Nexteer Automotive Group Limited · HKEX:1316

Nexteer Automotive — H1 2023 Earnings Presentation

24 slides from Nexteer Automotive's earnings presentation, Aug 16, 2023

  1. Slide 1: 2023 Interim Results Announcement

    2023 Interim Results Announcement 16 August 2023 Copyright 2023, Nexteer Automotive Corporation. All rights reserved. 1

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement These materials have been prepared by Nexteer Automotive Group Limited (“Nexteer” or the “Company”) and are being furnished to you solely for informational purposes. The information contained in these materials has not been independently verified. NO REPRESENTATION OR WARRANTY

  3. Slide 3: Vision Statement

    “ We are the Leading MOTION CONTROL TECHNOLOGY COMPANY that Accelerates Mobility to be SAFE, GREEN & EXCITING.” _ NeKCeer VISION STATEMENT

  4. Slide 4: 2023 1H Business Overview / Financial Review

    2023 1H Business Overview Robin Milavec, Executive Board Director, President, Chief Technology Officer and Chief Strategy Officer 2023 1H Financial Review / 2H Considerations Mike Bierlein, Senior Vice President and Chief Financial Officer 4

  5. Slide 5: 2023 1H Business Highlights

    2023 1H Business Highlights  Achieved Record Half-Year Revenue of US$2.1 Billion, Increasing by 17.4% Compared to 1H 2022  Successfully Launched 32 Major Customer Programs to Support Business Growth  Secured $2.8B of New Bookings, Mainly in 2nd Quarter  Wins include a second SbW program, NA EV t

  6. Slide 6: Launched 32 Major Programs in 1H 2023

    Launched 32 Major Programs in 1H 2023 NORTH AMERICA EMEASA APAC (11) (1) (20) GM Cruise Origin GMC Hummer SUV EV Chevrolet Montana Hiphi Y BMW X1 Changan Deepal SL03 Chevrolet Blazer EV REPS REPS, Columns & I-shafts, Halfshafts REPS SPEPS CEPS Halfshafts, I-shafts Halfshafts Chevrolet Silverado EV F

  7. Slide 7: New Business Award - 1H 2023

    New Business Award - 1H 2023 Key Highlights Bookings* Bookings Composition ($ in billions) ($ in billions)  2nd SbW program win with a leading global OEM 10% 14% ~$6.0B includes HWA & RWA $2.8B $2.8B $26.4 $2.8B 86%  NA EV truck business 89% EPS N. America $2.7B Driveline Asia Pac. volume increase

  8. Slide 8: Capitalizing on SbW & SDV

    Capitalizing on SbW & SDV* Levering Global Leadership in EPS, SbW, Steering Software & Vehicle Integration  Won 2nd SbW program with a leading global OEM - HWA & RWA  Secured SbW development contracts with several OEMs  Capitalizing on SDV trend by leveraging our software expertise in steering fe

  9. Slide 9: Re-Balancing APAC Customer Portfolio

    Re-Balancing APAC Customer Portfolio Asia Pacific Revenue FY2021 FY2022 FY2023e $812M $965M >$1B Local OEMs (excl. JV brands with 50% or above equity shares) Global OEMs Fast APAC Revenue Growth Benefited from Diversified Regional Customer Base 9

  10. Slide 10: Optimizing R&D Deployment

    Optimizing R&D Deployment Global Technical Center (GTC) • Portfolio Vision • Product and Process Architecture Strategy • Advance Core Product Technology • Software Development • R&D Innovation Technical Center (TC) GTC • Product and Process Engineering • Product Validation Tychy TC • Prototype Manuf

  11. Slide 11: Operational Efficiency and Execution

    Operational Efficiency and Execution  Early Retirement Incentive Program  Contractual escalation agreements (cost and saving realized in 2H 2023)  Non-contractual negotiation  Saginaw Solar Field (target completion in 2024) Ongoing Efforts to Improve Profitability  North America Columns Transit

  12. Slide 12: 2023 1H Business Overview / Financial Review

    2023 1H Business Overview Robin Milavec, Executive Board Director, President, Chief Technology Officer and Chief Strategy Officer 2023 1H Financial Review / 2H Considerations Mike Bierlein, Senior Vice President and Chief Financial Officer 12 12

  13. Slide 13: 1H 2023 Financial Observations

    1H 2023 Financial Observations Industry Environment Improving with Still Elevated Input Costs Achieved Record Half-Year Revenue of US$2.1 Billion Revenue Growth of 17.4% YoY, Outpacing Market by 920 bps EBITDA Growth of 17.7% YoY; Margins Remain Constrained by Macro Factors​  Inflationary pressures

