Nexteer Automotive Group Limited · HKEX:1316
Nexteer Automotive — H1 2020 Earnings Presentation
30 slides from Nexteer Automotive's earnings presentation, Aug 18, 2020
Slide 1: 2020 Interim Results Announcement
2020 Interim Results Announcement 18 August 2020 Copyright 2020, Nexteer Automotive Corporation. All rights reserved. 1
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
Slide 3: Our Presenters
Our Presenters BILL ROBIN QUIGLEY M I L AV E C Senior Vice President Executive Board Director Chief Financial Officer Senior Vice President Chief Technology Officer Chief Strategy Officer 3
Slide 4: Agenda
Agenda The Unprecedented Environment – Navigation & Current Status Bill Quigley, Senior Vice President and Chief Financial Officer The Way Forward Robin Milavec, Executive Board Director, Senior Vice President, Chief Technology Officer and Chief Strategy Officer 2020 1H Financial Review Bill Quigley
Slide 5: Unprecedented Environment
Unprecedented Environment Light Vehicle Production Unit Volume Y-o-Y Change % N. America APAC EMEASA* 3% -2% -6% -7% -18% -13% -24% -32% -32% -29% -26% -37% -33% -41% -67% -85% -99% -94% Jan. Feb. Mar. Apr. May Jun. Jan. Feb. Mar. Apr. May Jun. Jan. Feb. Mar. Apr. May Jun. 1H 2020 vs -40% -26% -41%
Slide 6: Navigating the Environment
Navigating the Environment Nexteer Response Quickly responded to sharp declines in customer demand & government mandates with orderly suspension of operations across manufacturing footprint; focus on maintaining operational readiness Proactive cost and cash flow management via workforce adjustments,
Slide 7: Global Operations Status Update
Global Operations Status Update North America APAC EMEASA ▪ US and Mexico restarted ▪ China in serial production ▪ Europe restarted production mid-May since mid-February with production mid-May ▪ June revenue at +85% of stable / steady revenue ▪ Europe revenue at +80% of February levels upswing Febr
Slide 8: Successful Launch of New Customer Programs in 1H
Successful Launch of 19 New Customer Programs in 1H NORTH AMERICA EM EASA APAC (4) (4) (11) Chevrolet Tahoe Chevrolet Suburban Peugeot 208 Geely Lynk & Co 05 Great Wall Haval H6 Buick Enclave SPEPS, Halfshafts* Halfshafts CEPS REPS, Halfshafts GMC Yukon Cadillac Escalade REPS, Halfshafts, I-Shafts F
Slide 9: 2020 1H Business Update
2020 1H Business Update ROBIN M I L AV E C Executive Board Director Senior Vice President Chief Technology Officer Chief Strategy Officer 9
Slide 10: Strategy for Profitable Growth
Strategy for Profitable Growth Expand Strengthen Capitalize on Optimize Cost Pursue Select Target China & Diversify Technology EPS as Enabler Structure Acquisitions & Emerging Revenue Base Leadership for ADAS & Alliances Markets A well-defined plan to drive stakeholder value 10 10
Slide 11: Looking Ahead
Looking Ahead Securing Sustainable Profitable Growth In A New Normal Reinforced Strategy Focused Execution ▪ Diversify customer base, grow / protect market share Expand & Diversify among strategically targeted OEMs Revenue Base ▪ Leverage and magnify in-house competencies for portfolio expansion ▪ R
Slide 12: Evolving Megatrends & Portfolio Alignment
Evolving Megatrends & Portfolio Alignment 12 12
Slide 13: Portfolio Alignment & Electrification
Portfolio Alignment & Electrification EPS CIS Driveline 2 2 2 1 1 1 1 2 1 1 1 Top 5 programs contributing to EV content for each product line are shown 13
Slide 14: Full-Size Trucks + Electrification = Growth Opportunities for Nexteer
Full-Size Trucks + Electrification = Growth Opportunities for Nexteer ▪ All product lines offer EV application ▪ All product lines represented on major BEV truck launches: early-mid 2020s – REPS, Column, I-Shaft, Driveline ▪ Protects market position, offers new incremental revenue, pulls ahead advan
Slide 15: High Output Rack EPS
High Output Rack EPS ▪ Truck BEVs Pull Ahead HO REPS Technology ▪ Opens New EPS Growth, Converts HD Trucks & LCVs from Hydraulic Power Steering ▪ Increases load capacity up to 24kN (vs. standard 10kN – 15kN ) Safety, Comfort, Fuel Economy & Differentiator ▪ Enhanced fuel economy: Mass reduction & en
Slide 16: New CIS and Driveline Tech on BEV Truck
New CIS and Driveline Tech on BEV Truck ▪ Truck BEVs Pull Ahead Driveline & CIS Technologies ▪ Establishes Premium Products in Marketplace, Paves Way to Broader Adoption New Ball Spline Axle Bar Technology New Column Position Module and ▪ Enables a halfshaft to meet NVH and durability Actuator Assem
