Slide 1: First Quarter 2023 Financial Results
First Quarter 2023 Financial Results April 27, 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 First Quarter 2023
Financial Overview First Quarter 2023 CORE OPERATING ADJUSTED OPERATING CASH SALES Q4 2022 EARNINGS Q4 2022PER SHARE EARNINGS Q4FLOW 2022 Q1 2023 $5.8B $263M $2.78 $(36)M UP 12% YOY UP 43% YOY UP 54% YOY Q1 2022 $5.2B $184M $1.80 $221M Lear Proprietary: The information contained herein is the proper
Slide 6: Q1 2023 Highlights
Q1 2023 Highlights Margin improvement in both Seating and E-Systems as compared to last year Sales outperformed global industry production by 6 percentage points with above market growth in both Seating and E-Systems Conquest award previously announced to supply complete seats for the Wagoneer and G
Slide 7: IGB Enhances Competitive Advantage in Seating
IGB Enhances Competitive Advantage in Seating IGB PROFILE VW, Audi, Porsche ≈$250M BMW Global EV OEM Mercedes-Benz Ford GM Hyundai 9 manufacturing locations ≈4,600 total employees, 2022 Total Revenue* Renault 114 Patents Other in 7 countries including ≈240 engineers Top Customers* IGB PRODUCT PORTFO
Slide 8: Thermal Comfort Systems Product Evolution
Thermal Comfort Systems Product Evolution BUSINESS INTEGRATION COMPONENT MODULARITY COMPLETE SEAT MODULARITY • Optimized portfolio through acquisitions of • Developed a more efficient integrated • Modular design drives industry leading Kongsberg and IGB ventilation and lumbar/massage module performa
Slide 9: Thermal Comfort Systems Portfolio
Thermal Comfort Systems Portfolio TCS PROFILE Pro-Forma Total Revenue* 2022 Pro-Forma Total Revenue by Product* ≈$550M 2022 Heat Vent & Active Cool 13 manufacturing ≈9,000 total employees, ≈$800M 395 Patents Lumbar & Massage Other locations in 8 countries including ≈500 engineers 2027 Target COMBINE
Slide 10: Winning Business in Both Segments
Winning Business in Both Segments RECENT SEATING AWARDS RECENT E-SYSTEMS AWARDS • Complete seats for the Wagoneer and Grand Wagoneer • BDU for a new Stellantis electric vehicle through 2030 • Additional volume for our ICB to support both the - Includes Lear-supplied Thermal Comfort Systems (heat, BE
Slide 11: Financial Review
Financial Review Jason Cardew Senior Vice President and CFO
Slide 12: Global Vehicle Production and Currency
First Quarter 2023 Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA Q1 2022 19.5 Q1 2022 3.6 Q1 2022 4.0 Q1 2022 5.8 Q1 2023 20.7 Q1 2023 3.9 Q1 2023 4.7 Q1 2023 5.4 UP 6% YOY UP 10% YOY UP 17% YOY DOWN 8% YOY KEY CURRENCIES
Slide 13: Growth Over Market
Growth Over Market First Quarter 2023 12% EUROPE 6% Q1 2023 Global GoM • Seating: Backlog and favorable platform mix • E-Systems: Favorable (1)% NORTH AMERICA platform mix and backlog 8% CHINA • Seating: Backlog partially 6% Q1 2023 offset by unfavorable platform mix • Seating: Favorable Seating GoM
Slide 14: Key Financials
Key Financials First Quarter 2023 ($ in millions, except per share amounts) 2022 2023 YEAR-OVER-YEAR DRIVERS Increased volume, strong backlog and commodity pass- Net Sales $5,208 $5,846 through, partially offset by the impact of foreign exchange Core Operating Earnings $184 $263 Increased sales, acc
Slide 15: Seating Sales and Margin Drivers
Seating Sales and Margin Drivers First Quarter 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 45 bps 0 bps 6.7% $125 $49 115 bps (10) bps $48 $4,453 (10) bps $466 (30)bps $(148) $300 $3,913 5.6% $218 Q1 2022 Volume / Backlog Commodities FX Acquisitions Q1 2023 Q1 2022 Volume
Slide 16: E-Systems Sales and Margin Drivers
E-Systems Sales and Margin Drivers First Quarter 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 10 bps 95 bps $24 $14 $134 3.5% $1,393 (50) bps $(75) 3.2% (15) bps (10)bps $1,296 $49 $42 Q1 2022 Volume / Backlog Commodities FX Q1 2023 Q1 2022 Volume / Backlog Commodities FX
Slide 17: Debt Structure and Capital Allocation
Debt Structure and Capital Allocation IGB Financing DEBT MATURITIES • To be funded with $150 million delayed-draw term loan ($ in millions) • Three-year maturity; fully prepayable with $2,150 no penalty Pro-Forma • Floating interest rate $2,000 Available Revolver Bonds Term Loan Strong Balance Sheet
Slide 18: 2023 Outlook
2023 Outlook FULL YEAR OUTLOOK KEY FACTORS • Global macro environment • Customer launch timing and execution • Production environment and stability • Commodity cost volatility • Vehicle affordability and impact on demand • Foreign exchange rates • Platform mix versus expectations • Upcoming OEM labo
Slide 19: Concluding Remarks
Concluding Remarks Ray Scott President and CEO
Slide 20: Seating Product Day
Leading in Growing our Core Operational Products Excellence SAVE THE DATE: Seating Product Day June 27, 2023 Optimizing Manufacturing Footprint Maximizing Long-Term and Cost Synergies Shareholder Value Lear Proprietary: The information contained herein is the property of Lear Corporation. 20
Slide 21: Appendix
Appendix
Slide 22: E-Systems Revenue by Product
E-Systems Revenue by Product E-SYSTEMS REVENUE ELECTRIFICATION REVENUE 2023 • Our electrification business consists of high voltage wiring and connection systems and key power electronics products OUTLOOK – AT MID-POINT • These products are a subset of our overall wiring, connection systems and elec
Slide 23: 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 80.9 FY 2022 14.3 FY 2022 16.2 FY 2022 25.1 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 24: 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 25: 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 expense, restructuring costs and other special items” (core operating earnings or adjusted s
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
Slide 28: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 28
Slide 29: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 29