TORONTO, March 06, 2025 (GLOBE NEWSWIRE) — Martinrea International Inc. (TSX : MRE), a diversified and global automotive supplier engaged in the design, development and manufacturing of highly engineered, value-added Lightweight Structures and Propulsion Systems, today announced the release of its financial results for the fourth quarter and year ended December 31, 2024, and declared a quarterly cash dividend of $0.05 per share.
HIGHLIGHTS
Full Year 2024:
- Total sales of $5,014.1 million, production sales of $4,737.1 million.
- Adjusted EBITDA(1) of $614.8 million, 12.3% of total sales.
- Adjusted Operating Income Margin(1) of 5.3%.
- Free Cash Flow(1) (excluding principal payments of IFRS-16 lease liabilities) of $183.8 million; Free Cash Flow(1) continues to trend near record levels for the Company.
- Diluted net loss per share of ($0.46) and Adjusted Net Earnings per Share(1) of $1.20 or $1.79 at a normalized effective tax rate after adjusting for unusual foreign exchange movements between the Mexican peso and the U.S. dollar. These foreign exchange movements are non-cash in nature, do not impact cash taxes and tend to balance out over time (refer to “Overall Results” section for further details).
- Net debt-to-Adjusted EBITDA(1) ratio, (excluding IFRS 16 impact) ended the year at 1.47x, below the Company’s target of 1.5x or better.
- Repurchased 5.4 million shares under our normal course issuer bid.
- Improved safety performance with a Total Recordable Injury Frequency (TRIF) of 0.99, a 10% improvement over 2023 and an 88% improvement since 2014.
Fourth Quarter 2024:
- Total sales of $1,150.9 million, production sales of $1,048.6 million.
- Adjusted EBITDA(1) of $131.7 million 11.4% of total sales.
- Adjusted Operating Income Margin(1) of 3.5%.
- Free Cash Flow(1) (excluding principal payments of IFRS-16 lease liabilities) of $76.4 million.
- Diluted net loss per share of ($1.82) and Adjusted Net Loss per Share(1) of ($0.21). Adjusted Net Earnings per Share(1) would have been $0.19 at a normalized effective tax rate adjusting for unusual non-cash foreign exchange movements related to the depreciation of the Mexican peso against the U.S. dollar.
- Fourth quarter financial results were impacted by lost sales due to an OEM vehicle inventory correction which was most pronounced among the Detroit 3 OEMs, particularly Stellantis.
- New business awards of approximately $40 million in annualized sales at mature volumes.
- Quarterly cash dividend of $0.05 per share declared.
- Impairment charges totalling $129.4 million recognized during the quarter, mainly related to slower-than-expected production volumes on electric vehicle platforms.
_____________________________________
1 The Company prepares its financial statements in accordance with IFRS Accounting Standards (“IFRS”). However, the Company considers certain non-IFRS financial measures as useful additional information in measuring the financial performance and condition of the Company. These measures, which the Company believes are widely used by investors, securities analysts and other interested parties in evaluating the Company’s performance, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with IFRS. Non-IFRS measures, included anywhere in this press release, include “Adjusted Net Income (Loss)”, “Adjusted Net Earnings (Loss) per Share (on a basic and diluted basis)”, “Adjusted Operating Income”, “Adjusted EBITDA”, “Free Cash Flow”, “Free Cash-Flow (after IFRS 16 lease payments)” and “Net Debt”. The relevant IFRS financial measure, as applicable, and a reconciliation of certain non-IFRS financial measures to measures determined in accordance with IFRS are contained in the Company’s Management Discussion and Analysis for the year ending December 31, 2024 and in this press release.
OVERVIEW
Pat D’Eramo, Chief Executive Officer, stated: “Our Company had some notable achievements in 2024. We continued to generate Free Cash Flow(1) at near-record levels, and maintained a strong balance sheet while returning significant capital to shareholders through share buybacks. Our safety record continued to improve, with a Total Recordable Injury Frequency of 0.99 – a 10% improvement over 2023, and notably better than the industry average of approximately 3.0. We won a number of quality awards from our customers. We invested in technology, including moving forward with machine learning installations across the enterprise which are expected to provide significant benefits in terms of safety, efficiency, and quality.”