Slide 17: Electrification + MaaS + ADAS L5 + Connectivity
Electrification + MaaS + ADAS L5 + Connectivity Featuring Nexteer’s Advanced Steering Technology ▪ ADAS L5, shared, self-driven, electric – No steering wheel or mechanical connection from gear to “driver” – New cyber security requirements – New OTA update capabilities ▪ Features Nexteer’s REPS Auton
Slide 18: Ford Bronco Features Powerpack Innovation
Ford Bronco Features Powerpack Innovation ▪ INNOVATION: <10 FIT, Nearly Cylindrical, Folded Circuit Board – Benefits: Packaging, Cost, Safety Nearly Cylindrical Powerpack Design ▪ Rack EPS-enabled ADAS – Lane Keeping & Auto Park Assist ▪ Enables OTA Flash Updates ▪ Common Software Across Vehicle Pla
Slide 19: Industry Recognition
GM 2019 Supplier of the Year Award GM Supplier Quality Excellence Awards for Nexteer Plants in Saginaw, US; Querétaro, Mexico; Chongqing, China; Wuhu, China and Bangalore, India Industry Recognition Ford Best Managed Companies with Outstanding Quality Performance in 2019 Award for Nexteer Querétaro,
Slide 20: 2020 1H Financial Review
2020 1H Financial Review BILL QUIGLEY Senior Vice President Chief Financial Officer 20
Slide 21: 2020 1H Financial Review
2020 1H Financial Review ▪ COVID-19 Pandemic Brought Unprecedented Global Constant Engagement Production Disruption Across All Served Markets – NA and EMEASA Operations Most Impacted ▪ Cost Actions Mitigated Earnings Impact from Significant Volume Loss and Production Shutdowns ▪ Customer Program Can
Slide 22: Key Financial Metrics
Key Financial Metrics ($ in millions) Revenue EBITDA Net Profit* Free Cash Flow (% of revenue) (% of revenue) -34% -58% -99% $45 $1,832 $277 $131 $1,211 15.1% $116 7.2% 7.2% 9.6% $1 -$190 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 * Net Profit Attributable to Equity Holders All
Slide 23: Revenue Comparison
Revenue Comparison ($ in millions) Regional Revenue Global Revenue Y-o-Y Change (structural %) $1,832 $1,832 -$580 14% 17% 17% 17% $1,211 -$55 $30 -$16 $1,211 15% 19% 69% 66% 1H 2019 1H 2020 1H 2019 V/P/O* NA CIS Morocco FX 1H 2020 N. America EMEASA APAC * Volume / Price / Other -$622 Pervasive and
Slide 24: Revenue by Region
Revenue by Region ($ in millions) Regional Revenue Performance Performance vs Market N. America APAC EMEASA Y-o-Y Revenue Change (structural %) (structural %) (structural %) N. America -38% $1,274 $305 $252 Asia Pac. -24% $231 $186 EMEASA -26% $794 Growth-Over-Market** 69% 66% 17% 19% 14% 15% 15% 17
Slide 25: Revenue by Product Line
Revenue by Product Line ($ in millions) Global Revenue Product Line Distribution (structural %) (growth %) EPS Columns Driveline HPS $1,832 -33% -46% -27% -36% 4% 15% $1,222 $270 15% 14% $1,211 $269 $71 4% 16% $824 $196 12% $45 $146 66% 68% 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H
Slide 26: EBITDA Bridge
EBITDA Bridge ($ in millions) EBITDA Y-o-Y EBITDA Drivers (% of revenue) -58% -$161 $277 $277 -$192 17% $116 $44 $116 -$13 15.1% 9.6% 1H 2019 1H 2020 1H 2019 V/M/P NA CIS Net Cost Perf. 1H 2020 Decremental Earnings Impact Limited to ~26% 26 26
Slide 27: EBITDA by Region
EBITDA by Region ($ in millions) N. America APAC EMEASA (% of revenue) (% of revenue) (% of revenue) 14.8% 19.5% $189 13.3% 20.1% $60 $34 9.1% $46 -0.5% $72 -$1 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 NA and EMEASA Most Impacted During 1H 2020 27
Slide 28: EBITDA to Net Profit Walk
EBITDA to Net Profit Walk ($ in millions) 1H 2019 1H 2020 ▪ D&A includes $32 in engineering EBITDA $ 277 $ 116 intangible asset impairments principally from customer - D&A Expense 117 145 program cancellations Operating Profit $ 160 $ (29) ▪ JV earnings comprised of CNX + Share of JV Earnings (2) (0
Slide 29: Free Cash Flow / Balance Sheet Summary
Free Cash Flow / Balance Sheet Summary ($ in millions) YE 2019 1H 2020 1H 2019 1H 2020 Cash and Capital Gross Debt $ 307 $ 302 -$28 Finance Leases 62 57 Less - Cash 602 375 Net Cash $ 233 $ 16 -$195 -$190 $240 -$162 Total Equity $ 1,852 $ 1,749 Total Net Capital $ 1,619 $ 1,734 Liquidity $45 $45 Cas
Slide 30: 2020 2H Considerations & Summary
2020 2H Considerations & Summary OEM Production Recovery Expected for 2H OEM Production Forecast (July IHS Forecast) (units in millions) ▪ All Markets Served 1H 2H ▪ Experiencing Current Strong Demand in NA for 2020 2020 % FST / SUVs Global 30.1 39.4 31% Favorable Earnings and Cash Flow Conversion o
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