Investor Presentation Schaltbau Holding AG November 2018 THE SMART EVOLUTION OF MOBILITY Picture credits: istockphoto LP
Executive Board Investor Presentation November 2018 2 Bringing Schaltbau back on track experienced management team Our common objectives Return to profit Dr Albrecht Köhler CEO (since May 2018) Thomas Dippold CFO (since Jan 2017) Dr Martin Kleinschmitt CRO (since Aug 2017) Stick to stringent cost management Freelance interim CEO / COO (2016-18) Deputy CEO GAZ Group (2014-16) Managing Director Knorr Bremse rolling stock bus. unit (2000-14) Leading general management and operations roles at Dt. / Daimler Benz Aerospace (1989-1999) CFO Faber-Castell AG (2014-16) CFO Semikron International (2008-14) Head of Controlling SCHOTT AG (2002-08) Partner at Noerr LLP and CEO Noerr Consulting AG Vice Chairman of the Board SAF-HOLLAND S.A. Interim management of various SMEs as CFO/CRO (since 2001) CFO Herlitz AG (1998-2000) Secure financing capabilities
Business and Market Overview
The Schaltbau Group at a glance Investor Presentation November 2018 4 Business overview Schaltbau Group SCHALTBAU HOLDING Components (COM) ~25% * Mobile Transportation Technology (MTT) ~60% * ** Stationary Transport Technology (STT) ~15% * SCHALTBAU Connect Contact Control BODE The Door PINTSCH Safety for Rail DC technology for trains, e-mobility and next-generation energy, driver desk equipment Door systems for trains, buses and automotive Level crossing systems, point heating systems, shunting equipment * Segmental sales split based on FY 2018 forecast, pre consolidation, rounded to the nearest 5% multiple ** Bode Group represents ~45% of Schaltbau Group s FY 2018 forecast sales
Key operating entities Investor Presentation November 2018 5 Snapshot of Schaltbau Subgroup COM MTT STT ~25% of Group sales * SCHALTBAU Connect Contact Control Member of the Schaltbau Group High-performance DC switching-technology for trains, e-mobility and next-generation energy State-of-the-art driver desk equipment High share of international sales, broad customer distribution Has developed from a pure component supplier to an application specialist providing components, assembly and service Highly efficient operations Performed very well in 2017 and 9M 2018, high order intake with strong and sustainable margins * FY 2018 forecast, pre consolidation, rounded to the nearest 5% multiple
Key operating entities Investor Presentation November 2018 6 Snapshot of Bode Subgroup COM MTT STT ~45% of Group sales * ** BODE The Door Member of the Schaltbau Group Established #3 player in an oligopolistic market, strong train door systems quality track record and best-in-class products Customer range has been expanded by leveraging train door system experience into bus and automotive applications such as Deutsche Post DHL s e-mobility vehicle StreetScooter Service organisation with high flexibility Polish subsidiary Rawag contributes train windows & interiors and provides additional production capacity Reorganisation of production processes well underway, will significant efficiency gains in sight Performance improved significantly in Q4 2017 and 9M 2018, good order intake * FY 2018 forecast, pre consolidation, rounded to the nearest 5% multiple ** Number does not include contribution of Alte, Sepsa and Refurbishment to MTT segmental sales
Key operating entities Investor Presentation November 2018 7 Snapshot of Pintsch Subgroup COM MTT STT ~15% of Group sales * PINTSCH Safety for Rail Member of the Schaltbau Group Established #3 player in various oligopolistic submarkets such as level crossings, shunting equipment and point heating systems Rail infrastructure market offers significant growth potential and major innovation opportunities related to digitalisation and interconnection of field elements and systems (e. g., point diagnostics) Improvement of terms & conditions with large customers ongoing Stronger focus on key product portfolio Consolidation of 3 sites into one major operations centre with roadmap established Performance improved significantly in Q4 2017 and 9M 2018, order intake shows volatility * FY 2018 forecast, pre consolidation, rounded to the nearest 5% multiple
