Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $226 million, up 12% year-on-year, with EBITDA margins expanding by 60 basis points to 6% [33][34] - Consolidated sales reached approximately $3.7 billion, an increase of $25 million compared to Q3 fiscal year 2024, driven by $84 million of favorable FX [34][35] - Adjusted net income was $38 million, or $0.45 per share [34] Business Line Data and Key Metrics Changes - In The Americas, improved business performance of $20 million was primarily driven by favorable commercial actions and lower input costs, despite lower net engineering recoveries [39] - EMEA saw a positive business performance of approximately $6 million, offset by lower volume and mix [40] - Asia's results improved year-on-year by $12 million, with EBITDA margin expanding by 150 basis points [41] Market Data and Key Metrics Changes - The Americas outperformed industry volumes, while EMEA and Asia faced ongoing customer volume and mix headwinds [8][15] - Sales in China underperformed industry production, primarily due to lower volumes from traditional luxury OEM customers [35][41] - The company expects to capitalize on growth opportunities with local China OEMs, despite near-term pressure on revenue from China [18][19] Company Strategy and Development Direction - The company is focused on leveraging its competitive advantages in innovation and operational execution to win new business, particularly in the context of U.S. onshoring [7][20] - The management emphasized a balanced capital allocation plan, including share repurchases and maintaining a strong cash balance [14][31] - The company anticipates significant U.S. onshoring opportunities with minimal incremental investment, aiming to capture a share of the estimated 600,000 units of annual vehicles potentially moving to the U.S. [23][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage tariff impacts, with net tariff expenses expected to decrease in Q4 [16][40] - The company is optimistic about achieving mid-single-digit EBITDA margins in EMEA over the next few years, driven by restructuring benefits and new business awards [17][40] - The management team believes that strong business performance will continue into 2026, despite uncertainties related to production volumes [60][61] Other Important Information - The company generated strong free cash flow of $115 million in Q3, maintaining a strong cash balance of $860 million and ample liquidity of $1.7 billion [14][44] - The company repurchased $50 million of its stock in Q3, bringing total repurchases for the fiscal year to $75 million, or approximately 4% of outstanding shares [14][44] Q&A Session Summary Question: Clarification on Nissan business and onshoring opportunity - Management confirmed that the Nissan business moving to the U.S. represents incremental revenue, estimated between $150 million to $200 million starting in 2026 [51][52] Question: Guidance on business performance into 2026 - Management indicated that business performance is expected to be a positive factor heading into 2026, with production volumes being a key variable [60][61] Question: Guidance for sales and EBITDA - Management explained that the increase in sales guidance was primarily due to FX impacts, which have a low margin pull-through effect [64] Question: Competitive advantage from local footprint - Management highlighted that the cost of establishing a JIT plant in the U.S. ranges from $20 million to $30 million, emphasizing the importance of customer relationships and delivery track record [83][84] Question: Margin performance and restructuring in Europe - Management indicated that achieving mid-single-digit EBITDA margins in Europe will require stability in production and successful execution of restructuring plans over the next few years [106][107]

Financial Performance - Consolidated net sales increased by approximately 1% year-over-year to ~$3.7 billion in Q3 FY25[11] - Adjusted EBITDA increased by $24 million year-over-year to $226 million in Q3 FY25, with a margin increase of 60 bps[11, 12] - Free cash flow was $115 million in Q3 FY25[11] - The company returned $50 million to shareholders through share repurchases in Q3, bringing the year-to-date total to $75 million, representing approximately 4% of shares outstanding[11, 12] - Adient is raising its FY25 revenue and EBITDA guidance[12] Regional Performance - Americas sales outperformed the market by 300 bps due to favorable volume/mix and full run-rate of key programs[32] - EMEA sales underperformed the broader market mainly due to customer mix and intentional portfolio actions[32] - Asia sales growth outpaced the broader market by 700 bps, driven by customer launches reaching full production volumes[32] Debt and Capital Structure - Cash balance was $860 million as of June 30, 2025[11] - Gross debt was approximately $2.4 billion and net debt was approximately $1.5 billion[11] - Net leverage ratio on a trailing twelve-month basis is 1.7x, within the targeted range of 1.5x-2.0x[44] Outlook - Consolidated revenue is expected to be approximately $14.4 billion[46] - Adjusted EBITDA is expected to be approximately $875 million[46] - Capital expenditures are expected to be approximately $150 million-$170 million[46]

