Slide 1: FY 2021 First Quarter Earnings Call
7 ADIENT 7 FY 2021 Feb.5,2021 | First Quarter Earnings Call
Slide 2: Important Information
4 ~ Important Information ADIENT 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 statem
Slide 3: Introduction and Agenda
> SS \ Introduction Mark Oswald y VP, Treasurer & Investor Relatior Agenda Business update t Douglas Del Gro President and Feb. 5, 2021 FY 2021 First Quarter Earnings Call
Slide 4: Q1 FY21 highlights
• • • ~ a 1 – For Non-GAAP and adjusted results, see appendix for detail and reconciliation to U.S. GAAP
Slide 5: Adient Sustainability
4 ~ Adient Sustainability _ADIENT \ Adient’s 2020 sustainability report outlines the company’s key Asal policies and actions regarding environmental responsibility, people and communities, governance and compliance, and more \ These policies and actions aim to ensure that Adient manages ; risks in t
Slide 6: Strengthening our leading position
~ Strengthening our leading position \ Steady cadence of business wins @ (replacement, new, conquest and alternative propulsion) expected to strengthen Adient’s leading market position Recent program wins: GM Future EV (new) Peugeot 3008 (new) Peugeot 5008 (new) Lincoln Nautilus China (new) Not pict
Slide 7: Launch status
f ~Launch status _ADIENT \ Second F-150 manufacturing location (Riverside, MO) successfully underway \ VW ID 3/4 SUVe represents 1st SVW electric car with MEB platform S Strong focus on process discipline around launch 4 readiness underpinning Adient’s successful launch performance continues Pa ae a
Slide 8: Positive Influences and Headwinds
Positive Influences Headwinds
Slide 9: Financial Review
- 4 al Review
Slide 10: Consolidated results Q1 FY21
As Reported As Adjusted 1 $ millions, except per share data Q1 FY21 Q1 FY20 Q1 FY21 Q1 FY20 B/(W) Consolidated $ 3,848 $ 3,936 $ 3,848 $ 3,936 -2% Revenue EBIT $ 282 $ (42) $ 295 $ 218 35% Margin 7.3% * 7.7% 5.5% EBITDA N/A N/A $ 378 $ 297 27% Margin 9.8% 7.5% Memo: Equity Income Memo: Equity Income
Slide 11: Sales vs. industry production by region
Q1 Q1 IHS Production Americas -5.2% 0.4% EMEA 2.7% 1.6% Asia -5.2% 4.3% $(73) $(82) Note: China 7.2% 5.9% Note: Asia excl. China -10.5% 2.0% consolidated > Adient sales impacted by recent portfolio adjustments, and Adient specific launches ‒ Americas sales primarily impacted by F-150 launch and Tesl
Slide 12: Adjusted EBITDA bridge Q1 FY21
$86 $32 $(21) $(9) $(7) > Q1FY21 Adj.-EBITDA of $378M, up $81M $378 y-o-y. Key drivers of the y-o-y increase: $297 ‒ Improved business performance, which included: Q1FY20 Improved SG&A Equity Vol / Mix FX / other Q1FY21 • Various “normal course” commercial Business Income Performance settlements • I
Slide 13: Adjusted EBITDA to free cash flow
(in $ millions) Q1 FY21 Q1 FY20 Adjusted-EBITDA $ 378 $ 297 (+/-) Net Equity in Earnings (93) (107) (-) Restructuring (55) (20) (+/-) Net Customer Tooling (8) 6 (+/-) Trade Working Capital (Net AR/AP + Inventory) 250 202 (+/-) Accrued Compensation (19) (61) (-) Interest paid (66) (49) (-) Taxes paid
Slide 14: Net debt, cash and debt profile
Net Debt ($ in millions) 12/31/2020 Cash & Debt Profile Amount December 31 September 30 Cash & Cash Equivalents $1,820 (in $ millions) 2020 2020 ABL Revolver, incl. FILO due 2024 (1) 0 Term Loan B due 2024 788 Cash $ 1,820 $ 1,692 9.00% Secured Notes due 2025 600 7.00% Secured Notes due 2026 800 Tot
