Disclaimer During this presentation management may discuss certain forward-looking statements concerning Nemak s future performance that should be considered as good faith estimates made by the Company. These forward-looking statements reflect management expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which could materially impact Nemak s actual performance. 1
Nemak overview Company highlights Financial highlights (2014A) (US$) Leading global supplier of complex, high-tech aluminum automotive components Began operations in 1981 Global footprint across 15 countries through 35 modern facilities Revenue $4.6bn Adj. EBITDA / Margin RoW 8% Europe 31% North America 61% Diversified product portfolio and customer base $700mm / 15% More than 50 customers worldwide Supplying ~650 / 1,200 vehicle platforms Volume by customer (2014A) Sole source supplier in ~85% of volume in 2014 Experienced management team Cylinder heads Engine blocks Product portfolio Transmissions Structural components Electric vehicles components Others (Incl. ) 17% 3% 2% 3% 5% 5% Europe 5% 6% 12% 25% 18% North America North America We believe 1 out of 4 light vehicles sold worldwide has a Nemak component Note: Percentages rounded to nearest percent. Financials converted to US$ at average exchange rate for the year as published by Banco de Mexico (2014: 13.30 Ps. / US$); Please refer to the disclaimer for the definition of Adjusted EBITDA 2
Light-weighting trend driven by CO2 / MPG regulations Strict emission & fuel economy standards have driven up aluminum content per vehicle and growth in Nemak s product categories is poised to capture 75% of all market growth (1) Fuel Economy Normalized to US Standards (MPG) (pounds of aluminum per vehicle) 65 60 55 50 Targets in MPG / grams of CO 2 : US 2025: 55 / 110 EU 2021: 61 / 95 Japan 2020: 55 / 105 China 2020: 50 / 116 Heads, Blocks, Transmissions, Structurals Wheels, Radiators, Others 314 +119 434 355 161 474 174 45 40 35 30 230 252 107 119 123 133 131 183 145 211 273 300 +89 25 2000E 2005E 2010E 2015E 2020E 2025E 2000 2005 2010 2015E 2020E 2025E Denotes growth in pounds per vehicle Source: International Council of Clean Transportation Note: MPG stands for miles per gallon (1) Based on expected growth in pounds of aluminum per vehicle from 2015-2025 Source: Ducker Worldwide 3
Nemak s growth strategy developed to capitalize on light-weighting trend Nemak Growth Drivers Cylinder heads Portfolio positioned for growth Presence in fast-growing markets Vertical integration initiatives Industry growth Mexico is becoming a key hub in the global auto market As cast Powertrain Aluminum Penetration Recovery in Europe (1) is driving demand Body & Structures Increasing Complexity Technology shift China has become the world s largest auto market ~15 million additional vehicles by 2020E (2) Machining Significant margin expansion opportunities Leading market position in heads, blocks and transmission components (1) Europe includes Western and Eastern Europe and Russia (2) Source: IHS Automotive, refers to additional vehicles produced globally in 2020 vs. 2014 4
Position & strategy Nemak Growth Drivers Significant opportunity to grow existing core business Cylinder heads (1) (US$bn) Engine blocks (1) (US$bn) 16.1 Automatic transmissions (1) (US$bn) 13.0 2.7 0.2 8.2 8.0 0.1 9.4 9.3 +1.3 3.3 9.7 13.4 +3.6 3.8 3.5 0.3 4.7 3.1 1.6 +1.2 2014 2020E 2014 2020E 2014 2020E Aluminum Iron Aluminum Iron High Complexity Low + Mid Complexity Extend leadership position Continue to capitalize aluminum penetration Capitalize on leading position in complex transmissions Denotes increase in US$bn Source: IHS Automotive and Nemak research (1) Refers to global market. Calculated with an average price of 84 US$ / aluminum head, 179 US$ / aluminum block, 65 US$ / iron head, 104 US$ / iron block, 48 US$ / transmission case and 30 US$ / torque converter housing 5
Nemak Growth Drivers Structural components is a key growth avenue Nemak has already secured five long-term contracts in less than a year while the structural components market continue with high growth prospects Aluminum structural components demand (US$bn) (1) 25 12 7 3 13 1 4 2015E 2020E 2030E Castings Non Castings Recently awarded contracts worth over US$140mm / year with 4 premium OEMs Source: Nemak research, IHS Automotive (1) Refers to demand in North America, Europe and China 6
Nemak Growth Drivers Machining offers significant EBITDA expansion potential Strategic rationale Vertical integration allows to increase more value added to the product Improves competitive position Increases entry barriers Improves quality, logistics and working capital costs Protect Tier-1 position Machining business offers equal or greater profitability than casting Nemak heads and blocks machining volume (%) 30% 65% 70% 35% 100% +35 p.p. As cast Machining 2014 Target Nemak 3rd Party (1) In-house machining target of 70% Note: Percentages rounded to the nearest percent (1) Volume outsourced by Nemak to Tier II suppliers 7
