Investor Presentation June 2021
Transcript of Investor Presentation June 2021
“The Global Leader for Parts and Solutions That Move Our World Today and Tomorrow”
Investor Presentation – June 2021
This presentation and any question-and-answer period or other
communications afterwards may contain forward-looking statements
with respect to the financial condition, results of operation and
business of the company made pursuant to the safe harbor provisions
of the Private Securities Litigation Act of 1995.
These forward-looking statements involve significant risks and
uncertainties (some of which are beyond the control of the company)
and are subject to change based upon various factors. These risks
are detailed from time to time in the company’s periodic reports filed
with the Securities and Exchange Commission and could cause actual
results to differ materially.
Safe Harbor Statement1
Premier supplier of non-discretionary automotive aftermarket hard parts
25,000+ retail and traditional aftermarket outlets in the U.S. and Canada
33,000+ SKUs in multiple categories
Premier supplier of non-discretionary heavy-duty hard parts
Cutting-edge testing and diagnostic technology for internal combustion and electrification
Top-tier manufacturer of next generation alternator and starter testers
Supplier of cutting-edge diagnostic equipment serving a global electric vehicle market
Electric vehicle power train and inverter technology portfolio
Fully integrated and scalable global supply chain
Globally positioned manufacturing and distribution centers support continued growth
Long-standing customer relationships
National retailers, traditional aftermarket outlets and OES suppliers
Industry Leading Management Team
Strong Liquidity
Overview2
* Estimates at consumer sales level
** Estimates based upon annualized unit shipment
Sources:
1.The Lang Aftermarket Annual 2018
2.PWC Product Diligence Report and MPA Estimate
3.AutoCare Fact Book 2018
4.Global Automotive Powertrain Testing Market 2017-2021 Report by Technavio
Top-tier Supplier of Non-Discretionary Automotive Replacement Parts
**
$2.7 Billion Market*
**
$900 Million Market*
**
$545 Million Market*
**
$350 Million Market*
Emerging Product Offerings
$500 Million Market*
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$1.1 Billion Market*
**
Average Age Vehicles in Year Range Categories, 2016-2019
Hard Parts Replacement Rates
Favorable Industry Dynamics
Source: EXPERIAN Source: IMR
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U.S. Motor Vehicle Population (VIO), 2010-2020In Millions
Consistent Increases in Registered Vehicles in Operation and Annual Miles Driven
Source: EXPERIAN
Miles Driven AnnuallyIn Billions
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The Aftermarket Sweet SpotThe Aftermarket “sweet spot” represents cars between six and twelve years of age that will likely require
replacement parts.
Upward ExpansionThe aftermarket “sweet spot” has stopped declining, and the current upward growth trend is expected to
continue for the next several years.
Strong TailwindsDrives demand for replacement parts and
Source: Experian Automotive VIO as of March 31, 2021 (Light Duty Registered Vehicles)
Pre-Sweet Spot
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Post-Sweet Spot
Pre-Sweet Spot
Volume Drop.
Long-Standing Customer RelationshipsNational retailers, traditional aftermarket outlets and OES suppliers.
*Aftermarket and warranty programs – No OEM
*
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Respected Brand Portfolio8
Torrance, CACorporate HeadquartersEngineeringQuality ControlManufacturing, IATFRemanufacturingEducation and Technology CentersIATF 16949 / 9001 Certified
MexicoEngineeringQuality ControlManufacturingRemanufacturingDistributionWarehousingIATF 16949 / ISO 9001 Certified
CanadaElectric Vehicle TechnologiesEngineeringQuality ControlManufacturingRemanufacturingISO 9001 Certified
New YorkElectric Vehicle TechnologiesEngineeringQuality ControlManufacturing
TennesseePurchasingIATF 16949/ ISO 9001 Certified
IndiaEngineeringQuality ControlManufacturingRemanufacturingIS0 9001 Certified
SingaporeSoutheast Asia HeadquartersLogisticsWarehousingIATF 16949 / ISO 9001 Certified
MalaysiaEngineeringQuality ControlManufacturingRemanufacturingIATF 16949 / ISO 9001 Certified
ChinaEngineeringQuality ControlWarehousingISO 9001 Certified
Global FootprintGlobal network of manufacturing and distribution facilities are strategically positioned --enabling efficient material sourcing, product manufacturing and distribution
*Map does not show all MPA manufacturing and distribution facilities.
