Schaeffler Group CEO And CFO Update, January 2022
Schaeffler Group – CEO and CFO update, January 2022Kepler Cheuvreux German Corporate ConferenceJanuary 19th, 2022PUBLIC
DisclaimerThis 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 are not historical facts;they include statements about Schaeffler Group’s beliefs and expectations and the assumptions underlying them. These statements are based on plans,estimates and projections as they are currently available to the management of Schaeffler AG. Forward-looking statements therefore speak onlyas of the date they are made, and Schaeffler Group undertakes no obligation to update any of them in light of new information or future events.By their very nature, forward-looking statements involve risks and uncertainties. These statements are based on Schaeffler AG management’s currentexpectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in theforward-looking statements. Actual results may differ from those set forth in the forward-looking statements as a result of various factors (including,but not limited to, future global economic conditions, changed market conditions affecting the automotive industry, intense competition in the marketsin which we operate and costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditionsaffecting our markets, and other factors beyond our control).This presentation is intended to provide a general overview of Schaeffler Group’s business and does not purport to deal with all aspects and detailsregarding Schaeffler Group. Accordingly, neither Schaeffler Group nor any of its directors, officers, employees or advisers nor any other person makesany representation or warranty, express or implied, as to, and accordingly no reliance should be placed on, the accuracy or completeness of the informationcontained in the presentation or of the views given or implied. Neither Schaeffler Group nor any of its directors, officers, employees or advisors norany other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any useof this information or its contents or otherwise arising in connection therewith.The material contained in this presentation reflects current legislation and the business and financial affairs of Schaeffler Group which are subjectto change.Schaeffler AG - Kepler Cheuvreux German Corporate Conference2PUBLIC
Agenda123Where we stand – Current trading and Key Q3 2021 messagesDivisional Business HighlightsTargetsSchaeffler AG - Kepler Cheuvreux German Corporate Conference3PUBLIC
Agenda123Where we stand – Current trading and Key Q3 2021 messagesDivisional Business HighlightsTargetsSchaeffler AG - Kepler Cheuvreux German Corporate Conference4PUBLIC
1 Where we stand – Current trading and Key Q3 2021 messagesSolid Q3 2021 – Automotive Technologies sales hampered by market, EBIT margin2 and FCF3 successfully protectedKey messagesQ3 Group sales1 -3.0% – Automotive Technologies sales realization1 hampered by market disruptions, strong growth in AutomotiveAftermarket and double-digit in IndustrialQ3 EBIT margin2 8.2% – Effective margin protection in Automotive2 Technologies despite lower volumes, strong margin in AutomotiveAftermarket and Industrial3Q3 FCF3 EUR 225 mn – Supported by higher EBITDA; counterbalanced by increased Capex and tactically higher inventories49M ROCE4 peaked at a strong 18.0% (9M 20: 8.0%) – Supported byabove average LTM earnings and proactive capital managementAutomotive Technologies Operating Model sharpened to boost5 execution of our “Mature and New” approach – Further differentiatingpowertrain-specific and powertrain-agnostic businessesSales growth1 Q3Gross margin Q3-3.0%23.8%EUR 3,332 mnQ3 2020: 23.5%EBIT margin2 Q3Free Cash Flow3 Q38.2%EUR 225 mnEUR 272 mnQ3 2020: EUR 333 mnFY 2021 Guidance confirmed for Group and divisional margins and6 FCF – Auto Technologies Outperformance guidance unchanged,Industrial top line raised1FX-adjusted 2 Before special items 3 Before cash in- and outflows for M&A activities 4 Beforespecial items, LTMSchaeffler AG - Kepler Cheuvreux German Corporate Conference5PUBLIC
