Slide 1: Fourth Quarter and Full Year 2022 Financial Results
Fourth Quarter and Full Year 2022 Financial Results February 2, 2023 Ray Scott, President and CEO Jason Cardew, Senior Vice President and CFO
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. The words “will,” “may,” “designed to,” “outl
Slide 3: Agenda
Agenda 01 02 03 BUSINESS UPDATE FINANCIAL REVIEW CONCLUDING REMARKS Ray Scott, President and CEO Jason Cardew, Senior Vice President and CFO Ray Scott, President and CEO Lear Proprietary: The information contained herein is the property of Lear Corporation. 3
Slide 4: Business Update
Business Update Ray Scott President and CEO
Slide 5: Financial Overview: Fourth Quarter and Full Year 2022
Financial Overview Fourth Quarter and Full Year 2022 CORE OPERATING ADJUSTED OPERATING CASH SALES Q4 2022 EARNINGS Q4 2022PER SHARE EARNINGS Q4FLOW 2022 Q4 2022 $5.4B $265M $2.81 $537M UP 10% YOY UP 67% YOY UP 130% YOY UP 222% YOY FY 2022 $20.9B $871M $8.72 $1.0B UP 8% YOY UP 5% YOY UP 10% YOY UP 52
Slide 6: 2022 Highlights
2022 Highlights BUSINESS Completed the Kongsberg acquisition and announced agreement to acquire IG Bauerhin (IGB) to expand product offerings in the growing thermal comfort solutions market Selected by General Motors to exclusively supply the Battery Disconnect Unit (BDU) on all full-size SUVs and t
Slide 7: Key 2023 Product Launches: Seating
Seating = Electric Vehicle Key 2023 Product Launches = Luxury Global OEM BMW 5 Series / i5 Chevrolet Colorado/ Chevrolet Silverado EV Mercedes-Benz E-Class CONQUEST CONQUEST GMC Canyon CONQUEST JIT, Thermal Comfort JIT, Trim, Thermal Comfort JIT, Trim, Structures JIT, Trim, Structures JIT, Fabric NO
Slide 8: Key 2023 Product Launches: E-Systems
E-Systems Key 2023 Product Launches = Electric Vehicle Chevrolet Colorado/ GM BET Platform GM Ultium Platform MINI Countryman Volvo EX90 GMC Canyon Onboard Charger and Battery Low Voltage Wiring Battery Disconnect Unit Intercell Connect Board Body Control Module Management System NORTH AMERICA NORTH
Slide 9: Focused Strategy in Place to Drive Growth and Profitability
Focused Strategy in Place to Drive Growth and Profitability Strategy Outlined in Q1 2021 Extend market Transform Lead in Industry 4.0 Prioritize people and leadership with through accelerated through planet priceable content growth in connection digitalization and systems and automation electrificat
Slide 10: Sales Backlog (Net New Awarded Business)
Sales Backlog (Net New Awarded Business) 2023–2025 CONSOLIDATED ≈$2.85B SALES BACKLOG CONSOLIDATED SALES BACKLOG BY REGION ($ in millions) ($ in millions) North America Europe ≈$1,550 ≈$750 ≈$2,850 E-SYSTEMS $1,050 SEATING South Asia America ≈$450 ≈55% ≈$100 Electrification ≈$1,500 DRIVERS OF BACKLO
Slide 11: Financial Review
Financial Review Jason Cardew Senior Vice President and CFO
Slide 12: Fourth Quarter 2022: Global Vehicle Production and Currency
Fourth Quarter 2022 Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA Q4 2021 20.7 Q4 2021 3.3 Q4 2021 4.1 Q4 2021 7.2 Q4 2022 21.2 Q4 2022 3.6 Q4 2022 4.3 Q4 2022 6.9 UP 2% YOY UP 8% YOY UP 5% YOY DOWN 5% YOY KEY CURRENCIES 2
Slide 13: Growth Over Market
Growth Over Market Fourth Quarter 2022 7% Q4 2022 5% FY 2022 17% EUROPE Global GoM • Seating: Backlog and favorable platform mix • E-Systems: Backlog and 1% NORTH AMERICA favorable platform mix (1)% CHINA 7% Q4 2022 • Seating: Backlog partially 5% FY 2022 • Seating: Backlog partially offset by unfav
Slide 14: Key Financials: Fourth Quarter 2022
Key Financials Fourth Quarter 2022 ($ in millions, except per share amounts) 2021 2022 YEAR-OVER-YEAR DRIVERS Strong backlog, increased volume and commodity pass- Net Sales $4,880 $5,371 through, partially offset by the impact from foreign exchange Core Operating Earnings $158 $265 Increased sales,
Slide 15: Seating Sales and Margin Drivers
Seating Sales and Margin Drivers Fourth Quarter 2022 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) $88 25 bps $236 50 bps 50 bps 6.8% $57 $4,037 $264 85 bps (5) bps (25) bps $(249) (50)bps $275 $3,641 5.5% $199 Q4 2021 Volume / Backlog Commodities FX Acquisitions Q4 2022 Q4 2021
Slide 16: E-Systems Sales and Margin Drivers
E-Systems Sales and Margin Drivers Fourth Quarter 2022 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 65 bps 70 bps 4.8% $74 145 bps $75 (100) bps $64 $76 $1,334 (0) bps $1,239 $(130) 3.0% $38 Q4 2021 Volume / Backlog Commodities FX Q4 2022 Q4 2021 Volume / Backlog Commodities FX
Slide 17: Operating Cash Flow and Capital Allocation
Operating Cash Flow and Capital Allocation CAPITAL ALLOCATION STRATEGY DEBT MATURITIES Strong Balance Sheet ($ in millions) $2,000 • No outstanding debt maturities until 2027 • Low cost of debt averaging less than 4% with a weighted average life of 14.4 years Available Revolver Bonds • Total availab
