Magna International Inc. · TSX:MG
Magna International — Investor Day (April 2021)
56 slides from Magna International's investor day presentation, Apr 14, 2021
Slide 1: Powering Profitable Growth in a Transforming Industry
Powerin g Profitable Growt h i n a Transforming Industry Magn a Investo r E ven t | Apri l 13 , 2021
Slide 2: Sar rere ce renee
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Slide 3: Forward looking statements
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Slide 4: Forward looking statements
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Slide 5: Start-up culture for 60+ years
Start - up culture for 60+ years 5
Slide 6: 1957-2020 Sales Growth: History rich in innovation and key investments
1957 - 2020 SALES GROWTH 2019 $40B S A LES F A C I L I T I ES 196 0 197 0 198 0 199 0 200 0 201 0 2020 PEAK SALES EMPLOYEES CAGR 1960’s $4M 1970’s $108M 38% 1980’s $1B 28% 130 17k 1990’s $9B 22% 174 59k 2000’s $26B 6% 241 84k Hydroformed Frames Complet e I nteriors Complete Vehicles 1960’s 1970’s 19
Slide 7: Y ea r Return o f Capital $7.6B T ea m Members 158K Y
5 Y ea r Return o f Capital $7.6B T ea m Members 158K 5 Y ear Investment i n Business $12.5B Numbe r o f Countries 27 Facilities World’s 34 2 Third Larges t Supplier Customers 50+ 5 Y ea r TS R (NYSE) 100% Sales* $40B 5 Y ea r A verage W eighte d GoM 6% * 2021 Sales Outlook $40.0 B – $41.6B 7
Slide 8: Innovation and Start-up Mindset, Manufacturing Expertise, Disciplined Profitable Growth
Innovatio n and Start - u p Mindset Manufacturing Expertise Disciplined Profitable Growth Ou r People an d Culture Decentralized Structure 8
Slide 9: Secular Trends Driving Change
Secular Trends Driving Change 9
Slide 10: The Power of Magna
Th e Powe r o f M agna 10 Dee p produc t expertise Complet e vehicl e engineering an d manufacturing Integrate d system s level analysi s an d approach
Slide 11: Systems Approach: Design Requirements and Optimized Products
Des i g n Re qui re ments Desig n Objectives Optimize d Products F la t Underbody Seat with Optimized Height eDrive Styling Packaging Functionality Manufacturability Affordability System s Approach Uniqu e Stylin g an d Packaging 11
Slide 12: Systems Approach: Design Requirements and Optimized Products
Des i g n Re qui re ments Desig n Objectives Optimize d Products eDrive Light w ei g ht Products Software an d Controls Activ e Aero Efficiency Safety Dynamics Drivability Affordability System s Approach Best - in - Class Driving Range 12
Slide 13: Systems Approach: Optimizing Vision and Response
System s Approach Optimizin g V isio n an d Respon s e Safety Convenience Efficiency Dynamics Affordability Digital Imagi n g Radar A d v anc e d Lighting Integr a t ed Cameras Front A d v anc e d Cameras U ltras onic Sensors Domain Controllers and S oft w a r e Single and Multi - C a m e ra Lo n g
Slide 14: Large Share of Components in Vehicles are Powertrain-Agnostic
Interior Sy s tems and Seating Body Stru c ture ECUs/DCUs Transmission Engine Sy s tems Exhaust Regulation Co m p one n ts Driving Systems (incl. chassis) Bod y Exterior (incl . Lighting and Mirrors) Complete Vehicle Engineering and Manu fa c t uri n g Thermal M an agement Sens o rs (ADAS) El ec t r
Slide 15: Majority of Components in an Electric Vehicle Remain Independent of Powertrain
E V , HV H y brid Po w e rtr a in - Agnostic Power Electronics – EV, HV Hybrid Interior Sy s tems and Seating Body Stru c ture ECUs/DCUs Driving Systems (incl. chassis) Bod y Exterior (incl . Lighting and Mirrors) Complete Vehicle Engineering and Manu fa c t u ri n g Thermal M an agement Battery Pac
Slide 16: Magna's Portfolio is Future-Ready as Transition to EVs Takes Place
