Slide 1: FY 2023 Second Quarter Earnings Call
FY 2023 Second Quarter Earnings Call May 3, 2023 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 Mark Oswald VP, Treasurer & Investor Relations > Business Update Doug Del Grosso President and CEO > Financial Review Jerome Dorlack Executive VP and CFO > Q&A FY2023 Second Quarter Earnings Call Adient – PUBLIC May 3, 2023 3
Slide 4: Executing Adient's FY23 plan
Executing Adient’s FY23 plan Remaining focused on delivering the company’s commitments > Strong operational execution, positive commercial momentum and an extreme focus on containing costs continue to drive the business forward Key Q2FY23 > Adient delivered solid Q2FY23 financial results, building o
Slide 5: Driving forward with focus on sustainable solutions
Driving forward with focus on sustainable solutions Leather Alternatives: Virtually all OEMs are UltraThin™: A new, working to reduce or eliminate leather unique seat Adient content to improve sustainability, increase construction of quality, and reduce cost. We are working thermoplastic management
Slide 6: Strengthening our leading position and solidifying supplier of choice status
Strengthening our leading position and solidifying supplier of choice status > Underpinned by solid execution, Adient continues to win a strong mix of EV Observations and ICE platforms across regions, including wins in the luxury, SUV, and mass from Shanghai market segments > Wins include replacemen
Slide 7: In process and upcoming launches
In process and upcoming launches > Adient continues to execute at a high level on all aspects of launches -- safety, quality, on-time delivery, and financial targets -- while working through a heavy Lincoln Nautilus launch cadence in the quarter APAC > Launches across the regions include a mix of co
Slide 8: FY2023 operating environment
FY2023 operating environment > As expected entering 2023, the overall operating environment to date in FY23 has modestly improved vs. FY22 Regional Environments Americas > The modest improvement in the operating environment is expected to continue in H2FY23; however, • “Run rates” at customers trend
Slide 9: Macro and industry specific trends driving the need for restructuring
Macro and industry specific trends driving the need for restructuring Several external and industry specific trends are reshaping the automotive sector. It’s imperative current and future business practices are aligned with these changes Key trends / influences Adient’s response > Light vehicle prod
Slide 10: Bor: A case study in effective, cost-efficient restructuring
Bor: A case study in effective, cost-efficient restructuring January 2020 Adient continues to execute “efficient” restructuring across its operations. Actions > As replacement business for the successor model of existing business are underpinned by the following mindset: came to sourcing, the custom
Slide 11: Financial Review
Financial Review FY2023 Second Quarter Adient – PUBLIC
Slide 12: Q2 FY2023 Key Financials
Q2 FY2023 Key Financials As Reported As Adjusted $ millions, except per share data Q2 FY23 Q2 FY22 Q2 FY23 Q2 FY22 B/(W) Consolidated $ 3,912 $ 3,506 $ 3,912 $ 3,506 12% Revenue EBIT $ 96 $ 46 $ 134 $ 79 NM Margin 2.5% 1.3% 3.4% 2.3% EBITDA N/A N/A $ 215 $ 159 35% Margin 5.5% 4.5% Memo: Equity Incom
Slide 13: Q2 FY2023 Revenue: Consolidated and Unconsolidated Sales
Q2 FY2023 Revenue: Consolidated and Unconsolidated Sales Regional Performance Consolidated sales (consolidated sales y-o-y growth (vs. Q2FY22) by region) 1, 2, 3 $519 Q2 Q2 S&P Production $(113) Americas 10.4% 9.8% $3,912 EMEA 22.4% 23.6% Asia 15.4% 0.8% Note: China 6.1% -7.8% $3,506 Note: Asia excl
Slide 14: Q2 FY23 Adjusted-EBITDA
Q2 FY23 Adjusted-EBITDA Q2FY23 adjusted EBITDA of $215M, up $56M y-o-y, was primarily driven by: $29 $84 > Volume and mix, which benefited the quarter by ~$84M as production $(44) improved $ in millions $(9) $(4) > Improved business performance of ~$29M, driven by: $159 $215 > Improved net material
Slide 15: Cash flow
