FY 2020 First Quarter Earnings Call January 31, 2020 Improving the experience of a world in motion 1 Adient – Improving the experience of a world in motion
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 the meaning of th e Private Securities Litigation Reform Act of 1995. In this document, statements regarding Adient’s future financial position, sales, costs, earnings, cash flows, other measures of results of operations, capital expenditures or debt levels and plans, objectives, outlook, targets, guidance or goals are forward-looking statements. Words suc h as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “forecast,” “project” or “plan” or terms of similar meaning are also generally intended to identify forward-looking statements. Adient cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Adient’s control, that could cause Adient’s actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: the ability of Adient to close the transactions subject to the Yanfeng agreement, the ability of Adient to effectively launch new business at forecasted and profitable levels, the ability of Adient to execute its turnaround plan, uncertainties in U.S. administrative policy regarding trade agreements, tariffs and other international trade relations, the impact of tax reform legislation through the Tax Cuts and Jobs Act, the ability of Adient to meet debt service requirements, terms of financing, general economic and business conditions, the strength of the U.S. or other economies, automotive vehicle production levels, mix and schedules, energy and commodity prices, the availability of raw materials and component products, currency exchange rates, the cancellation of or changes to commercial arrangements, and the ability of Adient to identify, recruit and retain key leadership. A detailed discussion of risks related to Adient’s business is included in the section entitled “Risk Factors” in Adient’s Annual Report on Form 10- K for the fiscal year ended September 30, 2019 filed with the SEC on November 22, 2019 and quarterly reports on Form 10-Q filed with the SEC, available at www.sec.gov. Potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this document are made only as of the date of this document, unless otherwise specified, and, except as required by law, Adient assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this document. In addition, this document includes certain projections provided by Adient with respect to the anticipated future performance of Adient’s businesses. Such projections reflect various assumptions of Adient’s management concerning the future performance of Adient’s businesses, which may or may not prove to be correct. The actual results may vary from the anticipated results and such variations may be material. Adient does not undertake any obligation to update the projections to reflect events or circumstances or changes in expectations after the date of this document or to reflect the occurrence of subsequent events. No representations or warranties are made as to the accuracy or reasonableness of such assumptions or the projections based thereon. This document also contains non-GAAP financial information because Adient’s management believes it may assist investors in evaluating Adient’s on-going operations. Adient believes these non-GAAP disclosures provide important supplemental information to management and investors regarding financial and business trends relating to Adient’s financial condition and results of operations. Investors should not consider these non-GAAP measures as alternatives to the related GAAP measures. A reconciliation of non-GAAP measures to their closest GAAP equivalent are included in the appendix. Reconciliations of non-GAAP measures related to FY2020 guidance have not been provided due to the unreasonable efforts it would take to provide such reconciliations. FY 2020 First Quarter Earnings Call / January 31, 2020 2 Adient – Improving the experience of a world in motion
Agenda Introduction Mark Oswald Vice President, Global Investor Relations Business update Douglas Del Grosso President and Chief Executive Officer Financial review Jeffrey Stafeil Executive Vice President and Chief Financial Officer Q&A FY 2020 First Quarter Earnings Call / January 31, 2020 3 Adient – Improving the experience of a world in motion
Recent developments Q2 2018 key takeaways > Adient reported solid Q1 financial results despite a decline in revenue – the company’s fourth consecutive quarter of sequential Adj.-EBITDA improvement and first quarter of improved y-o-y results since Q4FY17 ‒ Q1 revenue of $3.9B, down $222M or 5% y-o-y (down 4% excluding impact of FX) ‒ Q1 Adjusted-EBITDA of $297M 1 , up $121M y-o-y; margin of 7.5%, up 330 bps y-o-y ‒ Q1 Adjusted-EPS of $0.96 1 , compared to $0.31 in Q1FY19 ‒ Cash and cash equivalents of $965M at Dec. 31, 2019 > Announced agreement with JV partner Yanfeng to restructure existing JV relationships including: ‒ The sale of Adient’s 30% ownership stake in YFAI ‒ Extension of the YFAS JV to Dec. 31, 2038 See slide 16 for additional detail ‒ Amendments to the AYM JV agreement ‒ Transfer of certain IP rights (related to seating mechanisms business) to AYM > Divested RECARO Automotive Seating, further demonstrating Adient’s commitment to the core business and focus on capital allocation > Adient partnered with electronics leader LG at the Consumer Electronics Show (CES) to display its AI19 vehicle interior, which integrates LG’s electronic technology with Adient’s industry-leading seats > The combination of improving operating results and recently announced strategic transactions are expected to enable Adient to pre-pay a portion of its debt 1 – For Non-GAAP and adjusted results, see appendix for detail and reconciliation to U.S. GAAP FY 2020 First Quarter Earnings Call / January 31, 2020 4 Adient – Improving the experience of a world in motion
New business wins and launches Select wins Recent and upcoming launches Toyota Large SUV Jeep Junior Nissan Leaf Toyota Tacoma Cadillac CT5 • Americas • EMEA A significant number • Americas • Americas • Americas • New business • New business (JIT) • Launched in Q1 • Launched in Q1 • Launched in Q1 of EV program wins Ford Mach E within China, Mercedes GLA VW ID.3 Tesla Model 3 Europe and the Americas continues to strengthen Adient’s diversification across powertrains • EMEA • EMEA • China (ICE & EV) Nissan Tiida Alfa Romeo Kid • Launching in Q2 • Launched in Q1 • Launched in Q1 Strengthening our leading market position with profitable new business wins and improved launch performance • China • EMEA • Replacement & New • New business FY 2020 First Quarter Earnings Call / January 31, 2020 5 Adient – Improving the experience of a world in motion
Adient’s turnaround solidly on track Specific focus areas driving improved results ➢ ➢ ➢ Operational ➢ Launch improvement management • Continuous • Better launch improvement execution • Lean activities • Reduced number of ➢ • Asset utilization launches and launch • Rationalize footprint complexity ➢ Commercial Cost reduction discipline • SG&A savings • Material value chain • Focus on returns • Expanded focus on ➢ throughout product VAVE lifecycle FY 2020 First Quarter Earnings Call / January 31, 2020 6 Adient – Improving the experience of a world in motion
Driving shareholder value Driving shareholder value With operations stabilized Strengthening the balance and steadily improving, sheet opportunity to execute Cash flow growth strategic actions: Execute improvement Earnings growth phase of turnaround plan ► Portfolio adjustments (sale of focused on: RECARO Automotive Seating, Improved relationships with customers Adient Aerospace ► Launch management Execute phase one of deconsolidation, other asset ► Operational improvement Successfully winning new turnaround plan sales) and replacement business ► Cost reductions ► Announced strategic ► Commercial discipline ► Stabilize the business transactions with JV partner Yanfeng ► Accelerated debt repayment Executing actions to increase shareholder value FY 2020 First Quarter Earnings Call / January 31, 2020 7 Adient – Improving the experience of a world in motion
FINANCIAL REVIEW FY 2020 First Quarter FY 2020 First Quarter Earnings Call / January 31, 2020 8 Adient – Improving the experience of a world in motion Adient – Improving the experience of a world in motion
Recommend
More recommend
