Magna International Inc. · TSX:MG
Magna International — Investor Presentation (November 2021)
62 slides from Magna International's investor presentation, November 2021
Slide 1: Investor Presentation November 2021
Investor Presentation November 2021
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements"). Any such forward-looking statements are intended to provide information about management's current expectations an
Slide 3: Forward Looking Statements (cont.)
Forward Looking Statements (cont.) Forward-looking statements are based on information currently available to us and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as ot
Slide 4: Key Messages
Key Messages Well-positioned to capture growing market opportunities given systems approach and 1 unique complete vehicle capabilities 2 Supplier of choice for automakers and enabler for new entrants 3 Strategic portfolio positions us for sales growth over market and strong free cash flow 4 Untapped
Slide 5: Magna Snapshot
Magna Snapshot (NYSE: MGA, TSX: MG) Sales* Team Members ~ $35B 154K Customers Number of Countries 50+ 28 Facilities World's 347 4th Largest Supplier * 2021 Sales Outlook $34.6B – $35.6B Investor Presentation - November 2021 5
Slide 6: Foundational Strengths Enabling Success & Growth
Foundational Strengths Enabling Success & Growth Manufacturing Innovation and Our People Expertise Start-up Mindset and Culture Unparalleled Decentralized Disciplined Strong Global Scale Structure Profitable Balance Sheet Growth Investor Presentation - November 2021 6
Slide 7: Secular Trends Driving Change
Secular Trends Driving Change New Mobility Magna Positioning Enhanced e-Powertrain Full ADAS capability Expanded collaboration Software-enabled portfolio ecosystem functionality in our Complete system ECU-related products Product range fills expertise Leverage new business transition r
Slide 8: The Power of Magna
The Power of Magna Deep Product Expertise Complete Vehicle Engineering and Manufacturing Integrated Systems Level Analysis and Approach Investor Presentation - November 2021 8
Slide 9: Agnostic to Vehicle Propulsion
Agnostic to Vehicle Propulsion Included in Magna's portfolio EV Power Electronics – E-Drivetrain Battery Pack EV, HV Hybrid Interior Systems Body Sensors ECUs/DCUs Structure (ADAS) and Seating Powertrain- Complete Agnostic Vehicle Body Exterior Driving Engineering Electronics – Thermal (incl. Lighti
Slide 10: Clear Go Forward Strategy to Drive Growth
Clear Go Forward Strategy to Drive Growth Accelerate Drive Unlock New Deployment of Operational Business Models Capital towards Excellence and Markets High-Growth Areas Investor Presentation - November 2021 10
Slide 11: Impact of Megatrends
Accelerate Deployment of Capital Towards High Growth Areas • eDrives Magna Sales Over Time • Battery Enclosures Positive • ADAS Impact • Contract Vehicle Manufacturing Impact of Megatrends • New Business Models • Lighting • Active Aerodynamics • Body & Chassis Aligned • Dual Clutch Transmissions • M
Slide 12: High Growth Area: Electrification
High Growth Area: Electrification Expected Managed Sales 1 Key Growth Contributors >$4B eDrive program launches in China in HASCO-Magna Joint Venture High-volume 48V hybrid DCT programs >$2B New business in primary and secondary eDrives Expect >50% sales CAGR over the next few years in LG Joint Vent
Slide 13: Dual-Clutch Transmissions
Program Award Dual-Clutch Transmissions • Awarded family of transmissions from Daimler, including traditional (DCT) and hybrid (HDT) launching in 2025 • Represents third high-volume HDT program award • Beginning to launch HDTs this quarter for two additional global customers Supports Magna's Growt
Slide 14: Well-Positioned to Capture Growing EV Opportunity
