Martinrea International Inc. · TSX:MRE
Martinrea International — Q1 2024 Earnings Presentation
22 slides from Martinrea International's earnings presentation, May 2024
Slide 1: Q1 2024 Results
Q1 2024 RESULTS ~~ am la’ \ \ al Fa\ A an Vas | MARTINREA ff = / Ww 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 EXEC UTIV E OFFIC ER FRED DI TOSTO PRES IDENT AND C HIEF FINANC IAL OFFIC ER ROB WILDEBOER EXEC 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: Q1 2024 Highlights
Q1 2024 HIGHLIGHTS $162.8M ADJUSTED EBITDA $1,323.9M $0.62 (12.3% MARGIN) TOTAL SALES ADJUSTED EPS $79.2M ADJUSTED OPERATING INCOME (6.0% MARGIN) $1,257.5M PRODUCTION SALES www.martinrea.com | 6
Slide 7: Status of Operations
STATUS OF OPERATIONS Operationally, we continue to perform very well. Industry headwinds (e.g., supply The slow ramp-up in electric vehicle shortages, inflationary cost programs is resulting in underutilized pressures, tight labour market assets across the industry. conditions) continue to improve.
Slide 8: New Business Awards
NEW BUSINESS AWARDS LIGHTWEIGHT STRUCTURES PROPULSION SYSTEMS $20M $10M In Annualized Sales In Annualized Sales TOTAL TOTAL OVER LAST FOUR QUARTERS $30M $335M In Annualized Sales In Annualized Sales In addition, we were awarded replacement business worth $150M in annualized sales with a variety of O
Slide 9: Fred Di Tosto, President and Chief Financial Officer
FRED DI TOSTO PRESIDENT AND CHIEF FINANC IAL O FFIC ER www.martinrea.com | 9
Slide 10: Sequential Comparison to Q4 2023
SEQUENTIAL COMPARISON TO Q4 2023 Q1 2024 was a good start to the year as we bounced back from disruptions related to the UAW strike and Tier 2 supplier issue that impacted the fourth quarter. In Canadian Dollars Q1 2024 Q4 2023 Production sales were up approximately 8%, as industry Production Sales
Slide 11: Year-over-Year Comparison
YEAR-OVER-YEAR COMPARISON Adjusted Operating Income and Adjusted EBITDA increased year-over-year on a 1.5% increase in production sales. Free Cash Flow was a lot less negative compared to Q1 2023. In Canadian Dollars Q1 2024 Q1 2023 Production Sales $1,257.5M $1,239.5M Tooling Sales $66.4M $64.3M To
Slide 12: Balance Sheet
BALANCE SHEET NET DEBT - Excluding IFRS-16 ($ Millions) $1,200.0 Q1 2024 net debt (excluding the impact of $1,000.0 IFRS-16) increased by approximately $74 million compared to Q4 2023, reflecting $800.0 $600.0 $400.0 $857.7 $908.7 $955.9 $937.4 $889.2 $782.4 $856.5 foreign exchange translation and:
Slide 13: 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 for $295.3M the year FREE CASH FLOW* $100M-$150M $195.4M (before IFRS 16 lease payments) * Note: Including IFRS 16 leas
Slide 14: Rob Wildeboer, Executive Chairman
ROB WILDEBOER EXECUTIVE CHAIRMAN www.martinrea.com | 14
Slide 15: 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 product offering ratio of ~1.5x or better liquidity (at t
Slide 16: Thank You / Q&A
THANK YOU Q&A www.martinrea.com | 16
Slide 17: Appendix
APPENDIX www.martinrea.com | 17
Slide 18: Q1 Sales
Q1 SALES $1,400 • Sales up 1.5% year over year: – Production sales up 1.4% $1,200 +1.5% YoY – Tooling sales up 3.2% $1,000 • Increase in production sales driven by a 2.5% increase in Sales ($ Millions) $800 North America, due to: $1,303.9 $1,323.9 – New business launches, including with General $600
Slide 19: Q1 Adjusted Operating Income Margin
Q1 ADJUSTED OPERATING INCOME MARGIN 6.0% • Adjusted Operating Income Margin increased 20bps year-over- year. Adjusted Operating Income Margin (%) • North American margin declined due to: − A negative sales mix, including additional depreciation expense from recent new investments. 4.0% − An unfavora
Slide 20: Q1 Adjusted Net Earnings Per Share
Q1 ADJUSTED NET EARNINGS PER SHARE • Adjusted EPS of $0.62 increased year-over- $0.80 year, reflecting: – The factors impacting sales and margins described earlier. Adjusted Earnings Per Share ($) $0.60 – A net foreign exchange gain of $4.9M compared to a gain of $0.1M in Q1 2023. • Partially offset
Slide 21: Q1 Free Cash Flow
Q1 FREE CASH FLOW • Free Cash Flow improved year-over-year, $0 reflecting: ($1.4) – Lower cash capex. – Higher Adjusted EBITDA. Free Cash Flow ($ Millions) ($10) – Lower cash income taxes and interest paid. ($31.5) – Partially offset by an increase in cash used ($20) in non-cash working capital (net
Slide 22: Connect With Us
CONNECT WITH US www.martinrea.com
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