Adient Plc · NYSE:ADNT
Adient — JP Morgan Investor Presentation (August 2019)
33 slides from Adient's conference presentation, Aug 13, 2019
Slide 1: JP Morgan Investor Presentation
JP Morgan Investor Presentation August 13, 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: Today’s agenda and presenters
Today’s agenda and presenters Douglas Del Grosso President and Chief Executive Officer > Company & business overview Jeffrey Stafeil Executive Vice President and Chief Financial Officer > Financial overview FY 2019 August Investor Meetings 3 Adient – Improving the experience of a world in motion
Slide 4: 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 5: Adient today
Adient today Adient is the global market share leader in automotive seating, estimated to be supplying approximately one out of every three automotive seats worldwide** NYSE: Adient FY18 Revenue Global market Revenue by share (2018 market $60B) geography* ~$17.4B ~$9.4B We supply one Americas Europe
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 32 countries North America 91 Asia* 56 50 Global employees Africa 84,000 South America 12 5 * Does not include China joint ventures 6 6 Adient – Improving the experience of a world in motion
Slide 7: Strong customer diversification
Strong customer diversification FY 2019 August Investor Meetings 7 Adient – Improving the experience of a world in motion
Slide 8: Adient delivers a diverse range of seating products and solutions
Adient delivers a diverse range of seating products and solutions We partner with OEMs to develop customized seating systems that excel in quality and craftsmanship We utilize lightweight, innovative materials to enhance fuel efficiency and vehicle differentiation STRUCTURES AND FOAM FABRICS TRIM ME
Slide 9: Seating joint venture partnerships in China
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
Slide 10: 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 11: Business update
Business update FY 2019 August Investor Meetings 11 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 12: Operating turnaround gaining momentum and helping to offset macro headwinds
Operating turnaround gaining momentum and helping to offset macro headwinds Stabilizing and improving Achieving significant performance at reductions in premium freight underperforming plants and containment > Reduced headcount at critical JIT plant to align > Improved launch performance driving dow
Slide 13: Improving plant performance - Bridgewater Warren
Improving plant performance - - Bridgewater Warren Main root causes impacting performance Significant improvement in plant run rate since Q1 FY19 Unstable customer broadcasts Inadequate staffing Q1 FY19 Current Increased build complexity Customer disruptions 10+ / month 0-1 / month Integrator role n
Slide 14: Program profitability - VAVE / sustainability initiatives
Program profitability - - VAVE / sustainability initiatives Detailed Competitive Organizational Workshops Win-Win Cost Reduction Analysis & Brainstorming Sessions Implementation • Understanding industry trends • Leverages the collective • Offer lower cost alternative to our • Evaluate performance ag
Slide 15: Adient’s turnaround plan
Adient’s turnaround plan FY2019 FY2020 - FY2022 FY2023 and beyond Stabilization Improvement Optimization Renewed emphasis on Significant improvement in Expected margin gap closure to discipline in fundamentals free cash flow peers, additional FCF generation “Back-to-basics” approach Continue operati
Slide 16: Balancing the “now” with our “future”
Balancing the “now” with our “future” Moving the business forward … and ... positioning Adient for long-term success Commercial discipline New business wins > Resolved backlog of open commercial issues with five Porsche Macan Buick Envision critical customers VW A-SUV Ford Ranger > Prioritizing busi
Slide 17: China market and other significant macro influences
China market and other significant macro influences China market > The China macro economy, especially consumer sentiment, remains weak Trade / tariffs > Passenger vehicle sales and production significantly impacted by FX the economy and industry specific China factors (e.g. pull ahead of GB6 emissi
Slide 18: Financial overview
Financial overview FY 2019 August Investor Meetings 18 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 19: FY 2019 Q3 key financials
