Schaeffler Ag · XETR:SHA0
Schaeffler — Kepler Cheuvreux German Corporate Conference 2019
36 slides from Schaeffler's conference presentation, Jan 22, 2019
Slide 1: Executing our strategy
Entwurf 19.09.2018 15h00 Executing our strategy Schaeffler AG Kepler German Corporate Conference January 22, 2019 Frankfurt
Slide 2: Agenda
Agenda 1 Schaeffler at a glance – 9M 2018 results and current market environment 2 Strategy “Mobility for tomorrow” 3 Excellence Program “Agenda 4 plus One” 4 Diversified business portfolio – Our three divisions 5 Long-term value creation 6 Summary and outlook 2 January 22, 2019 Schaeffler AG - Kepl
Slide 3: Schaeffler at a glance – A global automotive and industrial supplier
1 Schaeffler at a glance Schaeffler at a glance – A global automotive and industrial supplier Global Automotive and Industrial supplier of high-precision components and mechatronic 72 plants systems Quality, technology and innovation as 18 R&D centers key success factors Well defined strategy
Slide 4: Schaeffler Group – Diversified business portfolio with three divisions
1 Schaeffler at a glance Schaeffler Group – Diversified business portfolio with three divisions Automotive OEM Automotive Aftermarket Industrial 64%3) 13%3) 23%3) Sales 8,991 mn Sales 1,880 mn Sales 3,150 mn EBIT margin2) 10.8% EBIT margin2) 19.0% EBIT margin2) 8.0% Chassis 18% E-Mobility OES busine
Slide 5: Macroeconomic environment – Increasingly challenging and complex
1 Schaeffler at a glance Macroeconomic environment – Increasingly challenging and complex Growth Automotive Lower GDP-growth Macro-economic OEMs suffer from the expected from 2019 new WLTP-cycle onwards risks External conditions Trade Industrial became much more Trade war between USA Slow down of in
Slide 6: 9M 2018 figures – Mixed performance in Q3
1 Schaeffler at a glance 9M 2018 figures – Mixed performance in Q3 Group Q3 18 9M 18 Automotive OEM Automotive AM Industrial Q3 9M Q3 9M Q3 9M Sales growth1) 3,521 10,714 2,191 6,778 476 1,401 854 2,535 (in EUR mn and %) +3.7% +5.1% +3.2% +4.3% -3.0% +1.3% +9.4% +9.8% Q3 9M Q3 9M Q3 9M EBIT margin2)
Slide 7: Guidance FY 2018 – We confirm our November update
1 Schaeffler at a glance Guidance FY 2018 – We confirm our November update Group Guidance Divisional Guidance Group Automotive OEM Automotive AM Industrial Sales growth1) (in %) +4-5% +3.5-4.5% +1.5-2.5% +8-9% EBIT margin2) 9.5-10.5% 8-8.5% 17-17.5% 10.5-11.0% (in %) Free Cash Flow3) EUR ~300 mn (in
Slide 8: Schaeffler Roadmap 2016-2020 – Transformation gaining momentum
2 Strategy “Mobility for tomorrow” Schaeffler Roadmap 2016-2020 – Transformation gaining momentum Roadmap Schaeffler Group Key aspects Today Strategy „Mobility for tomorrow“ to position Schaeffler for key future trends Excellence program "Agenda 4 plus One" to make Schaeffler a better Sustainabl
Slide 9: Strategy 'Mobility for tomorrow' – 8 strategic pillars
2 Strategy “Mobility for tomorrow” Strategy "Mobility for tomorrow" – 8 strategic pillars 1 Preferred technology partner 2 Automotive and Industrial supplier 3 Components and systems 4 Global player with local presence One Schaeffler Approach 5 E-Mobility, Industry 4.0, and digitalization 6 Quality,
Slide 10: Automotive and Industrial supplier – both in Components and Systems
2 Strategy “Mobility for tomorrow” Automotive and Industrial supplier – both in Components and Systems 2 3 5 Key aspects System Understanding / Industry 4.0 Long-standing experience in development and manufacturing of best-in-class mechanical components Proven system-level understanding enabling
Slide 11: E-Mobility, Industry 4.0 and Digitalization – Focused on future opportunities
2 Strategy “Mobility for tomorrow” E-Mobility, Industry 4.0 and Digitalization – Focused on future opportunities 2 3 5 Business logic Key aspects E-Mobility, Industry 4.0 and Digitalization as key growth opportunities for the long-term future E-Mobility, Industry 4.0 and Digitalization are three
Slide 12: Excellence program 'Agenda 4 Plus One' – Making Schaeffler a better company
3 Excellence Program “Agenda 4 plus One” Excellence program "Agenda 4 Plus One" – Making Schaeffler a better company 10% 25% 95% 100% Key aspects Initiate Plan Implement Close Initiativen ► Comprehensive program with 20 initiatives started in Q2 2016 1 Customer Excellence 55% ► 2 E-Mobility 55%
