Adient Plc · NYSE:ADNT
Adient — J.P. Morgan Auto Group Investor Meeting (June 2023)
38 slides from Adient's conference presentation, Jun 1, 2023
Slide 1: J.P. Morgan Auto Group Investor Meeting: Adient China Business Update
J.P. Morgan Auto Group Investor Meeting Adient China Business Update June 1, 2023 Adient – PUBLIC
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: Agenda
Agenda > Introduction > Adient Business Overview Jerome Dorlack Executive VP and CFO Jerome Dorlack > Adient Transformation in China James Huang Executive VP APAC > Q&A James Huang Adient – PUBLIC 3
Slide 4: Adient Business Overview
Adient Business Overview Adient – PUBLIC
Slide 5: Executive summary
Executive summary 1. Driving forward with focus ˃ Successfully executing Adient’s “back-to-basics” strategy ˃ Strengthening our leading position with new business wins, including significant EV platform wins ˃ Adient recognized as supplier of choice by our customers ˃ Increasing the company’s commit
Slide 6: Focused strategy driving forward progress
Focused strategy driving forward progress Leading supplier focused on Driving operational and Strengthening our Creating a sustainable automotive seating financial improvements leading position future together > Global reach and scale > Intense focus on launch > Significant EV wins across the > Comm
Slide 7: FY2023 operating environment
FY2023 operating environment > As expected entering 2023, the overall operating environment to date in FY23 has modestly improved vs. FY22 > The modest improvement in the operating environment is expected to continue in H2FY23; however, Regional Environments soft vehicle demand in China and increase
Slide 8: Executing Adient's FY23 plan
Executing Adient’s FY23 plan Remaining focused on delivering the company’s commitments > Strong operational execution, positive commercial momentum and an extreme focus on containing costs continue to drive the business forward Key Q2FY23 > Adient delivered solid Q2FY23 financial results, building o
Slide 9: Cash flow generation continues to improve
Cash flow generation continues to improve Adient expects to generate significant cash flow in the coming years, underpinned by: > Solid operational execution > A strengthening earnings profile driven by: > Intense focus on customer profitability > Balance in / balance out of new platforms > Growth i
Slide 10: Solid progress supports enhanced capital allocation plan
Solid progress at moving the company forward supports enhanced capital allocation plan > The ability to drive the business forward despite the challenging operating environment has enabled the company to enhance its capital allocation plan > Adient’s capital allocation plan has prioritized deleverag
Slide 11: A bright future lies ahead
A bright future lies ahead Inflationary > Since FY19, Adient’s focused strategy pressures to subside 100 bps and “back-to-basics” mindset has or be resolved Balance in placed the company on a solid path commercially 100 bps / balance Normalized out of to significantly improving margins production, S
Slide 12: Adient Transformation in China
Adient Transformation in China Adient – PUBLIC
Slide 13: Adient China
Adient China Click play video in browser J.P. Morgan China Investor Meeting Adient – PUBLIC 13
Slide 14: Adient in China – Staying abreast of the market
Adient in China – Staying abreast of the market > Adient began to develop and manufacture automotive seats in China starting in 1996 and we have continuously invested in the world’s largest auto market in the past three decades > In the early days of entry into China, Adient grew rapidly through joi
Slide 15: Adient has executed a recipe for success in China
Adient has executed a recipe for success in China across different customers Adient’s recipe for success in China 1 • Optimal nationwide footprint – located 2 • A highly regionalized organization wherever customers need us • A capable and experienced management • Strong in-house engineering capabili
Slide 16: Adient in China – Business overview
1 Adient in China – Business overview We generated We have We have $4.5B 3 wholly-owned entities ~35 manufacturing sales revenue in FY2022 1 locations 6 joint ventures 3 We employ with global tech centers ~15,000 ~18% (Adient Chongqing, CFAA & Keiper) highly engaged employees including ~900 engineer
Slide 17: Adient in China – Building the optimal footprint
1 Adient in China – Building the optimal footprint China Footprint - 35 Plants Chongqing Langfang Nantong • Far-reaching geographic BJA GAAS CFAA FAA CAA Keiper coverage to serve OEMs Tech Center China Office Daqing through both WOFE and JV footprint Changchun • Building a new Meihekou manufacturing
Slide 18: Adient in China – World-class, fully capable Technical Centers
1 Adient in China – World-class, fully capable Technical Centers • Full development capabilities with local innovation, design, prototype/testing, launch support, VAVE, etc. • World-class team and facilities • Strong synergy with Adient global TC network • Global standard and linked engineering syst
Slide 19: Global player with regionalized org structure and proven management team
2 Adient is a global player with regionalized org structure and proven management team in China > Adient shifted to a more regionalized org structure since 2018 to drive > Adient China has a capable and experienced agility and keep pace with local market changes management team with proven records,
Slide 20: Understanding of key China market trends
3 A deep understanding of key China market trends and industry knowledge that are favorable to Adient seating content Ongoing benchmarking activities In Production Next Gen In Development • Relax & ISS seat • ABTS frame Safety • Low block height • Power movement • Captain’s chairs Reconfiguration •
Slide 21: ADAS and safety will continue to add to seating content
3 Advanced Driver Assistance Systems (ADAS) and safety will continue to add to seating content and opportunity for Adient ▪ Available in portfolio 1 Additional sensors ▪ In development or partner ▪ Integration of directed source 2 Belt integration Sound in Seat 15 3 Occupant classification / biometr
