Martinrea International Inc. · TSX:MRE
Martinrea International — Q3 2021 Earnings Presentation
20 slides from Martinrea International's earnings presentation, Nov 4, 2021
Slide 1: Q3 2021 Quarterly Results Presentation
Q3 2021 QUARTERLY RESULTS PRESENTATION NOVEMBER 4, 2021 ©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 or expectations of, improvements in, expansion of and/or guidance or outlook as to
Slide 4: Pat D'Eramo, President and CEO
PAT D’ERAMO PRESIDENT AND CEO www.martinrea.com | 4
Slide 5: Tough quarter as supply shortages worsened; strong demand supports longer-term outlook
TOUGH QUARTER, AS SUPPLY SHORTAGES WORSENED; STRONG DEMAND SUPPORTS LONGER-TERM OUTLOOK Results were below expectations, The current environment is as chip-related OEM production difficult; we are navigating shutdowns and customer “call- through a period of volatility with offs” deteriorated during
Slide 6: Status of Operations
STATUS OF OPERATIONS North Europe Asia America • Volumes being hindered by • Industry volumes also being • China is also being impacted by semiconductor and other supply impacted by chip and other supply shortages and cost shortages. Improvement supply shortages. Cost inflation inflation. These head
Slide 7: Quarterly New Business Awards (2021 – 2024)
QUARTERLY NEW BUSINESS AWARDS (2021 – 2024) Product Group Customer Annualized Sales SOP Propulsion Systems (Fluids Systems) $40M 2022 - 2024 Year-to-date new business awards now total approximately $210 million www.martinrea.com | 7
Slide 8: Martinrea Innovation Development (MiND)
MARTINREA INNOVATION DEVELOPMENT (MiND) PURPOSE LEADERSHIP CURRENT MARTINREA EQUITY INVESTMENTS: Incubate, develop, and fund Bruce Johnson, • NanoXplore – Hold a 22.2% interest in innovative technologies that Executive Vice NanoXplore (GRA-TO), the world’s largest can be directly applied to Presiden
Slide 9: Fred Di Tosto, Chief Financial Officer
FRED DI TOSTO CHIEF FINANCIAL OFFICER www.martinrea.com | 9
Slide 10: Overview of Q3 2021 Results
OVERVIEW OF Q3 2021 RESULTS Third-quarter results impacted by semiconductor and other supply shortages, mix, cost inflation, and a heavy launch cycle In Canadian Dollars Q3 2021 Q3 2020 Production Sales $797.2M $933.3M Tooling Sales $51.3M $37.8M Total Sales $848.5M $971.1M Adjusted Operating Income
Slide 11: Adjusted Operating Income (Loss) Bridge: Q2 2021 to Q3 2021
ADJUSTED OPERATING INCOME (LOSS) BRIDGE: Q2 2021 TO Q3 2021 ($ MILLIONS) Q2 2021 Lower volume Negative mix Adjusted Impact at and weaker Operating Normal labour cost Cost Inflation Income Decremental absorption (primarily labour, Launch- Margins Related material, Lower energy) Costs COVID Other Q3 2
Slide 12: Balance Sheet
BALANCE SHEET NET DEBT - Excluding IFRS-16 ($ Millions) Net Debt increased in the third $1,000.0 quarter compared to Q2 2021 $800.0 $859.6 $776.4 $793.4 $600.0 $714.7 $728.0 $400.0 $662.6 $674.3 $682.4 Our Net Debt to Adjusted EBITDA $200.0 ratio ended the quarter at 2.5x, $0.0 below our covenant ma
Slide 13: 2023 Outlook Intact
2023 OUTLOOK INTACT 2023F TOTAL SALES $4.6-$4.8B ADJUSTED OPERATING INCOME MARGIN >8% FREE CASH FLOW >$200M KEY ASSUMPTIONS • Based on IHS volume projections • Capex expected to normalize over the forecast period and approximate depreciation as a % of sales • Outlook does not consider any contributi
Slide 14: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 14
Slide 15: Questions?
QUESTIONS? www.martinrea.com | 15
Slide 16: Appendix
APPENDIX www.martinrea.com | 16
Slide 17: Q3 2021 Results - Sales
Q3 2021 RESULTS - SALES • Sales down 12.6% year-over-year $971.1 $1,000 $848.5 – Production sales down 14.6% $800 Sales ($ Millions) $600 +92.1% YoY $400 – Tooling sales up 35.9% $200 • Negative impact impact from $0 Q3 2020 Q3 2021 – Lower industry production volumes due to the global shortage of s
Slide 18: Q3 2021 Results - Adjusted Operating Income (Loss) Margin
Q3 2021 RESULTS - ADJUSTED OPERATING INCOME (LOSS) MARGIN 10.0% • Adjusted Operating Income (Loss) Margin was a loss of 8.0% 7.8% 1.9%, 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% – Wea
Slide 19: Q3 2021 Results – Adjusted Net Earnings (Loss) per Share
Q3 2021 RESULTS – ADJUSTED NET EARNINGS (LOSS) PER SHARE $0.80 • Adjusted EPS was a loss of $0.21 in the Adjusted Earnings (Loss) Per $0.57 $0.60 quarter, driven mainly by the factors impacting sales and margins described $0.40 Share ($) $0.20 $0.00 earlier ($0.20) ($0.21) ($0.40) Q3 2020 Q3 2021 ww
Slide 20: Q3 2021 Results - Free Cash Flow
Q3 2021 RESULTS - FREE CASH FLOW • Free Cash Flow was negative during the quarter, $150 and down sharply year-over-year, due to: Free Cash Flow ($ Millions) $102.5 $100 – Lower adjusted EBITDA $50 – An increase in non-cash working capital, as $0 supply chain issues are resulting in a higher- than-no
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