Market and competitive environment Investor Presentation November 2018 8 Megatrends drive sustainable growth in global rail markets Megatrends Rolling stock Infrastructure & Rail control Digitisation / Automation Urbanisation Emission reductions Components / Mobile Transportation Technology Stationary Transportation Technology Connectivity Electrification / E-mobility SCHALTBAU Connect Contact Control BODE The Door PINTSCH Safety for Rail Safety Market growth: (1) ~2.6% Market size: (2) ~ 53bn Market growth: (1) ~2.9% Market size: (2) ~ 46bn Globalisation / China Regulation and liberalisation Regional market growth (1)(3) Western Europe: ~2.2% Asia / Pacific: ~2.5% NAFTA: ~3.1% CIS: ~2.7% Eastern Europe: ~2.7% Africa / ME: ~5.2% Latin America: ~4.8% Source: Unife, Roland Berger (1) Average annual market growth from 2015-17 until 2021-23 over six years (2) Average annual market 2015-2017 (3) Total rail market: Rolling stock, infrastructure, rail control, services and turnkey management
Market and competitive environment Investor Presentation November 2018 9 Railway market with oligopolistic supplier structure in many segments Overall rolling stock OEMs in the rail market Selected suppliers in the Schaltbau rolling stock market 1. + / (4) 32% Rolling stock c. 15% c. 5% c. 5% 2. 3. 4. BODE The Door SCHALTBAU Connect Contact Control c. 5% 5. 49% Other (3) 163bn (1) 19% Infrastructure Other OEMs (2) < 5% Market size ~ 53bn 6. 7. 8. 9. 10. Source: UNIFE, Company information (1) Total average annual rail market 2015-2017 (2) Incl. Hitachi Rail, Stadler, CAF, Pesa; ABB and Thales Transport not considered (mainly in infrastructure or control command and signalling technology) (3) Services, rail control, turnkey management (4) Combination of GE Transportation and Wabtec businesses still subject to regulatory approvals and other customary closing conditions
Striving for Sustainable and Profitable Growth Management Agenda 2017 & 9M 2018 Fulfilled
Key developments Investor Presentation November 2018 11 Management agenda 2017 & 9M 2018 fulfilled: higher financial flexibility for ongoing restructuring activities and organic growth in core business areas Stabilisation of financial situation Major cost reduction programmes initiated Strengthening of future competitiveness Stabilisation of operative business Divestiture of non-core industrial brakes business (Pintsch Bubenzer) effective 1 March 2018 Two successful capital increases in May 2017 and February 2018 Reduction of short- and midterm financial debt Optimisation of production and logistic processes o Fit for future programs at Bode and Rawag o On time program at Alte Strict focus on reduction of personnel cost and material expenses Reduction of complexity of Group organisation, improved steering and limitation of risks Restructuring agreement in STT (Pintsch) for 2018 and 2019, total savings of 4 million Investments mainly into mobility/logistics applications and further rolling stock development Digitisation: product development to be increasingly aligned towards customers needs Extended business model: services for the entire lifecycle of rolling stock and commercial vehicles Focus on local presence in international markets Sound order intake, revenue and EBIT development since Q3 2017 Orders at hand at the end of 9M 2018 at decent level
Key developments Investor Presentation November 2018 12 Restructuring roadmap Schaltbau: Major milestones successfully achieved further road to go 2017 2018 Create financial headroom 2018 2019 2019 2020 Achieve satisfactory debt level Ensure profitability on market level Stabilise operational performance Selective investments Step up investments in market opportunities and digital business models EXPLOIT GROWTH OPPORTUNITIES REDUCE COMPLEXITY REDUCE COSTS REDUCE DEBT 2017 2018 2019 2020
