Martinrea International Inc. · TSX:MRE
Martinrea International — Q2 2022 Earnings Presentation
25 slides from Martinrea International's earnings presentation, Aug 8, 2022
Slide 1: Q2 2022 Quarterly Results Presentation
Q2 2022 QUARTERLY RESULTS PRESENTATION AUGUST 8, 2022 ©2019 Martinrea International Inc.
Slide 2: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 2
Slide 3: Legal Disclaimer
LEGAL DISCLAIMER This presentation contains forward‐looking statements within the meaning of applicable securities laws (“forward‐looking statements”), including, but not limited to, statements relating to the growth of or expectations of, improvements in, expansion of and/or guidance or outlook as
Slide 4: Pat D'Eramo, President and CEO
PAT D’ERAMO PRESIDENT AND CEO www.martinrea.com | 4
Slide 5: Q2 2022 Results Consistent Vs. Last Quarter; 2023 Outlook Intact
Q2 2022 RESULTS CONSISTENT VS. LAST QUARTER; 2023 OUTLOOK INTACT Q2 2022 results were generally While the production environment consistent with our Q1 2022 has improved compared to the back performance on lower quarter‐over‐ half of last year, we continue to deal quarter production sales. Sales wer
Slide 6: Status of Operations
STATUS OF OPERATIONS North America Europe Rest of World Production Sales Production Sales Production Sales • Volume and mix are improved • We continue to make progress on • China impacted by volume and mix compared to 2H 2021 operating enhancements in the region headwinds, in part due to strict COVI
Slide 7: New Business Awards
NEW BUSINESS AWARDS Product Group Customer Annualized Sales SOP Lightweight Structures (Various Body and Chassis Structures) $70M 2023 Propulsion Systems (Fluids Systems) $15M 2022‐2024 www.martinrea.com | 7
Slide 8: Project Breakthrough
Launched in 2019, Project Breakthrough target was to: • Grow revenue and margins by providing engineered products with higher value‐added content to our customers – More multi‐material content to further lightweight – Create reliable product engineering source to our customers • Create long‐term dee
Slide 9: Martinrea's Commercial Groups
MARTINREA’S COMMERCIAL GROUPS Flexible Manufacturing Group www.martinrea.com | 9 ©2019 Martinrea International Inc. ©2020
Slide 10: Stellantis Jeep Grand Cherokee Front Rail Assembly
STELLANTIS JEEP GRAND CHEROKEE FRONT RAIL ASSEMBLY • Hydro‐formed upper tail • Aluminum high‐pressure die cast shock tower • 3rd Gen advanced high‐strength steel • Self‐pierce riveting (SPR) and structural adhesive joining • Thin‐gage electro‐galvanized steel MIG weld www.martinrea.com | 10 ©2019 Ma
Slide 11: Ford Mach-E Front and Rear Sub-Frames
FORD MACH‐E FRONT AND REAR SUB‐FRAMES • Fully responsible for design, development and validation • Multi‐material front subframe – Low‐pressure die cast hollow aluminum rear – Structured for optimal stiffness, mass and dimensional control – Welded steel front structure for management of front impact
Slide 12: Lucid Air Front and Rear Sub-Frames
LUCID AIR FRONT AND REAR SUB‐FRAMES • Front Sub‐frame – Aluminum front sub‐frame features leading‐ edge multi‐process architecture – Joined using structural adhesive – Hollow low‐pressure die cast and extrusion components • Rear Sub‐frame – Aluminum one‐piece hollow low‐pressure die cast www.martinr
Slide 13: Brake Lines with GrapheneGuard
BRAKE LINES WITH GRAPHENEGUARDTM • High‐performance brake line coating with graphene – Industry leading abrasion protection – Provides up to 25% weight savings – Improved chemical resistance and high temperature performance • Approved at Ford, GM, and Stellantis • In production at Ford and GM – Ford
Slide 14: Fred Di Tosto, Chief Financial Officer
FRED DI TOSTO CHIEF FINANCIAL OFFICER www.martinrea.com | 14
Slide 15: Q2 2022 Results – Sequential Comparison to Q1 2022
Q2 2022 RESULTS – SEQUENTIAL COMPARISON TO Q1 2022 Q2 2022 results generally consistent with Q1, as lower production sales offset by slightly better margins In Canadian Dollars Q2 2022 Q1 2022 Production Sales $1,052.6M $1,102.4M Production sales 4.5% lower due to mix Tooling Sales $61.2M $52.6M Tot
Slide 16: Q2 2022 Results – Year-Over-Year Comparison
Q2 2022 RESULTS – YEAR‐OVER‐YEAR COMPARISON Adjusted Operating Income and Adjusted EBITDA better than year‐ago levels on higher sales. Despite the improvement, results remain below potential, as inflationary cost headwinds, supply‐related disruptions and higher‐than‐normal launch activity continue t
Slide 17: 2023 Outlook Intact
2023 OUTLOOK INTACT 2023F 2021A TOTAL SALES $4.6‐$4.8B $3.78B ADJUSTED OPERATING INCOME MARGIN >8% 1.8% FREE CASH FLOW >$200M ($121.6M) www.martinrea.com | 17
Slide 18: Balance Sheet
BALANCE SHEET Q2 2022 net debt was relatively flat NET DEBT ‐ Excluding IFRS‐16 ($ Millions) compared to Q1 2022. During the fourth quarter of 2021, and in light of the semiconductor shortage, we proactively amended our lending agreements with our banking syndicate to provide financial covenant flex
Slide 19: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 19
Slide 20: Questions?
QUESTIONS? www.martinrea.com | 20
Slide 21: Appendix
APPENDIX www.martinrea.com | 21
Slide 22: Q2 2022 Results – Sales
Q2 2022 RESULTS ‐ SALES $1,200 $1,113.9 • Sales up 25.9% year‐over‐year $1,000 – Production sales up 25.5% $884.9 Sales ($ Millions) +25.9% YoY $800 $600 – Tooling sales up 33.3% $400 • Positive impact from $200 – Recovery in production of certain light vehicle programs $0 that were disproportionate
Slide 23: Q2 2022 Results – Adjusted Operating Income Margin
Q2 2022 RESULTS ‐ ADJUSTED OPERATING INCOME MARGIN • Adjusted Operating Income Margin declined 30bps year‐over‐year, 5.0% 4.4% reflecting: 4.1% – Cost inflation in materials, labour, energy and other inputs Adjusted Operating Income 4.0% – Certain other operational inefficiencies including substanti
Slide 24: Q2 2022 Results – Adjusted Net Earnings Per Share
Q2 2022 RESULTS – ADJUSTED NET EARNINGS PER SHARE $0.40 • Adjusted EPS of $0.32 was relatively flat year‐ Adjusted Earnings Per Share $0.34 $0.30 $0.32 over‐year despite higher sales, due to the factors impacting margins described earlier ($) $0.20 $0.10 $0.00 Q2 2021 Q2 2022 www.martinrea.com | 24
Slide 25: Q2 2022 Results – Free Cash Flow
Q2 2022 RESULTS ‐ FREE CASH FLOW $40 $23.5 • Free Cash Flow increased year‐over‐year, due largely Free Cash Flow ($ Millions) $20 to an increase in Adjusted EBITDA and a decrease in $0 tooling‐related working capital ($20) • This was partially offset by higher capex and interest ($40) paid on long‐t
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