Lear Corporation · NYSE:LEA
Lear — Auto Analysts of New York Conference 2008
31 slides from Lear's conference presentation, Jan 17, 2008
Slide 1: Auto Analysts of New York Conference
Exhibit 99.1 Auto Analysts of New York Conference January 17, 2008 1
Slide 2: Agenda
Agenda 2007 Accomplishments Bob Rossiter, Chairman, CEO and President 2008 Outlook and Sales Backlog Update Matt Simoncini, Chief Financial Officer Restructuring Status and Major 2008 Launches Jim Vandenberghe, Vice Chairman 2
Slide 3: Major 2007 Accomplishments
Major 2007 Accomplishments Significant progress on global restructuring actions Improved financial results; strengthened balance sheet Completed divesture of North American Interior business Seating business performing well; steps taken to improve Electrical and Electronic business Maintained qualit
Slide 4: Improved Financial Results
Improved Financial Results Net Sales And Core Operating Earnings** Net Sales* Core Operating Earnings* (in billions) (in millions) ≈$15.3 Excludes Interior business: * Excludes Interior business: - 2005 -- $3.1 billion - 2005 -- $(77) million - 2006 -- $3.2 billion - 2006 -- $(161) million - 2007 --
Slide 5: Free Cash Flow Returning To Historical Trend Levels
Free Cash Flow Returning To Historical Trend Levels* in millions ~$400+ 2005 Unusual Factors Change in customer payment terms (four day delay resulted in full month impact to reported cash flow) Historically large backlog / launch schedule and associated investment Customer production volatility Inc
Slide 6: Lear Positioned To Realize Future Value Through IAC Joint Ventures
Lear Positioned To Realize Future Value Through IAC Joint Ventures* IAC is a global market leader with annual sales of about $5.5 billion: Products include door panels, flooring and acoustics, instrument panels and cockpits, overhead systems and interior trim Joint venture is a platform for industry
Slide 7: Strong Market Position In Core Products
Strong Market Position In Core Products Seating Systems #2 globally, in a market estimated to be $45 to $50 billion in size: - #2 in North America - #3 in Europe - #2 in China and #1 in India Lear is the highest quality major seat manufacturer for the past 6 years, according to J.D. Power Seat Surve
Slide 8: Opportunity To Grow Electrical and Electronic Business
Opportunity To Grow Electrical and Electronic Business Power distribution is a critical system within every vehicle Expertise in system architecture and integration Ability to adapt new technologies into automotive applications Core capabilities in areas of increasing consumer demand (e.g., premium
Slide 9: Aggressively Growing Total Asian Sales
Aggressively Growing Total Asian Sales*** 2007 Highlights Total Asian Sales** Significant market position ($ in millions) in China: ~$2,850 Total sales > $700 million* $2,200 Supply 20+ OEMs on > 100 vehicle programs $1,850 19 manufacturing facilities $1,450 with approximately 6,000 employees $950 L
Slide 10: 2008 Outlook and Sales Backlog Update
2008 Outlook and Sales Backlog Update 10
Slide 11: 2008 Outlook: Production And Commodity Assumptions
2008 Outlook Production And Commodity Assumptions* Production (units in millions) Actual 2008 Status 2005 2006 2007 Outlook 2008 Trend North America Total Industry 15.8 15.3 15.0 14.4 Big Three 10.7 10.0 9.4 8.6 Europe Total Industry 18.7 19.0 20.0 20.1 Lear's Top 5 Customers 9.5 9.7 10.2 10.0 Euro
Slide 12: Positive Factors In 2008 Help Lear Mitigate Adverse Production Environment
Positive Factors In 2008 Help Lear Mitigate Adverse Production Environment in North America* Net new business of $330 million in 2008 Growth in Asia and with Asian manufacturers globally Increasing savings from global restructuring actions Ongoing operating efficiencies and cost reductions Continuin
Slide 13: Seating Business Performing Well
Seating Business Performing Well* Seating Margin Lear’s Competitive Strengths Global Footprint /Platform Breadth Customers include all major OEMs “Best-in-class” expertise across platforms Global program launch executions R&D leveraged globally Customer Focused Industry leading benchmarking capabili
Slide 14: Electrical And Electronic Business To Improve
Electrical And Electronic Business To Improve* Electrical and Electronic Margin Business Assessment Market Environment Fierce global competition depressing margins Increasing consumer demand for electrical content in vehicles Core Strategies Further develop system integration capabilities Achieve lo
Slide 15: 2008 Outlook: Net Sales
2008 Outlook Net Sales** Net Sales* 2008 Net Sales Outlook (in billions) ≈$330 million of net new Seating, Electrical and Electronic business Favorable foreign exchange of about $350 million, primarily 6% stronger Euro Adverse industry production, unfavorable platform mix and pricing of about $1 bil
