thyssenkrupp Equity Story Components Technology November 2017
thyssenkrupp a diversified industrial group Sales 41.4 bn 1 ; EBIT adj. 1.7 bn 1 Continuing operations Components Technology (CT) 7.6 bn 377 mn Elevator Technology (ET) 7.7 bn 922 mn Industrial Solutions (IS) 5.5 bn 111 mn Materials Services (MX) 13.7 bn 312 mn Steel Europe (SE) 8.9 bn 547 mn 1. Financial figures FY 16/17 2 November 2017 thyssenkrupp Equity Story Components Technology
Safety, comfort and efficiency Quality and efficiency durability and performance reliability and advanced engineering 3 November 2017 thyssenkrupp Equity Story Components Technology
Mission critical components for leading automotive and industry customers Sales 7.6 bn Automotive Industry ~70% of sales ~30% of sales 1 Steering Damper Automotive Systems Bearings Camshafts Springs & Stabilizers Forged Technologies More than 1 million parts/systems per day 1 Forged Technologies still partially also addressing the automotive industry 4 November 2017 thyssenkrupp Equity Story Components Technology
Key business regions expansion into best cost countries Sales 7.6 bn by customer location [%] Sales per Region [incl. Exports] Employees per Region +38% +19% 5.5 8% 10% 18% 7.6 4% 17% 28% 27,561 17% 9% 12% 32,904 11% 18% 17% 62% 50% 62% 53% 2007/08 2016/17 30.09.2008 30.09.2017 Others South America Asia NAFTA Europe 5 November 2017 thyssenkrupp Equity Story Components Technology
Steady growth and margin improvement [ mn] FY 13/14 FY 14/15 FY 15/16 FY 16/17 Q4 15/16 Q4 16/17 Guidance FY 17/18E Sales 6,172 6,753 6,807 7,571 1,685 1,923 Sales up (mid-to-high single-digit) EBIT adj. 268 313 335 377 79 102 EBIT adj. margin [%] 4.3 4.6 4.9 5.0 4.7 5.3 EBIT adj. growth partially diluted by ramp-up costs for new plants BCF 16 177 114 31 191 279 Upside powered by program as a part of 6 November 2017 thyssenkrupp Equity Story Components Technology
Positive mid-term outlook in all major markets within five years Light vehicles 1 Heavy duty 2 Construction equipment Wind power Production in mn units Production in mn units Sold units in 1 000 Connected capacity in GW +2% +11% +1% 100 91 92 95 3.1 3.2 +4% +3% 619 678 52 54 16 17e 19e 21e 16 17e 19e 21e 16e 17e 19e 21e 16e 17e 19e 21e Steady growth towards 100mn cars Opportunities from technology shifts % CAGR NA class 8 more positive in 2017 China effect in 16/17 3 Mid-term rebound 1. Light vehicles < 6 ton, only CBU (completely built up) units 2. Heavy duty vehicles > 6 ton 3. Stronger growth due to tightened emission standards and loading regulations Sources: LV: IHS LV Global Production Forecast (07/2017) HV: IHS HV Global Production Forecast (Q3/2017) CE: Off-Highway Research (03/2017) WP: MAKE Consulting (Q2/2017) 7 November 2017 thyssenkrupp Equity Story Components Technology Recovery after bottoming out Projections towards 780k units 2020+ Sustainable level of 60GW to 2020+ Regulatory effects Growing turbine sizes % Offshore wind CAGR
Light vehicles: China remains future growth driver Light vehicle (LV) production forecast [mn units] Europe NAFTA China +3.1% +1.5% 21.1 21.6 +1.3% 17.8 17.4 27.0 27.3 16 17e 19e 21e 16 17e 19e 21e 16 17e 19e 21e Continued growth esp. in Eastern Europe Market on peak level in 2016 New normal growth between 3-4% p.a. Source: IHS global LV forecast (07/2017), only CBU (completely built up) units 8 November 2017 thyssenkrupp Equity Story Components Technology
Growth Performance CT Strategic Way Forward @ Components Technology Benchmark profitability target supported by performance and growth plan Plant network Procurement Operational excellence (OPX) 4.3% 4.6% 4.9% 5.0% Growth Performance EBIT adj. margin 6-8% + Customers Markets 13/14 14/15 15/16 16/17 Target Innovations 9 November 2017 thyssenkrupp Equity Story Components Technology
Procurement capturing synergies and optimizing processes Examples: procurement initiatives World class procurement e.auctions Value chain engineering Global benchmarking initiative >20 deep-dive assessments >1,100 measures executed State-of-the-art tools and clear 2020 strategy > 1 bn PVO by e.auctions; further increase planned Dedicated, advanced auction models >40% saving on single items Roll out of Design-to-Cost Standard-tool (apriori) Cross-functional approach 10 November 2017 thyssenkrupp Equity Story Components Technology
