Schaeffler India Limited — Investor Presentation 2020

May 15, 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

15/05/2020

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 ended March 31, 2020.

Kindly take the same on your record.

Thanking you. Yours faithfully,

For Schaeffler India Limited

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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 - Q1 2020 May 15, 2020

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Agenda

1 COVID-19

2 Economy and Market 3 Q1 2020 Performance update 4 Operations shutdown

15/05/2020 Schaeffler India Limited | Investor presentation

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1 COVID-19COVID-19

Crisis Management

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CMT (Crisis Management Team) formed on 6[th] March (Executive Management, Plant management, Legal, Compliance)

• Early actions and work from home partially started one week before lockdown

• Daily update (COVID-19 cases, notifications and interpretations, plant updates)

• Health and Safety measures : SOPs, Safety videos

• Customers and suppliers status update

• Communication : Internal Videos, Podcasts, Letters / External to stock market

Enabling Home office

• Requisite infrastructure for Home Office was created

• Reconfiguration of workstations to facilitate employees to work from home

Care for community

Contribution to society, timely payments to suppliers and service providers, timely payment to employees

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1 COVID-19COVID-19

Safety measures

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Plants, Warehouses and Office CMTs ensured a controlled shutdown of respective sites and their subsequent re-activation

• Controlled shutdown of plants : Site security, Medical staff and Maintenance staff available through out

• SOP for plants, warehouses and offices start in line with National directives issued by the central government and customer best practices

• Stagewise implementation of SOP ensuring zero risk of spread of COVID-19

• Establishing of mechanism for employee traceability within the plant premises by clustering them in groups (from entry till exit)

• Small innovations and ideas encouraged in plants (Social distancing stickers, Sanitizer dispenser, Door opener)

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1 COVID-19

Agenda

1 COVID-19

2 Economy and Market

3 Q1 2020 Performance update

4 Operations shutdown

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1 COVID-19Economy and Market

Economic activity comes to a grinding halt| FY2020-21 growth forecast slashed to -1.0%[1]]

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GDP Growth % [2]] IIP – Overall (%) [3]]
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8.1 8.0 4.5 4.9 4.5
7.0 3.2
6.6 5.8 5.0 4.5 4.7 1.3 -1.4 [-4.6] [-6.6] [2.1] 0.4 2.1 -16.7
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2018 2019
7.4 7.6
Consumer Price Index 6.6
5.5 5.9 Core Industry Growth (%) [4]]
4.6
4.0 5.2 5.5
2.6 [2.9] [3.0] [3.0] [3.2] [3.2] [3.2] 3.8
2.6
2.1
1.2 1.4
-5.1 0.7
-0.2 -5.5 -6.5
Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20
Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20
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1] Oxford Economics Q1 2020 2[nd] Interim Update for India 3]Source: MOSPI

• 2]Source: Central Statistics Office (CSO) 4] Source: Office of the Economic Adviser

Key Aspects

• Economic recovery altered by the coronavirus outbreak : GDP growth forecasts for FY21 trimmed from 4.4% to -1.0%

• Reports project V-shaped recovery for India and growth in the range of 7.0% to 9.0% in FY22

• Amid uncertainty, downturn is expected across the manufacturing and service sectors, especially where demand is discretionary

• • PM Modi announced a 20 Trillion INR rescue package (equivalent to 10% of India’s GDP ) to weather the fallout of COVID-19 pandemic

• RBI slashed the repo rates by 75 basis points to 4.4% and has permitted banks to provide a three-month moratorium on all term loans to ease tensions build up due to COVID-19

• Revised forecast of 3.4 Mio. domestic vehicle production in 2020 against 4.5 Mio. vehicles in 2019 (down by 19%)

15/05/2020 Schaeffler India Limited | Investor presentation

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1 COVID-19Economy and Market

Weak Demand and Labor Constraints dent output amid the nationwide lockdown

% contribution to Core Industries

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5.4%
Cement Production (Mio T)
Y 2019 91.4
Y 2020
Y 2020 87.4
Y 2019 Growth -4%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 31.4 31 25
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%
Y 2019 234
Y 2020
Y 2020 239
Y 2019
Growth 7%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 75 78 96.4
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
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Steel Production (Mio T)
17.9%
Y 2020 Y 2019 29.4
Y 2020 28.6
Y 2019
Growth -3%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 9.9 9.3 9.4
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
Electricity Generation (Bn KWH) 19.8%
Y 2019 328
Y 2020
Y 2020 333
Y 2019
Growth 1.5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 113.2 111.7 108.5
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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1 COVID-19Economy and Market

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

in T Units

Two and Three Wheelers[1]]

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Y 2020
Y 2019
Y 2019 6,267
Y 2020 4,624
Growth -26%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 1,737 1,666 1221
Y 2019 1,945 2,583 1,739 1,960 2,119 1,999 2,131 1,963 2,072 2,257 1,977 1,495
Passenger Vehicles [1]]
Y 2020
Y 2019
Y 2019 1035
Y 2020 843
Growth -19%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 332 304 207
Y 2019 364 336 335 320 315 268 310 277 280 269 291 258
[1] Source: Society of Indian Automobile Manufacturers (SIAM)
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Commercial Vehicles[1]]

