Schaeffler Ag · XETR:SHA0
Schaeffler — Schaeffler Ag Ord — Q2 2024 Earnings Presentation
41 slides from Schaeffler's earnings presentation, Aug 6, 2024
Slide 1: Q2 and H1 2024 Schaeffler AG earnings
Q2 and H1 2024 Schaeffler AG earnings August 6, 2024 Herzogenaurach Copyright Schaeffler AG, 2024 – All rights reserved. | 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 Q2 and H1 2024 3 Financial Results Q2 and H1 2024 4 Outlook
Slide 4: Schaeffler Group – Q2 results impacted by increasingly challenging market environment
1 OVERVIEW Schaeffler Group – Q2 results impacted by increasingly challenging market environment Key messages Sales growth1 Q2 Gross Margin Q2 1 Q2 Sales +4.2% – Outperformance in ATech, continued strong growth1 in VLS, sales decline in B&IS due to market environment +4.2% 21.0% 2 Q2 EBIT margin2 4.
Slide 5: Schaeffler Group Q2 2024 – Highlights and lowlights
1 OVERVIEW Schaeffler Group Q2 2024 – Highlights and lowlights Automotive Technologies Market environment Solid outperformance driven by strong growth1 in Lower automotive production and weaker-than- E-Mobility, earnings resilience due to stable expected end markets in various industrial sectors mat
Slide 6: Agenda
1 Overview 2 Business Highlights Q2 and H1 2024 3 Financial Results Q2 and H1 2024 4 Outlook
Slide 7: Sales Performance Q2 2024 – Good growth in Europe and Americas
2 BUSINESS HIGHLIGHTS Q2 AND H1 2024 Sales Performance Q2 2024 – Good growth1 in Europe and Americas Automotive Vehicle Lifetime Bearings & Technologies2 Solutions2 Industrial Solutions2 Q2 2024 1 % of Group Region Growth sales 42% 16% 40% Europe 45% +3.1% +27.1% -7.6% +4.8% Americas 23% +4.4% +30.6
Slide 8: Automotive Technologies – Q2 with strong growth in E-Mobility and solid EBIT margin
2 BUSINESS HIGHLIGHTS Q2 AND H1 2024 Automotive Technologies – Q2 with strong growth1 in E-Mobility and solid EBIT margin2 Key Aspects Sales EBIT2 in EUR mn in EUR mn E-Mobility growing double- digit1, growth path in Europe and Americas continued +1.5%1 -15 mn +2.2%1 3,534 -22 mn 3,508 Engine & Tran
Slide 9: Automotive Technologies – Solid H1 order intake in both mature and new business
2 BUSINESS HIGHLIGHTS Q2 AND H1 2024 Automotive Technologies – Solid H1 order intake in both mature and new business Key aspects Order intake1,2 in EUR bn Thereof 3.2 5.0 5.1 2.1 E-Mobility First nomination for variable damping system received from a 10.5 new mobility player in China 9.5 8.2 H2 4.1
Slide 10: Vehicle Lifetime Solutions – Q2 with both very strong sales growth and EBIT margin
2 BUSINESS HIGHLIGHTS Q2 AND H1 2024 Vehicle Lifetime Solutions – Q2 with both very strong sales growth1 and EBIT margin3 Key Aspects Sales EBIT3 High double-digit sales growth1 in EUR mn +17.6%1 in EUR mn driven by ongoing favorable +65 mn market demand and continued strong delivery performance +27
Slide 11: Vehicle Lifetime Solutions – Acceleration of product portfolio extension for electrified vehicles
2 BUSINESS HIGHLIGHTS Q2 AND H1 2024 Vehicle Lifetime Solutions – Acceleration of product portfolio extension for electrified vehicles Key aspects 5 NEW AUXILIARY WATER PUMP 4.1 mn ViO1 • 25% of the relevant car parc will have an electrified powertrain solution in 2030 • Additional 71 repair solutio
Slide 12: Bearings & Industrial Solutions – Q2 sales and EBIT impacted by weak market environment