Slide 18: 2023 Outlook – Global Vehicle Production and Currency
2023 Outlook – Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA FY 2022 80.5 FY 2022 14.3 FY 2022 16.1 FY 2022 25.0 FY 2023 81.3 FY 2023 15.0 FY 2023 16.1 FY 2023 25.0 vs Prior Year vs Prior Year vs Prior Year vs Prior Year U
Slide 19: 2023 Full Year Outlook
2023 Full Year Outlook Interest Expense ≈$105 million Net Sales Operating Cash Flow $21,200 - $22,200 million $1,075 - $1,225 million Effective Tax Rate 21% to 22% Core Operating Earnings Capital Expenditures $875 - $1,075 million ≈$700 million Adjusted Net Income $510 - $670 million Adjusted EBITDA
Slide 20: 2022 Actual to 2023 Outlook – at Mid-Point
2022 Actual to 2023 Outlook – at Mid-Point ($ in millions) SALES ADJUSTED EARNINGS AND MARGIN $1,000 $110 $21,700 $(76) 15 bps 4.5% $(215) 25 bps 20 bps $20,892 (5) bps (5)bps 4.2% 5 bps $(11) - (25)bps $975 $871 2022 Volume / Mix / Backlog Commodities FX Acquisitions / 2023 Outlook 2022 Volume / Ba
Slide 21: Focused Strategy in Place to Drive Growth and Profitability
Focused Strategy in Place to Drive Growth and Profitability Strategy Outlined in Q1 2021 Extend market Transform Lead in Industry 4.0 Prioritize people and leadership with through accelerated through planet priceable content growth in connection digitalization and systems and automation electrificat
Slide 22: E-Systems Margin Expansion Plan – Key Drivers
E-Systems Margin Expansion Plan – Key Drivers CONNECTION SYSTEMS ELECTRONICS • Leveraging ICB to grow presence in the product space • Shifting resources to products with strong growth and financial returns • Continued growth in Battery Plugboards ‒ Targeting strong BDU market position (>20% share of
Slide 23: Lear Forward Plan Improves Cash Flow and Drives Shareholder Returns
Lear Forward Plan Improves Cash Flow and Drives Shareholder Returns • Optimize manufacturing footprint by • Generate cost savings to partially improving capacity utilization offset elevated wage inflation • Accelerate flexibility and automation • Aggressively manage working capital in manufacturing
Slide 24: Concluding Remarks
Concluding Remarks Ray Scott President and CEO
Slide 25: Executing for the Future
Executing for the Future Expand Thermal Comfort Solutions Grow Electrification and Connection Systems Execute Lear Forward Plan Focus on Cash Flow Generation Lear Proprietary: The information contained herein is the property of Lear Corporation. 25
Slide 26: Appendix
Appendix
Slide 27: Key Financials: Full Year 2022
Key Financials Full Year 2022 ($ in millions, except per share amounts) 2021 2022 YEAR-OVER-YEAR DRIVERS Strong backlog, increased volume and commodity pass- Net Sales $19,263 $20,892 through, partially offset by the impact from foreign exchange Core Operating Earnings $826 $871 Increased sales and
Slide 28: Seating Sales and Margin Drivers: Full Year 2022
Seating Sales and Margin Drivers Full Year 2022 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) $319 30 bps $805 $15,711 $198 45 bps $728 (60) bps 6.2% $(750) 25 bps $14,411 6.3% (5) bps (20) bps (25)bps $912 $981 FY 2021 Volume / Backlog Commodities FX Acquisitions FY 2022 FY 202
Slide 29: E-Systems Sales and Margin Drivers: Full Year 2022
E-Systems Sales and Margin Drivers Full Year 2022 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 55 bps 40 bps $274 4.1% $279 $5,180 $151 30 bps 3.5% $4,852 $(376) (170) bps (15) bps $197 $184 FY 2021 Volume / Backlog Commodities FX FY 2022 FY 2021 Volume / Backlog Commodities FX
Slide 30: Seating 2022 Actual to 2023 Outlook – at Mid-Point
Seating 2022 Actual to 2023 Outlook – at Mid-Point ($ in millions) SALES ADJUSTED EARNINGS AND MARGIN $650 $16,200 $110 20 bps 6.4% 15 bps 25 bps $(77) 6.2% 0 bps $15,711 $(140) (10) bps (25)bps $(54) (5)bps $1,040 $981 2022 Volume / Mix / Backlog Commodities FX Acquisitions / 2023 Outlook 2022 Volu
Slide 31: E-Systems 2022 Actual to 2023 Outlook – at Mid-Point
E-Systems 2022 Actual to 2023 Outlook – at Mid-Point ($ in millions) SALES ADJUSTED EARNINGS AND MARGIN 40 bps 50 bps 4.5% $350 $5,500 40 bps (5) bps 0 bps (25)bps $245 $45 $(75) 3.5% $5,180 $184 2022 Volume / Mix / Backlog FX 2023 Outlook at 2022 Volume / Backlog Commodities FX Engineering / Net 20
Slide 32: Non-GAAP
Non-GAAP In addition to the results reported in accordance with GAAP included throughout this presentation, the Company has provided information regarding “pretax income before equity income, interest, other (income) expense, restructuring costs and other special items” (core operating earnings or a
Slide 33: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 33
Slide 34: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 34
Slide 35: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 35
Slide 36: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 36
Slide 37: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 37