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

FY2025 First Quarter Earnings Call January 28, 2025 > Introduction Michael Heifler VP, Investor Relations and Strategy Adient – PUBLIC Important Information Adient has made statements in this document that are forward-looking and, therefore, are subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this ...

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

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

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

Company Overview - Adient is a global leader in automotive seating, employing over 70,000 individuals 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 Financial Event - Adient will host a conference call on January 28, 2025, at 8:00 a.m. (ET) to discuss its first 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]

Core Insights - Adient, Jaguar Land Rover (JLR), and Dow have collaborated to create seat foam for luxury vehicles using closed-loop recycled components, marking a significant advancement in the automotive industry towards a circular economy and reduced CO2 emissions [1][3]. Group 1: Environmental Impact and Innovation - The collaboration aims to mitigate the environmental effects of polyurethane (PU) foams in car seats by utilizing 'post-consumer' PU molded foams sourced from end-of-life vehicles, which are sorted and shredded to produce a new circular polyol [2]. - The Adient Front Seat Cushion prototypes currently incorporate 20% re-polyol derived from PU end-of-life vehicles, showcasing the integration of recycled materials into automotive seating [2][3]. Group 2: Industry Milestone and Future Steps - This initiative is recognized as the first instance of producing PU molded foam for seating applications under these sustainable conditions, positioning PU as central to a circular economy in the automotive sector [3]. - The companies plan to conduct further research to increase the percentage of re-polyol content and will test the closed-loop seat foam with JLR on a production scale starting in early 2025 [4]. Group 3: Statements from Key Executives - Frank Toenniges from Adient emphasized that developing components with closed-loop recycled foams is a major milestone and aims to enhance the proportion of recycled materials in seating systems [4]. - Andrea Debbane from JLR highlighted that this breakthrough exemplifies the automotive value chain's potential for achieving full circularity and driving significant sustainability changes [4]. Group 4: Company Overview - Adient is a global leader in automotive seating, employing over 70,000 individuals across 29 countries and operating more than 200 manufacturing and assembly plants worldwide [5].

