Schaeffler Ag · XETR:SHA0
Schaeffler — FY2014 Earnings Presentation
33 slides from Schaeffler's earnings presentation, Mar 26, 2015
Slide 1: Mobility for tomorrow – Quality. Technology. Innovation
Mobility for tomorrow Quality. Technology. Innovation Klaus Rosenfeld Chief Executive Officer Schaeffler AG Full Year 2014 Results Conference March 26, 2015 Frankfurt
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 Highlights 2014 2 Financials 2014 3 Outlook Page 3 Schaeffler Group · FY 2014 Results · March 26, 2015
Slide 4: 2014 – A successful year
1 Highlights 2014 2014 – A successful year Above average growth – 1 Strong operating results Quality, Technology and Innovation – 2 More than 2,500 new patents Operational success – 3 Both divisions contributed to growth Quality Technology Global presence strengthened – Innovation 4 4,000 new employ
Slide 5: Above average growth – Strong operating results
1 Highlights 2014 1 Above average growth – Strong operating results Sales Capex in EUR mn in EUR mn +8.2% +50% vs 2013 vs 2013 12,124 860 857 773 11,125 11,205 10,694 572 9,495 Ø 6.3% p.a. 361 2010-2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 EBIT Capex margin 15.9% 16.2% 13.2% 9.0% 12.6%
Slide 6: Quality, Technology and Innovation – More than 2,500 new patents
1 Highlights 2014 2 Quality, Technology and Innovation – More than 2,500 new patents Quality Innovation § More than 50 quality awards received in 2014 Number of new patent registrations in Germany1) § General Motors recognized 24 Schaeffler plants with "Supplier Quality Excellence Award 2014“ 2,518
Slide 7: Automotive – Significant above-market growth
1 Highlights 2014 3 Automotive – Significant above-market growth Highlights Demonstration Car 48 Volt § Schaeffler Automotive with sales growth of +10%, significantly above market1) § Growth driven by innovative products and technologies focused on fuel efficiency § Examples: - Engine: Variable Valv
Slide 8: Industrial – Back on track
1 Highlights 2014 3 Industrial – Back on track Highlights New Wind Power Standard WPOS § Schaeffler Industrial with sales growth of 3.3% § Growth driven by railway, wind power, motorcycles and aftermarket § Examples: - Railway: Bearing solutions for Metro, High Speed Trains and Freight Carriers in C
Slide 9: Global presence strengthened – 4,000 new employees
1 Highlights 2014 4 Global presence strengthened – 4,000 new employees Highlights New / expanded production facilities § Worldwide network of manufacturing and R&D Uljanowsk, facilities with 74 plants and 16 R&D centers Russia Nanjing, China Taicang, § Global presence further strengthened in 2014: P
Slide 10: Our Program "One Schaeffler" – Nearly 50% completed
1 Highlights 2014 5 Our Program "One Schaeffler" – Nearly 50% completed Program "One Schaeffler" Key aspects § Program "One Schaeffler" with 21 Initiatives across all divisions, regions and functions Executive Board § Harmonization of internal processes and CEO functions structures, realization of a
Slide 11: Strategic concept "Mobility for tomorrow" – Basis for future growth
1 Highlights 2014 6 Strategic concept "Mobility for tomorrow" – Basis for future growth Key mega trends 4 focus areas Society § Urbanization trends § Population growth Technology § Increasing complexity trends § Digitalization Eco-friendly 1 drives 2 Urban mobility Environmental § Renewable energies
Slide 12: Overview results – Strong performance in 2014
2 Financials 2014 Overview results – Strong performance in 2014 2013 2014 ∆ Q4/2013 Q4/2014 ∆ Q4/2014 vs in EUR mn in EUR mn 2014 vs 2013 in EUR mn in EUR mn Q4/ 2013 1 Sales 11,205 12,124 +8.2% 2,780 3,100 +11.5% EBITDA 1,6601) 2,172 +512 mn 1151) 469 +354 mn EBITDA margin (in %) 14.8 17.9 +3.1%-pt
Slide 13: Consolidated financial statements adjusted – Conti participation separated
