Q3 F2018 Results MOULDING. August 2, 2018 OUR FUTURE

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Derek Williamson
5 years ago
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1 Q3 F2018 Results MOULDING August 2, 2018 OUR FUTURE

2 Darren Kirk Chief Operating Officer MOULDING OUR FUTURE

3 Q3 F2018 Operations Overview Key Highlights in the Quarter Automotive Solutions North America (Polytech, Neocon, AFX) compared to Q3 F17 Lower overall N.A. industry vehicle production down 5% Passenger cars down 16%; trucks (including SUV/ CUV) up 1% (30% cars/ 70% trucks) Segment revenue exposure roughly 45%/ 55% between car/ truck Revenue down 15%; EBITDA margin lower by 170 basis points Several key programs won during quarter; new product initiatives and bidding activity remain good NAFTA risks and tariff threats continue to be monitored; no meaningful impact at this time EXCO TECHNOLOGIES LIMITED 3

4 Q3 F2018 Operations Overview Key Highlights in the Quarter Automotive Solutions Europe (ALC and Polydesign) compared to Q3 F17 Revenues and EBITDA up sharply as results of ALC improved to breakeven & Polydesign remained firm Change in strategy for ALC - will shrink rather than grow business due to very unfavorable labour conditions Reduced unemployment and market wage inflation have led to higher turnover and absenteeism ALC underlying operating losses have increased due to elevated OT and expedited freight costs Q3 F18 losses fully absorbed by temporary price increase from primary customer Audi program has ended, other programs being resourced, or moved fully or partially to Polydesign Objective is to have a smaller, more manageable operation with access to a higher quality labour pool Continuing discussions with primary customer to obtain permanent price increase Will not support operations with ongoing losses EXCO TECHNOLOGIES LIMITED 4

5 Q3 F2018 Operations Overview Key Highlights in the Quarter Automotive Solutions Europe (ALC and Polydesign) compared to Q3 F17 (cont d) Polydesign revenue growth of 20% Profitability up and margin improved despite ramp up costs Market in Europe remains firm with significant above-market growth opportunity available to Polydesign Record new business awards YTD of 13.4M Significant takeover business from suppliers in Eastern Europe facing similar labour issues as ALC Labour conditions in Morocco remain attractive EXCO TECHNOLOGIES LIMITED 5

6 Q3 F2018 Operations Overview Key Highlights in the Quarter Casting & Extrusion Monitoring NAFTA risks and tariff threats to segment, however considered manageable at this time Large Mould Group Higher revenues driven by ramp up of recent contract awards Group profitability down very slightly year over year Margin down on input cost inflation, FX headwinds, program mix and ramp up costs Remain focused on wringing out efficiencies of new manufacturing cell Progress continues, albeit at slower than expected pace; significant opportunity remains Similar equipment now operational at all three of group s locations (Newmarket, Toledo, Queretaro) Pricing conditions are improving; focusing on higher margin programs New order, quoting activity and backlog remain very strong EXCO TECHNOLOGIES LIMITED 6

7 Q3 F2018 Operations Overview Key Highlights in the Quarter Casting & Extrusion Extrusion Group Results remain firm year over year on the back of strong market conditions and operating improvements Plant harmonization initiative continues to take shape Lower cost structure, improved product flow and enhanced quality leading to market share gains and modest pricing power Plenty of opportunity left to realize further gains Have broken ground on new plant in Mexico Castool Group Group sales and profitability up sharply during the quarter Results benefiting from selective price increases, continuing rebound in capital equipment sales, seasoning of operations in Thailand and well positioned product portfolio EXCO TECHNOLOGIES LIMITED 7

8 Drew Knight Chief Financial Officer MOULDING OUR FUTURE

9 Q3 F2018 Financial Overview Consolidated Results Versus Prior Year Period Revenue of $152.8M, up $6.8M or 5% Automotive Solutions up $0.8M, Casting & Extrusion up $7.4M (before FX) FX movements subtracted $1.4M EBITDA of $20.1M; down $0.5M or 3% Modest reduction in Automotive Solutions offset by growth in Casting & Extrusion and lower corporate expenses (before FX) FX movements reduced EBITDA by $0.8M Both segments recorded top and bottom line improvement for third consecutive sequential quarter EXCO TECHNOLOGIES LIMITED 9

