Schaeffler Ag · XETR:SHA0
Schaeffler — Q1 2021 Earnings Presentation
48 slides from Schaeffler's earnings presentation, May 12, 2021
Slide 1: Q1 2021 Schaeffler AG earnings
Q1 2021 Schaeffler AG earnings Earnings Call May 12, 2021 Herzogenaurach
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 Overview 2 Business Highlights Q1 2021 3 Financial Results Q1 2021 4 Outlook May 12, 2021 Q1 2021 Schaeffler AG earnings 3
Slide 4: Strong Q1 2021 – Sales growth driven by China, double-digit margins in all divisions
1 Overview Strong Q1 2021 – Sales growth driven by China, double-digit margins in all divisions Key messages Sales growth1 Gross margin Q1 sales +11.2%1, with recovery in Greater China in Automotive 1 Technologies as main driver (+74%1) +11.2% 26.9% Q1 Gross margin with positive yoy development driv
Slide 5: Schaeffler Group Q1 2021 – Highlights and lowlights
1 Overview Schaeffler Group Q1 2021 – Highlights and lowlights All regions growing in Q1, only Europe flattish; Region Covid-19 pandemic situation in many European countries China with outstanding growth in all divisions, Region and even more in India still tense, requiring a clear focus Americas wi
Slide 6: Agenda
Agenda 1 Overview 2 Business Highlights Q1 2021 3 Financial Results Q1 2021 4 Outlook May 12, 2021 Q1 2021 Schaeffler AG earnings 6
Slide 7: Automotive Technologies – Exceptional growth in China, strong mature business
2 Business Highlights Q1 2021 Automotive Technologies – Exceptional growth in China, strong mature business securing double-digit EBIT margin2 Sales Strong sales performance driven by market recovery in China; Outperformance of +15.8%1 in EUR mn 180 bps impacted by base effect in China; continued ab
Slide 8: Automotive Technologies – How we win: preferred technology partner
2 Business Highlights Q1 2021 Automotive Technologies – How we win: contributing to customer’s success by becoming the preferred technology partner Strategic cooperation Successful entry in with REFIRE for Sustainability & heavy-duty hybrid Hydrogen Technology Climate Change modules market and Fuel
Slide 9: Automotive Technologies – How we win: E-Mobility Heavy Duty
2 Business Highlights Q1 2021 Automotive Technologies – How we win: E-Mobility Heavy Duty, Schaeffler is supplying E-Motors and Hybrid Modules for Heavy Duty Key Aspects: New Business GROW • Market Entry in Heavy Duty with Schaeffler Hybrid Modules • 3in1 System with integrated Power Electronics • L
Slide 10: Automotive Aftermarket – Stable sales development, margin lower
2 Business Highlights Q1 2021 Automotive Aftermarket – Stable sales development, margin lower on higher product costs and ramp-up of new AKO3 in Europe Sales +4.0%1 in EUR mn Continued strong customer demand across all regions 446 444 New E-Commerce Platform ETC in China with strong sales performanc
Slide 11: Automotive Aftermarket – How we win: tapping into LCV business growth
2 Business Highlights Q1 2021 Automotive Aftermarket – How we win: tapping into LCV business growth opportunities Schaeffler‘s model-based repair solutions for LCV´s Light Commercial Vehicles business is driven by • E-Commerce acceleration and “last mile” delivery services • Urbanization Schaeffler
Slide 12: Automotive Aftermarket – How we win in Region Americas
2 Business Highlights Q1 2021 Automotive Aftermarket – How we win in Region Americas: securing business growth by expanding product portfolio based on Schaeffler OE technology leadership New replacement product from Schaeffler • Introduction of new Torque Converter into the Independent Aftermarket i
Slide 13: Industrial – Strong March signaling market recovery, high profitability
2 Business Highlights Q1 2021 Industrial – Strong March signaling market recovery, high profitability Sales +3.9%1 First positive growth1 after 5 quarters of decline – Driven by China and Asia/Pacific, in EUR mn 836 Americas improved to flat, Europe with recovering momentum 827 Sectors Offroad and T
