE3 improved vs. H1 2022 by 0.8pp • SVA4 approaching 2019 pre-Covid levels 235 227 149 145 136 113 169 Q1 21 Q2 21 Q3 21
Slide 27: Free Cash Flow – Strongly positive in Q3
3 Financial Results Q3 and 9M 2022 Free Cash Flow – Strongly positive in Q3, increased EBITDA compensated outflows for Working Capital and Capex Free Cash Flow before M&A1 | in EUR mn Reconciliation Q3 2022 | in EUR mn +15 mn -150 -78 +127 55 -1 130 113 225 14 240 560 -219 240 -219 EBITDA ∆ Net Cape
Slide 28: Net debt of EUR 2.3 bn – Leverage ratio at 1.1x and solid liquidity position
3 Financial Results Q3 and 9M 2022 Net debt of EUR 2.3 bn – Leverage ratio1 at 1.1x and solid liquidity position Net financial debt and Leverage ratio1 | in EUR mn Key aspects Leverage ratio1 • Increased Revolving Credit Facility from EUR 1.8 bn to EUR 2.0 bn with maturity earliest in November 2027
Slide 29: Agenda
Agenda 1 Overview 2 Business Highlights Q2 and H1 2022 3 Financial Results Q2 and H1 2022 4 Outlook Nov 16, 2022 BNP Paribas Exane MidCap CEO Conference 29 PUBLIC
Slide 30: Market assumptions – What changed in our market assumptions since August
4 Outlook Market assumptions – What changed in our market assumptions since August Automotive Technologies – Global LVP1 2022 Automotive Aftermarket – Global LV Parc3 Industrial – Industrial Production4 81.8 3% 77.2 8% World Schaeffler 6% 2% assumes now up to 1.5 mn 4% discount vs. 1% 20.0 19.0 21.2
Slide 31: FY 2022 Guidance – Outlook for all metrics confirmed
4 Outlook FY 2022 Guidance – Outlook for all metrics confirmed, confident in reaching the upper end of Group ranges Group Guidance Divisional Guidance Automotive Automotive Industrial Technologies Aftermarket Actuals Guidance Actuals Guidance Actuals Guidance Actuals Guidance FY 2021 FY 2022 FY 2021
Slide 32: Conclusion & Outlook
4 Outlook Conclusion & Outlook Strong Q3 performance across all key metrics – Strongest quality of earnings in Industrial, 1 followed by Automotive Aftermarket and Automotive Technologies While managing the current headwinds, we actively manage our portfolio – Growing the New 2 and harvesting the Ma
Slide 33: Financial calendar and selected IR events
4 Outlook Financial calendar and selected IR events Roadshows & Conferences – With Top Management participation Financial calendar 2022/2023 Nov 9 Roadshow – Frankfurt, DACH, Deutsche Bank Nov 8 9M 2022 Earnings Release Nov 16-17 Conference – Paris, BNPP Exane, MidCap CEO Mar 7 FY 2022 Earnings Rele
Slide 34: IR Contact
IR Contact Investor Relations Phone: + 49 9132 82-4440 Email: ir@schaeffler.com Web: www.schaeffler.com/ir PUBLIC
Slide 35: Schaeffler AG has acquired the remaining 10% stake in Schaeffler Paravan
Backup Automotive Technologies – Schaeffler AG has acquired the remaining 10% stake in Schaeffler Paravan Where we stand We execute our Strategy Financial Impact1 • In June 2018 the Joint Venture Schaeffler Mature Business New Business • As part of the transaction, the ~70 Paravan Technologie GmbH u
Slide 36: External headwinds
Backup External headwinds • The macroeconomic, geopolitical and political situation remains exceptionally severe, complex and unprecedented • Supply chain constraints may change, but still impact on the availability and price developments of raw materials, logistics and energy • Inflationary pressur
Slide 37: 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 38: Ancillary comments to support the Equity Story
Backup Ancillary comments to support the Equity Story 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 EUR 75
Slide 39: Key figures Q3 and 9M 2022
Backup Key figures Q3 and 9M 2022 Q3 2022 9M 2022 in EUR mn Q3 2021 Q3 2022 vs. Q3 2021 9M 2021 9M 2022 vs. 9M 2021 +27.3% +14.0% Sales 3,332 4,242 10,346 11,790 +20.2%1 +8.7%1 Gross Profit 793 984 +191 mn 2,593 2,687 +94 mn Gross margin 23.8% 23.2% -0.6pp 25.1% 22.8% -2.3pp EBIT2 260 355 +95 mn 962
Slide 40: 9M 2022 Sales development – All regions and divisions contributed to growth
Backup 9M 2022 Sales1 development – All regions and divisions contributed to growth Automotive Automotive Industrial Technologies Aftermarket % of Group sales 9M 2022 60% 13% 27% Europe 41% +11.2% +10% +2% +23% Americas 22% +11.8% +13% +8% +10% Greater China 23% +2.7% +1% +8% +5% Asia/Pacific 14% +6
Slide 41: Gross Profit – Positive pricing and increased volumes
