Slide 1: FY 2017 Second Quarter Earnings Call
FY 2017 Second Quarter Earnings Call April 28, 2017 Improving the experience of a world in motion
Slide 2: Forward looking statement
Forward looking statement 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” wi
Slide 3: Agenda
Agenda Introduction Mark Oswald Executive Director, Global Investor Relations Second quarter highlights Bruce McDonald Chairman and Chief Executive Officer Financial review Jeffrey Stafeil Executive Vice President and Chief Financial Officer Q&A Q2 2017 Earnings / April 2017 3 Adient – Improving the
Slide 4: Highlights
Highlights > Strong Q2 results delivered earnings growth and margin expansion, building on ADNT’s positive momentum ‒ Adjusted-EBIT increased 12% to $334M (margin of 7.9%, up 100 bps) 1 ‒ Adjusted-EPS increased 16% to $2.50 1 ‒ Net debt of $2.6B and net leverage of 1.64x at March 31, 2017 1 > Full y
Slide 5: Highlights
Highlights > Auto Shanghai 2017 ‒ Debuted the Integrated Luxury Seat combining contemporary and advanced features and functions, offering a luxurious look and feel to high-end passengers ‒ Showcased “Luxury by Design” concept – a wide range of production-ready seating solutions in comfort, trim, use
Slide 6: FY17 Q2 key product launches
FY17 Q2 key product launches Strengthening our leading position across customers, segments, and regions… Range Rover Evoque Nissan Rogue Renault Clio VW Brazil United States Slovenia Romania Mitsubishi Pajero Nissan Patrol Nissan Caravan Land Rover Sport Indonesia Japan Japan Brazil Q2 2017 Earnings
Slide 7: Current operating environment
Current operating environment > Global production outlook fairly stable ‒ Near-term adjustments in U.S. (primarily passenger cars) > Strong growth in unconsolidated joint ventures > Growth initiatives gaining momentum ‒ Solid progress with adjacent market opportunities (e.g. aircraft seating) > Marg
Slide 8: Financial Review FY2017 Second Quarter
FINANCIAL REVIEW FY2017 Second Quarter Q2 2017 Earnings / April 2017 Adient – Improving the experience of a world in motion
Slide 9: FY2017 Q2 key financials
FY2017 Q2 key financials As Reported As Adjusted 1 $ millions, except per share data FY17 Q2 FY16 Q2 FY17 Q2 FY16 Q2 B/(W) Reported revenue $ 4,212 $ 4,298 $ 4,212 $ 4,298 -2% EBIT $ 286 $ 86 $ 334 $ 298 +12% Margin 6.8% 2.0% 7.9% 6.9% EBITDA N/A N/A $ 423 $ 384 +10% Margin 10.0% 8.9% Memo: Equity I
Slide 10: Revenue – consolidated & unconsolidated
Revenue – consolidated & unconsolidated > Consolidated sales challenged in the near-term resulting from Consolidated sales $ in Millions capital constraints in prior years (pre-2016) $4,298 ‒ FX and volume headwinds primary drivers of y-o-y decrease ($40) $4,212 ($46) > Strong growth continued in AD
Slide 11: EBIT & Adjusted-EBIT
EBIT & Adjusted-EBIT > Adj-EBIT expanded to $334M, up $36M y-o-y ‒ Seating up 11% y-o-y to $312M $ in Millions $17 $9 $34 $334 ‒ Interiors up 29% y-o-y to $22M ($24) $298 > Primary drivers: ‒ SG&A improvement reflecting the benefits of restructuring actions and 7.9% 6.9% lower corporate expenses ‒ I
Slide 12: Effective tax rate
Effective tax rate > Q2 and first half 2017 effective tax rate running higher vs. original plan (14-15% vs 10-12%) ‒ Geographic composition of profits primary driver (U.S. represents a larger share of profit vs. original expectations) ‒ Rate on consolidated operations expected at just under 20%; Chi
Slide 13: Cash flow & debt
