The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst
: Pretty impressive quarter. I guess, I can understand how sales were up sequentially. Year-over-year I think it was pretty surprising. Is it really just
mix and sort of regional waiting?
Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst
: Okay. In terms of -- I'm just trying to -- when you talk about further improvements to margin in the second half, some of it is predicated on supply
chain, this is also the launch costs. I guess I'm just trying to understand how material the tailwind from lower launch costs will be because supply
chains are still quite uncertain. Maybe just trying to isolate what's in your control.
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MAY 05, 2022 / 9:30PM, MRE.TO - Q1 2022 Martinrea International Inc Earnings Call
Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst
: So when you're talking with your customers, more recoveries and material costs, is that retroactive? Or just sort of on a go-forward basis, like just
what's reset, we can earn a normal margin. You're not trying to recover something in the last few quarters?
Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst
: Yes. Okay. That's understood. One last question, I guess, just energy prices in Europe, again, I can understand they are way up. And just how material
is that -- I don't know as part of your cost structure, what percentage is energy more specific to Europe?
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MAY 05, 2022 / 9:30PM, MRE.TO - Q1 2022 Martinrea International Inc Earnings Call
Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst
: That's super helpful, Fred. And I guess -- sorry, just to follow-up on -- I think it was David's last question. Again, the -- talking about going into 2023
with sort of the negotiations done. I mean, a way to think about that sort of a big chunk of that CAD 100 million headwind is not there next year?
Again, you might not recover it, but it's not there next year?
Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst
: Good job in the quarter.
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Pat, you've kind of answered my question, which was on aluminum. So as you know, use a lot of aluminum because of Honsel and your other
casting operations. And like I understand, like you get trued up by the customer, and there's all these formulas and things in that. But I find sometimes
there can be leads and lags. And just wondering if there are any distortions in Q1 or like were there any leads and lags or anything to note about
the Q1 adjustments?
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Right. And like are you protected in all your aluminum? Or is there some...
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Okay. And then just lastly, Pat, I just wanted to ask you. So you had this really strong recovery of operating earnings in North America during the
quarter. And like what do you think was the larger factor? Was it like the revenues you generated from the favorable mix, like the revenues came
in very strong? Or was the more stable operating environment where you just didn't have that customers stop go kind of production schedules?
Or is it really hard to probably...
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: So that -- you felt that in Q1 then?
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Okay. And Pat, like the thing I don't understand, when you talk about this more stable operating environment, you keep referring like how that's
helping your launches, but not you help all your production, not just your -- not just propels that are in launch but mature...
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Okay. And you haven't called out any particular launch issues, which, as you know, often arise. So I assume you're happy with the launches. There's
nothing significant to report there.
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: But like when you say resources, you're talking about engineering? Or are you talking about like people on the plant floor making the stuff?
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