Core Viewpoint - Adient's recent earnings report showed a significant decline in both earnings and revenue, leading to a downward revision of guidance for fiscal 2024, indicating potential challenges ahead for the company [2][6]. Financial Performance - Adient reported adjusted earnings per share (EPS) of 32 cents for Q3 fiscal 2024, down from 98 cents in the same period last year, and missed the Zacks Consensus Estimate of 67 cents [2]. - The company generated net sales of $3.72 billion, an 8% decrease year over year, and also missed the Zacks Consensus Estimate of $3.81 billion [2]. Segmental Performance - The Americas segment recorded revenues of $1.74 billion, an 8.6% decline year over year, missing the Zacks Consensus Estimate of $1.76 billion, but adjusted EBITDA increased to $99 million from $95 million [3]. - The EMEA segment's revenues were $1.29 billion, down 10.4% year over year, missing the Zacks Consensus Estimate of $1.35 billion, with adjusted EBITDA dropping significantly to $25 million from $103 million [4]. - The Asia segment reported revenues of $712 million, a 4% decline year over year, missing the Zacks Consensus Estimate of $729 million, while adjusted EBITDA rose 1% to $101 million [4]. Financial Position - As of June 30, 2024, Adient had cash and cash equivalents of $890 million, down from $1.11 billion as of September 30, 2023 [5]. - Long-term debt stood at $2.4 billion, with capital expenditures totaling $70 million compared to $60 million in the prior-year quarter [5]. Revised Guidance - Adient revised its fiscal 2024 revenue guidance to $14.6 billion, down from the previous estimate of $14.80-$14.90 billion, and adjusted EBITDA is now estimated at $870 million, down from $900-$920 million [6]. Market Position - Adient has a Zacks Rank 5 (Strong Sell), indicating expectations of below-average returns in the coming months [9]. - The company has an average Growth Score of C and a Momentum Score of D, but a strong value score of A, placing it in the top quintile for this investment strategy [8].

证 券 研 究 报 告 安道拓（ADNT）FY24Q3 业绩点评及业绩说明会纪要 会议时间：2024 年 8 月 6 日 EMEA 地区盈利承压，亚太区较稳健 会议地点：电话会议 ❖ 事项： 2024 年 8 月 6 日安道拓发布 2024 财年第三财季报告，并召开业绩说明会。公 司 FY2024Q3 截至 2024 年 6 月 30 日，与自然季度 CO2024Q2 相近，以下表 述均为自然季度。 ❖ 评论： 1. 营收： 1) 24Q2 公司营收约 37 亿美元、同比-8%，其中销量和定价下降影响 2.85 亿 美元，汇率变动影响 0.54 亿美元； 2) 24Q2 美洲区营收同比下降 8%，主要受销量减少和产品结构变化的影响； 3) 24Q2 EMEA 地区营收同比下降 9%，主要受市场需求疲软、客户产量下 降的影响； 4) 24Q2 亚洲区营收同比增长 1%，其中中国营收同比增长 6%； 5) 24Q2 公司合并前的座椅收入经外汇调整后同比增长 8%。 2. 盈利： 1) 24Q2 公司调整后净利润为 2900 万美元、同比-69%； 2) 24Q2 公司调整后 EBITDA 为 2.02 亿美元、同 ...