1 Where we stand – Current trading and Key Q3 2021 messagesSchaeffler Group Q3 2021 – Highlights and lowlightsAutomotive Technologies once again with strongOutperformance of 750 bps in Q3 (9M: 660 bps); allregions outperforming despite weaker marketsSemiconductor shortage led to extremely low LVP1 in Q3,indirectly impacting volumes in Automotive Technologiesacross all regionsAutomotive Aftermarket sales profiting from increasingdemand for individual mobility solutionsGeneral market headwinds – Semiconductor shortage,Covid-19 variants and supply chain situation – arepersisting with low visibilityIndustrial growth in Q3 driven by brisk economicrecovery, all sector clusters growing except Wind andRailwayCosts for raw materials, energy and transportationincreasing in Q3 as flagged, impacting H2 2021 with a lagBeing an Automotive and Industrial supplier pays off, andleads to margin resilience; strong FCF for each divisionand the whole Group, despite persisting high uncertainty1Light Vehicle ProductionSchaeffler AG - Kepler Cheuvreux German Corporate Conference6PUBLIC
1 Where we stand – Current trading and Key Q3 2021 messagesOur Outlook going forward – What changed in our market assumptions since AugustAs shown onNovember 9, 2021Automotive Technologies – Global LVP1 2021Industrial – Industrial Production3Automotive Aftermarket – GDP2Up to on upto 0.5 mnhigher thanIHS 2Q3Q4e2021e After a strong Q1, the LVP1 in Q2 and even more in Q3was strongly impacted by the semiconductor shortage For Q4, Schaeffler anticipates a moderate upside of upto 0.5 mn vehicles vs. IHS estimates0%Europe0.3% yoy vs. 2020 Schaeffler market assumption at the FY release was 80 mn vehicles (5 mn discount to IHS, Feb. 2021)AmericasGreater ChinaEuropeAsia/Pacific World GDP expected to reach 5.9% growth in 2021(2020: -3.4%) fueled by economic recovery after theCoronavirus crisis Global GDP growth expectation for FY 2021 slightlyreduced compared to the previous prognosis fromJune 2021 (6.3%)Light Vehicle Production (IHS Markit, October 2021)2GDP (Oxford Economics, September 2021)Schaeffler AG - Kepler Cheuvreux German Corporate ConferenceAmericasGreater ChinaAsia/PacificFY 2021EFY 2021E Global industrial production expected to grow by12.0% in 2021 (last release: 11.9%) Strong market development across all regions, mainlydriven by Greater China and Americas; fastestgrowing sector was the mechanical engineeringsector ( 13%)31WorldIndustrial Production (Oxford Economics, Sept. 2021)Sectors: Mechanical Engineering (NACE 28), Transport Equipment(NACE 30), Electrical Equipment (NACE 27.1)7PUBLIC
1 Where we stand – Current trading and Key Q3 2021 messagesFY 2021 Guidance – Group and divisional margins and FCF confirmedAs shown onNovember 9, 2021Group GuidanceDivisional GuidanceGuidance AugFY 2021Sales growth144Guidance NovFY 2021 11%AutomotiveTechnologies94 7%Aug 44Nov 94Outperf.Outperf.200 - 500 bps 200 - 500 bpsEBIT margin2Free Cash Flow38 - 9.5%8 - 9.5% EUR 400 mn EUR 400 mn 6% 6%AutomotiveAftermarketIndustrialAug 44Nov 94Aug 44Nov 94 10% 10%9 - 11%11 - 13% 12.5% 12.5% 10.5% 10.5%New market assumptions for Fiscal Year 2021 Automotive Technologies: LVP 2021 up to 0.5 mn vehicles higher thanlatest IHS estimate5 of 74.8 mn vehicles Automotive Aftermarket: Increase of global GDP by around 6% Industrial: Increase of relevant industrial production of around 12%1FX-adjusted 2 Before special items 3 Before cash in- and outflows for M&A activities 4 Release Date5 Light Vehicle Production (IHS Markit, October 2021)Schaeffler AG - Kepler Cheuvreux German Corporate Conference8PUBLIC
