Martinrea International (MRE) investor relations material

Executive summary

• Q3 2025 sales were $1,190.8 million, down 3.8% year-over-year, with production sales nearly flat and tooling sales down 54.9%.

• Adjusted operating income was $65 million (5.5% margin), up 20 basis points year-over-year, driven by operational improvements and lower depreciation.

• Adjusted net EPS rose to $0.52 from $0.19, reflecting improved margins, lower finance expense, and a lower effective tax rate.

• Free cash flow was $44.5 million, down from $57 million, mainly due to delayed receivables after a customer cyberattack, but collections have since occurred.

• Recognized for advancing women in manufacturing and investing in employee development programs.

Financial highlights

• Adjusted operating income for Q3 was $65 million, margin improved to 5.5%, up 20 basis points year-over-year.

• Adjusted net EPS rose to $0.52 from $0.19 in Q3 2024.

• Free cash flow before IFRS 16 lease payments was $44.5 million, down from $57 million last year.

• Net debt (ex-IFRS 16) decreased by $24 million to $768 million; net debt to adjusted EBITDA at 1.5.

• Gross margin for Q3 increased to 14.3% from 13.2% year-over-year.

Outlook and guidance

• 2025 outlook maintained: total sales of $4.8–$5.1 billion, adjusted operating income margin of 5.3–5.8%, and free cash flow of $125–$175 million.

• Expecting to finish 2025 near the high end of free cash flow guidance.

• Operating margins expected to improve year-over-year in 2026, driven by efficiency gains and commercial settlements.

• North American production assumed flat for 2025–2026 at 14.5–14.7 million units, with potential upside from reshoring.

• Outlook excludes impacts of tariffs and government policy changes, and anticipates $55 million in cash restructuring costs for 2025.