Slide 1: FY2022 Third Quarter Earnings Call
FY2022 Third Quarter Earnings Call August 5, 2022 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 FY2022 Third Quarter Earnings Call Adient – PUBLIC 3
Slide 4: Remaining focused and executing our plan despite the challenging operating environment
Remaining focused and executing our plan despite the challenging operating environment Despite encouraging signs certain negative external factors began to moderate toward the end of the quarter (i.e., lifting of the widespread COVID lockdowns in China and Key Q3FY22 External factors softening commo
Slide 5: Operating environment remains challenging
Operating environment remains challenging Adient operations performing Trending Headwinds Q3FY22 Impact* well outside of temporary Conflict in Ukraine > Supply chain disruptions (semiconductor and COVID operating inefficiencies continues; related) resulting in production downtime and lost (inefficie
Slide 6: Strengthening our leading position and remaining a supplier of choice
Strengthening our leading position and remaining a supplier of choice > Adient continues to win new business -- across powertrains (ICE and EVs), Toyota New EV components (foam, trim, metals, and complete seat), and customers (legacy and Complete Seat new entrants) Foam, Metals > Balance in / balanc
Slide 7: In process and upcoming launches
In process and upcoming launches Program Highlights Toyota Sequoia Americas > This program contains a high level of vertical integration including foam, trim, and metals > Associated capex benefited from a large degree of capital re- use (i.e., third row seats leverage existing JIT footprint and man
Slide 8: Advancing a sustainable future
Advancing a sustainable future > We approach our operations with a sustainable mindset that drives continuous progress toward our ESG goals. Examples include: Examples of leather alternatives − Sustainability workshops: We work with all global customers (legacy and new entrants) to provide seating s
Slide 9: Well positioned entering FY2023
Well positioned entering FY2023 It appears one of two scenarios is likely to play out in FY23 *… > Adient operations performing Scenario 2 well outside of temporary Scenario 1 o Relatively flat y-o-y production (shift o Global vehicle production exceeds FY22, from supply constrained to demand operat
Slide 10: Financial Review
Financial Review FY2022 Third Quarter Adient – PUBLIC
Slide 11: Q3 FY2022 Key Financials
Q3 FY2022 Key Financials As Reported As Adjusted 1 $ millions, except per share data Q3 FY22 Q3 FY21 Q3 FY22 Q3 FY21 B/(W) Consolidated $ 3,485 $ 3,242 $ 3,485 $ 3,242 7% Revenue $3,425 Q3FY21 pro forma adjusted for EBIT $ 35 $ 44 $ 64 $ 37 73% strategic/footprint actions Margin 1.0% 1.4% 1.8% 1.1%
Slide 12: Q3 FY2022 Revenue: Consolidated and Unconsolidated Sales
Q3 FY2022 Revenue: Consolidated and Unconsolidated Sales Regional Performance Consolidated sales (consolidated sales y-o-y growth (vs. Q3 FY21 pro forma) by region) 1, 2, 3 Includes $96M of $232 Q3 S&P material economics Q3 recoveries Production $183 Americas 15.9% 11.9% $(172) $3,485 EMEA 5.8% 3.6%
Slide 13: Q3 FY22 Adjusted-EBITDA
Q3 FY22 Adjusted-EBITDA Improved net material margin and launch/ops waste/tooling mostly offset by increased Q3FY22 adjusted EBITDA of $143M, up $18M y-o-y (adjusting for freight, labor and overhead $21 $10 portfolio actions executed in FY21) $ in millions $7 $(5) $(5) $(3) > External factors includ
Slide 14: Cash flow
Cash flow Free Cash Flow (1) Key drivers impacting YTD FCF: FY22 FY21 (-) Lower consolidated y-o-y earnings (driven (in $ millions) Q3 FY22 YTD Q3 FY21 YTD by lower volumes -- primarily supply chain related) Adjusted-EBITDA (Excl. Equity income) $ 127 $ 381 79 $ 613 (-) Typical month-to-month workin
Slide 15: Debt and capital structure
