Lear Corporation · NYSE:LEA
Lear — Auto Analysts of New York Conference 2007
33 slides from Lear's conference presentation, Jan 11, 2007
Slide 1: Auto Analysts of New York Conference
Exhibit 99.1 Auto Analysts of New York Conference January 11, 2007 1
Slide 2: Agenda
Agenda 2006 Accomplishments Bob Rossiter, Chairman and CEO Operating Priorities Doug DelGrosso, President and COO 2007 Outlook and Sales Backlog Update Jim Vandenberghe, Vice Chairman and CFO 2
Slide 3: Major 2006 Accomplishments
Major 2006 Accomplishments Repositioned our product portfolio for future success Core DimensionTM product and technology strategy Continued to aggressively grow total Asian sales Completed refinancing of near-term debt maturities Significantly Strengthened The Company’s Financial Flexibility And Com
Slide 4: Repositioned Our Product Portfolio For Future Success
Repositioned Our Product Portfolio For Future Success* Core Products Strategic Investment Electronic Seating and Electrical Interior Lear’s Product Portfolio 2006 Initiatives Maintained superior quality levels Agreements to contribute Lear’s New product-focused organization operations to IAC joint v
Slide 5: Core Dimension Product And Technology Strategy
Core DimensionTM Product And Technology Strategy SAFETY COMFORT & ENVIRONMETAL CRAFTSMANSHIP COMMONIZATION INFOTAINMENT FLEXIBILITY SYSTEMS CONVENIENCE SYSTEMS SYSTEMS ProTecTM PLuS ComforTecTM EnviroTecTM Lear Premium Lear Flexible Seat Cushion Tilt 2nd Leather Architecture Gen 2 Row Climate Seat S
Slide 6: Continued To Aggressively Grow Total Asian Sales
Continued To Aggressively Grow Total Asian Sales ** Revenue in Asia and with Lear’s Targeted Asian Manufacturers* Asian Sales by Major Market (in millions) Consolidated Non-consolidated China North $3,100 America $2,500 $2,200 Korea & $1,800 India $1,200 $800 Europe Other Asia 2002 2003 2004 2005 20
Slide 7: Completed Refinancing Of Near-Term Debt Maturities
Completed Refinancing Of Near-Term Debt Maturities Lear’s Maturity Profile – as of 12/31/06 ($ in millions) $2,000 $1,700 $1,500 $1,000 $1,000 $600 $500 $400 $300 $73 * $41 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Term Loan Public Bonds Revolving Credit Facility * Assumes 12/31/06 Euro e
Slide 8: Operating Priorities
Operating Priorities 8
Slide 9: Operating Priorities
Operating Priorities* World-class quality and customer service Lowest cost supplier in Seating and Electrical Distribution Increased focus on innovation and new technology Continued sales diversification by customer, region and vehicle segment Return Business To Historic Levels Of Operating Margins
Slide 10: World-Class Quality And Customer Service
Operating Priorities World-Class Quality And Customer Service “Supplier of the Year for Seating Systems” (Global) “Special Recognition for Customer Service” (Global) “Outstanding Effort in Design Engagement” (Europe) “Superior Supplier Diversity and Excellence in Quality” (North America) “Supplier A
Slide 11: Maintaining A Competitive Global Footprint
Operating Priorities Maintaining A Competitive Global Footprint* England Slovakia Turkey TACLE JV - China Seating Components Seat Trim Nissan Seating Guangzhou TACLE JV – Nissan Seating U.S. (Tennessee) Nanjing TACLE JV- Ford / Mazda – Seating Nissan Seating Shanghai Cadillac – Seating CTO Center Me
Slide 12: Evolving Component Manufacturing Footprint
Operating Priorities Evolving Component Manufacturing Footprint* Number of Component Facilities Excluding Interior Business Traditional Low-Cost Today 30% of Lear’s components come from 20 low-cost countries 41 (LCC), including essentially all 35 wire harnesses and seat trim 27 covers Targeting 45%
Slide 13: North America Major 2007 Launches -- High Volume
North America Major 2007 Launches -- High Volume Chevrolet Silverado GMC Sierra Premium Seating (Craftsmanship), including Lear’s Car2UTM Home Automation Flexible Architecture (Commonization) and Door Panels (Comfort & Convenience) 13
Slide 14: North America Major 2007 Launches -- Premium Vehicle
North America Major 2007 Launches -- Premium Vehicle Advanced Front Lighting (Safety) Light Electronics Module (Commonization) Passive Junction Box Module (Commonization) BMW 3-Series Convertible Terminals & Connectors (Commonization) Prefuse Battery Box and Powerfuses (Commonization) Hifi Amplifier
Slide 15: North America Major 2007 Launches -- Asian
North America Major 2007 Launches -- Asian Hyundai Veracruz IntelliTire® (Safety) 15 Seating System (Flexibility)
Slide 16: North America Major 2007 Launches -- Crossover Entries
North America Major 2007 Launches -- Crossover Entries Acura MDX Ford Edge / Lincoln MKX Wire Harnesses (Commonization) IntelliTire® (Safety) BMW X5 SAV – Premium Seating (Craftsmanship), Ford Escape / Mercury Mariner Electronics and Family Entertainment System (Infotainment) Wire Harnesses (Commoni
