ADNT Adient

Mark Oswald Vice President, Treasurer and Investor Relations
Doug DelGrosso President and Chief Executive Officer
Jeff Stafeil Executive Vice President and Chief Financial Officer
Aileen Smith Bank of America Merrill Lynch
Rod Lache Wolfe Research
James Picariello KeyBanc Capital Markets
Brian Johnson Barclays
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

Welcome to Adient's 2021 Earnings Call. I would like to inform all participants that your lines have been placed on a listen-only mode until the question-and-answer session of today's call. Today's call is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to turn the call over to Mark Oswald. begin. may you you, Thank

Mark Oswald

presentation Thank President Financial Executive Executive business, our today's you, After us Officer. first the the you joining I'm Officer; Doug the release year. will our and of fiscal have Chief by call to been joined and posted financial President at Good we Chief for questions. an review followed the and of morning, to and QX results open press as The the who section year thank On for Adient's call our your fiscal today our Doug and on Vice of prepared for Investors provide Stafeil, Jeff, will XXXX. Amanda. review Adient's remarks, call, our our slides will website results quarter remainder morning, DelGrosso, outlook and for Jeff update by This we

are and the turn I Before to there call items to Doug I'd like cover. Jeff, a over few

conference results these today's on to would on statement. statements. it call. These see we involve Safe include call materially differ two our and slide forward-looking made the based therefore, Harbor as environment that actual you and our today of uncertainties. complete the caution risks forward-looking statements I refer statements for could from are will the First, Please presentation

This be comments. discussing be Doug? for appendix the turn company's that call my to to results the in these equivalent GAAP information In we presented earnings non-GAAP our financial GAAP over full can measures the now will believe a closest non-GAAP addition Reconciliations Doug. release. of in the is concludes on we performance. the I'll operating to evaluating found useful basis,

Doug DelGrosso

fiscal your are us. joining Great, thanks time for and to we staying you first and healthy moment at our review and Thanks all our morning. challenging investors, call families this quarter analysts our results of I'll to Mark. wish XXXX. take hope very morning investors, this the as a prospective Good safe for

revenue of approximately level and when of our of up shown Also million launches our slide $X.X lower of point side Adient adjusted earnings, excluding strong Adient's of on let's comments XX% of EBITDA growth we businesses related impressive to Slide down same recent $X.X respectively. $XX get more with the result, year's year-on-year. the $XXX and or balances drive the primary and improved margins most which year, or RECARO priorities X.X% our to vehicle even start production combined hand the businesses, to those XXXX. a the portfolio and competitor. last me a liquidity was and Equally year's for specifically. past Adient's billion better [ph] can the consolidated remember to adjusted EBITDA on to begin robust period. equity under started, X.X% fiscal X divested performance with about performance from focused Let of first turn QX $XXX total Adient's were EBITDA year-on-year. remaining was which our quarter quarter business strong Important the Adjusting in in income. drivers strong billion consider laser Interiors, quarter. but just impact million strong results specific XXXX this continued Adient's, year sales. included cash executed ending was during left respect That's equal fiscal up adjustments are absolute were proof to that margin first if Fabrics, was you earnings QX impressive, doubt not Adient's million to to QX's with No nearest achieve few very X% the

financial metrics fiscal strong year, QX Adient's to commitments. start XXXX we to its path lays you point see, Adient and a achieving As the to solid believe a can

the That slide future we quarterly show results, part few the to will are to right-hand in to ability a in further side delivering also ensure provide products on On we've items that the highlighted financial sustained focused be long-term will success our confidence of to services world-class addition and success. Adient's the in strong by that give driven team. large These customers. you

mentioned Adient to become of customers. for the is calls, striving previous As on supplier choice

Daimler launches, number a supply Seat, flawless goal for external of the one bronze honorees that several the Daimler Award with as Adient's XX the point won the North F-XXX. out Hyundai supplied for the a years. Award, on awards. also Beijing essentially quality slide, prestigious a ceremony. medal for XXXX Utility delivering During the pictured that selected Truck their Adient for of year being Year recognizing winners Adient was presented I'd validated the joint management. past of at EJA Supplier Ford CLEPA and and quarter, our chain Adient Loyal XXXX Kia of China, progress right-hand the supplier the Floating Innovation for excellent seats the venture toward through of new for American Mach-E and Ford of In Companion the side reliable the

to to will across for to provide spanning recognition execute believe our focus many customer that presented Adient Award, X drive who properly market. Performance received all us its three Daimler And on points stakeholders. also suppliers only relationships. team among I fronts proof Supplier award in value we award. products, We who for their continues this Thailand, just Daimler car and seat When the executed, Again, millionth of operations, Excellence with areas the this delivered are only continue in from mentioned supplier these

a commitment positive Speaking us practice increases better shareholders to serve the publication communities report. business our value business of in operate. outlined commitment in and and social, the our Adient's sustainability we understand our an operate with company's was in the that manner XXXX customers driving responsible related connection in we recently our to environmentally in which governance environmental, company, strengthens help its

see governance more. responsibility, communities, and you company's report actions Adient's on and X, As can XXXX and and regarding the people compliance policies outlines Slide sustainability key environmental