Debt and capital structure Net Debt ($ in millions) 6/30/2022 Debt Profile Amount June 30 September 30 (in $ millions) 2022 2021 ABL Revolver, incl. FILO due 2024 (1) $ - Term Loan B due 2028 990 Cash $ 892 $ 1,521 9.00% Secured Notes due 2025 92 Total Debt 2,727 3,696 7.00% Secured Notes due 2026 -
Slide 16: FY22 Outlook – key financial metrics
FY22 Outlook – key financial metrics ~$14.0B > FY22 guidance updated to reflect Adient’s YTD results Consolidated sales Prior: ~$14.2B through June 30, 2022, planned debt paydown and current market conditions (including expected negative ~$640M - $660M Adj.-EBITDA Prior: Significantly lower (>$100M)
Slide 17: Likely factors expected to influence FY23 results
Likely factors expected to influence FY23 results Despite certain negative influences on the horizon heading into next year, Adient will continue to execute actions within its control and leverage numerous positive influences to drive the business forward in FY23 and beyond FY2022 Third Quarter Earn
Slide 18: Appendix and financial reconciliations
Appendix and financial reconciliations FY2022 Third Quarter Adient – PUBLIC
Slide 19: Q3 FY22 Adjusted-EBITDA: Americas
Q3 FY22 Adjusted-EBITDA: Americas Q3FY22 of $70M, up $47M y-o-y (adjusting for portfolio actions executed in FY21) > Numerous external factors including supply chain disruptions (and resulting operating inefficiencies) and increased freight costs continue to have an $ in millions adverse impact on t
Slide 20: Q3 FY22 Adjusted-EBITDA: EMEA
Q3 FY22 Adjusted-EBITDA: EMEA Q3FY22 of $31M, up $10M y-o-y (adjusting for $ in millions portfolio actions executed in FY21) > Numerous external factors including the conflict in the Ukraine and supply chain $3 disruptions (and resulting operating $7 inefficiencies) and increased freight costs had a
Slide 21: Q3 FY22 Adjusted-EBITDA: Asia
Q3 FY22 Adjusted-EBITDA: Asia Q3FY22 of $64M, down $36M y-o-y (adjusting for $ in millions portfolio actions executed in FY21) $8 $100 Key drivers of the y-o-y comparison: $92 > Unfavorable volume and mix impact of ~$12M, driven primarily by the widespread $(12) COVID lockdowns in China $(10) $64 >
Slide 22: 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 23: Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, Adj.-Equity Income
Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, Adj.-Equity Income, and Adj.-EBITDA excluding Adj.-Equity Income Three months ended June 30 2022 2021 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted Net sales $ 3,485 $ - $ 3,485 $ 3,242 $ - $ 3,242 Three Months Ended Cost of sales (1)
Slide 24: Non-GAAP Reconciliations - Adjusted Net Income and Adjusted EPS
Non-GAAP Reconciliations - Adjusted Net Income and Adjusted EPS Three Months Ended Three Months Ended June 30 June 30 (in $ millions) 2022 2021 2022 2021 Net income (loss) attributable to Adient $ (30) $ (71) Net income (loss) attributable to Adient $ (0.32) $ (0.75) Restructuring and impairment cos
Slide 25: 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 June 30 (in $ millions) 2022 2021 Income (loss) Income (loss) before Income Tax impact Effective before Income Tax impact Effective Taxes tax rate Taxes tax ra
Slide 26: Non-GAAP Reconciliations - Pro forma fiscal year 2021 reconciliations
Non-GAAP Reconciliations - Pro forma fiscal year 2021 reconciliations (in $ millions) Net Sales Q1 Q2 Q3 Q4 FY2021 Adjusted EBITDA Q1 Q2 Q3 Q4 FY2021 Americas - as reported: $ 1,737 $ 1,644 $ 1,440 $ 1,343 $ 6,164 Americas - as reported: $ 132 $ 64 $ 23 $ 13 $ 232 Americas footprint actions (20) - -
Slide 27: Segment Performance
Segment Performance Q1 2021 Q1 2022 Corporate/ Corporate/ Americas EMEA AP Consolidated Americas EMEA AP Consolidated Eliminations Eliminations Net Sales 1,737 1,604 554 (47) 3,848 1,498 1,230 784 (32) 3,480 Adjusted EBITDA 132 114 151 (19) 378 9 43 114 (20) 146 Adjusted Equity Income - 3 91 - 94 (1