Well-Positioned to Capture Growing EV Opportunity ICE EV Dual Clutch/ Primary Manual Transmission eDrive Take rate Higher addressable (%) 40% +150% 100% market Average CPV Increased vehicle ($US) $900 +22% $1,100 content 4WD/AWD Secondary eDrive Take rate (%) 20% 20% Average CPV Increased vehicle ($
Slide 15: Innovative Electrification Solutions
Innovative Electrification Solutions EtelligentEco EtelligentReach EtelligentForce Connected PHEV system Battery-electric drive system EV solution for pick-up trucks • Up to 38% emission reduction • 30% range extension • Drop-in replacement retains pick-up • Unique cloud connectivity feature • Combi
Slide 16: High Growth Area: ADAS
High Growth Area: ADAS Expect ADAS Sales to Key ADAS Growth Contributors Grow Above Market Ongoing Investments +15-20% CAGR Expanding Software Engineering Team +19-23% CAGR Strategic Partnerships 1 2020 2023 2027 1 Well-Positioned to Address ADAS Opportunities 1 Forward-looking financial information
Slide 17: Advanced Front Cameras
Program Award Advanced Front Cameras • Awarded new business with European-based global OEM • Will utilize latest generation camera technology • Based on platform that already has applications in production Bolsters Magna's Leading Camera Position Investor Presentation - November 2021 17
Slide 18: Innovation Across the Vehicle
Innovation Across the Vehicle Rethinking the possibilities using our core strengths and systems know-how Battery Enclosures Structural opportunities expand Magna MezzoPanel™ Integrated ADAS and with electrification lighting functions Adaptive Beam Lighting SmartAccessTM FreeFormTM Increased safety a
Slide 19: Innovation Ecosystem
Innovation Ecosystem Taping Into Great Thinking Outside the Company Open for Business Mindset Auto-Qualified Results Access to New Creative Approaches Investor Presentation - November 2021 19
Slide 20: Drive Operational Excellence
Drive Operational Excellence Next-Gen World-Class Manufacturing Initiatives MATERIAL MANAGEMENT/ LEADERSHIP LOGISTICS Big Autonomous Data and Simulation Robots Analytics PURCHASING INNOVATION WCM Horizontal MAFACT (Magna PRODUCT Industrial DEVELOPMENT and Vertical Factory Concept) Internet of Cybers
Slide 21: Early Stages of Our Sustainability Journey
Early Stages of Our Sustainability Journey Focused on Energy Optimization and Renewable Energy • Goals for carbon-neutrality – In Europe by 2025 – Globally by 2030 • Will be an industry leader in North America, and Science-Based Approach aligned with industry leaders in Europe Aligned with Objective
Slide 22: Unlock New Business Models and Markets
Unlock New Business Models and Markets New Mobility Landscape Creating Wide Range of Opportunities • Urban delivery • Factory automation • Collaboration with automakers Magna Positioning • Building blocks to participate in many of these areas • Complete vehicle systems approach makes our proposition
Slide 23: Flexible Production Concept
Flexible Production Concept Volume Extension • Expansion planning in advance First-Generation Plant Ability to replicate • Volume expansion in phases plants to satisfy • Flexible supply management long-term demand growth approach Can Scale to Meet Volume Requirements and Optimize Future Expansion In
Slide 24: Global Production Network
Global Production Network Well- Established 2019 2020 Future Central Europe Eastern Europe Asia North America Potential to establish a scalable footprint Can leverage our best people using Magna's North American footprint jointly with Graz, Austria Hoče, Slovenia Zhenjiang, China experts from Graz •
Slide 25: Full Vehicle and System Capabilities
Full Vehicle and System Capabilities Complete Vehicle Complete Vehicle EV and E/E Broad System Full ADAS System Engineering Manufacturing Architectures Portfolio and Software Platform Uniquely Positioned to be a Strategic Partner Investor Presentation - November 2021 25
Slide 26: Financial Strategy
