Schaeffler Ag · XETR:SHA0

Schaeffler — Schaeffler Ag Ord — Q3 2024 Earnings Presentation

51 slides from Schaeffler's earnings presentation, Nov 5, 2024

  1. Slide 1: Q3 and 9M 2024 Schaeffler AG earnings

    Q3 and 9M 2024 Schaeffler AG earnings November 5, 2024 Herzogenaurach Copyright Schaeffler AG, 2024 – All rights reserved. | PUBLIC

  2. 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

  3. Slide 3: Agenda

    1 Overview 2 Business Highlights Q3 and 9M 2024 3 Financial Results Q3 and 9M 2024 4 Outlook

  4. Slide 4: Schaeffler Group – Q3 results further impacted by challenging market environment

    1 OVERVIEW Schaeffler Group – Q3 results further impacted by challenging market environment Key messages Sales growth1 Q3 Gross Margin Q3 1 Q3 Sales1 -1.1% – Q2 trends continued with solid outperformance in ATech, strong growth in VLS and market-driven sales decline in B&IS -1.1% 21.8% 2 Q3 EBIT mar

  5. Slide 5: Schaeffler Group Q3 2024 – Highlights and lowlights

    1 OVERVIEW Schaeffler Group Q3 2024 – Highlights and lowlights Automotive Technologies Market environment Very strong Q3 order intake of EUR 2.4 bn in Lower automotive production especially in Europe, E-Mobility, ATech Book-to-bill-ratio 2.0x ongoing weakness in various industrial sectors Vehicle Li

  6. Slide 6: Additional structural measures announced – Program Forward to address current challenges

    1 OVERVIEW Additional structural measures announced – Program Forward to address current challenges Current Challenges 3 Focus Areas 1 1) Consolidate production footprint Challenging business Improve environment in the performance 2) Adjust capacities in factories Industrial sectors of B&IS 3) Optim

  7. Slide 7: Program Forward – Focus on Europe with gross reduction of ~4,700 HCO

    1 OVERVIEW Program Forward – Focus on Europe with gross reduction of ~4,700 HCO Impact Key aspects • Gross reduction of ~4,700 positions in Europe, thereof ~2,800 positions in Germany • Net reduction of ~3,700 positions after relocations • Gross reduction distributed over all three focus areas: B&IS

  8. Slide 8: Financial impact – Expected EBIT increase of EUR ~290 mn per year from 2029

    1 OVERVIEW Financial impact – Expected EBIT increase of EUR ~290 mn per year from 2029 Indicative ∆ EBIT Business Case includes EUR ~75mn cost ~290 Key aspects in EUR mn synergies as already communicated 75 • Recurring EBIT impact of EUR ~290 mn per year from 2029 onwards, thereof EUR ~75 mn of alre

  9. Slide 9: Business Highlights Q3 and 9M 2024

    1 Overview 2 Business Highlights Q3 and 9M 2024 3 Financial Results Q3 and 9M 2024 4 Outlook

  10. Slide 10: Sales Performance Q3 2024 – Heterogeneous regional development

    2 BUSINESS HIGHLIGHTS Q3 AND 9M 2024 Sales Performance Q3 2024 – Heterogeneous regional development Automotive Vehicle Lifetime Bearings & Technologies2 Solutions2 Industrial Solutions2 Q3 2024 1 % of Group Region Growth sales 42% 16% 41% Europe 43% -2.9% +11.8% -12.8% -2.9% Americas 23% +3.7% +10.2

  11. Slide 11: Automotive Technologies – Double-digit growth in E-Mobility, EBIT margin impacted by ramp-ups

    2 BUSINESS HIGHLIGHTS Q3 AND 9M 2024 Automotive Technologies – Double-digit growth1 in E-Mobility, EBIT margin3 impacted by ramp-ups Key Aspects Sales EBIT3 in EUR mn in EUR mn E-Mobility growing double-digit1 -83 mn in Q3, positive momentum in China due to growing xEV market +0.2%1 and ramp-up of x

