Traton SE · XETR:8TRA
Traton — Investor Presentation (October 2022)
140 slides from Traton's investor presentation, October 2022
Slide 1: TRATON SE Analyst & Investor Factbook
TRATON SE Analyst & Investor Factbook October 2022 .
Slide 2: Disclaimer
Disclaimer This presentation has been prepared for information purposes only. It does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Volkswagen AG, TRATON SE, or any company of the TRATON GROUP
Slide 3: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. Strategy: TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 3 .
Slide 4: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. Strategy: TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 4 .
Slide 5: Overview TRATON GROUP
Overview TRATON GROUP Four strong global brands under one roof 97,235 Employees worldwide1 “Transforming Transportation” €30.6 bn Sustainability as a core principle and responsible Sales revenue behavior as a top priority in the Group’s strategy 31 production and 271,608 assembly sites worldwide Uni
Slide 6: Major milestones for TRATON GROUP
Major milestones for TRATON GROUP 2015 2019 2021 2021+ Establishment of Successful IPO Acquisition New VW Truck & Bus of TRATON SE of Navistar TRATON Strategy 2018 2021 2021 2022 Re-branding/ Squeeze-Out of MAN SE, Introduction Charging JV with new identity realignment MAN T&B of new Daimler Truck G
Slide 7: Key figures FY 2021
Key figures FY 2021 Incoming orders Unit sales Sales revenue 359,975 units 271,608 units €30,620 mn Adj. operating result Adj. return on sales €1,599 mn 5.2 % Net cash flow TRATON Operations Adj. operating result excl. PPA Adj. return on sales excl. PPA €1,890 mn 6.2 % €938 mn October 2022 TRATON SE
Slide 8: Four strong global brands under one roof
Four strong global brands under one roof TRATON SE Analyst & Investor Factbook .
Slide 9: TRATON GROUP brands
TRATON GROUP brands Driving the shift Simplifying business Trusted partner Value for money Scania is positioned as a MAN is a reliable business Navistar produces trucks Volkswagen Truck & Bus premium innovation leader partner whose objective is to under the International brand (VWTB) offers excellen
Slide 10: Covering all segments of the transportation industry from light to heavy vehicles
Covering all segments of the transportation industry from light to heavy vehicles Note: Examples, the illustration does not provide a complete overview. October 2022 TRATON SE Analyst & Investor Factbook 10 .
Slide 11: Strong Group of brands across key CV markets
Strong Group of brands across key CV markets Home base Europe and Europe North America Brazil Brazil Unit sales (k) FY 20211 Trucks 231 86 67 251 53 Buses 19 4 5 51 5 Vans 22 - 22 - - Total 272 90 94 301 57 Trucks 85% Buses 7% Vans 8% Note: Addition of vehicles sold by Scania, MAN, Navistar and VWTB
Slide 12: Leading truck brands and #1 market positions in Europe and South America
Leading truck brands and #1 market positions in Europe and South America 29% 12% 36% Market share in Europe1 Market leader Market share Market share in Germany in North America2 Market leader Export business Export 33% business Market share 43% in South America Export Market leader business Market s
Slide 13: Diversified by geography and by brand
Diversified by geography and by brand Unit sales FY 20211 (% of total) Sales revenue FY 20211 (% of total) Other Germany Navistar Financial Services regions VW 12% Sales & 3% 16% Truck & Bus Services 7% 11% South America (excl. Brazil) 5% MAN EU27+3 Truck & Bus (excl. Germany) Brazil 35% 32% 24% Sca
Slide 14: 31 production and assembly sites around the globe
31 production and assembly sites around the globe1 1 As of December 31, 2021. Excluding Scania/MAN joint-venture assembly line. October 2022 TRATON SE Analyst & Investor Factbook 14 .
Slide 15: Key figures development
Key figures development1 Incoming orders (k units) Unit sales (k units) Book-to-bill (ratio in units) 360 1.33 272 1.12 1.14 244 1.05 229 227 233 242 0.94 216 205 190 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Sales revenue (€ bn) Adjusted operating result (€ bn) Adju
Slide 16: Outlook 2022: Geopolitical and economic risks are high
Outlook 2022: Geopolitical and economic risks are high TRATON GROUP 2021 2022e1 Unit sales (units) 271,608 substantial increase Sales revenue (€ million) 30,620 very sharp increase Adjusted RoS (in %) 5.2 5.0-6.0 TRATON Operations 2021 2022e1 Sales revenue (€ million) 30,103 very sharp increase Adju
Slide 17: Strong and experienced management team
Strong and experienced management team TRATON SE EXECUTIVE BOARD MEMBERS Christian Levin Annette Danielski Bernd Osterloh CEO TRATON SE and Scania CFO TRATON SE CHRO TRATON SE Alexander Vlaskamp Antonio Roberto Cortes Mathias Carlbaum CEO MAN Truck & Bus CEO Volkswagen Truck & Bus CEO and President
Slide 18: Corporate Governance – Two-tier board structure
Corporate Governance ̶ Two-tier board structure with independence secured by supervisory board composition Corporate Bodies of TRATON SE Annual General Meeting Shareholders exercise their rights in relation to the corporation‘s affairs. These include the shareholders exercising their voting rights,
Slide 19: Our values
Our values Our values set the base for everything we do and how we do it within TRATON GROUP. Our values match and represent our thinking, way of carrying out work, and how we relate to others – colleagues, customers, suppliers, associates. The values guide our actions and support us in our decision
Slide 20: Why TRATON is an attractive investment
Why TRATON is an attractive investment Strong competitive position with a diversified regional and brand portfolio in an attractive global growth market and profit pool State-of-the-art products and services strongly geared towards future trends in order to capture the opportunities in our industry
Slide 21: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. Strategy: TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 21 .