Financial Strategy Investor Presentation - November 2021 26
Slide 27: Strong 5 Year Performance
Strong 5 Year Performance 2016-2020 Average Weighted Sales 1 Investment in Business Growth Over Market (GoM) 6% $12.5B Return of Capital Total Shareholder Return (NYSE) $7.6B 100% peer average of 35% 1 Weighted Growth over Market (GoM) compares organic sales growth (%) to vehicle production change (
Slide 28: Continued Financial Flexibility
Continued Financial Flexibility ($Billions, unless otherwise noted) Estimated Future LTD Principal Repayments (12/31/20) TOTAL LIQUIDITY (9/30/21) ($Millions) $1,479 Cash $2.7 Available Term & Operating Lines of Credit $3.5 Total Liquidity $6.2 $722 $760 LEVERAGE RATIO (LTM, 9/30/21) $647 Adjusted D
Slide 29: Capital Allocation Priorities
Capital Allocation Priorities • Preserve liquidity and high investment Maintain Strong grade credit ratings Balance Sheet - Adj. debt / Adj. EBITDA ratio between 1.0-1.5x • Maintain flexibility to invest for growth • Organic and inorganic opportunities Invest for Growth • Innovation Return Capital •
Slide 30: M&A Aligned with Our Strategy
M&A Aligned with Our Strategy STRATEGIC FILTERS Expands/Complements Technology Base Technologies that Enable Acceleration in Megatrend Areas (e.g., electrification, autonomy) Customer Diversification Geographic Expansion Investor Presentation - November 2021 30
Slide 31: Capital Allocation
Capital Allocation PROJECTED USES OF CASH FROM OPERATIONS 1 (2021-2023 ) Incremental Investments and Share Repurchases 35-40% Net Internal Investments 50-55% An Attractive Dividend 10-15% Disciplined, Profitable Approach to Growth Will Remain a Foundational Principle 1 Forward-looking financial info
Slide 32: Q3 2021 Financial Results
Q3 2021 Financial Results Consolidated Sales Adjusted EBIT Adjusted EPS ($Billions) ($Millions) ($) $778 $1.95 0.1 $9.1 $10.0 0.1 $800 $2.00 $9.0 $7.9 0.1 $700 0.1 $8.0 $600 $1.50 0.1 0.1 $7.0 $500 $6.0 0.1 0.1 $5.0 $400 $1.00 0.1 0.1 $4.0 $229 $300 $3.0 0.1 $0.56 0.1 $200 $0.50 $2.0 0.1 0.1 $100 $1
Slide 33: Q3 2021 vs Q2 2021 (Sequential) Financial Results
Q3 2021 vs Q2 2021 (Sequential) Financial Results Consolidated Sales ($Billions) Q3'21 vs Q2'21 Production Global -6% -12% $10.0 0.1 North America -1% $9.0 Europe -18% $9.0 China -2% $7.9 0.1 $8.0 Magna Weighted -6% 0.1 $7.0 $6.0 0.1 $5.0 0.1 Key Factors • Lower global light vehicle production, subs
Slide 34: Q3 2021 vs Q2 2021 (Sequential) Financial Results
Q3 2021 vs Q2 2021 (Sequential) Financial Results Adjusted EBIT & Margin ($Millions) Key Factors -59% • Lower earnings on $1.1B decline in sales (-) • Production inefficiencies driven by unpredictable OEM production schedules (-) 0.2 $800 • Increased production costs, including freight and commoditi
Slide 35: 2021 Outlook Assumptions
2021 Outlook Assumptions 2020 AUGUST NOVEMBER Light Vehicle Production (millions of units) • North America 13.0 14.4 13.4 • Europe 16.5 18.1 16.5 • China 23.5 24.7 23.0 Foreign Exchange Rates • 1 CDN dollar equals USD 0.746 0.801 0.800 • 1 EURO equals USD 1.141 1.193 1.187 • 1 RMB equals USD 0.145 0
Slide 36: 2021 Outlook
2021 Outlook ($Billions, unless otherwise noted) 2020 AUGUST NOVEMBER Sales: • Body Exteriors & Structures $15.3 – $15.9 $14.1 – $14.5 • Power & Vision $11.8 – $12.2 $11.2 – $11.5 • Seating Systems $5.1 – $5.4 $4.6 – $4.8 • Complete Vehicles $6.3 – $6.6 $6.0 – $6.2 Total Sales $32.6 $38.0 – $39.5 $3
Slide 37: Free Cash Flow Expectations
Free Cash Flow Expectations 1 2021 ($Billions) $2.00 $1.6-$1.8 $1.80 • Significant reduction in light vehicle production assumptions $1.60 • Lower earnings on decline in sales $1.40 • Production inefficiencies • Increased production costs ~$1 • Higher working capital levels $1.20 $1.00 $0.80 $0.60 $
Slide 38: Executing Our Disciplined Profitable Growth Strategy