Slide 14: Industrial – How we win: driving the recovery with core products
2 Business Highlights Q1 2021 Industrial – How we win: driving the recovery with core products and innovations Offroad Industrial Automation Power Transmission Tillage Linear Standard bearing motor drive ball bearing Supporting and optimizing Testing of electronic chips Bearings used in a wide varie
Slide 15: Industrial – How we win in Region Americas
2 Business Highlights Q1 2021 Industrial – How we win in Region Americas: setting the course for sustainable growth in the U.S. Market Aerospace • Increased order entries for overhaul business Recovery started • Long term contract closed with key OEM Renewable Energy Large order for • Upgrading the
Slide 16: Adapting our structures – Very good progress since announcement in September 2020
2 Business Highlights Q1 2021 Adapting our structures – Very good progress since announcement in September 2020 3 step process Today Current status Financial impact 1. Footprint consolidation and • Estimated savings of EUR 250 - 300 mn Preparation reduction of capacity in Europe – Targeting ~ 3,200
Slide 17: Capital allocation – Capex ratio with 3.7% in Q1
2 Business Highlights Q1 2021 Capital allocation – Capex ratio with 3.7%2 in Q1 on an exceptionally low level Investment1 allocation | in EUR mn Key aspects • Reinvestment rate: clearly >1 in Industrial division and BD E-Mobility; FY 19 FY 20 Q1 20 Q1 21 clearly <1 in BD Transmission Systems and Eng
Slide 18: Sustainability – We are progressing on our roadmap
2 Business Highlights Q1 2021 Sustainability – We are progressing on our roadmap “Sustainable Sites” initiative Compensation linked to sustainability Global sustainability trainings • Initiative reinforces sustainability Two targets are integrated into this year’s • Dedicated trainings to foster con
Slide 19: Agenda
Agenda 1 Overview 2 Business Highlights Q1 2021 3 Financial Results Q1 2021 4 Outlook May 12, 2021 Q1 2021 Schaeffler AG earnings 19
Slide 20: Sales – Strong growth in China, recovery in Europe still lagging
3 Financial Results Q1 2021 Sales – Strong growth in China, recovery in Europe still lagging the other regions Sales | in EUR mn Key aspects • Positive sales development in Q1 with strong growth in China; Americas +8.5%1 and Asia/Pacific also with positive growth momentum +11.2%2 • Automotive Techno
Slide 21: Gross Profit – Strong Gross margin driven by Automotive Technologies
3 Financial Results Q1 2021 Gross Profit – Strong Gross margin driven by Automotive Technologies Gross Profit Q1 2020 vs. Q1 2021 | in EUR mn Key aspects • Normal negative price effect in Automotive Technologies (but less than PY), Aftermarket and Industrial with slightly negative pricing yoy • Stro
Slide 22: Functional costs – Flat development yoy, cost ratio decreased
3 Financial Results Q1 2021 Functional costs – Flat development yoy, cost ratio decreased due to strong cost discipline Functional costs | in EUR mn Key aspects • Functional costs increased by 0.9% in Q1; clearly less than the sales increase +0.9% • R&D costs flat yoy – Overall on a lower absolute l
Slide 23: Strong EBIT margin before special items
3 Financial Results Q1 2021 Strong EBIT margin before special items – Margin increase supported by top line growth, still low raw material costs and overhead cost control EBIT1 | in EUR mn Key aspects • Strong Q1 EBIT margin1 of 11.3% as a result of continued market +480 bps recovery in Automotive T
Slide 24: Automotive Technologies – Transmission and E-Mobility with strong growth
3 Financial Results Q1 2021 Automotive Technologies – Transmission and E-Mobility with strong growth, extraordinary high double-digit EBIT margin2 Sales by business division | yoy growth EBIT2 Q1 2020 vs. Q1 2021 | in EUR mn Q1 2020 Q1 2021 ∆1 E-Mobility 243 305 +26.5% Engine Systems 529 593 +14.5%