Slide 22: Trucks are capital goods – purchase decisions based on TCO
Trucks are capital goods – purchase decisions are based on rational factors: Total Cost of Ownership (TCO) Trucks Passenger Cars Sector Capital goods Consumer goods Customer focus Total cost of ownership Costs | Emotion | Prestige Customer expectations Annual mileage ~130,000 km ~10x ~14,000 km1 Fue
Slide 23: Global view on trucks
Global view on trucks North America Conventional trucks with engine in front - driven by high comfort and China safety requirements Fast-follower driven by regulations, infrastructure and professionalization Brazil Europe Advanced products built High-tech products in by European OEMs – in cab-over s
Slide 24: Truck industry is highly consolidated in key markets
Truck industry is highly consolidated in key markets High barriers to entry Limited number of global players Trucks are highly customized products given Heavy-duty trucks (>15t) market share 2020 Customization & heterogeneous customer requirements. held by top 3 in each region regulation Products ne
Slide 25: Purchasing decisions are driven by Total Cost of Ownership
Purchasing decisions are driven by Total Cost of Ownership (TCO) - Running costs dominate Cost distribution of a typical long-haul HDT1 Selected key elements Admin and Fuel (energy) services (Overhead) Annual mileage, driving behavior, Vehicle powertrain efficiency Driver Driver salary, related cost
Slide 26: Road transport accounts for over half of all tonne-kilometres in the EU
Road transport accounts for over half of all tonne-kilometres performed in the EU Modal split of freight transport Trend (2018, %, bn tonne-kilometres) Total transport performance by these five modes Inland waterways Air (4%, 135) (0%, 14) of transport increased by 12.0% from 2013 to Rail 2018. (13%
Slide 27: Even distribution of short- and long-haul transport
Even distribution of short- and long-haul transport – Strongest growth in mid and long distances Vehicle kilometer (bn vkm) 2010 2018 CAGR 2010-18 Share 2018 [%] [%] 12.7 <50 km -0.6% 8% 12.2 25.6 Short- 50-149 km 1.3% 18% 28.4 haul 48% 31.1 150-299 km 1.4% 22% 34.7 23.9 300-499 km 1.3% 17% 26.6 28.
Slide 28: Drivers and challenges in the industry
Drivers and challenges in the industry Examples Autonomous TCO optimization Electrification Euro VI & VII Digitalization Decarbonization Uptime General safety Geopolitical risks Direct vision regulation Customer Competition Regulatory needs and markets environment Driver shortage Inflationary Rising
Slide 29: Outlook for TRATON's core markets in general positive
Outlook for TRATON’s core markets in general positive, despite significant disruptions Truck unit sales, (> 6t)1, in k units Global trends driving the transportation industry 600 • Global GDP is expected to continue to 545 grow with transportation volume 521 growing around twice the pace. 500 449 US
Slide 30: Strong markets with transition to new technologies and solution offerings
Strong markets with transition to new technologies and solution offerings as basis for future growth Market cycle Electrification Services maturity (Illustrative view) • Service/aftermarket Short-term Europe risks • Innovation front-runner expected to increase • Growth of solution offerings Short-te
Slide 31: Truck market outlook 2022
Truck market outlook 2022 – Uncertainties due to high geopolitical and economic risks (as of July 28, 2022) 400 320 k units, > 6t 352 300 320 Market expectations2 EU27+31 200 2022e 100 0 +0% – +10% 2010 2012 2014 2016 2018 2020 2022 300 k units, > 6t 184 202 Market expectations2 South 200 175 100 20
Slide 32: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. Strategy: TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 32 .
Slide 33: Key strategic questions for TRATON Way Forward have changed
Key strategic questions for “TRATON Way Forward” have changed TRATON Way Forward: Strategic questions (2022-30+) Global Champion Strategy: Strategic questions (2015-21) How to ensure sustainable business and uphold needs of environment, 1 How to develop a group/own entity for trucks & buses? society
Slide 34: TRATON – Exciting pathway ahead
TRATON – Exciting pathway ahead Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation October 2022 TRATON SE Analyst & Investor Factbook 34 .
Slide 35: Responsible Company
Responsible Company Make responsible behavior a top priority in everything we do Strategy Execution & Governance Decarbonization & Circularity Responsible People & Diversity TRATON Company Accelerated! Value Creation Governance & Ethics October 2022 TRATON SE Analyst & Investor Factbook 35 .
