Martinrea International Inc. · TSX:MRE
Martinrea International — Q4 2020 Earnings Presentation
25 slides from Martinrea International's earnings presentation, Mar 4, 2021
Slide 1: Q4 2020 Quarterly Results Presentation
Q4 2020 QUARTERLY RESULTS PRESENTATION MARCH 4, 2021 ©2019 Martinrea International Inc. ©2020
Slide 2: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 2 ©2019 Martinrea International Inc. ©2020
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: 2020 in Review
2020 IN REVIEW ©2019 Martinrea International Inc. ©2020
Slide 5: Key Highlights in 2020
KEY HIGHLIGHTS IN 2020 • Revenues approached pre-COVID levels in the second half, with record adjusted earnings per share • Year ended with similar level of net debt as 2019 despite funding an acquisition and a global pandemic • Strong relationships with our lending syndicate allowed us to expand ou
Slide 6: Pat D'Eramo, President and CEO
PAT D’ERAMO PRESIDENT AND CEO www.martinrea.com | 6 ©2019 Martinrea International Inc. ©2020
Slide 7: Strong Momentum Continued in the Fourth Quarter
STRONG MOMENTUM CONTINUED IN THE FOURTH QUARTER Record fourth quarter Adjusted operating Production sales at the adjusted EPS, slightly income margin up year- high end of our ahead of our guidance over-year (>7% guidance range range excluding operations reflecting strong acquired from volumes; a fun
Slide 8: Status of Operations
STATUS OF OPERATIONS North Europe Asia America • Demand remains strong in the • Production volumes currently • China is operating at high post-COVID shutdown recovery, recovering at a slower pace, as demand levels, in line with pre- while inventories remain well compared to North America. COVID leve
Slide 9: Key Program Launches in 2021
KEY PROGRAM LAUNCHES IN 2021 Lightweight Structures Propulsion Systems Flexible Manufacturing Jeep Grand Cherokee Jeep Grand Cherokee Ford (New Vehicle) Jeep Grand Wagoneer Jeep Grand Wagoneer Float Arms / Tanks / Supports Ford Mustang Mach-E Ford – D35 6-Cylinder Nissan Pathfinder/ Rogue Engine Fue
Slide 10: New Business Awards During the Quarter
NEW BUSINESS AWARDS DURING THE QUARTER Product Group Customer Annualized Sales SOP Lightweight Structures $75M 2021-2024 (Various Body and Chassis Structures) Propulsion Systems $10M 2022 (Brake Line) Flexible Manufacturing Group $30M 2021-2024 (Suspension Modules, Brackets, Float Arms, Weldments) T
Slide 11: NanoXplore - A Successful Investment So Far
NANOXPLORE - A SUCCESSFUL INVESTMENT SO FAR Total Cost of Investment in NanoXplore $41.5 million Current Market Value of our position in NanoXplore $130 million (35 million shares x current share price of $3.71) as of February 25, 2021) Total Return 213% www.martinrea.com | 11 ©2019 Martinrea Intern
Slide 12: New Product Introduction - Graphene and Nylon Coated Brake Lines
NEW PRODUCT INTRODUCTION - GRAPHENE AND NYLON COATED BRAKE LINES We expect to be producing a new graphene-enhanced brake line product for one of our largest customers in 2021 www.martinrea.com | 12 ©2019 Martinrea International Inc. ©2020
Slide 13: Martinrea Book of Business Evolving with Market
MARTINREA BOOK OF BUSINESS EVOLVING WITH MARKET 2015A 2020A 2023E 2025E 8% 21% 25% 75% 79% 92% ICE Platforms BEV/Hybrid Platforms ICE Platforms BEV/Hybrid Platforms ICE Platforms BEV/Hybrid Platforms www.martinrea.com | 13 ©2019 Martinrea International Inc. ©2020
