Nexteer Automotive Group Limited · HKEX:1316
Nexteer Automotive — H1 2024 Earnings Presentation
24 slides from Nexteer Automotive's earnings presentation, Aug 14, 2024
Slide 1: 2024 Interim Results Announcement
2024 Interim Results Announcement 14 August 2024 1 Copyrights 2024, Nexteer Automotive Corporation. All rights reserved.
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: 2024 1H Business Overview / Financial Review
2024 1H Business Overview Robin Milavec, Executive Board Director, President, Chief Technology Officer and Chief Strategy Officer 2024 1H Financial Review / 2H Considerations Mike Bierlein, Senior Vice President and Chief Financial Officer 3
Slide 4: 2024 1H Business Overview
2024 1H Business Overview Launched Record 38 New Customer Programs Across All Regions 32 represented new or conquest business & 18 represented 100% EV Secured $2.1B of New Bookings, Mainly in 2nd Quarter 43% bookings were generated by Chinese customers, including 1st DPEPS award Continued Co
Slide 5: New Program Launches
New Program Launches 2024 1H Overview Major Programs Launch in 1H 38 Program Launches 1st Nissan Patrol REPS LEVC L380 REPS BYD Dolphin CEPS Peugeot Expert / Fiat Scudo / Toyota ProAce* / Vauxhall Vivaro / Citroën Jumpy EPS launch with Japanese OEM DPEPS 1st DPEPS launch in EMEASA 1st Major adjacent
Slide 6: New Business Award - 1H 2024
New Business Award - 1H 2024 Key Highlights Bookings* Bookings Composition ($ in billions) ($ in billions) Overall bookings among COEM customer portfolio ~$6.0B almost tripled vs. 1H 2023 41% 46% $2.1B 49% $2.1B 59% $26.4 $2.1B Significant incumbent 1% EPS 5% N. America business extension in NA
Slide 7: Continued Profitable Growth in Asia Pacific
Continued Profitable Growth in Asia Pacific Market Share Expansion with Well Maintained Margin Profile 1,215 965 812 646 APAC revenue ($ in millions) FY2020 FY2021 FY2022 FY2023 FY2024e Growth Momentum (Revenue) ~100% cumulative growth from 2020 to 2024e Profitability (EBITDA%) 19.5% 19.0% 17.2% 16.
Slide 8: SbW Innovating the Future of Steering
SbW Innovating the Future of Steering 1990 … 2010 … 2030 … CREATES VALUE ENHANCES REDUCES DIFFERENTIATION COMPLEXITY, COST 8
Slide 9: Full Suite of Modular EPS Solutions
Full Suite of Modular EPS Solutions Capitalizes on APAC Growth, Answers Global Need for Fast, Affordable, Advanced Steering Innovates with Existing, Industry-Leading EPS Building Blocks mREPS Reduces Cost Accelerates Speed-to-Market mPEPS Scalable & Increases Component Reuse Across Platforms
Slide 10: Operational Efficiency & Execution Improve Profitability
Operational Efficiency & Execution Early Retirement Incentive Program Contractual Escalation Agreements (2nd round ERIP implemented in 2H 2024) Non-Contractual Negotiation Saginaw Solar Field (Activated 25-acre solar field in 1H 2024) Ongoing Efforts to Improve Profitability North America
Slide 11: Leveraging Global Supply Chain
Leveraging Global Supply Chain Dual Sourcing - Mitigate risks, drive healthy supply base competition to enhance supply competitiveness Cost Targets & Contractual APRs - Achieve target costs, plus APRs as part of contractual agreements Accelerated Launches - Addressed market demand for shorter produc
Slide 12: Brazil Flooding & One Nexteer
Brazil Flooding & One Nexteer Overview Apr Southern Brazil’s catastrophic flooding impacted Nexteer Porto Alegre operations May 50 Nexteer employees lost their homes and/or belongings Global and local teams took action to mitigate the impact on Nexteer families & the business Jun Returning operation
Slide 13: 2024 1H Financial Review / 2H Considerations