  12. Slide 12: Automotive Technologies – Very strong Q3 order intake of EUR 2.4 bn in E-Mobility

    2 BUSINESS HIGHLIGHTS Q3 AND 9M 2024 Automotive Technologies – Very strong Q3 order intake of EUR 2.4 bn in E-Mobility Order intake1,2 Key aspects in EUR bn Thereof E-Mobility: Strong performance 3.2 5.0 5.1 4.4 YTD E-Mobility in the US market with programs for our innovative rigid 3in1 Beam 10.5 E-

  13. Slide 13: Vehicle Lifetime Solutions – Q3 with double-digit sales growth and strong EBIT margin

    2 BUSINESS HIGHLIGHTS Q3 AND 9M 2024 Vehicle Lifetime Solutions – Q3 with double-digit sales growth1 and strong EBIT margin3 Key Aspects Sales EBIT3 +16.1%1 Double-digit sales growth1 in all in EUR mn in EUR mn +70 mn +5 mn regions confirming strong 1,953 market position +13.2%1 333 106 1,710 644 10

  14. Slide 14: Vehicle Lifetime Solutions – Automechanika Frankfurt Innovation Award Winner

    2 BUSINESS HIGHLIGHTS Q3 AND 9M 2024 Vehicle Lifetime Solutions – Automechanika Frankfurt Innovation Award Winner: E-Motor repair tool for E-Axle repairs (E-Drive Stator Lift) Key Aspects • Joint development with our Aftermarket tooling partner • First-to-market prototype to separate rotor and stato

  15. Slide 15: Bearings & Industrial Solutions – EBIT margin stabilizing on low level

    2 BUSINESS HIGHLIGHTS Q3 AND 9M 2024 Bearings & Industrial Solutions – EBIT margin3 stabilizing on low level, impacted by continued weak market environment Key Aspects Sales EBIT3 in EUR mn in EUR mn -171 mn Industrial sales affected by -4.2%1 -5.0%1 ongoing weak European market -65 mn and unchanged

  16. Slide 16: Bearings & Industrial Solutions – Orderbook Industrial with positive growth for first time since 2022

    2 BUSINESS HIGHLIGHTS Q3 AND 9M 2024 Bearings & Industrial Solutions – Orderbook Industrial with positive growth for first time since 2022 Orderbook Industrial 3-month1, 2 Orderbook 3M1 Sales2 Recent order wins yoy growth % 40 Industrial Bearings: Supply contract for axle bearings 30 in important Au

  17. Slide 17: Capital allocation – Differentiated steering, prioritization of Capex for growth business

    2 BUSINESS HIGHLIGHTS Q3 AND 9M 2024 Capital allocation – Differentiated steering, prioritization of Capex for growth business Investment1 allocation Key Aspects in EUR mn FY 2023 Q3 2023 Q3 2024 4 9M 2024 4 • Reinvestment Rate Target: Continued prioritization of E-Mobility business with a Reinvestm

  18. Slide 18: Financial Results Q3 and 9M 2024

    1 Overview 2 Business Highlights Q3 and 9M 2024 3 Financial Results Q3 and 9M 2024 4 Outlook

  19. Slide 19: Sales – Good growth in Americas, continued strong performance by Vehicle Lifetime Solutions

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Sales – Good growth in Americas, continued strong performance by Vehicle Lifetime Solutions Sales Key Aspects in EUR mn -2.6%1 • Automotive Technologies: -2.5% growth2 in Q3, solid -1.1%2 outperformance driven by Europe and Americas 4,152 4,056 4,062 4,043 4,085 4,

  20. Slide 20: Gross Profit – Stable gross margin despite challenging market environment

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Gross Profit – Stable gross margin despite challenging market environment Gross Profit Q3 2023 vs. Q3 2024 Key Aspects in EUR mn • Pricing: Negative pricing driven by continued price pressure in B&IS • Mix: Positive mix effect driven by higher share of VLS 883 862

  21. Slide 21: Overhead costs – Increased ratio due to business and integration activities

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Overhead costs – Increased ratio due to business and integration activities Overhead costs Key Aspects in EUR mn +7.5% • R&D: Higher expenses related to E-Mobility customer projects 692 684 669 • Selling expenses: Increase mainly due to volume-driven logistic costs

  22. Slide 22: EBIT margin – Lower EBIT margin driven by Automotive Technologies and Bearings & Industrial Solutions

    3 FINANCIAL RESULTS Q3 AND 9M 2024 EBIT margin1 – Lower EBIT margin driven by Automotive Technologies and Bearings & Industrial Solutions Key Aspects EBIT1 • Automotive Technologies: EBIT margin1 suffering from both in EUR mn negative volume effects overall and project ramp-ups in E-Mobility -3.7pp

