Schaeffler India Limited — Investor Presentation 2020

Jul 28, 2020

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- 400 001 MUMBAI- 400 051

Company Code: 505790 Company Code: SCHAEFFLER

28/07/2020

Sub: Investor Presentation

Dear Sirs,

Phone: +91 8669613701

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 half year ended June 30, 2020.

Kindly take the same on your record.

Thanking you.

Yours faithfully,

For Schaeffler India Limited

Ashish Digitally signed by Ashish Tiwari Date: 2020.07.28 Tiwari 09:39:53 +05'30' Ashish Tiwari,

VP - Legal & Company Secretary

Encl.: As above

Schaeffler India Limited

Corporate Office: 15th Floor, (ASTP) Amar Sadanand Tech Park, Baner, Pune-411045, Maharashtra, Registered office: Nariman Bhavan, 8th Floor, 227 Backbay Reclamation, Nariman Point, Mumbai 400 021, Maharashtra, India, Phone +91 22 6681 4444, Fax +91 22 2202 7022, www.schaeffler.co.in, info.in@schaeffler.com, CIN: L29130MH1962PLC012340 ·

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Schaeffler India Limited Investor Presentation - Q2/6M 2020 July 28, 2020

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Weathering a storm

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Agenda

1 COVID-19

2 Economy and Market

3 Q2 / 6M 2020 Performance update

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COVID-191 COVID-19

Early ramp-up of plants and continued efforts to balance between demand and safety

Working days In H1 2020	Q1 Q2
	Jan Feb Mar Q1 Apr May Jun Q2
Planned days 155	26 25 26 77 26 26 26 78
Effective days 95	26 25 18 69 0 9 17 26
Days lost 60 39%	0 0 8 8 10% 26 17 9 52 67%

Plant CMTs ensured a controlled shutdown of respective sites and their subsequent re-activation

• Gradual plant operations resumed starting from beginning of May, with strict adherence to EHS SOP in alignment with directives issued by MoHFW

• Cluster formation to ensure quarantine of relevant employees in case of any symptoms/infection reported by employees.

• Employees are being encouraged and motivated to come-up and selfdeclare in case of any symptoms/ infection risks

• Medical Officer and Team Leaders are providing requisite support to the affected employees and their families, during Home Quarantine

• Restricted travel

Early Resumption of plants allowed us to ramp-up operations and outline measures

• Public Address System being used for daily briefing of safety and important message.

CMT : Crisis Management Team

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COVID-19

Rigorous Implementation of EHS SOP in SIL Plants

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100% Daily Checking of Temperature at Entry

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Canteen sitting realigned with Glass Partition in between

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Oxygen saturation level checking using Pulse Oximeter once in a week

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Office Seating with Social Distancing

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Daily Safety Briefing by Manager in each shift in open air area

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Cluster badges are displayed by all employees to raise awareness

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Covid safety Pledge in each shift

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Frequent Floor & Touch Point Sanitization

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Agenda

1 COVID-19

2 Economy and Market

3 Q2 / 6M 2020 Performance update

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Economy and Market 2 Economy and Market

2020 growth forecast slashed to -3.1%[1] ] | Localized Lockdowns hurt Revival

GDP Growth %[2]]

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7.1
6.2
5.6 5.7
5.2
4.4 4.1
3.1
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2019 2020
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Inflation Rate % (CPI)[3)]

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7.4 7.6 7.2
5.5 6.6 5.8 6.3 6.1
4.6
4.0
3.2 3.2
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
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IIP – Overall (%)[3]]

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4.9 5.2
2.1 2.1
1.3
-1.4 [-4.6] [-6.6] 0.1 -18.4 -57.6 -34.7
Core Industry Growth (%) [4]]
5.5
2.6 2.1
1.2 0.7 1.4
-0.2 [-5.1] [-5.5] -6.5 -38 -23.4
Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20
Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20
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Key Aspects

• Series of lockdowns to combat the pandemic took a toll on the economy: GDP growth forecasts for 2020 trimmed to -3.1%

• India witnessed revival in demand post unlocking of the economy in Jun - Manufacturing PMI increased to 47.2 in Jun from 30.8 and 27.4 in May and Apr respectively

• Localized lockdowns enforced across the urban centers pose challenges for a recovery as India struggles to get past the peak of the pandemic

