Magna International Inc. · TSX:MG
Magna International — Investor Presentation (August 2022)
36 slides from Magna International's investor presentation, August 2022
Slide 1: Investor Presentation August 2022
Investor Presentation August 2022
Slide 2: Slide 2
Slide 3: 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 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 161K Customers Number of Countries 50+ 28 Facilities World's 341 4th Largest Supplier * 2022 Sales Outlook $37.6B – $39.2B INVESTOR PRESENTATION - AUGUST 2022 5 Foundational Strengths Enabling Success & Growth Manufacturing anufacturing
Slide 6: 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 - AUGUST 2022 7 Creating a Better World of Mobility, Responsibly Net Carbon Neutral in Europe by 2025 and all operations by 2030 Technologi
Slide 7: Secular Trends Driving Change
Secular Trends Driving Change Magna Positioning 9 Enhanced e-Powertrain 9 Full ADAS capability 9 Expanded collaboration 9 Software-enabled portfolio ecosystem functionality in our 9 Complete system ECU-related products 9 Product range fills expertise 9 Leverage new business transition roadmap to EV
Slide 8: Impact of Megatrends
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 - AUGUST 2022 11 Portfolio Positively Impacted by Megatrends Magna Sales over time • eDrives Positive • Battery Enclosures
Slide 9: Key Growth Contributors
Key Growth Contributors Powertrain Battery ADAS Electrification 1 Enclosures 2021 >0.3 2021 2021 >0.5 533 2024F >2.5 2024F >0.6 2024F >1.2 15%+ 30%+ 20%+ 2027F CAGR 2027F CAGR 2027F CAGR Sales in $Billions 1 Represents managed sales. Managed sales = consolidated sales + sales at 100% for unconsoli
Slide 10: Key Wins in Electrification
Key Wins in Electrification • Primary and secondary eDrives ࡳ New entrant OEM ࡳ European OEM • DCT platform business including hybrid DCTs with Mercedes • eDrive with China-based OEM INVESTOR PRESENTATION - AUGUST 2022 15 Electrifying Trucks Without Compromise EtelligentForce • Uncompromised towing
Slide 11: Accelerating Powertrain Electrification Growth
Accelerating Powertrain Electrification Growth >4.5 2022 Est. (Managed Sales in $Billions) 1 >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. INVESTOR PRESENTATION - AUGUST 2022 17
Slide 12: 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 - AUGUST 2022
Slide 13: ADAS Business – Launching
ADAS Business – Launching Front camera system and Complete ADAS system near-field perception software Surround-view camera system INVESTOR PRESENTATION - AUGUST 2022 20 ADAS Business Growing – Key Wins • Advanced front camera programs • Surround View system on Toyota Tundra • Two Driver Monitoring S
Slide 14: 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 - AUGUST 2022 22 Accelerating ADAS Growth (Sales in $Billions) >2.0 2022 Est. 2
Slide 15: 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 16: Expecting Growth and Meaningful Shift in Product Portfolio
Expecting Growth and Meaningful Shift in Product Portfolio Positive ~24% Impact Impact of Megatrends 18% Aligned Negative Impact 2021 2027F INVESTOR PRESENTATION - AUGUST 2022 26 Foundation of Operational Excellence INVESTOR PRESENTATION - AUGUST 2022 27
Slide 17: Building the Factories of the Future
(2021) average annual sales on ~$7B vehicle launches 1.7B parts shipped improved quality 40bps costs/sales average annual $9B+ sales on new business awards customer recognitions 122 (record) INVESTOR PRESENTATION - AUGUST 2022 28 Building the Factories of the Future Factory Digitalization Data Analy
Slide 18: 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 ĮT Arcfox ĮS G-Class since 201
Slide 19: Financial Strategy
Financial Strategy INVESTOR PRESENTATION - AUGUST 2022 32 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) $7.4B 112% Peer Average of 29% 1 Weighte
Slide 20: M&A Aligned with Our Strategy