Core Viewpoint - Adient reported a decline in adjusted earnings per share (EPS) and net sales for the third quarter of fiscal 2024, missing consensus estimates [1] Financial Performance - Adjusted EPS for Q3 2024 was 32 cents, down from 98 cents in the same period last year, and below the Zacks Consensus Estimate of 67 cents [1] - Net sales totaled $3.72 billion, an 8% decrease year over year, and also missed the Zacks Consensus Estimate of $3.81 billion [1] Segmental Performance - **Americas Segment**: Revenues were $1.74 billion, an 8.6% decline year over year, missing the estimate of $1.76 billion. Adjusted EBITDA increased to $99 million from $95 million, exceeding the estimate of $67 million due to efficiencies [2] - **EMEA Segment**: Revenues fell to $1.29 billion, a 10.4% decline year over year, missing the estimate of $1.35 billion. Adjusted EBITDA dropped significantly to $25 million from $103 million, missing the estimate of $91 million due to lower customer releases [3] - **Asia Segment**: Revenues were $712 million, down 4% year over year, missing the estimate of $729 million. Adjusted EBITDA rose 1% to $101 million, beating the estimate of $95 million due to efficiencies [3] Financial Position - Cash and cash equivalents stood at $890 million as of June 30, 2024, down from $1.11 billion as of September 30, 2023 [4] - Long-term debt was reported at $2.4 billion [4] - Capital expenditures totaled $70 million, an increase from $60 million in the prior-year quarter [4] - The company repurchased approximately 2.6 million shares for $75 million during the quarter [4] Revised Guidance for 2024 - Adient revised its fiscal 2024 revenue guidance to $14.6 billion, down from the previous range of $14.80-$14.90 billion [5] - Adjusted EBITDA is now estimated at $870 million, reduced from the prior guidance of $900-$920 million [5] - Free cash flow is anticipated to be $250 million, with capital expenditures and cash tax estimates adjusted to $285 million and $100 million, respectively [5]

Core Viewpoint - Adient plc's Q3 FY 2024 results were disappointing, primarily due to underperformance in the EMEA segment, but a potential turnaround is anticipated in FY 2025 based on a positive outlook for the European automotive industry [1][4]. Financial Performance - Q3 FY 2024 results showed revenue, normalized EBITDA, and non-GAAP adjusted EPS were -3%, -12%, and -49% below consensus forecasts, respectively [3]. - Year-over-year (YoY) comparisons for Q3 FY 2024 indicated a decrease in top line by -8%, non-GAAP adjusted EBITDA by -27%, and normalized EPS by -67% [3]. - The EMEA segment's non-GAAP adjusted EBITDA fell by -76% YoY to $25 million, while the Americas and Asia segments saw increases of +4% and +1%, respectively [3]. Guidance and Outlook - Full-year FY 2024 revenue and non-GAAP adjusted EBITDA guidance were revised downwards by -2% and -4% to $14.6 billion and $870 million, respectively [3]. - Q4 FY 2024 is expected to see declines of -7% YoY in revenue and -4% YoY in normalized EBITDA [3]. - The company is proceeding with caution in the European market due to declining volume and insourcing issues [3]. Future Prospects - Consensus data suggests a +3% revenue growth and +11% EBITDA growth for FY 2025, contrasting with FY 2024's expected declines [5]. - The European automotive manufacturing volume is projected to rebound by +2.3% in 2025 after a -3.0% decrease in 2024 [5]. - Adient is taking steps to optimize costs and improve profitability in the EMEA segment, with plans to assess customer relationships for better efficiency [5]. Valuation - Adient's stock is currently valued at 5.5 times trailing twelve months' EV/EBITDA, close to its historical mean of 6.3 times [6]. - The consensus annualized EBITDA growth rate estimate for FY 2023-2027 is projected at +6.6% [6].