• Rural demand, already reaching 85% of pre-covid average sales, is expected to fuel India’s post lockdown growth, underpinned by higher farm income and minimal disruption due to lockdown

• GOI announced financial package worth INR 20 Trillion aimed at stimulating the economy in the form of credit guarantee to the MSMEs and liquidity injection into NBFCs

• RBI slashed the repo rates by 40 basis points to 4% (second reduction this year) and has provided a six-month moratorium on all term loans to ease tensions built up due to COVID19

1] Oxford Economics Q2 2020 for India 2]Source: Central Statistics Office (CSO) 3]Source: MOSPI 4] Source: Office of the Economic Adviser 28/07/2020 Schaeffler India Limited | Investor presentation

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Economy and Market 2 Economy and Market

Gradual Pickup in Core Sector activities as the Government relaxed lockdown in May

% contribution to Core Industries

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Cement Production (Mio T) 5.4% Steel Production (Mio T) 17.9%
Y 2019 149 Y 2019 50
Y 2020
Y 2020 Y 2020 114 Y 2020 35.5
Y 2019
Y 2019 Growth -24% Growth -29%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 9.9 9.3 9.4 1.6 5.3
Y 2020 31.4 31 25 4 22.2
Y 2019 9.7 9.4 10.3 10.4 10.4 9.7 9.6 9.6 9.0 9.3 8.8 9.8
Y 2019 29.8 28.5 33.1 29.2 28.6 28.4 28.1 24.5 25.1 26.2 27.1 30.5
Coal Production (Mio T) 10.3% Electricity Generation (Bn KWH) 19.8%
Y 2019 348 Y 2019 576
Y 2020 Y 2020
Y 2020 347 Y 2020 534
Y 2019 Growth -- Y 2019 Growth -7.2%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 75 78 96.4 47.6 50.3 Y 2020 113.2 111.7 108.5 91.9 109.0
Y 2019 70.1 70.7 92.7 56.3 58.6 56.9 49.0 43.6 40.1 50.4 62.0 70.3 Y 2019 110.1 100.6 117.0 119.0 129.2 125.4 123.4 118.6 114.7 106.2 101.5 108.0
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Source: Office of the Economic Adviser, all figures rounded off

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Economy and Market 2 Economy and Market

Covid-19 crisis continues to add the woes of India’s Auto Sector

in T Units

Two and Three Wheelers[1]]

Commercial Vehicles[1]]

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Y 2020 Y 2020
Y 2019 Y 2019
Y 2019 11,806 Q2’20 vs Q2’19 -79% Y 2019 526 Q2’20 vs Q2’19 -88%
Y 2020 5,921 Y 2020 218
Growth -50% Q2’20 vs Q1’20 -72% Growth -59% Q2’20 vs Q1’20 -85%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 1,737 1,666 1221 0 310 987 Y 2020 80 55 54 0 3 26
Y 2019 1,945 2,047 1,739 1,960 2,116 1,999 2,131 1,963 2,072 2,257 1,977 1,495 Y 2019 97 92 105 82 81 70 67 55 55 59 68 62
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Passenger Vehicles[1]]

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Y 2020
Y 2019
Y 2019 1924
Q2’20 vs Q2’19 -85%
Y 2020 980
Growth -49% Q2’20 vs Q1’20 -84%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 332 304 207 0 29 107.5
Y 2019 364 336 335 320 315 254 310 277 280 269 291 258
[1] Source: Society of Indian Automobile Manufacturers (SIAM)
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Agriculture Tractors[2]]

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Y 2020
Y 2019
Y 2019 377
Q2’20 vs Q2’19 -42%
Y 2020 288
Growth -23% Q2’20 vs Q1’20 -36%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 68 69 39 0.15 30.7 81.5
Y 2019 69 58 56 69 66 60 67 70 78 69 62 49
[2] Source: Tractor Manufacturer Association (TMA); Mar is estimated production
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Agenda

1 COVID-19

2 Economy and Market

3 Q2 / 6M 2020 Performance update

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Q2 / 6M 2020 Performance update 3 Q2 / 6M 2020 Performance update

Revenue from Operations | Hit by COVID-19 shutdown

Total revenue

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mn INR
43,606 (-4.4%) 13,674(-40.3%)
2019 2020
QoQ % -1.2 -4.7 -7.3 0.1 -10.4 -52.7
YoYQ % 8.2 1.5 -13.1 -12.6 -20.8 -60.7
11,723
11,167
10,352 10,365
9,285
4,389
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Key aspects

