Magna International Inc. · TSX:MG
Magna International — Investor Presentation (November 2023)
33 slides from Magna International's investor presentation, November 2023
Slide 1: Investor Presentation
Investor Presentation November 2023
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: Advancing mobility for everyone and everything.
Advancing mobility for everyone and everything. NOVEMBER 2023 3
Slide 5: Building Long-Term Value for our Shareholders
Building Long-Term Value for our Shareholders Executing Go-Forward Strategy across all 3 pillars • Rapidly growing addressable markets • Launching electrification business with multiple customers in key regions • Enhanced scale and expertise in Active Safety positions Magna among leaders • Increasin
Slide 6: Segment Breakdown
Segment Breakdown 2022 EXTERNAL SALES Body, Exteriors Power Complete & Structures & Vision Seating Vehicles $15.8B $11.6B $5.3B $5.2B Energy BY PRODUCT AREA Storage 0.5 Electronics (incl. ADAS) Engineering 0.7 Plastic/ 0.5 Composite 5.1 Exteriors Powertrain Mechatronics, 5.3 Seating Metal Body Mirro
Slide 7: The Power of Magna
The Power of Magna Deep product expertise Integrated systems level analysis and approach Complete vehicle engineering and manufacturing NOVEMBER 2023 8 Committed to Net-zero Net-zero Goals Alignment with our customers and 20% energy intensity reduction by 2027 the Science Based Targets Initiative –
Slide 8: 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 NOVEMBER 2023 10 Go-Forward Strategy 1. 2. 3. Accelerate Drive operational Unlock new deployment of excellence business models capital towards a
Slide 9: Portfolio Positively Impacted by Megatrends
Portfolio Positively Impacted by Megatrends Magna Sales over time Positive • eDrives and Components Impact • Battery Enclosures Impact of Megatrends • Active Safety • Lighting • Active Aerodynamics • Body & Chassis Complete Vehicles Aligned • Dual Clutch Transmissions • Mirrors • Mechatronics • Seat
Slide 10: Key Growth Contributors
Key Growth Contributors 1 Sales in $Billions 2 Powertrain Electrification Battery Enclosures Active Safety ~2.5 ~4.0 ~4.25 35%+ 75%+ 45%+ CAGR CAGR CAGR 0.8 0.6 0.1 2022 2023F 2025F 2027F 2022 2023F 2025F 2027F 2022 2023F 2025F 2027F Veoneer Active Safety 1 Sales for 2023 and 2025 represent mid-poin
Slide 11: Supporting Powertrain Electrification: Systems and Components
Systems Seven eDrive System programs booked: • 6 OEM customers based on 3 continents • Winning business in both primary and secondary drives Supporting • Three programs currently in production Powertrain • Two additional programs launching in next 6 months Electrification: Through Systems and Compon
Slide 12: Accelerating Powertrain Electrification Growth
ICE EV Dual Clutch/ Primary Manual Transmission eDrive Take Rate 35% +185% 100% Higher Addressable Market (%) Average CPV ($US) $900 +22% $1,100* Increased Vehicle Content 4WD/AWD Secondary eDrive Take Rate (%) 20% +50% 30% Higher Addressable Market Average CPV ($US) $400 +138% $950* Increased Vehic
Slide 13: Battery Enclosures
Key Growth Contributors 1 Sales in $Billions 2 Powertrain Electrification Battery Enclosures Active Safety ~2.5 ~4.0 ~4.25 35%+ 75%+ 45%+ CAGR CAGR CAGR 0.8 0.6 0.1 2022 2023F 2025F 2027F 2022 2023F 2025F 2027F 2022 2023F 2025F 2027F Veoneer Active Safety 1 Sales for 2023 and 2025 represent mid-poin
Slide 14: Building Competitive Moat in Battery Enclosures
