Schaeffler India Limited has informed the Exchange about Investor Presentation
Schaeffler India Limited · Pune · Maharashtra
BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, C – 1, Block G, Dalal Street, Bandra-Kurla Complex, Bandra (E), Mumbai-400001 Mumbai-400051 Company Code: 505790 Company Code: SCHAEFFLER
Sub: Investor Presentation
Dear Sirs,
17/02/2023
Phone: +912068198464
Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we enclose herewith Investor Presentation on Financial Results of the Company for the quarter and year ended December 31, 2022.
Kindly take the same on your record.
Thanking you.
Yours faithfully,
For Schaeffler India Limited
Ashish Tiwari, VP - Legal & Company Secretary
Encl.: As above
Schaeffler India Limited
Registered and Corporate Office: 15th Floor, (ASTP) Amar Sadanand Tech Park, Baner, Pune, Maharashtra, India – 411045 Tel: +91-20-68198400 | Fax: +91-20-68198405 CIN: L29130PN1962PLC204515, www.schaeffler.co.in, info.in@schaeffler.com,
Schaeffler India Limited Investor Presentation – Q4 and 12M 2022
February 17, 2023
PUBLIC
Agenda
1 2 3 4
Economy & Industry
Business Highlights Q4 and 12M 2022
Financial Highlights Q4 and 12M 2022
Stakeholder value creation
2
7
10
15
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1 Economy & Industry 2 Economy & Market
Economy | Economic growth eases
2020
2021
CY2022 Growth
GDP 1) 3)
20.1
7.7%
IIP 1) 3)
44.4
4.5%
13.5
8.4
5.4
4.1
6.3
6.0
9.5
Q1
Q2
Q3
12.8
2.1
Q4
1.8
Q1
1.7
1.3
Q2
Q3
Q4 Prov
Q2
Q3
Q4
Q1
Q2
Q3 Prov
2021
2022
2021
2022
2.5
Q1
• CY2022 GDP is expected to grow by 6.6%
• YTD Nov growth for mining,
manufacturing, & electricity stands at 4.5%, 4.0%, and 8.2% respectively
• CY2022 automotive production registered a growth of 17.8%; PVs, CVs posted strong growth. Tractors continue to see some challenges
• Inflationary pressure marginally subdued
due to softening of food prices
322
32.3
16.0
Q1
Q2
Q3
-9.2
Q4
Automotive Production 2) 4)
17.8%
CPI 1)
33.7
27.2
18.6
5.6
4.9
5.1
5.0
6.7%
7.3
7.0
6.3
6.1
-2.8
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4 Prov
2021
2022
2021
2022
Note : •
Data is reinstated every quarter as per final reports released by authorities GDP, IIP, and Automotive Production are YoY growth rates, whereas CPI is quarterly inflation rate. 6.7% is the average CPI for YTD 2022 Contribution of manufacturing, mining, & electricity in IIP stands at 78%, 14%, & 8% respectively Automotive Production includes PVs, CVs, & Tractors with production share of 68%, 16%, & 16% respectively
•
•
•
Source of data : 1) Ministry of Statistics & Programme Implementation 2) SIAM : Society of Indian Automobile Manufacturers 3) GDP - Gross Domestic Production, IIP - Index of Industrial Production, CPI - Consumer Price Index 4) Automotive Production includes PVs, CVs, & Tractors
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1 Economy & Industry 1 Economy & Industry
Core sector performance | Moderate movement
2020
2021
CY2022 Growth
Cement Production (mn T)
10.1%
Steel Production (mn T)
6.6%
34
32
31
35
30
38
32
34
32
30
29
30
30
30
25
30
28
28
27
31
24
35
31
32
11
11
11
11
11
10
10
10
10
10
11
11
10
10
10
10
10
9
11
11
12
11
10
11
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Coal Production (mn T)
12.7%
Electricity Generation (bn KWH)
8.4%
97
80
80
97
74
75
68 72
69
61
58
59
52
54
52
55
54
53
84
77
76
67
64
68
121 117
140 142 146 144 138 138 137
124 122 130
120 112
132 127 118 124
135 137
123 123
118
108
Key comments
Overall core sector index performance for CY22 is 7.2% compared to the same period previous year
Sector weightage within eight core sectors
Sector
% weight
Cement
Steel
Coal
Electricity
5.4%
17.9%
10.3%
19.9%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source of core sectors data: Office of Economic Advisor
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1 Economy & Industry 1 Economy & Industry
Automotive sector performance | Robust demand in PVs & CVs
2020
2021
CY2022 Growth
Two and three wheelers (mn Units) 1)
3.5%
Passenger Vehicles (Th Units) 2)
21.5%
1.6
1.9
1.9
2.0
1.6 1.6
1.7
1.8
1.8
1.5
1.6
1.8
1.7
1.4
1.9
2.1
1.9
1.9
2.0
1.7
1.4
1.3
1.4
351 353 373
349 338
401
379
413
376 390
367
323
350
331
374
331
364
320
292
291
296
310
224
0.7
144
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Commercial Vehicles (Th Units)2)
32.8%
Agriculture Tractors (Th Units) 3)
-5.7%
91
85
83
69
73
108
83
86
84
83
84
91
90
88
63
64
