ADNT - Earnings call transcript Q4 2024

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Operator

Welcome to Adient's Fourth Quarter 2024 Earnings Call. [Operator Instructions] I'd like to inform all participants that today's call is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the call over to Mike Heifler. Thank you.

You may begin.

Michael Heifler

Amanda. you, Thank and everyone, for us. joining Good thank morning, you slides call Investors today The of press been our presentation and the release have for posted website, adient.com. our section to joined our Executive business. President and I'm This Jerome Adient's today's Financial Vice Jerome update will and Oswald, Officer; provide and President an morning, Mark Chief by Officer. On Executive call, Chief Dorlack, the on are well the our overall we on have in APAC we performance. from positive driving efforts investors, EMEA feedback as regions as Based our spotlighted and how future Mark for will review and then our QX fiscal results financial outlook XXXX. open After call our prepared remarks, we your will the questions. to

Before a over few call to are like I'd Mark, to cover. there I turn items Jerome the and

environment as see and safe conference to and I forward-looking involve Slide X differ today call uncertainties. call. complete we risks the include on statement. therefore, for these from refer today's could caution statements actual These results will made our our harbor the the presentation you statements materially that would statements. it First, on forward-looking are of based Please

to basis, to GAAP presented of operating useful my in our evaluating Reconciliations the with it to to company's the release. And results non-GAAP that, be appendix closest that these will is believe pleasure measures on for financial be in the the non-GAAP a equivalent GAAP is can Jerome. performance. over addition we the discussing In information we call found full earnings turn

Jerome Dorlack

and China long-term on business leading our additional results. actions and our more year and also automation are morning, recent fiscal our information quarter Good artificial discuss thank Thanks, region details in set about provide Mike. intelligence share in to year EMEA efficiencies. success, outlook talk the we to for everyone, in drive and We'll on and taking of 'XX us developments fourth us you for use growing and full to joining up review and perspective our

year that business which difficult results. and X, headwinds. The strong solid volume the Adient's QX customer fourth environment. summarizes were full performance against a offset quarter results drove macro to Turning Slide team Adient

to $XXX points year-over-year As able over at adjusted and were flow. million in generated held cash decline a $XXX free EBITDA result, margins a we million despite flat XX in X% expand revenue. We basis

that capital also and disciplined continue count XX% million of We share which to share $XX in QX, at a of fiscal back repurchase stock the to fourth start another $XXX allowed compared ahead year -- Adient's bringing slightly to manner put allocate context, nearly the outstanding With in 'XX revised guidance. flow in returned year a To repurchases was the bought of in 'XX us total million, our approximately XXX% the we to finished free year. into our shareholders. quarter, cash strong start of of to

industry the beginning the X. the for can and Slide We Moving fiscal At expecting to 'XX, year. strong full million. forecasting volumes a performance, positive we of items were to business be $XXX that a of influence also we tailwind modest were

EBITDA compared team million much nearly The of fact, volumes, guidance to our to with $XXX ago. adjusted mitigate margin to contribution a impact weaker-than-expected In $XX was customer additional Adient million performance. was the initial able what this year a business headwind which occurred was

our X% the of our the of not we headwinds. While in business offsets face to resilience total margins, Adient we are satisfied are ability believe the with industry and demonstrating EBITDA I find company model

that 'XX get outlook but the is our Mark Turning to we fiscal year key strong shortly, the the industry next company performance takeaway volumes. offset continued expect slide. for to into lower will details

solid free fiscal in flow cash calls for outlook year Our earnings with conversion. roughly flat 'XX

company this win Adient OEMs the underpinning margins, to Pacific domestic solid discussed growth region. as follows: as new And overall we've are previous performance Asia calls. business in is China company continues Our to with in accretive growth

We slides. The the will are efficiencies on next is expand I this on executing through focused and in region. few driving the additional significant and also team in finding cost automation restructuring modularity. savings in Europe

we already our and we We to plans to continue a announced continue our and business In we'll region. expand to This Americas in from and the that improving out. is balance Americas conditions vehicle favorable to is exhibiting develop production expect performance the become actions, in EMEA's benefit to margins, around we for 'XX, the 'XX. see forecast expected as an to European start X% have in industry the balance in fiscal in 'XX. On market, takeaways cyclical frame year here regional X, in are intensifying and contraction current meaningful well contributor S&P fiscal that headwinds. calls additional Key Slide which the light secular in

out we expected in-source. look next growing few total well not the levels lower European years, as volumes as over to selectively return pre-COVID for certain seating due As China customers systems market as reduced to are exports, imports addressable to

realities eyes challenging Europe, and aggressively changing do taking continue to and the been in open have wide Our and action to are will we so.

