UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x |
Filed by a Party other than the Registrant ¨ |
Check the appropriate box:
¨ |
Preliminary Proxy Statement |
¨ |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
¨ |
Definitive Proxy Statement |
x |
Definitive Additional Materials |
¨ |
Soliciting Material Pursuant to §240.14a-12 |
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box): |
x |
No fee required. |
|
¨ |
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
|
1 |
Title of each class of securities to which transaction applies: |
|
2 |
Aggregate number of securities to which transaction applies: |
|
3 |
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
|
4 |
Proposed maximum aggregate value of transaction: |
|
5 |
Total fee paid: |
¨ |
Fee paid previously with preliminary materials. |
¨ |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
|
1 |
Amount Previously Paid: |
|
2 |
Form, Schedule or Registration Statement No.: |
|
3 |
Filing Party: |
|
4 |
Date Filed: |
|
|
SEC 1913 (02-02) |
Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_001.jpg)
AAM AMERICAN AXLE & MANUFACTURING HOLDINGS INC.
SHAREHOLDER OUTREACH SPRING 2023
April 2023 BRINGING THE FUTURE FASTER
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_002.jpg)
Forward-Looking Statements AAM BRINGING THE FUTURE FASTER
This presentation information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include factors detailed in the reports we file with the SEC, including those described under "Risk Factors" in our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. These forward-looking statements speak only as of the date of this communication. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
It should also be noted that this information contains certain financial measures, including Adjusted EBITDA, Adjusted Earnings per Share, Adjusted Free Cash Flow, Net Leverage Ratio and Liquidity that are not required by, or presented in accordance with, accounting principles generally accepted in the United States, or GAAP. These measures are presented here to provide additional useful measurements to review our operations, provide transparency to investors and enable period-to-period comparability of financial performance. A description of non-GAAP financial measures that we use to evaluate our operations and financial performance, and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, can be found in the appendix under "Reconciliation of Non-GAAP Measures."
2
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_003.jpg)
Outreach Topics AAM BRINGING THE FUTURE FASTER
AXL Overview and Current Business Profile
Corporate Governance (including Executive Compensation)
Sustainability Initiatives
Shareholder Feedback and Q&A
3
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_004.jpg)
AAM - Quick Facts AAM BRINGING THE FUTURE FASTER
Global-leader in design, engineering and manufacturing of automotive propulsion systems and technologies to support electric, hybrid and ICE vehicles
$5.8B 2022 Revenue
~19,000 Employees 18 Countries
Over 80 Locations
14 Global Engineering and Tech Centers
DRIVELINE
One of the leaders in hybrid and electric driveline solutions
A Global Leader in
Full-size Pickup Truck and SUV Driveline Systems
AWD Systems for Crossover Vehicles
Damped Gears, Viscous Dampers and Rubber Isolation Pulleys
Pioneer of Disconnecting AWD Systems
METAL FORMING
Strong position in electrified propulsion components
Leading automotive forger in the world
A Global Leader in
Forged Gears & Shafts
CVT Pulleys
Powdered Metal Connecting Rods
Aluminum Valve Bodies
Machined Helical Gears
Differential Assemblies
4
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_005.jpg)
2022 AAM Highlights AAM BRINGING THE FUTURE FASTER
Began to supply electric drive units for the Mercedes-AMG GT 63 S E PERFORMANCE vehicle
Awarded multiple contracts to supply major global OEMs with components for electric vehicles
Automotive News PACE AWARD 2022 WINNER Won three PACE Awards for our innovative electric vehicle technology and collaboration
Secured contracts worth over $10 billion for next generation full-size truck axle programs with multiple customers
GM Named by GM as the new axle supplier for its next generation Colorado and Canyon pickup trucks for model year 2023
TEKFOR Acquired Tekfor Group to provide synergies, diversify sales mix and increase electrification product portfolio
Recognized as an Overdrive Award winner at GM's 30th annual Supplier of the Year Awards
Forbes 2022 AMERICA'S BEST LARGE EMPLOYERS POWERED BY STATISTA Named one of Forbes America's Best Large Employers
2021 Announced commitment to net zero carbon emissions by 2040 in Sustainability Report
5
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_006.jpg)
AAM Long-Term Value Creation AAM BRINGING THE FUTURE FASTER
Diversification
Balanced mix of customers and geography.