2 Financials 2014 Consolidated financial statements adjusted – Conti participation separated Previous structure (until October 23, 2014) New structure (as per December 31, 2014) INA-Holding INA-Holding Schaeffler Schaeffler GmbH & Co. KG GmbH & Co. KG Schaeffler Schaeffler Verwaltungs 16.7% Verwaltu
Slide 14: Promised and delivered – Guidance achieved in all areas
1 Highlights 2014 Promised and delivered – Guidance achieved in all areas Growth Profitability Sales growth1) (FX-adjusted) 5-7% 9.0% P EBIT margin 12-13 % 12.6% P Capex 6-8 % of sales 7.1% of sales P Free cash flow Positive EUR +48 mn P Quality Innovation Quality policy Further improve Numerous qua
Slide 15: Sales above EUR 12 bn in 2014 – Sales growth excluding FX effects +9%
2 Financials 2014 1 Sales above EUR 12 bn in 2014 – Sales growth excluding FX effects +9% Sales 2014 sales by region1) in EUR mn in EUR mn / Y-o-y growth Asia/Pacific 1,206 / +6.6% +8.2%1) vs. FY 2013 9.9% 2,976 3,014 3,034 3,100 Greater China 2,756 2,858 2,811 2,780 1,540 / +29.4% 12.7% 57.0% 20.4%
Slide 16: Balanced growth – All business divisions and regions contributed
2 Financials 2014 Balanced growth – All business divisions and regions contributed Revenues per business division Revenues per region1) % vs 2013 % vs 2013 Engine Systems 2,266 +11.4% Europe 6,905 +5.8% Transmission Systems 3,826 +15.2% Americas 2,473 +4.8% Chassis Systems 1,364 +3.9% - thereof Nort
Slide 17: Automotive – Outperformance in all regions
2 Financials 2014 Automotive – Outperformance in all regions Sales development Automotive OEM Regional distribution Europe Americas Asia/Pacific Greater China 10% +12% +9% 13% +3% +1% 57% Europe Americas 21% World production: +3% Schaeffler Automotive OEM: +12% (operational sales growth) Asia/Pacifi
Slide 18: Automotive – Growth across all areas
2 Financials 2014 Automotive – Growth across all areas Sales split Key aspects Automotive Aftermarket § FX-adjusted growth rate of Automotive Division 17% 25% Engine Systems +10.7%, growth rate as reported +10.0% § Engine Systems: Growth driven among others by top-selling product groups camshaft pha
Slide 19: Industrial – Back on track
2 Financials 2014 Industrial – Back on track Sales trend Sales distribution 908 870 Industrial Aftermarket 839 804 Mobility 788 789 29% 784 769 770 757 745 764 38% Energy and Raw Material 14% 3,405 3,041 3,141 7% Aerospace 12% Production Machinery 2012 2013 2014 Key aspects Sales 2014 vs. 2013 § Pos
Slide 20: Industrial – Positive sales trend supported by nearly all sectors
2 Financials 2014 Industrial – Positive sales trend supported by nearly all sectors Regional split Key aspects Asia/Pacific § Industrial OEM business with mixed development across Greater China 10% sectors 13% § Mobility: Slight increase in sales § Sales increase largely driven by expansion of 58% E
Slide 21: EBIT margin at 12.6% – Earnings quality in-line with target range
2 Financials 2014 2 EBIT margin at 12.6% – Earnings quality in-line with target range EBIT ∆ EBIT in EUR mn in EUR mn 919 323 +9,7% -625 -15 -66 -21 vs. 20131) 1,523 418 429 368 377 383 1,008 324 319 293 380 EBIT Sales COGS R&D Sales Admin Others EBIT 2013 2014 1,523 EBIT Margin in % 1,008 9.0 12.6
Slide 22: Financial result – EUR 620 million
2 Financials 2014 Financial result – EUR 620 million Financial result¹) Composition of financial result¹) in EUR mn in EUR mn 375 620 65 3244) 72 44 54 385 166 1143) 143 122 100 69 46 266 6202) 23 424 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 4 1 Financial Fair value Others Trans- Accrued Cash Cash Hedging Trans- res
Slide 23: Net income increased – EUR 654 mn