He continued: “Our fourth-quarter results were impacted by OEM vehicle inventory corrections which were most pronounced among the Detroit 3 OEMs, particularly Stellantis. While this correction continues to some extent in the first quarter, we expect to see better production volumes moving forward. As previously discussed, electric vehicle sales have been slow to ramp up, which has resulted in margin pressure across the automotive parts industry. Given this dynamic, as well as other market challenges in both Europe and China, our strategy moving forward will be to focus on growth opportunities in North America, while maintaining our presence in Europe and working with local partners in China to minimize our footprint. We will further restructure our operations in Germany in 2025 and look at consolidation opportunities at other facilities that are underutilized due to the low EV volumes. We are also announcing an enterprise-wide project to reduce our annual SG&A expenses by $50 million.”
Peter Cirulis, Chief Financial Officer, stated: “We are pleased with our Free Cash Flow(1) performance during 2024, which came in at $183.8 million (excluding principal payments of IFRS 16 lease liabilities), close to the record of $195.4 million set in 2023, and well above the high end of our 2024 outlook range of $100-$150 million. Our continuous drive to find efficiencies by reusing flexible capital, as well as some program extensions that require less capital, contributed to the strong performance. Our Net Debt-to-Adjusted EBITDA(1) ratio (excluding IFRS 16 impact) ended the year at 1.47x, below the Company’s target of 1.5x or better. This includes spending $61.3 million to repurchase approximately 5.4 million shares through our normal course issuer bid in 2024. Looking at the fourth quarter, sales, excluding tooling sales of $102.3 million, were $1,048.6 million. While Adjusted Operating Income Margin(1) of 3.5% was down year over year on lower sales as a result of the OEM vehicle inventory correction, our Adjusted EBITDA Margin(1) of 11.4%, up 60 basis points year over year, is a testament to our strong operating performance.
He added: “I am also pleased to announce that we have been awarded new business representing $40 million in annualized sales at mature volumes, consisting of approximately $35 million in Lightweight Structures with Toyota, and $5 million in Propulsion Systems with General Motors. Over the last four quarters, we have been awarded new business worth approximately $230 million in annualized sales at mature volumes.”
Rob Wildeboer, Executive Chairman, stated: “As we look forward into 2025, we expect our results to improve over the fourth quarter. Most industry forecasters are currently calling for slightly lower vehicle production volumes in 2025, partly due to the continuation of the OEM vehicle inventory correction in the first quarter, as well as continued softness in EV production volumes. Bearing this in mind, our 2025 outlook calls for total sales of $4.8-$5.1 billion. We expect Adjusted Operating Income Margin(1) to fall within a range of 5.3% to 5.8%, an increase over 2024. We also expect another strong year of Free Cash Flow(1), in the range of $125-$175 million (excluding principal payments of IFRS 16 lease liabilities). Please note that this outlook excludes any potential impact from tariffs or other trade policies in the U.S. or other countries. Overall, we continue to perform at a high level, and the actions we are taking in 2025 are expected to drive better results in the years ahead. To our shareholders and all our stakeholders, thank you for your continued support.”
RESULTS OF OPERATIONS
All amounts in this press release are in Canadian dollars, unless otherwise stated; and all tabular amounts are in thousands of Canadian dollars, except earnings per share and number of shares.
Additional information about the Company, including the Company’s Management Discussion and Analysis of Operating Results and Financial Position for the year ended December 31, 2024 (“MD&A”), the Company’s audited consolidated financial statements for the year ended December 31, 2024 (the “audited consolidated financial statements”) and the Company’s Annual Information Form for the year ended December 31, 2024 can be found at www.sedarplus.ca.
OVERALL RESULTS
Results of operations may include certain items which have been separately disclosed, where appropriate, in order to provide a clear assessment of the underlying Company results. In addition to IFRS Accounting Standards (“IFRS”) measures, management uses non-IFRS measures in the Company’s disclosures that it believes provide the most appropriate basis on which to evaluate the Company’s results.
The following tables set out certain highlights of the Company’s performance for the three months and years ended December 31, 2024 and 2023. Refer to the Company’s consolidated financial statements for the year ended December 31, 2024 for a detailed account of the Company’s performance for the periods presented in the tables below.