Slide 25: Automotive Aftermarket – Stable sales, EBIT margin impacted
3 Financial Results Q1 2021 Automotive Aftermarket – Stable sales development, EBIT margin impacted by product costs and AKO ramp-up Sales by region | yoy growth EBIT5 Q1 2020 vs. Q1 2021 | in EUR mn Q1 2020 Q1 2021 ∆1 Europe 329 312 -3.1% Americas 81 83 +20.4% Greater China 15 25 +73.8% Asia/Pacifi
Slide 26: Industrial – Strong growth in several sector clusters
3 Financial Results Q1 2021 Industrial – Strong growth in several sector cluster, strong EBIT margin2 Sales by region | yoy growth EBIT2 Q1 2020 vs. Q1 2021 | in EUR mn Q1 2020 Q1 2021 ∆1 Europe 370 342 -7.3% Americas 149 140 +2.4% Greater China 189 234 +27.1% Asia/Pacific 118 119 +6.8% Total 827 83
Slide 27: EBIT before special items – Reconciliation
3 Financial Results Q1 2021 EBIT before special items – Reconciliation Reconciliation Q1 2021 | in EUR mn Key aspects • Special items amounted to EUR 15 mn in Q1, related legal risks and additional provisions for the Roadmap 2025 • Financial Result of EUR -34 mn better than prior year, which was imp
Slide 28: Net Income EUR 235 mn – EPS positive with EUR 0.35
3 Financial Results Q1 2021 Net Income1 EUR 235 mn – EPS2 positive with EUR 0.35 Net income1 | in EUR mn Key aspects • Q1 2021 Net Income1 reached EUR 235 mn, Net income before special +421 mn items1 amounted to EUR 247 mn • EPS clearly positive with EUR 0.35 (Q1 20: EUR -0.28) • Schaeffler Value Ad
Slide 29: Free Cash Flow – Strong EBITDA compensating outflows
3 Financial Results Q1 2021 Free Cash Flow – Strong EBITDA compensating outflows for Restructuring and Net Working Capital Free Cash Flow before M&A1 | in EUR mn Key aspects • Strong EBITDA with EUR 625 mn (Q1 20: EUR 403 mn) -7 mn • Capex decreased to EUR 132 mn, higher Capex in the upcoming quarte
Slide 30: Net debt decreased to EUR 2.2 bn – Leverage ratio at 1.1x
3 Financial Results Q1 2021 Net debt decreased to EUR 2.2 bn – Leverage ratio1 at 1.1x Net financial debt and Leverage ratio1 | in EUR mn Key aspects Leverage ratio1 • Net financial debt decreased to EUR 2.2 bn, Leverage ratio1 1.1x • No major maturities until March 2024 1.8 1.6 1.2 1.3 1.1 2,414 3,
Slide 31: Agenda
Agenda 1 Overview 2 Business Highlights Q1 2021 3 Financial Results Q1 2021 4 Outlook May 12, 2021 Q1 2021 Schaeffler AG earnings 31
Slide 32: Our Outlook going forward – What changed in our market assumptions
4 Outlook Our Outlook going forward – What changed in our market assumptions since March Automotive Technologies – Global LVP1 2021 Automotive Aftermarket – GDP2 Industrial – Industrial production3 12% 8% 10% World Around -1.5 World 8% ~82 6% 74.6 mn discount vs. IHS 6% estimates 4% 23.6 4% 17.9 20.
Slide 33: FY 2021 Guidance – Confident outlook, cautious approach
4 Outlook FY 2021 Guidance – Confident outlook, cautious approach Group Guidance Divisional Guidance Automotive Automotive Industrial Previous Guidance New Guidance Technologies Aftermarket FY 2021 FY 2021 Previous New Previous New Previous New Sales growth1 > 7% > 10% Outperf. Outperf. 5 - 7% 6 - 8
Slide 34: Conclusion & Outlook
4 Outlook Conclusion & Outlook Positive top line development led by recovery in China - Region Americas and Europe still 1 lagging, but evident signs of a strong recovery 2 Strong earnings quality in Automotive Technologies and Industrial – Aftermarket impacted by internal sourcing costs and AKO ram
Slide 35: 2021 Capital market activities
4 Outlook 2021 Capital market activities Roadshows & Conferences – May and June 2021 Virtual Events Financial calendar May 17 Roadshow – US/UK, Jefferies May 12 Q1 2021 Earnings Release May 18 Conference – Automotive, Citi Aug 4 H1 2021 Earnings Release May 19 Roadshow – DACH, Metzler Nov 9 9M 2021
Slide 36: IR Contact
