Schaeffler Ag · XETR:SHA0
Schaeffler — Kepler Cheuvreux German Corporate Conference 2022
51 slides from Schaeffler's conference presentation, Jan 19, 2022
Slide 1: Schaeffler Group – CEO and CFO update, January 2022
Schaeffler Group – CEO and CFO update, January 2022 Kepler Cheuvreux German Corporate Conference January 19th, 2022 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 Where we stand – Current trading and Key Q3 2021 messages 2 Divisional Business Highlights 3 Targets Schaeffler AG - Kepler Cheuvreux German Corporate Conference 3 PUBLIC
Slide 4: Where we stand – Current trading and Key Q3 2021 messages
Agenda 1 Where we stand – Current trading and Key Q3 2021 messages 2 Divisional Business Highlights 3 Targets Schaeffler AG - Kepler Cheuvreux German Corporate Conference 4 PUBLIC
Slide 5: Solid Q3 2021 – Automotive Technologies sales hampered by market, margin and FCF protected
1 Where we stand – Current trading and Key Q3 2021 messages Solid Q3 2021 – Automotive Technologies sales hampered by market, EBIT margin2 and FCF3 successfully protected Key messages Sales growth1 Q3 Gross margin Q3 Q3 Group sales1 -3.0% – Automotive Technologies sales realization 1 hampered by mar
Slide 6: Schaeffler Group Q3 2021 – Highlights and lowlights
1 Where we stand – Current trading and Key Q3 2021 messages Schaeffler Group Q3 2021 – Highlights and lowlights Automotive Technologies once again with strong Semiconductor shortage led to extremely low LVP1 in Q3, Outperformance of 750 bps in Q3 (9M: 660 bps); all indirectly impacting volumes in Au
Slide 7: Our Outlook going forward – What changed in our market assumptions since August
1 Where we stand – Current trading and Key Q3 2021 messages Our Outlook going forward – What changed in our market assumptions since August As shown on November 9, 2021 Automotive Technologies – Global LVP1 2021 Automotive Aftermarket – GDP2 Industrial – Industrial Production3 Up to 75.3 14% 74.8 8%
Slide 8: FY 2021 Guidance – Group and divisional margins and FCF confirmed
1 Where we stand – Current trading and Key Q3 2021 messages FY 2021 Guidance – Group and divisional margins and FCF confirmed As shown on November 9, 2021 Group Guidance Divisional Guidance Automotive Automotive Industrial Guidance Aug 44 Guidance Nov 94 Technologies Aftermarket FY 2021 FY 2021 Aug
Slide 9: Current Trading
1 Where we stand – Current trading and Key Q3 2021 messages Current Trading NEW 1 Good finish of FY 2021 – December sales better than expected, helped by sequential improvement in global LVP in Q4 2 Guidance for FY 2021 confirmed – Outperformance in Automotive Technologies expected at the upper end
Slide 10: Gross margin – Managing input cost inflation
1 Where we stand – Current trading and Key Q3 2021 messages Gross margin – Managing input cost inflation NEW Impact of input cost inflation (Gross effect) • As flagged in roadshows in November and December, input prices continued to increase in Q4 – Steel accounts for 65% of our production material
Slide 11: Conclusion & Outlook
1 Where we stand – Current trading and Key Q3 2021 messages Conclusion & Outlook Automotive Technologies strongly outperformed a weaker market, strong Aftermarket and 1 Industrial sales support evidence of “Automotive & Industrial Supplier” resilience paying off 2 Margins and FCF solid, also support
Slide 12: Divisional Business Highlights
Agenda 1 Where we stand – Current trading and Key Q3 2021 messages 2 Divisional Business Highlights 3 Targets Schaeffler AG - Kepler Cheuvreux German Corporate Conference 12 PUBLIC
Slide 13: Roadmap 2025 – Building on our strong foundations
2 Divisional Business Highlights Roadmap 2025 – Building on our strong foundations and innovating as diversified Automotive and Industrial Group Automotive Technologies Automotive Aftermarket Industrial Driving innovation with systems and services Mature New Platform ▪ One-stop-shop Robotics Wireles