FY 2019 Q3 key financials As Reported As Adjusted 1 $ millions, except per share data FY19 Q3 FY18 Q3 FY19 Q3 FY18 Q3 B/(W) Revenue $ 4,219 $ 4,494 $ 4,219 $ 4,494 -6% EBIT $ 95 $ 89 $ 129 $ 205 -37% Margin 2.3% 2.0% 3.1% 4.6% EBITDA N/A N/A $ 205 $ 318 -36% Margin 4.9% 7.1% Memo: Equity Income 2 $
Slide 20: Positive earnings trend driven by “self-help” initiatives
Positive earnings trend driven by “self-help” initiatives > Benefits related to turnaround actions implemented earlier this year are gaining traction - Q3FY19 earnings (adj. EBITDA and margin) improved sequentially for the second consecutive quarter and more than offset significant industry weakness
Slide 21: Q3FY19 cash flow & debt
Q3FY19 cash flow & debt 1 > Improving Adient’s cash generation is a key focus area for the May 2019 debt refinancing strengthened company and increased the flexibility of Adient’s > Strong Q3 free cash flow and quarter end cash balance capital structure – increased liquidity and extended maturities
Slide 22: Fiscal 2019 outlook
Fiscal 2019 outlook* Revenue ~ $16.5B – $16.7B Interest ~ $175M no change expense no change Adj. EBITDA H2 > H1 ~$105M - $115M no change Cash tax no change ~ $265M Equity income (incl. YFAI of $40M) CapEx ~ $500M – $525M Revised from $290M to $300M Revised from $550M to $575M > Driven by positive co
Slide 23: Reasons to invest in Adient
Reasons to invest in Adient 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 managem
Slide 24: Appendix and financial reconciliations
APPENDIX AND FINANCIAL RECONCILIATIONS FY 2019 August Investor Meetings 24 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 25: Non-GAAP financial measurements
Non-GAAP financial measurements > 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 free cash flow, Net debt and Net leverage as well as
Slide 26: Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA
Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA (see footnotes on slide 23) FY18 Actual FY19 Actual Last Twelve Months Ended Actual (in $ millions) Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Full FY18 Q1 FY19 Q2 FY19 Q3 FY19 Dec '18 Mar '19 June '19 Net income attributable to Adient $ (216) $ (
Slide 27: Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA
Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA 1. The income tax provision for the three months ended June 30, 2019 includes a tax charge of $254 million to record valuation allowances on the net deferred tax assets in Luxembourg and UK and a tax charge of $48 million to recognize t
Slide 28: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted Net Income Adjusted Net Income Adjusted Diluted EPS Three Months Ended Three Months Ended June 30 June 30 (in $ millions) 2019 2018 2019 2018 Net income attributable to Adient $ (321) $ 54 Diluted earnings per share as reported $ (3.43) $ 0.58 Becoming Adient (1) -
Slide 29: Non-GAAP reconciliations
Non-GAAP reconciliations Net Debt and Net Leverage Adjusted Equity Income Free Cash Flow Three Months Ended Three Months Ended June 30 September 30 June 30 June 30 (in $ millions) 2019 2018 (in $ millions) 2019 2018 (in $ millions) 2019 2018 Cash $ 1,025 $ 687 Equity income as reported $ 64 $ 87 Ope
Slide 30: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted net financing charges and adjusted Income before Income Taxes Financing Charges Adjusted Income before Income Taxes Three Months Ended June 30 Three Months Ended June 30 (in $ millions) 2019 2018 (in $ millions) 2019 2018 Income (loss) Income (loss) before Income Ta
Slide 31: Segment Performance
Segment Performance (in $ millions) Segment Performance Q1 2018 Q1 2019 Corporate / Corporate / Americas EMEA Asia Consolidated Americas EMEA Asia Consolidated Recon Items Recon Items Net sales $ 1,786 $ 1,853 $ 648 $ (83) $ 4,204 $ 1,935 $ 1,640 $ 650 $ (67) $ 4,158 Adjusted EBITDA 35 82 176 (27) 2
Slide 32: Supplementary - Seat Structures & Mechanisms progression
Supplementary - Seat Structures & Mechanisms (structures and mechanisms) progression Memo: Seat Structures & Mechanisms Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Net sales $ 718 $ 797 $ 783 $ 705 $ 3,003 Adjusted EBITDA (82) (34) (18) (34) (168) Adjusted EBITDA margin -11.4% -4.3% -2.3% -4.8% -5.6% Ad
Slide 33: Prior Period Results
Prior Period Results FY18 Actual FY19 Actual Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Full FY18 Q1 FY19 Q2 FY19 Q3 FY19 Sales ($Mils.) $ 4,204 $ 4,596 $ 4,494 $ 4,145 $ 17,439 $ 4,158 $ 4,228 $ 4,219 Adjusted EBIT 162 251 205 148 766 105 117 129 % of Sales 3.85% 5.46% 4.56% 3.57% 4.39% 2.53% 2.77% 3.06% Q1-2
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