Turning to X. Slide

business. Let's SG&A 'XX, our well as as path engineering efficiencies. In progression expenses EMEA walk we the on took and year through rightsizing restructuring fiscal for margin actions improving focused plant

net During year, $XX million end booked the by charges $XXX XXXX. million savings of of in benefits total of the EMEA approximately annually expected we with approximately

with Europe to in be will evolve, plans. restructuring aligned production continues situation customer the future As

magnitude restructuring to for no we booked year potential additional While fiscal years. in restructuring next 'XX over similar announce total a in additional have today, we few believe we to do the what the of specific there's

well and strategic region. in including a commercial manufacturing pairing non-strategic of We are efficiency Europe, We've focusing as conducting suppliers. of reduced review with on activities and in other including the businesses customers undertaking also near-term expenditures negotiating actions improvements margin been continuous improvement our portfolio, capital as on floor the

in non-core be of We region the will deployment with the consequential capital and assets. both pairing

presence Chinese leveraging region. to China OEMs in we as growth the relationships in are into localize Lastly, customer EMEA target they our with

profitability volume and we persisting. other 'XX, to only year we headwinds positive from and actions. market partially be 'XX performance business in see weak expect from fiscal in to And out offset by restructuring EMEA Looking mix conditions lower and 'XX,

point likely plan within is be 'XX of year the recovery low fiscal of to margin half first the region. our The

expect Europe underperforming in in seat the including performance, incur restructuring picture in margin large we strengthen providing as benefits. 'XX tailwinds we to as positive balance balance roll off and positive business fiscal programs We common additional year out, achieve and greater

EMEA a to actions from and designed of else in/balance in perspective expect points. additional balance XX all to to For continues the equal, the to improve profitability tailwind, self-help Bottom we XXX to execute your and our help modeling, out be company restructuring basis 'XX theater. line, within

China of company. other X. where We lot customers view understanding competitive terms for we our cutting-edge, business excellence seating OEMs better which of a is on center and our of China growth Slide received investors from of regions. advantage China they other growth our interest our are engine the innovation Turning localize a the developing China-based China, high-feature It in business to into for in in We business. as regions cross-selling with strong given are a outside systems, to future we relationships as

significant business, provide the to balance Yanfeng growth delever taken Adient business in Yanfeng operationally overall. When integrated in looking Adient's it to growth. in unlocked and our transformational have and success business China sheet. XXXX divested ongoing which our in proceeds, recent is a reconfigured will business remaining ventures several in XXXX. allowed we These China $X.X our interiors Given for JV us dissolved transactions We growth vertically billion in that natural for important understand a to and key China, position actions efficient tailwind and business at other with highly cash years to

Importantly, transactions generated meaningful focus OEMs, total million significant we cumulatively unconsolidated occurred, flow. of growth share. just we've seen in shift cash enabled growth under on XX%, to believe us these received in China would which from $XXX free course we they Since gain to strong dividends and with our seeding JVs local

Slide show growth with XX. OEMs, and unmatched years address with our footprint footprint in We in others. XX X to Wuhan recent NIO, centers. Geely, expanded to and plants example, and opportunities BYD China, technical growing Xinji. for We're including our Leapmotor, We've state-of-the-art local many Turning

on year have from growth 'XX double-digit Chinese we fiscal year, won revenue local of mix outlined Chinese year Last billion to XXXX, XX% 'XX. Similarly, As in up OEMs new approximately year. growth revenue. with across unconsolidated OEMs total year of our expect customers revenue fiscal fiscal our expect last $X.X from annual of X and end reach of consolidated businesses and XX, XX% and we've generated business the Slide by 'XX China between from and

Turning to XX. Slide

We launches. the successful winning and right executing are prioritizing business

innovative our a this which consumer to win awards case. global customer to point growth experience business competitive resulted our enhancement China market to business the also in share further maintaining like I Xiaomi, an with drive would part while relationships. in and from out demonstrate Our outstanding quarter capabilities

to multiple the vertically EMEA, accretive we the -- systems see As enabler you high margins. Underpinning where a new seat to Chevrolet on system pickup in integrated JIT, win. some trim, our seat business in include are wins it's also our can as launches. U.S. the these Bolt SUV improving complete metals manufacturer. We've a complete electric program, system We've the In with also seat seat This Volvo the won complete that won of metals won case. chart, it's popular U.S.-based on complete execution that and a to key cases, in truck new SUV localized foam is represents with the include wins and level conquest EXXX the region. excluding business

perform our safety, delivery continue on-time We for on metrics quality to and customers.

around core now automation this and Turning that our business efforts excellence, principles and will customer to our believe improve automation In keeping AI. X operational announced management we performance, key we developments strengthen Slide with of morning to XX. portfolio accelerating

First, efficiencies. Adient Mindtrace expand with plans at has improving to Adient tool AI welding aimed these significantly efforts inspection globally. launched an

automated accuracy and specifically with investment Mindtrace, of technology an has made with Paslin Adient them selling joint of agreement patterns, part a development collaboration joining Adient also labor on focused develop our advanced with As October. to to executed increase XD. in reduce cells with

results. Wrapping new improving We and up transform non-traditional are enhancing see labor opportunity our ergonomics, operations bonding and reproducible continues an by quality well both speed repeatable creating on savings, direct Automation to XX. and now safety increasing accuracy, cut for an where of Slide operation as automated we assembly our reducing of process and of patterns. and costs achieving portfolio indirect in