65
72
70
71
72
76
96
72
96
104
84
62
88
57
44
22
92
69
97
104 101 104
105
105
99
87
79
100
90
68
59
54
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
• Growth in PVs on the back of easing pandemic related challenges and semiconductor shortages
• Rising market demand, positive
sentiments led to a strong growth in CVs
• YTD growth in tractors are seeing
some moderation because of cyclical impact and demand crunch in the rural market
Source of data : 1) SIAM : Society of Indian Automobile Manufacturers 2) TMA : Tractor Manufacturers Association 3) TW – Two wheelers, CV – Commercial Vehicles, PV – Passenger Vehicles,
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1 Economy & Industry
Union Budget | Key Highlights
7 Priorities of budget 2023-24
Total expenditure of INR 45 trillion
1. Real GDP growth of 6.5% and nominal growth of 10.5% for FY24
Economy Real GDP growth of 6.5% and nominal growth of 10.5% for FY’24
2. Capital investment outlay increased by 33% to INR 10 lakh crore
Defence, 13%
Road Transport and Highways , 6%
Railways , 5%
Chemicals and Fertilisers , 4%
Rural Development , 4%
Agri, 3%
others, 65%
Government policies to enable faster growth and accelerate developments; resonates well for Schaeffler India’s strategic priorities
Government Expenditure Increased capital investment outlay - INR 10 lakh crore
Railways Highest ever capital outlay in Railways - INR 2.4 lakh crore
Agriculture Agriculture Accelerator Fund
Sustainability Green Credit Programme to incentivize sustainability actions by companies
Hi-tech Three centers of excellence for R&D in Artificial Intelligence
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Agenda
1 2 3 4
Economy & Industry
Business Highlights Q4 and 12M 2022
Financial Highlights Q4 and 12M 2022
Stakeholder value creation
2
7
10
15
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2 Business Highlights Q4 and 12M 2022 2 Q4 / 12M 2021 Performance
Q4 2022 | Sustained performance with strong quality of earnings
Key Messages
Resilient performance across our balanced business portfolio
Business wins in both Automotive and Industrial businesses continue
Strong quality of earnings while coping with external headwinds
Leading ahead with ambitious and structured ESG programme at Schaeffler India, in line with Group targets
Board of Directors recommend a dividend of INR 24 per equity share of face value INR 2, payout ratio of 43%
Continue to see macroeconomic and geopolitical headwinds – weakened global market outlook, inflation and input cost pressures
Sales growth 17.8% vs Q4’21 2.2% vs Q3’22 17,947 mn INR
PAT margin 12.9% Q4’22 12.5% Q4’21 2,310 mn INR
EBIT 1) margin 16.2% Q4’22 16.1% Q4’21 2,913 mn INR
FCF 32.7% vs Q4’21 239.0% vs Q3’22 2,454 mn INR
1) EBIT (before exceptional items)
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2 Business Highlights Q4 and 12M 2022 2 Q4 / 12M 2021 Performance
Q4 Business developments | Wins in e-mobility
Automotive Technologies
Automotive Aftermarket
Industrial
Reliability and emission reduction
Increased market coverage
Precision and Efficiency
1
2
3
Key win in PVs1) for e-mobility solutions
Business win for wheel bearings and DGBBs for PV1) segment
Business wins in CVs1) for clutch systems and DGBBs
1) TW - Two-wheelers, CV - Commercial Vehicles, PV - Passenger Vehicles
1
2
3
Volume wins for our recently launched products – wipers and center joint support
Business wins for FEAD/ Timing Kit, TRBs in the PV segment continue
Continued focus on diversification and penetration through range extension
1
2
3
New business wins for ACBBs in the TW segment
Key business win for SRBs, DGBBs, TRBs and seize resistant bearings in the raw material segment
Business wins in Railways - Vande Bharat and LHB coaches
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Agenda
1 2 3 4
Economy & Industry
Business Highlights Q4 and 12M 2022
Financial Highlights Q4 and 12M 2022
Stakeholder value creation
2
7
10
15
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3 Financial Highlights Q4 and 12M 2022
Revenue from operations | Growth momentum continues
Total revenue
mn INR
13,168
12,329
14,876
15,232
15,675
17,488
17,564
17,947
55,605
68,674
Growth
Q1FY21
Q2FY21
Q3FY21
Q4FY21
Q1FY22
Q2FY22
Q3FY22
Q4FY22
QoQ
3.4%
-6.4%
20.7%
2.4%
2.9%
11.6%
0.4%
2.2%
YoY
41.8%
180.9%
32.7%
19.6%
19.0%
41.8%
18.1%
17.8%
Key aspects • YoY growth on the back of exports and sustained domestic performance • Strong CY 2022 performance across businesses, aided by accelerated
