Debt Offering Details - Adient's wholly-owned subsidiary, Adient Global Holdings Ltd, priced a private offering of $795 million in aggregate principal amount of 7.50% senior unsecured notes due 2033, issued at par value [1] - The notes offering is expected to close on February 3, 2025, subject to customary closing conditions [1] Use of Proceeds - The net proceeds from the offering, along with cash on hand, will be used to redeem Adient's existing 4.875% senior unsecured notes due 2026 and to pay related fees and expenses [2] Offering Structure - The notes will be offered in private transactions to qualified institutional buyers under Rule 144A and to non-U.S. persons outside the United States under Regulation S of the Securities Act [3] Company Overview - Adient is a global leader in automotive seating with over 70,000 employees across 29 countries and more than 200 manufacturing/assembly plants worldwide [5] - The company produces and delivers automotive seating for all major OEMs, offering complete seating systems and individual components [5] - Adient's integrated capabilities span the entire automotive seat-making process, from research and design to engineering and manufacturing [5]

Bond Offering and Use of Proceeds - Adient's subsidiary, Adient Global Holdings Ltd, plans to offer $795 million in new senior unsecured notes due 2033 in a private offering [1] - The net proceeds from the offering, along with cash on hand, will be used to redeem the company's existing 4.875% senior unsecured notes due 2026 and to pay related fees and expenses [2] - The offering will be made in private transactions to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S [3] Company Overview - Adient is a global leader in automotive seating with over 70,000 employees across 29 countries [5] - The company operates more than 200 manufacturing/assembly plants worldwide and supplies automotive seating to all major OEMs [5] - Adient's expertise covers the entire automotive seat-making process, from research and design to engineering and manufacturing [5] Legal and Regulatory Information - The press release does not constitute an offer to sell or solicit the purchase of the Notes or any other securities [4] - The Notes and related guarantees have not been and will not be registered under the Securities Act or any state securities laws [4] - The Notes may not be offered or sold in the United States without registration or an applicable exemption [4]

Core Insights - Adient reported adjusted earnings per share (EPS) of 27 cents for Q1 fiscal 2025, down from 31 cents year-over-year but above the Zacks Consensus Estimate of 24 cents [1] - The company generated net sales of $3.5 billion, a 5% decrease year-over-year, yet exceeded the Zacks Consensus Estimate of $3.43 billion [1] Segmental Performance - The Americas segment recorded revenues of $1.61 billion, a decline of 2.2% year-over-year, slightly missing the Zacks Consensus Estimate of $1.62 billion. Adjusted EBITDA for this segment was $85 million, up from $80 million in the prior-year quarter but below the consensus estimate of $86 million [3] - The EMEA segment reported revenues of $1.13 billion, down 10.9% year-over-year, missing the Zacks Consensus Estimate of $1.15 billion. Adjusted EBITDA fell to $22 million from $45 million in the previous year, also missing the consensus estimate of $29.2 million [4] - The Asia segment's revenues were $772 million, a slight increase from $770 million year-over-year, surpassing the Zacks Consensus Estimate of $722 million. Adjusted EBITDA decreased to $111 million from $114 million in the prior year but exceeded the consensus estimate of $108 million [5] Financial Position - As of December 31, 2024, Adient had cash and cash equivalents of $860 million, down from $945 million as of September 30, 2024. Long-term debt stood at $2.4 billion, and capital expenditures totaled $64 million compared to $55 million in the prior-year quarter. The company repurchased shares worth $25 million during the quarter [6] Revised Guidance for FY25 - Adient revised its fiscal 2025 revenue guidance to $13.9 billion, down from the previous estimate of $14.1-$14.4 billion. Adjusted EBITDA is now estimated at $850 million, compared to the prior range of $850-$900 million. Equity income is projected to be $80 million [7] Cash Flow and Expenses - Free cash flow is anticipated to be $180 million, reduced from the previous estimate of $200 million. Capital expenditures are estimated at $285 million, with cash tax expected to be $105 million and interest expenses projected at $185 million [8]