Core Insights - Adient reported $3.72 billion in revenue for the quarter ended June 2024, marking an 8.4% year-over-year decline and an EPS of $0.32 compared to $0.98 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $3.81 billion, resulting in a surprise of -2.53%, while the EPS surprise was -52.24% against a consensus estimate of $0.67 [1] Revenue and Earnings Performance - Light Vehicle Production in North America was 4.2 million, exceeding the average estimate of 3.95 million [3] - Light Vehicle Production in China was 7 million, slightly below the average estimate of 7.28 million [4] - Light Vehicle Production in EMEA was 4.4 million, close to the average estimate of 4.47 million [5] - Light Vehicle Production in South America was 0.7 million, compared to the average estimate of 0.73 million [6] - Net Sales in Asia were $712 million, below the estimated $728.63 million, reflecting a -4% change year-over-year [7] - Net Sales from Eliminations were -$21 million, better than the estimated -$25.52 million, showing a -16% change year-over-year [8] - Net Sales in the Americas were $1.74 billion, slightly below the average estimate of $1.76 billion, with an -8.6% year-over-year change [9] - Net Sales in EMEA were $1.29 billion, under the average estimate of $1.35 billion, representing a -10.4% year-over-year change [10] Stock Performance - Adient shares have returned -8.3% over the past month, compared to the Zacks S&P 500 composite's -5.9% change, with a current Zacks Rank of 5 (Strong Sell) indicating potential underperformance in the near term [11]

Financial Performance - Adient recorded net sales of $3,716 million for Q3 2024, a decrease of $339 million or 8.4% compared to Q3 2023, primarily due to lower production volumes and unfavorable currency impacts[137]. - Gross profit for Q3 2024 was $207 million, representing 5.6% of net sales, down from $302 million or 7.4% in Q3 2023, attributed to lower production volumes and unfavorable material economics[138]. - Net loss attributable to Adient was $11 million in Q3 2024, compared to a net income of $73 million in Q3 2023, driven by lower production volumes and higher restructuring costs[139]. - Adient's net sales for the first nine months of fiscal 2024 decreased by $540 million or 5% compared to the same period in fiscal 2023, largely due to production disruptions and softening demand[142]. - Comprehensive loss attributable to Adient was $78 million for Q3 2024, a decrease of $84 million compared to a comprehensive income of $6 million in Q3 2023[160]. - For the first nine months of fiscal 2024, comprehensive loss was $88 million, down $249 million from a comprehensive income of $161 million in the same period of fiscal 2023[161]. - Net sales for the first nine months of fiscal 2024 were $11,126 million, down 6% from $11,666 million in the same period of fiscal 2023[170]. - Net loss attributable to Adient was $61 million for the first nine months of FY2024, compared to net income of $70 million for the same period in FY2023[159]. Segment Performance - Global light vehicle production increased by 0.5% to 22.1 million units in Q3 2024, with North America showing a 2.4% increase, while South America experienced a decline of 12.5%[136]. - The EMEA segment faced persistent operational challenges, contributing to a 4.3% decline in vehicle production in that region[135]. - EMEA segment net sales decreased by 10% in Q3 2024 to $1,288 million, down from $1,438 million in Q3 2023[174]. - Adjusted EBITDA for the EMEA segment in Q3 2024 was $25 million, a decline of 76% from $103 million in Q3 2023[174]. Costs and Expenses - Restructuring and impairment costs rose significantly to $16 million in Q3 2024, compared to $6 million in Q3 2023, indicating increased operational challenges[140]. - Cost of sales decreased by $244 million, or 7%, and gross profit decreased by $95 million, or 31%, in Q3 FY2024 compared to Q3 FY2023[143]. - SG&A expenses decreased by $27 million, or 18%, in Q3 FY2024 compared to Q3 FY2023, primarily due to lower net engineering and administrative spending[145]. - Restructuring and impairment costs increased by $10 million in Q3 FY2024 and by $122 million in the first nine months of FY2024 due to restructuring actions in EMEA[147]. - Cost of sales decreased by $440 million, or 4%, and gross profit decreased by $100 million, or 13%, in the first nine months of FY2024 compared to the same period in FY2023[144]. - SG&A for the first nine months of FY2024 decreased by $44 million, or 10%, compared to the first nine months of FY2023[146]. Cash Flow and Financing - Cash provided by operating activities decreased to $280 million in the first nine months of fiscal 2024, down from $373 million in the prior year[189]. - Adient incurred $152 million in restructuring costs during the first nine months of fiscal 2024, with expected annual operating cost reductions of approximately $100 million upon completion of the 2024 Plan[192][193]. - As of June 30, 2024, Adient had $923 million available under its asset-based revolving credit facility[183]. - The Term Loan B Agreement had an outstanding balance of $633 million as of June 30, 2024, with a maturity extended to January 31, 2031[184]. Market Conditions - The automotive industry is experiencing softening consumer demand and lower vehicle production, impacting Adient's financial results[164]. - The automotive industry has faced significant volatility in commodity costs, including steel and petrochemical prices, which may continue to impact Adient's input costs[197]. - Adient has historically managed to offset inflation effects through operating efficiencies, despite experiencing moderate cost increases[197]. Monitoring and Risk - The company is closely monitoring the financial results of its EMEA segment for potential implications on long-lived asset recoverability[134]. - Adient is closely monitoring the EMEA segment for potential impairment of long-lived assets, including goodwill, due to unfavorable trends[164]. - As of June 30, 2024, there have been no material changes to Adient's critical accounting estimates and policies since the fiscal year ended September 30, 2023[198]. - Adient has not experienced adverse changes in market risk exposures that materially affected its disclosures as of June 30, 2024[200].

