Adient Plc · NYSE:ADNT
Adient — Investor Presentation (January 2019)
27 slides from Adient's investor presentation, Jan 16, 2019
Slide 1: Adient Investor Meeting
Adient Investor Meeting January 16, 2019 Improving the experience of a world in motion
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” within
Slide 3: Today's agenda
Today’s agenda Douglas Del Grosso President and Chief Executive Officer > Adient today > CEO 100-day plan > Transitioning from 100-day plan Jeffrey Stafeil Executive Vice President and Chief Financial Officer > Looking forward Investor Meeting: January 2019 3 Adient – Improving the experience of a w
Slide 4: Adient - key messages today
Adient - key messages today > Adient has a solid foundation > Internal and external headwinds that impacted FY18 continued into FY19 > Case study demonstrating our ability to resolve complex issues; turnaround actions taking root > Benchmarking our performance illustrates what can be achieved by fix
Slide 5: Adient today
Adient today Adient is a critical supplier in automotive seating, supplying approximately one out of every three automotive seats worldwide NYSE: ADNT FY18 Revenue Global market Revenue by share* geography* ~$17.4B ~$9.4B We supply one Americas Europe / out of every three Consolidated Unconsolidated
Slide 6: Strong customer diversification
Strong customer diversification PSA Others Ford JLR 2% 10% 11% > Industry leading diversification 2% GM We work with the 5% > By customer BMW No customer is greater than 12% of world’s largest 6% N. American total consolidated sales OEM's FCA automotive Volvo 5% 27% 11% > By platform manufacturers R
Slide 7: Seating joint venture partnerships in China enable clear leadership position
Our Seating joint venture partnerships in China enable us to enjoy a clear leadership position in China We generated We have We have $9.2B 21 seating joint ventures* 79 manufacturing sales revenue in FY2018 locations with We employ 4 45% global tech centers 33,000 combined share of the passenger veh
Slide 8: Adient dominates seat quality in J.D. Power's China Initial Quality Study
Adient continues to dominate the seat quality category in J.D. Power’s China Initial Quality Study with 21 awards in 2018 SJA BMW X1 seats YFAS Skoda Rapid seats COMPACT LUXURY SUV CFAA Audi Q3 seats MIDSIZE BASIC Volkswagen Touran L 6x x 7 CQYFAS Changan CS55 seats YFAS seats Buick GL6 seats COMPAC
Slide 9: Challenging 2018 in both SS&M and NA Seating
Challenging 2018 in both SS&M and NA Seating Negative headwinds Negative headwinds impacting SS&M Common headwinds impacting NA Seating > Launch planning > Higher than assumptions that normal volatility in did not > Volume & complexity customer releases materialize of launches (higher than historica
Slide 10: 2018 challenges significantly impacted ADNT's financial results
2018 challenges significantly impacted ADNT’s financial results ADNT Adjusted EBITDA 1 $’s millions $1,605 Equity earnings in $93 Seating remained strong; however, $301 $1,200 performance at YFAI $62 weighed on earnings $323 Impact on FY2018 $1,211 earnings primarily $815 driven by unsuccessful 7.5%
Slide 11: Examples of 2018 challenges – Clanton, AL
Examples of 2018 challenges – Clanton, AL Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Fiscal 2019 Issue Actions taken Actions taken Actions taken > Launch challenges associated > Improved production stability > New plant manager hired > Executed successful > Plant and program with large domestic SUV (2nd / > Fo
Slide 12: Examples of 2018 challenges – volume and complexity of launches
Examples of 2018 challenges – volume and complexity of launches Seating Americas and SS&M launches by fiscal year 89 91 > Higher number of launches than 1 5 3 historical norm 12 9 71 13 1 > Next generation product launches 62 1 23 7 have greater complexity 4 49 14 3 22 29 > SS&M launches included gl
Slide 13: Examples of 2018 challenges – recliners and common front seat architecture
Examples of 2018 challenges – recliners and common front seat architecture Conversion to 3000 family recliner (fcst) Common front seat architecture volume (fcst) Units: parts in millions Units: vehicles in millions 0.5 0.5 0.6 0.4 58 0.5 16 34 75 88 95 0.2 1.1 1.2 0.4 1.0 1.2 0.8 1.1 65 0.8 54 46 0.
