Gentherm Inc · NASDAQ:THRM

Gentherm — Investor Day (February 2023)

70 slides from Gentherm's investor day presentation, Feb 22, 2023

Slide 1: Strategy Update February 22, 2023
Exhibit 99.1 STRATEGY UPDATE F E B R U AR Y 2 2 , 2 0 2 3 P r o p r i e t a r y © 2 0 2 3
Slide 2: Forward-Looking Statement
Forward-Looking Statement Except for historical information contained herein, statements in this presentation are forward-looking statements that are made by Gentherm Incorporated (the “Company”) pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All stat
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures In addition to the results reported herein in accordance with GAAP, the Company has provided here or may discuss on the related conference call, Adjusted EBITDA , Adjusted EBITDA margin, Adjusted EBITDA excluding non-cash stock-based compensation, Adjusted EBITDA m
Slide 4: Our Mission
OUR MISSION Creating and delivering extraordinary solutions that make meaningful differences in everyday life, by improving health, wellness, comfort, and energy efficiency Positively impacting people’s lives around the world Proprietary © Gentherm 2023 4
Slide 5: Why Gentherm
Why Gentherm 01 02 03 Pure play leader in thermal Global automotive market is Unique, innovative Global reach and industry- management and pneumatic large and under-penetrated and energy efficient solutions leading manufacturing comfort with thermal and pneumatic key to vehicles of the future capa
Slide 6: Board of Directors
PHIL Eyler JOHN Stacey BYRON T. Shaw II BETSY Meter CHARLES Kummeth DAVID Heinzmann SOPHIE Desormière RON Hundzinski Board of Directors Special Partner & Advisor, CFO & Managing Harman Executive President & President & Director, KPMG President, International Director; Director, TI Detroit Chief Grow
Slide 7: Leadership Team
HUI (HELEN) Xu JAYMI Wilson THOMAS Stocker BARB Runyon WAYNE Kauffman STEVE Fletcher YIJING Brentano RAFAEL Barkas MATTEO Anversa PHIL Eyler Leadership Team Europe Asia Automotive, North America Automotive, Global IR, Strategy & General Chief Human Global Automotive, Global Chief Financial President
Slide 8: Our Locations
Manufacturing and Distribution Our Locations Sales and Support Engineering 2022 Revenue* 30+ LOCATIONS | 14,000+ TEAM MEMBERS | $1.3B REVENUE* Europe 28% North America 43% Asia 29% EUROPE: ASIA: NORTH AMERICA: Odelzhausen, Germany Shanghai, China HQ - Northville, MI Echterdingen, Germany Langfang,
Slide 9: 50+ Global Automotive Customers
50+ Global Automotive Customers NORTH AMERICA ASIA EUROPE Extremely well-diversified, global customer base Proprietary © Gentherm 2023 9
Slide 10: Market Segments
Market Segments Medical Products 3% 3% Battery Products 5% Standalone Electronics Products 6% Automotive Cables 8% Fluid Valves 10% * Core Thermal Products * 65% Pneumatic Seat Products * Includes electronics 2022 Pro forma, includes full year of Alfmeier revenue Achieved significant product diversi
Slide 11: Our Sustainability Journey
Our Sustainability Journey People Planet Places Product ® 92% of employees work at 100% renewable energy in 2022 at 8,500+ community volunteer ClimateSense enables up to ISO14001 certified sites Northville, Treuchtlingen, Stuttgart hours 70% energy savings, 30+% * and Pilsen locations BEV range exte
Slide 12: Key Industry Trends
Key Industry Trends GENTHERM OPPORTUNITIES Focus on human comfort and Demand for BEV range health extension solutions Vehicle Software- Smart Devices/ Comfort & Wellness Increasing adoption rates for Energy optimization Electrification Defined Vehicle Features Redefined comfort products Miniatur
Slide 13: Vehicle Electrification
Vehicle Electrification PROJECTED POWERTRAIN APPLICATION RATES 17% 33% 14% 52% 10% 19% 17% 19% 60% 11% 32% 17% 2023 2026 2030 ICE Mild Hybrid Full Hybrid Electric Source: S&P Global Light Vehicle Powertrain Alternate Propulsion Forecast January 2023 Relevant Regions Only: NA, EU, JP, KO, CH Accelera
