Slide 1: FY2024 Second Quarter Earnings Call
FY2024 Second Quarter Earnings Call May 3, 2024 Adient – PUBLIC
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” within
Slide 3: Agenda
Agenda > Introduction Michael Heifler Investor Relations > Business Update Jerome Dorlack President and CEO > Financial Review Mark Oswald Executive VP and CFO > Q&A FY2024 Second Quarter Earnings Call Adient – PUBLIC May 3, 2024 3
Slide 4: Strong Q2 with a continued focus on execution
Strong Q2 with a continued focus on execution > Laser focus on operational execution drove solid results Key Q2FY24 > Performance partially offset volume challenges from Financial Metrics launches, soft EV demand in Americas and EMEA Consolidated ~$3.8B > China continues to execute at a very high le
Slide 5: Current environment vs. original FY2024 expectations
Current environment vs. original FY2024 expectations H1 FY2024 Strong business > Stronger business performance > Operational execution, austerity measures performance offset volume > Softer volumes challenges, resulting in solid > Adverse customer mix H1 performance in line with > Slow customer ramp
Slide 6: Asia growth, EMEA efficiency, Americas execution
Asia growth, EMEA efficiency, Americas execution 2024 > Robust growth in China > Platform mix, EV slowdown impacting > Solid core execution > Maintain excellent operational execution Adient > Slower launch ramps and EV demand Beyond 2024 > Continued double digit growth in China, > Lower in-region pr
Slide 7: China: Growth engine continues to accelerate
China: Growth engine continues to accelerate ~$4.6B business (program lifetime) sourced in FY23 Forecast volume growth CAGR of 10% over the next 5 years Top 3 player in China by market share Awarded business from 10 new customers since FY22 Strong execution and profitability in China FY2024 Second Q
Slide 8: European realignment to increase efficiency
European realignment to increase efficiency > Changing market dynamics in Europe have driven a structurally lower volume environment > Proactive changes to address the new environment: Influences driving > Restructuring charge of ~$125M recorded in Q2FY24 structural changes > Holistic action plans a
Slide 9: Americas: Customer base and footprint enable margin opportunity
Americas: Customer base and footprint enable margin opportunity Diversified Americas Customer Base > Strong and growing relationship with Asian OEMs FY24 consolidated revenues by customer 1 > ICE/PHEV/BEV flexibility > Increasing vertical integration and modularity are opportunities for margin expan
Slide 10: Launch discipline -- cadence and complexity
Launch discipline -- cadence and complexity > Successfully navigating launch complexity in Toyota Camry Dodge RAM Skoda Octavia Americas, China Americas Americas EMEA > Slower ramp phase of certain launches > Highly vertically integrated impacting volumes program, including JIT, > Modular assembly i
Slide 11: New business wins help solidify our supplier-of-choice status
New business wins help solidify our supplier-of-choice status > Winning vertically integrated complete seat business with strategic customer base Geely / Volvo EX50 Chang’an Deepal Complete Seat Complete Seat > Foam and trim business Foam, Trim Foam, Trim, Metals wins drive future margin expansion >
Slide 12: Why Adient?
Why Adient? > Adient is committed to driving value by increasing earnings, margin, FCF > Key enablers: > China/Asia region growth ~200 bps of margin > Improved business performance in Americas/EMEA enhancement > Low margin metals exits, higher margin replacement expected 1 > Proactive restructuring
Slide 13: Financial Review
Financial Review FY2024 Second Quarter Adient – PUBLIC
Slide 14: Q2 FY24 Key financials
Q2 FY24 Key financials As Reported As Adjusted 1 $ millions, except per share data Q2 FY24 Q2 FY23 Q2 FY24 Q2 FY23 B/(W) Consolidated Revenue $ 3,750 $ 3,912 $ 3,750 $ 3,912 (4)% EBIT $ 8 $ 96 $ 147 $ 134 10% Margin 0.2% 2.5% 3.9% 3.4% EBITDA N/A N/A $ 227 $ 215 6% Margin 6.1% 5.5% Memo: Equity Inco
Slide 15: Q2 FY24 Revenue: consolidated and unconsolidated sales
Q2 FY24 Revenue: consolidated and unconsolidated sales Regional Performance Consolidated sales (consolidated sales y-o-y growth vs. Q2FY23 by region) 1, 2 Asia ex. China (6)% vs. S&P (7)% $(134) Americas APAC $(28) (6)% 2% $3,912 $3,750 vs. S&P --% EMEA vs. S&P (1)% (3)% vs. S&P (5)% China 13% vs. S
Slide 16: Q2 FY24 Adjusted-EBITDA
Q2 FY24 Adjusted-EBITDA Q2FY24 adjusted EBITDA of $227M, up $12M y-o-y, was $8 $4 $1 $ in millions $215 $227 primarily driven by: $(1) > Business performance of $47M, as improved net material 6.1% margin, freight costs, engineering and administrative costs 5.5% - including certain compensation relat
Slide 17: Q2 FY2024 Cash flow