Slide 36: We are fully committed to the Paris Agreement
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation We are fully committed to the Paris Agreement Scope -50% -70% -28/-19% -20% 1+2 t CO2e t CO2e (2030 vs. 2019)1 Electricity/Gas usage Energy intensity improvement (2025 vs. 2015)1 (2022 vs. 2018)2 (2030 vs. 2018)3
Slide 37: Our CO2 impact stems almost exclusively from products' use phase
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Our CO2 impact stems almost exclusively from our products’ use phase – but will change in the future Combustion engine BEV BEV (electricity mix)1 (green electricity)2 Use Production Maintenance Recovery 1 Based on
Slide 38: System efficiency comparison between BEV and FCEV
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Our strategic focus is underlined by a comparison of system efficiency between BEV and FEV Production Refueling Operation Electrical 100% energy distribution & inversion AC/DC mix of slow & fast charging DC-AC, en
Slide 39: Battery electric vehicles become majority technology for trucks and buses
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation We see battery electric vehicles become the majority technology for trucks and buses % ICE Additional alternative technologies competing with diesel BEV 2022 2030 2040 October 2022 TRATON SE Analyst & Investor Fac
Slide 40: We boost our e-mobility investments
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation We boost our e-mobility investments Investment increase 2022 Investment increase 2021 €1.6 bn €2.6 bn €1.0 bn 2020 - 2025 2021 - 20261 1 Incl. Navistar October 2022 TRATON SE Analyst & Investor Factbook 40 .
Slide 41: All TRATON brands with BEV products across major applications
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation All TRATON brands with BEV products across major applications and weight classes MAN electric truck Scania electric bus Navistar electric bus VWCO electric truck (eTGM) (Citywide LF) (IC Bus electric CE Series) (e
Slide 42: High-performance charging network for Europe
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation High-performance charging network for Europe >1,700 public charging points €500 mn investment (jointly) Joint Venture founded in July 2022 Network will be open and accessible to all brands Independent manage
Slide 43: Electrification will impact repair & maintenance but open new profit pools
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Electrification will impact how we do repair & maintenance but also will open new profit pools Win customers from 3rd party Shift business model Charging services providers for complex from product to servic
Slide 44: Circularity – Optimize resource consumption here & now
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Circularity – Optimize resource consumption here & now Business model Today’s examples Reuse: Prioritization of recycled metals in foundries Remanufacturing: High- Produce Use quality scrap to serve spare- parts o
Slide 45: Value Creation
Value Creation Focus on sustainable value creation for our stakeholders Strategy Execution & Governance Performance-driven Responsible Navistar as part of TRATON TRATON Company Accelerated! family Value Creation TRATON goes China October 2022 TRATON SE Analyst & Investor Factbook 45 .
Slide 46: Creating value for our stakeholders
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Creating value for our stakeholders 1 2 3 China important Successful integration growth market Performance-driven of Navistar Brand performance Integration of Navistar and China as important future profit programs
Slide 47: Ambitious targets for each of our brands
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Ambitious targets for each of our brands Strategic RoS target 12% 8% 8% 9% Fully committed Realignment Volume growth and Deliver profitable to sustainability program & topline strong products performance i
Slide 48: Successful integration of Navistar
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Successful integration of Navistar Accomplished since the merger … … and there is much more to come Strong progress in integrating Navistar into Unify our values and culture with TRATON to TRATON’s operations guid
Slide 49: China is one of the most important profit pools
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation China is one of the most important profit pools 1.4 million trucks sold in 2021 World’s largest single market for commercial vehicles Segment shift towards more sophisticated products First western truck manufactu
Slide 50: TRATON Accelerated!
TRATON Accelerated! Shape our role in the future logistics ecosystem Strategy Execution & Governance Business Model Expansion Responsible Partnership Culture TRATON Company Accelerated! Value Creation Embrace Digital October 2022 TRATON SE Analyst & Investor Factbook 50 .
Slide 51: ACE platform elements critical for ACE-related business models
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation ACE1 platform elements critical for all ACE-related business models Autonomous vehicle Self-driving system Control Tower + service (SDS) (CT) ACE vehicle Virtual driver ensures Ensures basic dispatching cont
Slide 52: We build a solution ecosystem around our customer
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation We build a solution ecosystem around our customer Administration Transport planning Charging Reports & analytics Transport facilities Real-time tracking management Route & flow optimization En-route Vehicle data &
Slide 53: Future Financial Services set-up currently being defined
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Future Financial Services set-up currently being defined Status Scania Financial Services MAN branded VWTB directly via Financial Services is a fully integrated Financial Services VW Financial Services – p
Slide 54: TRATON FS – Global multi-brand captive finance business
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation TRATON FS – Global multi-brand captive finance business leveraging existing structures Brand specific front office Common back office Increased funding capabilities October 2022 TRATON SE Analyst & Investor Factbo
Slide 55: TRATON Way Forward strategy guiding path towards the future
TRATON Way Forward strategy guiding path towards the future – strong focus on execution NEW Strategy Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation October 2022 TRATON SE Analyst & Investor Factbook 55 .
Slide 56: Build-up of a TRATON Modular System based on Scania principles
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Build-up of a TRATON Modular System based on 4 Scania principles Scania Bygglåda TRATON Modular System TRATON Modular System We create standardized Group interfaces 2x Within Group: Same need – identical solution
Slide 57: From evolution to revolution
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation From evolution to revolution 4 TRATON MODULAR SYSTEM Realized value … Reusable, modular parts for Common ALL TRATON Brands components Joint negotiations Time October 2022 TRATON SE Analyst & Investor Factbook 57 .