Slide 13: Rigorous execution of efficiency initiatives
3 Excellence Program “Agenda 4 plus One” Rigorous execution of efficiency initiatives – Continuously improving our performance Overview as discussed at September 2018 CMD Start Date Cost Efficiency HCO1) Reduction Restructuring Full Financial Focus Completion Target Target Cost Impact Ratio 1 EUR 36
Slide 14: Automotive OEM – At a glance
4 Diversified business portfolio – Our three divisions 1 Automotive OEM – At a glance Sales and EBIT margin Sales by business division1) in EUR mn 18% 5% E-Mobility Chassis Systems 31% Engine 47% Transmission 8,991 Systems Systems 64%4) 8,525 Sales FY2017: EUR 8,991 mn Sales split by customer mix 20
Slide 15: Automotive OEM product portfolio – Broad drivetrain know-how
4 Diversified business portfolio – Our three divisions 1 Automotive OEM product portfolio – Broad drivetrain know-how Engine systems 31% of Automotive OEM sales in 2017 Transmission systems 47% of Automotive OEM sales in 2017 E-Mobility Chassis systems 5% 18% of Automotive OEM sales in 2017 of Autom
Slide 16: Mobility for Tomorrow – Our E-mobility Strategy
4 Diversified business portfolio – Our three divisions 1 Mobility for Tomorrow – Our E-mobility Strategy ICE HEV EV Vision Powertrain Electrified Drivetrain Portfolio Global vehicle production [in mn units] 117 110 70% 102 12% 90 30% 4% 11% 33% 40% 95% 86% 55% 30% 2017 2020 e 2025 e 2030 e Source: I
Slide 17: E-Mobility – Content per vehicle
4 Diversified business portfolio – Our three divisions 1 E-Mobility – Content per vehicle excl. Aftermarket, Heavy Duty & Motorcycles Content per Vehicle 1) in EUR 1 ICE 2 HEV 3 BEV x 2.5 x 1.5 ~150 x 4.0 ~125 ~100 ~90 ~60 ~25 2016 2025 2016 2025 2016 2025 90 mn 56 mn 3 mn 39 mn 0.5 mn 16 mn Average
Slide 18: Schaeffler e-Axle transmission driving the Audi e-tron Quattro
4 Diversified business portfolio – Our three divisions 1 Automotive OEM – Schaeffler e-Axle transmission is driving the brand new Audi eTron Quattro Weight related torque density of electric car transmissions Front Axle Transmission with integrated Torque density Parking Lock Actuator [Nm/kg] Q6 etr
Slide 19: P2 Hybrid Modules: Variants & Portfolio Roadmap
4 Diversified business portfolio – Our three divisions 1 P2 Hybrid Modules: Variants & Portfolio Roadmap Generation 2 Generation 3 Generation 4 highly integrated Hybrid Modules for Mild-, integration of Start-up element to further integration of power electronics to further Full- and Plugin Hybrid a
Slide 20: P2 High Voltage Hybrid Module with integrated torque inverter
4 Diversified business portfolio – Our three divisions 1 P2 High Voltage Hybrid Module with integrated torque inverter Top facts of P2 HV Hybrid Module with integrated torque converter: ▪ High E-motor constant power up to 70 kW with active oil cooling at rotor and stator ▪ ICE torque up to 600 Nm; T
Slide 21: Automotive Aftermarket – At a glance
4 Diversified business portfolio – Our three divisions 2 Automotive Aftermarket – At a glance Sales and EBIT margin Sales by region3) in EUR mn Americas Europe 21% 3% China 2% Asia/Pacific 1,880 13%4) 73% 1,813 Sales FY2017: EUR 1,880 mn Sales split by channel OES business 2016 2017 2018e 2018 18% G
Slide 22: Growth drivers in the Independent Aftermarket – Components and Solutions
4 Diversified business portfolio – Our three divisions 2 Growth drivers in the Independent Aftermarket – Components and Solutions Components Solutions Outlook Traditional business with Complete sets and kits for Trends in OEM business fuel future replacements parts plug n' play repair solution
Slide 23: Our markets continue to grow – China offering great long-term potential
4 Diversified business portfolio – Our three divisions 2 Our markets continue to grow – China offering great long-term potential Vehicle population Key growth drivers Million units (PC/LCV) 425 1.2 1.4 bn Global vehicle fleet will grow 390 381 2016 2022 at 3.4% CAGR 2016-2020 335 400 310 300 V
Slide 24: Industrial – At a glance
4 Diversified business portfolio – Our three divisions 3 Industrial – At a glance Sales and EBIT margin Sales by region3) in EUR mn 15% 9% Asia/Pacific Greater China 18% 3,150 Americas Europe 23%4) 57% 3,000 Sales FY2017: EUR 3,150 mn Industrial sales by sector cluster 2016 2017 2018e Wind 2018 10%
