Martinrea International Inc. · TSX:MRE
Martinrea International — Q3 2024 Earnings Presentation
26 slides from Martinrea International's earnings presentation, November 2024
Slide 1: Q3 2024 Results
Q3 2024 RESULTS a~ ~~ \ = yy. Vas f MARTINREA] NN
Slide 2: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 2
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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 Company’s beliefs or views or expectations of, improvements in, expansion of and
Slide 4: Agenda
AGENDA PAT D’ERAMO CHIEF EXECUTIVE OFFICER FRED DI TOSTO PRESIDENT PETER CIRULIS CHIEF FINANCIAL OFFICER ROB WILDEBOER EXECUTIVE CHAIRMAN Q&A www.martinrea.com | 4
Slide 5: Pat D'Eramo, Chief Executive Officer
PAT D’ERAMO CHIEF EXECUTIVE OFFICER www.martinrea.com | 5
Slide 6: Q3 2024 Highlights
Q3 2024 HIGHLIGHTS $65.9M ADJUSTED OPERATING $1,237.5M $154.1 INCOME (5.3% MARGIN) TOTAL SALES ADJUSTED EBITDA (12.5% MARGIN) $57.0M FREE CASH FLOW $1,167.3M PRODUCTION SALES www.martinrea.com | 6
Slide 7: Pat D'Eramo, Chief Executive Officer
PAT D’ERAMO CHIEF EXECUTIVE OFFICER www.martinrea.com | 7
Slide 8: Fred Di Tosto, President
FRED DI TOSTO PRESIDENT www.martinrea.com | 8
Slide 9: Status of Operations
STATUS OF OPERATIONS Operationally, we continue to execute well. Commercial activity to offset EV We have experienced OEM volume shortfalls and lingering production shutdowns on inflationary costs continues. select programs, often with little to no advance warning. Vehicle production volumes impacte
Slide 10: New Business Awards
NEW BUSINESS AWARDS LIGHTWEIGHT STRUCTURES PROPULSION SYSTEMS $30M In Annualized Sales $5M In Annualized Sales 2024-2027 Start of Production 2025 Start of Production (Formerly Navistar) TOTAL AWARDS SINCE LAST QUARTER TOTAL AWARDS OVER LAST FOUR QUARTERS $35M In Annualized Sales $265M In Annualized
Slide 11: Global Leadership Conference
GLOBAL LEADERSHIP CONFERENCE www.martinrea.com | 11
Slide 12: Peter Cirulis, Chief Financial Officer
PETER CIRULIS CHIEF FINANCIAL OFFICER www.martinrea.com | 12
Slide 13: Sequential Comparison to Q2 2024
SEQUENTIAL COMPARISON TO Q2 2024 In Canadian Dollars Q3 2024 Q2 2024 Production sales down approximately 8% quarter over Production Sales $1,167.3M $1,263.7M quarter, on lower production volumes. Tooling Sales $70.2M $38.1M Higher tooling sales quarter over quarter. Year to date, tooling sales conti
Slide 14: Net Earnings per Share
NET EARNINGS PER SHARE Q3 2024 Net Earnings per Share Impacted by Depreciation of Mexican Peso against the U.S. Dollar. Q3 2024 Net Earnings per Share (In $000s unless otherwise noted) assuming a normalized Net Earnings per Share (as reported) 31% Effective Tax Rate Net Earnings Before Income Taxes
Slide 15: Year-over-Year Comparison
YEAR-OVER-YEAR COMPARISON In Canadian Dollars Q3 2024 Q3 2023 Production sales down approximately 7% year over Production Sales $1,167.3M $1,250.4M year, on lower production volumes. Tooling Sales $70.2M $128.6M Total Sales $1,237.5M $1,378.9M Operating Income $65.9M $83.0M Operating Income % 5.3% 6
Slide 16: Balance Sheet
BALANCE SHEET NET DEBT - Excluding IFRS-16 ($ Millions) Q3 2024 net debt (excluding the impact of $1,000.0 IFRS-16) decreased by approximately $32 million compared to Q2 2024. $900.0 $800.0 $955.9 In Q3 2024, we spent approximately $9.5 $937.4 $700.0 $857.7 $908.7 $889.2 $856.5 $852.1 $820.1 million
Slide 17: 2024 Outlook
2024 OUTLOOK 2024F 2023A FREE CASH FLOW* $100-$150M (before IFRS 16 lease payments) $195.4M (high end of the range or better expected) Approximately $340M $295.3M CAPEX (expect to finish the year below this level) TOTAL SALES $5.0-$5.3B $5.34B (low end of the range or slightly lower expected) ADJUST
Slide 18: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 18
Slide 19: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Invest to Maintain and Maintain Strong Return Capital to Grow Our Business Balance Sheet Shareholders • Organic opportunities • Targeted Net Debt/Adjusted EBITDA • Repurchase shares with excess • Invest in R&D and new products ratio of ~1.5x or better liquidity (at the a
Slide 20: Thank You, Q&A
THANK YOU Q&A www.martinrea.com | 20
Slide 21: Appendix
APPENDIX www.martinrea.com | 21
Slide 22: Q3 Sales
• Sales down 10.3% year over year: Q3 SALES – Production sales down 6.6% – Tooling sales down 45.4% • North American production sales were down 3.7%, $1,400 reflecting: $1,200 -10.3% YoY – Lower year-over-year production volumes on $1,000 certain vehicle platforms including the Jeep Grand Cherokee a
Slide 23: Q3 Adjusted Operating Income Margin
Q3 ADJUSTED OPERATING INCOME MARGIN • Adjusted Operating Income Margin declined 70bps year-over- year. 6.0% • North American margin increased due to: Adjusted Operating Income Margin (%) − Lower tooling sales. − Higher year-over year favourable commercial settlements. − Productivity and efficiency i
Slide 24: Q3 Net Earnings per Share
Q3 NET EARNINGS PER SHARE • Net earnings per share of $0.19 decreased year-over-year, reflecting: $0.80 – The factors affecting sales and Adjusted Operating Income Margin explained earlier, and Net Earnings Per Share ($) $0.60 – An unusually high tax rate, driven primarily by the depreciation of the
Slide 25: Q3 Free Cash Flow
Q3 FREE CASH FLOW $90 • Free Cash Flow declined year-over-year, reflecting: $80 – Higher cash capex. $70 – A decrease in cash provided by non-cash Free Cash Flow ($ Millions) $60 working capital. $50 – Lower Adjusted EBITDA. – Partially offset by lower cash income $40 $80.5 taxes and interest paid.
Slide 26: Connect With Us
CONNECT WITH US www.martinrea.com
Martinrea International — Q3 2024 Earnings Presentation on 6ix