Slide 1: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results August 1, 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 Second Quarter 2023
Financial Overview Second Quarter 2023 CORE OPERATING ADJUSTED OPERATING SALES Q4 2022 EARNINGS Q4 2022PER SHARE EARNINGS Q4 2022 CASH FLOW Q2 2023 $6.0B $302M $3.33 $311M UP 18% YOY UP 61% YOY UP 86% YOY UP $300M YOY Q2 2022 $5.1B $187M $1.79 $11M Lear Proprietary: The information contained herein
Slide 6: Q2 2023 Highlights
Q2 2023 Highlights Positive momentum accelerated with record sales and improved operating results in both business segments Sales outperformed global industry production, driven by growth over market in E-Systems of 11 percentage points Year-to-date E-Systems awards are more than 50% higher than in
Slide 7: Seating Product Day Major Announcements
Seating Product Day Major Announcements • Increased 2023 outlook for net sales, core operating earnings • Increased expected Thermal Comfort Systems addressable and free cash flow market industry outgrowth to 4 percentage points (from 2 percentage points) annually through 2027 • Increased JIT seatin
Slide 8: E-Systems Update
E-Systems Update • Fourth consecutive quarter of year-over-year margin improvement YEAR-TO-DATE AWARDS • Year-to-date awards more than 50% higher ($ in millions) than in 2022 ≈$710 - High voltage and low voltage wiring awards for multiple EV platforms, including our first wiring award with BMW - Awa
Slide 9: Financial Review
Financial Review Jason Cardew Senior Vice President and CFO
Slide 10: Global Vehicle Production and Currency
Second Quarter 2023 Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA Q2 2022 18.7 Q2 2022 3.5 Q2 2022 4.1 Q2 2022 5.2 Q2 2023 21.5 Q2 2023 4.1 Q2 2023 4.6 Q2 2023 6.2 UP 15% YOY UP 15% YOY UP 15% YOY UP 19% YOY KEY CURRENCIES
Slide 11: Growth Over Market
Growth Over Market Second Quarter 2023 2% Q2 2023 6% EUROPE Global GoM 3% H1 2023 • Seating: Backlog • E-Systems: Backlog and favorable platform mix (4)% NORTH AMERICA 10% CHINA (1)% Q2 2023 • Seating: Unfavorable Seating GoM platform mix partially • Seating: Backlog and offset by backlog favorable
Slide 12: Key Financials
Key Financials Second Quarter 2023 ($ in millions, except per share amounts) 2022 2023 YEAR-OVER-YEAR DRIVERS Increased volume, strong backlog, commodities, and Net Sales $5,071 $5,999 acquisitions, partially offset by the impact of foreign exchange Core Operating Earnings $187 $302 Increased sales,
Slide 13: Seating Sales and Margin Drivers
Seating Sales and Margin Drivers Second Quarter 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) $163 $25 $40 $4,468 7.2% 15 bps 40 bps 105 bps $392 $(26) 0 bps (5)bps (15) bps (20)bps $322 $3,874 $300 6.0% $233 Q2 2022 Volume / Backlog Commodities FX Acquisitions Q2 2023 Q2 2
Slide 14: E-Systems Sales and Margin Drivers
E-Systems Sales and Margin Drivers Second Quarter 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 50 bps 220 bps (15) bps 4.1% (15) bps $29 $1,531 (20) bps $94 (10) bps $63 $220 $(9) $1,197 2.0% $24 Q2 2022 Volume / Backlog Commodities FX Q2 2023 Q2 2022 Volume / Backlog Comm
Slide 15: 2023 Outlook – Global Vehicle Production and Currency
2023 Outlook – Global Vehicle Production and Currency Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA FY 2022 80.9 FY 2022 14.3 FY 2022 16.2 FY 2022 25.1 FY 2023 84.0 FY 2023 15.0 FY 2023 17.5 FY 2023 24.8 vs Prior Year vs P
Slide 16: 2023 Full Year Outlook
2023 Full Year Outlook Interest Expense ≈$105 million Net Sales Operating Cash Flow No Change $22,350 - $23,050 million $1,180 - $1,280 million April Outlook $21,200 - $22,200 million Effective Tax Rate April Outlook $1,075 - $1,225 million 21% to 22% Core Operating Earnings Capital Expenditures No
Slide 17: Seating H1 2023 to H2 2023 Outlook
Seating H1 2023 to H2 2023 Outlook SALES MID-POINT TO HIGH-END SWING FACTORS ($ in millions) $8,921 High-End Sales and Earnings Impacts $8,404 • Potential labor strike at OEMs $(725) $(92) Mid-Point $8,104 • Consumer demand • Commercial negotiations H1 2023 Actuals Volume / Other FX H2 2023 Outlook
Slide 18: E-Systems H1 2023 to H2 2023 Outlook
E-Systems H1 2023 to H2 2023 Outlook SALES MID-POINT TO HIGH-END SWING FACTORS ($ in millions) High-End Sales and Earnings Impacts $2,924 $2,801 • Potential labor strike at OEMs $(129) $(42) Mid-Point $2,751 • Consumer demand • Commercial negotiations H1 2023 Actuals Volume / Other FX H2 2023 Outloo
Slide 19: Debt Structure and Capital Allocation
Debt Structure and Capital Allocation Strong Balance Sheet DEBT MATURITIES • IGB acquisition largely financed with new $150 million three-year term loan ($ in millions) - Floating interest rate; fully prepayable with no penalty $2,150 • No meaningful debt maturities until 2027 • Low cost of bonds av
Slide 20: Concluding Remarks
Concluding Remarks Ray Scott President and CEO
Slide 21: Strategic Business Priorities
Strategic Business Priorities Expanding Competitive Advantage Focused Product Portfolio in in Seating with Thermal Comfort E-Systems Driving Growth Systems Innovations Improving Cost Generating Cash and Driving Competitiveness through Long-Term Shareholder Value Operational Excellence Lear Proprieta
Slide 22: Appendix
Appendix
Slide 23: Non-GAAP
Non-GAAP In addition to the results reported in accordance with GAAP included throughout the presentation, the Company has provided information regarding “pretax income before equity income, interest, other expense, restructuring costs and other special items” (core operating earnings or adjusted se
Slide 24: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 24
Slide 25: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 25
Slide 26: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 26
Slide 27: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 27