Slide 58: Group Product Management and Solution Development planned
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation Strong Group Product Management and Solution 4 Development planned to be set up Group Product Management Group Solution Development ICE powertrain E-mobility (incl. battery) Autonomous, software, E/E Basic chassis
Slide 59: One strong Group delivering outstanding customer value
Strategy Execution & Governance Responsible TRATON Company Accelerated! Value Creation 4 More performance steps Faster time to market, and more customer one integration, then value to all brands “plug & play” for brands One strong Group delivering outstanding customer value Lower product/component/
Slide 60: Scania strategy
Scania strategy .
Slide 61: Driving the shift towards a sustainable transport system
Driving the shift towards a sustainable transport system Our business model, the modular 1 system and the Scania way together with our local presence provide a world-class foundation to build on 12% 2 We will drive the shift and secure future profitability leadership Strategic RoS target 3 We will e
Slide 62: We have a strong & unique foundation
We have a strong & unique foundation Our Our Our business model modular system company culture By making our customers The key to delivering The value-based corporate profitable, we become tailored customer culture that underpins profitable solutions profitably everything that we do October 2022 TRA
Slide 63: New Super-based powertrain
New Super-based powertrain Unprecedented 8% fuel savings Ready for tomorrow’s emissions standards Equipped for renewable fuels 8% October 2022 TRATON SE Analyst & Investor Factbook 63 .
Slide 64: The strength of global footprint in industrial and commercial system
The strength of global footprint in both the industrial and commercial system • Same product • Accelerate market position by global • Same working capacity standards - Reduce lead times • Same quality to growth markets Luleå Luleå in Asia 1 Södertälje Lahti mn Oskarsha Oskarshamn St. St. Petersburg
Slide 65: Digitalization, data and AI in service offering
Digitalization, data and AI have an important role as we continue to develop our service offering Data driven Fuel Reliable Vehicle performance efficiency service Connectivity Artificial intelligence Customer experience driven AI supported AI supported uptime development of our service portfolio sal
Slide 66: Scania's shift to electrification
Scania's shift to electrification – accelerated by our modular system Electrified drivetrain 40T 4 h 280 km/h 40T 4.5 h 560 km/h 2020 ~130-250 km 60T 3 h 210 km/h 60T 4 h 420 km/h BEV 2030 October 2022 TRATON SE Analyst & Investor Factbook 66 .
Slide 67: The shift to electric vehicles drives need for solution sales
The shift to electric vehicles drives an increased need for solution sales Range / flexibility Revenues & Laws & incentives regulations Transport Driving & of goods Charging & vehicle energy supply operation Complete Financing vehicle R&M solution October 2022 TRATON SE Analyst & Investor Factbook 6
Slide 68: MAN strategy
TRATON i! , fe | i
Slide 69: MAN Truck & Bus: strong focus on execution
MAN Truck & Bus: strong focus on execution Execution of realignment measures 1 to improve sustainable earnings power Product roadmap with consistent 8% 2 leveraging of TRATON Modular System defined Strategic RoS target 3 Lifting growth potential in Vehicle Services business October 2022 TRATON SE An
Slide 70: Realignment program well on track
Realignment program well on track Ambition (€ mn) Dimensions (€ mn) 7% 450 1,700 1,700 3.3% 700 550 2019 Counter Improve- Program Structural Material Volume / Improve- actual effects e.g. ment target measures Price ment Return on raw material, (gross) Return on (gross) freight, energy, sales inflati
Slide 71: Significant impact of realignment measures from 2023 onwards
Significant impact of realignment measures to be effective from 2023 onwards Dimensions (€ mn) Achievements until today 550 Structural Production & Engineering footprint MAN structurally drastically changed measures Headcount cost reduction and head count reduction according plan 700 Cross-fun
Slide 72: Significant staff cost reductions will be reached
Significant staff cost reductions will be reached HCC 48% Structural measures Global staff costs1 (in €) Staff program deliverables -17% Structural shift from high-cost to best-cost countries Higher level of flexibility on staff Improved direct vs. indirect staff ratio Full earnings impact f
Slide 73: Improved competitiveness through change in global footprint of truck production
Significantly improved competitiveness through change in global footprint of truck production Structural measures Strategic building blocks Core KPIs Production Reduction of network 3,800 3,000 complexity from 3 truck Indirect plants to 2 truck plants Optimized personnel Efficient value creation
Slide 74: New trucks & buses with highly competitive TCO
New trucks & buses with highly competitive TCO Truck - TG3 Bus - L4C / E4C Successfully launched in 02/2020, Launch in 2019 (ICE), Launch in 2020 (BEV) updated in 2022 MAN Efficiency Run: 550 km achieved in 24h Super Test 03/2022: Best-in-class fuel operation with one battery charge consumpt
Slide 75: Clear roadmap towards zero-emission transportation
Clear roadmap towards zero-emission transportation 2024/25 Common modular system Truck 65% 52% (Value share 90% of common parts1) TG (BEV) TG (ICE) Electric truck Truck update with Common modular system to market new powertrain New cabin & frame 2023 2025/26 Bus 40% 65% (Value share 90% of common pa
Slide 76: Vehicle Services business as the main lever of growth
Vehicle Services business as the main lever of growth Vehicle Services business sales revenue 1. Vehicle Services business (CAGR p.a.) Increase contract portfolio +6% Increase uptime +4% Sales excellence & digital sales Shift to e-mobility & autonomous driving 2019-2021 2022E+ 2. Financial S
Slide 77: Navistar strategy
Navistar strategy .