2 Financials 2014 3 Net income increased – EUR 654 mn Net income 2014 Net income in EUR mn in EUR mn 12,124 1,523 -10,601 +1 654 610 -6201) 654 380 -250 1272) 63 Sales Costs EBIT Financial Investment Taxes/ Net 2010 2011 2012 2013 2014 result result minorities income 1) Includes one-off effects from
Slide 24: Free cash flow 2014 of EUR 48 mn – Impacted by one-off effects
2 Financials 2014 4 Free cash flow 2014 of EUR 48 mn – Impacted by one-off effects Free cash flow Free cash flow 2014 in EUR mn in EUR mn 2,172 121 238 857 228 142 135 57 46 473 48 398 -19 114 Refi- nancing1) 371 Anti- -306 trust 277 fine 48 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -14 EBITDA Δ Capex Interest Tax Ot
Slide 25: Working Capital 21.0% of sales – Capex ratio 7.1% of sales
2 Financials 2014 Working Capital 21.0% of sales – Capex ratio 7.1% of sales Working Capital Capex2) in EUR mn in EUR mn 357 2,900 2,613 2,608 2,648 2,696 2,778 2,548 2,333 229 202 155 143 121 114 108 572 857 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2013 2014 In % of sales1) In % of
Slide 26: Leverage ratio stable – Cost of debt significantly reduced
2 Financials 2014 5 Leverage ratio stable – Cost of debt significantly reduced Net financial debt1) Cost of debt2) in EUR mn in % Average maturity until year end Bank debt 6,547 6,134 Capital market debt 5,755 5,768 5,778 5,445 5,447 5,529 601 567 564 496 3.2 3.0 2.7 2.7 2.7 334 2.6 2.6 2.6 30 M 18
Slide 27: New CFO – Dr. Hauck starts on April 1, 2015
2 Financials 2014 New CFO – Dr. Hauck starts on April 1, 2015 Executive Board Key aspects § Leadership structure reflects 3-dimensional matrix Chief Executive Officer § The Executive Board consists of 8 Board members and 4 Regional CEOs CEOs Chief Technology CEO Automotive Officer Industrial § Roles
Slide 28: Ambitious targets – Further growth planned for 2015
3 Outlook Ambitious targets – Further growth planned for 2015 Growth Profitability Sales growth 5-7%1) EBIT margin 12-13% Sustainably Capex 6-8% of sales Free cash flow positive 1) FX adjusted Quality Innovation Quality policy Further improve R&D expenses 5% of sales Maintain leading Employees ~ 3,0
Slide 29: "Mobility for tomorrow" – Schaeffler technology partner for Formula E series
"Mobility for tomorrow" – Schaeffler technology partner for Formula E series Formula E 2015 10.01. Buenos Aires 14.03. Miami 04.04. Long Beach 09.05. Monaco 23.05. Berlin 06.06. Moskau 27./28.06. London Page 29 Schaeffler Group · FY 2014 Results · March 26, 2015
Slide 30: Schaeffler IR contact
Schaeffler IR contact Investor Relations Financial calendar 2015 phone: + 49 9132 82 4440 FY 2014 Results: 26 March 2015 fax: + 49 9132 82 4444 Q1 2015 Results: 21 May 2015 [email protected] Q2 2015 Results: 20 August 2015 www.schaeffler-group.com/ir Q3 2015 Results: 19 November 2015 Page 30 Schaeff
Slide 31: Automotive and Industrial sales
Backup Automotive and Industrial sales Sales Automotive Sales Industrial in EUR mn in EUR mn +10.0%1) vs. FY 2013 2,316 2,212 2,225 2,230 2,088 2,054 2,035 1,987 +3.3%2) vs. FY 2013 769 770 757 745 764 789 804 784 8,164 8,983 3,041 3,141 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2013
Slide 32: Overview of new corporate and financing structure
Backup Overview of new corporate and financing structure Current corporate structure (as of December 31, 2014) Financing structure (as of December 31, 2014) TopCo INA-Holding Schaeffler Debt instrument Nominal Interest Maturity Rating GmbH & Co. KG 100% Loans: HoldCo Term Loan (EUR) 500 E+4.50% Oct-
Slide 33: Sufficient cash sources available to serve HoldCo needs
Backup Sufficient cash sources available to serve HoldCo needs Chart simplified Future structure INA Holding for illustration Sustainable access to cash flow at HoldCo Schaeffler GmbH purposes & Co. KG TopCo § Permitted Upstream Payments in OpCo loan and Schaeffler bond documents allow OpCo cash to