Lear Corporation · NYSE:LEA
Lear — Frankfurt Auto Show Investor Conference 2011
33 slides from Lear's conference presentation, Sep 13, 2011
Slide 1: Frankfurt Auto Show Investor Conference September 13, 2011
Frankfurt Auto Show Investor Conference September 13, 2011
Slide 2: Agenda
Agenda Lear Business Overview Matt Simoncini, President and CEO Electrical Power Management Systems Ray Scott, SVP and President EPMS 2011 Financial Outlook Jason Cardew, Interim CFO Summary Matt Simoncini, President and CEO Q & A 2
Slide 3: Lear Business Overview
Gear... Lear Business Overview
Slide 4: Present State of the Business
4 Present State of the Business* Leading Tier 1 global automotive supplier Strong global position and low-cost footprint Leader in product quality, customer service and innovation Diversified sales and customer base serving all of the world's major automakers Very strong balance sheet, with $1.8 bil
Slide 5: Global Leader in Automotive Seating
Strong Market Position -- One of two dominant suppliers with global scale and complete component capabilities with forecasted 2011 sales of approximately $10.6 billion Key Capabilities -- Complete automotive seat systems; seat covers (including cut and sew, fabric and leather), structures, mechanism
Slide 6: Electrical Power Management Systems Market Position
HIGH-POWER WIRE HARNESS SOLID STATE SMART JUNCTION BOX(tm) TRADITIONAL WIRE HARNESS Strong Market Position -- One of four suppliers with global capability in both traditional and high-power electrical power management systems with forecasted 2011 sales of approximately $3.0 billion Key Capabilities
Slide 7: Global Capabilities with Low-Cost Footprint
7 Global Capabilities with Low-Cost Footprint Approximately 93,000 Employees At 200 Locations In 35 Countries Low-Cost Engineering Centers China, India, Philippines Low-Cost Operations 21 Countries
Slide 8: Geographic and Customer Sales Diversification
Geographic and Customer Sales Diversification By Customer Total Company 2011 First Half Consolidated Sales Approximately Two-Thirds of Global Sales Outside North America 8 Europe 42% North America 35% Rest of World 8% Asia 15% (CHART) (CHART)
Slide 9: 2011 to 2013 Consolidated Sales Backlog
2011 to 2013 Consolidated Sales Backlog* 2011 - 2013 Sales Backlog 9 (in millions) (CHART) ^$2,400 ^$1,000 ^$900 ^$500 * As of August 4, 2011. Sales backlog assumes volumes based on IHS Automotive 7/15/2011 production forecast and a Euro exchange rate of $1.40 / Euro. Please see slide titled "Forwar
Slide 10: Strong Capital Structure and Liquidity
10 One of the strongest balance sheets in the industry; more than twice as much cash as outstanding debt Improving credit metrics No outstanding debt maturities until 2018 $500 million credit facility provides additional liquidity with flexible terms and conditions Modest pension liability Substanti
Slide 11: Strategic Overview
Gear... Strategic Overview
Slide 12: Strategic Direction
12 Strategic Direction* Seamless CEO transition; strong and experienced management team in place No major changes in strategy planned Continued organic investment in emerging markets Niche acquisitions to strengthen both core businesses No major acquisitions needed or planned Maintain strong balance
Slide 13: Well Positioned for Future Profitable Growth Following Restructuring
13 Well Positioned for Future Profitable Growth Following Multi-Year Restructuring Initiative* Restructured global business operations and diversified sales (2005 to present) Closed 44 manufacturing and 11 administrative facilities Located 80% of component plants and 90% of related employment in 21
Slide 14: Industry Production North America, Europe and BRIC Markets
14 Industry Production North America, Europe and BRIC Markets* Source: Wards, IHS and Company estimates 9% 2011 to 2016 CAGR 3% 2011 to 2016 CAGR 5% 2011 to 2016 CAGR (Millions of Units) Forecast * Please see slide titled "Forward-Looking Statements" at the end of this presentation for further infor
Slide 15: Liquidity and Capital Allocation