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MichiganDetroit Technical CenterOffering Testing Solutionsfor Electric VehicleManufacturers
Shanghai Technical CenterOffering Testing Solutions forElectric Vehicle Manufacturers(Joint Venture)
Global Footprint96% offshore production
Cutting edge manufacturing facilitiesInternational workforce of approximately 5,000+
Growth InitiativesExpanded manufacturing capacity for all product lines
Expansion in Mexico nearing completion, including ramp up of brake caliper program
Sales and operational enhancements to acquired heavy-duty rotating electrical business
Completion of multi-product production capacity in Malaysia
Increased sales and marketing initiatives to support acquired electric vehicle and aerospace technology
Relocation of product lines to lower-cost manufacturing and distribution facilities
Continuous global focus on enhancing operating efficiencies
A Scalable Infrastructure for Growth10
Rotating Electric
Hubs and Bearings
Brake Power BoostersBrake Master Cylinders
Turbochargers
Product portfolio of premium non-discretionary replacement hard-parts and component testing equipment
Electrical ComponentTesting
Brake Calipers
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Large market opportunityLeverage current customer base with new products
New customer opportunities gaining momentumPrograms tailored for retail and traditional markets
New offerings complementary to existing product lines
Consolidating Brake-line Supplier BaseReduced to just a few top-tier suppliers
Estimated Retail Market Size
Strategic Brake Product-Line Expansion
Sources:
1. Frost and Sullivan, June 2016
2. MPA estimates 2018
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Strategic PositionExpansion of existing products into current and heavy-duty markets
Utilization of manufacturing capabilities in IndiaContinuous manufacturing process improvements
ProductsNew and remanufactured heavy-duty starters, alternators and
electrical components
Complementary Heavy-Duty Rotating Electrical Product Line
Sources:
1. Frost and Sullivan, March 2017
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Electrification Technologies14
Automotive Aerospace Space
Electric Motor & Inverter
Development Testing
Cutting-Edge TechnologyAutomotive & aerospace electric development and testing equipment portfolio serving customers worldwide
Battery Testing
Active Load (Motor)
Emulators
Direct Current
Emulators
Electric Motor & Inverter
Performance Testing
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Strategic GrowthLeverage existing customer channels
Capitalize on rapidly emerging electric vehicle market
Testing Solutions for Today and TomorrowBench top alternator and starterProduction alternator and starterAlternator and starter endurance
Electric engine emulatorsElectric power train and aerospace propulsion
Hybrid vehicle electric motor
Cutting-Edge Technology
Sources:
1.Technavio.com, “Global Automotive Powertrain Testing Market 2017-2021”, October 2017
2.Technavio.com, “Global Automotive Powertrain Testing Services Market 2018-2022”, April 2018
3.Market estimated based on management estimates, (target and D&V)
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Testing Categories
• Emissions - air pollutant reduction
✓ Powertrain - ICE and EV
• Proving Ground – traditional track testing
• Vehicle Dynamics Testing – vehicle response to driver inputs
• Aerodynamic Testing – subset of vehicle dynamics; how vehicle responds to air flow
✓Reliability Testing – defines long-term failure modes
• Material Testing – analyzes trade-offs between use of materials; light-weighting
✓Noise & Vibration Testing – measurement of acoustics associated with vehicle
• Chassis Dynamometer / Climatic Testing – vehicle response to heat, cold, & humidity
✓Component Testing – dampers, engine mounts, tires, etc
✓ Simulation - mHIL and pHIL - full Vehicle, sub-assembly, and component simulation / mechanical, electrical
Market Segments
✓ Internal Combustion
✓Hybrid and Electric Vehicle
✓ Aero / Aviation and Rail
• Marine
R&D spend drives test budget. Auto R&D spending focused
on HEV, autonomous vehicles, and mobility service areas
✓Areas of involvement
Testing and DiagnosticsAreas of Focus for Electrification Market
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Motorcar Parts Street SmartTM SuiteMarket analysis
Tailored customer programsBrand positioning and sales strategy development
Creative developmentCategory management
CatalogingSales training and field service
Vendor managed inventoryCollaborative planning, forecasting & replenishment
Consumer and end-user education programs
Value-Added ProgramsAward-winning marketing, merchandising and sales team partnerships.
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Net Sales Six-Year CAGR – representing 10.2 percent growth
(In Millions)
Sales Growth
Note:
The Company adjusted net sales for ASC 606 for the years FY2017-FY2018
[Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contract with Customers (“ASC 606”)]
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$301.7
$369.0
$422.1 $427.5
$472.8
$535.8 $540.8
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
A $130 Billion Market for Automotive Aftermarket Hard Parts in North America
Solid Market Share Growth in Key Product Categories
Multi-year Investment Expansion Program Nearing Completion, Enhancing Growth and Profitability
Opportunities to leverage customer relationships and low-cost manufacturing footprint
Positioned to Benefit As Supply Chain Consolidates and Demand Starts to Return to Pre-COVID 19 Dynamics
Highly Regarded Electric Vehicle Diagnostic Testing Portfolio for Automotive and Aerospace Applications
Recurrent service revenue opportunities
$11+ billion global market for diagnostic/testing equipment
Growth Opportunities in All Product Lines will Drive Further Growth
Reputation for service, quality and production capacity enables horizontal expansion
Investment Considerations20
Gary S. Maier
Vice PresidentCorporate Communications and Investor Relations
310-972-5124
Contact 21