Schaeffler Ag · XETR:SHA0
Schaeffler — Schaeffler Ag Ord — Q1 2023 Earnings Presentation
42 slides from Schaeffler's earnings presentation, May 9, 2023
Slide 1: Q1 2023 Schaeffler AG earnings
Q1 2023 Schaeffler AG earnings May 9, 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: Agenda
1 Overview 2 Business Highlights Q1 2023 3 Financial Results Q1 2023 4 Outlook May 9, 2023 PUBLIC
Slide 4: Schaeffler Group with strong Sales growth and good performance in Q1 2023
1 OVERVIEW Schaeffler Group with strong Sales growth and good performance in Q1 2023 Key messages Q1 2023 Sales growth1 Q1 Gross Margin Q1 1 Q1 Sales1 +10.4% – All Divisions growing thanks to price and volume; Region Europe leading with double-digit growth Q1 Gross margin 23.7% – Mainly driven by ex
Slide 5: Sales Performance Q1 2023 – Growth across all Divisions and Regions
1 OVERVIEW Sales Performance Q1 2023 – Growth across all Divisions and Regions Automotive Automotive Industrial Technologies Aftermarket Q1 2023 1 % of Group Region Growth Sales 59% 14% 27% Europe 45% +15.1% +30.3% +12.2% +17.3% Americas 22% +0.8% +15.9% +14.4% +5.4% Greater 20% -8.2% +17.2% +19.1%
Slide 6: Schaeffler Group Q1 2023 – Highlights and lowlights
1 OVERVIEW Schaeffler Group Q1 2023 – Highlights and lowlights • Automotive Technologies • Outperformance Automotive Americas Portfolio strategy paying off – Continued strong In Automotive Technologies negative growth1 in E-Mobility and Chassis; Half of FY outperformance in the Americas Region due t
Slide 7: Agenda – Business Highlights Q1 2023
1 Overview 2 Business Highlights Q1 2023 3 Financial Results Q1 2023 4 Outlook May 9, 2023 PUBLIC
Slide 8: Automotive Technologies – Moderate Sales growth, EBIT margin improved
2 BUS INES S H IGH LIGHTS Q1 2023 Automotive Technologies – Moderate Sales growth1, EBIT margin2 improved Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn Moderate Sales growth1 of 6.0% driven by Europe (+15.1%) and supported by all Business +6.0%1 +24 mn Divisions; strong growth in E-Mobility, Chassis w
Slide 9: Automotive Technologies – Order intake E-Mobility on track for annual target
2 BUS INES S H IGH LIGHTS Q1 2023 Automotive Technologies – Order intake E-Mobility on track for annual target of EUR 2 - 3bn Business Highlights Order Intake1 in EUR bn Thereof 2.7 3.2 5.0 0.9 Expansion of 2in1 E-Axle business E-Mobility with new project nomination Schaeffler is entering Indian EV
Slide 10: Automotive Aftermarket – Exceptional double-digit Sales growth, EBIT Margin significantly improved
2 BUS INES S H IGH LIGHTS Q1 2023 Automotive Aftermarket – Exceptional double-digit Sales growth1, EBIT Margin2 significantly improved Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn Exceptionally high double-digit Sales growth1 vs. low comps, +25.7%1 +39 mn driven by strong demand, pricing and reductio
Slide 11: Automotive Aftermarket – Leading market position and enhanced logistical performance
2 BUS INES S H IGH LIGHTS Q1 2023 Automotive Aftermarket – Leading market position and enhanced logistical performance Leading market position Logistical performance • Innovative repair solutions for Transmission, Engine and • Strong regional footprint as growth enabler Chassis applications for wide
Slide 12: Industrial – Double-digit Sales growth, EBIT margin includes Ewellix PPA amortization
2 BUS INES S H IGH LIGHTS Q1 2023 Industrial – Double-digit Sales growth1, EBIT margin2 includes Ewellix PPA amortization Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn +15 mn Strong Sales growth1 (+13.4%), +13.4%1 including Ewellix contribution; Greater China and Americas driving growth, double-digit
Slide 13: Industrial – Orderbook growth further declining but still positive
2 BUS INES S H IGH LIGHTS Q1 2023 Industrial – Orderbook growth further declining but still positive Orderbook1, 2 3-month Orderbook 3M1 Sales3 Business Highlights yoy growth % 40 Expanding the service portfolio with condition monitoring based on 30 electrical signal diagnosis as well as intelligent
Slide 14: Capital allocation – Continued prioritization of Capex for growth business
