Schaeffler Ag · XETR:SHA0
Schaeffler — Investor Day (November 2015)
70 slides from Schaeffler's investor day presentation, Nov 20, 2015
Slide 1: Schaeffler AG – Analyst Day
Schaeffler AG – Analyst Day November 20, 2015
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements. The words "anticipate", "assume", "believe", "estimate", "expect", "intend", "may", "plan", "project“, "should" and similar expressions are used to identify forward-looking statements. Forward-looking statements are statements that ar
Slide 3: Agenda
Agenda 1 Overview K. Rosenfeld 2 Business profile and investment highlights K. Rosenfeld 3 Technology and R&D Prof. Dr. Gutzmer 4 Production and Operational Excellence O. Jung 3 Schaeffler AG Analyst Day 2015
Slide 4: Schaeffler Group – A leading integrated automotive and industrial supplier
1 Overview Schaeffler Group – A leading integrated automotive and industrial supplier Schaeffler at a glance Key financials in EUR mn unless otherwise indicated Leading integrated automotive and industrial supplier of high- precision components and systems 2014 9M 2015 Global footprint with arou
Slide 5: Our history – From a technological pioneer to a global player
1 Overview Our history – From a technological pioneer to a global player 1946 1949 1957 1958 Dr. Wilhelm and Dr.-Ing. E.h. Development of the First foreign plant in Close to the customer: Georg Schaeffler establish INA needle roller cage Llanelli, Great Britain Plant opening in Sao Paulo, Brazil 196
Slide 6: Strong track record of above-average growth and profitability
1 Overview Strong track record of above-average growth and profitability Development of sales Development of EBIT 2006 – YTD 20151) 2006 – YTD 20151) in EUR bn in EUR bn 1.7 CAGR +5% 12.1 11.1 11.2 1.5 1.5 10.7 1.5 10.0 1.42) 9.5 1.3 9.0 8.9 8.3 1.1 1.1 13% margin 1.0 7.3 12% margin 1.0 0.4 2006 200
Slide 7: Proactive cash flow management over the cycle
1 Overview Proactive cash flow management over the cycle Development of capital expenditures Development of Operating Cash Flow 2006 – YTD 20151) 2006 – YTD 20151) in EUR mn in EUR mn 1,137 1,133 1,091 1,069 1,021 1,027 978 933 920 890 9002) 912 860 857 773 743 597 572 8% of sales 6% of sales 361 32
Slide 8: Our success factors - Quality, technology and innovation
1 Overview Our success factors - Quality, technology and innovation Outstanding application expertise and production Significant R&D spend1) technology in EUR mn 593 611 626 495 467 1 Quality, Technology and Innovation: More than 50 quality awards in 2014 State-of-the-art Plants, R&D and testing
Slide 9: Customer base – Global and diversified customer base
2 Business profile and investment highlights Customer base – Global and diversified customer base Automotive customers ~ 75% of Industrial customers ~ 25% of Schaeffler sales Schaeffler sales Other customers ~40% Other customers ~85% (9M 15) (9M 15) Top 10 customers Top 10 customers ~60% of Automoti
Slide 10: Product offering – Leader for critical components and systems in automotive
2 Business profile and investment highlights Product offering – Leader for critical components and systems in automotive ~70% of Automotive division sales are non-bearing related (2014) Rolling Engine systems bearings Valve train (26% of sales in 9m'15) components Strut bearings Variable Torque cams
Slide 11: Product offering – Leading bearing supplier to over 60 industrial sectors
2 Business profile and investment highlights Product offering – Leading bearing supplier to over 60 industrial sectors ~ 85% of Industrial division sales are bearing related (2014) Rotary table Linear guidance systems bearings with Active measuring magnetic system Spherical bearings plain Cylindrica
Slide 12: Footprint – Integrated global manufacturing and R&D
2 Business profile and investment highlights Footprint – Integrated global manufacturing and R&D Global footprint US Europe Cheraw (2) Danbury China Germany Italy Fort Mill (2) Anting Bühl Momo Joplin Europe Nanjing Herzogenaurach Spartanburg Suzhou Homburg (3) Troy Taicang
Slide 13: Organisational structure and management team
2 Business profile and investment highlights Organisational structure and management team 3-dimensional matrix Divisions and business divisions Asia / Pacific Greater China C Regions Americas Schaeffler Group Europe Automotive Industrial Automotive A Divisions CEO Functions Industrial Engine Transmi
Slide 14: Chronology 2009 – 2015 – The Schaeffler story