Slide 14: Portfolio Aligned with Electrification
Portfolio Aligned with Electrification Internal Combustion Engine (ICE)-only Electric Vehicle (EV)-enablers Electric Vehicle (EV)-specific ® ClimateSense Battery Cell ICE Valves Neck Conditioners ECUs Seat Heaters Climate Control Connectors ® Seats (CCS ) EV Cables Battery Thermal ICE Cables Pneumat
Slide 15: Equipping EVs of Today and Tomorrow
Equipping EVs of Today and Tomorrow EV Range Extending Climate Comfort Solutions ClimateSense® Battery Performance Solutions Digital Intelligence ICE Gentherm BEV Gentherm Content*: Content*: $$ $$$$ * Actual content varies per vehicle $30 - 300 $150 - $1,000 Electric Vehicles accelerate content gro
Slide 16: Consumer Satisfaction Research Summary
Consumer Satisfaction Research Summary Heated Seats Climate Control Seats Heated Steering Wheel 96% 96% 94% Satisfaction 94% 93% 93% Would Repurchase Study conducted in 2021 in partnership with Escalent (formerly Morpace), covering 3,000+ respondents in North America, Europe and China Consumers acro
Slide 18: 2018 Strategy Recap
2018 Strategy Recap Five years of relentless strategic execution have delivered results Proprietary © Gentherm 2023 18
Slide 19: Three Years of Industry Challenges
Three Years of Industry Challenges COVID Semiconductor Cost Transport Geopolitical Shortages Inflation Delays Disruptions Implemented strong measures to de-risk and built a foundation for accelerated growth Proprietary © Gentherm 2023 19
Slide 20: Global Vehicle Volume
Global Vehicle Volume 100 June 2018 Forecast 90 15% 80 22% 70 January 2023 Forecast 60 50 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Sources: S&P Global Light Vehicle Production Forecast June 2018 S&P Global Light Vehicle Production Forecast January 2023 Relevant Regions Only:
Slide 21: Strategy 1: Focused Growth
Strategy 1: Focused Growth 1.1 Accelerate Core Climate & Comfort Grow and Expand with Key Customers AUTOMOTIVE REVENUE GROW TH * OUTPERFORMANCE VS MARKET Expand Product Portfolio Grow in Asia 13% ® 1.2 Introduce ClimateSense ® Develop ClimateSense Platform 8% Win Production Award 6% 1.3 Drive Batter
Slide 22: Strategy 2: Extend Technology Leadership
Strategy 2: Extend Technology Leadership INNOVATIONS BROUGHT TO MARKET ECU integrated Cell-Connecting Board ClimateSense® Software and User Experience 1. 6. Proprietary thin foil cell-connecting system w ith embedded cell- Scalable software, improving comfort, personalization and energy efficiency.
Slide 23: Strategy 3 and 4: Margins & ROIC, Capital Allocation
Strategy 3: Expand Strategy 4: Optimize Capital Margins & ROIC Allocation to Drive Shareholder Return Corporate Restructuring Capital Allocation Divest/Exit Non-Core Products Increase liquidity Execute Fit for Growth Initiative Capex projects to drive organic growth SG&A Rationalization Opportunisti
Slide 24: Five Year Total Shareholder Return
Five Year Total Shareholder Return 106% 67% 59% 57% -13% -14% NASDAQ DJ US Auto & THRM S&P 500 Composite Parts Index DJ US Auto TSR Peer Group Parts Index Average 5-year Total Return from 12/31/2017 through 12/31/2022 Source: Nasdaq, FactSet TSR peer group as listed in 2022 Proxy Best in class share
Slide 25: Our Journey
Our Journey FUTURE Continuing evolution to an integrated, human science-driven systems innovator, encompassing NOW hardware, electronics, Expand beyond thermal with software algorithms and comfort, health advanced sensing and wellness capabilities PAST Global market leader and developer of innovativ
Slide 27: Our Strategy 2023 and Beyond
Our Strategy 2023 and Beyond Profitable Growth Flywheel Aspiration: $3 Billion revenue by 2030 Proprietary © Gentherm 2023 27