1 Where we stand – Current trading and Key Q3 2021 messagesCurrent TradingNEW1Good finish of FY 2021 – December sales better than expected, helped by sequential improvement in global LVP in Q42Guidance for FY 2021 confirmed – Outperformance in Automotive Technologies expected at the upper end of the guidance range3Cost inflation / Raw Materials – More severe impact in 2022, unsurprisingly it will be the key earnings headwind going forwardAutomotive Technology margin guidance for 2022 will be below guidance 2021, and consistent with AT Mid Term Targets4Execution – Restructuring program successfully closed, FCF to absorb the payouts in 2022, benefits expected in 2023/2024 as hinted5Outlook – Decent start into 2022, Guidance will be announced in March. Both our financial 2025 Mid-term Targets and ourclimate neutrality Sustainability Targets remain our reference in measuring the success of our Roadmap FY 2021 guidance confirmed for Group and Divisions FY 2022 guidance will be announced in March – Divisional margins to be expressed as floorsSchaeffler AG - Kepler Cheuvreux German Corporate Conference9PUBLIC
1 Where we stand – Current trading and Key Q3 2021 messagesGross margin – Managing input cost inflationNEWImpact of input cost inflation (Gross effect) As flagged in roadshows in November and December, input prices continued to increase in Q4– Steel accounts for 65% of our production material– Logistics and energy cost follow the same trend In Q3 2021, 100 bps1 gross margin impact from Raw Materials, Energy and Logistics, increase to 200 bps1 in Q4 2021, as flagged In Q4 2021, material price indices stabilized on a higher-than-expected level; we now forecast between 350 and 450 bps1 of headwind on average in FY2022, (before: 200 bps1 with front-loaded phasing)How we mitigate (Net effect) Pricing dynamics is different among divisions and businesses, and price recovery is in most cases partial, and with a time lag– In Automotive Technologies, price recovery mostly relies on one-to-one customer negotiations, which differ among customers and regions; overallpositive feedback, constructive conversations and negotiations with Customers regarding input cost; we expect the process to be concretized by end ofMarch– In Industrial, pricing initiatives are showing positive effects and mix is favorably developing1On a gross basis vs. H1 2021Schaeffler AG - Kepler Cheuvreux German Corporate Conference10PUBLIC
1 Where we stand – Current trading and Key Q3 2021 messagesConclusion & Outlook1Automotive Technologies strongly outperformed a weaker market, strong Aftermarket andIndustrial sales support evidence of “Automotive & Industrial Supplier” resilience paying off2Margins and FCF solid, also supported by tactical mitigating actions, as external headwinds raw materials, energy, freight - continue to be challenging3Underlying cash flow remains strong – Dividend policy unchanged; strong focus on M&Apipeline4Sustainability focus intensifying – Strategically with Scope 3 upstream targets. Operationally,increasingly embedded in product innovation, investments and operations, and sourcing5FY 2021 Margins and FCF guidance confirmed – Preparedness to face increased input costsfor longer, related to raw materials, energy and transportation costs; high confidence insustainably growing our business and leveraging Automotive and Industrial competitive edgeSchaeffler AG - Kepler Cheuvreux German Corporate ConferenceRelentless focus onexecution –Delivering solidoperatingperformance andcash generation11PUBLIC
Agenda123Where we stand – Current trading and Key Q3 2021 messagesDivisional Business HighlightsTargetsSchaeffler AG - Kepler Cheuvreux German Corporate Conference12PUBLIC