While we execution year allocation share 'XX Adient plan. reduction year and disciplined team backdrop. debt and with balanced strong EBITDA remains we macro company buybacks operational in an a and volume against not capital fiscal In the margin prudently and are performance challenging our to our standpoint achieve goal from margins, X% a 'XX, delivered satisfied result fiscal total commercial via

by aided restructuring, expect Looking earnings and in/balance strong into continued 'XX, in out, and year a modularity balance fiscal environment, performance business customer lower we positive automation. production

We strategic continue and expect more focus growth APAC partnering in on and China to with customers.

balanced significant conversion ongoing We have expenditures a cash 'XX featuring to model finally, allocation a capital return low year expect flow to generate stewards flow cash And fiscal committed that, taxes, plan it free a good executing like turn capital to in financials capital we 'XX. year Mark fiscal I'd year cash to our and fiscal shareholders. With are being we to now capital walk free with over and 'XX. on and outlook business of our strong and efficient to for focus of our through

Mark Oswald

Jerome. Thanks,

results on Slide adjusted our on results reported side. format, page on our in to the shows the Adhering the financials typical right the left and jump side Let's our XX.

our year-on-year. to million ability $XXX resilience mitigate was year ago, special quarter million onetime solid drive performance Adient the the presentation. High flat in which ensured focus of we revenue all or the million, for adjustments we This speaks net for on in of nature performance from important to are business in of as as Details income share. decrease either underlying in level view the EBITDA exclude will external trends otherwise a results, pressures. to appendix the per is that a the skew We adjusted $XX or $XXX commentary performance. quarter, adjusted items adjusted which reported and $X.XX

Slide on highlighted are results year XX. full our Next,

year were $XXX XXXX. environment, was a where mitigate dollars took we 'XX down EBITDA with sales Jerome sales about down Lower year steps commercial and customer cost year full was volume earlier, year-over-year noted and from characterized billion, negative incremental FX recoveries. contribution As the volume Full savings lower-than-expected X%. mix challenging volumes to drove million, decline. Adjusted customer $XX.X X% approximately fiscal and by

Importantly, our through volume margins high-teen we X% to decremental typical our manage to were able compared positive performance. conversion to lost business percentage on

of quickly, I'll revenue on $XXX This For we the have details the year $XXX We $XX volumes sales of ensure adequate production was primary FX on Slide since pricing fiscal next few approximately XX. the per The decrease net year-on-year for cover the a time the or adjusted customer slides QX a consolidated share. 'XX. was of resulting decrease $X.XX income lower are Q&A. Starting rather included million, with compared reported year, for we of $X.X $XXX reported million billion, with should in and quarter. slides. of results from million million driver of slight tailwind the lower

the were on driven weaker program a lower slide, Focusing sales in in by by in X% side year-on-year Americas mix. X%, volumes sales lower right-hand EMEA, while approximate the Americas, Asia Adient's were an China. of and and the growth consolidated lower In grew sales driven by

Wrangler, line our high-volume launches, as managed APAC also inventory of as sales the market. Jeep the company's production customer full we Adient's offset in have rates. experienced were outpacing the improvement with be industry significant generally programs customer outside region, achieving launches program negatively year sales in few this by industry Asia, levels. In we commercial was such market from program by with production outperformed While seen a continues and impacted overall and from our new demand. weaker launches of which downtime recoveries. engine In from were In China, Europe, Sales Ram our new China growth to our year-to-date volumes

Regarding FX. Europe end year-on-year declined of Adient's results APAC. about programs unconsolidated for production were X% in impacted seating by adjusted and certain Results of revenue,

XX. Slide to Moving

all bridge of a team show the Adient segments The flat year-on-year to drivers was primary comparison at detailed between Adjusted $XXX on of performance EBITDA of million, provided the headwinds EBITDA adjusted QX our partially tough the and margin business have in of the commodity the challenging are done approximately We page. periods. resulting a has performance market. Americas a macro a across platforms primarily key in and driven the improvements The year regions. $XX business drove XX job performance We in net in a volumes volume the basis improved $XX on material improved incurred recoveries. costs. The of a managing was and million in The and a operating mix, QX, lower million, offset headwind primarily expansion freight, timing lower net team offset the production engineering in resulting vehicle costs, point $XX reduced from million headwind margin performance commendable at of from including business better admin performance by the is EMEA. APAC result throughout business The environment. which and

timing including $XX was recoveries, net by we the provided certain costs million As detailed of Volume result segment input material performance a quarters, margin was primarily level with slides of in launch customer the performance QX in reduced and EMEA, million $XX results of quarter driven a mix peso. In from lower and was were customer performance for positive the the improved combined and costs. year-on-year transactional and headwind, which Mexican $XX weak quarter $X driven FX the influenced of and net million impacts by pass-throughs Business production. impacted material margin, volume from offset by which better mix, driven Commodities negatively the in by contractual partially customer million by customers. increased business performance. Americas, a headwind million, by impacted management improved production, downtime lower past were inventory of by labor our appendix in High was $XX performance, the presentation.