2 BUSINESS HIGHLIGHTS Q2 AND H1 2024 Bearings & Industrial Solutions – Q2 sales and EBIT3 impacted by weak market environment and operational one-offs Key Aspects Sales EBIT3 in EUR mn in EUR mn Unchanged situation in sector -3.9%1 -105 mn -89 mn cluster Wind and softer demand -3.6%1 in Europe and C
Slide 13: Bearings & Industrial Solutions – Orderbook Industrial not indicating a near-term recovery
2 BUSINESS HIGHLIGHTS Q2 AND H1 2024 Bearings & Industrial Solutions – Orderbook Industrial not indicating a near-term recovery Orderbook Industrial 3-month1, 2 Orderbook 3M1 Sales2 Recent Order Wins yoy growth % 40 European industrial gearbox 30 manufacturer switched with majority of its demand for
Slide 14: Capital allocation – Differentiated steering, prioritization of Capex for growth business
2 BUSINESS HIGHLIGHTS Q2 AND H1 2024 Capital allocation – Differentiated steering, prioritization of Capex for growth business Investment1 allocation Key Aspects in EUR mn FY 2023 Q2 2023 Q2 2024 H1 2024 • Reinvestment Rate Target: Continued prioritization of E-Mobility business, whereas in mature b
Slide 15: Agenda
1 Overview 2 Business Highlights Q2 and H1 2024 3 Financial Results Q2 and H1 2024 4 Outlook
Slide 16: Sales – Good growth in Europe and Americas, very strong performance by Vehicle Lifetime Solutions
3 FINANCIAL RESULTS Q2 AND H1 2024 Sales – Good growth in Europe and Americas, very strong performance by Vehicle Lifetime Solutions Sales Key Aspects in EUR mn +3.3%1 • Automotive Technologies: +2.2% growth2 in Q2, driven by Europe +4.2%2 and Americas 4,152 4,056 4,062 4,043 4,085 4,191 • Vehicle L
Slide 17: Gross Profit – Stable gross profit development in Q2 yoy
3 FINANCIAL RESULTS Q2 AND H1 2024 Gross Profit – Stable gross profit development in Q2 yoy Gross Profit Q2 2023 vs. Q2 2024 Key Aspects in EUR mn • Pricing: Maintained pricing levels in ATech and VLS, price pressure in B&IS +16 +12 880 • Mix: Positive mix effect driven by higher share of division V
Slide 18: Overhead costs – Increased ratio due to business & integration activities
3 FINANCIAL RESULTS Q2 AND H1 2024 Overhead costs – Increased ratio due to business & integration activities Overhead costs Key Aspects in EUR mn +11.2% • R&D: Higher expenses related to E-Mobility and Chassis customer 692 684 projects 641 615 622 626 • Selling expenses: Higher logistic costs yoy, m
Slide 19: EBIT margin – Lower EBIT margin driven by Bearings & Industrial Solutions
3 FINANCIAL RESULTS Q2 AND H1 2024 EBIT margin1 – Lower EBIT margin driven by Bearings & Industrial Solutions Key Aspects EBIT1 • Automotive Technologies: EBIT margin1 impacted by higher costs in EUR mn for customer projects and unfavorable FX • Vehicle Lifetime Solutions: Very strong EBIT margin1 d
Slide 20: Automotive Technologies – Good outperformance, EBIT margin impacted by higher overhead expenses
3 FINANCIAL RESULTS Q2 AND H1 2024 Automotive Technologies – Good outperformance, EBIT margin3 impacted by higher overhead expenses Sales by business division yoy growth EBIT2 Q2 2023 vs. Q2 2024 in EUR mn Q2 2023 Q2 2024 ∆1 +19 E-Mobility 294 350 +19.5% Engine & Transmission 1,311 1,299 -0.6% 90 -1
Slide 21: Vehicle Lifetime Solutions – Very strong growth in all regions, EBIT margin clearly above PY
3 FINANCIAL RESULTS Q2 AND H1 2024 Vehicle Lifetime Solutions – Very strong growth1 in all regions, EBIT margin5 clearly above PY Sales by region yoy growth EBIT5 Q2 2023 vs. Q2 2024 in EUR mn Q2 2023 Q2 2024 ∆1 Europe 353 454 +27.1% +70 Americas 121 141 +30.6% -1 +5 119 Greater China 38 47 +25.7% -