2 Business profile and investment highlights Chronology 2009 – 2015 – The "Schaeffler story" Phase 1 Phase 2 Phase 3 2009-2011 2012-2015 2016-2020 "Restructuring" "Transformation" "Profitable growth" Strategy 1 Strategy concept "Mobility for tomorrow" Roadmap Schaeffler 2020 2 New Organizational &
Slide 15: Our strategic concept – Long-term growth from Mobility for tomorrow
2 Business profile and investment highlights Our strategic concept – Long-term growth from “Mobility for tomorrow” Key mega trends 4 focus areas 1 Eco-friendly drives Urban mobility 2 Urbanization Society trends Population growth Increasing complexity Technology trends Digitalization “Mobili
Slide 16: Strategic targets – Roadmap Schaeffler 2020 in preparation
2 Business profile and investment highlights Overview Strategic targets – "Roadmap Schaeffler 2020" in preparation Strategic direction Strategic targets 2020 Industrial 1 Continuation of a profitable 25% Status quo growth strategy based on the 75% Re-energize the analysis key success factors "Qualit
Slide 17: Schaeffler equity story
2 Business profile and investment highlights Schaeffler equity story 3 pillars 1 Out-performance 9M FX-adjusted sales growth of 6.5%, EBIT-margin at 13.3% in Automotive Best-in-class business with superior growth and margin profile Out-performance of global light vehicle production on average
Slide 18: Automotive division again strongly outperforms the market in 9M
2 Business profile and investment highlights 1 Automotive division again strongly outperforms the market in 9M Sales and EBIT margin Sales development by business division in EUR mn 8,983 9M 14 9M 15 7,658 8,164 excl. FX 7,511 6,670 effects Engine Systems 1,674 1,937 +15.7% +6.8% Transmission Sy
Slide 19: Automotive – Best-in-class business with superior growth and margin profile
2 Business profile and investment highlights 1 Automotive – Best-in-class business with superior growth and margin profile Combustion engine dominant but will be further electrified... …to meet CO2 reduction targets Powertrain concepts CO2 legislation enacted worldwide 220 2% 1% 9% 19% 35% 185 g CO2
Slide 20: Automotive – Best-in-class business with superior growth and margin profile
2 Business profile and investment highlights 1 Automotive – Best-in-class business with superior growth and margin profile Content per vehicle growth1) Leading sector margins EBIT margin (%) Europe Americas Greater China Asia/Pacific 16% 14% +4% 12% 10% +8% +20% +7% 8% 6% 4% 2% Global content 2010 (
Slide 21: Industrial division with mixed development in 9M
2 Business profile and investment highlights 2 Industrial division with mixed development in 9M Sales and EBIT margin Sales development Industrial in EUR mn 3,406 3,138 9M 14 9M 15 3,041 ex FX effects 2,354 2,471 Industrial 1,489 1,571 +5.5% -1.7% Applications Industrial 865 900 +4.0% -2.9% Afte
Slide 22: Industrial – Growth and margin upside from re-aligning the business
2 Business profile and investment highlights 2 Industrial – Growth and margin upside from re-aligning the business Key issues Industrial division Strategic target 1 Sales development and profitability below expectation Industrial business contributes 25% to Group sales by 2020 2 Decreasing market sh
Slide 23: Industrial – Growth and margin upside from re-aligning the business
2 Business profile and investment highlights 2 Industrial – Growth and margin upside from re-aligning the business Overview of Program CORE Key achievements CORE in 2015 Key elements Actions New organization structure with strong regional Strengthen high-volume market sales focus agreed; new man
Slide 24: Strong underlying free cash flow generation
2 Business profile and investment highlights 3 Strong underlying free cash flow generation 2014 9M 14 9M 15 Free cash flow development EBITDA 2,172 1,703 1,765 in EUR mn 238 264 Interest paid (520) (388) (430) 135 Interest received 8 4 41 Income taxes paid (277) (197) (247) -19 -12 -60 Working capit
Slide 25: Cash flow generation – Further deleveraging expected going forward
2 Business profile and investment highlights 3 Cash flow generation – Further deleveraging expected going forward Net financial debt 2018 leverage target in EUR mn EUR 6.0 bn1) Net debt 825 mn after IPO 6,190 6,245 2.7x Mid-term 5,768 5,778 5,950 Deleveraging 5,755 EUR 1 bn target 5,529 from IPO 2.3
Slide 26: Key messages
3 Summary Key messages 1 We are an integrated automotive and industrial supplier with a proven track-record of above-average growth and profitability 2 Based on our strategy concept we are well positioned to shape the 'Mobility for tomorrow' 3 We have a superior automotive business that consistently
Slide 27: Technology and R&D