Slide 78: Navistar is accelerating its impact
Navistar is accelerating its impact 1 Recover market share through offering new technologies, services and solutions 9% Strategic 2 Create greater value for our customers by leveraging TRATON RoS GROUP Modular System target 3 Optimize our assets with a benchmark cost structure and investment efficie
Slide 79: Building blocks to deliver stronger profitability
Building blocks to deliver stronger profitability New integrated powertrain and electric offerings to 1 grow customer satisfaction and profitability through value- based pricing 9% 2 Dealer performance improvement through ownership rationalization and improved effectiveness 3 New service and solutio
Slide 80: Modular integrated powertrain to drive improved class 8 profitability
1 Modular integrated powertrain to drive improved Class 8 class 8 profitability Navistar’s 13L/15L engine split Value proposition Service business 15L Day 1 sale Heavy truck engine proportion 15L Profit potential 5x service potential Industry split 40% margin increase 2x 13L at least 13L Today Ambit
Slide 81: Substantial opportunity to lead electric transition
1 Substantial opportunity to lead electric transition Class 6/7 & Bus Bus market share Electrification IC Bus® brand is #1 in School Bus Medium Duty the school bus industry by 2032… Average market size: 32k Ideal 95% 70% markets electric electric Class 6/7 (medium duty) market share for electric Ele
Slide 82: Drive greater dealer performance
2 Drive greater dealer performance Rationalizing dealer network Improving the performance Increasing customer base 50% increase Dealer ownership groups Customer count 133 2018 2021 2024 Today Ambition October 2022 TRATON SE Analyst & Investor Factbook 82 .
Slide 83: Expand service and solution offerings
3 Expand service and solution offerings Expanding our solution offerings Strong revenue and margin growth Parts and hardware Service and solutions Doubling revenues & increase margin by Revenue potential (per vehicle %) Aftersales and solutions revenue 500 bps Un-tapped Bundled potential solution of
Slide 84: Optimize cost efficiency and group technology
4 Optimize cost efficiency and group technology Modularization Production footprint optimization Reducing complexity through collaboration Driving conversion cost improvement Shared R&D Global purchasing scale Integrating Group technologies Transitioning effectively component spend October 2022 TRAT
Slide 85: Expand financial services
5 Expand financial services Captive finance potential Adding value for the customer Expand into new revenue streams 3 to support the transition to new technologies and business models Share of vehicles financed 3x Offer tailor-made and bundled growth 2 financing solutions potential Exit outsourced a
Slide 86: Resulting in market share recovery
6 Resulting in market share recovery Class 6-8 market share Factors driving market share growth Introduction of world class group driveline Ambition: To grow at least 1% point of share per year Electrification Market share potential #1 dealer network in North America Expanded service offerings 14% t
Slide 87: VWTB strategy
VWTB strategy .
Slide 88: VWTB: Less you don't want, more you don't need
VWTB: Less you don’t want, more you don’t need 1 VWTB has returned to historical profitability and return on investment levels 2 VWTB will keep its growth path enjoying the recovery on its core markets and benefiting from the full line up 8% 3 VWTB has all the required conditions to further expand g
Slide 89: Ready to grow
1 Ready to grow VWTB renewed full product line up VWTB current main markets potential Zero emission Light Mid South America actual truck market development (Truck >6 t registrations in 1.000 units) 300 Brazilian financial Potential crisis growth 250 200 -60% 186 e-Delivery Delivery Constellation Hea
Slide 90: Designed for volatility
2 Designed for volatility State-of-the-art Modular Consortium Production System 100% operated by suppliers - “partners” - with low direct labor costs Innovative, lean, agile & flexible plant Low break-even operation with the right plant capacity: 100k + units October 2022 TRATON SE Analyst & I
Slide 91: Global expansion readiness
3 Global expansion readiness Current export markets 30 countries ≅ 9k VWTB units Mid-term 30+ target countries ≅ 15k units Long-term 15+ additional target countries Current export markets Mid-term target markets Long-term target markets (9k units in 2021) ≅ 25k units Benefit from the strong VW her
Slide 92: Future ready
4 Future ready New profit pools will double sales revenue from Vehicle Services business by 2025 e-Consortium Digital-Consortium Offer of complete Digital-Consortium Truck Bus e-line up and services Truck to foster the Smart for the e-mobility Truck ecosystem Bus ecosystem through leveraging from th
Slide 93: Focus on efficiency
5 Focus on efficiency Leverage TRATON Modular System Outstanding execution Group components Meteor Further cost efficiency associated with Excellence and Costfit programs Leverage synergies from TRATON Modular System and low-cost local development Outstanding execution due to experienced team
Slide 94: Group financial strategy
Group financial strategy .
