Magna International Inc. · TSX:MG
Magna International — Investor Presentation (December 2022)
66 slides from Magna International's investor presentation, December 2022
Slide 1: Investor Presentation December 2022
Investor Presentation December 2022
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this document 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 and pl
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 1 systems approach and unique complete vehicle capabilities Operational excellence to enhance efficiencies and mitigate 2 impacts of challenging environment Strategic portfolio positions us for sales growth over market and 3
Slide 5: Magna Snapshot
Magna Snapshot (NYSE: MGA, TSX: MG) Sales* Team Members ~ $38B 170K Customers Number of Countries 50+ 28 Facilities World's 345 4th Largest Supplier * 2022 Sales Outlook $37.4B – $38.4B INVESTOR PRESENTATION - DECEMBER 2022 5
Slide 6: Foundational Strengths Enabling Success & Growth
Foundational Strengths Enabling Success & Growth Manufacturing Expertise Decentralized Structure Entrepreneurial Ownership Disciplined Mindset Mentality Profitable Growth INVESTOR PRESENTATION - DECEMBER 2022 6
Slide 7: ESG Minded from the Start…
ESG Minded from the Start… Operate efficiently and responsibly Fair treatment of employees Contributing to communities in which we operate INVESTOR PRESENTATION - DECEMBER 2022 7
Slide 8: Creating a Better World of Mobility, Responsibly
Creating a Better World of Mobility, Responsibly Net Carbon Neutral in Europe by 2025 and all operations by 2030 Technologies that help customers achieve their sustainability goals Strong, diverse, and inclusive teams INVESTOR PRESENTATION - DECEMBER 2022 8
Slide 9: Secular Trends Driving Change
Secular Trends Driving Change 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 roadmap to EV
Slide 10: Advancing mobility for everyone and everything.
Advancing mobility for everyone and everything. INVESTOR PRESENTATION - DECEMBER 2022 10
Slide 11: Go-Forward Strategy
Go-Forward Strategy 1. 2. 3. Accelerate Drive operational Unlock new deployment of excellence business models capital towards and markets high-growth areas INVESTOR PRESENTATION - DECEMBER 2022 11
Slide 12: Portfolio Positively Impacted by Megatrends
Portfolio Positively Impacted by Megatrends Magna Sales over time • eDrives Positive • Battery Enclosures Impact • ADAS Impact of Megatrends • Contract Vehicle Manufacturing • Lighting • Active Aerodynamics • Body & Chassis Aligned • Dual Clutch Transmissions • Mirrors • Mechatronics • Seating Negat
Slide 13: Key Growth Contributors
Key Growth Contributors 1 (Sales in $Billions ) Powertrain Battery ADAS Electrification 2 Enclosures 2021 >0.3 2021 2021 533 >0.5 2024F >2.5 2024F >0.6 2024F >1.2 15%+ 30%+ 20%+ 2027F CAGR 2027F CAGR 2027F CAGR Sales in $Billions 1 Based on our expectations at date of our Investor Event (May 10, 2
Slide 14: Electrification Business Growing Rapidly
Electrification Business Growing Rapidly 2 eDrive 2 high-volume hybrid Sales growing at >50% program launches DCT program launches CAGR over outlook period in LG-Magna JV INVESTOR PRESENTATION - DECEMBER 2022 14
Slide 15: Key Wins in Electrification
Key Wins in Electrification • Primary and secondary eDrives ̶ New entrant OEM ̶ European OEM • DCT platform business including hybrid DCTs with Mercedes • eDrive with China-based OEM INVESTOR PRESENTATION - DECEMBER 2022 15
Slide 16: Electrifying Trucks Without Compromise
Electrifying Trucks Without Compromise EtelligentForce • Uncompromised towing and payload • Minimal disruption to vehicle platform and OEM assembly • Significant customer interest INVESTOR PRESENTATION - DECEMBER 2022 16