Maintain Strong Balance Sheet • Preserve liquidity and high investment grade credit ratings Adj. debt to Adj. EBITDA ratio between 1.0-1.5x • Maintain investment flexibility Invest for Growth • Organic and inorganic opportunities • Innovation Return Capital to Shareholders • Continued dividend gro
Slide 21: Projected Operating Cash Flow Uses
Projected Operating Cash Flow Uses 2022-2024 35-40% Currently Unallocated 50-55% Net Internal Investments 10-15% An Attractive Dividend INVESTOR PRESENTATION - AUGUST 2022 36 Continued Financial Flexibility ($M) Estimated Future LTD Principal Repayments (12/31/21) TOTAL LIQUIDITY (06/30/22) ($M) $1,
Slide 22: Q2 2022 Financial Results
Q2 2022 Financial Results Consolidated Sales ($Billions) Q2'22 Production +4% Global +2% $10.0 $9.4 0.1 North America +14% $9.0 Europe -1% $9.0 0.1 China -5% $8.0 $7.0 0.1 Magna Weighted +8% $6.0 Key Factors 0.1 $5.0 $4.0 0.1 • Higher global light vehicle production and assembly $3.0 volumes (+) • L
Slide 23: Financial Outlook – Key Assumptions
Financial Outlook – Key Assumptions 2021 APRIL 2022 JULY 2022 Light Vehicle Production (millions of units) • North America 13.1 14.7 14.7 • Europe 16.0 16.4 16.4 • China 24.6 24.4 24.4 Foreign Exchange Rates • 1 CDN dollar equals USD 0.798 0.790 0.783 • 1 EURO equals USD 1.183 1.091 1.052 • 1 RMB eq
Slide 24: Free Cash Flow Expectations
Free Cash Flow Expectations 1 2022 ($Billions) 1.0 $0.7-$0.9 $0.7-$0.9 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 April 2022 Outlook July 2022 Outlook 1 Free Cash Flow is Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other assets plus settlement of long-t
Slide 25: 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 26: 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 27: 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 aging Domain Ultrasonic Warning Braking Algorithms RADAR R Controllers Sensors Far Field Near Field Solid State Cameras Surround View LiDAR
Slide 28: 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 - AUGUST 2022 50 Q2 2022 INVESTOR PRESENTATION - AUGUST 2022 51
Slide 29: Sales Performance vs Market
Sales Performance vs Market Q2 2022 vs Q2 2021 PERFORMANCE VS WEIGHTED GLOBAL 1 PRODUCTION REPORTED ORGANIC (Weighted GoM) Body Exteriors & Structures 8% 15% 7% Power & Vision 0% 7% (1%) Seating Systems 7% 16% 8% Complete Vehicles (6%) 7% (1%) TOTAL SALES 4% 12% 4% Unweighted Production Growth 2% 2
Slide 30: Geographic Sales and Q2 2022 Cash Flow
Geographic Sales Q2 2022 vs Q2 2021 NORTH AMERICA EUROPE $4.1B $4.6B $3.8B $4.1B PRODUCTION 14% PRODUCTION (1%) ASIA REST OF WORLD $912M $947M $122M $100M ASIA PRODUCTION (2%) S.A. PRODUCTION 14% China Production (5%) Q2 2021 Q2 2022 INVESTOR PRESENTATION - AUGUST 2022 54 Q2 2022 Cash Flow and I
Slide 31: Leverage Ratio
Leverage Ratio ($Millions) LTM EBITDA $ 3,105 Lease Adjustment $ 325 Other $ 135 Adjusted EBITDA $ 3,565 Debt per Balance Sheet $ 3,513 Lease Liability per Balance Sheet $ 1,564 Other $ 198 Adjusted Debt $ 5,275 Adjusted Debt / Adjusted EBITDA (Q2 2022) 1.48x INVESTOR PRESENTATION - AUGUST 2022 56
Slide 32: 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) +8% -16% $3.9 250 $227 0.1 $3.6 $191 200 0.1 6.2% 150 0.1 100 0.1 50 4.8% 0.1 0 0.0 Q2'21 Q2'22 Q2'21 Q2'22 • Higher global light vehicle production (+) • Higher net inp
Slide 33: Segment Financial Performance
S E A T I N G Segment Financial Performance Sales Adjusted EBIT & Margin ($Billions) ($Millions) +7% -92% $1.3 $26 $1.2 0.1 0.1 0.0 2.2% 0.0 0.0 $2 0.0 0.2% 0.0 Q2'21 Q2'22 Q2'21 Q2'22 • Higher global light vehicle production (+) • Higher net input costs (-) • Launch of new programs (+) • Higher lau
Slide 34: Other
Other INVESTOR PRESENTATION - AUGUST 2022 61
Slide 35: 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 Mercedes-Benz Volkswagen ID Buzz Coming Soon Fisker Ocean NIO ES NIO ES7 7 X peng G9 Xpeng Smartt B-SUV Smart B-SU SUV V North America
Slide 36: 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%
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