10 Q3 F2018 Financial Overview Consolidated Results Versus Prior Year Period EPS of $0.27 per share versus $0.26 per share prior year quarter Tax rate 23% favorable impact of lower US tax rate and profit shift towards lower tax rate jurisdictions Free cash flow of $18.6 million in the quarter Strong cash flow has strengthened balance sheet to a net cash position EXCO TECHNOLOGIES LIMITED 10

11 Q3 F2018 Financial Overview Consolidated Revenue Reconciliation C$ Millions (1.4) Q3 F17 Automotive Solutions (FX Adjusted) Casting & Extrusion (FX Adjusted) Foreign Exchange Q3 F18 EXCO TECHNOLOGIES LIMITED 11

12 Q3 F2018 Financial Overview Consolidated EBITDA Reconciliation C$ Millions 20.7 (0.8) (0.8) 20.1 Q3 F17 Automotive Solutions* Casting & Extrusion* Corporate Foreign Exchange Q3 F18 * FX Adjusted EXCO TECHNOLOGIES LIMITED 12

13 C$ Millions Q3 F2018 Financial Overview Automotive Solutions Segment - Revenues Q3/F18 versus Q3/F (7.4) 8.3 (0.4) 99.9 Sales Q3/F17 Lower net revenue from Polytech, Neocon, AFX Higher net revenue from Polydesign, ALC Foreign Exchange Rates Sales Q3/F18 EXCO TECHNOLOGIES LIMITED 13

14 C$ Millions Q3 F2018 Financial Overview Automotive Solutions Segment - EBITDA Q3/F18 versus Q3/F (14.6% Margin) (1.5) (0.6) (0.4) (13.2% Margin) EBITDA Q3/F17 Lower Sales* Margin Deterioration (excluding ALC) Foreign Exchange Rates Elimination of ALC Losses EBITDA Q3/F18 *EBITDA for each business changed by same percentage as sales from prior year quarter (excluding ALC) EXCO TECHNOLOGIES LIMITED 14

15 C$ Millions Q3 F2018 Financial Overview Casting and Extrusion Segment - Revenues Q3/F18 versus Q3/F (1.0) 52.8 Sales Q3/F17 Castool Extrusion Large Mould Foreign Exchange Rates Sales Q3/F18 EXCO TECHNOLOGIES LIMITED 15

Q3 F2018 Financial Overview Decent EBITDA growth despite higher input costs and adverse FX movements Casting and Extrusion Segment C$ Millions 50 Revenue 14% 18%

16 Q3 F2018 Financial Overview Decent EBITDA growth despite higher input costs and adverse FX movements Casting and Extrusion Segment C$ Millions 50 Revenue 14% 18% Segment EBITDA Margin 110 bp C$ Millions 10 Segment EBITDA 7% 40 16% 30 14% % 0 Q3 F17 Q3 F18 10% Q3 F17 Q3 F18 0 Q3 F17 Q3 F18 EXCO TECHNOLOGIES LIMITED 16

17 C$ Millions Financial Leverage and Liquidity Balance Sheet in Net Cash Position with Strong Liquidity 40 C$2M Net Cash LTM Q3 F2018 EBITDA of C$72M Bank Indebtedness/ Other Term Notes Revolver Borrowings Cash C$50M committed revolver matures February 2021; $25M available Balance sheet cash of $39M 0 Consistently positive free cash flow Last twelve months ended June 30 th, 2018 EXCO TECHNOLOGIES LIMITED 17

18 Questions EXCO TECHNOLOGIES LIMITED 18

19 MOULDING OUR FUTURE

Q4 F2018 Results MOULDING OUR FUTURE. November 27, 2018

Q4 F2018 Results MOULDING OUR FUTURE November 27, 2018 Cautionary Statement Information in this presentation relating to projected growth and financial performance of the Company s business units, contribution