growth in exports
Growth
Q4’22 vs Q3’22
Q4’22 vs Q4’21
12M’22 vs 12M’21
Automotive Technologies
Automotive Aftermarket
Industrial
Exports & others
-2.3%
12.3%
-2.2%
17.5%
23.5%
11.1%
0.5%
55.2%
23.8%
18.3%
12.4%
59.6%
Revenue Bridge mn INR
Sales mix Q4 2022
Exports & Others 1)
19%
39%
Industrial
33%
9%
Automotive Technologies
Automotive Aftermarket
1) Exports mainly includes exports to group companies, scrap sale and other operating income
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3 Financial Highlights Q4 and 12M 2022
Earnings Quality | Robust performance
EBIT1) mn INR
1,708
1,604
2,216
2,451
2,602
2,741
2,756
2,913
6 0 8 , 1
Q1FY21
Q2FY21
Q3FY21
Q4FY21
Q1FY22
Q2FY22
Q3FY22
Q4FY22
EBIT %
YTD%
13.0%
13.0%
14.9%
16.1%
16.6%
15.7%
15.7%
16.2%
14.3%
16.0%
Key aspects
• Improved YoY performance due to better sales mix and sustained
countermeasures
• Significant improvement in CY 2022, aided by sales mix, volume gains
and focused countermeasures
EBIT Bridge mn INR
%Margin
PAT mn INR
16.1%
16.2%
1,395
1,281
1,708
1,906
2,071
2,258
2,154
2,310 6 0 8 , 1
Q1FY21
Q2FY21
Q3FY21
Q4FY21
Q1FY22
Q2FY22
Q3FY22
Q4FY22
PAT%
10.6%
10.4%
11.5%
12.5%
13.2%
12.9%
12.3%
12.9%
YTD%
11.3%
12.8%
1) EBIT (before exceptional items) - interest income (net) at 182.7 mn INR in Q4 ‘22 (118.2 mn INR Q4’21) ;
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3 Financial Highlights Q4 and 12M 2022
Working capital, Capex | Significant improvement
Working Capital mn INR
11,413
8,713
6,485
12,526
12,932
10,101
11,451
9,869
2021
2022
Key aspects
• Working Capital levels improved, focused efforts on inventory
management and receivables
• Capex framework – efficient and judicious use of resources. Investment
in growth business continues
• Strong free cash flow generation on the back of overall performance
Q1
Q2
Q3
Q4
% to sales
Capex mn INR
3M’21
3M’22
6M’21
6M’22
9M’21
9M’22
12M’21
12M’22
and improved working capital
15.8%
19.9%
18.0%
20.1%
19.3%
19.9%
18.0%
17.0%
751
429
1,407
1,005
460
474
566
1,842
797
1,089
724
2021
1,827
2022
Free Cash Flow mn INR
2021
2022
2,454
1,849
Q1
Q2
Q3
Q4
% to sales
3M’21
3M’22
6M’21
6M’22
9M’21
9M’22
12M’21
12M’22
3.3%
4.8%
3.5%
6.5%
3.4%
6.2%
3.5%
7.3%
Q1
(208)
Q2
Q3
Q4
(1,501)
YoY Development
-111.3%
153.1%
-33.5%
32.7%
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3 Financial Highlights Q4 and 12M 2022 2 Q4 / 12M 2021 Performance
Performance Indicators
Revenue
Revenue growth (YoY) Revenue growth (QoQ) EBITDA
EBITDA Margin
EBIT1)
EBIT Margin
EBT
EBT Margin
PAT
PAT Margin
Capex2)
FCF
Unit
mn INR
% % mn INR
%
mn INR
%
mn INR
%
mn INR
%
mn INR
mn INR
Q4 2022
17,947
Q3 2022
17,564
Q4 2021
15,232
17.8% 2.2% 3,443
19.2%
2,913
16.2%
3,096
17.2%
2,310
12.9%
1,827
2,454
18.1% 0.4% 3,273
18.6%
2,756
15.7%
2,896
16.5%
2,154
12.3%
1,005
724
19.6% 2.4% 2,962
19.4%
2,451
16.1%
2,569
16.9%
1,906
12.5%
566
1,849
12M 2022
12M 2021
68,674
23.5%
13,076
19.0%
55,605
47.8%
9,950
17.9%
7,979
11,012
Focused efforts and our balanced business mix 16.0% helped to deliver resilient performance 11,770
14.3%
8,431
17.1%
8,792
12.8%
4,990
3,768
15.2%
6,291
11.3%
1,929
3,279
1) EBIT and EBT (before exceptional items) - interest income (net) at 182.7 mn INR in Q4 ‘22 (118.2 mn INR Q4’21) ; 2) Capex includes CWIP
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Agenda
1 2 3 4
Economy & Industry
Business Highlights Q4 and 12M 2022
Financial Highlights Q4 and 12M 2022
Stakeholder value creation
2
7
10
15
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Schaeffler Group ESG Targets | Clear commitment to sustainability
Climate Neutral Supply Chain Climate neutral supply chain until 2040
Climate Neutral Production At all Schaeffler production locations until 2030
Sustainable Suppliers 90% of the purchasing volume of production materials will be sourced from suppliers with self-assessments on sustainability by 2022
Renewable Energy 100% purchased power from renewable sources until 2024
8 ESG Targets
Women in Leadership 20% women in top-management positions by 2025
Energy Efficiency 100 GWh cumulated annual efficiency gains until 2024
Employee Safety 10% average annual reduction in the accident rate (LTIR) by 2024
Fresh Water Supply 20% reduction of fresh water supply until 2030
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Schaeffler India ESG Targets | Clear commitment to sustainability