Included in Magna’s portfolio EV Interior Sy s tems and Seating Body Stru c ture ECUs/DCUs Transmission Driving Systems (incl. chassis) Bod y Exterior (incl . Lighting and Mirrors) Sens o rs (ADAS) Power Electronics – EV, HV Hybrid Complete Vehicle Engineering and Manu fa c t uri n g Battery Pack E
Slide 17: Opportunities Ahead with Go-Forward Strategy
Opportunitie s Ahea d with Go - Forwar d Strategy 17
Slide 18: Key Strategic Drivers
Ke y Strategi c Drivers 2. Drive operational excellence 1. Accelerate deploymen t of capita l towards high - growth areas 3. Unloc k new busines s models an d markets 18
Slide 19: Accelerate Deployment of Capital Towards High-Growth Areas
Accelerat e Deployment o f Capita l T owards High - Growt h Areas 19
Slide 20: Our Strategy is to Drive Growth in Positively Impacted Areas
Magna Sales over time Impact of Megatrends Toda y Future Positive Impact Aligned Negative Impact • Lighting • Activ e Aerodynamics • Body & Chassis • Dual Clutch Transmissions • Mirrors • Mechatronics • Seating • eDrives • Battery Enclosures • ADAS • Contract Vehicle Manufacturing • New Business Mod
Slide 21: Electrification
Focus of this section EV Po w e rtr a in - Agnostic ICE Power Electronics – EV , HV Hybrid Interior Systems and S ea t i n g Body Stru c ture ECUs/DCUs Transmission Exhaust Regulation Co m p one n ts Driving Sy s tems (incl. Chassis) El ec t r on ics – Other Sens o rs (ADAS) Bod y Exterior (incl . L
Slide 22: Powertrain Portfolio Building Block Approach
MODULAR & SCALABLE BUILDING BLOCKS MODULAR & SCALABLE PRODUCTS Electrification Enablers Gearset s & Diffe r entials S y nchro Shifting S y stems Housing s & Coverings Clutche s & Decoupling Parklock O i l Hydraulics Contro l HW & Actuations Traction E - Motor Inverter S W & C ontrol Algorithms Manua
Slide 23: Increasing Opportunities for Growth in Electrified Powertrains
Increasing Opportunities for Growth i n Electrifie d Powertrains T raction E - Motor Inverter Gearset s & Diffe r entials S y nchro Shifting S y stems Housing s & Coverings Clutche s & Decoupling Parklock O i l Hydraulics Contro l HW & Actuations Traction E - Motor Inverter L G an d Magna e - Powert
Slide 24: Ready for an Electrified Future
Read y f o r an Electrifie d Future • > $2 billion in managed sales* expected b y 2023 • W e believ e w e ca n b e > $ 4 billio n in manage d s ales * b y 2027 • S tron g competitiv e positio n regardless o f take - rates * Managed sales = consolidated sales + sales at 100% for unconsolidated entiti
Slide 25: Higher Content Opportunity and Addressable Market as EV Transition Unfolds
ICE EV Dual Clutch/ Manual Transmission Primary eDrive T ake rate (%) 40% 100% +150% Higher addressable market Increase d vehicle content A verag e CPV ($US) $9 0 0 $1,100 +2 2 % T ake rate (%) 4WD/AWD 20% Secondary eDrive 20% A verag e CPV ($US) Increase d vehicle content $4 0 0 $950 +138% Higher C
Slide 26: Electrifying Trucks and Hybrid Systems: Etelligent Solutions
EtelligentEco Connecte d PHE V system • U p t o 38 % e missio n reduct i o n • Uniqu e clou d c onnect i v i t y feature • S mar t cruis e contro l an d ec o routing • Cla ss - leadin g pe rf o r man c e in all - ele c t r i c dr i v ing Ne w Benchmar k fo r E f ficient Plug - in - Hybri d T echnolo
Slide 27: Autonomy/ADAS
Focus of this section EV Po w e rtr a in - Agnostic ICE Power Electronics – EV, HV Hybrid Interior Systems an d Sea t i n g Body Stru c ture ECUs/DCUs Transmission Engine Sy s tems Exhaust Regulation Co m p one n ts Driving Sy s tems (incl. Chassis) El ec t r oni cs – Other Bod y Exterior (incl . Li
Slide 28: ADAS Building Block Approach