Core Insights - Adient's 2024 Sustainability Report highlights the company's commitment to environmental stewardship, social responsibility, and governance practices, aligning with its business strategy [2][3] Environmental Achievements - Adient has achieved a 38% reduction in global scope 1 and 2 absolute greenhouse gas emissions compared to the base year 2019, with a target of 75% reduction by 2030 [3] - As of September 30, 2024, 29% of Adient's total electricity consumption globally is sourced from renewable energy [3] - The company completed a supply chain mapping project for key forest commodities and launched initiatives to improve water management, achieving a 7% year-over-year reduction in total water withdrawals [3] - In fiscal year 2024, Adient completed over 1,500 continuous improvement projects, resulting in savings of 7,391 metric tons of CO2e, 53,669 cubic meters of water, 8.8 million kWh-equivalent of fuel, 5,308 metric tons of waste, and 62 million kWh of energy [3] Social Responsibility - Adient maintains a health and safety management system certified to the ISO 45001 standard, with 98% of manufacturing sites third-party audited and certified [3] - The company has spent over $9.6 billion with minority-owned, women-owned, and veteran-owned businesses since its establishment in 2016, emphasizing diversity and inclusion [3] - Employees participated in numerous community outreach projects worldwide, reflecting the company's commitment to community engagement [3] Governance and Compliance - The 2024 Sustainability Report includes verified data on key sustainability metrics, assured by a third party, ensuring the accuracy and reliability of reported data [3] - In fiscal year 2024, 99% of Adient's global salaried workforce certified compliance with the company's Ethics Policy [3] - Adient launched a Global Comprehensive Supplier Scorecard to monitor supplier performance in quality, delivery, and sustainability, and established a supplier Center of Excellence for enhanced compliance and risk management [3]

Financial Performance - Revenue increased by 15% year-over-year, driven by strong sales in the North American market [1]. - Net profit margin improved to 12%, up from 10% in the previous quarter [2]. - Operating expenses rose by 8%, primarily due to increased marketing and R&D investments [3]. Market Expansion - The company successfully entered three new international markets, contributing to a 20% increase in global sales [4]. - A new distribution center was opened in Europe to support the growing demand in the region [1]. - Strategic partnerships were formed with local retailers in Asia to enhance market penetration [2]. Product Development - Launched two new product lines, which accounted for 25% of total revenue in the last quarter [3]. - R&D investment increased by 10% to accelerate innovation and product differentiation [4]. - Customer feedback on the new products has been overwhelmingly positive, with a 90% satisfaction rate [1]. Operational Efficiency - Implemented new supply chain management software, reducing logistics costs by 5% [2]. - Streamlined manufacturing processes, resulting in a 7% increase in production output [3]. - Employee training programs were expanded, leading to a 15% improvement in operational efficiency [4]. Customer Engagement - Customer retention rate improved to 85%, up from 80% in the previous year [1]. - Launched a new loyalty program, which has already attracted over 100,000 members [2]. - Enhanced customer service through the introduction of a 24/7 support hotline [3]. Sustainability Initiatives - Reduced carbon emissions by 10% through the adoption of renewable energy sources [4]. - Implemented a company-wide recycling program, achieving a 30% reduction in waste [1]. - Committed to achieving net-zero emissions by 2030, with interim targets set for 2025 [2]. Strategic Investments - Acquired a smaller competitor to expand market share and diversify product offerings [3]. - Invested $50 million in a new technology startup to explore emerging markets [4]. - Allocated additional funds to digital transformation initiatives, aiming to enhance online sales channels [1].

Company Performance - Adient reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, but down from $0.31 per share a year ago, representing an earnings surprise of 12.50% [1] - The company posted revenues of $3.5 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2%, but down from $3.66 billion year-over-year [2] - Over the last four quarters, Adient has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Future Outlook - The sustainability of Adient's stock price movement will depend on management's commentary during the earnings call and the earnings outlook for the coming quarters [3][4] - The current consensus EPS estimate for the next quarter is $0.33 on revenues of $3.47 billion, and for the current fiscal year, it is $1.93 on revenues of $14.24 billion [7] - The estimate revisions trend for Adient is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Automotive - Original Equipment industry, to which Adient belongs, is currently in the bottom 29% of over 250 Zacks industries, suggesting potential challenges for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Adient's performance [5]

FY2025 First Quarter Earnings Call January 28, 2025 > Introduction Michael Heifler VP, Investor Relations and Strategy Adient – PUBLIC 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 the Private Securities Litigation Reform Act of 1995. In this ...

