Slide 1: FY2022 Second Quarter Earnings Call
FY2022 Second Quarter Earnings Call May 5, 2022 Adient – PUBLIC 1
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” withi
Slide 3: Agenda
Agenda > Introduction Mark Oswald VP, Treasurer & Investor Relations > Business Update Doug Del Grosso President and CEO > Financial Review Jeff Stafeil Executive VP and CFO > Q&A FY2022 Second Quarter Earnings Call Adient – PUBLIC 3
Slide 4: Remaining focused despite intensified external pressures
Remaining focused despite intensified external pressures Continuing the trend established in H2FY21, numerous external factors including supply Intensified headwinds chain disruptions (and resulting operating inefficiencies), elevated commodity prices, Key Q2FY22 increased freight costs, and labor a
Slide 5: Operating environment remains challenging
Operating environment remains challenging The operating environment Trending Headwinds Q2FY22 Impact* continues to be challenging through the midway point of Conflict in Ukraine > Supply chain disruptions (semiconductor and COVID combined with FY22. In addition to the widespread related) resulting i
Slide 6: Navigating through inflationary pressures
Navigating through inflationary pressures Risk Mitigation 2022 recoveries Input Costs Prior Today Future significantly exceeding historical averages ~70% contractual w/ ~70%+ contractual w/ Increasing contractual given successful Steel approx. two quarter lag shortened lag agreements w/ shorter lag
Slide 7: The FY2022 narrative continues to evolve, driven by significant external influences
The FY2022 narrative continues to evolve, driven by significant external influences Expectations entering FY22 Current view Assuming transitory in nature, > No change to positive influences within Adient’s Positive influences Negative influences mitigating actions being executed including: control –
Slide 8: Strengthening our leading position and remaining a supplier of choice
Strengthening our leading position and remaining a supplier of choice > Adient was awarded the highly vertically integrated replacement Toyota Toyota Camry Camry business in the Americas, including the complete seat, metals, foam Complete Seat, Metals, Trim, Foam and trim. > Multiple conquest wins w
Slide 9: In process and upcoming launches
In process and upcoming launches The F-150 Lightning launch is meeting quality, delivery and Ford F-150 Lightning financial expectations as launch progresses. Americas Existing footprint was utilized to support this launch, including a plant expansion to support new shipping and IT systems allowing
Slide 10: Highlighting sustainability progress on Earth Day
Highlighting sustainability progress on Earth Day On April 22, Adient celebrated Earth Day by recognizing several recent outstanding sustainability projects. These initiatives, some of which are highlighted below, demonstrate our employees’ shared commitment to bettering our processes and operating
Slide 11: Summary
Summary > Adient continues to execute actions within its control to position the company for sustained success, including: > Advancing the company’s “Back to Basics” strategy – focused on launch execution, cost/operational improvement, and customer profitability management > Implementing processes /
Slide 12: Financial Review
Financial Review FY2022 Second Quarter Adient – PUBLIC
Slide 13: Q2 FY2022 Key Financials
Q2 FY2022 Key Financials As Reported As Adjusted 1 $ millions, except per share data Q2 FY22 Q2 FY21 Q2 FY22 Q2 FY21 B/(W) Consolidated $ 3,506 $ 3,819 $ 3,506 $ 3,819 (8)% Revenue $3,950 Q2FY21 pro forma adjusted for EBIT $ 46 $ 230 $ 79 $ 221 (64)% strategic/footprint actions Margin 1.3% 6.0% 2.3%
Slide 14: Q2 FY2022 Revenue: Regional Performance
Q2 FY2022 Revenue: Consolidated and unconsolidated sales Regional Performance Consolidated sales (consolidated sales y-o-y growth (vs. Q2 FY21 pro forma) by region) 1, 2 $131 Q2 Q2 IHS Production $(318) $(126) Americas -3.0% -3.5% $3,819 $3,950 $3,506 EMEA -17.3% -17.9% Asia -1.3% 0.2% Note: China -
Slide 15: Q2 FY22 Adjusted-EBITDA
Q2 FY22 Adjusted-EBITDA Q2FY22 adjusted EBITDA of $159M, down $131M y-o-y (adjusting for Improved launch/ops waste/tooling performance offset by increased freight, labor portfolio actions executed in FY21) and overhead, and lower net material margin > Numerous external factors including supply chain
Slide 16: Cash flow