Economic and Market Conditions - Adient's financial performance is significantly impacted by global economic conditions, including consumer demand for new vehicles and supply chain disruptions [84]. - The automotive industry has faced a decline in production volumes due to weakening consumer demand and high interest rates, affecting Adient's revenues [86]. - The EMEA region is experiencing overcapacity and pricing pressures, leading to a heightened risk of impairment for Adient's operations in that area [91]. - Adient's access to capital markets is crucial for its operations, and any economic downturn could adversely affect its liquidity and financial condition [88]. - The ongoing geopolitical uncertainties, including the conflict in Ukraine, have led to increased costs and potential disruptions in supply chains [99]. - Changes in consumer credit availability and borrowing costs have negatively impacted global automotive sales, which could adversely affect Adient's business [136]. Supply Chain and Operational Challenges - The company has implemented strategies to mitigate supply chain disruptions, but these typically offset only a portion of the adverse impacts [86]. - Adient's operations are subject to foreign currency risks, which can affect its financial results due to volatility in exchange rates [97]. - The automotive industry has faced supply chain disruptions, leading to volatility in automobile production and decreased sales for Adient, without a corresponding decrease in labor costs [107]. - Work stoppages at Adient's facilities or those of its customers could disrupt operations and lead to increased labor costs alongside decreased production [117]. - Adient's supply chain management is crucial, as disruptions from suppliers could negatively impact its financial condition and operating results [151]. Labor and Workforce Issues - The company continues to assess the impact of labor shortages and wage inflation on its operational capabilities [86]. - Adient has experienced wage inflationary pressures due to constrained labor availability and targeted strikes by the United Auto Workers, which may continue to increase costs [107]. - Adient's ability to attract and retain qualified personnel is critical for its business success, and challenges in a hybrid working environment may impact productivity [150]. - Adient's workforce consists of approximately 70,000 employees, with 41% identifying as female and 52% of U.S. employees identifying as ethnic minorities [56]. Financial and Tax Considerations - Adient's total consolidated indebtedness as of September 30, 2024, is approximately $2.4 billion, which may adversely affect its business and profitability [146]. - Changes in tax laws and aggressive tax audits could negatively impact Adient's financial position and results of operations [127][128]. - Adient's effective tax rate could be volatile due to changes in tax laws and the mix of earnings across different jurisdictions [169]. - The Inflation Reduction Act of 2022 introduces a 15% corporate minimum tax effective for Adient's fiscal year 2024, but currently, Adient is not subject to this provision [170]. - The OECD's Pillar Two framework, which establishes a global minimum corporate tax rate of 15%, is expected to be applicable to Adient starting in its 2025 fiscal year [171]. Competition and Market Position - Adient's business in China faces aggressive competition, which could result in price reductions and reduced margins if the company cannot maintain its market position [100]. - The global automotive component supply industry is highly competitive, with pricing pressures from OEMs and competitors potentially affecting Adient's sales levels and margins [109]. - Shifts in market shares among vehicle segments could adversely affect Adient's profitability, particularly if consumer demand shifts away from vehicles with higher interior content [155]. Sustainability and Environmental Goals - Adient faces risks related to climate change and sustainability, including potential regulatory requirements that could impact demand for its products [138]. - The company has made commitments to reduce carbon emissions, but achieving these goals may require significant resources and could increase operational costs [141]. - Adient aims to reduce scope 1 and 2 greenhouse gas emissions by 75% by 2030, with a long-term target of achieving carbon neutrality at manufacturing sites by 2040 [51]. - In fiscal year 2024, Adient plans to attribute 100% of electricity consumed at its sites worldwide to renewable sources by 2035, with over 60 sites already consuming renewable electricity [53]. - Adient has developed products like the Soft Back Panel and Soft Side Valance, integrating up to 70% recycled PET, reducing seat weight by up to 2 kg [54]. Corporate Governance and Legal Risks - Adient is subject to various international laws, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, which could lead to criminal penalties and fines if violated [105]. - Legal proceedings and disputes could adversely affect Adient's financial performance and reputation [144]. - Legislative proposals could affect Adient's ability to secure governmental contracts if it moves its corporate location abroad [174]. - Changes in U.S. tax law could potentially reclassify Adient as a U.S. corporation, leading to increased tax liabilities [176]. Strategic Initiatives and Innovation - The company is investing in technology and innovation, including automation and artificial intelligence, to reduce costs and improve accuracy [15]. - Adient's Core Product Portfolio strategy aims to provide high-quality products while reducing complexity and development time [20]. - Adient is adapting to trends in electric vehicles and advanced driver assistance systems, providing unique opportunities for growth [39]. - Adient's strategic focus includes enhancing its market position through leadership in sustainability and technology [76]. Leadership and Management - Adient has a diverse executive team with significant experience in the automotive sector, including positions at Delphi Technologies and ZF Friedrichshafen AG [69][70][74]. - The executive team includes leaders with extensive backgrounds in sustainability and IT, reflecting a commitment to modern business practices [76][79]. - Adient's Chief Financial Officer, Mark A. Oswald, has held various investor relations and finance roles since 1994, indicating strong financial leadership [77]. - The company has established diversity and inclusion councils in three business regions to drive strategic actions in talent acquisition and retention [60].

Company Overview - Adient plc (NYSE: ADNT) is a designer and manufacturer of seating systems and components for various types of vehicles, including passenger cars and trucks [1] - The company is based in Ireland and supplies its products to manufacturers globally [1] Financial Performance - Adient has reported earnings exceeding $14.5 billion, indicating a significant scale of operations within the automotive seating industry [1]

Group 1 - Adient plc (ADNT) is an automotive seating systems company with a Zacks Consensus Estimate for its current year earnings revised 14.9% downward over the last 60 days [1] - Advanced Drainage Systems, Inc. (WMS) is a water management solutions company with a Zacks Consensus Estimate for its current year earnings revised 6.5% downward over the last 60 days [1] - Atlanta Braves Holdings, Inc. (BATRA) is a sports and entertainment company with a Zacks Consensus Estimate for its current year earnings revised 151.3% downward over the last 60 days [2]