Martinrea International Inc. · TSX:MRE
Martinrea International — Q4 2022 Earnings Presentation
24 slides from Martinrea International's earnings presentation, Mar 2, 2023
Slide 1: Q4 2022 Quarterly Results Presentation
Q4 2022 QUARTERLY RESULTS PRESENTATION MARCH 2, 2023 ©2019 Martinrea International Inc.
Slide 2: 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 3: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 3
Slide 4: Martinrea Vision – Making Lives Better
MARTINREA VISION – MAKING LIVES BETTER www.martinrea.com | 4
Slide 5: Key Highlights of 2022
KEY HIGHLIGHTS OF 2022 Industry-leading safety metrics continued to improve Record revenues of $4.758 billion – up 25.7% from 2021 Total Recordable Injury Frequency of 1.21 – 86% improvement over 2014 Record Adjusted EBITDA – up 62.4% from 2021 Free Cash Flow of $50.2 million ($78.8 million in 2H 20
Slide 6: Key Highlights of 2022 (Continued)
KEY HIGHLIGHTS OF 2022 (CONTINUED) Successfully launched a Continued to invest in leading- substantial amount of new edge technologies business (up from 'C' in 2021) www.martinrea.com | 6
Slide 7: Pat D’Eramo, President and CEO
PAT D’ERAMO PRESIDENT AND CEO www.martinrea.com | 7
Slide 8: Continued Solid Performance in Q4 2022; Strong 2023 Expected
CONTINUED SOLID PERFORMANCE IN Q4 2022; STRONG 2023 EXPECTED Q4 2022 results were generally consistent Q4 2022 Adjusted Operating Income quarter-over-quarter as we continue to Margin was slightly lower quarter- recover inflationary costs through over-quarter, due essentially to commercial activity a
Slide 9: 2023 Outlook Maintained
2023 OUTLOOK MAINTAINED 2023F 2022A TOTAL SALES $4.8-$5.0B $4.76B ADJUSTED OPERATING INCOME MARGIN 6%-7% 4.8% FREE CASH FLOW $150M-$200M $50.2M www.martinrea.com | 9
Slide 10: Status of Operations
STATUS OF OPERATIONS North Rest of World Europe 2022 Production Sales America 2022 Production Sales 2022 Production Sales • Adjusted Operating Income Margin • Notable quarter-over-quarter • Adjusted Operating Income declined contracted somewhat quarter-over- improvement in Adjusted Operating slightl
Slide 11: New Business Awards Announced
NEW BUSINESS AWARDS ANNOUNCED Product Group Customer Annualized Sales SOP Lightweight Structures (Various Body and Chassis Structures) $60M 2025 Propulsion Systems (Gearbox Housing, Fluids Systems) $15M 2023-2024 Flexible Manufacturing Group (Trim Components) $15M 2023 New business awards since the
Slide 12: Effenco®
EFFENCO® • Acquired assets of Montreal-based Effenco® Development Inc. in 2022 • Effenco® designs, manufactures and markets ultracapacitor systems, which reduces: • The Effenco® Hybrid electric solution is focused on the heavy-duty vocational truck market • Effenco® is a Global Cleantech 100 company
Slide 13: Fred Di Tosto, Chief Financial Officer
FRED DI TOSTO CHIEF FINANCIAL OFFICER www.martinrea.com | 13
Slide 14: Q4 2022 Results – Sequential Comparison to Q3 2022
Q4 2022 RESULTS – SEQUENTIAL COMPARISON TO Q3 2022 Q4 2022 sales and operating income generally consistent with Q3. Adjusted EBITDA was a new quarterly record for the Company. In Canadian Dollars Q4 2022 Q3 2022 Production sales up 4.1% largely reflecting Production Sales $1,173.6M $1,127.1M reclass
Slide 15: Q4 2022 Results – Year-Over-Year Comparison
Q4 2022 RESULTS – YEAR-OVER-YEAR COMPARISON Adjusted Operating Income and Adjusted EBITDA were up sharply from a challenging year-ago quarter on higher sales and margins. In Canadian Dollars Q4 2022 Q4 2021 Production Sales $1,173.6M $849.9M Tooling Sales $121.0M $203.6M Total Sales $1,294.6M $1,053
Slide 16: Balance Sheet
BALANCE SHEET NET DEBT - Excluding IFRS-16 ($ Millions) $1,000.0 $800.0 Q4 2022 net debt was modestly lower $600.0 compared to Q3 2022. $857.7 $922.1 $931.1 $928.2 $908.7 $400.0 $688.1 $662.2 $582.8 $670.6 $662.6 $682.4 Net-debt-to-Adjusted EBITDA ended the $200.0 quarter at 1.95x, in line with our
Slide 17: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Invest to Maintain and Maintain Strong Return Capital Grow Our Business Balance Sheet to Shareholders • Organic opportunities • Targeted Net Debt/Adjusted • Repurchase shares with • Invest in R&D and product EBITDA ratio of ~1.5x over excess liquidity offering time (at t
Slide 18: Cash Flow
CASH FLOW Decrease driven by COVID-19 pandemic OPERATING CASH FLOW - BEFORE CHANGES IN WORKING CAPITAL ($ MILLIONS) and chip/other supply shortages $600 $500 $508 $524 $400 $461 $300 $406 $348 $358 $308 $321 $200 $259 $100 $0 2014 2015 2016 2017 2018 2019 2020 2021 2022 CAPEX ADDITIONS ($ MILLIONS)
Slide 19: Questions?
QUESTIONS? www.martinrea.com | 19
Slide 20: Appendix
APPENDIX www.martinrea.com | 20
Slide 21: Q4 2022 Results - Sales
Q4 2022 RESULTS - SALES $1,200 • Sales up 22.9% over Q4 2021, as semiconductor and other $1,000 +22.9% YoY supply shortages had a pronounced impact on prior-year volumes Sales ($ Millions) $800 $600 $1,294.6 – Production sales up 38.1% $1,053.4 $400 – Tooling sales down 40.6% $200 • Positive impact
Slide 22: Q4 2022 Results - Adjusted Operating Income (Loss) Margin
Q4 2022 RESULTS - ADJUSTED OPERATING INCOME (LOSS) MARGIN 6.0% • Adjusted Operating Income Margin up 580bps year-over-year, reflecting: Adjusted Operating Income (Loss) – Higher production volumes and improved sales mix 4.0% – Favourable commercial settlements – Productivity and efficiency improveme
Slide 23: Q4 2022 Results - Adjusted Net Earnings (Loss) Per Share
Q4 2022 RESULTS – ADJUSTED NET EARNINGS (LOSS) PER SHARE $0.60 • Adjusted EPS of $0.58 was much improved year- Adjusted Earnings (Loss) Per $0.40 over-year, reflecting: $0.20 $0.58 – The factors impacting sales and margins Share ($) described earlier $0.00 ($0.12) – A net foreign exchange gain of $2
Slide 24: Q4 2022 Results - Free Cash Flow
Q4 2022 RESULTS - FREE CASH FLOW $25 • Free Cash Flow decreased year-over-year due to: Free Cash Flow ($ Millions) $20 – Higher capex $15 – A decrease in cash provided by non-cash $10 $21.1 working capital $14.7 – Higher interest expense $5 – Higher cash taxes $0 Q4 2021 Q4 2022 – Partially offset b
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