Slide 1: First Quarter 2021 Financial Results
First Quarter 2021 Financial Results May 7, 2021 Ray Scott, President and CEO Jason Cardew, Senior Vice President and CFO Making every drive better™ 1
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 BUSINESS UPDATE Ray Scott, President and CEO FINANCIAL REVIEW Jason Cardew, Senior Vice President and CFO CONCLUDING REMARKS 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 2021
Financial Overview First Quarter 2021 $5.4B $336M SALES CORE OPERATING EARNINGS UP 20% YOY UP 64% YOY 9 PPTS GoM $3.73 6.3% ADJUSTED EARNINGS ADJUSTED OPERATING PER SHARE MARGIN UP 82% YOY UP 1.7 PPTS YOY Year-over-year sales growth over market (GoM) excludes the impact of FX, commodities and acquis
Slide 6: First Quarter Business Highlights
First Quarter Business Highlights Delivered strong financial results despite very challenging industry conditions Successfully navigated supply chain shortages and intermittent OEM production disruptions Continued to grow faster than the market in both business segments Acquired M&N Plastics to expa
Slide 7: Focused Strategy in Place to Drive Growth and Profitability
Focused Strategy in Place to Drive Growth and Profitability EXECUTING EVERY DAY Extend market Transform through accelerated Lead in Industry leadership with Prioritize growth in connection 4.0 through priceable people and systems and digitalization and content planet electrification automation Makin
Slide 8: Build on our Strong Position in Seating
Build on our Strong Position in Seating Best-in-class operational performance driving market share gains and industry-leading financial returns Additional organic and inorganic investments to extend leadership position as Extend market most vertically integrated seating supplier leadership with pric
Slide 9: Proactively Positioning E-Systems for the Future
Proactively Positioning E-Systems for the Future Target organic and inorganic investments to increase vertical integration capabilities in connection systems and other engineered components to strengthen electrical distribution business Leverage industry leading domain expertise and capabilities wit
Slide 10: Drive Operational Excellence
Drive Operational Excellence Extend leadership position in operational excellence through increased use of advanced automation to reduce costs and improve quality Leverage data analytics and artificial intelligence to optimize logistics and Transform supply chains Lead in Industry E-Systems 4.0 thro
Slide 11: Integrate ESG Across the Enterprise
Integrate ESG Across the Enterprise Develop green products, such as those that support electrification or are constructed of environmentally friendly materials Prioritize Transform Enhance operations to utilize natural resources more efficiently Leadpeople E-Systems and through in Industry 4.0planet
Slide 12: Financial Review
Financial Review Jason Cardew, Senior Vice President and CFO
Slide 13: Global Vehicle Production and Currency
First Quarter 2021 Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA Q1 2020 17.5 Q1 2020 3.8 Q1 2020 4.8 Q1 2020 3.0 Q1 2021 19.9 Q1 2021 3.6 Q1 2021 4.8 Q1 2021 5.4 UP 14% YOY DOWN 4% YOY FLAT YOY UP 80% YOY KEY CURRENCIES 2
Slide 14: Strong Growth Over Market in All Regions
Strong Growth Over Market in All Regions First Quarter 2021 9% Global GoM 8% EUROPE ▪ Seating: Favorable platform mix and backlog 9% NORTH AMERICA ▪ E-Systems: Strong backlog across all products 9% 10% CHINA ▪ Seating: Favorable Seating GoM ▪ Seating: Favorable platform mix platform mix ▪ E-Systems:
Slide 15: Key Financials
Key Financials First Quarter ($ in millions, except per share amounts) 2020 2021 YEAR-OVER-YEAR DRIVERS Higher volume, favorable platform mix, impact of foreign Net Sales $4,458 $5,354 exchange and strong backlog Core Operating Earnings $205 $336 Higher volume, favorable platform mix and operating O
Slide 16: Seating Sales and Margin Drivers
Seating Sales and Margin Drivers First Quarter ($ in millions) SALES ADJUSTED EARNINGS AND MARGIN $40 $126 $3,996 160 bps 5 bps 50 bps $463 7.7% 5 bps $3,367 $307 6.0% (50 bps) $201 $201 Q1 2020 Volume / Mix Backlog FX Q1 2021 Q1 2020 Volume / Backlog Commodities FX Net Q1 2021 / Other Mix Performan
