Magna International Inc. · TSX:MG
Magna International — Investor Presentation (May 2022)
36 slides from Magna International's investor presentation, May 2022
Slide 1: Investor Presentation May 2022
Investor Presentation May 2022
Slide 2: Slide 2
Slide 3: Forward Looking Statements
Forward Looking Statements Certain statements in this document constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements"). Any such forward-looking statements are intended to provide information about management's current expectations and pl
Slide 4: Key Messages
Key Messages Well-positioned to capture growing market opportunities given 1 systems approach and unique complete vehicle capabilities Operational excellence to enhance efficiencies and mitigate 2 impacts of challenging environment Strategic portfolio positions us for sales growth over market and 3
Slide 5: Magna Snapshot
Magna Snapshot (NYSE: MGA, TSX: MG) Sales* Team Members ~ $38B 161K Customers Number of Countries 50+ 28 Facilities World's 340 4th Largest Supplier * 2022 Sales Outlook $37.3B – $38.9B INVESTOR PRESENTATION - MAY 2022 5 Foundational Strengths Enabling Success & Growth Manufacturing anufacturing Exp
Slide 6: ESG Minded from the Start
ESG Minded from the Start… Operate efficiently and responsibly Fair treatment of employees Contributing to communities in which we operate INVESTOR PRESENTATION - MAY 2022 7 Creating a Better World of Mobility, Responsibly Net Carbon Neutral in Europe by 2025 and all operations by 2030 Technologies
Slide 7: Secular Trends Driving Change
Secular Trends Driving Change Magna Positioning 9 Enhanced e-Powertrain 9 Full ADAS capability 9 Expanded collaboration 9 Software-enabled portfolio ecosystem functionality in our 9 Complete system ECU-related products 9 Product range fills expertise 9 Leverage new business transition roadmap to EV
Slide 8: Impact of Megatrends: Go-Forward Strategy
Go-Forward Strategy 1. 2. 3. Accelerate Drive operational Unlock new deployment of excellence business models capital towards and markets high-growth areas INVESTOR PRESENTATION - MAY 2022 11 Portfolio Positively Impacted by Megatrends Magna Sales over time • eDrives Positive • Battery Enclosures Im
Slide 9: Key Growth Contributors
Key Growth Contributors Powertrain Battery ADAS Electrification 1 Enclosures 2021 >0.3 2021 2021 >0.5 533 2024F >2.5 2024F >0.6 2024F >1.2 15%+ 30%+ 20%+ 2027F CAGR 2027F CAGR 2027F CAGR Sales in $Billions 1 Represents managed sales. Managed sales = consolidated sales + sales at 100% for unconsoli
Slide 10: Key Wins in Electrification
Key Wins in Electrification • Primary and secondary eDrives ࡳ New entrant OEM ࡳ European OEM • DCT platform business including hybrid DCTs with Mercedes • eDrive with China-based OEM INVESTOR PRESENTATION - MAY 2022 15 Electrifying Trucks Without Compromise EtelligentForce • Uncompromised towing and
Slide 11: Accelerating Powertrain Electrification Growth
Accelerating Powertrain Electrification Growth >4.5 2022 Est. (Managed Sales in $Billions) 1 >2.5 >2.0 >4.0 2021 Est. >0.3 2021 2023F 2024F 2027F 1 Managed sales = consolidated sales + sales at 100% for unconsolidated entities. INVESTOR PRESENTATION - MAY 2022 17
Slide 12: Battery Enclosures – Growing Addressable Market
Battery Enclosures – Growing Addressable Market • Large, high content, highly engineered product • Multi-materials and processes • Investing capital while leveraging existing know-how and installed capacity • Launching on the GMC Hummer EV and Ford F-150 Lightning INVESTOR PRESENTATION - MAY 2022 18
Slide 13: ADAS Business Growing – Key Wins
ADAS Business – Launching Front camera system and Complete ADAS system near-field perception software Surround-view camera system INVESTOR PRESENTATION - MAY 2022 20 ADAS Business Growing – Key Wins • Advanced front camera programs • Surround View system on Toyota Tundra • Two Driver Monitoring Syst
