Schaeffler Ag · XETR:SHA0
Schaeffler — Schaeffler Ag Ord — Q4 2023 Earnings Presentation
50 slides from Schaeffler's earnings presentation, Mar 5, 2024
Slide 1: Q4 and FY 2023 Schaeffler AG earnings
Q4 and FY 2023 Schaeffler AG earnings March 5, 2024 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
1 Overview 2 Business Highlights Q4 and FY 2023 3 Financial Results Q4 and FY 2023 4 Outlook Mar 5, 2024 Q4 and FY 2023 Schaeffler AG earnings 3 PUBLIC
Slide 4: Schaeffler Group with solid performance in FY
1 OVERVIEW Schaeffler Group with solid performance in FY 2023 Key messages FY 2023 Sales growth1 FY EBIT margin2 FY FY Sales1 +5.8% – Good growth driven by positive volume 1 and pricing +5.8% 7.3% FY EBIT margin2 7.3% – Margin increase driven by 2 EUR 16,313 mn FY 2022: 6.6% Automotive Divisions per
Slide 5: Schaeffler Group FY 2023 – Highlights and lowlights
1 OVERVIEW Schaeffler Group FY 2023 – Highlights and lowlights • Group performance • Group Topline Strong portfolio management across all Divisions Automotive Technologies temporarily lagging global paying off, leading to resilient earnings, strong vehicle production growth, whereas in Industrial ba
Slide 6: Business Highlights Q4 and FY 2023
1 Overview 2 Business Highlights Q4 and FY 2023 3 Financial Results Q4 and FY 2023 4 Outlook Mar 5, 2024 Q4 and FY 2023 Schaeffler AG earnings 6 PUBLIC
Slide 7: Group – Positive sales and EBIT development
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Group – Positive sales and EBIT development Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn All Regions and Divisions growing in 2023, Europe and Automotive +5.8%1 Aftermarket double-digit. Positive +141 mn volume and pricing 16,313 FY EBIT margin2 above PY driv
Slide 8: Sales Performance FY 2023 – All Divisions and Regions growing
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Sales Performance FY 2023 – All Divisions and Regions growing Automotive Automotive Industrial Technologies Aftermarket FY 2023 1 % of Group Region Growth Sales 60% 14% 26% Europe 44% +12.4% +10.3% +7.0% +10.5% Americas 22% -2.8% +12.0% +11.3% +2.0% Greater
Slide 9: Automotive Technologies – Market growth and pricing continued to push profitability
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Automotive Technologies – Market growth and pricing continued to push profitability Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn Performance driven by Mature Business in FY 2023. Very promising +5.4%1 order intake, both in Mature and New business +143 mn +5.3
Slide 10: Automotive Technologies – E-Mobility Order Intake of EUR 5.1 bn in 2023
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Automotive Technologies – E-Mobility Order Intake of EUR 5.1 bn in 2023, overachieving our EUR 2-3 bn target Key aspects Order Intake1 in EUR bn Thereof 2.7 3.2 5.0 5.1 E-Mobility Introducing our innovative DHT platform into the strongly growing China PHEV m
Slide 11: Automotive Aftermarket – Q4 with further business growth and strong EBIT margin
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Automotive Aftermarket – Q4 with further business growth and strong EBIT margin2 Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn +107 mn Strong sales growth1 on high comps, market environment remains favorable 367 +11.8%1 Sales growth1 driven by 2,253 260 eComme
Slide 12: Automotive Aftermarket – Tailormade repair solutions for HEVs
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Automotive Aftermarket – Tailormade repair solutions for HEVs from the leading expert of engine systems KEY ASPECTS • By 2025, 35% of new car registrations are expected to be HEVs • We provide innovative repair solutions for workshops to handle the increasin
Slide 13: Industrial – FY EBIT margin strongly impacted by market-driven volume decline
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Industrial – FY EBIT margin2 strongly impacted by market-driven volume decline Sales EBIT2 KEY ASPECTS in EUR mn in EUR mn Q4 sales strongly impacted by -108 mn economic slowdown; FY Sales increase driven by Ewellix +3.9%1 493 Gross margin development driven
Slide 14: Industrial – Orderbook still below prior-year level, but market recovery slowly emerging
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Industrial – Orderbook still below prior-year level, but market recovery slowly emerging Orderbook 3-month1, 2 Orderbook 3M1 Sales2 Key aspects yoy growth % 40 Record orderbook for Schaeffler’s 30 Aerospace sector by both market share wins, and improved fund