2 Divisional Business HighlightsRoadmap 2025 – Building on our strong foundations and innovating as diversifiedAutomotive and Industrial GroupAutomotive TechnologiesMatureWeHARVESTwith ourenablerTechnologiesWeEXIT/DIVESTexpiring businesses& consolidate ourfootprintNewWeBUILDCompetencies inPower Electronics &HydrogenWeGROWin ElectrifiedPowertrainsWe drive the transition to innovative propulsionand chassis technologies, to conquer leadershippositions in New BusinessIndustrialAutomotive AftermarketDriving innovation with systems and servicesPlatformbusiness One-stop-shop Consolidated distributionAdvancedrepairsolutions& services Plug & Play solutions Also available for hybrids Wheelbearings for Independent of drive trainpassenger High-performance partscarsWe capture growth opportunities in new marketsand maintain a high margin levelSchaeffler AG - Kepler Cheuvreux German Corporate ConferenceRoboticssolutionsWireless conditionmonitoringHydrogensolutionsPushing growth in our core businessLarge-size windbearingsRail bearingsAgriculturaltechnologiesWe further build on our profitability track record,while entering in promising new technologies13PUBLIC
2 Divisional Business Highlights – Automotive TechnologiesAutomotive Technologies – Strong Outperformance, effective margin protectionSalesSales by business division yoy growthin EUR mnGrossmargin6,2865,4252,1619M 20209M 2021 1719883 22.4%Engine Systems1,4251,603 13.5%Transmission Systems2,4392,819 16.5%842982 16.8%5,4256,286 16.1% 16.1%1-12.2%11,921Q3 2020Q3 20219M 20209M 202121.0%19.5%15.8%21.7%E-MobilityChassis SystemsTotalOutperformance: Sales1 vs. market development in 9MEBIT2 7.7ppin EUR mn-3.6pp176 6.6pp1 6.6pp 3.0pp 9.4pp4679.5%16.1%6.6%17.5%9.8%16.4%8.1% 11.1%14.2%23.6%88-16EBITmargin2 10.9ppWorldQ3 2020Q3 20219M 20209M 20218.2%4.6%-0.3%7.4%FY 20Europe 4.5pp 0.9ppAmericas 8.0ppGreater China 10.3ppAsia/Pacific 6.5ppProduction of light vehicles 9M 2021 vs. 9M 2020 (IHS Markit, October 2021)Sales growth Schaeffler Automotive Technologies 9M 2021 vs. 9M 2020FX-adjusted 2 Before special itemsSchaeffler AG - Kepler Cheuvreux German Corporate Conference14PUBLIC
2 Divisional Business Highlights – Automotive TechnologiesVision Powertrain 2035 – Electrification is further acceleratingVision Powertrain 2035Global Light Vehicle Production15%We drive the transition to innovativepropulsion systems30%56%35%HEV as transition technology willreach tipping point in 203088%40%32%50%30%8%12%2020 e2025 eICEElectrification is further accelerating2030 eHEV2035 exEVSchaeffler AG - Kepler Cheuvreux German Corporate Conference15PUBLIC
2 Divisional Business Highlights – Automotive TechnologiesWe actively manage our Product Portfolio – Harvesting the Mature, Growing the New BusinessMature BusinessVision Powertrain 2035Global Light Vehicle ProductionPowertrain agnostic1productsProducts forICE and HEVNew BusinessPowertrain agnostic1productsProducts forElectrified 2%2020 e2025 eICEExample2030 eHEVBall Screw Drivefor Steering2035 eRear Wheel Steering3in1 e-AxlexEV1 Independentfrom powertrain typeDecreasing potentialSchaeffler AG - Kepler Cheuvreux German Corporate ConferenceIncreasing potentialStrongly increasing potential16PUBLIC
2 Divisional Business Highlights – Automotive TechnologiesEco-system – Optimizing our leading technological platform, leveraging our strong industrializationcapabilitiesMature BusinessWeHARVESTwith ourEnabler-TechnologiesWeEXIT/DIVESTexpiring businesses &consolidate our footprintNew BusinessHow we harvest Mature Business We right-size investments and resource allocation in our Maturebusiness by consequently reducing investments in ICEtechnologies (Reinvestment Rate 1)WeBUILD We leverage our synergies in Mature even more, by combiningthe Engine and Transmission businessCompetencies inPower Electronics &Hydrogen We aim to become the market leader in the powertrain agnosticAutomotive Bearings market We EXIT/DIVEST expiring businesses like chain drive systems andfurther consolidate our European footprintWeGROWin ElectrifiedPowertrainsOur Mature business provides the foundation and industrialization scale and funds our New businessSchaeffler AG - Kepler Cheuvreux German Corporate Conference17PUBLIC