Cash flow & debt 1 Free Cash Flow (1) Debt FY17 Actual > Prepaid $100M of the $1.5B term loan > Net leverage of 1.64x at March 31, 2017; expect (in $ millions) Q2 FY17 H1 FY17 to be ~1.5x at year-end (1) Adjusted EBITDA $ 423 $ 800 Net Debt and Net Leverage (-) Interest Expense (33) (68) March 31 Se
Slide 14: Looking forward: FY2017 guidance
Looking forward: FY2017 guidance Memo: Updated Guidance Prior guidance Negatively impacted by foreign exchange, and near-term production Revenue $16.15 - $16.25 billion $16.8 - $17.0 billion adjustments ADJ. EBIT $1.24 - $1.26 billion $1.15 - $1.20 billion Strong operating performance driving higher
Slide 15: Adient's Key Investment Thesis
Adient’s Key Investment Thesis MARKET POSITION ˃ Broadest and most complete range of seating products ˃ Unparalleled customer diversity– market leadership in North America, Europe and China (unique and longstanding position in China through JV structure); support all major automakers (190+ active pl
Slide 16: Appendix and Financial Reconciliations
A PPEN D IX A N D FIN A N C IA L R EC ON C ILIATION S FY2017 Second Quarter Adient / Q2 2017 Earnings / 4-28-17
Slide 17: Non-GAAP financial measurements
Non-GAAP financial measurements > Adjusted EBIT, Adjusted EBIT margin, Pro-forma adjusted EBIT, Pro-forma adjusted EBIT margin, Pro-forma adjusted EBITDA, Adjusted effective tax rate, Adjusted net income attributable to Adient, Pro-forma adjusted net income attributable to Adient, Adjusted earnings
Slide 18: Non-GAAP reconciliations
Non-GAAP reconciliations EBIT, Pro-forma Adjusted EBIT, Pro-forma Adjusted EBITDA FY16 Actual FY17 Actual Last Twelve Months Ended Actual Actual Actual Actual (in $ millions) Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY17 Jun '16 Sep '16 Dec '16 Mar '17 Net income attributable to Adient $ (
Slide 19: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted Net Income Adjusted Net Income Adjusted Diluted EPS Three Months Ended Three Months Ended March 31 March 31 (in $ millions) 2017 2016 2017 2016 Net income attributable to Adient $ 192 $ (779) Diluted earnings per share as reported $ 2.04 $ (8.31) Separation costs (1
Slide 20: Non-GAAP reconciliations
Non-GAAP reconciliations Free Cash Flow Three Months Ended Six Months Ended Adjusted EBITDA to Free Cash Flow March 31 March 31 Three Months Six Months (in $ millions) 2017 2016 2017 2016 Ended March 31 Ended March 31 (in $ millions) 2017 2017 Operating cash flow $ 156 $ 204 $ 143 $ 294 Less: Capita
Slide 21: Non-GAAP reconciliations
Non-GAAP reconciliations Net Debt and Adjusted Equity Income Net Debt and Net Leverage Adjusted Equity Income Three Months Ended March 31 September 30 March 31 (in $ millions) 2017 2016 (in $ millions) 2017 2016 Cash (1) $ 729 $ 550 Equity income as reported $ 91 $ 77 Purchase accounting amortizatio
Slide 22: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted Income before Income Taxes, Financing Charges, and Segment Adjusted EBIT Adjusted Income before Income Taxes Three Months Ended March 31 (in $ millions) 2017 2016 Income before Income Taxes Tax impact Effective tax rate Income before Income Taxes Tax impact Effectiv
Slide 23: Prior Period Results
Prior Period Results FY16 Actual FY17 Actual Last Twelve Months Ended Actual Actual Actual Actual Actual Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY17 Jun '16 Sep '16 Dec '16 Mar '17 Sales ($Bils.) $ 4,162 $ 4,233 $ 4,298 $ 4,362 $ 3,944 $ 4,038 $ 4,212 $ 17,055 $ 16,837 $ 16,642 $ 16,556