Slide 17: E-Systems Sales and Margin Drivers
E-Systems Sales and Margin Drivers First Quarter ($ in millions) SALES ADJUSTED EARNINGS AND MARGIN $21 $1,358 105 bps 7.0% $57 75 bps $121 $95 $68 95 bps $1,091 (30 bps) 4.8% (25 bps) $53 Q1 2020 Volume / Backlog FX Commodities Q1 2021 Q1 2020 Volume / Backlog Engineering Commodities Net Q1 2021 Mi
Slide 18: Strong Balance Sheet and Ample Liquidity to Invest for Growth
Strong Balance Sheet and Ample Liquidity to Invest for Growth LIQUIDITY AND CAPITAL ALLOCATION DEBT MATURITIES ($ in millions) • $3.1 billion in total liquidity, including $1.75 billion available under revolving line of credit Term Loan Available Revolver Bonds • No significant near-term debt maturi
Slide 19: 2021 Financial Outlook Drivers
2021 Financial Outlook Drivers ($ in millions) Seating E-Systems Lear Core Operating Sales Earnings February Outlook (Mid-Point) $ 20,300 $ 1,215 Platform Mix ++ + + + Production Disruptions - -- - - Foreign Exchange Rates + + + + Commodity Inflation and Other Premium Costs - - + - Operating Perform
Slide 20: 2021 Full Year Outlook
2021 Full Year Outlook Net Sales Interest Expense Restructuring Costs $20,350 - $21,150 million ≈$90 million ≈$100 million February Outlook $19,800 - $20,800 million Core Operating Earnings Effective Tax Rate Capital Spending $1,140 - $1,310 million ≈21% ≈$625 million February Outlook $1,130 - $1,30
Slide 21: Concluding Remarks
Concluding Remarks Ray Scott, President and CEO
Slide 22: Strong execution in first quarter; anticipate strong full year results
Strong execution in first quarter despite a Anticipate strong full year results despite challenging environment continued headwinds Strategy drives sustainable returns and Capital allocation plan in place to profitable growth support strategy Lear Proprietary: The information contained herein is the
Slide 23: Appendix
Appendix
Slide 24: 2021 Full Year Outlook: Global Vehicle Production and Currency
2021 Full Year Outlook Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA FY 2020 72.8 FY 2020 13.0 FY 2020 16.9 FY 2020 21.9 FY 2021 79.1 FY 2021 15.1 FY 2021 18.5 FY 2021 22.9 UP 9% YOY UP 16% YOY UP 10% YOY UP 5% YOY KEY CUR
Slide 25: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to the results reported in accordance with GAAP included throughout this presentation, the Company has provided information regarding “pretax income before equity income, interest, other expense, restructuring costs and other special items” (core operating
Slide 26: Non-GAAP Financial Information
Non-GAAP Financial Information Core Operating Earnings and Adjusted Margins First Quarter ($ in millions) 2020 2021 Net sales $ 4,457.7 $ 5,354.4 Net income attributable to Lear $ 76.4 $ 203.7 Interest expense 24.4 22.3 Other expense, net 40.5 6.3 Income taxes 26.5 58.9 Equity in net income of affil
Slide 27: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted Earnings Per Share First Quarter (In millions, except per share amounts) 2020 2021 Net income attributable to Lear $ 76.4 $ 203.7 Costs related to restructuring actions 34.0 24.4 Loss on extinguishment of debt 21.1 - Other 3.2 3.3 Tax impact of special items a
Slide 28: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted Segment Earnings and Margins First Quarter Seating E-Systems ($ in millions) 2020 2021 2020 2021 Net sales $ 3,366.6 $ 3,996.0 $ 1,091.1 $ 1,358.4 Segment earnings $ 186.1 $ 292.0 $ 32.4 $ 89.3 Restructuring costs and other special items - Costs related to res
Slide 29: Non-GAAP Financial Information
Non-GAAP Financial Information Free Cash Flow First Quarter ($ in millions) 2020 2021 Net cash provided by operating activities $ 222.3 $ 247.5 Capital expenditures (109.1) (112.9) Free cash flow $ 113.2 $ 134.6 Lear Proprietary: The information contained herein is the property of Lear Corporation.
Slide 30: Non-GAAP Financial Information
Non-GAAP Financial Information (in millions, except per share amounts) First Quarter 2021 Restructuring Other Reported Costs Special Items Adjusted Pretax Income Before Equity Income, Interest and Other Expense $ 307.4 $ 24.4 * $ 4.4 * $ 336.2 Equity Income (5.9) (5.9) Pretax Income Before Interest