2 Divisional Business Highlights – Automotive TechnologiesEco-system – Creating a leading technological platform with strong industrialization capabilitiesMature BusinessWeHARVESTwith ourEnabler-TechnologiesWeEXIT/DIVESTexpiring businesses &consolidate our footprintNew BusinessGrowing our New Business We continuously leverage our Automotive Industrial supplier ecosystem – Our New Business thrives on the strong foundations of theMatureWeBUILD We harness synergies between Automotive Technologies, AutomotiveAftermarket and Industrial, even more in New Business fields likeE-Motors or HydrogenCompetencies inPower Electronics &Hydrogen We complement our portfolio organically but also inorganically byacquisitions, JVs or cooperations We remain open to new collaborations in our future growth fieldsE-Mobility, Fuel Cells and Chassis MechatronicsWeGROWin ElectrifiedPowertrainsStrong manufacturing and technological platform works like an eco-system, integrating collaborationsSchaeffler AG - Kepler Cheuvreux German Corporate Conference18PUBLIC
2 Divisional Business Highlights – Automotive TechnologiesAutomotive Technologies Operating Model sharpenedMature BusinessKey aspectsNew Business We sharpen our Operating Model in AutomotiveTechnologies, consistent with our goals to:PowertrainspecificPowertrainagnosticEngine &TransmissionBearingsE-MobilityChassis Systems Lead in E-Mobility, technological edge and innovation Strengthen Chassis system business as second pillar ofthe Division Extract higher synergies with business forconventional powertrains (Engine & TransmissionSystems) Leverage our powertrain agnostic automotivebearings business and our synergies with theIndustrial division We increasingly differentiate our steering of resources,capital and growthOperating Model sharpened to further boost execution of “Mature & New” and “Powertrain-agnostic & -specific” approachSchaeffler AG - Kepler Cheuvreux German Corporate Conference19PUBLIC
2 Divisional Business Highlights – Automotive TechnologiesAutomotive Technologies – How we win: Driving the transition to innovative Powertrain and Chassis TechnologiesSchaeffler & Mobileyeare advancing theindustrialization ofautonomous vehiclesInvestment in state-ofthe-art sustainable EMobility plantSchaeffler at IAA 2021:Showcasing ourtechnologycompetenciesSchaeffler winsprestigious 2021Automotive News PACEAwards for E-MobilitySchaeffler AG - Kepler Cheuvreux German Corporate Conference20PUBLIC
2 Divisional Business Highlights – Automotive AftermarketAutomotive Aftermarket – Strong sales development in Q3, good margin on high compsSalesSales by region yoy growthin EUR mn 8.7%1500456Grossmargin9M 20209M 2021 1Europe875985 13.2%Americas216271 34.0%Greater China5778 34.8%Asia/Pacific5678 44.0%1,2041,411 18.3% 18.3%11,4111,204Q3 2020Q3 20219M 20209M 202135.1%30.8%34.4%31.5%TotalAutomotive Aftermarket sales growth by channel1EBIT2-1.2ppin EUR mn23IAMIAM-4.5pp1908620634OESOES7145TotalTotalQ3 2020EBIT18.8%margin21Q3 202114.3%9M 202015.8%9M 202114.6%9M 2020-20%9M 2021-10%0%10%20%30%40%3Independent Aftermarket 4 Original Equipment Service 5 Contains E-Commerce sales and sales toAutomotive suppliers in addition to IAM and OESFX-adjusted 2 Before special itemsSchaeffler AG - Kepler Cheuvreux German Corporate Conference21PUBLIC