Expand our product portfolio, driving opportunities with new OEMs and regions.
Agnostic to propulsion market changes.
Sales
Grow above market by leveraging scale and technology.
Electrification will further drive expansion into new segments.
Protect and extend the core business.
Offer a compelling value proposition to customers.
Financials
Leverage AAM's Operating Systems to drive top tier EBITDA margin and cash flow generation.
Enhance balance sheet strength.
Long-Term Focus
Leader in electric propulsion technology.
Increase size and scale through organic and inorganic growth.
Effective deployment of capital.
6
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_007.jpg)
Corporate Governance Highlights AAM BRINGING THE FUTURE FASTER
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_008.jpg)
Independent and Engaged Board AAM BRINGING THE FUTURE FASTER
Independence
9 out of 10 directors are independent
Lead Independent Director
Committees comprised of only independent directors (except Executive Committee)
Independent directors meet regularly in executive session without management present
Accountability
Proactive shareholder engagement program
Proxy access by-laws
Majority vote for directors in uncontested elections
Candid Board and committee evaluation process
Commitment to Board refreshment
Sound Practices
Board policy requires inclusion of women and minority candidates in the selection process for every open seat
Nominating/Corporate Governance Committee oversight of sustainability program and human capital management, including DEI initiatives and succession planning
Director education, including a recent DEI awareness workshop
Stock ownership requirements for directors and executive officers
Hedging or pledging of AAM stock is prohibited
Risk Management
Active Board oversight of AAM's overall risk management structure
Individual Board committees oversee risks related to their areas of responsibility
AAM has robust risk management processes throughout the Company
The Board and its committees receive regular updates from management on top enterprise risks and related risk mitigation activities
AAM performs thorough risk assessments, including a recent climate risk scenario analysis, cybersecurity risk assessment and a product life cycle assessment
30% Board Diversity (2 Women and 1 Black)
8
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_009.jpg)
Compensation Linked To Strategic Business Objectives AAM BRINGING THE FUTURE FASTER
AAM's compensation philosophy supports our business strategy and performance, aligns with shareholder interests and pays competitively. Our compensation programs are designed to balance short-term performance and long-term growth. A significant portion of CEO and other NEO pay is performance based and at risk
The Compensation Committee annually reviews performance metrics, targets and payouts to ensure they are challenging stretch goals that drive performance while mitigating risk.
Strategic Business Objective
Continue to strengthen the balance sheet; provide funding for organic growth, research & development, and other capital priorities; reduce leverage
Develop innovative technology, including electrification, and reinvest in research & development
Secure future replacement business and achieve profitable growth while retaining flexibility to address market changes
Drive productivity and financial performance
Achieve progress on ESG priorities, including DEI initiatives and environmental goals
Create sustainable value for shareholders and align with our shareholders' experience
Alignment
Incentive Metric
Operational cash flow
2022 Annual Incentive Program (40% metric)
Free Cash Flow
2022 LTI Performance Awards (100% metric of performance-based LTI)
Strategic Goals
2022 Annual Incentive Program (10% metric)
EBITDA margin
2022 Annual Incentive Program (40% metric)
ESG/Sustainability Goals
2022 Annual Incentive Program (10%)
Relative TSR
2022 LTI Performance Awards (modifier -15% or +15%)
AAM utilized EBITDA margin, cash flow, ESG/Sustainability goals and a relative TSR modifier as incentive compensation metrics for 2022
Note: For definitions of Adjusted EBITDA, EBITDA (refers to adjusted EBITDA margin under Annual Incentive Plan), Adjusted Free Cash Flow, Operational Cash Flow and Non-GAAP reconciliations, please see the attached appendix
9
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_010.jpg)
2022 Annual Incentive Compensation AAM BRINGING THE FUTURE FASTER
