Investor Presentation. Sustaining Growth. February 2017

Transcription

1 Investor Presentation Sustaining Growth February 2017

2 Cautionary Statement Information in this presentation relating to projected growth and financial performance of the Company s business units, contribution of our greenfield business units, margin performance and operating efficiencies are forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements made during this presentation referring to growth and financial performance of the Company s business units, margin, operating improvement, capital expenditures and acquisitions because these plans, intentions or expectations are based on, among other things, assumptions about the number of automobiles produced in North America and Europe, the number of extrusion dies required in North America and South America, the rate of economic growth in North America and Europe and emerging markets, investment by OEMs in drivetrain and structural part architecture and other initiatives intended to reduce fuel consumption and/or the weight of automobiles, weakening raw material prices, continuing economic recovery, capital expenditures and currency fluctuations which may in fact not occur. These forward-looking statements include known and unknown risks, uncertainties, assumptions and other factors which may cause actual results or achievements to be materially different from those expressed or implied. For a more extensive discussion of Exco s risks and uncertainties see the Risks and Uncertainties section in the latest Annual Report, Annual Information Form ( AIF ) and other reports and securities filings made by the Company. This information is available at and While Exco believes that the expectations expressed by such forward-looking statements are reasonable, we cannot assure that they will be correct. In evaluating forward-looking information and statements, readers should carefully consider the various factors which could cause actual results or events to differ materially from those indicated in the forward-looking information and statements. Readers are cautioned that the foregoing list of important factors is not exhaustive. Furthermore, the Company will update its disclosure upon publication of each fiscal quarter s financial results and otherwise disclaims any obligations to update publicly or otherwise revise any such factors or any of the forward-looking information or statements contained herein to reflect subsequent information, events or developments, changes in risk factors or otherwise. EXCO TECHNOLOGIES LIMITED 2

3 Company Overview Business Highlights Global provider of tooling and interior trim components & solutions to the industrial and automotive markets Two principle business segments: Casting & Extrusion and Automotive Solutions Emission reduction requirements, vehicle lightweighting trends, market share gains and interior-trim focused acquisitions are key growth drivers Leading market positions; over 60 year history Global footprint; concentrated in low cost jurisdictions Decentralized divisions run as profit centers TSX listed (XTC); control block owns 23% of shares *Last twelve months to Dec 31, 2016 Pro-Forma for AFX Industries acquisition United States Canada Mexico Europe Other Financial Highlights Pro-Forma LTM revenue of C$644 million and EBITDA of C$91 million (14% margin)* F2010-F2016 revenue & EBITDA CAGR of 24% Dividend has increased by 310% since F2010 Consistently strong free cash flow Low pro-forma financial leverage and strong liquidity F2016 Sales by Customer Location 35% 8% 3% 4% 49% EXCO TECHNOLOGIES LIMITED 3

4 Principle Business Segments Pro-Forma Revenue and EBITDA through December 31, 2016 C$644 million in Revenue C$91 million in EBITDA 71% Automotive Solutions Segment (C$460M) Polytech Polydesign Neocon ALC AFX 40% 29% Casting & Extrusion Segment (C$184M) Extrusion Technology 35% Casting Technology 25% Castool Group C$32M Casting & Extrusion (17% Margin) C$65M Automotive Solutions (14% Margin) (C$7 million) Corporate Expense Through December 31, 2016 Pro-Forma for acquisition of AFX Industries (closed April 4, 2016) EXCO TECHNOLOGIES LIMITED 4

5 Global Presence 16 Manufacturing Locations in 8 Countries and 6,351 Employees Chesterfield, MI Troy, MI Port Huron, MI Toledo, OH Uxbridge, ON Newmarket, ON Markham, ON Landshut, Germany (sales center) Sofia, Bulgaria (2) Dartmouth, NS Matamoros, MX (2) Wylie, TX Tangier, Morocco Queretaro, MX Medellin, Colombia Sorocaba, Brazil Chonburi, Thailand Casting & Extrusion Technologies Extrusion Technology Casting Technology Castool Group Automotive Solutions EXCO TECHNOLOGIES LIMITED 5

6 Automotive Solutions Segment EXCO TECHNOLOGIES LIMITED 6

7 Automotive Solutions Segment A leading innovator for interior trim and convenience solutions to the global auto market Competitive Strengths Largest supplier of flexible restraint and storage systems for autos in N.A. with majority share Content on popular models; sizeable SUV/CUV exposure Five businesses provide an expanding array of product offerings aimed at enhancing vehicle appeal Low-cost producer with facilities in Mexico, Morocco and Bulgaria Strategically located in Free Trade Zones near US and European markets Recent Supplier Awards from Honda, Toyota, General Motors, Subaru, and Faurecia Favorable Market Conditions Record production volumes expected to continue near current levels Source: HIS Automotive Light Vehicle Production (millions of units) P 2018P NAFTA Europe EXCO TECHNOLOGIES LIMITED 7

