Slide 1: Q4 and FY 2021 Schaeffler AG earnings
Q4 and FY 2021 Schaeffler AG earnings Earnings Call March 8, 2022 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
Agenda 1 Overview 2 Business Highlights Q4 and FY 2021 3 Financial Results Q4 and FY 2021 4 Outlook Mar 8, 2022 Q4 and FY 2021 Schaeffler AG earnings 3 PUBLIC
Slide 4: Strong performance in FY 2021 – Key messages
1 Overview Strong performance in FY 2021 – Strong FCF and contribution by all divisions Key messages FY 2021 Sales EBIT FY Group sales1 +9.7% – Good Outperformance in Automotive 1 Technologies, double-digit growth in Aftermarket and Industrial FY EUR 13.9 bn FY EUR 1.3 bn FY EBIT margin2 9.1% – Marg
Slide 5: FY 2021 Guidance – Achieved both by Group and Divisions
1 Overview FY 2021 Guidance – Achieved both by Group and Divisions Group Results FY 2021 Divisional Results FY 2021 Automotive Automotive Industrial Technologies Aftermarket Guidance4 Actuals Guidance4 Actuals Guidance4 Actuals Guidance4 Actuals Sales growth1 > 7% 9.7% Outperf. 400 bps > 10% 13.0% 1
Slide 6: Schaeffler Group FY 2021 – Highlights and lowlights
1 Overview Schaeffler Group FY 2021 – Highlights and lowlights Semiconductor shortage led to extremely high volatility Automotive Technologies with good Outperformance of of LVP1 volumes throughout FY 2021, indirectly 400 bps in FY 2021; E-Mobility order intake EUR 3.2 bn, hampering top line growth
Slide 7: Agenda
Agenda 1 Overview 2 Business Highlights Q4 and FY 2021 3 Financial Results Q4 and FY 2021 4 Outlook Mar 8, 2022 Q4 and FY 2021 Schaeffler AG earnings 7 PUBLIC
Slide 8: Automotive Technologies – Good Full Year Outperformance, well-protected EBIT margin
2 Business Highlights Q4 and FY 2021 Automotive Technologies – Good Full Year Outperformance, well-protected EBIT margin2 Sales in EUR mn +7.4%1 Q4 sales hampered by lower LVP yoy. Overall good level of Outperformance in the -12.2%1 FY with 400 bps – Europe the main driver 8,436 7,816 2,391 2,150 E-
Slide 9: Automotive Technologies – E-Mobility Order Intake goal overachieved
2 Business Highlights Q4 and FY 2021 Automotive Technologies – E-Mobility Order Intake goal overachieved Order Intake1 Business Highlights in EUR bn 15.0 12.6 7.3 10.2 10.2 H2 4.6 E/E3 competencies expanded Market for BEV Thermal with inhouse 800V power electronics Management entered 5.5 4.8 8.0 7.7
Slide 10: Automotive Aftermarket – Earnings quality affected by delivery performance and input costs
2 Business Highlights Q4 and FY 2021 Automotive Aftermarket – Earnings quality affected by delivery performance and increased input costs Sales in EUR mn +13.0%1 Continued strong growth in Asian regions and Americas -1.5%1 1,642 1,848 438 437 Positive price development to offset increasing input cos
Slide 11: Automotive Aftermarket – Schaeffler OneCode Eco-System
2 Business Highlights Q4 and FY 2021 Automotive Aftermarket – Schaeffler OneCode Eco-System, Improved customer experience Real-time product details ACCESS More than 40,000 articles Repair and installation instructions. SPEED Start on scan Authenticity check PROOF No chance for counterfeits Link to R
Slide 12: Industrial – Double-digit sales growth, FY EBIT margin at 12%
2 Business Highlights Q4 and FY 2021 Industrial – Double-digit sales growth, FY EBIT margin2 at 12% Sales Broad economic recovery continued to benefit our performance in Q4 – Most in EUR mn +13.6%1 sectors growing double-digit, Railway returning to positive growth. Double-digit +12.0%1 growth in Eur
Slide 13: Industrial – Diversified Portfolio with significant growth potential
2 Business Highlights Q4 and FY 2021 Industrial – Diversified Portfolio with significant growth potential Orderbook 3-month Business highlights 2 yoy growth Orderbook 3-month Sales 1 Strong growth in our core business of 40 standardized and specialized bearings across our market clusters 30 20 10 0
Slide 14: Capital allocation – Capex prioritization with investments in growth business