Slide 22: Bearings & Industrial Solutions – Negative growth in Europe and China, EBIT margin significantly lower
3 FINANCIAL RESULTS Q2 AND H1 2024 Bearings & Industrial Solutions – Negative growth1 in Europe and China, EBIT margin2 significantly lower yoy Sales by region yoy growth EBIT2 Q2 2023 vs. Q2 2024 in EUR mn Q2 2023 Q2 2024 ∆1 Europe 779 718 -7.6% 131 Americas 349 358 +2.7% Greater China 380 351 -6.0
Slide 23: Net Income – EPS for H1 at prior year's level, ROCE at 10.7%
3 FINANCIAL RESULTS Q2 AND H1 2024 Net Income1 – EPS2 for H1 at prior year´s level, ROCE3 at 10.7% Net income1 Key Aspects in EUR mn -105 mn • Q2 Net income yoy impacted by lower EBIT and financial result • ROCE and Schaeffler Value Added negatively affected by lower EBIT 231 and higher capital empl
Slide 24: Free Cash Flow – Positive cash development in Q2
3 FINANCIAL RESULTS Q2 AND H1 2024 Free Cash Flow – Positive cash development in Q2 Free Cash Flow before M&A1 in EUR mn Reconciliation Q2 2024 in EUR mn -28 mn 421 -10 182 210 103 75 -24 -195 75 -111 -6 -73 EBITDA ∆ Net Capex Net Interest Taxes Others FCF Q2 2024 Working Q2 20241 -166 Capital Q1 20
Slide 25: Leverage ratio at 2.4x LTM EBITDA bsi – Technically impacted until full consolidation of Vitesco
3 FINANCIAL RESULTS Q2 AND H1 2024 Leverage ratio at 2.4x LTM EBITDA bsi – Technically impacted until full consolidation of Vitesco Net financial debt and Leverage ratio1 4,920 Key Aspects in EUR mn 4,613 • Gross debt higher yoy notably due to bond issuance for the financing 2.4x of the acquisition
Slide 26: Agenda
1 Overview 2 Business Highlights Q2 and H1 2024 3 Financial Results Q2 and H1 2024 4 Outlook
Slide 27: FY 2024 Combined Guidance updated – EBIT margin and Free Cash Flow adjusted
4 OUTLOOK FY 2024 Combined Guidance updated – EBIT margin3 and Free Cash Flow4 adjusted FY 2024 Combined Guidance1 Key Aspects • FY 2024 Group Guidance is based on: Schaeffler Group - Vitesco accounted for „at equity“ from acquisition in January until Q3 2024 FY 2023 H1 2024 FY 2024 included Actuals
Slide 28: Conclusion & Outlook – Challenging Q2, combined full year guidance adjusted
4 OUTLOOK Conclusion & Outlook – Challenging Q2, combined full year guidance adjusted 1 Financial performance – Robust performance in ATech despite challenging market conditions; VLS with continued strong contribution; B&IS impacted by weak markets and operational one-offs 2 Strong Balance Sheet – P
Slide 29: Financial calendar and selected IR events
4 OUTLOOK Financial calendar and selected IR events Roadshows & Conferences Financial calendar 2024/2025 with Top Management participation Aug 7 Citi Roadshow – Virtual Nov 5 9M 2024 Earnings Release Aug 21 Montega Investor Days – Hamburg Mar 5 FY 2024 Earnings Release Sep 19 UBS German Auto Trip –
Slide 30: Thank you
Thank you Investor Relations Contact Phone +49 9132 82-4440 Email ir@schaeffler.com Web www.schaeffler.com/ir Copyright Schaeffler AG, 2024 – All rights reserved. | PUBLIC
Slide 31: Backup
Aug 6, 2024 Q2 and H1 2024 Schaeffler AG earnings Copyright Schaeffler AG, 2024 – All rights reserved. | PUBLIC
Slide 32: At equity accounting Vitesco Technologies Group AG until September 30th 2024