Cash flow Free Cash Flow (1) FY22 FY21 Key drivers impacting YTD FCF: (in $ millions) Q2 FY22 YTD Q2 FY21 YTD (-) Lower consolidated y-o-y earnings (driven Adjusted-EBITDA (Excl. Equity income) $ 142 $ 254 $ 250 $ 534 by lower volumes -- primarily supply chain (+) Dividend - 1 8 9 related) (-) Restr
Slide 17: Debt and capital structure
Debt and capital structure Net Debt ($ in millions) 3/31/2022 Cash & Debt Profile Amount March 31 September 30 Cash & Cash Equivalents $ 1,118 (in $ millions) 2022 2021 ABL Revolver, incl. FILO due 2024 (1) - Cash $ 1,118 $ 1,521 Term Loan B due 2028 993 Total Debt 2,936 3,696 9.00% Secured Notes du
Slide 18: FY22 Outlook – key financial metrics
FY22 Outlook – key financial metrics Consolidated sales ~$14.2B > FY22 guidance updated to reflect Adient’s YTD Prior: ~$14.8B results through March 31, 2022, planned debt Significantly lower (>$100M) vs. paydown and current market conditions Adj.-EBITDA FY21 pro forma results of $810M Prior: Modest
Slide 19: Beyond FY2022
Beyond FY2022 > Despite the challenging operating environment that continues to influence FY2022, we are optimistic… Adient’s foundation is strong “Sticky” costs and mitigating and continues to strengthen Transitory costs / headwinds actions > Focused on executing “Back-to- > Supply chain disruption
Slide 20: Appendix and financial reconciliations
Appendix and financial reconciliations FY 2022 Second Quarter Adient – PUBLIC
Slide 21: Q2 FY22 Adjusted-EBITDA: Americas
Q2 FY22 Adjusted-EBITDA: Americas Q2FY22 of $46M, down $19M y-o-y (adjusting for portfolio actions executed in FY21) > Numerous external factors including supply chain disruptions (and resulting operating inefficiencies) and increased freight costs had a significant impact on the quarter $ in millio
Slide 22: Q2 FY22 Adjusted-EBITDA: EMEA
Q2 FY22 Adjusted-EBITDA: EMEA Q2FY22 of $30M, down $104M y-o-y (adjusting for $ in millions portfolio actions executed in FY21) > Numerous external factors including supply chain disruptions (and resulting operating inefficiencies) $141 and increased freight costs had a significant impact $134 $3 on
Slide 23: Q2 FY22 Adjusted-EBITDA: Asia
Q2 FY22 Adjusted-EBITDA: Asia Q2FY22 of $105M, down $9M y-o-y (adjusting for $ in millions portfolio actions executed in FY21) Key drivers of the y-o-y comparison: $121 $4 $114 $5 > Improved business performance, primarily net material margin, partially offset by $105 $(7) $(8) $(5) increased freigh
Slide 24: Non-GAAP financial measurements and pro-forma reconciliations
Non-GAAP financial measurements and pro-forma reconciliations 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 interest expense, Free ca
Slide 25: Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, Adj.-Equity Income
Non-GAAP Reconciliations - EBIT, Adj.-EBIT, Adj.-EBITDA, Adj.-Equity Income, and Adj.-EBITDA excluding Adj.-Equity Income Three months ended March 31 2022 2021 (in $ millions) GAAP Adj. Adjusted GAAP Adj. Adjusted Net sales $ 3,506 $ - $ 3,506 $ 3,819 $ - $ 3,819 Cost of sales (1) 3,328 - 3,328 3,52
Slide 26: Non-GAAP Reconciliations - Adjusted Net Income and Adjusted EPS
Non-GAAP Reconciliations - Adjusted Net Income and Adjusted EPS Adjusted Net Income Adjusted Diluted EPS Three Months Ended Three Months Ended March 31 March 31 (in $ millions) 2022 2021 2022 2021 Net income (loss) attributable to Adient $ (81) $ 69 Net income (loss) attributable to Adient $ (0.85)
Slide 27: Non-GAAP Reconciliations - Adjusted Income before Income Taxes and Effective Tax Rate
Non-GAAP Reconciliations - Adjusted Income before Income Taxes and Effective Tax Rate Adjusted Income before Income Taxes Three Months Ended March 31 (in $ millions) 2022 2021 Income (loss) Income (loss) before Income Tax impact Effective before Income Tax impact Effective Taxes tax rate Taxes tax r
Slide 28: Non-GAAP Reconciliations - Pro forma fiscal year 2021 reconciliations
Non-GAAP Reconciliations - Pro forma fiscal year 2021 reconciliations (in $ millions) Net Sales Q1 Q2 Q3 Q4 FY2021 Adjusted EBITDA Q1 Q2 Q3 Q4 FY2021 Americas - as reported: $ 1,737 $ 1,644 $ 1,440 $ 1,343 $ 6,164 Americas - as reported: $ 132 $ 64 $ 23 $ 13 $ 232 Americas footprint actions (20) - -
Slide 29: Segment Performance
Segment Performance Q1 2021 Q1 2022 Corporate/ Corporate/ Americas EMEA AP Consolidated Americas EMEA AP Consolidated Eliminations Eliminations Net Sales 1,737 1,604 554 (47) 3,848 1,498 1,230 784 (32) 3,480 Adjusted EBITDA 132 114 151 (19) 378 9 43 114 (20) 146 Adjusted Equity Income - 3 91 - 94 (1