Financial Results Q1/201430 April 2014

1

Highlights Q1/2014

• Establishment and roll out of new product development process

• Progress in logistic roadmap: Launch of scanner solution in Bad Schussenried

• New product launches proceeded consistently stable and on schedule

• Winning first business contract in China with Truck & Off Highway customer

• Finalisation of the installation of the new mechanical line in the Break Disc division

• Moving into new R&D facilities in Toronto / Canada

• High customer orders led to logistical and operational pressure on the existing technical

capacity, especially in the Powder Metallurgy division

• First annual press conference

2

Sales and EBITDA forecasts reached

Clearly outperforming European car market

€ m Q1/2014 Q1/2013 Change in %

Group sales 104.8 84.6 +23.9%

Adj. EBITDA 8.8 6.0 +46.9%

Depreciation (excl. PPA) 4.0 3.0 +25.0%

Adj. EBIT 4.9 3.0 +60.9%

Net income for the period 3.2 1.9 +73.3%

EPS (in €) 0.55 0.32 +73.3%

Working Capital Ratio (%) 11.8 16.4

Capex 9.2 8.2 + 12.1%

Free cash flow -12.0 -19.1

Net Debt -14.8 1.1

ROCE (%) 18.8 15.7

No. of employees (average) 1.090 1.040 +4.8%

3

GroupSales by quarter (€m)

Q2 Q3

+23.9%

Q4

92.6 96.784.6

Q1

104.891.8

20142013

23.9%

Q1/2014

104.8

Q1/2013

84.6

Sales (€m)

New product launches and high customer orders main growth drivers

Q2

11.0 11.1

8.8

6.0

Q1

46.9%

Q4

7.6

Q3

20142013

Adj. EBITDA (€m) Adj. EBITDA by quarter (€m)

8.4%

Q1/2013

8.8

7.1%

0.26.0

46.9%

Q1/2014

EBITDAAdjustments

4

Group

14.714.7

EAT by quarter (€m)

Q2

4.7

Q1

3.2

1.9

+73.3%

Q4

1.9

Q3

4.9

20142013

+73.3%

Q1/2014

3.2

Q1/2013

1.9

EAT (€m)

2.9

+78.9%

Q4Q3

6.9

Q2

6.6

Q1

4.5

2.5 20132014

4.5

2.5

Q1/2014Q1/2013

+78.9%

EBT (€m) EBT by quarter (€m)

5

Group

14.7

1.9

14.7

2.2

14.7 17.5

2.3

2.2

14.7 17.5

2.3

Sales by customer (€m)

SHW well positioned with German OEMs

AUDI

PSA 2.02.6

Hilite 2.1

Ford 3.13.0

ThyssenKrupp 2.73.2

Volvo Cars 3.65.6

Porsche 4.86.4

BMW 9.59.6

Daimler 17.712.8

Other 19.315.8

1.4

VW 30.622.1

4.66.9

Q1/2014Q1/2013

6

Pumps & Engine ComponentsSales by quarter (€m)

Q4

+27.2%

72.4

Q3

69.9

Q2

68.6

Q1

80.6

63.3

20142013

Sales (€m)

P&EC not yet in a stable condition

+55.4%

4.8

Q4

6.2

Q3

7.5

Q1

8.8

Q2

9.5

20142013

Adj. EBITDA (€m) Adj. EBITDA by quarter (€m)

4.8

7.6%

Q1/2014

7.5

9.3%

Q1/2013

+55.4%

80.6

Q1/2013

63.3

27.2%

Q1/2014

7

Brake DiscsSales by quarter (€m)

Q2

21.2

Q1

23.224.2

Q3

22.7

+14.0%

Q4

24.3

Sales (€m)

Slight improvement of profitability despite operational burdens

2.0

Q4

+17.0%

1.9

Q3Q2

2.6

Q1

1.71.5

Adj., EBITDA (€m) Adj. EBITDA by quarter (€m)

20132014

201320141.5

7.2%

1.7

Q1/2014Q1/2013

7.0%

+17.0%

21.2

Q1/2013

24.2

Q1/2014

14.0%

8

Working Capital

Net Working Capital / Sales (LTM)

First positive results from logistics optimization projects

Medium-term target: 11%

15.6%

16.8%

Q1/2013

9.1%

Q4/2013Q3/2013

16.1%

Q2/2013Q4/2012

11.2%

Q3/2012

15.7%

Q2/2012

15.6%

Q1/2012

15.2%

11.8%

Q1/2014

9

Cash flow

5.

Balanced operating cash flow due to improved working capital

(€m) Q1/2014 Q1/2013

Cash flow from operating activities 0.0 -10.9

Cash flow from investing activities -12.0 -8.2

Free cash flow -12.0 -19.1

Other 0.0 0.6

Change in net cash -12.0 -18.5

10

Net debt

Net debt (€m)

Q2/2012

-17.6

Q1/2012

-14.9

Q4/2011

-8.6

Q1/2014

-14.8

Q4/2012 Q1/2013

-26.6

1.1

19.6

Q3/2012

-19.0

Q2/2013 Q3/2013

-2.9

Q4/2013

-20.1

11

Capex - Depreciation

14.714.7

14.7

Capex* by quarter (€m)

Q4

6.3

Q3

9.3

Q2

9.2

Q1

9.28.2

20132012

Capex* (€m)

Capex remains on a high level

4.0

Q4Q3

3.7

Q2

3.4

Q1

4.0

3.0

Depreciation (€m) Depreciation by quarter (€m)

20132012

+32.3%

4.0

Q1/2013 Q1/2014

3.0

Q1/2014Q1/2013

8.29.2

12.1%

* Additions to tangible and intangible assets

12

Sound financial profile

Balance sheet as of 31 March 2014 (€m) Balance sheet as of 31 December, 2013 (€m)