Lane Automatic Emergency Departure Warning Braking Lane K eep Assist Lane C entering C ontrol Surround View Adaptive C ruise C ontrol Rear Automatic Emergency Braking CROSS - SYSTEM FEATURES PREMIUM FEATURES SAFETY FEATURES (NCAP 5 - STAR) MODULAR & SCALABLE BUILDING BLOCKS F a r Fi el d Cameras Dig
Slide 29: Delivering Level 4 Premium Features
Drive r Monitorin g System • Detection of distracted driver behavior, drows i nes s an d fatigue • Custom i zab l e audib l e , v isua l an d hapt i c aler t notifications • Progra m launc h i n 2022 Increasin g In - Cabin Safet y wit h Monitoring Autonomou s V ale t Park • Leve l 4 Autonomou s V al
Slide 30: Expect ADAS Sales to Grow Above Market
Expec t ADA S Sale s t o Gro w Abov e Market Ke y ADAS Growt h Contributors • A nticipat e 19 - 23 % CAG R 202 0 t o 2023 • W e believ e w e ca n gro w a t 15 - 20% CAG R fro m 202 3 t o 2027 • Ongoin g investments • E xpandin g softwar e engineerin g team • S trategi c partnerships 30
Slide 31: Innovation Across the Vehicle
Innovatio n Acros s th e V ehicle ct Batt er y E nc los u r e s ura l o pp o r t u n itie s e xpa n d wit h e lec t rific a tion Magn a Mezz o P ane l ™ Inte g ra t e d ADA S and lightin g functio n s Adapti v e Be a m Lighting I n c re a se d s a fet y a n d f u nction b y in tegratin g el ectronic
Slide 32: Battery Enclosures and Magna MezzoPanel
Batter y Enclosures • C ontr i bute s t o vehic l e structur e an d safety • S teel , aluminum , an d multi - materia l , includ in g composites • B usines s award s fo r G M Humme r E V and For d F - 15 0 EV Structura l Opportunities Expan d wit h Electrification Magn a MezzoPanel™ • Fron t fasci a
Slide 33: SmartAccess and Adaptive Beam Lighting
SmartAccess ™ • Enable s uniqu e acces s experiences • Easil y operate d throug h m ultip l e human - machine in terf a c e so lu t i ons • Enhanced safety through non - contact obstacle detection • F ull y c ustomizable Bridgin g Mechatronic s and Electronic s t o Delive r N e w F unctionality Adap
Slide 34: Tapping Into Great Thinking Outside the Company
T appin g Int o Grea t T hinking Outsid e th e Comp a n y Ope n fo r Busines s Mindset Auto - Qualifie d Results Acces s t o New Creativ e Approaches Innovatio n Ecosystem 34
Slide 35: Drive Operational Excellence
Driv e Operational Excellence 35
Slide 36: Committed to Manufacturing Excellence
Committed to Manufacturing Excellence WCM LEADERSHIP QU AL I TY CAPITAL INFORMATION TECHNOLOGY MAFACT PRODUCT DEVEL O PMENT PROCESS PURCHASING INNOVATION 1 2 3 4 5 6 7 8 9 MATERIAL MANAGEMENT/ LOGISTICS 36 W orl d Clas s Manufacturing
Slide 37: Increased Focus on Smart Factory Enablers
Next - Ge n W orl d Clas s Manufacturing • B i g dat a an d analytics • A utonomou s robots • Simulation • Horizon t a l an d v er t ica l syste m integra ti on • I ndustria l i nterne t o f things • Cybersecurity • Th e cloud • A dditiv e manufacturing • A ugmente d reality 37 Increased Focus on Sm
Slide 38: Smart Dies
Smar t Dies • 5 - 10 % uptim e improvement • U p t o 30 % reductio n i n scrap • 30 - 50 % les s hour s i n inspection Real - T im e Analytics fo r Bette r Decisions 38
Slide 39: Advanced Robotics
Advance d Robotics • Hig h volu m e prod u ction • 2D/3 D v isio n system s an d tra j ec to r y plannin g wit h A I • 50 % reduct i o n i n floo r s pace • 10 - 20 % highe r operat i n g e f fic i ency Automation - Enable d E f ficiency 39
Slide 40: Fenceless Robotics
Fenceles s Robotics • Operato r an d robo t freel y an d s afely collaborate • Double s payloa d a t 1 0 time s th e speed • Reduce d floo r space • I mprove d operato r e rgonomics Huma n an d Roboti c Collaboration 40
Slide 41: Data Analytics
Dat a Analytics Usin g Dat a t o Minimize W ast e an d Reduc e Costs • P ain t c olo r c hang e process optimization • Implemente d i n 2 0 Exteriors manufacturin g facilities • S ignifican t c os t savings 41