Executing Our Disciplined Profitable Growth Strategy Strategy 2020 2023 2 Future 43.0-45.5 Continued 32.6 growth over Accelerate deployment of Sales ($B) market capital towards high-growth areas Accelerate 5.1 8.1-8.6 Adjusted EBIT Margin deployment Margin (%) expansion Drive Drive operational of ca
Slide 39: Investment Summary
Investment Summary Well-positioned to capture growing market opportunities given systems approach and unique complete vehicle capabilities Supplier of choice for automakers and enabler for new entrants Strategic portfolio positions us for sales growth over market and strong free cash flow Untapped p
Slide 40: Appendix
Appendix Investor Presentation - November 2021 40
Slide 41: New Launches – North America
N O R T H A M E R I C A New Launches Jeep Grand Cherokee 3-Row Ford Bronco Chevrolet Bolt EUV Toyota Tundra Honda Civic GMC Hummer Body Power & Vision Seating Investor Presentation - November 2021 41
Slide 42: New Launches – Europe
E U R O P E New Launches Skoda Enyaq BMW 2 Series Active Tourer Peugeot 308 Mercedes-Benz EQE Volkswagen T7 BMW iX Body Power & Vision Seating Investor Presentation - November 2021 42
Slide 43: New Launches – Asia
A S I A New Launches Mercedes-Benz C-Class Ford Mustang Mach E Geely Emgrand GL Audi A7 Sportback Honda Civic Body Power & Vision Seating Investor Presentation - November 2021 43
Slide 44: Unique Styling and Packaging
Systems Approach Unique Styling and Packaging Design Requirements Design Objectives System Approach - Packaging Optimized Products Styling Flat Underbody Packaging Seat with Optimized Functionality Height Manufacturability eDrive Affordability Investor Presentation - November 2021 44
Slide 45: Best-in-Class Driving Range
Systems Approach Best-in-Class Driving Range Design Requirements Design Objectives Optimized Products Efficiency Safety eDrive Software and Controls Dynamics Drivability Lightweight Active Aero Affordability Products Investor Presentation - November 2021 45
Slide 46: Optimizing Vision and Response
Systems Approach Optimizing Vision and Response Design Requirements Design Objectives Optimized Products Far Field & Near Field 3D Surround View Driver & Occupant Monitoring Safety Front Digital Domain Advanced Imaging Controllers Convenience Cameras Radar and Software Efficiency Single and Long Ran
Slide 47: Powertrain Portfolio: Building Block Approach
Powertrain Portfolio Building Block Approach Gearsets & Shifting Housings & Clutches & Synchro Parklock Differentials Systems Coverings Decoupling MODULAR & SCALABLE BUILDING BLOCKS Control HW Traction SW & Control Oil Hydraulics Inverter & Actuations E-Motor Algorithms MODULAR & SCALABLE PRODUCTS M
Slide 48: Full ADAS Systems: Building Block Approach
Full ADAS Systems Building Block Approach MODULAR & SCALABLE Near Field Digital Imaging Domain Solid State Ultrasonic Far Field Surround View BUILDING BLOCKS Cameras Cameras RADAR Controllers LiDAR Sensors Software & Algorithms Perception | Fusion | Planning | Control SAFETY FEATURES (NCAP 5-STAR) L
Slide 49: Complete Vehicles: Building Block Approach
Complete Vehicles Building Block Approach PRODUCT PROCESS COMPLETE Definition Complete Complete VEHICLE Vehicle Vehicle Vehicle E/E of Complete Vehicle Vehicle Vehicle Models Platform Architecture Architecture Testing & Production Vehicle Targets Integration Validation Globally Complete Manufacturin
Slide 50: Battery Enclosures and Magna MezzoPanel
Battery Enclosures Magna MezzoPanel • Contributes to vehicle structure and safety • First-to-market, large-format decorated front • Steel, aluminum, and multi-material, including integration panel composites • Integrates ADAS sensors and lighting • Business awards for GM Hummer EV and Ford • Featur
Slide 51: SmartAccess and Adaptive Beam Lighting
