Magna International Inc. · TSX:MG
Magna International — Investor Presentation (February 2022)
50 slides from Magna International's investor presentation, February 2022
Slide 1: Investor Presentation February 2022
Investor Presentation February 2022
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 1 systems approach and unique complete vehicle capabilities 2 Supplier of choice for automakers and enabler for new entrants Strategic portfolio positions us for sales growth over market and 3 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 343 4th Largest Supplier * 2022 Sales Outlook $38.8B – $40.4B INVESTOR PRESENTATION - FEBRUARY 2022 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 - FEBRUARY 2022 6
Slide 7: Secular Trends Driving Change
Secular Trends Driving Change 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 roadmap to EV
Slide 8: The Power of Magna
The Power of Magna Deep product expertise Complete vehicle engineering and manufacturing Integrated systems level analysis and approach Enables Magna's Unique Competitive Position INVESTOR PRESENTATION - FEBRUARY 2022 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 - FEBRUARY 2022 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 1 Expected Managed Sales Key Growth Contributors 3.000 0.1 >$2.5B 0.1 eDrive program launches in China in 2.500 HASCO-Magna Joint Venture >$2B 0.1 2.000 0.1 High-volume 48V hybrid DCT programs 1.500 0.1 1.000 0.1 New business in primary and secondary eDrives 0.500 $
Slide 13: Dual-Clutch Transmissions
Dual-Clutch Transmissions Program Award Dual-Clutch Transmissions • Awarded family of transmissions from Daimler, including traditional (DCT) and hybrid (HDT) launching in 2025 • Represents third high-volume HDT program award • Beginning to launch HDTs this quarter for two additional global custom
Slide 14: 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 15: 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 16: High Growth Area: ADAS
High Growth Area: ADAS Expect ADAS Sales to Grow Above Market Key ADAS Growth Contributors 5.0 4.5 4.0 Ongoing Investments 30%+ CAGR 3.5 Expanding Software Engineering Team 3.0 2.5 2.0 1.5 Strategic Partnerships 1.0 0.5 0.0 1 2021 2024 Well Positioned to Address ADAS Opportunities 1 Forward-looking
Slide 17: Unique Driver and Occupant Monitoring System
Unique Driver and Occupant Monitoring System • Integrated driver and occupant monitoring system • System solution fully integrates camera and electronics into the interior mirror • Driver and in-cabin occupant monitoring achieved with a single camera • Production starts in 2024 with German automaker
Slide 18: Launching Hasco Magna eDrives
Launching Hasco Magna eDrives • Joint venture in China begins high-volume serial production of integrated eDrive systems • Global supplier for all secondary eDrives for Volkswagen's MEB platform • One of many eDrive products in Magna's portfolio that cover power ranges up to 250 kW Best-In-Class Dra
Slide 19: Innovation Across the Vehicle
Innovation Across the Vehicle Rethinking the possibilities using our core strengths and systems Battery Enclosures Magna MezzoPanel™ know-how Structural opportunities expand Integrated ADAS and with electrification lighting functions Adaptive Beam Lighting SmartAccessTM FreeFormTM Increased safety a
Slide 20: 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 - FEBRUARY 2022 20
Slide 21: 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 22: 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 Science-Based Approach ̶ Globally by 2030 Aligned with Objectives of • Will be an industry leader in North America, and aligned with industry leaders in Eu
