Slide 1: FY 2019 Fourth Quarter Earnings Call
FY 2019 Fourth Quarter Earnings Call November 7, 2019 Improving the experience of a world in motion FY 2019 Fourth Quarter Earnings Call / November 7, 2019
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 Mark Oswald Vice President, Global Investor Relations Business update Douglas Del Grosso President and Chief Executive Officer Financial review Jeffrey Stafeil Executive Vice President and Chief Financial Officer Q&A FY 2019 Fourth Quarter Earnings Call / November 7, 2019 3 Adien
Slide 4: Recent developments key takeaways
Recent Q2 2018developments key takeaways > Despite being down y-o-y, Adient’s Q4 financial results improved sequentially for the third consecutive quarter despite persistent headwinds in China and the impact of a labor strike at General Motors ‒ Q4 revenue of $3.9B, down $224M or 5% y-o-y (down 4% e
Slide 5: New business wins and launches
New business wins and launches Select wins Recent and upcoming launches BMW X5 Mercedes GLC Ford Transit Mercedes GLB Chevrolet Onix Toyota Corolla • China • China • EMEA • Americas • Americas • Americas • New business • New business • Replacement • Launched in Q4 • Launched in Q4 • Launched in Q4 T
Slide 6: Adient's turnaround plan is on track
Adient’s turnaround plan is on track — successfully stabilized the business in FY19 ➢ ➢ ➢ ➢ ➢ ➢ ➢ FY 2019 Fourth Quarter Earnings Call / November 7, 2019 6 Adient – Improving the experience of a world in motion
Slide 7: Transitioning to the improvement phase of turnaround
Transitioning to the improvement phase of turnaround Launch Operational Cost Commercial management improvement reduction discipline ➢ Better launch ➢ Continuous ➢ SG&A savings ➢ Focused on execution improvement ➢ Material value returns ➢ Reduced throughout ➢ Lean activities chain number of product ➢
Slide 8: China market and other significant macro influences
China market and other significant macro influences China market > Consumer confidence and sentiment remains cautious amid fears of a global economic slowdown and geopolitical concerns Macro economy > Vehicle sales and production expected to be impacted by overall macro > Latest economic data sugges
Slide 9: Financial Review
FINANCIAL REVIEW FY 2019 Fourth Quarter FY 2019 Fourth Quarter Earnings Call / November 7, 2019 9 Adient Adient– Improving – Improving thethe experience of of experience a world in in a world motion motion
Slide 10: FY 2019 Q4 key financials
FY 2019 Q4 key financials As Reported As Adjusted 1 $ millions, except per share data FY19 Q4 FY18 Q4 FY19 Q4 FY18 Q4 B/(W) Revenue $ 3,921 $ 4,145 $ 3,921 $ 4,145 -5% EBIT $ 102 $ (1,069) $ 138 $ 148 -7% Margin 2.6% (25.8)% 3.5% 3.6% EBITDA N/A N/A $ 215 $ 250 -14% Margin 5.5% 6.0% Memo: Equity Inc
Slide 11: FY 2019 full year key financials
FY 2019 full year key financials As Reported As Adjusted 1 $ millions, except per share data FY19 FY18 FY19 FY18 B/(W) Revenue $ 16,526 $ 17,439 $ 16,526 $ 17,439 -5% EBIT $ 229 $ (1,020) $ 489 $ 766 -36% Margin 1.4% * 3.0% 4.4% EBITDA N/A N/A $ 787 $ 1,196 -34% Margin 4.8% 6.9% Memo: Equity Income
Slide 12: Revenue – consolidated & unconsolidated
Revenue – consolidated & unconsolidated Consolidated sales Unconsolidated Seating and SS&M $ in Millions $4,145 $2,222 M Year-over- $(160) year growth $(64) $3,921 $1,924 M - 13% Down 11% excluding FX Q4FY18 Volume/Pricing FX Q4FY19 FY18 Q4 FY19 Q4 Unconsolidated Interiors Regional Performance (cons
Slide 13: Americas and EMEA driving H2 improvement
Americas and EMEA driving H2 improvement Adj.-EBITDA performance H2 vs H1 FY19 > Turnaround actions implemented in 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 H2 vs
Slide 14: Q4 FY19 Adjusted-EBITDA
Q4 FY19 Adjusted-EBITDA > Q4FY19 Adj.-EBITDA of $215M, $ in millions down $35M y-o-y. Primary drivers of the y-o-y performance included: $250 ‒ The impact of lower volumes & mix within Americas and Asia, a decline in equity income and increased SG&A $(20) $215 costs (non-recurrence of benefit 6.0% $