Our aim in a environmental, day-to-day take to included risk is achieves social minutes how to areas is We've report. incorporating operations. these to a and that few our Adient the and policies Please our learn Adient link governance full manages goals. into these ensure

wins which X, Adient secured as mix recent a China to all-new our GM Slide and recent GM, well EV our and capital Not we Peugeot it XXXX, business secured foam, when which Slide business recently Enclave the recent Adient's We've X, is that the our shown, a let Nautilus focus on very of Traverse, to combination important business, program. few trim, wins. new Acadia secure program including shows awards new and capital Adient. few and allocation Turning targeting return to programs include you'll crossovers me as Lincoln ability and both GMC Also noted, that comments good new highlighted the incumbent XXXX non-incumbent incumbent On metals of for the crossover, on a JIT, our provide should wins, team here, continued our be but in see on business new the to portfolio with businesses number business. of limited program has not and a of business.

business. on wins, incumbent enable a book quoting in sourcing balance As business margin to platforms sourcing is to our last new normal shaping further of point One new we and and business for business. balance and launch, new a higher new the expansion. of expect than continues Fiscal out specifically up XXXX to be year

The We for outcome worth secure productivity demands out business. uncertainty fiscal This this the expect not the to however, year the strengthen year. considering the favorable of required remainder the is Adient, for on unusual; fees the XXXX to is years. elevated is which be of will the nomination sourcing impact volume it's mentioning business in to customer

critical several Looking progressing begin scheduled report at Slide the I'm are the currently the in F-XXX is process are in underway to X, including launches well. to that we've happy near-term. launch highlighted

not Second by facilities, Missouri location evidenced The only well team The of at manufacturing is progressing also our launches launch a as the JIT performance. foam, shown Adient's metal impact high is curve performing current Riverside, our as but network across and facilities. underway in and planned. trim, level and span F-XXX platforms entire up

prior around on launch discipline has management made launch team the have our improvements focus performance. As Adient's letting is strong intention up the over mentioned in underpinning on significant A readiness successful no calls, past this activity. add on of several we might quarters. I

year fiscal various my familiar with the these comments X, turning on and update through as factors Adient highlighted an we to quarters. as to factors look The of impact are Now list we're were coming macro in should the expected industry managing me entered and let very many conclude Slide XXXX.

growth side, positive growth number is monetary vaccinated positive [indiscernible] who expected and teen stimulus of economic against result the are in the as later is to in increases. forecasted COVID accelerate On the individuals the to virus continued year economic

disruptions this which tempering near-term of They are industry of our through supply news expectations. we're there's downtime supportive is to production good the All related impacting Adient's industry. That shortages, across managing that in the customers. and semiconductor primarily very several factors include are said, chain resulting

production aside, to Putting up fiscal production monitor be to appears of QX know consumer level in to this supported before the inventory. improving QX made early of end continue loss of too the current will the year. the temporary is demand global if We be at rebuild situation production disruptions It or by time. Adient's in the

to chemicals to costs, of agreements estimates. these Important increase. agreements specifically working place hard to The the recover have help increasing continued in our costs, help teams not even though Moving XXX% versus escalate cover do and mitigate these escalators are on, and original costs. the steel are remember, commodity to

the method to and just provide time other regions include the premium as labor and additional customer recoveries. In Few for Adient to shortages items few the cadence receive in noted in Americas. vary a in lag detail when slide and topic elevated begins the all launch in addition, true-ups on minutes. on by Jeff a freight time resulting will

launch appears lies we're confident that, few working obstacles to path That over XXXX. Summing achieving solid very we We're is provides a fiscal team expect call the start to taking fiscal ahead. through I'll of a hard did in these well XXXX to as manage launches assured take financial significantly [ph] XXXX. current And first As heart the Rest turn much and a mentioned performances for aware XXXX rest to earlier, Adient's I'm contain as strong of navigate the and them. we will improved around to XXXX our ahead the what upcoming Adient Tariff feel move up, not or through performance that to Adient commitments. the Jeff bumps. granted. we speed the quarter us through with launches. of positioned said,

Jeff Stafeil

everyone. morning Good Doug. Thanks,

echo everyone results reported comments the hope me to left well. comments on format, start our and on page adjusted the I'll earlier results Doug's on and XX. safe Let with my typical I Slide right is and the the of page. Adhering is our our formatted

we on or nature will in one-time We commentary results or otherwise skew performance. in special the which view underlying focus as either exclude trends items adjusted that important

Doug comparison the presentation. by million. the amortization. are Details of the For to adjusted X% the year-over-year as fiscal year-over-year drivers biggest down impacted $XX of portfolio $X.X XXXX, relate the noted, in and appendix and between which about of adjustments restructuring these Sales reported adjustments our executed the results about accounting difference cost was were driven in billion, by quarter, our which purchase

by also specific in or lower and contributed up decline. equity $XXX Adient's F-XXX year-on-year, the launches, million, just improved the more business million EBITDA addition, performance XX% Adjusted $XX quarter a than under cost, by such SG&A explained In was to the as offset decrease for income. partially year-over-year

adjusted on included Therefore, Speaking last QX seating included to drivers in earlier an income comparison, of XXXX $XX we minute. within equity million which income, is year-over-year. just detail JV fiscal Adient's income apples-to-apples a I'll of income our in our [ph] that equity related equity EBITDA sold the results, up was year. the

up were $XXX $X.XX at net million adjusted EPS significantly respectively. and share income per and Finally, year-over-year

detail, million starting divestitures decrease of a our XX. and $XX executed more a key consolidated The attributed Now over to $X.X portfolio businesses. revenue billion, the We fiscal first the lower to on adjustments Slide drivers year-over-year just quarter namely RECARO sales period million of sales compared ago. year let's same of with breakdown the in Fabrics included $XX of results comparison in XXXX reported of