2024 1H Business Overview Robin Milavec, Executive Board Director, President, Chief Technology Officer and Chief Strategy Officer 2024 1H Financial Review / 2H Considerations Mike Bierlein, Senior Vice President and Chief Financial Officer 13 13
Slide 14: 1H 2024 Financial Observations
1H 2024 Financial Observations Achieved 1st Half Revenue of $2.1B Outpacing the Market by 120 bps EBITDA Growth of 6% YoY and Margin Expansion of 50 bps Material, manufacturing and fixed cost reductions driving margin expansion Brazil flood impacting 1st half results Exchange rates impacted m
Slide 15: 1H 2024 Key Financial Metrics
1H 2024 Key Financial Metrics ($ in millions) Revenue EBITDA Net Profit* Free Cash Flow -0.1% +6% -18M $2,102 $2,105 $2,099 $60 $197 $186 $34 $160 9.4% $45 8.9% 1.6% 7.6% $16 2.2% 0.7% -0.3% +23% $3 0.1% ($2) 1H 2023 2H 2023 1H 2024 1H 2023 2H 2023 1H 2024 1H 2023 2H 2023 1H 2024 1H 2023 2H 2023 1H
Slide 16: 1H 2024 Revenue Bridge
1H 2024 Revenue Bridge ($ in millions) Total Revenue YoY Revenue Drivers -0.1% $2,099 $2,102 $2,099 ($3) 1H 2023 1H 2024 * VPO: Volume, Pricing & Others 16
Slide 17: 1H 2024 Revenue Growth Outpacing Market
1H 2024 Revenue Growth Outpacing Market Global N. America EMEASA APAC 1% YoY* (6%) YoY 2% YoY 13% YoY 1.2% GoM** (8%) GoM 7% GoM 12% GoM Total Adjusted Revenue Growth Vs. 1H 2023 Outperformed Market 120 bps, +1.2% * Adjusted revenue growth excludes foreign exchange and commodity ** Growth-over-marke
Slide 18: 1H 2024 Financial Results
1H 2024 Financial Results ($ in millions) Revenue by Region Total Revenue Regional Distribution (structural %) (growth %) NA APAC EMEASA $2,102 $2,099 +$71 $595 $1,195 ($76) $544 17% 18% $1,119 $361 +$5 $366 ($21) ($0) 26% 28% (6.3%) +9.3% +1.4% 57% 53% 1H 2023 1H 2024 1H 2023 V/P/O* 1H 2024 1H 2023
Slide 19: EBITDA Bridge – 1H 2024 vs 1H 2023
EBITDA Bridge – 1H 2024 vs 1H 2023 ($ in millions) EBITDA YoY EBITDA Drivers (% of revenue) +6% $197 $186 +$11 8.9% 9.4% 1H 2023 1H 2024 Margin Profile Improved as Performance and Volume Offsetting Unfavorable Exchange 19
Slide 20: EBITDA and Margin Performance by Region
EBITDA and Margin Performance by Region ($ in millions) NA APAC EMEASA (% of revenue) (% of revenue) (% of revenue) $98 $105 $87 $82 $18 $7 8.2% 7.8% 15.0% 17.6% 5.1% 2.0% 1H 2023 1H 2024 1H 2023 1H 2024 1H 2023 1H 2024 EBITDA Impacted by Performance Drove Margin Impacted by Reduced Volume and Fx Ma
Slide 21: EBITDA to Net Profit Bridge
EBITDA to Net Profit Bridge ($ in millions) 1H 2023 1H 2024 JV Earnings comprised of CNXMotion, EBITDA $ 186 $ 197 DF and Chongqing operations - D&A Expense 139 156 D&A includes $(38M) impairments and $24M Recovery from customer program Operating Profit $ 47 $ 41 cancellation + Share of JV Earni
Slide 22: 1H 2024 Free Cash Flow / Balance Sheet
($ in millions) 1H 2024 Free Cash Flow / Balance Sheet Dec 2023 Jun 2024 1H 2023 1H 2024 Cash and Capital Gross Debt $ 49 $ 48 Finance Leases 51 46 Less: Cash 312 280 Net Debt / (Cash) $ (211) $ (186) $(171) $231 Total Equity $ 2,011 $ 1,995 $152 Total Net Capital $ 1,800 $ 1,809 ($154) Net Debt / N
Slide 23: 2024 Operating Considerations
2024 Operating Considerations Positive Factors Challenges Near-Term On track for another record year for Industry production volume forecasts revenue have been reducing Restructuring underway to improve Elevated recession risk with key profit margins indicators in the US showing economic weakness P
Slide 24: Strategy for Profitable Growth
Strategy for Profitable Growth Expand Strengthen Capitalize on Optimize Cost Pursue Select Target China & Diversify Technology Megatrend & Structure Acquisitions & Emerging Revenue Base Leadership Portfolio Alignment & Alliances Markets A well-defined plan to drive stakeholder value 24
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