Lear Corporation · NYSE:LEA
Lear — Auto Analysts of New York Detroit Auto Conference 2005
32 slides from Lear's conference presentation, Jan 13, 2005
Slide 1: Auto Analysts of New York Detroit Auto Conference
fast forward advance relentlessly world's leading automotive interior supplier R Auto Analysts of New York Detroit Auto Conference January 13, 2005 Exhibit 99.2
Slide 2: Agenda
Agenda I. Company Overview Bob Rossiter, Chairman & CEO Operating Review Jim Vandenberghe, Vice Chairman 2005 Financial Guidance and Sales Backlog Update Dave Wajsgras, SVP & CFO Panel Q & A Session
Slide 3: Company Overview
(LEAR... Company Overview
Slide 4: Highlights of Today's Presentation
Highlights of Today's Presentation Global business conditions are challenging Following a consistent, disciplined strategy to deliver profitable growth Three-year sales backlog increases to $3.8 billion Solid 2005 financial outlook; dividend increased
Slide 5: Business Conditions
Business Conditions Continued mixed economic signals North American and European vehicle production down in first quarter Raw material prices negatively impacting earnings Fierce global competition for market share Significant Adverse Earnings Impact In First Quarter; Improving Outlook For Balance O
Slide 6: A Balanced, Long-Term Approach to Creating Shareholder Value
We Have a Balanced, Long-Term Approach to Creating Shareholder Value Leverage our core capabilities as a leader in automotive interiors to profitably grow our business worldwide; Deliver the highest quality and customer satisfaction in the industry Expand our presence in Asia and with Asian manufact
Slide 7: Asian Strategy
Asian Strategy Leverage JVs and strategic partnerships to support Japanese and Korean OEMs globally Support growth of traditional North American and European customers in Asia Expand low-cost manufacturing and engineering capability Continue to expand presence in China
Slide 8: Operating Review
(LEAR... Operating Review
Slide 9: Operating Review
Operating Review Strategy to mitigate the impact of higher raw material prices Continued emphasis on quality and customer satisfaction Investment in new facilities to support growth and low-cost initiatives Significant new product launch year, including GM total interior integrator program Content p
Slide 10: Strategy to Mitigate Higher Raw Material Prices
Strategy to Mitigate Higher Raw Material Prices Supply base compression Re-sourcing - develop new sources of supply In-sourcing - fill open capacity where appropriate Lear's Cost Technology Optimization process Low-cost country sourcing and engineering Supplier Lean Manufacturing and Six Sigma Furth
Slide 11: Highest Quality Seat Manufacturer: J.D. Power Results
Sustained low level of TGW in 2004 Over 30% improvement since 1999 Seven Best-in-Segment vehicles Midsize and full-size car / premium sports car Light duty and heavy duty full-size pickup Entry luxury SUV / full-size van Highest Quality Seat Manufacturer Supplying Multiple OEMs Source: 2003 J.D. Pow
Slide 12: 2005 Key Product Launches
Americas Cadillac DTS / Buick LeSabre Total interior integrator program replacement DCX Dodge Ram Truck Seats, doors, IP, overhead systems Ford Explorer / Mountaineer Seats, doors, electrical distribution Hyundai Sonata Seats, electrical distribution International Audi A6 - China Seats BMW 3-Series
Slide 13: Total Interior Integrator Program Update
Total Interior Integrator Program Update for Cadillac DTS / Buick LeSabre Replacement Program meeting financial targets Meeting harmony and craftsmanship targets Best-in-class rating for seat comfort Manufacturing readiness on target Vehicles debut at Chicago Auto Show in February On Track To Delive
Slide 14: Ongoing Manufacturing Footprint Changes
Ongoing Manufacturing Footprint Changes Investing In Footprint Actions Globally To Support Growth Opportunities And Low-Cost Country Strategy Efficiency Actions Downsizing, closures and relocations impacted 15 facilities in 2004 Growth Opportunities New facilities opened to support business in China
Slide 15: Growing Our Content Per Vehicle
North American CPV to Improve in 2005* European CPV Growth to Moderate in 2005* Please see slide titled "Forward-Looking Statements" at the end of this presentation. 1998 Q2 2003 2000 2004 2005 2003 1Q04 TGR 12.4 596 553 584 308 357 West 30.6 31.6 North 45.9 43.9 1998 2000 2004 2005 TGR 12.4 247 353
Slide 16: Focused Strategy Has Allowed Lear to Deliver Solid Results
Focused Strategy Has Allowed Lear to Deliver Solid Results Core operating fundamentals remain strong Proactively addressing near term challenges Investing in sales growth and customer diversification Well positioned to continue to deliver superior value Despite Industry Challenges, Long Term Outlook
Slide 17: 2005 Financial Guidance
(LEAR... 2005 Financial Guidance
Slide 18: 2005 Production Stable in North America and Europe
North America (in millions) 2005 Production Stable In North America And Europe 2005 Outlook Vehicle Production Assumptions* 2004 Forecast 2005 Forecast 3rd Qtr 4th Qtr East 15.8 15.7 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 0.6 2004 Forecast 2005 Forecast 3rd Qtr 4th Qtr East 18.5 18
Slide 19: 2005 Outlook: Net Sales
2005 Outlook Net Sales* Record Net Sales In 2005 Anticipated 2002 2003 2004 Guidance 2005 Guidance East 14.4 15.8 16.8 17.6 West 30.6 0.4 North 45.9 46.9 45 (in billions) ^ $16.8 $15.8 ^ $17.6 - $18.0 Please see slide titled "Forward-Looking Statements" at the end of this presentation.