Slide 17: Accelerating Powertrain Electrification Growth
Accelerating Powertrain Electrification Growth 1 2 (Managed Sales in $Billions ) >4.5 2022 Est. >2.5 >2.0 >4.0 2021 Est. >0.3 2021 2023F 2024F 2027F 1 Managed sales = consolidated sales + sales at 100% for unconsolidated entities 2 Based on our expectations at date of our Investor Event (May 10, 202
Slide 18: Battery Enclosures – Growing Addressable Market
Battery Enclosures – Growing Addressable Market • Large, high content, highly engineered product • Multi-materials and processes • Investing capital while leveraging existing know-how and installed capacity • Launching on the GMC Hummer EV and Ford F-150 Lightning INVESTOR PRESENTATION - DECEMBER 20
Slide 19: Battery Enclosures – Growing Addressable Market
Battery Enclosures – Growing Addressable Market 1 (Sales in $Billions ) >1.5 2022 Est. >0.6 2021 Est. 2021 2024F 2027F 1 Based on our expectations at date of our Investor Event (May 10, 2022). Underlying foreign exchange and light vehicle production assumptions for 2024 and 2027 included in the Appe
Slide 20: ADAS Business – Launching
ADAS Business – Launching Front camera system and Complete ADAS system near-field perception software Surround-view camera system INVESTOR PRESENTATION - DECEMBER 2022 20
Slide 21: ADAS Business Growing – Key Wins
ADAS Business Growing – Key Wins • Advanced front camera programs • Surround View system on Toyota Tundra • Two Driver Monitoring Systems (DMS) INVESTOR PRESENTATION - DECEMBER 2022 21
Slide 22: Full Systems Capability
Full Systems Capability • Complete sensor suite, domain controller and software • Scalable system approach enabling L2+ features • Enhanced vehicle intelligence delivering a complete ADAS experience INVESTOR PRESENTATION - DECEMBER 2022 22
Slide 23: Accelerating ADAS Growth
Accelerating ADAS Growth 1 (Sales in $Billions ) >2.0 2022 Est. 20%+ CAGR >1.2 >0.9 >1.7 2021 Est. >0.5 2021 2023F 2024F 2027F 1 Based on our expectations at date of our Investor Event (May 10, 2022). Underlying foreign exchange and light vehicle production assumptions for 2024 and 2027 included in
Slide 24: Leading Market Positions in Aligned Product Areas
Leading Market Positions in Aligned Product Areas • eDrives 2021 Sales by Product Area Magna Sales over time (in Billions) • Battery Enclosures Positive • ADAS Impact • Contract Vehicle Manufacturing BODY Impact of Megatrends SEATING MIRRORS & CHASSIS • Lighting $4.9 $2.3 $9.0 • Active Aerodynamics
Slide 25: Deep product expertise, integrated systems approach, complete vehicle
Deep product expertise Integrated systems approach Complete vehicle engineering and manufacturing INVESTOR PRESENTATION - DECEMBER 2022 25
Slide 26: Expecting Growth and Meaningful Shift in Product Portfolio
Expecting Growth and Meaningful Shift in Product Portfolio 1 Positive ~24% Impact Impact of Megatrends 18% Aligned Negative Impact 2021 2027F 1 Based on our expectations at date of our Investor Event (May 10, 2022). Underlying foreign exchange and light vehicle production assumptions for 2024 and 20
Slide 27: Foundation of Operational Excellence
Foundation of Operational Excellence INVESTOR PRESENTATION - DECEMBER 2022 27
Slide 28: Operational excellence metrics
(2021) ~$7B average annual sales on vehicle launches 1.7B parts shipped improved quality 40 bps costs/sales average annual $9B+ sales on new business awards customer recognitions 122 (record) INVESTOR PRESENTATION - DECEMBER 2022 28
Slide 29: Building the Factories of the Future
Building the Factories of the Future Factory Digitalization Data Analytics Drive Predictive Tool Maintenance End of Line Quality Inspection Using Augmented Reality • Timely, data-driven decisions • Rapid scaling • Improves quality, lower scrap, • Improve quality, reduce costs eliminates other proces
