Adient Plc · NYSE:ADNT
Adient — Investor Presentation (April 2019)
31 slides from Adient's investor presentation, April 2019
Slide 1: Adient Supplemental Investor Materials
Adient Supplemental Investor Materials April 2019 Improving the experience of a world in motion
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: Executive summary
Executive summary Leading competitive position in a strong and vital market > Adient maintains one of the largest market shares (~33%) in a concentrated segment with few global competitors > Well diversified customer mix - no customer is greater than 12% of total consolidated sales > High barriers t
Slide 4: Adient Business Overview and Update
Adient Business Overview and Update 4 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 5: Adient today
Adient today Adient is a critical supplier in automotive seating, estimated to be supplying approximately one out of every three automotive seats worldwide NYSE: ADNT FY18 Revenue Global market Revenue by share (2018 market $60B) geography* ~$17.4B ~$9.4B We supply one Americas Europe / out of every
Slide 6: We are located right where our customers need us most
We are located right where our customers need us most Global locations 214 manufacturing facilities Europe 30 countries North America 91 Asia* 56 50 Global employees Africa 84,000 South America 12 5 * Does not include China joint ventures 6
Slide 7: Strong customer diversification
Strong customer diversification 7 Adient – Improving the experience of a world in motion
Slide 8: Third-party recognition
Third-party recognition Customer Awards Quality / Diversity Awards > Nissan Best Competitiveness Award – > Health and Safety awards from MESS union – Sunderland, UK Gebze, Turkey > PSA Opel Group Gold Status – Zaragoza, Spain > Excellent Partner China Certification – Burscheid, Germany > PSA Opel Gr
Slide 9: Adient key platforms
Adient key platforms ADNT top platforms by revenue * Business wins $'s Millions Platform % of Total Sales > Select recently secured replacement and new business 1 Ford F 150 5% wins 2 FCA Ram Pickup 4% > Ford F-150 (replacement) 3 Honda Pilot 3% > BMW 7-Series (replacement) 4 Chevrolet Traverse 3% >
Slide 10: Seating joint ventures in China enable clear leadership position
Our Seating Joint Venture partnerships in China enable us to enjoy a clear leadership position in China We generated We have We have $9.2B 21 seating joint ventures* ~80 manufacturing sales revenue in FY2018 locations with We employ 4 45% global tech centers 33,000 combined share of the passenger ve
Slide 11: China’s unconsolidated financial strength
China’s unconsolidated financial strength 1 FY2014 – FY2018 CNY in billions Industry Adient Results Sales Net Cash 3 60.2 9.0 > Top-line growth > Well capitalized Units, Millions 43.6 in excess of balance sheets China Light Vehicle industry growth across the Production 2 3.3 various joint ventures 2
Slide 12: Global market overview
Global market overview North America Europe China / Asia Pacific > Benefits from a favorable mix of > Macro-factors pressuring industry: > ADNT expects to outperform the Asian vehicles (trucks / SUVs / CUVs) remain market, due to its strong customer mix, ‒ Overhang from Worldwide Harmonized Lt. stro
Slide 13: Well positioned innovation and product portfolio
Well positioned innovation and product portfolio Global Industry trends Implications for seating • Safety • Changes in vehicle architecture & • Electrification power managment • Light-weight • Slim & lightweight • Low block height • Connectivity • Smart, individualized heating & cooling • Urbanizati
Slide 14: 2018 operating backdrop - SS&M and NA Seating
2018 operating backdrop - SS&M and NA Seating Headwinds impacting Headwinds impacting SS&M Common headwinds NA Seating > Launch planning > Higher than assumptions that normal volatility in did not > Volume & complexity customer releases materialize of launches (higher than historical norm) > Unplann
Slide 15: Margin potential with successful turnaround execution
Margin potential with successful turnaround execution Bridging the profitability gap Benchmarking our performance will require operational “self 12% help” and commercial actions Closest peer 8.5 – 9% 2 > Examples of operational “self help” levers > Organizational alignment 8% > Launch recovery Adjus
Slide 16: Priorities to successfully drive performance
Priorities to successfully drive performance Improve on operational / launch Back to basics issues > Re-establish business mindset with > Intense focus on operational execution and clear accountability elimination of waste > Reduce / eliminate non-essential Improve on > Tighter / true assessment of
Slide 17: New team / organizational structure to drive turnaround