Slide 23: 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 24: Flexible Production Concept
Flexible Production Concept Volume Extension • Expansion planning in advance First-Generation Plant • Volume expansion in phases Ability to replicate plants • Flexible supply management to satisfy long-term demand growth approach Can Scale to Meet Volume Requirements and Optimize Future Expansion IN
Slide 25: 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 26: Full Vehicle and System Capabilities Uniquely Positioned to be a Strategic Partner
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 - FEBRUARY 2022 26
Slide 27: Financial Strategy
FINANCIAL STRATEGY INVESTOR PRESENTATION - FEBRUARY 2022 27
Slide 28: Strong 5 Year Performance
Strong 5 Year Performance 2017-2021 Average Weighted Sales 1 Investment in Business Growth Over Market (GoM) 6% $10.8B Return of Capital Total Shareholder Return (NYSE) $7.4B 112% peer average of 29% 1 Weighted Growth over Market (GoM) compares organic sales growth (%) to vehicle production change (
Slide 29: Capital Allocation Principles
MAINTAIN STRONG BALANCE SHEET • Preserve liquidity and high investment grade credit ratings Capital - Adj. debt: Adj. EBITDA ratio between 1.0-1.5x • Maintain flexibility to invest for growth Allocation INVEST FOR GROWTH • Organic and inorganic opportunities Principles • Innovation RETURN CAPITAL TO
Slide 30: M&A Aligned with Our Strategy
M&A Aligned with Our Strategy STRATEGIC FILTERS • Expands/Complements Technology Base • Technologies that Enable Acceleration in Megatrend Areas (e.g., electrification, autonomy) • Customer Diversification • Geographic Expansion INVESTOR PRESENTATION - FEBRUARY 2022 30
Slide 31: 2021 Financial Results
2021 Financial Results Consolidated Sales Adjusted EBIT Margin Adjusted EPS ($Billions) (%) ($) 7.0% $6.00 0.1 $40.0 0.1 $36.2 $5.13 $35.0 $32.6 0.1 6.0% 5.7% $5.00 0.1 5.1% $3.95 $30.0 5.0% 0.1 0.1 $4.00 $25.0 4.0% 0.1 0.1 $3.00 $20.0 1 $15.0 WEIGHTED GoM +4% 0.1 3.0% 0.1 $2.00 2.0% 0.1 0.1 $10.0 $
Slide 32: Q4 2021 Financial Results
Q4 2021 Financial Results Consolidated Sales Adjusted EBIT Adjusted EPS ($Billions) ($Millions) ($) Q4'21 vs Q4'20 Prod'n Global -17% $12.0 Magna Weighted -21% 0.1 $1,095 $3.00 $2.83 0.1 $10.6 $1,000 0.1 0.1 $2.50 $9.1 $10.0 0.1 0.1 $800 $2.00 $8.0 0.1 0.1 $508 $600 $6.0 $1.50 $1.30 1 WEIGHTED GoM +
Slide 33: Q4 2021 vs Q3 2021 (Sequential) Financial Results
Q4 2021 vs Q3 2021 (Sequential) Financial Results Consolidated Sales ($Billions) Q4'21 vs Q3'21 Production +15% Global +21% $10.0 0.1 North America +11% $9.1 $9.0 Europe +28% $7.9 0.1 China +33% $8.0 $7.0 0.1 Magna Weighted 18% $6.0 0.1 $5.0 $4.0 0.1 Key Factors $3.0 0.1 • Higher global light vehicl
Slide 34: Q4 2021 vs Q3 2021 (Sequential) Financial Results
Q4 2021 vs Q3 2021 (Sequential) Financial Results Adjusted EBIT & Margin ($Millions) Key Factors +122% • Increased earnings on $1.2B increase $600 0.2 in sales (+) $508 $500 • Provision on engineering service contracts with 0.1 automotive unit of Evergrande in Q3 '21 (+) $400 • Government R&D incent
Slide 35: Q4 2021 Cash Flow and Investment Activities
Q4 2021 Cash Flow and Investment Activities Free Cash Flow 1 Cash from Operations Before Changes in $849M ($Millions) Operating Assets & Liabilities Changes in Operating Assets & Liabilities $502M $1,670 0.1 Cash from Operations $1,351M $1,550 0.1 Fixed Asset Additions ($549M) $1,350 Increase in Inv
Slide 36: Financial Outlook – Key Assumptions
