Slide 1: Third Quarter 2023 Financial Results
Third Quarter 2023 Financial Results October 26, 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 Third Quarter 2023
Financial Overview Third Quarter 2023 CORE OPERATING ADJUSTED OPERATING SALES Q4 2022 EARNINGS Q4 2022PER SHARE EARNINGS Q4 2022 CASH FLOW Q3 2023 $5.8B $267M $2.87 $404M UP 10% YOY UP 14% YOY UP 23% YOY UP 60% YOY Q3 2022 $5.2B $235M $2.33 $252M Lear Proprietary: The information contained herein is
Slide 6: Q3 2023 Highlights
Q3 2023 Highlights Fifth consecutive quarter of improved year-over-year results Launched complete seats for recent Stellantis conquest award for its Wagoneer and Grand Wagoneer premium SUVs Awarded first General Motors seat ventilation program Received more than twice as many J.D. Power 2023 U.S. Se
Slide 7: Seating Update
Seating Update RECENT AND OPERATIONAL EXCELLENCE INNOVATION UPCOMING LAUNCHES • Wagoneer and Grand Wagoneer • Received more than twice as • Named Automotive News (conquest award) many 2023 J.D. Power1 awards 2023 PACE award finalist for • BMW 5-Series in Europe as any other seat supplier ReNewKnitTM
Slide 8: Thermal Comfort Systems Progress
Thermal Comfort Systems Progress PHASE 1 PHASE 2 PHASE 3 2023 - 2024 2023 – 2026+ 2026+ (previously 2027+) BUSINESS COMPONENT COMPLETE SEAT INTEGRATION MODULARITY MODULARITY • Created Thermal Comfort Systems (TCS) • Granted sourcing control for thermal • 7 development projects with global OEMs organ
Slide 9: E-Systems Update
E-Systems Update ✓ Fifth consecutive quarter of year-over-year margin improvement • Highest margin since the first quarter of 2021 Industry volume Efficiency Long-term ✓ Drivers of margin improvement and margin accretive backlog improvements at North American facilities resolutions for key commercia
Slide 10: Financial Review
Financial Review Jason Cardew Senior Vice President and CFO
Slide 11: Global Vehicle Production and Currency
Third Quarter 2023 Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA Q3 2022 21.2 Q3 2022 3.6 Q3 2022 3.7 Q3 2022 7.1 Q3 2023 22.0 Q3 2023 4.0 Q3 2023 4.0 Q3 2023 7.1 UP 4% YOY UP 9% YOY UP 6% YOY DOWN 1% YOY KEY CURRENCIES 20
Slide 12: Growth Over Market
Growth Over Market Third Quarter 2023 (1)% Q3 2023 8% EUROPE Global GoM 2% YTD 2023 • Seating: Favorable backlog and platform mix • E-Systems: Favorable (8)% NORTH AMERICA platform mix and backlog (3)% CHINA (2)% Q3 2023 • Seating: Unfavorable • Seating: Favorable backlog Seating GoM platform mix pa
Slide 13: Key Financials
Key Financials Third Quarter 2023 ($ in millions, except per share amounts) 2022 2023 YEAR-OVER-YEAR DRIVERS Increased volume, strong backlog, the impact of foreign Net Sales $5,241 $5,781 exchange, acquisitions and commodities Core Operating Earnings $235 $267 Increased sales, including accretive b
Slide 14: Seating Sales and Margin Drivers
Seating Sales and Margin Drivers Third Quarter 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) $45 $4,285 $71 $52 $95 10 bps 10 bps 5 bps 6.4% $134 6.6% $3,888 (10) bps (15) bps (20) bps $300 $275 $255 Q3 2022 Volume / Mix Backlog FX Acquisitions Commodities / Q3 2023 Q3 2022
Slide 15: E-Systems Sales and Margin Drivers
E-Systems Sales and Margin Drivers Third Quarter 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 50 bps 5.3% 40 bps $1,496 60 bps $79 $82 $29 (10) bps $55 $(23) 3.9% $1,353 $53 Q3 2022 Volume / Mix Backlog FX Commodities / Q3 2023 Q3 2022 Volume / Backlog FX Commodities / Q3
Slide 16: Debt Structure and Capital Allocation
Debt Structure and Capital Allocation Strong Balance Sheet DEBT MATURITIES • No meaningful debt maturities until 2027 • Low cost of bonds averaging less than 4% with a ($ in millions) weighted average life of ≈13.5 years $2,150 • Total available liquidity of ≈$3.0 billion Available Revolver Bonds Te
Slide 17: 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 81.1 FY 2022 14.3 FY 2022 16.2 FY 2022 25.3 FY 2023 86.7 FY 2023 15.0 FY 2023 18.1 FY 2023 26.6 vs Prior Year vs P
Slide 18: 2023 Full Year Outlook
2023 Full Year Outlook Interest Expense ≈$105 million Net Sales Operating Cash Flow No Change $23,100 - $23,300 million $1,230 - $1,270 million August Outlook $22,350 - $23,050 million Effective Tax Rate August Outlook $1,180 - $1,280 million 21% to 22% Core Operating Earnings Capital Expenditures N
Slide 19: Q4 Segment Outlook – Excluding UAW Strike Impact
Q4 Segment Outlook – Excluding UAW Strike Impact SEATING E-SYSTEMS Excluding strike Excluding strike impact impact $4.4 Excluding strike $1.5 billion impact billion Excluding strike impact 7.5% 6.4% $4.17 $1.40 billion billion 6.8% Mid-Point Mid-Point 5.5% of Outlook Mid-Point of Outlook of Outlook
Slide 20: Concluding Remarks
Concluding Remarks Ray Scott President and CEO
Slide 21: Strategically Positioned to Drive Growth and Profitability
Strategically Positioned to Drive Growth and Profitability Innovative Thermal Comfort Focused E-Systems Product Capabilities Driving Seating Growth Portfolio Improving Margins Lear Forward Plan Improving Strong Cash Flow Conversion Operational Excellence and Supporting Return of Capital to Offsettin
Slide 22: Appendix
Appendix
Slide 23: Full-Year 2023 Segment Outlook – Excluding UAW Strike Impact
Full-Year 2023 Segment Outlook – Excluding UAW Strike Impact SEATING E-SYSTEMS Excluding strike Excluding strike impact impact $17.63 Excluding strike billion $5.92 impact Excluding strike billion impact 7.0% 4.9% $17.38 $5.82 billion billion 6.8% 4.6% Mid-Point Mid-Point of Outlook Mid-Point of Out
Slide 24: 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 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
Slide 28: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 28