moulding - exco technologies limited · port huron, mi toledo, oh matamoros, mx (2) wylie, tx...

MOULDINGOUR FUTURE

Investor

Presentation

February 2018

EXCO TECHNOLOGIES LIMITED | 2

Information in this presentation relating to projected growth and financial performance of the Company’s business units, contribution ofour 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 andfinancial performance of the Company’s business units, margin, operating improvement, capital expenditures and acquisitions becausethese plans, intentions or expectations are based on, among other things, assumptions about the number of automobiles produced inNorth America and Europe, the number of extrusion dies required in North America and South America, the rate of economic growth inNorth America and Europe and emerging markets, investment by OEMs in drivetrain and structural part architecture and other initiativesintended to reduce fuel consumption and/or the weight of automobiles, raw material prices, general economic conditions, capitalexpenditures and currency fluctuations. These forward-looking statements include known and unknown risks, uncertainties, assumptionsand other factors which may cause actual results or achievements to be materially different from those expressed or implied. For a moreextensive discussion of Exco’s risks and uncertainties see the ‘Risks and Uncertainties’ section in the latest Annual Report, AnnualInformation Form (“AIF”) and other reports and securities filings made by the Company. This information is available at www.sedar.comand www.excocorp.com.

While Exco believes that the expectations expressed by such forward-looking statements are reasonable, we cannot assure that they willbe correct. In evaluating forward-looking information and statements, readers should carefully consider the various factors which couldcause actual results or events to differ materially from those indicated in the forward-looking information and statements. Readers arecautioned that the foregoing list of important factors is not exhaustive. Furthermore, the Company will update its disclosure uponpublication of each fiscal quarter’s financial results and otherwise disclaims any obligations to update publicly or otherwise revise anysuch factors or any of the forward-looking information or statements contained herein to reflect subsequent information, events ordevelopments, changes in risk factors or otherwise.

Cautionary Statement


Company Overview

Business Highlights

• Global provider of aluminum-focused 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 light-weighting trends, market share gains, new product development 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

53%

3%

11%

28%4%United States

Canada

Mexico

Europe

Other

Financial Highlights

• LTM Q1F18 revenue of C$566 million and EBITDA of C$77 million (14% margin)

• Latest 5-Yr Revenue & EBITDA CAGR of 19% & 14%

• Dividend has increased by well over 300% since F2010

• Consistently strong free cash flow

• Low pro-forma financial leverage and strong liquidity

F2017 Sales by Customer Location


Principal Business Segments

Last Twelve Months Revenue and EBITDA1

Polytech

ALC

Polydesign

AFX

Neocon

Extrusion Technology

Casting Technology

Castool Group

33%Casting &Extrusion(C$185)

C$566 million in Revenue

C$31M Casting & Extrusion

(17% Margin)

(C$7 million)

C$77 million in EBITDA

Corporate Expense

67%Automotive

Solutions(C$381M)

C$53MAutomotive

Solutions(14% Margin)

1 To the end of Exco’s first fiscal quarter ended December 31st, 2017


Global Presence

17 Manufacturing Locations in 8 Countries and 6,671 Employees

Dartmouth, NS

Uxbridge, ONNewmarket, ONMarkham, ONChesterfield, MI

Troy, MIPort Huron, MIToledo, OH

Wylie, TXMatamoros, MX (2)

Queretaro, MX

Medellin, Colombia

Sorocaba, Brazil

Tangier, Morocco

Chonburi,Thailand

Sofia, Bulgaria (3)

Landshut, Germany (sales center)

Automotive Solutions


Casting Technology

Castool Group

Casting & Extrusion Technologies


Automotive Solutions Segment



• 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, Eastern and Western European markets

• Recent Supplier Awards from Honda, Toyota, General Motors, Subaru, and Faurecia

Competitive Strengths

A leading innovator for interior trim and convenience solutions to the global auto market