Q2 FY2024 Cash flow Free Cash Flow Key drivers impacting FY24 FCF: Adjusted EBITDA to Free Cash Flow Q2 YTD (+) Lower level of restructuring spend y-o-y (in $ millions) 2024 2023 2024 2023 (+) Higher level of cash dividends from joint Adjusted-EBITDA $ 227 $ 215 $ 443 $ 427 ventures Adjusted Equity
Slide 18: Debt and capital structure
Debt and capital structure Net Debt Cash & Debt Profile ($ in millions) 3/31/2024 March 31 September 30 Amount (in $ millions) 2024 2023 Cash & Cash Equivalents $ 905 ABL Revolver, incl. FILO due 2027 1 - Cash $ 905 $ 1,110 Term Loan B due 2031 635 Total Debt 2,535 2,535 7.000% Secured Notes due 202
Slide 19: FY24 Outlook – key financial metrics
FY24 Outlook – key financial metrics Consolidated sales ~$14.8B - $14.9B Prior: ~15.4B - $15.5B > Sales forecast at $14.8B - $14.9B, reflecting Adj.-EBITDA ~$900M - $920M slower launch ramps, adverse customer mix and Prior: ~985M softer electric vehicle production Equity income ~$80M Incl. in Adj.-E
Slide 20: Year-on-year FY24 adj. EBITDA outlook drivers
Year-on-year FY24 adj. EBITDA outlook drivers ~$190 - $200 $938 $908 ~$900 - $920 ~$(100) - ~$(60) ~$(20) ~$(10) (110) $(30) 6.1% - 6.1% 5.9% 6.2% FY23 Nonrecurring Adj. Business Volume / FX Other / Equity FY24 Items FY23 Perf. Mix Footprint Income Guide Run-Rate FY2024 Second Quarter Earnings Call
Slide 21: Appendix and financial reconciliations
Appendix and financial reconciliations FY2024 Second Quarter Adient – PUBLIC
Slide 22: Q2 FY24 Adjusted-EBITDA: Americas
Q2 FY24 Adjusted-EBITDA: Americas Q2FY24 of $80M, up $8M y-o-y, driven by: $ in millions > Improved business performance of $35M, driven primarily by timing of commercial $4 recoveries and improved freight costs, as $35 well as certain compensation-related austerity measures. These benefits more $80
Slide 23: Q2 FY24 Adjusted-EBITDA: EMEA
Q2 FY24 Adjusted-EBITDA: EMEA Q2FY24 of $57M, up $4M y-o-y, driven by: $ in millions > $15M benefits from net commodities resulting primarily from lower $1 $2 $1 commodity costs $15 > Improved business performance of $57 $2M, driven by: $53 > Improved net material margin, lower $(15) input costs (i.
Slide 24: Q2 FY24 Adjusted-EBITDA: Asia
Q2 FY24 Adjusted-EBITDA: Asia Q2FY24 of $112M, down $1M y-o-y, driven $ in millions by: > Improved business performance related to higher material margin and improved $7 $1 labor efficiencies, which more than offset $113 $10 increased launch costs $112 $(10) > Equity income was $7M higher driven $(9
Slide 25: 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 26: Non-GAAP Reconciliations - Adj.-EBIT, Adj.-EBITDA, and Adj.-Net income
Non-GAAP Reconciliations - Adj.-EBIT, Adj.-EBITDA, and Adj.-Net income (a) & (b) Adjusted EBIT and Adjusted EBITDA Three months ended March 31 (in $ millions) 2024 2023 Net income (loss) $ (49) $ 10 Net financing charges 47 59 Other pension expense 2 2 (c) Adjusted net income attributable to Adient
Slide 27: Non-GAAP Reconciliations - Adjusted income tax expense, effective tax rate
Non-GAAP Reconciliations - Adjusted income tax expense, effective tax rate (d) Adjusted income tax expense and effective tax rate Three Months Ended March 31, (in $ millions, except effective tax rate) 2024 2023 Income Income Income (loss) tax Income (loss) tax before Income expense Effective before
Slide 28: Non-GAAP Reconciliations - Adjusted diluted EPS, equity income, net financing charges
Non-GAAP Reconciliations - Adjusted diluted earnings per share, adj. equity income, adj. net financing charges (e) Adjusted diluted earnings per share (f) Adjusted equity income Three months ended Three Months Ended March 31 March 31 (in $ millions, except per share data) 2024 2023 (in $ millions) 2
Slide 29: Non-GAAP Reconciliations - Free cash flow, net leverage, sales
Non-GAAP Reconciliations - Free cash flow, net leverage, prior year fx-adjusted consolidated and unconsolidated sales (i) & (j) Net debt and leverage ratio March 31 September 30 (h) Free cash flow (in $ millions) 2024 2023 Three Months Ended Six Months Ended March 31 March 31 Numerator: (in $ millio
Slide 30: Non-GAAP Reconciliations - Segment performance
Non-GAAP Reconciliations - Segment performance Q1 2023 Q1 2024 Corporate/ Corporate/ Americas EMEA Asia Consolidated Americas EMEA Asia Consolidated Eliminations Eliminations Net Sales 1,724 1,182 821 (28) 3,699 1,647 1,268 770 (25) 3,660 Adjusted EBITDA 69 28 138 (23) 212 80 45 114 (23) 216 Adjuste
Slide 31: Non-GAAP reconciliations - footnote addendum
Non-GAAP reconciliations - footnote addendum (1) Corporate-related costs not allocated to the segments include executive office, communications, corporate development, legal and corporate finance. (2) Reflects restructuring charges for costs that are probable and reasonably estimable and one-time as