Magna International Inc. · TSX:MG
Magna International — Investor Presentation (June 2021)
57 slides from Magna International's investor presentation, June 2021
Slide 1: Investor Presentation June 2021
Investor Presentation June 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 $40B 158K Customers Number of Countries 50+ 28 Facilities World’s 347 Third Largest Supplier * 2021 Sales Outlook $40.2 B – $41.8B Investor Presentation - June 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 - June 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 - June 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 - June 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* Key Growth Contributors >$4B eDrive program launches in China in HASCO-Magna Joint Venture High-volume 48V hybrid DCT programs >$2B New business in primary and secondary eDrives Expect >50% sales CAGR over the next few years in LG Joint Ventu
Slide 13: Well-Positioned to Capture Growing EV Opportunity
Well-Positioned to Capture Growing EV Opportunity ICE EV Dual Clutch/ Primary Manual Transmission eDrive Take rate Higher addressable (%) 40% +150% 100% market Average CPV Increased vehicle ($US) $900 +22% $1,100 content 4WD/AWD Secondary eDrive Take rate (%) 20% 20% Average CPV Increased vehicle ($
Slide 14: 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 15: 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 2020 2023 2027 Well-Positioned to Address ADAS Opportunities Investor Presentation - June 2021 15
Slide 16: 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 Increased safety and function
Slide 17: 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 - June 2021 17
Slide 18: 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 19: 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 20: 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 21: 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 22: 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 23: 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 - June 2021 23
Slide 24: Financial Strategy
Financial Strategy Investor Presentation - June 2021 24
Slide 25: 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) $7.6B 100% peer average of 35% 1 Weighted Growth over Market (GoM) compares organic sales growth (%) to vehicle production change (
Slide 26: Continued Financial Flexibility
Continued Financial Flexibility ($B) Estimated Future LTD Principal Repayments (12/31/20) ($M) TOTAL LIQUIDITY (3/31/21) $1,479 Cash $3.5 Available Term & Operating Lines of Credit $3.5 $722 $760 $647 $365 Total Liquidity $7.0 $129 2021 2022 2023 2024 2025 Thereafter LEVERAGE RATIO (LTM, 3/31/21) Ad
Slide 27: Capital Allocation Priorities
Capital Allocation Priorities • Preserve liquidity and high investment Maintain Strong grade credit ratings Balance Sheet - Adj. debt / Adj. EBITDA ratio between 1.0-1.5x • Maintain flexibility to invest for growth • Organic and inorganic opportunities Invest for Growth • Innovation Return Capital •
Slide 28: M&A Aligned with Our Strategy
M&A Aligned with Our Strategy STRATEGIC FILTERS Expands/Complements Technology Base Technologies that Enable Acceleration in Megatrend Areas (e.g., electrification, autonomy) Customer Diversification Geographic Expansion Investor Presentation - June 2021 28
Slide 29: Capital Allocation
Capital Allocation PROJECTED USES OF CASH FROM OPERATIONS (2021-2023) Incremental Investments and Share Repurchases 35-40% Net Internal Investments 50-55% An Attractive Dividend 10-15% Disciplined, Profitable Approach to Growth Will Remain a Foundational Principle Investor Presentation - June 2021 2
Slide 30: Q1 2021 Financial Results
Q1 2021 Financial Results Consolidated Sales Adjusted EBIT & Margin Adjusted EPS Free Cash Flow 2 ($Billions) ($Millions) ($) ($Millions) +18% +91% +116% +13% $10.2 $770 11.0% $1.86 800 $414 $8.7 700 10.0% $366 7.6% 9.0% 600 $403 8.0% $0.86 500 7.0% 400 4.7% 6.0% 300 5.0% 200 4.0% 100 0 3.0% Q1'20 Q
Slide 31: 2021 Outlook
2021 Outlook MAY FEBRUARY 2023 1 Assumptions Light Vehicle Production (millions of units) • North America 15.6 15.9 16.3 • Europe 18.5 18.5 20.1 • China 24.7 24.0 26.0 Foreign Exchange Rates • 1 CDN dollar equals USD 0.797 0.770 0.770 • 1 EURO equals USD 1.201 1.210 1.210 • 1 RMB equals USD 0.153 0.
