ThyssenKrupp Business Area Components Technology · o R&D responsibility shift to ... BMW - Daimler...

Developing the future.

Business Area Components Technology March 2014



1

Overview Business Area Components Technology Eight Business Units in Three Clusters

Note: Sales split as of FY 2012/13

BEARINGS

UNDERCARRIAGES

INDUSTRY (~20% of sales)

Excavator

DAMPERS

SPRINGS & STABILIZERS

STEERING

SYSTEMS

CHASSIS (~60% of sales)

CAMSHAFTS

FORGED & MACHINED

COMPONENTS

POWERTRAIN (~20% of sales)

Motor



2

Leading Positions with Mission Critical Components

1 out of 5 produced crawler

machines is equipped with our products

9 out of the Top 10 wind turbine

manufacturers rely on Components Technology

9 out of 10 premium light vehicles

are driven by our components

1 out of 3 heavy vehicle engines

are powered by our crankshafts

Light Vehicles Trucks Construction Equipment

Wind Power

Powertrain

Chassis Industry



3

Components Technology with Global Production Footprint

Chassis Powertrain Industry

USA

Mexico

Brazil

Europe

Americas

Germany

Spain

Hungary

UK

Liechtenstein

Italy

Bulgaria

France

Romania

China

India

Japan

Bigger Asia



4

Leading Engineering Competence for “Better” Solutions Selected Highlights

Seamless Rolled Rings Up to 8,000 mm in

Diameter and 30,000 kg of Weight for Newest Turbine Generations

Bearing Technology Increased Durability and

Reduced Maintenance by Plastic-Coated Cage

Variability in the Cylinder Head CO2-reduction by

Integrated Solutions

Lightweight Con Rods Weight Reduction

between 5 to 10% Possible

Crankshaft Competence

Excellent Know-how in Rough Forged and Machined

Parts

Shock Absorbers Infinite Adjustment

Possibilities for a better Driving Experience

Steering Systems Integration of Active

Steering Functions

Track Systems Hardening Competencies with Increased Durability

(+30 to 50% lifetime)

Engineering expertise for continuous improvement for our customers worldwide

Chassis Powertrain Industry

ThermoTecSpring®

Coil Spring with Weight Reduction

between 15 to 20%



5

Turning Fundamental Trends into Business Opportunities Technology Innovation and Business Excellence are a Must for Components Technology

Sustainability

o CO2-emission: Europe -95g/km until 2020 (-40% vs. today)

o World: >60% EV or Hybrid cars on roads in 2030

Functionality

o R&D responsibility shift to suppliers

o Increasing requirements

o Autonomous driving

Glocalization

o Global and simultaneous launch of new models

o Award of high volume platforms

o Local footprints

o Product life time decrease

o Light weight approach & new (material-mix) products

o Technology transfer to lower price segments

Product/ Technology

o 1.5 bn cars on the road in 2030 (today: ~1.0 bn)

o Growth driven by emerging markets

Demand

o Automotive: Requested yearly savings

o Wind Power: Chinese OEMs and suppliers with excess capacity drive price pressure

o Constant cost measures

Competition



6

Light Vehicles Trucks Construction Equipment* Wind Power

Units produced [mn]

Units sold [‘000]

Connected capacity [GW]

Units produced

[mn]

o Emission reductions

o Lightweight and urban mobility

o Connectivity & convenience

o Changing competitive situation in China

o Technology (Euro VI) and regional shift (e.g. Brazil) expected

o Mainly driven by Chinese demand of excavators

o Dependency on economic growth

o Trend to more powerful turbine-classes

o Strong growth in offshore segment

Example ‘Demand’: Steady Growth…

83 99

16 17 14

85

13 18

+4%

15

566

16 15

+5%

17 14

490

13

466

12

50 34

+4%

17 16 15 14 13 18

59 3.6 3.4

+5%

17 16 15 14 13

4.3

18

Actual Forecast * no update/Forecast to 2018 available Sources: IHS Global Insight (02/2014), Off-Highway Research (08/2013), MAKE Consulting (Q4/2013)



7

Automotive Industry

Light Vehicles Trucks Construction Equipment* Wind Power

… Driven by Emerging Markets (Expectations 2014 vs. 2013)

w/o Germany

<-6.0% (very weak) <-1.5% (weak) >6.0% (very good) >1.5% (good) neutral Business trend for 2014 vs. 2013:

Production Units sold Connected capacity Production

* no update available Sources: IHS Global Insight (02/2014); Off-Highway Research (08/2013); MAKE Consulting (Q4/2013); graded by management estimation



8

Example ‘Sustainability’: Suppliers Act as Solution Provider For OEMs

o Change in Cycle Testing Specifications from NEDC2 to WLPT in 2017

o Increased distance and higher speed

o Increased acceleration

95 g/km

68-78 g/km

117 g/km109 g/km

~170 g/km

105 g/km

today

2000 2005 2010 2015 2020 202540

80

120

160

200

240

Grams CO2 per Kilometer normalized to NEDC

Fleet Consumption Must be Reduced by Planned Legislation Changes New WLTP1 Cycle

Natural Gas Vehicles

o 25% CO2-reduction compared to gasoline engine

o CAGR 2000-2013: +24% (to 17.7 m CNG3 Vehicles world-wide)

Pressure on CO2-reduction fosters new technologies

1) World-Harmonized Light-Duty Vehicles Test Procedure | 2) New European Driving Cycle | 3) Compressed Natural Gas



9

Example ‘Glocalization’: Global Auto Architecture Offers Growth Potential

Future prospects (2012 – 2020)

Average volume per platform

Number of platforms to produce 80% output

Modular/platform design

Source: IHS Global Insight

o Engine and vehicle design on modular or platform solution from nearly every OEM ongoing

o More choice to the customer, with less complexity for OEMs

o Introduction of global and flexible solutions

o Realizing economies of scale with high volume platforms

o Reduction of supplier base

MQB

CMF1 EMP2 NGA 0,0 0,4 0,8 1,2

Hyundai

VW

Ford

PSA

GM

BMW

Daimler

Units produced per platform [mn]

2020 2012

0 4 8 12

Number of platforms [#]

-45%

-35%

-40%

-25%

-55%

-45%

-25%

+65%

+70%

+100%

+60%

+90%

+160%

+160%

UKL MFA

Growth rate 2012-2020



10

Future Customer Challenges Create Business Opportunities Leveraging Technology Base and Global Presence

Strategic Actions Components Technology Future Challenges

Explore market opportunities: Strong global presence, with ongoing actions to optimize footprint

Global footprint to ensure proximity to customers

Realign

Footprint

Focus on process efficiency, highest quality standards and customer service

Close cooperation leveraging entire group

BA- and group-wide programs accelerate learning curve in all BA CT business units

Cost efficiency and restructuring

Increase

Performance

Support environmental targets: Ongoing innovations for less weight and CO2-reduction (e.g. cylinder head module)

Strong R&D pipeline within our three business segments (e.g. InCarplus for automotive innovations)

Differentiate



11

Components Technology Already with Global Presence Sales per Region and Customers FY 2012/13

incl. export

14%

8%

26%

1%

31%

21%

Sales per Region Sales per Customer

Others

Asia

Germany South Amercia

NAFTA

Rest of EU

BMW

VW

Others

Fiat

Cummins

Ford

Daimler

Realign

Footprint

Only automotive industry



12

Ongoing Efforts to Optimize Global Footprint Glocalization together with our Customers

Europe

CHASSIS, China Cold forging, Steering, Damper SOP 2013/14

CHASSIS, Mexico Cold Forging SOP 2012

POWERTRAIN, China Crankshafts rough and machined SOP 2013

POWERTRAIN, China Cylinder Head Module SOP 2014

CHASSIS, China Coil Springs SOP 2013

POWERTRAIN, Germany Cylinder Head Module

SOP 2013/14

POWERTRAIN, Brazil Cylinder Head Module SOP 2015

CHASSIS, Hungary Axle Assembly Audi SOP 2013

Americas Asia

~25 Locations in Americas ~40 Locations in Europe ~20 Locations in Asia

Realign

Footprint



13

2,300

FY 2014/15

700

FY 2013/14 FY 2012/13

Ramp-up Efficiency Gains 2015

Sustainable Efficiency Gains to Support EBIT Target FY 2013/14 and Mid-Term Upside for ThyssenKrupp Group