Key developments Investor Presentation November 2018 13 Comprehensive restructuring measures initiated Operational restructuring measures Selected measures Current status Group Group-wide procurement optimization Holding Components Mobile Transportation Technology Stationary Transportation Technology SCHALTBAU HOLDING SCHALTBAU Connect Contact Control BODE The Door PINTSCH Safety for Rail Personnel adjustments, restructuring of central functions (e.g. Controlling) SPII: Execution of order for >300 trains (Italian prototype), expansion of services & after-sales business Xi an: Planned expansion of refurbishment & services business Bode: Restructuring of production concept & production control ( state-of-the-art production ), general purchase price reductions Rawag: Efficiency increase / reduction of personnel cost ratio, raising value for the customer through expanded module offering Alte: Expansion of after sales business, new business with composites for interiors, purchase price reduction & quality management Pintsch Bamag: Improvement of terms and conditions with large customers, efficiency increase in production through lean management Pintsch Tiefenbach: Relocation of production site Sprockhövel to Dinslaken (end of 2019)
FY 2017
Financials FY 2017 Investor Presentation November 2018 15 Sales and earnings targets 2017 (as adjusted over time) achieved Sales +1.5% vs. 2016 516.5 million Order intake +7.8% vs. 2016 594.0 million EBIT 2.4 million before one-off effects One-off effect of revaluation of Schaltbau Sepsa: Goodwill impairment Schaltbau Pintsch Bubenzer: -23.0 million reported -24.2 million -1.1 million
Financials FY 2017 Investor Presentation November 2018 16 Strong order intake in FY 2017 mainly due to contribution from Mobile Transportation Technology Order intake grows by 7.8% Mainly driven by Mobile Transportation Technology, also impacted by a full-year contribution from Schaltbau Sepsa (consolidated since 30 September 2016) and relocation of the Refurbishment business (was part of Stationary Transportation Technology before) Very positive order intake development in Components Significant decrease of order intake in Stationary Transportation Technology due to lower order placements in Germany as well as a more conservative approach on international projects Order book increases by 18.3% to 508.3 million (end of 2016: 429.8 million) 800 700 600 500 400 300 200 100 0 Order intake in million 594 551 146 130 114 158 333 263 2016 1 2017 2 Components Mobile Transportation Technology Stationary Transportation Technology
Financials FY 2017 Investor Presentation November 2018 17 FY 2017 sales increase in line with management expectations Sales up by 1.5% Significant increase in second half of 2017 mainly due to completion of major projects Slight decrease in comparable sales of 4% mainly driven by strong decline in industrial brakes volume (Pintsch Bubenzer) and a lower volume in level crossing technology Full-year contribution of Schaltbau Sepsa offsets organic decline 700 600 500 400 300 Sales in million 509 517 138 131 149 121 23 35 Sales 2017 by market in % Germany Germany 200 100 222 265 42 Rest of Europe Rest of Europe Rest of world Rest of World 0 Components 2016 1 2017 2 Mobile Transportation Technology Stationary Transportation Technology
Financials FY 2017 Investor Presentation November 2018 18 Extraordinary Schaltbau Sepsa revaluation impacts Group EBIT in 2017 EBITDA improved year-on-year Reported EBIT at -23.0 million, EBIT margin at -4.4% One-off effect of revaluation of Schaltbau Sepsa amounting to -24.2 million Goodwill impairment Schaltbau Pintsch Bubenzer amounting to -1.1 million Additional expenses for restructuring activities of around 8 million 25 20 15 10 5 0-5 -10 EBIT and EBITDA in million 20.1 16.4 +3.9% +3.2% -2.8% 2016-4.4% 2017-15 -20-14.5-25 EBIT EBITDA -23.0