  23. Slide 23: Automotive Technologies – Solid outperformance, EBIT margin impacted by lower volumes

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Automotive Technologies – Solid outperformance, EBIT margin2 impacted by lower volumes and higher R&D expenses Sales by business division yoy growth EBIT2 Q3 2023 vs. Q3 2024 in EUR mn in EUR mn Q3 2023 Q3 2024 ∆1 107 E-Mobility 333 367 +11.5% Engine & Transmission

  24. Slide 24: Vehicle Lifetime Solutions – Very strong growth in all regions, strong EBIT margin

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Vehicle Lifetime Solutions – Very strong growth1 in all regions, strong EBIT margin5 Sales by region yoy growth EBIT5 Q3 2023 vs. Q3 2024 in EUR mn in EUR mn Q3 2023 Q3 2024 ∆1 Europe 386 436 +11.8% +39 Americas 127 123 +10.2% 0 +1 Greater China 34 45 +29.6% 106 10

  25. Slide 25: Bearings & Industrial Solutions – Continued weakness in Europe, EBIT margin significantly lower

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Bearings & Industrial Solutions – Continued weakness in Europe, EBIT margin2 significantly lower yoy Sales by region yoy growth EBIT2 Q3 2023 vs. Q3 2024 in EUR mn in EUR mn Q3 2023 Q3 2024 ∆1 Europe 745 650 -12.8% Americas 339 335 +2.4% 138 Greater China 370 366 -

  26. Slide 26: Net Income – EPS for 9M at EUR 0.38, ROCE at 9.0%

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Net Income1 – EPS2 for 9M at EUR 0.38, ROCE3 at 9.0% Net income1 Key Aspects in EUR mn -163 mn • Q3 Net income yoy impacted by lower EBIT and financial result • ROCE and Schaeffler Value Added negatively affected by lower EBIT 231 and higher capital employed due to

  27. Slide 27: Free Cash Flow – Strong FCF despite integration and financing costs

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Free Cash Flow – Strong FCF despite integration and financing costs, effective Working Capital management Free Cash Flow before M&A1 in EUR mn Reconciliation Q3 2024 in EUR mn +6 mn +100 408 182 210 188 +59 188 103 75 -227 -51 -101 -73 EBITDA ∆ Net Capex Net Intere

  28. Slide 28: Leverage ratio at 2.5x LTM EBITDA bsi

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Leverage ratio at 2.5x LTM EBITDA bsi – Technically impacted until full consolidation of Vitesco Net financial debt and Leverage ratio1 4,920 4,812 Key Aspects in EUR mn 4,613 • Gross debt higher yoy notably due to bond issuance for the financing 2.4x 2.5x of the a

  29. Slide 29: Vitesco Technologies – Highlights

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Vitesco Technologies – Highlights 2,045 121 EUR mn EUR mn sales in Q3 2024 (PY: EUR 2,199 mn) – mainly impacted by 5.9% decreasing Non-Core sales and adjusted EBIT (PY: EUR 67 mn, overall Automotive environment 3.1%) – supported by accelerated R&D reimbursements an

  30. Slide 30: Vitesco Technologies – Group Level Development

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Vitesco Technologies – Group Level Development Sales (EUR mn) Adjusted EBIT (EUR mn) Vitesco Technologies Organic growth Organic sales development 2.7 pp above light -1.9% vehicle production despite planned decrease in Non-Core sales 2,199 Headwinds from currency r

  31. Slide 31: Vitesco Technologies – Division Powertrain Solutions

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Vitesco Technologies – Division Powertrain Solutions Sales (EUR mn) Adjusted EBIT (EUR mn) Powertrain Solutions Division – DIV P Organic growth Topline decreased due to phase-out of Non-Core -10.8% sales, consolidation, weak market environment and currency related

  32. Slide 32: Vitesco Technologies – Division Electrification Solutions

    3 FINANCIAL RESULTS Q3 AND 9M 2024 Vitesco Technologies – Division Electrification Solutions Sales (EUR mn) Adjusted EBIT (EUR mn) Electrification Solutions Division – DIV E Organic growth Despite market volatility, Electrification portfolio +12.3% experiences consistent growth Sales development inc