2 Divisional Business Highlights – Automotive AftermarketAutomotive Aftermarket – How we win: REPXPERT Remote Support is the next level digital service for garagesConventional technical support methods reach their limitationswhen it comes to complex, demanding vehicle repairs Service technicians increasingly report difficulties in resolving technicalinquiries via telephone or emailSchaeffler launches a Microsoft Dynamics 365 based technicalsupport solution for smartphones, tablets or HoloLens Images and sound transmitted in real time Mixed reality to accurately visualize positions and rotational directionsFree of chargefor garagesFast login viaQR codeAvailable inEurope already in No access barriers or licenses cost for garages2021REPXPERT Remote Support enables complex technical repairs and promotes direct contact to garagesSchaeffler AG - Kepler Cheuvreux German Corporate Conference22PUBLIC
2 Divisional Business Highlights – IndustrialIndustrial – Double-digit sales growth, EBIT margin2 above 12%SalesSales by region yoy growth 14.2%1in EUR mn 15.8%12,6492,335911774GrossmarginQ3 2020Q3 20219M 20209M 202123.5%29.0%27.3%29.5% 1Europe9731,071 10.5%Americas396436 15.3%Greater China639756 17.7%Asia/Pacific328385 20.4%2,3352,649 14.2%Industrial sales growth by sector cluster 9M 20211in EUR mn 3.5pp 4.6pp6119M 2021TotalEBIT2EBITmargin29M 2020Two-WheelersOffroadIndustrial AutomationPower TransmissionWindRaw MaterialsAerospaceRailwayIndustrial Distribution321113202Q3 2020Q3 20219M 20209M 20217.8%12.4%8.6%12.1%1FX-adjusted 2 Before special items-10%0%10%20%30%40%50%FX-adjusted 2 Before special itemsSchaeffler AG - Kepler Cheuvreux German Corporate Conference23PUBLIC
2 Divisional Business Highlights – IndustrialIndustrial – How we win: Railsponsible Supplier Award 2021 in the category “Climate Change and Circular Economy”Railway SupplierAward Supply model with direct availability and 100 percentreturn service Circular approach reducing CO2 emissions, energy andwater consumption by approx. 95 percent Combining customer value with key sustainabilityaspectsSchaeffler AG - Kepler Cheuvreux German Corporate Conference24PUBLIC
2 Divisional Business HighlightsSynergies – Automotive and Industrial cross-fertilization leveraging Offroad & E-Motor New E-Mobility business for Offroad applications basedon close cooperation between divisions Customer intimacy and application knowledge of theIndustrial Division Automotive E-motor technology know-howSchaeffler AG - Kepler Cheuvreux German Corporate Conference25PUBLIC
2 Divisional Business HighlightsCapital allocation – Capex ratio increased to 6.4% in Q3, investments in growth businessInvestment1 allocation in EUR mn Reinvestment rate: clearly 1 in Industrial division and BD E-Mobility;consistently 1 in BD Transmission Systems and Engine SystemsFY 19FY 20Q3 20Q3 219M 2167237886127273 Automotive Technologies: continued prioritization drives investments;machinery investments for E-Motor production in Hungary672613512 Industrial: investments for capacity expansion of large size bearings inNanjing, China; new hall for Railway bearings in Brasov, ketCapex1,045632181215482Capex ratio27.2%5.0%5.3%6.4%4.7%ReinvestmentRate1Key aspects Q3Investments1 by region 9M 2021in EUR mn (yoy change)0.70.70.9Asia/Pacific23%Greater China255 ( 2)102 (-23)12%Americas1.029 (-5)7%Europe58%53 ( 5)0.7Additions to intangible assets and property, plant and equipment 2 Capex in % of salesSchaeffler AG - Kepler Cheuvreux German Corporate Conference26PUBLIC
Agenda123Where we stand – Current trading and Key Q3 2021 messagesDivisional Business HighlightsTargetsSchaeffler AG - Kepler Cheuvreux German Corporate Conference27PUBLIC
3 TargetsSustainability – New step on our path to Climate NeutralityKey aspectsLong-Term Sustainability Targets Decarbonization as top priority20192025203020352040 Emissions occurring in the supplychain (Scope 3 upstream): Climate neutral from 2040Base YearClimate NeutralProductionScope 3upstream-25%Climate NeutralCompany-90%*Scope 1 2-75%-90%*Scope 3downstream Emission reduction of 25% until2030 From 2025, Schaeffler willsource 100,000 tons of greensteel on an annual basis fromSwedish start-up H2greensteel Production facilities (Scope 1&2): Climate neutral from 2030 Emission reduction of 75% until2025Not included Clear strategy with specificmeasures being defined andimplemented across the company* Residual emissions are to be compensatedSchaeffler AG - Kepler Cheuvreux German Corporate Conference28PUBLIC