New team / organizational structure to drive turnaround CEO Doug Del Grosso Three Fully Integrated Regions Americas EMEA AP Finance Jerome Dorlack Michel Berthelin James Huang Jeff Stafeil Seating Seating Seating Legal SS&M SS&M SS&M Cathy Ebacher Engineering Engineering Engineering Commercial Comme
Slide 18: Benefits expected from new organizational direction
Benefits expected from new organizational direction > Drive accountability Organizational objectives > Speed up decision-making > Reduce complexity and redundant costs > Flatter organization Organizational impact > Fully integrated regional business covering entire portfolio > Condensed central func
Slide 19: Focused on commercial excellence
Focused on commercial excellence Early Successes Increased commercial focus through product lifecycle ➢ CEO-level direct customer interactions to align product Initiate face-to-face dialogue with customers in critically economics with the high quality of seating solutions being strained relationship
Slide 20: While launch activity remains heightened, lessons learned contributing to FY19 success
While launch activity remains heightened, lessons learned are contributing to success in FY19 Seating Americas and SS&M launches by fiscal year 93 89 70 > On track to achieve 76% successful launch target in FY19 62 49 > Maintaining rate of successful launches YTD in FY19 45 > 38% drop in number of p
Slide 21: Disciplined Approach Toward Underperforming Plants
Disciplined Approach Toward Underperforming Plants Plant Launch Monitor Process Progression on Underperforming Plants (FYE17 – FY19 YTD) Weekly – Targeted Business List • New business opportunities • Current business changes (lifetime ext., volume 20% y-o-y increase, and etc.) improvement • Global l
Slide 22: 2018 challenges and improvement by 2019 – Clanton, AL (SS&M)
Disciplined approach toward underperforming plants 2018 challenges and improvement by 2019 – Clanton, AL (SS&M) Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Fiscal 2019 Issue Actions taken Actions taken Actions taken > Launch challenges associated > Improved production stability > New plant manager hired > Execu
Slide 23: Bridgewater facility – Warren, MI (Seating NA)
Operational and commercial actions improving results Bridgewater facility – Warren, MI (Seating NA) Operational and commercial Key benefits and actions underway opportunities Operational ➢ Largest consolidated joint-venture ➢ Improved material flow workshops and ➢ Clear and focused roadmap to partne
Slide 24: Driving to a stable, leaner and focused SS&M business
Driving to a stable, leaner and focused SS&M business Significantly reduced ongoing capital expenditure needs with a more focused, vertically integrated global footprint CONFIDENTIAL 24 Adient – Improving the experience of a world in motion
Slide 25: Financial
Financial 25 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 26: Recent developments – Q2 FY19
Recent developments – Q2 FY19 Actual Preliminary Q1 Q2 First half Revenue $4.2B ~$4.2B ~$8.4B Preliminary results B/(W) vs. Q2FY18 $(371)M Preliminary results B/(W) vs. H1FY18 $(417)M ~ $185-195M ~ $361-371M Adj. EBITDA $176M Incl. equity income of ~$60M Incl. equity income of ~$143M Incl. equity in
Slide 27: Significant opportunity to deleverage
Significant opportunity to deleverage Downsize SS&M Close margin gap to peer ADNT 2018 free cash flow (FCF) a ~$0 ADNT 2018 Adj. EBITDA b $1.2B ADNT 2018 Adj. EBITDA margin ~4.7% SS&M performance: 2018 Adjusted EBITDA $(168)M Gap to peer ~400bps or $700M 2018 SS&M CapEx $(255)M Approximate SS&M FCF
Slide 28: Reasons to invest in ADNT
Reasons to invest in ADNT Leveraging our Increased Focused on the leading position shareholder core business in China value Critical supplier in the Unique and longstanding automotive seating business, position in China through our with a leading market position joint venture structure New managemen
Slide 29: Appendix
Appendix 29 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 30: Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA
Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA FY16 Actual FY17 Actual FY18 Actual (in $ millions) Full FY16 Full FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Full FY18 Net income attributable to Adient $ (1,546) $ 877 $ (216) $ (168) $ 54 $ (1,355) $ (1,685) Income attributable to noncontr
Slide 31: Prior Period Results
Prior Period Results FY16 Actual FY17 Actual FY18 Actual Full FY16 Full FY17 Full FY18 Sales ($Mils.) $ 16,790 $ 16,213 $ 17,439 Adjusted EBIT 1,176 1,240 766 % of Sales 7.00% 7.65% 4.39% Adjusted EBITDA 1,531 Q1-2016 1,601 1,196 % of Sales 9.12% 9.87% 6.86% Adj Equity Income 364 394 385 Adj EBIT Ex