Slide 30: Established Track Record
Established Track Record • Produced >3.7 million vehicles • Scaling business • Integrating new building blocks • Speed to market • Continuous improvement mindset Vehicles In Production Mercedes-Benz BMW 5 series Jaguar E-PACE Jaguar I-PACE BMW Z4 Toyota GR Supra Arcfox αT Arcfox αS G-Class since 201
Slide 31: Beyond just cars
beyond just cars Product Lifecycle Mobility Manufacturing Services Infrastructure Manufacturing and assembly Operational and consumer services Offerings adjacent to vehicle service connected to the product/vehicle that enhance vehicle usage, efficiency, or adoption INVESTOR PRESENTATION - DECEMBER 2
Slide 32: Magna Enters Micromobility Market
Magna Enters Micromobility Market • Utilizing Magna’s capabilities and platform technologies • Invested in Yulu and in growing battery-swapping business • Ongoing activities with delivery robots INVESTOR PRESENTATION - DECEMBER 2022 32
Slide 33: Financial Strategy
Financial Strategy INVESTOR PRESENTATION - DECEMBER 2022 33
Slide 34: Strong 5 Year Performance
Strong 5 Year Performance 2017-2021 Average Weighted Sales 1 Investment in Business Growth Over Market (GoM) 6% Growth Over Market in Every Year $10.8B Return of Capital Total Shareholder Return (NYSE) $7.4B 112% Peer Average of 29% 1 Weighted Growth over Market (GoM) compares organic sales growth (
Slide 35: Financial strategy: balance sheet, growth, capital return
Maintain Strong Balance Sheet • Preserve liquidity and high investment grade credit ratings ‒ Adj. debt to Adj. EBITDA ratio between 1.0-1.5x • Maintain investment flexibility Invest for Growth • Organic and inorganic opportunities • Innovation Return Capital to Shareholders • Continued dividend gro
Slide 36: M&A Aligned with Our Strategy
M&A Aligned with Our Strategy • Expands/Complements Technology Base • Technologies that Enable Acceleration in Megatrend Areas (e.g., electrification, autonomy) • Customer Diversification • Geographic Expansion INVESTOR PRESENTATION - DECEMBER 2022 36
Slide 37: Projected Operating Cash Flow Uses
Projected Operating Cash Flow Uses 2022-2024 1 35-40% Currently 50-55% Unallocated Net Internal Investments 10-15% An Attractive Dividend 1 Underlying foreign exchange and light vehicle production assumptions for 2024 included in the Appendix. INVESTOR PRESENTATION - DECEMBER 2022 37
Slide 38: Continued Financial Flexibility
Continued Financial Flexibility ($Billions) Estimated LTD Principal Repayments (12/31/21) ($Millions) TOTAL LIQUIDITY (09/30/22) $1,437 Cash $1.1 Available Term & Operating Lines of Credit $3.5 Total Liquidity $4.6 $771 $692 $651 LEVERAGE RATIO (LTM, 09/30/22) Adjusted Debt $5.138 $455 Adjusted EBIT
Slide 39: Q3 2022 Financial Results
Q3 2022 Financial Results Consolidated Sales ($Billions) Q3'22 Production +17% Global 24% $10.0 $9.3 0.1 North America 24% $9.0 Europe 25% $7.9 0.1 China 27% $8.0 $7.0 0.1 Magna Weighted 24% $6.0 Key Factors 0.1 $5.0 $4.0 0.1 • Higher global light vehicle production and $3.0 assembly volumes (+) 0.1
Slide 40: Q3 2022 Financial Results
Q3 2022 Financial Results Adjusted EBIT & Margin Adjusted EPS ($Millions) ($) +93% +91% 500 $441 0.1 1.20 $1.07 0.1 450 0.1 0.1 1.00 400 0.1 0.1 350 0.1 0.80 $0.56 300 0.1 $229 0.1 250 4.8% 0.1 0.60 0.1 200 0.1 150 2.9% 0.0 0.40 0.1 100 0.0 0.20 0.1 50 0.0 0 0.0 0.00 0.0 Q3'21 Q3'22 Q3'21 Q3'22 Adju
Slide 41: Financial Outlook – Key Assumptions