Slide 20: 2005 Outlook: Net Income Per Share
Range of $5.00 to $6.00 per share, depending on: Production levels & platform mix Impact on supply chain from sustained high level of raw material prices Customer productivity negotiations 2005 Outlook Net Income Per Share* 2005 Net Income Per Share Impacted By Uncertainty Surrounding Production / M
Slide 21: Capital Spending
Capital Spending* 2002 2003 2004 Guidance 2005 Guidance CapX 273 376 400 425 Increase in Net Sales 75 (in millions) $376 ^ $400 Please see slide titled "Forward-Looking Statements" at the end of this presentation. $475 % of Revenue 2.4% ^ 2.4% ^ 2.5% 2005 and 2006 backlog of $2.9 billion Low-cost co
Slide 22: Full Year 2005 Financial Guidance
Net Sales $17.6 - $18.0 billion Net Income Per Share $5.00 - $6.00 Interest Expense $170 - $175 million Tax Rate 25% - 27% Depreciation $400 - $425 million Capital Expenditures $425 - $475 million Full Year 2005 Financial Guidance* Please see slide titled "Forward-Looking Statements" at the end of t
Slide 23: Sales Backlog Update
(LEAR... Sales Backlog Update
Slide 24: Three-Year Backlog Growth
Interior And Electronic / Electrical Represent Half Of Three-Year Backlog European And Asian Customers Represent Almost Half Of Three-Year Backlog Backlog Growth* Previous Status New Status East 1.4 1.6 Please see slide titled "Forward-Looking Statements" at the end of this presentation. $1,400 $1,5
Slide 25: 2005-2007 Backlog
2004 2005 2006 2007 2008 East 750 1550 1350 900 500 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 2005 - 2007 Backlog* Cumulative $1,350 $3,800 $2,900 (in millions) Please see slide titled "Forward-Looking Statements" at the end of this presentation. $1,550 $900 Upside Opportunity In 2007 From Op
Slide 26: Sales Backlog Methodology
Sales Backlog Methodology New Method (3 years) Awarded business Rolling off / resourced business Sales Backlog Increases comparability with peers Captures 'full value' of new business awards Reduces fluctuations due to program timing uncertainty New Method Provides A Simplified Reflection Of New Bus
Slide 27: Dividend Increase
Dividend Increase Increased quarterly dividend from $0.20 to $0.25 per share Payable on March 14, 2005, to shareholders of record February 25, 2005 Indicative annual dividend rate for 2005 of $1.00 per share Dividend policy going forward: Payout levels reviewed annually in connection with financial
Slide 28: Summary
Summary Overall Company strategy remains unchanged 2005 financials remain strong despite challenging environment New sales backlog supports continued growth Dividend increase reflects Company's confidence in the long term Lear Remains Focused On Delivering Superior Value To Our Customers And Our Sha
Slide 29: Advance Relentlessly
ADVANCE RELENTLESSLY(tm) www.lear.com LEA NYSE Listed R
Slide 30: Use of Non-GAAP Financial Information
The Company has provided information regarding "free cash flow" and net income per share adjusted to exclude a one-time tax benefit (non-GAAP financial measures) in this presentation. Free cash flow represents net cash provided by operating activities before the net change in sold accounts receivabl
Slide 31: Free Cash Flow and Adjusted Net Income Per Share
2003 Free Cash Flow (in millions) Net cash provided by operating activities $ 586.3 Net change in sold accounts receivable 298.1 Net cash provided by operating activities before net change in sold accounts receivable 884.4 Capital expenditures (375.6) Free cash flow $ 508.8 Net Income Per Share Adju
Slide 32: 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. Actual results may differ materially from anticipated results as a result of certain risks and uncertainties
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