Financials FY 2017 Investor Presentation November 2018 19 Net result 2017 impacted by higher financing costs Strong decline in Schaltbau Group s net profit mainly driven by: Decreased EBIT Higher interest expenses due to higher interest margins as well as higher drawing of existing credit lines 20,0 10,0 0,0-2.61 per share Net profit in million -8.04 per share One-time effects related to refinancing activities -10,0-20,0-12.0-15.8-30,0-40,0-50,0-60,0-49.6 2016 2017-51.7 Group net profit Schaltbau Shareholders
9M 2018
Financials 9M 2018 Investor Presentation November 2018 21 Order intake increases like-for-like Strong order intake of 420.2 million in 9M 2018 Like-for-like, overall increase by 2.3% or 8.9 million, driven by Stationary Transportation Technology (Q2 2018 win of train formation unit project) and Components Order intake in Mobile Transportation Technology declines slightly, but still in line with expectations Order book at end of 9M 2018 at 515.5 million, up 1.3% vs. 509.0 million at end of 9M 2017 External order intake in million ** 500 444 420 450 390 381 400 109 350 115 109 115 300 85 70 250 45 60 200 150 251 236 100 228 216 50 0 9M 2017 Components Reported 9M 2018 9M 2017 9M 2018 Mobile Transportation Technology Like-for-like* Stationary Transportation Technology * Excluding Pintsch Bubenzer and Sepsa contributions: Pintsch Bubenzer was deconsolidated on 1 March 2018, Sepsa was classified as held for sale in November 2017 ** Figures may not add up due to rounding
Financials 9M 2018 Investor Presentation November 2018 22 Sales growth driven by increases in Mobile Transportation Technology and Components Sales grow by 3.6% vs. 9M 2017, an increase of 13.1 million External sales in million ** Significant volume increase in Mobile Transportation Technology (in particular at Bode) 450 400 363 376 347 Strong sales volume development in Components Sales in Stationary Transportation significantly below prior year, mainly due to sale of Pintsch Bubenzer in Q1 2018 350 300 250 200 96 112 77 44 300 96 42 112 36 45.6% of total sales in 9M 2018 generated in European countries other than Germany, and 18.2% outside of Europe 150 100 50 190 221 162 199 0 9M 2017 9M 2018 9M 2017 9M 2018 Components Reported Mobile Transportation Technology Like-for-like* Stationary Transportation Technology * Excluding Pintsch Bubenzer and Sepsa contributions: Pintsch Bubenzer was deconsolidated on 1 March 2018, Sepsa was classified as held for sale in November 2017 ** Figures may not add up due to rounding
Financials 9M 2018 Investor Presentation November 2018 23 Significant EBIT improvement 9M 2018 EBIT at -1.5 million ( -16.4 million in 9M 2017), adjusted by one-off effects at 12.3 million / 3.3% of sales Increase is driven by 9M 2018 EBIT adjustments in million 14 14000 12 12000 10 10000 +10.0 +2.3 12.3 Higher sales volume, positive impact from product mix, and productivity improvements in Components Positive effects from restructuring activities 12.0 million Sepsa impairment in Q3 2017 Earnings per share at -1.39 (9M 2017: -6.01) 8 8000 6 6000 4 4000 2 2000 0-2 0-2000 -4-4000 -1.5 +1.6 +0.6 +2.6-7.1 +3.8 EBIT reported Impairment LED technology Deconsolidation Pintsch Bubenzer Restructuring expenses Release of PSD provisions Add. IFRS 5 effect Sepsa real estate Impairment Alte Impairment Bode UK EBIT before exceptional items
Strategic Agenda
Investor Presentation November 2018 25 Strategy Schaltbau Group management Decentralised income statement responsibility Standardised reporting from local management and review by Group Executive Board Coordination of intra-group aspects via management committee SCHALTBAU Connect Contact Control State-of-the-art DC tech & driver desk equipment Application of know-how from serving the rail industry to grow further in dynamic fields such as e-mobility and next-gen energy Ongoing process differentiation: pick/configure/ design-to-order, based on volume and complexity Expansion into North America, Russia, China, maybe India, with efforts coordinated with other