Slide 14: Automotive Technologies – Strong Outperformance, effective margin protection
2 Divisional Business Highlights – Automotive Technologies Automotive Technologies – Strong Outperformance, effective margin protection Sales Sales by business division | yoy growth in EUR mn +16.1%1 9M 2020 9M 2021 ∆1 -12.2%1 6,286 E-Mobility 719 883 +22.4% 5,425 2,161 1,921 Engine Systems 1,425 1,
Slide 15: Vision Powertrain 2035 – Electrification is further accelerating
2 Divisional Business Highlights – Automotive Technologies Vision Powertrain 2035 – Electrification is further accelerating Vision Powertrain 2035 Global Light Vehicle Production We drive the transition to innovative 15% propulsion systems 30% 56% 35% 88% HEV as transition technology will 40% reach
Slide 16: We actively manage our Product Portfolio – Harvesting the Mature, Growing the New Business
2 Divisional Business Highlights – Automotive Technologies We actively manage our Product Portfolio – Harvesting the Mature, Growing the New Business Vision Powertrain 2035 Mature Business New Business Global Light Vehicle Production Products for Powertrain agnostic1 Powertrain agnostic1 Products fo
Slide 17: Eco-system – Optimizing our leading technological platform
2 Divisional Business Highlights – Automotive Technologies Eco-system – Optimizing our leading technological platform, leveraging our strong industrialization capabilities Mature Business New Business How we harvest Mature Business • We right-size investments and resource allocation in our Mature We
Slide 18: Eco-system – Creating a leading technological platform
2 Divisional Business Highlights – Automotive Technologies Eco-system – Creating a leading technological platform with strong industrialization capabilities Mature Business New Business Growing our New Business • We continuously leverage our Automotive + Industrial supplier eco- We system – Our New
Slide 19: Automotive Technologies Operating Model sharpened
2 Divisional Business Highlights – Automotive Technologies Automotive Technologies Operating Model sharpened Mature Business New Business Key aspects • We sharpen our Operating Model in Automotive Technologies, consistent with our goals to: Powertrain- Engine & − Lead in E-Mobility, technological ed
Slide 20: Automotive Technologies – How we win
2 Divisional Business Highlights – Automotive Technologies Automotive Technologies – How we win: Driving the transition to innovative Powertrain and Chassis Technologies Schaeffler & Mobileye Investment in state-of- are advancing the the-art sustainable E- industrialization of Mobility plant autonom
Slide 21: Automotive Aftermarket – Strong sales development in Q3, good margin on high comps
2 Divisional Business Highlights – Automotive Aftermarket Automotive Aftermarket – Strong sales development in Q3, good margin on high comps Sales Sales by region | yoy growth in EUR mn +18.3%1 9M 2020 9M 2021 ∆1 +8.7%1 Europe 875 985 +13.2% 1,411 1,204 456 500 Americas 216 271 +34.0% Greater China
Slide 22: Automotive Aftermarket – How we win: REPXPERT Remote Support
2 Divisional Business Highlights – Automotive Aftermarket Automotive Aftermarket – How we win: REPXPERT Remote Support is the next level digital service for garages Conventional technical support methods reach their limitations when it comes to complex, demanding vehicle repairs • Service technician
Slide 23: Industrial – Double-digit sales growth, EBIT margin above 12%
2 Divisional Business Highlights – Industrial Industrial – Double-digit sales growth, EBIT margin2 above 12% Sales Sales by region | yoy growth in EUR mn +14.2%1 9M 2020 9M 2021 ∆1 +15.8%1 2,649 Europe 973 1,071 +10.5% 2,335 Americas 396 436 +15.3% 774 911 Greater China 639 756 +17.7% Q3 2020 Q3 202
Slide 24: Industrial – How we win: Railsponsible Supplier Award 2021