| Year ended December 31, 2024 |
Year ended December 31, 2023 |
$ Change | % Change | ||||||||||
| Sales | $ | 5,014,127 | $ | 5,340,003 | (325,876 | ) | (6.1 | %) | |||||
| Gross Margin | 648,557 | 675,397 | (26,840 | ) | (4.0 | %) | |||||||
| Operating Income | 124,608 | 269,114 | (144,506 | ) | (53.7 | %) | |||||||
| Net Income (Loss) for the period | (34,546 | ) | 153,665 | (188,211 | ) | (122.5 | %) | ||||||
| Net Earnings (Loss) per Share – Basic and Diluted | $ | (0.46 | ) | $ | 1.93 | (2.39 | ) | (123.8 | %) | ||||
| Non-IFRS Measures** | |||||||||||||
| Adjusted Operating Income | $ | 266,698 | $ | 297,275 | (30,577 | ) | (10.3 | %) | |||||
| % of Sales | 5.3 | % | 5.6 | % | |||||||||
| Adjusted EBITDA | 614,758 | 616,678 | (1,920 | ) | (0.3 | %) | |||||||
| % of Sales | 12.3 | % | 11.5 | % | |||||||||
| Adjusted Net Income* | 91,041 | 176,492 | (85,451 | ) | (48.4 | %) | |||||||
| Adjusted Net Earnings per Share – Basic* | $ | 1.21 | $ | 2.22 | (1.01 | ) | (45.5 | %) | |||||
| Adjusted Net Earnings per Share – Diluted* | $ | 1.20 | $ | 2.22 | (1.02 | ) | (45.9 | %) | |||||
| Three months ended December 31, 2024 |
Three months ended December 31, 2023 |
$ Change | % Change | ||||||||||
| Sales | $ | 1,150,928 | $ | 1,296,121 | (145,193 | ) | (11.2 | %) | |||||
| Cost of sales (excluding depreciation) | (937,527 | ) | (1,065,338 | ) | 127,811 | 12.0 | % | ||||||
| Depreciation of property, plant and equipment and right-of-use assets (production) | (84,361 | ) | (77,555 | ) | (6,806 | ) | (8.8 | %) | |||||
| Gross Margin | 129,040 | 153,228 | (24,188 | ) | (15.8 | %) | |||||||
| Research and development costs | (10,194 | ) | (9,754 | ) | (440 | ) | (4.5 | %) | |||||
| Selling, general and administrative | (74,445 | ) | (83,476 | ) | 9,031 | 10.8 | % | ||||||
| Depreciation of property, plant and equipment and right-of-use assets (non-production) | (4,310 | ) | (4,548 | ) | 238 | 5.2 | % | ||||||
| Gain (loss) on disposal of property, plant and equipment | (22 | ) | 1,197 | (1,219 | ) | (101.8 | %) | ||||||
| Restructuring costs | (1,034 | ) | (27,266 | ) | 26,232 | 96.2 | % | ||||||
| Impairment of assets | (129,446 | ) | (895 | ) | (128,551 | ) | (14,363.2 | %) | |||||
| Operating Income (Loss) | $ | (90,411 | ) | $ | 28,486 | (118,897 | ) | (417.4 | %) | ||||
| Share of loss of equity investments | (757 | ) | (930 | ) | 173 | 18.6 | % | ||||||
| Finance expense | (17,513 | ) | (20,215 | ) | 2,702 | 13.4 | % | ||||||
| Other finance expense | (1,227 | ) | (421 | ) | (806 | ) | (191.4 | %) | |||||
| Income (Loss) before taxes | $ | (109,908 | ) | $ | 6,920 | (116,828 | ) | (1,688.3 | %) | ||||
| Income tax expense | (23,424 | ) | (5,070 | ) | (18,354 | ) | (362.0 | %) | |||||
| Net Income (Loss) for the period | (133,332 | ) | 1,850 | (135,182 | ) | (7,307.1 | %) | ||||||
| Net Earnings (Loss) per Share – Basic and Diluted | $ | (1.82 | ) | $ | 0.02 | (1.84 | ) | (9,200.0 | %) | ||||
| Non-IFRS Measures** | |||||||||||||
| Adjusted Operating Income | $ | 40,069 | $ | 56,647 | (16,578 | ) | (29.3 | %) | |||||
| % of Sales | 3.5 | % | 4.4 | % | |||||||||
| Adjusted EBITDA | 131,660 | 140,080 | (8,420 | ) | (6.0 | %) | |||||||
| % of Sales | 11.4 | % | 10.8 | % | |||||||||
| Adjusted Net Income (Loss)* | (15,596 | ) | 29,251 | (44,847 | ) | (153.3 | %) | ||||||
| Adjusted Net Earnings (Loss) per Share – Basic and Diluted* | $ | (0.21 | ) | $ | 0.37 | (0.58 | ) | (156.8 | %) | ||||
*Adjusted Net Income (Loss) and Adjusted Net Earnings (Loss) per Share for the three months and year ended December 31, 2024 were negatively impacted by an unusually high effective tax rate. This was driven primarily by the magnitude and pace of the depreciation of the Mexican Peso against the U.S. dollar, which is the functional currency of the Company’s Mexican operations. In situations where the local and functional currencies differ, IFRS, contrary to US GAAP, requires the tax value of assets and liabilities denominated in local currency to be revalued to the operations’ functional currency at the reporting date, with the related foreign exchange movements impacting the tax expense for the period. These foreign exchange movements are non-cash in nature, do not impact cash taxes and tend to balance out over time. Including this, and other foreign exchange related items, the effective tax rate for the year ended December 31, 2024 was 53.2%. Excluding these foreign exchange items, the effective tax rate would have been 30.6%, which is more reflective of a typical tax rate for the Company. Using a tax rate of 30.6%, Adjusted Net Earnings per Share would have been $0.19 for the three months ended December 31, 2024, and $1.79 for the year ended December 31, 2024.