fiscal margin. year 'XX weaker year inefficiencies we full and for performance business However, as net negative was incurred material

the steps satisfied are As are taking EMEA and we Jerome segment with to performance, address indicated, situation. not we

goodwill impairment was assessment That that recorded. assets, leaving process. thus, EMEA's of risk course our the recoverability in said, results, XXXX to is we including and EMEA year-end in the conducted a of of trend recent Form impairment XX-K. closing its including part under as Before No impairment, our due long-lived mention team I'll EMEA, warning language of normal heightened are

efficiency to actions As Jerome adjust to assess discussed region. our are additional earlier, we we continue Europe in taking costs in the steps

cash taken fiscal million to primarily restructuring $XXX European in expect in charges approximately year increase related XXXX, to XXXX. to We restructuring costs

million net in We was margin. performance improved business negatively quarter million. generated Volume on by material $XX Asia. the impacted of $XX from positive Moving mix

are focusing better business, of start of on executing and roll-off to the company which performance regional driving the metals and believe will business Americas new and of margin we XXXX. we bridge. In addition also includes have in year we bridges, which additional continues restructuring we which continue in the inflection included EMEA, summary, QX our into operating to lower-performing the efficiencies, business drive In on point have In XXXX. plan, full an production expect improved a Asia positively as mentioned, previously to the

me Let Slide XX. Starting on structures to with Slide our cash liquidity and capital XX XX. now and cash, shift on

On of slide the the the quarterly right-hand smooth differences. side results, which out year highlights full

cash free defined cash was For less $XXX quarter, as the CapEx, flow flow, operating million.

year, the cash free full on slide. drivers the the For million are side listed the of year-on-year right-hand the for of full company generated year results flow. The $XXX primary of

expect point to the in utilize source We as fiscal million to million low-cost of on strong last continues XXXX. Flipping a XX. to year-end free out we conversion XXXX. liquidity. September the $XXX at of cash XXXX, Adient versus side had slide, right-hand $XXX called factoring XX, One factored receivables of various continue At fiscal Slide and programs

outstanding slide, period. XXXX represents through noted As the in on at shares share beginning the the right-hand the our shareholders the XX% of company were million This returned repurchases. to approximately of side of $XXX fiscal that

flexibility. debt retired resources a to being sheet, in of maintaining of balance ensuring stewards demonstrate good efficient approximately moves commitment the capital $XXX Adient's strong while of also allocation and million We These quarter.

under and just X.Xx debt The XXXX. within company's $X.X Adient's billion respectively, net at liquidity line debt and $X.X revolving to Total range net of the credit. September and $XXX hand XX of leverage million about sheet. billion, million $X.X of Xx. under XX, at the company of X.X balance for billion, targeted capacity $XXX cash comprised was our of was to undrawn totaled on September Turning position Adient's

XX. to Moving Slide

our review 'XX outlook. underlying Let's assumptions key some fiscal to

fiscal As year match customer more we Americas to pressures in enter adjust to inventories volume demand. ongoing consumer and continue we seeing closely are XXXX, Europe customers the as

close to year, levels reducing XXXX on to lower calendar be For in play out basis. Important expect sales QX customers are we X% full we an to are our the as note, the approximately seeing year. these dynamics out FX-adjusted inventory

We low in XXXX. sales for expect year point to QX and earnings fiscal the be

latest incorporates China schedules plan program customer level. In on the expect October internal S&P business volume production Our year, our the outperform new estimates estimates, the we market. our and a us upcoming to enable will for

to pressures margins. From We additional line EBITDA automation, encompasses the an at material we through and our be through X% range perspective, flat to performance expect year-over-year next year maintaining for negative offset top expect efficiencies, X% net volumes. program Adient business leveraging guidance, midpoint to incremental year-over-year modularity a which of adjusted

rates we posted peso. the currencies, RMB exchange assumed have Regarding euro, Mexican on and

a XX fully to several forward. weakening hedge reminder, in months recent exposure As -- through peso will it transactional take results. Consequently, flow our the for the quarters peso be we Mexican our

Americas, retained sunsetting expected that to production 'XX. Obviously, this and has Moving to I to JIT items note quarter. few variant. million are billion Ram Dodge into developments our $XX.X are on competitor year lower fiscal volumes X. picked ins 'XX. In headwind a expected Classic program XX. affecting impact outs $XXX volumes. the the Ram the split remaining expected be our would year always has $XX.X there These are Slide up by Dodge We the versus driven in to the fiscal ICE Sales is BEV business portion The on been the in billion volumes a year-to-year. and be range,

headwind. of to business million is our the exit Europe in be Additionally, expected BMW $XXX

expect Americas GM these the headwinds with programs the crossovers We large growth offset X-row on the in Tacoma. in key to as such Toyota