2022 annual incentive performance measures were set to drive operational performance and advance key strategic and ESG/sustainability initiatives
Measure
EBITDA Margin
Operational Cash Flow
Strategic Measures
ESG/Sustainability Measures
Description
Supports maintaining a flexible cost structure and protects margins despite inflation impacts, increased R&D spend and metal market cost recoveries
Encourages focus on annual cash flow target achievement to reduce debt and on the capital intensity of our business profile
Designed to emphasize importance of continuous effort and focus on supporting AAM as a premier global Tier 1 automotive supplier
New measure for 2022 in response to shareholder feedback, aligning an incentive pay outcome with meaningful advancements in our sustainability program
Weighting
40%
40%
10%
10%
Note: For definitions of Adjusted EBITDA, EBITDA (refers to adjusted EBITDA margin under Annual Incentive Plan), Adjusted Free Cash Flow, Operational Cash Flow and Non-GAAP reconciliations, please see the attached appendix
10
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_011.jpg)
2022 Annual Incentive Compensation AAM BRINGING THE FUTURE FASTER
Financial Measures
EBITDA Margin
Operational Cash Flow
Weighting
40%
40%
Threshold (Payout 0%)
11.00%
$400 million
Target (Payout 100%)
13.50%
$550 million
Maximum (Payout 200%)
15.00%
$625 million
2022 Actual Performance
13.06%
$573 million
% of Target Earned
82%
131%
2022 Actual Payout
33%
52%
Achievements
Strategic Measures
(actual payout: 20%)
Received awards for first electric-beam axle with EKA Mobility and electric vehicle components with multiple OEMs
Won three Automotive News Pace awards for innovation and collaboration
Over $150 million in debt reduction and extended debt maturities at a lower interest rate
Acquired Tekfor Group in June 2022
Launched 17 product programs and received the GM Overdrive Award for sixth consecutive year
Integrated AAM's environmental operating system module (E4) into our operating system and updated AAM's safety program (S4) to include electrical safety
ESG/Sustainability Measures
(actual payout: 20%)
Hired first Director of DEI, launched AAM's 2+1 global DEI program, engaged in associate surveys and created responsive action plans, and named on Forbes list of Best Employers for Diversity
Improved our CDP climate change report score to an A- from a C
Included a standalone sustainability component to annual incentive compensation program
Adjusted EBITDA Margin
Delivered one of the highest EBITDA margins among our competitor peer group
12.9%
9.3%
2022
AXL
Group Average
Competitor peer group average comprises ADNT, ALV, AXL, BWA, DAN, LEA and MGA
Total Cumulative Actual Payout 125% of Target
Note: For definitions of Adjusted EBITDA, EBITDA (refers to adjusted EBITDA margin under Annual Incentive Plan), Adjusted Free Cash Flow, Operational Cash Flow and Non-GAAP reconciliations, please see the attached appendix
11
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_012.jpg)
2022 Long-Term Incentive Compensation AAM BRINGING THE FUTURE FASTER
Adjusted Free Cash Flow:
Over $1 Billion
Reduce debt (nearly $700 million)
Invest in electrification and next generation successor programs
Strategic initiatives Tekfor acquisition
Maintain liquidity during pandemic and industry challenges
Record Performance 2020-2022
Payout of 2020 performance awards
Despite unprecedented market conditions, delivered over $1 billion of adjusted free cash flow, allowing AAM to reduce debt, invest in electrification and
next generation successor programs, conduct strategic initiatives and maintain liquidity.
No adjustments for the impact of COVID or other unanticipated macroeconomic events were made in determining the earned awards.
The 2022 LTI award payout was reduced by 15% based on relative TSR performance over the three-year period.
Based On Record Cash Flow, Earned 170% of Target
Note: For definitions of Adjusted EBITDA, EBITDA (refers to adjusted EBITDA margin under Annual Incentive Plan), Adjusted Free Cash Flow, Operational Cash Flow and Non-GAAP reconciliations, please see the attached appendix
12
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_013.jpg)
Sustainability Leadership and Oversight AAM BRINGING THE FUTURE FASTER
Sustainability Program Governance and Oversight
BOARD OF DIRECTORS
CHAIRMAN AND CEO
POLICY COMMITTEE
SUSTAINABILITY PROGRAM LEAD (AAM PRESIDENT)
CORPORATE SUSTAINABILITY TEAM
The Board plays a critical role in AAM's
Sustainability Program through effective
oversight and responsiveness to feedback
from shareholders.