Slide 28: Strategy 1: Leverage World Class Talent and Culture
Strategy 1: Leverage World Class Talent and Culture Proprietary © Gentherm 2023
Slide 29: Human Capital and DE&I Progress
Human Capital and DE&I Progress Engrained winning culture Dramatic enhancement of behaviors talent through internal development and recruitment Established Diversity, Equity, Industry-leading and Inclusion (DE&I) as a manufacturing culture and foundation of the company environment with best-in- with
Slide 31: Core Technology Competencies
Core Technology ADVANCED SENSING Competencies Thermal & HUMAN-CENTRIC SCIENCE-BASED Pneumatic SOFTWARE AND ELECTRONICS DESIGN Solutions SYSTEMS ENGINEERING Proprietary © Gentherm 2023 31
Slide 32: Empowering the Software-Defined Vehicle
Empowering the Software- Defined Vehicle Thermal and Pneumatic Comfort and Wellness modes enabled by software: • Recovery • Mood • Alertness • Pain Management Post sale feature additions through over-the-air updates Technology strategy is perfectly aligned with Software Defined Vehicle ProprP ie rto
Slide 34: Focused Growth Pillars
Focused Growth Pillars Accelerate Thermal Grow Pneumatic Drive Battery Expand Patient Comfort Growth Comfort Performance Solutions Thermal Solutions Enabled by Gentherm Electronics & Software Systems Proprietary © Gentherm 2023 34
Slide 36: Market Growth Potential - Take Rate Increase
Market Growth Potential - Take Rate Increase Climate Seats 35% 55% 63% None Heated-Only Seats 43% Climate Controlled Seats (CCS) 33% 29% 22% 12% 8% Market in units Relevant Regions Only: NA, EU, JP, KO, CH 2018 2022 2030 (Projected) Source: Gentherm internal research Significant customer demand for
Slide 37: Market Growth Potential - Heated Steering Wheel
Market Growth Potential - Take Rate Increase Heated Steering Wheel 65% 81% 85% None Heated Steering Wheel 35% 19% 15% Market in vehicles Relevant Regions Only: NA, EU, JP, KO, CH Source: Gentherm internal research 2018 2022 2030 (Projected) Significant customer demand for Gentherm’s thermal technolo
Slide 38: 2022 Global Market Share
* 2022 Global Market Share Heated & Cooled Seats Heated-Only Seats Heated Steering Wheel Gentherm Competitor A 40% Competitor B 60% Competitor C 60% Competitor D Other Market in USD *Relevant Regions Only: NA, EU, JP, KO, CH Source: Gentherm internal research Global market share leader Proprietary ©
Slide 39: Market Growth Potential
Market Growth Potential (Dollars in Billions) $3.7 9+% CAGR $2.7 CCS™ $1.8 Seat Heater* Steering Wheel Heater 2022 2026 2030 * Includes Seat Heating, Neck Conditioner, Footwell Heating Market in USD Relevant Regions Only: NA, EU, JP, KO, CH Source: Gentherm internal research Thermal comfort prolifer
Slide 40: Sustainable Competitive Advantage
Sustainable Competitive Advantage Largest independent supplier Global R&D and of thermal and pneumatic manufacturing footprint products In-house Electronics Science-focused, human- capabilities centric technology leadership Proven track record of getting Thermophysiology and new products to market P
Slide 41: ClimateSense Innovative Microclimate Solutions
® ClimateSense Innovative Microclimate Solutions Ready for the future, today Intelligent climate zones per Greater styling freedom and occupant weight improvement Self-regulating control Enabling smaller central through advanced sensing HVAC system to heat and and algorithms cool entire vehicle Redu
Slide 42: ClimateSense Scalable Platform
MID ® ClimateSense Scalable Platform Neck Footwell Conditioner Heater High Power Surface Cooling Heating Climate Seat Climate Controls Heated Steering Wheel LOW HIGH ® Enabled by Gentherm ClimateSense Software and Electronics Based on data collected through the study of Thermophysiology Opportunity
Slide 43: Accelerate Thermal Comfort