Cash generally slightly $XXX joint KEIPER $XXX operating in $XXX due in income is agreement million, million fiscal taxes Our expected are with the million, forecast partners line million. year 'XX. at million. to changes to year-on-year Equity expected be $XX outlook our at between expense adjusted is at EBITDA at venture. is the down $XXX Interest to

million, For plans free modeling customer our forecast at to purposes, is alignment our focus taxes. With at last million. CapEx fiscal our expected modestly million reuse. at expense tax in driven is which reflects with $XX returns, cash year flow repurchase respect $XXX have launch on restructuring, note, and And and share estimated 'XX finally, and million year-on-year, authorization. our $XXX $XXX down cash is higher higher versus important on $XXX efficiencies million million, $XXX CapEx by we year, to approximately capital remaining

more generation. cash expect of match closely of terms to we capital returns In cadence, to

Our and typical is flow pattern to seasonal working for due weighted and schedules flows. production half earnings cash capital second

Lastly, Slide XX. turning to

a provided outlook We year midpoint. have fiscal our to high-level 'XX bridge results from fiscal 'XX our year

to offset expect our We sum of of the be to consistent. are mix Equity income a and million performance lower be primarily FX KEIPER modest million. To business positive of it $XX $XX net up, somewhat will year-on-year, message commodities volume million. restructuring $XXX is expected headwind lower and of approximately due to agreement.

question-and-answer We call. are results costs on Operator, as delivering question, with for please? to flow strong portion first for controllables strong our the can business flexibility business we generating let's sheet. With our excellent of the that, lowering free the a of while cash owners move the our and maintaining customers, have balance such managing focused

Operator

from Our Bank with first question comes of Murphy America. [Operator Instructions] John

John Murphy

A few here. to try questions. quick be I'll

on a kind you lighter than could do it been is seems game they're be be be about has volumes maybe actions a because anything and if and program more of discussion environment might context to historically. that First, that of guessing you get reasonably you to of that and of been now on bit have settlements also, operating collaborative forecasts, commercial customers, come side Jerome, a your sort in you about would recoveries if the specifically, can historically. with than basis? And what the short and think to on industry think how If take obviously, a more were in the talk working micro as run they you the actually here your able there right volume these

Jerome Dorlack

of Maybe that. Yes. a comments on just couple

our isn't where features that saves to with associated the have driving contractual delaying really LTAs, save often waste and contractual design for, engineering talked in Adient the past There's money if think XX% managed the able what than can and with track in or to VAVEs. We've business lot the I get what basket think that into short anticipated an year, the and we the out decremental our versus would into out for that. business. And our more we're waste I work call a was product we austerity volume for a at taking XX%, significantly taking system that environment you we discussions, them. decremental offsetting running what of difficult our maybe look also what demonstrate see demonstrates year to the we ability fiscal going X% through the get on customer out in what take we savings, that of the the a trenches program, a to would pay share our contractual money of find ESX maybe record and call more typical with see 'XX, willing mean delaying in in end measures customers recoveries, about of customers really can to into goods us, you that and managing non-value-added that I we we things, of that term, where working other agreements, customers with commercial at

the go some that that was lot the we're able so A in of of in 'XX. things after system. still to waste is really And

realize you come us. the able to to win-win see types into and if XX engage. Americas, that and XX.X and to maybe hungry value their them. to solutions suppliers they're Europe, to up customers savings when in the really the we're So some margin. aren't margins, accelerate build, the be we as deliver more have build that their into a really protect willing they can have because deliver a environment, these you're They It to where opens protect for as and volumes get customers to decline, of But a XX.X field that down these they they our at a when they're looking today of XX,

contract ram get accretive margin not that's value to to decremental it's of also just value maybe for an them, you to really straight but can level. a looking So always X% us. renegotiation. And type It's how you battering how discussion, deliver accretive

tough, ways and in while to discussions ES process. And we've has is, in So in want some particular, been the through there. given the think I out your of are customer set anything particular our with question a dynamic value those you to set customers, I the been of more With dynamic has demonstrated our would much I for in and the in know it particular, our it you discussions process last on a know, a if down very, very think process. inventory Mark, customer mean, scheduling both of breakdown add? I X deliver scheduling particularly quarters, first our Americas say, of burn types scheduling, announcements of Europe just don't have us to customer group, certainly I you in what

Mark Oswald

John, couple last our true. over at dynamic sales, what say, the it because that's from that's quarters. right, -- XX.X%, And If I hence, No, would been look looking right? of the right, more I XX.X% range, at clearly, to has we're production

So we're trying that. to hedge

in seen cetera. of terms some the recent of news system, et certain shifts You've out going reports

adjust dynamic to So again, to. continue that very we'll

John Murphy

now. on saying way plight right a what's is going Dynamic of

Jerome, FY just in you're time in to turn Europe, kind contracts, the the as saying like future. up. it what comfort on Just just ticking that, seems curious, it's of into like particularly underperforming level These that starts I'm keep coming time. roll over roll you of more a just have on? contracts economic maybe but there off of 'XX a issue think could is persistent slipping. and sort And these it this It's that you be kind event, something normal underperforming 'XX, contracts keeps

Jerome Dorlack

production What dates. that is of probably say, other engine on, or contracts sunsetting -- there's I'd where actual closure say out die we dates. those we There's I Customers end hard programs there. have clear stops I mean, of plant X/X have would -- there's we now either that have clear are

to X/X windows type where been contracts, able them. we've On extension of some that's other renegotiate we the those have associated of with an

that as that be I So in some always they some I we mean the and But the delays them. Is to of do think more risk with a more or there have it. extend. first still go clarity if to there X/X reprice of roll-off extensions ability risk out 'XX visibility, is have there some I on 'XX. sunsetting, think we going there's there's comes associated and in

to we wave think real the in sunsetting tailwind. that first starts 'XX. the first see we That's when occur said of I

I we we have when here visibility more European much the into today production did confidence than with just now. given scheduling you here that sat last think year, we sitting

Operator

Colin next from Langan Wells with Our question comes Fargo.

