Adient Plc · NYSE:ADNT
Adient — Q4 FY2021 Earnings Presentation
32 slides from Adient's earnings presentation, Nov 10, 2021
Slide 1: FY 2021 Fourth Quarter Earnings Call
FY 2021 Fourth Quarter Earnings Call November 10, 2021 Adient – PUBLIC 1
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” withi
Slide 3: Agenda
Agenda > Introduction Mark Oswald VP, Treasurer & Investor Relations > Business Update Doug Del Grosso President and CEO > Financial Review Jeff Stafeil Executive VP and CFO > Q&A FY2021 Fourth Quarter Earnings Call Adient – PUBLIC Nov. 10, 2021 3
Slide 4: FY21 - A tale of two distinctively different halves
FY21 - A tale of two distinctively different halves > Adient delivered strong first half FY21 results as evidenced by Key Q4 FY21 significant y-o-y earnings and margin improvement. Financial Metrics H1 FY21 > The improvement was underpinned by continued execution of the company’s ‘Back to Basics’ st
Slide 5: Current operating environment – macro factors continue to dominate the headlines
Current operating environment – macro factors continue to dominate the headlines and impact near-term results FY21 Caution Macro pressures aside, Adient’s business Headwinds performance continues to improve Net Impact entering FY22 > Significant consolidated adj.-EBITDA margin > Supply chain disrupt
Slide 6: Macro influences - mitigating the impact
Macro influences - mitigating the impact > Many of the macro headwinds influencing the industry and Adient are believed to be transitory in nature > Adient has executed several actions to mitigate these headwinds; additional, more forceful actions will need to be implemented if the macro pressures h
Slide 7: Driving forward with focus: the day-to-day
Driving forward with focus: the day-to-day Executing Adient’s “Back to Basics” strategy > Adient has made significant progress in its core business performance as evidenced by the increase in consolidated adj.-EBITDA margins since FY19 (~550 bps excluding impact of macro pressures); improvement in S
Slide 8: Driving forward with focus: strategic objectives
Driving forward with focus: strategic objectives Adient continues to execute and deliver results for activities within its control China Strategic Transformation Balance Sheet Transformation > Adient closed previously announced transactions, > Adient’s strong cash balance combined with proceeds stra
Slide 9: Strengthening our leading position
Strengthening our leading position Replacement, new, and conquest wins expected to 1 strengthen Adient’s leading market position, including 2 alternative propulsion platforms. FY21 win rates were strong and in line with internal expectations, with BEV platforms accounting for ~20% of business wins.
Slide 10: In process and upcoming launches
In process and upcoming launches In process and upcoming 1 2 key launches: 1 Honda Global Front Seat Architecture 2 Infinity QX60 3 Toyota Tundra 3 4 4 Mercedes GLB EQB Launch volume and complexity FY22 vs. FY21 > Launch execution performing at very high levels; performance achieved despite the chal
Slide 11: Summary
Summary > Adient is focused and executing actions to position the company for sustained, long- term success: > Advancing the company’s “Back to Basics” strategy > Driving operational improvements > Executing quality launches > Winning business (new and incumbent) > Transforming its operations in Chi
Slide 12: Financial Review
Financial Review FY2021 Fourth Quarter Adient – PUBLIC
Slide 13: Q4 FY2021 Key Financials
Q4 FY2021 Key Financials As Reported As Adjusted 1 $ millions, except per share data Q4 FY21 Q4 FY20 Q4 FY21 Q4 FY20 B/(W) Consolidated $ 2,771 $ 3,597 2,771 $ 3,597 (23)% Revenue EBIT $ 1,170 $ 50 43 $ 199 (78)% Margin NM 1.4% 1.6% 5.5% EBITDA N/A N/A 118 $ 287 (59)% Margin 4.3% 8.0% Memo: Equity I
Slide 14: FY2021 Full Year Key Financials
FY2021 Full Year Key Financials As Reported As Adjusted 1 $ millions, except per share data FY21 FY20 FY21 FY20 B/(W) Consolidated $ 13,680 $ 12,670 13,680 $ 12,670 8% Revenue EBIT $ 1,726 $ (195) 596 $ 363 64% Margin NM NM 4.4% 2.9% Adj. EBITDA Margin excluding Equity Income of 4.7% (or 5.2% exclud
Slide 15: Q4 FY2021 Revenue: Consolidated and unconsolidated sales
Q4 FY2021 Revenue: Consolidated and unconsolidated sales Regional Performance Consolidated sales (consolidated sales y-o-y growth by region)1 $17 Q4 Q4 IHS Production $3,597 $(808) $(35) Americas -25.2% -25.2% $2,771 EMEA -28.0% -29.7% Asia -0.4% -15.1% Note: China -27.4% -16.8% Note: Asia excl. Chi
Slide 16: Q4 FY21 Adjusted-EBITDA
Q4 FY21 Adjusted-EBITDA Q4 FY21 Adj.-EBITDA of $118M, down $169M y-o-y $41 Business performance includes positive performance of ~$30M offset by temporary operating inefficiencies (resulting from persistent and (semiconductor supply chain disruptions and increased widespread supply chain disruptions