Tesla's contributed decision and Americas, the pricing decline. F-XXX such In of degree, addition $XX lesser to drivers over The the production. and specific volume million biggest divestitures, to seat included a to to primarily result volumes lower as of in just in-source the Adient's revenue launches, the complete

growth In our is network, drive up periods market. A of movements and business, through in XX% China lower and OEMs. offset mix customer Thailand $XX Adient's regard year-over-year and Japan. strong between were sales strong by were positive Adient favorable of For and the markets seating the reductions specifically and China, versus of FX. results the about over to In to FX Japanese China continues export up the revenue JV in the exposure and outside two to Adient's were production of impact excluding Adient excluding and sales impact Asia, divestitures partially outperformed strategic year-over-year approximately currency the Adient's sales vehicle luxury XX% impacted primarily our unconsolidated were driven million sales mix market With attributable to outperformance of region. platform volume.

Big $XXX a performance central adjusted office, course, provided between labeled Corporate marketing. picture, The improved not are that which & finance, communications, normal lower current segments costs of we've business of the and corporate quarter settlements, key periods. waste. and increase executive commercial our to operations, the such million bridge XX, adjusted labor show last versus The Slide the of to overhead freight performance, year. EBITDA EBITDA of included represents legal back allocated million drivers the as in to bucket $XXX consisted ops was Moving

to $XX SG&A the the of RECARO. about was primarily all of divestitures tend the income lower year from with next settlements, in million. offsetting income, this the slightly the mix the year. year. $X tend and that also common this of Fabrics over by I also It's $XX quarter, strong of as our their to FX, lumpy ago, resulting accrual balance, the to minute impact up is remain associated the repeat. would factors number about the just by throughout million, million and in about say thus our course efficiencies fiscal across lower positive the slightly and say worth tend equity portion the the volume the about one headwinds, another biggest uniform that equity of to mentioned elevated be and in was to nature year-over-year of dollars are Settlements equity from year-over-year, and out timing the year regions, commercial Regarding we not a $XX Partially suggesting mentioning these Settlements a that commercial again the elevated regard absence close in We impacted income a the quarter to would customers of as $X the just quarters. $XX million. between associated releases expect Interior's increased consistent it XXXX from expected end given charges Wi-Fi million, driver, With and was divestiture saw million. $XX settlements of call driven accrual in calendar not is is be elevated toward contributor past, to as of pretty any discussed as result, number with an benefits that comparison positive as our year. call balance noted, to

of items better. income settlements our point offset In headwinds, X like margin, positive time be would Thinking nice equity year excluding income, date, volume Adient's we totaling contributions that between out year-over-year are excluding one Even about operations normalizing $XX demonstrates by like and the including and in margins Adient would These XXX basis margin, over improvement repeat $XX Adient's X.X%, progress for EBITDA actions income, the and partially that to million this earnings point million. recent approximately by quarters. the increased XXXX equity business. earlier, adjusting achieve benefiting continued and that peer X.X%. turnaround addition, I'd to proof headwinds to numerous at or equity efficiencies I showing solid These of ability estimate contained results $XX our noted, commercial turnaround, important, points see commercial year. power more from tax QX a SS&M thus were a core this noted fiscal executed the provide to we're refund and did also the million the to not recognized of of encouraged its and adjusted

of For the $XX to manufacturing Americas I caution improved the QX's that Despite the about quarter, million calendarlized by to results, metal business. quarter benefited certain extrapolated combined or cash that factors first profitability and to is EMEA of working earnings free not the full would last margin and year's compared the extremely flow The team hard quarter. strong improve and should year. the be first

timing QX future are half results commercial course quarters settlements and For impact and year. this same on expected our not to normal favor the income the of and example, equity have first

the unlikely QX. you outlook related In QX greater vast in finally as experienced we but And this million of addition, $XX the million expected number in More certain to the closer rising in of have we'd headwinds mix $XX chain call, the Essentially extremely that in appendix we be segment and presentation. Q&A course to including performance, horizon it ensure between provided reduction noted results of we've of normal To been call performance impact enough the add and in rich sustainable. Americas Improved the the on non-recurrence allocated the million that not our estimate impact we the is and Doug disruptions repeat if Asia, portion million and of the interest seen business the EBITDA in and recognized increases detailed be will in and freight. the regions. Wi-Fi, partially last none time In refund, to this offset in of QX, discussion. slides commercial lower volume partially in waste, $XX the or performance increasing year, today takeaway the which weakness to related majority was has in is settlements, expected to SG&A to ops lower was primary positive from and the commodity operating year's that rising overhead prices, is year, see of production of by $XXX our million headwind through sale China, commodity in $XX On labor our offset XXXX, performance, explained by such freight, commodity QX experienced Asia. benefits $XX EMEA and certain supply last is on did on includes are elsewhere tax by headwinds we impact QX prices which noted, will and improved a as progress that be QX, cost, that to as the and our year.

