Commercial Vehicle Group (CVGI) Small-Cap Growth Virtual Investor Conference summary

Strategic transformation and business focus

• Executing a transformation to diversify through electrical systems growth, leveraging vehicle electrification trends.

• New business wins in electrical systems are driving positive financial performance and momentum in 2024.

• Strategy includes making electrical systems the largest business, diversifying platforms, and reducing exposure to cyclical Class 8 truck markets.

• Ongoing optimization of vehicle solutions and industrial automation, with potential exits from non-strategic businesses.

• Engaged an investment bank to explore alternatives for the industrial automation business, including partnerships or divestiture.

Financial performance and outlook

• 2023 revenue reached $995 million with adjusted EBITDA of $67.6 million; market cap around $190 million.

• Adjusted EBITDA margin expanded by over 140 basis points in 2023; EPS grew 76% over 2022.

• Net leverage reduced to 1.5x EBITDA by end of 2023, supported by free cash flow and debt paydown.

• 2024 guidance: net sales between $915M–$1,015M, adjusted EBITDA $60M–$73M, with margins expected to remain flat.

• Despite downturns in key markets, profitability actions and new business wins are expected to maintain margins and generate free cash flow.

Segment and product developments

• Electrical systems segment is growing, offsetting declines in Class 8 truck and construction/agriculture markets.

• Vehicle solutions and aftermarket segments show steady growth and recovery since 2020.

• Unity Seat product line expansion is driving global business wins and meets safety compliance in all strategic regions.

• Aftermarket business, primarily seats and wipers, is expected to grow year-over-year due to operational improvements and new business wins.

• Industrial automation is pivoting from contract manufacturing to engineered solutions, with strong interest in the new STACC product.