Magna International Inc. · TSX:MG
Magna International — Investor Presentation (September 2020)
26 slides from Magna International's investor presentation, September 2020
Slide 1: Investor Presentation September 2020
INVESTOR PRESENTATION SEPTEMBER 2020
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: Challenging Production Environment in Key Markets
Challenging Production Environment in Key Markets… Trend shows sequential Mid-term production trending Challenging Q2 improvement lower than previously anticipated • NA & EU markets • Industry environment • Initiated and accelerated experienced significant recovering off of the restructuring YOY red
Slide 5: Agenda / Magna COVID-19 Update
Agenda • Magna COVID-19 Update • Q2 2020 Update • 2020 Outlook • Financial Strategy • Positioning for the Future 5 MAGNA COVID-19 UPDATE 6
Slide 6: Restart of Operations
Restart of Operations • Health and safety of employees remains our top priority • Reintegrating employees back into plants and offices • Following established protocols, assessment tools & guidance documents 7 Update on Restart of Production • China and North America – Capacity getting close to leve
Slide 7: Advancing Our Protocols / Q2 2020 Update
Advancing Our Protocols • Smart Start Playbook provided an excellent framework for managing a “new normal” • Production ramped up without significant disruption to production efficiency • Team of varying backgrounds developed recommendations: – How our global operations could be adjusted to stay pre
Slide 8: Q2-2020 Vehicle Production and Total Sales
Q2-2020 Vehicle Production Region YOY Change in Production North America - 70% Europe - 59% China + 3% Global - 42% Estimated COVID-19 Impact on Magna’s 2Q20 Results: Total Sales ~$5.5 billion EBIT ~$1.2 billion Decremental Margin ~22% 11 Q2 2020 Total Sales Key Factors: • Impact of COVID-19 pandemi
Slide 9: Q2 2020 Adjusted EBIT and Financial Highlights
Q2 2020 Adjusted EBIT ADJUSTED EBIT Key Factors: - $1.3B • COVID-19 ~$1.2B (-) $677M • Lower tooling contribution (-) • Higher engineering costs in our ADAS business including retroactive social tax costs (-) ($600)M • Net provisions for customer claims (-) • Net warranty costs (-) • Lower spending
Slide 10: Q2 2020 Segment Results and Cash Flow
Q2 2020 Segment Results (incl. COVID-19 Impact) ($Millions, unless otherwise noted) BODY EXT. & STRUCTURES Q2 2019 Q2 2020 POWER & VISION Q2 2019 Q2 2020 Sales 4,243 1,623 Sales 2,808 1,298 Adjusted EBIT 341 (315) Adjusted EBIT 201 (226) Adjusted EBIT % 8.0% (19.4)% Adjusted EBIT % 7.2% (17.4)% COVI
Slide 11: Financial Strategy
FINANCIAL STRATEGY 17 Capital Allocation Principles Unchanged • Preserve liquidity and high investment grade 1 Maintain Strong Balance Sheet credit ratings • Maintain flexibility to invest for growth • Organic opportunities (disciplined capital spending) 2 Invest for Growth • Innovation • Acquisitio
Slide 12: Strong Liquidity Position
Strong Liquidity Position ($Millions, unless otherwise noted) Available Operating & Term Lines of Credit $ 3,490 Cash & Cash Equivalents $ 648 Total Available Liquidity (6/30/20) $ 4,138 19 Adjusted Debt to Adjusted EBITDA ($Millions, unless otherwise noted) Q2 2020 LTM EBITDA $ 2,311 Lease Adjustme
Slide 13: No Significant Debt Repayments Until 2022
No Significant Debt Repayments Until 2022 Estimated Future LTD Principal Repayments 1 ($Millions) 2,071 2 751 619 338 106 33 2020 2021 2022 2023 2024 Thereafter 1 As of December 31st, 2019 and excludes operating leases 2 Pro-forma including completed offering in June, 2020 of $750M of 10-year senior
Slide 14: 2020 Outlook
2020 Outlook 1 ($Billions, unless otherwise noted) August 2020 Total Sales $30.0 - $32.0 EBIT Margin % 2.9% - 3.3% Interest Expense ~$90M Tax Rate ~30% Capital Spending ~$1.4 1 In this outlook we have assumed no material unannounced acquisitions or divestitures or other significant transactions. In