Cash flow Free Cash Flow Key drivers impacting FY23 FCF YTD: (+) Higher consolidated y-o-y earnings (driven (in $ millions) Q2 FY23 YTD Q2 FY22 YTD by improved volumes and incrementally Adjusted-EBITDA (Excl. Equity income) $ 203 $ 388 $ 142 $ 254 improving production environment) Dividend 1 $ 13 -
Slide 16: Debt and capital structure
Debt and capital structure Net Debt ($ in millions) 3/31/2023 Cash & Debt Profile Amount March 31 September 30 Cash & Cash Equivalents $ 826 (in $ millions) 2023 2022 (1) ABL Revolver, incl. FILO due 2027 - Cash $ 826 $ 947 Term Loan B due 2028 635 7.00% Secured Notes due 2028 500 Total Debt (2) 2,5
Slide 17: FY23 Outlook – key financial metrics
FY23 Outlook – key financial metrics > FY23 guidance updated to reflect Adient’s YTD results through Consolidated sales ~$15.0B No change March 31, 2023 and current market conditions (including revised production forecast and current FX rates) Adj.-EBITDA ~$850M > Consolidated sales of ~$15.0B (up 8
Slide 18: Appendix and financial reconciliations
Appendix and financial reconciliations FY 2023 Second Quarter Adient – PUBLIC
Slide 19: Q2 FY23 Adjusted-EBITDA: Americas
Q2 FY23 Adjusted-EBITDA: Americas Q2FY23 of $72M, up $26M y-o-y, driven by: > Improved volume and mix of ~$15M resulting from modestly improving customer production $3 > Improved business performance of ~$14M driven $14 by: $ in millions $72 > Increased net material margin performance $(6) of ~$22M,
Slide 20: Q2 FY23 Adjusted-EBITDA: EMEA
Q2 FY23 Adjusted-EBITDA: EMEA Q2FY23 of $53M, up $23M y-o-y, driven by: $ in millions > Increased volume and mix of $52M resulting from improving customer production > Improved business performance of ~$14M, $14 $2 driven by: > ~$27M of net material margin $52 improvement, aided by certain commercia
Slide 21: Q2 FY23 Adjusted-EBITDA: Asia
Q2 FY23 Adjusted-EBITDA: Asia Q2FY23 of $113M, up $8M y-o-y, driven by: > Favorable volume and mix impact of ~$17M, $ in millions driven primarily by the improved production environment in Asia outside of China > Improved business performance of ~$7M, $7 driven by: $17 $113 > ~$7M of improved net ma
Slide 22: 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 23: Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, and Adj.-Equity Income
Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, and Adj.-Equity Income Three months ended March 31 2023 2022 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted Net sales $ 3,912 $ - $ 3,912 $ 3,506 $ - $ 3,506 Cost of sales (1) 3,662 - 3,662 3,328 - 3,328 Gross profit 250 - 250 178 - 178
Slide 24: Non-GAAP Reconciliations - Adjusted Net Income and Adjusted EPS
Non-GAAP Reconciliations - Adjusted Net Income and Adjusted EPS Adjusted Net Income Adjusted Diluted EPS Three Months Ended Three Months Ended March 31 March 31 (in $ millions) 2023 2022 2023 Net income (loss) attributable to Adient $ (15) $ (81) Diluted earnings (loss) per share as reported $ (0.16
Slide 25: Non-GAAP Reconciliations - Adjusted Income before Income Taxes and Effective Tax Rate
Non-GAAP Reconciliations - Adjusted Income before Income Taxes and Effective Tax Rate Adjusted Income before Income Taxes Three Months Ended March 31 (in $ millions) 2023 2022 Income (loss) Income (loss) before Income Tax impact Effective before Income Tax impact Effective Taxes tax rate Taxes tax r
Slide 26: Non-GAAP Reconciliations - Unconsolidated sales fiscal year 2022
Non-GAAP Reconciliations - Unconsolidated sales fiscal year 2022 reconciliations Unconsolidated Sales (FX adjusted) (in $ millions) Unconsolidated Net Sales Q1 Q2 Q3 Q4 FY2022 As reported $ 1,208 $ 926 $ 876 $ 1,056 $ 4,066 FX Impact (138) (66) FX Adjusted 1,070 860 FY2023 Second Quarter Earnings Ca
Slide 27: Segment Performance
Segment Performance Q1 2022 Q1 2023 Corporate/ Corporate/ Americas EMEA AP Consolidated Americas EMEA AP Consolidated Eliminations Eliminations Net Sales 1,498 1,230 784 (32) 3,480 1,724 1,182 821 (28) 3,699 Adjusted EBITDA 9 43 114 (20) 146 69 28 138 (23) 212 Adjusted Equity Income (1) (1) 36 - 34