  14. Slide 14: 1H 2023 Key Financial Metrics

    1H 2023 Key Financial Metrics ($ in millions) Revenue EBITDA Net Profit* Free Cash Flow +17.4% 17.7% +$45M 9.8x $60 $2,102 $186 12.3% $1,791 $158 $34 8.9% 1.6% 8.8% -0.6% ($7) ($11) 1H 2022 1H 2023 1H 2022 1H 2023 1H 2022 1H 2023 1H 2022 1H 2023 Revenue Growth Above Market Offset by FX * Net Profit

  15. Slide 15: 1H 2023 Revenue Bridge

    1H 2023 Revenue Bridge ($ in millions) Total Revenue Y-O-Y Revenue Drivers 17.4% $2,102 $2,102 $1,791 $311 1H 2022 1H 2023 * V/M/P/O: Volume, Mix, Pricing & Others 15

  16. Slide 16: 1H 2023 Revenue Growth Outpacing Market

    1H 2023 Revenue Growth Outpacing Market N. America EMEASA APAC 10% Y/Y* 16% Y/Y 54% Y/Y -2% GoM* 1% GoM 44% GoM Global Adjusted Revenue +20.4% Total Adjusted Revenue Growth Vs. 1H 2022 Outperformed Market 920 bps, +9.2% $2,156 $1,791 * Adjusted revenue growth excludes foreign exchange and commodity

  17. Slide 17: 1H 2023 Financial Results

    1H 2023 Financial Results ($ in millions) Revenue by Region Total Revenue Regional Distribution (structural %) (growth %) NA APAC EMEASA $2,102 +$204 $544 +$100 $1,195 $1,791 18% 17% $1,095 +$49 $361 $316 -$4 18% $378 -$38 26% 21% +9.1% +43.7% +14.2% 57% 61% 1H 2022 1H 2023 1H 2022 V/P/O* 1H 2023 1H

  18. Slide 18: EBITDA Bridge – 1H 2023 vs 1H 2022

    EBITDA Bridge – 1H 2023 vs 1H 2022 ($ in millions) EBITDA Y-o-Y EBITDA Drivers (% of revenue) +17.7% $186 $158 +$28 8.8% 8.9% 1H 2022 1H 2023 Margin Profile Tempered by Exchange and Inflation * V/M/P: Volume, Mix & Pricing 18

  19. Slide 19: EBITDA and Margin Performance by Region

    EBITDA and Margin Performance by Region ($ in millions) NA APAC EMEASA (% of revenue) (% of revenue) (% of revenue) $27 $98 $82 $79 $68 $18 7.2% 8.2% 18.1% 15.0% 8.4% 5.1% 1H 2022 1H 2023 1H 2022 1H 2023 1H 2022 1H 2023 Gradual Margin Margins Remain Strong Lower Margin Due to Improvement Despite FX

  20. Slide 20: Investment for the Future

    Investment for the Future ($ in millions) Engineering / Prod. Development* Cap-Ex** (% of revenue) (% of revenue) $151 $137 $58 $49 7.6% 7.2% 2.7% 2.8% 1H 2022 1H 2023 1H 2022 1H 2023 * Engineering and product development costs charged to income statement and development costs capitalized as intangi

  21. Slide 21: EBITDA to Net Profit Bridge

    EBITDA to Net Profit Bridge ($ in millions) 1H 2022 1H 2023 EBITDA $ 158 $ 186  JV Earnings comprised of CNXMotion, DF and Chongqing - D&A Expense 136 139 operations Operating Profit $ 22 $ 47  Income Tax Expense favorable + Share of JV Earnings (2) 0 primarily due to reduced - Net Finance Costs (

  22. Slide 22: 1H 2023 Free Cash Flow / Balance Sheet

    ($ in millions) 1H 2023 Free Cash Flow / Balance Sheet Dec Dec 2022 2022 Jun 2023 Jun 2023 1H 2022 1H 2023 Cash and Capital Gross Debt $ 50 $ 48 Finance Leases 61 58 Less: Cash 246 290 Net Cash $ (135) $ (185) (129) 122 Total Equity $ 1,977 $ 1,993 ($171) $231 Total Net Capital $ 1,842 $ 1,808 Net D

  23. Slide 23: 2023 Operating Considerations

    2023 Operating Considerations Tailwinds Headwinds Record revenue – On-track to deliver over Lingering Inflationary pressures $4B in revenue impacting labor, energy and material Improved operating environment costs  Commodity prices stabilizing Supply base challenging with price increase requests 

  24. Slide 24: Strategy for Profitable Growth

    Strategy for Profitable Growth Expand Strengthen Capitalize on Optimize Cost Pursue Select Target China & Diversify Technology Megatrend & Structure Acquisitions & Emerging Revenue Base Leadership Portfolio Alignment & Alliances Markets A well-defined plan to drive stakeholder value 24

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