SmartAccess Adaptive Beam Lighting • Enables unique access experiences • Glare-free high beam • Easily operated through multiple human-machine • Virtual dynamic bending interface solutions • Speed-dependent lighting • Enhanced safety through non-contract obstacle detection • Pedestrian detection •
Slide 52: FreeForm Provides Endless Design Possibilities
FreeForm • Currently launching technology on complete seat program for global OEM • Three other programs also awarded, including from new entrant OEM, that launch in 2022 • Significant additional customer interest Fully customizable Provides Endless Design Possibilities Investor Presentation - Nove
Slide 53: Smart Dies: Real-Time Analytics for Better Decisions
Smart Dies • 5-10% uptime improvement • Up to 30% reduction in scrap • 30-50% less hours in inspection Real-Time Analytics for Better Decisions Investor Presentation - November 2021 53
Slide 54: Advanced Robotics: Automation-Enabled Efficiency
Advanced Robotics • High volume production • 2D/3D vision systems and trajectory planning with AI • 50% reduction in floor space • 10-20% higher operating efficiency Automation-Enabled Efficiency Investor Presentation - November 2021 54
Slide 55: Fenceless Robotics: Human and Robotic Collaboration
Fenceless Robotics • Operator and robot freely and safely collaborate • Doubles payload at 10 times the speed • Reduced floor space • Improved operator ergonomics Human and Robotic Collaboration Investor Presentation - November 2021 55
Slide 56: Data Analytics: Using Data to Minimize Waste
Data Analytics • Paint color change process optimization • Implemented in 20 Exteriors manufacturing facilities • Significant cost savings Using Data to Minimize Waste and Reduce Costs Investor Presentation - November 2021 56
Slide 57: Segment Financial Performance: Body Exteriors & Structures
B O D Y E X T E R I O R S & S T R U C T U R E S Segment Financial Performance Sales Adjusted EBIT ($Billions) ($Millions) -17% $3.9 $390 $450 0.1 $400 $3.2 0.1 $350 0.1 $300 0.1 $250 $200 0.1 $150 $98 0.1 $100 0.1 $50 $0 0.0 Q3'20 Q3'21 Q3'20 Q3'21 • Reduced earnings on lower sales (-) • Negative im
Slide 58: Segment Financial Performance: Power & Vision
P O W E R & V I S I O N Segment Financial Performance Sales Adjusted EBIT ($Billions) ($Millions) -8% $250 $227 0.1 $2.7 0.1 $2.5 $200 0.1 0.1 $150 0.1 0.1 $67 $100 0.1 0.1 $50 0.1 0.1 $0 0.0 Q3'20 Q3'21 Q3'20 Q3'21 • Reduced earnings on lower sales (-) • Lower global light vehicle production, inclu
Slide 59: Segment Financial Performance: Seating Systems
S E A T I N G S Y S T E M S Segment Financial Performance Sales Adjusted EBIT ($Billions) ($Millions) -12% $1.3 $66 0.1 $1.1 0.1 0.1 0.0 $22 0.0 0.0 0.0 0.0 Q3'20 Q3'21 Q3'20 Q3'21 • Reduced earnings on lower sales (-) • Negative impact of production disruptions (-) • Lower global light vehicle prod
Slide 60: Segment Financial Performance: Complete Vehicles
C O M P L E T E V E H I C L E S Segment Financial Performance Sales Adjusted EBIT ($Billions) ($Millions) -10% $90 $80 $70 $1.4 $1.3 $70 $60 $50 $40 $30 $30 $20 $10 $0 Q3'20 Q3'21 Q3'20 Q3'21 • Lower vehicle assembly volumes, including impact of • $45M provision on engineering service contracts with
Slide 61: Segment Sales & Adjusted EBIT Margin %
Segment Sales & Adjusted EBIT Margin % SALES ($B) 2 BODY EXTERIORS & POWER & VISION SEATING SYSTEMS COMPLETE VEHICLES STRUCTURES '20-'23 '20-'23 '20-'23 '20-'23 10-12% 10-12% 11-13% 5-8% CAGR CAGR CAGR CAGR 18.0-19.0 16.5 13.6 14.1-14.5 1 13.0-13.6 11.0 11.2-11.5 9.7 6.1-6.5 6.7 6.0-6.2 6.3-6.8 5.6
Slide 62: Magna Segment and Regional Data
Magna Segment and Regional Data 2020 Sales by Segment 2020 Sales by Geography 2020 Adjusted EBIT by Segment 1 1 ROW AP Complete Complete Vehicles Body 2% Vehicles Body Exteriors & 6% Exteriors & 16% 16% Structures Structures Seating Systems 6% Seating 41% Systems 14% 48% North America 49% Europe 44%
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