Schaeffler Ag · XETR:SHA0
Schaeffler — Berenberg Conference USA 2021
43 slides from Schaeffler's conference presentation, May 20, 2021
Slide 1: Schaeffler AG Investor Presentation
Schaeffler AG Investor Presentation Marc McGrath, CEO Americas May 20, 2021
Slide 2: Agenda
Agenda 1 Schaeffler Group Q1/2021 Financials 2 Highlights & Deep Dive Americas Region Schaeffler Group Q1/2021 Business 2
Slide 3: Schaeffler Group at a glance – We are an Automotive and Industrial supplier
1 Schaeffler Group Q1/2021 Financials Schaeffler Group at a glance – We are an Automotive and Industrial supplier 3 Divisions Schaeffler Group 4 Regions In % of Sales 2020 In % of Sales 2020 • Leading position in technology and Asia/Pacific innovation 13% Industrial 25% • Diversified customer base s
Slide 4: Roadmap 2025 – Building on our strong foundations
1 Schaeffler Group Q1/2021 Financials 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 Wi
Slide 5: Strong Q1 2021 – Sales growth driven by China, double-digit margins in all divisions
1 Schaeffler Group Q1/2021 Financials 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 po
Slide 6: Schaeffler Group Q1 21 – Highlights and lowlights
1 Schaeffler Group Q1/2021 Financials 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, requirin
Slide 7: Automotive Technologies – Exceptional growth in China
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 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 9: 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 10: Our Outlook going forward – What changed in our market assumptions since March
2 Business Highlights Q1 2021 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
Slide 11: FY 2021 Guidance – Confident outlook, cautious approach
2 Business Highlights Q1 2021 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. O
Slide 12: Agenda
Agenda 1 Schaeffler Group Q1/2021 Financials 2 Highlights & Deep Dive Americas Region Schaeffler Group Q1/2021 Business 12
Slide 13: Where we stand – Americas region at a glance
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas Where we stand – Americas region at a glance Main Locations Headquartered in Canada Plants, R&D Centers and Stratford, ON Fort Mill, SC Distribution Centers Brampton, ON Edmonton, AB Oakville, ON (Canada Headquarters) 13 Plants 5 R&D / e
Slide 14: Where we stand – Americas region with 21% of total Group sales
2 1 Schaeffler Group Q1 Business Highlights & Deep Dive Americas Americas Introduction Where we stand – Americas region with 21% of total Group sales Net sales development Division Sales Distribution 2010-2020 (mn EUR) 2020 CAGR 1,523 2,477 (2010-2020) 5.0% AFTERMARKET INDUSTRIAL 3.000 CAGR 11% 20%
Slide 15: Where we play – Attractive markets and diverse customer base
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas Where we play – We are present in attractive markets, and deliver solutions to a diverse customer base – Trends also reinforced by government policies Key Trends Focus Areas Customer Sectors Cars & Light Commercial Vehicles Sustainabilit
Slide 16: Automotive Technologies – How we win: preferred technology partner
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas 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 Climat
Slide 17: Automotive Technologies – How we win: E-Mobility Heavy Duty
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas 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
Slide 18: How we win – Automotive Technologies: Finalist for 2021 Automotive News Pace Award
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas How we win – Automotive Technologies: Finalist for the 2021 Automotive News Pace Award! AUTOMOTIVE NEWS PACE AWARD • The P2 Hybrid Module for RWD Transmission, produced at our Wooster plant, has been chosen as a finalist for the 2021 Aut
Slide 19: Automotive Aftermarket – How we win: tapping into LCV business growth
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas 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 se
Slide 20: Automotive Aftermarket – How we win in Region Americas
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas 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 i
Slide 21: Industrial – How we win: driving the recovery with core products
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas 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 ch
Slide 22: Industrial – How we win in Region Americas
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas 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
Slide 23: How we win – High priority on training and development of our employees
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas How we win – High priority on training and development of our employees • Schaeffler Academy • Technical Training • Leadership & Talent Management • Apprenticeship Inspire & Empower • Group Engineer Program • Co-op Program • Internship •
Slide 24: How we win – Our sustainability initiatives are well on track
2 Schaeffler Group Q1 Business Highlights & Deep Dive Americas How we win – Our sustainability initiatives are well on track We made significant improvements in our operational efficiency. 2 GWH of 0 Landfill at energy saved Danbury Site Turned 100 10 Million By achieving one of the Saving enough en
Slide 25: We pioneer motion
We pioneer motion
Slide 26: 2021 Capital market activities
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 Earnings R
Slide 27: IR Contact
IR Contact Investor Relations Phone: + 49 9132 82-4440 Email: ir@schaeffler.com Web: www.schaeffler.com/ir
Slide 28: Backup – Q1/2021 Financials
Backup 1 Backup 1 – Q1/2021 Financials May 12, 2021 Q1 2021 Schaeffler AG earnings 28
Slide 29: Key figures Q1 2021
Backup – Q1/2021 Financials 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
Slide 30: Sales – Strong growth in China, recovery in Europe still lagging
Backup – Q1/2021 Financials 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 31: Gross Profit – Strong Gross margin driven by Automotive Technologies
Backup – Q1/2021 Financials 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 32: Functional costs – Flat development yoy, cost ratio decreased
Backup – Q1/2021 Financials 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 33: Strong EBIT margin before special items
Backup – Q1/2021 Financials 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 34: EBIT before special items – Reconciliation
Backup – Q1/2021 Financials 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 35: Net Income EUR 235 mn – EPS positive with EUR 0.35
Backup – Q1/2021 Financials 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 36: Free Cash Flow – Strong EBITDA compensating outflows
Backup – Q1/2021 Financials 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 37: Net debt decreased to EUR 2.2 bn – Leverage ratio at 1.1x
Backup – Q1/2021 Financials 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 38: Ancillary comments
Backup Ancillary comments 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 systems Order Intake E-Mobility
Slide 39: Backup – Additional information
Backup 2 Backup 2 – Additional information May 12, 2021 Q1 2021 Schaeffler AG earnings 39
Slide 40: Key figures by Group and division
Backup – Additional information 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
Slide 41: Automotive Technologies (AT) outperformance by quarters
Backup – Additional information 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
Slide 42: Overview Corporate and Financing Structure
Backup – Additional information 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) (
Slide 43: Liquidity position of EUR 3.6 bn at the end of March 2021
Backup – Additional information 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