Slide 32: Free Cash Flow Expectations
Free Cash Flow Expectations 1 2021 2021-2023 ($Billions) ($Billions) 2.0 $1.6-$1.8 $5.5-$6.0 1.8 $1.4-$1.6 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 February 2021 Outlook May 2021 Outlook 1 Free Cash Flow is Cash from Operating Activities plus proceeds from normal course dispositions of fixed and othe
Slide 33: Executing Our Disciplined Profitable Growth Strategy
Executing Our Disciplined Profitable Growth Strategy Strategy 2020 2023 Future 43.0-45.5 Continued 32.6 growth over Accelerate deployment of Sales ($B) market capital towards high-growth areas Accelerate 5.1 8.1-8.6 Adjusted EBIT Margin deployment Margin1 (%) expansion Drive Drive operational of cap
Slide 34: 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 35: Appendix
Appendix Investor Presentation - June 2021 35
Slide 36: 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 - June 2021 36
Slide 37: 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 - June 2021 37
Slide 38: 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 - June 2021 38
Slide 39: Unique Styling and Packaging
Systems Approach Unique Styling and Packaging Design Requirements Design Objectives Optimized Products Styling Flat Underbody Packaging Seat with Optimized Functionality Height Manufacturability eDrive Affordability Investor Presentation - June 2021 39
Slide 40: 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 - June 2021 40
Slide 41: 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 42: Building Block Approach: Powertrain Portfolio
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 43: Building Block Approach: Full ADAS Systems
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 44: Building Block Approach: Complete Vehicles
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 45: Battery Enclosures and Magna MezzoPanel
Battery Enclosures Magna MezzoPanel • Contributes to vehicle structure and safety • Front fascia with integrated ADAS sensors • Steel, aluminum, and multi-material, including and lighting composites • Large-format lens and in-mold film • Business awards for GM Hummer EV and Ford F-150 EV Structural
Slide 46: 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 47: Smart Dies
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 - June 2021 47
Slide 48: Advanced Robotics
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 - June 2021 48
Slide 49: Fenceless Robotics
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 - June 2021 49
Slide 50: Data Analytics
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 - June 2021 50
Slide 51: 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 & Margin ($Billions) ($Millions) +9% +64% $4.0 350 $327 0.1 $3.7 300 0.1 250 $199 8.1% 0.1 200 0.1 150 0.1 100 5.4% 0.1 50 0.1 0 0.0 Q1'20 Q1'21 Q1'20 Q1'21 • Higher global light vehicle production (+)
Slide 52: Segment Financial Performance: Power & Vision
P O W E R & V I S I O N Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) +25% +120% $3.2 350 $297 0.1 0.1 $2.5 300 0.1 9.4% 250 0.1 0.1 200 150 $135 0.1 0.1 5.4% 0.1 100 0.1 50 0.1 0 0.0 Q1'20 Q1'21 Q1'20 Q1'21 • Higher global light vehicle production (+) • Earnings
Slide 53: Segment Financial Performance: Seating
S E A T I N G Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) +3% +38% $55 $1.30 0.1 $1.26 0.1 $40 0.1 4.2% 0.0 0.0 3.2% 0.0 0.0 0.0 Q1'20 Q1'21 Q1'20 Q1'21 • Acquisition of Hongli in China (+) • Productivity and efficiency improvements at an • Launch of new progra
Slide 54: Segment Financial Performance: Complete Vehicles
C O M P L E T E V E H I C L E S Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) +40% $1.9 +60% 90 $80 0.0 80 0.0 $1.3 70 60 $50 4.3% 0.0 50 0.0 40 3.8% 30 0.0 20 0.0 10 0 0.0 Q1'20 Q1'21 Q1'20 Q1'21 • Higher vehicle assembly volumes (+9,100 units) • Earnings on hig
Slide 55: Segment Sales & Adjusted EBIT Margin %
Segment Sales & Adjusted EBIT Margin % 1 SALES ($B) 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 16.5-17.1 13.6 13.0-13.6 2 12.0-12.4 11.0 9.7 6.1-6.5 6.7 6.7-7.0 6.3-6.8 5.6
Slide 56: Magna Segment and Regional Data
Magna Segment and Regional Data 2020 Sales by Segment 2020 Sales by Geography 2020 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% 29% 29%
Slide 57: Investor Presentation - June 2021
Investor Presentation - June 2021 57
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