Martinrea International Inc. · TSX:MRE
Martinrea International — Q2 2024 Earnings Presentation
24 slides from Martinrea International's earnings presentation, August 2024
Slide 1: Q2 2024 Results
Q2 2024 RESULTS a~ VN / \ ak A, ib Jaa f MARTINREA J] SIS \w w
Slide 2: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 2
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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 Company’s beliefs or views or expectations of, improvements in, expansion of an
Slide 4: Agenda
AGENDA PAT D’ERAMO C HIEF EX EC UTIV E OFFIC ER FRED DI TOSTO PRES IDENT PETER CIRULIS C HIEF FINANC IAL OFFIC ER ROB WILDEBOER EX EC UTIV E C HAIRMAN Q&A www.martinrea.com | 4
Slide 5: Pat D'Eramo, Chief Executive Officer
PAT D’ERAMO CHIEF EXECUTIVE OFFICER www.martinrea.com | 5
Slide 6: Q2 2024 Highlights
Q2 2024 HIGHLIGHTS $166.1M ADJUSTED EBITDA $1,301.8M $0.58 (12.8% MARGIN) TOTAL SALES ADJUSTED EPS $81.6M ADJUSTED OPERATING INCOME (6.3% MARGIN) $1,263.7M PRODUCTION SALES www.martinrea.com | 6
Slide 7: Status of Operations
STATUS OF OPERATIONS Operationally, we continue to perform very well. Commercial activity to offset Industry headwinds inflationary cost pressures and continue to improve. volume shortfalls continues. Slow ramp-up in EV programs is resulting in underutilized assets across the industry. www.martinrea
Slide 8: New Business Awards
NEW BUSINESS AWARDS LIGHTWEIGHT STRUCTURES PROPULSION SYSTEMS $75M In Annualized Sales $50M In Annualized Sales 2025-2027 Start of Production 2025 Start of Production TOTAL TOTAL OVER LAST FOUR QUARTERS $125M In Annualized Sales $310M In Annualized Sales www.martinrea.com | 8
Slide 9: Fred Di Tosto, President
FRED DI TOSTO PRESIDENT www.martinrea.com | 9
Slide 10: Financial Metrics Among the Best in Our Industry
FINANCIAL METRICS AMONG THE BEST IN OUR INDUSTRY LTM Adjusted Operating Income / Adjusted EBIT LTM Free Cash Flow (as a % of Sales) as of Q1 Margin as of Q1 2024 2024 8.0% 7.4% 6.0% 4.2% 4.0% 5.6% 5.3% 5.3% 5.2% 3.5% 6.0% 4.0% 4.3% 3.9% 4.0% 3.2% 2.0% 0.9% 0.8% 2.7% 0.5% 0.2% 2.0% 0.0% -0.2% 0.0% -2
Slide 11: Peter Cirulis, Chief Financial Officer
PETER CIRULIS CHIEF FINANCIAL OFFICER www.martinrea.com | 11
Slide 12: Sequential Comparison to Q1 2024
SEQUENTIAL COMPARISON TO Q1 2024 In Canadian Dollars Q2 2024 Q1 2024 Production sales were generally consistent quarter over Production Sales $1,263.7M $1,257.5M quarter. Tooling Sales $38.1M $66.4M Tooling sales declined by 43%, as they continued to moderate from elevated levels. Total Sales $1,301
Slide 13: Year-Over-Year Comparison
YEAR-OVER-YEAR COMPARISON Q2 2024 results were largely consistent year over year, though Free Cash Flow was better. In Canadian Dollars Q2 2024 Q2 2023 Production Sales $1,263.7M $1,251.1M Tooling Sales $38.1M $109.9M Total Sales $1,301.8M $1,361.1M Adjusted Operating Income $81.6M $82.4M Adjusted O
Slide 14: Balance Sheet
BALANCE SHEET NET DEBT - Excluding IFRS-16 ($ Millions) $1,200.0 Q2 2024 net debt (excluding the impact of $1,000.0 $800.0 IFRS-16) decreased by approximately $4 $600.0 million compared to Q1 2024, reflecting: $908.7 $955.9 $937.4 $889.2 $400.0 $857.7 $782.4 $856.5 $852.1 $662.6 $682.4 $200.0 Strong
Slide 15: 2024 Outlook
2024 OUTLOOK 2024F 2023A TOTAL SALES $5.0-$5.3B $5.34B ADJUSTED OPERATING INCOME MARGIN 5.7%-6.2% 5.6% Approximately $340M CAPEX Approximating depreciation and amortization expense $295.3M for the year FREE CASH FLOW* $100M-$150M $195.4M (before IFRS 16 lease payments) * Note: Including IFRS 16 leas
Slide 16: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 16
Slide 17: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Invest to Maintain and Maintain Strong Return Capital to Grow Our Business Balance Sheet Shareholders • Organic opportunities • Targeted Net Debt/Adjusted EBITDA • Repurchase shares with excess • Invest in R&D and new products ratio of ~1.5x or better liquidity (at the a
Slide 18: Thank You Q&A
THANK YOU Q&A www.martinrea.com | 18
Slide 19: Appendix
APPENDIX www.martinrea.com | 19
Slide 20: Q2 Sales
Q2 SALES • Sales down 4.4% year over year: – Production sales up 1.0% $1,400 – Tooling sales down 65.3% $1,200 -4.4% YoY • North American production sales were up 1.2%, $1,000 reflecting: Sales ($ Millions) – The launch and ramp-up of new programs, including $800 the General Motors (GM) BEV3/BET ele
Slide 21: Q2 Adjusted Operating Income Margin
Q2 ADJUSTED OPERATING INCOME MARGIN • Adjusted Operating Income Margin increased 20bps year-over- Adjusted Operating Income Margin (%) 6.0% year. • North American margin declined due to: − Operational inefficiencies at certain operating facilities − Higher SG&A expense as a percentage of sales 4.0%
Slide 22: Q2 Adjusted Net Earnings Per Share
Q2 ADJUSTED NET EARNINGS PER SHARE $0.80 • Adjusted EPS of $0.58 decreased year-over- year, reflecting: Adjusted Earnings Per Share ($) $0.60 – A $1.1M loss on the disposal of property, plant and equipment, and – A higher effective tax rate. $0.40 • Partially offset by: $0.62 $0.58 – A net foreign e
Slide 23: Q2 Free Cash Flow
Q2 FREE CASH FLOW $60 • Free Cash Flow improved year-over-year, reflecting: $50 – Lower cash capex. Free Cash Flow ($ Millions) – Higher Adjusted EBITDA. $40 – Lower cash income taxes and interest paid. $30 $51.7 – Partially offset by an increase in $20 non-cash working capital. $26.5 $10 $0 Q2 2023
Slide 24: Connect With Us
CONNECT WITH US www.martinrea.com
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