Slide 42: Sustainability
Sustainability Science - Base d Approach Aligne d wit h Objective s of Pari s Climat e Agreement Focuse d o n Energ y Optimiza t ion an d Renewabl e Energy • G oal s fo r car bon - neu tr a li t y – I n Europ e b y 2025 – Globa ll y b y 2030 • Wil l b e a n industr y l eade r i n Nort h America , an
Slide 43: Unlock New Business Models and Markets
Unloc k Ne w Business Model s an d Markets 43
Slide 44: Broad Range of Mobility Ecosystem Opportunities
Broa d Range o f Mobility Ecosystem Opportunities 44
Slide 45: Flexible Production Concept
V olum e Extension • Expansion planning in advance • Volume expansion in phases • Flexible supply management approach First - Generatio n Plant Ability to replicate plants to satisfy long - term demand growth Can Scale to Meet Volume Requirements and Optimize Future Expansion Flexibl e Productio n C
Slide 46: Global Production Network
W ell - Established 2019 2020 Future Eastern Europe Central Europe Asia Nort h America Graz, Austria • Si x SOP s deliver e d i n 2 4 months • B att e r y electric , h y bri d an d I CE vehicle s pro du c e d i n th e same facilit y an d o n sam e p roductio n lines Hoče, Slovenia • State - of - the
Slide 47: Complete Vehicle Building Block Approach
COMPLETE VEHICLE E/E Arch ite c tur e Vehicle Platfor m Vehicle Arch ite c tur e Vehicle Models Body MAJOR SYSTEMS / DOMAINS Bod y & Chassis eDrives Mechatronics Mirrors Seats Lighting Exteriors ADAS Sensors ADAS Po w ertra i n Chassis HM I & Infotainment Product Specification PRODUCT SYSTEMS Defini
Slide 48: Uniquely Positioned to be a Strategic Partner
Complete Vehicle Complete Vehicle E V an d E/E Broad System Ful l ADA S System Engineering Manufacturing Architectures Portfolio and Software Platform Ful l V ehicl e an d Syste m Capabilities 48 Uniquely Positioned to be a Strategic Partner
Slide 49: On the Winning Side of Change
O n th e Winning Sid e o f Change 49
Slide 50: Capital Allocation Principles
1 Maintain Strong Balance Sheet 2 Invest for Growth • Organic and inorganic opportunities • Innovation 3 Return Capital to Shareholders • Continued dividend growth over time • Repurchase shares with excess liquidity Capita l Allocatio n Principles • Preserve liquidity and high investment grade credi
Slide 51: Financial Highlights - Past Three Years
• A verag e weighte d sale s growt h ove r marke t 1 o f 7% • $5. 8 billio n i n fre e cas h flo w 2 generation • Investe d $5. 9 billio n i n ou r business • Retur n o f capita l t o shareholder s o f $4. 7 billion Financia l Highlights – Pas t Thre e Y ears T ota l Shareholde r Retur n o f + 36 %
Slide 52: Financial Outlook - To 2023
• Continue d weighte d sale s growt h ove r marke t 1 • Stron g growt h i n unconsolidate d sales • Expandin g Adjuste d EBI T Margi n 2 t o 8%+ • Fre e cas h flow 3 generatio n betwee n $5. 5 - $6. 0 billion Financia l Outlook – T o 2023 Solid Outlook Supports Growth Investments and Return of Capit
Slide 53: Summary
Summary 53
Slide 54: Disciplined Profitable Growth to Generate Sustainable Shareholder Value
Our Strategy Our Future Sales ($B) 2020 2023 Future 43 . 0 – 45 . 5 32 . 6 Continued growt h over market Adjusted EBIT Margin 1 (%) 5.1 8. 1 – 8.6 Margin expans io n Adjusted ROIC 2 (%) Stron g return o n capital 7.9 Business Mix Impac t o f megatrends: Positiv e impact Aligned Negativ e impact Evol
Slide 55: Untapped Potential to Generate Profits and Grow Shareholder Value
• Poised for market shifts • Supplier of choice for automakers and enabler for new entrants • Financial stability to fund the future Untapped Potential to Generate Profits and Grow Shareholder Value 55
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