Slide 14: Margin potential and CEO observations from first days
Margin potential and CEO observations from first 100 days Benchmarking our performance CEO observations of 100 day assessment 12% > Leading customer position • Diversified revenue with #1 market share largest Closest peer 8.5 – 9% 2 markets (NA & China) • #1 or 2 position in most other markets 8% >
Slide 15: Key actions - transitioning from 100-day plan
Key actions - transitioning from 100-day plan Fix and prevent Focus on core Commercial Strengthen operational / launch Downsize SS&M “back-to-basics” discipline balance sheet problems > Re-establish business > Problem plant focus > Economics / surcharge / > Evaluating options to > Focus on tier 1 bu
Slide 16: New leadership organization to deliver a turnaround
New leadership organization to deliver a turnaround Douglas Del Grosso President and Chief Executive Officer Michel Berthelin James Huang Jeff Stafeil Cathy Ebacher Vice President Executive Vice Vice President Vice President Seating EMEA President and General Counsel Seating APAC Chief Financial and
Slide 17: Looking forward – fiscal 2019
Looking forward – fiscal 2019 Investor Meeting: January 2019 17 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 18: Anticipated macro influences
Anticipated macro influences > In general, softening demand compared with recent years; however, no hard landing expected Global Industry Demand ‒ NA: Relatively stable; late in cycle and rising interest rates pressuring demand and affordability ‒ Europe: WLTP, Brexit and political uncertainty (Fran
Slide 19: Fiscal 2019 outlook
Fiscal 2019 outlook Preliminary Q1 Commentary on Q1 / full year > First half FY19 expected to be trough Adj. EBITDA / earnings; expect to see Revenue ~ $4,158M improvement in second half results vs. first half results (but lower than FY18) > Unconsolidated Seating and SS&M sales down ~10% (down 5% e
Slide 20: Significant flexibility in capital structure
Significant flexibility in capital structure > Secured leverage very low today > Strong and supportive bank group > No near term maturities > Most of debt is unsecured and not due until 2024/2026 > Options exist to refinance secured debt to more flexible structure > Reduce or eliminate covenant expo
Slide 21: What you can expect for Adient going forward
What you can expect for Adient going forward > Top priority is to improve EBITDA and free cash flow near-term > Increase the strength and flexibility of our balance sheet > Focus on profitable growth and return on invested capital with specific product, customer and regional strategies > Rightsize S
Slide 22: Questions?
Questions? Investor Meeting: January 2019 22 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 23: Appendix and financial reconciliations
APPENDIX AND FINANCIAL RECONCILIATIONS January Investor Meeting Investor Meeting: January 2019 23 – Improving Adient Adient – Improving thethe experience of of experience a world in in a world motion motion
Slide 24: Non-GAAP financial measurements
Non-GAAP financial measurements > 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 free cash flow, Net debt and Net leverage as well as
Slide 25: Non-GAAP reconciliations
Non-GAAP reconciliations EBIT, Adjusted EBIT, Adjusted EBITDA FY16 Actual FY17 Actual FY18 Actual (in $ millions) Full FY16 Full FY17 Full FY18 Net income attributable to Adient $ (1,546) $ 877 $ (1,685) Income attributable to noncontrolling interests 84 85 $ 84 (12) Income Tax Provision 1,839 99 $
Slide 26: Non-GAAP reconciliations – Adjusted Equity Income
Non-GAAP reconciliations Adjusted Equity Income Adjusted Equity Income Twelve Months Ended September 30 (in $ millions) 2018 2017 2016 Equity income as reported $ (13) $ 522 $ 344 Purchase accounting amortization (1) 22 22 20 Restructuring related charges (2) 10 1 - Impairment of YFAI Investment (3)
Slide 27: Prior Period Results
Prior Period Results Last Twelve Months Ended Actual Actual Actual FY16 FY17 FY18 Sales ($Mils.) $ 16,790 $ 16,213 $ 17,439 Adjusted EBIT 1,156 1,244 770 % of Sales 6.89% 7.67% 4.42% Adjusted EBITDA 1,511 Q1-2016 1,605 1,200 % of Sales 9.00% 9.90% 6.88% Adj Equity Income 364 394 385 Adj EBIT Excl Eq