Slide 95: We have defined clear set of financial ambitions
We have defined clear set of financial ambitions Safeguard Focus on investments in Reduce sustainable common debt levels profitability components, and strengthen and resilience new business capital of results models and new structure technologies October 2022 TRATON SE Analyst & Investor Factbook 95
Slide 96: Stringent execution along building blocks towards RoS target
Stringent execution along clearly defined building blocks towards RoS target Volume 9% increase MAN T&B 5.2% realignment Improved Input cost price & mix inflation Efficiency gains R&D expenses across Group in future trends TRATON GROUP TRATON GROUP 2021 TARGET 2024 October 2022 TRATON SE Analyst & I
Slide 97: Building blocks driving margin upside and earnings resilience
Building blocks driving margin upside and earnings resilience Volume, mix & pricing MAN T&B realignment program Highly competitive products & services Improved fixed cost structure and leading to volume increases and better increased productivity thanks to stringent price positioning & mix across th
Slide 98: Targeted investments in R&D and capex
Securing future competitiveness with targeted investments in R&D and capex Distribution of primary R&D costs Distribution of capex Primary R&D costs in % of TRATON Operations sales revenue Capex in % of TRATON Operations sales revenue 4.8% ~4% 4.2% ~4% 100% 100% 80% 80% Two thirds of total budget Re
Slide 99: TRATON's capital framework
TRATON’s capital framework – Focus on optimizing pillars to deleverage Operating funding Effective use Structural sources of funds measures Improving Targeted, Strengthening cash conversion earnings future-oriented Strong capital momentum R&D and Capex commitment Improved structure to further deleve
Slide 100: Full focus on enhancing financial performance and resilience
Full focus on enhancing TRATON’s financial performance and resilience Executing towards Improving resilience ambitious RoS target and cost efficiency Strong financial policy Remuneration system and capital allocation aligned to strategic framework targets Focus on deleveraging Leveraging potential w
Slide 101: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. Strategy: TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 101 .
Slide 102: CO2-neutral future quote from CEO
“We want a CO2-neutral future, and to achieve this we are doing much more than just the minimum required of us. Our brands will be drivers of change as we move toward zero-emission transportation solutions.” CHRISTIAN LEVIN CEO, TRATON SE October 2022 TRATON SE Analyst & Investor Factbook 102 .
Slide 103: Our goal: being a Responsible Company
Our goal: being a Responsible Company by making substantial transformative efforts toward achieving the SDGs in three areas Decarbonization & Circularity People & Diversity Governance & Ethics Creating solutions that minimize Capturing the diversity of skills, know-how, Enabling transparent, risk-or
Slide 104: Decarbonization & Circularity
Decarbonization & Circularity Our Goal Moving toward an operating model and product design that sustainably minimize greenhouse gas (GHG) emissions and optimize resource consumption in the value chain. For TRATON, this means focusing on Zero-emission vehicles especially via electrification Energy ef
Slide 105: People & Diversity
People & Diversity Our Goal Capturing the diversity of skills, know-how, and perspectives of employees or partners & safeguarding the just and equal treatment of any individuals involved in our value chain. Increasing employer attractiveness and innovative strength. For TRATON, this means focusing o
Slide 106: Governance & Ethics
Governance & Ethics Our Goal Enabling transparent, risk-oriented, and fair decision-making that is consistent with the Company’s rights and obligations and generates long-term value for TRATON and its stakeholders. This includes looking beyond our own Company and putting social responsibility into p
Slide 107: Ratings
Ratings In February 2022, renowned environmental agency ISS ESG rewarded TRATON with “Prime” status and a “C+” rating (on a scale of A+ to D–) for its sustainable value creation efforts in the machinery sector. In November 2021, TRATON received an ESG Risk Rating of 27.2 and was assessed to be at me
Slide 108: Participation & memberships
Participation & memberships TRATON has been a member of the UN Global Compact since October 2021 and has committed to supporting the Ten Principles. TRATON will regularly report on its activities in these fields as a part of its commitment to the UN Global Compact. All our brands are committed to se
Slide 109: Information about sustainability
Information about sustainability More detailed information regarding sustainability at TRATON can be found in our ESG Factbook and in the Sustainability section of our website. ESG Factbook Sustainability section of our website October 2022 TRATON SE Analyst & Investor Factbook 109 .
Slide 110: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. Strategy: TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 110 .
Slide 111: TRATON share
TRATON share Share data ISIN (International Securities Identification Number) DE000TRAT0N7 WKN (German Security Identification number) TRAT0N Common code 196390065 Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) Stock exchange & Nasdaq Stockholm Regulated market (Prime Standard) of Frankfurt
Slide 112: TRATON GROUP Dividends
TRATON GROUP Dividends Dividend policy Dividend per share, DPS • The TRATON GROUP intends paying a dividend of 30 (% of earnings after tax1) to 40% of its annual consolidated profit after tax. 1.00€ • The resolution to distribute a dividend for a particular1.0 1.0 fiscal year is adopted by the Annua
Slide 113: TRATON shares performance
TRATON shares performance Key data 2019 to 2021 Relative performance in the last 12 months 1.2 In € 2019 2020 2021 1.1 Share price at year-end 23.92 22.61 22.14 1.0 0.9 High for the year 27.35 24.26 28.46 0.8 Low for the year 22.02 11.00 19.80 0.7 Dividend per share 1.00 0.25 0.50 0.6 Market capital
Slide 114: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. Strategy: TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 114 .