Other short termliabilities(34.6%)

Pensions(12.0%)

Currentassets

(47.9%)

Non-currentassets

(51.5%)

Equity(42.1%)

37.9

187.3m

1.1

105.0

85.8

Assets

24.4

97.7

Equity & Liabilites

70.5

7.116.0

Equity ratio above industry average

Cash(0.6%)

Other short termliabilities(36.0%)

Pensions(13.1%)

Currentassets

(45.3%)

Non-currentassets

(53.2%)

Equity(44.1%)

37.9

187.3m

5.7

Equity & Liabilites

67.4

7.2

24.5

82.5

Assets

2.8

99.7

84.8

Other long term liabilities(3.9%)

Cash(1.5%)

Other long term liabilities(3.5%)Bank debt (7.8%)

Bank debt(3.1%)

13

Update CEO Agenda: Status North America

• Management team established (General Manager, Sales Manager, Operation Manager)

• Search for development engineers started

• Building for administration, R&D and production leased; moved into building March 5

• Customer visits and RFQ process started

• Negotiations with T&OH customer; letter of intent received

• Business plan finalized and approved

Light vehicle production (< 6 t) – North America (m units)

Source: PwC Autofacts – April 2014

SHW seamlessly ties up with activities in US market

2.4%

2018

18.3

2017

18.3

2016

17.6

2015

17.5

2014

16.8

2013

16.2

14

• First contract for T&OH customer project signed

• Project leader appointed

• Search for General Manager and plant Manager in final stage

• Additional customer projects and RFQ in process

• Planning process for preparation of production started

• Business plan updated; approved by the Supervisory Board in MarchStatus North America Project

Update CEO Agenda: Status China

Light vehicle production (< 6 t) – China (m units)

Source: PwC Autofacts – April 2014

19.3

+7.9%

2018

28.2

2017

27.5

2016

25.9

2015

23.7

2014

21.4

2013

15

Update CEO Agenda: Status Brazil - ramp up

Suppliers adequately qualified

Assembly line installed

Technical approval by customer successfully carried out (December 2014)

First customer deliveries in the course of Q2/2014

Customer RFQ’s sales activities ongoing

5.9%

2018

6.1

2017

5.9

2016

5.5

2015

5.1

2014

4.6

2013

4.6

Light vehicle production (< 6 t) – South America (m units)

Source: PwC Autofacts – April 2014

16

Update CEO Agenda: Reorganisation of product development

Composition of project teamsin development projects

Redesign of the product development process with support of external consultant finished

Implementation phase started in March

Training of the employees will be done in parallel

17

Update CEO Agenda: Supply Chain Management / Lean Management

Supply Chain Management

Lean Management Supplier base

Logistic planning process optimized with € 4m – €6m stock reduction achieved

Implementation of lean management organisation started to increase productivity

Suppliers in Eastern Europe, Turkey and China visited and evaluation process on-going

Material flow process redesigned and implementation process started

Implementation of team structures started in March

Customer approval process for several components from suppliers of LC countries started

IT processes to manage consignment stock started

Scanner project successfully launched in April

18

3.7%

2018

19.1

2017

18.8

2016

18.3

2015

17.4

2014

16.6

2013

16.0

5.7%

2018

524,937

2017

491,356

2016

455,616

2015

421,690

2014

380,011

2013

397,409

Source: PwC Autofacts – April 2014 Source: LMC Automotive – Q1/2014

Market environment in Europe further brightening

Light vehicle production (< 6 t) – Europe (m units) Truck production (GVW > 6t) - Western Europe (units)

units 2013 2014 2015 2016 2017 2018 CAGR

Mercedes-Benz 89.072 84.730 92.731 99.549 105.928 111.613 4,6%

MAN Group 58.281 57.057 62.825 67.806 72.155 76.196 5,5%

PACCAR 48.897 47.921 54.533 59.715 64.953 69.730 7,4%

IVECO Group 43.731 41.141 47.958 54.356 59.707 64.833 8,2%

Volvo 48.151 44.911 49.692 53.990 58.447 62.691 5,4%

Scania 48.310 46.108 50.179 53.718 57.472 61.075 4,8%

Renault 31.330 31.071 35.065 38.819 42.553 46.008 8,0%

m units 2013 2014 2015 2016 2017 2018 CAGRVW Group 4,49 4,66 4,82 5,05 5,09 5,04 2,3%PSA Group 1,94 2,01 2,00 2,06 2,27 2,28 3,3%Renault-Nissan 1,82 1,82 1,94 2,20 2,21 2,18 3,7%BMW Group 1,43 1,44 1,53 1,60 1,70 1,82 5,0%Daimler Group 1,43 1,59 1,67 1,65 1,60 1,68 3,3%Ford Group 1,07 1,14 1,18 1,11 1,13 1,16 1,6%GM Group 0,90 0,87 0,92 1,09 1,20 1,22 6,4%

19

Outlook 2014

• Focal points:

Acquisition of new orders

Business expansion in Brazil, China and North America

Optimisation of the production processes and procedures (shop floor management)

Optimisation of the product development process

Optimisation of the entire supply chain

• Numerous new product launches

• Capex: between € 25m – € 29m

• Group sales: € 380m – € 400m

P&EC sales: € 287m – € 305m

BD sales: € 93m – € 95m

• Adj. EBITDA: € 38m – € 40m

• Working Capital Ratio: sustainable 11 percent

20

Contact Investor Relations

Michael SchicklingHead of Investor Relations & Corporate Communications

SHW AGWilhelmstrasse 6773433 Aalen-Wasseralfingen Telephone: +49 (0) 7361 502-462E-Mail: michael.schickling@shw.de

21

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