Financial Outlook – Key Assumptions 2021 JULY 2022 NOVEMBER 2022 Light Vehicle Production (millions of units) • North America 13.1 14.7 14.5 • Europe 16.0 16.4 16.0 • China 24.6 24.4 25.5 Foreign Exchange Rates • 1 CDN dollar equals USD 0.798 0.783 0.767 • 1 EURO equals USD 1.183 1.052 1.043 • 1 RMB
Slide 42: 2022 Outlook
2022 Outlook ($Billions, unless otherwise noted) 2021 JULY 2022 NOVEMBER 2022 Sales: • Body Exteriors & Structures 14.5 16.0 – 16.6 16.0 – 16.4 • Power & Vision 11.3 11.7 – 12.1 11.6 – 11.9 • Seating Systems 4.9 5.3 – 5.6 5.2 – 5.4 • Complete Vehicles 6.1 5.1 – 5.4 5.0 – 5.2 Total Sales 36.2 37.6 –
Slide 43: Free Cash Flow Expectations
Free Cash Flow Expectations 1 2022 ($Billions) 1.0 $0.7-$0.9 0.9 0.8 0.7 $0.4-$0.6 0.6 0.5 • Reduced earnings outlook (-) 0.4 • Higher expected year end working capital (-) 0.3 • Lower capital spending outlook (+) 0.2 0.1 0.0 July 2022 Outlook November 2022 Outlook 1 Free Cash Flow is Cash from
Slide 44: Executing Our Disciplined Profitable Growth Strategy
Executing Our Disciplined Profitable Growth Strategy Strategy 2021 2027F Future Continued 36.2 growth over Sales ($B) Accelerate deployment of capital market towards high-growth areas Accelerate Adjusted EBIT 5.7 Margin deployment Margin (%) expansion Drive of capital Drive towardsoperational high o
Slide 45: Investment Summary
Investment Summary 1 Well-positioned to capture growing market opportunities given systems approach and unique complete vehicle capabilities 2 Operational excellence to enhance efficiencies and mitigate impacts of challenging environment Strategic portfolio positions us for sales growth over market
Slide 46: Appendix
APPENDIX INVESTOR PRESENTATION - DECEMBER 2022 46
Slide 47: Bringing Power to the Wheels
Bringing Power to the Wheels MODULAR & SCALABLE PRODUCTS MODULAR & SCALABLE BUILDING BLOCKS SW & Traction Inverter Control Control HW Primary + Dedicated E-Motor & Actuation Algorithms Secondary eDrive Hybrid Drive Shifting Clutches & Parklock Systems Decoupling Gearsets & Hydraulics Synchro Differe
Slide 48: Well-Positioned to Capture Growing EV Opportunity
Well-Positioned to Capture Growing EV Opportunity ICE EV Dual Clutch/ Manual Transmission Primary 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 49: Complete System Integration and Fusion Capabilities
Complete System Integration and Fusion Capabilities SAFETY FEATURES Lane Automatic Lane Keep (NCAP 5-STAR) Departure Emergency Assist Software & Digital Imaging Domain Ultrasonic Warning Braking Algorithms RADAR Controllers Sensors Far Field Near Field Solid State Cameras Surround View LiDAR Cameras
Slide 50: Leveraging Core Building Blocks To Address New Markets
Leveraging Core Building Blocks To Address New Markets MICRO MOBILITY MID-SIZE URBAN TRANSPORTERS PRODUCT COMPLETE Vehicle Vehicle Vehicle E/E ADAS SYSTEMS Lighting Seats Exteriors VEHICLE Models Platform Architecture Architecture Sensors MAJOR SYSTEMS / Powertrain HMI & Body & ADAS Body eDrives Mec
Slide 51: 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 - DECEMBER 2022 51
Slide 52: Financial Outlook Beyond 2022 – Key Assumptions
Financial Outlook Beyond 2022 – Key Assumptions 2024 2027 Light Vehicle Production (millions of units) • North America 17.5 17.1 • Europe 21.2 20.9 • China 29.0 31.3 Foreign Exchange Rates • 1 CDN dollar equals USD 0.800 0.800 • 1 EURO equals USD 1.130 1.130 • 1 RMB equals USD 0.157 0.157 INVESTOR P
Slide 53: Q3 2022
Q3 2022 INVESTOR PRESENTATION - DECEMBER 2022 53
Slide 54: Sales Performance vs Market
Sales Performance vs Market Q3 2022 vs Q3 2021 PERFORMANCE VS WEIGHTED GLOBAL 1 PRODUCTION REPORTED ORGANIC (Weighted GoM) Body Exteriors & Structures 25% 31% 7% Power & Vision 16% 26% 2% Seating Systems 15% 25% 1% Complete Vehicles (3%) 13% (11%) TOTAL SALES 17% 27% 3% Unweighted Production Growth