Company Performance - Adient reported quarterly earnings of $0.32 per share, missing the Zacks Consensus Estimate of $0.67 per share, and down from $0.98 per share a year ago, representing an earnings surprise of -52.24% [1] - The company posted revenues of $3.72 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 2.53%, and down from $4.06 billion year-over-year [1] - Over the last four quarters, Adient has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during the same period [1] Stock Performance - Adient shares have declined approximately 37.2% since the beginning of the year, contrasting with the S&P 500's gain of 8.7% [2] - The current Zacks Rank for Adient is 5 (Strong Sell), indicating expectations of underperformance in the near future [4] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $3.54 billion, and for the current fiscal year, it is $2.14 on revenues of $14.77 billion [4] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [4] Industry Context - The Automotive - Original Equipment industry, to which Adient belongs, is currently ranked in the bottom 14% of over 250 Zacks industries, suggesting a challenging environment [5] - Strattec Security, another company in the same industry, is expected to report quarterly earnings of $0.38 per share, reflecting a year-over-year decline of 24%, with revenues projected at $141.51 million, up 7% from the previous year [5]

Financial Performance - Q3 FY2024 reported revenue was $3,716M, an 8% decrease compared to Q3 FY2023, with adjusted EBITDA of $202M, down 27% year-over-year[2] - Adjusted net income for Q3 FY2024 was $29M, with adjusted EPS diluted at $0.32, compared to a net loss of $11M and EPS diluted of $(0.12) in the same quarter last year[2] - Adient reported net sales of $3,716 million for the three months ended June 30, 2024, a decrease of 8.4% compared to $4,055 million for the same period in 2023[19] - The gross profit for the same period was $207 million, down from $302 million, reflecting a gross margin of 5.6%[19] - Adjusted EBITDA for the three months ended June 30, 2024, was $202 million, with an adjusted EBITDA margin of 5.4%[29] - Net income attributable to Adient was a loss of $11 million for the three months ended June 30, 2024, compared to a profit of $73 million in the same period last year[19] - Adjusted net income attributable to Adient was $29 million, down from $93 million in the previous year[39] - Adjusted diluted earnings per share decreased to $0.32 from $0.98 year-over-year[44] - Adjusted EBIT margin was 3.4% of net sales, down from 4.8% in the same quarter last year[38] - Total net sales for the quarter were $3,716 million, compared to $4,055 million in the prior year[38] Cash Flow and Debt - The company generated free cash flow of $88M in Q3 FY2024, compared to $143M in Q3 FY2023[10] - Cash provided by operating activities was $158 million for the three months ended June 30, 2024, down from $203 million in the prior year[26] - Net debt as of June 30, 2024, was $1,647 million, an increase of 15.6% from $1,425 million as of September 30, 2023[54] - Total debt as of June 30, 2024, was $2,537 million, slightly up from $2,535 million as of September 30, 2023[54] - The net leverage ratio increased to 1.87 as of June 30, 2024, from 1.52 as of September 30, 2023[53] Segment Performance - The Americas segment reported adjusted EBITDA of $99M, while EMEA and Asia reported $25M and $101M, respectively, with overall performance impacted by lower customer production[8] - Adient's Americas segment generated net sales of $1,737 million, while the EMEA