Investor Presentation Schaltbau Holding AG THE SMART EVOLUTION OF MOBILITY November 2018 Picture credits: iStockphoto LP
Investor Presentation November 2018 2 Executive Board Bringing Schaltbau back on track – experienced management team Our common objectives • Return to profit Dr Martin Kleinschmitt Dr Albrecht Köhler Thomas Dippold • Stick to stringent CFO (since Jan 2017) CEO (since May 2018) CRO (since Aug 2017) cost management • • • Freelance interim CEO / COO CFO Faber-Castell AG (2014-16) Partner at Noerr LLP and (2016-18) CEO Noerr Consulting AG • CFO Semikron International • Deputy CEO GAZ Group (2014-16) • (2008-14) Vice Chairman of the Board • Secure financing • Managing Director Knorr Bremse SAF-HOLLAND S.A. • Head of Controlling SCHOTT AG rolling stock bus. unit (2000-14) • (2002-08) Interim management of various SMEs capabilities • Leading general management and as CFO/CRO (since 2001) operations roles at Dt. / Daimler Benz • CFO Herlitz AG (1998-2000) Aerospace (1989-1999)
Business and Market Overview
Investor Presentation November 2018 4 The Schaltbau Group at a glance Business overview Schaltbau Group SCHALTBAU HOLDING Components (COM) Mobile Transportation Technology (MTT) Stationary Transport Technology (STT) ~15% * ~25% * ~60% * ** SCHALTBAU BODE PINTSCH PINTSCH Connect Contact Control The Door Safety for Rail DC technology for trains, e-mobility and Door systems for Level crossing systems, next-generation energy, driver desk equipment trains, buses and automotive 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
Investor Presentation November 2018 5 Key operating entities 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
Investor Presentation November 2018 6 Key operating entities 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
Investor Presentation November 2018 7 Key operating entities 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
Investor Presentation November 2018 8 Market and competitive environment Megatrends drive sustainable growth in global rail markets Rolling stock Infrastructure & Rail control Megatrends Digitisation / Automation Urbanisation Components / Mobile Transportation Technology Stationary Transportation Technology Emission reductions Connectivity BODE PINTSCH PINTSCH SCHALTBAU Connect Contact Control Safety for Rail The Door Electrification / E-mobility • Market growth : (1) • Market growth : (1) ~2.6% ~2.9% Safety • Market size : (2) • Market size : (2) ~€53bn ~€46bn Globalisation / China Regional market growth (1)(3) • Western Europe: ~2.2% • Asia / Pacific: ~2.5% • NAFTA: ~3.1% • CIS: ~2.7% Regulation and liberalisation • 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
Investor Presentation November 2018 9 Market and competitive environment 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 (4) / + 1. 2. c. 15% 3. BODE SCHALTBAU c. 5% 32% The Door Connect Contact Control Rolling stock 4. c. 5% c. 5% 5. Other OEMs (2) < 5% € 163bn (1) 49% 6. Other (3) 7. Market size ~€53bn 19% 8. Infrastructure 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
Investor Presentation November 2018 11 Key developments Management agenda 2017 & 9M 2018 fulfilled: higher financial flexibility for ongoing restructuring activities and organic growth in core business areas Stabilisation of Major cost reduction Strengthening of Stabilisation of financial situation programmes initiated future competitiveness operative business Divestiture of non-core Optimisation of production and Investments mainly into Sound order intake, revenue industrial brakes business logistic processes mobility/logistics applications and EBIT development since (Pintsch Bubenzer) effective 1 and further rolling stock Q3 2017 o “Fit for future” programs March 2018 development Orders at hand at the end of at Bode and Rawag Two successful capital Digitisation: product 9M 2018 at decent level o “On time” program at Alte increases in May 2017 and development to be increasingly Strict focus on reduction of February 2018 aligned towards customers personnel cost and material needs Reduction of short- and mid- expenses Extended business model: term financial debt Reduction of complexity of services for the entire lifecycle Group organisation, improved of rolling stock and commercial steering and limitation of risks vehicles Restructuring agreement in STT Focus on local presence in (Pintsch) for 2018 and 2019, international markets total savings of € 4 million
Investor Presentation November 2018 12 Key developments Restructuring roadmap Schaltbau: Major milestones successfully achieved – further road to go 2017 – 2018 2018 – 2019 2019 – 2020 Create financial headroom Achieve satisfactory debt level Ensure profitability on market level Stabilise operational performance Selective investments Step up investments in market oppor- tunities and digital business models EXPLOIT GROWTH OPPORTUNITIES REDUCE COSTS REDUCE COMPLEXITY REDUCE DEBT 2017 2018 2019 2020
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