  33. Slide 33: Outlook

    1 Overview 2 Business Highlights Q3 and 9M 2024 3 Financial Results Q3 and 9M 2024 4 Outlook

  34. Slide 34: Guidance FY 2024 confirmed for all metrics

    4 OUTLOOK Guidance FY 2024 confirmed for all metrics FY 2024 Combined Guidance1 KEY ASPECTS • FY 2024 Group Guidance is based on: Schaeffler Group - Vitesco accounted for „at equity“ from acquisition in January until Q3 2024 FY 2023 9M 2024 FY 2024 included Actuals Actuals Guidance1 - Vitesco to be

  35. Slide 35: Schaeffler operating model and reporting structure – 4 Divisions plus Corporate & Other

    4 OUTLOOK Schaeffler operating model and reporting structure – 4 Divisions plus Segment Others includes for 2024 Corporate & Other from Jan 1st, 2025 at equity result/full consolidation of Vitesco. From Jan 1st, 2025 Vitesco activities allocated to new segments 1 2 3 4 Vehicle Lifetime Bearings & In

  36. Slide 36: Conclusion & Outlook – Challenging Q3, combined FY guidance confirmed

    4 OUTLOOK Conclusion & Outlook – Challenging Q3, combined FY guidance confirmed 1 Financial performance – Mixed performance in ATech, continued strong contribution from VLS, B&IS earnings quality below expectations. Strong FCF despite Vitesco integration and financing costs 2 Program Forward – Addre

  37. Slide 37: Financial calendar and selected IR events

    4 OUTLOOK Financial calendar and selected IR events Roadshows & Conferences Financial calendar 2024/2025 with Top Management participation Nov 19 BNP Paribas Midcap CEO Conference – Paris Mar 5 FY 2024 Earnings Release Nov 20 DZ Bank Equity Conference – Frankfurt Apr 24 AGM Dec 4 Goldman Sachs Auto

  38. Slide 38: Thank you

    Thank you Investor Relations Contact Phone +49 9132 82-4440 Email ir@schaeffler.com Web www.schaeffler.com/ir Copyright Schaeffler AG, 2024 – All rights reserved. | PUBLIC

  39. Slide 39: Backup

    Nov 5, 2024 Q3 and 9M 2024 Schaeffler AG earnings Copyright Schaeffler AG, 2024 – All rights reserved. | PUBLIC

  40. Slide 40: At equity accounting Vitesco Technologies Group AG until September 30th 2024

    BACKUP At equity accounting Vitesco Technologies Group AG until September 30th 2024 Subsequent measurement in Q3 20241 Key aspects in EUR mn • Accounting driven by 1 Vitesco earnings, 2 IFRS conversion, 3 1 PPA effects, 4 adjustments and 5 1,236 +0.5 2 4 OCI effects 3 5 +5.7 • Effects shown represen

  41. Slide 41: At equity accounting Vitesco Technologies Group AG until September 30th 2024

    BACKUP At equity accounting Vitesco Technologies Group AG until September 30th 2024 Subsequent measurement in 9M 20241 Key aspects in EUR mn • Accounting driven by 1 Vitesco earnings, 2 IFRS conversion, 3 1 2 PPA effects, 4 adjustments, 5 OCI +21.8 effects and 6 Vitesco dividend 1,269 payment 3 4 •

  42. Slide 42: Key figures by Division

    BACKUP Key figures by Division Adjusted comparative figures 2023 Automotive Technologies in EUR mn Bearings & Industrial Solutions in EUR mn Q1 23 Q2 23 Q3 23 Q4 23 FY 23 Q1 24 Q2 24 Q3 24 Q1 23 Q2 23 Q3 23 Q4 23 FY 23 Q1 24 Q2 24 Q3 24 Sales 1,778 1,730 1,748 1,780 7,035 1,770 1,764 1,678 Sales 1,7

  43. Slide 43: Market assumptions

    BACKUP Market assumptions Global LVP1 2024 Global LV Parc3 Industrial Production4 90.5 88.5 88-89 4.9% 4.9% World World 0.7% 0.8% 1.6% 1.1% 2.7% 21.4 22.2 21.6 23.3 -1.1% 2023 Q1 Q2 Q3 Q4e 2024e 2024e Europe Americas Greater China Asia/Pacific Europe Americas Greater China Asia/Pacific S&P SHA2 FY 2