IR Contact Investor Relations Phone: + 49 9132 82-4440 Email: ir@schaeffler.com Web: www.schaeffler.com/ir
Slide 37: Backup 1 – Information top-up
Backup 1 Backup 1 – Information top-up May 12, 2021 Q1 2021 Schaeffler AG earnings 37
Slide 38: Key figures Q1 2021
Backup Key figures Q1 2021 Q1 2021 in EUR mn Q1 2020 Q1 2021 vs. Q1 2020 +8.5% Sales 3,281 3,560 +11.2%1 Gross Profit 789 957 +168 mn Gross margin 24.0% 26.9% +2.9pp EBIT2 212 403 +191 mn EBIT margin2 6.5% 11.3% +4.8pp Net income3 -186 235 +421 mn EPS4 (in EUR) -0.28 0.35 +0.63 Schaeffler Value Adde
Slide 39: Ancillary comments to support the Equity Story
Backup Ancillary comments to support the Equity Story Additional KPIs FY 2021 Comments Incl. TMM, Fuel Cells and Starting from 2021, the business division E-Mobility includes Thermal management modules, fuel E-Mobility perimeter Chassis Mechatronics cell components as well as mechatronic chassis sys
Slide 40: Equity Story – Creating long-term value and generating Free Cash Flow
Backup Equity Story – Positioning Schaeffler for long-term value creation 1 Roadmap 2025 in execution – Focus on capital allocation, portfolio management and FCF generation Automotive Technologies – Conquer leadership positions in New Business for electrified 2 Powertrains and Chassis applications 3
Slide 41: Free Cash Flow details Q1 2021
Backup Free Cash Flow details Q1 2021 – FCF supported by strong operational performance FCF1 Q1 2020 vs. Q1 2021 | in EUR mn Key aspects ∆ Net Working Capital EUR -164 mn • Positive EBITDA development yoy due to strong performance of Automotive Technologies division • Net Working Capital negative wi
Slide 42: Working Capital ratio 19.8% – Capex ratio 3.7% in Q1
Backup Working Capital ratio 19.8% – Capex ratio 3.7% in Q1 Working capital1 | in EUR mn Capex2 | in EUR mn +116 mn -32 mn 2,427 2,555 2,559 2,338 2,543 164 136 181 151 132 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 in % of sales (LTM) in % of sales 17.2% 20.0% 20.4% 18.6% 19.8% 5.0
Slide 43: Automotive Technologies (AT) outperformance by quarters
Backup Automotive Technologies (AT) outperformance by quarters YTD 21 Q1 21 Outperformance: +1.8pp Outper- IHS1 AT2 formance World +14.0% +15.8% +1.8pp Europe -1.1% +3.4% +4.5pp Americas -2.8% +6.0% +8.8pp Greater China +76.5% +74.3% -2.2pp Asia/Pacific +3.1% +13.6% +10.5pp FY 20 Q1 20 Q2 20 Q3 20 Q
Slide 44: Key figures by Group and division
Backup Key figures by Group and division Adjusted comparative figures 2020 Group | in EUR mn Automotive Aftermarket | in EUR mn Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Sales 3,281 2,291 3,391 3,626 3,560 Sales 446 301 456 438 444 Sales Growth1 -9.3% -34.5% -2.8% +4.5% +11.2% Sale
Slide 45: Overview Corporate and Financing Structure
Backup Overview Corporate and Financing Structure Corporate structure (simplified) | as of March 31, 2021 Financing structure | as of March 31, 2021 A IHO Verwaltungs GmbH INA-Holding Schaeffler Debt instrument Nominal Nominal Interest Maturity Rating GmbH & Co. KG (USD m) (EUR1 m) (Fitch/Moody’s/S&
Slide 46: Backup 2 – Additional information
Backup 2 Backup 2 – Additional information May 12, 2021 Q1 2021 Schaeffler AG earnings 46
Slide 47: FY 2021 Guidance – Confident outlook, cautious approach
Backup FY 2021 Guidance – Confident outlook, cautious approach Group Guidance Divisional Guidance Automotive Automotive Industrial Technologies Aftermarket Actuals New Guidance Q1 2021 FY 2021 Actuals New Actuals New Actuals New Q1 2021 Guidance Q1 2021 Guidance Q1 2021 Guidance Sales growth1 11.2%
Slide 48: Liquidity position of EUR 3.6 bn at the end of March 2021
Backup Liquidity position of EUR 3.6 bn at the end of March 2021 Liquidity Maturity Profile • Cash balance Schaeffler Group as per end of March 2021 • Balanced debt maturity profile; remainder of EUR 2022 bond maturity EUR 1,854 mn (December 2020 EUR 1,758 mn) pre-funded; no major maturities until M