Slide 15: Positioning for the Future
POSITIONING FOR THE FUTURE 25 Continue to Monitor Ongoing and Potential New Trends Magna Well Positioned to Remain a Leader in Mobility 26
Slide 16: Select Technologies Supporting Trends
Select Technologies Supporting Trends Smart Access Reconfigurable Battery Frames Seating 27
Slide 17: Powertrain Electrification is Growing
Powertrain Electrification is Growing… 4% 2% 3% 5-8% 10-15% 7-9% 26-29% 11-17% 2019 40% 2025 38-46% 2030 51% 27-29% 17-19% 28-29% 11-19% Internal Combustion Engine (ICE) Micro Hybrid: ICE with 12V start/stop functionality & regeneration capability Mild Hybrid: ICE with 48V start/stop functionality,
Slide 18: Positioned to Help Reduce Vehicle Weight
Positioned to Help Reduce Vehicle Weight • Broadest offering of lightweight design and manufacturing solutions • Ability to support OEMs with comprehensive engineering for product and process design • Strong know-how in joining multi-materials • Global footprint allows us to win, support and launch
Slide 19: Magna's ADAS Hardware Building Blocks
Magna’s ADAS Hardware Building Blocks Single Front Ultrasonic and Multi Camera Sensors Camera Domain Radar LiDAR Controller 33 Positioned for Smart Mobility Consumer Focused Vehicles Flexible Mobility Vehicles Architecture Providing Services Body & Structure Powertrain Seating ADAS/Electronics/ Mech
Slide 20: In Summary
In Summary • Implementing right-sizing actions to align with updated mid-term expectations • Strong liquidity position • Continuing to invest for the future • Well positioned for future mobility 35 APPENDIX 36
Slide 21: New Launches Ramping Up
N O R T H A M E R I C A New Launches Ramping Up Q Q Q Q Q Q Q Ford F d Escape E M Mercedes-Benz d B GLE Coupe C Ford F d Maverick M i k Q Q Q Q Cadillac C dill Escalade E l d Ford F d Mustang M t Mach M hE Q Body Q Power & Vision Q Seating 37 E U R O P E New Launches Ramping Up Q Q Q Q Q Q Q Q Volks
Slide 22: Executive Leadership Announcement
A S I A New Launches Ramping Up Q Q Q Q Q Q Mercedes-Benz M d B GLB Ford F d Explorer E l BMW X2 Q Q Q Q Q Q Q Cadillac C dill CT4 Geely G l 05 Chevy Ch Blazer Bl Q Body Q Power & Vision Q Seating 39 Executive Leadership Announcement • Sherif Marakby has joined Magna as Executive Vice President of R
Slide 23: GM Supplier of the Year Awards
GM Supplier of the Year Awards 6 Mirrors Truck Frames Supplier of the Year Awards Driveline Fascias Systems Seat Systems FREEFORM¥ Innovation Most Ever for a Supplier in a Single Year 41 PACE Award for Composite Liftgate • Lightweight solution debuted on the 2020 Toyota Supra • Space frame reinforce
Slide 24: Q2 2020 Sales Performance vs Market
Q2 2020 Sales Performance vs Market Unweighted Weighted Performance vs Performance vs 1 Reported Organic Global Production Global Production Body Exteriors & Structures (62%) (61%) (19%) (2%) Power & Vision (54%) (53%) (11%) 6% Seating (64%) (63%) (21%) (4%) Complete Vehicles (48%) (47%) (5%) 12% TO
Slide 25: Disciplined Capital Spending Profile
Disciplined Capital Spending Profile Capital Spending ($Billions) 1.9 1.8 1.7 1.4 % of ~5.25 5.12 Sales 4.04 3.65 2016 2017 2018 2019 45 Strong Free Cash Flow Generation Free Cash Flow 1 ($Billions) 2.3 1.6 1.2 1.1 2016 2017 2018 2019 1 Free Cash Flow is Cash from Operating Activities plus proceeds
Slide 26: Long History of Increasing Dividend
Long History of Increasing Dividend Annualized Dividend 1 ($ per share) 1.60 1.46 14% 1.32 CAGR 1.12 1.00 0.88 0.76 0.64 0.55 0.50 Q410 Q411 Q412 Q413 Q414 Q415 Q416 Q417 Q418 Q419 1 Based on Q4 run rate 47
Magna International — Investor Presentation (September 2020) on 6ix