Adient(ADNT) - 2025 Q3 - Quarterly Results

Q3 FY2025 Performance Summary Financial Highlights Adient reported strong Q3 FY2025 results with a 1% year-over-year revenue increase to $3.741 billion and a significant 15% rise in Adjusted EBIT to $145 million, prompting an upward revision of its full-year financial outlook | | REVENUE | EBIT | NET INCOME | EPS DILUTED | | :--- | :--- | :--- | :--- | :--- | | AS REPORTED | $3,741M | $118M | $36M | $0.43 | | vs. Q3 24 | 1% | 26% | NM | NM | | | ADJ. EBIT | ADJ. EBITDA | ADJ. NET INCOME | ADJ. EPS DILUTED | | AS ADJUSTED | $145M | $226M | $38M | $0.45 | | vs. Q3 24 | 15% | 12% | 31% | 41% | - Adjusted EBITDA for Q3FY25 reached $226M, a $24M year-over-year improvement, with the Adjusted EBITDA margin expanding by 60 basis points to 6.0%, attributed to favorable material margins and reduced operating costs[2][6] - The company's strong financial performance in the first three quarters of FY25 led to an upward revision of its full-year guidance for revenue and Adjusted EBITDA[2][6] Business Developments and Strategic Wins Adient secured significant new business across all regions, including a key conquest win with Mercedes in EMEA and new business with an Asia-based OEM moving production to the U.S., reinforcing its market position - Adient is leveraging its operational strengths to benefit from the trend of customers onshoring programs to the U.S., positioning itself as a net beneficiary[1][2][5] - Key business wins in Q3 include new conquest business for the Mercedes VAN C-Large in EMEA, SUV business with an Asia-based OEM moving to the U.S., and new trim business with BYD in Asia[5] - The company received numerous global awards for performance and quality from major OEMs including GAC Toyota, Renault Korea, GM, Nissan, Toyota, and Ford[4] Capital Allocation and Shareholder Returns The company demonstrated its commitment to shareholder returns by repurchasing $50 million of its shares during the third quarter, with $185 million remaining under the current authorization - Resumed its share repurchase program, returning $50M to shareholders in Q3[3][6] - Year-to-date share repurchases total $75M, retiring about 4% of shares outstanding from the beginning of the fiscal year[3][6] - The current share repurchase authorization has $185M remaining with no expiration date[3] Detailed Financial and Segment Analysis Segment Performance (Adjusted EBITDA) In Q3 FY25, the Americas and Asia segments showed strong year-over-year growth in Adjusted EBITDA, driven by improved business performance and lower operating costs, while EMEA experienced a decline due to volume/mix and unfavorable net commodities | | Americas | | EMEA | | Asia | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | Q3 25 | Q3 24 | Q3 25 | Q3 24 | Q3 25 | Q3 24 | | Adj. EBITDA | $112M | $99M | $21M | $25M | $113M | $101M | - Americas: Adj. EBITDA increased to $112M from $99M YoY, with a 70 bps margin expansion, driven by favorable commercial actions and lower operating expenses[7] - Asia: Adj. EBITDA grew to $113M from $101M YoY, resulting in a 150 bps margin expansion, primarily due to lower operating and launch costs[7][8] - EMEA: Adj. EBITDA decreased to $21M from $25M YoY, impacted by unfavorable volume/mix, net commodities, and transactional FX[7][8] Financial Position and Cash Flow Adient maintained a solid financial position with $860 million in cash and cash equivalents as of June 30, 2025, generating $115 million in free cash flow during Q3 FY25, while total debt remained stable at approximately $2.4 billion | | 06/30/25 | 09/30/24 | | :--- | :--- | :--- | | CASH & CASH EQUIVALENTS | $860M | $945M | | TOTAL DEBT | $2,394M | $2,405M | | NET DEBT | $1,534M | $1,460M | | | YTD 25 | YTD 24 | | :--- | :--- | :--- | | OPERATING CASH FLOW | $236M | $280M | | CAPITAL EXPENDITURES | $(166)M | $(194)M | | FREE CASH FLOW | $70M | $86M | - Free cash flow for the third quarter of FY25 was $115M, a significant improvement compared to $88M in Q3FY24[10] Key Operating Metrics Consolidated sales for Q3 FY25 increased by approximately 1% to $3.741 billion, mainly due to translational FX impacts, while unconsolidated sales declined by 9% due to portfolio rationalization | | Q3 25 | Q3 24 | | :--- | :--- | :--- | | CONSOLIDATED SALES | $3,741M | $3,716M | | UNCONSOLIDATED SALES | $825M | $925M | | EQUITY INCOME (as adjusted) | $23M | $23M | | INTEREST EXPENSE (as adjusted) | $51M | $48M | | INCOME TAX EXPENSE (as adjusted) | $30M | $30M | - The ~1% increase in consolidated revenues was primarily driven by translational foreign exchange impacts[11] - The ~9% year-over-year decrease in unconsolidated revenues was mainly due to portfolio rationalization finalized in Q1 FY2025[11] FY2025 Outlook Revised Full-Year Guidance Reflecting strong performance through the first three quarters, Adient has raised its FY2025 guidance, now expecting consolidated sales of approximately $14.4 billion and Adjusted EBITDA of around $875 million, with free cash flow outlook unchanged | Metric | FY2025 Outlook | Previous Outlook | | :--- | :--- | :--- | | Consolidated sales | ~$14.4B | ~$13.9B | | Adj.