Schaeffler Ag · XETR:SHA0
Schaeffler — Investor Presentation (December 2015)
35 slides from Schaeffler's investor presentation, December 2015
Slide 1: Schaeffler Capital Market Presentation
Schaeffler Capital Market Presentation December 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 2 Business profile and investment highlights 3 Financial Results 9M 2015 4 Outlook and Summary 3 SchaefflerAG - Capital Markets Presentation
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 u Leading integrated automotive and industrial supplier of high- precision components and systems 2014 9M 2015 u Global footprint with arou
Slide 5: 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 6: 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 1,027 978 933 920 890 900 912 860 857 773 743 597 572 8% of sales 6% of sales 361 321
Slide 7: 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 611 626 593 495 467 1 Quality, Technology and Innovation: u More than 50 quality awards in 2014 u State-of-the-art Plants, R&D and testing
Slide 8: 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 9: 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 components Strut (26% of sales in 9m'15) bearings Variable Torque cams
Slide 10: 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 11: Footprint – Integrated global manufacturing and R&D
2 Business profile and investment highlights Footprint – Integrated global manufacturing and R&D Global footprint US Europe u Cheraw (2) u Danbury China Germany Italy Fort Mill (2) Anting Bühl Momo u u Joplin Europe u u Nanjing u u Herzogenaurach u u Spartanburg u Suzhou u Homburg (3) Troy u Taicang
Slide 12: 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 u Urbanization 1 Eco-friendly drives Urban mobility 2 Society trends u Population growth u Increasing complexity Technology trends u Digitalization “Mobili
Slide 13: 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 14: Schaeffler equity story
2 Business profile and investment highlights Schaeffler equity story 3 pillars 1 Out-performance u 9m FX-adjusted sales growth of 6.5%, EBIT-margin at 13.3% in Automotive u Best-in-class business with superior growth and margin profile u Out-performance of global light vehicle production on average
Slide 15: 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 D D 7,658 8,164 excl. FX 7,511 6,670 effects Engine Systems 1,674 1,937 +15.7% +6.8% Transmission Sy
Slide 16: 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 2% 1% 220 9% 19% 35% 185 g CO2
Slide 17: 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 18: 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 D D 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 19: 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 20: 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 4 New organization structure with strong regional u Strengthen high-volume market sales focus agreed; new man
Slide 21: 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 22: 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 5,950 Deleveraging 5,755 5,768 5,778 EUR 1 bn target 5,529 from IPO 2.3
Slide 23: Overview key financials 9M 2015
3 Financial Results 9M 2015 Overview key financials 9M 2015 9M 15 Q3 15 in EUR mn 9M 14 9M 15 Q3 14 Q3 15 vs. 9M 14 vs. Q3 14 Sales 9,024 9,982 +10.6% 3,034 3,250 +7.1% EBITDA 1,703 1,765 3.6% 590 604 +2.4% EBITDA margin 18.9 17.7 -1.2%-pts. 19.4% 18.6% -0.8%-pts. EBIT 1,230 1,251 +1.7% 429 433 +0.9
Slide 24: Sales 9M 2015 up 10.6%