Slide 14: Full Systems Capability / Accelerating ADAS Growth
Full Systems Capability • Complete sensor suite, domain controller and software • Scalable system approach enabling L2+ features • Enhanced vehicle intelligence delivering a complete ADAS experience INVESTOR PRESENTATION - MAY 2022 22 Accelerating ADAS Growth (Sales in $Billions) >2.0 2022 Est. 20%+
Slide 15: Leading Market Positions in Aligned Product Areas
Leading Market Positions in Aligned Product Areas • eDrives 2021 Sales by Product Area Magna Sales over time (in Billions) • Battery Enclosures Positive • ADAS Impact • Contract Vehicle Manufacturing BODY Impact of Megatrends SEATING MIRRORS & CHASSIS • Lighting $4.9 $2.3 $9.0 • Active Aerodynamics
Slide 16: Expecting Growth and Meaningful Shift in Product Portfolio
Expecting Growth and Meaningful Shift in Product Portfolio Positive ~24% Impact Impact of Megatrends 18% Aligned Negative Impact 2021 2027F INVESTOR PRESENTATION - MAY 2022 26 Foundation of Operational Excellence INVESTOR PRESENTATION - MAY 2022 27
Slide 17: Building the Factories of the Future
(2021) average annual sales on ~$7B vehicle launches 1.7B parts shipped improved quality 40bps costs/sales average annual $9B+ sales on new business awards customer recognitions 122 (record) INVESTOR PRESENTATION - MAY 2022 28 Building the Factories of the Future Factory Digitalization Data Analytic
Slide 18: Established Track Record
Established Track Record • Produced >3.7 million vehicles • Scaling business • Integrating new building blocks • Speed to market • Continuous improvement mindset Vehicles In Production Mercedes-Benz BMW 5 series Jaguar E-PACE Jaguar I-PACE BMW Z4 Toyota GR Supra Arcfox ĮT Arcfox ĮS G-Class since 201
Slide 19: Financial Strategy
Financial Strategy INVESTOR PRESENTATION - MAY 2022 32 Strong 5 Year Performance 2017-2021 Average Weighted Sales 1 Investment in Business Growth Over Market (GoM) 6% Growth Over Market in Every Year $10.8B Return of Capital Total Shareholder Return (NYSE) $7.4B 112% Peer Average of 29% 1 Weighted G
Slide 20: Capital Allocation / M&A Aligned with Our Strategy
Maintain Strong Balance Sheet • Preserve liquidity and high investment grade credit ratings Adj. debt to Adj. EBITDA ratio between 1.0-1.5x • Maintain investment flexibility Invest for Growth • Organic and inorganic opportunities • Innovation Return Capital to Shareholders • Continued dividend gro
Slide 21: Continued Financial Flexibility
Projected Operating Cash Flow Uses 2022-2024 35-40% Currently Unallocated 50-55% Net Internal Investments 10-15% An Attractive Dividend INVESTOR PRESENTATION - MAY 2022 36 Continued Financial Flexibility ($M) Estimated Future LTD Principal Repayments (12/31/21) TOTAL LIQUIDITY (03/31/22) ($M) $1,437
Slide 22: Q1 2022 Financial Results
Q1 2022 Financial Results Consolidated Sales ($Billions) Q1'22 Production -5% Global -7% $12.0 0.1 North America -4% Europe -16% $10.2 $10.0 $9.6 0.1 China +3% 0.1 Magna Weighted -7% $8.0 Key Factors 0.1 $6.0 0.1 • Lower global light vehicle production (-) $4.0 0.1 • Lower assembly volumes (-) $2.0
Slide 23: Financial Outlook – Key Assumptions / 2022 Outlook
Financial Outlook – Key Assumptions 2021 FEBRUARY 2022 APRIL 2022 Light Vehicle Production (millions of units) • North America 13.1 15.2 14.7 • Europe 16.0 18.5 16.4 • China 24.6 24.2 24.4 Foreign Exchange Rates • 1 CDN dollar equals USD 0.798 0.800 0.790 • 1 EURO equals USD 1.183 1.130 1.091 • 1 RM
Slide 24: Free Cash Flow Expectations / Disciplined Profitable Growth Strategy
Free Cash Flow Expectations 1 2022 ($Billions) $1.1-$1.3 1.4 1.2 $0.7-$0.9 1.0 0.8 0.6 0.4 0.2 0.0 February 2022 Outlook April 2022 Outlook 1 Free Cash Flow is Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other assets plus settlement of long-term rece