Liquidity and Capital Allocation Total Liquidity* * Total liquidity includes $1.8 billion of cash and $500 million revolving credit facility as of July 2, 2011. 15 Intra quarter peak to trough cash needs Cushion Cash unavailable for daily use Organic Investment Components in emerging markets Support
Slide 16: New Investment in Component Capacity in Emerging Markets
16 New Investment in Component Capacity in Emerging Markets and Low-Cost Countries (2010-2012)* Mexico Metals & Mechanisms Seat Trim Wire Harnesses Brazil Metals & Mechanisms Seat Trim Wire Harnesses India Metals & Mechanisms Seat Foam Thailand Seat Foam Seat Trim Wire Harnesses China Metals & Mecha
Slide 17: Electrical Power Management Systems
17 Electrical Power Management Systems
Slide 18: EPMS - Overview
EPMS forecasted 2011 sales on track for ~$3.0+ billion; over 20% growth year-over-year Growing faster than the industry Global technical team of over 1,900 engineers specializing in software, hardware, mechanical & advanced materials and power electronics A highly competitive global footprint for bo
Slide 19: EPMS - Capabilities
EPMS - Capabilities 19 Wire Harnesses Low/high voltage wire harnesses Power distribution boxes Excellence in change management Terminals & Connectors Low/high voltage & high power systems Fuse & pre-fuse boxes Pin headers & bus bars Junction Boxes Passive junction boxes Smart junction boxes Solid st
Slide 20: EPMS - Complete Systems Solutions
20 EPMS - Complete Systems Solutions Uniquely positioned to leverage expertise in wiring, terminals & connectors and electronics for efficient electrical power management systems Innovating And Executing With Unrivaled Efficiency Complete Architecture Solutions for Electrical Distribution and Power
Slide 21: EPMS - Financial Metrics
(CHART) 21 EPMS - Financial Metrics* 2009 2011 Outlook 2013 Target $1.9 2010 $2.6 (3.7%) 4.7% 5.25-5.75% Target Markets & Products Prioritize fastest growing segments ROIC focus and discipline for new investments Leading & Efficient Innovation Total systems approach Technology leadership in gateway
Slide 22: EPMS - Alignment to Market Trends
EPMS - Alignment to Market Trends Fuel Efficiency and CO2 Emissions Connectivity & Communication Global Platforms Affordable Cost Structure Advanced Efficiency Systems Charging systems, distribution and energy management portfolio Implemented on 14 platforms with 9 customers 8 "First-to-Market" tech
Slide 23: EPMS - Strategic Priorities
EPMS - Strategic Priorities Operational Excellence Growth Selective Technology Investment The Lear Team 23
Slide 24: 2011 Financial Outlook
Gear... 2011 Financial Outlook
Slide 25: Full Year 2011 Outlook: Vehicle Production, Euro and Key Commodities
Full Year 2011 Outlook Vehicle Production, Euro and Key Commodities* Sources: IHS Automotive and Company estimates Vehicle Production (in millions) * Please see slide titled "Forward-Looking Statements" at the end of this presentation for further information. 25
Slide 26: Full Year 2011 Financial Outlook
26 * Please see slides titled "Non-GAAP Financial Information" and "Forward-Looking Statements" at the end of this presentation for further information. Full Year 2011 Financial Outlook*
Slide 27: Summary
Gear... Summary
Slide 28: Summary
28 Summary* Seamless CEO transition Strong and experienced management team in place Positioned for industry recovery in mature markets and continued industry growth in emerging markets Diversified sales and customer base serving all of the world's major automakers Strong global position and low-cost
Slide 29: Q&A
Gear... Qéa&A
Slide 30: Non-GAAP Financial Information
30 Non-GAAP Financial Information In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP") included throughout this presentation, the Company has provided information regarding "pretax income (loss) before interest, other expense,
Slide 31: Non-GAAP Financial Information: Segment Earnings
31 Non-GAAP Financial Information Segment Earnings
Slide 32: Non-GAAP Financial Information: Adjusted Segment Earnings - EPMS
32 Non-GAAP Financial Information Adjusted Segment Earnings - EPMS
Slide 33: Forward-Looking Statements
Forward-Looking Statements 33 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. The words "will," "may," "designed to," "outlook," "believes," "