Core Viewpoint - Adient (ADNT) has been added to the Zacks Rank 1 (Strong Buy) List, indicating strong market confidence in the company's performance [1] Company Summary - Adient is recognized as one of the world's largest automotive seating suppliers [1] - The Zacks Consensus Estimate for Adient's current year earnings has increased by 8.1% over the last 60 days [1]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1][2] Zacks Style Scores - Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum characteristics, serving as complementary indicators to the Zacks Rank [3][4] - Each stock is rated from A to F, with A indicating the highest potential for outperforming the market [4] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [4] Growth Score - The Growth Style Score assesses a company's financial health and future outlook by analyzing projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Style Score evaluates stocks based on price trends and earnings outlook changes, helping investors identify optimal buying opportunities [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who want to consider value, growth, and momentum simultaneously [7] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to guide investors in portfolio creation [8] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.62% since 1988, significantly outperforming the S&P 500 [9] Stock Example: Adient (ADNT) - Adient PLC, a major automotive seating supplier, holds a 3 (Hold) rating on the Zacks Rank and has a VGM Score of A [12] - The company has a Value Style Score of A, supported by a forward P/E ratio of 12.32, making it attractive for value investors [13] - Recent upward revisions in earnings estimates for fiscal 2025 have increased the Zacks Consensus Estimate by $0.06 to $1.87 per share, with an average earnings surprise of +18.3% [13]

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Company Overview - Adient (NYSE: ADNT) is a global leader in automotive seating, employing over 70,000 people across 29 countries and operating more than 200 manufacturing and assembly plants worldwide [3] - The company produces and delivers automotive seating for all major original equipment manufacturers (OEMs), covering the entire process from research and design to engineering and manufacturing [3] Upcoming Events - Adient will host a conference call on August 6, 2025, at 8:30 a.m. (ET) to discuss its third quarter fiscal 2025 financial results [1] - A live webcast of the call and presentation materials will be available on the Adient Investor Relations website, with a replay accessible afterward [1] Participation Details - To participate in the conference call by telephone, dial 888-566-1827 (U.S.) or 773-799-3976 (international) 15 minutes prior to the start time, using the passcode ADIENT [2]

Core Viewpoint - Adient plc is positioned to benefit from its diverse customer base and international presence, despite facing challenges such as high restructuring costs in Europe and uncertainty regarding year-end customer recoveries [1] Group 1: Market Position and Business Wins - Adient has established a strong market position through a broad range of products and a diverse customer base, which is expected to strengthen further [2] - In fiscal 2024, Adient secured new and renewal contracts totaling approximately $1 billion in annual revenues, with around 90% of these agreements involving local OEMs, many set to launch in fiscal years 2026 and 2027 [3] Group 2: Regional Performance and Strategy - The company is gaining momentum in the EMEA region, driven by restructuring benefits and securing key programs with European customers, while also developing opportunities with China-based OEMs [4] - Adient is focusing on enhancing efficiency by phasing out lower-performing segments and launching higher-margin programs expected to positively impact results in 2026 [4] Group 3: Innovations and Automation - Adient's initiatives in automation and modularity are yielding positive results, with automation reducing labor costs and improving quality, speed, and safety [5] - The implementation of AI-powered welding inspection and partnerships for 3D sewing automation are enhancing precision and reducing labor needs, differentiating Adient in supporting China OEMs expanding internationally [5] Group 4: Challenges and Financial Outlook - Sales in China are lagging, with revenues expected to remain stable or slightly decline in fiscal 2025 due to an unfavorable production mix [6] - Adient anticipates higher European restructuring costs and has revised its free cash flow outlook to $150-$170 million from a previous estimate of $180 million [6]