Slide 15: FY 2023 Guidance achieved
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 FY 2023 Guidance achieved – Delivering robust profitability and cash generation FY 2023 Guidance1 Schaeffler Group Automotive Technologies Automotive Aftermarket Industrial Guidance1 Actuals Guidance1 Actuals Guidance1 Actuals Guidance1 Actuals Sales Outperf
Slide 16: Capital allocation – Continued prioritization of Capex for growth business
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Capital allocation – Continued prioritization of Capex for growth business Investment1 allocation KEY ASPECTS in EUR mn • Reinvestment Rate: Continued prioritization of investments in FY 21 FY 22 Q4 22 Q4 23 FY 23 Industrial division and New Business in Auto
Slide 17: Transaction update – Steps towards becoming a leading Motion Technology Company
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Transaction update – Steps towards becoming a leading Motion Technology Company Exchange Ratio Target shareholding structure post-transaction 1:11.4 1 IHO Holding Free Float ~30% ~70% Common Shares Common Shares • Agreement reached between Schaeffler AG and
Slide 18: Transaction update – Structured steering of integration preparation, milestones on track
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Transaction update – Structured and clear steering of integration preparation, milestones on track Indicative Timeline Integration • Constructive steering of the integration process via joint weekly Integration Committee Meetings, productive discussions at e
Slide 19: Sustainability – We successfully delivered on our targets in 2023
2 BUS INES S H IGH LIGHTS Q4 AND F Y 2023 Sustainability – We successfully delivered on our targets in 2023 Climate Neutral Production Freshwater Withdrawal -23.9% 1 Target: Climate neutral production (Scope 1+2) by 2030 -12.9% Target: 20% reduction of freshwater withdrawal by vs. 2022 vs. base year
Slide 20: Financial Results Q4 and FY 2023
1 Overview 2 Business Highlights Q4 and FY 2023 3 Financial Results Q4 and FY 2023 4 Outlook Mar 5, 2024 Q4 and FY 2023 Schaeffler AG earnings 20 PUBLIC
Slide 21: Sales – Growth in Q4 driven by Automotive divisions
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Sales – Growth in Q4 driven by Automotive divisions Sales KEY ASPECTS in EUR mn +0.6%1 +3.3%2 • Automotive Technologies: 5.3%2 growth in Q4 driven by strong growth in Europe and China 4,242 4,019 4,152 4,056 4,062 4,043 3,758 3,790 • Automotive Aftermarket: 4.2%
Slide 22: Gross Profit – Positive pricing, unfavorable FX
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Gross Profit – Positive pricing, unfavorable FX Gross Profit Q4 2022 vs. Q4 2023 KEY ASPECTS in EUR mn • Pricing: Maintained pricing levels • Volumes: Negative sales volume effects driven by Automotive +19 893 Aftermarket and Industrial -15 -2 820 • Production C
Slide 23: Overhead costs – Overhead cost ratio flat vs 2022
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Overhead costs – Overhead cost ratio flat vs 2022 despite M&A related expenses Overhead costs KEY ASPECTS in EUR mn +0.3% • R&D: Slightly lower R&D expenses due to higher capitalization with E-Mobility projects ramp-up 648 666 645 650 622 628 633 604 • Selling e
Slide 24: EBIT margin – Seasonality pattern broadly in line with 2022
3 F INANCIAL RES ULTS Q4 AND F Y 2023 EBIT margin1 – Seasonality pattern broadly in line with 2022, higher FY margin EBIT1 KEY ASPECTS in EUR mn - 11 mn • Automotive Technologies: EBIT margin1 sequentially lower – but improved yoy – supported by good momentum in mature business 355 340 336 • Automot
Slide 25: Automotive Technologies – Strong support by Mature Business
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Automotive Technologies – Strong support by Mature Business Sales by business division yoy growth EBIT2 Q4 2022 vs. Q4 2023 in EUR mn Q4 2022 Q4 2023 ∆1 E-Mobility 356 345 -0.8% +19 Engine & Transmission 1,302 1,333 +5.2% +19 86 Bearings 670 692 +6.3% 78 Chassis
Slide 26: Automotive Aftermarket – Continued strong performance
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Automotive Aftermarket – Continued strong performance Sales by region yoy growth EBIT5 Q4 2022 vs. Q4 2023 in EUR mn Q4 2022 Q4 2023 ∆1 Europe 356 359 +0.2% Americas 107 110 +7.9% +4 77 +6 Greater China 24 33 +43.8% +9 Asia/Pacific 36 35 +5.3% 59 0 0 Total 523 5