Slide 16: 2008 Outlook: Core Operating Earnings – Core Businesses
2008 Outlook Core Operating Earnings – Core Businesses ** Core Operating Earnings* 2008 Core Operating (in millions) Earnings Outlook Adverse industry production and unfavorable platform mix in North America Challenging pricing environment Increasing restructuring savings Operating efficiencies and
Slide 17: Sales Backlog Update
Sales Backlog Update* Composition of Sales Backlog** 2008 – 2010 Sales Backlog** ($ in millions) By Product: Seating -- 30% Electrical and Electronic -- 70% By Region: North America -- $(290)M Europe -- $550M Asia -- $280M South America -- $100M By Customer Type: Big Three -- $(450)M European -- $66
Slide 18: Restructuring Status and Major 2008 Launches
Restructuring Status and Major 2008 Launches 18
Slide 19: Restructuring Status: 2005 - 2007 Restructuring Plan
Restructuring Status 2005 - 2007 Restructuring Plan* Objectives: eliminate excess capacity, improve operating efficiency in response to structural changes within the industry and accelerate our move to low-cost countries. Present Status: closure of 19 manufacturing facilities, numerous consolidation
Slide 20: Restructuring Status: 2008 – 2010 Restructuring-Related Actions
Restructuring Status 2008 – 2010 Restructuring-Related Actions* Restructuring spending peaked at $180 million in 2007, as we completed our major initiative and pulled ahead some actions previously planned for 2008 and 2009 For 2008, we forecast restructuring costs are expected to be in the range of
Slide 21: Restructuring Status: Evolving Component Manufacturing Footprint
Restructuring Status Evolving Component Manufacturing Footprint* Restructuring Actions Reducing Component Facilities in High-Cost Countries and Increasing the Percentage of Lear’s Components Originating in Low-Cost Countries Lear Component Plants in High-Cost Countries Today 40% of Lear’s components
Slide 22: We Are Also Investing In Infrastructure In The Asia-Pacific Region
We Are Also Investing In Infrastructure In The Asia-Pacific Region* China India 19 manufacturing facilities, 6 new in 2007 7 manufacturing facilities, 3 new in 2007 2 new engineering/R&D centers in 1 engineering center in Mumbai Shanghai (includes CTO activities) 4 program launches in 2007 19 progra
Slide 23: Major 2008 Launches: North America
Major 2008 Launches North America BMW X6 Mazda 6 (Seating, Electronics) (Seating, Wire Harness) Lincoln MKS Chevrolet Aveo (Seating) (Seating) 23
Slide 24: Major 2008 Launches: Europe
Major 2008 Launches Europe Opel Vectra - Seating Fiat Lancia Delta - Seating Other European Launches Ford Kuga – Wire Harness, Smart Junction Box BMW 5 & 7 Series – Smart Junction Box Alfa Romeo 159 – Seating Mercedes GLK – Seating Nissan Qashqai L– Seating, Smart Junction Box Citroen Microspace – S
Slide 25: Major 2008 Launches: Rest of World
Major 2008 Launches Rest of World South America China Other Asia VW Gol - Seating Chery B13 - Seating Ford/Mazda Ranger - Seating Japan Citroen C4 Seating Chery H13 Seating Mazda 3/Axela Wire Harness Chery QQ Seating Fiat Siena Seating Nissan Cube Wire Harness, SJB DFM BF Seating, Wire Harness Nissa
Slide 26: Summary and Outlook
Summary and Outlook* Lear is financially sound Two consecutive years of improving financial results Strong cash generation restored No significant near-term debt maturities Making progress on strategic priorities Completed divestiture of Interior business Increasing savings from global restructuring
Slide 27: Q and A Session
Q and A Session Ph Aes. is y 8
Slide 28: Non-GAAP Financial Information
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 “income before interest, other expense, income taxes, res
Slide 29: Non-GAAP Financial Information: Core Operating Earnings
Non-GAAP Financial Information Core Operating Earnings (in millions) 2006 2005 Pretax loss $ (655.5) $ (1,187.2) Divestiture of Interior business 636.0 - Goodwill impairment charges 2.9 1,012.8 Interest expense 209.8 183.2 Other expense, net * 87.8 96.6 Costs related to restructuring actions 105.6 1
Slide 30: Non-GAAP Financial Information: Free Cash Flow
Non-GAAP Financial Information Free Cash Flow (in millions) 2001 2002 2003 2004 2005 2006 Net cash provided by operating activities $ 829.8 $ 545.1 $ 586.3 $ 675.9 $ 560.8 $ 285.3 Net change in sold accounts receivable (245.0) 122.2 298.1 70.4 (411.1) 178.0 Net cash provided by operating activities
Slide 31: Forward-Looking Statements
Forward-Looking Statements 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. Actual results may differ materially from anticipated results as a