Colin Langan

strong just here think rate? of Is Maybe kind here? particularly to it guide 'XX better how actually abnormally annualizes it I your and why Europe adjusted or EBIT, headwinds XXXX What's is at annualize the And mean, the a so all strong. sort about it's of that QX? Is from that soften line quarter? guide. this is QX with start, in If actually than better strong I sales should just there keeping should something we annualized in

Mark Oswald

played can through to be year. right, Yes, the recoveries, the of roll in start of course of terms generally go I'd as off timing you expected there. certain right, just of Colin, I'll kind it this that variable year, that we say commercial as out

from were right, did were in a job it commercial in whether the launch, was it do able freight, et cetera. recoveries of was operational terms strong at quarter. good performance the So business We what an perspective, just whether we the to

So out. those played

be little of commercial to again, that But We've I is going or that in into say, to lot It's with XXXX, out the trying offset a to be income a to comes spread be going there. come able going volume recoveries that that down what a FX. performance. down. problem annualize bit of business of I'd obviously, equity with slug us. timing going it's think that be to another, that We're to for got

message volume business across 'XX. again, overall various to look is performance as story the But regions. So that improve It's it's I continues a combination as of I go those. into

Colin Langan

competitive then Are And sort for I cost roll footprint of mean, second already about customers make waiting and half to parts how want regions. more in you in weaker I to much And in you certain the been facilities for decisions? of Why Europe that of you'd higher programs relocate? you've today? certain to are the taking weakest clearly off? was mean, do have is waiting is talking the actions? you Europe the delay your

Jerome Dorlack

Yes.

of why to in question, is terms of 'XX, faster, that capital. rolling then So I more see 'XX, good be business back begin reasons 'XX, your number profitable and of the balance of one more there off that's not we in and stewards in programs trying we're that 'XX with And a why we to think then timeframe. 'XX will to be

approach restructuring, the to there's so and those coming out and $XXX and contribution in the additional being a going million we measured $XXX margin see measured of region approach the can versus into And sites, this there. additional profitability the into when another, immediately it, flowing million, putting call

will we're business look region in we that's it the the look what looking profitable and So while through for not closures, additional we why site long we've we it region region, that's how And chip be more measured located, the talked where that. be spent we to disposal say looking front the customer component is, see where When being what of just future potential of footprint at additional have really very non-core through of years, competitiveness, about look our at line terms announced, restructuring, come today at why our really to and time, the how be few the the as when to back what in programs as at footprint, there'll be and to it's we can at customers we and we comes that's the it and our what the we comes the that working work region on are to in into I'd over on be at half say, same work a footprint, but we think the the customers the last and saying out, at we it, itself look capacity capacity And back, through look those. of non-core with assets, play, next footprint and restructuring, tied transform taken necessarily come those we at we of to in within disposal due as our this doing term, we about previously line when in potential pare starts as of located. the with through going when to necessarily overall terms not the the the we we're through but year. What on which have in need there'll that more assets peers year look of is down. at come those, with to in that in I would we overall

just itself Our vastly consumption region. different million versus unit used uncompetitive our footprint isn't vastly It's region the or peer a itself set. XX be to chip

the X it's next million you XX consumption. over to out units X If look seating of to years, down

just massive region in pared back, in there's be paired customers to their that needs with it and footprint. line back So the be needs to overcapacity our and

It's to a an the not overcapacity needs taken. action of competitiveness be it's footprint. So that

Operator

Spak with next question Our from comes UBS. Joe

Joseph Spak

So what take I just restructuring but just I opening $XX follow-up book related originally, saying million were first to by million this the million $XX you think year, I that's year. $XXX you in Europe. $XXX this to is Maybe million 'XX. another the of to on want then from savings I to similar there of if by you confirm, another said I 'XX, think mention And comments, as one magnitude you the think cash in heard you're going this 'XX. Should well? be a

So million Is should how lower it? we're that versus think 'XX. talking a about roughly rate about like 'XX we $XXX run

Mark Oswald

year, expect million $XXX right related on charge. is million what to Yes, Joe, the a the It's we'd years, to comments right? restructuring $XXX the just you're this of cash not clarify, over the XXXX few next

Joseph Spak

-- And Okay.