Group 1 - Adient reported $3.61 billion in revenue for the quarter ended March 2025, a year-over-year decline of 3.7% [1] - The EPS for the same period was $0.69, compared to $0.54 a year ago, indicating a significant increase [1] - The reported revenue exceeded the Zacks Consensus Estimate of $3.47 billion, resulting in a surprise of +4.07% [1] Group 2 - Adient's EPS surprise was +91.67%, with the consensus EPS estimate being $0.36 [1] - The company's shares returned +22.2% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [3] - Adient currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Group 3 - Net Sales in the Americas reached $1.70 billion, exceeding the average estimate of $1.59 billion, representing a +2.4% change year-over-year [4] - Net Sales in Asia were reported at $707 million, below the average estimate of $735.50 million, reflecting a -4.7% change year-over-year [4] - Net Sales in EMEA amounted to $1.23 billion, surpassing the average estimate of $1.16 billion, but showing a -10.2% change year-over-year [4]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 was $233 million, up 3% year on year, with EBITDA margins expanding by 40 basis points to 6.5% [28][29] - Consolidated sales were approximately $3.6 billion, a decrease of $139 million compared to Q2 fiscal year 2024, primarily due to lower customer volumes and foreign exchange impacts [30][31] - Free cash flow for Q2 was an outflow of $90 million, consistent with internal expectations reflecting normal seasonality [37] Business Line Data and Key Metrics Changes - In the Americas, sales increased due to favorable comparisons with the previous year, while EMEA and Asia saw declines in sales [30][31] - Adjusted EBITDA in the Americas improved by $15 million, driven by favorable commercial actions and lower input costs [34] - EMEA experienced a year-over-year decline in volume mix, negatively impacting results by $9 million, but business performance improved due to restructuring benefits [35][36] Market Data and Key Metrics Changes - The company outperformed industry volumes in the Americas, while EMEA faced headwinds from weaker market demand [30][31] - In Asia, sales in China underperformed due to lower volumes from traditional luxury OEM customers, but overall performance outside China remained strong [31][32] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through resourcefulness and leveraging its global footprint to create value for customers [11][15] - Adient aims to capitalize on growth opportunities by localizing production and optimizing its supply chain to reduce tariff exposure [15][16] - The company is committed to driving operational excellence and innovation, with a focus on product development and automation [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage tariff impacts and maintain strong business performance despite macroeconomic uncertainties [25][26] - The outlook for the second half of fiscal year 2025 remains positive, with expectations for continued operational improvements and manageable volume headwinds [41][43] - Management reiterated guidance for fiscal year 2025, assuming no significant changes to current tariff policies [43][44] Other Important Information - A non-cash goodwill impairment of $333 million was recorded in the EMEA reporting unit due to a significant decline in market value [27][21] - The company ended the quarter with a strong cash balance of $754 million and total liquidity of $1.6 billion [39][40] Q&A Session Summary Question: Can you clarify the status of tariff recoveries? - Management indicated that 75% of the tariff exposure has been resolved, with ongoing negotiations and cost offsets for the remaining 25% [54][56] Question: How is the EMEA region performing? - Management noted that while there are still challenges, recent restructuring actions have led to improved business performance, though variability is expected [57][58] Question: What is the outlook for margins and cost efficiency? - Management expects to see improvements in margins over time, particularly as lower-margin businesses roll off and new higher-margin products are introduced [60][70] Question: What is the company's approach to capital allocation? - The company will take a measured approach to capital allocation, focusing on investments in the business while considering share repurchases based on cash generation and market conditions [78][80] Question: Can you comment on potential acquisitions? - Management refrained from commenting on specific M&A transactions but emphasized that any acquisition would need to add value for shareholders and customers [86][88]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 was $233 million, up 3% year-on-year, with EBITDA margins expanding by 40 basis points to 6.5% [30][31] - Consolidated sales decreased to approximately $3.6 billion, a decline of $139 million compared to Q2 fiscal year 2024, primarily due to lower customer volumes and foreign exchange impacts [32][33] - Free cash flow for Q2 was an outflow of $90 million, consistent with internal expectations reflecting normal seasonality [39] Business Line Data and Key Metrics Changes - In the Americas, sales increased due to favorable comparisons with the previous year, driven by key customer programs reaching full run rates [33][34] - EMEA experienced lower production volumes but began to see improvements from restructuring efforts, with a recorded non-cash goodwill impairment of $333 million due to market value declines [22][30] - Asia's performance was flat year-on-year, with expectations for growth driven by new business with local OEMs [23][34] Market Data and Key Metrics Changes - The Americas outperformed industry volumes, while EMEA faced headwinds from weaker market demand [33][34] - In Asia, sales in China underperformed due to lower volumes from traditional luxury OEM customers, but new customer launches outside China are expected to drive growth [33][34] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through resourcefulness and leveraging its global footprint to create value for customers [13][17] - Adient aims to capitalize on growth opportunities by focusing on more profitable business and investing in innovation and efficiency measures [10][17] - The company is committed to maintaining operational excellence and solid execution to navigate macroeconomic volatility [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage tariff exposure and emphasized the importance of USMCA compliance [15][17] - The outlook for the second half of fiscal year 2025 remains positive, with expectations for continued strong business performance despite potential volume headwinds from tariffs [45][46] - Management highlighted the resilience of the operating model and the ability to mitigate external pressures [30][31] Other Important Information - Adient received multiple awards for supplier excellence, including recognition from GM and Toyota for quality and performance [11][12] - The company has a strong cash balance of $754 million and total liquidity of $1.6 billion, with no near-term debt maturities [41][42] Q&A Session Summary Question: Can you clarify the progress on tariffs and the roadmap for recovery? - Management indicated that the roadmap includes ongoing price negotiations and cost offsets, with 75% of the gross position already resolved [57][58] Question: How is the EMEA region performing relative to expectations? - Management noted that while EMEA showed positive business performance, it is still subject to variability and should not be seen as a trend [60][62] Question: What is the outlook for margins and cost efficiency actions? - Management expects significant opportunities for margin improvement, particularly in the Americas, while cautioning that EMEA may not see inflection until 2026 [71][74] Question: How are FX assumptions impacting guidance? - Management maintained previous FX assumptions due to volatility, indicating potential translational upside if rates hold [77][78] Question: What is the current mindset on capital allocation? - Management reiterated a measured approach to capital allocation, focusing on investments in the business and potential share repurchases based on cash generation and market clarity [80][82]