Schaltbau Group entities where feasible; centralised competence centres along with local assembly and service High-margin cross-industry DC technology specialist BODE The Door State-of-the-art door systems for trains, buses and automotive, train interiors Further integration of digital functionality such as passenger ticketing and entertainment & preventive maintenance, ramp in after-sales business Standardisation of door drive modules, redesign of production processes and better utilisation of capacities available in Poland and Turkey Expansion into North America and Asian markets with efforts coordinated with other Schaltbau Group entities where feasible Efficient door system provider in high-growth market PINTSCH Safety for Rail State-of-the-art level crossing systems, point heating systems, shunting equipment and other rail infrastructure with focus on German market Strong relationship with Deutsche Bahn as the key customer Efficiency gains by ongoing restructuring and consolidation of three Pintsch sites into one main location Focus on core products and selective exploitation of new business opportunities Sustainable high-quality rail infrastructure player
Investor Presentation November 2018 26 Sales guidance 2018 confirmed Sales guidance for 2018 with a range of 480-500 million (without Sepsa and taking into account the sale of Pintsch Bubenzer in Q1 2018) In million 517 480-500 million Organic growth of around 40 60 million expected for FY 2018: -41 490 Strong growth in Mobile Transportation driven by Bode Group Positive sales outlook for Component business -37 52 Sales FY 2017 Pintsch Bubenzer* Sepsa** Organic growth Sales guidance FY 2018 * Adjusted by FY 2017 and 01-02/2018 sales ** Adjusted by FY 2017 sales
Investor Presentation November 2018 27 Targets 2018 confirmed Solid order book from stabilised order intake in 2017 serves as stable basis for profitable growth Initial positive effects from restructuring measures implemented in the financial year 2017 expected to contribute to an improvement in EBIT margin: Increase in profitability through optimized production processes and improved purchase conditions should lead to savings in material and personnel expenses Non-operating special effects from extraordinary impairments arising out of restructuring measures or disposal of subsidiaries will possibly continue to occur in 2018 Outlook (in million) Guidance FY 2018 * 2017 Order intake 500-520 ** 594.0 Sales 480-500 ** 516.5 Mobile Transportation Technology Stationary Transportation Technology Significant improvement 265.3 Significant decline 120.5 Components Slight increase 130.7 EBIT margin Around 3% ** 0.5%*** * Compared to FY 2017 ** Excluding Pintsch Bubenzer, Sepsa and one-offs *** Excluding extraordinary items
Profitability in % Investor Presentation November 2018 28 Portfolio development 2018 vs. 2017 25 2017 Schaltbau subgroup Profitable growth 2018 15 5 Pintsch subgroup Profitability increase 2018 2017 2018-5 2017 Bode subgroup Growth + profitability -15-20 -10 0 10 20 30 Bubbles show 2017/2018 E profitability and 2017/2018 E year-on-year revenue growth. Bubble size represents significance for Schaltbau, based on revenue share. Green arrows represent expected development trend 2018 vs. 2017. Growth in %
Investor Presentation November 2018 29 Schaltbau Vision 2020 Disposal of non-core business Operational excellence throughout the organization 2020 Overall increased share of service and international revenues State-of-the-art product and service offering in terms of quality and innovation Our clear goal is to focus Schaltbau Group on its strategic core competencies and to consistently increase profitability. That is why we intend to dispose non-core business areas as well as those which are not sustainably profitable. These alignments should result in reduced revenues and simultaneously increased profitability until 2020, enabling Schaltbau to return to historical profitability levels and future growth.