Financial Outlook – Key Assumptions Automotive Light Vehicle Production (millions of units) 2021 2022 2024 North America 13.1 15.2 17.5 Europe 16.0 18.5 21.2 China 24.5 24.2 29.0 U.S. Foreign Exchange Rates 2021 2022 2024 Cdn 0.798 0.800 0.800 Euro 1.183 1.130 1.130 RMB 0.155 0.157 0.157 Acquisition
Slide 37: Financial Outlook
Financial Outlook ($Billions, unless otherwise noted) 2022 2024 Sales: • Body Exteriors & Structures 16.2 – 16.8 19.6 – 20.6 • Power & Vision 11.9 – 12.3 14.3 – 14.9 • Seating Systems 5.4 – 5.7 6.2 – 6.6 • Complete Vehicles 5.8 – 6.1 5.0 – 5.5 Total Sales 38.8 – 40.4 44.6 – 47.1 Adjusted EBIT Margin
Slide 38: Free Cash Flow Generation
Free Cash Flow Generation 1 ($Billions) $2.3 $1.9 $1.6 $1.3 $1.1-$1.3 $1.2 $5.75B-$6.25B (2022-2024) 2017 2018 2019 2020 2021 2022F 2023F 2024F 1 Free Cash Flow is Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other assets minus capital spending minus inve
Slide 39: Executing Our Disciplined Profitable Growth Strategy
Executing Our Disciplined Profitable Growth Strategy Strategy 2021 2024 2 Future 44.6-47.1 Continued 36.2 growth over Sales ($B) Accelerate deployment of capital market towards high-growth areas 8.1-8.6 Accelerate Adjusted EBIT 5.7 Margin deployment Margin (%) expansion Drive of capital Drive high t
Slide 40: 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 Untapp
Slide 41: AN amnona,
AN amnona,
Slide 42: Appendix
Appendix INVESTOR PRESENTATION - FEBRUARY 2022 42
Slide 43: Significant Content on BEV Launches Globally
Significant Content on BEV Launches Globally Coming Soon Ford F-150 Lightning Mercedes-Benz GLS SUV Cadillac Lyriq Rivian R1S GMC Hummer BMW iX Mercedes-Benz EQE Volkswagen ID Buzz Coming Soon Fisker Ocean NIO ES7 Xpeng G9 Smart B-SUV North America Europe China INVESTOR PRESENTATION - FEBRUARY
Slide 44: Key 2022 Non-EV Launches
Key 2022 Non-EV Launches Chevrolet Silverado (Oshawa) Jeep Wagoneer Honda CR-V Toyota Tundra Ford Maverick Alpha Romero Tonale BMW X1 Mercedes-Benz GLC BMW X5 North America Europe China INVESTOR PRESENTATION - FEBRUARY 2022 44
Slide 45: Leverage Ratio
Leverage Ratio ($Millions) LTM EBITDA $ 3,576 Lease Adjustment $ 320 Other $ (83) Adjusted EBITDA $ 3,813 Debt per Balance Sheet $ 3,993 Lease Liability per Balance Sheet $ 1,680 Other $ 218 Adjusted Debt $ 5,891 Adjusted Debt / Adjusted EBITDA (Q4 2021) 1.54x INVESTOR PRESENTATION - FEBRUARY 2022 4
Slide 46: Segment Sales & Adjusted EBIT Margin %
Segment Sales & Adjusted EBIT Margin % 1 SALES ($B) BODY EXTERIORS & POWER & VISION SEATING SYSTEMS COMPLETE VEHICLES STRUCTURES '21-'24 '21-'24 '21-'24 '21-'24 11-12% 8-10% 8-11% (6)-(3)% CAGR 19.6-20.6 CAGR CAGR CAGR 16.2-16.8 14.5 14.3-14.9 13.6 11.9-12.3 11.3 9.7 6.2-6.6 6.1 5.8-6.1 4.9 5.4-5.7
Slide 47: 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%
Slide 48: 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 49: Full ADAS Systems
Full ADAS Systems Building Block Approach MODULAR & SCALABLE Near Field Digital Imaging Domain Solid State Ultrasonic Far Field Surround View RADAR Controllers LiDAR Sensors BUILDING BLOCKS Cameras Cameras Software & Algorithms Perception | Fusion | Planning | Control SAFETY FEATURES (NCAP 5-STAR) L
Slide 50: Complete Vehicles
Complete Vehicles Building Block Approach PRODUCT PROCESS COMPLETE Definition Complete Complete VEHICLE Vehicle Vehicle Vehicle E/E Vehicle Vehicle of Complete Vehicle Models Platform Architecture Architecture Testing & Production Vehicle Targets Integration Validation Globally Complete Manufacturin
Magna International — Investor Presentation (February 2022) on 6ix