Slide 22: Speed, agility and execution are our differentiators to win
4/5 Speed, agility and execution are our differentiators to win We drive forward with agility We execute and deliver what we commit Real examples of what we can do: Key figures about our execution performance: • Won an OEM full foam business as we were the only seating supplier that could set up a f
Slide 23: Case sharing: A successful growth path of Adient Chongqing
Case sharing: A successful growth path of Adient Chongqing How Adient Chongqing executed our recipe for success • The first seating supplier to enter NEV sector and • The org behavior has adapted to the needs and started to work with local NEV startups since 2015 mindset of Chinese customers • Reven
Slide 24: Our attractive and unique business propositions in China
Our attractive and unique business propositions in China How does our recipe for success and its advantages translate to Adient? 1• Scalability o Scale our product and production according to market demand while leveraging off the shelf technology and footprint advantage 2• Content Growth o Focus on
Slide 25: Well-positioned to capture future growth in China
Adient continues to apply our recipe for success and is well-positioned to capture future growth in China Forecast volume growth >$4.6B new business bookings (program CAGR in next 5 years beat lifetime) in FY23 market by >2 times Top 3 player with Awarded business from significant growth of >8 new c
Slide 26: Serving Chinese OEMs in overseas expansion
In the next phase, Adient also has advantages to serve Chinese OEMs in overseas expansion with our global presence and capability Adient China Customer Mix 1 40% 2023 60% 40% 2028 60% Chinese OEM International OEM Adient is well positioned to capture growing exports from China to overseas markets gi
Slide 27: Q&A
7 ADIENT Q&A NNNNNN NNNNANN NNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNNN NNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNNAN NNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNNN NNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNANN NNNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNAN NNNNNN NNNNNN NNNNNN NNNNNN NNNNAN NNNNAN NNNNNN NNNNNN NNN
Slide 28: Appendix
7 ADIENT Appendix NNNNNN NNNNANN NNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNNN NNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNNAN NNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNNN NNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNANN NNNNNAN NNNNAN NNNNNN NNNNNN NNNNNN NNNNAN NNNNNN NNNNNN NNNNNN NNNNNN NNNNAN NNNNAN NNNNNN NNNNN
Slide 29: Adient today
Adient today *Adient share includes non-consolidated revenue. Revenue by geography based on FY2021 (consolidated and non-consolidated). Source: External and management estimates Adient is a critical supplier in automotive seating, supplying innovative seat solutions to meet the needs of auto manufac
Slide 30: We are located where our customers need us most
We are located where our customers need us most Global locations 30 countries 200+ manufacturing facilities Global employees 70,000+ J.P. Morgan China Investor Meeting Adient – PUBLIC 30
Slide 31: Adient delivers a diverse range of seating products and solutions
Adient delivers a diverse range of seating products and solutions COMPLETE SEATS FOAM We are one of the market leaders for complete We produce foam for automotive cushions, seat systems, serving every major automaker backrests, head restraints and more. Our expert around the globe, offering smart so
Slide 32: Driving forward with focus on product solutions for today and tomorrow
Driving forward with focus on product solutions for today and tomorrow Adient China product Leather Alternatives: Virtually all OEMs are UltraThin: A new, development capability working to reduce or eliminate leather unique seat is strong and in-house content to improve sustainability, increase cons
Slide 33: Adient has extensive experience working with NEV startups in China
Adient has extensive experience working with NEV startups in China How Adient works with China NEV startups Our collaboration with NIO 2016 2018 Innovation and product development • Focus on innovation for user experience differentiation • Adient became NIO’s first • NIO’s first model ES8 delivery •
Slide 34: Recognized as the trusted seating expert through awards
Adient is recognized by the industry and customers as the trusted seating expert through continuous business awards and recognition A few key awards received by Adient China YTD in FY23 Industry and customer J.D. Power Volvo Car APAC Daimler recognitions In total 7 Awards Excellent Supplier Award To
Slide 35: Adient CEO visited China and Shanghai Auto Show in April 2023
Adient President and CEO Doug Del Grosso visited China and Shanghai Auto Show in April 2023 “It was great to be back in China to meet with customers, visit our operations and engage with the Adient team face to face. Visiting the Shanghai auto show reinforced my belief in how important the China mar
Slide 36: Non-GAAP financial measurements and pro-forma reconciliations
Non-GAAP financial measurements and pro-forma reconciliations 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 interest expense, Free ca
Slide 37: Non-GAAP Reconciliations - EBIT, Adj.-EBITDA, Net Debt
Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, Adj.-Equity Income, Net Debt Three months ended March 31 2023 2022 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted Net sales $ 3,912 $ - $ 3,912 $ 3,506 $ - $ 3,506 Cost of sales (1) 3,662 - 3,662 3,328 - 3,328 Gross profit 250 - 250 178
Slide 38: Segment Performance
Segment Performance Q1 2022 Q1 2023 Corporate/ Corporate/ Americas EMEA AP Consolidated Americas EMEA AP Consolidated Eliminations Eliminations Net Sales 1,498 1,230 784 (32) 3,480 1,724 1,182 821 (28) 3,699 Adjusted EBITDA 9 43 114 (20) 146 69 28 138 (23) 212 Adjusted Equity Income (1) (1) 36 - 34
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