Slide 27: Industrial – Double-digit sales decline in Wind and China continued
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Industrial – Double-digit sales decline1 in Wind and China continued Sales by region yoy growth EBIT2 Q4 2022 vs. Q4 2023 in EUR mn Q4 2022 Q4 2023 ∆1 Europe 448 455 +2.2% Americas 194 204 +10.6% 97 Greater China 277 209 -20.1% Asia/Pacific 147 146 +4.8% Total 1
Slide 28: Net Income – FY EPS at EUR 0.47, impacted by Vitesco transaction accounting
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Net Income1 – FY EPS² at EUR 0.47 technically, impacted by accounting related to Vitesco transaction Net income1 KEY ASPECTS in EUR mn -189 mn • Q4 2023 Net income1 lower yoy on higher special items from Vitesco transaction 226 • Negative tender offer (EUR -188
Slide 29: Free Cash Flow – FY guidance beat with EUR 421 mn in 2023
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Free Cash Flow – FY guidance beat with EUR 421 mn in 2023 despite increasing Capex Free Cash Flow before M&A1 in EUR mn Reconciliation Q4 2023 in EUR mn -34 mn +206 245 210 240 244 182 210 +214 103 14 -273 -89 -93 -73 EBITDA ∆ Net Capex Net Interest Taxes Others
Slide 30: Dividend – Proposed dividend EUR 45 cents, Payout Ratio at 47%
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Dividend – Proposed dividend EUR 45 cents1, Payout Ratio at 47%2 Dividend and payout ratio2| in % KEY ASPECTS EUR per common non-voting share • EUR 45 cents1 dividend proposed, payout ratio 47%2 • Future payout policy corridor of 40 to 60% of Net Income before s
Slide 31: Net debt of EUR 3.2 bn – Leverage ratio at 1.5x
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Net debt of EUR 3.2 bn – Leverage ratio at 1.5x Net financial debt and Leverage ratio1 KEY ASPECTS in EUR mn 3,231 3,189 3,072 • Gross debt sequentially higher in Q4 2023 due to cash 2,999 securitization of Total Return Swap (EUR 261 mn) 2,552 2,331 2,235 1,992
Slide 32: Transition year 2024 – We will adapt our operating model and reporting
3 F INANCIAL RES ULTS Q4 AND F Y 2023 Transition year 2024 – We will adapt our operating model and reporting in the transition to Schaeffler New Transition year 2024 KEY ASPECTS Merger Closing Expected 1• Schaeffler transitory operating model from Q1 2024: • Automotive Aftermarket and Industrial alr
Slide 33: Outlook
1 Overview 2 Business Highlights Q4 and FY 2023 3 Financial Results Q4 and FY 2023 4 Outlook Mar 5, 2024 Q4 and FY 2023 Schaeffler AG earnings 33 PUBLIC
Slide 34: FY 2024 Guidance – Until the merger closes, we will guide only on Group level
4 OUTLOOK FY 2024 Guidance – Until the merger closes, we will guide only on Group level FY 2024 Guidance1 KEY ASPECTS • In transition year 2024 we will only guide Schaeffler Group on Group level • FY 2024 Group Guidance is based on: FY 2023 FY 2024 − Vitesco accounted for „at equity“ from Actuals Gu
Slide 35: Conclusion & Outlook – Strong basis for building the leading Motion Technology company
4 OUTLOOK Conclusion & Outlook 1 Financial Performance – Good execution in FY 2023, strong cash generation and robust balance sheet. Our balanced business across Divisions and Regions proving its resilience 2 Outlook – 2024 expected to remain a challenging year from a macroeconomic perspective Stron
Slide 36: Financial calendar and selected IR events
4 OUTLOOK Financial calendar and selected IR events Roadshows & Conferences Financial calendar 2024 with Top Management participation Mar 6 Roadshow – Hamburg, Warburg Apr 25 Virtual AGM Mar 7 Roadshow – Frankfurt, Oddo BHF May 7 Q1 2024 Earnings Release Mar 19 Auto Conference – Paris, BNP Paribas A
Slide 37: Thank you
Thank you Investor Relations Contact Phone +49 9132 82-4440 Email ir@schaeffler.com Web www.schaeffler.com.ir Mar 5, 2024 Q4 and FY 2023 Schaeffler AG earnings 37 PUBLIC
Slide 38: Mar 5, 2024 Q4 and FY 2023 Schaeffler AG earnings
Mar 5, 2024 Q4 and FY 2023 Schaeffler AG earnings 38 PUBLIC
Slide 39: Market assumptions and implications – Environment to remain challenging in 2024
BACKUP Market assumptions and implications – Environment to remain challenging in 2024 Automotive Technologies – Global LVP1 2024 Vehicle Lifetime Solutions – Global LV Parc3 Bearings & Industrial Solutions – Industrial Production4 90.1 89.6 ~90 5.4% 4.4% World 2.5% 2.6% World 21.4 22.2 22.6 23.9 0.