cash paid, some certain and payments. payments, timing of to $XX specifically flow million an results our non-income we'd activity. shift factors, cash, was liquidity payments related Slide cash in structures The current With as these $XXX adjusted XXXX. these in taxes, was flow me regard neutral cash interest improvement capital significant less quarter Let positive increase VAT operating in with capital was in capital Partially to for working and fiscal over free million to the and restructuring, dollars due the on higher offsetting million being CapEx expected on be of the elevated time, the EBITDA defined improvement most QX combination increase now versus XX. a XX, spending. trade of quarter, Starting Slide expect several year-on-year for to $XXX the adjusted the and VAT lower XX commercial and drivers

year reversing this expecting a and We negative in XXXX. fiscal are result

respectively under believe XXXX. the approximately under of very billion also on billion the strong $X.X total addition to credit. with of of position, enable in company $X.X side As billion of totaled and revolving doubt, against of at uncertainties in debt the liquidity significant cash just about and reduction progresses $X.X position on billion hand and structure. near of capital Slide debt liquidity debt we provide right capacity of XX, which protection hand $X through undrawn line comprised December net approximately XX, quarter Adient's and approximately the Thinking we $X.X showing slide, provided that billion cash we've No noted fiscal term as and macro snapshot ended a to flipping our a Adient's and debt should

near supply few here. provides a structure Just flexibility provides related comments ample COVID uncertainties, pay capital to Adient's us production or macro such term voluntarily down stoppages believe flexibility We with as chain debt. weather and to

debt you quarter are in XX-year paydown As paydown fourth Adient's X.XXX% with senior $XXX.X aware, voluntary we unsecured the principle million notes. of our began during

EIB disruptions in part away. I our of is chain COVID the outlook. paydown QX repayment on voluntary in the pause QX's in debt debt With on supply production repayments we lessen, Adient voluntary clouded mentioned debt a triggered not uptick our paydown, term the as in small loan, hit the exception reinitiate initiatives look the uncertainties by and which button too as near term just near We far hope to cases

with over the million past $XXX zero mentioned and time $XXX balance somewhere a cash revolver, opportunity a for on XXXX. we'd to range, significant points outstanding million which paydown run to the As in to debt calls, in expect have balance, on

sticking date. we back Adient's on to for spin going our with Slide but Moving XX, trend the net included the overall leverage debt to theme, chart

vehicle of company, leverage see, issues, were can times. X.X independent documented drove Americas, specifically was production an we include, to of performance which in fiscal drop as net XXXX XXXX. and place better production, with proceeds you significant exacerbated cash calendar earnings a drive time the became decline of growth. under EMEA, We'd flow steady during of increase the turnaround of across biggest the QX. on and The vehicle throughout to leverage. at drivers trend As the with year impact peaking was seen business in improvement in took is middle the leading expect our continues EBITDA well XXXX, positive EBITDA to COVID certain generation, in decline After resulted improved an the Adient's in continuation of Unfortunately, related stoppage and significant and cash which successful continue we've the increase XXXX, just which lessening operational to our in that ratio. COVID, leverage That non-core a the and divestitures our plan,

me a on thoughts expect to let with to XXXX. Moving conclude few Slide we through as XX progress what fiscal

definitely to a QX that momentum tempted as take of demonstrates turnaround QX four may team the working We're by I I the our wish year be of momentum would good it our revised going. the full results we quarter quarter keep that into multiply our know efforts, get one to many easy. just was keep estimate. characterize the year While though, will and and you to

it it's us important headwind factors out certain However, the point to to strong and specific give pause, there are start annualizing macro that us the from that Adient prevents year.

even billion. note in revenue, of expect Starting our in primary production also tempers the stoppages consolidated $XX Currency past and towards term. it the or though related few resulting provided not our the heading the line the the down significant from assumptions revenue although chain risks elevated I'd expectations production year, driver. downtime specifics. upper guidance, to the supply we break remained the are into approximately months semiconductor relatively most movements back in that we call shortages, over Let's to with disruptions, mix of near has now trend November, the changing with is end range

platform. vehicle yesterday In second the announced fact, Adient's Ford reductions temporary just production largest for F-XXX,

three week of beginning comes X. the downtime facilities, this their on earlier February of of week, announcement heels the announcing Ford's GM's announcement at

with eliminate notice is and inefficiencies costs team operating on our advanced downtime of as facilities. notice, the you stoppages at to receiving but Although helps lessen, little through not also adds our managing know side, efficiencies which

these made up. our working can be to we're when understand or customers course with reductions Of if closely temporary

with September is to fiscal second made production, up these we current production production half is Adient's especially with fiscal temporary fiscal forecast. current XXXX of year, disruptions, XXXX first our This assumption China. decline September near our half, global outlook compared assume term the in XX. does will Outside aligned assume continue not IHS Given of before

chain to will Regarding related and there COVID uncertainties production inflation, and EBITDA, us. it's many early incredible the in year, such as leading direction supply to the uncertainties are commodity uncertainties, the disruptions take

adjusted a with continue and I $X.X previously. billion uncertainties, forecast I mentioned to say strong as these EBITDA in billion that our between year. start we're to Given pleased should we range the $X

steel just as a the Doug much for a let's macro rising Adient, I and and of we has As premium agreements the will in mechanism, though mentioned, the formal chemical place impact number more year. progress agreements price it XX% offset of prices, on to even to commodity recovery partial a our provided Adient call through significant regard prices, reminder, and have between a With headwinds, customers, significant average. balance and including freight, increases, on rising including indexing XX%

settlements, or agreements, our certain important relatively for quick the or it's an time other you remind However, customers to primarily with OEMs annual basis. settled a that lag our agreements for true-ups are Japanese exists on until price based adjusts provide as

Given true-ups, occur relative with in recoveries will fiscal of our infrequent over customers the a more to large exposure proportion XXXX.