ACCELERATE THERMAL COMFORT —Drive take rate increase ® —Expand ClimateSense —Build on strong key customers —Grow in Asia —Increase content and features Proprietary © Gentherm 2023 43
Slide 44: Pillar: Grow Pneumatic Comfort
PILLAR 02 Grow Pneumatic Comfort Proprietary © Gentherm 2023 Proprietary © Gentherm 2023 44
Slide 45: Overview of Pneumatic Comfort Business
Overview of Pneumatic Comfort Business Business Highlights • Headquartered in Treuchtlingen, Germany • Innovative market leader in Automotive lumbar and massage • Pioneered SMA technology for pneumatic massage and lumbar Seat Comfort Solutions • ~2,000 Employees globally • 4-Way lumbar support• Mass
Slide 46: Comfort Technology Penetration
Comfort Technology Penetration Consumer demand for comfort will drive an increase in all 5% types of massage and lumbar systems 34% 61% Pneumatic will grow the Pneumatic fastest, driven by OEM need Other Solutions for decreased power None consumption, space and weight requirements Market in vehicles
Slide 47: 2022 Global Market Share Pneumatic Seat Comfort
* 2022 Global Market Share Pneumatic Seat Comfort 30% Gentherm Competitor A Competitor B Other Market in USD *Relevant Regions Only: NA, EU, JP, KO, CH Source: Gentherm internal research Market leader in pneumatic seat comfort solutions Proprietary © Gentherm 2023 47
Slide 48: Breakthrough Integrated Solution
Breakthrough Integrated Solution The application of thermal and massage technologies for health and wellness in automotive seating Localized Pulsating Contrast Treatment Treatment Treatment Using Thermophysiology and medical science to enhance vehicle occupant experience and well-being ProprP ie rto
Slide 49: Grow Pneumatic Comfort
GROW PNEUMATIC COMFORT —Grow with established customers —Drive take rate increase —Penetrate Asia —Expand in North America —Introduce innovative pulsating massage Proprietary © Gentherm 2023 49
Slide 50: Pillar: Drive Battery Performance Solutions
PILLAR 03 Drive Battery Performance Solutions 50 Proprietary © Gentherm 2023
Slide 51: Battery Performance Core Competencies
Battery Performance Core Competencies Cell Connecting Technology Battery Thermal Management • Customized • Temperature monitoring serial/parallel connecting • Battery pre-conditioning• Temperature sensing • Maintenance of operating • Voltage sensing temperature Cable Technology • High-voltage connec
Slide 52: Proprietary Cell Connecting Technology
Proprietary Cell Connecting Technology Replacing complex sensor cable harnesses with innovative flex foil conductors Benefits of Gentherm’s proprietary Mechanical Structuring Process technology: • Fully automatic, high speed production process * • 99% improvement in environmental impact vs chemical
Slide 53: Drive Battery Performance Solutions
DRIVE BATTERY PERFORMANCE SOLUTIONS —Gain foothold in battery cell connecting market with innovative and environmentally friendly flex foil solution —Expand value proposition with smart cell connectors —Continue to solve customer challenges with battery heating and cooling solutions —Opportunistical
Slide 54: Pillar: Expand Patient Thermal Solutions
PILLAR 04 Expand Patient Thermal Solutions Proprietary © Gentherm 2023 54
Slide 55: Global Patient Thermal Management Market Exceeds $2.5B
Global Patient Thermal Management Market Exceeds $2.5B 2022 25% • Large market with superior contribution margins • Industry’s broadest patient thermal management portfolio 56% • Core thermal technology shared with Automotive, driving 19% product development synergies and low relative investment • H
Slide 56: Modalities of Patient Thermal Management
Modalities of Patient Thermal Management Liquid Resistive Air Gentherm is the only company in the market that offers all three modalities Proprietary © Gentherm 2023 56
Slide 57: Expand Patient Thermal Solutions