Consistent with shareholder expectations,
the Board is actively engaged in overseeing
AAM's Sustainability Program and holds
senior leadership accountable for
sustainability performance and reporting.
ESG WORKING GROUP
ENVIRONMENTAL
SOCIAL
PRODUCT
SUPPLY CHAIN
GOVERNANCE
13
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_014.jpg)
Sustainability Initiatives AAM BRINGING THE FUTURE FASTER
AAM BRINGING THE FUTURE FASTER
POWERING A SUSTAINABLE FUTURE
2022 SUSTAINABILITY REPORT
Scope 1,2, & 3 Emissions
Achieve net zero carbon by 2040
Energy
100% Renewabe energy sourcing in the U.S. by 2025
Water
Zero incidents of water contamination and water scarcity in watersheds where we operate
Waste
Zero-waste-to-landfill status for all facilities by 2035
We are focused on achieving profitable growth and doing so sustainably.
Our climate goals were validated by Science Based Targets initiative (SBTi).
Environmental
Social
Product
Supply Chain
Governance
14
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_015.jpg)
Question and Answer
AAM BRINGING THE FUTURE FASTER
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_016.jpg)
Appendix
AAM BRINGING THE FUTURE FASTER
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_017.jpg)
Non-GAAP Reconciliation AAM BRINGING THE FUTURE FASTER
2022 Annual Incentive Performance Metrics
EBITDA Margin:
(in millions)
Twelve Months Ended
December 31, 2022
Net income $ 64.3
Interest expense 174.5
Income tax expense 2.0
Depreciation and amortization 492.1
EBITDA $ 732.9
Restructuring and acquisition-related costs 30.2
Debt refinancing and redemption costs 6.4
Unrealized loss on equity securities 25.5
Non-recurring items:
Malvern fire insurance recoveries, net of charges (39.1)
Gain on bargain purchase of business (13.6)
Acquisition-related fair value of inventory adjustment 5.0
Adjusted EBITDA $ 747.3
Adjustment under Annual Incentive Plan:
Impact of financial performance of Tekfor not included in target (15.9)
Adjusted EBITDA under Annual Incentive Plan $ 731.4
Net Sales, as reported $ 5,802.4
Reduction for Tekfor sales (204.0)
Net Sales under Annual Incentive Plan $ 5,598.4
Adjusted EBITDA margin under Annual Incentive Plan 13.06%
17
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_018.jpg)
Non-GAAP Reconciliation AAM BRINGING THE FUTURE FASTER
2022 Annual Incentive Performance Metrics
Operational Cash Flow:
(in millions)
Twelve Months Ended
December 31, 2022
Adjusted EBITDA $ 747.3
Purchases of property, plant and equipment (171.4)
Proceeds from sale of property, plant and equipment 4.7
Operational Cash Flow $ 580.6
Adjustments under Annual Incentive Plan:
EBITDA impact of Tekfor acquisition (15.9)
Purchases of property, plant and equipment related to Tekfor 8.3
Operational Cash Flow under Annual Incentive Plan $ 573.0
18
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_019.jpg)
Non-GAAP Reconciliation
2020 - 2022 Long-term Incentive Performance Metric
Free Cash Flow and Adjusted Free Cash Flow:
(in millions)
Twelve Months Ended December 31,
2022 2021 2020
Net cash provided by operating activities $ 448.9 $ 538.4 $ 454.7
Purchases of property, plant and equipment (171.4) (181.2) (215.6)
Proceeds from sale of property, plant and equipment 4.7 2.0 1.7
Free Cash Flow $ 282.2 $ 359.2 $ 240.8
Restructuring and acquisition-related costs 30.8 63.7 70.6
Adjusted Free Cash Flow $ 313.0 $ 422.9 $ 311.4
Three-year cumulative adjusted Free Cash Flow $ 1,047.3
19
![](https://content.edgar-online.com/edgar_conv_img/2023/04/25/0000947871-23-000488_image_020.jpg)
AAM
www.aam.com
Grafico Azioni American Axle and Manufa... (NYSE:AXL)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni American Axle and Manufa... (NYSE:AXL)
Storico
Da Lug 2023 a Lug 2024