2 Business Highlights Q4 and FY 2021 Capital allocation – Capex prioritization with investments in growth business, Capex ratio of 4.8% in FY 2021 Investment1 allocation | in EUR mn Key aspects FY • Reinvestment rate: clearly >1 in Industrial division and BD E-Mobility; FY 19 FY 20 Q4 20 Q4 21 FY 21
Slide 15: Portfolio Management Automotive Technologies – Operating Model sharpened
2 Business Highlights Q4 and FY 2021 Portfolio Management Automotive Technologies – Operating Model sharpened Mature Business New Business • E-Motors • Cam phaser Engine & E-Mobility • Gearboxes / Torque Transfer • Variable Valve train Transmission Solutions Powertrain- • Dual mass fly wheel • E-axl
Slide 16: Portfolio Management Automotive Technologies – Electrification is further accelerating
2 Business Highlights Q4 and FY 2021 Portfolio Management Automotive Technologies – Electrification is further accelerating Vision Powertrain – OLD Vision Powertrain – NEW Global Light Vehicle Production Global Light Vehicle Production Climate targets towards zero 15% emission in major markets 20% 1
Slide 17: Market Clusters Industrial – New approach providing a more comprehensive picture
2 Business Highlights Q4 and FY 2021 Market Clusters Industrial – New approach providing a more comprehensive picture Renewables Transportation & • Aerospace • Wind Mobility • Rail • Hydrogen EUR 680 mn1 EUR 1,087 mn1 • Offroad 30% +8.2%2 19% +11.6%2 • Two-Wheelers Sales FY 20211 EUR 3,568 mn 18% Ma
Slide 18: Sustainability – All 2021 targets achieved, sustainability is a strategic priority
2 Business Highlights Q4 and FY 2021 Sustainability – All 2021 targets achieved, sustainability is a strategic priority Energy Employee Safety Supplier Base Key for achieving climate Key for achieving climate Employees play a key role for target for in-house production target for supply chain the co
Slide 19: Agenda
Agenda 1 Overview 2 Business Highlights Q4 and FY 2021 3 Financial Results Q4 and FY 2021 4 Outlook Mar 8, 2022 Q4 and FY 2021 Schaeffler AG earnings 19 PUBLIC
Slide 20: Sales – Solid development in Q4, only slightly negative yoy despite tough comps
3 Financial Results Q4 and FY 2021 Sales – Solid development in Q4, only slightly negative yoy despite tough comps Sales | in EUR mn Key aspects Q4 • Automotive Technologies with lower sales in all regions due to high -3.3%1 base and ongoing supply chain disruptions -5.6%2 • AAM with negative growth
Slide 21: Gross Profit – Favorable pricing could not compensate lower volumes and higher production costs
3 Financial Results Q4 and FY 2021 Gross Profit – Favorable pricing could not compensate lower volumes and higher production costs Gross Profit Q4 2020 vs. Q4 2021 | in EUR mn Key aspects • Positive price development in all divisions • Negative volume effect mainly related to Automotive Technologies
Slide 22: Overhead costs – Cost ratio sequentially stable, higher R&D spending
3 Financial Results Q4 and FY 2021 Overhead costs – Cost ratio sequentially stable, higher R&D spending to support New business Overhead costs | in EUR mn Key aspects • Overhead costs increased by 11% in Q4 on low comps due to short-term work/other pandemic measures still in place; at pre-pandemic l
Slide 23: EBIT – Strong margin in Industrial, Auto divisions impacted
3 Financial Results Q4 and FY 2021 EBIT1 – Strong margin in Industrial, Auto divisions impacted by hampered volumes and high base EBIT1 | in EUR mn Key aspects • EBIT margin negatively impacted by phasing in of input price effects -3.8pp • Automotive Technologies with clearly lower margin yoy, drive
Slide 24: Automotive Technologies – Sales hampered by market bottlenecks, effective margin protection
3 Financial Results Q4 and FY 2021 Automotive Technologies – Sales hampered by market bottlenecks, effective margin protection despite input cost increase Sales by business division | yoy growth EBIT2 Q4 2020 vs. Q4 2021 | in EUR mn Q4 2020 Q4 2021 ∆1 E-Mobility 328 363 +7.6% Engine Systems 631 553
Slide 25: Automotive Aftermarket – Mixed sales development yoy, EBIT margin impacted