Slide 40: Key figures Q4 and FY 2023
BACKUP Key figures Q4 and FY 2023 Q4 2023 FY 2023 in EUR mn Q4 2022 Q4 2023 vs. Q4 2022 FY 2022 FY 2023 vs. FY 2022 +0.6% +3.2% Sales 4,019 4,043 15,809 16,313 +3.3%1 + 5.8%1 Gross Profit 893 820 -72 mn 3,579 3,596 +17 mn Gross margin 22.2% 20.3% -1.9pp 22.6% 22.0% -0.6pp EBIT2 233 222 -11 mn 1,046
Slide 41: Sales Performance Q4 2023 – Strong polarization across Regions and Divisions
BACKUP Sales Performance Q4 2023 – Strong polarization across Regions and Divisions Automotive Automotive Industrial Technologies Aftermarket Q4 2023 1 % of Group Region Growth Sales 62% 13% 25% Europe 45% +15.6% +0.2% +2.2% +8.8% Americas 21% -9.6% +7.9% +10.6% -3.0% Greater 21% +7.8% +43.8% -20.1%
Slide 42: Automotive Technologies – Strong margin driven by good momentum in mature business
BACKUP Automotive Technologies – Strong margin2 driven by good momentum in mature business Sales by business division yoy growth EBIT2 FY 2022 vs. FY 2023 in EUR mn FY 2022 FY 2023 ∆1 E-Mobility 1,346 1,312 +0.0% +62 435 Engine & Transmission 5,153 5,306 +5.3% +19 +89 -26 Bearings 2,625 2,697 +5.6%
Slide 43: Automotive Aftermarket – Double-digit sales growth, very strong EBIT margin
BACKUP Automotive Aftermarket – Double-digit sales growth1, very strong EBIT margin5 Sales by region yoy growth EBIT5 FY 2022 vs. FY 2023 in EUR mn FY 2022 FY 2023 ∆1 Europe 1,358 1,497 +10.3% +136 Americas 434 478 +12.0% +10 367 +2 Greater China 117 139 +28.7% -1 Asia/Pacific 132 139 +11.8% -39 260
Slide 44: Industrial – All Regions growing except China, EBIT margin below prior year
BACKUP Industrial – All Regions growing except China, EBIT margin2 below prior year Sales by region yoy growth EBIT2 FY 2022 vs. FY 2023 in EUR mn FY 2022 FY 2023 ∆1 Europe 1,756 1,867 +7.0% Americas 742 800 +11.3% 493 Greater China 1,156 1,009 -6.3% Asia/Pacific 617 612 +5.3% -25 +31 385 -26 Total
Slide 45: Net Income – EBIT reconciliation and special items
BACKUP Net Income1 – EBIT reconciliation and special items Reconciliation FY 2023 in EUR mn KEY ASPECTS • Special items amounted to EUR 353 mn in FY, mainly related to valuation of energy forward contracts and expenses from recognizing the obligation to acquire Vitesco shares tendered 1,187 under th
Slide 46: Working Capital ratio 18.6% – Capex ratio 6.7% in Q4
BACKUP Working Capital ratio 18.6% – Capex ratio 6.7% in Q4 Working capital1 Capex2 in EUR mn in EUR mn +54 mn +33 mn 3,368 3,224 3,309 3,184 3,165 2,976 3,030 2,803 273 240 247 219 221 198 175 156 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 in % o
Slide 47: Automotive Technologies outperformance by quarters
BACKUP Automotive Technologies (AT) outperformance by quarters Adjusted comparative figures 2022 FY 23 Outperformance: -4.0pp Q1 23 Q2 23 Q3 23 Q4 23 Outper- Outper- Outper- Outper- S&P1 AT2 formance S&P1 AT2 formance S&P1 AT2 formance S&P1 AT2 formance World +7.4% +6.0% -1.4pp +16.8% +10.7% -6.1pp
Slide 48: 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 Q2 23 Q3 23 Q4 23 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Sales 3,758 3,790 4,242 4,019 4,152 4,056 4,062 4,043 Sales 464 506 548 523 582
Slide 49: Overview Sustainability Ratings – Strong track record
BACKUP Overview Sustainability Ratings – Strong track record Climate Change Water Security 100 A A A A A- A- A A- 75 A- A- B A- 75 76 79 B B- B B- 50 60 65 B- B- 50 25 43 C D D C C- C- D D 0 D D D- D- 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022
Slide 50: Overview Corporate and Financing Structure
BACKUP Overview Corporate and Financing Structure Financing structure as of December 31, 2023 Corporate structure (simplified) as of December 31, 2023 A IHO Verwaltungs GmbH Debt instrument Nominal Nominal Interest Maturity Rating USD mn EUR1 mn Fitch/Moody’s/S&P INA-Holding Schaeffler Loans RCF (EU