OPX next level operational performance initiatives to continue track record Examples: OPX initiatives OPX management system Speed factory Energy savings Annual plant benchmarking Close KPI/measure tracking Best practice sharing 700 OPX experts trained >600 measures ongoing Optimized intra-logistics Automated ground vehicles (AGVs) and Human-Machine Interfaces (HMI) 50% - 60% reduction of manual logistics operations Oven, process, heat recovery Close tracking and mgmt. Continued savings increase 14/15: 30 GWh ( 3.5 mn) 15/16: 40 GWh ( 5.0 mn) 11 November 2017 thyssenkrupp Equity Story Components Technology
Strong and balanced customer portfolio enhanced in recent years Example LV: Solid market positions with established OEMs and new players Established premium and mass market OEMs NEW Electric vehicle OEMs NEW Chinese OEMs Well established partner of leading automotive OEMs Supplier for key EV players Serve top Chinese OEMs 12 November 2017 thyssenkrupp Equity Story Components Technology
Steady growth by our innovation pipeline for tomorrow s mobility Examples: innovation projects Steer-bywire Automated driving Joint R&D platform Active damping Carbon fiber reinforced plastic components Single-wheel Steering / Torque Vectoring Trusted development partner for leading OEMs and new entrants 13 November 2017 thyssenkrupp Equity Story Components Technology
Autonomous Driving Sustainable Mobility Starting market penetration around 2020 beginning in restricted areas E-Hailing / car sharing continue their growth across the world, starting from small base Future Mobility Aggressive and tightening CO2 reduction targets in Europe, US and China Connectivity driven by OEMs, business models develop over time Ownership 14 November 2017 thyssenkrupp Equity Story Components Technology Connectivity
Committed to realize the value upside from tk s Strategic Way Forward Best-in-class engineering and processes Growth prospects from steady stream of innovations + 4.3% 4.6% 4.9% 5.0% Growth Performance EBIT adj. margin 6-8% Expanding global production network 13/14 14/15 15/16 16/17 Target Strong customer portfolio with long-term contracts 15 November 2017 thyssenkrupp Equity Story Components Technology
Disclaimer thyssenkrupp AG The information set forth and included in this presentation is not provided in connection with an offer or solicitation for the purchase or sale of a security and is intended for informational purposes only. This presentation contains forward-looking statements that are subject to risks and uncertainties. Statements contained herein that are not statements of historical fact may be deemed to be forward-looking information. When we use words such as plan, believe, expect, anticipate, intend, estimate, may or similar expressions, we are making forward-looking statements. You should not rely on forward-looking statements because they are subject to a number of assumptions concerning future events, and are subject to a number of uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from those indicated. These factors include, but are not limited to, the following: (i) market risks: principally economic price and volume developments, (ii) dependence on performance of major customers and industries, (iii) our level of debt, management of interest rate risk and hedging against commodity price risks; (iv) costs associated with, and regulation relating to, our pension liabilities and healthcare measures, (v) environmental protection and remediation of real estate and associated with rising standards for real estate environmental protection, (vi) volatility of steel prices and dependence on the automotive industry, (vii) availability of raw materials; (viii) inflation, interest rate levels and fluctuations in exchange rates; (ix) general economic, political and business conditions and existing and future governmental regulation; and (x) the effects of competition. Please note that we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. 16 November 2017 thyssenkrupp Equity Story Components Technology