Schaeffler : Commented Slides presentation Q2 and H1 2023 Schaeffler AG earnings

COMMENTED SLIDES / CONFERENCE CALL Q2 AND H1 2023 EARNINGS

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Company Representatives

Klaus Rosenfeld, CEO

Claus Bauer, CFO

Renata Casaro, Head of Investor Relations

Conference Call (Active) Participants

Akshat Kacker, J.P. Morgan

Horst Schneider, Bank of America

Sanjay Bhagwani, Citi

Markus Schmitt, ODDO BHF

Thomas Swift, Morgan Stanley

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Renata Casaro

Dear investors, dear analysts, thank you for joining the Schaeffler Group's Second Quarter 2023 Earnings Call. As usual, our call will be conducted under the disclaimer. Without further ado, I will pass the floor onto Mr. Klaus Rosenfeld, CEO of the Schaeffler Group and to Mr. Claus Bauer, CFO. Klaus, the floor is yours.

Klaus Rosenfeld

Thank you, Renata, ladies and gentlemen. Welcome to our second quarter conference call. You all have the presentation in front of you that we published this morning, and I would immediately jump to Page number four, where you have the overview with the key messages.

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Klaus Rosenfeld

You saw the numbers. Q2 Sales up nearly 10%, driven by volume growth in the Automotive divisions and also by continued favourable pricing in all three divisions. Gross Profit margin in Q2 more or less in line with Q2 2022 at 21.8%, also here a function of the year-on-year improved margins in Automotive Technologies and Aftermarket, and a little bit of a weaker margin in Q2 for Industrial.

Then EBIT margin 7.1% in the quarter, 7.6% in the first half. Let me start again with Industrial. Weaker in Industrial, 8.8%, clearly a disappointment in Q2. On the other hand, a very strong margin in Automotive Aftermarket. Let's point to the first half. 17% in Automotive Aftermarket clearly speaks for itself, and I can say already here, upfront, that the positive trend also continues into Q3. And then solid in Automotive Technologies. You all remember Q1, where we posted 4.3%. Now another 4.3% in Q2 clearly led us to also the change in our divisional Guidance.

Before I come to this, very briefly on the Free cash flow, EUR 103 mn positive Free cash flow in the quarter, a significant improvement compared to the last year, and if you consider that again, for the half year, nearly EUR 30 mn, including significant one- off restructuring pay-outs of around EUR 150 mn, it tells you that the underlying Free cash flow generation is absolutely intact. It is driven by the EBITDA improvement but also by effective working capital management.

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