Magna International Inc. · TSX:MG
Magna International — Investor Presentation (November 2020)
25 slides from Magna International's investor presentation, November 2020
Slide 1: Investor Presentation November 2020
INVESTOR PRESENTATION NOVEMBER 2020
Slide 2: Slide 2
Slide 3: Forward Looking Statements
Forward Looking Statements Certain statements in this document constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements"). Any such forward-looking statements are intended to provide information about management's current expectations and pl
Slide 4: Agenda / Q3 2020 and Outlook Update
Agenda • Q3 2020 and Outlook Update • Positioning for the Future • Financial Strategy 3 Q3 2020 AND OUTLOOK UPDATE 4
Slide 5: Strong Q3 2020 Financial Performance
Strong Q3 2020 Financial Performance $9.1B Consolidated Sales -2% $778M Consolidated Adjusted EBIT +39% 8.5% Adjusted EBIT Margin +250 bps $1.95 Adjusted Diluted EPS +38% $1.3B Free Cash Flow vs $385m $115M Returned to shareholders through dividends Increased 2020 Outlook 5 Q3 2020 Consolidated Sale
Slide 6: Q3 2020 Adjusted EBIT Margin and Segment Results
Q3 2020 Adjusted EBIT Margin % ADJUSTED EBIT MARGIN % Key Factors: +250bps • Cost savings and efficiencies realized (+) 8.5% • COVID-19 related government employee support programs (+) $778M • Labour strike at GM in Q3 2019 (+) 6.0% • Launch costs (+) $558M • Productivity and efficiency improvements
Slide 7: Q3 2020 Cash Flow
Q3 2020 Cash Flow $ MILLIONS Cash from Operations Net Income + Non-Cash Items $ 1,094 Changes in Non-Cash Operating Assets & Liabilities $ 518 $ 1,612 Investment Activities Fixed Assets $ (213) Investments, Other Assets & Intangibles $ (68) $ (281) Proceeds from Disposition and Other $ 14 Free Cash
Slide 8: Increased 2020 Outlook
Increased 2020 Outlook 1 $ BILLIONS UNLESS OTHERWISE NOTED U.S. GAAP November 2020 August 2020 Sales: • Body Exteriors & Structures $13.0 - $13.4 • Power & Vision $9.2 - $9.5 • Seating Systems $4.3 - $4.5 • Complete Vehicles $5.4 - $5.6 Total Sales $31.5 - $32.5 $30.0 - $32.0 Adjusted EBIT Margin %
Slide 9: Launching Arcfox D-T Electric Vehicle; Cooperation with Fisker
Launching Arcfox D-T Electric Vehicle • First vehicle produced with the Arcfox brand by the Magna-BJEV joint venture • For Magna, first vehicle assembled outside of Europe • Volumes expected to grow over the next couple of years as production ramps up and more Arcfox-branded vehicles launch 13 Coope
Slide 10: Business Award for Camera Monitoring System
Business Award for Camera Monitoring System • Awarded business for new camera monitoring system across multiple vehicle models for a global automaker • ClearView¥ technology will enter the market in 2022 • Unique combination of camera, exterior and interior mirror, electronic and software capabiliti
Slide 11: Continue to Monitor Ongoing and Potential New Trends
Continue to Monitor Ongoing and Potential New Trends Magna Well Positioned to Remain a Leader in Mobility 17 Select Technologies Supporting Trends Smart Access Reconfigurable Battery Frames Seating 18
Slide 12: Powertrain Electrification is Growing
Powertrain Electrification is Growing… 4% 2% 3% 5-8% 10-15% 7-9% 26-29% 11-17% 2019 40% 2025 38-46% 2030 51% 27-29% 17-19% 28-29% 11-19% Internal Combustion Engine (ICE) Micro Hybrid: ICE with 12V start/stop functionality & regeneration capability Mild Hybrid: ICE with 48V start/stop functionality,
Slide 13: Positioned to Help Reduce Vehicle Weight; Autonomy Will Proliferate
Positioned to Help Reduce Vehicle Weight • Broadest offering of lightweight design and manufacturing solutions • Ability to support OEMs with comprehensive engineering for product and process design • Strong know-how in joining multi-materials • Global footprint allows us to win, support and launch
Slide 14: Magna's ADAS Hardware Building Blocks; Positioned for Smart Mobility
Magna’s ADAS Hardware Building Blocks Single Front Ultrasonic and Multi Camera Sensors Camera Domain Radar LiDAR Controller 23 Positioned for Smart Mobility Consumer Focused Vehicles Flexible Mobility Vehicles Architecture Providing Services Body & Structure Powertrain Seating ADAS/Electronics/ Mech