2 BUS INES S H IGH LIGHTS Q1 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 Q1 2022 Q1 2023 division and BD E-Mobility; clearly <1.0 in BD
Slide 15: M&A – We continue to expand our ecosystem in a focused way
2 BUS INES S H IGH LIGHTS Q1 2023 M&A – We continue to expand our ecosystem in a focused way, ECO-Adapt acquisition by Industrial in Q1 M&A Radar Collaborations and partnerships Automotive Technologies and Automotive Aftermarket Hydrogen Power Mechatronics electronics and systems & Electronics manuf
Slide 16: Agenda – Financial Results Q1 2023
1 Overview 2 Business Highlights Q1 2023 3 Financial Results Q1 2023 4 Outlook May 9, 2023 PUBLIC
Slide 17: Sales – All Regions and Divisions growing, strong performance by Automotive Aftermarket
3 F INANCIAL RES ULTS Q1 2023 Sales – All Regions and Divisions growing, strong performance by Automotive Aftermarket Sales KEY ASPECTS in EUR mn +10.5%1 +10.4%2 • Automotive Technologies: Strong performance by Regions Europe and Asia/Pacific, declining Sales2 in Greater China (-8.2%) 4,242 4,019 4,
Slide 18: Gross Profit – Positive Pricing, Volume and Mix effects in Q1 2023
3 F INANCIAL RES ULTS Q1 2023 Gross Profit – 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 i
Slide 19: Overhead costs – Overhead cost increased yoy, driven by higher Selling expenses
3 F INANCIAL RES ULTS Q1 2023 Overhead costs – Overhead cost increased yoy, driven by higher Selling expenses Overhead costs KEY ASPECTS in EUR mn +10.3% • R&D: Slight increase in R&D cost driven by innovation projects in the Industrial division 649 666 622 628 604 • Selling expenses: Higher Selling
Slide 20: EBIT margin – Good margin level driven by extraordinary strong Automotive Aftermarket
3 F INANCIAL RES ULTS Q1 2023 EBIT margin1 – Good margin level driven by extraordinary strong Automotive Aftermarket EBIT1 KEY ASPECTS in EUR mn +1.2pp • Automotive Technologies: EBIT margin1 improved sequentially and yoy, driven by price and volume effects 355 336 • Automotive Aftermarket: EBIT mar
Slide 21: Automotive Technologies – All Business Divisions growing, improved EBIT margin
3 F INANCIAL RES ULTS Q1 2023 Automotive Technologies – All Business Divisions growing1, improved EBIT margin2 Sales by business division yoy growth EBIT2 Q1 2022 vs. Q1 2023 in EUR mn Q1 2022 Q1 2023 ∆1 E-Mobility 307 336 +9.5% +5 105 Engine & Transmission 1,257 1,340 +5.8% +15 Bearings 643 659 +2.
Slide 22: Automotive Aftermarket – Double-digit Sales growth across all Regions, strong EBIT margin expansion
3 F INANCIAL RES ULTS Q1 2023 Automotive Aftermarket – Double-digit Sales growth1 across all Regions, strong EBIT margin2 expansion Sales by region yoy growth EBIT5 Q1 2022 vs. Q1 2023 in EUR mn Q1 2022 Q1 2023 ∆1 Europe 306 394 +30.3% Americas 99 120 +15.9% +62 0 Greater China 30 34 +17.2% +3 103 A
Slide 23: Industrial – Growth across all Regions and Market Clusters, increased EBIT
3 F INANCIAL RES ULTS Q1 2023 Industrial – Growth1 across all Regions and Market Clusters, increased EBIT2 yoy Sales by region yoy growth EBIT2 Q1 2022 vs. Q1 2023 in EUR mn Q1 2022 Q1 2023 ∆1 Europe 427 477 +12.2% Americas 170 201 +14.4% +49 Greater China 255 297 +19.1% -9 +12 Asia/Pacific 128 150
Slide 24: Net Income – EPS at EUR 0.19, ROCE reached 12.5%
3 F INANCIAL RES ULTS Q1 2023 Net Income1 – EPS² at EUR 0.19, ROCE³ reached 12.5% Net income1 KEY ASPECTS in EUR mn • Q1 2023 Net income1 slightly below Q1 2022, mainly related to -7 mn valuation of energy forward contracts 169 • ROCE³ and Schaeffler Value Added4 sequentially improved 136 140 129 •
Slide 25: FCF – Q1 2023 impacted by front-loaded cash-outs for restructuring
3 F INANCIAL RES ULTS Q1 2023 FCF – Q1 2023 impacted by front-loaded cash-outs for restructuring, German inflation compensation bonus Free Cash Flow before M&A1 in EUR mn Reconciliation Q1 2023 in EUR mn 493 -87 mn 240 244 -210 14 -221 -37 -92 -8 -73 -73 EBITDA ∆ Net Capex Net Interest Taxes Others
Slide 26: Net debt of EUR 3.0 bn – Schaeffler credit rating upgraded to Investment grade