  44. Slide 44: Key figures Q3 and 9M 2024

    BACKUP Key figures Q3 and 9M 2024 Q3 2024 9M 2024 in EUR mn Q3 2023 Q3 2024 vs. Q3 2023 9M 2023 9M 2024 vs. 9M 2023 -2.6% -0.3% Sales 4,062 3,957 12,270 12,233 -1.1%1 +1.0%1 Gross Profit 883 862 -21 mn 2,709 2,828 +119 mn Gross margin 21.7% 21.8% +0.1pp 22.1% 23.1% +1.0pp EBIT2 340 187 -153 mn 964 7

  45. Slide 45: Automotive Technologies – Solid outperformance, EBIT margin lower yoy

    BACKUP Automotive Technologies – Solid outperformance, EBIT margin2 lower yoy Sales by business division yoy growth EBIT2 9M 2023 vs. 9M 2024 in EUR mn in EUR mn 9M 2023 9M 2024 ∆1 +39 E-Mobility 962 1,054 +10.7% 283 Engine & Transmission 3,950 3,824 -2.2% -24 Chassis Systems 343 334 -2.0% -44 -22 2

  46. Slide 46: Vehicle Lifetime Solutions – Strong growth in all regions, EBIT margin clearly above PY

    BACKUP Vehicle Lifetime Solutions – Strong growth1 in all regions, EBIT margin5 clearly above PY Sales by region yoy growth EBIT5 9M 2023 vs. 9M 2024 in EUR mn in EUR mn 9M 2023 9M 2024 ∆1 Europe 1,132 1,305 +13.7% +145 Americas 368 396 +19.4% -2 +4 Greater China 106 132 +28.1% 333 Asia/Pacific 104

  47. Slide 47: Bearings & Industrial Solutions – Negative growth in Europe and China

    BACKUP Bearings & Industrial Solutions – Negative growth1 in Europe and China, EBIT margin2 below PY Sales by region yoy growth EBIT2 9M 2023 vs. 9M 2024 in EUR mn in EUR mn 9M 2023 9M 2024 ∆1 Europe 2,299 2,101 -8.5% 428 +11 Americas 1,035 1,050 +3.1% Greater China 1,152 1,059 -5.8% -9 Asia/Pacific

  48. Slide 48: Net Income – EBIT reconciliation and special items

    BACKUP Net Income1 – EBIT reconciliation and special items Reconciliation Q3 2024 in EUR mn Key aspects • Special items in Q3 mainly include integration costs for the Vitesco acquisition 187 170 • Financial result lower yoy due to higher interest payments -17 -81 Special items by Division3 in EUR mn

  49. Slide 49: Working Capital ratio 19.8% – Capex ratio 5.7% in Q3

    BACKUP Working Capital ratio 19.8% – Capex ratio 5.7% in Q3 Working capital1 Capex2 in EUR mn in EUR mn -99 mn -20 mn 3,318 3,413 3,402 3,233 3,175 3,219 3,040 273 247 221 222 227 198 195 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2023 2023 2023 2023 2024 2024 2024 2023 2023 2023 2023 2024 2024 2024

  50. Slide 50: Vitesco Technologies – Financial KPIs

    BACKUP Vitesco Technologies – Financial KPIs Vitesco Technologies Group (EUR mn) Highlights and Recent Developments Q3 2023 Q3 2024 Delta Sales Sales impacted by decreased Non-Core sales and Sales 2,199.4 2,045.1 -154.3 negative FX effects (1.9 pp) % growth -7.0% Adj. EBIT 66.6 120.7 54.1 Adjusted E

  51. Slide 51: Overview Corporate and Financing Structure

    BACKUP Overview Corporate and Financing Structure Financing structure IHO Verwaltungs GmbH as of October 31, 2024 A Corporate structure (simplified) as of October 31, 2024 Debt instrument Nominal Nominal Interest Maturity Rating USD mn EUR1 mn Fitch/Moody’s/S&P Loans RCF (EUR 1,000 mn) - 300 E+3.75%

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