Backup Financial Figures FY 2017 and 9M 2018
Financials FY 2017 Investor Presentation November 2018 31 Mobile Transportation Technology FY 2017 growth driven by consolidation effects BODE The Door Order intake up 70.2 million vs. 2016 Positive development at rail door systems as well as interiors for rail vehicles Significant new orders, e. g. from Hitachi Rail Italy for delivery of 39 vehicles including options of up to 300 vehicles Sales growth of 43.1 million vs. 2016 Full-year contribution from Schaltbau Sepsa (+ 19 million) and reclassification of Schaltbau Refurbishment (+ 12 million) Organic business growth at Rawag and Alte EBIT margin of -10.0% vs. +2.3% in 2016 Revaluation of Schaltbau Sepsa ( 24.2 million) Negative operating contribution from Schaltbau Sepsa Group ( -8.7 million) and other foreign subsidiaries almost compensated by positive margin at Bode and Rawag Order intake and revenue in million 400 350 333.4 300 263.2 265.3 250 222.2 200 150 +26.7% +19.4% 100 50 0 Order intake Revenue 2016 2017 EBIT in million 10 5.2 6 2-2 -6-10 -14-18 -22-26 -26.4-30 EBIT * * Operating EBIT 2017: -2.2 million; effect from revaluation of Schaltbau Sepsa: - 24.2 million
Financials FY 2017 Investor Presentation November 2018 32 Stationary Transportation Technology Weak order intake and revenue development in FY 2017 PINTSCH Safety for Rail Significantly lower order intake volume Decline in new business with level crossing technology as well as railway signal technology (axle counting and shunting technology) Sales decrease by 28.8 million vs. 2016 Mainly driven by rail infrastructure products and brake systems Shift of Refurbishment business ( 11.9 million) to MTT EBIT margin of -4.6% (FY 2016: -18.8%) Cost-cutting measures compensate negative volume effects to just a small extent Impairment at Schaltbau Pintsch Bubenzer ( -1.1 million) Provisions for contingent losses high in 2016 ( 16.4 million) Order intake and revenue in million 180 160 157.8 149.3 140 120 114.3 120.5 100 80 60-27.6% -19.4% 40 20 0 Order intake Revenue 2016 2017 EBIT in million 10 5 0-5 -5.5-10 -15-20 -25-30 -28.1-35 -40 EBIT
Financials FY 2017 Investor Presentation November 2018 33 Components Strong business performance in FY 2017 SCHALTBAU Connect Contact Control Order intake clearly improved ( +16.2 million) Higher order intake volume for snap-action switches for rail vehicles both in the new vehicles business and in aftersales business Positive development at SPII in Italy; stabilisation of business in China despite investment shift from locomotives and passenger coaches to metro systems; North America below prior year due to project delays Sales decrease of 6.8 million vs. 2016 Significantly lower revenue at SPII partially offset by sales increases at Schaltbau GmbH EBIT margin improves to 16.4% (2016: 12.5%) Moderate sales decrease overcompensated by positive product mix effects and improved cost structure Order intake and revenue in million 180 160 146.3 140 130.1 137.5 130.7 120 100 80 60 +12.5% -4.9% 40 20 0 Order intake Revenue 2016 2017 EBIT in million 30 25 21.4 20 17.2 15 10 +24.4% 5-28.1 0 EBIT
Financials FY 2017 Investor Presentation November 2018 34 Slight decrease in Group assets in FY 2017 due to divestiture effects Non-current assets 40.0 million below prior year, reduction of both tangible and intangible assets Depreciation on Schaltbau Sepsa due to classification as assets held for sale ( 24.2 million) Classification of Pintsch Bubenzer as assets held for sale ( 16 million) Foundation of joint venture Zhejiang Yonggui Bode Transportation Equipment in China; payment of initial capital contribution Current assets significantly higher ( +32.9 million): Classification of Schaltbau Sepsa and Schaltbau Pintsch Bubenzer as assets held for sale 15.6 million cash inflow from capital increase in May 2017 reported under other receivables and assets 600 500 400 300 200 100 0 Assets in million 459 452 264 297 195 155 End of 12016 End of 2 2017 Non-current Current