8 Automotive Solutions Segment Five businesses provide an expanding array of product offerings Business Manufacturing Location(s) Facility Size Polytech Mexico 130,000 sq ft Polydesign Morocco 185,000 sq ft Neocon Nova Scotia, Canada Bulgaria Lesotho Mexico 77,000 sq ft 108,000 sq ft 65,000 sq ft 91,000 sq ft Key Products/ Programs Netting-based storage systems for trunks, seat backs and door panels, etc. Netting-based restraint systems for passenger/ cargo separation Plastic injected moulded consoles, gearshift boots and componentry Similar products as Polytech Cutting and sewing of leather for instrument panels, door panels, consoles, steering wheels Thermoformed products Cargo organizer systems Flooring and protective systems Tier 1 supplier of leather seat covers for BMW 3 Series, 5 Series Tier 2 supplier of leather seat covers for most Mini programs $35 million Audi seat cover contract in Europe to commence late F2016 Tier 2 supplier of interior trim components to diversified N.A customers Die cut leather sets for seating and most other interior trim applications Leather wrapped, machine and hand sewn automotive interior parts include steering wheels, shift knobs & boots, brake handles, armrests EXCO TECHNOLOGIES LIMITED 8

9 Automotive Solutions Revenue Drivers Growing content per vehicle and still plenty of runway left C $25 Content Per Vehicle $23.63 C $20 C $15 C $10 C $5 $- $5.49 $15.76 $13.61 $7.16 $7.07 $7.00 $7.40 $8.60 $9.23 $5.49 $ Polytech, Neocon, Polydesign ALC AFX 18% Organic CAGR 163% Total CAGR Fiscal year ended September 30 Aggregate of revenue for Polytech, Neocon and Polydesign divided by region vehicle production (N.A. for Polytech and Neocon; Europe for Polydesign) ALC and AFX revenue pro-forma for year acquired (Vehicle production volume is N.A. for AFX; Europe for ALC) EXCO TECHNOLOGIES LIMITED 9

10 Casting & Extrusion Segment EXCO TECHNOLOGIES LIMITED 10

11 Casting Technology Moulds for transmission cases, engine blocks and other automotive products Competitive Strengths Largest independent manufacturer of die-cast moulds in North America; estimated 20% share Three locations: Ontario, Ohio and Mexico with combined facilities totalling 200,000 square feet Industry leading design and engineering Capable of producing moulds up to 75 tons 3,500 ton die-casting machine and foundry to test products. Furnaces deliver standard aluminum alloy, structural aluminum alloy & magnesium $10 million program to increase capacity & reduce delivery times; all equipment now delivered Additive printing capability enhances mould design EXCO TECHNOLOGIES LIMITED 11

12 Casting Technology Leading designer, builder and developer of large high pressure die-cast moulds Key Program Factors Customers include Fiat Chrysler, Ford, Mercedes, General Motors and their tier one suppliers Supported customers on more than 80 programs over last 20 years during which time Exco has: Delivered ~400 complete new dies Completed over 650 die rebuilds Vast majority of new dies are designed by Exco Exco currently supplies 100% of large tooling to the world s largest Silafont TM foundry Historical Overview of New Dies (Mid 1990s 2016) Type Variety 81 Programs FWD Transmission RWD Transmission Auto and Manual 4, 5, 6, 8 & 9 Speed; CVT Case and Converter All Wheel Drive 4, 5, 6, 8 & 10 Speed Case and Converter Heavy Duty Truck ~400 New Dies 28 ~ ~105 Engine Block I3, I4, V6, V8 15 ~85 Structural Components All Other Engine Cradle Instrument Panel Door Structure Rear Rail Oil Pan Transfer Case Axle Tube Marine Gearbox EXCO TECHNOLOGIES LIMITED 12

13 Millions of Pounds Extrusion Technology Largest designer and manufacturer of dies for aluminum extrusions in the Americas Competitive Strengths Estimated market share of 30% in North America Flagship locations in Ontario and Michigan Recent expansions into Brazil, Colombia and Texas Customer consolidation and competitor shake-out benefiting well-capitalized players such as Exco Upgraded machinery and commonality of design and manufacturing process across plants N.A. Producer Shipments of Extrusions 1 6,000 5,500 5,000 4,500 4,000 3, E Extruded Products by End Market 1 2% Transportation 10% 10% 10% 31% Building & Construction Consumer Durables Electrical 37% Machinery & Equipment 1 The Aluminum Association, Exco Other EXCO TECHNOLOGIES LIMITED 13

14 Castool Group Equipment, accessories and tooling for aluminum die-cast machines and extrusion presses Competitive Strengths Proprietary consumable tooling components and systems designed to increase equipment efficiency through improved uptime and yields State of the art 76,000 sq ft facility in Ontario Thailand facility (30,000 sq ft) opened June 2014 to serve the Asian and European markets Dummy Blocks Die-Cast Shot Sleeves Robot Cell Extrusion Container Pressure Ring Plunger Tips EXCO TECHNOLOGIES LIMITED 14