3 F INANCIAL RES ULTS Q1 2023 Net debt of EUR 3.0 bn – Schaeffler credit rating upgraded to Investment grade (Baa3) by Moody’s Net financial debt and Leverage ratio1 KEY ASPECTS in EUR mn 2,999 • Leverage ratio increased to 1.4x due to the Ewellix acquisition 2,552 • Term Loan (EUR 500 mn) drawn dur
Slide 27: Agenda – Outlook
1 Overview 2 Business Highlights Q1 2023 3 Financial Results Q1 2023 4 Outlook May 9, 2023 PUBLIC
Slide 28: Market assumptions broadly unchanged – Environment assumed to remain challenging in 2023
4 OUTLOOK Market assumptions broadly unchanged – Environment assumed to remain challenging in 2023 Automotive Technologies – Global LVP1 2023 Automotive Aftermarket – Global LV Parc3 Industrial – Industrial Production4 ~82- 3.2% 82.3 85.5 83.9 World 5.3% 1.3% 0.4% 2.5% World 19.9 19.0 21.5 21.9 21.1
Slide 29: FY 2023 Guidance confirmed – Good Q1 but we remain cautious
4 OUTLOOK FY 2023 Guidance confirmed – Good Q1 but we remain cautious on market development FY 2023 Guidance Schaeffler Group Automotive Technologies Automotive Aftermarket Industrial Guidance Guidance Guidance Guidance FY 20231 FY 2023 FY 2023 FY 2023 Sales Outperformance growth2 5 – 8% 5 – 7% 9 –
Slide 30: Conclusion & Outlook – On track to deliver our 2025 Roadmap mid-term targets
4 OUTLOOK Conclusion & Outlook – Good Q1, Guidance confirmed, strong Balance Sheet 1 Good Q1 performance – Sales growth across all Divisions and Regions, good Group profitability driven by Automotive Aftermarket and Automotive Technologies 2 Solid cash generation in Q1 – Even considering the restruc
Slide 31: Financial calendar and selected IR events
4 OUTLOOK Financial calendar and selected IR events Roadshows & Conferences Financial calendar 2023 with Top Management participation May 10 Roadshow – Frankfurt, DACH, ODDO May 9 Q1 2023 Earnings Release May 11 Roadshow – London, J. P. Morgan Aug 2 H1 2023 Earnings Release May 12 Credit Conference
Slide 32: Thank you
Thank you Investor Relations Contact Phone +49 9132 82-4440 Email ir@schaeffler.com Web www.schaeffler.com/ir May 9, 2023 32 PUBLIC
Slide 33: Backup
May 9, 2023 Q1 2023 Schaeffler AG earnings PUBLIC
Slide 34: 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 35: 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 36: 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 37: Key figures Q1 2023
BACKUP Key figures Q1 2023 Q1 2023 in EUR mn Q1 2022 Q1 2023 vs. Q1 2022 +10.5% Sales 3,758 4,152 +10.4%1 Gross Profit 871 984 +113 mn Gross margin 23.2% 23.7% +0.5pp EBIT2 258 336 +78 mn EBIT margin2 6.9% 8.1% +1.2pp Net income3 136 129 -7 mn EPS4 (in EUR) 0.21 0.19 -0.02 Schaeffler Value Added5 25
Slide 38: Net Income – EBIT reconciliation and special items
BACKUP Net Income1 – EBIT reconciliation and special items Reconciliation Q1 2023 in EUR mn KEY ASPECTS • Special items amounted to EUR 92 mn in Q1, mainly related to valuation of energy forward contracts 336 • Financial Result lower yoy due to higher interest payments and higher expenses for intere
Slide 39: Working Capital ratio 19.9% – Capex ratio 5.3% in Q1
BACKUP Working Capital ratio 19.9% – Capex ratio 5.3% in Q1 Working capital1 Capex2 in EUR mn in EUR mn +421 mn +65 mn 3,368 3,224 3,184 2,976 2,803 240 219 221 175 156 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022 2022 2022 2022 2023 2022 2022 2022 2022 2023 in % of Sales (LTM) in % of Sales 20.0% 22.1% 22.0%
Slide 40: Automotive Technologies (AT) outperformance by quarters
BACKUP Automotive Technologies (AT) outperformance by quarters Adjusted comparative figures 2022 YTD Outperformance: +0.3pp Q1 23 Outper- S&P1 AT2 formance World +5.7% +6.0% +0.3pp Europe +13.7% +15.1% +1.4pp Americas +10.0% +0.8% -9.2pp Greater China -7.2% -8.2% -0.9pp Asia/Pacific +11.3% +15.5% +4
Slide 41: 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 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Sales 3,758 3,790 4,242 4,019 4,152 Sales 464 506 548 523 582 Sales Growth1 +1.9% +4.4% +20.2% +11.8% +10.4% Sales G
Slide 42: Overview Corporate and Financing Structure
BACKUP Overview Corporate and Financing Structure Corporate structure (simplified) as of March 31, 2023 Financing structure as of March 31, 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