Slide 1: Fourth Quarter and Full Year 2020 Financial Results
Fourth Quarter and Full Year 2020 Financial Results February 4, 2021 Ray Scott, President and CEO Jason Cardew, Senior Vice President and CFO
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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. The words “will,” “may,” “designed to,” “outl
Slide 3: Agenda
Agenda • Business Update Ray Scott, President and CEO • Financial Review Jason Cardew, Senior Vice President and CFO • Concluding Remarks Ray Scott, President and CEO 3
Slide 4: Business Update
Business Update Ray Scott, President and CEO 4
Slide 5: Fourth Quarter 2020 Financial Overview
Fourth Quarter 2020 Financial Overview Sales Core Operating Earnings $5.2B $330M $17.0B Full Year 2020 $614M Full Year 2020 Adjusted Earnings per Share Adjusted Operating Margin $3.66 6.3% $5.33 Full Year 2020 3.6% Full Year 2020 Please see appendix for discussion of non-GAAP financial measures, as
Slide 6: 2020 Business Highlights
2020 Business Highlights Executed highly effective response to COVID-19 pandemic, prioritizing employee health and safety and preserving liquidity Grew sales 6 percentage points faster than the market (10 points in E-Systems and 4 points in Seating) $2.8 billion sales backlog for 2021-2023 supports
Slide 7: Seating – Key Product Launches
Seating – Key Product Launches = Electric Vehicle Porsche Taycan Cross Nissan Qashqai BMW 2-Series Mercedes EQS Land Rover Ferrari Maserati Grecale Chevrolet Onix / Alfa Romeo Tonale Turismo JIT and JIT and JIT and Range Rover JIT and JIT and Onix Plus JIT and JIT and Components Components Component
Slide 8: E-Systems – Key Product Launches
E-Systems – Key Product Launches = Electric Vehicle Great Wall T5 SUV JLR (Various) Geely D-SUV NEV OEM Jaguar I-Pace Volvo S60/S90, GMC Hummer NEV OEM Connectivity OBC, DC/DC Wiring Small CUV HV/LV Wiring Lynk & Co EX11 BDU Small CUV Asia BISG Inverter Asia HV/LV Wiring Europe PHEVs North America H
Slide 9: Electrification Product Portfolio Built on Long History
Electrification Product Portfolio Built on Long History 2010 2021 FAW Hongqi Battery HV Wire Initial 90+ Models Power Electronics Management Systems Harness and Market Entry Connection Systems HV Wire On-Board Chargers Battery Management Units HV Wire Harnesses 9 Models Charging Systems DC-DC Conver
Slide 10: E-Systems – High Voltage Electrical Architecture
E-Systems – High Voltage Electrical Architecture 1. HV Wire Harness 1 2. HV Connection Systems 5 3. Integrated Power Modules: On-Board Chargers & DC/DC Converters 2 In Lear’s Portfolio 2 4. Battery Management Systems 5. HV Power Distribution Box / Battery Disconnect Unit Off-Board Charging Equipment
Slide 11: Growing Electrification Business
Growing Electrification Business 45 ($ in millions) 40 2550 Electrification Sales Outlook New Business Annual Quote Pipeline 35 2050 28 Customers 30 ≈ 25% to 35% Win Rate 25 1550 19 Customers ≈ $1,400 17 Customers 20 14 Customers $1,000 1050 15 6-Year Revenue CAGR $725 32% 10 ≈ $2.0B 550 $700 $1.0B
Slide 12: Financial Review
Financial Review Fourth Quarter and Full Year 2020 Results Jason Cardew, Senior Vice President and CFO 12
Slide 13: Fourth Quarter 2020 Global Vehicle Production and Currency
Fourth Quarter 2020 Global Vehicle Production and Currency Industry Production (units in millions) Global North America Europe and Africa China Q4 2019 22.3 Q4 2019 3.8 Q4 2019 5.3 Q4 2019 6.9 Q4 2020 22.9 Q4 2020 3.9 Q4 2020 5.4 Q4 2020 7.3 vs Prior Year vs Prior Year vs Prior Year vs Prior Year Up
Slide 14: Fourth Quarter 2020 Strong Growth Over Market in All Regions
Fourth Quarter 2020 Strong Growth Over Market in All Regions Global GoM1 North America 16% 8% FY 2020 Global GOM 6% Europe 4% Seating 7% | E-Systems 11% FY 2020 Seating 4% | FY 2020 E-Systems 10% China 8% 1 Year-over-year sales growth excludes the impact of FX and acquisitions. The year-over-year ch
Slide 15: Key Financials – Fourth Quarter
Key Financials ($ in millions, except per share amounts) Fourth Quarter Comments 2019 2020 Net Sales $ 4,818 $ 5,243 • Primarily reflects new business backlog of $357M Core Operating Earnings $ 241 $ 330 • Primarily reflects margin accretive backlog and net Operating Margin % 5.0% 6.3% performance A
