Outlook for fiscal year 2017 reaffirmed

Financial results H1 2017

Analyst and Investor Conference Call, 28 July 2017

1

Agenda

> Financial results January to June 2017

> Outlook for fiscal year 2017 and beyond

Drive international growth and leverage

innovation leadership

2

Stable market environment in H1 2017

SHW well positioned to benefit from structural market changes and strong

demand for mobility solutions

Light vehicle production: + 2.6

per cent to 47.2 million units

with marked growth rate

differences

Gasoline engines gain further

market share; diesel engines

stable

Above-average growth rates for

automatic transmissions –

global production increased by

6.7 per cent to 27.7 million units

Light Vehicle Production(< 6 t) (m units)

Source: IHS, July 2017

Global Engine Production(m units)

Global Transmission Production(m units)

202.7215.3

SHW Group Sales (€m)

9.8

Gasoline

37.1

Diesel

9.8

35.9

19.8

Automatic

27.726.0

Manual

19.1

1.5

South

America

1.3

North

America

9.0

China

12.812.5

9.1

Europe

11.611.4

H1 2016

H1 2017

3

Sales development as budgeted

EBITDA margin temporarily

impacted by brake disc

business unit and non-recurring

administrative costs

Slightly lower depreciation due

to below average asset

additions in 2015 und 2016

High investments in new

markets

Positive operating free cash

flow

Sound financial profile

Financial figures H1 2017

Financial results within the target range

2 Additions to tangible and intangible assets

1 Figures include rounding adjustments

€m1 H1

2017

H1

2016Change

Group sales 202.7 215.3 -5.8%

EBITDA 19.8 21.8 -9.1%

as % of sales 9.8% 10.1% -

Depreciation 11.5 12.2 -5.7%

EBIT 8.3 9.6 -13.4%

as % of sales 4.1% 4.4% -

ROCE 11.7% 12.5% -

Net income for the period 5.4 6.5 -17.7%

EPS (in €) 0.8 1.0 -17.7%

Investments2 14.7 9.9 49.0%

as % of sales 7.3% 4.6% -

Working capital ratio 12.9% 12.3% -

Operating free cash flow 3.9 -9.9 -

Equity ratio 49.9% 50.7% -

Net debt / net cash -7.9 -4.2 -

4

Group

Sales by quarter (€m)

EBITDA (€m)

Sales (€m)

215.3

-5.8%

H1 2017

202.7

H1 2016

98.4 93.6

Q3

97.0

Q2

108.7

Q1

104.3106.6

Q4

-9.1%

H1 2017

19.8

H1 2016

21.8

Group sales influenced by:

the transition to the second

generation of an electrically

driven transmission oil pump

for the start-stop function

(Pumps and Engine

Components)

higher unit sales

(Brake Discs)

EBITDA below the previous

year’s level mainly triggered

by:

a lower earnings contribution

of the Brake Discs business

segment

non-recurring administrative

costs

EBITDA by quarter (€m)

Q4

9.611.1

Q3

10.7

Q2

11.0

Q1

10.110.8

10.1%

2017

2016

9.7% 10.1% 11.1% 11.8%9.8%

5

Customer sales

International growth and diversified product range will lead to a

more balanced customer structure

Decline in sales mainly relates to

the transition to the second

generation of an electrically

driven transmission oil pump for

the start-stop function

Dependency on the VW group

expected to decrease by

internationalisation and

diversification towards

transmission oil pumps from

2018 onwards

Other33.2

38.3

Brembo4.44.3

Hilite5.55.2

Ford8.6

6.8

Thyssen

Krupp 9.09.9

BMW19.620.3

Daimler21.4

33.1

VW59.1

56.5

Audi15.3

Volvo Cars14.8

17.4

18.5

Porsche9.1

7.3

H1 2017

H1 2016

6

Business Segment: Pumps and Engine Components

Sales decline as budgeted by

8.9 per cent to € 155.4 million

Passenger Cars: -13 per cent

to € 123.1 million

Industry: +14 per cent to

€ 16.6 million

Powder Metallurgy: +10 per

cent € 15.6 million

EBITDA margin improved to

11.5 per cent due to positive

volume and product mix effects

and productivity improvements

Earnings development of

foreign subsidiaries overall

according to plan

Sales by quarter (€m)

EBITDA (€m)

Sales (€m)

Q4

85.9 80.6

Q1

84.774.7

Q2

74.8

Q3

72.1

H1 2016

170.6155.4

H1 2017

-8.9%

EBITDA by quarter (€m)

9.5 9.4

Q1

9.2

Q2

8.4

Q3

10.3

Q4

8.5

11.1% 11.7% 10.9% 11.2% 14.3%

2016

2017

17.918.8

H1 2016 H1 2017

-4.7%

11.3%

7

Business Segment: Brake Discs

Temporary negative effects on EBITDA noticeably diminished in Q2

Total number of brake discs sold:

+ 8.4 per cent

Positive volume and product mix

effects as well as productivity

improvements contrasted with

higher purchase costs for coke

and the contractual delay in

adjusting material surchargesQ4

21.5

Q3

22.1

Q2

24.0

Q1

23.720.7

23.7

6.0%

H1 2017

47.3

H1 2016

44.7

1.8

Q4

1.3

Q3

2.8

Q2

2.2

Q1

1.31.6

7.7% 5.5% 9.0% 12.7%

2017

2016

Sales by quarter (€m)Sales (€m)

EBITDA (€m) EBITDA by quarter (€m)