EXPAND PATIENT THERMAL SOLUTIONS —New product and technology introductions —Take share with differentiated resistive warming —Expand in Europe and China —Diversify go-to-market channels Proprietary © Gentherm 2023 57
Slide 59: Our Financial Journey
Our Financial Journey 2018 - 2021 2022 Looking Forward Achieved high-teens Adjusted Entered 2022 with net cash Return to high-teens Adjusted EBITDA Margin in 2H20 and position EBITDA Margin 1H21 Realigned cost structure; Deployed over $220M cash towards Strong Cash Flow reduced operating expenses st
Slide 60: Revenue 2023-2026 Projection
Revenue 2023-2026 Projection Mid Teens CAGR $25-$75M $2.05B - $2.35B $125-$175M $75-$125M $375-$425M $1.45B - $1.55B 2023 Thermal Comfort Pneumatic Comfort Battery Performance Medical 2026 Solutions Significant Automotive content growth drives above market revenue growth Proprietary © Gentherm 2023
Slide 61: 2024 – 2026 Profitability Roadmap
2024 – 2026 Profitability Roadmap Manufacturing Productivity Increase Adjusted EBITDA margins to high-teens Continuo Value us $30M - 50M margin expansion ManufacEngineer turing Improve Continuous Value Automation Automat through manufacturing productivity Footprint Improvement Engineering ing ment i
Slide 62: Adjusted EBITDA: 2023-2026 Projection
Adjusted EBITDA: 2023-2026 Projection High Teens ~.5% 1-2% -2-3% 2.5-4.5% 1-2% 11.5-13.5% 2023 EBITDA Volume Leverage Annual Price Reduction Productivity & Value Purchasing Excellence Alfmeier Synergies 2026 EBITDA Engineering Operational execution drives margin expansion Proprietary © Gentherm 2023
Slide 63: Maintain Strong Balance Sheet
Maintain Strong Balance Sheet < x x 0.7 x 01 Progressively reduced 0.6 x debt between 2018 0.2 Net Leverage and 2021 x x x (0.5) x (0.9) x x x 02 Alfmeier & Dacheng Leveraged strong balance $100 acquisitions sheet to acquire Alfmeier and Dacheng in 2022 $50 $- 2018 2019 2020 2021 2022 Looking Forwar
Slide 64: Capital Allocation
Capital Allocation 2018 – 2022 Uses of Cash Way Forward Continue to fund organic growth Others Capital Expenditures Acquisitions (incl. Deploy capital towards EPS accretive strategic M&A tech) Return cash to shareholders through opportunistic share buybacks Share Repurchases Net Debt Reduction Main
Slide 65: M&A Strategy
M&A Strategy Keys to Success M&A Priorities Expand in-cabin Strong financial position Alignment to corporate content to enable transaction strategic priorities Accelerate Capabilities Robust due diligence Strong execution of process integration Grow Medical Disciplined and strategic M&A process is i
Slide 66: Strategy 4: Deliver Financial Excellence
Strategy 4: Deliver Financial Excellence —Return to High-teens Adjusted EBITDA Margin —Strengthen Free Cash Flow conversion —Maintain a strong balance sheet —Balanced capital allocation strategy Proprietary © Gentherm 2023
Slide 67: Why Gentherm
Why Gentherm 01 02 03 Pure play leader in thermal Global automotive market is Unique, innovative Global reach and industry- management and pneumatic large and under-penetrated and energy efficient solutions leading manufacturing comfort with thermal and pneumatic key to vehicles of the future capa
Slide 68: Q&A
Q&A OUR STRATEG Y FOCUSED GROWTH PILLARS Profitable Growth Flywheel Accelerate Thermal Grow Pneumatic Drive Battery Expand Patient Comfort Growth Comfort Performance Solutions Thermal Solutions Enabled by Gentherm Electronics & Software Systems Proprietary © Gentherm 2023 68
Slide 70: Definitions of Abbreviations
Definitions of Abbreviations • BEV – Battery Electric Vehicle • BTM – Battery Thermal Management • CCS® – Climate Control Seat (Heat/Cool) • ECU – Electronic Control Unit • HVAC – Heating, Ventilation and Air Conditioning • ICE – Internal Combustion Engine • iMTM - Intelligent Micro-Thermal Module •

