Martinrea International Inc. · TSX:MRE
Martinrea International — Q4 2021 Earnings Presentation
27 slides from Martinrea International's earnings presentation, Mar 3, 2022
Slide 1: Q4 2021 Quarterly Results Presentation
Q4 2021 QUARTERLY RESULTS PRESENTATION MARCH 3, 2022 ©2019 Martinrea International Inc.
Slide 2: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 2
Slide 3: Legal Disclaimer
*LEGAL DISCLAIMER 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 growth of or expectations of, improvements in, expansion of and/or guidance or outlook as
Slide 4: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 4
Slide 5: Reasons to Be Positive
REASONS TO BE POSITIVE • Q4 2021 results were better than Q3 2021 • We are off to an even better start in 2022 • Results should continue to improve throughout the year as supply chain conditions normalize and volumes recover • Launch activity is expected to normalize late this year, which should hel
Slide 6: Key Highlights of 2021
KEY HIGHLIGHTS OF 2021 • We celebrated out 20th anniversary as an auto parts manufacturer • We continued to deliver industry-leading safety metrics with a TRIF of 1.37 – a 46% improvement over last year, and a 91% improvement since 2014 • We reached an agreement with our banking syndicate on covenan
Slide 7: Pat D'Eramo, President and CEO
PAT D’ERAMO PRESIDENT AND CEO www.martinrea.com | 7
Slide 8: Another Challenging Quarter, But Better Than the Last; 2023 Outlook Intact
ANOTHER CHALLENGING QUARTER, BUT BETTER THAN THE LAST; 2023 OUTLOOK INTACT Results improved sequentially over Although improving, challenges Q3 2021 levels; chip-related OEM remain, as we continue to face production shutdowns and customer volume and cost headwinds, supply “call-offs” continued in th
Slide 9: Status of Operations
STATUS OF OPERATIONS North Europe Asia America • Volumes continue to be held back by • Europe is facing similar volume • China is also being impacted by the semiconductor and other supply headwinds and cost pressures as in same volume and cost headwinds as shortages, though production was North Amer
Slide 10: Quarterly New Business Awards (2021 – 2024)
QUARTERLY NEW BUSINESS AWARDS (2021 – 2024) Product Group Customer Annualized Sales SOP Lightweight Structures (Various Body and Chassis Structures) $50M 2022 - 2024 Propulsion Systems (Fluids Systems) $35M 2022-2024 Flexible Manufacturing Group (Suspension Module, Various Industrial $15M 2022-2024
Slide 11: Path to 2023 Outlook
PATH TO 2023 OUTLOOK Launch related cash expected to normalize Expected to into second half of 2022 smooth as supply chain improves Commercial Other >8% negotiations Heavy Launch Cycle Operations and customer production inefficiency Material/Labour/Energy Cost Inflation Volume/ Mix Adjusted Operatin
Slide 12: EV Battery Joint Venture
EV Battery Joint Venture www.martinrea.com | 12
Slide 13: VoltaXplore - Timeline
VOLTAXPLORE - TIMELINE 2021 Early 2022 Mid-2022 Mid-2024 Secure Commissioning Go/No Go Demonstration and SOP of Decision on 10 GWh SOP of first phase of facility Demonstration facility (to be built in two 10 GWh facility facility phases) www.martinrea.com | 13
Slide 14: Advantages of Graphene-Enhanced Li-Ion Batteries
ADVANTAGES OF GRAPHENE-ENHANCED LI-ION BATTERIES www.martinrea.com | 14
Slide 15: VoltaXplore – 2022 Battery Day
VOLTAXPLORE – 2022 BATTERY DAY • To be held at the VoltaXplore demonstration facility in Montreal • Tour of demonstration facility • Technical discussions and presentations with representatives from VoltaXplore including senior management www.martinrea.com | 15
Slide 16: Fred Di Tosto, Chief Financial Officer
FRED DI TOSTO CHIEF FINANCIAL OFFICER www.martinrea.com | 16
Slide 17: Q4 2021 Results – Year-over-Year Comparison
Q4 2021 RESULTS – YEAR-OVER-YEAR COMPARISON Year-over-year, fourth quarter results were impacted by lower volumes due to semiconductor and other supply shortages, mix, cost inflation, certain operational inefficiencies, heavy launch activity, and lower COVID-related subsidies In Canadian Dollars Q4
Slide 18: Q4 2021 Results – Sequential Comparison to Q3 2021
Q4 2021 RESULTS – SEQUENTIAL COMPARISON TO Q3 2021 Fourth quarter results improved sequentially; chip-related OEM production shutdowns and customer “call-offs” continued during the quarter, but did improve slightly In Canadian Dollars Q4 2021 Q3 2021 Production sales up 6.6% on higher Production Sal
Slide 19: 2023 Outlook Intact
2023 OUTLOOK INTACT* 2023F 2021A TOTAL SALES $4.6-$4.8B $3.78B ADJUSTED OPERATING INCOME MARGIN >8% 1.8% FREE CASH FLOW >$200M ($121.6M) KEY ASSUMPTIONS • Based on IHS volume projections • Capex expected to normalize over the forecast period and approximate depreciation as a % of sales • Outlook doe
Slide 20: Balance Sheet
BALANCE SHEET* NET DEBT - Excluding IFRS-16 ($ Millions) Net Debt was essentially flat in the fourth quarter compared to Q3 2021. $1,000.0 Net Debt to Adjusted EBITDA ended $800.0 $859.6 $857.7 the quarter at 3.11x. $776.4 $793.4 $600.0 $714.7 $674.3 $682.4 $728.0 $662.6 $400.0 During the fourth qua
Slide 21: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 21
Slide 22: Questions?
QUESTIONS? www.martinrea.com | 22
Slide 23: Appendix
APPENDIX www.martinrea.com | 23
Slide 24: Q4 2021 Results - Sales
Q4 2021 RESULTS - SALES $1,000 $1,071.0 $1,053.4 • Sales down 1.6% year-over-year $800 -1.6% YoY – Production sales down 13.5% Sales ($ Millions) $600 – Tooling sales up 129.8% $400 • Negative impact from – Lower industry production volumes due to the global $200 $0 Q4 2020 Q4 2021 shortage of semic
Slide 25: Q4 2021 Results - Adjusted Operating Income (Loss) Margin
Q4 2021 RESULTS - ADJUSTED OPERATING INCOME (LOSS) MARGIN 8.0% • Adjusted Operating Income (Loss) Margin was close to break even 6.2% (-0.3%), a sharp year-over-year decline, driven by: Adjusted Operating Income 6.0% – Lower industry production volumes (Loss) Margin (%) 4.0% – Negative sales mix 2.0
Slide 26: Q4 2021 Results - Adjusted Net Earnings (Loss) Per Share
Q4 2021 RESULTS – ADJUSTED NET EARNINGS (LOSS) PER SHARE $0.80 • Adjusted EPS was a loss of $0.12 in the Adjusted Earnings (Loss) Per quarter, driven mainly by the factors $0.60 $0.55 impacting sales and margins described $0.40 Share ($) $0.20 $0.00 earlier ($0.20) ($0.12) ($0.40) Q4 2020 Q4 2021 ww
Slide 27: Q4 2021 Results - Free Cash Flow
Q4 2021 RESULTS - FREE CASH FLOW $25 $21.1 • Free Cash Flow increased year-over-year, mainly Free Cash Flow ($ Millions) $20 reflecting a reduction in tooling-related working $15 capital $10 • Cash capex was also lower year-over-year $5 $0 ($5) ($2.6) Q4 2020 Q4 2021 www.martinrea.com | 27
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