Building Competitive Moat in Battery Enclosures • Establishing strong market position for EVs in key regions • In some cases, vertically integrating into current metal forming / composite facilities • Complex, high-content products • Using our chassis & body structure engineering expertise and resou
Slide 15: Building a Global Leader in Active Safety
Key Growth Contributors 1 Sales in $Billions 2 Powertrain Electrification Battery Enclosures Active Safety ~2.5 ~4.0 ~4.25 35%+ 75%+ 45%+ CAGR CAGR CAGR 0.8 0.6 0.1 2022 2023F 2025F 2027F 2022 2023F 2025F 2027F 2022 2023F 2025F 2027F Veoneer Active Safety 1 Sales for 2023 and 2025 represent mid-poin
Slide 16: Active Safety Technology and Market
Focused on Driver Assist Functions Market Relevant ADAS Market Stronger legal High request for SW (Sales in $Billions) regulation and features and L2+ Increasing content consumer ratings functionalities per vehicle 45 40 11% Technology 40 35 CAGR 30 From distributed to Accelerated 30 more centralize
Slide 17: ADAS Transformation to Gain Higher CPV
ADAS Transformation to Gain Higher CPV HIGHLY INTEGRATED SYSTEMS ADAS SYSTEMS & SOFTWARE SMART SENSORS Vehicle SW Stack ADAS SW Stack Decentralized architecture with ADAS Hybrid architecture ture with ADAS AD features Central arch. w. central compute and features integrated in sensors or sensor inte
Slide 18: Accelerating Growth in Active Safety
Accelerating Growth in Active Safety Sales in $Billions Including Active Safety Acquisition 45%+ ~4.25 CAGR 3.5-3.7 1.8-1.9 0.6 2022 2023F 2025F 2027F Veoneer Active Safety NOVEMBER 2023 29 Program Activity in Complete Vehicles Currently ramping up Fisker Engineering and Vehicle Awarded Replacemen
Slide 19: Impact of Megatrends: Expect to Grow Above Market
Expect to Grow Above Market in Aligned Product Areas Positive • eDrives and Components Magna Sales Impact • Battery Enclosures • Active Safety y Stable businesses Impact of Megatrends • Lighting • Active Aerodynamics Global scale • Body & Chassis Aligned • Dual Clutch Leading market Transmissions po
Slide 20: Operational Excellence Focus
Go-Forward Strategy 1. 2. 3. Accelerate Drive operational Unlock new deployment of excellence business models capital towards and markets high-growth areas NOVEMBER 2023 33 Operational Excellence Focus Short and Mid-Term Long-Term Consolidation and restructuring of Accretive automation and productiv
Slide 21: Multiple Operational Excellence Activities Underway
Multiple Operational Excellence Activities Underway Digitization – Enabling Higher Productivity Big Data – Reducing Cost Smart Die Pressure Sensors Micro-Stops Production Expedites Hot Jobs” Metal Finish Vibration Harmonics Metal Forming Strain Analysis Process Digitization and Analytical Tools Phys
Slide 22: New Mobility: Beyond Just Cars
Go-Forward Strategy 1. 2. 3. Accelerate Drive operational Unlock new deployment of excellence business models capital towards and markets high-growth areas NOVEMBER 2023 36 beyond just cars $500B+ $125B ~20% CAGR $200B $50B 2022 2030 Current New Mobility Focus NOVEMBER 2023 37
Slide 23: Leveraging Magna Building Blocks; New Mobility Initial Traction
Leveraging Magna Building Blocks Mobility Product Lifecycle Infrastructure Manufacturing Services Offerings adjacent to vehicle service Manufacturing and assembly Operational and consumer services that enhance vehicle usage, efficiency, connected to the product/vehicle or adoption PRODUC PRODUCT PRO
Slide 24: Financial Strategy