Technology and R&D Prof. Dr.-Ing. Peter Gutzmer Deputy CEO and Chief Technology Officer Schaeffer AG – Analyst Day November 20, 2015
Slide 28: Agenda
Agenda 1 Overview 2 Technology and R&D 3 Summary 28 Schaeffler AG Analyst Day 2015
Slide 29: Global R&D footprint
1 Overview Global R&D footprint Germany Worldwide 16 R&D Center • Herzogenaurach • Schweinfurt • Höchstadt • Bühl South (> 50 employees) Korea • Homburg • Changwon Frankreich • Hagenau Japan • Slovakia Yokohama • Kysuce USA Hungary • Troy • Szombathely • Fort Mill • Romania China Wooster • Brasov •
Slide 30: Widespread Network of Partners and Cooperations
1 Overview Widespread Network of Partners and Cooperations Customers Organizations Universities Sponsoring 30 Schaeffler AG Analyst Day 2015
Slide 31: Schaeffler R&D – A structured process
1 Overview Schaeffler R&D – A structured process Innovation process Product development process Research/Innovation activities cooperation Leading to a best-in-class innovation platform No of patents registered1) 2,518 ► At the Schaeffler Hub for Automotive 2,100 Research in E-Mobility at Karlsruher
Slide 32: Outstanding surface technology and simulation capabilities
1 Overview Outstanding surface technology and simulation capabilities Surface Technology Simulation and validation Materialica Award 2012 & 2014 Key aspects Key aspects World leader in competence for functional Large-size bearing test rig 'Astraios' went into surfaces and coatings operation in S
Slide 33: Inhouse electronics, mechatronics and software competences
1 Overview Inhouse electronics, mechatronics and software competences Electronics and software Drives and mechatronics Key aspects Key aspects Electronics and software development Design and simulation of direct drives and Powertrain development precision mechanics Mechanical System Integrat
Slide 34: Strategic concept: Mobility for Tomorrow
1 Overview Strategic concept: "Mobility for Tomorrow" Key megatrends 4 focus areas Society Urbanization trends Population growth Environmentally friendly drives Urban mobility Technology Increasing complexity trends Digitalization Environmental Renewable energies trends Availability of r
Slide 35: Broad fleet of demonstrator vehicles for dedicated regional solutions
1 Overview Broad fleet of demonstrator vehicles for dedicated regional solutions Fiesta eWheelDrive Schaeffler Schaeffler CO2ncept-10% Hybrid Schaeffler Schaeffler Efficient ACTIVeDRIVE Future Mobility China Gasoline Technology Car Diesel Eco Drive Schaeffler Efficient Future Mobility North America
Slide 36: Broadest drivetrain know-how in Automotive
2 Technology and R&D Broadest drivetrain know-how in Automotive CO2 reduction Durability Design for manufacturing Weight reduction Engine Transmission Chassis e-Mobility Safe driving pleasure Comp 1 Comp 2 Comp 3 Schaeffler 36 Schaeffler AG Analyst Day 2015
Slide 37: Engine – Precision products for less fuel consumption and enhanced driving comfort
2 Technology and R&D Engine – Precision products for less fuel consumption and enhanced driving comfort Systems for variable valve lifting and timing Thermal management modules Innovative bearing solutions for intelligent temperature control for reducing weight and friction 37 Schaeffler AG Analyst
Slide 38: Transmission – Innovative components and systems for all transmission concepts
2 Technology and R&D Transmission – Innovative components and systems for all transmission concepts Powerful damper systems for torque converters and clutches Dry and wet automated clutch modules for DCT´s and e-clutch systems Efficient CVT systems incl. powerful CVT chain 38 Schaeffler AG Analyst D
Slide 39: Chassis – From bearings to complex mechatronic systems
2 Technology and R&D Chassis – From bearings to complex mechatronic systems Ball screw drives for electromechanical actuators in chassis systems Powerful electromechanical actuators for active roll stabilization Electromechanical actuator for ride height adjustment 39 Schaeffler AG Analyst Day 2015
Slide 40: E-Mobility – Systems for hybrid and electrical drive systems
2 Technology and R&D E-Mobility – Systems for hybrid and electrical drive systems Powerful hybrid modules for 48 V and HV for all types of transmissions Powerful electric axle systems for 48 V and HV e-Wheel drive 40 Schaeffler AG Analyst Day 2015
Slide 41: Application example – Schaeffler technologies for reduced CO2 emissions
2 Technology and R&D Application example – Schaeffler technologies for reduced CO2 emissions Vehicle Powertrain Efficiency @ NEDC C-segment 3 cyl. 1L gasoline w/ 5.1 l/100 km start-stop and smart 1380 kg incl. driver alternator 114 g CO2/km 6-speed MT 41 Schaeffler AG Analyst Day 2015
