Slide 1: FY 2020 First Quarter Earnings Call
FY 2020 First Quarter Earnings Call January 31, 2020 Improving the experience of a world in motion 1 Adient – 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: Agenda
Agenda Introduction Mark Oswald Vice President, Global Investor Relations Business update Douglas Del Grosso President and Chief Executive Officer Financial review Jeffrey Stafeil Executive Vice President and Chief Financial Officer Q&A FY 2020 First Quarter Earnings Call / January 31, 2020 3 Adient
Slide 4: Recent developments key takeaways
Recent Q2 2018developments key takeaways > Adient reported solid Q1 financial results despite a decline in revenue – the company’s fourth consecutive quarter of sequential Adj.-EBITDA improvement and first quarter of improved y-o-y results since Q4FY17 ‒ Q1 revenue of $3.9B, down $222M or 5% y-o-y (
Slide 5: New business wins and launches
New business wins and launches Select wins Recent and upcoming launches Toyota Large SUV Jeep Junior Nissan Leaf Toyota Tacoma Cadillac CT5 • Americas • EMEA A significant number • Americas • Americas • Americas • New business • New business (JIT) of EV program wins • Launched in Q1 • Launched in Q1
Slide 6: Adient's turnaround solidly on track
Adient’s turnaround solidly on track Specific focus areas driving improved results ➢ ➢ ➢ Launch Operational ➢ management improvement •Continuous •Better launch improvement execution •Lean activities •Reduced number of ➢ launches and launch •Asset utilization complexity •Rationalize footprint ➢ Comme
Slide 7: Driving shareholder value
Driving shareholder value Driving shareholder value With operations stabilized Strengthening the balance and steadily improving, sheet opportunity to execute strategic actions: Cash flow growth Execute improvement phase of turnaround plan Earnings growth ► Portfolio adjustments (sale of focused on:
Slide 8: Financial Review
FINANCIAL REVIEW FY 2020 First Quarter FY 2020 First Quarter Earnings Call / January 31, 2020 8 Adient Adient– Improving – Improving thethe experience of of experience a world in in a world motion motion
Slide 9: FY 2020 Q1 key financials
FY 2020 Q1 key financials As Reported As Adjusted 1 $ millions, except per share data Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 B/(W) Revenue $ 3,936 $ 4,158 $ 3,936 $ 4,158 -5% EBIT $ (42) $ 54 $ 218 $ 105 108% Margin * 1.3% 5.5% 2.5% EBITDA N/A N/A $ 297 $ 176 69% Margin 7.5% 4.2% Memo: Equity Income 2,3 $
Slide 10: Revenue – consolidated & unconsolidated
Revenue – consolidated & unconsolidated Consolidated sales Unconsolidated Seating and SS&M $ in Millions $2,265 M $4,158 $2,201 M Year-over- $(179) year growth $(43) $3,936 +3% Up 4% excluding FX Q1FY19 Volume/Pricing FX Q1FY20 Q1 FY19 Q1 FY20 Unconsolidated Interiors Regional Performance (consolida
Slide 11: Q1 FY20 Adjusted-EBITDA
Q1 FY20 Adjusted-EBITDA > Q1FY20 Adj.-EBITDA of $297M, up $121M y-o-y. Primary drivers of the y-o-y performance included: ‒ Improved business performance (launch, ops $ in millions waste, freight, material margin) in Americas $23 $297 and EMEA, and to a lesser extent in Asia. $0 $47 7.5% ‒ An increa
Slide 12: Q1 FY20 Adjusted-EBITDA: Americas
Q1 FY20 Adjusted-EBITDA: Americas > Q1FY20 Adj. EBITDA of $94M, up $51M y-o-y. Primary drivers of the y-o-y performance included: $ in millions ‒ Business performance improvement of $40M Business performance: including $18M of commercial, $10M of launch, • $18M Commercial $20M Net material margin op
Slide 13: Q1 FY20 Adjusted-EBITDA: EMEA
