Adient Plc · NYSE:ADNT
Adient — Barclays Global Automotive Conference 2019
31 slides from Adient's conference presentation, November 2019
Slide 1: Barclays Global Automotive Conference
Barclays Global Automotive Conference November 2019 Improving the experience of a world in motion
Slide 2: Important information
Important information Adient has made statements in this document that are forward-looking and, therefore, are subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed “forward-looking statements” within
Slide 3: Today's agenda and presenters
Today’s agenda and presenters Jerome Dorlack Vice President Seating Americas > Americas overview Jeffrey Stafeil Executive Vice President and Chief Financial Officer > Financial overview Barclays Global Automotive Conference – November 2019 3 Adient – Improving the experience of a world in motion
Slide 4: Executive summary
Executive summary Leading competitive position in a strong and vital market > Adient maintains one of the largest market shares (~33%) in a concentrated segment with few global competitors > Well diversified customer mix - no customer is greater than 12% of total consolidated sales > High barriers t
Slide 5: Adient Americas Region Today
Adient Americas Region Today Adient is a critical supplier in automotive seating, supplying approximately one out of every three automotive seats worldwide Adient Americas FY19 Revenue Americas market share* Americas revenue by customer ~$7.8B Lear We supply Ford Toyota Consolidated Adient ~ 33% 6.4
Slide 6: Adient Americas Footprint
Adient Americas Footprint United States Canada Canada 1 ▪ Plymouth – Tech Center ▪ Tillsonburg – Foam ▪ Avanzar San Antonio – JIT/Components ▪ Bridgewater Detroit – JIT Mexico ▪ Bridgewater Warren – JIT ▪ Acuna – Trim ▪ Bridgewater Estaboga – JIT ▪ Aguacalientes – JIT ▪ Bridgewater Lansing – JIT ▪ A
Slide 7: Adient Americas Leadership Team – Back-to-Basics Organization
Adient Americas Leadership Team – Back-to-Basics Organization Established three fully integrated Regions with direct functional oversight > Key external hires to accelerate the turnaround > Seating and SS&M combined > Commercial and Program Management combined > Key functional leadership added as di
Slide 8: Adient America's Turnaround Plan is on Track Despite Challenges
Adient America’s Turnaround Plan is on Track Despite Challenges FY2019 Stabilization ➢ Renewed emphasis on discipline in fundamentals ➢ ➢ ➢ ➢ ➢ ➢ Barclays Global Automotive Conference – November 2019 8 Adient – Improving the experience of a world in motion
Slide 9: Stabilizing the Adient Americas Business
Stabilizing the Adient Americas Business › Laser focus on waste reduction via plant centered ideology → go and see → then FY19 Cost Improvement Trend $100 deploy world class resources to resolve ($M) $90 $80 › Cross-functional involvement in launches, $70 on the shop floor, yielding benefits in more
Slide 10: Americas Delivers Flawless Launch of the New Daimler GLB
Americas Delivers Flawless Launch of the New Daimler GLB Back to basics approach is delivering strong results > The all-new Daimler Mercedes- Benz GLB completed a flawless seating launch in Q4 of FY19 > Achieved all Adient launch performance metrics through the measurement window > This vehicle cont
Slide 11: Transitioning to the Improvement Phase of the Americas Turnaround
Transitioning to the Improvement Phase of the Americas Turnaround Operational Program Cost Management Customer Excellence Management Satisfaction ➢ Clear KPIs for ➢ Effective ➢ Strong VA/VE ➢ Customer each plant management discipline aligned ➢ Compensation cadence ➢ Effective resources aligned to ➢
Slide 12: Financial overview
Financial overview Barclays Global Automotive Conference – November 2019 12 Adient Adient– Improving – Improving thethe experience of of experience a world in in a world motion motion
Slide 13: FY 2019 key financials
FY 2019 key financials1 FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4 Sales ($ Millions) $4,158 $4,228 $4,219 $3,921 Third Adjusted EBITDA ($ Millions) 176 191 205 215 consecutive quarter of Margin 4.23% 4.52% 4.86% 5.48% sequential improvement Margin excl. Equity Income 2.24% 3.03% 3.29% 3.60% Improved operation
Slide 14: Americas and EMEA driving H2 improvement
Americas and EMEA driving H2 improvement Adj.-EBITDA performance H2 vs H1 FY19 > Turnaround actions implemented in the Americas Total Adient * Americas and EMEA throughout FY19 gained traction and drove just under 2.00% $77M +$56M +$53M $100M in improved Adj.-EBITDA +138 bps +78 bps performance in H
Slide 15: Cash flow & debt
Cash flow & debt 1 Free Cash Flow Debt FY19 FY18 > Cash and cash equivalents of $924M at September 30, 2019 (in $ millions) Q4 FY19 Full Year Q4 FY18 Full Year > No near-term maturities Adjusted-EBITDA $ 215 $ 787 $ 250 $ 1,196 > Adient will continue to monitor and assess its cash position (+/-) Net
Slide 16: Outlook – key drivers expected to influence FY20
Outlook – key drivers expected to influence FY20 Lower launch costs Softening end markets (lower volumes / negative mix) VAVE initiatives Commercial discipline Operational improvements (full year run rate of FY19 actions + FY20 actions) FX Reduced launch activity Adient’s self-help opportunities are