6.1%

H1 2016

3.83.1

-16.9%

H1 2017

7.7%

8

Net working capital ratio

Net working capital ratio target in a range of 11 per cent to 12 per cent

Net working capital reduced to

€ 50.6 million

Higher inventories due to:

a variety of projects in

progress (unfinished

products)

Lower trade receivables mainly

due to:

lower sales (adjusted figure:

-11.3 per cent)

Higher trade payables due to:

comparatively higher asset

additions

14.1%

12.0%

Q1/16 Q4/16

13.1%

Q3/15

12.3%

Q4/15

12.2%12.9%

Q3/16Q2/16

10.6%

Q1/ 17

11.7%

Q2/17

7.0%

Q2/15

11.0%10.4%

Development of net working capital ratio

Medium-term target 11 per cent to 12 per cent

9

Investments and depreciation

Investments in property, plant and

equipment and intangible assets

at a total of € 14.7 million

Pumps & Engine Components:

mainly for new assembly lines in

Germany and China (total: €

11.6m)

Brake Discs: mainly for second

automated aluminium casting line

and machining lines (total: €

2.7m)

Slightly lower depreciation due to

below average asset additions in

2015 und 2016

Investments by quarter (€m)

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

Investments (€m)

Q4

8.0

Q3

6.8

Q2

5.74.9

Q1

9.0

5.0

H1 2017

11.5

H1 2016

12.2

-5.7%

6.2

Q2

5.8

Q3

6.1 6.3

Q4Q1

5.75.9

14.7

H1 2016 H1 2017

+49.0%

9.9

5.6%

4.7%

2017

2016

5.4% 5.8% 6.3%

4.5% 7.0%8.4% 8.6%

6.7%5.9%

5.8%

High level of investments in new markets

10

Operating cash flow significantly

improved mainly due to a

significant lower increase in

working capital

Total free cash flow influenced

by payment of second purchase

price instalment for joint venture

SHW Longji Brake Discs

Cash Flow

Strong focus on operating free cash flow

1 Figures include rounding adjustments

€m1 Q2

2017

Q2

2016

H1

2017

H1

2016

Cash flow from operating activities 7.9 1.4 18.5 -0.3

Cash flow from investing activities

- tangible and intangible assets-5.7 -4.7 -14.5 -9.7

Operating free cash flow 2.1 -3.3 3.9 -10.0

Cash flow from investing activities

- financial assets0.0 0.0 -6.8 0.0

Total free cash flow 2.1 -3.3 -2.9 -10.0

Other (esp. dividend payment) -6.7 -6.5 -6.7 -6.6

Change in net cash -4.5 -9.8 -9.6 -16.5

11

Non-current assets increased

due to investments in tangible

assets

Current assets nearly

unchanged

Equity ratio at 49.9 per cent due

to above average increase of

balance sheet total

Net debt still significantly

below industry average

Sound financial profile

Sound balance sheet safeguards strategic flexibility

28.0

118.7

229.5

73.5

4.88.8

26.1

116.3

30.06.2016 30.06.17

237.8

72.5

10.68.0

LiabilitiesAssets

30.06.2016

229.5

1.2

95.2

133.0

30.06.2017

237.8

2.7

95.9

139.2

Cash

Current assets

Non-current assets

Other long-term liabilities

Bank debt

Other short-term liabilitiesPensions

Equity

12

Outlook

Guidance for FY 2017 reaffirmed

Substantial boost in sales and earnings from 2018 onwards

Phase I: Consolidation Phase II: Capital-efficient growth

Sales

(€m)

EBITDA

(%)

650

300

550

500

600

450

463

406 400 – 420

560 – 590

620 – 650

2019 20202015 2016

9.4%

2018

10.7%

2017

10.0% – 11.0%

11.0% – 12.0%

11.5% – 12.5%12.0% – 13.0%

470 – 495

SHW EuropeSHW International

*Only for illustrative purposes

*

13

Your key takeaways

Pumps & Engine Components business segment well on track

Brake Discs business segment temporarily below target level

We reaffirm our full year guidance of Group sales of € 400m to € 420m and an

EBITDA-margin of 10 per cent to 11 per cent

Sound balance sheet safeguards strategic flexibility

14

Financial Calendar 2017

Dates Events

03.05.2017 Financial Report – January to March 2017

09.05.2017 Annual General Meeting (Congress Centre Heidenheim)

28.07.2017 Financial Report – January to June 2017

30.08.2017 Commerzbank – Sector Conference, Frankfurt

07.09.2017 Small Cap Conference – Bankhaus Lampe, Dusseldorf

19.09.2017 Berenberg and Goldman Sachs – German Corporate Conference, Munich

26.10.2017 Financial Report – January to September 2017

15

Michael SchicklingHead of Investor Relations & Corporate Communications

Telephone: +49 (0) 7361 502-462

E-Mail: michael.schickling@shw.de

Sandra SchererJunior Manager Investor Relations & Corporate Communications

Telephone: +49 (0) 7361 502-469

E-Mail: sandra.scherer@shw.de

Contact Investor Relations

16

Disclaimer

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noted that financial information relating to the Company contained in this document has not been audited and in some cases is based on management information

and estimates.

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Certain market data and financial and other figures (including percentages) in this document were rounded in accordance with commercial principles. Figures

rounded may not in all cases add up to the stated totals or the statements made in the underlying sources. For the calculation of percentages used in the text, the

actual figures, rather than the commercially rounded figures, were used. Accordingly, in some cases, the percentages provided in the text may deviate from

percentages based on rounded figures.

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Certain statements in this presentation are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and

assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward‐looking statements. These risks,

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only of the date of this presentation. Statements contained in this presentation regarding past trends or events should not be taken as a representation that such

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