Gentherm — Investor Day (February 2023) on 6ix

Gentherm — Investor Day (February 2023)

Slide 1: Strategy Update February 22, 2023

Slide 2: Forward-Looking Statement

Slide 3: Use of Non-GAAP Financial Measures

Slide 4: Our Mission

Slide 5: Why Gentherm

Slide 6: Board of Directors

Slide 7: Leadership Team

Slide 8: Our Locations

Slide 9: 50+ Global Automotive Customers

Slide 10: Market Segments

Slide 11: Our Sustainability Journey

Slide 12: Key Industry Trends

Slide 13: Vehicle Electrification

Slide 14: Portfolio Aligned with Electrification

Slide 15: Equipping EVs of Today and Tomorrow

Slide 16: Consumer Satisfaction Research Summary

Slide 17: 2018-2022 Update

Slide 18: 2018 Strategy Recap

Slide 19: Three Years of Industry Challenges

Slide 20: Global Vehicle Volume

Slide 21: Strategy 1: Focused Growth

Slide 22: Strategy 2: Extend Technology Leadership

Slide 23: Strategy 3 and 4: Margins & ROIC, Capital Allocation

Slide 24: Five Year Total Shareholder Return

Slide 25: Our Journey

Slide 26: Imagine…

Slide 27: Our Strategy 2023 and Beyond

Slide 28: Strategy 1: Leverage World Class Talent and Culture

Slide 29: Human Capital and DE&I Progress

Slide 30: Strategy 2: Extend Technology Leadership

Slide 31: Core Technology Competencies

Slide 32: Empowering the Software-Defined Vehicle

Slide 33: Strategy 3: Focused Growth

Slide 34: Focused Growth Pillars

Slide 35: Pillar: Accelerate Thermal Comfort

Slide 36: Market Growth Potential - Take Rate Increase

Slide 37: Market Growth Potential - Heated Steering Wheel

Slide 38: 2022 Global Market Share

Slide 39: Market Growth Potential

Slide 40: Sustainable Competitive Advantage

Slide 41: ClimateSense Innovative Microclimate Solutions

Slide 42: ClimateSense Scalable Platform

Slide 43: Accelerate Thermal Comfort

Slide 44: Pillar: Grow Pneumatic Comfort

Slide 45: Overview of Pneumatic Comfort Business

Slide 46: Comfort Technology Penetration

Slide 47: 2022 Global Market Share Pneumatic Seat Comfort

Slide 48: Breakthrough Integrated Solution

Slide 49: Grow Pneumatic Comfort

Slide 50: Pillar: Drive Battery Performance Solutions

Slide 51: Battery Performance Core Competencies

Slide 52: Proprietary Cell Connecting Technology

Slide 53: Drive Battery Performance Solutions

Slide 54: Pillar: Expand Patient Thermal Solutions

Slide 55: Global Patient Thermal Management Market Exceeds $2.5B

Slide 56: Modalities of Patient Thermal Management

Slide 57: Expand Patient Thermal Solutions

Slide 58: Strategy 4: Deliver Financial Excellence

Slide 59: Our Financial Journey

Slide 60: Revenue 2023-2026 Projection

Slide 61: 2024 – 2026 Profitability Roadmap

Slide 62: Adjusted EBITDA: 2023-2026 Projection

Slide 63: Maintain Strong Balance Sheet

Slide 64: Capital Allocation

Slide 65: M&A Strategy

Slide 66: Strategy 4: Deliver Financial Excellence

Slide 67: Why Gentherm

Slide 68: Q&A

Slide 69: Appendix

Slide 70: Definitions of Abbreviations