Compelling equity story 1 Leading position in fast-growing markets 2 Broad portfolio of leading casting technologies focused on complex and high value-added products 3 Leading product development capabilities supported by skilled workforce 4 Solid customer relationships with diversified revenue streams 5 Global footprint with modern facilities near key customer sites 6 Proven track record of profitable growth and financial resilience 7 Experienced management team 8
Product complexity 2 Broad portfolio of leading casting technologies focused on complex and high value-added products Nemak Casting Technologies (1) Product portfolio focused on complex components Regions NA, SA, EU, Asia GSPM Sand Package HPDC Rotacast Lost Foam Advanced production capabilities and casting processes globally Well-positioned to partner with OEMs to codesign, engineer and test components Increasingly complex products under development + Seat Frames (Al & Mg) Wheels (Al & Mg) Oil Pans, Housing Covers (Al) Pistons (Al & Mg) Brake Calipers (Al & Other) Instrument Panels (Al & Mg) Front Covers (Al) HPDC Blocks (Al) Cylinder Heads (Al) Structural Components (Al & Mg) Sand Package Blocks (Al) Aut. Transmission Cases (Al) Manual Transmission Cases (Al) Manifolds (Fe) Higher value added High barriers to entry & switching costs Product lifecycle of six to eight years - - Process complexity + We believe most of our competitors focus on just one or two major casting technologies Note: OEMs stands for Original Equipment Manufacturers (1) GSPM stands for Gravity Semi-Permanent Mold, a casting process used to produce cylinder heads, Sand Package refers to a casting technology used to produce engine blocks, HPDC refers to High Pressure Die Casting and refers to a casting process used to produce engine blocks, transmission parts and other components, ROTACAST refers to a casting technology used to produce cylinder heads and engine blocks, Lost Foam refers to a casting technology used to produce engine blocks and bed plates 9
4 Solid customer relationships with diversified revenue streams average OEM relationship of 20+ years Diversified revenue streams OEM Years of Relationship Number of Vehicle Platforms (1) 30+ 72 30+ 110 30+ 80 20+ 104 20+ 13 NA & Europe 15+ 19 15+ 37 15+ 80 10+ 50 Others 80 Total 645 Nemak supplies engine & transmission components for ~650 out of 1,200 vehicle platforms worldwide Source: IHS Automotive and Nemak research (1) Platforms refer to vehicle nameplates 10
5 Global footprint with modern manufacturing facilities (1) Slovakia Poland Canada Germany Russia (1) Russia Austria United States Mexico Spain Hungary China Brazil Czech Republic India Argentina (1) Considers manufacturing facilities 11
6 Proven track record of profitable growth Revenues (US$bn) 4.6 Organic growth strategy 4.4 Focused commercial strategy Increase customer share Product portfolio and regional expansion 3.6 3.9 M&A strategy Additional customers, products and technology High-growth markets and geographic diversification 3.0 3.0 2.9 Disciplined selection criteria & PMI 2.0 1.3 1.4 Canada Foundries (1) 0.8 0.9 0.9 1.0 0.1 0.1 0.2 0.2 0.2 0.3 0.4 0.4 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 Adjusted EBITDA (US$mm) 16 700 From 1993-2014, both revenues and EBITDA have grown at a CAGR of ~20% Source: Nemak Audited Financial Statements with an average FX for each year, as published by Banco de Mexico (1) Acquisition made during the fourth quarter of 2000. Started consolidating in 2001 12
7 Experienced management team MBA or PhD A. Tamez CEO A. Sada CFO M. Nolte VP of Commercial K. Bentin VP of HR G. Barbero VP of Manufacturing Years of experience in the aluminum casting industry 31 21 21 18 33 N. Cantu BU Director Mexico P. Flynn BU Director US & Canada K. Lellig BU Director Europe L. Peña BU Director South America E. Saenz BU Director Asia Ops. and Product Dev. J. Rada BU Director Asia Bus. Dev and Comm. 23 5 19 18 19 25 21 years average experience in the aluminum casting industry Note: Flag indicates nationality 13
Compelling equity story 1 Leading position in fast-growing markets 2 Broad portfolio of leading casting technologies focused on complex and high value-added products 3 Leading product development capabilities supported by skilled workforce 4 Solid customer relationships with diversified revenue streams 5 Global footprint with modern facilities near key customer sites 6 Proven track record of profitable growth and financial resilience 7 Experienced management team 14