Slide 115: First-time credit ratings assigned to TRATON SE in 2020
First-time credit ratings assigned to TRATON SE in 2020 Moody´s with Baa2 Stable outlook, S&P with BBB stable outlook • First-time credit ratings assigned to TRATON SE by Moody´s and Standard & Poor´s in 2020 • TRATON SE with solid investment grade ratings. Current ratings1: • Moody’s: Baa2 stable o
Slide 116: Development of credit ratings since 2020
Development of credit ratings since 2020 Moody´s with Baa2 Stable outlook, S&P with BBB stable outlook March 3, April 29, 2021 Ba1 / June 17, 2020 October 22, 2020 2021 S&P outlook BB+ First-time S&P outlook Debut €700 change (in light of July 22,2022 publication change (in light of mn similar actio
Slide 117: Bonds Outstanding
Bonds Outstanding TRATON with well-tested access to the debt capital markets €5.1 bn in bonds outstanding Issuer TRATON Finance Luxembourg S.A. Guarantor TRATON SE (Ticker: 8TRA, Country: DE) Guarantor Ratings Baa1 neg. / BBB stab. Baa2 stab. / BBB stab. Issue Ratings Baa1 / BBB Baa2 / BBB Sustainab
Slide 118: TRATON financing via debt capital markets
TRATON financing via debt capital markets Simplified overview • TRATON Finance Luxembourg S.A.1, TRATON Treasury AB 1 and TRATON SE to serve as issuers for the TRATON GROUP, with the payment obligations of TRATON Finance Luxembourg S.A. and TRATON Treasury AB being guaranteed by TRATON SE • IB issua
Slide 119: Liquidity overview TRATON GROUP
Liquidity overview TRATON GROUP CREDIT LINES GROSS LIQUIDITY • Solid liquidity available to TRATON GROUP As of June 30, 2022 • As of June 30, 2022, the liquidity reserve 2.0 1.8 consists of credit lines of €7.1bn1, thereof 1.6 Total ~€2.3 bn • €2.6 bn from Volkswagen AG, and 1.4 1.2 • €4.5bn syndica
Slide 120: Syndicated revolving credit facility (RCF)
Syndicated revolving credit facility (RCF) Syndicated RCF (as of Jul-20) amended & ✓ Ample frame amount increased restated on December 15, 2021 in total by €750 mn to €4.5 bn amounting to €4.5 bn ✓ Maturity extended to new • Revolving credit facility secures and 5+1+11 years from 3+1+1 years streaml
Slide 121: TRATON Group Debt Maturity Profile
TRATON Group Debt Maturity Profile Maturity profile (€ bn) as of June Major developments Debt 9 overview (€ bn) 30, 20221 TRATON financial debt 19.8 • €700 mn Schuldschein issued (tranches of 3y, 5y and 7y) thereof CI/OP 10.6 • Total of €5.1 bn Bonds issued (tranches of thereof FS 9.2 1.5y, 1.75y, 2
Slide 122: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. Strategy: TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 122 .
Slide 123: Key financials by segments
Key financials by segments FY 2021 Scania MAN Navistar VWTB Operations1 Financial Corporate Group (in € mn) V&S T&B S&S Services Items2 Sales revenue 13,927 10,934 3,557 2,113 30,103 964 -447 30,620 Adj. operating 1,412 249 41 171 1,883 259 -543 1,599 result Adj. Return 10.1% 2.3% 1.2% 8.1% 6.3% 26.
Slide 124: TRATON GROUP
TRATON GROUP TRATON GROUP 2017 2018 2019 2020 2021 Incoming orders (units) 229,074 243,714 227,240 216,251 359,975 Unit sales (units) 204,911 232,992 242,219 190,180 271,608 Book-to-bill 1.12 1.05 0.94 1.14 1.33 Sales revenue (€ mn) 24,366 25,927 26,901 22,580 30,620 Operating result (€ mn) 1,512 1,
Slide 125: TRATON Operations
TRATON Operations TRATON Operations 2017 2018 2019 2020 2021 Incoming orders (units) 229,074 243,714 227,240 216,251 359,975 Trucks 205,291 209,738 190,974 182,402 305,745 Buses 20,522 23,889 21,032 14,611 22,237 MAN TGE vans 3,261 10,087 15,234 19,238 31,993 Unit sales (units) 204,911 232,992 242,2
Slide 126: TRATON GROUP – Sales revenue
TRATON GROUP – Sales revenue Sales revenue (€ mn) Sales revenue business areas (€ mn) GROUP Operations Other 30.6 Financial Services 30.6 25.9 26.9 26.9 24.4 25.9 24.4 22.6 22.6 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 October 2022 TRATON SE Analyst & Investor Factbook 126 .