-EBITDA | ~$875M | ~$850M | | Equity income | ~$75M | ~$80M | | Interest expense | ~$190M | No change | | Cash taxes | ~$100M | ~$105M | | Capital expenditures | ~$260M | ~$285M | | Free cash flow | ~$150M-$170M | No change | - The updated guidance reflects strong year-to-date performance and current macroeconomic conditions, including production volumes, tariffs, and foreign exchange rates[12] - The company anticipates that most tariff costs will be largely mitigated and the guidance assumes no change to current tariff policy[12] Appendix: Financial Statements & Non-GAAP Reconciliations Consolidated Financial Statements This section provides the unaudited condensed consolidated financial statements for Adient plc, including the Statement of Income, Statement of Financial Position (Balance Sheet), and Statement of Cash Flows for the periods ended June 30, 2025 Statement of Income (Loss) Presents the company's revenues, expenses, and net income for the three months ended June 30, 2025, compared to the same period in 2024, with net income attributable to Adient significantly improving to $36 million | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net sales | $3,741 | $3,716 | | Gross profit | $237 | $207 | | Earnings before interest and income taxes | $118 | $94 | | Net income attributable to Adient | $36 | $(11) | | Diluted earnings (loss) per share | $0.43 | $(0.12) | Statement of Financial Position Details the company's assets, liabilities, and shareholders' equity as of June 30, 2025, compared to the fiscal year-end on September 30, 2024, with total assets at $8.836 billion and total debt at $2.394 billion | (in millions) | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total assets | $8,836 | $9,351 | | Cash and cash equivalents | $860 | $945 | | Total liabilities | $7,360 | $7,855 | | Long-term debt | $2,385 | $2,396 | | Total shareholders' equity attributable to Adient | $1,785 | $2,134 | Statement of Cash Flows Outlines the cash inflows and outflows from operating, investing, and financing activities for the three months ended June 30, 2025, showing $172 million in cash from operations and $50 million used for share repurchases | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $172 | $158 | | Cash used by investing activities | $(49) | $(70) | | Cash used by financing activities | $(63) | $(92) | | Increase (decrease) in cash and cash equivalents | $106 | $(15) | Non-GAAP Reconciliations and Footnotes This section provides detailed reconciliations of non-GAAP financial measures, such as Adjusted EBITDA, Adjusted EBIT, and Free Cash Flow, to their most directly comparable U.S. GAAP measures, along with footnotes explaining segment composition and specific adjustments Segment Results and Reconciliation Provides a breakdown of net sales and Adjusted EBITDA by geographic segment for Q3 2025 and Q3 2024, along with a reconciliation of total segment Adjusted EBITDA to the consolidated income before income taxes Adjusted EBITDA by Segment (Q3 2025 vs Q3 2024) | (in millions) | Americas | EMEA | Asia | Consolidated | | :--- | :--- | :--- | :--- | :--- | | Q3 2025 Adj. EBITDA | $112 | $21 | $113 | $226 | | Q3 2024 Adj. EBITDA | $99 | $25 | $101 | $202 | - A reconciliation from total segment Adjusted EBITDA ($246M in Q3 2025) to Income before income taxes ($66M in Q3 2025) is provided, detailing adjustments for corporate costs, restructuring, depreciation, and other items[27] Adjusted EBIT and EBITDA Reconciliation Reconciles GAAP Net Income to non-GAAP EBIT, Adjusted EBIT, and Adjusted EBITDA for the third quarter, showing Net Income of $59 million reconciled to Adjusted EBITDA of $226 million for Q3 2025 Reconciliation to Adjusted EBITDA (Q3 2025) | (in millions) | Q3 2025 | | :--- | :--- | | Net income | $59 | | Net financing charges | $51 | | Other pension expense | $1 | | Income tax expense | $7 | | EBIT | $118 | | EBIT adjustments | $27 | | Adjusted EBIT | $145 | | Depreciation & Equity based comp. | $81 | | Adjusted EBITDA | $226 | Adjusted Earnings Per Share (EPS) Reconciliation Details the calculation of Adjusted Diluted EPS, reconciling from reported diluted EPS, with Q3 2025 reported diluted EPS of $0.43 adjusted to an Adjusted Diluted EPS of $0.45 | (per share data) | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Diluted earnings (loss) per share as reported | $0.43 | $(0.12) | | EBIT adjustments total | $0.31 | $0.35 | | Tax impact of EBIT adjustments and other tax items | $(0.27) | $0.11 | | Impact of adjustments on noncontrolling interests | $(0.02) | $(0.02) | | Adjusted diluted earnings per share | $0.45 | $0.32 | Free Cash Flow Analysis Provides a reconciliation of cash from operating activities to the non-GAAP measure of free cash flow, showing Q3 2025 operating cash flow of $172 million less capital expenditures of $57 million resulted in free cash flow of $115 million | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating cash flow | $172 | $158 | | Capital expenditures | $(57) | $(70) | | Free cash flow | $115 | $88 | Net Debt and Leverage Calculates the company's net debt and net leverage ratio as of June 30, 2025, with total debt of $2.394 billion less cash of $860 million resulting in net debt of $1.534 billion and a net leverage ratio of 1.72x | (in millions) | June 30, 2025 | | :--- | :--- | | Total debt | $2,394 | | Less: cash and cash equivalents | $860 | | Net debt | $1,534 | | Adjusted EBITDA - last four quarters | $890 | | Net leverage ratio | 1.72 |