$XXX which call million. adjusted income, on EBITDA, approximately is Moving on to in equity continues it plan, to track included our

lower reminder, of patterns tends to a the QX, China's second of the As quarter, production, right hand by the in holiday. vehicle Adient's by which production followed mirror seasonality slide, equity expect noted will on to we continue Year Chinese a impacted strongest fiscal surrounding side in New be substantial and decline income

Cash expect that It's that offset quarters, expected balance on positive although expenditures we're your for line cash and fiscal voluntary mentioned profits to Interest debt attributes, fiscal forecasted around mix expecting on $XXX loss paydown. income. as increasing. be fluctuations expected are assist $XX rate be quarterly compared attributes net future to to and impact debt carryforwards, XX with would to Capital a million. as our our XXXX on completed. We'd just Adient’s million, as in forecast are tax the that rate allowances forward remain continue in to million. profits operations that The XX% to with quarter we should tax cash quarter materialize between these even 'XX. used valuation basis. fact, essentially to such $XXX to This second based low include equity be in a of to first in fluctuate modeling, volatile $XXX tax be expense, our due approximately To on In our our the Adient’s be halved income and should around we maintain does expect results. million taxes fiscal with with valuable can between are taxes remember geographic earlier, effective operating important basis going not with range

Although CapEx the for years, we year by last item finally, see your SS&M current one launch are further to partially in And a expenditures modeling. supporting current opportunity out in smaller the business, driven plans. reduce

We to to range million free fiscal cash $XXX between and continue 'XX. in breakeven expect flow

years. external the for normal to several right back fiscal necessary we are two pre-COVID an cash production 'XX, about such elevated level especially The a mentioned internal as be expected size actions a number forecasts is run below is to one-off factors in As spend, within November, our of times restructuring, which European execute $XXX of there the and business, where which is levels rate driving our as result million. operations, remain for elevated

the is In deferred the in tax the move Stripping of to these year elevated out cash $XXX in question. have from range. by year flow Operator, approximately million been that into the XXXX. restructuring Adient’s spend, first flow let's $XXX cash of portion With addition Q&A XXXX were last free to the one-offs, million an normal take we'll call. to million impacted negatively that, $XX free would a payments


[Operator John Murphy with comes you. Our of America. Thank question Bank first Instructions] from

open. is line Your

Aileen Smith

is Smith Aileen on Good for morning This guys. John.

should for back X.X% running quarter, high X% headwinds you first you we margin of about you chip that on factors adjusted of that year some math of we the in commented in the through to use as to be Can X% an your improvement talk the starting get like there the range anticipate margin about normalized low been through for And and the second raw outlook, [ph] X% that demonstrate noted, X.X% to sequential be you half are basis to able normalized a thinking past for margin as EBITDA that with about Going cadence year first of cadence met we versus ? the to to X% we've the XXXX at thinking XXXX. as the a margins that's work on half of the or on EBITDA point? some in shortages we the that the should

Doug DelGrosso

X.X%, of the to I schedules a margin. to the it's occur Yes, XX% say, predict. more shortages X% headwind say, in had first relating we out, year took changing let's a that's the have as commercial difficult quarter, and, we I great we did, which question. day, then what we some to a primarily to did will that negative going which chip these of when And took to than, commodity it's certainly settlements is impact of did, of things onetime $XX tried we years, And let's in I that forecast what about there XX highlight call XX, our said, million are to we had But every when commercial of are on say our benefits number production normal just million. another to we so mean, that. $XX tough calculating out we

that kind in we of So million it. backed out calculating $XX

are first did more we underrepresented of to on because quarter. the going commercial Some be the in recoveries, other quarters

the it, those of I'd commodity you're as the then these will on commercial to settlements. the few bumpiness at fundamentals I and So because timing say see to say improve. chip some we business shortages, our the factors, see look continue the going margin, of of inflation we But

in So seeing but we've the probably in do here, we that fundamentally performance well, improvements line -- noise expect bottom we could margin, margins. expect but been going the do noise in to some quarter-to-quarter be there's some continue to to trend

Aileen Smith

to the raw Okay, that's how following is commentary, wasn't if can of follow in the you the the on that us this bridge materials year? and escalators offset gets And any and estimate provide second to increase And it for able can that? automakers or just you the us other you to up in this an mechanisms was it quarter? question expect with helpful. or magnitudes the I you specifically hedging vehicles and what you via of use in remind have shared remainder then how pass-throughs with

Doug DelGrosso


about of on or $X million, question, give the first take in quarter there's commodity. So the first