Favorable Market Conditions

• Production volumes expected to continue near record levels

Source: IHS Automotive

10

12

14

16

18

20

22

2011 2012 2013 2014 2015 2016 2017 2018P

Light Vehicle Production (millions of units)

NAFTA Europe


Business Manufacturing Location(s)

Facility Size Key Products/ Programs

Polytech Mexico 130,000 sq ft• 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

Polydesign Morocco 215,000 sq ft• Similar products as Polytech • Cutting and sewing of leather for instrument panels, door panels, consoles,

steering wheels, sun visor assembly and wrapping

Neocon Canada 77,000 sq ft• Thermoformed products• Cargo organizer systems• Flooring and protective systems including bumper covers

Bulgaria 250,000 sq ft

• Tier 2 supplier of leather seat covers for most Mini programs• Audi seat cover contract in Europe ramping up through F2017• Leveraging customer relationships of Polydesign

Mexico 91,000 sq ft

• 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


Five businesses provide an expanding array of product offerings


$5.49 $6.54 $8.60 $9.25 $10.41

$4.19

$7.16 $7.42 $4.81

$3.76 $6.03

$-

$5

$10

$15

$20

$25

2013 2014 2015 2016 2017

Content Per Vehicle

Polytech, Neocon, Polydesign ALC AFX

$20.44

Automotive Solutions Revenue Drivers

Fiscal year ended September 30Aggregate of revenue for Polytech, Neocon and Polydesign divided by region vehicle production (N.A. for Polytech and Neocon; Europe for Polydesign)ALC acquired March 2014; AFX acquired April 2016 (Vehicle production volume is N.A. for AFX; Europe for ALC)

Growing content per vehicle with essentially endless potential

40% Total CAGR

$5.49

$10.72

$15.76

$21.24

17% Organic CAGR


Casting & Extrusion Segment


• 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 capital program to increase capacity & reduce delivery times; equipment now operational

• Additive printing capability enhances mould design

Casting Technology

Aluminum-focused tooling for automotive powertrain and structural components



2012 2013 2014 2015 20163,500

4,000

4,500

5,000

5,500

6,000

Mill

ion

s o

f Po

un

ds


Largest designer and manufacturer of dies for aluminum extrusions in the Americas


• 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

31%

37%

10%

10%

10%

2%Transportation/ Auto

Building & Construction

Consumer Durables

Electrical

Machinery & Equipment

Other

N.A. Producer Shipments of Extrusions1

Extruded Products by End Market1

1 The Aluminum Association, Exco


Castool Group

Die-Cast Shot Sleeves

Extrusion Container Plunger Tips

Dummy Blocks

Pressure Ring

Equipment, accessories and tooling for aluminum die-cast machines and extrusion presses

• 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


Robot Cell


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

19

25

35

42

Net Pounds Per Vehicle of Aluminum Extruded Products

Source: Ducker worldwide

20

25

30

35

40

45

50

55

60

2000 2005 2010 2015 2020 2025

Light Vehicle Miles Per Gallon, Normalized to CAFE

2012 2015 2020 2025

Source: NHTSA and EPA*2025 mpg target currently under review

US 202554.5 mpg*

Dashed line representsfuture requirements

US 201635.5 mpg


Financial Results


153 153 170 195 192 183

90 92115

155 172 19184

148 158 105

67104

F2012 F2013 F2014 F2015 F2016 F2017


Casting and Extrusion498

589

368

245243

584

ALC

AFX

Annual Revenue by Segment

Strong top-line growth driven by both business segments

Fiscal year ended September 30ALC acquired March 2014; AFX acquired April 2016

C$ Millions


Quarterly Revenue by Segment

Lower Automotive Solutions revenue reflects curtailment of ALC’s unprofitable operations and return of seasonality to North American auto production

