Nemak SAB de CV · BMV:NEMAK/A
Nemak SAB de CV — UBS Mexico City, March 2020
31 slides from Nemak SAB de CV's conference presentation, March 2020
Slide 1: Investor Presentation
Investor Presentation UBS – Mexico City – March 2020 Innovative Lightweighting
Slide 2: 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 3: Nemak Overview
Nemak Overview ©Nemak | Public
Slide 4: Nemak Today
Nemak Today Leading provider of innovative lightweighting solutions 2019 Revenues 2019 EBITDA1 US $4.0 Billion US $621 Million Diversified product portfolio Sole supplier in ~90% of sales Strong customer base 1 in 4 new vehicles sold has a Nemak component (1) = EBITDA = Operating Income + Depreciati
Slide 5: Broad portfolio of automotive lightweighting solutions
Broad portfolio of automotive lightweighting solutions Cylinder Heads Engine Blocks Longitudinal Members Transmission Cases E-Motor Housings Battery Housings ©Nemak | Public 5
Slide 6: State-of-the-art facilities in major automotive markets
State-of-the-art facilities in major automotive markets Slovakia Russia 38 Manufacturing facilities 16 Countries Spain ~23K Employees ©Nemak | Public 6
Slide 7: Solid and long-standing customer relationships
Solid and long-standing customer relationships 40 years 25 years 20 years 15 years 10 years 35 years 25 years 20 years 15 years 10 years 35 years 20 years 20 years 15 years 10 years ~2 years ©Nemak | Public 7
Slide 8: Strong competitive position
Strong competitive position Product Customer portfolio Cylinder heads 3% 4% 3% Others 28% 5% Engine blocks 5% 6% Transmissions components 13% 18% Structural & EV 14% components ©Nemak | Public 8
Slide 9: Financial Overview / Recent Developments
Financial Overview / Recent Developments ©Nemak | Public
Slide 10: Financial Overview
Financial Overview ©Nemak | Public 10
Slide 11: 2019 Summary
2019 Summary Financial results Industry developments • EBITDA at Guidance, despite lower- • Customer production headwinds in than-expected volume North America • Net Debt to EBITDA at 1.9x • Europe and Asia affected by softer industry conditions • Favorable South America outlook Structural & EV comp
Slide 12: 2019 Financial highlights
2019 Financial highlights Revenue by Region Δ vs. Guidance Actual Guidance 2019 RoW Volume (M Units) 46.0 44.3 (3.7)% 9% Sales (US$ B) 4.4 4.0 (8.7)% North America EBITDA (US$ M) 620 621 0.2% Europe 56% 35% EBITDA / Pc (US$) 13.5 14.0 4.0% CAPEX (US$ M) 320 344 24 ©Nemak | Public 12
Slide 13: Financial performance
Financial performance Dividends Capex (US$ M) -45 (US$ M) (-26%) -59 541 (-15%) 171 170 445 460 433 403 125 344 92 80 60 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Net Debt Net Debt to EBITDA (US$ M) (Times) 1,315 1,261 1,271 1,252 1.9 1.8 1.9 1,210 1,206 1.7 1.6 1.6 2014 2015 2016
Slide 14: 2020 Guidance considerations
2020 Guidance considerations Challenges Opportunities • Industry development • 12 product launches globally in Customer-specific structural & EV components business Regional • Market share growth in Brazil • Phase-out of export program to China • Cost-reduction program • European market shift aw
Slide 15: Auto industry trend – Light Vehicle Sales
Auto industry trend – Light Vehicle Sales (M Units) US Europe -1% -2% 17.1 17.0 16.7 16.4 22.0 21.7 20.7 20.1 17.2 17.3 17.0 16.8 20.1 20.0 19.6 19.1 17 18 19 20 17 18 19 20 China Brazil +9% -5% 28.0 26.9 2.9 2.8 2.9 24.6 24.0 2.6 27.4 26.6 24.3 23.7 2.7 2.8 2.2 2.5 17 18 19 20 17 18 19 20 ©Nemak |
Slide 16: 2020 Guidance
2020 Guidance Δ vs. 2019 Volume (M Eq. Units) 42.0 (5.2)% Sales (US$ B) 3.8 (5.4)% EBITDA (US$ M) 565 (7.8)%* CAPEX (US$ M) 290 54 * Excludes 2019 extraordinary item ©Nemak | Public 16
Slide 17: 2020 Guidance - Volume
2020 Guidance - Volume -2.3 Comments (-5.2%) 44.3 IN PROCESS 1.2 42.0 • Expected reduction mainly in North America. 2.1 0.7 0.7 • Customer production • Exports to China • Product mix • New SC/EV applications and powertrain growth in Brazil partially offset volume headwinds. • Volume accounts for mos