2 Divisional Business Highlights – Industrial Industrial – How we win: Railsponsible Supplier Award 2021 in the category “Climate Change and Circular Economy” Railway Supplier Award • Supply model with direct availability and 100 percent return service • Circular approach reducing CO2 emissions, ene
Slide 25: Synergies – Automotive and Industrial cross-fertilization
2 Divisional Business Highlights Synergies – Automotive and Industrial cross-fertilization leveraging Offroad & E-Motor • New E-Mobility business for Offroad applications based on close cooperation between divisions • Customer intimacy and application knowledge of the Industrial Division • Automotiv
Slide 26: Capital allocation – Capex ratio increased to 6.4% in Q3
2 Divisional Business Highlights Capital allocation – Capex ratio increased to 6.4% in Q3, investments in growth business Investment1 allocation | in EUR mn Key aspects Q3 • Reinvestment rate: clearly >1 in Industrial division and BD E-Mobility; FY 19 FY 20 Q3 20 Q3 21 9M 21 consistently <1 in BD Tr
Slide 27: Targets
Agenda 1 Where we stand – Current trading and Key Q3 2021 messages 2 Divisional Business Highlights 3 Targets Schaeffler AG - Kepler Cheuvreux German Corporate Conference 27 PUBLIC
Slide 28: Sustainability – New step on our path to Climate Neutrality
3 Targets Sustainability – New step on our path to Climate Neutrality Long-Term Sustainability Targets Key aspects • Decarbonization as top priority • Emissions occurring in the supply 2019 2025 2030 2035 2040 chain (Scope 3 upstream): − Climate neutral from 2040 − Emission reduction of 25% until 20
Slide 29: Mid-term Targets until 2025
3 Targets Mid-term Targets until 2025 Mid-term Targets Automotive Technologies Automotive Aftermarket Industrial Outperformance1 FX-adj. sales growth FX-adj. sales growth 200 to 500 bps > GDP growth > IP growth on average2 on average2 on average2 3 4 6% to 13 15% to 12 14% to EBIT margin before spec
Slide 30: Equity Story – Positioning Schaeffler for long-term value creation
3 Targets 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 application
Slide 31: IR Contact
IR Contact Investor Relations Phone: + 49 9132 82-4440 Email: ir@schaeffler.com Web: www.schaeffler.com/ir PUBLIC
Slide 32: Schaeffler Group overview Q3 2021 details
Back up 1 Schaeffler Group overview 2 Q3 2021 details Schaeffler AG - Kepler Cheuvreux German Corporate Conference 32 PUBLIC
Slide 33: Schaeffler in facts – strong starting point
Backup: Schaeffler AG overview and detailed Q3 2021 financials Schaeffler in facts – strong starting point Strong customer base with Approximately More than approx. 11,800 EUR 12.6 bn 1,900 customers Sales in 2020 patents filed in 2020 1.1 m 75 plants tons of processed steel p.a. 20 R&D centers Arou
Slide 34: Schaeffler Group at a glance
Backup: Schaeffler AG overview and detailed Q3 2021 financials Schaeffler Group at a glance – We are an Automotive and Industrial supplier 3 Divisions Schaeffler Group 4 Regions In % of FY 2020 In % of FY 2020 Asia Pacific • Leading positions in 13% Industrial technology and innovation 25% • 10 cust
Slide 35: Overview Corporate and Financing Structure
Backup: Schaeffler AG overview and detailed Q3 2021 financials Overview Corporate and Financing Structure Corporate structure (simplified) | as of September 30, 2021 Financing structure | as of September 30, 2021 A IHO Verwaltungs GmbH INA-Holding Schaeffler Debt instrument Nominal Nominal Interest
Slide 36: Schaeffler Group overview Q3 2021 details
Back up 1 Schaeffler Group overview 2 Q3 2021 details Schaeffler AG - Kepler Cheuvreux German Corporate Conference 36 PUBLIC
Slide 37: Key figures Q3 and 9M 2021
Backup: Schaeffler AG overview and detailed Q3 2021 financials Key figures Q3 and 9M 2021 Q3 2021 9M 2021 in EUR mn Q3 2020 Q3 2021 vs. Q3 2020 9M 2020 9M 2021 vs. 9M 2020 -1.8% +15.4% Sales 3,391 3,332 8,964 10,346 -3.0%1 +15.9%1 Gross Profit 796 793 -3 mn 1,907 2,593 +686 mn Gross margin 23.5% 23.