**Non-IFRS Measures
The Company prepares its consolidated financial statements in accordance with IFRS. However, the Company considers certain non-IFRS financial measures as useful additional information in measuring the financial performance and condition of the Company. These measures, which the Company believes are widely used by investors, securities analysts and other interested parties in evaluating the Company’s performance, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with IFRS. Non-IFRS measures include “Adjusted Net Income (Loss)”, “Adjusted Net Earnings (Loss) per Share (on a basic and diluted basis)”, “Adjusted Operating Income”, “Adjusted EBITDA”, “Free Cash Flow”, “Free Cash Flow (after IFRS 16 lease payments)”, and “Net Debt”.
The following tables provide a reconciliation of IFRS “Net Income (Loss)” to Non-IFRS “Adjusted Net Income (Loss)”, “Adjusted Operating Income” and “Adjusted EBITDA”:
| Three months ended December 31, 2024 |
Three months ended December 31, 2023 |
|||||
| Net Income (Loss) | $ | (133,332 | ) | $ | 1,850 | |
| Adjustments, after tax* | 117,736 | 27,401 | ||||
| Adjusted Net Income (Loss) | $ | (15,596 | ) | $ | 29,251 | |
| Year ended December 31, 2024 |
Year ended December 31, 2023 |
|||||
| Net Income (Loss) | $ | (34,546 | ) | $ | 153,665 | |
| Adjustments, after tax* | 125,587 | 22,827 | ||||
| Adjusted Net Income | $ | 91,041 | $ | 176,492 | ||
*Adjustments are explained in the “Adjustments to Net Income (Loss)” section of this Press Release
| Three months ended December 31, 2024 |
Three months ended December 31, 2023 |
||||||
| Net Income (Loss) | $ | (133,332 | ) | $ | 1,850 | ||
| Income tax expense | 23,424 | 5,070 | |||||
| Other finance expense | 1,227 | 421 | |||||
| Share of loss of equity investments | 757 | 930 | |||||
| Finance expense | 17,513 | 20,215 | |||||
| Adjustments, before tax* | 130,480 | 28,161 | |||||
| Adjusted Operating Income | $ | 40,069 | $ | 56,647 | |||
| Depreciation of property, plant and equipment and right-of-use assets | 88,671 | 82,103 | |||||
| Amortization of development costs | 2,898 | 2,527 | |||||
| Loss (gain) on disposal of property, plant and equipment | 22 | (1,197 | ) | ||||
| Adjusted EBITDA | $ | 131,660 | $ | 140,080 | |||
| Year ended December 31, 2024 |
Year ended December 31, 2023 |
||||||
| Net Income (Loss) | $ | (34,546 | ) | $ | 153,665 | ||
| Income tax expense | 87,149 | 43,492 | |||||
| Other finance income | (6,913 | ) | (6,653 | ) | |||
| Share of loss of equity investments | 2,904 | 3,560 | |||||
| Finance expense | 76,014 | 80,323 | |||||
| Adjustments, before tax* | 142,090 | 22,888 | |||||
| Adjusted Operating Income | $ | 266,698 | $ | 297,275 | |||
| Depreciation of property, plant and equipment and right-of-use assets | 335,479 | 310,144 | |||||
| Amortization of development costs | 11,070 | 10,298 | |||||
| Loss (gain) on disposal of property, plant and equipment | 1,511 | (1,039 | ) | ||||
| Adjusted EBITDA | $ | 614,758 | $ | 616,678 | |||
*Adjustments are explained in the “Adjustments to Net Income (Loss)” section of this Press Release
SALES
Three months ended December 31, 2024 to three months ended December 31, 2023 comparison
| Three months ended December 31, 2024 |
Three months ended December 31, 2023 |
$ Change | % Change | ||||||||||
| North America | $ | 881,043 | $ | 959,464 | (78,421 | ) | (8.2 | %) | |||||
| Europe | 243,554 | 311,034 | (67,480 | ) | (21.7 | %) | |||||||
| Rest of the World | 31,855 | 34,467 | (2,612 | ) | (7.6 | %) | |||||||
| Eliminations | (5,524 | ) | (8,844 | ) | 3,320 | 37.5 | % | ||||||
| Total Sales | $ | 1,150,928 | $ | 1,296,121 | (145,193 | ) | (11.2 | %) | |||||
The Company’s consolidated sales for the fourth quarter of 2024 decreased by $145.2 million or 11.2% to $1,150.9 million as compared to $1,296.1 million for the fourth quarter of 2023. The total decrease in sales was driven by year-over-year decreases across all operating segments.