Slide 15: Net leverage ratio
Net Leverage Ratio 7.00 Spike in net April 2020 - leverage driven 6.00 Issued by COVID-19’s $600m 9% significant Senior Note impact on Q3 5.00 EBITDA Improving operational / financial performance, 4.00 lessening impact from COVID-19 and 3.00 executed portfolio COVID- changes in FY20 2.00 19 driving
Slide 16: FY21 Outlook
Q1 Actual Outlook FY21 $3.8B ~ $14.6B – $15.0B $378M ~ $1,000M – $1,100M $94M ~ $250M $60M ~ $235M $12M ~ $85M $71M ~ $320 - $340M $160M ~ $0M - $100M ~$160M - $260M excl. special items impacting FY21 (e.g. elevated restructuring and deferred non-income tax payments) Reconciliations of non-GAAP meas
Slide 17: Appendix and financial reconciliations
7 ADIENT 7 Appendix and ae financial reconciliations
Slide 18: Americas Adjusted EBITDA
• Q1FY21 Adj. EBITDA of $132M, up $38M • y-o-y. Key drivers of the y-o-y increase: • Improved business performance which included: • Various commercial settlements • Improved operating performance including lower freight and lower labor & overhead Lower SG&A costs primarily driven by improved perfor
Slide 19: EMEA Adjusted EBITDA
Q1FY21 Adj. EBITDA of $114M, up $65M y-o-y. Key drivers of the y-o-y increase: Improved business performance which • included: • • • Various commercial settlements • Improved operating performance $26 $3 including lower launch, ops waste, $114 tooling, freight and labor & overhead $(11) $47 Lower SG
Slide 20: Asia Adjusted EBITDA
Q1FY21 Adj. EBITDA of $151M, down $26M y-o-y. Key drivers of the y-o-y decline: Absence of Interiors equity income resulting • from the YFAI divestiture (Q1FY20 contained $18M of Interiors equity income) • • • In addition, volume and efficiencies • drove an approximate $12M benefit to $177 equity in
Slide 21: Non-GAAP financial measurements
5 : 4 ~ Non-GAAP financial measurements _ADIENT 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 cash flow and Ne
Slide 22: Adjusted EBIT and EBITDA reconciliation
Three months ended December 31 2020 2019 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted Net sales $ 3,848 $ - $ 3,848 $ 3,936 $ - $ 3,936 Cost of sales (1) 3,507 5 3,512 3,673 (2) 3,671 Gross profit 341 (5) 336 263 2 265 (2) Selling, general and administrative expenses 149 (14) 135 165 (10) 1
Slide 23: Adjusted Net Income and Diluted EPS
Adjusted Net Income Adjusted Diluted EPS Three Months Ended Three Months Ended December 31 December 31 (in $ millions) 2020 2019 2020 2019 Net income (loss) attributable to Adient $ 150 $ (167) Net income (loss) attributable to Adient $ 1.58 $ (1.78) Restructuring and impairment costs 7 2 Restructur
Slide 24: Adjusted Income before Income Taxes
Adjusted Income before Income Taxes Three Months Ended December 31 (in $ millions) 2020 2019 Income (loss) Income (loss) before Income Tax impact Effective before Income Tax impact Effective Taxes tax rate Taxes tax rate As reported $ 225 $ 52 23.1% $ (88) $ 54 -61.4% (1) Adjustments 12 (1) -8.3% 26
Slide 25: Quarterly segment financial data
(in $ millions) Q1 2020 Q1 2021 Corporate / Corporate / Americas EMEA Asia Consolidated Americas EMEA Asia Consolidated Recon Items Recon Items Net sales $ 1,859 $ 1,564 $ 572 $ (59) $ 3,936 $ 1,737 $ 1,604 $ 554 $ (47) $ 3,848 Adjusted EBITDA 94 49 177 (23) 297 132 114 151 (19) 378 Adjusted EBITDA