3 Financial Results Q4 and FY 2021 Automotive Aftermarket – Mixed sales development yoy due to delivery performance, EBIT margin5 impacted by higher input costs Sales by region | yoy growth EBIT5 Q4 2020 vs. Q4 2021 | in EUR mn Q4 2020 Q4 2021 ∆1 Europe 309 291 -6.4% Americas 84 92 +7.1% Greater Chi
Slide 26: Industrial – Growth momentum continued, strong EBIT margin
3 Financial Results Q4 and FY 2021 Industrial – Growth momentum continued, strong EBIT1 margin driven by scale effects and structural cost savings Sales by region | yoy growth EBIT1 Q4 2020 vs. Q4 2021 | in EUR mn Q4 2020 Q4 2021 ∆2 Europe 340 402 +17.6% Americas 132 151 +9.5% Greater China 202 226
Slide 27: Net Income – EBIT reconciliation and special items
3 Financial Results Q4 and FY 2021 Net Income1 – EBIT reconciliation and special items Reconciliation FY 2021 | in EUR mn Key aspects • Financial Result improved by EUR 87 mn vs. prior year; mainly due to one-off impacts (prior year payback of High-Yield Bond; interest income of concluded tax case i
Slide 28: Net Income – EPS at EUR 0.22, ROCE reached a strong 16.0%
3 Financial Results Q4 and FY 2021 Net Income1 – EPS2 at EUR 0.22, ROCE3 reached a strong 16.0% Net income1 | in EUR mn Key aspects • Q4 2021 Net Income1 mainly improved from higher financial result; Net +42 mn income before special items1 amounted to EUR 165 mn • FY 2021 Net Income1 of EUR 756 mn a
Slide 29: Free Cash Flow – Positive, despite seasonal impact and tactical increase of inventory
3 Financial Results Q4 and FY 2021 Free Cash Flow – Positive, despite seasonal impact and tactical increase of inventory Free Cash Flow before M&A1 | in EUR mn Reconciliation Q4 2021 | in EUR mn -300 mn +51 -188 -61 -97 55 488 -138 137 333 355 130 113 225 55 -285 EBITDA ∆ Net Capex Net Taxes Others
Slide 30: Net debt – Leverage ratio at 0.9x and strong liquidity position
3 Financial Results Q4 and FY 2021 Net debt – Leverage ratio1 at 0.9x and strong liquidity position Net financial debt and Leverage ratio1 | in EUR mn Key aspects Leverage ratio1 • Net financial debt further decreased, Leverage ratio1 below Mid-Term Targets • No maturities until March 2024 after pre
Slide 31: Reported and adjusted comparative figures FY 2021
3 Financial Results Q4 and FY 2021 Reported and adjusted comparative figures FY 2021 FY 21 – Reported and adjusted comparative figures Key aspects adjusted comparative figures FY 21 – Adjusted Group FY 21 – Reported comp. figures ∆ 1 Sales Growth Sales Growth1 1 +9.7% +10.2% +0.5pp • Constant-curren
Slide 32: Agenda
Agenda 1 Overview 2 Business Highlights Q4 and FY 2021 3 Financial Results Q4 and FY 2021 4 Outlook Mar 8, 2022 Q4 and FY 2021 Schaeffler AG earnings 32 PUBLIC
Slide 33: FY 2022 Guidance – Suspended
4 Outlook FY 2022 Guidance – Suspended 1 Due to the great geopolitical and economic uncertainty caused by the war in Ukraine, the FY 2022 guidance - approved on February 22nd and mentioned in our Annual Report - is suspended 2 In the current unprecedented situation, it is impossible to reasonably as
Slide 34: Conclusion & Outlook
4 Outlook Conclusion & Outlook Russia/Ukraine conflict escalation – Safety of our employees and their families in the region 1 are our top priority, very limited direct exposure; Task Force in place to monitor and manage the situation in the region 2 Strong performance in FY 2021 – Diversification a
Slide 35: 2022 Capital market activities
4 Outlook 2022 Capital market activities Roadshows & Conferences involving Top Management Financial calendar 2022 Mar 9 Conference – Exane and Jefferies, Auto Conference Mar 8 FY 2021 Earnings Release Mar 10 Roadshow – Oddo, Continental Europe Apr 21 AGM May 10 Q1 2022 Earnings Release May 31 Hanove
Slide 36: IR Contact
IR Contact Investor Relations Phone: + 49 9132 82-4440 Email: ir@schaeffler.com Web: www.schaeffler.com/ir PUBLIC
Slide 37: Market assumptions as of 22nd February – Under review
Backup Market assumptions as of 22nd February1 – Under review Automotive Technologies – Global LVP2 2022 Automotive Aftermarket – GDP3 Industrial – Industrial Production4 6% 84.1 8% 77.1 5% World Around -4 mn 6% 4% discount vs. World IHS estimates 3% 4% 20.7 18.8 16.6 21.1 2% 2% 1% 0% 0% Q1 Q2 Q3 Q4