Slide 15: Q4 FY19 Adjusted-EBITDA: Americas
Q4 FY19 Adjusted-EBITDA: Americas > Q4FY19 Adj. EBITDA of $64M, down $6M y- o-y. Primary drivers of the y-o-y performance Business performance: • $25M Launch / Ops Waste / Tooling included: • $4M Freight • $(2)M Operating performance ‒ Increased SG&A costs (driven primarily by • $(9)M Pricing $(2)M
Slide 16: Q4 FY19 Adjusted-EBITDA: EMEA
Q4 FY19 Adjusted-EBITDA: EMEA Business performance: • $7M Freight > Q4FY19 Adj. EBITDA of $47M, down $8M • $8M Pricing $ in millions y-o-y. Primary drivers of the y-o-y • $(3)M Material $5M Net material margin • $(13)M Launch / Ops Waste / Tooling performance included: • $(9)M Operating performance
Slide 17: Q4 FY19 Adjusted-EBITDA: Asia
Q4 FY19 Adjusted-EBITDA: Asia Business performance: > Q4FY19 Adj. EBITDA of $126M, down • $(1)M Pricing $10M Net material margin • $11M Material $20M y-o-y. • $2M Launch / Ops Waste / Tooling > Lower volume $(17)M and equity $ in millions income $(16)M resulting from a significant reduction in China
Slide 18: Cash flow & debt
Cash flow & debt 1 Free Cash Flow (1) 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 (+/-)
Slide 19: FY20 Outlook
FY20 Outlook FY 2019 Fourth Quarter Earnings Call / November 7, 2019 19 Adient Adient– Improving – Improving thethe experience of of experience a world in in a world motion motion
Slide 20: FY20 Outlook – executive summary and key assumptions
FY20 Outlook – executive summary and key assumptions > Key focus areas (operational improvements, launch management, cost containment and commercial discipline) expected to drive earnings Key assumptions growth in FY20 vs. FY19 Production* > Improved performance for the metals business is expected t
Slide 21: FY20 Outlook – consolidated sales
FY20 Outlook – consolidated sales • Lower industry production (NA, Europe, Asia (excl. China)) > FY20 consolidated sales expected to range • Further volume declines based on customer release between $15.6B and $15.8B schedules not reflected in third party estimates Includes • GM labor strike impact
Slide 22: FY20 Outlook - Adj.-EBITDA
FY20 Outlook - Adj.-EBITDA Positive influences Expected headwinds Delivered on FY19 commitment… H2 > H1 Overcoming just despite GM strike and ➢ Operational improvements including: ➢ Impact of negative volume / mix under $200M in greater than expected expected headwinds ➢ Lower launch activity & cost
Slide 23: FY20 Outlook – key financial metrics
FY20 Outlook – key financial metrics Consolidated sales > Forecasted y-o-y decline in revenue expected to have a greater impact in the second half of FY20 compared with first half FY20 ~$15.6B - $15.8B > Q1FY20 revenue expected to be modestly lower compared with Q4FY19 Adj.-EBITDA > Overcoming just
Slide 24: Appendix and Financial Reconciliations
APPENDIX AND FINANCIAL RECONCILIATIONS FY 2019 Fourth Quarter FY 2019 Fourth Quarter Earnings Call / November 7, 2019 24 Adient Adient– Improving – Improving thethe experience of of experience a world in in a world motion motion
Slide 25: 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 26: 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 27: 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 28: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted Net Income Adjusted Net Income Adjusted Diluted EPS Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended September 30 September 30 30-Sep September 30 (in $ millions) 2019 2018 2019 2018 2019 2018 2019 2018 Net income attributable to Adient
Slide 29: Non-GAAP reconciliations
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) 2019 2018 2019 2018 Income (loss) Income (loss) before Income Tax impact Effective before Income Ta
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