Climate Neutral Supply Chain Climate neutral supply chain until 2040
Climate Neutral Production At all Schaeffler production locations until 2030
Sustainable Suppliers 90% of the purchasing volume of production materials will be sourced from suppliers with self-assessments on sustainability by 2022
Renewable Energy 100% purchased power from renewable sources until 2024
8 ESG Targets
Women in Leadership 8% female employees by 2025
Energy Efficiency 4 GWh cumulated annual efficiency gains until 2024
Employee Safety 10% average annual reduction in the accident rate (LTIR) by 2025
Fresh Water Supply 20% reduction of fresh water supply until 2030
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Jal Sahara | CSR Impact Award
CSR Award
Sustainability fund & Convergence
Livelihood Generation for Landless
Capacity building of Community
Water Security and Sustainable livelihood Development
Agriculture Development
Soil And Water Conservation Measures
Water Storage Measures
Impact
Enhanced Agriculture Production & Income
Enhanced Income of Landless households
44% rise in water level
116% Increase in annual income
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Dividend payout | Consistent approach to value creation
Dividend per share (INR)
50%
24
16
6
7
8
2018
2019
2020
2021
2022
Pay out ratio (% to net profit before exceptional items)
Target dividend payout ratio, 30% to 50% of net income*
• The Board of Directors of the Company has recommended a dividend for the year ended December 31 2022, at the rate of INR 24/-per equity share ( INR 16 per share for CY2021) of face value INR 2/- each
Note: Dividend per share for previous years restated considering face value of INR 2 per equity share for comparable presentation. CY2022 dividend is subject to approval of shareholders
*Net Income – annual standalone profits after tax (PAT)
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In Summary
1
2
3
4
Strong performance for the year aided by broad based growth across businesses and accelerated growth in exports
Margins supported by increased volumes, sales mix and sustained countermeasures
Focus on consistent capital deployment remains. Strong cash generation and robust balance sheet.
Entering 2023 on the back of external headwinds – inflationary pressures and geopolitical situation
• We remain committed to our strategic roadmap of realizing our structured ESG goals
•
Emphasis on stakeholder value creation remains
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Disclaimer
The information contained in this presentation is provided by Schaeffler India Limited (“the Company”), to you solely for your reference. This document is being given solely for your information and for your use and may not be retained by you and neither this presentation nor any part thereof may be (i) used or relied upon by any other party or for any other purpose; (ii) copied, photocopied, duplicated or otherwise reproduced in any form or by any means; or (iii) re-circulated, redistributed, passed on, published in any media, website or otherwise disseminated, to any other person, in any form or manner, in part or as a whole, without the prior written consent of the Company. This presentation does not purport to be a complete description of the market conditions or developments referred to in the material.
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 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 only as 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 current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-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 markets in which we operate and costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditions affecting 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 details regarding Schaeffler Group. Accordingly, neither Schaeffler Group nor any of its directors, officers, employees or advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance should be placed on, the accuracy or completeness of the information contained in the presentation or of the views given or implied. Neither Schaeffler Group nor any of its directors, officers, employees or advisors nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of 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 subject to change
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Thank you
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