Adient Plc · NYSE:ADNT
Adient — Q2 FY2021 Earnings Presentation
26 slides from Adient's earnings presentation, May 6, 2021
Slide 1: FY 2021 Second Quarter Earnings Call
7 ADIENT 7 FY 2021 May 6, 2021 Second 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 Z VP, Treasurer & Investor Relatior Agenda Business update t Douglas Del Gro President and FY 2021 Second Quarter Earnings Call
Slide 4: a 1 – For Non-GAAP and adjusted results, see appendix for detail and reconciliation
a 1 – For Non-GAAP and adjusted results, see appendix for detail and reconciliation to U.S. GAAP Adient - PUBLIC
Slide 5: YFAS transactions
1 - Cash proceeds from YFAS transactions based on USD to RMB exchange rate as of Mar. 10, 2021 Adient - PUBLIC
Slide 6: 1 - Based on management estimates of OEM outsourced seating Adient - PUBLIC
1 - Based on management estimates of OEM outsourced seating Adient - PUBLIC
Slide 7: Adient - PUBLIC
1 2 3 4 1 2 5 3 6 4 5 6 Adient - PUBLIC
Slide 8: Turnaround plan progress
Successfully Managing through executing “normal course” improvement industry headwinds phase of turnaround plan Executing strategic Strengthening transformational Adient’s leading changes to the market position business Adient - PUBLIC
Slide 9: Major influences in H1 FY21 versus expected H2 FY21
~ Major influences in H1 FY21 versus expected H2 FY21 _ADIENT Ke rivers FY21 Adj.-EBITDA Performan \ Throughout FY21, improved business performance, strong vehicle mix, and lower “normal course” SG&A costs are driving improved profitability vs FY20. S Temporary operating inefficiencies (driven by su
Slide 10: Financial Review
uy Pee | Financial Review fe pe i bak
Slide 11: Q2 FY21 As Reported and As Adjusted
As Reported As Adjusted 1 $ millions, except per share data Q2 FY21 Q2 FY20 Q2 FY21 Q2 FY20 B/(W) Consolidated $ 3,819 $ 3,511 $ 3,819 $ 3,511 8.8% Revenue EBIT $ 230 $ 66 $ 221 $ 142 56% Margin 6.0% 1.9% 5.8% 4.0% EBITDA N/A N/A $ 303 $ 211 44% Margin 7.9% 6.0% Memo: Q2FY20 equity Memo: Equity Inco
Slide 12: unconsolidated
> consolidated ‒ ‒ unconsolidated > > > Q2 FY20 Q2 FY21 Adient - PUBLIC
Slide 13: Adjusted EBITDA bridge Q2 FY20 to Q2 FY21
> $33 $24 $43 $(4) $(4) $303 ‒ $211 Q2FY20 Equity Income Vol / Mix Improved SG&A FX/Other $- Q2FY21 Business Performance ‒ ‒ > $58 $303 $79 $(42) $(3) $211 > Q2FY20 EMEA Asia Americas Corporate Q2FY21 > Adient - PUBLIC
Slide 14: Adjusted EBITDA to free cash flow
(in $ millions) Q2 FY21 YTD Q2 FY20 YTD Adjusted-EBITDA $ 303 $ 681 $ 211 $ 508 (+/-) Net Equity in Earnings (45) (138) (3) (110) (-) Restructuring (45) (100) (20) (40) (+/-) Net Customer Tooling 8 - (8) (2) (+/-) Trade Working Capital (Net AR/AP + Inventory) (153) 97 (103) 99 (+/-) Accrued Compensa
Slide 15: Cash and debt profile
Net Debt ($ in millions) 3/31/2021 March 31 September 30 Cash & Debt Profile Amount (in $ millions) 2021 2020 Cash & Cash Equivalents $984 (1) Cash $ 984 $ 1,692 ABL Revolver, incl. FILO due 2024 0 Term Loan B due 2024 786 Subsequent Total Debt 3,668 4,307 9.00% Secured Notes due 2025 600 to the Net
Slide 16: H2 vs. H1 FY21 Adjusted EBITDA headwinds
Volume 2 ~$(25)M - $(50)M Commercial settlements 3 4 ~$(125)M - $(150)M Net commodity prices ~$(50)M - $(75)M Engineering timing ~$(25)M - $(50)M Temporary COVID benefits ~$(10)M - $(35)M Business improvement / efficiencies / ~$35M - $60M other Consolidated Adj.-EBITDA H2 vs. H1 ~$(200)M - $(300)M E
Slide 17: Outlook FY21
Outlook FY21 Reconciliations of non-GAAP measures related to FY2021 guidance have not been provided due to the unreasonable efforts it would take to provide such reconciliations Adient - PUBLIC
Slide 18: Appendix and financial reconciliations
7 ADIENT 7 Appendix and oes financial reconciliations
Slide 19: Q2 FY21 Adjusted EBITDA: Americas
~Q2 FY21 Adjusted-EBITDA: Americas _ADIENT Business performance (impacted by temporary Q2 FY21 Adj. EBITDA of $64M, down $42M operating inefficiencies): , $ in millions + $(4)M Freight y-o-y. Key drivers of the y-o-y decline: + $(5)M Other performance (e.g. operations improvement, commercial settlem
Slide 20: Adient - PUBLIC
‒ • • ‒ • $14 $141 $23 $(2) $44 $62 Adient - PUBLIC
Slide 21: Adient - PUBLIC
$3 $121 $14 $44 $(3) $63 * Excluding equity income. Including equity income, margins of 14.2% and 20.6% for Q2 FY20 and Q2 FY21, respectively Adient - PUBLIC
Slide 22: 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 23: Adjusted EBIT and EBITDA reconciliation
Three months ended March 31 2021 2020 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted Net sales $ 3,819 $ - $ 3,819 $ 3,511 $ - $ 3,511 Cost of sales (1) 3,521 (1) 3,520 3,274 (3) 3,271 Gross profit 298 1 299 237 3 240 (2) Selling, general and administrative expenses 148 (17) 131 127 (19) 108
Slide 24: Adjusted Net Income and Adjusted Diluted EPS
Adjusted Net Income Adjusted Diluted EPS Three Months Ended Three Months Ended March 31 March 31 (in $ millions) 2021 2020 2021 2020 Net income (loss) attributable to Adient $ 69 $ (19) Net income (loss) attributable to Adient $ 0.72 $ (0.20) Restructuring and impairment costs 5 52 Restructuring and
Slide 25: Adjusted Income before Income Taxes
Adjusted Income before Income Taxes Three Months Ended March 31 (in $ millions) 2021 2020 Income (loss) Income (loss) before Income Tax impact Effective before Income Tax impact Effective Taxes tax rate Taxes tax rate As reported $ 122 $ 28 23.0% $ 18 $ 16 88.9% Adjustments 41 (2) -4.9% 76 (3) -3.9%
Slide 26: Segment sales and Adjusted EBITDA by quarter
(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