Financial Strategy NOVEMBER 2023 40 Strong 5 Year Performance 2018-2022 Average Weighted Sales 1 Investment in Business Growth Over Market (GoM) 6% Growth Over Market in Every Year $10.4B Return of Capital Total Shareholder Return (NYSE) $7.0B 13% Peer Average of -16% 1 Weighted Growth over Market (
Slide 25: Strategic Filters
Maintain Strong Balance Sheet • Preserve liquidity and high investment grade credit ratings - Adj. debt to Adj. EBITDA ratio between 1.0-1.5x • Maintain investment flexibility Invest for Growth • Organic and inorganic opportunities • Innovation Return Capital to Shareholders • Continued dividend gro
Slide 26: Continued Financial Strength; Q3 2023 Performance Highlights
Continued Financial Strength TOTAL LIQUIDITY (30SEP23) ($Millions) Adjusted Debt/EBITDA 2.5 Cash 1,022 2.19 2.02 Available Term & Operating Lines of Credit 3,500 2.0 <2.0 Total Liquidity 4,522 1.5 LEVERAGE RATIO (LTM, 30SEP23) ($Millions) Adjusted Debt 7,356 1.0 Adjusted EBITDA 3,647 0.5 Adjusted De
Slide 27: Q3 2023 Financial Results
Q3 2023 Financial Results Consolidated Sales ($Millions) +15% Q3 2023 PRODUCTION Global +4% North America +7% Europe +14% China -2% Magna Weighted +8% Weighted GoM1 2% (4% excl. Complete Vehicles) 2 1 Weighted Growth over Market (GoM) compares organic sales growth (%) to vehicle production change (%
Slide 28: Updated 2023 Outlook
Updated 2023 Outlook – Key Assumptions 2022 AUGUST 2023 NOVEMBER 2023 Light Vehicle Production (millions of units) • North America 14.3 15.2 15.2 • Europe 15.8 17.0 17.6 • China 26.4 26.2 27.1 Foreign Exchange Rates • 1 CDN dollar equals USD 0.769 0.746 0.743 • 1 EURO equals USD 1.053 1.096 1.075 •
Slide 29: 2025 Outlook Revised Upwards
2025 Outlook Revised Upwards 2025 1 Original Updated (February '23) (September '23) Sales $44.7 – $47.2B $46.7 – $49.2B Adj. EBIT Margin 6.8% – 7.9% 6.8% – 7.9% 2 Capital Spending ~$2.0B ~$2.1B 1 2025 Outlook has been updated solely to reflect the acquisition of Veoneer Active Safety. All other 2025
Slide 30: CapEx and Free Cash Flow Generation
Long-Term Capital to Sales Ratio Unchanged Capital / Sales Outlook 60.0 0.1 46.7 – 49.2 0.1 42.1 – 43.1 50.0 37.8 ($Billions) Sales 0.1 0.1 40.0 0.1 30.0 0.1 0.1 20.0 0.0 0.0 10.0 0.0 0.0 0.0 4.0 2022 2023F 2025F 0.1 0.1 3.5 CapEx ($Billions) ~2.5 0.1 3.0 ~2.1 0.1 1.7 2.5 0.1 2.0 0.1 0.1 1.5 0.0 1.0
Slide 31: Disciplined Profitable Growth Strategy
Disciplined Profitable Growth Strategy Future Strategy 2022 2027F Continued 37.8 growth over Sales ($B) Accelerate deployment of capital market towards high-growth areas Accelerate Adjusted EBIT 4.4 Margin deployment Margin (%) expansion Drive of capital Drive towardsoperational high operational exc
Slide 32: Appendix: Magna Segment and Regional Data
Appendix NOVEMBER 2023 56 Magna Segment and Regional Data 1 2022 Sales by Segment 2022 Sales by Geography 2022 Adjusted EBIT by Segment ROW AP 1% Complete Complete Vehicles Body Vehicles Body 14% Exteriors & 11% 14% Exteriors & Structures Structures Seating 6% Systems Seating 14% 41% Systems North 5
Slide 33: Annualized Dividend
Annualized Dividend 1 ($ per share) 2.00 0.1 11% 1.80 1.84 1.80 CAGR 1.72 1.60 0.1 1.60 1.46 1.32 0.1 1.40 1.20 1.12 0.1 1.00 0.88 1.00 0.76 0.1 0.80 0.64 0.55 0.50 0.60 0.1 0.40 0.1 0.20 0.00 0.0 Q4'10 Q4'11 Q4'12 Q4'13 Q4'14 Q4'15 Q4'16 Q4'17 Q4'18 Q4'19 Q4'20 Q4'21 Q4'22 Increased Q4 Dividend for
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