Slide 25: Broad range of standard and customized products
4 Diversified business portfolio – Our three divisions 3 Broad range of standard and customized products Standard product business Ball Bearings Cylindrical Spherical Tapered Needle Roller Linear Plain bearings Mechatronics Systems Roller Bearings Roller Bearings Roller Bearings Bearings Technology
Slide 26: Business portfolio – From components to Industry 4.0
4 Diversified business portfolio – Our three divisions 3 Business porfolio – From components to Industry 4.0 Portfolio Region Sector split Channel Industry 4.0 services Wind Industry 4.0 Mechatronics Raw Materials Europe Aerospace OEM & MRO Railway Mechanical Systems Offroad Two Wheelers Americas Po
Slide 27: Use of cash – Focus on future growth and attractive dividend
5 Long-term value creation Use of cash – Focus on future growth and attractive dividend Our Cash Flow formula Key aspects + Operating Cash Flow1) Strong cash flow generation from operating business and 3 main uses of cash: Cash Δ Working Capital generation +/- 1 Dividend - Capex (Internal Growth)
Slide 28: M&A strategy – Focus on technology and execution
5 Long-term value creation M&A strategy – Focus on technology and execution 7 Search fields Key aspects (Power) E-Motor Electronics Clearly defined M&A strategy based on 7 search fields with Manufacturing Industry 4.0 / Mechatronics focus on technology, innovation and smaller add-on Competence acq
Slide 29: Steer by wire acquisition – Positioning our Chassis business
5 Long-term value creation Steer by wire acquisition – Positioning our Chassis business for autonomous driving growth potential Steer by wire – Key aspects SpaceDrive enables save autonomous driving via its redundant structure ▪ Steer by wire is a key-enabling technology for the fast-growing market
Slide 30: Elmotec Statomat acquisition – Another key step in our E-mobility strategy
5 Long-term value creation Elmotec Statomat acquisition – Another key step in our E-mobility strategy Elmotec Statomat – Key aspects Innovative technology & production processes ▪ Elmotec is a pioneer in the production of stator manufacturing machines and one of the leading suppliers of machines for
Slide 31: Elmotec Statomat acquisition – Closing the technology gap
5 Long-term value creation Elmotec Statomat acquisition – Closing the technology gap for mass production Stator Manufacturing Processes* in series production at Schaeffler today Rotor Manufacturing Processes* prototyping machines available at Schaeffler ext. supplier technology as of today Productio
Slide 32: Adapting execution to a more complex market environment
6 Summary and Outlook Key messages 1 FY 2018 guidance confirmed despite increasingly challenging and complex environment We are executing on our strategy – “Agenda 4 plus One” excellence program drives our 2 transformation, well on track Diversified business portfolio with focus on future drivers –
Slide 33: SCHAEFFLER
SCHAEFFLER SCHAEFFLER
Slide 34: Free Cash Flow before M&A Q3 at EUR 201 mn – Capex Ratio Q3 at 7.4%
Backup Free Cash Flow before M&A Q3 at EUR 201 mn – Capex Ratio Q3 at 7.4% Free Cash Flow FY 2017 Target: Key aspects in EUR mn FCF ~ EUR 500mn1) FCF before M&A at EUR 201 mn in Q3’18 (PY: EUR 333 mn), FCF -119 mn vs 9M 2017 conversion ratio 17% 333 Lower EBIT and higher inventory level as main
Slide 35: Working Capital ratio 18.7% of sales – Capex ratio 7.4% of sales in Q3
Backup Working Capital ratio 18.7% of sales – Capex ratio 7.4% of sales in Q3 Working capital1) Capex2) in EUR mn in EUR mn 400 306 299 295 289 2,820 2,756 2,733 262 2,737 2,672 279 2,575 2,342 873 857 1.2 1.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2018 2017 2018 In % of sales In % 8.6% 7.9%
Slide 36: Key figures by Group and division – new structure
Backup Key figures1) by Group and division – new structure Group Automotive Aftermarket in EUR mn in EUR mn Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Sales 3,574 3,472 3,434 3,541 3,551 3,642 3,521 Sales 484 444 506 446 446 479 476 Sales Growth
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