Slide 1: Fourth Quarter and Full Year 2023 Financial Results
February 6, 2024 Fourth Quarter and Full Year 2023 Financial Results 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: Fourth Quarter and Full Year 2023
Financial Overview Fourth Quarter and Full Year 2023 CORE OPERATING ADJUSTED OPERATING SALES EARNINGS EARNINGS PER SHARE CASH FLOW Q4 2023 $5.8B $288M $3.03 $570M UP 9% YOY UP 9% YOY UP 8% YOY UP 6% YOY FY 2023 $23.5B $1.1B $12.02 $1.2B UP 12% YOY UP 29% YOY UP 38% YOY UP 22% YOY Lear Proprietary: T
Slide 6: 2023 Highlights
2023 Highlights BUSINESS Completed I.G. Bauerhin (IGB) acquisition and hosted a Seating Product Day highlighting the latest technologies and new business awards that will support market share gains and earnings growth Launched complete seats for recent Stellantis conquest award of its Wagoneer and G
Slide 7: Key 2024 Product Launches: Seating
Seating Key 2024 Product Launches = Electric Vehicle = Luxury Citroën C3 / Ram 1500 REV / Chevrolet Equinox / BMW X3 Hyundai Santa Fe Porsche 911 C3 Aircross 1500 Ramcharger GMC Terrain CONQUEST JIT, Foam, JIT, Thermal Comfort JIT, Trim, Thermal Comfort JIT, Trim JIT, Trim, Foam, FlexAirTM, Thermal
Slide 8: Key 2024 Product Launches: E-Systems
E-Systems Key 2024 Product Launches = Electric Vehicle Citroën C3 / Ford Expedition / Volvo ES90 Lynk & Co. Crossover Volvo EX90 Ford Kuga C3 Aircross Navigator High Voltage Wiring and Low Voltage Wiring Body Control Module Low Voltage Wiring and Low Voltage Wiring Low Voltage Wiring Smart Power Dis
Slide 9: Innovative Product Launches
Innovative Product Launches Intercell Connect Board (ICB) FlexAirTM ReNewKnitTM • Launching with • Launched on the • Launching with General Motors on Hyundai Santa Fe three OEMs in 2024 the Ultium platform • 29 development • First-to-market • Pursuing additional projects with 13 automotive textile o
Slide 10: Core Sales Backlog
Core Sales Backlog (Net New Awarded Business) CONSOLIDATED SALES BACKLOG BY REGION 2024–2026 CONSOLIDATED ≈$2.8B CORE SALES BACKLOG ($ in millions) ($ in millions) ≈$2,800 North $1,000 E-SYSTEMS America SEATING Europe ≈$1,175 ≈$875 ≈$1,200 $1,800 $500 ≈$800 ≈$800 $200 Asia $300 ≈$600 $700 $600 $500
Slide 11: Financial Review
Financial Review Jason Cardew Senior Vice President and CFO
Slide 12: Fourth Quarter 2023 Global Vehicle Production and Currency
Fourth Quarter 2023 Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA Q4 2022 21.6 Q4 2022 3.6 Q4 2022 4.4 Q4 2022 7.0 Q4 2023 23.5 Q4 2023 3.7 Q4 2023 4.7 Q4 2023 8.3 UP 9% YOY UP 5% YOY UP 7% YOY UP 18% YOY KEY CURRENCIES 20
Slide 13: Growth Over Market
Growth Over Market Full-Year 2023 1% 2023 (4)% NORTH AMERICA 6% EUROPE (3)% CHINA Global GoM • Seating: Unfavorable • Seating: Backlog partially (2)% Q4 2023 platform mix partially • Seating: Favorable offset by unfavorable offset by backlog platform mix and backlog platform mix • E-Systems: Backlog
Slide 14: Key Financials: Fourth Quarter 2023
Key Financials Fourth Quarter 2023 ($ in millions, except per share amounts) 2022 2023 YEAR-OVER-YEAR DRIVERS Strong backlog, impact from foreign exchange and commodity Net Sales $5,371 $5,841 pass-through Core Operating Earnings $265 $288 Accretive sales backlog Operating Margin % 4.9% 4.9% Adjuste
Slide 15: Seating Sales and Margin Drivers
Seating Sales and Margin Drivers Fourth Quarter 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) $72 $53 $12 $4,343 $175 20 bps 6.8% 6.8% $4,037 (5) bps (10) bps (5) bps $300 $(6) $294 $275 Q4 2022 Volume / Mix Backlog FX Acquisitions Commodities / Q4 2023 Q4 2022 Volume / Bac
Slide 16: E-Systems Sales and Margin Drivers
E-Systems Sales and Margin Drivers Fourth Quarter 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 60 bps 5.6% $17 $1,498 $33 5 bps $119 55 bps 4.8% $1,334 $84 $(5) (40) bps $64 Q4 2022 Volume / Mix Backlog FX Commodities / Q4 2023 Q4 2022 Volume / Backlog FX Commodities / Q4
Slide 17: Capital Allocation Driving Shareholder Value
Capital Allocation Driving Shareholder Value Strong balance sheet supports growth and capital returns to shareholders Capital Allocation • S&P credit upgrade to BBB with a stable outlook • Extended the $2.0B credit agreement by one year to 2027 2020-2022 2023 Improving cash flow generation 9% 10% 5%
Slide 18: Lear Forward Plan Update
Lear Forward Plan Update • Reshaping footprint to improve cost • Accelerating deployment of structure and plant utilization automation to offset wage inflation • Expanding footprint in North Africa including • Leveraging acquisitions to improve two new production facilities efficiency and address la
Slide 19: 2024 Outlook – Global Vehicle Production and Currency
