Martinrea International Inc. · TSX:MRE
Martinrea International — Q3 2022 Earnings Presentation
25 slides from Martinrea International's earnings presentation, Nov 1, 2022
Slide 1: Q3 2022 Quarterly Results Presentation
Q3 2022 QUARTERLY RESULTS PRESENTATION NOVEMBER 1, 2022 ©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 of or expectations of, improvements in, expansion of and/or guidance or outlook as
Slide 4: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 4
Slide 5: Pat D'Eramo, President and CEO
PAT D’ERAMO PRESIDENT AND CEO www.martinrea.com | 5
Slide 6: Q3 2022 Results Up Solidly vs. Last Quarter, Strong 2023 Expected
Q3 2022 RESULTS UP SOLIDLY VS. LAST QUARTER STRONG 2023 EXPECTED Q3 2022 results showed a solid Adjusted operating income margin improvement over Q2 2022, mainly was up 170bps quarter-over-quarter reflecting higher margins. Adjusted driven by an improved mix, lower EBITDA of $140 million was a quart
Slide 7: Status of Operations
STATUS OF OPERATIONS North Rest of World Europe YTD Production Sales America YTD Production Sales YTD Production Sales • Adjusted operating income improved • Adjusted operating income slightly lower • Adjusted operating income quarter-over-quarter on higher quarter-over-quarter improved quarter-over
Slide 8: Revised 2023 Outlook
REVISED 2023 OUTLOOK 2023F 2023F (previous) 2021A TOTAL SALES $4.8-$5.0B $4.6-$4.8B $3.78B ADJUSTED OPERATING INCOME MARGIN 6%-7% >8% 1.8% FREE CASH FLOW $150M-$200M >$200M ($121.6M) www.martinrea.com | 8
Slide 9: Global Leadership Conference
GLOBAL LEADERSHIP CONFERENCE • October 11 – 14 in Ontario, Canada • 150 top leaders in various roles across the organization • Representation every region in which we have a presence • Canada • US • Mexico • Brazil • Germany • Spain • Slovakia • China • Japan • Purpose: To discuss the Company’s stra
Slide 10: Global Leadership Conference – Key Takeaways
GLOBAL LEADERSHIP CONFERENCE – KEY TAKEAWAYS • We are doubling down on our four-pillar strategy • The strategy has served us well in the past, enabling us to: – Expand our business – organically and through acquisition – Double our adjusted operating income margin in less than five years (2014-2019)
Slide 11: Global Leadership Conference – Key Takeaways
GLOBAL LEADERSHIP CONFERENCE – KEY TAKEAWAYS • Disciplined Financial Management What Does it Mean? – Prudent profitable growth – Strict return hurdle rates when quoting new business – Free Cash Flow is the top priority • Interactive workshop held on Free Cash Flow • Strong commitment and buy-in acro
Slide 12: Global Leadership Conference – Key Takeaways
GLOBAL LEADERSHIP CONFERENCE – KEY TAKEAWAYS • Program Management – Presentations and panel discussions exploring most successful launches to ensure we implement and enhance best practices in future launches www.martinrea.com | 12
Slide 13: Global Leadership Conference – Key Takeaways
GLOBAL LEADERSHIP CONFERENCE – KEY TAKEAWAYS • Martinrea Operating System (MOS) – Reviewed process discipline – Interactive workshops demonstrating how LEAN can have a big impact not only on efficiency, productivity, and profits but also on employee engagement and morale www.martinrea.com | 13
Slide 14: Global Leadership Conference – Key Takeaways
GLOBAL LEADERSHIP CONFERENCE – KEY TAKEAWAYS • We Have a Lot of Opportunities – In our core automotive parts business, but not limited to it • We Are an Innovative Company – Our R&D capabilities are strong – BreakThrough products will be key to our organic growth – MiND is an incubator for new techn
Slide 15: Fred Di Tosto, Chief Financial Officer
FRED DI TOSTO CHIEF FINANCIAL OFFICER www.martinrea.com | 15
Slide 16: Q3 2022 Results – Sequential Comparison to Q2 2022
Q3 2022 RESULTS – SEQUENTIAL COMPARISON TO Q2 2022 Q3 2022 results better than Q2, mainly on higher margins, but also better production sales. Free Cash Flow also improved on higher EBITDA and positive working capital flows In Canadian Dollars Q3 2022 Q2 2022 Production sales up 7% reflecting positi
Slide 17: Q3 2022 Results – Year-Over-Year Comparison
Q3 2022 RESULTS – YEAR-OVER-YEAR COMPARISON Adjusted Operating Income and Adjusted EBITDA were much-improved over a very challenging year-ago quarter on higher sales and margins. Free Cash Flow also improved sharply on higher EBITDA and positive working capital flows. In Canadian Dollars Q3 2022 Q3
Slide 18: Balance Sheet
BALANCE SHEET NET DEBT - Excluding IFRS-16 ($ Millions) Q3 2022 net debt was essentially flat compared to Q2 2022. $1,000.0 $800.0 $922.1 $931.1 $928.2 During the fourth quarter of 2021, and in $859.6 $857.7 $600.0 $714.7 $776.4 $682.4 $728.0 $793.4 light of the semiconductor shortage, we $662.6 $67
Slide 19: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 19
Slide 20: Questions?
QUESTIONS? www.martinrea.com | 20
Slide 21: Appendix
APPENDIX www.martinrea.com | 21
Slide 22: Q3 2022 Results - Sales
Q3 2022 RESULTS - SALES $1,200 • Sales up 40.7% over Q3 2021, as semiconductor and other $1,000 supply shortages had a pronounced impact on prior-year volumes Sales ($ Millions) +40.7% YoY $800 $600 $1,194.1 – Production sales up 41.4% $400 $848.5 – Tooling sales up 30.5% $200 • Positive impact from
Slide 23: Q3 2022 Results - Adjusted Operating Income (Loss) Margin
Q3 2022 RESULTS - ADJUSTED OPERATING INCOME (LOSS) MARGIN 6.0% • Adjusted Operating Income Margin up 770bps year-over-year, reflecting: – Higher production volumes and improved sales mix Adjusted Operating Income (Loss) 5.0% – Favourable commercial settlements 4.0% – Productivity and efficiency impr
Slide 24: Q3 2022 Results - Adjusted Net Earnings (Loss) Per Share
Q3 2022 RESULTS – ADJUSTED NET EARNINGS (LOSS) PER SHARE $0.60 • Adjusted EPS of $0.56 was much improved year- over-year, reflecting: Adjusted Earnings (Loss) Per $0.40 $0.20 $0.56 – The factors impacting sales and margins as Share ($) described earlier – A net foreign exchange gain of $5.0 million,
Slide 25: Q3 2022 Results - Free Cash Flow
Q3 2022 RESULTS - FREE CASH FLOW $80 • Free Cash Flow increased year-over-year, due to an increase in Adjusted EBITDA and improved Free Cash Flow ($ Millions) $60 $40 $64.1 working capital flows $20 $0 • Free Cash Flow is expected to be positive for full- ($20) ($41.6) year 2022 ($40) ($60) Q3 2021
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