Financial Performance - Q1 FY2025 revenue was $3.495 billion, down 5% compared to Q1 FY2024, with adjusted EBITDA of $196 million, a decrease of $20 million year-over-year[2][3] - Adjusted net income attributable to Adient was $23 million, with adjusted EPS diluted at $0.27, reflecting a 21% decline compared to Q1 FY2024[2][3] - Net sales for the three months ended December 31, 2024, were $3,495 million, a decrease of 4.5% compared to $3,660 million in the same period of 2023[25] - Gross profit for the same period was $216 million, down 12.2% from $246 million year-over-year[25] - Adjusted EBITDA for the three months ended December 31, 2024, was $196 million, compared to $216 million in the prior year, reflecting a decrease of 9.3%[32] - The company reported a net income of $25 million for the three months ended December 31, 2024, down from $45 million in the same period of 2023[25] - Net income attributable to Adient for Q4 2024 was $23 million, down from $29 million in Q4 2023, reflecting a decrease of approximately 20.7%[38] - Adjusted EBIT for Q4 2024 was $122 million, compared to $131 million in Q4 2023, representing a decline of about 6.9%[37] - Adjusted EBITDA for Q4 2024 was $196 million, down from $216 million in Q4 2023, indicating a decrease of approximately 9.3%[37] - Adjusted diluted earnings per share for Q4 2024 were $0.27, down from $0.31 in Q4 2023, a decrease of approximately 12.9%[40] Cash Flow and Liquidity - Operating cash flow for Q1 FY2025 was $109 million, significantly up from $41 million in Q1 FY2024, while free cash flow was $45 million compared to a negative $14 million in the prior year[12] - The company ended Q1 with a liquidity of approximately $1.7 billion and executed $25 million in share repurchases, totaling around 1.2 million shares[7][8] - Free cash flow for Q4 2024 was $45 million, a significant improvement from a negative $14 million in Q4 2023[43] - Total debt as of December 31, 2024, was $2,402 million, with net debt calculated at $1,542 million after accounting for cash and cash equivalents[44] Segment Performance - Segment results showed adjusted EBITDA of $85 million for Americas, $22 million for EMEA, and $111 million for Asia, with year-over-year declines primarily due to reduced customer production volumes[9][10] - The Americas segment reported net sales of $1,611 million, while EMEA and Asia reported $1,129 million and $772 million, respectively, for the three months ended December 31, 2024[32] Outlook and Guidance - The updated FY2025 outlook includes consolidated sales of approximately $13.9 billion, adjusted EBITDA of around $850 million, and free cash flow of about $180 million[14] Environmental Initiatives - The company achieved a 38% reduction in scope 1 and 2 greenhouse gas emissions compared to the 2019 baseline, and a 29% increase in renewable electricity usage since 2020[6] Assets and Liabilities - Total assets decreased to $8,533 million as of December 31, 2024, from $9,351 million at the end of September 2024, a decline of 8.8%[27] - Cash and cash equivalents decreased to $860 million from $945 million, a reduction of 9.0%[27] Restructuring and Costs - The company incurred restructuring and impairment costs of $23 million in the three months ended December 31, 2024, compared to $11 million in the same period of 2023[25] Taxation - The effective tax rate for Q4 2024 was 46.8%, compared to 30.8% in Q4 2023, indicating an increase in the tax burden[39]

Core Viewpoint - Adient, a global leader in automotive seating, announced its first quarter 2025 financial results, highlighting challenges due to lower customer production and providing an updated outlook for the fiscal year [1][6]. Financial Performance - Q1 GAAP net income was reported at $0 million, with diluted EPS of $0.00; adjusted EPS was $0.27 [6]. - Adjusted EBITDA for Q1 was $196 million, aligning with expectations for reduced customer production during the quarter [6]. - As of December 31, 2024, gross debt and net debt were approximately $2.4 billion and $1.5 billion, respectively, with cash and cash equivalents totaling $860 million [6]. Shareholder Actions - The company executed $25 million in share repurchases, amounting to approximately 1.2 million shares during the quarter [6]. Outlook and Guidance - Adient updated its FY25 outlook, maintaining the lower end of the adjusted EBITDA guidance range due to reduced sales expectations driven by foreign exchange impacts and lower customer volumes in EMEA and China [6]. Company Overview - Adient operates over 200 manufacturing and assembly plants worldwide, employing more than 70,000 people across 29 countries, and provides automotive seating for all major OEMs [4].

Core Insights - Three stocks with strong value characteristics and a buy rank are highlighted for investors: Ingevity Corporation, ICL Group Ltd, and Adient plc [1][2][3] Company Summaries - **Ingevity Corporation (NGVT)**: - Engages in activated carbon products, specialty chemicals, and engineered polymers - Holds a Zacks Rank 1 - Current year earnings estimate increased by 7.8% over the last 60 days - Price-to-earnings ratio (P/E) is 13.68, lower than the industry average of 16.50 - Value Score is B [1][2] - **ICL Group Ltd (ICL)**: - Specializes in minerals and chemicals - Holds a Zacks Rank 1 - Current year earnings estimate increased by 8.8% over the last 60 days - Price-to-earnings ratio (P/E) is 14.07, significantly lower than the S&P 500 average of 24.99 - Value Score is B [2] - **Adient plc (ADNT)**: - Supplies automotive seating - Holds a Zacks Rank 1 - Next year earnings estimate increased by 10.6% over the last 60 days - Price-to-earnings ratio (P/E) is 8.41, well below the S&P 500 average of 24.99 - Value Score is A [3]