Slide 38: FY 2022 Guidance as of 22nd February – Suspended
Backup FY 2022 Guidance as of 22nd February1 – Suspended Adjusted comparative figures 2021 Group Guidance Divisional Guidance Automotive Automotive Industrial Actuals Guidance Technologies Aftermarket FY 2021 FY 2022 Actuals Guidance Actuals Guidance Actuals Guidance Outperf. Out- Sales growth2 10.2
Slide 39: Ancillary comments to support the Equity Story
Backup Ancillary comments to support the Equity Story Additional KPIs FY 2022 Comments Order Intake E-Mobility EUR 2 - 3 bn Starting from 2022 the new target of EUR 2 - 3 bn applies Focus areas include Digitalization, Sustainability, Innovation & Technology and investments in New Capex Up to EUR 900
Slide 40: 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 Automotive Technologies – Conquer leadership positions in New Business for electrified 2 Powertrains and Chassis applications 3
Slide 41: Key figures Q4 and FY 2021
Backup Key figures Q4 and FY 2021 Q4 2021 FY 2021 in EUR mn Q4 2020 Q4 2021 vs. Q4 2020 FY 2020 FY 2021 vs. FY 2020 -3.3% +10.0% Sales 3,626 3,506 12,589 13,852 -5.6%1 +9.7%1 Gross Profit 952 846 -106 mn 2,859 3,439 +580 mn Gross margin 26.3% 24.1% -2.2pp 22.7% 24.8% +2.1pp EBIT2 422 272 -150 mn 798
Slide 42: Free Cash Flow details FY 2021
Backup Free Cash Flow details FY 2021 – FCF supported by good operational performance FCF1 FY 2020 vs. FY 2021 | in EUR mn Key aspects • Positive EBITDA development yoy due to good operating performance ∆ Net Working Capital EUR -277 mn and prior year restructuring accrual • Net Working Capital nega
Slide 43: Working Capital ratio 19.5% – Capex ratio 5.4% in Q4
Backup Working Capital ratio 19.5% – Capex ratio 5.4% in Q4 Working capital1 | in EUR mn Capex2 | in EUR mn +362 mn +37 mn 2,427 2,555 2,559 2,338 2,543 2,726 2,752 2,700 164 136 181 151 132 136 215 188 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 i
Slide 44: Automotive Technologies – Good Outperformance and EBIT margin
Backup Automotive Technologies – Good Outperformance and EBIT margin2 Sales by business division | yoy growth EBIT2 FY 2020 vs. FY 2021 | in EUR mn FY 2020 FY 2021 ∆1 E-Mobility 1,047 1,245 +17.8% Engine Systems 2,056 2,156 +4.8% Transmission Systems 3,508 3,741 +6.4% -62 Chassis Systems 1,204 1,294
Slide 45: Automotive Aftermarket – Strong sales development, solid EBIT margin
Backup Automotive Aftermarket – Strong sales development, solid EBIT margin5 Sales by region | yoy growth EBIT5 FY 2020 vs. FY 2021 | in EUR mn FY 2020 FY 2021 ∆1 Europe 1,184 1,275 +8.1% Americas 301 363 +26.1% +2 Greater China 77 101 +27.5% +17 -26 -10 +13 Asia/Pacific 80 109 +37.9% Total 1,642 1,
Slide 46: Industrial – Double-digit growth in all regions, strong EBIT margin
Backup Industrial – Double-digit growth in all regions, strong EBIT margin2 Sales by region | yoy growth EBIT2 FY 2020 vs. FY 2021 | in EUR mn FY 2020 FY 2021 ∆1 Europe 1,312 1,473 +12.3% -5 Americas 528 588 +13.8% +194 -32 -23 +16 Greater China 840 982 +14.5% Asia/Pacific 451 525 +18.3% Total 3,132
Slide 47: Automotive Technologies (AT) outperformance by quarters
Backup Automotive Technologies (AT) outperformance by quarters FY 21 Q1 21 Q2 21 Q3 21 Q4 21 Outperformance: +4.0pp Outper- Outper- Outper- Outper- IHS1 AT2 formance IHS1 AT2 formance IHS1 AT2 formance IHS1 AT2 formance World +15.9% +15.8% -0.1pp +48.2% +65.3% +17.1pp -19.1% -12.2% +6.9% -10.5% -12.
Slide 48: 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 Q2 21 Q3 21 Q4 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Sales 3,281 2,291 3,391 3,626 3,560 3,454 3,332 3,506 Sales 446 301 456 438
Slide 49: Overview Corporate and Financing Structure
Backup Overview Corporate and Financing Structure Corporate structure (simplified) | as of December 31, 2021 Financing structure | as of December 31, 2021 A IHO Verwaltungs GmbH INA-Holding Schaeffler Debt instrument Nominal Nominal Interest Maturity Rating GmbH & Co. KG (USD m) (EUR1 m) (Fitch/Mood