Schaeffler Ag · XETR:SHA0
Schaeffler — 16th German Corporate Conference, Kepler Cheuvreux 2017
29 slides from Schaeffler's conference presentation, Jan 17, 2017
Slide 1: Schaeffler AG – 16th German Corporate Conference
Schaeffler AG 16th German Corporate Conference Kepler Cheuvreux January 17, 2017 Frankfurt
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 Schaeffler at a glance 2 Strategy "Mobility for tomorrow" 3 Investment Highlights 4 Summary 3 January 17, 2017 16th German Corporate Conference | © Schaeffler 2017
Slide 4: Schaeffler Group – A leading automotive and industrial supplier
1 Schaeffler at a glance Schaeffler Group – A leading automotive and industrial supplier Schaeffler at a glance Sales growth 2012 – LTM 2016 in EUR bn 13.2 13.2 12.1 11.1 11.2 Leading automotive and industrial supplier of high-precision components and systems We expect to Global footprint with a
Slide 5: Strategy "Mobility for tomorrow" – 4 key elements
2 Strategy "Mobility for tomorrow" Strategy "Mobility for tomorrow" – 4 key elements Vision / Mission 4 Focus areas 8 Strategic pillars 16 Strategic initiatives 5 January 17, 2017 16th German Corporate Conference | © Schaeffler 2017
Slide 6: Financial Ambitions for 2020 – Profitable growth and sustainable value creation
2 Strategy "Mobility for tomorrow" Financial Ambitions for 2020 – Profitable growth and sustainable value creation Financial Ambitions 2020 Sales Growth Ø 4-6% p.a. w/o external growth, FX-adjusted EBIT Margin 12-13% p.a. Before one-off effects, w/o external growth Free Cash flow ~€ 900M in 2020 w/o
Slide 7: Schaeffler Equity Story – 4 key questions
3 Investment highlights Schaeffler Equity Story – 4 key questions Equity Story – 3 key elements 4 key questions 1 What is your expectation regarding outperformance in Automotive for 2017? Automotive growth above market + 2 What does e-mobility mean for Schaeffler? Margin upside in Industrial 3 When
Slide 8: Schaeffler Automotive at a glance
3 Investment highlights Schaeffler Automotive at a glance Sales and EBIT margin 2012 – LTM 2016 Sales by region 2015 in EUR mn 9,993 10,169 8,986 22% 7,658 8,164 53% 15% 2012 2013 2014 2015 LTM 2016 10% Growth rate (y-o-y)1) +5.1% +8.6% +10.7% +5.8% +5.3% EBIT margin2) 13.5% 13.0% 14.0% 13.6% 14.4%
Slide 9: Outperformance Automotive 2016 – Below average
3 Investment highlights 1 Outperformance Automotive 2016 – Below average Indicative figures for illustration purposes Outperformance 2010 – 9M2016 Key aspects Q1 2016 ø 2010Q3– 2016 Q2 2016 2015:9M 2016 Q4 2016 FY 2016 Growth rate Automotive 1) 5.0% 5.8% +5%5.1% 5.3% to come to come Historical out
Slide 10: Outperformance Automotive 2017 – Back to plus 4%-pts above-market
3 Investment highlights 1 Outperformance Automotive 2017 – Back to plus 4%-pts above-market Sales development Indicative figures for illustration Key aspects purposes Nearly 100% Expected global light vehicle production growth of booked business around 1.5% for 2017 Sales growth Schaeffler 2017
Slide 11: E-Mobility – Accelerated scenario becomes more realistic
3 Investment highlights 2 E-Mobility – Accelerated scenario becomes more realistic Global production volume 1) Basic scenario 2) Global production volume 1) Accelerated in millions of units in millions of units scenario 2) CAGR 2010/2030 CAGR 2010/2030 +2.4% p.a. 120 +2.4% p.a. 120 111 111 10% 102 4
Slide 12: E-Mobility – main powertrain structures
3 Investment highlights 2 E-Mobility – 3 main powertrain structures 1 Internal combustion engines 2 Hybrid vehicles 3 Battery electric vehicles Powertrain structure Powertrain structure Powertrain structure Battery capacity: Battery capacity: 5- 10 kWh 20- 100 kWh E = Engine E = Engine T = Tra
Slide 13: Strong starting position in e-mobility – Broad portfolio of solutions
3 Investment highlights 2 Strong starting position in e-mobility – Broad portfolio of solutions Product portfolio Key aspects 1999 C02 – Reduction 1st Schaeffler E-Mobility symposium 2002 1st E-Mobility concept car 2005 1st serial production of components HV hybrid for hybrid modules module 48 V hyb
Slide 14: More than 20 customer projects – 6 series contracts
3 Investment highlights 2 More than 20 customer projects – 6 series contracts Americas Europe China 1-Gear Electric Axle Front + Rear Tier 1 SOP Q3/2018 Hybrid Module Tier 1 SOP Q1/2018 2-Gear Electric Axle Rear Tier 1 Hybrid Module with SOP Q4/2017 Integrated Torque Converter Tier 1 1-Gear Electric
Slide 15: Compact Dynamics acquired – Broadening competence and scope