Slide 18: Debt Profile
Debt Profile Amortization Schedule (US$ M, Dec ‘19) Currency Distribution Average Life increased from 4.4 to 4.9 years* Others 8% 592 543 EUR USD 43% 49% 561 500 Rate Distribution 127 115 Variable 17% 34 28 22 24 31 31 43 20 21 22 23 24 25 26 27 28+ Bank Debt Long Term Bonds * Change vs Sept 30th, 2
Slide 19: Recent Developments
Recent Developments ©Nemak | Public 19
Slide 20: Committed to world-class sustainability practices
Committed to world-class sustainability practices • Nemak to set science-based emission targets • Lightweighting solutions facilitate customer efforts to reduce CO2 footprint • Intensive use of aluminum from recycled sources • Selected to join two stock indices comprised of companies with leading ec
Slide 21: Innovation as a competitive advantage
Winner of the 2020 International Die Casting Innovation as a competitive Competition advantage • Invest ~2% revenue in Research & Development • Increased focus on electrification businesses Battery housings and e-motor housings Nemak battery housing featuring joining & assembly capabilities Struct
Slide 22: E-mobility business
E-mobility business • Leveraging technological capabilities and footprint to supply EV components • Broad range of solutions spanning casting as well as joining and assembly • Progress in EV components: All-electric applications o Electric Mobility Center in North America o Production of e-motor h
Slide 23: Nemak to supply battery housings to Ford Mustang Mach-E
Nemak to supply battery housings to Ford Mustang Mach-E • Setting-up production facility in North America fully dedicated to assembly of e-mobility applications. • Ford Mach-E Battery Housing: 2.2 x 1.5 meter structure Multiple aluminum components State-of-the-art joining and assembly processe
Slide 24: 2025 Strategy Update
2025 Strategy Update ©Nemak | Public
Slide 25: Emission regulations driving e-mobility and lightweighting
Emission regulations driving e-mobility and lightweighting Fuel Efficiency Regulation Miles per gallon Electrification 95 • Faster adoption in industry 2025 Objectives 85 Europe - 67.6 China - 61.0 75 EUA - 38.0 Vehicle structures 65 • Mix of lighter materials in 55 vehicle structure US 2012 4
Slide 26: Solid development in new business avenues
Solid development in new business avenues • Awarded business to-date for ~US$750 M in structural & EV components Pipeline of sales prospects amounts to ~US$1.3 B ©Nemak | Public 26
Slide 27: Awarded SC/EV business – select applications
Awarded SC/EV business – select applications Battery Housing Subframe E-Motor Housing Mercedes-Benz BMW iNext BMW i8 GLE Hybrid E-Motor Housing Subframe Longitudinal Member Jaguar I-Pace AMG SL232 BMW i4 ©Nemak | Public 27
Slide 28: Awarded SC/EV business – select applications
Awarded SC/EV business – select applications Subframe E-Motor Housing A-Pillar Volvo Polestar Porsche Taycan Mercedes-Benz EQS Battery Housing Battery Housing Battery Housing BMW X5 Jeep Wrangler Ford Mustang Mach-E Hybrid ©Nemak | Public 28
Slide 29: Increasing Nemak content per vehicle
Increasing Nemak content per vehicle Combustion Engine Hybrid Battery Electric US$450 – 500 US$480 – 580 US$550 – 700 Structural Components Hybrid Other EV Structural Components Trans Structural Components components Battery E-Motor Housings Housings Head, Block & Trans Head & Block Increased Value
Slide 30: Key takeaways
Key takeaways Positioned to capture growth in e-mobility and structural applications Profitable combustion engine business drives cash flow generation Prudent financial management and capital allocation Order book in SC/EV worth ~US$750 M in annual revenue Pursuing sales prospects in SC/EV worth ~US
Slide 31: Nemak Innovative Lightweighting
6 Nemak Innovative Lightweighting