and Asia segments reported $1,288 million and $712 million, respectively[29] - Adjusted EBITDA for the Americas segment was $99 million, up from $95 million in the same period last year, while EMEA dropped to $25 million from $103 million[31] Outlook and Strategic Initiatives - The FY2024 outlook was updated to reflect consolidated sales of approximately $14.6B, down from a prior estimate of $14.8B-$14.9B[12] - Adient China is expected to drive double-digit growth in the coming years, focusing on innovation in seating comfort, connectivity, and sustainability[4] - The company is advancing automation and AI tools to improve operational efficiency and reduce costs[5] - The company is focused on deleveraging activities and expects to improve its financial position in the upcoming quarters[16] Costs and Expenses - Corporate-related costs increased to $(23) million from $(22) million year-over-year[31] - Restructuring and impairment costs rose to $(16) million from $(6) million in the same period last year[31] - The company reported a net financing charge of $(48) million, slightly down from $(49) million in the previous year[31] - Adjusted equity income for Q2 2024 was $23 million, down 14.8% from $27 million in Q2 2023[46] - Net financing charges for Q2 2024 were $48 million, unchanged from Q2 2023[48] - Operating cash flow for Q2 2024 was $158 million, a decrease of 22.1% compared to $203 million in Q2 2023[50] - Free cash flow for Q2 2024 was $88 million, down 38.5% from $143 million in Q2 2023[51] - Adjusted EBITDA for Q2 2024 was $202 million, a decline of 26.9% from $276 million in Q2 2023[51] - Capital expenditures for Q2 2024 were $70 million, compared to $60 million in Q2 2023[50] Taxation - The company reported an adjusted effective tax rate of 40% for the three months ended June 30, 2024[17] - The effective tax rate for the three months ended June 30, 2024, was 88.9%, significantly higher than 22.8% in 2023[41]

Financial Performance - Adient reported a Q3 2024 GAAP net loss of $11 million and a diluted EPS of $(0.12), while the adjusted EPS was $0.32 [1] - The adjusted EBITDA for Q3 was $202 million, impacted by lower customer production [1] - The company generated free cash flow of $88 million during the quarter [1] Debt and Cash Position - As of June 30, 2024, Adient's gross debt and net debt were approximately $2.5 billion and $1.6 billion, respectively, with cash and cash equivalents totaling $890 million [1] - The company executed $75 million in share repurchases, retiring about 2.6 million shares in the quarter, bringing year-to-date repurchases to $225 million and approximately 7.1 million shares [1] Outlook and Market Conditions - Adient updated its FY24 outlook, acknowledging the effects of lower vehicle production expectations [1] - The company operates over 200 manufacturing and assembly plants globally, producing automotive seating for all major OEMs [3]

Group 1 - Adient will participate in the J.P. Morgan Auto Conference on August 8, 2024, with a fireside chat featuring CEO Jerome Dorlack and CFO Mark Oswald at 10:15 AM Eastern Time [1] - A live webcast of the fireside chat will be available on the investor section of Adient's website [1] Group 2 - Adient is a global leader in automotive seating, employing over 70,000 people across 29 countries [2] - The company operates more than 200 manufacturing and assembly plants worldwide, producing automotive seating for all major OEMs [2] - Adient's expertise covers the entire automotive seat-making process, from research and design to engineering and manufacturing [2]