Schaeffler Ag · XETR:SHA0
Schaeffler — FY2016 Earnings Presentation
35 slides from Schaeffler's earnings presentation, Mar 8, 2017
Slide 1: Results FY 2016 Schaeffler AG
Results FY 2016 Schaeffler AG Analyst and Investor Conference Call March 8, 2017 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 Financial Results 2016 3 Investment Highlights 4 Outlook 3 March 8, 2017 Schaeffler AG FY 2016 Results
Slide 4: Strong results 2016 – On track to achieve Financial Ambitions 2020
1 Overview Strong results 2016 – On track to achieve Financial Ambitions 2020 Key aspects Group sales +3.4%1) based on strong Q4 2016 with sales increase of +5.6%1) – 1 FY 2016 EBIT margin2) at 12.7% (FY '15: 12.7%) 2 Record result in Automotive with sales increase of +6.0%1) (Q4 '16: +8.2%) – FY 20
Slide 5: Sales growth FY 2016 3.4% (FX-adjusted) – 12.7% EBIT margin before one-offs
2 Financial Results 2016 1 Sales growth FY 2016 3.4% (FX-adjusted) – 12.7% EBIT margin before one-offs Sales EBIT before one-off effects in EUR mn in EUR mn +3.4%1) vs FY 2015 3,339 3,382 3,343 3,369 3,361 441 438 3,237 3,221 3,265 433 418 421 417 424 384 13,179 13,338 1,676 1,700 Q1 Q2 Q3 Q4 Q1 Q2
Slide 6: Automotive Division – Strong Q4 2016 due to China and Automotive Aftermarket
2 Financial Results 2016 2 Automotive Division – Strong Q4 2016 due to China and Automotive Aftermarket Sales Sales by region FY 2016 in EUR mn y-o-y growth1) Asia/Pacific +7.3% +6.0%1) vs FY 2015 11% Greater China +24.3% 16% 2,515 2,554 2,576 2,603 2,630 2,442 2,466 2,524 51% 22% Americas Europe +1
Slide 7: Automotive Division – China as major growth driver
2 Financial Results 2016 2 Automotive Division – China as major growth driver Schaeffler in Greater China OEM sales exposure 2016 Key customers Local OEMs +34%1) 34% 66% Ningxia International OEMs Nanjing +20%1) Taicang Shanghai Suzhou (Headquarter) Total Sales: EUR 1,675 mn Xiangtan Sales growth
Slide 8: Automotive Division – Strong performance in Automotive Aftermarket
2 Financial Results 2016 2 Automotive Division – Strong performance in Automotive Aftermarket Two sales channels, three types of business Sales exposure 2016 OES business +20%1) 19% Solutions business +17%1) 81% Components business +6%1) Total Sales EUR 1,810 mn Independent Aftermarket: 81% of sales
Slide 9: Industrial Division – Revenues trend stabilizing
2 Financial Results 2016 3 Industrial Division – Revenues trend stabilizing Sales Sales by business division in EUR mn 32% Industrial Sectors Industrial Distribution -3.2% 1) FY 2016: -4.1% 1) vs Q4 2015 FY 2016: -6.1%1) (Q4 2016: -2.9% 1)) (Q4 2016: -3.6% 1)) 68% 824 828 795 755 767 766 741 731 Tot
Slide 10: Industrial Division – EBIT down due to volume, price and mix
2 Financial Results 2016 3 Industrial Division – EBIT down due to volume, price and mix EBIT 1) 2015 vs. 2016 Key aspects in EUR mn Lower EBIT due to negative price, volume and mix impact 303 EBIT margin 7.0% in FY2016 after 9.5% in FY2015 CORE program on track, Wave I 95% completed +14 209 +1
Slide 11: Industrial Division – CORE Wave II successfully started
2 Financial Results 2016 3 Industrial Division – CORE Wave II successfully started Indicative Financial Impact Wave I Key aspects in EUR mn 40 CORE Wave II targeting Gross Profit optimization and extended 31 Overhead Cost reduction through consolidation of plants also 17 outside Industrial divis
Slide 12: Strong Free Cash Flow generation – FCF conversion ratio improved to 32%