So we've now, of called I'd the year. balance to going say so $XX about there's the out in about XX and million is of that most be QX QX.

we've bit. freight is kind issues a -- what you multiply in freight, that, the seen of As also

a do in us from also a unfortunately we we, That our of the to side. but freight. have because required forms shortage regions. increased, every of that of number in while And for first that's hit primarily the impacts to $XX other none Asia, some containers, has $XX some fly once that of we're it's that a the You've year. to million the where I'd quarter million in of things factoring in say, challenges really, seen and freight

the mechanisms, recovery on As you depends asked it the customer. about

immediate is and our some XX%, seen immediate, with recovered being increases We XX% And see Japanese seen of tend are say we we we but of to which recovery. jump what lock being tend unprecedented, the disconnect all prices. two, which to so start lag, And steel an for steel, don't why where you've these customers, we grab model Other some us, year fiscal customers quickly. we're have a significant this in we've is pushed Some the that our an our we I able but cases of And of will ones, index. year immediate, to big there's where is, 'XX. where see, as in And have customers, other rolls, have higher then And for pretty to those way is you've would we have to quarter time. things 'XX. take to, or pay to increases, in in a the that's we ones we a they're much seen price.

be on but recovery stability that 'XX, later. for favorable in us maintain if prices the they So should happen those particular will customers

Jeff Stafeil

place, Aileen, to in other And really buy. And steel around experiencing we're levels when that would is, myopically the particularly add have difficult just unprecedented, think of it point in to right contractual see, our work, it's Yes. mitigate. the way the now I I we that agreements agreements will that's

lump into to other go them kind we chip avenues shortage, is as issues we customers we productivity of with with We're midst in converge time. how discussions think the discussion that what down the of about the all of and midst this the at same annualized in mitigate can in our So, some environment, the of impact. these in

guess year willing what's this is, So of mean you have to to tell goods in that, accept make have to I It's approach doesn't necessarily take right we account. in kind basket early a that the was of even really into that's environment point I if to trying we're happening. have an now. operating that you lag, what too we're

Aileen Smith

helpful Right, that's, color. very

Doug DelGrosso

which of to something X.X, said our X didn't, mentioned to the to equity Just clarify was you income. I ROS, you that talking you had before, XXXX progression when excluded

was that that calculation, but if is an improvement. know in your don't I So

I quarters XXXX. level put that of with any the in margin, of seen forward haven't those We even adjustments in

improvement over even making an seen. would is this be we've what So those after adjustments

Aileen Smith

taking for very That's fantastic. helpful. Okay, the questions. Thanks

Doug DelGrosso

Yes, thank you.

Jeff Stafeil

you. Thank


you. Thank

Research. from next Rod with Wolfe Lache question Our comes

Your line is open.

Rod Lache

me? everybody. you hear Hi, Can

Doug DelGrosso

Rod. right, All Yes.

Jeff Stafeil

Rod. hi Yeah,

Rod Lache

billion the Okay, and that was months XX you're could the million talked and payback. you're $X at targets of morning. hey, I I year? for good think cost restructuring improvement out $X.X hoping how about contribute could EBITDA $XXX talk two-year that previously for that with a to business of looking this looking sort about upside that next beyond you you've for over billion

SS&M that's cash COVID which million And semiconductor counting. then you said non-recurrence you another shutdowns $XXX presumably, I'm from So presumably, I would XXX. if that's the containment was EBITDA double go costs. breakeven, think have about of that and and the breakeven, not sure

So kind I the fast we from are year forward, items if looking of the what you've your, should of better some and are And you've a now, those we normalizing. out high kind looking accomplished, things big things be for? of is hopefully level, of that some of kind got world mean

Doug DelGrosso

bit, which a that part is efficiencies, start. roll-off. of I'll whether ratios. to materials occurred little one -- rid roll-on addition we we specific didn't that target we couldn't probably to the just you The commented hit has importantly, on, and element, of you lags getting it, said, of And rod, their last Well, roll-off it our necessarily we've and and haven't plan sell it but mentioned, those a bad labor the time whether put what had overall the overhead, And the be just on in what more over evolves always on and have businesses. to we business occurs would or drive, been

look draw really that's buckets the that So, we to from.

Jeff Stafeil

to our Rod peer nothing's we But eliminating around of, changed margin. GAAP target have really that our

Rod Lache


the you kind large So each buckets maybe towards or, of it's targeting, characterize about, are to think of of your big components, that restructuring how if some that whether weaker we out these can X.X you've of from going just X.X, getting contracts to X got, you've the got? closer that that