Slide 17: FY20 Outlook – key financial metrics
FY20 Outlook – key financial metrics * Consolidated sales ~$15.6B - $15.8B > FY20 consolidated sales expected to range between $15.6B and $15.8B > Key focus areas (operational improvements, launch management, cost containment and Adj.-EBITDA commercial discipline) expected to drive earnings growth i
Slide 18: Reasons to invest in Adient
Reasons to invest in Adient Leveraging our Increased Focused on the leading position shareholder core business in China value Critical supplier in the Unique and longstanding automotive seating business, position in China through our with a leading market position joint venture structure New managem
Slide 19: APPENDIX - Company overview
APPENDIX - Company overview Barclays Global Automotive Conference – November 2019 19 Adient Adient– Improving – Improving thethe experience of of experience a world in in a world motion motion
Slide 20: Adient today
Adient today Adient is a critical supplier in automotive seating, supplying approximately one out of every three automotive seats worldwide NYSE: ADNT FY19 Revenue Global market Revenue by share (2018 market ~$60B)* geography* ~$16.5B ~$7.9B Consolidated Unconsolidated Americas Europe / Lear revenue
Slide 21: We are located where our customers need us most
We are located where our customers need us most Global locations 220 manufacturing facilities 35 countries Global employees 83,000 Barclays Global Automotive Conference – November 2019 21 Adient – Improving Adient thethe - Improving experience of of experience a world in in a world motion motion
Slide 22: Strong customer diversification
Strong customer diversification JLR 2% Others Ford PSA 2% 10% 11% > Industry leading diversification We work with the > By customer FCA 10% No customer is greater than 12% of world’s largest BMW 5% N. American total consolidated sales OEM's automotive Volvo 27% GM > By platform 6% manufacturers 6% E
Slide 23: Seating Joint Venture partnerships in China enable clear leadership position
Our Seating Joint Venture partnerships in China enable us to enjoy a clear leadership position in China We generated We have We have $7.4B 19 seating joint ventures* ~79 manufacturing sales revenue in FY2019 locations with We employ 4 ~ 40% - 45% global tech centers 31,000 combined share of the high
Slide 24: Adient delivers a diverse range of seating products and solutions
Adient delivers a diverse range of seating products and solutions We partner with OEMs to develop customized seating systems that excel in quality and craftsmanship We utilize lightweight, innovative materials to enhance fuel efficiency and vehicle differentiation STRUCTURES AND FOAM FABRICS TRIM ME
Slide 25: Well positioned innovation and product portfolio
Well positioned innovation and product portfolio Global Industry trends Implications for seating • Safety • Changes in vehicle architecture & • Electrification power managment • Light-weight • Slim & lightweight • Low block height • Connectivity • Smart, individualized heating & cooling • Urbanizati
Slide 26: APPENDIX – Financial reconciliations
APPENDIX – Financial reconciliations Barclays Global Automotive Conference – November 2019 26 Adient Adient– Improving – Improving thethe experience of of experience a world in in a world motion motion
Slide 27: Non-GAAP financial measurements
Non-GAAP financial measurements > Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income attributable to Adient, Adjusted effective tax rate, Adjusted earnings per share, Adjusted equity income, Adjusted free cash flow, Net debt and Net leverage as well as
Slide 28: Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA
Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA Three months ended September 30 Twelve months ended September 30 2019 2018 2019 2018 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted GAAP Adj. Adjusted GAAP 1 Adj. Adjusted Net sales $ 3,921 $ - $ 3,921 $ 4,145 $ - $ 4,145 $ 16,52
Slide 29: Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA (prior periods)
Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA Three months ended December 31 Three months ended March 31 Three months ended June 30 (prior periods) (in $ millions) GAAP 2018 Adj. Adjusted GAAP 2019 Adj. Adjusted GAAP 2019 Adj. Adjusted Net sales $ 4,158 $ - $ 4,158 $ 4,228 $ - $ 4,
Slide 30: Segment Performance
Segment Performance (in $ millions) Q1 2018 Q1 2019 Corporate / Corporate / Americas EMEA Asia Consolidated Americas EMEA Asia Consolidated Recon Items Recon Items Net sales $ 1,786 $ 1,853 $ 648 $ (83) $ 4,204 $ 1,935 $ 1,640 $ 650 $ (67) $ 4,158 Adjusted EBITDA 35 82 176 (27) 266 43 2 154 (23) 176
Slide 31: Supplementary - Seat Structures & Mechanisms (SS&M) progression
Supplementary - Seat Structures & Mechanisms (SS&M) progression Memo: Seat Structures & Mechanisms Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Net sales $ 718 $ 797 $ 783 $ 705 $ 3,003 Adjusted EBITDA (82) (34) (18) (34) (168) Adjusted EBITDA margin -11.4% -4.3% -2.3% -4.8% -5.6% Adjusted Equity Income