2 Financial Results 2016 4 Strong Free Cash Flow generation – FCF conversion ratio improved to 32% Free Cash Flow Key aspects in EUR mn FY 2015 FY 2016 Q4 2015 Q4 2016 Free Cash Flow increased by EUR 365 mn to EUR 735 mn in FY 2016 in EBITDA 2,096 2,293 331 476 particular due to higher EBITDA and
Slide 13: EPS increased to EUR 1.30 – Proposed Regular dividend to raise to 50 cents
2 Financial Results 2016 5 EPS increased to EUR 1.30 – Proposed Regular dividend to raise to 50 cents w/o special dividend4) Net income Dividend amount in EUR mn in EUR mn +45% vs FY 2015 859 +15 cents vs FY 2015 329 654 250 591 229 EPS 1.30 Pro Forma EPS 0.971) 35 cents 50 cents 5) 2014 2015 2016 2
Slide 14: Strategy "Mobility for tomorrow" – E-Mobility, Industry 4.0 and Digitalization
2 Financial Results 2016 6 Strategy "Mobility for tomorrow" – E-Mobility, Industry 4.0 and Digitalization Vision / Mission 4 Focus areas 8 Strategic pillars 16 Strategic initiatives 14 March 8, 2017 Schaeffler AG FY 2016 Results
Slide 15: Schaeffler Equity Story – 4 key questions
3 Investment Highlights Schaeffler Equity Story – 4 key questions Equity Story – 3 key elements 4 key questions A What is your expectation regarding your Automotive outperformance for 2017? Automotive growth above market + B Are there any news with regard to e-mobility? Margin upside in Industrial C
Slide 16: Outperformance 2017 – Strong Q4 2016
3 Investment Highlights A Outperformance 2017 – Strong Q4 2016 Outperformance 2013 – 2017 Automotive sales and market development FY 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Europe Americas Greater China Asia/Pacific +24% Growth rate Automotive 1) 5.0% 5.8% 5.1% 8.2% 6.0% +14% Light Vehicle Prod
Slide 17: Outperformance 2017 – Around 4%-pts above market
3 Investment Highlights A Outperformance 2017 – Around 4%-pts above market Key launches 2017 Key drivers 100% booked business 1 Ramp-up fully variable valve train system UniAir with Jaguar LandRover 2 Ramp-up electromechanical camphaser for Renault-Nissan 6 Ball Screw 3 Growing Torque Converte
Slide 18: E-Mobility – Accelerated scenario becomes more realistic
3 Investment Highlights B E-Mobility – Accelerated scenario becomes more realistic Global production volume 1) Global production volume 1) Accelerated in millions of units Basic scenario 2) in millions of units scenario 2) CAGR 2010/2030 CAGR 2010/2030 +2.4% p.a. 120 +2.4% p.a. 120 111 111 10% 102 4
Slide 19: E-Mobility – Broad portfolio of solutions
3 Investment Highlights B E-Mobility – Broad portfolio of solutions CO2 Reduction Key aspects Schaeffler with a broad powertrain product portfolio ranging from mild hybrid to full battery electric vehicle solutions More than ten years of experience with E-Mobility solutions 500 Million Euro in
Slide 20: E-Mobility – E-Clutch, 48V mild and high voltage hybridization
3 Investment Highlights B E-Mobility – E-Clutch, 48V mild and high voltage hybridization ICE HEV HEV/BEV Schaeffler E-Clutch Schaeffler 48 V Solutions Schaeffler High Voltage Solutions Actuator Pedal Options Clutch System 48V Hybrid Module 48V E-Axle HV Hybrid Module HV E-Axle Schaeffler E-Clutch1
Slide 21: E-Mobility – Key performance indicators to manage transition
3 Investment Highlights B E-Mobility – Key performance indicators to manage transition 2015 2016 Market BEV 360 572 (0.6%) Development1) HEV 2,102 2,865 (3.1%) in Vehicles '000 ICE 86,274 89,561 (96.3%) Target 2020 w/o AAM2) # BEV > 2,000 BEV 3,484 8,372 (0.1%) 1 # HEV Sales > 13,000 HEV 1
Slide 22: Industrial margin – When will the margin pick up again?