Slide 17: Cash flow
Cash flow Free Cash Flow (1) Key drivers impacting FY21 FCF: (+) Higher y-o-y earnings FY21 FY20 (+) Increased China dividends (driven by China (in $ millions) Q4 FY21 YTD Q4 FY20 YTD strategic transaction) Adjusted-EBITDA $ 118 $ 917 $ 287 $ 673 (+) Lower capital expenditures (primarily driven (+/-
Slide 18: Debt and capital structure
Debt and capital structure ($ in millions) 9/30/2021 Net Debt Cash & Debt Profile Amount Cash balance September 30 September 30 Cash & Cash Equivalents $1,521 includes $695M (in $ millions) 2021 2020 (1) of initial ABL Revolver, incl. FILO due 2024 0 proceeds related to China Cash $ 1,521 $ 1,692 Te
Slide 19: Financial Outlook FY 2022
Financial Outlook FY 2022 Adient – PUBLIC
Slide 20: FY22 Outlook Summary
FY22 Outlook Summary Volume and inflationary pressures significantly influencing FY22 outlook Key assumptions Persistent macro headwinds (primarily supply chain disruptions and inflationary pressures such as commodities, freight, energy, etc.) are Production * Based on October IHS estimates expected
Slide 21: FY22 Outlook – consolidated sales
FY22 Outlook – consolidated sales $870 Pro Forma FY21 China strategic transaction: among other items, the termination of ~$14,300 $(120) $(100) $(30) $(20) YFAS JV / consolidation of CQADNT and Langfang $13,680 Other China transactions: divestitures of smaller, non-core businesses (i.e., remaining f
Slide 22: FY22 Outlook – adjusted EBITDA
FY22 Outlook – adjusted EBITDA China strategic transaction: increase to consolidated EBITDA by Pro Forma FY21 TBD reduce equity income by $155M (slightly higher vs. original ~$90M, ~$(65) expectations due to outperformance at YFAS in Q4 FY21) $917 ~$(15) ~$(15) ~$(10) ~$(5) ~$810 Other China transac
Slide 23: FY22 Outlook – key financial metrics
FY22 Outlook – key financial metrics Outlook FY22 Metrics influenced by more certain planning assumptions Consolidated sales ~$14.8B > Consolidated sales of ~$14.8B (based on Oct. IHS forecast); total sales (consolidated plus non- Interest expense ~$150M consolidated) expected to outpace global vehi
Slide 24: Appendix and financial reconciliations
Appendix and financial reconciliations FY 2021 Fourth Quarter Adient – PUBLIC
Slide 25: Q4 FY21 Adjusted-EBITDA: Americas
Q4 FY21 Adjusted-EBITDA: Americas Q4 FY21 Adj.-EBITDA of $13M, down $98M y-o-y $ in millions (semiconductor supply chain disruptions and increased commodity costs had a significant impact on Q4 FY22). $8 $111 Key drivers of the y-o-y comparison: > Lower volume and mix of about $80M > Temporary opera
Slide 26: Q4 FY21 Adjusted-EBITDA: EMEA
Q4 FY21 Adjusted-EBITDA: EMEA $ in millions Q4 FY21 Adj.-EBITDA of $0, down $84M y-o-y (semiconductor supply chain disruptions and increased commodity costs had a significant impact on Q4 FY22). $23 Business performance significantly impacted by temporary operating inefficiencies (resulting from per
Slide 27: Q4 FY21 Adjusted-EBITDA: Asia
Q4 FY21 Adjusted-EBITDA: Asia Business performance: Q4 FY21 Adj.-EBITDA of $122M, up $9M y-o-y • $1M Net Material Margin (excl Econ) • $(3)M Freight Key drivers of the y-o-y comparison: > Increased volume and mix of about $8M $ in millions $4 $5 > Improved core business performance (lower $122 $8 la
Slide 28: 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 interest expense, Free cash flow and Net debt as well a
Slide 29: Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, and Adj.-Equity Income
Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, and Adj.-Equity Income Three months ended September 30 Twelve months ended September 30 2021 2020 2021 2020 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted GAAP Adj. Adjusted GAAP Adj. Adjusted Net sales $ 2,771 $ - $ 2,771 $ 3,597 $ - $
Slide 30: Non-GAAP Reconciliations - Adjusted Net Income and Adjusted EPS
Non-GAAP Reconciliations - Adjusted Net Income and Adjusted EPS Adjusted Net Income Adjusted Diluted EPS Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended September 30 September 30 September 30 September 30 (in $ millions) 2021 2020 2021 2020 2021 2020 2021 2020 Net incom
Slide 31: Non-GAAP Reconciliations - Adjusted Income before Income Taxes and Effective Tax Rate
Non-GAAP Reconciliations - Adjusted Income before Income Taxes and Effective Tax Rate Adjusted Income before Income Taxes Three Months Ended September 30 Twelve Months Ended September 30 (in $ millions) 2021 2020 2021 2020 Income (loss) Income (loss) before Income Tax impact Effective before Income
Slide 32: Segment Performance
Segment Performance Q1 2020 Q1 2021 Corporate/ Corporate/ Americas EMEA Asia Consolidated Americas EMEA Asia Consolidated Eliminations Eliminations Net Sales 1,859 1,564 572 (59) 3,936 1,737 1,604 554 (47) 3,848 Adjusted EBITDA 94 49 177 (23) 297 132 114 151 (19) 378 Adjusted Equity Income - 3 105 -