Slide 16: Key Financials – Full Year
Key Financials ($ in millions, except per share amounts) Full Year Comments 2019 2020 Net Sales $ 19,810 $ 17,046 • Reflects pandemic-related volume reductions, partially offset by backlog Core Operating Earnings $ 1,309 $ 614 • Reflects lower volumes and premium costs related to Operating Margin %
Slide 17: Seating Sales and Margin Drivers Fourth Quarter
Seating Sales and Margin Drivers Fourth Quarter ($ in millions) Sales Adjusted Earnings and Margin 150 bps 7.6% $221 $72 $3,900 $3,629 $212 $295 35 bps 15 bps ($234) 5.9% (30 bps) $213 Q4 2019 GM Strike All Other Backlog FX Q4 2020 Q4 2019 Volume / Mix / Backlog Net COVID Net Q4 2020 Other Performan
Slide 18: E-Systems Sales and Margin Drivers Fourth Quarter
E-Systems Sales and Margin Drivers Fourth Quarter ($ in millions) Sales Adjusted Earnings and Margin $44 7.7% 25 bps 7.6% $136 $1,344 95 bps $1,189 $20 $92 (10 bps) $103 (55 bps) ($45) (65 bps) Q4 2019 GM Strike All Other Backlog FX Q4 2020 Q4 2019 Volume / Mix / Backlog Engineering Net COVID Net Q4
Slide 19: 2021 Full Year Outlook Global Vehicle Production and Currency
2021 Full Year Outlook Global Ve hicle Production and Currency Industry Production (units in millions) Global North America Europe and Africa China Actual FY 2020 72.6 FY 2020 13.0 FY 2020 16.9 FY 2020 21.9 Outlook FY 2021 79.1 FY 2021 15.6 FY 2021 18.5 FY 2021 22.6 High End FY 2021 81.3 vs Prior Ye
Slide 20: 2021 Full Year Outlook
2021 Full Year Outlook $19.8 - $20.8 Interest ≈$90 Restructuring ≈$100 Net Sales billion Expense million Costs million Core Operating $1,130 - $1,300 Effective Capital ≈$600 ≈22% Earnings million Tax Rate Spending million Adjusted $1,690 - $1,860 Adjusted Net $725 - $855 $550 - $700 Free Cash Flow E
Slide 21: Sales Backlog (Net New Awarded Business)
Sales Backlog (Net New Awarded Business) 2021–2023: Consolidated Consolidated Backlog Sales Backlog By Region ($ in millions) ($ in millions) North America ≈$1,275 Europe ≈$1,025 ≈$2,825 $900 ≈$1,175 Asia ≈$525 ≈$1,000 $1,925 $300 $450 ≈$650 $150 $875 $550 $500 2021-2023 2021 2022 2023 2021–2023 sal
Slide 22: Concluding Remarks
Concluding Remarks Ray Scott, President and CEO 22
Slide 23: 2021: The Road Ahead
2021: The Road Ahead Well positioned to benefit from industry recovery Strong momentum in both business segments Targeting strategic investments to enhance competitive position Investor Day 23
Slide 24: Appendix
Appendix LEAR | Making every drive better”
Slide 25: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to the results reported in accordance with GAAP included throughout this presentation, the Company has provided information regarding “pretax income before equity income, interest, other (income) expense, restructuring costs and other special items” (core o
Slide 26: Non-GAAP Financial Information
Non-GAAP Financial Information Core Operating Earnings and Adjusted Margins Fourth Quarter Full Year ($ in millions) 2019 2020 2019 2020 Net sales $ 4,817.6 $ 5,243.2 $ 19,810.3 $ 17,045.5 Net income attributable to Lear $ 126.0 $ 201.6 $ 753.6 $ 158.5 Interest expense 22.6 21.5 92.0 99.6 Other (inc
Slide 27: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted Earnings Per Share Fourth Quarter Full Year (In millions, except per share amounts) 2019 2020 2019 2020 Net income available to Lear common stockholders $ 152.5 $ 201.6 $ 789.5 $ 158.5 Redeemable noncontrolling interest (26.5) - (35.9) - Net income attributabl
Slide 28: Non-GAAP Financial Information
Non-GAAP Financial Information Free Cash Flow Fourth Quarter Full Year ($ in millions) 2019 2020 2019 2020 Net cash provided by operating activities $ 485.0 $ 400.8 $ 1,284.3 $ 663.1 Capital expenditures (193.8) (167.0) (603.9) (452.3) Free cash flow $ 291.2 $ 233.8 $ 680.4 $ 210.8 28
Slide 29: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted Segment Earnings and Margins Fourth Quarter Seating E-Systems ($ in millions) 2019 2020 2019 2020 Net sales $ 3,629.1 $ 3,899.6 $ 1,188.5 $ 1,343.6 Segment earnings $ 144.2 $ 270.1 $ 79.0 $ 93.1 Restructuring costs and other special items - Costs related to re