• QoQ revenue loss was caused by shutdown for the whole month of April and staggered opening in May and June

• YoY revenue loss is additionally caused by market volatility and demand slowdown in some sectors of automotive and industrial business

Sales mix 2020

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6M 2020
Others
(-33.3% YoY)
21%
Mobility
(-41.9% YoY)
79%
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Q2 / 6M 2020 Performance update 3 Q2 / 6M 2020 Performance update

Earnings before tax | Continued adverse impact of COVID-19 lockdown

Key comments

EBT

mn INR (% in bracket denotes absolute change over same period previous year)

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5,346 (-20.8%) 534 (-81.9%)
2019 2020
EBT % 13.9 11.9 11.1 12.0 11.9 -12.9
YTD % 12.3 3.9
1,626
1,326
1,241
1,154 1,101
-567
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• Revenue drop by 60.7% (Q2 2020 vs. Q2 2019) resulted in -12.9% PBT margin, due to fixed cost impacts. However cost saving measures helped minimizing the losses

• Resumption of partial operations in Q2 2020 and cost saving initiatives, facilitated 3.9% PBT margin in H1 2020.

Cost saving measures led to minimizing margin loss in H2 2020

EBT : before exceptional items

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Q2 / 6M 2020 Performance update 3 Q2 / 6M 2020 Performance update

Performance Indicators

		Unit	Q2 2020	Q1 2020	Q2 2019	H1 2020	H1 2019	12M 2019
	Revenue	mn INR	4,389	9,285	11,167	13,674	22,890	43,606
	Revenue growth (YoY)	%	-60.7%	-20.8%	1.5%	-40.3%	4.8%	-4.4%
	Revenue growth (QoQ)	%	-52.7%	-10.4%	-4.7%
	EBITDA	mn INR	(196)	1,378	1,598	1,182	3,473	6,461
	EBITDA Margin EBIT	% mn INR	-4.5% (695)	14.8% 934	14.3% 1,214	8.6% 239	15.2% 2,710	14.8% 4,874
	EBIT Margin	%	-15.8%	10.1%	10.9%	1.7%	11.8%	11.2%
	EBT	mn INR	(567)	1,101	1,326	534	2,951	5,346
	EBT Margin	%	-12.9%	11.9%	11.9%	3.9%	12.9%	12.3%
	PAT	mn INR	(425)	784	825	359	1,887	3,676
	PAT Margin	%	-9.7%	8.4%	7.4%	2.6%	8.2%	8.4%

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-Impacted by -Countermeasures helped minimizing losses in Q2

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OPTIME | Wireless next generation condition monitoring Solution

Global online launch of OPTIME on 1[st] July 2020

550 participants from 12 countries

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Features of OPTIME

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Plug : The vibration sensors are attached to each machine using screws or adhesive. Then they are activated via NFC.

Play : Provides trends and, using a multi-stage warning system, provides a visual representation of the severity of potential incidents. In an emergency, it can sound an alarm and provide add info

Predict : he system detects malfunctions weeks in advance and provides information on the root causes. This works with continuous automatic analyses.

Key benefits of OPTIME

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Cost efficient : Monitoring hundreds of rotating machines for a few cents each per day – up to 50% cheaper than handheld measurement

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Installs quickly : Installing the sensors and setting up the OPTIME app takes mere minutes – no prior experience required

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Expert knowhow : Digital Service provides professional diagnostics based on expert algorithms and machine learning, 24/7 via

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For beginners & experienced users : Intuitive operation, provides crucial information and comprehensive expandability – perfect for a broad range of users and applications

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Three components:

• Wireless, battery-powered vibration and temperature sensors

• A gateway

• A digital service

Launch in India in October 2020

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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 the Company’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 the Company. Forward-looking statements therefore speak only as of the date they are made, and the Company 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 the management of the Company’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. 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 the Company’s business and does not purport to deal with all aspects and details regarding the Company. Accordingly, neither the Company 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 the Company nor any of its directors, officers, employees or advisors nor any other person shall have any liability whatsoever for any errors or omissions or missions in, any information or opinions contained herein, and none of them accept any liability (in negligence, or otherwise) whatsoever for any loss howsoever arising from any use of this presentation 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 the Company which are subject to change.

This presentation is not an offer of securities for sale in any jurisdiction.

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Thank you for your attention

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