FY 2023 Second Quarter Earnings Call
FY2023 operating environment
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> As expected entering 2023, the overall operating environment to date in FY23 has modestly improved
vs. FY22
>
The modest improvement in the operating environment is expected to continue in H2FY23; however,
soft vehicle demand in China and increased steel prices in North America temper our second half
expectations
Positive
Neutral
Expected Influences H2 vs. H1
> Stability of customer production schedules (gradual, sequential
improvement)
> Self-help; increased efficiencies
Vehicle production (improved in N. America, largely offset by modestly
lower production in ROW)
> Energy, freight, labor availability and cost
Commercial settlements / recoveries
>
Balance in/balance out
>
Steel costs (potential risk in Q4)
Cautionary
>
Consumer demand (potential softening)
ADIENT
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Regional Environments
Americas
•
"Run rates" at customers trending in a positive
direction
Inventory rebuild combined with a likely increase in
sales incentives should support vehicle build
assumptions for FY23
Monitoring potential softening of consumer demand
China
•
Auto demand in China remains "soft" despite
unprecedented price cuts
•
Soft demand and rising inventories heighten
concerns for downward revisions to production
schedules in the coming quarters
Europe
Long-term vehicle production forecast not expected
to return to pre-COVID levels
Adient continues to identify actions to be
implemented to improve financial performance
(reducing SG&A, footprint, lower capital spending,
etc.).
See slides 9-10 for key trends driving the need for
restructuring, Adient's response and a case study in
effective, cost-efficient restructuring
FY2023 Second Quarter Earnings Call
Adient - PUBLIC
May 3, 2023
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