2024 Outlook – Global Vehicle Production and Currency Global Vehicle Production and Currency INDUSTRY PRODUCTION (units in millions) GLOBAL NORTH AMERICA EUROPE AND AFRICA CHINA FY 2023 88.6 FY 2023 15.6 FY 2023 18.3 FY 2023 27.6 FY 2024 88.0 FY 2024 15.8 FY 2024 17.9 FY 2024 27.5 vs Prior Year vs P
Slide 20: 2024 Full Year Outlook
2024 Full Year Outlook Interest Expense ≈$110 million Net Sales Operating Cash Flow $24,000 - $24,600 million $1,275 - $1,425 million Effective Tax Rate 21% - 22% Core Operating Earnings Capital Expenditures $1,155 - $1,305 million ≈$675 million Adjusted Net Income $730 - $840 million Adjusted EBITD
Slide 21: 2023 Actual to 2024 Outlook – at Mid-Point
2023 Actual to 2024 Outlook – at Mid-Point SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 5.1% $63 $70 35 bps 15 bps $1,200 $24,300 $23,467 4.8% $(5) $1,230 $(495) $1,120 (20)bps FY 2023 Volume / Mix Backlog FX Commodities / Acquisition / FY 2024 FY 2023 Volume / Backlog Commodit
Slide 22: Concluding Remarks
Concluding Remarks Ray Scott President and CEO
Slide 23: Executing Long-Term Strategy to Increase Shareholder Value
Executing Long-Term Strategy to Increase Shareholder Value Seating E-Systems Operational Excellence • Strengthening leadership • Focused product portfolio is • Improving cash flow through position through operational well positioned for long-term Lear Forward Plan excellence, vertical integration, g
Slide 24: Appendix
Appendix
Slide 25: Total Company Revenue by Customer
Total Company (including non-consolidated) 2023 Actuals 2027 Target REVENUE BY CUSTOMER REVENUE BY CUSTOMER Global EV OEM Other Global EV OEM Other Financial targets assume an average Euro of $1.09, an average Chinese RMB of 7.15 / $, S&P Global Mobility production forecast as of October 16, 2023, a
Slide 26: Key Financials: Full Year 2023
Key Financials Full Year 2023 ($ in millions, except per share amounts) 2022 2023 YEAR-OVER-YEAR DRIVERS Increased volume, strong backlog, acquisitions and commodity Net Sales $20,892 $23,467 pass-through, partially offset by the impact from foreign exchange Core Operating Earnings $871 $1,120 Incre
Slide 27: Seating Sales and Margin Drivers: Full Year 2023
Seating Sales and Margin Drivers Full Year 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) $99 15 bps 15 bps 6.8% $558 $193 $17,549 55 bps (10) bps $1,009 (15) bps $(21) $1,191 $15,711 6.2% $981 FY 2022 Volume / Mix Backlog FX Acquisitions Commodities / FY 2023 FY 2022 Volume
Slide 28: E-Systems Sales and Margin Drivers: Full Year 2023
E-Systems Sales and Margin Drivers Full Year 2023 SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) $319 $67 $5,918 $359 40 bps 0 bps 4.6% $(7) $5,180 80 bps (10) bps $275 3.5% $184 FY 2022 Volume / Mix Backlog FX Commodities / FY 2023 FY 2022 Volume / Backlog FX Commodities / FY 20
Slide 29: Seating 2023 Actual to 2024 Outlook – at Mid-Point
Seating 2023 Actual to 2024 Outlook – at Mid-Point SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 0 bps 6.9% 20 bps $70 $18,175 $113 6.8% (10) bps $1,245 $700 $(3) $1,191 $17,549 $(254) 2023 Volume / Mix Backlog FX Commodities / Acquisitions 2024 Outlook 2023 Volume / Backlog Com
Slide 30: E-Systems 2023 Actual to 2024 Outlook – at Mid-Point
E-Systems 2023 Actual to 2024 Outlook – at Mid-Point SALES ADJUSTED EARNINGS AND MARGIN ($ in millions) ($ in millions) 85 bps 5.6% $500 $6,125 60 bps $340 $5,918 $(2) $(50) 4.6% (45) bps $275 $(241) 2023 Volume / Mix Backlog FX Commodities / 2024 Outlook 2023 Volume / Backlog Commodities / FX / 202
Slide 31: 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 (income) expense, restructuring costs and other special items” (core operating earnings or ad
Slide 32: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 32
Slide 33: Non-GAAP: Adjusted Net Income and Earnings Per Share
Non-GAAP Adjusted Net Income and Earnings Per Share Fourth Quarter Full Year (In millions, except per share amounts) 2022 2023 2022 2023 Net income attributable to Lear $ 117.5 $ 127.3 $ 327.7 $ 572.5 Costs related to restructuring actions 65.4 37.3 158.9 134.2 Acquisition costs 0.4 (0.1) 10.0 0.8 A
Slide 34: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 34
Slide 35: Non-GAAP: Adjusted Segment Earnings and Margins
Non-GAAP Adjusted Segment Earnings and Margins Full Year ($ in millions) Seating E-Systems 2022 2023 2022 2023 Net sales $ 15,711.2 $ 17,548.8 $ 5,180.3 $ 5,918.1 Segment earnings $ 893.0 $ 1,066.9 $ 74.4 $ 228.9 Restructuring costs and other special items - Costs related to restructuring actions 65
Slide 36: Non-GAAP
Non-GAAP Lear Proprietary: The information contained herein is the property of Lear Corporation. 36