3 TargetsMid-term Targets until 2025Mid-term TargetsAutomotive TechnologiesAutomotive AftermarketIndustrialOutperformance1FX-adj. sales growthFX-adj. sales growth200 to 500 bps GDP growth IP growthon average2on average2on average2 34 6%13 15%12 14%EBIT margin before special items4EBIT margin before special items4EBIT margin before special items4tototoSchaeffler Group1ROCEFCF conversion12 to 15%0.3 to 0.5based on EBIT reported4based on EBIT reported4 5FX-adj. sales growth above Light Vehicle Production (IHS) 2 from 2021 to 2025 3 Industrial Production (Oxford Economics) 4 latest in 2023 5 before cash in- and outflows for M&ASchaeffler AG - Kepler Cheuvreux German Corporate Conference29PUBLIC
3 TargetsEquity Story – Positioning Schaeffler for long-term value creation1Roadmap 2025 in execution – Focus on capital allocation, portfolio management and FCF generation2Automotive Technologies – Conquer leadership positions in New Business for electrifiedPowertrains and Chassis applications3Automotive Aftermarket – Maintain a high margin level, expand our share of wallet and reach4Industrial – Enter attractive growth fields, further enhance profitability5Financial Framework – Strict performance orientation based on Mid-term Targets6Sustainability – Fully committed to activate all impact levers to achieve sustainability goalsSchaeffler AG - Kepler Cheuvreux German Corporate ConferenceCreating long-termvalue and generatingFree Cash Flow30PUBLIC
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Back up12Schaeffler Group overviewQ3 2021 detailsSchaeffler AG - Kepler Cheuvreux German Corporate Conference32PUBLIC
Backup: Schaeffler AG overview and detailed Q3 2021 financialsSchaeffler in facts – strong starting pointStrong customer base withApproximately11,800EURapprox.customers12.6 bnSales in 2020More than1,900patents filed in 202075 plants20 R&D centers1.1 mtons of processed steel p.a.Around 200 locations in more than 50 countries6.4%EBIT margin in 202011AroundFar more than83,90010,000employeesworldwide2different productsBefore special items 2 As at September 30, 2021Schaeffler AG - Kepler Cheuvreux German Corporate Conference33PUBLIC
Backup: Schaeffler AG overview and detailed Q3 2021 financialsSchaeffler Group at a glance – We are an Automotive and Industrial supplier3 DivisionsSchaeffler Group4 RegionsIn % of FY 2020In % of FY 2020 Leading positions intechnology and innovationIndustrial25%Asia Pacific13% 10 customer sectors Market leading offering fromcomponents and systems toservicesEUR 12.6 %Europe43%GreaterChina23%EUR 12.6 bn 75 plants and 20 R&D centers 83,000 employees in morethan 50 countriesAmericas21%Well-diversified Automotive and Industrial supplier with global reach and synergistic businessesSchaeffler AG - Kepler Cheuvreux German Corporate Conference34PUBLIC
Backup: Schaeffler AG overview and detailed Q3 2021 financialsOverview Corporate and Financing StructureCorporate structure (simplified) as of September 30, 2021Financing structure as of September 30, 2021A IHO Verwaltungs GmbHDebt instrumentINA-Holding SchaefflerGmbH & Co. KGLoans100%BondsIHO Beteiligungs GmbHAIHO Verwaltungs GmbH200E 2.25%Dec-24Not rated-0E 3.00%Feb-22Not rated3.625% SSNs 2025 (EUR)-8003.625%May-25BB/Ba2/BB-3.75% SSNs 2026 (EUR)-7503.75%Sep-26BB/Ba2/BB-4.75% SSNs 2026 Ba2/BB-6.00% SSNs 2027 (USD)4503896.00%May-27BB/Ba2/BB-6.375% SSNs 2029 ating(Fitch/Moody’s/S&P)E 0.80%Ø 1.65%1.125%1.875%2.750%2.875%3.375%Ø 2.47%3Sep-24May-23, 25, 28 & 30Mar-22Mar-24Oct-25Mar-27Oct-28Not ratedNot ratedNot ratedBB /Ba1/BB BB /Ba1/BB BB /Ba1/BB BB /Ba1/BB BB /Ba1/BB 36.0%Vitesco Technologies AG24.9%BCPFreefloat54.0%54.0%75.1%Schaeffler AG3,416 Ø 3.75%2,3B Schaeffler AGLoansFreefloatRating(Fitch/Moody’s/S&P)-Debt instrumentFreefloatMaturityBridge Facility (EUR 400 m)Total IHO Verwaltungs GmbH10.0%InterestRCF (EUR 800 m)3.875% SSNs 2027 (EUR)100%10.0%Nominal Nominal(USD m) (EUR1 m)Bonds36.0%Continental AGRCF (EUR 1,800 m)Schuldschein Loans (EUR)Commercial Paper Program (EUR)1.125% SNs 2022 (EUR)1.875% SNs 2024 (EUR)2.750% SNs 2025 (EUR)2.875% SNs 2027 (EUR)3.375% SNs 2028 (EUR)Total Schaeffler GroupNominal Nominal(USD m) (EUR1 m)-55745458007506507504,0521EUR/USD 1.1579 2 After cross currency swaps 3 Incl. commitment and utilization fees 4 On October 4, 2021, Schaeffler AGhas terminated variable SSD tranches in the amount of EUR 259 m. The early repayment will be made on November 11, 2021.Schaeffler AG - Kepler Cheuvreux German Corporate Conference35PUBLIC
Back up12Schaeffler Group overviewQ3 2021 detailsSchaeffler AG - Kepler Cheuvreux German Corporate Conference36PUBLIC
Backup: Schaeffler AG overview and detailed Q3 2021 financialsKey figures Q3 and 9M 2021in EUR mnQ3 2020Q3 2021Sales3,3913,332Gross ProfitGross margin79623.5%79323.8%EBIT2EBIT margin23229.5%Net income3Q3 2021vs. Q3 20209M 2021vs. 9M 20209M 20209M 20218,96410,346-3 mn 0.3pp1,90721.3%2,59325.1% 686 mn 3.8pp2728.2%-50 mn-1.3pp3764.2%9949.6% 618 mn 5.4pp-171149 320 mn-531611 1,142 mnEPS4 (in EUR)-0.260.22 0.48-0.790.92 1.71Schaeffler Value Added5-164631 795 mn-164631 795 mnROCE68.0%18.0% 10.0pp8.0%18.0% 10.0ppFree Cash Flow7333225-108 mn185468 283 mnCapex181215 34 mn481482 1 mn2,6882,014-674 mn2,6882,014-674 mn1.6x0.8x-0.8x1.6x0.8x-0.8x83,71183,935 0.3%83,71183,935 0.3%Net financial debtLeverage ratio8Headcount-1.8%-3.0%1 15.4% 15.9%11FX-adjusted 2 Before special items 3 Attributable to shareholders of the
PUBLIC Automotive Technologies -Global LVP1 2021 1 Where we stand -Current trading and Key Q3 2021 messages Our Outlook going forward -What changed in our market assumptions since August Schaeffler AG - Kepler Cheuvreux German Corporate Conference 7
VARDIS / PRIVATE EQUITY CFO SURVEY PAGE 5 / CFO'S ROLE Only 26% of CFO's report their current role as their first corporate CFO role 46% have previously held a PE CFO role The primary reason for their selection for the role is prior PE experience (55%) followed by industry expertise (39%) 73% of CFO's are responsible for functions beyond finance including Legal (73%), IT .
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changed. Today, the CFO works hand-in-hand with the CEO to direct the fate of the company. The CEO sets the company's strategy and vision; the CFO makes it happen. He's responsible for managing the financial activities of the entire company to create short-term profit and long-term viability. The CEO provides the Big Picture; the CFO
The Chief Financial Officer "CFO" has recently also been termed as the Chief Future Officer or the Chief Frontier Officer. The way definition of CFO has evolved and so has the real role of a CFO. The change itself highlights the growing importance of finance for driving business decisions and preparing the organization for future growth.
Another highlighted the CFO's access Out of the shadows Sharper LP scrutiny is expanding the CFO's remit to include investor-facing roles during fundraising, writes Victoria Robson Fundraising plans The role of the CFO When did your firm close its most recent flagship fund? 17% 22% 27% 30% 4% 2018 2017 2016 Before 2016
in 2011, Mr. De Angelis has been CFO at Parmalat S.p.A., Central Staff manager at Lavazza S.p.A. and CFO, General Manager and Member of the Board of Directors at KME in GIM/SMI-KME group. Between 1996 and 2003 De Angelis was CFO at Edison Group (Montedison group) and between 1987 a
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