Q1 FY20 Adjusted-EBITDA: EMEA $ in millions > Q1FY20 Adj. EBITDA of $49M, up $47M y-o-y. Primary drivers of the y-o-y Business performance: performance included: • $17M Commercial $21M Net material margin • $4M Material • $19M Launch / Ops Waste / Tooling ‒ Business performance improvement of • $5M
Slide 14: Q1 FY20 Adjusted-EBITDA: Asia
Q1 FY20 Adjusted-EBITDA: Asia > Q1FY20 Adj. EBITDA of $177M, up Business performance: $23M y-o-y. Primary drivers of the y-o-y • $3M Commercial $9M Net material margin • $6M Material performance included: • $1M Launch / Ops Waste / Tooling • $1M Other performance (including hourly merit increases) •
Slide 15: Cash flow & debt
Cash flow & debt 1 Free Cash Flow (1) Debt FY20 FY19 (in $ millions) Q1 FY20 Q1 FY19 > Cash and cash equivalents of $965M at December 31, 2019 Adjusted-EBITDA $ 297 $ 176 > Cash balance includes ~$100M - $200M of excess liquidity that (+/-) Net Equity in Earnings (107) (82) Highly is expected to be
Slide 16: Additional opportunity to strengthen the balance sheet
Additional opportunity to strengthen the balance sheet - positioning Adient for long-term success Proceeds Divestiture of RECARO Non-core, breakeven business $0 expected to be Automotive Seating Focus on capital allocation used to paydown a portion of Sale of 30% ownership stake in Adient’s debt $37
Slide 17: FY20 Outlook – key financial metrics
FY20 Outlook – key financial metrics * Revenue ~ $15.6B – $15.8B Interest ~ $190M no change Expense prior $200M Updated guidance reflects $30M Adj. EBITDA ~ $870M – $910M Cash Tax ~ $100M - $110M prior $820M - $860M Memo: ETR high 30% range no change decrease in equity income resulting from Equity ~
Slide 18: Appendix and Financial Reconciliations
APPENDIX AND FINANCIAL RECONCILIATIONS FY 2020 First Quarter FY 2020 First Quarter Earnings Call / January 31, 2020 18 Adient Adient– Improving – Improving thethe experience of of experience a world in in a world motion motion
Slide 19: 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 20: Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA
Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA Three months ended December 31 2019 2018 2018 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted Adj. Adjusted GAAP 1 Adj. Adjusted Net sales $ 3,936 $ - $ 3,936 $ 4,158 $ - $ 4,158 Cost of sales (1) 3,673 (2) 3,671 3,978 (10) 3,968
Slide 21: Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA (prior periods)
Non-GAAP reconciliations - EBIT, Adjusted EBIT, Adjusted EBITDA Three months ended March 31 Three months ended June 30 Three months ended September 30 (prior periods) (in $ millions) GAAP 2019 Adj. Adjusted GAAP 2019 Adj. Adjusted GAAP 2019 Adj. Adjusted Net sales $ 4,228 $ - $ 4,228 $ 4,219 $ - $ 4
Slide 22: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted Net Income Adjusted Net Income Adjusted Diluted EPS Three Months Ended Three Months Ended December 31 December 31 (in $ millions) 2019 2018 2019 2018 Net income (loss) attributable to Adient $ (167) $ (17) Net income (loss) attributable to Adient $ (1.78) $ (0.18) R
Slide 23: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted Income before Income Taxes and Effective Tax Rate Adjusted Income before Income Taxes Three Months Ended December 31 (in $ millions) 2019 2018 Income (loss) Income (loss) before Income Tax impact Effective before Income Tax impact Effective Taxes tax rate Taxes tax
Slide 24: Segment Performance
Segment Performance Segment Performance (in $ millions) Q1 2019 Q1 2020 Corporate / Corporate / Americas EMEA Asia Consolidated Americas EMEA Asia Consolidated Recon Items Recon Items Net sales $ 1,935 $ 1,640 $ 650 $ (67) $ 4,158 $ 1,859 $ 1,564 $ 572 $ (59) $ 3,936 Adjusted EBITDA 43 2 154 (23) 17