Martinrea International Inc. · TSX:MRE
Martinrea International — Q2 2021 Earnings Presentation
20 slides from Martinrea International's earnings presentation, Aug 10, 2021
Slide 1: Q2 2021 Quarterly Results Presentation
Q2 2021 QUARTERLY RESULTS PRESENTATION AUGUST 10, 2021 ©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 or expectations of, improvements in, expansion of and/or guidance or outlook as to
Slide 4: Pat D'Eramo, President and CEO
PAT D’ERAMO PRESIDENT AND CEO www.martinrea.com | 4
Slide 5: Second Quarter Impacted by Supply Shortages; Longer-Term Outlook Remains Positive
SECOND QUARTER IMPACTED BY SUPPLY SHORTAGES; LONGER-TERM OUTLOOK REMAINS POSITIVE Production sales below our guidance range, impacted by the industry-wide shortage of semiconductor chips Adjusted Operating Income Margin impacted by weaker cost absorption on lower volumes, sales mix, and a heavy laun
Slide 6: Status of Operations
STATUS OF OPERATIONS North Europe Asia America • Vehicle demand remains strong • Industry volumes are also being • China is operating at high in the post-COVID shutdown impacted by the global demand levels, in line with pre- recovery. Vehicle inventories semiconductor shortage. Supply COVID levels,
Slide 7: Quarterly New Business Awards (2021 – 2024)
QUARTERLY NEW BUSINESS AWARDS (2021 – 2024) Product Group Customer Annualized Sales SOP Lightweight Structures $30M 2021-2023 (Various Body and Chassis Structures) Propulsion Systems $10M 2022 - 2024 (Fluids Systems) TOTAL = $40M Year-to-date new business awards now total approximately $170 million
Slide 8: VoltaXplore – EV Battery Joint Venture
VOLTAXPLORE – EV BATTERY JOINT VENTURE www.martinrea.com | 8
Slide 9: VoltaXplore – Timeline
VOLTAXPLORE – TIMELINE 2021 Early 2022 Mid-2022 Mid-2024 Secure Commissioning Go/No Go SOP of Demonstration and SOP of Decision on 10 GWh facility facility Demonstration 10 GWh facility facility www.martinrea.com | 9
Slide 10: VoltaXplore – Advantages of Using Graphene
VOLTAXPLORE – ADVANTAGES OF USING GRAPHENE www.martinrea.com | 10
Slide 11: Fred Di Tosto, Chief Financial Officer
FRED DI TOSTO CHIEF FINANCIAL OFFICER www.martinrea.com | 11
Slide 12: Overview of Q2 2021 Results
OVERVIEW OF Q2 2021 RESULTS Strong year-over-year growth from pandemic lows, but still below pre-pandemic levels given near-term headwinds In Canadian Dollars Q2 2021 Q2 2020 Production Sales $838.9M $418.8M Tooling Sales $45.9M $41.8M Total Sales $884.9M $460.6M Adjusted Operating Income $39.1M ($6
Slide 13: Q2 2021 Results - Sales
Q2 2021 RESULTS - SALES • Sales up 92% over pandemic-impacted Q2 2020 – Production sales up 100% +92.1% YoY – Tooling sales up 10% • Positive impact from – Higher production volumes on certain programs – New business launches • Negative impact from – Global semiconductor shortage, which is expected
Slide 14: Q2 2021 Results - Adjusted Operating Income Margin
Q2 2021 RESULTS - ADJUSTED OPERATING INCOME MARGIN • Adjusted Operating Income Margin was 4.4%, up sharply 10.0% year-over-year, driven by: 4.4% Adjusted Operating Income – Better fixed cost absorption on higher sales volumes 5.0% – Productivity and efficiency improvements 0.0% Margin (%) -5.0% • Ma
Slide 15: Q2 2021 Results – Adjusted Net Earnings Per Share
Q2 2021 RESULTS – ADJUSTED NET EARNINGS PER SHARE $0.40 $0.34 • Adjusted EPS much higher year-over year, Adjusted Earnings Per Share $0.20 $0.00 given recovery over pandemic-impacted Q2 ($0.20) 2020 ($) ($0.40) ($0.60) • Q2 2021 EPS also benefitted from: – A $0.05 net foreign exchange gain ($0.80) (
Slide 16: Q2 2021 Results - Free Cash Flow
Q1 2021 RESULTS - FREE CASH FLOW $20 • Free Cash Flow was negative during the quarter due largely to an increase in working capital Free Cash Flow ($ Millions) $0 – Production-related working capital increased as ($20) short lead times on production releases due to semiconductor and other material s
Slide 17: Our Balance Sheet Is Strong
OUR BALANCE SHEET IS STRONG NET DEBT - Excluding IFRS-16 ($ Millions) Net Debt increased in the second quarter compared to Q1 2021 Our Net Debt to Adjusted EBITDA NET DEBT TO LTM ADJUSTED EBITDA ratio ended the quarter at ~1.8x, modestly above our target range of ~1.5x, but within our comfort zone w
Slide 18: 2023 Outlook
2023 OUTLOOK 2023F TOTAL SALES $4.6-$4.8B ADJUSTED OPERATING INCOME MARGIN >8% FREE CASH FLOW >$200M LIGHT VEHICLE PRODUCTION VOLUME ASSUMPTION (CURRENT IHS FORECAST) 16.7M - NORTH AMERICA 20.6M - EUROPE KEY ASSUMPTIONS • More than 90% of sales in 2023 represents booked business • Capex expected to
Slide 19: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 19
Slide 20: Questions?
QUESTIONS? www.martinrea.com | 20
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