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Y 2020
Y 2019
Y 2019 294
Y 2020 189
Growth -36%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 80 55 54
Y 2019 97 92 105 82 81 70 67 55 55 59 68 62
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Agriculture Tractors[2]]

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Y 2020
Y 2019
Y 2019 183
Y 2020 176
Growth -4%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y 2020 68 69 39
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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1 COVID-19

Agenda

1 COVID-19

2 Economy and Market

3 Q1 2020 Performance update

4 Operations shutdown

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Q1 2020 Performance update1 COVID-19

Q1 2020 | Highlights and Lowlights

Q1 2020 profit margin at Q4 2019 level despite shutdown of operations since 23[rd] March owing to COVID-19 crisis

Working capital managed well and continues to be relatively below last year

Sales and operations momentum came to a halt due to COVID-19 crisis

Shutdown since 23[rd] March impacted the momentum of quarterly performance towards end of the quarter

Strong free cash flow and liquidity position despite performance loss in Mar’20 due to shutdown of operations

Continue to manage COVID-19 crisis effectively, safety measures taken ahead of Government announcements

Schaeffler India Limited | Investor presentation

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Q1 2020 Performance update1 COVID-19

Revenue from Operations | Hit by COVID-19 shutdown

Total revenue

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

• QoQ revenue loss was caused by shutdown from March 23[rd] (COVID-19)

• 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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Q1 2020
Others
(-15.3% QoQ)
20%
Mobility
(-9.1% QoQ)
80%
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15/05/2020 Schaeffler India Limited | Investor presentation

1 COVID-19Q1 2020 Performance update

Earning Quality | PBT margin at preceding quarter level despite shutdown due to COVID-19

PBT (before exceptional items) in INR mn (% in bracket denotes absolute change over same period previous year)

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5,346 (-20.8%)
2019 2020
PBT % 13.9 11.9 11.1 12.0 11.9
YTD % 12.3 -32.3
1,626
1,326
1,241
1,154
1,101
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Key comments

• Despite revenue loss, profitability was maintained due to better mix and cost level

• Working Capital was also controlled effectively and was relatively better than the last quarter.

Earning quality level of Q4 2019 maintained

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1 COVID-19Q1 2020 Performance update

Performance Highlights

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Unit Q1 2020 Q4 2019 Q1 2019 12M 2019
Revenue mn INR 9,285 10,365 11,723 43,606
Revenue growth (YoY) % -20.8% -12.6% 8.2% -4.4%
- -
Revenue growth (QoQ) % 10.4% 0.1% 1.2%
EBITDA mn INR 1,378 1,541 1,875 6,461
EBITDA Margin % 14.8% 14.9% 16.0% 14.8%
EBIT mn INR 934 1,117 1,497 4,874
EBIT Margin % 10.1% 10.8% 12.8% 11.2%
PBT Margin mn INR 1,101 1,241 1,626 5,346
PBT Margin % 11.9% 12.0% 13.9% 12.3%
PAT mn INR 784 846 1,062 3,676
PAT Margin % 8.4% 8.2% 9.1% 8.4%
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PAT margin better than Q4 2019, improved mix and cost level

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1 COVID-19

Agenda

1 COVID-19

2 Economy and Market

3 Q1 2020 Performance update

4 Operations shutdown

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1 COVID-19Operations shutdown

Closure of operations| Notified nationwide shutdown 25[th] Mar to 17[th] May due to COVID-19

	Working days		Q1 Q2 Q3 Q4 Jan Feb Mar Q1 Apr May Jun Q2
	Planned days 308		26 25 26 77 26 26 26 78 77 76
	Effective days 256		26 25 18 69 0 8 26 34 77 76
	Shutdown days 52 17%		0 0 8 8 10% 26 18 0 44 56% 0 0
		March
	Maneja	25/4 8 30%
	Savli	22/4 8 30%
	Talegaon	5/5 6 20%
	Hosur	9/5 7 25%

Key comments

• Lock down – Govt. announcement

• Phase 1.0 (25[th] Mar – 14[th] April)

• Phase 2.0 (15[th] April – 3[rd] May)

• Phase 3.0 (4[th] May – 17[th] May)

• Plant /warehouse closure since :

• Maneja & Savli | 23[rd] March

• Pune | 23[rd] March

  • Hosur | 25[th] March

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1 COVID-19Operations shutdown

We are ramping up …

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GEARING UP TO START ….

• All plants and warehouses have commenced operations partially as per government approvals

• We are awaiting new notifications for end of lockdown to start our offices

• Requisite countermeasures being defined for financial stability

WE WILL WEATHER THIS STORM TOO…..

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Operations shutdown

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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Operations shutdown

Thank you for your attention

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