Financials FY 2017 Investor Presentation November 2018 35 Equity & liabilities: negative group result impacts equity in FY 2017 Higher non-current liabilities due to restructuring of financial debt: syndicated loan line amounting to 100.0 million and debenture stock classified as long-term liabilities Current liabilities down to 198.5 million due to the aforementioned reclassifications; bridge financing of 25.0 million and current account liabilities classified as short-term Equity decreases by 36.5 million despite 15.5 million capital increase, due to negative net group result; equity ratio of 15.6% (end of 2016: 23.3%) Net financial debt increases to 158.4 million (end of 2016: 148.0 million) Leverage (net financial debt/annual EBITDA) at 7.9 (2016: 9.1); mid-term goal: Further reduction of net financial debt relative to EBITDA to reach a leverage figure around 3 In Q1 2018, the situation improved significantly, driven by the sale of Pintsch Bubenzer and a major equity injection 600 500 400 300 200 100 0 Liabilities in million 459 452 241 199 111 183 107 71 End of 12016 End End of of 2017 2 2017 Equity Non-current Current
Financials FY 2017 Investor Presentation November 2018 36 Positive operating cash flow in FY 2017 Positive operating cash flow ( +10.5 million) reflects stringent working capital management (operating cash flow in FY 2016: +25.8 million) Cash outflow for investments increases vs. 2016 ( -18.2 million), proceeds from capital increase deposited on escrow account ( 15.6 million) Financing cash flow 2017 mainly reflects: 15.5 million cash inflow from capital increase and 4.1 million from new loans 50 45 40 35 30 25 20 31.2 Cash flow 2017 in million EUR +10.5-34.3 Thereof: 15.5 m. EUR escrow account for debt redemption 6.0 million repayment of loans and 11.4 million cash outflow for interest payments 15 10 +5,7-0,9 +12.2 5 0 Cash EoFY 2016 CF op. CF invest CF fin. Currency Cash EoFY 2017 Free cashflow= CF op.+cf invest.
Financials 9M 2018 Investor Presentation November 2018 37 BODE Mobile Transportation Technology The Door Sales growth driven by positive development at Bode Group External order intake down 15.1 million Like-for-like decrease of roughly 12 million, but still in line with expectations External sales growth of 30.4 million Significant increase driven by Bode Group EBIT at -16.0 million 9M 2017 impacted by a 12.0 million Sepsa impairment 9M 2018 performance impacted by Impairment of Alte and Bode UK ( 12.3 million) IFRS 5 effects from purchase of Sepsa real estate in Q3 2018 ( 3.8 million) Negative operating contribution from Alte (lower sales volume, additional temporary workers, warranty expenses, ramp-up costs) Further improvements in productivity expected in the coming quarters * Figures may not add up and/or match exactly with figures consolidated on Group level, due to rounding External order intake and sales in million * 260 251.5 240 22.9 236.4 220 20.5 220.5 200 190.1 21.3 180 27.5 160 140 120 228.6 215.9 +16.0% 100 199.2 80 162.6 60-6.0% 40 20 0 9M 2017 9M 2018 9M2017 9M 2018 Order intake Sales Like-for-like Sepsa EBIT in million 0,0-2,0-4,0-6,0-8,0-10,0-12,0-14,0-16,0-18,0-16.2-16.0-20,0 9M 2017 9M 2018
Financials 9M 2018 Investor Presentation November 2018 38 Stationary Transportation Technology Stabilisation and first improvements PINTSCH Safety for Rail External order intake declines by >15%, related to the sale of Pintsch Bubenzer Like-for-like, external order intake is up >30%, largely due to winning a major order for a train formation unit External sales decrease by >40%, mainly due to the disposal of Pintsch Bubenzer Sales like-for-like down by 6.0 million Lower sales volume at Pintsch Bamag due to several customer pushouts in rail infrastructure, mostly to be recovered until year-end EBIT just above the base line Improvement largely due to the release of provisions for onerous contracts for the PSD project in Brazil and cost reductions, set off in part by impairment on the LED technology business Restructuring agreement with workers counsel, total savings of 4.0 million for 2018 and 2019 Further restructuring and PSD closing benefits will materialise in the next quarters * Figures may not add up and/or match exactly with figures consolidated on Group level, due to rounding External order intake and sales in million * 90 85.0 80 77.5 70 70.0 39.8 9.9 60 35.7 50-17.6% 44.0 40 8.2 30 60.1-43.2% 20 45.2 41.8 35.8 10 0 9M 2017 9M 2018 9M 2017 9M 2018 Order intake Sales Like-for-like Bubenzer EBIT in million 2,0 +0.2 0,0-2,0-4,0-6,0-7.0-8,0 9M 2017 9M 2018