BACKUP At equity accounting Vitesco Technologies Group AG until September 30th 2024 Subsequent measurement in H1 20241 Key aspects in EUR mn • Accounting driven by 1 Vitesco +29 earnings, 2 accounting policy harmonization and 3 PPA effects 1,269 • Effects shown represent 38.9% 1 -32 (shareholding) s
Slide 33: Key figures by Division
BACKUP Key figures by Division Adjusted comparative figures 2023 Automotive Technologies in EUR mn Bearings & Industrial Solutions in EUR mn Q1 23 Q2 23 Q3 23 Q4 23 FY 23 Q1 24 Q2 24 Q1 23 Q2 23 Q3 23 Q4 23 FY 23 Q1 24 Q2 24 Sales 1,778 1,730 1,748 1,780 7,035 1,770 1,764 Sales 1,787 1,769 1,714 1,6
Slide 34: Market assumptions
BACKUP Market assumptions Global LVP1 2024 Global LV Parc3 Industrial Production4 90.5 88.7 ~89 4.9% 4.9% World 43.7 46.8 43.6 45.1 World 2.8% 0.7% 0.8% 1.3% 1.3% -1.1% H1 H2 2023 H1 H2e 2024e 2024e Europe Americas Greater China Asia/Pacific Europe Americas Greater China Asia/Pacific S&P SHA2 FY 202
Slide 35: Key figures Q2 and H1 2024
BACKUP Key figures Q2 and H1 2024 Q2 2024 H1 2024 in EUR mn Q2 2023 Q2 2024 vs. Q2 2023 H1 2023 H1 2024 vs. H1 2023 +3.3% +0.8% Sales 4,056 4,191 8,208 8,276 +4.2%1 +2.0%1 Gross Profit 867 880 +13 mn 1,826 1,966 +140 mn Gross margin 21.4% 21.0% -0.4pp 22.2% 23.8% +1.6pp EBIT2 289 204 -85 mn 624 525
Slide 36: Automotive Technologies – Good Outperformance, EBIT margin stable
BACKUP Automotive Technologies – Good Outperformance, EBIT margin2 stable Sales by business division yoy growth EBIT2 H1 2023 vs. H1 2024 in EUR mn H1 2023 H1 2024 ∆1 E-Mobility 630 687 +10.3% +65 Engine & Transmission 2,646 2,616 -0.4% Chassis Systems 232 231 -0.3% -11 176 -35 161 Total 3,508 3,534
Slide 37: Vehicle Lifetime Solutions – Strong growth in all regions, EBIT margin clearly above PY
BACKUP Vehicle Lifetime Solutions – Strong growth1 in all regions, EBIT margin5 clearly above PY Sales by region yoy growth EBIT5 H1 2023 vs. H1 2024 in EUR mn H1 2023 H1 2024 ∆1 Europe 746 869 +14.7% +106 Americas 241 273 +24.2% -2 +2 +3 228 Greater China 72 88 +27.4% Asia/Pacific 70 79 +14.5% -44
Slide 38: Bearings & Industrial Solutions – Negative growth in Europe and China, EBIT margin below PY
BACKUP Bearings & Industrial Solutions – Negative growth1 in Europe and China, EBIT margin2 below PY Sales by region yoy growth EBIT2 H1 2023 vs. H1 2024 in EUR mn H1 2023 H1 2024 ∆1 Europe 1,554 1,451 -6.5% +32 Americas 696 715 +3.4% 290 Greater China 782 693 -7.9% -7 -38 Asia/Pacific 525 509 +0.3%
Slide 39: Net Income – EBIT reconciliation and special items
BACKUP Net Income1 – EBIT reconciliation and special items Reconciliation Q2 2024 in EUR mn Key aspects • Special items in Q2 mainly include integration costs for the Vitesco acquisition 204 • Financial result lower yoy due to higher interest payments 178 -26 -75 Special items by Division3 in EUR mn
Slide 40: Working Capital ratio 20.8% – Capex ratio 4.7% in Q2
BACKUP Working Capital ratio 20.8% – Capex ratio 4.7% in Q2 Working capital1 Capex2 in EUR mn in EUR mn +227 mn -3 mn 3,318 3,413 3,402 3,233 3,175 3,040 273 247 221 222 198 195 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2023 2023 2023 2023 2024 2024 2023 2023 2023 2023 2024 2024 in % of sales (LTM) in % o
Slide 41: Overview Corporate and Financing Structure
BACKUP Overview Corporate and Financing Structure Financing structure as of June 30, 2024 A IHO Verwaltungs GmbH Corporate structure (simplified) as of June 30, 2024 Debt instrument Nominal Nominal Interest Maturity Rating USD mn EUR1 mn Fitch/Moody’s/S&P Loans RCF (EUR 800 mn) - 0 E+3.75% Jun-26 No