Fiscal year ended September 30

C$ Millions

45 47 47 44 47

99

146

87

Q1 F17 Q2 F17 Q3 F17 Q4 F17 Q1 F18

AFXALCPolytech, Polydesign, NeoconCasting and Extrusion

108 106

153 154

131


88

135


29 29 3443 37 31

17 19

27

41 5459

-4 -5 -7 -7 -7 -6F2012 F2013 F2014 F2015 F2016 F2017

Corporate Expense


Casting and Extrusion

C$ Millions

Annual EBITDA by Segment

EBITDA improvement generally in line with sales growth over time


43

54

77

43

8383


Quarterly EBITDA by Segment


C$ Millions

8 9 8 6 8

16 1715

1111

Q1 F17 Q2 F17 Q3 F17 Q4 F17 Q1 F18

Corporate


Casting and Extrusion23

2320

16

Casting and Extrusion EBITDA has started to recover

17


Net Income and Adjusted Net Income

C$ Millions

Net income up sharply over time

24.4 23.630.7

40.847.6

42.5

11.5 8.9

F2012 F2013 F2014 F2015 F2016 F2017 Q1 F17 Q1 F18

Other Income/ Expense

Reported Net Income24.4 23.6

30.7

40.8

Diluted Reported EPS $0.58 $0.58 $0.73 $0.96 $1.11 $1.00 $0.27 $0.21

Diluted Adjusted EPS $0.58 $0.58 $0.73 $0.96 $1.03 $1.03 $0.30 $0.21

44.143.7

12.78.9


Dividend

* Dividend increased by 6% to an annualized rate of 34 cents/ share January 2018

CAD Cents/ Share

10.513.5

17.319.5

23.027.0

31.033.5*

F2011 F2012 F2013 F2014 F2015 F2016 F2017 F2018

Strong dividend growth and manageable payout rate

Adj Net Income 32% 22% 30% 27% 24% 26% 30%

FFO^ 18% 17% 22% 19% 16% 17% 20%

EBITDA 14% 15% 16% 15% 13% 14% 16%

% of:

^Cash Flow from Operations before changes in working capital


Cash Flow Generation

Continuing strong EBITDA to free cash flow conversion

C$

Mill

ion

s


83 (100%) 18 (22%)

1 (1%) 16 (19%)

49 (59%)

EBITDA Interest/ Taxes/OtherOpex

Working Capital Capex (Net ofDisposals)

Free Cash Flow

F2017


Capital Expenditures

C$ Millions

Capex remains relatively stable despite Exco’s strong growth

1 1 2 25

1113 11 10

21

11

188 12

8

0

5

10

15

20

25

30

F2013 F2014 F2015 F2016 F2017 F2018E

Automotive Solutions C&E Maintenance/ Growth C&E Greenfield

22

25

20

23

16

Includes $5 million for

purchase of AFX’s real estate

29


Financial Leverage and Liquidity

Net Debt/ LTM Q1 F18 EBITDA1 of 0.2x

34

27

8

11

-40

-30

-20

-10

0

10

20

30

40

50

C$

Mill

ion

s

C$12M Net Debt

Bank Indebtedness/ Other

Term Notes

Revolver Borrowings

Cash

• LTM Q1 F2018 EBITDA of C$77M

• C$50M committed revolver matures February 2019; $20M available

• Balance sheet cash of $34M

• Consistently positive free cash flow

1 Last twelve months ended December 31st, 2017


1.30

1.40

1.50

1.60

65%

27%

5%3%

USD EUR CAD Other

Annual Foreign Exchange Sensitivity

Approximate RevenueExposure by Currency

USD/CAD EUR/CAD

Estimated Impact of a $0.01 FX Change on F2018 Annual Consolidated Sales and Net Profit

1.24

1.32

Δ$0.01

1.41

1.46

Average exchange rate for F15, F16 and F17

~C$2.7M Sales ~C$1.0M

~C$0.5M Net Profit Minimal

1.31 1.46

1.10

1.20

1.30

1.40

1.50


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moulding - exco technologies limited · port huron, mi toledo, oh matamoros, mx (2) wylie, tx...

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