3 Investment Highlights C Industrial margin – When will the margin pick up again? EBIT 1) development 2016 – 2018 Key aspects in EUR mn EBIT gap of around EUR 100 mn due to lower FY2016 EBIT level Δ 34 307 CORE Wave I and Wave II on track to deliver 413) EUR 64 mn contribution to EBIT 232) Remai
Slide 23: Industrial Division – New business picking up
3 Investment Highlights C Industrial Division – New business picking up Example 1 Example 2 Example 3 Wind Power Transmission Industrial Automation Coated tapered and cylindrical roller bearings Standard and customized bearings for Bearings for machine tool applications incl. Industry for wind
Slide 24: Use of cash – Balanced approach
3 Investment Highlights D Use of cash – Balanced approach Use of cash Use of cash priorities in EUR mn 2014A 2015A 2016A Guidance 2017 FCF w/o External Growth 48 370 735 ~600 0 0 0 ? 1 Dividends 3 External Growth 30-40% of FCF 48 370 735 net income Financing proceeds1) 298 1,214 1,773 -1 -3292)2) Fi
Slide 25: Strong results 2016 - On track to reach Financial Ambitions 2020
4 Outlook Strong results 2016 - On track to reach Financial Ambitions 2020 FY 2015 Guidance FY 2016 FY 2016 Guidance FY 2017 Financial Ambitions 2020 Sales Growth +3.5% FX-adjusted 3-4% +3.4% FX-adjusted 4-5% Ø 4-6% p.a. w/o external growth, FX-adjusted EBIT Margin 12.7% Before one-off effects 12-
Slide 26: Financial calendar H1 2017
4 Outlook Financial calendar H1 2017 March 8, 2017 Results FY 2016 March 9, 2017 Roadshow, London March 22, 2017 Bank of America Merrill Lynch Conference, London April 26, 2017 Annual General Meeting, Nuremberg May 11, 2017 Q1 2017 Results May/June Roadshow, North America May/June Roadshow, Europe J
Slide 27: IR Contact
IR Contact Investor Relations Financial Calendar Annual General Meeting: April 26, 2017 Phone: + 49 9132 82 4440 Q1 2017 results: May 11, 2017 Email: ir@schaeffler.com Capital Markets Day: July 20, 2017 Web: www.schaeffler.com/ir H1 2017 results: August 8, 2017 9M 2017 results: November 8, 2017 27 M
Slide 28: Key figures FY 2016
Backup Key figures FY 2016 FY '16 Q4 '16 in EUR mn FY '15 FY '16 vs. FY '15 Q4 '15 Q4 '16 vs. Q4 '15 +1.2% +4.3% Sales 1 13,179 13,338 +3.4%1) 3,221 3,361 +5.6%1) 1,6762) 1,7002) +1.4% 4182) 4242) +1.4% EBIT 1,402 1,556 +154 mn 151 280 +129 mn 12.7%2) 12.7%2) +0.0%-pts. 13.0%2) 12.6%2) -0.4%-pts. EB
Slide 29: Sales by region, business division and sector cluster
Backup 1 Sales by region, business division and sector cluster Automotive sales growth1) by region Industrial sales growth1) by region Q1 '16 Q2 '16 Q3 '16 Q4 '16 FY '16 Q1 '16 Q2 '16 Q3 '16 Q4 '16 FY '16 Europe +0.9% +6.6% +0.2% +3.9% +2.9% Europe -1.9% +1.5% -2.4% -2.3% -1.3% Americas +1.9% +2.9%
Slide 30: Net income of EUR 859 mn in FY 2016
Backup 2 Net income of EUR 859 mn in FY 2016 Net income1) Financial result2) 253 in EUR mn in EUR mn 241 EUR -206 mn 212 vs FY 2015 167 178 187 176 161 167 142 125 85 88 70 65 21 591 859 547 341 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2015 2016 2) For presentation purposes negative
Slide 31: Working Capital ratio optimized – Capex ratio 8.6%
Backup 3 Working Capital ratio optimized – Capex ratio 8.6% Working capital1) Capex2) in EUR mn in EUR mn 2,820 2,796 2,802 318 317 2,738 2,740 2,666 282 2,498 257 268 2,430 244 242 243 1,025 1,146 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2015 2016 In % of sales In % of sales 22.6 2
Slide 32: Leverage ratio FY 2016 1.1x – Gearing ratio at 132%
Backup 4 Leverage ratio FY 2016 1.1x – Gearing ratio at 132% Net financial debt and leverage ratio Change in net financial debt in EUR mn in EUR mn 6,245 5,688 6,190 5,950 4,889 4,909 4,874 981 46 3,707 2.636 -3,009 -1,071 2.7 2.7 2.6 2,876 2.1 2.1 2.0 2,636 1.2 Gross debt Repay- New FX effect Gross
Slide 33: Schaeffler Value Added EUR 915 mn – RoCE 21.7%
Backup 5 Schaeffler Value Added EUR 915 mn – RoCE 21.7% Schaeffler Value Added 1) Key aspects Schaeffler Value Added in EUR mn Schaeffler Value Added 1) measures internal value creation on a group- 2.7 931 wide basis 885 915 803 787 Schaeffler Value Added 2016 of EUR 915 mn slightly below prior
Slide 34: Earnings per share
Backup 6 Earnings per share Earnings per common non-voting share (as reported) Earnings per common non-voting share (ProForma) in EUR in EUR 0.53 0.42 0.36 0.38 0.37 0.36 0.38 0.37 0.27 0.28 0.28 0.27 0.28 0.24 0.11 0.11 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2015 2016 1.28 1.30 0
Slide 35: Corporate and Financing Structure
Backup Overview Corporate and Financing Structure Corporate structure (simplified) Financing Structure as of December 31, 2016 in EUR2) mn, as of December 31, 2016 IHO Verwaltungs INA-Holding Schaeffler Nominal Nominal GmbH & Co. KG Debt instrument Interest Maturity Rating (USD mn) (EUR mn) Term loa