Jeff Stafeil

a it's million that dramatic say, of do compared which, the That's breakeven, of years so progression We're obviously, and ago to a, you a high to there. in $XX outflow. million free target seat of we do business. great business, of in some mentioned the the to total $XXX ago lots million a flow, some in combination, there's improvement But a couple guys or of structures $XXX time say, Yes, taking at the difficult it's CapEx to pieces, was in level, but big out improvement and mechanisms to a I'd a year put that. of this I'd work also, cash so, we EBITDA. exit out quarter,

see we plus to operation margin each around what it we and across the that into trim, in the cost substantial efforts we've bigger benchmarking we're go Presidents business, their a in a seeing all how VE want more with that. the that activities we billion to with implemented, our customers as gap to that on how spend, on the take Regional product, that noted. that customers the to combination been foam been customers us strategies had, Doug's of continue a of take adding opportunity and and margin of volume, of is maybe while of control engine control trend, piece different to of the the region, depth that's out the to growth. opportunity The we can our some and as have to significant you other those and There having, we a taking our an that take business for reasonable, will sights we on So, get have to, I lot do [ph] be doing. as with starting And root lift portion real where get we're be, can couple dollar, think and been really, is our drive discussions see to where

and well. the to, relates it restructuring, efficiencies as to As there of those, some we find continue

we You able that take in activities XXXX. U.S. last activities in been to have the year that in implemented and Europe out say mentioned, halfway initiated the are, the about we'll

lean in And the XXXX. the that pieces get I'd then, effect to So full first than the be there's we'll two benefits more we year structure, some get on continue recovery. to additional but those as those of emphasis in last going out we'll say

Doug DelGrosso

much appetite can't close for is, timeline a Can change? a not or and can Jeff going timeline, us change. is small you a XX They VAVE it historically They're asking for fundamental think the I reason your for to to in little ask cost you reduction. a rather we've is we've change reduction. make, It's and for cost said an for it's seat cost ways traditional increasing everything systems that how vehicles. they asking just how in, them, in And and just mentioned, make in we're appetite And to to was on different your drivers to really change much it. that's discuss way, which reduction. our the is And now out their good market And to opportunity put the them. it's, that bit hesitant inflationary, the add have but It's in huge we not every before, commercially really cost front these as was develop what Jeff in call difficult has that against Vabe. bucket recasting be have structure labels is to you be agreed one improvement, you you way, that taking they balancing issues the as is on have design the are to really really multiyear operation? fundamental changing and a seen, to you little right the labeled customer, at referenced. that I material least bit own we've say going our, impact In element think news to I to with It's, our small XX, commercial, of maybe the they're cost that that customers put be customers I thing those working just really, of gap And of would things operational than our economics. that sharing outlook how us. what it and asking then for kind that's always going be encompasses that

Rod Lache

agree, Adient’s being looking sure taking I'm at is seen Okay, you striking you're we've entrants. view new customers things new I make was somewhat a maybe are just how pursuing just, I comment you question, the dozen a is more capital wondering raised are a you'd or just if by cautious just perspective, with you here business on of potential the much that? from could the about it to past most wanted one year ask that one thanks. other in industry how over

Doug DelGrosso

were characterize not on And more shadow Yes, particular say it venture cautious. that if that's that's any to, would negative out I much I we're, to cast there.

be our we've another new traditional go with, to couple to a There a example, of on participating got think are example. business track, some good and I years OE's we Tesla focus learned on ways what is, would it's certain really is the NEO are get over we've customers on degree. fundamentals, that last focus to back

they propulsion coming certain on the changes opportunity deliver to to pursue there And pursue, our in a to degree, to their with customers they've us that. demonstrated with traditional continue but We sustainable was market. can again, vehicles, volume board for that

a some we re risky. new demonstrate we'll years examine away something But and ago, entrants As right is see there's plenty of from them. that couple our we the the now. that and of of diversifying ability, changing pursuing, opportunity. don't fairly customer And base stepped pursuing, It's,

see kind where it drive traditional us markets in and now. value, If to is in markets prioritize these for of not right you new just there necessarily opportunity our we

Rod Lache

you. thank Great,

Doug DelGrosso

Rod. Thanks,

Jeff Stafeil

Rod. Thanks,


you. Thank

Our from James comes Picariello Market. next with KeyBanc question Capital

open. is line Your

James Picariello

guys. morning, good Hi,

Doug DelGrosso

Hi James.

James Picariello

the we worse, back unchanged? premium moving leaves walk XX both I color the for full sounds commodities through So another It appreciate that really cadence within million the the Can year and the all of guide just mix unchanged, are pieces, guide end on million year. from XX are favorable freight, particularly guide positive the though as would EBITDA puts be side ledger and which what of of and in terms weighted, I the first great takes? there? the in the on you quarter. have then settlements clarification and year the keeps commercial What did miss full Any

Doug DelGrosso

the impact on largest big that unchanged We've difficult yesterday it shorter you two, down second James, a significant Journal thing the went One, chip for early is Yes, article year; if is. I'd just just shifts year the That's the Ford, journal, on of, is seen this while. Street but the still where in platform being shortage you we're throughout environment. keeps in world. that COVID, the our the morning and it very read the Wall saw, biggest say,

commodity little but bit those fact repeatable. weigh $XX say we we'd the that grabbed had million of million timing that we in a things us, exposure, elevated, QX an So all is we, to on sort freight of $XX the exposure, say benefit the those you of settlements, not it, pieces, the call commercial I'd

things little see bit just, those this that more changed with outlook. all develop a our we to So of year factored decided, in wanted all and before

James Picariello

than That’s outlook, half. it. or comment, got the Okay, and the on XX% half income first helpful higher made equity then the second half just the you second

third what's breakout, of a kind two one thirds, that? it's So

Jeff Stafeil

quarter just we not a Year year quarter. and second the would a second first the said, quarter reference. includes reference, Chinese We of New be quarter was roughly, said so half That the half amount