Slide 127: TRATON Operations
TRATON Operations TRATON Operations1 2017 2018 2019 2020 2021 Sales revenue (€ mn) 23,403 24,963 26,444 22,152 30,103 Operating result (€ mn) 1,368 1,346 1,741 176 677 Operating RoS (%) 5.8 5.4 6.6 0.8 2.2 Adj. operating result (€ mn) 1,318 1,484 1,729 230 1,883 Adj. operating RoS (%) 5.6 5.9 6.5 1.
Slide 128: TRATON Operations – Incoming orders & Unit sales
TRATON Operations – Incoming orders & Unit sales Incoming orders (k units) Unit sales (k units) Book-to-bill 1.12 1.05 0.94 1.14 1.33 Trucks Buses MAN TGE Trucks Buses MAN TGE 360 244 272 229 227 216 242 233 205 190 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Note: Totals taking into account c
Slide 129: TRATON Operations – Sales revenue & adj. operating result
TRATON Operations – Sales revenue & adj. operating result Sales revenue (€ mn) Adjusted operating profit (€ mn) Scania V&S Navistar S&S Scania V&S Navistar S&S MAN T&B VWTB MAN T&B VWTB 30.1 1.7 1.9 26.4 1.5 25.0 1.3 23.4 22.2 13.9 13.9 1.2 1.5 1.4 13.0 1.2 12.4 11.5 0.2 10.9 0.8 0.5 0.2 0.5 0.4 0.0
Slide 130: Scania Vehicles & Services
Scania Vehicles & Services Scania V&S 2017 2018 2019 2020 2021 Incoming orders (units) 109,415 97,446 88,739 92,940 116,798 Unit sales (units) 90,777 96,475 99,457 72,085 90,366 Book-to-bill 1.21 1.01 0.89 1.29 1.29 Sales revenue (€ mn) 12,427 12,981 13,934 11,521 13,927 Operating result (€ mn) 1,16
Slide 131: MAN Truck & Bus
MAN Truck & Bus MAN T&B 2017 2018 2019 2020 2021 Incoming orders (units) 94,003 112,915 100,652 84,921 143,531 Unit sales (units) 89,987 102,556 104,887 81,673 93,668 Book-to-bill 1.04 1.10 0.96 1.04 1.53 Sales revenue (€ mn) 10,022 10,815 11,088 9,659 10,934 Operating result (€ mn) 526 402 371 -553
Slide 132: Navistar Services & Sales
Navistar Services & Sales Navistar S&S 2017 2018 2019 2020 20211 Incoming orders (units) - - - - 42,588 Unit sales (units) - - - - 30,305 Book-to-bill - - - - 1.41 Sales revenue (€ mn) - - - - 3,557 Operating result (€ mn) - - - - 41 Operating RoS (%) - - - - 1.2 Adj. operating result (€ mn) - - - -
Slide 133: Volkswagen Truck & Bus
Volkswagen Truck & Bus VWTB 2017 2018 2019 2020 2021 Incoming orders (units) 27,381 36,535 41,103 38,805 57,241 Unit sales (units) 25,881 36,362 41,891 36,974 57,405 Book-to-bill 1.06 1.00 0.98 1.05 1.00 Sales revenue (€ mn) 1,162 1,421 1,738 1,235 2,113 Operating result (€ mn) -103 28 55 -15 171 Op
Slide 134: TRATON Financial Services
TRATON Financial Services Financial Services 2017 2018 2019 2020 2021 Sales revenue (€ mn) 721 760 849 820 964 Operating result (€ mn) 111 138 142 107 259 Operating RoS (%) 15.4 18.2 16.8 13.1 26.9 Adj. operating result (€ mn) 111 138 142 107 259 Adj. operating RoS (%) 15.4 18.2 16.8 13.1 26.9 Retur
Slide 135: TRATON FS – Sales revenue & adj. operating result
TRATON FS – Sales revenue & adj. operating result Sales revenue (€ mn) Adjusted operating profit (€ mn) 964 259 849 820 760 721 138 142 111 107 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 October 2022 TRATON SE Analyst & Investor Factbook 135 .
Slide 136: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 136 .
Slide 137: TRATON Investor Relations Team
TRATON Investor Relations Team Lars Korinth Fabian Schimpf Head of Investor Relations Analysts and Investors +49 152 313 73 138 +49 172 744 86 99 lars.korinth@traton.com fabian.schimpf@traton.com Contact Navistar: Margit Hartmann Marvin Kalberlah Annual General Meeting, Events US-Analysts and US-Inv
Slide 138: Agenda
Agenda 1. TRATON at a Glance 2. Truck Industry 3. TRATON Way Forward 4. Sustainability 5. Shares 6. Debt & Rating 7. Financials 8. IR Team 9. Useful Links October 2022 TRATON SE Analyst & Investor Factbook 138 .
Slide 139: Useful links
Useful links TRATON GROUP BRANDS TRATON Website Scania Newsroom Investor Relations Website MAN Newsroom Newsroom Navistar Newsroom Reports & Presentations VWTB Newsroom Shares & Financial Figures Events Debt & Rating Sustainability Corporate Governance Annual General Meeting Financial Calendar Conta
Slide 140: TRATON SE Analyst & Investor Factbook
TRATON SE Analyst & Investor Factbook .