Slide 15: Financial Strategy: Capital Allocation Principles Unchanged
FINANCIAL STRATEGY 25 Capital Allocation Principles Unchanged • Preserve liquidity and high investment grade 1 Maintain Strong Balance Sheet credit ratings • Maintain flexibility to invest for growth • Organic opportunities (disciplined capital spending) 2 Invest for Growth • Innovation • Acquisitio
Slide 16: Strong Liquidity Position; Improving Adjusted Debt to Adjusted EBITDA
Strong Liquidity Position $ MILLIONS UNLESS OTHERWISE NOTED Available Operating & Term Lines of Credit $ 3,728 Cash & Cash Equivalents $ 1,618 Total Available Liquidity (9/30/20) $ 5,346 27 Improving Adjusted Debt to Adjusted EBITDA $ MILLIONS LTM EBITDA $ 2,530 Lease Adjustment $ 316 Other $ (10) A
Slide 17: No Significant Debt Repayments Until 2022; Returning Capital to Shareholders
No Significant Debt Repayments Until 2022 Estimated Future LTD Principal Repayments 1 ($Millions) 2,071 2 751 619 338 106 33 2020 2021 2022 2023 2024 Thereafter 1 As of December 31st, 2019 and excludes operating leases 2 Pro-forma including completed offering in June, 2020 of $750M of 10-year senior
Slide 18: In Summary / Appendix
In Summary • Strong Q3 financial performance • Increased 2020 Outlook • Deep systems portfolio, together with Complete Vehicle expertise, position us for the future of mobility • Continuing to invest for the future 31 APPENDIX 32
Slide 19: Magna CEO Transition; New Launches Ramping Up
Magna CEO Transition • Don Walker announced his retirement effective end of 2020 after 33 years of impeccable service, growing Magna to be the third largest global automotive supplier, one of Fortune’s Worlds Most Admired Companies, and a perennial wwinner of customer, industry and ttechnology award
Slide 20: New Launches Ramping Up: Europe and Asia
E U R O P E New Launches Ramping Up Q Q Q Q Q Q Q Q Volkswagen V lk C Caddy dd BMW 2 2-Series S i P Porsche h Taycan T Cross C Turismo T i Q Q Q Q Mercedes-Benz M d B GLA Volkswagen V lk ID.4 ID 4 Q Body Q Power & Vision Q Seating 35 A S I A New Launches Ramping Up Q Q Q Q Q Q Mercedes-Benz M d B GL
Slide 21: Honglizhixin Seating; Getrag Update
Honglizhixin (“Hongli”) Seating • Agreement signed to acquire 65% and control of Hongli, a leading seat supplier to Chinese automakers • Expands Magna’s capabilities in China • Strengthens competitiveness through additional manufacturing sites, full engineering and testing, increased vertical integr
Slide 22: Getrag Update (cont'd); Impact of Non-Cash Impairment
Getrag Update (cont’d) Wholly Owned Operations • Business, predominantly DCT technology, continues to perform well • Package-neutral hybrid DCT (“HDT”) – important element of our powertrain electrification strategy – BMW program award – both DCTs and HDTs – HDT program award with additional global O
Slide 23: Economic Ownership of Transmission JVs; Sales Performance vs Market
Economic Ownership – Transmission JV’s ACCOUNTING TREATMENT MAGNA 50% GFT GFT: No control – equity account for 50% interest 50% (Europe) FORD MOTOR CO. GAP: Control – consolidate entity (i.e. investment in GJT) 75% and record minority interest (i.e. Ford’s interest in GFT) GAP 25% 66.7% GJT: No cont
Slide 24: Sales Performance vs Market (YTD); Disciplined Capital Spending Profile
Sales Performance vs Market (by segment) YTD 2020 vs YTD 2019 Performance Performance vs Unweighted vs Weighted 1 Reported Organic Global Production Global Production Body Exteriors & Structures (27%) (26%) (1%) 3% Power & Vision (24%) (19%) 6% 10% Seating (26%) (26%) (1%) 3% Complete Vehicles (30%)
Slide 25: Strong Free Cash Flow Generation; Long History of Increasing Dividend
Strong Free Cash Flow Generation Free Cash Flow 1 ($Billions) 2.3 1.6 1.2 1.1 0.8-1.0 2016 2017 2018 2019 2020F 1 Free Cash Flow is Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other assets minus capital spending minus investment in other assets 45 Long H
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