15 Casting & Extrusion Segment Focus on vehicle light-weighting provides significant ongoing growth opportunity Ever more stringent fuel efficiency and emission reduction standards are driving the development of increasingly advanced engines and transmissions by OEM and tier 1 suppliers Better fuel economy and lower emissions are also driving transition from steel to aluminum alloys in the production of non-powertrain structural components Light Vehicle Miles Per Gallon, Normalized to CAFE Dashed line represents future requirements US mpg US mpg Net Pounds Per Vehicle of Aluminum Extruded Products Source: NHTSA and EPA Source: Ducker worldwide EXCO TECHNOLOGIES LIMITED 15

16 Financial Results EXCO TECHNOLOGIES LIMITED 16

17 Revenue by Segment Strong top-line contribution from both business segments C$ Millions AFX AFX ALC 84 ALC ALC F2010 F2011 F2012 F2013 F2014 F2015 F2016 Q1 F16 Q1 F17 Fiscal year ended September 30 ALC acquired March 2014; AFX acquired April 2016 EXCO TECHNOLOGIES LIMITED 17

18 EBITDA by Segment EBITDA improvement in line with sales growth C$ Millions Corporate Expense Automotive Solutions F2010 F2011 F2012 F2013 F2014 F2015 F Q1 F16 Q1 F17 Fiscal year ended September 30 EXCO TECHNOLOGIES LIMITED 18

19 Net Income and Adjusted Net Income Net income up sharply with strong results from the underlying business C$ Millions 51.2 AFX H1 Pro-Forma AFX Transaction Costs One-Time Tax/ Other Reported Net Income F2013 F2014 F2015 F2016 Q1 F16 Q1 F17 Basic Reported EPS $0.58 $0.74 $0.96 $1.12 Adjusted EPS $0.62 $0.74 $1.00 $1.20 $0.28 $0.27 $0.28 $0.30 EXCO TECHNOLOGIES LIMITED 19

20 Dividend Payout Rate Sustained dividend growth in-line with earnings improvement CAD Cents/ Share * * Dividend increased by 14% to an annualized rate of 32 cents/ share February 2017 % of: F2010 F2011 F2012 F2013 F2014 F2015 F2016 F2017 Net Income 32% 32% 22% 30% 27% 24% 24% FFO^ 17% 18% 17% 22% 19% 16% 17% EBITDA 14% 14% 15% 16% 15% 13% 14% ^Cash Flow from Operations before changes in working capital EXCO TECHNOLOGIES LIMITED 20

21 Cash Flow Generation Continuing strong free cash flow generation C$ Millions F2016 Aggregate F2010 F2015 $83 (100%) $15 (19%) $4 (5%) $15 (18%) $267 (100%) $61 (23%) $48 (18%) $9 (11%) $40 (48%) $55 (21%) $29 (11%) $74 (28%) EBITDA Interest/ Taxes/Other Opex Working Capital Maintenance Capex Growth Capex Free Cash Flow EBITDA Interest/ Taxes/ Other Opex Working Capital Maintenance Capex Growth Capex Free Cash Flow Fiscal year ended September 30 EXCO TECHNOLOGIES LIMITED 21

22 Capital Expenditures Capex remains relatively stable C$ Millions F2013 F2014 F2015 F2016 F2017E Automotive Solutions C&E Maintenance/ Growth C&E Greenfield EXCO TECHNOLOGIES LIMITED 22

23 C$ Millions Financial Leverage and Liquidity Net Debt/ LTM Q1F17 Pro-Forma EBITDA of 0.3x 80 Exco C$29M Net Debt LTM Q1F17 Pro-Forma EBITDA of C$91M Bank Indebtedness/ Other Term Notes C$100M committed revolver matures February 2019; $60M available Balance sheet cash of $38M Revolver Borrowings Cash Generated free cash flow of $40 million in F2016 and $18 million in Q1F Near term free cash flow will continue to be directed towards debt repayment -40 As at December 31, 2016 EXCO TECHNOLOGIES LIMITED 23

24 Annual Foreign Exchange Sensitivity Estimated Impact of a $0.01 FX Change on F2017 Annual Consolidated Sales and Net Profit Approximate Revenue Exposure by Currency 5% 3% 1.50 USD/CAD Δ$ EUR/CAD ~C$3.1M Sales ~C$1.1M ~C$0.75M Net Profit Minimal 27% 65% USD EUR CAD Other /09/ /09/ /09/ /09/ /09/ /09/2016 Average exchange rate for F15 and F16 EXCO TECHNOLOGIES LIMITED 24

25 Questions EXCO TECHNOLOGIES LIMITED 25

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