50% contribution to efficiency target from synergize+ especially by tapping unaddressed bundling potentials and pulling cross-functional levers

Efficiency Gains 2015 by Business Area

2015

~10%

Energy & Other

Personnel ~20%

Operations ~20%

~50%

Corporate

~6% Industrial Solutions

~15%

~14%

Steel Europe

Elevator Technology ~14%

Materials Services

~12%

~27%

million €

(Procurement)

700

500

100

~600

150

150

850

850

~13% Steel Americas

achieved Q1: ~200

Increase

Performance

Efficiency Gains 2015 by Categories

Components Technology



14

2015 and BA Programs Set up to Boost Profitability S

up

po

rt

act

ivit

ies

Pri

mary

act

ivit

ies

Purchasing

Process Program

Inbound Logistics

Operations

Marketing and Sales

Outbound Logistics

Service

BA programs initiated to push internal performance and to fulfill ambitious impact 2015 plan

Organization

HR

Technology

2015

Realign

Footprint

Realign

Footprint

Increase

Performance

€350 m

Plant improvement process

ONE production system

Performance culture

Procurement

IT-infrastructure

Operational excellence



15

Group-wide R&D Projects Deliver Solutions for Future Market Needs

R&D expenses TK Group E.g. InCar®plus Project

Start: Oct 2011 End: Sep 2014 Roadshow starting Oct. 2014

R&D and innovation characterized by ambition for

sustainable technological differentiation

244

331

47

647

269

644

57

343

221

44

286

551

R&D cost

Amortization of capitalized

development cost

Order related R&D cost

13/14E 11/12

Chassis DampTronic® X

10/11

Note: Group w/o Inoxum increased R&D expenses by €20 m or 3.2%

Body LITECOR®

EFFICIENCY

LIGHTWEIGHT

COST-COMPETITIVE

GREEN

HIGH-PERFORMING

30 projects with more than 40 individual solutions for Body, Powertrain, Chassis

Differentiate

12/13

Powertrain POSS



16

Distinguished Products Setting Benchmarks in 2013

DampTronic® sky + EPAS

High-end adjustable damping system and electromechanical steering system leading to benchmark in comfort

Presta²

Serving high-volume engine platforms with cylinder head modules

Outstanding reputation for performance

HD Crankshafts

Cost Emissions Weight

Chassis Camshafts Crankshafts

Differentiate

Animation Presta2.wmv



17

Approaching Emerging Markets with Latest Technology

C-EPS

Launch of Presta2 (cylinder head module)

Presta2

Launch of C-EPS

Differentiate

//upload.wikimedia.org/wikipedia/de/b/be/Vw_Logo.svg



18

Good Start into Fiscal Year 2013/14

3.1

4.6

5.3

EBIT adjusted, EBIT adjusted margin (million €, %) Sales (million €)

Q1

1,345 1,360

1,517 1,490

3.9

Current trading conditions:

• Qoq seasonally weaker order intake and sales:

• Light vehicles: continuing high demand from the US and China; first signs of recovery in European markets

• Trucks: heavy truck market still at low level

• Industrial components: improving business activity for wind turbines especially in China; construction equipment market still challenging

• Adjusted EBIT margin increased to 4.5% supported by benefits from restructuring and efficiency measures

Q4 Q1

2012/13 2013/14

1,428

Q1 Q4 Q1

2012/13 2013/14

42

63

81

58 64

4.5



19

Measures Are Strongest Performance Lever

301

503 5.3

7.3

453

6.5

2009/10 2012/13

EBIT adjusted, EBIT adjusted margin (million €, %) Sales (million €)

2009/10 2012/13

5,724

6,908 7,011

Mid-term target

5,715

Mid-term target

244

4.3

7-8

Market upside

measures

Key perspectives FY 2013/14 vs. FY 2012/13

• Light vehicles: USA and China with continuing strong demand; Western European markets stabilizing on a low level with slight upside potential

• Heavy trucks: stabilizing markets with slightly improving demand in Europe

• Industrial components: ongoing weak demand in construction equipment market; improved market conditions in the wind energy sector

• EBIT continues to include ramp-up related costs for new plants and products



20

Passion Powers Precision and Performance

Nm

ThyssenKrupp Business Area Components Technology · o R&D responsibility shift to ... BMW - Daimler...

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