Mark Oswald

clarity, I at mean, saying just we And a what we're look production if there. schedules, that's out customer there's -- for potential Joe, that's

$XXX potential -- million to now see of look saying We're What the million terms this we is if to we're another saying charge of $XX going there, European out the today comments JIT be theater, or we a million. in out a out $XX today JIT announcing region of my It's million capacity. We're anything. $XXX capacity. there. not is back restructuring $XXX If we're Europe on potential the used what million more that there. taking at or just not we of charge is the look total So

of or a terms to of any net taking lot In of out. it. anything a that going because just Again, net early kind savings associated be declare too capacity is savings, with it's to

So but unfortunately, rate fixed structure region it, and we're capacity as looked in not modeling. savings to is calc take management standpoint. going will think just savings it's from order keeping when from just to of net a in about out, is -- the much it go hold because standpoint costs you lot with a shouldn't a that with in to necessarily It cost improvement the par a margin region as not as necessarily net at be overall you run

Joseph Spak

guess you call color I still the ventures XX, probably us some are I argue to going of support operations. coming challenged of Slide on region I years. some on look of that over there, at that the be the your unconsolidated appreciate many would if your I customers in China On think those specifically through all this

they the them? JV through existing that localize? more and JVs? And to the structure When of plan would occur, is then facilities leverage if China you for does that localize. as relationships become that they and owned Or I to going mentioned the with know the you what's So wholly want those some be localize

Jerome Dorlack

Yes.

to our double-digits think we consolidated And as of 'XX and view our that customer within fiscal year of kind the the growth to activities 'XX. we that year call come rightly again, from China we really forecast and lot on highlighted, mix comes from, in there. our fiscal look today's we as region. our largely I you into said growing China, We believe a from

driven to They into our the we local venture XXXX, what and and mix when activities through favorable given owned Europe, have into to actions be one be with ventures. go terms customer our your wholly took customer reasons is significant standpoint. And in customers customer million owned see turning be year BYD more go in and we every could wholly that's value really leverage that and these breakdown believe what other continue first wholly to attack is our that our into we view through on from into joint we it Malaysia, ourselves It very a the into -- as mean Thailand our plan consolidated us. where will that very that. And a into that owned unique and who's $XX into us. question, the consolidated unconsolidated, uniquely from the region, BYD own will firmly million, with KEIPER of mean, And We region, through that that's there. I asset spin leverage, the valuable of especially out Europe when equity we standpoint, we and We very the window Yanfeng They're partner we that's a action off see to we did income those And the to when that be you a equity domestic we breaking as them why go $XX a drive OEMs. out out we divest the and necessarily regions. customer strong partners then continue consolidated our of in And partners because in from. assets mix unconsolidated our view the and the region. I continue as within the We It won't them, our Adient's strong to JV to to just people them. Chinese XXXX to why get income what favorable from took we in really partner. joint activities. and believe and we to that from that's we

Operator

with Rosner Wolfe Emmanuel Research. from comes question next Our

Emmanuel Rosner

overall Europe. question as there you for fiscal and also issue, to trying level I'm the headwinds essentially is these Americas taking adjusting Do a production? essentially are more extent your there destocking, where and the demand, with is on in secular on time some the the a Or headwinds XXXX first mix think industry year down My will mix a of in for but actions is you're line component? the the customer if market in of to be current line example? to the growth what see growth the the timing

Mark Oswald

Yes.

I it's destocking start and add right? I if think, running. So I is example, they'll want think I aligned, be the on. get to and inventories Emmanuel, And if Americas, at right, once think inventory look timing, for mix, do Jerome, I'll you a But Emmanuel, right? they the

called classic I of out going the RAM, RAM a program is think a we where sunsetting. with away. right, couple that's That's like examples

Americas. with year mix running large towards a So this in is say, really of But mention they program also didn't we again, right? crossovers, they're at over with it's to we where within that's we'd view last what think electric help and another new the the year, that rate that I'd market. I'd regional the So yes, So a I our Jerome more a that when time, if alluded combination. And we look right, right? would into well to with to out would backlog the years, in right? us, mix at OEMs, specific. at here timing Americas, an gravitate the So for Adient be specific. the that's performing to I'd customer that that's the an do extremely benefit business I offset Japanese right, going manufactured say be future, X look a run won look GM's right? you where rate it's then going So at I

the the performance the volumes in So but for we came was of expecting to the of volumes 'XX again, what down, see really But And we're long example where that going. performance think continued And a irrespective saw region. for that where improve. mix continued 'XX going good are there. you term, again region over in still a business business I

Jerome Dorlack

the and then Europe thing on And little touch a other we'll I would for Americas, the say bit.

we Emmanuel, third-party continue is down to Americas, metals. the been For that transparent, we've very will wind

year. year, Americas last So this large was sunset with will in the this off metals year. associated to wind finally a supposed contract It of sunset that the there's program the there

Europe a and customers, will There's is for lull Germany is call the they margin so, Hungary. That it, off Americas that wind there within and, third-party between launches the good line there's be off So Americas. and now it, respect there's will in to incremental in million $XXX their to expect $XXX some we as nature. It's the then and and profile that about, very winding off happen, vehicle been that or about be will XXXX a wind of of metals secular thing actually Europe's in call versus vehicle given being million as architecture. the to that region. sales purposely small next is in is that, for of region. With underperformance terms is that that wound in that in our broader always And the particular, one transparent region of the down we've some in S&P,

underperformance as that's Some we baked assets. There's of of -- talked of we're winding divestitures about that number some some year there. lead that is also divestitures the this those noncore off of into the that those planning to of shown

also mean longer that return from a as to as term. mix. it's So line we standpoint we out kind in would Mark look of said, expect I to into Europe, the

driven from the where some region in also year, a within is the So of in this program divestiture lull some there's one then that of a but we're segment, large B&C for planning sites. the launch Europe the within of one that the