Sales for the fourth quarter of 2024 in the Company’s North America operating segment decreased by $78.4 million or 8.2% to $881.0 million from $959.5 million for the fourth quarter of 2023. The decrease was due to lower year-over-year OEM production volumes on certain platforms, including the Jeep Grand Cherokee and Wagoneer, Mercedes’ new electric vehicle platform (EVA2), and a transmission for the ZF Group; programs that ended production during or subsequent to the fourth quarter of 2023, specifically the Ford Edge, Dodge Charger/Challenger, Chevrolet Bolt, and an aluminum engine block for Stellantis; and a decrease in tooling sales of $15.8 million, which are typically dependent on the timing of tooling construction and final acceptance by the customer. These negative factors were partially offset by the launch and ramp up of new programs during or subsequent to the fourth quarter of 2023, including General Motors’ new electric vehicle platforms (BEV3/BET), and the Toyota Tacoma; higher year-over-year OEM production volumes on certain other platforms, including General Motors’ Equinox/Terrain, the Ford Mustang Mach E, and an engine block for Ford; and the impact of foreign exchange on the translation of U.S. denominated production sales, which had a positive impact on overall sales for the fourth quarter of 2024 of $3.0 million. Overall fourth quarter industry-wide OEM light vehicle production volumes in North America decreased by approximately 3% year-over-year.
Sales for the fourth quarter of 2024 in the Company’s Europe operating segment decreased by $67.5 million or 21.7% to $243.6 million from $311.0 million for the fourth quarter of 2023. The decrease was due to lower year-over-year OEM production volumes on certain platforms, including aluminum engine blocks for Ford and Mercedes, the Mercedes’ new electric vehicle platform (EVA2), and a transmission for the ZF Group; programs that ended production during or subsequent to the fourth quarter of 2023, specifically the BMW Mini; and a decrease in tooling sales of $16.6 million, which are typically dependent of the timing of tooling construction and final acceptance by the customer. These negative factors were partially offset by the launch and ramp up of new programs during or subsequent to the fourth quarter of 2023, including Volkswagen’s new electric vehicle platform (PPE); higher year-over-year OEM production volumes on certain platforms, including the Lucid Air, and an aluminum engine block for Jaguar Land Rover; and the impact of foreign exchange on the translation of Euro denominated production sales, which had a positive impact on overall sales for the fourth quarter of 2024 of $5.7 million. Overall fourth quarter industry-wide OEM light vehicle production volumes in Europe decreased by approximately 8% year-over-year.
Sales for the fourth quarter of 2024 in the Company’s Rest of the World operating segment decreased by $2.6 million or 7.6% to $31.9 million from $34.5 million in the fourth quarter of 2023. The decrease was largely driven by lower year-over-year production volumes on the Cadillac CT6 vehicle platform in China; partially offset by the launch and ramp up of new programs, specifically the BMW 5-series in China, and an increase in tooling sales of $4.4 million.
Overall tooling sales decreased by $25.1 million (including outside segment sales eliminations) to $102.3 million for the fourth quarter of 2024 from $127.4 million for the fourth quarter of 2023.
Year ended December 31, 2024 to year ended December 31, 2023 comparison
| Year ended December 31, 2024 |
Year ended December 31, 2023 |
$ Change | % Change | ||||||||||
| North America | $ | 3,789,821 | $ | 4,022,741 | |||||||||