Backup Gross Profit – Positive pricing and increased volumes partially compensating higher production costs Gross Profit 9M 2021 vs. 9M 2022 | in EUR mn Key aspects • Pricing: Sequentially further improved in all divisions during 2022 • Volumes: Strong increase in Q3 in Auto Technologies and Industr
Slide 42: Automotive Technologies – Continued growth in New Business, EBIT margin down yoy
Backup Automotive Technologies – Continued growth1 in New Business, EBIT margin2 down yoy due to higher input costs Sales by business division | yoy growth EBIT2 9M 2021 vs. 9M 2022 | in EUR mn 9M 2021 9M 2022 ∆1 E-Mobility 732 991 +28.4% Engine & Transmission 3,499 3,849 +4.0% Bearings 1,845 1,955
Slide 43: Automotive Aftermarket – Moderate growth, EBIT margin down yoy
Backup Automotive Aftermarket – Moderate growth1, EBIT margin5 down yoy due to higher selling costs Sales by region | yoy growth EBIT5 9M 2021 vs. 9M 2022 | in EUR mn 9M 2021 9M 2022 ∆1 Europe 985 1,000 +1.6% -2 Americas 271 327 +7.6% +14 -28 +2 +4 Greater China 78 92 +8.1% Asia/Pacific 78 97 +17.8%
Slide 44: Industrial – Double-digit top line growth, EBIT margin increased
Backup Industrial – Double-digit1 top line growth, EBIT margin2 increased despite input cost headwinds Sales by region | yoy growth EBIT2 9M 2021 vs. 9M 2022 | in EUR mn 9M 2021 9M 2022 ∆1 Europe 1,071 1,315 +23.4% Americas 436 541 +10.3% -10 Greater China 757 879 +5.3% -49 +7 +15 Asia/Pacific 385 4
Slide 45: Net Income – EBIT reconciliation and special items
Backup Net Income1 – EBIT reconciliation and special items Reconciliation 9M 2022 | in EUR mn Key aspects • Special items amounted to EUR 63 mn in 9M 2022, mainly related to the consolidation of the Footprint in Europe within “Roadmap 2025” • Financial Result has increased by 19 mn to -104 mn yoy ma
Slide 46: Free Cash Flow details 9M 2022
Backup Free Cash Flow1 details 9M 2022 – FCF at EUR 35 mn FCF1 9M 2021 vs. 9M 2022 | in EUR mn Key aspects • EBITDA lower yoy, negatively impacted by weaker first and second ∆ Net Working Capital EUR -222 mn quarters of 2022 • Net Working Capital negative mainly due to increased receivables as a res
Slide 47: Working Capital ratio 22.0% – Capex ratio 5.2% in Q3
Backup Working Capital1 ratio 22.0% – Capex ratio2 5.2% in Q3 Working capital1 | in EUR mn Capex2 | in EUR mn +616 mn +4 mn 2,543 2,726 2,752 2,700 2,803 3,184 3,368 132 136 215 188 156 175 219 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 in % of sales (LTM) in
Slide 48: Automotive Technologies (AT) outperformance by quarters
Backup Automotive Technologies (AT) outperformance by quarters YTD Q1 22 Q2 22 Q3 22 Outperformance: -0.5pp Outper- Outper- Outper- S&P1 AT2 formance S&P1 AT2 formance S&P1 AT2 formance World -3.3% -3.2% +0.1pp +1.7% +1.3% -0.4pp +27.5% +25.2% -2.3pp Europe -14.8% -1.9% +12.9pp -1.8% +2.4% +4.2pp +2
Slide 49: 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 Q3 22 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Sales 3,560 3,454 3,332 3,506 3,758 3,790 4.242 Sales 444 467 500 437 463 506 547 Sales
Slide 50: Overview Corporate and Financing Structure
Backup Overview Corporate and Financing Structure Corporate structure (simplified) | as of September 30, 2022 Financing structure | as of September 30, 2022 A IHO Verwaltungs GmbH INA-Holding Schaeffler Debt instrument Nominal Nominal Interest Maturity Rating GmbH & Co. KG (USD m) (EUR1 m) (Fitch/Mo
Slide 51: ESG Targets
Backup Sustainability – Eight non-financial targets underline clear commitment to sustainability Climate Neutral Supply Chain Climate Neutral Supply Chain until 2040 Climate Neutral Production Sustainable Suppliers at all Schaeffler production 90% of the purchasing volume of production locations unt
Slide 52: Path to Climate Neutrality
Backup Path to Climate Neutrality – Ambitious Scope targets defined Long-Term Sustainability Targets Key aspects • Decarbonization as top priority • Emissions occurring in the supply 2019 2025 2030 2035 2040 chain (Scope 3 upstream): − Climate neutral from 2040 − Emission reduction of 25% until 2030
Slide 53: Schaeffler to become climate neutral
Backup Sustainability – Fundamental key building block of our transformation Schaeffler to become climate neutral until 2040 Sustainable Sustainable Sustainable materials production products • New target of climate • 46 plants are purchasing 100% • Sustainability in focus of Sustainability targets n
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