Financials 9M 2018 Investor Presentation November 2018 39 Components Ongoing strong operational performance SCHALTBAU Connect Contact Control External order intake increases External sales strongly improved by 16.4 million Ongoing high demand of connectors, snap-action switches and contactors EBIT improves to 22.4 million Positive development driven by high sales volume, favorable product mix and productivity improvements Strong EBIT level expected to be maintained throughout 2018 External order intake and sales in million * 120 115.7 108.6 112.2 100 95.8 80 +17.1% 60 EBIT in million 25 22.4 20 15.9 15 40 +6.5% 10 20 5 0 Order intake Sales 0 EBIT 9M 2017 9M 2018 * Figures may not match exactly with figures consolidated on Group level, due to rounding
Financials 9M 2018 Investor Presentation November 2018 40 Equity base substantially strengthened, net debt significantly reduced Equity increases by 31.8 million following the successful capital increase in February 2018; equity ratio at 25.4% at the end of 9M 2018 (up from 15.6% at year-end 2017) Reduction of net debt by 46.7 million in 9M 2018 Repayment of 25.0 million in bridge financing Additional repayment of current account liabilities Further reduction of net debt expected in Q4 2018 Restructuring of equity and net debt in million 120 180 102.4 160 158.4 100 140 80 70.6 120 111.7 100 60 80 40 +45.1% 60-29.5% 20 40 20 0 Equity 0 Net debt 31/12/2017 30/09/2018 31/12/2017 30/09/2018
Financials 9M 2018 Investor Presentation November 2018 41 Cash flow in 9M 2018 is affected by sale of Pintsch Bubenzer, capital increases and higher working capital Positive free cash flow driven by 29.3 million cash inflow from sale of Pintsch Bubenzer 15.6 million release of funds from an escrow account Positive effects set off in part by higher working capital In million Free cash flow -29.8 +7.4 Financing cash flow in 9M 2018 mainly reflects: 46.5 million cash inflow from capital increase 70.5 million cash outflow due net repayment of loans Cash flow from financing activities -21.4 +5.0 Cash flow * -25.8-14.0 9M 2017 9M 2018 * Total cash flow includes change in cash funds due to exchange rate fluctuations
Financial calendar and contact details 2019 2 April 2019 Annual Report 2018 30 April 2019 31 July 2019 3M 2019 Interim Statement 6M 2019 Interim Report 31 October 2019 9M 2019 Interim Statement IR contact Wolfgang Güssgen Head of IR & CC guessgen@schaltbau.de T +49 89 93005-209 Schaltbau Holding AG Hollerithstrasse 5 81829 Munich Germany Picture credits: istockphoto LP
Appendix Investor Presentation November 2018 43 Disclaimer This presentation contains forward-looking statements. These statements are based on the current views, expectations and assumptions of the management of Schaltbau Holding AG and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those described herein due to factors affecting Schaltbau Holding AG such as, among other things, changes in the general economic and competitive environment, capital market risks, currency exchange rate fluctuations and competition from other companies, and changes in international and national laws and regulations, in particular with respect to tax laws and regulations. Schaltbau Holding AG does not assume any obligation to update any forward-looking statements. The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may be placed, for any purpose, on the information contained in this announcement or its accuracy or completeness. The information in this presentation is subject to change.