Slide 14: Pure Electric Vehicle Platforms in Martinrea Portfolio
PURE ELECTRIC VEHICLE PLATFORMS IN MARTINREA PORTFOLIO Daimler EVA2 Body and chassis structures SOP: 2022 Ford Mach E Aluminum front and rear subframes SOP: 2020 Geely PMA 1 Aluminum rear subframes SOP: 2021 GM EV Hummer Body and chassis structures SOP: 2022 Audi PPE Body and chassis structures SOP:
Slide 15: Electric Vehicle Opportunities
ELECTRIC VEHICLE OPPORTUNITIES TODAY’S FUEL LINES Tomorrow: Thermal Management/Cooling Lines www.martinrea.com | 15 ©2019 Martinrea International Inc. ©2020
Slide 16: Addressable Content per Vehicle
ADDRESSABLE CONTENT PER VEHICLE www.martinrea.com | 16 ©2019 Martinrea International Inc. ©2020
Slide 17: Fred Di Tosto, Chief Financial Officer
FRED DI TOSTO CHIEF FINANCIAL OFFICER www.martinrea.com | 17 ©2019 Martinrea International Inc. ©2020
Slide 18: Overview of Q4 2020 Results
OVERVIEW OF Q4 2020 RESULTS In Canadian Dollars Q4 2020 Q4 2019 Production Sales $982.3M $787.0M Tooling Sales $88.6M $130.6M Sales up 16.7% (4.9% excluding MRE Total Sales $1,071.0M $917.6M Metalsa sales Operating Income* $66.1M $51.8M Operating income margin up year- OI Margin %* 6.2% 5.6% over-ye
Slide 19: Q4 2020 Results - Sales
Q4 2020 RESULTS - SALES $1,100 $1,071.0 $1,050 +16.7% YoY • Sales up 16.7% year-over-year Sales ($ Millions) $1,000 $950 $917.6 (up 4.9% excluding $108M in sales from MRE $900 Metalsa) – Production sales up 24.8% $850 $800 $750 – Tooling sales down 32.1% Q4 2019 Q4 2020 • GM-UAW strike resulted in $
Slide 20: Q4 2020 Results - Adjusted Operating Income Margin
Q4 2020 RESULTS - ADJUSTED OPERATING INCOME MARGIN* 8.0% • Excluding the MRE Metalsa Group, overall adjusted operating income margin was 7.3% Adjusted Operating Income 6.2% 6.0% 5.6% • Margin improvement driven by: Margin (%) – Lower tooling sales 4.0% – Positive sales mix – Productivity and efficie
Slide 21: Q4 2020 Results - Adjusted Earnings Per Share
Q4 2020 RESULTS – ADJUSTED EARNINGS PER SHARE* $0.60 • Record fourth-quarter adjusted EPS was Adjusted Earnings Per Share $0.55 $0.55 driven by sales and margin performance $0.50 $0.45 • A lower than expected effective tax rate also ($) contributed to the quarter $0.42 $0.40 $0.35 $0.30 Q4 2019 Q4 2
Slide 22: Q4 2020 Results - Free Cash Flow
Q4 2020 RESULTS - FREE CASH FLOW* $60 $47.6 • Free cash flow in Q4 reflected timing of Free Cash Flow ($ Millions) $40 working capital flows and higher capex ahead of new business launches $20 • On a full-year basis, 2020 free cash flow of $0 ($2.6) $62 million exceeded our breakeven target, ($20) d
Slide 23: Our Balance Sheet Is Strong
OUR BALANCE SHEET IS STRONG NET DEBT - Excluding IFRS-16 ($ Millions)* $800.0 Net debt remained essentially flat $750.0 $776.4 in the fourth quarter compared $700.0 $714.7 $682.4 to Q3 2020 $650.0 $674.3 $662.6 $600.0 2019 Q1/20 Q2/20 Q3/20 Q4/20 Our net debt to adjusted EBITDA ratio ended the quart
Slide 24: Outlook and Guidance
OUTLOOK AND GUIDANCE Q1 2021F Q1 2020A Q1 PRODUCTION SALES $900M - $1,000M $822.5M GUIDANCE ADJUSTED FD EPS* $0.36 - $0.44 $0.38 * Adjusted for unusual and other items as noted in our Q4 2020 MD&A available at www.sedar.com • Temporary lag in aluminum price adjustment expected to impact Q1 2021 adju
Slide 25: Questions?
QUESTIONS? www.martinrea.com | 25 ©2019 Martinrea International Inc. ©2020
Martinrea International — Q4 2020 Earnings Presentation on 6ix