3 Financial Results 9M 2015 Sales 9M 2015 up 10.6% Sales 9M 2015 sales by region in EUR mn Y-o-y growth (w/o FX effects) Asia/Pacific +12.1% (2.4%) 12,124 11,125 11,205 Greater China 10% 9,982 +26.3% (+5.8%) 9,024 14% 54% Americas 22% Europe +21.2% (+9.8%) +3.4% (+2.2%) Sales by division Y-o-y growt
Slide 25: EBIT margin 9M 2015 12.5%
3 Financial Results 9M 2015 EBIT margin 9M 2015 12.5% EBIT Key aspects in EUR mn 9M 15 EBIT margin down by 1.1%-points from 13.6% mainly due to: 1,523 1,469 1) 4 Reduced gross profit margin (-1.0%-pts) in Industrial 1,388 1,251 business 1,230 4 Increase in R&D and selling expenses on group level 4 O
Slide 26: Financial Result 9M 2015 EUR 462 mn
3 Financial Results 9M 2015 Financial Result 9M 2015 EUR 462 mn Financial result1) Reconciliation Financial Result in EUR mn in EUR mn -53 663 -194 620 597 462 215 462 9M Non-cash One-off 9M 2015 424 valuation effects excl. one-offs and 2015 effects loans / refinancing valuation effects as reported
Slide 27: Net income 9M 2015 EUR 521 mn
3 Financial Results 9M 2015 Net income 9M 2015 EUR 521 mn Net income1) Reconciliation of net income in EUR mn in EUR mn 67 521 135 7 439 21 654 Provision for EU antitrust fine 521 439 9M 2014 Δ EBIT Δ Financial Δ Taxes Δ Minorities 9M 2015 380 Result Key aspects u Improved financial result leads to
Slide 28: Free cash flow 9M 2015 EUR 192 mn
3 Financial Results 9M 2015 Free cash flow 9M 2015 EUR 192 mn 9M 2015 Free cash flow Free cash flow (before one-off items) in EUR mn in EUR mn 4) 4) 533 398 473 301 365 5) 1,765 48 192 (273) (87) 2012 2013 2014 9M 14 9M 15 Operating cash flow 1,133 1,027 1,385 4) 8954) 1,0855) (743) (166) (173)1) Ke
Slide 29: Working capital improved – Capex on track
3 Financial Results 9M 2015 Working capital improved – Capex on track Working capital Capex in EUR mn in EUR mn 2,900 2,880 2,548 860 857 2,417 2,333 743 2,016 2,119 1,900 1,626 1,676 572 500 1,713 1,812 1,813 1,495 1,536 (704) (879) (928) (1,065) (1,052) 12/12 12/13 12/14 09/14 09/15 2012 2013 2014
Slide 30: Financial debt development
3 Financial Results 9M 2015 Financial debt development Net financial debt Change in net financial debt in EUR mn in EUR mn 219 41 5,950 210 5,778 -88 -210 6,505 5,936 5,950 5,778 5,447 12/14 FX effect Δ Cash Repayment Bond Other 09/15 Position Term Loan1) refinancing2) Key aspects 4 Net financial de
Slide 31: Guidance 2015
4 Outlook and Summary Guidance 2015 Sales Profitability Sales growth 4-5%1) EBIT margin 12-13%2) Capex 6-8% of sales Free cash flow Sustainably positive 1) At constant currency 2) Does not include one-off items Quality Innovation Quality policy Further improve R&D expenses 5% of sales Maintain leadi
Slide 32: Key messages
4 Outlook and 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
Slide 33: Financial calendar 2015/2016
Financial calendar 2015/2016 Nov. 19, 2015 Results 9M 2015 Nov. 20, 2015 Analyst Day, Herzogenaurach Société Générale Premium Review, Paris Dec. 2/3, 2015 Goldman Sachs Global Automotive Conference, London Jan. 12/13, Deutsche Bank Global Auto Industry Conference, Detroit 2016 Commerzbank German Inv
Slide 34: IR contact
IR contact Investor Relations phone: + 49 9132 82 4440 Christoph Beumelburg +49 (0)9132 82 5414 fax: + 49 9132 82 4444 Niels Fehre +49 (0)9132 82 85805 Email: [email protected] Susanne Sievers +49 (0)9132 82 4408 Web: www.schaeffler.com/ir 34 SchaefflerAG - Capital Markets Presentation
Slide 35: Overview on current corporate and financing structure
Backup Overview on current corporate and financing structure Corporate structure (November 30, 2015) Financing structure (November 30, 2015) TopCo Nominal INA-Holding Schaeffler Debt instrument Interest Maturity Rating GmbH & Co. KG (mn) 100% HoldCo Loans: HoldCo Term Loan (EUR) 5002) E+3.75% Oct-20