3 Investment highlights 2 Compact Dynamics acquired – Broadening competence and scope 1 System and Powertrain Competence 2 Acquisition Schaeffler acquires a 51% stake in Compact Dynamics GmbH from SEMIKRON International GmbH. Closing expected in Q1 2017; call option for remaining 49% stake until
Slide 16: Schaeffler Industrial at a glance
3 Investment highlights Schaeffler Industrial at a glance Sales and EBIT margin 2012 – LTM 2016 Sales by region 2015 in EUR mn Americas 3,406 3,233 19% 3,138 Greater China Europe 3,041 3,029 2012 2013 2014 2015 LTM 2016 15% 56% Growth rate (y-o-y) 1) -1.6% -8.1% +4.2% -3.2% +3.0% -5.3% Asia/Pacific
Slide 17: Revitalizing the Industrial division – Program CORE
3 Investment highlights 3 Revitalizing the Industrial division – Program CORE 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 overhead
Slide 18: Cost reduction and efficiency improvements – First wave mostly completed in 2016
3 Investment highlights 3 Cost reduction and efficiency improvements – First wave mostly completed in 2016 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
Slide 19: Cost reduction and efficiency improvements – Second wave initiated in 2016
3 Investment highlights 3 Cost reduction and efficiency improvements – Second wave initiated in 2016 Indicative Indicative Financial Impact figures Key aspects Δ EBIT in EUR mn 58 Second wave announced in November 2016 23 41 50 60 Cost savings through consolidation of plants in Europe and Americ
Slide 20: Cost reduction and efficiency improvements – Overall target remains in place
3 Investment highlights 3 Cost reduction and efficiency improvements – 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
Slide 21: Customer focus and growth – New business picking up
3 Investment highlights 3 Customer focus and growth – New business picking up Example 1 Example 2 Example 3 Railway Wind Aerospace Sectors and products Sectors and products Sectors and products E-locomotive Wind turbine Aerospace engine Tapered and cylindrical roller bearing with ceramic D
Slide 22: Use of cash – M&A strategy based on selected add-on acquisitions
3 Investment highlights 4 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
Slide 23: Summary – Key messages
4 Summary Key messages Schaeffler is a leading global automotive and industrial supplier with an established strategy 1 "Mobility for tomorrow" and clear Financial Ambitions until 2020 2 Outperformance Automotive below-average in 2016, but back to 4%-pts target in 2017 3 Powertrain electrification r
Slide 24: IR Contact
IR Contact Investor Relations Financial Calendar FY 2016 results: March 8, 2017 Phone: + 49 9132 82 4440 Q1 2017 results: May 11, 2017 Email: ir@schaeffler.com H1 2017 results: August 8, 2017 Web: www.schaeffler.com/ir 9M 2017 results: November 8, 2017 24 January 17, 2017 16th German Corporate Confe
Slide 25: Sales growth 9M 2016 2.7% (FX-adjusted)
Backup Sales growth 9M 2016 2.7% (FX-adjusted) Sales Sales by region 9M 2016 in EUR mn y-o-y growth (w/o FX effects) Asia/Pacific +2.7%1) +2.9% (+4.4%) vs 9M 2015 Greater China 10.3% 3,339 3,382 3,343 3,369 +5.5% (+10.5%) 3,237 3,221 3,265 14.3% 54.2% 21.2% Americas Europe -5.0% (-0.4%) +0.5% (+1.7%
Slide 26: Automotive – Strong growth in Greater China
Backup Automotive – Strong growth in Greater China Automotive sales and market development 9M Automotive sales by division 9M Europe Americas Greater China Asia/Pacific in EUR mn 9M 2015 +22% +4.7%1) 9M 2016 +11% +7% +2.4%1) 3,150 3,217 +4% +3% 0% +1% 1,946 1,960 +10.3%1) +6.2%1) -3% 1,317 1,384 1,0
Slide 27: Industrial – Mixed development across sectors
Backup Industrial – Mixed development across sectors Industrial sales by sector cluster 9M1) Industrial sales by region 9M in EUR mn 9M 2015 9M 2016 Two-Wheelers Wind -0.9%1) Aerospace 1,382 1,352 -6.4%1) Industrial Automation -20.4%1) 466 423 -5.3%1) Offroad 361 279 238 220 Power Transmission Rail
Slide 28: Strong Free Cash Flow generation
Backup Strong Free Cash Flow generation Free Cash Flow Key aspects 9M 2015 9M 2016 Q3 2015 Q3 2016 Free Cash Flow increased by EUR 287 mn to EUR 479 mn in 9M 2016 EBITDA 1,765 1,817 604 600 Net interest paid dropped by EUR 302 mn in 9M 2016 Net interest paid -389 -87 -50 -53 EUR 829 mn capex i
Slide 29: Overview Corporate and Financing Structure
Backup Overview Corporate and Financing Structure Corporate Structure (simplified) Financing Structure as of October 14, 2016 as of October 14, 2016 INA-Holding Schaeffler IHO Verwaltungs GmbH (HoldCo) GmbH & Co. KG Nominal Nominal Debt instrument Interest Maturity Rating (USD mn) (EUR mn) Term loan
Schaeffler — 16th German Corporate Conference, Kepler Cheuvreux 2017 on 6ix