Slide 17: Europe And Rest Of World Major 2007 Launches
Europe And Rest Of World Major 2007 Launches Europe Rest of World Audi A4 Cadillac SLS (China) Seating, Electronics Seating, Door Panels, Flooring & Acoustics BMW 3-Series M-Sport Chang’an CV6, CV8, CV11, CM5 (China) Seating, Electronics Seating Fiat Bravo Fiat Punto (Brazil) Seating Seating, Electr
Slide 18: Innovation - SoyFoam
Operating Priorities Innovation - SoyFoam™ SoyFoam™ is a soybean oil-based flexible foam material for use in automotive applications Lear, working in partnership with Ford, has developed market-ready seating applications for SoyFoam™ Advantages of SoyFoam™ Lower environmental impact to produce Up to
Slide 19: Innovation - Solid-State Smart Junction Box
Operating Priorities Innovation - Solid-State Smart Junction Box A Smart Junction Box (SJB) is the main hub of a vehicle’s electrical system SJBs control power to electrical features, such as power windows, power door locks, lighting, instrumentation and audio/visual systems S M A Advantages of Soli
Slide 20: 2007 Outlook and Sales Backlog Update
2007 Outlook and Sales Backlog Update 20
Slide 21: 2007 Outlook: Industry Production Key Assumptions
2007 Outlook Industry Production Key Assumptions* 2006 Estimate 2007 Outlook North American Production Total Industry 15.3 mil About Flat Big Three 10.2 mil Down 2% European Production Total Industry 19.0 mil Up 1% Lear's Top 5 Customers 9.6 mil About Flat Euro $1.25 / Euro $1.30 / Euro 21 Please se
Slide 22: 2007 Outlook: Key Lear Factors Turn Positive
2007 Outlook Key Lear Factors Turn Positive* Definitive direction for Interior business Continued sales diversification Growth in Asia and with Asian manufacturers globally Improved launch efficiency and lower launch-related costs Potential for moderation in commodity costs Increasing savings from g
Slide 23: 2007 Outlook: Global Restructuring Initiative
2007 Outlook Global Restructuring Initiative* Lear's major restructuring initiative was launched in mid-2005 in response to depressed industry conditions, changing market trends and significant customer restructuring actions and is expected to be completed in 2007 On track to close 15 facilities, co
Slide 24: 2007 Outlook: Assessment Of Key Financials
2007 Outlook Assessment Of Key Financials* Assuming an industry production environment that is roughly in line with 2006. . . we see the following outlook for 2007: Within our core Seating and Electronic and Electrical businesses: Global new business of about $800 million, Seating margins continue t
Slide 25: 2007 Outlook: Net Sales – Core Businesses
2007 Outlook Net Sales – Core Businesses** Net Sales – Core Businesses* 2007 Net Sales Outlook (in billions) $15.0 $14.5 $800 million of new Seating $14.0 and Electronic and Electrical business Roughly flat industry volume Slightly negative platform mix Favorable foreign exchange, primarily stronger
Slide 26: Margin Improvement Actions For Core Businesses
Margin Improvement Actions For Core Businesses* To offset the adverse impact of unfavorable platform mix and a continued challenging pricing environment, we are implementing the following actions: Seating Business Electronic & Electrical Business New global Seating business Savings from restructurin
Slide 27: 2007 Outlook: Core Operating Earnings – Core Businesses
2007 Outlook Core Operating Earnings – Core Businesses** Core Operating Earnings* 2007 Core Operating (Core Businesses) Earnings Outlook (in millions) $560 - $600 New global business $520 - $550 Improving Margins $401 Lower launch activity and cost Restructuring savings Moderating commodity prices A
Slide 28: Sales Backlog Update
Sales Backlog Update* Three-year sales backlog down from 2007 – 2009 Sales Backlog recent levels, reflecting: $1.4 Majority of Lear’s North American (in billions) production volume recently changed over to new models Evolving business model, with fewer pass-through sales and increased $0.8 emphasis
Slide 29: Q and A Session
Q and A Session 29
Slide 30: 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 certain non-GAAP financial measures. These measures inclu
Slide 31: Non-GAAP Financial Information
Non-GAAP Financial Information Reconciliations of net sales – core businesses and core operating earnings – core businesses 2005 Subtotal - Electronic and Corporate Core (in millions) Seating Electrical and Other Businesses Interior Consolidated Net sales $ 11,035.0 $ 2,956.6 $ - $ 13,991.6 $ 3,097.
Slide 32: Non-GAAP Financial Information
Non-GAAP Financial Information Reconciliation of segment earnings to loss before income taxes and cumulative effect of a change in accounting principle (in millions) 2005 Seating $ 323.3 Electronic and Electrical 180.0 Interior (191.1) Segment earnings $ 312.2 Corporate and geographic headquarters a
Slide 33: 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