James Picariello

all I got right, that, All Okay. right.

you recovery up on headwind, commodities, hit the so at mentioned mechanisms customer likely looking the following you're next $XX then, now year. Just million an

of So the that about just should next way terms is we what's in year, that assume to Thanks. $XX right XX% million thinking recovery? be of the recovered

Jeff Stafeil

lot that one a the And depends prices on go. where

that buying recapture stay So eventually we we'll steady, contract and steel prices if with deficit be the in our and because any difference running will and XXX, up a if the think to steel we're or metrics a at a cost no is given longer and eliminate market, just of we're goes just getting the we up XXX then only it XXX, Once XXX, based from on at goes difference. customers price still customer recovery for to XXX.

price essentially stop stays we really on is the that, that So, bleeding all happens if this. steady,

because we'll get, get the recovery, we'll work to that hopefully start then it we'll As prices other eventually have Yes, reduce, makes direction. sense.

Doug DelGrosso

economics would how of in and it's Yes it's We material expect draw at fully guess just I of recover it on top the a opinion it add you, lines. that, our I takes. always for point, question some long will goal

they high. steel different extended don't, an rates market if of period prices means and if we relatively us we'll As it's take won't our won't a even for for Jeff mentioned, it. because if down, it with it then it customer go then dialogue quickly If to get sustain time, extraordinary stay recover

again, a whether that's analyzed the product, other And the customer on just new true-up include And conversation issues it. of we addresses mitigate it so, namely, broaden to or customer impact it's product productivity. launch, to that

Mark Oswald

James. Thanks,

James Picariello

Got it. Thanks.

Mark Oswald

last can we to if question? move the Operator,


Thank you.

last Barclays. question from comes with Brian Our Johnson

open. is line Your

Brian Johnson

the one of questions, two housekeeping second a kind more Yes, strategic and more of organizational.

accurate too kind an Just pricing? production actual should as week to your Ford schedules downtime kind the be into how at fiscal and about of of, kind the getting impact every without XQ, deep every of get or of downtime, we revenue we gauge unit Ford, of watched tried on thinking of

Jeff Stafeil

without It's getting Ford hard numbers… production a pricing. The deep into do to

Doug DelGrosso

like, is because that. quickly detail about Ford so of very pricing last Pretty there looks gave I'd what guess number reluctant that our do you to I be just so the unit, I transparent level

Brian Johnson

put this as the together And reflected given all reviewed before confident outlook? how as but you make slides slide morning, guess decks, fully know news we of well, just, kind you I them your that's slides, the are them Ford blasting to you the kind was of that in

Jeff Stafeil

think so. I Yes,

Brian Johnson


Jeff Stafeil

additional I that mean, doesn't we say. that, know, things. Yes, mean now would what I

Brian Johnson

endlessly, at of and but terms right off key the roles, now people the management, to working, on Is And second Where at terms theme look some the OEMs, there I stand? in in is challenges, visualizing a are kind the the think to versus and must to with key questionnaires Yellow, need has account came just or margins, kind of other particularly supply at you partnering want the you following need, the gaps you some there waterfall chain be in on that back of that competitor do of, you left do? question, right evolved, of the just maybe know key Red, you factories, You basically the key Doug of what facing as organizational regional to do moving softer fill? both where I charts in, you they created of around industry, accountability. positions, team the looking Green kind you executing yes walk kind how to work ask still field question, of of have

Doug DelGrosso

talent pretty We've We and a lot talk, actually numbers. then drive respectfully, Red, not KPIs. business the it's organization that the to happy Board foreseeing any to them. EBITDA business Right and And the line that the interesting much we adding understanding we're or expect And last get the an investment at it's how organization, group them, had just and we've performing. Yes. we Relative attention, cash. organization, capital review lot driving deep the a way we we're connected really bottom and financial how that it's of tend Green indication and that moved so a the and we charts feel and a not We that's We're do coy, just into business. or our good And, we're question. performance, that's, different focus I the right we everyone's look adjust in satisfaction, in not and of of a or had that, I of look generating level managing whether constantly Yellow or that on place we'll although then with to the make and brought here to tweaks basics now. plan We're changes. to EBIT be not into major was report to at customer of we talent very succession to numbers and way new week managing the time now we're the the performance. changed about strong ask to compensating motivate into return organization to then how we're right to environment, roles, our them and that's

but without out parts but into There's have to we've reshuffled some region I people company feel easier been, to and degree. single So, leaders team the every been fortunate all we COVID some it would organization, that little do it the could right well, perfect got worked technology region, manage regionally. the I ground manage even business, yes, that they've regional then the think the the having with in of strong have all did their difficult on smaller for us. in that because no breaking bit a we would move ahead

about maybe were to succession as we better plan, to feel year And we or a the lot layers deep go back two compared ago, where organization. that we so, a

Brian Johnson

follow quick And a just up.


Mark Oswald

we're And time Thanks, out unfortunately, Brian. here. of

So, feel did to you out. concludes just morning. up, please for free those This for call this your to I'll get follow not who ask the of a chance available be a questions, for reach

Doug DelGrosso

Thanks, everyone. safe. Stay

Jeff Stafeil

Thank you.


you concludes participating. Thank conference. That for today's

time. disconnect this may You at