Slide 42: Application example – Schaeffler technologies for reduced CO2 emissions
2 Technology and R&D Application example – Schaeffler technologies for reduced CO2 emissions Engine thermal dethrottling Hybridization management swichtable valve lift FEAD friction reduction 48 V P2 hybrid module engine friction reduction ride height C-segment / 3 cyl. 1L gasoline / 6-speed MT adju
Slide 43: Strong mechatronics competence – Complex systems know-how
2 Technology and R&D Strong mechatronics competence – Complex systems know-how High-voltage P2 hybrid module High- voltage electric axle International Grand Prix Award received (OEM New Technologies category) The new P2 hybrid module from Schaeffler is High power density suited for all grades of
Slide 44: Strong mechatronics competence – Example: Anti roll stabilizer
2 Technology and R&D Strong mechatronics competence – Example: Anti roll stabilizer Cable Stab bar Decoupling- 3 Stage E-Motor ECU Torque sensor unit planetary gear Key aspects: ► First-to-market mechatronics system for Smart Chassis and Automated Driving ► Key benefit: Reduction in CO2 emissions an
Slide 45: Industrie 4.0 – Solutions from components to machine tools
2 Technology and R&D Industrie 4.0 – Solutions from components to machine tools Degree of electrification C Machine tool 4.0 Rotary axes with B measuring system, condition monitoring Rolling and linear A bearings Optimized Bearings Mechatronic Modules System Expertise 45 Schaeffler AG Analyst Day 20
Slide 46: Digital process development
2 Technology and R&D Digital process development Research funding from government institutions Process simulation Global data management Digital factory 46 Schaeffler AG Analyst Day 2015
Slide 47: Key messages
3 Summary Key messages 1 Broad global R&D network of partners and cooperations 2 Our outstanding competencies in mechanics are complemented by extensive know-how in surface technologies, simulation as well as electronics and software 3 Broadest drivetrain know-how in Automotive 4 Dedicated system so
Slide 48: Fascination Motorsports – ABT Schaeffler Audi Sport
Fascination Motorsports – ABT Schaeffler Audi Sport 48 Schaeffler AG Analyst Day 2015
Slide 49: Production and operational excellence
Production and operational excellence Oliver Jung Chief Operating Officer Schaeffer AG – Analyst Day November 20, 2015
Slide 50: Agenda
Agenda 1 Overview 2 Production and operational excellence 3 Summary 50 Schaeffler AG Analyst Day 2015
Slide 51: Global Operations Organization – Global Technology Network
1 Overview Global Operations Organization – Global Technology Network Europe Greater China Key aspects Regional COO Regional COO ... ... Innovation in products and … … Schaeffler Production Excellence … … … … … production technology … … … … … … Efficiency (plants, logistics) Corporate COO … St
Slide 52: Integrated global manufacturing and R&D footprint
1 Overview Integrated global manufacturing and R&D footprint ≈ 63,000 employees in 74 plants worldwide Global footprint 60 % of internal added value US Europe Cheraw (2) Danbury China Germany Italy Fort Mill (2) Anting Bühl Momo Joplin Europe Nanjing Herzogenaurach Spartanburg
Slide 53: Plants – Our base for Operational Excellence
2 Production and operational excellence 1 Plants – Our base for Operational Excellence Localization rate constantly increasing Key aspects Europe Americas Strong plants operating with the Schaeffler Production 4% 3% 3% 31% System concentrated on QCD 26% 30% (improvements in quality, 96% 97% 97% 70
Slide 54: Industrial Engineering – Industrialization
2 Production and operational excellence 2 Industrial Engineering – Industrialization Key aspects Location development Taicang Covers the entire industrialization process from factory planning over factory building up to the definition of methods and standards for manufacturing planning, production
Slide 55: Production Technology – Innovation in production technology and products
2 Production and operational excellence 3 Production Technology – Innovation in production technology and products Key aspects State-of-the-Art technologies Responsible for development and optimization of production technology processes and production Forging Forming machines worldwide methods C
Slide 56: Innovative production – Cold formed tapered roller bearing
2 Production and operational excellence 3 Innovative production – Cold formed tapered roller bearing ("Solid Formed Bearing") Development Key aspects Process Deep knowledge in simulation, process and tooling leads to innovative new products 30% reduction of process steps 50% material saving