Emmanuel Rosner

give cost mentioned, I lot of some rough metals Specifically, as to of And you buckets performance as breakdown year, would this a What of the be it? some then roll-off would your you be color. portion what just follow-up, $XXX million, a for? of accounts part That's great of again, business. look next at for able

Mark Oswald

Yes.

our go in there's tooling improvement. what when what freight, performance, I the when look Obviously, say think aspect, Those of bucket, all I right, would but waste. on look lot ops continuous There's launch that doing there's at there's things and at that overall, positive, Emmanuel. we I I control. a obviously, business the we're that are

getting that, again, will of, business those at the But to focused same, I were 'XX helps. lower-performing we have what platforms let's I underperforming buckets of year, off. this much of continues metals -- impact an won't from on just the cost we're to Americas each In metals rolling as do more the pretty out. those able into in look say, tailwind of you and then addition the which as rolling off break it environment certain 'XX, in just

Operator

from comes with James BNP question Picariello next Our Paribas.

James Picariello

you on the dimension just just basis, for first how Just this magnitude to EMEA be for the which year-over-year half, trough. degradation? margins Can year to most and the help the particularly the challenged on be sounds on the margin representing about a thinking

Mark Oswald

Yes.

region. volume to we have is XXXX. going to EMEA in do be for look So that James, indicate we as expect positive impact performance obviously, the did out into We another business

we're So improvement, the is the that doing, again, launch, in hard what what in of 'XX. I'd impacted customer-driven say, clearly team just us continuous certain costs terms of working

get run into as rate didn't labor. stopped at customers as trapped as production, improve right, we had 'XX. So they we Those

on called a lower a is reduction out, the we've that in there, going and again, So volume biggest the 'XX. be over production. impact Clearly, I think the tailwind the about it, the in But overall EBITDA X% from to that becomes driver. volumes impact call

James Picariello

for your calling sales of like outlook, points outgrowth. on you're X And it China, Okay. looks Asia-Pac

confidence out. do was Just we single-digits supposed market at if play to beginning I on year, which the the Asia-Pac curious of guidance year's didn't back Because thereabout, necessarily look what drives this? believe the the mid to by last outperform

severe what be were months, just And the Asia up that think set over last all surprises industry different can that. But assessment? time you to growth, XX this speak no I you last appreciate downside the agree if for volatility we can the about question what's around? with year to

Jerome Dorlack

from it's a a imports is very growth we occurred out that versus versus of of our that when lot region in played year through vehicle or lines, region. what the I there significantly. in think now on that's look that We've year, last I of exports. earlier, BYD already year, some question, the and lot equity partners, versus A baked what that the that and what as market considered of from Geely -- own mean of platforms. This domestic a the production. production exporting of between When intelligence the fair who we I our and income have we is thought, last last differently We S&P in there. in came export region the mentioned XXX% production strong the versus exports very at exports. growth. we're weren't the we both especially much saw because domestic pure some wasn't forecast X% get year, A lot Yes. We the mix into outgrowth, booked lot

between at domestic looked we've within year I consumption we're when that smarter mix internal mix of So the think customers. into the versus this going region,

can't So I natural this that market we another may did to think expect we up. than we and more year comes last the have see. That's intelligence be we that going into There dynamic to be say surprised. just year not mix

pushing I aware, package. think as is everyone is China a through stimulus

They're We readying that haven't ago, one be. an be. about That mix another have one. or They on X necessarily impact that significant will seen may released could have didn't a effect. be months will what what exactly

dynamics on X% we we around edges. the a deal place of good latest some that be in outgrowth changes have, could based have last of think there But So that the the took intelligence considering market. year, confidence I

Michael Heifler

the me, up I people Please this out want remarks call. Operator, a Okay. we are now. we will there's want their I Jerome, everybody still participation and end in to free queue. thank on feel add? closing to to you to the reach follow after any to know couple going call of for call.

Jerome Dorlack

you year in shares. And that's the 'XX. No. To everyone easy and It thank then walk set to questions, wasn't to very team you have all today. follow-on Adient want challenges. free shareholders, and volume I for I of said, fiscal participation thank the makes certainly And as all special. all, always to if all face all glad much what call, articulate first to questions with you team the we're of of a you And analysts, for out feel please your hard-fought to much. very thank to time, confidence the Adient feel any and Mike through free Adient the Mike for reach the the mean, our very on Adient the Mark. for and Thank or you us

Mark Oswald

everyone. Thanks,

Operator

That conference. participating. Thank you concludes today's for

may at You disconnect time. this

Adient (ADNT) 8 Nov 242024 Q4 Earnings call transcript