Nemak SAB de CV · BMV:NEMAK/A
Nemak SAB de CV — Q4 2020 Earnings Presentation
35 slides from Nemak SAB de CV's earnings presentation, February 2021
Slide 1: 4Q20 Results
4Q20 Results FEBRUARY 2021 ©Nemak | Public 1
Slide 2: Agenda
Agenda • 4Q20 Highlights • Financial Overview • 2021 Guidance Armando Tamez Alberto Sada Adrián Althoff CEO CFO IR Officer ©Nemak | Public 2
Slide 3: Forward-Looking Statement
FORWARD-LOOKING STATEMENT This presentation contains forward-looking information based on numerous variables and assumptions that are inherently uncertain. They involve judgments with respect to, among other things, future economic, competitive and financial market conditions and future business dec
Slide 4: Successfully managing the COVID-19 pandemic
Successfully managing the COVID-19 pandemic Best practices across operations Focus on Health and Safety ©Nemak | Public 4
Slide 5: Efforts to support business continuity
Efforts to support business continuity Image is for illustration purposes only • Operational efficiencies to optimize costs and expenses • Use of credit lines to reinforce liquidity position Record-breaking results in the second half of the year ©Nemak | Public 5
Slide 6: Steady industry recovery since June 2020
Steady industry recovery since June 2020 • North America and Europe volume close to pre-COVID levels • Positive industry trends in China ©Nemak | Public 6
Slide 7: Solid recovery in second half of 2020
Solid recovery in second half of 2020 • First half impacted by pandemic EBITDA • Second half: 21%+ Stronger customer demand Cost reduction efforts Best-ever EBITDA per eq. unit ©Nemak | Public 7
Slide 8: Deleveraging efforts in the fourth quarter
Deleveraging efforts in the fourth quarter Repaid most credit lines drawn during pandemic Similar Net Debt level vs 2019 ©Nemak | Public 8
Slide 9: Supporting our customers' lightweighting and electrification strategies
Supporting our customers’ lightweighting and electrification strategies Secured new contract to develop and produce battery housings for iconic, full-electric premium vehicle ©Nemak | Public 9
Slide 10: 2020 order book in e-mobility and structural applications
2020 order book in e-mobility and structural applications • ~US$850 million in annual revenue ©Nemak | Public 10
Slide 11: Positive developments on the powertrain side
Positive developments on the powertrain side New contracts for blocks and cylinder heads in all regions Incremental business with Asian OEM worth ~US$80 million annually ©Nemak | Public 11
Slide 12: New contracts across our product lines in 2020
New contracts across our product lines in 2020 ~US$700 million annually ©Nemak | Public 12
Slide 13: Important industry recognitions
Important industry recognitions “Supplier of the Year” “Launch of the Year” ©Nemak | Public 13
Slide 14: Increased activity in e-mobility and structural applications across our regions
Increased activity in e-mobility and structural applications across our regions Mustang Mach-E in North America New all-electric sedan in Asia Battery housings for plug-in hybrid EVs in Europe ©Nemak | Public 14
Slide 15: New sales prospects in e-mobility and structural applications
New sales prospects in e-mobility and structural applications New business opportunities worth +US$1B annually ©Nemak | Public 15
Slide 16: We made continued progress on our sustainability journey in 2020
We made continued progress on our sustainability journey in 2020 ©Nemak | Public 16
Slide 17: We continue driving value creation, now as a fully independent company
We continue driving value creation, now as a fully independent company Better positioned to capitalize on demand for sustainable mobility solutions ©Nemak | Public 17
Slide 18: Financial Results
Financial Results ©Nemak | Public 18
Slide 19: North America and Europe showed overall recovery trend in second half
North America and Europe showed overall recovery trend in second half • Improvement in light-vehicle sales and production • Better economic conditions ©Nemak | Public 19
Slide 20: Overall recovery trend in our main markets
Overall recovery trend in our main markets Vehicle SAAR (Y-o-y Change) 30% China 10% 6% USA -3% W. Europe -10% -4% -7% Brazil -30% -50% -48% -70% -81% -80% -77% -90% Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 2020 ©Nemak | Public Source: IHS Markit, Automotive News, Marklines, Nemak 20
Slide 21: Nemak's volume performance similar to industry
Nemak’s volume performance similar to industry • Volume close to pre- pandemic levels in 2H • Increased customer demand in China ©Nemak | Public 21
Slide 22: Improved financial performance in quarter
Improved financial performance in quarter Restructuring initiatives implemented in the first half of the year ©Nemak | Public 22
Slide 23: Sustainable cost structure improvements
Sustainable cost structure improvements • COGS and SG&A reductions for the second half • ~US$250 million in cost savings for the year A large portion of recent efficiencies are sustainable over mid-to-long term ©Nemak | Public 23
Slide 24: 2H20 Global Results
2H20 Global Results Revenue (M USD) EBITDA (M USD) +56 -62 (+21%) (-3%) 1,904 328 1,842 272 2H19 3Q19 2H20 3Q20 2H19 3Q19 2H20 3Q20 Eq. Volume 20.8 20.2 Unitary 13.1 16.2 ©Nemak | Public 24
Slide 25: Positive free cash flow generation in second half
Positive free cash flow generation in second half Operating Cash Flow: ~US$280 million Net debt: US$1.2 billion CAPEX: US$130 million ©Nemak | Public 25
Slide 26: Repaid most credit lines drawn during the pandemic
Repaid most credit lines drawn during the pandemic • Repaid ~US$530 million ©Nemak | Public 26
Slide 27: Focus on reducing leverage
Focus on reducing leverage Net Debt / EBITDA (LTM base, times) 4.75 4.0 3.5 3.4 2.8 • Net Leverage at 2.8x 2.1 2.5x excluding severance 3.6 3.1 2.5 1Q 2Q 3Q 4Q Ratio w/o Severance Severance impact Covenant ©Nemak | Public 27
Slide 28: Working to bring our leverage ratio back down to pre-pandemic levels
Working to bring our leverage ratio back down to pre-pandemic levels By 4Q, we had more than US$800 million in committed and uncommitted credit lines available ©Nemak | Public 28
Slide 29: Summary of regional results 4Q20
Summary of regional results 4Q20 Revenues 4Q20 4Q19 % Var. North America 464 490 (5.3) Europe 360 339 6.2 Rest of World 123 112 9.8 Total 946 941 0.5 EBITDA 4Q20 4Q19 % Var. North America 77 68 13.2 Europe 64 56 14.3 Rest of World 8 9 (11.1) Total 150 133 12.8 ©Nemak | Public 29
Slide 30: 2021 Outlook
2021 Outlook ©Nemak | Public 30
Slide 31: Capturing new opportunities in e-mobility and structural applications
Capturing new opportunities in e-mobility and structural applications Best in class performance Lean and agile organization Flexible approach to investing ©Nemak | Public 31
Slide 32: 2021 Guidance
2021 Guidance Volume: 38.8 M Eq. Units Revenue: US$3.6 B EBITDA: US$552 M CAPEX: US$380 M ©Nemak | Public 32
Slide 33: Stronger groundwork to capture lightweighting and electrification opportunities
Stronger groundwork to capture lightweighting and electrification opportunities ©Nemak | Public 33
Slide 34: Q&A
Q&A ©Nemak | Public 34
Slide 35: For more information contact us
For more information contact us at: investors.Nemak.com investor@Nemak.com ©Nemak | Public 35