Slide 57: Tool Management & Prototyping – Early involvement in R&D process
2 Production and operational excellence 4 Tool Management & Prototyping – Early involvement in R&D process Key aspects Prototypes… Worldwide network of tool and prototype centers Development partner for new products (design for manufacturing) and manufacturing of prototypes Development, manufa
Slide 58: Special Machinery – Proprietary machines which are not available on the market
2 Production and operational excellence 5 Special Machinery – Proprietary machines which are not available on the market Key aspects Develops and realizes the following: Production facilities, measuring and testing technology, image processing, electronic systems and control systems Maintains a
Slide 59: High-Tech Production: Ball Screw Drives
2 Production and operational excellence 5 High-Tech Production: Ball Screw Drives Key aspects High-Tech Production of ball screw drives for steering mechanism Balls with tolerance 1µm Grinding tolerance 2µm Ball screw axial clearance < 5µm Own competencies to design high quality equipment
Slide 60: Bearing & Components Technologies
2 Production and operational excellence 6 Bearing & Components Technologies Key aspects Rolling bearing business within Schaeffler Group Internal supplier for rolling bearings in the Schaeffler Group Automotive 74% 26% Industrial with responsibility for bearing production and development Europe
Slide 61: Purchasing – Manager of the external added value
2 Production and operational excellence 7 Purchasing – Manager of the external added value Key aspects Purchasing Volume 2010-2014 (in bn. €) Identification of adequate supplier base 8.000 Production Material Non-Production Material High quality goods at competitive prices and available at 7.000
Slide 62: Key messages
3 Summary Key messages 1 Global network of strong plants with dedicated focus on quality, cost and delivery 2 Unique Schaeffler Production System providing the frame for our global plants network 3 State-of -the-art production technology enabling constant improvement in our long added value chain 4
Slide 63: Plant Tour
3 Summary Plant Tour Innovative Production: Solid Formed Bearing 2 High-Tech Production: Ball Screw Drives 3 Efficient Production: High-Volume Press 4 We are 1 Future concepts in production: here 3D Printer 63 Schaeffler AG Analyst Day 2015
Slide 64: Backup
SCHAEFFLER Backup November 20, 2015
Slide 65: Profit & Loss statement 2012 – 9M 2015
Backup Profit & Loss statement 2012 – 9M 2015 in EUR mn 2012 2013 2014 9M 14 9M 15 Sales 11,125 11,205 12,124 9,024 9,982 Cost of Sales (7,836) (8,029) (8,654) (6,460) (7,153) Gross Profit 3,289 3,176 3,470 2,564 2,829 R&D (593) (611) (626) (473) (534) Selling expenses (759) (761) (827) (596) (687)
Slide 66: Cash flow statement 2012 – 9M 2015
Backup Cash flow statement 2012 – 9M 2015 in EUR mn 2012 2013 2014 9M 14 9M 15 EBIT 1,469 1,008 1,523 1,230 1,251 Interest paid (581) (605) (520) (388) (430) Interest received 9 8 8 4 41 Income taxes paid (229) (378) (277) (197) (247) Dividends received 1 1 1 0 0 Depreciation, amortization and impai
Slide 67: Cash flow statement 2012 – 9M 2015 (continued)
Backup Cash flow statement 2012 – 9M 2015 (continued) in EUR mn 2012 2013 2014 9M 14 9M 15 Free cash flow 301 473 48 (87) 192 Dividends paid to shareholders and non-controlling interests (1) (1) (1) (1) (251) Receipts from loans 395 27 727 610 208 Repayments of loans (449) (649) (429) (192) (209) Ch
Slide 68: Balance sheet 2012 – 9M 2015
Backup Balance sheet 2012 – 9M 2015 in EUR mn Assets 2012 2013 2014 9M 14 9M 15 Intangible assets 554 538 555 532 559 Property, plant and equipment 3,515 3,369 3,748 3,511 3,961 Investments in equity-accounted 3 3 4 3 3 Other investments 14 14 14 14 14 Other financial assets 78 202 1,9601) 113 2,293
Slide 69: Balance sheet 2012 – 9M 2015 (continued)
Backup Balance sheet 2012 – 9M 2015 (continued) in EUR mn Shareholders’ equity and liabilities 2012 2013 2014 9M 14 9M 15 Share capital 500 500 600 500 600 Capital reserves 0 0 1,600 0 1,600 Other reserves (2,796) (2,031) (1,276) (1,592) (1,005) Accumulated other comprehensive income (loss) (362) (4
Slide 70: Overview on current corporate and financing structure
Backup Overview on current corporate and financing structure Corporate structure (as of 12 November 2015) Pro forma financing structure Post prepayments from IPO proceeds in October 2015 TopCo Nominal INA-Holding Schaeffler Debt instrument Interest Maturity Rating GmbH & Co. KG (mn) 100% HoldCo Loan