Slide 25: Investment Summary
Investment Summary 1 Well-positioned to capture growing market opportunities given systems approach and unique complete vehicle capabilities 2 Operational excellence to enhance efficiencies and mitigate impacts of challenging environment Strategic portfolio positions us for sales growth over market
Slide 26: Bringing Power to the Wheels
Bringing Power to the Wheels MODULAR & SCALABLE PRODUCTS MODULAR & SCALABLE BUILDING BLOCKS SW & Traction Inverter Control Control HW Primary + Dedicated E-Motor & Actuation Algorithms Secondary eDrive Hybrid Drive Shifting Clutches & Parklock Systems Decoupling Gearsets & Hydraulics Synchro Differe
Slide 27: Complete System Integration and Fusion Capabilities
Complete System Integration and Fusion Capabilities SAFETY FEATURES Lane Automatic Lane Keep (NCAP 5-STAR) Departure Emergency Assist Software & Digital Imaging aging Domain Ultrasonic Warning Braking Algorithms RADAR R Controllers Sensors Far Field Near Field Solid State Cameras Surround View LiDAR
Slide 28: Innovation Ecosystem
Innovation Ecosystem Taping Into Great Thinking Outside the Company Open for Business Mindset Auto-Qualified Results Access to New Creative Approaches INVESTOR PRESENTATION - MAY 2022 50 Q1 2022 INVESTOR PRESENTATION - MAY 2022 51
Slide 29: Sales Performance vs Market
Sales Performance vs Market Q1 2022 vs Q1 2021 PERFORMANCE VS WEIGHTED GLOBAL 1 PRODUCTION REPORTED ORGANIC (Weighted GoM) Body Exteriors & Structures 1% 6% 13% Power & Vision (3%) (2%) 5% Seating Systems 6% 10% 17% Complete Vehicles (31%) (26%) (19%) TOTAL SALES (5%) (2%) 5% Unweighted Production G
Slide 30: Q1 2022 Cash Flow and Investment Activities
Q1 2022 Cash Flow and Investment Activities Free Cash Flow 1 Cash from Operations Before Changes in $749M ($Millions) Operating Assets & Liabilities Changes in Operating Assets & Liabilities ($569M) $950 0.1 Cash from Operations $180M 0.1 Fixed Asset Additions ($238M) Increase in Investments, Other
Slide 31: Segment Financial Performance
B O D Y E X T E R I O R S & S T R U C T U R E S Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) +1% -30% $4.0 $4.1 350 $327 0.1 300 0.1 250 8.1% $229 0.1 200 0.1 150 0.1 100 5.6% 0.1 50 0.1 0 0.0 Q1'21 Q1'22 Q1'21 Q1'22 • Launch of new programs (+) • Higher input c
Slide 32: Segment Financial Performance
S E A T I N G Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) +6% -11% $1.4 $55 0.1 $1.3 $49 0.1 0.1 4.2% 0.0 3.6% 0.0 0.0 0.0 0.0 Q1'21 Q1'22 Q1'21 Q1'22 • Launch of new programs (+) • Higher input costs (-) • Lower global light vehicle production (-) • Earnings o
Slide 33: Other
Other INVESTOR PRESENTATION - MAY 2022 60
Slide 34: Significant Content on BEV Launches Globally
Significant Content on BEV Launches Globally Coming Soon Ford Ford dFF-150 -15 150 0 Lightning Lightni h ing M Mercedes-Benz ercedes-B d Benz GLS GLS SUV SUV Cadillac Cadi dillllac L Lyriq yriq i Rivian Rivian i R1R1S S GMC Hummer BMW iX Mercedes Benz EQE Mercedes-Benz Volkswagen ID Buzz Coming Soon
Slide 35: 2024 Financial Outlook
2024 Financial Outlook 1 ASSUMPTIONS Light Vehicle Production (millions of units) • North America 17.5 • Europe 21.2 • China 29.0 Foreign Exchange Rates • 1 CDN dollar equals USD 0.800 • 1 EURO equals USD 1.130 • 1 RMB equals USD 0.157 $ Billions, Unless Otherwise Noted Sales • Body Exteriors & Stru
Slide 36: Magna Segment and Regional Data
Magna Segment and Regional Data 1 2021 Sales by Segment 2021 Sales by Geography 2021 Adjusted EBIT by Segment ROW AP 1% Complete Complete Vehicles Body Vehicles Body Exteriors & 11% Exteriors & 17% 14% Structures Structures Seating 39% Systems 8% Seating 41% Systems 13% 46% North America Europe 42%
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