Slide 38: Sales – Mixed regional sales development
Backup: Schaeffler AG overview and detailed Q3 2021 financials Sales – Mixed regional sales development, China with weakest growth on tough comps Sales | in EUR mn Key aspects Q3 • Slightly negative growth development yoy, driven by lower production -1.8%1 levels in Automotive Technologies and V-sha
Slide 39: Gross Profit – Stable gross margin yoy, production costs increasing
Backup: Schaeffler AG overview and detailed Q3 2021 financials Gross Profit – Stable gross margin yoy, production costs increasing Gross Profit Q3 2020 vs. Q3 2021 | in EUR mn Key aspects • Negative price effect in Auto Technologies lower than PY, due to some material price clauses in North America;
Slide 40: Functional costs – Increase yoy due to low comps
Backup: Schaeffler AG overview and detailed Q3 2021 financials Functional costs – Increase yoy due to low comps, cost discipline keeps functional cost ratio sequentially stable Functional costs | in EUR mn Key aspects • Functional costs increased by 12% in Q3 yoy on very low comps due to short-term
Slide 41: Solid EBIT margin – Strong margin in Industrial
Backup: Schaeffler AG overview and detailed Q3 2021 financials Solid EBIT margin1 – Strong margin in Industrial, Automotive Technologies indirectly impacted by semi shortage EBIT1 | in EUR mn Key aspects • Solid Q3 EBIT margin1 of 8.2%, however input price effects phasing in -1.3pp • Automotive Tech
Slide 42: Automotive Technologies – Outperformance driven by double-digit Europe and Asia/Pacific
Backup: Schaeffler AG overview and detailed Q3 2021 financials Automotive Technologies – Outperformance driven by double-digit Europe and Asia/Pacific, Americas strong, effective margin protection Sales by business division | yoy growth EBIT2 Q3 2020 vs. Q3 2021 | in EUR mn Q3 2020 Q3 2021 ∆1 E-Mobi
Slide 43: Automotive Aftermarket – Strong sales development, EBIT margin impacted by input costs
Backup: Schaeffler AG overview and detailed Q3 2021 financials Automotive Aftermarket – Strong sales development, EBIT margin5 impacted by higher input costs Sales by region | yoy growth EBIT5 Q3 2020 vs. Q3 2021 | in EUR mn Q3 2020 Q3 2021 ∆1 Europe 334 341 +2.3% Americas 80 102 +26.5% Greater Chin
Slide 44: Industrial – Most sector clusters with double-digit growth
Backup: Schaeffler AG overview and detailed Q3 2021 financials Industrial – Most sector clusters with double-digit growth, strong EBIT2 margin Sales by region | yoy growth EBIT2 Q3 2020 vs. Q3 2021 | in EUR mn Q3 2020 Q3 2021 ∆1 Europe 295 372 +26.7% Americas 127 151 +17.6% -1 Greater China 231 250
Slide 45: EBIT before special items – Reconciliation
Backup: Financials Q3/2021 EBIT before special items – Reconciliation Reconciliation 9M 2021 | in EUR mn Key aspects • Special items amounted to positive EUR 27 mn in 9M, mainly related to a partial reversal of provisions for the Roadmap 2025 • Financial Result of EUR -85 mn (PY: EUR -114 mn); posit
Slide 46: Net Income EUR 149 mn, EPS EUR 0.22 – ROCE reached 18.0%
Backup: Schaeffler AG overview and detailed Q3 2021 financials Net Income1 EUR 149 mn, EPS2 EUR 0.22 – ROCE3 reached a strong 18.0% Net income1 | in EUR mn Key aspects • Q3 2021 Net Income1 reached EUR 149 mn, Net income before special +320 mn items1 amounted to EUR 146 mn • 9M 2021 Net Income1 of E
Slide 47: Free Cash Flow – Strong EBITDA compensated outflows for Capex
Backup: Schaeffler AG overview and detailed Q3 2021 financials Free Cash Flow – Strong EBITDA compensated outflows for Capex Free Cash Flow before M&A1 | in EUR mn Reconciliation Q3 2021 | in EUR mn -108 mn +15 -215 0 519 -97 +3 225 137 333 355 130 113 225 EBITDA ∆ Net Capex Net Taxes Others FCF -28
Slide 48: Net debt decreased to EUR 2.0 bn – Leverage ratio at 0.8x
Backup: Schaeffler AG overview and detailed Q3 2021 financials Net debt decreased to EUR 2.0 bn – Leverage ratio1 at 0.8x Net financial debt and Leverage ratio1 | in EUR mn Key aspects Leverage ratio1 • Net financial debt decreased to EUR 2.0 bn, Leverage ratio1 0.8x • No maturities until March 2024
Slide 49: Free Cash Flow details 9M 2021
Backup: Schaeffler AG overview and detailed Q3 2021 financials Free Cash Flow details 9M 2021 – FCF supported by good operational performance FCF1 9M 2020 vs. 9M 2021 | in EUR mn Key aspects • Positive EBITDA development yoy due to good operating performance ∆ Net Working Capital EUR -151 mn • Net W
Slide 50: Ancillary comments
Backup: Schaeffler AG overview and detailed Q3 2021 financials Ancillary comments As shown on November 9, 2021 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 Mechat
Slide 51: 2022 Capital market activities
2022 Capital market activities Roadshows & Conferences – Next CEO & CFO IR events Financial calendar 2022 Mar 8 FY 2021 Earnings Release Jan 19 Conference – Kepler, German Corporates (virtual) Symposium Baden-Baden, Automotive Apr 6 Jan. 25 Roadshow – HSBC, Italy/Spain/France (virtual) Technologies
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