Slide 55: Sales Performance vs Market
Sales Performance vs Market 2022 YTD vs 2021 YTD PERFORMANCE VS WEIGHTED GLOBAL 1 PRODUCTION REPORTED ORGANIC (Weighted GoM) Body Exteriors & Structures 11% 16% 10% Power & Vision 4% 9% 3% Seating Systems 9% 17% 11% Complete Vehicles (15%) (5%) (11%) TOTAL SALES 4% 11% 5% Unweighted Production Growt
Slide 56: Geographic Sales
Geographic Sales Q3 2022 vs Q3 2021 NORTH AMERICA EUROPE $5.0B $4.7B $3.5B $3.1B $3.3B $4.5B $4.0B $3.9B $3.0B $2.5B $3.5B $3.0B $2.0B $2.5B $1.5B $2.0B $1.5B $1.0B $1.0B $0.5B $0.5B $0.0B $0.0B PRODUCTION 24% PRODUCTION 25% ASIA REST OF WORLD $1400M $140M $133M $1.2B $1200M $120M $1000M $927M $100M
Slide 57: Q3 2022 Cash Flow and Investment Activities
Q3 2022 Cash Flow and Investment Activities ($Millions) 1 Free Cash Flow Cash from Operations Before Changes in $591 ($Millions) Operating Assets & Liabilities Changes in Operating Assets & Liabilities ($353) Cash from Operations $238 $0 0.1 -$25 0.1 Fixed Asset Additions ($364) -$50 Increase in Inv
Slide 58: Leverage Ratio
Leverage Ratio ($Millions) LTM EBITDA $ 3,273 Lease Adjustment $ 325 Other $ 97 Adjusted EBITDA $ 3,695 Debt per Balance Sheet $ 3,420 Lease Liability per Balance Sheet $ 1,520 Other $ 198 Adjusted Debt $ 5,138 Adjusted Debt / Adjusted EBITDA (Q3 2022) 1.39x INVESTOR PRESENTATION - DECEMBER 2022 58
Slide 59: Segment Financial Performance
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 & Margin ($Billions) ($Millions) 25% 130% $4.0 250 $225 0.1 $3.2 200 0.1 0.1 150 $98 5.7% 0.1 100 3.1% 0.1 50 0.0 0 0.0 Q3'21 Q3'22 Q3'21 Q3'22 • Higher global light vehicle production (+) Adjusted EBIT
Slide 60: Segment Financial Performance
P O W E R & V I S I O N Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) 16% 75% 250 $2.9 0.3 $2.5 200 0.2 $117 150 0.2 $67 100 0.1 50 2.7% 4.0% 0.1 0 0.0 Q3'21 Q3'22 Q3'21 Q3'22 • Higher global light vehicle production (+) Adjusted EBIT Margin % • Launch of new pro
Slide 61: Segment Financial Performance
S E A T I N G Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) 15% 59% $35 0.1 $1.3 $1.1 0.1 $22 0.1 0.0 2.7% 0.0 2.0% 0.0 0.0 Q3'21 Q3'22 Q3'21 Q3'22 • Higher global light vehicle production (+) Adjusted EBIT Margin % • Launch of new programs (+) • Earnings on high
Slide 62: Segment Financial Performance
C O M P L E T E V E H I C L E S Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) -3% 117% 90 0.2 80 $65 0.1 $1.3 $1.2 70 0.1 60 0.1 50 40 $30 5.4% 0.1 30 0.1 20 2.4% 0.0 10 0 0.0 Q3'21 Q3'22 Q3'21 Q3'22 • Weaker euro: $207M (-) Adjusted EBIT Margin % • Higher vehicl
Slide 63: Other
Other INVESTOR PRESENTATION - DECEMBER 2022 63
Slide 64: Significant Content on BEV Launches Globally
Significant Content on BEV Launches Globally Coming Soon Ford F-150 Lightning Mercedes-Benz EQS SUV Cadillac Lyriq Rivian R1S GMC Hummer BMW iX Mercedes-Benz EQE Volkswagen ID Buzz Coming Soon Fisker Ocean NIO ES7 Xpeng G9 Smart B-SUV North America Europe China INVESTOR PRESENTATION - DECEMBER
Slide 65: Key 2022 Non-EV Launches
Key 2022 Non-EV Launches Chevrolet Silverado (Oshawa) Jeep Wagoneer Honda CR-V Toyota Tundra Ford Maverick Alpha Romeo Tonale BMW X1 Mercedes-Benz GLC BMW X5 North America Europe China INVESTOR PRESENTATION - DECEMBER 2022 65
Slide 66: Magna Segment and Regional Data
Magna Segment and Regional Data 1 2021 Sales by Segment 2021 Sales by Geography 2021 Adjusted EBIT by Segment ROW AP 1% Complete Complete Vehicles Body Vehicles Body Exteriors & 11% Exteriors & 17% 14% Structures Structures Seating 39% Systems 8% Seating 41% Systems 13% 46% North America Europe 42%
Magna International — Investor Presentation (December 2022) on 6ix